Dear Friends and Colleagues,

The final deadline associated with the regular session has come and gone. 1,073 bills were passed and sent to Governor Abbott. Of that total, 80 were vetoed (including Article X of the budget). The remaining bills were either signed by the Governor or allowed to become law.

All of the monitored bills that passed have become law. A link to the final version of each bill, as well as an overview and the effective date of each one, are set forth below. I’ve also included a few additional bills since they be of interest to many list recipients. The added bills are noted with a “++”.

This final update for the regular session does not include a list of monitored bills that did not pass. For more information about bills that failed, please review the June 1^st update (Sine Die Edition). The prospects of a special session (or more) is discussed at the end of this update.

Bills that Passed

Attorney's Fees

HB 1578 – Recovery of Attorney's Fees in Certain Civil Cases

• Summary: HB 1578, filed by Rep. Brooks Landgraf (R – Odessa), amends section 38.001 of the Civil Practice & Remedies Code (CPRC) to include any type of organization as defined under the Business Organizations Code, but excludes “a quasi-governmental entity authorized to perform a function by state law, a religious organization, a charitable organization, or a charitable trust.”

• Effective date: September 1, 2021. The changes in law made by HB 1578 apply only to an award of attorney's fees in an action commenced on or after the effective date.

HB 2416 – Recovery of Attorney’s Fees as Compensatory Damages ++

• Summary: HB 2416, filed by Rep. Barbara Gervin-Hawkins (D – San Antonio), adds section 38.0015 to the CPRC and allows a person to recover reasonable attorney’s fees from an individual, corporation, or other entity from which recovery is permitted under section 38.001 of the CPRC as compensatory damages in breach of a construction contract cases. However, HB 2416 does not create or imply a private cause of action or independent basis to recover attorney’s fees.

• Effective date : September 1, 2021. The changes in law addressed in HB 2416 apply only to a cause of action that accrues on or after the effective date.

Civil Liability/Causes of Action

HB 19 – Procedure, Evidence, and Remedies in Civil Actions Involving Commercial Motor Vehicle Accidents

• Summary: HB 19, filed by Rep. Jeff Leach (R – Plano), amends the CPRC to provide specific procedural and evidentiary guidelines for cases arising out of commercial motor vehicle accidents. HB 19 addressed the following topics (among other things):

• Bifurcated trials : Much like the bifurcation process under section 41.009 of the CPRC, if requested by a defendant, HB 19 requires a bifurcated trial in commercial motor vehicle accident actions when a claimant seeks to recover exemplary damages. Requests to bifurcate a trial must be brought on or before the later of: (1) the 120^th day after the date the defendant bringing the motion files the defendant's original answer; or (2) the 30^th day after the date a claimant files a pleading adding a claim or cause of action against the defendant bringing the motion. In the first phase of a bifurcated trial, the trier of fact would determine liability and the amount of compensatory damages. In the second phase, the trier of fact would determine liability for and the amount of exemplary damages.

• Violation of regulatory standards : HB 19 provides that, in a civil action involving a commercial motor vehicle, a defendant’s failure to comply with a regulation or standard would be admissible into evidence in the first phase of a bifurcated trial only if, in addition to complying with other requirements of law: (1) the evidence tends to prove that a failure to comply with the regulation or standard was a proximate cause of the bodily injury or death for which damages are sought; and (2) the regulation or standard is specific and governs, or is an element of a duty of care applicable to, the defendant, the defendant’s employee, or the defendant ’s property or equipment when any of those is at issue in the action. However, nothing in HB 19 prevents a claimant from pursuing a claim for exemplary damages relating to the defendant’s failure to comply with other applicable regulations or standards, or from presenting evidence on that claim in the second phase of a bifurcated trial.

• Direct actions against an employer: Under HB 19, in a civil action involving a commercial motor vehicle, an employer defendant’s liability for damages caused by the ordinary negligence of a person operating the defendant’s commercial motor vehicle shall be based only on respondeat superior if the defendant stipulates that, at the time of the accident, the person operating the vehicle was: (1) the defendant’s employee; and (2) acting within the scope of employment. If an employer-defendant stipulates that the defendant’s employee was acting within the scope of employment and the trial is bifurcated, a claimant may not, in the first phase of the trial, present evidence on an ordinary negligence claim against the employer-defendant that requires a finding by the trier of fact that the employer-defendant’s employee was negligent in operating a vehicle as a prerequisite to the employer-defendant being found negligent in relation to the employee’s operation of the vehicle. A claimant would not be prevented from pursuing: (1) an ordinary negligence claim against an employer-defendant for another claim, such as negligent maintenance, that does not require a finding of negligence by an employee as a prerequisite to an employer-defendant being found negligent for its conduct or omission, or from presenting evidence on that claim in the first phase of a bifurcated trial; or (2) a claim for exemplary damages arising from an employer-defendant’s conduct or omissions in relation to the accident that is the subject of the action, or from presenting evidence on that claim in the second phase of a bifurcated trial.

• Even when an employer stipulates to liability and the trial is bifurcated, if an employer-defendant is regulated by the Motor Carrier Safety Improvement Act of 1999 or Chapter 644 of the Transportation Code, a party may present any of the following evidence in the first phase of a trial that is bifurcated if the evidence is applicable to the defendant:

• whether the employee who was operating the employer-defendant's commercial motor vehicle at the time of the accident that is the subject of the civil action: (A) was licensed to drive the vehicle at the time of the accident; (B) was disqualified from driving the vehicle under 49 C.F.R. Section 338.51, 383.12, or 391.15 at the time of the accident; (C) was subject to an out-of-service order, as defined by 49 C.F.R. Section 390.5 at the time of the accident; (D) was driving the vehicle in violation of a license restriction imposed under 49 C.F.R. Section 383.95 or Section 522.043 of the Transportation Code, at the time of the accident; ( E) had received a certificate of driver’s road test from the employer-defendant as required by 49 C.F.R. Section 391.33; (F) had been medically certified as physically qualified to operate the vehicle under 49 C.F.R. Section 391.41; (G) was operating the vehicle when prohibited from doing so under 49 C.F.R. Section 382.201, 382.205, 382.207, 382.215, 395.3, or 395.5 or 37 T.A.C. Section 4.12, as applicable, on the day of the accident; (H) was texting or using a handheld mobile telephone while driving the vehicle in violation of 49 C.F.R. Section 392.80 or 392.82 at the time of the accident; (I) provided the employer-defendant with an application for employment as required by 49 C.F.R. Section 391.21(a) if the accident occurred on or before the first anniversary of the date the employee began employment with the employer defendant; and (J) refused to submit to a controlled substance test as required by 49 C.F.R. Section 382.303, 382.305, 382.307, 382.309, or 382.311 during the two years preceding the date of the accident; and

• whether the employer-defendant (A) allowed the employee to operate the employer’s commercial motor vehicle on the day of the accident in violation of 49 C.F.R. Section 382.201, 382.205, 382.207, 382.215, 395.3, or 395.5 or 37 T.A.C. Section 4.12, as applicable, on the day of the accident; (B) had complied with 49 C.F.R. Section 382.301 in regard to controlled-substance testing of the employee-driver if: (i) the employee-drive was impaired because of the use of a controlled substance at the time of the accident; and (ii) the accident occurred on or before the 180^th day after the date the employee began employment with the employer-defendant; (C) had made the investigations and inquiries as provided by 49 C.F.R. Section 391.23(a) in regard to the employee-driver if the accident occurred on or before the first anniversary of the date the employee driver began employment with the employer defendant; and (D) was subject to an out-of-service order, as defined by 49 C.F.R. Section 390.5.

• If a civil action is bifurcated under Section 72.052, evidence admissible under the bill would be: (1) admissible in the first phase of the trial only to prove ordinary negligent entrustment by the employer-defendant to the employee who was driving the employer-defendant's commercial motor vehicle at the time of the accident; and (2) the only evidence that may be presented by the claimant in the first phase of the trial on the negligent entrustment claim.

• Admissibility of visual depictions of all motor vehicle accidents : Under HB 19, in civil actions involving a motor vehicle, a court may not require expert testimony for admission of evidence of a photograph or video of a vehicle or object involved in accident. If properly authenticated under the Texas Rules of Evidence, a photograph or video of a vehicle or object involved in an accident is presumed admissible, even if the photograph or video tends to support or refute an assertion regarding the severity of damages or injury to an object or person involved in the accident that is the subject of a civil action under HB 19.

• Commercial Automobile Insurance Report . The Texas Department of Insurance will be required to conduct a study each biennium on HB 19’s effect on premiums, deductibles, coverage, and availability of coverage for commercial automobile insurance. A report of the results of the survey will have to be submitted to the Legislature no later than December 1 of each even-numbered year for the preceding biennium. This section of the bill will expire on December 31, 2026.

• Effective date: September 1, 2021. The changes in law addressed in HB 19 apply only to a cause of action commenced on or after the effective date.

SB 6 – Liability for Certain Claims Arising During a Pandemic or Pandemic-Related Disaster

• Summary : SB 6, filed by Sen. Kelly Hancock (R – North Richland Hills) and others, amends the Medical Liability Act and the CPRC to provide liability protection for healthcare providers, businesses that manufactured and distributed products related to a pandemic emergency, and individuals and businesses that continue to operate during a statewide pandemic emergency. More specifically, SB 6 does the following:

• Liability of Physicians, Health Care Providers, and First Responders During a Pandemic : Except in a case of reckless conduct or intentional, wilful, or wanton misconduct, a physician, health care provider, or first responder will not be liable for an injury, including economic and noneconomic damages, or death arising from care, treatment, or failure to provide care or treatment relating to or impacted by a pandemic disease or a disaster declaration related to a pandemic disease, if the physician, health care provider, or first responder proves by a preponderance of the evidence that: (1) a pandemic disease or disaster declaration related to a pandemic disease was a producing cause of the care, treatment, or failure to provide care or treatment that allegedly caused the injury or death; or (2) the individual who suffered injury or death was diagnosed or reasonably suspected to be infected with a pandemic disease at the time of the care, treatment, or failure to provide care or treatment.

• A physician, health care provider, or first responder may not use this showing as a defense to liability for negligent care, treatment, or failure to provide care or treatment if a claimant proves by a preponderance of the evidence that the respective diagnosis, treatment, or reasonable suspicion of infection with a pandemic disease at the time of the care, treatment, or failure to provide care or treatment was not a producing cause of the individual's injury or death.

• The provisions of SB 6 do not constitute a waiver of sovereign immunity of the state or governmental immunity of a political subdivision. A physician, health care provider, or first responder who intends to raise the defense described above must provide to a claimant specific facts that support such an assertion no later than the later of: (1) the 60^th day after the date the claimant serves an expert report on the physician, health care provider, or first responder under Section 74.351; or (2) the 120 ^th day after the date the physician, health care provider, or first responder files an original answer in the suit.

• This limitation applies only to a claim arising from care, treatment, or failure to provide care or treatment that occurred during a period beginning on the date that the president of the United States or the governor makes a disaster declaration related to a pandemic disease and ending 60 after the date that the declaration terminates.

• Pandemic Emergency Related Products . A person who designs, manufacturers, sells, or donates a product described in SB 6 (e.g., clothing or equipment worn to minimize exposure to hazards of a pandemic disease; medical devices, equipment, and supplies used during a pandemic emergency or to treat individuals infected or suspected to be infected with a pandemic disease; drugs, medicines, and vaccines used to treat or prevent the spread of the disease; tests to diagnose or determine immunity to a pandemic disease; and commercial cleaning, sanitizing, or disinfecting supplies used to prevent the spread of a pandemic disease) are not liable for personal injury, death, or property damage caused by the product unless: (1) the person either had actual knowledge of a defect in the product when the product left the person’s control, or acted with actual malice in designing, manufacturing, selling, or donating the product; and (2) the product presented an unreasonable risk of substantial harm.

• A person who designs, manufactures, labels, sells, or donates a product described in SB 6 during a pandemic emergency is not liable for personal injury, death, or property damage caused by a failure to warn or provide adequate instructions regarding the use of a product unless: (1) the person acted with actual malice in failing to warn or provide adequate instructions regarding the use of the product; and (2) the failure to warn or provide adequate instructions regarding the use of the product presents an unreasonable risk of substantial harm.

• A person is not liable for personal injury, death, or property damage caused by or resulting from the person's selection, distribution, or use of a product described in SB 6 during a pandemic emergency unless: (1) the person either had actual knowledge of a defect in the product when the person selected, distributed, or used the product, or acted with actual malice in selecting, distributing, or using the product; and (2) the product presented an unreasonable risk of substantial harm.

• Liability for Causing Exposure to a Pandemic Disease : A person is not liable for injury or death caused by exposing an individual to a pandemic disease during a pandemic emergency unless the claimant establishes that:

• (1) the person who exposed the individual: (a) knowingly failed to warn the individual of or remediate a condition that the person knew was likely to result in the exposure of an individual to the disease, provided that the person: (i) had control over the condition; (ii) knew that the individual was more likely than not to come into contact with the condition; and (iii) had a reasonable opportunity and ability to remediate the condition or warn the individual of the condition before the individual came into contact with the condition; or (b) knowingly failed to implement or comply with government-promulgated standards, guidance, or protocols intended to lower the likelihood of exposure to the disease that were applicable to the person or the person’s business, provided that the person: (i) had a reasonable opportunity and ability to implement or comply with the standards, guidance, or protocols; and (ii) refused to implement or comply with or acted with flagrant disregard of the standards, guidance, or protocols; and

• (2) reliable scientific evidence shows that the failure to warn the individual of the condition, remediate the condition, or implement or comply with the government-promulgated standards, guidance, or protocols was the cause in fact of the individual contracting the disease.

• A person is deemed to be in compliance with a government-promulgated standard, guideline, or protocol, if the person makes a good faith effort to substantially comply with at least one order, rule, or declaration. SB 6 also adds the Legislature to the list of those that may promulgate an order, rule, or authoritative declaration.

• Expert Reports: Claims for exposure to a pandemic disease must be supported by one or more expert reports. Unless the deadline is extended by written agreement of the parties, no later than the 120th day after the date a defendant files an answer to a claim for a pandemic disease disclosure under SB 6, a claimant must serve on the defendant: (1) a report authored by at least one qualified expert that provides a factual and scientific basis for the assertion that the defendant’s failure to act caused the individual to contract a pandemic disease; and (2) a curriculum vitae for each expert whose opinion is included in the report.

• A defendant must file an objection to the sufficiency of the report and serve the objection on the claimant no later than 21 days after the later of: (1) the date the report is served on the defendant; or (2) the date the defendant’s answer to the claim is filed.

• If a court determines that a report does not represent an objective, good faith effort to provide a factual and scientific basis for the assertion that the defendant’s failure to act caused the injured individual to contract a pandemic disease, the court may grant the claimant a single 30-day period to cure any deficiency in the report.

• If a sufficient report is not timely served, the court, on the defendant’s motion, must enter an order: (1) dismissing the claim with respect to the defendant, with prejudice; and (2) awarding to the defendant reasonable attorney’s fees and costs of court incurred by the defendant in the action.

• SB 6 does not require a single expert to address all causation issues with respect to all defendants. Further, a report required under SB 6: (1) is not admissible in evidence by any party; (2) cannot be used in a deposition, trial, or other proceeding; and (3) cannot be referred to by any party during the course of the action, except in a proceeding to determine if a report is sufficient or timely.

• After a claim to which SB 6 applies is filed, all claimants, collectively, can take no more than two depositions before the required expert report is served.

• If, at the time of the injury or death caused by exposing an individual to a pandemic disease during a pandemic emergency, an order, rule, or declaration of the governor or an agency of the state establishing or applying standards, guidelines, or protocols related to a pandemic disease does not apply to a person under this section, and no other standards, guidelines, or protocols applicable to the person have been promulgated and adopted by a local governmental entity with jurisdiction over the person, the person is deemed to be in compliance with government-promulgated standards, guidelines, and protocols for purposes of the law.

• Interlocutory Appeal. A person may appeal from an interlocutory order of a district court, county court at law, statutory probate court, or county court that overrules an objection filed to an expert report or denies all or part of the relief sought in a motion to dismiss.

• Educational Institutions . SB 6 exempts an educational institution from liability for equitable monetary relief arising from a cancellation or modification of a course, program, or activity of the institution if the cancellation or modification arose during a pandemic emergency and was caused, in whole or in part, by the emergency.

• Effective date : June 14, 2021. However, the amendments to the Medical Liability Act and Chapter 148 of the CPRC apply only to an action commenced on or after March 13, 2020, for which a judgment has not become final before the effective date. The amendments to section 79.0031 of the CPRC apply only to an action commenced on or after the effective date.

SB 219 – Civil Liability and Responsibility for the Consequences of Defects in Plans, Specifications, or Related Documents for Construction and Repair of Real Property Improvements

• Summary: SB 219, filed by Sen. Bryan Hughes (R – Mineola), amends the Business & Commerce Code to establish that a contractor (as defined under the bill) is not responsible for the consequences of defects in, and may not warranty the accuracy, adequacy, sufficiency, or suitability of, plans, specifications, or other design or bid documents for the construction (as defined under the bill), or repair of any improvement to real property provided to the contractor by the person with whom the contractor entered into the contract or another on that person's behalf. However, SB 219 does not apply to contracts for the construction or repair of a “critical infrastructure facility,” which includes: (1) equipment, facilities, devices, structures, and buildings used or intended for use in the storage of certain natural resources and the gathering, transportation, treating, storage, or processing of CO2; and (2) commercial airport facilities used for the landing, parking, refueling, shelter, or takeoff of aircraft, maintenance or servicing of aircraft, aircraft equipment storage, or navigation of aircraft.

• SB 219 also requires a contractor to make a written disclosure to the other contracting party of the existence of any known defect in the plans, specifications, or other design or bid documents discovered by the contractor before or during construction. A contractor must also disclose certain inaccuracies, inadequacies, and other insufficiencies, in addition to defects. Further, the bill includes provisions establishing the meaning of "ordinary diligence" and establishing that a disclosure by a contractor is made in the contractor’s capacity as a contractor and not as a licensed professional. A contractor who fails to disclose conditions may be liable for defects that result from the failure to disclose. Further, SB 219 prohibits these protections from being waived by contract.

• SB 219 also amends the Government Code to prohibit an applicable governmental entity from requiring in a contract for engineering or architectural services related to the construction or repair of an improvement to real property, or in a contract related to the construction or repair of an improvement to real property that contains engineering or architectural services as a component part, that such services be performed to a level of professional skill and care beyond that which would be provided by an ordinarily prudent engineer or architect with the same professional license under the same or similar circumstances. The bill does not prevent a party to a contract for engineering or architectural services from enforcing specific obligations in the contract that are separate from the standard of care.

• Further, SB 219 includes provisions stating that the provisions do not apply to the construction, repair, alteration, or remodeling of an improvement to real property if: (1) the construction, repair, alteration, or remodeling is performed under a "design-build" contract; and (2) the part of the plans, specifications, or other design or bid documents for which the contractor is responsible under the contract is the part alleged to be defective. SB 219 also provides that design services provided under a "design-build" contract will be subject to the same standard of care requirements provided in section 130.0021 of the CPRC.

• Effective date: September 1, 2021. The changes in the law addressed in SB 219 apply only to a contract entered into on or after the effective date.

HB 2086 – Appeals of Interlocutory Orders Denying Summary Judgment Motions by Certain Contractors

• Summary: HB 2086, filed by Rep. Eddie Morales (D – Eagle Pass), amends Section 51.014 of the CPRC to authorize the interlocutory appeal of an order either granting or denying a motion for summary judgment filed by certain contractors. More specifically, a contractor may appeal the grant or denial of summary judgment cases arising out of the conduct of a contractor who constructs or repairs a highway, road, or street for the Texas Department of Transportation if, at the time of the personal injury, property damage, or death, the contractor was in compliance with contract documents material to the condition or defect that was the proximate cause of the personal injury, property damage, or death.

• Effective date: June 16, 2021.

Court Costs

SB 41 – Consolidation and Allocation of State Court Costs

• Summary: SB 41, filed by Sen. Judith Zaffirini (D – Laredo), is an omnibus bill intended to: (1) simplify the civil filing fee and criminal court cost structure; (2) ensure that filing fees and court costs are going to support the judiciary; and (3) ensure that fees being collected for a purpose are actually being used for that intended purpose.

• Effective date: September 1, 2021.

Damages

HB 2064 – Amount of Hospital or Physician Liens on Certain Causes of Action or Claims

• Summary: HB 2064, filed by Rep. Jeff Leach (R – Plano), amends section 55.004(b) of the Property Code to add a new subsection (3) and provides another method for calculating the amount of a hospital lien. Under HB 2064, a hospital lien will be the lesser of: (1) the amount of the hospital's charges for services provided to the injured individual during the first 100 days of the injured individual's hospitalization; or (2) 50 percent of all amounts recovered by the injured individual through a cause of action, judgment, or settlement described by Section 55.003(a); or (3) the amount awarded by the trier of fact for the services provided to the injured individual by the hospital less the pro rata share of attorney’s fees and expenses the injured individual incurred in pursuing the claim.

• Effective date: June 16, 2021.

Healthcare Liability

SB 232 – Service of Expert Reports for Health Care Liability

• Summary: SB 232, filed by Sen. Nathan Johnson (D – Dallas), amends Chapter 74 of the CPRC by adding a “preliminary determination for expert report requirement” (section 74.353) that includes the following elements:

• On motion of a claimant filed no later than 30 days after the date the defendant's original answer is filed, a court may issue a preliminary determination regarding whether a claim made by the claimant is a health care liability claim.

• If a court determines that a claim is a health care liability claim, the claimant shall serve an expert report as required by section 74.351 no later than the later of: (1) 120 days after the date each defendant's original answer is filed; (2) 60 days after the date the court issues the preliminary determination; or (3) a date agreed to in writing by the affected parties.

• If a court does not issue a preliminary determination before the 91st day after the date that a claimant files a motion, the court shall issue a preliminary determination that the claim is a health care liability claim. A preliminary determination would be subject to interlocutory appeal by either the claimant or defendant.

• If an interlocutory appeal results in an appellate court reversing a trial court’s preliminary determination that a claim is not a health care liability claim, the claimant shall serve an expert report as required by Chapter 74 of the CPRC no later than 120 days after the date that the appellate court issues an opinion reversing the preliminary determination. A preliminary determination applies only to the issue of whether a claimant is required to serve an expert report under Chapter 74.

• SB 232 also amends section 51.014 of the CPRC to add orders regarding preliminary determinations to the list of appealable interlocutory orders.

• Effective date: September 1, 2021. The changes in the law addressed in SB 232 apply to actions commenced on or after the effective date.

Judiciary/Judicial System

SJR 47 – Proposed Constitutional Amendment Changing the Eligibility Requirements for Certain Judicial Offices

• Summary: SJR 47, filed by Sen. Joan Huffman (R – Houston) and others, proposes a constitutional amendment that would add the following eligibility requirements to serving as a judge or justice in Texas:

• Supreme Court Chief Justice or Justice : In addition to being 35 years old; a U.S. citizen and Texas resident at the time of election; a practicing lawyer licensed in Texas for at least ten (10) years; or a practicing lawyer licensed in the State of Texas and judge of a state court or county court established by the Legislature by statute for a combined total of at least ten (10) years, the Chief Justice or Justice of the Supreme Court must not have had their license to practice law revoked, suspended, or subject to a probated suspension during the time period set forth above.

• District court judge : In addition to being a U.S. citizen and Texas resident, a district court judge must have been a practicing lawyer or a judge of a Texas court, or both combined, for eight (8) years next preceding the judge’s election, during which time the judge’s license to practice law has not been revoked, suspended, or subject to a probated suspension. A person must have resided in the district in which the judge was elected for two (2) years next preceding the election and continue to reside in the district during the judge’s term.

• Effective date : The amendment to the Texas Constitution with respect to appellate court justices and judges would take effect January 1, 2022, and apply only to a chief justice or other justice of the supreme court, a presiding judge or other judge of the court of criminal appeals, or a chief justice or other justice of a court of appeals who is first elected for a term that begins on or after January 1, 2025, or who is appointed on or after that date. The amendment to the Texas Constitution with respect to district judges would take effect January 1, 2022, and apply only to a district judge who is first elected for a term that begins on or after January 1, 2025, or who is appointed on or after that date.

HB 3774 – Operation and Administration of and Practice and Procedure Related to Judicial Proceedings

• Summary: HB 3774, filed by Rep. Jeff Leach (R – Plano), is an omnibus bill that will do, among other things, the following: (1) create new judicial district courts in certain counties (Bell, Cameron [juvenile], Denton, Harris, Hays, Hidalgo, McLennan, Smith, Tarrant [criminal], and Williamson); (2) create a new statutory probate court in Denton County; (3) create statutory county courts in certain counties (Kendall, McLennan, Montgomery, San Patricio, and Williamson); (4) create a county criminal court in Tarrant County; (5) address the transfer of cases from county courts to district courts; and (6) amend the Government Code to allow the Office of Court Administration (OCA) to allow public access to view information or documents in the state court document database and to charge a reasonable fee for additional optional features in the database.

• Effective date : Unless otherwise provided in the bill, the effective date will be September 1, 2021.

Real Estate/Property Owner Associations ++

SB 1588 – Powers and Duties of Property Owner Associations

• Summary: SB 1588, filed by Sen. Bryan Hughes (R – Mineola), modifies certain existing regulations and introduce new provisions relating to property owners’ associations. New provisions include the following:

• Resale certificate fee cap . SB 1588 caps a fee charged by a property owners’ association to assemble, copy, and deliver a resale certificate to an owner at $375, and caps a fee to prepare and deliver a resale certificate update at $75.

• Damages . SB 1588 specifies that if a property owners’ association fails to deliver required information related to a subdivision before the fifth business day, rather than the seventh day, after the second request for the information was mailed or delivered, the owner can seek a judgment against the property owners’ association for actual damages, instead of the $500 cap under current law. The bill also specifies that attorney’s fees for which an owner sought a judgment against an association must be reasonable.

• Website . SB 1588 requires a property owners’ association to make the current version of the association’s dedicatory instruments relating to the association or subdivision available on the homepage of a website available to association members that was maintained by the association or a management company on behalf of the association.

• Management certificates . SB 1588 adds to the list of information a property owners’ association will be required to record on a management certificate, such as (1) any amendments to a declaration; (2) the telephone number and email address of the person managing the association or the association’s designated representative; and (3) the website address where the association’s dedicatory instruments were located.

• A property owners’ association will have to record an amended management certificate in each county in which any portion of a residential subdivision was located. By the seventh day after the date a property owners’ association filed a management certificate or amended management certificate for recording, the association must electronically file the certificate or amended certificate with the Texas Real Estate Commission (TREC). TREC will only collect a certificate or amended certificate for the purpose of making the data accessible to the general public through a website. This provision takes effect December 1, 2021, and TREC will have to establish and make available the system necessary for electronic filing of management certificates by that date. A property owners’ association that had recorded a management certificate or amended management certificate with a county clerk on or before December 1, 2021, will have to electronically file the most recently recorded certificate with TREC no later than June 1, 2022. With certain exceptions, a property owners’ association and its officers, directors, employees, and agents will not be liable to any person for a delay in recording or failure to record a management certificate with a county clerk’s office or electronically file the certificate with TREC. An owner will not be liable for attorney’s fees incurred by a property owners’ association relating to the collection of a delinquent assessment against the owner or interest on the amount of a delinquent assessment if the fees were incurred by the association or the interest accrued during the period a management certificate was not recorded with a county clerk or electronically filed with TREC.

• Architectural review authority . SB 1588 defines an “architectural review authority” as the governing authority for the review and approval of improvements within a subdivision. Provisions related to an architectural review authority would apply only to a property owners’ association that consisted of more than 40 lots and would not apply during a development period or during an period in which the declarant: appointed at least a majority of the members of the architectural review authority or otherwise controlled the appointment of the authority; or had the right to veto or modify a decision of the authority.

• Authority membership restrictions . A person cannot be appointed or elected to serve on an architectural review authority if the person was a current property owners’ association board member, a current board member’s spouse, or a person residing in a current board member’s household.

• Notice . A decision by the architectural review authority denying an application or request by an owner for the construction of improvements in the subdivision can be appealed to the board. A written notice of the denial will have to be provided to the owner by certified mail, hand delivery, or electronic delivery. The notice must: describe the basis for the denial in reasonable detail and changes, if any, to the application or improvements required as a condition to approval; and inform the owner that the owner could request a hearing on or before the 30th day after the date the notice was mailed.

• Hearings . The board must hold a hearing no later than the 30th day after the date the board received the owner’s request for a hearing and will have to notify the owner of the date, time, and place of the hearing by the 10th day before the date of the hearing. Only one hearing will be required. During a hearing, the board or the designated representative of the property owners’ association and the owner or the owner’s designated representative will be provided the opportunity to discuss, verify facts, and resolve the denial of the owner’s application or request for the construction of improvements, and the changes, if any, requested by the architectural review authority in the notice provided to the owner. The board or owner can request a postponement. If requested, a postponement will have to be granted for a period of not more than 10 days. Additional postponements can be granted by agreement of the parties. The property owners’ association or the owner can make an audio recording of the meeting.

• Open board meetings . SB 1588 requires notices to members of a regular or special board meeting of a property owners’ association to be provided at least 144 hours (instead of 72 hours) before the start of regular board meeting and at least 72 hours before the start of a special board meeting. Notice will have to be posted on the home page of any internet website available to association members maintained by the association, including a website maintained by a management company on behalf of the association. The bill specifies that a board cannot, unless in an open meeting for which prior notice to owners was given, consider or vote on the approval of any amendment of an annual budget.

• Attorney’s fees and collection costs . SB 1588 specifies that certain attorney’s fees, third party collection costs, and assessed fines to which a payment received by a property owners’ association from an owner would be applied must be reasonable. The bill also changes from 30 days to 45 days the period in which an owner could cure a delinquency before further collection action was taken.

• Credit reporting services . SB 1588 requires a property owners’ association to give written notice to an owner by certified mail before reporting any delinquency of an owner to a credit reporting service. A property owners’ association or the association’s collection agent cannot report any delinquent fines, fees, or assessments to a credit reporting service that were the subject of a pending dispute between the owner and the association. An association can report delinquent payment history assessments, fines, and fees of property owners within its jurisdiction to a credit reporting service only if: (1) at least 30 business days before reporting to a credit reporting service, the association sent a detailed report of all delinquent charges owed; and (2) a property owner had been given the opportunity to enter into a payment plan. The bill's provisions relating to credit reporting applies only to a fine, fee, or assessment that became due on or after the bill’s effective date.

• Hearings . SB 1588 requires that certain hearings related to dispute resolution be held before the board, rather than allowing such hearings to be held before a board-appointed committee. A property owners’ association will have to provide to an owner a packet containing all documents, photographs, and communications relating to the matter the association intended to introduce at the hearing not later than 10 days before the hearing. If an association did not provide the information packet within the required period, an owner would be entitled to a 15-day postponement of the hearing. During a hearing, a member of the association board or the association’s designated representative must first present the association’s case against the owner. An owner or the owner’s designated representative will be entitled to present the owner’s information and issues relevant to the appeal or dispute.

• Lease and rental applicants . A property owners’ association can request the following information be submitted to the association regarding a lease or rental applicant: contact information, including the name, mailing address, phone number, and email address of each person who resides at a property in the subdivision under a lease; and the commencement date and term of the lease.

• Effective date : September 1, 2021, except as otherwise specified in the bill.

HB 2237 – Mechanic’s, Contractor’s, or Materialman’s Liens

• Summary: HB 2237, filed by Rep. Dustin Burrows (R – Lubbock), will impact subcontractors in numerus ways, including the following:

• Establishes uniformity in the notice requirements by imposing the same notice obligation on all subcontractors regardless of with whom they have contracted. Rather than sending one notice to the owner and one to the general contractor, the single notice now required must be sent to both simultaneously. Additionally, HB 2237 prescribes the form of the notice to be given under both Section 53.056 (notice of derivative claimant) and 53.057 (notice of contractual retainage).

• Adds alternative methods for delivery of the notices required to be sent under Sections 53.056 and 53.057 (as detailed below).

• Eliminates the requirement that an architect, engineer or surveyor have a direct contractual relationship with the owner to be entitled to file a lien.

• Eliminates an owner’s ability to cut-off the time period in which lien claims can be perfected through the filing of an affidavit of completion or notice of termination or abandonment.

• Shortens the deadline to bring suit to foreclose a lien to the first anniversary of the last day on which a claimant may file a lien affidavit under Section. 53.052.

• Removes the requirement that the statutory lien waivers under Section 53.284 be notarized.

• Effective date: January 1, 2022. The changes in law made by HB 2237 apply only to an original contract entered into on or after the effective date.

Special Session(s)

On June 18, Governor Abbott vetoed Article X of the state budget (SB 1), which effectively defunds the legislative branch at the end of this fiscal year (August 31). Consequently, the Legislature is expected to convene for at least two special sessions. One session, which will likely be set for September or October, will focus on the redrawing of the state’s political maps and the distribution of $16 billion in federal coronavirus relief funds. Before then, however, Governor Abbott has indicated that he will call lawmakers back to work on July 8. Topics have yet to be announced, but they will likely include election and bail issues. The Legislature will also need to restore funds removed from SB 1 by the Governor's veto.

Sincerely,

Jerry D. Bullard
Chair, State Bar of Texas Appellate Section
Co-Chair, Legislative Liaison Committee, State Bar of Texas Appellate Section

Jerry D. Bullard*
Adams, Lynch & Loftin, P.C.
3950 Highway 360
Grapevine, Texas 76051
O: 817.552.7742
F: 817.328.2942
email: jdb@all-lawfirm.com
* Board Certified - Civil Appellate Law
Texas Board of Legal Specialization

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