Bill Text: TX SB776 | 2025-2026 | 89th Legislature | Introduced
Bill Title: Relating to the award of compensatory damages caused by certain delays under governmental construction contracts.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2025-01-13 - Filed [SB776 Detail]
Download: Texas-2025-SB776-Introduced.html
| 89R3521 AJA-F | ||
| By: Hughes | S.B. No. 776 | |
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| relating to the award of compensatory damages caused by certain | ||
| delays under governmental construction contracts. | ||
| BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
| SECTION 1. Subchapter Z, Chapter 2252, Government Code, is | ||
| amended by adding Section 2252.911 to read as follows: | ||
| Sec. 2252.911. COMPENSATORY DAMAGES CAUSED BY GOVERNMENTAL | ||
| DELAYS IN CONSTRUCTION CONTRACTS. (a) In this section: | ||
| (1) "Compensatory damages" means the costs actually | ||
| incurred by a contractor as a result of delay in the schedule that | ||
| could not be reasonably mitigated by the contractor. The term does | ||
| not include: | ||
| (A) special damages; | ||
| (B) consequential damages; | ||
| (C) home office overhead, except overhead costs | ||
| for labor as defined in the applicable construction contract; | ||
| (D) profit or markup on indirect costs; | ||
| (E) the costs of performing additional work that | ||
| are separately agreed to by the governmental entity and contractor | ||
| in a construction contract; or | ||
| (F) indirect costs not related to the project in | ||
| the applicable construction contract. | ||
| (2) "Contractor" means a person engaged in the | ||
| business of developing, constructing, fabricating, repairing, | ||
| altering, or remodeling improvements to real property. | ||
| (3) "Governmental entity" means: | ||
| (A) the state; | ||
| (B) a municipality, county, public school | ||
| district, or special-purpose district or authority; | ||
| (C) a district, county, or justice of the peace | ||
| court; | ||
| (D) a board, commission, department, office, or | ||
| other agency in the executive branch of state government, including | ||
| an institution of higher education as defined by Section 61.003, | ||
| Education Code; | ||
| (E) the legislature or a legislative agency; or | ||
| (F) the Supreme Court of Texas, the Texas Court | ||
| of Criminal Appeals, a court of appeals, or the State Bar of Texas | ||
| or another judicial agency having statewide jurisdiction. | ||
| (b) A provision of a construction contract between a | ||
| governmental entity and a contractor may not prohibit the award of | ||
| compensatory damages to the contractor for a delay to the extent | ||
| that the delay is caused solely by the governmental entity or by a | ||
| party for which the governmental entity is responsible. | ||
| (c) This section does not restrict, limit, or prohibit the | ||
| inclusion of a contract provision in a construction contract | ||
| prescribing requirements or conditions that must be met by a | ||
| contractor to seek recovery of compensatory damages, including | ||
| requirements or conditions relating to notice, justification, or a | ||
| duty to mitigate or for demonstrating or proving the actual cost or | ||
| schedule impact of a delay. | ||
| (d) This section may not be waived. A purported waiver of | ||
| this section in violation of this subsection is void. | ||
| (e) This section does not apply to a construction contract: | ||
| (1) for services related to recovery or relief from a | ||
| natural disaster involving the repair or renovation of a residence; | ||
| or | ||
| (2) that is subject to Section 201.112, Transportation | ||
| Code. | ||
| SECTION 2. Section 2252.911, Government Code, as added by | ||
| this Act, applies only to a construction contract entered into on or | ||
| after the effective date of this Act. | ||
| SECTION 3. This Act takes effect September 1, 2025. | ||
