HB 2463

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
(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
(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:
(B)  a municipality, county, public school
district, or special-purpose district or authority;
(C)  a district, county, or justice of the peace
(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,
(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
(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;
(2)  that is subject to Section 201.112, Transportation
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.