HB 3290

relating to the time period for which certain funds payable under a
construction contract must be reserved for the benefit of
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1.  Section 53.101, Property Code, is amended by
amending Subsection (a) and adding Subsection (a-1) to read as
(a)  During the progress of work under an original contract
for which a mechanic's lien may be claimed and for the period
described by Subsection (a-1) [30 days after the work under the
contract is completed], the owner shall reserve:
(1)  10 percent of the contract price of the work to the
(2)  10 percent of the value of the work, measured by
the proportion that the work done bears to the work to be done,
using the contract price or, if there is no contract price, using
the reasonable value of the completed work.
(a-1)  After the completion of work under an original
contract for which a mechanic's lien may be claimed, the owner shall
reserve the funds described by Subsection (a) for a period ending
(1)  the 31st day after the date the work under the
(2)  the 61st day after the date:
(A)  a certificate of occupancy is issued for the
(B)  the improvement is first used for its
SECTION 2.  The changes in law made by this Act apply only to
a contract entered into on or after the effective date of this Act.
A contract entered into before the effective date of this Act is
governed by the law as it existed immediately before the effective
date of this Act, and that law is continued in effect for that
SECTION 3.  This Act takes effect September 1, 2025.