NACM Southwest Show of Strength Gets Bill Changed

NACM Southwest members recently took a stand against Texas House Bill 2237 during a public hearing last month. Thanks to their efforts, they were able to persuade the Texas House of Representatives' Business & Industry Committee to amend unfavorable language within the bill that they said hurt suppliers.

"I am pleased to report that the efforts of the NACM Southwest were successful in obtaining a compromised revision to House Bill 2237," said Randall Lindley, partner at Bell Nunnally & Martin LLP (Dallas). "The testimony of 11 NACM Southwest members and two supporting lawyers, combined with the efforts of our lobbyist, persuaded Committee members and the bill's author to include a new provision in the bill that allows subcontractors to send a notice of nonpayment to the general contractor."

The original bill had removed the second-month notice used by suppliers to perfect their liens. Southwest members argued that suppliers would lose a valuable collection tool and would likely run into more payment issues.

Following the public hearing and numerous testimonies from NACM Southwest members, the bill was sent back into pending status. After substitutes were considered in committee, the bill was eventually amended on May 7, before being passed by the House the next day.

"While this bill continues to 'remove' the 'second-month notice,' the added provision accomplishes our goal of keeping a 'collection tool' in place for use by our members," Lindley said. "The added benefit of the revised language is that the notice is not required to be sent in order to perfect the lien claim, therefore, the 'gotcha' that was associated with failing to send the second-month notice has been removed."

The bill was reviewed by the Senate's Business & Commerce Committee in a public hearing on May 18. Perrin Fourmy, senior associate for Bell Nunnally, stated that while there was a Senate committee substitute offered, "the changes did not affect the language that we requested be inserted to address NACM members' concerns." At press time, the bill was still pending in committee.

-Bryan Mason, editorial associate

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Thursday, 28 October 2021

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