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Bills Overhaul Lien Filing in Texas and Louisiana.

Two bills were proposed in the Texas State House, and one in the Louisiana House, that would alter the process of filing liens in each state. The Texas bills never made it out of committee, while the Louisiana bill was signed into law by Governor John Bel Edwards on June 11.

Louisiana House Bill 203 began as a multiyear cleanup effort to remove the conflicts and ambiguities created by amendments to the state's Private Works Act throughout the last 40 years, said Kurt Sorensen, CCE, CEW, CICP.

"Essentially, this is not a huge change to lien law in Louisiana. It does some small things like strengthen the bond requirements, but primarily, it leaves things status quo, but in a more logical and easier to understand format."

In Texas, House Bill 589 was a "complete overhaul of the current Texas Property Code," said Randall K. Lindley, a partner with Bell Nunnally & Martin LLP. Under this law, subcontractors and suppliers would "be required to send notices out on every project they worked on," Lindley said. This contrasts with current law, which only requires a notice be sent out if a creditor has an unpaid invoice.

"Legally speaking, this notice of furnishing would act as a condition precedent to having any lien rights in Texas. As a result, subcontractors and suppliers would be required to send notices out on every project they worked on as opposed to only the projects where they had an unpaid invoice," Lindley said. "Practically speaking, being required to send notices on every project would be extremely burdensome to many NACM members. Therefore, we were against HB 589."

The second bill, House Bill 3498, modified existing Texas Property Code. It eliminated the preliminary notice letter requirement and it removed provisions requiring "statutory retainage" and "owner liability," according to Lindley.

Due in no small part to a strong NACM lobbying effort and almost a dozen NACM members showing up in Austin, Texas, to testify against them, neither bill made it out of the House committee hearings.

Chris Ring works with countless credit professionals every day at Secured Transaction Services. He can be reached at chrisr@nacm.org.

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Title Annotation:Construction Corner
Publication:Business Credit
Geographic Code:1U7TX
Date:Jul 1, 2019
Words:357
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