The bill, S.B. No. 1615, amends Section 162.031 of the Property Code to clarify the responsibilities of trustees regarding trust funds related to construction contracts. It introduces a new subsection (a-1) that specifies that a trustee who retains or diverts trust funds due to disputes, including alleged defaults, related to a construction contract—other than the contract for which the trust funds were originally received—will be considered to have misapplied those funds.

The provisions of this bill will only apply to contracts entered into on or after its effective date, which is set for September 1, 2025. This change aims to enhance accountability for trustees in the management of trust funds associated with construction projects, ensuring that funds are used appropriately and in accordance with the intended contractual obligations.

Statutes affected:
Introduced: Property Code 162.031 (Property Code 162)