House Bill No. 3288 amends Section 162.031 of the Property Code to introduce a new provision regarding the handling of trust funds in construction contracts. The bill adds Subsection (a-1), which specifies that a trustee who retains or diverts trust funds due to a dispute—such as an alleged default—related to a construction contract, other than the one associated with the trust funds, is considered to have misapplied those funds. This change aims to clarify the responsibilities of trustees in managing trust funds in the context of construction contracts.

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 means that any disputes or issues arising from contracts established before this date will not be subject to the new regulations outlined in the bill.

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