QUOIN Legislative Information

Texas Supreme Court Modifies its Decision in Light v. Centel Cellular Co. Regarding Covenants Not to Compete
In the case of Alex Sheshunoff Management Services v. Johnson, __S.W.3d___, 2006 WL 2997287 ( Tex. , Oct. 20, 2006), the Texas Supreme Court modified its holding in Light v. Centel Cellular Co., 883 S.W.2d 642 ( Tex. 1994), regarding covenants not to compete. Alex Sheshunoff Management Services (“ASM”) hired Mr. Kenneth Johnson as an at-will employee in 1993. In 1997, Mr. Johnson received a promotion to director of the “Affiliation Program.” A few months after the promotion, ASM presented Johnson with an employment agreement, which contained a covenant not to compete. ASM informed Johnson that signing the agreement was a condition of his continued employment.
The agreement was at-will in the sense that it had no fixed term of employment and stated that “ither party may elect to terminate this Agreement at any time for any reason” subject to employer and employee notice provisions. The agreement also contained a clause wherein the employee recognized that he would receive confidential information and specialized training and the employer in turn promised to provide the training. The agreement also specified the confidential information that the employee would receive. After signing the agreement, Johnson received confidential information and specialized training, as outlined in the employment agreement. In 2002, Johnson quit his job and went to work for a competitor.
ASM sued Johnson for breach of the covenant not to compete. Johnson argued that the covenant was not enforceable as a matter of law. The basis of Johnson’s argument was that ASM’s promises to provide confidential information and specialized training were illusory at the time the agreement was made. Johnson cited to the Texas Supreme Court’s decision in Light to support this argument. The trial court agreed with Johnson and granted his motion for summary judgment based on this argument.
On appeal, the Texas Supreme Court stated that an at-will employee’s covenant non-compete becomes enforceable when the employer performs the promises made in exchange for the covenant. This decision is a departure from the Light decision, wherein the court stated that the promises must be performed at the time the parties entered into the covenant. In reaching its decision, the court reviewed the Covenants Not to Compete Act and the legislative history behind the Act. Tex. Bus. & Com. Code § 15.50(a). The court concluded that contrary to Light, a covenant not to compete need only be ancillary to or part of an agreement at the time the agreement is entered into. Therefore, a unilateral contract that was formed when the employer performed a promise that was illusory when made can satisfy the requirements of the Act.
For complete information visit www.canterburylaw.com.

Support Comprehensive Immigration Reform - Do Not Let Politics Trump Sound Policy, Get Your Message to Congress!
This week, Congress returns to Washington, DC for the last few weeks before the November elections. Immigration reform remains a top issue and House and Senate staffers still report that for every call/letter they receive backing a comprehensive solution they receive 100 anti-immigrant calls. Please continue to inform and educate your members of the importance of contacting Congress on Comprehensive Immigration Reform.
AGC has heard and seen recent comments from Members of Congress that the business community has not been vocal enough on this issue outside the beltway. It is time that Congress hear from employers who will be impacted by this legislation by sending op eds and letters to the editor of local media outlets, and attend town hall meetings in addition to calling and sending letters to Congress.
A new letter supporting comprehensive reform has been posted on the AGC Legislative Action Center. Please take a minute to review this letter and send a personal version on your letterhead to Congress. In addition please forward a link to your members, as we are all stakeholders in this debate.
Talking Points
AGC supports comprehensive immigration reform that protects our national security as well as our economic security. For reform to truly work it must do more than just increase border security and internal enforcement. Employers must be able to find a legal labor supply and employers must be able to rely on the documents and verification system that they will be forced to use.
The federal government is increasing enforcement on worksites around the country, yet employers remain dependent in using a cumbersome I-9 process to verify employee work eligibility. In addition, there is a shortage of workers in the construction industry as well as other sectors of our country. Increased enforcement without a new worker visa program could hurt efforts to increase construction employment.
The construction industry supports more border security and also realizes that employers must be part of the solution. However, reform that will truly work must take into account our labor needs and that construction employment has constantly increased at twice the rate of the rest of the economy. A new worker visa must be created to help construction companies get the workers they need when they are unable to find U.S. citizens to fill their jobs. In addition, the undocumented that are already here need to be identified and they need indisputable documentation of their work status. By creating a system where they come forward, pay fines, learn English, pay back taxes, pass criminal background checks, and only then go to the back of the line for a potential green card is a meaningful penalty to pay.
The House and Senate must appoint conferees to the Immigration Bills, and begin develop compromise legislation.
Please contact Kelly Knott at knottk@agc.org or 202/547-4685 if you have questions on what is happening on this issue in Congress or Kelley Keeler at keelerk@agc.org on how we can help coordinate local media placement.

QUOIN Members Step Up to the Plate
On August 16, 2006 the QUOIN-PAC Leadership Team reached out to QUOIN members and requested they Pitch In! to assist in funding the 2006 QUOIN-PAC. The response was fantastic as members pledged over $90,000 and the number is still growing. QUOIN wishes to THANK all of the members who contributed and a special Thank You to the QUOIN-PAC Leadership Team who assured that QUOIN remains a viable political force within the State by gathering the resources needed to solidify our position.
It’s not too late to join the list of members who have contributed to QUOIN-PAC. To add your name to this growing list, contact Jack Baxley at the QUOIN office 972-647-0697. Thank you for ALL your support!

QUOIN-PAC Leadership Team
Denward Freeman, Medco Construction
Tom Kader, SEDALCO Construction Services
Preston McAfee, Rogers-O’Brien Construction
Buddie Barnes, Dee Brown
Jim Thompson, James R Thompson
Charles DeVoe, Charter Builders
Harold MacDowell, TDIndustries
Tim Cummings, Cummings Electrical
Jay Hedges, AUI Contractors
Gary Shelton, Southern Mechanical Plumbing
Charles Raymond, Raymond Construction
Kevin Mask, T.A.S. Commercial Concrete Construction
William Wright, H.E. Wright & Company
Bob Williams, C.D. Henderson Construction Services

QUOIN-PAC Contributors
David Anderton, A & A Landscape & Irrigation
Stan McCarthy, ACME Brick Co.
Rusty Haile, ACME Brick Co.
Steve Turner, Air Source Heating & Air Conditioning
Jill Hurd, All-Tex Plumbing Supply
Warren Andres, Andres Construction
Jayson Turner, Arrowhead Rebar Co., Inc.
Glenn Strother, AUI Contractors
Ron Gafford, Austin Commercial
Steve Baker, Baker Drywall
Bill Baldwin, Baldwin Insurance & Bonding
Bruce Basden, Basden Steel
Brandon Blackburn, Blackburn May & Co
Phillip Bell, Bob Moore Construction
Larry Knox, Bob Moore Construction
Curt Hellen, Bob Moore Construction
Ed McGuire, Bob Moore Construction
Mike Moore, Bob Moore Construction
Kyle Whitesell, Bob Moore Construction
John Bosworth, Bosworth Steel Erectors
Barry Moore, Brandt Engineering
Sam Gioldasis, Brandt Engineering
Lawrence Brown, Brown & Tucker
Rick Thompson, Buford-Thompson Co.
Joe Canterbury, Canterbury Stuber Elder Gooch & Surratt
Kyle Gooch, Canterbury Stuber Elder Gooch & Surratt
Chuck Stuber, Canterbury Stuber Elder Gooch & Surratt
Tony Bellissimo, Capform
Charlie Henderson, C.D. Henderson Construction Services
Doug Jones, Centex Construction
Jim Enna, CESCO
Craig Levering, CESCO
Tommy Valenta, Chaparral Steel
Bob Baylis, City Wide Mechanical
Mike Trull, CMC Construction Services
Randy Haefli, Component Construction Co., Ltd
Tommy Stewart, Connell Construction
Jim Denson, Denson Construction
Joe Denson, Denson Construction
Ovid Morphew, Design System Group
Jim Hemsworth, Dobbs Construction
Don Dobbs, Dobbs Construction
King Cook, Fugro Consultants
Randy Garrett, Garrett & Associates
Mike Gilbert, Gilbert Construction
Mike Darden, Greater Metroplex Interiors
Scott Griffith, Griffith & Nixon
Doug Moore, Heritage Insurance
Fritz McKinstry, Hill & Wilkinson
Greg Wilkinson, Hill & Wilkinson
Mark DeWitt, Holmes Murphy Insurance
Mark Reid, Idea Construction
Darrin Weber, IMA of Texas

Steve Luebbehusen, JBM Builders
Rusty Norris, Joe Funk Construction
Richard Daiker, K and S Insurance
Jim Kingham, J.E. Kingham Construction Services
Dan Burrows, Leasing & Associates
Judy Lembke, Lemco Construction Services, L.P.
Bill White, Locke Liddell & Sapp, LLP
Pat Hrncir, MAPP Construction
Jeff Haley, Matrix Interior Construction
Tim Hill, McCaslin-Hill Construction
Mike McWay, McCarthy Building
David McDonald, McDonald & Simmons
John Fulkerson, McQueary Henry Bowles Troy
Phillip Brown, McQueary Henry Bowles Troy
Pete Rush, McQueary Henry Bowles Troy
Paul Kreiling, McQueary Henry Bowles Troy
Randy Hubbard, MDI General Contractors
Frank Pieschel, MDI General Contractors
Louis Schindler, Medco Construction
Chris Robinson, Medco Construction
Curtis Roberts, Mills-Roberts & Associates
Sam Mullis, Mullis Newby Hurst
Tony Murray, Murray Construction
Bob Perrenot, PM Lasco Demolition
Jeff Green, Par Flooring
Pete Durant, Pete Durant & Associates
David Karcher, Precept Builders
Jeff Wheeler, Precept Builders
Ken Blankenfeld, Precept Builders
Billy Goff, Precept Builders
Danny Scroggins, Precept Builders
David Ringberger, Protection Systems
Mike Slapater, Ramtech Building Systems, Inc.
Jimmy Mays, Ray F Skiles
Glenn Nihart, Ray F Skiles
Clay Harrison, Ray F Skiles
Dewayne Hodges, Ray F Skiles
Richard Ringo RBR Construction
Randy Cupp, RE Cupp Construction
Terry Rice, Rice Drywall
Romero Callazo, ROC Construction
Paul Johnson, Rogers-O’Brien Construction
Russ Garrison, SEDALCO Construction Services
Warren Simmons, Simmons & Associates
Bill Dawkins, Site Enterprises
Rickey Skinner, Skinner Masonry
Melvin Smith, Smith Custom Masonry
Gary Shelton, Southern Mechanical Plumbing
Gary Bullock, Southern Star Concrete
Charlie Stewart, Southwest Construction Services
Ernest Adams, Southwest Construction Services
David Bloxom, Speed Fab-Crete
Danny Copeland, Spring Valley Construction
Mike Freeman, Steele-Freeman
Darrell Benton, Steele-Freeman
David Marsh, Steele-Freeman
Jim Gomes, System Electric Co.
Bob Lowe, TDIndustries
Jack Lowe, TDIndustries
Rod Johannsen, TDIndustries
Tim McNew, TDIndustries
Ben Houston, TDIndustries
Jeff Riddle, TDIndustries
Ernie Bowman, TNT Equipment
Adam Trevino, Trevino Mechanical
Tracy Tucker, Tucker Agency
Dutch Wickes, Walker Engineering
John Wier, Wier & Associates
Farris Wilks, Wilks Masonry

Legislative Passes Governor's Monumental Tax Reform Package
History was made at the State Capitol over the past thirty days as the Legislature passed a momentous package of bills proposed by Governor Perry that redo the state's antiquated tax system and bring the largest tax cut in Texas history to property owners. The legislation will meet the requirements set forth by the Supreme Court on school finance by moving the primary funding of public schools back to the state.
This was one of those times when everything came off near perfection. The Governor set the table with his appointment of the Texas Tax Reform Commission to hold hearings around the state before proposing a new tax plan. The present franchise tax system has been dying a slow death and was modeled on a Texas economy of the past that was based on capital intensive businesses. This is not exactly the picture of businesses in Texas today which now has a service industry based economy. The Tax Reform Commission kept hearing the same message, "the tax system needs to be fair, broad-based and levied at a low rate." HB 3 as passed by the Legislature is all of the above. It is as broad-based as the Texas Constitution will allow, it is fair and it will be levied at a low rate.
The road at the Legislature was not always smooth over the past thirty days, but the two leaders - Speaker Tom Craddick and Lt. Governor David Dewhurst worked with Governor Perry to iron out the concerns that were raised and to reach agreements that were acceptable and would meet the objectives of providing school property tax relief and meeting the mandates of the Supreme Court ruling late last year.
AGC Texas Building Branch carefully reviewed the package of bills and decided the tax reform package was fair and broad-based and it decided to support the package as it was asked to do by Governor Rick Perry. The Texas economy is expected to grow as a result of the passage of this new tax system. Ray Perryman has stated it will likely be a big economic driver for the future of the Texas economy because it will be based on the Texas business picture which continues to be more and more of a service industry economy and the property tax cuts are a big incentive to more businesses.
AGC Texas Building Branch salutes Governor Perry, Speaker Tom Craddick, the Texas House of Representatives, Lt. Governor David Dewhurst, and the Texas Senate for their efforts to meet the challenges at this critical time. This special session and its accomplishments will likely be looked on as one of the finest hours in Texas Legislative history.

Potential Immigration Boycott May 1
QUOIN members who have concerns regarding the “A Day Without an Immigrant: Boycott of U.S. Businesses” scheduled for Monday May 1, 2006 should refer to the attached information provided by the (EWIC) Essential Workers Immigration Coalition on what businesses and employers should consider. Please note that the information from the EWIC has been provided to QUOIN by the AGC of America and should not be considered as legal advice. Click here for article.

TCEQ Proposes Major Amendment and renewal of TPDES Multi-Sector General Permit and Stormwater
The Texas Commission on Environmental Quality has proposed a major amendment and renewal of the Texas Pollution Discharge Elimination System. (TPDES) Multi-Sector General Permit. The multi-sector general permit authorizes the discharge of storm water associated with industrial activity. The TCEQ will hold a public meeting on Friday, May 19, 2006 at 2:00 p.m. at their headquarters, 12100 Park 35 Circle, Building F Room 2210 in Austin, Texas. The public comment period will close at the conclusion of the public meeting.
The principal changes to the multi-sector general permit include:
Removal of the requirement for a facility owner to sign the application for permit coverage
Revisions to the annual discharge monitoring report (DMR) requirements to report results of compliance with numeric effluent limits
Revisions to the benchmark reporting requirements
Addition to the requirement to maintain a rain gauge for determination of representative storm events
Revision of Sector J, related to Mineral Mining and Processing Facilities, to require alternative permit coverage for certain quarries that are addressed in the Texas Water Code at 26.553
Revisions to provide additional technical and administrative clarifications
A copy of the proposed renewal general permit and proposed fact sheet are available here.

Governor Perry Calls Special Session of The Legislature; Texas Tax Reform Commission Releases Final Report
On March 17, 2006 Governor Perry announced that he will call a special session of the legislature beginning Monday, April 17, 2006. In his statement the Governor said, “This special session provides legislators of both parties a rare opportunity to significantly reduce property taxes, makes substantial reforms to the franchise tax so it is fairer, broader, and ensure our schools have a reliable and constitutional stream of revenue.”
On Wednesday, March 29, 2006 Governor Perry and former Comptroller John Sharp announced the publication of the final report of the Texas Tax Reform Commission. Sharp was appointed by the Governor to chair the Commission that included twenty-three other members. The report entitled “Tax Fairness – Property Tax Relief for Texans” contains recommendations for reform of the state’s business tax structure along with a $5.9 billion reduction in property taxes.
In summary the report recommends the following:
The Legislature should cut school district taxes for maintenance and operations by lowering the rate to $1 per $100 and permanently recapping the rate at no more that $1.30 per $100 by the 2007 tax year.
Reform of the state’s franchise tax will occur by broadening the base of businesses that pay into the system and eliminating loopholes. The franchise tax rate will be cut from 4.5% to 1%. The tax base will change and will be based on a business’ margin by allowing each business to choose between two calculations: deducting either the cost of goods sold or employee compensation (including health insurance, pensions and other benefits) from its total revenue. The small business exemption will double from $150,000 to $300,00 in total revenue and will exempt sole proprietors and non-corporate general partnerships.
New Revenue Sources:
Restructured business tax — $4 billion
State budget surplus — $1 billion
$1-per-pack increase on cigarette tax — $800 million
Taxing auto sales based on a standardized vehicle value — $75 million
New auditors in comptroller’s office to help collect taxes — $50-60 million
Total — $5.9 billion
Property Tax Relief:
Rate would go from a maximum $1.50 per $100 of property value to a maximum of $1.30. Schools would receive enough state money to lower the rate to $1.00.
Total cost — 5.9 billion
To receive a form on how to calculate your companies tax liability please contact Jack Baxley at the QUOIN office.

Economists say U.S., Texas construction to be strong in 2006
DAVID KOENIG, Associated Press
IRVING, Texas — Construction of nonresidential buildings should be strong early this year, partly because people who have bought homes in the recent housing boom need new places to work, shop and educate their kids, according to industry economists.
Housing grew faster than other types of construction in 2005, but economists say those figures could flip-flop this year.
The signs of a housing slowdown are there. Housing starts and applications for home-building permits fell in December, and the inventory of unsold homes has hit record levels as new houses outnumber buyers.
Home construction will taper off in 2006, said Kenneth D. Simonson, chief economist for the Associated General Contractors of America. But, he added, "there is enough momentum on the (nonresidential) construction side that we will still have a few good months before things slow down."
Simonson, whose trade group represents the building industry, predicted an increase in manufacturing construction nationwide and in Texas, where Texas Instruments Inc. is building a new semiconductor factory near Dallas and Toyota is building a truck plant in San Antonio.
"Even in an industry that seems to be struggling, like automotive, the reality is that there is construction taking place and more is on the way," Simonson told a meeting of Dallas-area contractors and architects.
Cliff Brewis, a construction analyst for publisher McGraw-Hill Cos., said a housing boom like the recent one is usually followed by the building of hospitals, hotels, schools, courts and prisons to serve the growing population. He expects that trend to hold up in 2006.
The weakest part of the Texas commercial construction industry may be office buildings, especially in the Dallas-Fort Worth area, where vacancy rates are still above the national average, Brewis said.
The economists predicted continued construction of retail space around Dallas. Retailers like the area because of its large number of high-income households combined with a relatively low cost of housing, which leaves residents with more money to spend on other things.
Commercial buildings must be designed before they are built, and architects have been busy, signaling strong construction activity this year, said Kermit Baker, chief economist for the American Institute of Architects.
The group surveyed architectural firms around the country, and half expect more work this year than last, with another one-third expecting revenue to be flat.
With those and other signs pointing to strong demand for construction, the same factors could drive up contractors' costs.
Simonson said he doubted the once-fashionable idea that rebuilding the hurricane-battered Gulf Coast would drain workers from Texas - rebuilding in south Louisiana has been far slower than expected, and he expects more Louisiana refugees and businesses to move permanently to Texas.
But, Simonson said, the cost of construction materials will rise 6 percent to 8 percent this year, about twice the expected rate of inflation.
Many producers of cement have already announced price hikes on top of double-digit increases last year. The Bush administration announced this week it would cut antidumping duties and allow more cement to be imported from Mexico to ease shortages.

School District Procurement Practices Investigated
The Texas House of Representatives Committee on General Investigating and Ethics in conjunction with the Public Education Committee conducted their first hearing on November 30th. The main focus of the joint committee hearing was to begin a review and investigation on attempts by school district officials to skirt competitive bidding requirements with respect to facility renovation and construction contracts, and other relevant contracts, through the use of improper procurement contracts with associations or other school districts.
To learn more about the hearing and the roll QUOIN along with the Texas Building Branch AGC has in this investigation please contact the QUOIN office.

Governor Perry Tax Reform Committee
The unofficial list of Texans who will serve on the Governor Select Committee on Tax Reform has grown from what many thought would be a small select group to twenty-four people. The purpose of the committee, which is headed by former comptroller John Sharp, is to look at the state’s tax system and make recommendations for a more lucrative and less painless funding source. Word has it that Governor Perry is expected to have the list complete and made public within the next few days. QUOIN members should be pleased by the number of business leaders from Dallas/Fort Worth who are anticipated to be formally named to the select committee. The following is an unofficial list of Texans who are expected to be named to the Governor’s Committee to investigate state tax reform.

Howard Wolfe (Austin) Attorney

Texas Constitutional Election, November 8th
QUOIN members are being encouraged to vote on the nine constitutional amendments that have been put forth by legislature to the voting citizens of Texas. The election will be held on Tuesday, November 8, 2005.

Nine constitutional amendments will appear on the November 8th ballot in the following order:

Proposition 9 – “The constitutional amendment authorizing the legislature to provide for a six-year term for a board member of a regional mobility authority.”

Judge Rules Against Contracting Method
A Galveston judge ruled that the method used by the Galveston ISD to contract for renovation work at its Austin Middle School was illegal. The method being utilized was a “job order contract” through the “Buy Board” which is operated by the Texas Association of School Boards. Under the illegal arrangement the Galveston ISD contracted with the Houston ISD to use a Houston general contractor for the $8 million renovation project. The Houston contractor was required to pay Houston ISD and the Buy Board two percent of the total contract. The judge ruled that job order contracts be used for minor projects and the work at Austin clearly was major even if the terms were not defined in statute. This decision could have implications statewide as several school districts have used the same method to do their own construction projects.

QUOIN Members Step Up to the Plate
On August 9th the QUOIN-PAC Leadership Team reached out to QUOIN members and requested they Pitch In! to assist in funding the 2005 QUOIN-PAC. The response was fantastic as members pledged over $70,000 and the number is still growing. QUOIN wishes to THANK all of the members who contributed and a special Thank You to the QUOIN-PAC Leadership Team who assured that QUOIN remains a viable political force within the State by gathering the resources needed to solidify our position.
It’s not to late to join this list of members who have contributed to QUOIN-PAC. To add your name to this growing list, contact Jack Baxley at the QUOIN office 972-647-0697. Thank you ALL for your support!

QUOIN-PAC Leadership Team:
Denward Freeman, Medco Construction
Tom Kader, SEDALCO Construction Services
Preston McAfee, Rogers-O’Brien Construction
Warren Andres, Andres Construction
Charlie Henderson, C.D. Henderson
Wally Bryce, Coronado Builders
Buddie Barnes, Dee Brown
Jim Thompson, James R Thompson
Don George, George/McKenna Electrical Contractors
Steve Luebbehusen, JBM Builders
David Karcher, Precept Builders
Richard Ringo, RBR Construction
Mike Freeman, Steele-Freeman
Harold MacDowell, TDIndustries
Tim Cummings, Cummings Electrical
Jay Hedges, AUI/Pyramid Building Systems
Mike McWay, McCarthy Building Co.

QUOIN-PAC Contributors:
Stan McCarthy, ACME Brick Co.
Rusty Haile, ACME Brick Co.
Steve Turner, Air Source Heating & Air Conditioning
Jill Hurd, All-Tex Plumbing Supply
Rabie Hashem, Alshall Construction
Jason Geesey, Applied Advertising
Ron Gafford, Austin Commercial
Steve Baker, Baker Drywall Co.
Bob Long, Big Sky Construction
Brandon Blackburn, Blackburn May & Co.
Phillip Bell, Bob Moore Construction
Larry Knox, Bob Moore Construction
Mike Riley, Bonded Lightning Protection
John Bosworth, Bosworth Steel Erectors
Gary Boyter, Boyter Insulation
Sam Gioldasis, Brandt Engineering
Barry Moore, Brandt Engineering
Rick Thompson, Buford-Thompson Co.
Charles Ferrara, Can-Fer Construction Co.
Joe Canterbury, Canterbury Stuber Elder Gooch & Surratt
Steve Roebuck, Cates, Courtney & Roebuck
Doug Jones, Centex Construction
Rick Johnson, Centex Construction
Robert Van Cleave, Centex Construction
Rodney Moss, Centex Construction
Rod Campbell, Century Mechanical
Charles DeVoe, Charter Builders
John Lenheiser, Chubb Group of Insurance
Bob Baylis, City Wide Mechanical
Rich Roder, CMT Construction Management Technology
Randy Haefli, Component Construction
Tommy Stewart, Connell Construction
Brice Hill, Constructors & Associates
Rich Horton, Coronado Builders
Craig Levering, Crawford Electric Supply
Weldon Crisp, Crisp Fire Sprinkler

David Melville, David Melville Excavating
Jim DeMoss, DeMoss Co.
Jim Denson, Denson Construction
Joe Denson, Denson Construction
Ovid Morphew, Design System Group
Mark Russell, DFW Door & Hardware
Rick Fuller, DMW Design
Jim Hemsworth, Dobbs Construction
Don Dobbs, Dobbs Construction
Gary Estes, Estes Electric
Mike Fisher, Fisher-Pearson
King Cook, Fugro Consultants
Dan Cain, George D Alan Co.
Randy Hagler, Hagler Construction
Mona Hagler, Hagler Construction
Al Hagler, Hagler Construction
Steve Hargrove, Hargrove Electric
Steve Harrison, Harrison Steck Hoover & Drake
Henry Steck, Harrison Steck Hoover & Drake
William Wright, H.E. Wright Construction
Doug Moore, Heritage Insurance
Fritz McKinstry, Hill & Wilkinson
Greg Wilkinson, Hill & Wilkinson
Larry Love, HVAC Technical
Mark Reid, IDEA Construction
Darrin Weber, IMA of Texas
Jim Kingham, J.E. Kingham
Jeff Eubank, Jeff Eubank Roofing
Jerry Mills, JMEG Electrical
Ray Nazier, JMEG Electrical
Rusty Norris, Joe Funk Construction
Richard Daiker, K and S Insurance
Keith Alexander, K.B. Alexander Co of Texas
Kendall Jenkins, KMJ Contractors
Cliff Kurosky, Kurosky & Co. Painting Contractors
Dan Burrows, Leasing Associates, Inc.
Robert Scroggins, Linbeck
Bill White, Locke Liddell & Sapp LLP
Larry Ciarkowski, Lofland-CoMet
Mike Trull, Lofland-CoMet
Bob Bowen, Manhattan
Pat Hrncir, MAPP Construction
Vernon Proctor, Mart, Inc.
Jeff Haley, Matrix Interior Construction
John Fulkerson, McQueary Henry Bowles Troy
Randy Hubbard, MDI, Inc.
Frank Pieschel, MDI, Inc.
Louis Schindler, Medco Construction
Dale Payne, Mills Electrical
Curtis Roberts, Mills-Roberts & Associates
Sam Mullis, Mullis Newby Hurst
Nikki Boone, Noonstar
David Oliver, Olicon, Inc.
Bob Perrenot, PM Lasco Demolition
Paul Pogue, Pogue Construction

Danny Scroggins, Precept Builders
Billy Goff, Precept Builders
Ken Blankenfeld, Precept Builders
Jeff Wheeler, Precept Builders
David Ringberger, Protection Systems
Clay Harrison, Ray F Skiles
Jimmy Mays, Ray F Skiles
Glen Nihart, Ray F Skiles
Charles Raymond, Raymond Construction
Joy Thompson, Rebar Services
Joe King, Red-I-Steel
Ron Reed, Reed Engineering Group
Terry Rice, Rice Drywall
Robert Fullington, RJF Constructors
Bob Metzler, RLM Construction
Romeo Collazo, ROC Construction
Riley Harris, RPR Construction
Pat Pinkerton, RPR Construction
Russ Garrison, SEDALCO
Michael McVey, SEDALCO
Vickie Walker, SEDALCO
Pat Winn, SEDALCO
Bob Kriz, SEDALCO
Lloyd Tackitt, SEDALCO
Marlin Allen, SEDALCO
Bill Dawkins, Site Enterprises
Randy Trice, Sonny & Randy Trice Painting
Tom Jones, Southern Cast Stone
Gary Shelton, Southern Mechanical
Wayne Shelton, Southern Mechanical
Gary Bullock, Southern Star
David Oxford, Southwest Assurance Group
David Bloxom, Speed Fab-Crete
Jim Archer, Spring Valley Construction
Darrell Benton, Steele-Freeman
Jim Gomes, System Electric Co.
Kevin Mask, T.A.S. Commercial Concrete
Tim McNew, TDIndustries
Ben Houston, TDIndustries
Rod Johannsen, TDIndustries
Jack Lowe, TDIndustries
Mike Johnson, Texas Tile Contractors
Larry Frazier, The Fain Group
Larry Frymire, The Frymire Co.
Charles Sweeney, The Sweeney Co.
John Avila, Thos. S. Byrne
Ernie Bowman, TNT Equipment
Tracy Tucker, Tucker Agency
Charlie Walker, Walker Engineering
Dutch Wickes, Walker Engineering
Jim Jordan, Weaver & Tidwell
Mark DeWitt, Willis of Texas
James Zeig, Zeig Electric

Governor Signs Local Government Sovereign Immunity Bill
Governor Rick Perry has signed into law a bill affirming that local governments can not use sovereign immunity as a legal claim in contractual disputes. House Bill 2039, authored by Representative Joe Nixon (R - Houston) and Senator Jeff Wentworth (R - San Antonio), was the top legislative priority for the Associated General Contractors - Texas Building Branch (AGC-TBB).

"While there were several bills debated this session that were important to the commercial construction industry, House Bill 2039 was one we knew would have the greatest impact on the majority of our contractors around the state. We appreciate the outstanding efforts of Representative Nixon and Senator Wentworth for their work to pass this bill," said Jim Sewell, Executive Vice President of AGC-TBB.

"This legislation will clarify that local governments must honor their written contracts, and that sovereign immunity cannot be used as a legal defense to a legitimate claim. I was pleased to work with AGC building contractors to pass this important legislation," said Representative Nixon.

"To hide behind the principle of sovereign immunity, or 'the king can do no wrong,' is a mistake in modern times," said Senator Jeff Wentworth. "House Bill 2039, which I sponsored in the Senate, is vital to the private citizens and companies who enter into contractual agreements with local governmental entities, expecting the 'kings' to uphold their end of the bargain. There is no reason local government should be protected from lawsuits or otherwise allowed to deny citizens their day in court."

The Texas Supreme Court in 1970 in the Missouri Pacific Railroad v. Brownsville Navigation District confirmed the language the "sue and be sued" in the Texas Statutes meant that a local governmental entity could both sue and be sued in a contractual dispute. This issue was not in dispute until recently when a couple of Texas Court of Appeals issued conflicting decisions in these cases involving the use of sovereign immunity by a local governmental entity in a contractual dispute.

Governor Perry also signed into law two other important Texas Building Branch bills. HB 1826 by Grusendorf / West will prohibit any school district from using district resources to implement improvements to real property if the district does not own or lease the property. Likewise HB 1940 by Ritter / Wentworth was signed. This bill addresses the major flaws in the current state dispute resolution system. It shortens the length of time required to get a hearing before SOAH and requires the state agency to pay up to $250,000 if the ruling is in the contractors favor.

Governor Perry Signs Legislation
On June 17th and 18th, Governor Perry signed into law three very important pieces of legislation affecting the construction industry. HB 2039 affirming that local governments cannot use sovereign immunity as a legal claim in contractual disputes, HB 1826 prohibiting any school district from using district resources to implement improvements to real property if the district does not own or lease the property and HB 1940 addresses the flaws in the current state dispute resolution system. To view these bills click here.

Changes To City of Dallas Noise Ordinance
The City of Dallas has made amendments to section 30-1 and 30-2 to Chapter 30 “NOISE” of the Dallas City Code. QUOIN members are advised that, Section 30-2 (8): Construction start times for Monday – Saturday to remain at 7:00AM. Stop work time is changed to 7:00PM. for all days. This is a one-hour reduction. Holiday start time will remain at 7:00AM unless they fall on Sunday when construction is prohibited.

For clarity and consistency in Section 30-2 (8) “residential area” has been changed to “residential use” as defined by the Dallas Development Code. This use includes, “college dormitory, fraternity or sorority house, duplex, group residential facility, handicapped group dwelling unit, mobile home park, campground, multifamily, residential hotel, retirement housing and single family.” To review the ordinance click here.

QUOIN Legislative Update
The Governor has until midnight June 19th to take action on bills (sign, veto, or merely let go into law without his signature).

HB2039 by Representative Nixon/Senator Wentworth > Local Government Sovereign Immunity Bill. H.B. 2039 does not change but clarifies the law in regards to local governmental sovereign immunity. The bill says the law meant that cities and other governmental units and contracting parties can go to court and get their disputes resolved. Status: Bill has been sent to the Governor

HB1826 by Representative Grusendorf/Senator West > Limits the use of school district employees for construction activities. Status: Bill has been sent to the Governor

HB1940 by Representative Ritter/Senator West > Amends the State’s dispute resolution process with SOAH hearings. (State Office of Administrative Hearings). Status: Bill has been sent to the Governor

HB2525 by Representative Callegari/Senator Lindsay > Combines all of the alternative project delivery methods into one government code. Status: Bill has been sent to the Governor

HB7 by Representative Solomons/Senator Staples > Workers Compensation Reform. The bill will lower health care cost, provide relief to employers and provide better benefits to injured workers while giving them every incentive to return to work sooner. Status: Governor signed bill June 1, 2005

SB1320 by Senator Staples > Would have given Junior/Community Colleges sovereign immunity for contracts. Status: Bill did not pass in the Senate

HB1146 by Representative Chisum/Senator Averitt > Contingent Payment Bill. Status: Bill sponsor in the Senate did not place on Senate calendar in final day for Senate passage

HB3356 by Representative Nixon > Contingent Fee contracts for legal services by local government entities (Donna ISD). Status: Bill not able to win approval in the House

QUOIN Legislative Update May 5, 2005
The following Bills were taken under consideration during the week of May 2nd.

H.B. 1146 (Chisum) > Contingent Payment legislation. Status: the House passed H.B. 1146 on 5/4/05 and has been forwarded to the Senate Business and Commerce Committee where it will come under consideration as S.B. 1444.

H.B. 1826 (Grusendorf) > Limits the use of School District employees and resources for construction projects. Status: Reported out of Calendars Committee on 5/4/05 and is scheduled for a vote on the House floor for Tuesday 5/10/05.

H.B. 2039 (Nixon) > Local Government Sovereign Immunity. Status: Since passing through the House is currently in the Senate State Affairs Committee.

QUOIN Legislative Update April 27, 2005
Several of our legislative initiatives have been passed out of select House Committees and/or Texas State House and moved to the Senate. QUOIN thanks the members of our association who have taken the time to write letters or make calls to assist in moving our legislative agenda forward.

H.B. 1826 (Grusendorf) - Prohibits the use of school district employees, property or resources for improvements to real property not owned or leased by the district. Status: Passed out of House Public Education Committee on April 27, 2005

H.B. 2039 (Nixon) – Local government Sovereign Immunity legislation. Status: Passed out of House on April 18, 2005 and referred to Senate State Affairs

H.B. 1146 (Chisum) – Contingent Payment legislation. Status: Voted favorably from House Business & Industry Committee on April 15, 2005, reported out and sent to Calendars Committee on April 21, 2005

H.B. 1940 (Ritter) – Amends the State’s Dispute Resolution Process with SOAH Hearings. Status: Passed out of House State Affairs on April 25, 2005 sent to House Calendar Committee.

H.B. 3356 (Nixon) – Contingent Fee contracts for legal services by a local governmental entity.Status: Voted favorably from House Civil Practices Committee on April 18, 2005

S.B. 1320 (Staples) – Provides that a Junior College District has the same sovereign immunity rights as institutions of higher education. Status: Bill has been placed on the Senate Intent Calendar with no action taken as of this date.

S.B. 1191 (Wentworth) – Local Government Sovereign Immunity legislation. Status: Will be substituted with H.B. 3356.

S.B. 1444 (Averitt) – Contingent Payment legislation. Status: Bill has been referred to Senate business & Commerce Committee

Additional Bills of Importance

H.B. 1217 (Eiland) – Would void a construction insurance provision in a contract if it requires a person to be an additional insured or provides for a waiver of subrogation.Status: Left pending in House Insurance Committee.

H.B. 1573 (Geren) – Relating to the definition of the practice of architecture. Status: Passed out of House and referred to Senate Business & Commerce

H.B. 2270 (Riddle) – would allow an “affected person” who is not given notice of a construction project to enjoin the project.Status: Pending in House Land and Resource Management.

CSSB 868 (Carona) – Controlled Insurance Program legislation.Status: To be laid out before Business and Commerce.

AGC Legislation Moving Forward
This week House Bill 2039 our local government sovereign immunity legislation was passed out of the House Civil Practices Committee and forwarded to Calendars prior to going to the House floor for passage. H.B. 2156 the consolidated insurance program bill received a hearing in the House Insurance Committee on Monday, April 11. Several QUOIN members testified late into the night in opposition of the legislation and H.B. 2156 was left as pending business. The contingent payment legislation H.B. 1146 is expected to be passed out of the House Business and Industry Committee on Thursday, April 14.

QUOIN members are needed to testify for H.B. 1826 on Tuesday, April 19, during the House Public Education Committee hearing beginning at 2:00 P.M. at the State Capitol. H.B. 1826 if passed will restrict the use of school district employees in performing maintenance and construction activities. A district's employees would only be able to perform maintenance or construction activities on property that is either owned or leased by the district. This bill was created due to the concerns expressed by QUOIN members over a school district in our area who has been constructing schools for other ISD'S.

QUOIN Members Testify
When the legislature is in session, nothing compares to the effectiveness of QUOIN members testifying at the Capitol. QUOIN members who take time to travel to Austin to speak out on important construction industry issues should be applauded by all of us.

The following QUOIN members testified recently in front of legislative committees on the Sovereign Immunity Bill and the Contingent Payment Bill:

Warren Andres, Andres Construction,

Tom Kader, SEDALCO Construction Services

Denward Freeman, MEDCO Construction

Don George, George/McKenna Electrical Contractor

Mike Freeman, Steele-Freeman

Wally Bryce, Coronado Builders

Jerry Gallagher, Gallagher Construction Co.

Richard Ringo, RBR Construction

Brad Baylis, City Wide Mechanical

Rodney Moss, Centex Construction Co.

Ed Reeves, TDIndustries, Ltd.

John Egan, March USA, Inc.

Steve Warnick, Austin Commercial, Inc.

Additional QUOIN members will be needed to provide testimony on various pieces of legislation over the next eight weeks including the two Bills listed above as they move from the House to the Senate. Please contact the QUOIN office to let us know if we can count on you to assist us in moving our legislative agenda forward.

Key Industry Issues Before Texas House Committees
House Bill 2039, our sovereign immunity legislation was taken under consideration by the House Civil Practices Committee on Wednesday, March 30, 2005. H.B. 2039 amends Chapter 271 of the Local Government Code by adding a new subchapter to provide that all governmental entities that are given the authority by statute or the constitution to enter into contracts waive sovereign immunity to suit for the purpose of adjudicating a claim arising under the contract, subject to the terms and conditions of the subchapter. QUOIN member Richard Ringo, President of RBR Construction joined with fellow TBB-AGC members to testify in favor of H.B. 2039.

During the past three years QUOIN Contractor members have worked with fellow Texas Building Branch AGC contractors and representatives from the Texas Contractors Association that represents various subcontractor associations to craft legislation to address contingent payment clauses in construction contracts. H.B. 1146 our Contingent Payment bill will eliminate that vast majority of perceived and real abuses in construction contracts, while still allowing one party to contractually defuse the risk of non-payment by an upstream third party in the chain of contract. It will also eliminate situations where a company tries to hide behind a contingent payment clause in an unclear situation. H.B. 1146 was heard in the House Business and Industry Committee on Tuesday, April 5, 2005 at the State Capital. Several members of QUOIN testified in favor of passage of H.B. 1146. QUOIN members will be requested to contact their state house representative prior to a vote on H.B. 1146 on the floor of the Texas House of Representatives.

For details on the hearing or how you can provide your support for these important pieces of legislation please contact Jack Baxley or Raleigh Roussell at the QUOIN office.

Proposed Texas House & Senate Legislation Influencing Your Business

H.B. 3453 – Building Permits: would prohibit a person from obtaining a commercial building permit if the land on which the building is to be built has been exposed to asbestos and if local, state, or federal agencies are investigating the site.

H.B. 3461 – Developing Moratoria: would require a city, prior to imposing a moratorium on commercial development, to comply with certain procedures that are currently applicable to a moratorium on residential development, including: (1) notice and hearing prior to the adoption of the moratorium; and (2) a requirement that a moratorium may be imposed only if there is a need to prevent a shortage of public facilities.

H.B. 1626 – Third Party Liability: would prohibit most third party lawsuits on jobsite accidents. Bill will also prohibit use of broad form hold harmless agreements.

H.B. 490 – Would prohibit the use of indemnity clause for sole or concurrent negligence in construction contracts.

H.B. 1217 – Would void a construction insurance provision in a contract if it requires a person to be an additional insured or provides for a waiver of subrogation.

H.B. 2234 – Taxes: would require the sales tax rate for repair and remodel of non-residential real property to be set at the location of the jobsite unless jobsite is located in more than one city.

H.B. 2525 – Construction Procurement Statutes: will bring the various governmental procurement statutes into one section. Also will bring in horizontal construction under the various project delivery processes.

S.B. 445 – Indemnification: provides that a construction contract cannot contain a clause that requires a person to indemnify or hold harmless another for the sole or concurrent negligence.

S.B. 962 – Public School Construction: would make model plans available for school construction and require the TEA to develop a regional construction cost index. ISD would not be entitled to state assistance in any portion of the constructing cost which exceeds the index. Local funds could be used to pay the excess.

S.B. 1243 – Bidders Preference: provides that the Texas Building & Procurement Commission is to give a preference to a contractor who provides health insurance and pays at least 75% of the premium for each full-time employee. Coverage must be at least equivalent to that provided by the state. This would apply to certain state contracts.

S.B. 1355 – Health Insurance Requirement: would require a vendor of goods or a service provider of a $1 million contract to provide and pay for health insurance for each full-time employee. Insurance must be at least equivalent to basic coverage provided to state employees.

H.B. 265 – Building Permits: would require a municipality to issue or deny a permit no later than the 45th day after the date an application for a permit is submitted. If the municipality fails to grant or deny a permit in the time required the municipality (1) may not collect any permit fees associated with the application, (1) shall refund any permit fees associated with the application that may have been collected. (H.B. 265 has passed the House and is now under consideration in the Senate)

Several of the Bills listed above will have hearings scheduled to take testimony before committees in the next two – four weeks. Your concerns and comments regarding legislation are appreciated. Please contact Jack Baxley at the QUOIN office with any questions or comments you may have.

Project Delivery For Governmental Entities (cities, counties, & river authorities)
A collaborative effort by owners, architects, engineers, contractors, design/builders, construction managers, attorneys and many other volunteers, this book gives an explanation in layman's terms of Senate Bill 510. It also explains how the statute changed delivery methods, and the process and procedures for procurement. It is an indispensable tool for government offices as well as contractors. Click here to view the book in pdf format (you will be required to login).

Project Delivery For Texas Public Schools
A collaborative effort by owners, architects, engineers, contractors, design/builders, construction managers, attorneys and many other volunteers. It is their hope that users find it beneficial and that it contribute to the improvement of the building industry. It is also recognized that the construction process is an evolving process.
As Districts deliberate which project delivery method provides “best value” a number of factors must be evaluated. There is no single “best” method. Each delivery method has certain advantages and disadvantages. It is not the intent of this document to endorse any specific method, but to provide a better understanding of the most common delivery methods including basic definitions, relative merits and limitations of each method, insight to the typical issues inherent in each method and recommend procurement guidelines. Click here to view the book in pdf format (you will be required to login).

The Federal Communications Commission's (FCC's) New Rules on Unsolicited Fax Advertisements
The Federal Communications Commission's (FCC's) new rules on unsolicited fax advertisements are apparently causing great confusion. The FCC originally scheduled those rules to take effect on August 25, 2003. The limited purpose of this email is to confirm that the FCC subsequently stayed the new rules not once but twice. On August 18, 2003, the FCC stayed the new rules through December 31, 2004. On October 1, 2004, the FCC extended the stay through June 30, 2005.
Click here for a copy of the latest order on the effective date for the new rules (pdf) and click here to access the fact sheet that appears on the agency's web site.
As you may recall, the new rules would eliminate the exception that business community has long understood to permit any person to send an unsolicited fax advertisement to any other person with whom the sender has an "established business relationship."

Update From Around The Region
City Of Dallas: On May 26th the Dallas City Council the following codes that will become effective on July 1, 2004

2000 International Building Code, 2003 International Existing Building Code, 2000 International Plumbing Code, 2000 International Mechanical Code, 2000 International Fuel Gas Code and 2002 National Electrical Code.
Dallas City Manager Ted Benavides has submitted his resignation and will retire from the city November 19th. QUOIN will miss its working relationship with Mr. Benavides, as he has been nothing but fair and honest in dealing with issues that effect the construction industry.

City of Arlington: The City of Arlington Department of Planning and Development services is in the process of moving forward with epermitting a web-based citizen centric development tracking software. The system will streamline the building permit approval process as well as provide faster response time for building inspections. The implementation of the program will cause development fees to increase.

For more information and to download copies of the RFP and application forms, go to the TCEQ website. At the site, click on “SUBJECT INDEX,” and follow the link to the “Texas Emissions Reduction Plan (TERP).” You may also contact Ms. Leslie Schmidt at 512-239-2934, for information and copies of the materials.

TCEQ Announces Availability of Emissions Reduction Project Grants
The Texas Commission on Environmental Quality (TCEQ) is pleased to announce the availability of grants for projects in the state’s air quality non-attainment and near non-attainment areas, aimed at the reduction of emissions of oxides of nitrogen (Nox). Eligible applicants include any individual, governmental agency, non-profit entity, or private company that owns and operates on-road heavy-duty diesel vehicles (10,000 lb GVWR) or non-road diesel equipment (50+hp), including marine vessels and locomotives, primarily in the non-attainment and near –non-attainment areas of the state.

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