ABC Texas Testimony on SB 841
Testimony of Geoffrey Tahuahua President, Associated Builders and Contractors of Texas, before the Texas State Senate Committee on Business & Commerce
Chairman Schwertner, Vice Chair King, and Members of the Committee:
My name is Geoffrey Tahuahua, and I serve as President of Associated Builders and Contractors of Texas, a statewide trade association representing more than 1,600 merit shop contractors and construction-related firms across the state. Thank you for the opportunity to testify today in support of Senate Bill 841, filed by Senator Hughes.
SB 841 addresses an important clarification within Chapter 162 of the Texas Property Code—namely, the ability of a trust fund beneficiary to assign their interest in unpaid funds. This issue may seem narrow at first glance, but it directly impacts the integrity of payment practices in construction and the ability of responsible parties to seek recourse when they’ve paid for work that was never fulfilled.
Under current law, a contractor or subcontractor who pays a party downstream—only to discover that the funds were not used to pay vendors or suppliers as intended—has very limited legal tools to recover those funds. Historically, the assignment of trust fund claims offered a clear remedy: the paying party could step into the shoes of the unpaid vendor and seek recovery from the party who misused the funds. However, recent court decisions have cast doubt on whether such assignments are legally valid, introducing confusion and exposing responsible contractors to the risk of double payment with no recourse.
SB 841 restores clarity and fairness by expressly permitting assignments of trust fund claims—but with important guardrails. The bill requires that:
The assignment be in writing;
It occurs after payment is made;
It be separate from the original construction contract;
And only parties involved in the original project may participate.
This ensures transparency and avoids abuse while allowing those who have honored their payment obligations to pursue those who have not.
This bill does not shift liability or introduce new regulatory burdens—it simply restores a long-standing and fair tool for resolving disputes and ensuring that payment flows as intended in Texas construction projects.
Ultimately, SB 841 supports contractors who do the right thing, discourages bad actors, and protects small businesses—particularly material suppliers and subcontractors—who are often left with the fewest options when trust is broken.
We respectfully urge your support of SB 841, and I’m happy to answer any questions.
Thank you.