Texas § PR.162.005 - DEFINITIONS

§ PR.162.005. DEFINITIONS

DEFINITIONS. In this chapter: (1) A trustee acts with "intent to defraud" when the trustee: (A) retains, uses, disburses, or diverts trust funds with the intent to deprive the beneficiaries of the trust funds; (B) retains, uses, disburses, or diverts trust funds and fails to establish or maintain a construction account as required by Section 162.006 or fails to establish or maintain an account record for the construction account as required by Section 162.007 ; or (C) uses, disburses, or diverts trust funds that were paid to the trustee in reliance on an affidavit furnished by the trustee under Section 53.085 if the affidavit contains false information relating to the trustee's payment of current or past due obligations. (2) "Current or past due obligations" are those obligations incurred or owed by the trustee for labor or materials furnished in the direct prosecution of the work under the construction contract prior to the receipt of the trust funds and which are due and payable by the trustee no later than 30 days following receipt of the trust funds. (3) "Direct cost" means a cost included under a construction contract that is specific to the construction of the improvement that is the subject of the contract. (4) "Indirect cost" means a cost included under a construction contract that is not specific to the construction of the improvement that is the subject of the contract. (5) "Financial institution" means a bank, savings association, savings bank, credit union, or savings and loan association authorized to do business in the state. (6) "Construction account" means an account in a financial institution into which only trust funds and funds deposited by the contractor that are necessary to pay charges imposed on the account by the financial institution may be maintained. Added by Acts 1987, 70th Leg., ch. 578, Sec. 3, eff. Aug. 31, 1987. Amended by Acts 1997, 75th Leg., ch. 1018, Sec. 3, eff. Sept. 1, 1997.