By Campbell H.B. No. 2565 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to arbitration of a claim against a state agency for 1-3 breach of contract for the improvement of real property. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Title 5, Civil Practice and Remedies Code, is 1-6 amended by adding Chapter 111 to read as follows: 1-7 CHAPTER 111. ARBITRATION OF CLAIM AGAINST STATE AGENCY FOR 1-8 BREACH OF BUILDING CONTRACT 1-9 Sec. 111.001. DEFINITIONS. In this chapter: 1-10 (1) "Building contract" means a written contract for 1-11 the improvement of real property. 1-12 (2) "Contractor" means a person who has entered into a 1-13 contract directly with a state agency. The term does not include a 1-14 subcontractor who has entered into a contract with a contractor. 1-15 (3) "State agency" means the state or an agency, 1-16 department, commission, bureau, board, office, council, court, or 1-17 other entity that is in any branch of state government and that is 1-18 created by the constitution or a statute of this state, including a 1-19 university system or institution of higher education as defined by 1-20 Section 61.003, Education Code. The term does not include a 1-21 county, municipality, court of a county or municipality, special 1-22 purpose district, or other political subdivision of this state. 1-23 Sec. 111.002. COMPULSORY ARBITRATION; WAIVER OF SOVEREIGN 2-1 IMMUNITY. A contractor who has a claim under a building contract 2-2 with a state agency may sue to compel or enforce arbitration under 2-3 Section 111.004, and the state's sovereign immunity is waived to 2-4 that extent. 2-5 Sec. 111.003. NOTICE; REQUEST FOR ARBITRATION. (a) A 2-6 contractor who believes that the agency is in breach of the 2-7 contract may compel the agency to arbitrate under this chapter only 2-8 if the contractor notifies the agency of the alleged breach in 2-9 writing. 2-10 (b) A notice under this section must be received by the 2-11 state agency not later than the first anniversary of the date the 2-12 contractor completed the improvement that was the subject matter of 2-13 the building contract and must include a request for arbitration. 2-14 Sec. 111.004. ARBITRATION BINDING; MAY BE COMPELLED. An 2-15 arbitration under this chapter between the agency and a contractor 2-16 shall be binding arbitration conducted and decided in accordance 2-17 with the rules of the American Arbitration Association. The 2-18 arbitration is governed by, and may be compelled and enforced 2-19 under, the Texas General Arbitration Act (Article 224 et seq., 2-20 Revised Statutes) or under the United States Arbitration Act (9 2-21 U.S.C. Section 1 et seq.), if applicable. 2-22 SECTION 2. This Act applies only to a breach of contract 2-23 occurring on or after the effective date of this Act, without 2-24 regard to whether the contract was entered into before, on, or 2-25 after that date. A breach of contract occurring before the 3-1 effective date of this Act is governed by the law in effect at the 3-2 time the breach of contract occurred, and that law is continued in 3-3 effect for that purpose. 3-4 SECTION 3. The importance of this legislation and the 3-5 crowded condition of the calendars in both houses create an 3-6 emergency and an imperative public necessity that the 3-7 constitutional rule requiring bills to be read on three several 3-8 days in each house be suspended, and this rule is hereby suspended, 3-9 and that this Act take effect and be in force from and after its 3-10 passage, and it is so enacted.