By:  Ratliff                                           S.B. No. 905
       73R5476 DLF-F
                                 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
   1-24  IMMUNITY.  A contractor who has a claim under a building contract
    2-1  with a state agency may sue to compel or enforce arbitration under
    2-2  Section 111.004, and the state's sovereign immunity is waived to
    2-3  that extent.
    2-4        Sec. 111.003.  NOTICE; REQUEST FOR ARBITRATION.  (a)  A
    2-5  contractor who believes that the agency is in breach of the
    2-6  contract may compel the agency to arbitrate under this chapter only
    2-7  if the contractor notifies the agency of the alleged breach in
    2-8  writing.
    2-9        (b)  A notice under this section must be received by the
   2-10  state agency not later than the first anniversary of the date the
   2-11  contractor completed the improvement that was the subject matter of
   2-12  the building contract and must include a request for arbitration.
   2-13        Sec. 111.004.  ARBITRATION BINDING; MAY BE COMPELLED.  An
   2-14  arbitration under this chapter between the agency and a contractor
   2-15  shall be binding arbitration conducted and decided in accordance
   2-16  with the rules of the American Arbitration Association.  The
   2-17  arbitration is governed by, and may be compelled and enforced
   2-18  under, the Texas General Arbitration Act (Article 224 et seq.,
   2-19  Revised Statutes) or under the United States Arbitration Act (9
   2-20  U.S.C. Section 1 et seq.), if applicable.
   2-21        SECTION 2.  This Act applies only to a breach of contract
   2-22  occurring on or after the effective date of this Act, without
   2-23  regard to whether the contract was entered into before, on, or
   2-24  after that date.  A breach of contract occurring before the
   2-25  effective date of this Act is governed by the law in effect at the
   2-26  time the breach of contract occurred, and that law is continued in
   2-27  effect for that purpose.
    3-1        SECTION 3.  The importance of this legislation and the
    3-2  crowded condition of the calendars in both houses create an
    3-3  emergency and an imperative public necessity that the
    3-4  constitutional rule requiring bills to be read on three several
    3-5  days in each house be suspended, and this rule is hereby suspended,
    3-6  and that this Act take effect and be in force from and after its
    3-7  passage, and it is so enacted.