By Hightower H.B. No. 2780
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to arbitration of certain claims against the Texas
1-3 Department of Criminal Justice arising from the construction of
1-4 certain state correctional facilities.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Title 4, Subtitle G, Government Code, is amended
1-7 by adding Chapter 510 to read as follows:
1-8 CHAPTER 510. ARBITRATION OF STATE CORRECTIONAL FACILITIES
1-9 CONSTRUCTION CLAIMS.
1-10 Sec. 510.001. SHORT TITLE. This act may be referred to as
1-11 the State Correctional Facilities Construction Claims Arbitration
1-12 Act.
1-13 Sec. 510.002. FINDINGS; DECLARATION OF POLICY. (a) The
1-14 legislature finds that:
1-15 (1) The massive program for construction of
1-16 correctional facilities in the state pursuant to subsection (e) of
1-17 Article 3, Section 49-h of the state constitution has resulted in
1-18 the submission to the department of several claims in excess of $10
1-19 million for excess costs purportedly incurred by state prison
1-20 construction contractors during the construction program.
1-21 (2) Due to their size and complexity, these large
1-22 claims differ in character from smaller state construction contract
1-23 claims that may arise from time to time, and are particularly
2-1 amenable to resolution through a one-time-only arbitration process.
2-2 (3) These large claims present may common issues of
2-3 fact and law that would enable economical adjudication through the
2-4 application of generally recognized construction contract
2-5 arbitration procedures.
2-6 (4) Providing state prison construction contractors a
2-7 one-time-only administrative process for achieving speedy and final
2-8 resolution of large, complex claims and receiving just and due
2-9 compensation without resort to litigation against the state would
2-10 promote judicial economy, preserve the state's sovereign immunity
2-11 from civil suit, and maintain the credibility of the state as a
2-12 fair business partner in major construction projects such as the
2-13 recent expansion of the state's correctional system.
2-14 (5) The adjudication and reimbursement of valid claims
2-15 for excess costs incurred by state prison construction contractors
2-16 in the course of constructing state correctional facilities
2-17 pursuant to subsection (e) of Article 3, Section 49-h of the state
2-18 constitution is an authorized use of the proceeds of those general
2-19 obligation bonds when such costs have been determined by an
2-20 independent arbitration panel to have been valid and within the
2-21 scope of the original construction contract.
2-22 (b) For the purpose of promoting fairness and judicial
2-23 economy, it is the policy of the state to provide for full and fair
2-24 adjudication of large, complex claims arising from the state's
2-25 recent prison construction program according to generally
3-1 recognized binding arbitration procedures, without resort to
3-2 litigation or waiver of the state's sovereign immunity from civil
3-3 suit. It is the policy of the state to pay that part of any such
3-4 claim determined to be valid and within the scope of the original
3-5 construction contract by a qualified, independent arbitration panel
3-6 from the proceeds of general obligation bonds authorized and issued
3-7 to finance the prison construction program.
3-8 Sec. 510.003. DEFINITIONS. In this chapter:
3-9 (a) "Commission" means the Correctional Facilities
3-10 Construction Claims Commission.
3-11 (b) "Eligible claim" means a claim submitted to the
3-12 commission by a state prison construction contractor for $10
3-13 million or more in aggregate claimed excess costs incurred in the
3-14 course of performing one or more contracts for construction of one
3-15 or more state correctional facilities pursuant to subsection (e) of
3-16 Article 3, Section 49-h of the state constitution. Claims by the
3-17 same person attributable to different contracts or facilities shall
3-18 be aggregated for the purpose of determining eligibility.
3-19 (c) "State prison construction contractor" means a person
3-20 who contracted with the department to provide goods or services in
3-21 furtherance of the construction of one or more state correctional
3-22 facilities, and includes both prime contractors and subcontractors.
3-23 Sec. 510.004. CORRECTIONAL FACILITIES CONSTRUCTION CLAIMS
3-24 COMMISSION. (a) The Correctional Facilities Construction Claims
3-25 Commission is created as an agency of the executive branch of state
4-1 government.
4-2 (b) The commission shall be composed of three retired state
4-3 or federal district or appellate judges who are experienced in the
4-4 adjudication of construction contract disputes. Members of the
4-5 commission shall be appointed by the governor from a list of at
4-6 least six nominees which shall be submitted by the chief justice of
4-7 the supreme court within 30 days of the effective date of this act.
4-8 (c) The governor shall designate one member of the
4-9 commission as the presiding officer of the commission to serve in
4-10 that capacity at the pleasure of the governor.
4-11 (d) Members of the commission shall serve on a full-time
4-12 basis and shall be compensated as provided by legislative
4-13 appropriation.
4-14 (e) Each member of the commission is an officer of the state
4-15 as that term is used in the constitution, and each member shall
4-16 qualify by taking the official oath of office.
4-17 Sec. 510.005. GENERAL POWERS AND DUTIES OF THE COMMISSION.
4-18 (a) The commission shall have the power and duty to make final
4-19 determination of all eligible claims submitted by state prison
4-20 construction contractors.
4-21 (b) The commission may issue such orders and undertake such
4-22 other actions as may be necessary to the discharge of its duties,
4-23 including administration of oaths; examination of witnesses;
4-24 receipt of evidence; issuance of compulsory process; and levy of
4-25 appropriate procedural sanctions upon the parties.
5-1 (c) The deliberations of the commission shall be exempt from
5-2 the Texas Open Meetings Act, and the records of the proceedings of
5-3 the commission shall be available to the public in the same manner
5-4 and to the same extent as records of proceedings conducted in the
5-5 district courts of this state. The proceedings of the commission
5-6 are exempt from the Texas Administrative Procedure Act.
5-7 (d) The commission may receive legislative appropriations
5-8 for salaries and administrative expenses and employ such staff as
5-9 may be necessary for the discharge of its duties.
5-10 (e) The commission may contract with any person or state
5-11 agency other than the department for administrative and support
5-12 services.
5-13 Sec. 510.006. PROCEEDINGS; PARTIES. (a) The commission
5-14 shall determine what amount of money, if any, shall be paid on an
5-15 eligible claim submitted to the commission by a state prison
5-16 construction contractor. The commission shall conduct
5-17 quasi-judicial, binding arbitration proceedings in accordance with
5-18 generally recognized construction contract arbitration practice.
5-19 The commission shall establish its own procedures, which shall
5-20 generally conform to, but shall not be governed by, the rules of
5-21 civil procedure and evidence established for the district courts of
5-22 this state.
5-23 (b) Parties to arbitration proceedings before the commission
5-24 shall be the department, represented by the attorney general, and
5-25 any state prison construction contractors with eligible claims.
6-1 (c) The parties to an arbitration proceeding before the
6-2 commission may settle at any time during the proceeding, at which
6-3 time the commission shall enter an agreed order incorporating the
6-4 terms of the parties' settlement.
6-5 (d) The commission shall commence arbitration proceedings
6-6 within 60 days of the date the last commissioner is appointed by
6-7 the governor and qualified to serve.
6-8 Sec. 510.007. EFFECT OF COMMISSION ORDER. The commission
6-9 shall issue an order containing findings of fact and conclusions of
6-10 law and announcing its decision as to the amount, if any, to be
6-11 awarded to a state prison construction contractor bringing an
6-12 eligible claim. The arbitration award shall not include punitive
6-13 or exemplary damages. There shall be no appeal from a decision of
6-14 the commission, which shall be final and binding upon all parties.
6-15 A commission order shall be enforceable in the same manner as
6-16 orders of the district courts of this state.
6-17 Sec. 510.008. PAYMENT OF ARBITRATION AWARD. (a) A state
6-18 prison construction contractor receiving an arbitration award from
6-19 the commission shall be entitled to payment in full from the
6-20 proceeds of general obligation bonds issued pursuant to subsection
6-21 (e) of Article 3, Section 49-h of the state constitution. No other
6-22 state funds maybe used to satisfy an arbitration award under this
6-23 act. In the event of sufficient funds are not available from the
6-24 bond proceeds to satisfy all arbitration awards granted by the
6-25 commission, the available funds shall be divided among the state
7-1 prison construction contractors receiving arbitration awards on a
7-2 pro-rata basis.
7-3 (b) The comptroller of public accounts shall disburse funds
7-4 from the state treasury in satisfaction of an arbitration award as
7-5 soon as practicable after receipt from the commission of a
7-6 certified copy of the commission order making the award.
7-7 (c) The public finance authority shall issue general
7-8 obligation bonds previously authorized by subsection (e) of Article
7-9 3, Section 49-h of the state constitution to the extent necessary
7-10 to finance any arbitration award under this act. The issuance of
7-11 such bonds, if necessary, and the disbursement of funds from bond
7-12 proceeds to satisfy an arbitration award under this act shall not
7-13 require the approval of the bond review board or the attorney
7-14 general.
7-15 Sec. 510.009. NO WAIVER OF SOVEREIGN IMMUNITY. This act is
7-16 intended to provide an administrative process for resolving claims
7-17 against the state without resort to civil suit. Accordingly,
7-18 nothing in this act shall be construed as a waiver of the state's
7-19 sovereign immunity from civil suit.
7-20 Sec. 510.010. TIME LIMIT. All proceedings before the
7-21 commission shall be completed on or before June 1, 1996. Upon
7-22 completion of its duties, the commission shall forward a final
7-23 report of its activities and findings to the governor, the
7-24 lieutenant governor and the speaker of the house of
7-25 representatives. The report may include such recommendations as
8-1 the commission may deem appropriate regarding future administration
8-2 of contracts for construction of state correctional facilities.
8-3 Sec. 510.011. EXPIRATION OF ACT. This act expires and the
8-4 commission shall cease to exist on December 31, 1996.
8-5 SECTION 2. The importance of this legislation and the
8-6 crowded condition of the calendars in both houses create an
8-7 emergency and an imperative public necessity that the
8-8 constitutional rule requiring bills to be read on three several
8-9 days in each house be suspended, and this rule is hereby suspended,
8-10 and that this Act take effect and be in force from and after its
8-11 passage, and it is so enacted.