KJG C.S.H.B. 172 75(R)BILL ANALYSIS


CIVIL PRACTICES
C.S.H.B. 172
By: Nixon, Joe
4-7-97
Committee Report (Substituted)



BACKGROUND 

Sovereign immunity protects the state from lawsuits.  It is based on a
common law rule that courts may not hear claims against the sovereign or
king without the sovereign's consent. Officers and employees of the
sovereign are shielded from court suits as well. 

In Texas, to seek legal redress against the state, a party must seek
permission to sue the state from the Legislature.  Under typical claims
against the state, if the Legislature agrees to suit by waiving sovereign
immunity, and the plaintiff sues the state and wins, the state is still
immune from liability. A critical exception to the governmental immunity
doctrine is that the state waives its immunity from liability when it
contracts.  However, even if there is no dispute about the state's
liability in a breach of contract claim, the doctrine of sovereign
immunity still bars a suit against the state unless the state has
expressly given its consent to be sued.  Texas is one of only a few states
that continues to claim sovereign immunity in disputes over contracts with
the state. 


PURPOSE

HB 172 would waive sovereign immunity for contract claims for goods or
engineering or construction services brought against the state.  It would
allow litigation but would limit awards to the contract value, including
any charge accepted by the unit of state government.  HB 172 would not
allow for consequential or punitive damages. 


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any
additional rulemaking authority to a state officer, department, agency or
institution. 


SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Chapter 5, Civil Practices and Remedies Code, by adding
Chapter 111. 

 Sec. 111.001.  Defines "unit of state government".

 Sec. 111.002.  (a) Allows a unit of state government to be sued for
breach of a written    contract for goods or engineering or construction
services, brought to    recover money damages or to compel alternative
dispute resolution. 

   (b) Provides that the total amount of damages may not exceed the total
value of the written contract, including any charge accepted by the unit
of    state government. 

   (c) Provides that consequential and punitive damages are not allowed.

 Sec. 111.003.  Specifies that sovereign immunity is waived only to the
extent allowed by    Sec. 111.002. 
 
 Sec. 111.004.  Provides that venue for the suit is Travis County. 
 
 Sec. 111.005.  Provides that service of citation and other required
process must be made    on the attorney general and the unit of state
government with which the    claimant contracted. 

 Sec. 111.006.  Requires that Article 1.05, Title 79, Revised Statutes,
providing the    applicability of prejudgment interest,  apply to a
judgment awarded to a    claimant under this chapter, except that the
interest rate not exceed 6%. 

 Sec. 111.007.  Allows the attorney general to settle or compromise a suit
brought under    this chapter. 

 Sec. 111.008.  Provides how the unit of state government shall pay a
judgment or      settlement under this chapter. 

 Sec. 111.009.  Provides that execution on state property is not
authorized. 

 Sec. 111.010.  Provides that Chapter 107, Civil Practice and Remedies
Code, does not    apply to a suit brought under this chapter. 

SECTION 2.  Effective date:  September 1, 1997.

SECTION 3.   (a) Applies prospectively.  Savings clause.

  (b) Provides the date a contract is entered into.

SECTION 4.  Emergency Clause.



COMPARISON OF ORIGINAL TO SUBSTITUTE

1. Specifies that sovereign immunity is waived only for a claim that the
state breached  a written contract for goods or engineering or
construction services, brought in order to  obtain money damages or to
compel alternative dispute resolution. 

2. Specifies that total damages may not exceed the contract value,
including any charge  accepted by the unit of state government. 

3. Provides that venue for suits brought under this chapter is Travis
County. 

4. Eliminates limitations period.

5. Caps prejudgment interest at 6%.