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%.