ZEM C.S.H.B. 2118 75(R)BILL ANALYSIS CIVIL PRACTICES C.S.H.B. 2118 By: Bosse 4-14-97 Committee Report (Substituted) BACKGROUND The Texas Department of Transportation (TxDOT) enters into more contracts with entities outside state government than any other state agency. In 1995, TxDOT was a party to 1,176 highway construction contracts valued at almost $2 billion and spent another $101 million on routine maintenance contracts and $91 million on professional services. TxDOT's policy is to have those closest to the problem attempt to resolve disputes immediately. A series of appeal procedures has been established that culminates with a decision by the State Office of Administrative Hearings (SOAH), an independent agency, whose decisions are appealable directly to a district court. The Texas Transportation Commission has adopted rules governing the contract claims procedures under the broad authority the Commission has to develop contracts as the Commission deems appropriate and within the best interest of the state. The department 's internal Contract Claims Process is found in its rules under 43 TAC 1.68. Because of an unpublished court opinion, Crawford Marine, which held that the court had no jurisdiction to hear a contract claim against TxDOT, it is necessary to have the department's Contract Claims Process codified in statute. There is currently no statute which explicitly gives jurisdiction to a court to review a department contract claim. PURPOSE To codify into statute the contract claim procedures for contracts of the Texas Department of Transportation. RULEMAKING AUTHORITY It is the committee's opinion that this bill grants rulemaking authority to the Texas Transportation Commission in Section 201.112(a). SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter C, Chapter 201, Transportation Code, by adding Section 201.112, as follows: Sec. 201.112 CONTRACT CLAIMS (a) Provides that Texas Transportation Commission, may by rule, establish procedures for the informal resolution of a claim arising out of a contract under Section 22.018, Chapter 223, or Chapter 2254, Government Code. (b) Provides that the contractor, if dissatisfied with the department's resolution of the claim under procedures authorized under Subsection (a), may request a formal hearing to resolve the claim under Chapter 2001, Government Code. (c) Requires an administrative law judge's proposal for decision rendered under Chapter 2001, Government Code, to be submitted to the director of the Texas Department of Transportation for adoption. Provides that the director may change a finding of fact or conclusion of law made by the administrative law judge, or may vacate or modify an order issued by the administrative judge. Requires the director to state in writing the reason and the legal basis for change. (d) Provides that the director's final order is subject to judicial review under Chapter 2001, Government Code, under the substantial evidence rule. (e) Provides that this section does not waive state immunity from liability. SECTION 2. Emergency clause; Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The committee substitute adds contracts described by Section 22.018, relating to airport or air navigation facility operations, to the list of contract claims for which the commission may establish informal resolution procedures.