1-1     By:  Nixon (Senate Sponsor - Cain)                     H.B. No. 172

 1-2           (In the Senate - Received from the House May 12, 1997;

 1-3     May 13, 1997, read first time and referred to Committee on

 1-4     Jurisprudence; May 18, 1997, reported adversely, with favorable

 1-5     Committee Substitute by the following vote:  Yeas 7, Nays 0;

 1-6     May 18, 1997, sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR H.B. No. 172                     By:  Cain

 1-8                            A BILL TO BE ENTITLED

 1-9                                   AN ACT

1-10     relating to project contract claims against a unit of state

1-11     government.

1-12           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-13           SECTION 1.  Title 5, Civil Practice and Remedies Code, is

1-14     amended by adding Chapter 111 to read as follows:

1-15               CHAPTER 111.  CONTRACT CLAIMS AGAINST THE STATE

1-16           Sec. 111.001.  DEFINITIONS.  In this chapter:  (a)  "Unit of

1-17     state government" means the state or an agency, department,

1-18     commission, bureau, board, office, council, court or other entity

1-19     that is in any branch of state government and that is created by

1-20     the constitution or a statute of this state, including a university

1-21     system or institution of higher education as defined by Section

1-22     61.003, Education Code.  The term does not include a county,

1-23     municipality, court of a county or municipality, special purpose

1-24     district, or other political subdivision of this state, and does

1-25     not include the Texas Department of Transportation.

1-26                 (b)  "Project Contract" means a contract between a unit

1-27     of state government and a Contractor for a Project as the term

1-28     "Project" defined in Section 2166.001(3) Government Code.

1-29                 (c)  "Contractor" means an individual, partnership,

1-30     corporation, limited liability company or partnership or other

1-31     business entity that is a party to a written contract with a unit

1-32     of state government for a Project which was entered after

1-33     competitive bidding.

1-34           Sec. 111.002. CLAIMS.  (a)  A Contractor may make a claim

1-35     against a unit of state government for breach of a Project

1-36     Contract.

1-37                 (b)  A claim may be made by filing a petition with the

1-38     chief administrative officer or another officer of the unit of

1-39     state government if designated in the contract.  The petition shall

1-40     contain a concise statement of the facts relied on by the

1-41     Contractor, the relief or remedy desired, a copy of the Project

1-42     Contract and other contract documents which pertain to the claim

1-43     and be sworn to by the contractor or its representative or

1-44     attorney.

1-45                 (c)  The chief administrative officer or another

1-46     officer of the unit of state government, if designated in the

1-47     contract, shall examine the claim and negotiate in good faith with

1-48     the Contractor in an effort to resolve the claim.  If there is no

1-49     resolution of the claim within 30 days after receipt of the claim,

1-50     the parties shall proceed to mediation with an independent mediator

1-51     selected by the parties.  The mediation shall be completed in the

1-52     ensuing 30 days.  If the mediation does not produce agreement as to

1-53     the claim, the chief administrative officer or another officer of

1-54     the unit of state government, if designated in the contract, shall

1-55     respond to the claim providing the factual and legal basis for the

1-56     position of the unit of state government as to the claim within 90

1-57     days after receipt of the claim.

1-58                 (d)  If the Contractor is not satisfied with the

1-59     response to the claim by the unit of state government, the

1-60     Contractor may file an appeal with the unit of state government.

1-61     The appeal shall set forth the factual and legal basis for the

1-62     claim and request that the claim be referred to the State Office of

1-63     Administrative Hearings for a contested case hearing.

1-64                 (e)  The unit of the government shall refer the claim

 2-1     to the State Office of Administrative Hearings for a contested case

 2-2     hearing pursuant to Section 2003 et. seq. Government Code as to the

 2-3     issues raised in the appeal.

 2-4                 (f)  If the proposal for decision issued by the

 2-5     administrative law judge at the State Office of Administrative

 2-6     Hearings makes an award of some portion of the claim, the proposal

 2-7     for decision shall be forwarded to the Speaker of the House and Lt.

 2-8     Governor as a recommendation for an appropriation to pay the amount

 2-9     of the award in the next appropriation to the unit of state

2-10     government.

2-11           Section 111.003.  AWARDS.  (a)  An award based on a claim

2-12     made under this chapter may not exceed the total value of the

2-13     consideration the Contractor was to receive under the Contract.

2-14                 (b)  An award may not be made for consequential or

2-15     similar damages or for exemplary or punitive damages.

2-16                 (c)  Article 1.05, Title 79, Revised Statutes (Article

2-17     5069-1.05 Vernon's Texas Civil Statutes) applies to an award under

2-18     this chapter.

2-19                 (d)  A Contractor must make any claim under the Project

2-20     Contract not later than 90 days after the Project Contract is

2-21     completed.

2-22           SECTION 2.  This Act takes effect September 1, 1997.

2-23           SECTION 3.  (a)  This Act applies only to a suit based on a

2-24     Project Contract entered into by a unit of state government on or

2-25     after the effective date of this Act.  A suit based on a Project

2-26     Contract entered into before the effective date of this Act is

2-27     governed by the law as it existed immediately before the effective

2-28     date of this Act, and that law is continued in effect for this

2-29     purpose.

2-30                 (b)  For purposes of this section, a Project Contract

2-31     is entered into after the effective date of this Act if it is

2-32     executed or renewed after the effective date of this Act.

2-33           SECTION 4.  The importance of this legislation and the

2-34     crowded condition of the calendars in both houses create an

2-35     emergency and an imperative public necessity that the

2-36     constitutional rule requiring bills to be read on three several

2-37     days in each house be suspended, and this rule is hereby suspended.

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