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. 2-38 * * * * *