By: Cain S.B. No. 1786 A BILL TO BE ENTITLED AN ACT 1-1 relating to project contract claims against a unit of state 1-2 government. 1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-4 SECTION 1. Title 5, Civil Practice and Remedies Code, is 1-5 amended by adding Chapter 111 to read as follows: 1-6 CHAPTER 111. CONTRACT CLAIMS AGAINST THE STATE 1-7 Sec. 111.001. DEFINITIONS. In this chapter: 1-8 (1) "Unit of state government" means the state or an 1-9 agency, department, commission, bureau, board, office, council, 1-10 court, or other entity that is in any branch of state government 1-11 and that is created by the constitution or a statute of this state, 1-12 including a university system or institution of higher education as 1-13 defined by Section 61.003, Education Code. The term does not 1-14 include a county, municipality, court of a county or municipality, 1-15 special-purpose district, or other political subdivision of this 1-16 state and does not include the Texas Department of Transportation. 1-17 (2) "Project contract" means a contract between a unit 1-18 of state government and a contractor for a project as the term 1-19 "project" is defined in Section 2166.001(4), Government Code. 1-20 (3) "Contractor" means an individual, partnership, 1-21 corporation, limited liability company or partnership, or other 1-22 business entity that is a party to a written contract with a unit 1-23 of state government for a project which was entered into after 2-1 competitive bidding. 2-2 Sec. 111.002. CLAIMS. (a) A contractor may make a claim 2-3 against a unit of state government for breach of a project 2-4 contract. 2-5 (b) A claim may be made by filing a petition with the chief 2-6 administrative officer or another officer of the unit of state 2-7 government if designated in the contract. The petition shall 2-8 contain a concise statement of the facts relied on by the 2-9 contractor, the relief or remedy desired, and a copy of the project 2-10 contract and other contract documents which pertain to the claim 2-11 and must be sworn to by the contractor or the contractor's 2-12 representative or attorney. 2-13 (c) The chief administrative officer or another officer of 2-14 the unit of state government, if designated in the contract, shall 2-15 examine the claim and negotiate in good faith with the contractor 2-16 in an effort to resolve the claim. If there is no resolution of 2-17 the claim within 30 days after receipt of the claim, the parties 2-18 shall proceed to mediation with an independent mediator selected by 2-19 the parties. The mediation shall be completed within the ensuing 2-20 30 days. If the mediation does not produce agreement as to the 2-21 claim, the chief administrative officer or another officer of the 2-22 unit of state government, if designated in the contract, shall 2-23 respond to the claim, providing the factual and legal basis for the 2-24 position of the unit of state government as to the claim within 90 2-25 days after receipt of the claim. 3-1 (d) If the contractor is not satisfied with the response to 3-2 the claim by the unit of state government, the contractor may file 3-3 an appeal with the unit of state government. The appeal shall set 3-4 forth the factual and legal basis for the claim and request that 3-5 the claim be referred to the State Office of Administrative 3-6 Hearings for a contested case hearing. 3-7 (e) The unit of state government shall refer the claim to 3-8 the State Office of Administrative Hearings for a contested case 3-9 hearing pursuant to Chapter 2003, Government Code, as to the issues 3-10 raised in the appeal. 3-11 (f) If the proposal for decision issued by the 3-12 administrative law judge at the State Office of Administrative 3-13 Hearings makes an award of some portion of the claim, the proposal 3-14 for decision shall be forwarded to the speaker of the house and 3-15 lieutenant governor as a recommendation for an appropriation to pay 3-16 the amount of the award in the next appropriation to the unit of 3-17 state government. 3-18 Sec. 111.003. AWARDS. (a) An award based on a claim made 3-19 under this chapter may not exceed the total value of the 3-20 consideration the contractor was to receive under the contract. 3-21 (b) An award may not be made for consequential or similar 3-22 damages or for exemplary or punitive damages. 3-23 (c) Article 1.05, Title 79, Revised Statutes (Article 3-24 5069-1.05, Vernon's Texas Civil Statutes), applies to an award 3-25 under this chapter. 4-1 (d) A contractor must make any claim under the project 4-2 contract not later than 90 days after the project contract is 4-3 completed. 4-4 SECTION 2. This Act takes effect September 1, 1997. 4-5 SECTION 3. (a) This Act applies only to a suit based on a 4-6 project contract entered into by a unit of state government on or 4-7 after the effective date of this Act. A suit based on a project 4-8 contract entered into before the effective date of this Act is 4-9 governed by the law as it existed immediately before the effective 4-10 date of this Act, and that law is continued in effect for that 4-11 purpose. 4-12 (b) For purposes of this section, a project contract is 4-13 entered into after the effective date of this Act if it is executed 4-14 or renewed after the effective date of this Act. 4-15 SECTION 4. The importance of this legislation and the 4-16 crowded condition of the calendars in both houses create an 4-17 emergency and an imperative public necessity that the 4-18 constitutional rule requiring bills to be read on three several 4-19 days in each house be suspended, and this rule is hereby suspended.