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.