1-1     By:  Cain                                             S.B. No. 1786

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Jurisprudence;

 1-4     April 24, 1997, reported adversely, with favorable Committee

 1-5     Substitute by the following vote:  Yeas 7, Nays 0; April 24, 1997,

 1-6     sent to printer.)

 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 1786                    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:

1-17                 (1)  "Unit of state government" means the state or an

1-18     agency, department, commission, bureau, board, office, council,

1-19     court, or other entity that is in any branch of state government

1-20     and that is created by the constitution or a statute of this state,

1-21     including a university system or institution of higher education as

1-22     defined by Section 61.003, Education Code.  The term does not

1-23     include a county, municipality, court of a county or municipality,

1-24     special-purpose district, or other political subdivision of this

1-25     state and does not include the Texas Department of Transportation.

1-26                 (2)  "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" is defined in Section 2166.001(4), Government Code.

1-29                 (3)  "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 into 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 chief

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

1-39     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, and a copy of the project

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

1-43     and must be sworn to by the contractor or the contractor's

1-44     representative or attorney.

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

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

1-47     examine the claim and negotiate in good faith with the contractor

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

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

1-50     shall proceed to mediation with an independent mediator selected by

1-51     the parties.  The mediation shall be completed within the ensuing

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

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

1-54     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 response to

1-59     the claim by the unit of state government, the contractor may file

1-60     an appeal with the unit of state government.  The appeal shall set

1-61     forth the factual and legal basis for the claim and request that

1-62     the claim be referred to the State Office of Administrative

1-63     Hearings for a contested case hearing.

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

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

 2-2     hearing pursuant to Chapter 2003, Government Code, as to the issues

 2-3     raised in the petition and 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

 2-8     lieutenant governor as a recommendation for an appropriation to pay

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

2-10     state government.

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

2-12     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 similar

2-15     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

2-18     under 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 that

2-29     purpose.

2-30           (b)  For purposes of this section, a project contract is

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

2-32     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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