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. 2-38 * * * * *