LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE
75th Regular Session
April 21, 1997
TO: Honorable Rodney Ellis, Chair IN RE: Senate Bill No. 1786
Committee on Jurisprudence By: Cain
Senate
Austin, Texas
FROM: John Keel, Director
In response to your request for a Fiscal Note on SB1786 ( Relating
to project contract claims against a unit of state government.)
this office has detemined the following:
Biennial Net Impact to General Revenue Funds by SB1786-As Introduced
Implementing the provisions of the bill would result in a
net negative impact of $(1,161,155) to General Revenue Related
Funds through the biennium ending August 31, 1999.
The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.
Fiscal Analysis
The bill would amend the Civil Practice and Remedies Code by
adding new provisions to allow certain contractors to file contract
claims against the state, except the Texas Department of Transportation,
by filing a claim with the state agency. A contractor who files
a claim with a state agency would be allowed to appeal an agency
decision and request an administrative hearing with the State
Office of Administrative Hearings (SOAH), a form of alternative
dispute resolution for state agencies. Agencies would be represented
by the Office of the Attorney General (OAG).
Methodolgy
The Office of the Attorney General states that the bill would
provide a new cause of action against the state. In addition,
the OAG expects that the availability of a new remedy would
allow contractors to more readily seek relief through the hearings
process, since the state would waive sovereign immunity in cases
filed under these new provisions. There is no estimate included
as to the possible increased State exposure to liability due
to sovereign immunity being waived in such cases.
The OAG
anticipates that its Tort Litigation Division would require
four additional attorneys and four support staff to handle the
new construction contracts/administrative appeals. The OAG
estimates that there could be approximately 8,856 additional
hours billed to the new litigation.
The SOAH estimates
that it would bill each referring agency approximately $21,000
for each case referred, based on prior experience in hearing
construction cases. This figure is based on SOAH's $70 per
hour billing rate and includes billable hours related to prehearing
proceedings, reviewing testimony, ruling on discovery disputes,
holding the hearing on the merits, reviewing post hearing briefs
and reply briefs, and drafting a proposal for decision for submission
to the referring agency. The fiscal impact of the administrative
hearings would be to each agency referring cases to SOAH.
The probable fiscal implications of implementing the provisions
of the bill during each of the first five years following passage
is estimated as follows:
Five Year Impact:
Fiscal Year Probable Change in Number
Savings/(Cost) of State
from General Employees from
Revenue Fund FY 1997
0001
1998 ($598,700) 8.0
1998 (562,455) 8.0
2000 (562,455) 8.0
2001 (562,455) 8.0
2002 (562,455) 8.0
Net Impact on General Revenue Related Funds:
The probable fiscal implication to General Revenue related funds
during each of the first five years is estimated as follows:
Fiscal Year Probable Net Postive/(Negative)
General Revenue Related Funds
Funds
1998 ($598,700)
1999 (562,455)
2000 (562,455)
2001 (562,455)
2002 (562,455)
No fiscal implication to units of local government is anticipated.
Source: Agencies: 302 Office of the Attorney General
304 Comptroller of Public Accounts
360 State Office of Administrative Hearings
LBB Staff: JK ,BB ,JC