SRC-AXB S.B. 629 76(R)   BILL ANALYSIS


Senate Research Center   S.B. 629
76R5404  MLS-FBy: Cain
Jurisprudence
4/15/1999
As Filed


DIGEST 

Currently, unless Texas has expressly given consent to be sued, it is
protected by sovereign immunity.  Consequently, a state agency can sue a
contractor for breach of contract, but the contractor has no recourse
against a state agency's breach of contract.  In recent years, the
likelihood that a state agency will violate contractual agreements has
increased,  fewer contractors apply for jobs, and the remaining contractors
translate their risks into higher bids.  S.B. 629 provides regulations for
a contractor to sue a unit of state government. 

PURPOSE

As proposed, S.B. 629 creates procedures for a contractor to sue a unit of
state government and receive an award from the unit of state government or
through an appropriation, depending on the award amount. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 5, Civil Practice and Remedies Code, by adding
Chapter 111, as follows: 

CHAPTER 111.  CONTRACT CLAIMS AGAINST THE STATE

Sec.  111.001.  DEFINITIONS.  Defines "contract," "contractor," and "unit
of state government." 

Sec.  111.002.  CLAIM FOR BREACH OF CONTRACT.  Authorizes a contractor to
make a claim for breach of contract against a unit of state government.
Requires a contractor to assert a claim within 90 days of contract
completion.  Provides that a claim may be made by filing a petition with
certain entities.  Sets forth petition requirements.  Requires certain
officers to examine and negotiate the claim, in good faith, with the
contractor. 

Sec.  111.003.  MEDIATION.  Requires the parties to proceed to mediation if
the claim is unresolved 30 days after its receipt.  Requires mediation to
be completed by the 60th day after receipt of the claim, and sets forth an
exception.  Prohibits the mediation period from exceeding 90 days after
receipt of the claim.  Provides that the contract may include terms for
mediation.  Prohibits the contract from requiring the contractor to waive a
remedy entitled under this chapter.  Requires mediation costs to be shared
equally by the contractor and the unit of state government.  Requires
certain state government officers to respond to the claim within 30 days
after the end of unsuccessful mediation. 

Sec.  111.004.  CONTESTED CASE HEARING.  Authorizes an unsatisfied
contractor to file an appeal.  Sets forth appeal requirements.  Requires
the unit of state government to refer the claim to the State Office of
Administrative Hearings for a hearing under Chapters 2001 and 2003,
Government Code.  Requires the agency to pay a claim if the award is
$500,000 or less, within 30 days after the issuance of the award decision,
under certain conditions.  Requires the proposal for decision to be sent to
certain legislative authorities for appropriation consideration, if the
settlement decision makes an award for more than $500,000. 

Sec.  111.005.  AWARDS.  Prohibits a contractor's claim award from
exceeding the total value to be received under the contract.  Prohibits an
award from being made for exemplary or punitive damages.  Provides that
Chapter 304, Finance Code, applies to an award under this chapter. 

Sec.  111.006.  EXCLUSION.  Provides that this chapter does not apply to a
claim against the Texas Department of Transportation. 

SECTION 2.  Effective date:  September 1, 1999.

SECTION 3.  Makes application of this Act prospective.

SECTION 4.  Emergency clause.