76R13494 DAK-F
By Nixon H.B. No. 69
Substitute the following for H.B. No. 69:
By Nixon C.S.H.B. No. 69
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to claims against units of state government relating to
1-3 contracts for certain goods, services, or projects.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle F, Title 10, Government Code, is amended
1-6 by adding Chapter 2260 to read as follows:
1-7 CHAPTER 2260. RESOLUTION OF CERTAIN CONTRACT CLAIMS
1-8 AGAINST THE STATE
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Sec. 2260.001. DEFINITIONS. In this chapter:
1-11 (1) "Contract" means a written contract between a unit
1-12 of state government and a contractor for:
1-13 (A) goods;
1-14 (B) services; or
1-15 (C) a project as defined by Section 2166.001.
1-16 (2) "Contractor" means an independent contractor who
1-17 has entered into a contract directly with a unit of state
1-18 government. The term does not include:
1-19 (A) a contractor's subcontractor, officer,
1-20 employee, agent, or other person furnishing goods or services to a
1-21 contractor;
1-22 (B) an employee of a unit of state government;
1-23 or
1-24 (C) a student at an institution of higher
2-1 education.
2-2 (3) "Institution of higher education" has the meaning
2-3 assigned by Section 61.003, Education Code.
2-4 (4) "Unit of state government" means the state or an
2-5 agency, department, commission, bureau, board, office, council,
2-6 court, or other entity that is in any branch of state government
2-7 and that is created by the constitution or a statute of this state,
2-8 including a university system or institution of higher education.
2-9 The term does not include a county, municipality, court of a county
2-10 or municipality, special purpose district, or other political
2-11 subdivision of this state. The term does not include the Texas
2-12 Department of Transportation.
2-13 Sec. 2260.002. APPLICABILITY. This chapter does not apply
2-14 to a claim for personal injury or wrongful death arising from the
2-15 breach of a contract.
2-16 Sec. 2260.003. DAMAGES. (a) The total amount of money
2-17 recoverable on a claim for breach of contract under this chapter
2-18 may not, after deducting the amount specified in Subsection (b),
2-19 exceed the balance due and owing on the contract price, including
2-20 orders for additional work.
2-21 (b) Any amount owed the unit of state government for work
2-22 not performed under a contract or in substantial compliance with
2-23 its terms shall be deducted from the amount in Subsection (a).
2-24 Sec. 2260.004. REQUIRED CONTRACT PROVISION. (a) Each unit
2-25 of state government that enters into a contract to which this
2-26 chapter applies shall include as a term of the contract a provision
2-27 stating that the dispute resolution process used by the unit of
3-1 state government under this chapter must be used to attempt to
3-2 resolve a dispute arising under the contract.
3-3 (b) The attorney general shall provide assistance to a unit
3-4 of state government in developing the contract provision required
3-5 by this section.
3-6 Sec. 2260.005. EXCLUSIVE PROCEDURE. The procedures
3-7 contained in this chapter are exclusive and required prerequisites
3-8 to suit in accordance with Chapter 107, Civil Practice and Remedies
3-9 Code.
3-10 Sec. 2260.006. SOVEREIGN IMMUNITY. This chapter does not
3-11 waive sovereign immunity to suit or liability.
3-12 (Sections 2260.007-2260.050 reserved for expansion
3-13 SUBCHAPTER B. NEGOTIATION OF CLAIM
3-14 Sec. 2260.051. CLAIM FOR BREACH OF CONTRACT; NOTICE. (a) A
3-15 contractor may make a claim against a unit of state government for
3-16 breach of a contract between the unit of state government and the
3-17 contractor. The unit of state government may assert a counterclaim
3-18 against the contractor.
3-19 (b) A contractor must provide written notice to the unit of
3-20 state government of a claim for breach of contract not later than
3-21 the 180th day after the date of the event giving rise to the claim.
3-22 (c) The notice must state with particularity:
3-23 (1) the nature of the alleged breach;
3-24 (2) the amount the contractor seeks as damages; and
3-25 (3) the legal theory of recovery.
3-26 (d) A unit of state government must assert, in a writing
3-27 delivered to the contractor, any counterclaim not later than the
4-1 90th day after the date of notice under Subsection (b). A unit of
4-2 state government that does not comply with this subsection waives
4-3 the right to assert the counterclaim.
4-4 Sec. 2260.052. NEGOTIATION. (a) The chief administrative
4-5 officer or, if designated in the contract, another officer of the
4-6 unit of state government shall examine the claim and any
4-7 counterclaim and negotiate with the contractor in an effort to
4-8 resolve them. Except as provided by Subsection (b), the
4-9 negotiation must begin not later than the 60th day after the later
4-10 of:
4-11 (1) the date of termination of the contract;
4-12 (2) the completion date in the original contract; or
4-13 (3) the date the claim is received.
4-14 (b) A unit of state government against which a claim is
4-15 filed is entitled to delay the beginning of negotiation until after
4-16 the 180th day after the date of the event giving rise to the claim.
4-17 (c) Each unit of state government with rulemaking authority
4-18 shall develop rules to govern the negotiation of a claim under this
4-19 section. If a unit of state government does not have rulemaking
4-20 authority, that unit shall follow the rules adopted by the attorney
4-21 general.
4-22 Sec. 2260.053. PARTIAL RESOLUTION OF CLAIM. (a) If the
4-23 negotiation under Section 2260.052 results in the resolution of
4-24 some disputed issues by agreement or in a settlement, the parties
4-25 shall reduce the agreement or settlement to writing and each party
4-26 shall sign the agreement or settlement.
4-27 (b) A partial settlement or resolution of a claim does not
5-1 waive a party's rights under this chapter as to the parts of the
5-2 claim that are not resolved.
5-3 Sec. 2260.054. PAYMENT OF CLAIM FROM APPROPRIATED FUNDS. A
5-4 unit of state government may pay a claim resolved in accordance
5-5 with this subchapter only from money appropriated to it for payment
5-6 of contract claims or for payment of the contract that is the
5-7 subject of the claim. If money previously appropriated for payment
5-8 of contract claims or payment of the contract is insufficient to
5-9 pay the claim or settlement, the balance of the claim may be paid
5-10 only from money appropriated by the legislature for payment of the
5-11 claim.
5-12 Sec. 2260.055. INCOMPLETE RESOLUTION. If a claim is not
5-13 entirely resolved under Section 2260.052 on or before the 270th day
5-14 after the date the claim is filed with the unit of state
5-15 government, unless the parties agree in writing to an extension of
5-16 time, the contractor may file a request for a hearing under
5-17 Subchapter C.
5-18 (Sections 2260.056-2260.100 reserved for expansion
5-19 SUBCHAPTER C. CONTESTED CASE HEARING
5-20 Sec. 2260.101. DEFINITION. In this subchapter, "office"
5-21 means the State Office of Administrative Hearings.
5-22 Sec. 2260.102. REQUEST FOR HEARING. (a) If a contractor is
5-23 not satisfied with the results of negotiation with a unit of state
5-24 government under Section 2260.052, the contractor may file a
5-25 request for a hearing with the unit of state government.
5-26 (b) The request must:
5-27 (1) state the factual and legal basis for the claim;
6-1 and
6-2 (2) request that the claim be referred to the State
6-3 Office of Administrative Hearings for a contested case hearing.
6-4 (c) On receipt of a request under Subsection (a), the unit
6-5 of state government shall refer the claim to the State Office of
6-6 Administrative Hearings for a contested case hearing under Chapter
6-7 2001, Government Code, as to the issues raised in the request.
6-8 Sec. 2260.103. HEARING FEE. (a) The chief administrative
6-9 law judge of the office may set a fee for a hearing before the
6-10 office under this subchapter.
6-11 (b) The chief administrative law judge of the office shall
6-12 set the fee in an amount that:
6-13 (1) is not less than $250; and
6-14 (2) allows the office to recover all or a substantial
6-15 part of its costs in holding hearings.
6-16 (c) The chief administrative law judge of the office by rule
6-17 may establish a graduated fee scale, increasing the fee in relation
6-18 to the amount in controversy.
6-19 (d) The office may:
6-20 (1) assess the fee against the party who does not
6-21 prevail in the hearing; or
6-22 (2) apportion the fee against the parties in an
6-23 equitable manner.
6-24 Sec. 2260.104. HEARING. (a) An administrative law judge of
6-25 the office shall conduct a hearing in accordance with the
6-26 procedures adopted by the chief administrative law judge of the
6-27 office.
7-1 (b) Within a reasonable time after the conclusion of the
7-2 hearing, the administrative law judge shall issue a written
7-3 decision containing the administrative law judge's findings and
7-4 recommendations.
7-5 (c) The administrative law judge shall base the decision on
7-6 the pleadings filed with the office and the evidence received.
7-7 (d) The decision must include:
7-8 (1) the findings of fact and conclusions of law on
7-9 which the administrative law judge's decision is based; and
7-10 (2) a summary of the evidence.
7-11 Sec. 2260.105. PAYMENT OF CLAIM. (a) The unit of state
7-12 government shall pay the amount of the claim or part of the claim
7-13 if the administrative law judge finds, by a preponderance of the
7-14 evidence, that under the laws of this state the claim or part of
7-15 the claim is valid.
7-16 (b) A unit of state government shall pay a claim under this
7-17 subchapter from money appropriated to it for payment of contract
7-18 claims or for payment of the contract that is the subject of the
7-19 claim. If money previously appropriated for payment of contract
7-20 claims or payment of the contract is insufficient to pay the claim,
7-21 the balance of the claim may be paid only from money appropriated
7-22 by the legislature for payment of the claim.
7-23 Sec. 2260.106. PREJUDGMENT INTEREST. Chapter 304, Finance
7-24 Code, applies to a judgment awarded to a claimant under this
7-25 chapter, except that the applicable rate of interest may not exceed
7-26 six percent.
7-27 Sec. 2260.107. EXECUTION ON STATE PROPERTY NOT AUTHORIZED.
8-1 This chapter does not authorize execution on property owned by the
8-2 state or a unit of state government.
8-3 SECTION 2. This Act takes effect September 1, 1999.
8-4 SECTION 3. (a) This Act applies only to a claim pending or
8-5 arising on or after the effective date of this Act, without regard
8-6 to whether the contract was entered into before, on, or after that
8-7 date.
8-8 (b) Notwithstanding Section 2260.051(b), Government Code, as
8-9 added by this Act, a claimant must provide written notice to the
8-10 unit of state government for a claim pending before the effective
8-11 date of this Act not later than the 180th day after that date.
8-12 SECTION 4. The importance of this legislation and the
8-13 crowded condition of the calendars in both houses create an
8-14 emergency and an imperative public necessity that the
8-15 constitutional rule requiring bills to be read on three several
8-16 days in each house be suspended, and this rule is hereby suspended.