By Nixon                                                H.B. No. 69
         76R109 DLF-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to claims against a unit of state government relating to
 1-3     contracts for certain services or projects.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Title 5, Civil Practice and Remedies Code, is
 1-6     amended by adding Chapter 110 to read as follows:
 1-7               CHAPTER 110.  CONTRACT CLAIMS AGAINST THE STATE
 1-8           Sec. 110.001.  DEFINITION.  In this chapter, "unit of state
 1-9     government" means the state or an agency, department, commission,
1-10     bureau, board, office, council, court, or other entity that is in
1-11     any branch of state government and that is created by the
1-12     constitution or a statute of this state, including a university
1-13     system or institution of higher education as defined by Section
1-14     61.003, Education Code.  The term does not include a county,
1-15     municipality, court of a county or municipality, special purpose
1-16     district, or other political subdivision of this state.
1-17           Sec. 110.002.  RIGHTS OF CONTRACTING PARTIES.  (a)  A
1-18     claimant may proceed under Section 110.003 with respect to a claim
1-19     against a unit of state government that alleges that the unit has
1-20     breached a written contract with the claimant for engineering or
1-21     construction services.
1-22           (b)  Sovereign immunity to suit is waived for purposes of an
1-23     appeal under Section 110.006.
1-24           Sec. 110.003.  CLAIM.  A claim may be made by filing a
 2-1     petition with the chief administrative officer or, if designated in
 2-2     the contract, another officer of the unit of state government.  The
 2-3     petition must:
 2-4                 (1)  contain a concise statement of the facts relied on
 2-5     by the claimant, the relief or remedy desired, a copy of the
 2-6     contract, and other contract documents that pertain to the claim;
 2-7     and
 2-8                 (2)  be sworn to by the claimant or the claimant's
 2-9     representative or attorney.
2-10           Sec. 110.004.  NEGOTIATION AND MEDIATION.  (a)  The chief
2-11     administrative officer or, if designated in the contract, another
2-12     officer of the unit of state government, shall examine the claim
2-13     and negotiate in good faith with the claimant in an effort to
2-14     resolve the claim.
2-15           (b)  If the claim is not resolved before the 31st day after
2-16     the date the claim is received, the parties shall mediate the claim
2-17     with an independent mediator selected by the parties.  The
2-18     mediation shall be completed during the following 30 days or, if
2-19     both parties agree to the extension during the mediation process,
2-20     may continue for a longer period.
2-21           (c)  If the mediation does not produce agreement as to the
2-22     claim, the chief administrative officer or, if designated in the
2-23     contract, another officer of the unit of state government, shall
2-24     respond to the claim providing the factual and legal basis for the
2-25     position of the unit as to the claim not later than the 30th day
2-26     after the date the mediation is terminated.
2-27           Sec. 110.005.  CONTESTED CASE HEARING.  (a)  If the claimant
 3-1     is not satisfied with the response to the claim by the unit of
 3-2     state government, the claimant may file an appeal with the unit.
 3-3           (b)  The appeal must:
 3-4                 (1)  state the factual and legal basis for the claim;
 3-5     and
 3-6                 (2)  request that the claim be referred to the State
 3-7     Office of Administrative Hearings for a contested case hearing.
 3-8           (c)  On receipt of an appeal under Subsection (a), the unit
 3-9     of state government shall refer the claim to the State Office of
3-10     Administrative Hearings for a contested case hearing under Chapter
3-11     2001, Government Code, as to the issues raised in the appeal.
3-12           Sec. 110.006.  APPEAL TO COURT.  The final order of the unit
3-13     of state government on the claim may be appealed as a final
3-14     decision in a contested case under Section 2001.171, Government
3-15     Code, and the court to which the claim is appealed may make an
3-16     award in accordance with Section 110.007.
3-17           Sec. 110.007.  AWARD.  (a)  An award based on a claim made
3-18     under this chapter may not exceed the total value of the
3-19     consideration the claimant was to receive under the contract,
3-20     including any charge accepted by a unit of state government.
3-21           (b)  The award may not include any:
3-22                 (1)  consequential or similar damages; or
3-23                 (2)  exemplary damages.
3-24           Sec. 110.008.  VENUE.  An appeal brought under Section
3-25     110.006 shall be brought in Travis County.
3-26           Sec. 110.009.  SERVICE OF CITATION.  In an appeal brought
3-27     under Section 110.006, service of citation and other required
 4-1     process must be made on:
 4-2                 (1)  the attorney general; and
 4-3                 (2)  the chief administrative officer or another
 4-4     officer of the unit of state government with which the claimant
 4-5     contracted.
 4-6           Sec. 110.010.  PREJUDGMENT INTEREST.  Chapter 304, Finance
 4-7     Code, applies to a judgment awarded to a claimant under this
 4-8     chapter, except that the applicable rate of interest may not exceed
 4-9     six percent.
4-10           Sec. 110.011.  SETTLEMENT.  The attorney general may settle
4-11     or compromise an appeal brought under Section 110.006.
4-12           Sec. 110.012.  PAYMENT OF JUDGMENT OR SETTLEMENT.  (a)  A
4-13     unit of state government shall pay a judgment or settlement under
4-14     this chapter from money appropriated to the unit that the unit is
4-15     authorized to use for the services or property obtained under the
4-16     contract on which the suit was based.
4-17           (b)  To the extent money described by Subsection (a) is not
4-18     available to make the payment, the judgment or settlement may be
4-19     paid only from money appropriated by the legislature for payment of
4-20     the judgment or settlement.
4-21           Sec. 110.013.  EXECUTION ON STATE PROPERTY NOT AUTHORIZED.
4-22     This chapter does not authorize execution on property owned by the
4-23     state or a unit of state government.
4-24           Sec. 110.014.  APPLICATION OF OTHER LAWS.  Chapter 107 does
4-25     not apply to an appeal brought under Section 110.006.
4-26           SECTION 2.  This Act takes effect September 1, 1999.
4-27           SECTION 3.  (a)  This Act applies only to a suit based on a
 5-1     written contract described by Section 110.002, Civil Practice and
 5-2     Remedies Code, as added by this Act, entered into by a unit of
 5-3     state government on or after the effective date of this Act.  A
 5-4     suit based on a contract entered into before the effective date of
 5-5     this Act is governed by the law as it existed immediately before
 5-6     the effective date of this Act, and that law is continued in effect
 5-7     for that purpose.
 5-8           (b)  For purposes of this section, a contract is entered into
 5-9     after the effective date of this Act if it is executed or renewed
5-10     after the effective date of this Act.
5-11           SECTION 4.  The importance of this legislation and the
5-12     crowded condition of the calendars in both houses create an
5-13     emergency and an imperative public necessity that the
5-14     constitutional rule requiring bills to be read on three several
5-15     days in each house be suspended, and this rule is hereby suspended.