1-1 AN ACT
1-2 relating to alternative dispute resolution proceedings of
1-3 governmental bodies and the resolution of certain contract claims
1-4 against the state.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 441.031, Government Code, is amended to
1-7 read as follows:
1-8 Sec. 441.031. DEFINITION [DEFINITIONS]. In this subchapter,
1-9 "state[:]
1-10 [(5) "State] record" means a document, book, paper,
1-11 photograph, sound recording, or other material, regardless of
1-12 physical form or characteristic, made or received by a state
1-13 department or institution according to law or in connection with
1-14 the transaction of official state business. The term does not
1-15 include:
1-16 (1) library or museum material made or acquired and
1-17 preserved solely for reference or exhibition purposes;
1-18 (2) [,] an extra copy of a document preserved only for
1-19 convenience of reference;
1-20 (3) [,] a stock of publications or of processed
1-21 documents;[,] or
1-22 (4) any records, correspondence, notes, memoranda, or
1-23 [other] documents, other than a final written agreement described
1-24 by Section 2009.054(c), associated with a matter conducted under an
2-1 alternative dispute resolution procedure in which personnel of a
2-2 state department or institution, local government, special
2-3 district, or other political subdivision of the state participated
2-4 as a party, facilitated as an impartial third party, or facilitated
2-5 as the administrator of a dispute resolution system or
2-6 organization.
2-7 SECTION 2. Section 441.091, Government Code, is amended to
2-8 read as follows:
2-9 Sec. 441.091. DEFINITION [DEFINITIONS]. In this subchapter,
2-10 "county[:]
2-11 [(1) "County] record" means any document, paper,
2-12 letter, book, map, photograph, sound or video recording, microfilm,
2-13 magnetic tape, electronic medium, or other information recording
2-14 medium, regardless of physical form or characteristic and
2-15 regardless of whether public access to it is open or restricted
2-16 under the laws of the state, created or received by a county or
2-17 precinct or any county or precinct officers or employees, including
2-18 the district clerk, pursuant to law, including an ordinance or
2-19 order of the commissioners court of the county, or in the
2-20 transaction of public business. The term does not include:
2-21 (1) [(A)] extra identical copies of documents created
2-22 only for convenience of reference or research by county or precinct
2-23 officers or employees;
2-24 (2) [(B)] notes, journals, diaries, and similar
2-25 documents created by a county or precinct officer or employee for
2-26 the officer's or employee's personal convenience;
2-27 (3) [(C)] blank forms;
3-1 (4) [(D)] stocks of publications;
3-2 (5) [(E)] library and museum materials acquired solely
3-3 for the purposes of reference or display;
3-4 (6) [(F)] copies of documents in any media furnished
3-5 to members of the public to which they are entitled under Chapter
3-6 552, or other state law; or
3-7 (7) [(G)] any records, correspondence, notes,
3-8 memoranda, or [other] documents, other than a final written
3-9 agreement described by Section 2009.054(c), associated with a
3-10 matter conducted under an alternative dispute resolution procedure
3-11 in which personnel of a state department or institution, local
3-12 government, special district, or other political subdivision of the
3-13 state participated as a party, facilitated as an impartial third
3-14 party, or facilitated as the administrator of a dispute resolution
3-15 system or organization.
3-16 SECTION 3. Section 201.003(8), Local Government Code, is
3-17 amended to read as follows:
3-18 (8) "Local government record" means any document,
3-19 paper, letter, book, map, photograph, sound or video recording,
3-20 microfilm, magnetic tape, electronic medium, or other information
3-21 recording medium, regardless of physical form or characteristic and
3-22 regardless of whether public access to it is open or restricted
3-23 under the laws of the state, created or received by a local
3-24 government or any of its officers or employees pursuant to law,
3-25 including an ordinance, or in the transaction of public business.
3-26 The term does not include:
3-27 (A) extra identical copies of documents created
4-1 only for convenience of reference or research by officers or
4-2 employees of the local government;
4-3 (B) notes, journals, diaries, and similar
4-4 documents created by an officer or employee of the local government
4-5 for the officer's or employee's personal convenience;
4-6 (C) blank forms;
4-7 (D) stocks of publications;
4-8 (E) library and museum materials acquired solely
4-9 for the purposes of reference or display;
4-10 (F) copies of documents in any media furnished
4-11 to members of the public to which they are entitled under Chapter
4-12 552, Government Code, or other state law; or
4-13 (G) any records, correspondence, notes,
4-14 memoranda, or [other] documents, other than a final written
4-15 agreement described by Section 2009.054(c), Government Code,
4-16 associated with a matter conducted under an alternative dispute
4-17 resolution procedure in which personnel of a state department or
4-18 institution, local government, special district, or other political
4-19 subdivision of the state participated as a party, facilitated as an
4-20 impartial third party, or facilitated as the administrator of a
4-21 dispute resolution system or organization.
4-22 SECTION 4. Section 2008.057(c), Government Code, is amended
4-23 to read as follows:
4-24 (c) Notwithstanding Section 154.073(e) [154.073(d)], Civil
4-25 Practice and Remedies Code:
4-26 (1) a private communication and a record of a private
4-27 communication between a facilitator and a member or members of the
5-1 committee are confidential and may not be disclosed unless the
5-2 member or members of the committee, as appropriate, consent to the
5-3 disclosure; and
5-4 (2) the notes of a facilitator are confidential except
5-5 to the extent that the notes consist of a record of a communication
5-6 with a member of the committee who has consented to disclosure in
5-7 accordance with Subdivision (1).
5-8 SECTION 5. Chapter 2008, Government Code, as added by
5-9 Chapter 934, Acts of the 75th Legislature, Regular Session, 1997,
5-10 is redesignated as Chapter 2009, Government Code, and amended to
5-11 read as follows:
5-12 CHAPTER 2009 [2008]. ALTERNATIVE DISPUTE RESOLUTION FOR USE BY
5-13 GOVERNMENTAL BODIES [AT STATE AGENCIES]
5-14 SUBCHAPTER A. GENERAL PROVISIONS
5-15 Sec. 2009.001. [2008.001.] SHORT TITLE. This chapter may be
5-16 cited as the Governmental Dispute Resolution Act.
5-17 Sec. 2009.002. [2008.002.] POLICY. It is the policy of this
5-18 state that disputes before governmental bodies [state agencies] be
5-19 resolved as fairly and expeditiously as possible and that each
5-20 governmental body [state agency] support this policy by developing
5-21 and using alternative dispute resolution procedures in appropriate
5-22 aspects of the governmental body's [agency's] operations and
5-23 programs.
5-24 Sec. 2009.003. [2008.003.] DEFINITIONS. In this chapter:
5-25 (1) "Alternative dispute resolution procedure"
5-26 includes:
5-27 (A) a procedure described by Chapter 154, Civil
6-1 Practice and Remedies Code; and
6-2 (B) a combination of the procedures described by
6-3 Chapter 154, Civil Practice and Remedies Code.
6-4 (2) "Governmental body" has the meaning assigned by
6-5 Section 552.003.
6-6 (3) [(2)] "State agency" means an officer, board,
6-7 commission, department, or other agency in the executive branch of
6-8 state government with statewide jurisdiction that makes rules or
6-9 determines contested cases. The term includes:
6-10 (A) the attorney general;
6-11 (B) an institution of higher education as
6-12 defined by Section 61.003, Education Code; and
6-13 (C) the State Office of Administrative Hearings.
6-14 (4) [(3)] The following terms have the meanings
6-15 assigned by Section 2001.003:
6-16 (A) "contested case";
6-17 (B) "party";
6-18 (C) "person"; and
6-19 (D) "rule."
6-20 Sec. 2009.004. [2008.004. AGENCY] CONTRACTS; BUDGETING FOR
6-21 COSTS. (a) A governmental body [state agency] may pay for costs
6-22 necessary to meet the objectives of this chapter, including
6-23 reasonable fees for training, policy review, system design,
6-24 evaluation, and the use of impartial third parties.
6-25 (b) To the extent allowed by the General Appropriations Act,
6-26 a state [the] agency may use [for this purpose] money budgeted for
6-27 legal services, executive administration, or any other appropriate
7-1 aspect of the state agency's operations to pay for costs incurred
7-2 under Subsection (a).
7-3 (c) [(b)] A governmental body [state agency] may contract
7-4 with another governmental body [state agency], including the
7-5 Center for Public Policy Dispute Resolution at The University of
7-6 Texas School of Law, with an alternative dispute resolution system
7-7 created under Chapter 152, Civil Practice and Remedies Code, or
7-8 with a private entity for any service necessary to meet the
7-9 objectives of this chapter.
7-10 Sec. 2009.005. [2008.005.] SOVEREIGN IMMUNITY. (a) This
7-11 chapter does not waive immunity from suit and does not affect a
7-12 waiver of immunity from suit contained in other law.
7-13 (b) The state's sovereign immunity under the Eleventh
7-14 Amendment to the United States Constitution is not waived by this
7-15 chapter.
7-16 (c) Nothing in this chapter authorizes binding arbitration
7-17 as a method of alternative dispute resolution.
7-18 SUBCHAPTER B. ALTERNATIVE DISPUTE RESOLUTION
7-19 Sec. 2009.051. [2008.051.] DEVELOPMENT AND USE OF
7-20 PROCEDURES. (a) Each governmental body [state agency] may develop
7-21 and use alternative dispute resolution procedures. Alternative
7-22 dispute resolution procedures developed and used by a governmental
7-23 body [state agency] must be consistent with Chapter 154, Civil
7-24 Practice and Remedies Code.
7-25 (b) Alternative dispute resolution procedures developed and
7-26 used by a state agency also must be consistent[, and] with the
7-27 administrative procedure law, Chapter 2001. The State Office of
8-1 Administrative Hearings may issue model guidelines for the use of
8-2 alternative dispute resolution procedures by state agencies.
8-3 (c) [(b)] If a state agency that is subject to Chapter 2001
8-4 adopts an alternative dispute resolution procedure, it may do so by
8-5 rule.
8-6 Sec. 2009.052. [2008.052.] SUPPLEMENTAL NATURE OF
8-7 PROCEDURES. (a) Alternative dispute resolution procedures
8-8 developed and used under this chapter supplement and do not limit
8-9 other dispute resolution procedures available for use by [at] a
8-10 governmental body [state agency].
8-11 (b) This chapter may not be applied in a manner that denies
8-12 a person a right granted under other state or federal law or under
8-13 a local charter, ordinance, or other similar provision, including a
8-14 right to an administrative or judicial hearing.
8-15 Sec. 2009.053. [2008.053.] IMPARTIAL THIRD PARTIES. (a) A
8-16 governmental body [state agency] may appoint a governmental officer
8-17 or employee or a private individual to serve as an impartial third
8-18 party in an alternative dispute resolution procedure. The
8-19 governmental body's [agency's] appointment of the impartial third
8-20 party is subject to the approval of the parties, except that when a
8-21 State Office of Administrative Hearings administrative law judge
8-22 has issued an order referring a case involving a state agency to an
8-23 alternative dispute resolution procedure under Section
8-24 2003.042(a)(5) [2003.042(5)], the administrative law judge may
8-25 appoint the impartial third party for the parties if they cannot
8-26 agree on an impartial third party within a reasonable period.
8-27 (b) [The impartial third party must possess the
9-1 qualifications required under Section 154.052, Civil Practice and
9-2 Remedies Code.]
9-3 [(c)] A governmental body [state agency] also may obtain the
9-4 services of a qualified impartial third party through an agreement
9-5 with [the State Office of Administrative Hearings,] the Center for
9-6 Public Policy Dispute Resolution at The University of Texas School
9-7 of Law, an alternative dispute resolution system created under
9-8 Chapter 152, Civil Practice and Remedies Code, [or] another
9-9 governmental body, [state] or a federal agency or through a pooling
9-10 agreement with several governmental bodies [state agencies]. The
9-11 agreements may provide that the using governmental body [agency] or
9-12 the parties will reimburse the furnishing entity [agency], in kind
9-13 or monetarily, for the full or partial cost of providing the
9-14 qualified impartial third party.
9-15 (c) A state agency may also obtain the services of a
9-16 qualified third party through an agreement with the State Office of
9-17 Administrative Hearings.
9-18 (d) The impartial third party must possess the
9-19 qualifications required under Section 154.052, Civil Practice and
9-20 Remedies Code. The impartial third party is subject to the
9-21 standards and duties prescribed by Section 154.053, Civil Practice
9-22 and Remedies Code, and has the qualified immunity prescribed by
9-23 Section 154.055, Civil Practice and Remedies Code, if applicable.
9-24 Sec. 2009.054. [2008.054.] CONFIDENTIALITY OF CERTAIN
9-25 RECORDS AND COMMUNICATIONS. (a) Sections 154.053 and 154.073,
9-26 Civil Practice and Remedies Code, apply to the communications,
9-27 records, conduct, and demeanor of the impartial third party and the
10-1 parties.
10-2 (b) Notwithstanding Section 154.073(e) [154.073(d)], Civil
10-3 Practice and Remedies Code:
10-4 (1) a communication relevant to the dispute, and a
10-5 record of the communication, made between an impartial third party
10-6 and the parties to the dispute or between the parties to the
10-7 dispute during the course of an alternative dispute resolution
10-8 procedure are confidential and may not be disclosed unless all
10-9 parties to the dispute consent to the disclosure; and
10-10 (2) the notes of an impartial third party are
10-11 confidential except to the extent that the notes consist of a
10-12 record of a communication with a party and all parties have
10-13 consented to disclosure in accordance with Subdivision (1).
10-14 (c) Subsection (b)(1) does not apply to a final written
10-15 agreement to which a governmental body [entity] is a signatory that
10-16 is reached as a result of a dispute resolution procedure conducted
10-17 under this chapter. Information in the final written agreement is
10-18 subject to required disclosure, is excepted from required
10-19 disclosure, or is confidential in accordance with Chapter 552 and
10-20 other law.
10-21 (d) An impartial third party may not be required to testify
10-22 in any proceedings relating to or arising out of the matter in
10-23 dispute.
10-24 Sec. 2009.055. [2008.055. INTERAGENCY] SHARING OF
10-25 INFORMATION; CONSISTENCY OF PROCEDURES. (a) A governmental body
10-26 [state agency] may share the results of its alternative dispute
10-27 resolution program with other governmental bodies [agencies] and
11-1 with the Center for Public Policy Dispute Resolution at The
11-2 University of Texas School of Law. The center may collect and
11-3 analyze the information and report its conclusions and useful
11-4 information to governmental bodies [state agencies] and the
11-5 legislature.
11-6 (b) Governmental bodies [State agencies] should, to the
11-7 extent feasible given [the] differences in their [agency] purpose,
11-8 jurisdiction, and constituency, adopt policies and procedures for
11-9 alternative dispute resolution that are consistent with the
11-10 policies and procedures of other governmental bodies [state
11-11 agencies].
11-12 SECTION 6. Section 154.073, Civil Practice and Remedies
11-13 Code, is amended to read as follows:
11-14 Sec. 154.073. CONFIDENTIALITY OF CERTAIN RECORDS AND
11-15 COMMUNICATIONS [IN DISPUTE RESOLUTION PROCEDURES]. (a) Except as
11-16 provided by Subsections (c), [and] (d), and (e), a communication
11-17 relating to the subject matter of any civil or criminal dispute
11-18 made by a participant in an alternative dispute resolution
11-19 procedure, whether before or after the institution of formal
11-20 judicial proceedings, is confidential, is not subject to
11-21 disclosure, and may not be used as evidence against the participant
11-22 in any judicial or administrative proceeding.
11-23 (b) Any record made at an alternative dispute resolution
11-24 procedure is confidential, and the participants or the third party
11-25 facilitating the procedure may not be required to testify in any
11-26 proceedings relating to or arising out of the matter in dispute or
11-27 be subject to process requiring disclosure of confidential
12-1 information or data relating to or arising out of the matter in
12-2 dispute.
12-3 (c) An oral communication or written material used in or
12-4 made a part of an alternative dispute resolution procedure is
12-5 admissible or discoverable if it is admissible or discoverable
12-6 independent of the procedure.
12-7 (d) A final written agreement to which a governmental body,
12-8 as defined by Section 552.003, Government Code, is a signatory that
12-9 is reached as a result of a dispute resolution procedure conducted
12-10 under this chapter is subject to or excepted from required
12-11 disclosure in accordance with Chapter 552, Government Code.
12-12 (e) If this section conflicts with other legal requirements
12-13 for disclosure of communications, records, or materials, the issue
12-14 of confidentiality may be presented to the court having
12-15 jurisdiction of the proceedings to determine, in camera, whether
12-16 the facts, circumstances, and context of the communications or
12-17 materials sought to be disclosed warrant a protective order of the
12-18 court or whether the communications or materials are subject to
12-19 disclosure.
12-20 SECTION 7. Section 2003.001(2), Government Code, is amended
12-21 to read as follows:
12-22 (2) "Alternative dispute resolution procedure" has the
12-23 meaning assigned by Section 2009.003 [2008.003].
12-24 SECTION 8. Section 2003.042(a), Government Code, is amended
12-25 to read as follows:
12-26 (a) An administrative law judge employed by the office or a
12-27 temporary administrative law judge may:
13-1 (1) administer an oath;
13-2 (2) take testimony;
13-3 (3) rule on a question of evidence;
13-4 (4) issue an order relating to discovery or another
13-5 hearing or prehearing matter, including an order imposing a
13-6 sanction;
13-7 (5) issue an order that refers a case to an
13-8 alternative dispute resolution procedure, determines how the costs
13-9 of the procedure will be apportioned, and appoints an impartial
13-10 third party as described by Section 2009.053 [2008.053] to
13-11 facilitate that procedure;
13-12 (6) issue a proposal for decision that includes
13-13 findings of fact and conclusions of law; [and]
13-14 (7) [(6)] if expressly authorized by a state agency
13-15 rule adopted under Section 2001.058(f), make the final decision in
13-16 a contested case;[.]
13-17 (8) [(7)] serve as an impartial third party as
13-18 described by Section 2009.053 [2008.053] for a dispute referred by
13-19 an administrative law judge, unless one of the parties objects to
13-20 the appointment; and
13-21 (9) [(8)] serve as an impartial third party as
13-22 described by Section 2009.053 [2008.053] for a dispute referred by
13-23 a government agency under a contract.
13-24 SECTION 9. Subtitle F, Title 10, Government Code, is amended
13-25 by adding Chapter 2260 to read as follows:
13-26 CHAPTER 2260. RESOLUTION OF CERTAIN CONTRACT CLAIMS
13-27 AGAINST THE STATE
14-1 SUBCHAPTER A. GENERAL PROVISIONS
14-2 Sec. 2260.001. DEFINITIONS. In this chapter:
14-3 (1) "Contract" means a written contract between a unit
14-4 of state government and a contractor for goods or services, or for
14-5 a project as defined by Section 2166.001. The term does not
14-6 include a contract subject to Section 201.112, Transportation Code.
14-7 (2) "Contractor" means an independent contractor who
14-8 has entered into a contract directly with a unit of state
14-9 government. The term does not include:
14-10 (A) a contractor's subcontractor, officer,
14-11 employee, agent, or other person furnishing goods or services to a
14-12 contractor;
14-13 (B) an employee of a unit of state government;
14-14 or
14-15 (C) a student at an institution of higher
14-16 education.
14-17 (3) "Institution of higher education" has the meaning
14-18 assigned by Section 61.003, Education Code.
14-19 (4) "Unit of state government" means the state or an
14-20 agency, department, commission, bureau, board, office, council,
14-21 court, or other entity that is in any branch of state government
14-22 and that is created by the constitution or a statute of this state,
14-23 including a university system or institution of higher education.
14-24 The term does not include a county, municipality, court of a county
14-25 or municipality, special purpose district, or other political
14-26 subdivision of this state.
14-27 Sec. 2260.002. APPLICABILITY. This chapter does not apply
15-1 to a claim for personal injury or wrongful death arising from the
15-2 breach of a contract.
15-3 Sec. 2260.003. DAMAGES. (a) The total amount of money
15-4 recoverable on a claim for breach of contract under this chapter
15-5 may not, after deducting the amount specified in Subsection (b),
15-6 exceed the balance due and owing on the contract price, including
15-7 orders for additional work.
15-8 (b) Any amount owed the unit of state government for work
15-9 not performed under a contract or in substantial compliance with
15-10 its terms shall be deducted from the amount in Subsection (a).
15-11 (c) Any award of damages under this chapter may not include:
15-12 (1) consequential or similar damages;
15-13 (2) exemplary damages;
15-14 (3) any damages based on an unjust enrichment theory;
15-15 (4) attorney's fees; or
15-16 (5) home office overhead.
15-17 Sec. 2260.004. REQUIRED CONTRACT PROVISION. (a) Each unit
15-18 of state government that enters into a contract to which this
15-19 chapter applies shall include as a term of the contract a provision
15-20 stating that the dispute resolution process used by the unit of
15-21 state government under this chapter must be used to attempt to
15-22 resolve a dispute arising under the contract.
15-23 (b) The attorney general shall provide assistance to a unit
15-24 of state government in developing the contract provision required
15-25 by this section.
15-26 Sec. 2260.005. EXCLUSIVE PROCEDURE. The procedures
15-27 contained in this chapter are exclusive and required prerequisites
16-1 to suit in accordance with Chapter 107, Civil Practice and Remedies
16-2 Code.
16-3 Sec. 2260.006. SOVEREIGN IMMUNITY. This chapter does not
16-4 waive sovereign immunity to suit or liability.
16-5 (Sections 2260.007-2260.050 reserved for expansion
16-6 SUBCHAPTER B. NEGOTIATION OF CLAIM
16-7 Sec. 2260.051. CLAIM FOR BREACH OF CONTRACT; NOTICE. (a) A
16-8 contractor may make a claim against a unit of state government for
16-9 breach of a contract between the unit of state government and the
16-10 contractor. The unit of state government may assert a counterclaim
16-11 against the contractor.
16-12 (b) A contractor must provide written notice to the unit of
16-13 state government of a claim for breach of contract not later than
16-14 the 180th day after the date of the event giving rise to the claim.
16-15 (c) The notice must state with particularity:
16-16 (1) the nature of the alleged breach;
16-17 (2) the amount the contractor seeks as damages; and
16-18 (3) the legal theory of recovery.
16-19 (d) A unit of state government must assert, in a writing
16-20 delivered to the contractor, any counterclaim not later than the
16-21 90th day after the date of notice under Subsection (b). A unit of
16-22 state government that does not comply with this subsection waives
16-23 the right to assert the counterclaim.
16-24 Sec. 2260.052. NEGOTIATION. (a) The chief administrative
16-25 officer or, if designated in the contract, another officer of the
16-26 unit of state government shall examine the claim and any
16-27 counterclaim and negotiate with the contractor in an effort to
17-1 resolve them. Except as provided by Subsection (b), the
17-2 negotiation must begin not later than the 60th day after the later
17-3 of:
17-4 (1) the date of termination of the contract;
17-5 (2) the completion date in the original contract; or
17-6 (3) the date the claim is received.
17-7 (b) A unit of state government against which a claim is
17-8 filed is entitled to delay the beginning of negotiation until after
17-9 the 180th day after the date of the event giving rise to the claim.
17-10 (c) Each unit of state government with rulemaking authority
17-11 shall develop rules to govern the negotiation and mediation of a
17-12 claim under this section. If a unit of state government does not
17-13 have rulemaking authority, that unit shall follow the rules adopted
17-14 by the attorney general. A model rule for negotiation and
17-15 mediation under this chapter shall be provided for voluntary
17-16 adoption by units of state government through the coordinated
17-17 efforts of the State Office of Administrative Hearings and the
17-18 office of the attorney general.
17-19 Sec. 2260.053. PARTIAL RESOLUTION OF CLAIM. (a) If the
17-20 negotiation under Section 2260.052 results in the resolution of
17-21 some disputed issues by agreement or in a settlement, the parties
17-22 shall reduce the agreement or settlement to writing and each party
17-23 shall sign the agreement or settlement.
17-24 (b) A partial settlement or resolution of a claim does not
17-25 waive a party's rights under this chapter as to the parts of the
17-26 claim that are not resolved.
17-27 Sec. 2260.054. PAYMENT OF CLAIM FROM APPROPRIATED FUNDS. A
18-1 unit of state government may pay a claim resolved in accordance
18-2 with this subchapter only from money appropriated to it for payment
18-3 of contract claims or for payment of the contract that is the
18-4 subject of the claim. If money previously appropriated for payment
18-5 of contract claims or payment of the contract is insufficient to
18-6 pay the claim or settlement, the balance of the claim may be paid
18-7 only from money appropriated by the legislature for payment of the
18-8 claim.
18-9 Sec. 2260.055. INCOMPLETE RESOLUTION. If a claim is not
18-10 entirely resolved under Section 2260.052 on or before the 270th day
18-11 after the date the claim is filed with the unit of state
18-12 government, unless the parties agree in writing to an extension of
18-13 time, the contractor may file a request for a hearing under
18-14 Subchapter C.
18-15 Sec. 2260.056. MEDIATION. (a) Before the 270th day after
18-16 the date the claim is filed with the unit of state government and
18-17 before the expiration of any extension of time under Section
18-18 2260.055, the parties may agree to mediate a claim made under this
18-19 chapter.
18-20 (b) The mediation shall be conducted in accordance with
18-21 rules adopted under Section 2260.052(c).
18-22 (Sections 2260.057-2260.100 reserved for expansion
18-23 SUBCHAPTER C. CONTESTED CASE HEARING
18-24 Sec. 2260.101. DEFINITION. In this subchapter, "office"
18-25 means the State Office of Administrative Hearings.
18-26 Sec. 2260.102. REQUEST FOR HEARING. (a) If a contractor is
18-27 not satisfied with the results of negotiation with a unit of state
19-1 government under Section 2260.052, the contractor may file a
19-2 request for a hearing with the unit of state government.
19-3 (b) The request must:
19-4 (1) state the factual and legal basis for the claim;
19-5 and
19-6 (2) request that the claim be referred to the State
19-7 Office of Administrative Hearings for a contested case hearing.
19-8 (c) On receipt of a request under Subsection (a), the unit
19-9 of state government shall refer the claim to the State Office of
19-10 Administrative Hearings for a contested case hearing under Chapter
19-11 2001, Government Code, as to the issues raised in the request.
19-12 Sec. 2260.103. HEARING FEE. (a) The chief administrative
19-13 law judge of the office may set a fee for a hearing before the
19-14 office under this subchapter.
19-15 (b) The chief administrative law judge of the office shall
19-16 set the fee in an amount that:
19-17 (1) is not less than $250; and
19-18 (2) allows the office to recover all or a substantial
19-19 part of its costs in holding hearings.
19-20 (c) The chief administrative law judge of the office by rule
19-21 may establish a graduated fee scale, increasing the fee in relation
19-22 to the amount in controversy.
19-23 (d) The office may:
19-24 (1) assess the fee against the party who does not
19-25 prevail in the hearing; or
19-26 (2) apportion the fee against the parties in an
19-27 equitable manner.
20-1 Sec. 2260.104. HEARING. (a) An administrative law judge of
20-2 the office shall conduct a hearing in accordance with the
20-3 procedures adopted by the chief administrative law judge of the
20-4 office.
20-5 (b) Within a reasonable time after the conclusion of the
20-6 hearing, the administrative law judge shall issue a written
20-7 decision containing the administrative law judge's findings and
20-8 recommendations.
20-9 (c) The administrative law judge shall base the decision on
20-10 the pleadings filed with the office and the evidence received.
20-11 (d) The decision must include:
20-12 (1) the findings of fact and conclusions of law on
20-13 which the administrative law judge's decision is based; and
20-14 (2) a summary of the evidence.
20-15 (e) In a contested case hearing under this subchapter:
20-16 (1) the decision may not be appealed; and
20-17 (2) the state agency may not change the finding of
20-18 fact or conclusion of law, nor vacate or modify an order as
20-19 provided in Section 2001.058(e).
20-20 (f) Subchapter G, Chapter 2001, does not apply to a hearing
20-21 under this section.
20-22 Sec. 2260.105. PAYMENT OF CLAIM. (a) The unit of state
20-23 government shall pay the amount of the claim or part of the claim
20-24 if:
20-25 (1) the administrative law judge finds, by a
20-26 preponderance of the evidence, that under the laws of this state
20-27 the claim or part of the claim is valid; and
21-1 (2) the total amount of damages, after taking into
21-2 account any counterclaim, is less than $250,000.
21-3 (b) A unit of state government shall pay a claim under this
21-4 subchapter from money appropriated to it for payment of contract
21-5 claims or for payment of the contract that is the subject of the
21-6 claim. If money previously appropriated for payment of contract
21-7 claims or payment of the contract is insufficient to pay the claim,
21-8 the balance of the claim may be paid only from money appropriated
21-9 by the legislature for payment of the claim.
21-10 Sec. 2260.1055. REPORT AND RECOMMENDATION TO LEGISLATURE.
21-11 (a) If, after a hearing, the administrative law judge determines
21-12 that a claim involves damages of $250,000 or more, the
21-13 administrative law judge shall issue a written report containing
21-14 the administrative law judge's findings and recommendations to the
21-15 legislature.
21-16 (b) The administrative law judge may recommend that the
21-17 legislature:
21-18 (1) appropriate money to pay the claim or part of the
21-19 claim if the administrative law judge finds, by a preponderance of
21-20 the evidence, that under the laws of this state the claim or part
21-21 of the claim is valid; or
21-22 (2) not appropriate money to pay the claim and that
21-23 consent to suit under Chapter 107, Civil Practice and Remedies
21-24 Code, be denied.
21-25 Sec. 2260.106. PREJUDGMENT INTEREST. Chapter 304, Finance
21-26 Code, applies to a judgment awarded to a claimant under this
21-27 chapter, except that the applicable rate of interest may not exceed
22-1 six percent.
22-2 Sec. 2260.107. EXECUTION ON STATE PROPERTY NOT AUTHORIZED.
22-3 This chapter does not authorize execution on property owned by the
22-4 state or a unit of state government.
22-5 Sec. 2260.108. DEFENSE BY ATTORNEY GENERAL. (a) The
22-6 attorney general shall defend a unit of state government in a
22-7 contested case hearing covered by this chapter.
22-8 (b) The attorney general may settle or compromise the
22-9 portion of a claim that may result in state liability under this
22-10 chapter.
22-11 SECTION 10. Chapter 2009, Government Code, as amended by
22-12 this Act, does not require a party to a dispute to participate in
22-13 an alternative dispute resolution procedure, and does not preclude
22-14 a party from seeking another remedy, including litigation, that
22-15 otherwise is available.
22-16 SECTION 11. Chapter 2009, Government Code, as amended and
22-17 redesignated by this Act, and Section 154.073, Civil Practice and
22-18 Remedies Code, as amended by this Act, apply only to an alternative
22-19 dispute resolution proceeding that begins on or after September 1,
22-20 1999. An alternative dispute resolution proceeding that began
22-21 before September 1, 1999, and a record associated with that
22-22 proceeding, are governed by the law applicable to the proceeding
22-23 immediately before the effective date of this Act, and that law is
22-24 continued in effect for that purpose.
22-25 SECTION 12. (a) Chapter 2260, Government Code, as added by
22-26 this Act, applies only to a claim pending or arising on or after
22-27 the effective date of this Act, without regard to whether the
23-1 contract was entered into before, on, or after that date.
23-2 (b) Notwithstanding Section 2260.051(b), Government Code, as
23-3 added by this Act, a claimant must provide written notice to the
23-4 unit of state government for a claim pending before the effective
23-5 date of this Act not later than the 180th day after that date.
23-6 SECTION 13. Chapter 2260, Government Code, as added by this
23-7 Act, does not apply to a claim or dispute with respect to which the
23-8 76th Legislature or a previous legislature has enacted a concurrent
23-9 resolution granting permission to the contractor to bring a suit
23-10 against the state or a unit of state government.
23-11 SECTION 14. (a) Except as provided by Subsection (b) of
23-12 this section, this Act takes effect immediately.
23-13 (b) Sections 1-8 of this Act take effect September 1, 1999.
23-14 SECTION 15. The importance of this legislation and the
23-15 crowded condition of the calendars in both houses create an
23-16 emergency and an imperative public necessity that the
23-17 constitutional rule requiring bills to be read on three several
23-18 days in each house be suspended, and this rule is hereby suspended,
23-19 and that this Act take effect and be in force according to its
23-20 terms, and it is so enacted.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 826 was passed by the House on April
29, 1999, by a non-record vote; that the House refused to concur in
Senate amendments to H.B. No. 826 on May 27, 1999, and requested
the appointment of a conference committee to consider the
differences between the two houses; and that the House adopted the
conference committee report on H.B. No. 826 on May 30, 1999, by a
non-record vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 826 was passed by the Senate, with
amendments, on May 24, 1999, by a viva-voce vote; at the request of
the House, the Senate appointed a conference committee to consider
the differences between the two houses; and that the Senate adopted
the conference committee report on H.B. No. 826 on May 30, 1999, by
the following vote: Yeas 30, Nays 0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor