By Junell H.B. No. 2741
76R1495 DAK-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the creation of the State Claims Commission for certain
1-3 contract claims.
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 Chapters 2259 and 2260 to read as follows:
1-7 CHAPTER 2259. STATE CLAIMS COMMISSION
1-8 SUBCHAPTER A. GENERAL AND ADMINISTRATIVE PROVISIONS
1-9 Sec. 2259.001. DEFINITION. In this chapter, "commission"
1-10 means the State Claims Commission.
1-11 Sec. 2259.002. SUNSET PROVISION. The State Claims
1-12 Commission is subject to Chapter 325 (Texas Sunset Act). Unless
1-13 continued in existence as provided by that chapter, the commission
1-14 is abolished and this chapter expires September 1, 2011.
1-15 Sec. 2259.003. COMPOSITION OF COMMISSION; QUALIFICATIONS.
1-16 (a) The commission is composed of:
1-17 (1) one member appointed by the governor;
1-18 (2) one member appointed by the lieutenant governor;
1-19 and
1-20 (3) one member appointed by the speaker of the house
1-21 of representatives.
1-22 (b) To be eligible for appointment as a member of the
1-23 commission, an individual must:
1-24 (1) be licensed to practice law in this state;
2-1 (2) have practiced administrative law; and
2-2 (3) have experience in the adjudication of contract
2-3 disputes.
2-4 (c) The commission annually shall elect one of its members
2-5 as presiding officer.
2-6 Sec. 2259.004. TERMS; VACANCY. (a) Members of the
2-7 commission serve staggered terms of six years, with the term of one
2-8 member expiring on February 1 of each odd-numbered year.
2-9 (b) If a vacancy occurs during a term, the appointing
2-10 authority shall fill the vacancy for the unexpired term.
2-11 Sec. 2259.005. COMPENSATION; EXPENSES. (a) A member of the
2-12 commission may receive compensation for the member's services.
2-13 (b) A member of the commission is entitled to reimbursement
2-14 from commission funds for travel expenses incurred by the member
2-15 while conducting the business of the commission, as provided by the
2-16 General Appropriations Act.
2-17 Sec. 2259.006. MEETINGS. (a) The commission shall hold at
2-18 least four meetings each year.
2-19 (b) The commission may meet at the times and places within
2-20 the state as the commission designates.
2-21 Sec. 2259.007. STAFF. The State Office of Administrative
2-22 Hearings shall provide staff and facilities to the commission
2-23 sufficient for the commission to perform its powers and duties.
2-24 Sec. 2259.008. ANNUAL REPORT. The commission shall prepare
2-25 annually a written report accounting for all funds received and
2-26 disbursed by the commission during the preceding fiscal year. The
2-27 report must meet the reporting requirements applicable to financial
3-1 reporting provided by the General Appropriations Act.
3-2 (Sections 2259.009-2259.050 reserved for expansion
3-3 SUBCHAPTER B. POWERS AND DUTIES
3-4 Sec. 2259.051. GENERAL POWERS AND DUTIES. (a) The
3-5 commission shall conduct hearings and issue findings related to
3-6 breach of contract claims against a unit of state government
3-7 brought under Chapter 2260.
3-8 (b) The commission may:
3-9 (1) hold hearings;
3-10 (2) administer oaths;
3-11 (3) take testimony;
3-12 (4) rule on a question of evidence; and
3-13 (5) issue an order relating to discovery or another
3-14 hearing matter.
3-15 Sec. 2259.052. PROCEDURAL RULES. (a) The commission shall
3-16 adopt rules that govern the procedures, including discovery
3-17 procedures, that relate to a hearing conducted by the commission.
3-18 (b) The commission shall develop rules that govern the
3-19 negotiation of claims under Subchapter B, Chapter 2260, by units of
3-20 state government that do not have rulemaking authority.
3-21 (c) Notwithstanding other law, the procedural rules of the
3-22 unit of state government on behalf of which the hearing is
3-23 conducted govern procedural matters that relate to the hearing only
3-24 to the extent that the commission's rules adopt the unit's
3-25 procedural rules by reference.
3-26 CHAPTER 2260. RESOLUTION OF CERTAIN CONTRACT CLAIMS
3-27 AGAINST THE STATE
4-1 SUBCHAPTER A. GENERAL PROVISIONS
4-2 Sec. 2260.001. DEFINITIONS. In this chapter:
4-3 (1) "Commission" means the State Claims Commission.
4-4 (2) "Contract" means a contract between a unit of
4-5 state government and a contractor for:
4-6 (A) goods;
4-7 (B) services; or
4-8 (C) a project as defined by Section 2166.001.
4-9 (3) "Contractor" means an independent contractor who
4-10 has entered into a contract directly with a unit of state
4-11 government. The term does not include:
4-12 (A) a subcontractor who has entered into a
4-13 contract with a contractor;
4-14 (B) an employee of a unit of state government;
4-15 or
4-16 (C) a student at an institution of higher
4-17 education.
4-18 (4) "Institution of higher education" has the meaning
4-19 assigned by Section 61.003, Education Code.
4-20 (5) "Unit of state government" means the state or an
4-21 agency, department, commission, bureau, board, office, council,
4-22 court, or other entity that is in any branch of state government
4-23 and that is created by the constitution or a statute of this state,
4-24 including a university system or institution of higher education.
4-25 The term does not include a county, municipality, court of a county
4-26 or municipality, special purpose district, or other political
4-27 subdivision of this state.
5-1 Sec. 2260.002. APPLICABILITY. This chapter does not apply
5-2 to a claim for personal injury or wrongful death arising from the
5-3 breach of a contract.
5-4 Sec. 2260.003. APPLICATION OF ADMINISTRATIVE PROCEDURE AND
5-5 TEXAS REGISTER ACT. Except as otherwise provided by this chapter,
5-6 Chapter 2001 does not apply to a hearing under this chapter.
5-7 Sec. 2260.004. DAMAGES. (a) The total amount of damages
5-8 awarded to a claimant based on a claim for breach of contract under
5-9 this chapter may not exceed the total value of consideration the
5-10 claimant was to receive under the contract.
5-11 (b) Any award of damages under this chapter may not include:
5-12 (1) consequential or similar damages;
5-13 (2) exemplary damages;
5-14 (3) any damages based on an unjust enrichment theory;
5-15 (4) attorney's fees; or
5-16 (5) home office overhead.
5-17 Sec. 2260.005. REQUIRED CONTRACT PROVISION. (a) Each unit
5-18 of state government that enters into a contract to which this
5-19 chapter applies shall include as a term of the contract a provision
5-20 stating that the dispute resolution process used by the unit of
5-21 state government under this chapter must be used to attempt to
5-22 resolve a dispute arising under the contract.
5-23 (b) The attorney general shall provide assistance to a unit
5-24 of state government in developing the contract provision required
5-25 by this section.
5-26 Sec. 2260.006. EXCLUSIVE PROCEDURE. The procedures
5-27 contained in this chapter are exclusive and required prerequisites
6-1 to seeking consent to suit under Chapter 107, Civil Practice and
6-2 Remedies Code.
6-3 Sec. 2260.007. SOVEREIGN IMMUNITY REAFFIRMED AND NOT WAIVED.
6-4 (a) The rule of sovereign immunity from suit without legislative
6-5 consent, and the inability of the immunity to be waived by the
6-6 conduct of any person, is reaffirmed.
6-7 (b) Any conduct, act, or inaction by any person in the
6-8 execution, administration, or performance of any contract subject
6-9 to this chapter does not constitute a waiver of the state's
6-10 immunity from suit.
6-11 (Sections 2260.008-2260.050 reserved for expansion
6-12 SUBCHAPTER B. NEGOTIATION OF CLAIM
6-13 Sec. 2260.051. CLAIM FOR BREACH OF CONTRACT; NOTICE. (a) A
6-14 claimant may make a claim against a unit of state government that
6-15 alleges that the unit of state government breached a contract with
6-16 the claimant. The unit of state government may file a counterclaim
6-17 against the claimant.
6-18 (b) A claimant must provide written notice to the unit of
6-19 state government of a claim for breach of contract not later than
6-20 the 180th day after the date of the alleged breach.
6-21 (c) The notice must state with particularity:
6-22 (1) the nature of the alleged breach;
6-23 (2) the amount the claimant seeks as damages; and
6-24 (3) the legal theory of recovery.
6-25 (d) A claimant must file a claim for breach of contract
6-26 with the chief administrative officer or, if designated in the
6-27 contract, another officer of the unit of state government not later
7-1 than the 30th day after the date notice is provided under
7-2 Subsection (b). The claim must contain:
7-3 (1) a concise statement of the facts and the legal
7-4 theory of recovery relied on by the claimant;
7-5 (2) a statement of the relief or remedy desired; and
7-6 (3) a copy of the contract and any other relevant
7-7 documents that pertain to the claim.
7-8 (e) A unit of state government must file any counterclaim
7-9 not later than the 90th day after the date of notice under
7-10 Subsection (b).
7-11 Sec. 2260.052. NEGOTIATION. (a) The chief administrative
7-12 officer or, if designated in the contract, another officer of the
7-13 unit of state government shall examine the claim and any
7-14 counterclaim and negotiate in good faith with the claimant in an
7-15 effort to resolve them. Except as provided by Subsection (b), the
7-16 negotiation must begin not later than the 60th day after the later
7-17 of:
7-18 (1) the date of termination of the contract;
7-19 (2) the completion date in the original contract; or
7-20 (3) the date the claim is received.
7-21 (b) A unit of state government against which a claim is
7-22 filed is entitled to delay the beginning of negotiation until after
7-23 the 180th day after the date of the alleged breach.
7-24 (c) Each unit of state government with rulemaking authority
7-25 shall develop rules to govern the negotiation of a claim under this
7-26 section. If a unit of state government does not have rulemaking
7-27 authority, that unit shall follow the rules adopted by the
8-1 commission under Section 2259.052 unless that unit has created its
8-2 own procedures that have been approved by the commission.
8-3 Sec. 2260.053. PARTIAL RESOLUTION OF CLAIM. (a) If the
8-4 negotiation under Section 2260.052 results in the resolution of
8-5 some disputed issues by agreement or in a settlement, the parties
8-6 shall reduce the agreement or settlement to writing and each party
8-7 shall sign the agreement or settlement.
8-8 (b) Any agreement or settlement shall be filed with the
8-9 commission.
8-10 Sec. 2260.054. PAYMENT OF CLAIM FROM APPROPRIATED FUNDS. A
8-11 unit of state government may pay the claim only from money
8-12 appropriated to it for payment of contract claims or for payment of
8-13 the contract that is the subject of the claim.
8-14 Sec. 2260.055. INCOMPLETE RESOLUTION. If a claim is not
8-15 entirely resolved under Section 2260.052 on or before the 180th day
8-16 after the date the claim is filed with the commission, unless the
8-17 parties agree to an extension of time and file that agreement with
8-18 the commission, the claimant may file a request for hearing with
8-19 the commission.
8-20 (Sections 2260.056-2260.100 reserved for expansion
8-21 SUBCHAPTER C. COMMISSION HEARING
8-22 Sec. 2260.101. REQUEST FOR HEARING. (a) If a claimant is
8-23 not satisfied with the results of negotiation with a unit of state
8-24 government under Section 2260.052, the claimant may file a request
8-25 for hearing with the commission.
8-26 (b) The request for hearing must include:
8-27 (1) the information provided to the unit of state
9-1 government under Section 2260.051(d); and
9-2 (2) only the issues that remain disputed after
9-3 negotiation under Subchapter B.
9-4 Sec. 2260.102. NOTICE OF HEARING. (a) Not later than the
9-5 seventh day after the day a claimant files a request for hearing,
9-6 the commission shall set a hearing date and provide written notice
9-7 to the claimant and the unit of state government.
9-8 (b) The commission shall schedule the hearing for a date not
9-9 earlier than the 60th day after the date the claimant filed the
9-10 request for hearing.
9-11 Sec. 2260.103. DISCOVERY. Commission rules adopted under
9-12 Section 2259.052 must provide that the claimant and the unit of
9-13 state government have limited discovery.
9-14 Sec. 2260.104. VENUE FOR HEARING. Unless the commission
9-15 determines that good cause exists for the selection of a different
9-16 location, the commission shall hold the hearing in Travis County.
9-17 Sec. 2260.105. HEARING FEE. (a) The commission may set a
9-18 fee for a hearing before the commission under this subchapter.
9-19 (b) The commission shall set the fee in an amount that:
9-20 (1) is not less than $250; and
9-21 (2) allows the commission to recover all or a
9-22 substantial part of its costs in holding hearings.
9-23 (c) The commission by rule may establish a graduated fee
9-24 scale, increasing the fee in relation to the amount in controversy.
9-25 (d) The commission may:
9-26 (1) assess the fee against the party who does not
9-27 prevail in the hearing; or
10-1 (2) apportion the fee against the parties in an
10-2 equitable manner.
10-3 Sec. 2260.106. DESIGNATION OF HEARING PANEL. (a) The
10-4 commission may:
10-5 (1) hear the claim brought before it; or
10-6 (2) designate a person or a panel of persons the
10-7 commission determines are qualified to hear the claim.
10-8 (b) A person who hears a claim under this section is
10-9 entitled to compensation for the person's services as determined by
10-10 the commission.
10-11 Sec. 2260.107. HEARING ON RECORD. The commission may hear a
10-12 claim on the record without live testimony if the commission
10-13 determines that, considering the nature of the claim, a hearing on
10-14 the record is equitable and efficient.
10-15 Sec. 2260.108. HEARING. (a) The commission shall conduct a
10-16 hearing in accordance with the procedures adopted by the
10-17 commission.
10-18 (b) At the conclusion of the hearing, the commission shall
10-19 issue a written order detailing the commission's findings and
10-20 recommendations.
10-21 Sec. 2260.109. PAYMENT OF CLAIM. (a) The unit of state
10-22 government shall pay the amount of the claim or part of the claim
10-23 if:
10-24 (1) a majority of the commission finds, by a
10-25 preponderance of the evidence, that under the laws of this state
10-26 the claim or part of the claim is valid; and
10-27 (2) the total amount of damages, after taking into
11-1 account any counterclaim, is less than $250,000.
11-2 (b) A unit of state government shall pay the claim in
11-3 accordance with Section 2260.054.
11-4 Sec. 2260.110. REPORT AND RECOMMENDATION TO LEGISLATURE.
11-5 (a) If after a hearing the commission determines that a claim
11-6 involves damages of $250,000 or more, the commission shall issue a
11-7 written report containing the commission's findings and
11-8 recommendations to the legislature.
11-9 (b) The commission may recommend that the legislature:
11-10 (1) appropriate money to pay the claim or part of the
11-11 claim if a majority of the commission finds, by a preponderance of
11-12 the evidence, that under the laws of this state the claim or part
11-13 of the claim is valid; or
11-14 (2) not appropriate money to pay the claim and that
11-15 consent to suit under Chapter 107, Civil Practice and Remedies
11-16 Code, be denied.
11-17 SECTION 2. This Act takes effect September 1, 1999.
11-18 SECTION 3. (a) This Act applies only to a breach of
11-19 contract pending or arising on or after the effective date of this
11-20 Act, without regard to whether the contract was entered into
11-21 before, on, or after that date.
11-22 (b) Notwithstanding Section 2260.051(b), Government Code, as
11-23 added by this Act, a claimant must provide written notice to the
11-24 unit of state government for breach of a contract entered into
11-25 before the effective date of this Act not later than the 180th day
11-26 after that date.
11-27 (c) For purposes of this section, a contract is entered into
12-1 after the effective date of this Act if it is executed or renewed
12-2 after the effective date of this Act.
12-3 SECTION 4. The importance of this legislation and the
12-4 crowded condition of the calendars in both houses create an
12-5 emergency and an imperative public necessity that the
12-6 constitutional rule requiring bills to be read on three several
12-7 days in each house be suspended, and this rule is hereby suspended.