1-1     By:  Cain                                              S.B. No. 629
 1-2           (In the Senate - Filed February 22, 1999; February 23, 1999,
 1-3     read first time and referred to Committee on Jurisprudence;
 1-4     April 22, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 4, Nays 0; April 22, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 629                   By:  Harris
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to contract claims against a unit of state government.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Title 5, Civil Practice and Remedies Code, is
1-13     amended by adding Chapter 110 to read as follows:
1-14               CHAPTER 110.  CONTRACT CLAIMS AGAINST THE STATE
1-15           Sec. 110.001.  DEFINITIONS.  In this chapter:
1-16                 (1)  "Contract" means a contract between a unit of
1-17     state government and a contractor for a project as that term is
1-18     defined by Section 2166.001(4), Government Code.
1-19                 (2)  "Unit of state government" means the state or an
1-20     agency, department, commission, bureau, board, office, council,
1-21     court, or other entity that is in any branch of state government
1-22     and that is created by the constitution or a statute of this state,
1-23     including a university system or institution of higher education as
1-24     defined by Section 61.003, Education Code.  The term does not
1-25     include a county, municipality, court of a county or municipality,
1-26     special purpose district, or other political subdivision of this
1-27     state.
1-28           Sec. 110.002.  RIGHTS OF CONTRACTING PARTIES.  (a)  A
1-29     claimant may proceed under Section 110.003 with respect to a claim
1-30     against a unit of state government that alleges that the unit has
1-31     breached a written contract with the claimant for engineering or
1-32     construction services.
1-33           (b)  Sovereign immunity to suit is waived for purposes of an
1-34     appeal under Sections 110.006 and 110.007.
1-35           Sec. 110.003.  CLAIM.  (a)  A contractor may make a claim
1-36     against a unit of state government for breach of a contract.
1-37           (b)  A claim may be made by filing a petition with the chief
1-38     administrative officer or, if designated in the contract, another
1-39     officer of the unit of state government.  The petition must:
1-40                 (1)  contain a concise statement of the facts relied on
1-41     by the claimant, the relief or remedy desired, a copy of the
1-42     contract, and other contract documents that pertain to the claim;
1-43     and
1-44                 (2)  be sworn to by the claimant or the claimant's
1-45     representative or attorney.
1-46           Sec. 110.004.  NEGOTIATION AND MEDIATION.  (a)  The chief
1-47     administrative officer or, if designated in the contract, another
1-48     officer of the unit of state government, shall examine the claim
1-49     and negotiate in good faith with the claimant in an effort to
1-50     resolve the claim.
1-51           (b)  If the claim is not resolved before the 31st day after
1-52     the date the claim is received, the parties shall mediate the claim
1-53     with an independent mediator selected in accordance with the rules
1-54     of the American Arbitration Association in effect on the date the
1-55     contract was entered into.  The mediation shall be completed during
1-56     the following 60 days or, if both parties agree to an extension
1-57     during the mediation process, may continue for a longer period.
1-58           Sec. 110.005.  CONTESTED CASE HEARING.  (a)  If the claimant
1-59     is not satisfied with the response to the claim by the unit of
1-60     state government, the claimant may file an appeal with the unit.
1-61           (b)  The appeal must state the factual and legal basis for
1-62     the claim.
1-63           (c)  On receipt of an appeal under Subsection (a), the
1-64     contractor making the appeal and the unit of state government shall
 2-1     before the 31st day after the appeal:
 2-2                 (1)  agree to arbitration as outlined in Section
 2-3     110.006; or
 2-4                 (2)  agree to refer the claim to court as outlined in
 2-5     Section 110.007.
 2-6           Sec. 110.006.  ARBITRATION.  Claims referred to arbitration
 2-7     under Section 110.005 shall be decided in accordance with the
 2-8     Construction Industry Arbitration Rules of the American Arbitration
 2-9     Association in effect on the date the contract was entered into.
2-10           Sec. 110.007.  APPEAL TO COURT.  Claims referred under
2-11     Section 110.005 may be appealed as a contested case by trial under
2-12     Section 2001.171, Government Code, and the court to which the claim
2-13     is appealed may make an award in accordance with Section 110.008.
2-14           Sec. 110.0075.  STANDARD OF REVIEW.  In all cases appealed
2-15     pursuant to Section 110.007, the court shall review the case by
2-16     trial de novo, in accordance with Section 2001.173, Government
2-17     Code.
2-18           Sec. 110.008.  AWARD.  (a)  An award based on a claim made
2-19     under this chapter may not exceed the total value of the
2-20     consideration the claimant was to receive under the contract,
2-21     including any charge accepted by a unit of state government.
2-22           (b)  The award may not include any:
2-23                 (1)  consequential or similar damages; or
2-24                 (2)  exemplary damages.
2-25           Sec. 110.009.  VENUE.  An appeal brought under Section
2-26     110.007 shall be brought in Travis County.
2-27           Sec. 110.010.  SERVICE OF CITATION.  In an appeal brought
2-28     under Section 110.007, service of citation and other required
2-29     process must be made on:
2-30                 (1)  the attorney general; and
2-31                 (2)  the chief administrative officer or another
2-32     officer of the unit of state government with which the claimant
2-33     contracted.
2-34           Sec. 110.011.  PREJUDGMENT INTEREST.  Chapter 304, Finance
2-35     Code, applies to a judgment awarded to a claimant under this
2-36     chapter.
2-37           Sec. 110.012.  SETTLEMENT.  The attorney general may settle
2-38     or compromise an appeal brought under Section 110.007.
2-39           Sec. 110.013.  PAYMENT OF JUDGMENT OR SETTLEMENT.  (a)  A
2-40     unit of state government shall pay a judgment or settlement under
2-41     this chapter from money appropriated to the unit that the unit is
2-42     authorized to use for the services or property obtained under the
2-43     contract on which the suit was based.
2-44           (b)  To the extent money described by Subsection (a) is not
2-45     available to make the payment, the judgment or settlement may be
2-46     paid only from money appropriated by the legislature for payment of
2-47     the judgment or settlement.
2-48           Sec. 110.014.  EXECUTION ON STATE PROPERTY NOT AUTHORIZED.
2-49     This chapter does not authorize execution on property owned by the
2-50     state or a unit of state government.
2-51           Sec. 110.015.  APPLICATION OF OTHER LAWS.  Chapter 107 does
2-52     not apply to an appeal brought under Section 110.007.
2-53           Sec. 110.016.  EXCLUSION.  This chapter does not apply to a
2-54     claim against the Texas Department of Transportation.
2-55           SECTION 2.  This Act takes effect September 1, 1999.
2-56           SECTION 3.  (a)  This Act applies only to a suit based on a
2-57     written contract described by Section 110.002, Civil Practice and
2-58     Remedies Code, as added by this Act, entered into by a unit of
2-59     state government on or after the effective date of this Act.  A
2-60     suit based on a contract entered into before the effective date of
2-61     this Act is governed by the law as it existed immediately before
2-62     the effective date of this Act, and that law is continued in effect
2-63     for that purpose.
2-64           (b)  For purposes of this section, a contract is entered into
2-65     after the effective date of this Act if it is executed or renewed
2-66     after the effective date of this Act.
2-67           SECTION 4.  The importance of this legislation and the
2-68     crowded condition of the calendars in both houses create an
2-69     emergency and an imperative public necessity that the
 3-1     constitutional rule requiring bills to be read on three several
 3-2     days in each house be suspended, and this rule is hereby suspended.
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