By:  Raymond                                                      H.B. No. 3492



A BILL TO BE ENTITLED

AN ACT

relating to resolution of disputes arising under construction 
contracts.    
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 7, Civil Practice and Remedies Code, is 
amended by adding Chapter 161 to read as follows:

CHAPTER 161.  TEXAS CONSTRUCTION DISPUTE ADJUDICATION ACT

SUBCHAPTER A.  DISPUTE ADJUDICATION
	161.001.  Definitions.  In this chapter, "Adjudication" is a 
non-binding but temporarily dispositive contract mechanism for 
preventing and resolving disputes between the owners and prime 
contractors of public and private works.
	161.002.  RESPONSIBILITY FOR CONSIDERATION.  It shall be the 
responsibility of the owners and prime contractors to recognize the 
probability of disputes arising during the construction process and 
to consider providing a mechanism for preventing disputes or for 
the early resolution of those disputes which do occur.  The State 
and all subdivisions should consider the use of dispute 
adjudication on all projects.  Every contract for the construction 
of public works should contain a provision that the use of 
adjudication was considered.
	161.003.  METHODS OF ADOPTING.  Adjudication may be included 
in a contract by stating the intention of the parties to use this 
Act, or by any other language and terms they may jointly agree.

SUBCHAPTER C.  ADJUDICATION
	161.004.  PROVISIONS REQUIRED.  A party to a construction 
contract may provide in the contract for the right to refer a 
dispute arising under the contract for adjudication under a 
procedure complying with this section.  Such provisions of a 
contract shall:
	(a)  enable a party to give notice at any time of his 
intention to refer a dispute to adjudication;
	(b)  provide a timetable with the object of securing the 
appointment of a qualified adjudicator from a neutral appointing 
authority or district court and referral of the dispute to him 
within 7 days of such notice;
	(c)  require the adjudicator to reach a decision within 28 
days of referral or such longer period as is agreed by the parties 
after the dispute has been referred;
	(d)  allow the adjudicator to extend the period of 28 days by 
up to 14 days, with the consent of the party by whom the dispute was 
referred;
	(e)  impose a duty on the adjudicator to act impartially; and           
	(f)  enable the adjudicator to take the initiative in 
ascertaining the facts and the law.
	161.005.  QUALIFICATIONS OF ADJUDICATOR.  A person shall be 
qualified to serve as an adjudicator in a particular matter if they 
are neutral, possess the technical or professional knowledge or 
experience to understand the issues and make a written reasoned 
determination of the dispute and have a minimum of fifteen 
classroom hours of instruction in the adjudication process in a 
course conducted by an alternative dispute resolution organization 
approved by the parties or any court making the appointment.
	161.006.  DECISION TO BE IN WRITING.  The contract shall 
provide that the decision of the adjudicator shall be in writing, 
shall explain the basis for the decision, shall be summarily 
enforceable and temporarily binding until the dispute is finally 
determined by legal proceedings, by arbitration when the parties 
have agreed to arbitration or by agreement.
	161.007.  FINAL DETERMINATION.  The parties may agree to 
accept the decision of the adjudicator as finally determining the 
dispute.
	161.008.  IMMUNITY.  The adjudicator is not liable for 
anything done or omitted in the discharge or purported discharge of 
his functions as adjudicator unless the act or omission is in bad 
faith, and any employee or agent of the adjudicator is similarly
protected from liability.
	SECTION 2.  This Act takes effect September 1, 2003.