By: Lucio S.B. No. 1847
A BILL TO BE ENTITLED
relating to the authorization and regulation of casino gambling and
to the creation, powers, and duties of the Texas Gaming Commission;
authorizing taxes, establishing scholarships for Texas Students in
public colleges and universities providing civil and criminal
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 160 to read as follows:
CHAPTER 160. DISPUTE RESOLUTION BOARDS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 160.001. DEFINITION. In this chapter, "construction
contract" means a contract between a real property owner and a
contractor for the improvement of real property in this state.
Sec. 160.002. METHOD OF ADOPTION. A dispute arising under a
construction contract may be submitted to a dispute resolution
board in accordance with this chapter if the contract includes
language that reflects the intent of the parties to use the process
provided by this chapter.
Sec. 160.003. PUBLIC CONSTRUCTION CONTRACTS. Each
construction contract entered into by a state agency or political
subdivision that does not provide for submission of disputes
arising under the contract to a dispute resolution board under this
chapter must contain a provision stating that the use of dispute
resolution under this chapter was actively considered and rejected.
[Sections 160.004-160.050 reserved for expansion]
SUBCHAPTER B. DISPUTE RESOLUTION BOARD
Sec. 160.051. COMPOSITION AND SELECTION OF BOARD. (a) A
dispute resolution board consists of three persons selected in
accordance with this section.
(b) On or before the 15th day after the date a construction
contract subject to this chapter is executed, each party to the
contract shall select one nominee qualified to serve as a board
member under this chapter and communicate the name and
qualifications of the nominee to the other party for approval.
(c) A party may accept or reject the other party's
nomination on or before the seventh day after the date the party
receives notice of the nomination.
(d) A nominee that is not rejected during the period
prescribed by Subsection (c) is considered approved.
(e) If a nominee is rejected, the party who nominated the
person shall nominate another qualified person.
(f) Once two board members nominated by the parties are
accepted, those board members shall nominate a third qualified
person to be chairperson of the board. Each party may accept or
reject the nomination on or before the 15th day after the date the
party receives notice of the nomination. If the nominee for
chairperson is not rejected by one of the parties in the time
prescribed by this subsection, the nominee is considered accepted.
If the nominee is rejected by a party, the two approved board
members shall make additional nominations for chairperson until a
nomination is accepted by the parties.
Sec. 160.052. QUALIFICATIONS OF BOARD MEMBERS. (a) A
board member selected by a party to the construction contract must
(1) at least 10 years of technical or managerial
experience in engineering, construction, or architecture; and
(2) experience in:
(A) one or more of the general types of
construction involved in the contract;
(B) the interpretation of construction contract
(C) the analysis and resolution of construction
(b) The chairperson of the board must have:
(1) at least 15 years of experience in the person's
(2) at least 10 years of experience in:
(A) construction dispute resolution;
(C) arbitration; or
(D) service as a judge; and
(3) competence in the interpretation of construction
contract documents and the analysis and resolution of construction
(c) Each person who serves on a board must have:
(1) experience serving on a dispute resolution board,
on a dispute review board, on a dispute adjudication board, or as an
adjudicator or judge; or
(2) 40 hours of classroom training in the mechanisms
of dispute resolution boards, construction adjudication,
construction arbitration, or construction mediation.
Sec. 160.053. CONFLICTS OF INTEREST; NEUTRALITY. (a) A
member of a dispute resolution board may not have any current or
prior involvement in the contract or construction project that is
the subject of the dispute that could compromise the person's
ability to review the dispute impartially.
(b) Except for providing services as a dispute resolution
board member, arbitrator, or mediator on a matter involving the
owner or contractor, a board member may not, at the time of service
on the board or during the two years before the person begins
serving on the board, have:
(1) employment with, an ownership interest in, or an
existing business or financial relationship, including the
provision of fee-based consulting services, with:
(A) a party to the contract under which the
(B) a third-party construction manager for the
(C) any subcontractor or subconsultant to the
(D) another contractor or construction manager
for the owner;
(2) a financial interest in the contract;
(3) involvement, directly or indirectly, in the
preparation of the bid documents for the contract or a bid by any
bidder for the invitation to bid for the contract; or
(4) involvement in the management or administration of
(c) Except for participation in the board's activities as
provided by the construction contract and the board's contract
entered into under Section 160.054, the owner or contractor may not
solicit advice from or consult with the board or individual members
of the board on matters related to the conduct of the work under the
construction contract or resolution of problems under the
construction contract that might compromise the board's integrity.
(d) A board member may not advocate for a party to the
(e) A board member has a continuing duty to avoid conflicts
of interest and shall promptly disclose to the other board members
and the parties any matter that could reasonably give rise to a
perception of partiality or non-neutrality.
Sec. 160.054. CONTRACT WITH BOARD. (a) On or before the
15th day after the date the chairperson of the board is selected,
the board members and parties to the construction contract shall
execute a standard three-party agreement in which the board members
(1) endeavor to assist the parties in preventing and
resolving disputes during the term of the construction contract;
(2) read and become familiar with all the contract
documents, including the specifications, plans, addenda, progress
schedule and updates, weekly progress reports, minutes of progress
meetings, change orders, and other documents relevant to the
performance of the contract and necessary to the board's work;
(3) visit the construction site as soon as practicable
after selection of the board and reserve at least one day each month
for project site visits and visit the site at least bimonthly, or
more frequently if beneficial; and
(4) keep abreast of the construction activities and
become familiar with the work in progress.
(b) The frequency, time, and duration of visits required
under the board's contract shall be mutually agreed on by the board,
owner, and contractor, or if the parties and the board do not agree,
scheduled by the board.
(c) The board shall also agree to consider, fairly and
impartially, each dispute referred to the board by a party to the
construction contract and provide written recommendations to the
owner and contractor based on the relevant provisions of the
construction contract, any applicable law, and the facts and
circumstances involved in the dispute. The board's recommendations
shall express, clearly and completely, the logic and reasoning
leading the board to the recommendations so that all the parties
fully understand and can use the recommendations to assist them in
negotiating a resolution of the dispute. The board's
recommendations may address issues of entitlement, unjust
enrichment, or both.
[Sections 160.055-160.100 reserved for expansion]
SUBCHAPTER C. DUTIES OF PARTIES TO CONSTRUCTION CONTRACT
Sec. 160.101. OWNER DUTIES. The owner shall:
(1) provide each board member with a copy of all
contract documents, including the specifications, plans, addenda,
progress schedule and updates, weekly progress reports, minutes of
progress meetings, change orders, and any other documents relevant
to the performance of the contract and necessary to the board's
(2) provide the board with:
(A) conference facilities at or near the
construction site; and
(B) secretarial and copying services.
Sec. 160.102. CONTRACTOR DUTIES. The contractor shall
furnish each board member with relevant documents prepared by the
contractor, such as progress schedules, to supplement the documents
provided by the owner.
[Sections 160.103-160.150 reserved for expansion]
SUBCHAPTER D. OPERATION OF BOARD
Sec. 160.151. BOARD ACTIVITY AND EXPENSES. (a) The board
shall be active throughout the term of the construction contract.
The cost of the board's activity must be included as a capital
expense of the project.
(b) The total cost of a qualified minority or historically
underutilized dispute resolution board administrative
organization, including the expense of the board members, counts
toward meeting all minority set-aside goals or provisions required
(c) The board shall begin operation on the written
authorization of the owner received after the board's contract
under Section 160.054 is executed and end operation at the end of
the term of the construction contract after the final payment due
under the construction contract has been made.
Sec. 160.152. IMMUNITY. (a) Each board member, in the
performance of the member's duties on the board, acts in the
capacity of an independent agent intended to facilitate the
resolution of disputes and not as an employee of the owner or the
(b) To the fullest extent permitted by law, each board
member is entitled to quasi-judicial immunity for an action or
decision associated with the consideration, hearing, and
recommendation of a resolution for a dispute referred to the board.
Each board member shall be held harmless for any personal or
professional liability arising from or related to board activities.
(c) To the fullest extent permitted by law, the owner and
contractor shall indemnify each board member for claims, losses,
demands, costs, and damages, including reasonable attorney's fees,
for bodily injury, property damage, or economic loss arising out of
or related to the member's carrying out of board functions.
Indemnification provided under this subsection is a joint and
several obligation of the owner and the contractor.
Sec. 160.153. INFORMAL PROCEEDINGS AND RECOMMENDATIONS.
(a) The owner and contractor may agree, with respect to any issue,
claim, or dispute, to request that the board act in an advisory
capacity to assist in resolution of the issue, claim, or dispute at
a formal hearing before the board.
(b) For the purposes of an informal proceeding under this
section, each party shall submit a written submission not longer
than two written pages to the board. To the extent possible, the
parties shall also submit to the board written questions for the
board agreed to by the parties.
(c) On submission of an informal proceeding to the board
under this section, either party may request an opportunity to give
an oral presentation to the board, and the board may request an oral
presentation by the parties. An oral presentation under this
subsection must take place during a regularly scheduled meeting of
the board. Unless a time limit for oral presentations is agreed to
by the parties, the board shall establish a time limit for oral
(d) The board shall present its advisory recommendation to
the parties orally not later than four hours after the conclusion of
any oral presentation by the parties.
(e) The parties and the board are not bound in any way by the
advisory recommendation, and the same matter may be heard again in a
formal hearing before the board.
(f) The parties shall agree that an advisory recommendation
is not admissible in any administrative or judicial proceeding for
any reason and may not offer or move for admission of an advisory
Sec. 160.154. FORMAL FINDINGS AND RECOMMENDATIONS. (a) On
the request of either party, the board shall conduct a formal
hearing in accordance with this section.
(b) The hearing shall be conducted by the board chairperson
in accordance with any dispute resolution board rules and hearing
procedures established by the board and with all members of the
board present and participating.
(c) The board shall allow each party to present the party's
position on the dispute, with the contractor presenting first.
(d) The board may ask any questions of the parties that the
board considers appropriate.
(e) The board may schedule continuations of the hearing from
time to time. The board may not accept any further submissions or
evidence from a party after the conclusion of the hearing unless the
submission or evidence is expressly requested by the board.
Sec. 160.155. FINDINGS AND RECOMMENDATIONS. (a) After the
hearing under Section 160.154 concludes, the board shall meet to
formulate its findings and recommendations for resolution of the
dispute. The board's deliberations shall be conducted in private
and are confidential.
(b) The board shall base its findings and recommendations on
the contract provisions and the facts and circumstances of the
(c) The board shall make a concerted effort to reach a
unanimous decision but may issue its findings and recommendations
with the agreement of two members. The findings and
recommendations must be signed by all board members.
(d) A dissenting member shall clearly indicate the member's
dissent on the findings and recommendations and provide clearly
identified separate dissenting findings and recommendations, which
shall be included as part of the board's findings and
Sec. 160.156. TIME FOR ISSUING FINDINGS AND
RECOMMENDATIONS. The board shall issue its findings and
recommendations to the owner and the contractor on or before the
21st day after the date the hearing concludes or as otherwise
determined by the board and agreed to by the parties.
Sec. 160.157. EFFECT OF FINDINGS AND RECOMMENDATIONS.
(a) Although the purpose of the board findings and recommendations
is to assist the parties in negotiating a resolution of their
disputes, the written findings and recommendations shall be
admitted, unless otherwise agreed by the parties, into evidence in
any subsequent judicial, arbitral, or administrative proceeding.
(b) A board member or other participant in a board hearing
may not be required to testify as to what was said or presented at a
board meeting or any hearing, conference, or other proceeding of
Sec. 160.158. DISCLOSURE OF RECORDS. The records of a
dispute resolution board are not records of any government agency
and any records, notes, or drafts taken or made by a board member
are not subject to disclosure under any freedom of information law.
SECTION 2. This Act takes effect September 1, 2003.