79R1014 ATP-D

By:  Van Arsdale                                                  H.B. No. 707


A BILL TO BE ENTITLED
AN ACT
relating to the ability of a home-rule municipality to sue and be sued. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTION 1. Section 51.075, Local Government Code, is amended to read as follows: Sec. 51.075. AUTHORITY RELATING TO LAWSUITS; PRESENTATION OF CLAIM. (a) The municipality may plead and be impleaded in any court. (b) Except as provided by Subsection (c), a person may not file suit on a claim against a municipality or an elected or appointed municipal official in the official's capacity as an appointed or elected official unless the person has presented the claim to the governing body of the municipality and the governing body neglects or refuses to pay all or part of the claim before the 60th day after the date of the presentation of the claim. (c) A person may file a suit for injunctive relief against a municipality. After the court's ruling on the application for temporary injunctive relief, any portion of the suit that seeks monetary damages shall be abated until the claim is presented to the governing body of the municipality and the governing body neglects or refuses to pay all or part of the claim before the 60th day after the date of the presentation of the claim. SECTION 2. Subchapter E, Chapter 51, Local Government Code, is amended by adding Section 51.0751 to read as follows: Sec. 51.0751. NOTICE OF SUIT AGAINST MUNICIPALITY. (a) A person filing suit against a municipality or against a municipal official in the official's capacity as a municipal official shall deliver written notice to: (1) the mayor of the municipality; and (2) the city attorney or other attorney having jurisdiction to represent the municipality in a civil suit. (b) The written notice must be delivered by certified or registered mail before the 30th business day after the date the suit is filed and must contain: (1) the style and cause number of the suit; (2) the court in which the suit was filed; and (3) the date on which the suit was filed. (c) If a person does not give notice as required by this section, the court in which the suit is pending shall dismiss the suit on a motion for dismissal made by the municipality or the municipal official. SECTION 3. Subchapter A, Chapter 252, Local Government Code, is amended by adding Section 252.004 to read as follows: Sec. 252.004. SUIT AGAINST MUNICIPALITY ARISING UNDER CERTAIN CONTRACTS. (a) A home-rule municipality that is a party to a written contract for engineering, architectural, or construction services or for goods related to engineering, architectural, or construction services may sue or be sued, plead or be impleaded, or defend or be defended on a claim arising under the contract. A suit on the contract brought by a municipality shall be brought in the name of the municipality. A suit on the contract brought against a municipality shall identify the municipality by name and must be brought in a state court in a county in which the municipality is wholly or partly located. (b) The total amount of money recoverable from a municipality on a claim for breach of the contract is limited to the following: (1) the balance due and owed by the municipality under the contract as it may have been amended, including any amount owed as compensation for the increased cost to perform the work as a direct result of owner-caused delays or acceleration; (2) the amount owed for change orders or additional work required to carry out the contract; (3) reasonable and necessary attorney's fees that are equitable and just; and (4) interest as allowed by law. (c) An award of damages under this section may not include: (1) consequential damages, except as allowed under Subsection (b)(1); (2) exemplary damages; or (3) damages for unabsorbed home office overhead. (d) This section does not waive a defense or a limitation on damages available to a party to a contract, other than a bar against suit based on sovereign immunity. (e) This section does not waive sovereign immunity to suit in federal court. SECTION 4. (a) Section 51.075, Local Government Code, as amended by this Act, and Section 51.0751, Local Government Code, as added by this Act, apply only to a suit filed on or after September 1, 2005. A suit filed before September 1, 2005, is governed by the law as it existed on the date the suit was filed, and the former law is continued in effect for that purpose. (b) Section 252.004, Local Government Code, as added by this Act, applies only to a claim arising under a contract executed on or after September 1, 2005. A claim that arises under a contract executed before September 1, 2005, is governed by the law as it existed on the date the contract is executed, and the former law is continued in effect for that purpose. SECTION 5. This Act takes effect September 1, 2005.