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.