LEGISLATIVE BUDGET BOARD

Austin, Texas

FISCAL NOTE, 79TH LEGISLATIVE REGULAR SESSION

March 29, 2005

TO:	Honorable Robert Duncan, Chair, Senate Committee on State Affairs
FROM:	John S. O'Brien, Deputy Director, Legislative Budget Board
IN RE:	SB1191 by Wentworth (Relating to the adjudication of claims arising under written contracts with local governmental entities.), As Introduced

No fiscal implication to the State is anticipated.

The bill would require that a local governmental entity, as defined by the bill, would waive sovereign immunity to suit for the purpose of adjudicating a claim arising under a contract the entity has entered into for goods or services. The bill would provide certain limitations on adjudication awards. The bill would take effect September 1, 2005, and would apply only to a claim arising under a contract executed on or after that date.

Local Government Impact

If a contract were adjudicated through alternative dispute resolution proceedings, in court, or in an arbitration proceeding, the local governmental entity would incur, at a minimum, legal expenses. If adjudication of the contract results in the local governmental entity paying damages within the limits of the proposed statute, the entity would incur additional costs. Those costs would vary depending on the terms and costs of the contract.

Source Agencies:

LBB Staff:

JOB, SR, JB, DLBa