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H.B. No. 1940
AN ACT
relating to alternative dispute resolution of certain contract
claims against the state.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Sections 2260.003(a) and (c), Government Code,
are amended to read as follows:
(a) The total amount of money recoverable on a claim for
breach of contract under this chapter may not, after deducting the
amount specified in Subsection (b), exceed an amount equal to the
sum of:
(1) the balance due and owing on the contract price;
[and]
(2) the amount or fair market value of orders or
requests for additional work made by a unit of state government to
the extent that the orders or requests for additional work were
actually performed; and
(3) any delay or labor-related expense incurred by the
contractor as a result of an action of or a failure to act by the
unit of state government or a party acting under the supervision or
control of the unit of state government.
(c) Any award of damages under this chapter may not include:
(1) consequential or similar damages, except delays or
labor-related expenses described by Subsection (a)(3);
(2) exemplary damages;
(3) any damages based on an unjust enrichment theory;
(4) attorney's fees; or
(5) home office overhead.
SECTION 2. Section 2260.005, Government Code, is amended to
read as follows:
Sec. 2260.005. EXCLUSIVE PROCEDURE. Subject to Section
2260.007, the procedures contained in this chapter are exclusive
and required prerequisites to suit in accordance with Chapter 107,
Civil Practice and Remedies Code. This chapter does not prevent a
contractor sued by a unit of state government from asserting a
counterclaim or right of offset against the unit of state
government in the court in which the unit of state government files
the suit.
SECTION 3. Section 2260.051(d), Government Code, is amended
to read as follows:
(d) A unit of state government must assert, in a writing
delivered to the contractor, any counterclaim not later than the
60th [90th] day after the date of notice under Subsection (b). A
unit of state government that does not comply with this subsection
waives the right to assert the counterclaim.
SECTION 4. Section 2260.052(a), Government Code, is amended
to read as follows:
(a) The chief administrative officer or, if designated in
the contract, another officer of the unit of state government shall
examine the claim and any counterclaim and negotiate with the
contractor in an effort to resolve them. The [Except as provided by
Subsection (b), the] negotiation must begin not later than the
120th [60th] day after the [later of:
[(1) the date of termination of the contract;
[(2) the completion date in the original contract; or
[(3) the] date the claim is received.
SECTION 5. Section 2260.056(a), Government Code, is amended
to read as follows:
(a) Before the 120th [270th] day after the date the claim is
filed with the unit of state government and before the expiration of
any extension of time under Section 2260.055, the parties may agree
to mediate a claim made under this chapter.
SECTION 6. Section 2260.104(e), Government Code, is amended
to read as follows:
(e) In a contested case hearing under this subchapter:
(1) the decision may not be appealed except for abuse
of discretion; and
(2) the state agency may not change the finding of fact
or conclusion of law, nor vacate or modify an order as provided in
Section 2001.058(e).
SECTION 7. Section 2260.105, Government Code, is amended by
adding Subsection (a-1) to read as follows:
(a-1) The unit of state government shall pay that part of
the claim that is less than $250,000 if:
(1) the administrative law judge finds, by a
preponderance of the evidence, that under the laws of this state the
claim or part of the claim is valid; and
(2) the total amount of the damages, after taking into
account any counterclaim, equals or exceeds $250,000.
SECTION 8. Section 2260.052(b), Government Code, is
repealed.
SECTION 9. The changes in law made by this Act apply only to
claims involving a breach of a contract entered into by a unit of
state government on or after the effective date of this Act. A
claim involving a breach of a contract entered into by a unit of
state government before the effective date of this Act is governed
by the law in effect immediately before that date, and that law is
continued in effect for that purpose.
SECTION 10. This Act takes effect September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1940 was passed by the House on May
10, 2005, by the following vote: Yeas 142, Nays 0, 2 present, not
voting; and that the House concurred in Senate amendments to H.B.
No. 1940 on May 27, 2005, by the following vote: Yeas 138, Nays 0,
2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1940 was passed by the Senate, with
amendments, on May 25, 2005, by the following vote: Yeas 31, Nays
0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor