HBA-ATS C.S.S.C.R. 33 76(R) BILL ANALYSIS Office of House Bill AnalysisC.S.S.C.R. 33 By: Ratliff Civil Practices 4/30/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE Gibson Recycling, Inc. (corporation) contracted with the Texas Natural Resource Conservation Commission (TNRCC), to recycle waste tires under the waste tire recycling program (program). The corporation alleges that it performed required obligations under the program, while TNRCC failed to meet its obligations under the terms of the agreement between the corporation and TNRCC, and under the program. Furthermore, the corporation alleges that TNRCC caused the corporation to undergo an audit on its operations under the program, on which TNRCC determined that Gibson had been overpaid and proceeded to withhold a $400,000 payment. The corporation claims that it is lawfully entitled to that payment and that it has sustained damages as a result of the action of TNRCC. C.S.S.C.R. 33 grants Gibson Recycling, Inc., permission to file a claim against the Texas Natural Resource Conservation Commission with the State Office of Administrative Hearings (hearings office). This concurrent resolution sets forth certain stipulations governing the resolution of the dispute and the types of remedies available. The resolution requires an administrative law judge (ALJ) of the hearings office to hear the claim as a contested case and to render a written order containing the ALJ's findings of facts and recommendations. Any act, finding, ruling, or award by the ALJ is not subject to appeal to any Texas court. The ALJ is authorized to establish a fee to recover the hearings office's costs and to assess a fee against the party that does not prevail or apportion the fee against the parties in an equitable manner. If legislation is enacted that authorizes the hearings office to hear contract claims against the state, the hearing authorized by this resolution is required to be heard in accordance with that legislation and any rules or procedures adopted under that legislation. In the contested case, TNRCC is authorized to assert any counterclaim or offset that it claims against the corporation with respect to the agreement. Nevertheless, TNRCC must pay, exclusively from money appropriated for this purpose, the claim if the ALJ finds, by a preponderance of the evidence, the claim is valid. However, the amount awarded by the ALJ is prohibited from including any amount attributable to consequential or punitive or exemplary damages. In addition, the amount of the claim paid is prohibited from exceeding the balance due and owing on the contract price less any amount owed for work not performed under the contract and less the amount of any valid counterclaim or offset asserted by TNRCC. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.S.C.R. 33 grants Gibson Recycling, Inc., permission to file a claim against the Texas Natural Resource Conservation Commission with the State Office of Administrative Hearings (hearings office). Requires an administrative law judge (ALJ) of the hearings office to hear the claim as a contested case and to render a written order containing the ALJ's findings of facts and recommendations. Authorizes TNRCC to assert any counterclaim or offset that it claims against the corporation with respect to the agreement. Provides that TNRCC must pay, exclusively from money appropriated for this purpose, the claim if the ALJ finds, by a preponderance of the evidence, the claim is valid. Prohibits the amount awarded by the ALJ from including any amount attributable to consequential or punitive or exemplary damages. Prohibits the amount of the claim paid from exceeding the balance due and owing on the contract price less any amount owed for work not performed under the contract and less the amount of any valid counterclaim or offset asserted by TNRCC. Provides that any act, finding, ruling, or award by the ALJ is not subject to appeal to any Texas court. Authorizes the ALJ to establish a fee to recover the hearings office's costs and to assess a fee against the party that does not prevail or apportion the fee against the parties in an equitable manner. Requires the hearing authorized by this resolution, if legislation is enacted that authorizes the hearings office to hear contract claims against the state, to be heard in accordance with that legislation and any rules or procedures adopted under that legislation. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.S.C.R. 33 differs from the original concurrent resolution by removing the allegation that the Texas Natural Resource Conservation Commission's (TNRCC) audit division manipulated figures to suggest that the corporation was overpaid by TNRCC. C.S.S.C.R. 33 differs from the original concurrent resolution by granting Gibson Recycling, Inc., permission to file a claim against the Texas Natural Resource Conservation Commission with the State Office of Administrative Hearings (hearings office), rather than permission to sue the State of Texas and TNRCC. Accordingly, the substitute removes those resolutions that: provided that remedies available to the corporation would be limited to traditional remedies for breach of contract, but prohibited the corporation from recovering punitive or exemplary damages; authorized the corporation and TNRCC to agree to submit the subject of this resolution to binding arbitration; and provided that the TNRCC executive director would be served process as provided by the Civil Practice and Remedies Code. Like the original resolution, the substitute sets forth certain stipulations governing the types of remedies available. In addition, the substitute sets forth conditions governing the resolution of the dispute. To read these stipulations and conditions, please see the Analysis section in this document.