HBA-MSH C.S.H.B. 2312 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 2312
By: Bosse
Civil Practices
4/4/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

During the 76th legislative session, the legislature established an
administrative procedure for disputes arising on contract claims against
the state.  In February 2001 the Texas Supreme Court ruled in General
Services Commission v. Little-Tex Insulation Company Inc. that the
administrative procedure established by the legislature for certain breach
of contract claims against the state was intended to be the exclusive
method available for resolving those cases.  This decision narrowed the
ability of the legislature to waive sovereign immunity.  C.S.H.B. 2312
clarifies the ability of the legislature to waive sovereign immunity. 

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.H.B. 2312 amends the Government Code to require each unit of state
government that enters into a contract to include in the contract a
provision stating that a dispute resolution process must be used to resolve
a dispute arising under the contract.  The bill exempts from provisions
relating to the resolution of certain contract claims against the state
contracts that do not include a provision stating that a dispute resolution
process must be used to attempt to resolve a dispute arising under the
contract and contracts executed or awarded on or before August 30, 1999.
The bill prohibits the total amount recoverable on a claim for breach of
contract under such provisions from exceeding the balance due and owing on
the contract price, plus 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, minus any amount owed the unit of state government for work not
performed under a contract. The bill sets forth provisions reaffirming the
authority of the legislature to deny or grant a waiver of immunity to suit
against a unit of state government. 

EFFECTIVE DATE

On passage, or if the Act does not receive the necessary vote, the Act
takes effect September 1, 2001. 

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 2312 differs from the original bill by requiring each unit of
state government to include a provision in a contract stating that a
dispute resolution process must be used in all contracts rather than only
certain contracts.  The substitute provides that the amount of orders made
by a unit of state government is only to the extent that the orders were
actually performed as it related to calculating the total amount
recoverable on a claim for breach of contract.  The substitute also
conforms the substitute to Texas Legislative Council format.