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.