By: Ritter (Senate Sponsor - Eltife) H.B. No. 3511
(In the Senate - Received from the House May 6, 2013;
May 8, 2013, read first time and referred to Committee on Natural
Resources; May 17, 2013, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 11, Nays 0;
May 17, 2013, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 3511 By: Eltife
A BILL TO BE ENTITLED
AN ACT
relating to the adjudication of certain claims under a written
contract with a special-purpose district or authority or local
governmental entity.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Title 5, Civil Practice and Remedies Code, is
amended by adding Chapter 113 to read as follows:
CHAPTER 113. WATER SUPPLY CONTRACT CLAIM AGAINST LOCAL DISTRICT
OR AUTHORITY
Sec. 113.001. DEFINITIONS. In this chapter:
(1) "Adjudicating a claim" means the bringing of a
civil suit and prosecution to final judgment in court and includes
the bringing of an authorized arbitration proceeding and
prosecution to final resolution in accordance with any mandatory
procedures established in the contract that is the subject of the
dispute under Section 113.002.
(2) "Local district or authority" means a
special-purpose district or authority, including a levee
improvement district, drainage district, irrigation district,
water improvement district, water control and improvement
district, water control and preservation district, fresh water
supply district, navigation district, special utility district,
and river authority, and any conservation and reclamation district.
Sec. 113.002. WAIVER OF IMMUNITY TO SUIT FOR CLAIM
REGARDING WATER SUPPLY CONTRACT. A local district or authority
that enters into a written contract stating the essential terms
under which the local district or authority is to provide water to a
purchaser for use in connection with the generation of electricity
waives sovereign immunity to suit for the purpose of adjudicating a
claim that the local district or authority breached the contract by
not providing water, or access to water, according to the
contract's terms.
Sec. 113.003. REMEDIES. (a) Except as provided by
Subsection (b), remedies awarded in a proceeding adjudicating a
claim under this chapter may include any remedy available for
breach of contract that is not inconsistent with the terms of the
contract, including the cost of cover and specific performance.
(b) Remedies awarded in a proceeding adjudicating a claim
under this chapter may not include consequential or exemplary
damages.
Sec. 113.004. NO WAIVER OF OTHER DEFENSES. This chapter
does not waive a defense or a limitation on damages available to a
party to a contract other than sovereign immunity to suit.
Sec. 113.005. NO WAIVER OF IMMUNITY TO SUIT IN FEDERAL
COURT. This chapter does not waive sovereign immunity to suit in
federal court.
Sec. 113.006. NO WAIVER OF IMMUNITY TO SUIT FOR TORT
LIABILITY. This chapter does not waive sovereign immunity to suit
for a cause of action for a negligent or intentional tort.
Sec. 113.007. NO NEW OR ADDITIONAL WATER RIGHTS. This
chapter does not grant any user of water any new or additional
rights to water or any new or additional priority to water rights.
This chapter does not confer any rights inconsistent with the terms
of the contract that is the subject of a dispute under Section
113.002.
Sec. 113.008. AUTHORITY OF REGULATORY AGENCIES; COMPLIANCE
WITH REGULATORY ORDER. (a) This chapter does not limit the
authority of the Texas Commission on Environmental Quality or any
other state regulatory agency.
(b) Compliance with an order of the Texas Commission on
Environmental Quality or any other state regulatory agency that
expressly curtails water delivery to a specific electric generating
facility is not considered a breach of contract for the purposes of
this chapter.
Sec. 113.009. NO THIRD-PARTY BENEFICIARIES. (a) This
chapter waives sovereign immunity only for the benefit of:
(1) a party to the contract that is the subject of a
dispute under Section 113.002; or
(2) the assignee of a party to the contract, if
assignment of an interest in the contract is permitted by the terms
of the contract.
(b) Except for an assignment described by Subsection
(a)(2), a party authorized by this chapter to sue for a cause of
action of breach of contract may not transfer or assign that cause
of action to any person.
SECTION 2. Section 271.151(2), Local Government Code, is
amended to read as follows:
(2) "Contract subject to this subchapter" means:
(A) a written contract stating the essential
terms of the agreement for providing goods or services to the local
governmental entity that is properly executed on behalf of the
local governmental entity; or
(B) a written contract, including a right of
first refusal, regarding the sale or delivery of not less than
1,000 acre-feet of reclaimed water by a local governmental entity
intended for industrial use.
SECTION 3. Section 271.153, Local Government Code, is
amended by amending Subsection (a) and adding Subsection (c) to
read as follows:
(a) Except as provided by Subsection (c), the [The] total
amount of money awarded in an adjudication brought against a local
governmental entity for breach of a contract subject to this
subchapter is limited to the following:
(1) the balance due and owed by the local governmental
entity under the contract as it may have been amended, including any
amount owed as compensation for the increased cost to perform the
work as a direct result of owner-caused delays or acceleration;
(2) the amount owed for change orders or additional
work the contractor is directed to perform by a local governmental
entity in connection with the contract;
(3) reasonable and necessary attorney's fees that are
equitable and just; and
(4) interest as allowed by law, including interest as
calculated under Chapter 2251, Government Code.
(c) Actual damages, specific performance, or injunctive
relief may be granted in an adjudication brought against a local
governmental entity for breach of a contract described by Section
271.151(2)(B).
SECTION 4. (a) Chapter 113, Civil Practice and Remedies
Code, as added by this Act, applies only to a cause of action that
accrues on or after the effective date of this Act. A cause of
action that accrues 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.
(b) Chapter 113, Civil Practice and Remedies Code, as added
by this Act, does not waive sovereign immunity to suit for any
claims related to or arising out of a contract that was the subject
of litigation that was adjudicated or dismissed on the basis of
sovereign immunity prior to the effective date of this Act.
(c) Sections 271.151(2) and 271.153, Local Government Code,
as amended by this Act, apply to a claim that arises under a
contract executed on or after the effective date of this Act. A
claim that arises under a contract executed before the effective
date of this Act is governed by the law in effect on the date the
contract was executed, and the former law is continued in effect for
that purpose.
SECTION 5. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2013.
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