Texas 2019 - 86th Regular

Texas Senate Bill SB28 Compare Versions

Only one version of the bill is available at this time.

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1	1	2019S0352-T 03/05/19
2	2	By: Huffman S.B. No. 28
3	3
4	4
5	5	A BILL TO BE ENTITLED
6	6	AN ACT
7	7	relating to procurement of a contingent fee contract for legal
8	8	services by a state agency or political subdivision.
9	9	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	10	SECTION 1. Section 2254.101, Government Code, is amended by
11	11	adding Subdivisions (2-a) and (2-b) to read as follows:
12	12	(2-a) "Governmental entity" means a political
13	13	subdivision and a state governmental entity.
14	14	(2-b) "Political subdivision" has the meaning
15	15	assigned by Section 2254.021.
16	16	SECTION 2. Sections 2254.102(a) and (b), Government Code,
17	17	are amended to read as follows:
18	18	(a) This subchapter applies only to a contingent fee
19	19	contract for legal services entered into by a [state] governmental
20	20	entity.
21	21	(b) The legislature by this subchapter is providing, in
22	22	accordance with Sections [Section] 44 and 53, Article III, Texas
23	23	Constitution, for the manner in which and the situations under
24	24	which a [state] governmental entity may compensate a public
25	25	contractor under a contingent fee contract for legal services.
26	26	SECTION 3. The heading to Section 2254.103, Government
27	27	Code, is amended to read as follows:
28	28	Sec. 2254.103. STATE GOVERNMENTAL ENTITY: CONTRACT
29	29	APPROVAL; SIGNATURE.
30	30	SECTION 4. Subchapter C, Chapter 2254, Government Code, is
31	31	amended by adding Sections 2254.1032, 2254.1034, 2254.1036,
32	32	2254.1037, and 2254.1038 to read as follows:
33	33	Sec. 2254.1032. POLITICAL SUBDIVISION: SELECTION OF
34	34	PROVIDER. (a) A political subdivision may select an attorney or
35	35	law firm to award a contingent fee contract only in accordance with
36	36	Section 2254.003(a) and this section.
37	37	(b) In procuring legal services under a contingent fee
38	38	contract, a political subdivision shall:
39	39	(1) select the most highly qualified attorney or law
40	40	firm on the basis of demonstrated competence, qualifications, and
41	41	experience in the requested services; and
42	42	(2) attempt to negotiate a contract with that attorney
43	43	or law firm for a fair and reasonable price.
44	44	(c) If a satisfactory contract cannot be negotiated with the
45	45	most highly qualified attorney or law firm under Subsection (b),
46	46	the political subdivision shall:
47	47	(1) formally end negotiations with that attorney or
48	48	law firm;
49	49	(2) select the next most highly qualified attorney or
50	50	law firm; and
51	51	(3) attempt to negotiate a contract with that attorney
52	52	or law firm at a fair and reasonable price.
53	53	(d) A political subdivision described by Subsection (c)
54	54	shall continue the process described by that subsection to select
55	55	and negotiate with attorneys or law firms until a contract is
56	56	entered into or the political subdivision terminates the
57	57	procurement process.
58	58	Sec. 2254.1034. POLITICAL SUBDIVISION: INDEMNIFICATION.
59	59	(a) A political subdivision may require an attorney or law firm
60	60	selected under Section 2254.1032 to indemnify or hold harmless the
61	61	political subdivision from claims and liabilities resulting from
62	62	negligent acts or omissions of the attorney or law firm or persons
63	63	employed by the attorney or law firm.
64	64	(b) A political subdivision may not require an attorney or
65	65	law firm selected under Section 2254.1032 to indemnify, hold
66	66	harmless, or, subject to Subsection (c), defend the political
67	67	subdivision for claims or liabilities resulting from negligent acts
68	68	or omissions of the political subdivision or its employees.
69	69	(c) Subsection (b) does not prevent an attorney or law firm
70	70	selected under Section 2254.1032 from defending the political
71	71	subdivision or its employees in accordance with a contract for the
72	72	defense of negligent acts or omissions of the political subdivision
73	73	or its employees.
74	74	Sec. 2254.1036. POLITICAL SUBDIVISION: CONTRACT NOTICE;
75	75	APPROVAL BY GOVERNING BODY. (a) A political subdivision may enter
76	76	into a contingent fee contract for legal services only if the
77	77	governing body of the political subdivision:
78	78	(1) before or at the time of giving the written notice
79	79	required by Section 551.041 for a meeting described by Subdivision
80	80	(2), also provides written notice to the public stating:
81	81	(A) the reasons for pursuing the matter that is
82	82	the subject of the legal services for which the attorney or law firm
83	83	would be retained and the desired outcome of pursuing the matter;
84	84	(B) the competence, qualifications, and
85	85	experience demonstrated by the attorney or law firm selected under
86	86	Section 2254.1032;
87	87	(C) the nature of any relationship, including the
88	88	beginning of the relationship, between the political subdivision or
89	89	governing body and the attorney or law firm selected under Section
90	90	2254.1032;
91	91	(D) the reasons the political subdivision is not
92	92	able to pursue the matter using its own resources and without
93	93	retaining an outside attorney or law firm on a contingent fee basis;
94	94	(E) the reasons the legal services cannot be
95	95	reasonably obtained from attorneys in private practice under a
96	96	contract providing for the payment of hourly fees without
97	97	contingency; and
98	98	(F) the reasons entering into a contingent fee
99	99	contract for legal services is in the best interest of the residents
100	100	of the political subdivision; and
101	101	(2) approves the contract in an open meeting called
102	102	for the purpose of considering:
103	103	(A) the need for obtaining the legal services;
104	104	(B) the terms of the contract;
105	105	(C) the competence, qualifications, and
106	106	experience of the attorney or law firm; and
107	107	(D) the reasons the contract is in the best
108	108	interest of the residents of the political subdivision.
109	109	(b) On approval of a contingent fee contract, the governing
110	110	body of a political subdivision shall state in writing that the
111	111	political subdivision finds that:
112	112	(1) there is a substantial need for the legal
113	113	services;
114	114	(2) the legal services cannot be adequately performed
115	115	by the attorneys and supporting personnel of the political
116	116	subdivision;
117	117	(3) the legal services cannot reasonably be obtained
118	118	from attorneys in private practice under a contract providing only
119	119	for the payment of hourly fees, without regard to the outcome of the
120	120	matter, because of the nature of the matter for which the services
121	121	will be obtained or because the political subdivision does not have
122	122	funds to pay the estimated amounts required under a contract
123	123	providing only for the payment of hourly fees; and
124	124	(4) the relationship between the political
125	125	subdivision or the governing body and the attorney or law firm being
126	126	retained is not improper and would not appear improper to a
127	127	reasonable person.
128	128	Sec. 2254.1037. POLITICAL SUBDIVISION: CONTRACT AS PUBLIC
129	129	INFORMATION. A contingent fee contract approved under Section
130	130	2254.1036 is public information under Chapter 552 and may not be
131	131	withheld from a requestor under Section 552.103 or any other
132	132	exception from required disclosure.
133	133	Sec. 2254.1038. POLITICAL SUBDIVISION: ATTORNEY GENERAL
134	134	REVIEW OF CONTRACT. (a) Before a political subdivision may enter
135	135	into a contingent fee contract for legal services, the political
136	136	subdivision must receive attorney general approval of the contract.
137	137	The political subdivision shall file the contract with the attorney
138	138	general along with:
139	139	(1) a description of the matter to be pursued by the
140	140	political subdivision;
141	141	(2) a description of the interest that the state or any
142	142	other governmental entity may have in the matter;
143	143	(3) a copy of the notice required by Section
144	144	2254.1036(a) and a statement of the method and date of the provision
145	145	of the notice;
146	146	(4) a copy of the statement required by Section
147	147	2254.1036(b); and
148	148	(5) any supporting documentation required by the
149	149	attorney general.
150	150	(b) The attorney general may refuse to approve a contract
151	151	under Subsection (a) if the attorney general finds that:
152	152	(1)(A) the legal matter that is the subject of the
153	153	contract presents one or more questions of law or fact that are in
154	154	common with a matter the state already has addressed or is pursuing;
155	155	and
156	156	(B) pursuit of the matter by the political
157	157	subdivision will not promote the just and efficient resolution of
158	158	the matter; or
159	159	(2) the political subdivision failed to comply with
160	160	Section 2254.1036 or the findings made by the political subdivision
161	161	under that section are not supported by the documents provided by
162	162	the political subdivision.
163	163	(c) Unless the political subdivision requests expedited
164	164	review when requesting review under Subsection (a), the attorney
165	165	general shall approve or deny a contract not later than the 90th day
166	166	after the date the attorney general receives the request.
167	167	(d) This section does not apply to a contract with total
168	168	aggregated claims of less than $100,000.
169	169	SECTION 5. Sections 2254.104(b), (c), and (d), Government
170	170	Code, are amended to read as follows:
171	171	(b) The contracting attorney or law firm shall permit the
172	172	governing body or governing officer of the [state] governmental
173	173	entity, the attorney general, and the state auditor or the
174	174	political subdivision's auditor, as applicable, each to inspect or
175	175	obtain copies of the time and expense records at any time on
176	176	request.
177	177	(c) On conclusion of the matter for which legal services
178	178	were obtained, the contracting attorney or law firm shall provide
179	179	the contracting [state] governmental entity with a complete written
180	180	statement that describes the outcome of the matter, states the
181	181	amount of any recovery, shows the contracting attorney's or law
182	182	firm's computation of the amount of the contingent fee, and
183	183	contains the final complete time and expense records required by
184	184	Subsection (a). The complete written statement required by this
185	185	subsection is public information under Chapter 552 and may not be
186	186	withheld from a requestor under that chapter under Section 552.103
187	187	or any other exception from required disclosure.
188	188	(d) This subsection does not apply to the complete written
189	189	statement required by Subsection (c). All time and expense records
190	190	required under this section are public information subject to
191	191	required public disclosure under Chapter 552. Information in the
192	192	records may be withheld from a member of the public under Section
193	193	552.103 only if, in addition to meeting the requirements of Section
194	194	552.103, the chief legal officer or employee of the [state]
195	195	governmental entity determines that withholding the information is
196	196	necessary to protect the entity's strategy or position in pending
197	197	or reasonably anticipated litigation. Information withheld from
198	198	public disclosure under this subsection shall be segregated from
199	199	information that is subject to required public disclosure.
200	200	SECTION 6. Section 2254.108(d), Government Code, is amended
201	201	to read as follows:
202	202	(d) Litigation and other expenses payable under the
203	203	contract, including expenses attributable to attorney, paralegal,
204	204	accountant, expert, or other professional work performed by a
205	205	person who is not a contracting attorney or a partner, shareholder,
206	206	or employee of a contracting attorney or law firm, may be reimbursed
207	207	only if the [state] governmental entity and, if applicable, the
208	208	entity's [state] auditor determine that the expenses were
209	209	reasonable, proper, necessary, actually incurred on behalf of the
210	210	[state] governmental entity, and paid for by the contracting
211	211	attorney or law firm. The contingent fee may not be paid until the
212	212	entity's [state] auditor, or the governing body of a political
213	213	subdivision without an auditor, as applicable, has reviewed the
214	214	relevant time and expense records and verified that the hours of
215	215	work on which the fee computation is based were actually worked in
216	216	performing reasonable and necessary services for the [state]
217	217	governmental entity under the contract.
218	218	SECTION 7. Sections 2254.109(a) and (c), Government Code,
219	219	are amended to read as follows:
220	220	(a) This subchapter does not limit the right of a [state]
221	221	governmental entity to recover fees and expenses from opposing
222	222	parties under other law.
223	223	(c) An [A state] officer, employee, or governing body of a
224	224	governmental entity, including the attorney general, may not waive
225	225	the requirements of this subchapter or prejudice the interests of
226	226	the governmental entity [state] under this subchapter. This
227	227	subchapter does not waive the state's sovereign immunity or a
228	228	political subdivision's governmental immunity from suit or the
229	229	state's [its] immunity from suit in federal court under the
230	230	Eleventh Amendment to the federal constitution.
231	231	SECTION 8. Subchapter C, Chapter 2254, Government Code, is
232	232	amended by adding Section 2254.110 to read as follows:
233	233	Sec. 2254.110. VOID CONTRACT. A contract entered into or an
234	234	arrangement made in violation of this subchapter is void as against
235	235	public policy.
236	236	SECTION 9. Section 403.0305, Government Code, is repealed.
237	237	SECTION 10. Subchapter C, Chapter 2254, Government Code, as
238	238	amended by this Act, applies only to a contract entered into on or
239	239	after the effective date of this Act.
240	240	SECTION 11. This Act takes effect September 1, 2019.