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A BILL TO BE ENTITLED
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AN ACT
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relating to severance pay for political subdivision employees and |
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independent contractors. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 180, Local Government Code, is amended |
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by adding Section 180.011 to read as follows: |
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Sec. 180.011. LIMITATION ON SEVERANCE PAY FOR EMPLOYEES AND |
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INDEPENDENT CONTRACTORS. (a) In this section: |
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(1) "Misconduct" means an act or omission by an |
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employee or contractor of a political subdivision in the |
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performance of the employee's or contractor's duties that the |
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governing body of the political subdivision determines to be |
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misconduct. The term includes any finding of criminal conduct. |
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(2) "Severance pay" means dismissal or separation |
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income paid on termination of: |
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(A) the employment of an employee that is in |
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addition to the employee's usual earnings from the employer at the |
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time of termination; or |
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(B) the contract of an independent contractor |
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that is in addition to the contractor's usual compensation from the |
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employer as prescribed by the contract. |
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(b) This section does not apply to a public or teaching |
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hospital. |
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(c) A political subdivision that enters into a contract or |
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employment agreement, or renewal or renegotiation of an existing |
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contract or employment agreement, that contains a provision for |
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severance pay with an employee or independent contractor must |
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include: |
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(1) a requirement that severance pay that is paid from |
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tax revenue may not exceed the amount of compensation, at the rate |
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at the termination of employment or the contract, the employee or |
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independent contractor would have been paid for 20 weeks, excluding |
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paid time off or accrued vacation leave; and |
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(2) a prohibition of the provision of severance pay |
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when the employee or independent contractor is terminated for |
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misconduct. |
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(d) A political subdivision shall post each severance |
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agreement in a prominent place on the political subdivision's |
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Internet website. |
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(e) This subsection applies to an action brought against a |
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political subdivision by an employee or independent contractor of |
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the political subdivision arising from the termination of the |
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person's employment or contract. A court may not issue a writ of |
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execution or mandamus in connection with a judgment in the action if |
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the judgment does not comply with this section. |
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SECTION 2. Section 180.011, Local Government Code, as added |
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by this Act, applies only to a contract entered into or an action |
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filed on or after the effective date of this Act. |
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SECTION 3. This Act takes effect September 1, 2025. |