SRC-JFA H.B. 1338 75(R)   BILL ANALYSIS


Senate Research Center   H.B. 1338
By: Junell (Lindsay)
State Affairs
5-12-97
Engrossed


DIGEST 

In 1972, the General Appropriations Act included a provision that
prohibited the expenditure of appropriated funds for the purchase of
liability insurance to cover tort claims arising under the Tort Claims Act
of 1969.  In 1993, Section 53 of the General Appropriations Act was
amended to allow state agencies to purchase directors' and officers'
liability insurance, however, the attorney general opined that this
section was limited to policies designed to cover suits arising under the
Tort Claims Act.  In 1995, the legislature attempted to broaden the scope
of Section 53 by renaming it "Purchase of Insurance."  Some ambiguity
remained and although the comptroller has agreed to allow the renewal of
existing directors' and officers' insurance policies, the attorney general
has limited this authority until the legislature has had an opportunity to
enact a general law authorizing state agencies to purchase the policies
covering claims other than those arising under the Tort Claims Act.  This
bill would allow a state agency to purchase directors' and officers'
liability insurance policies covering  commission or board members and
executive staff for claims arising outside of the Tort Claims Act.   

PURPOSE

As proposed, H.B. 1338 authorizes a state agency to purchase directors'
and officers' liability insurance policies covering commission or board
members and executive staff for claims arising outside of the Tort Claims
Act.  

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 104, Civil Practice and Remedies Code, by adding
Section 104.009, as follows:  

Sec. 104.009.  DIRECTORS' AND OFFICERS' LIABILITY INSURANCE.  Authorizes a
state agency, institution, or department to purchase a directors' and
officers' liability insurance policy applicable to damages for conduct
described under Section 104.002 and other conduct customarily covered
under directors' and officers' liability insurance policies for the
benefit of certain individuals.  Requires an insurance agency purchased
under this section to have a deductible applicable to the liability of the
state agency, institution, or department in an amount equal to the amount
of the limits of liability established under Section 104.003.  Authorizes
the deductible applicable to an individual's liability to be set at a
lower amount.  Provides that the purchase of an insurance policy under
this section does not waive a defense, immunity, or jurisdictional bar
available to the state agency, institution, or department purchasing the
insurance or to the insured.   

SECTION 2. Amends Section 104.003(b), Civil Practice and Remedies Code, to
provide that the state is not liable under this chapter to the extent that
damages are recoverable under and are in excess of the deductible limits
of a contract of insurance or a plan of self-insurance authorized by
statute.   


 SECTION 3. Emergency clause.
  Effective date: upon passage.