ZEM S.B. 1697 75(R) BILL ANALYSIS CIVIL PRACTICES S.B. 1697 By: Ellis (Bosse) 5-1-97 Committee Report (Unamended) BACKGROUND Activities performed by a municipality are categorized by 101.0215(b), Civil Practice and Remedies Code, as either proprietary or governmental. This Act allows a person to sue a municipality for certain torts that may arise in the performance of these activities. It specifies those functions that are governmental and those that are proprietary. Generally, proprietary functions are those that are discretionary. The designation of an activity as governmental rather than proprietary subjects the claim to the liability caps established by the Act ($250,000 for each person and $500,000 for each single occurrence for bodily injury or death and $100,000 for injury to or destruction of property). Community development activities, even though inherently governmental, are not categorized in the Act as either governmental or proprietary. However, courts have found them to be proprietary (i.e. discretionary), resulting in unlimited liability for the municipality. Consequently, lawsuits against municipalities relating to community development activities would diminish the funds available for projects within the municipality. The designation of community development activities as governmental functions should provide reasonable limits on recoveries in this arena and avoid the potential for major losses which could reduce funding of community development projects. PURPOSE This bill would designate community development activities performed under Chapter 373 of the Local Government Code as governmental functions which will place a monetary cap on tort claims arising out of this type of activity. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1 Amends Section 101.0215(a), Civil Practices and Remedies code by adding community development activities undertaken by a municipality under Chapter 373 of the Local Government Code as a governmental function. SECTION 2 Effective Date: September 1, 1997. Applies prospectively. Savings clause. SECTION 3 Emergency Clause.