1-1     By:  Junell (Senate Sponsor - Lindsay)                H.B. No. 1338

 1-2           (In the Senate - Received from the House May 8, 1997;

 1-3     May 9, 1997, read first time and referred to Committee on State

 1-4     Affairs; May 16, 1997, reported favorably by the following vote:

 1-5     Yeas 13, Nays 0; May 16, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to the purchase of directors' and officers' liability

 1-9     insurance by state agencies.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Chapter 104, Civil Practice and Remedies Code, is

1-12     amended by adding Section 104.009 to read as follows:

1-13           Sec. 104.009.  DIRECTORS' AND OFFICERS' LIABILITY INSURANCE.

1-14     (a)  A state agency, institution, or department may purchase a

1-15     directors' and officers' liability insurance policy applicable to

1-16     damages for conduct described under Section 104.002 and other

1-17     conduct customarily covered under directors' and officers'

1-18     liability insurance policies for the benefit of:

1-19                 (1)  a director or officer of the agency, institution,

1-20     or department;

1-21                 (2)  a member of a governing board, commission, or

1-22     council of the agency, institution, or department; or

1-23                 (3)  a member of the executive staff of the agency,

1-24     institution, or department.

1-25           (b)  An insurance policy purchased under this section must

1-26     have a deductible applicable to the liability of the state agency,

1-27     institution, or department in an amount equal to the amount of the

1-28     limits of liability established under Section 104.003.  The

1-29     deductible applicable to an individual's liability may be set at a

1-30     lower amount.

1-31           (c)  The purchase of an insurance policy under this section

1-32     does not waive a defense, immunity, or jurisdictional bar available

1-33     to the state agency, institution, or department purchasing the

1-34     insurance or to the insured.

1-35           SECTION 2.  Section 104.003(b), Civil Practice and Remedies

1-36     Code, is amended to read as follows:

1-37           (b)  The state is not liable under this chapter to the extent

1-38     that damages are recoverable under and are in excess of the

1-39     deductible limits of:

1-40                 (1)  a contract of insurance; or

1-41                 (2)  [under] a plan of self-insurance authorized by

1-42     statute.

1-43           SECTION 3.  The importance of this legislation and the

1-44     crowded condition of the calendars in both houses create an

1-45     emergency and an imperative public necessity that the

1-46     constitutional rule requiring bills to be read on three several

1-47     days in each house be suspended, and this rule is hereby suspended,

1-48     and that this Act take effect and be in force from and after its

1-49     passage, and it is so enacted.

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