LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 20, 2001
TO: Honorable Fred M. Bosse, Chair, House Committee on Civil
Practices
FROM: John Keel, Director, Legislative Budget Board
IN RE: HB1119 by Dutton (Relating to tort liability of
governmental units.), Committee Report 1st House,
Substituted
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HB1119, Committee Report 1st House, Substituted: negative impact *
* of $(283,000) through the biennium ending August 31, 2003. *
* *
* The bill would make no appropriation but could provide the legal *
* basis for an appropriation of funds to implement the provisions of *
* the bill. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $0 *
* 2003 (283,000) *
* 2004 (461,000) *
* 2005 (434,000) *
* 2006 (434,000) *
****************************************************
All Funds, Five-Year Impact:
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*Fiscal Probable Savings/(Cost) from Change in Number of State *
* Year General Revenue Fund Employees from FY 2001 *
* 0001 *
* 2002 $0 0.0 *
* 2003 (283,000) 5.0 *
* 2004 (461,000) 9.0 *
* 2005 (434,000) 9.0 *
* 2006 (434,000) 9.0 *
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Fiscal Analysis
The bill would increase the statutory cap on damages for the tort
liability of state government. Currently, the Civil Practice and
Remedies Code provides that the liability of a unit of state government
is limited to $250,000 per person and $500,000 per occurrence for bodily
injury or death, and $100,000 per occurrence for property damage. Under
this bill, monetary damages are limited to a maximum amount of $375,000
for each person and $750,000 for each single occurrence for bodily
injury or death, and $150,000 per occurrence for property damage. The
bill would take effect September 1, 2001, and would apply only to a
cause of action that accrues on or after that date.
Methodology
The Office of the Attorney General (OAG) projects that the increase in
the maximum limits on tort claims will result in an increase in the
number of cases filed against the state as the higher award amounts will
make filing a lawsuit more attractive. The increase in the number of
cases is estimated to require an addtional 5 attorneys and 4 legal
support staff for the tort litigation division, at an ongoing cost of
approximately $434,000 annually.
In addition to costs associated with defending against the additional
lawsuits, there will also be a negative impact related to increased
damage awards.
Local Government Impact
Municipalities with a population of less than 100,000 (2000 census) would
be unaffected by the provisions of the bill. Municipalities with a
population over 100,000 (2000 census) and all other units of local
government would be affected by the proposed increases in liability
limitations.
The Texas Association of Counties (TAC) provided estimates of the impact
on counties that participate in the association's risk management pool.
Estimates are based on an actuarial projection report prepared for TAC.
Coverage would be increased by approximately $561,000 per year for
indemnity payment only. Assuming defense costs at an average 60 percent
of the indemnity cost, a 50 percent increase in claims, and an additional
increase in defense expenses resulting from fewer claimants willing to
settle outside of court, TAC estimates an increased cost of $1.5 - $1.7
million to counties participating in the TAC risk management pool as a
result of the provisions of the bill.
TAC covers 125 counties in the risk pool for automobile and general
liability. Extrapolating the cost increase to those 125 counties for all
counties would indicate an increase to counties statewide between $6
million and $7 million annually. The impact to individual counties would
vary. Harris County provided an estimated cost increase of no less than
$110,000 or upward to $765,000 or more each year. Harris County
anticipates the likely need to add an assistant county attorney to their
staff and presumes a tort liability exposure increase of 20 percent.
Included in the impact to units of local government are the estimated
1,600 special districts statewide. It is anticipated that all special
districts and municipalities with a population over 100,000 would
experience a negative fiscal impact proportional to that of the
counties.
Source Agencies: 304 Comptroller of Public Accounts, 302 Office of
the Attorney General
LBB Staff: JK, TB, SC, DB