LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 77th Regular Session
April 4, 2001
TO: Honorable Fred M. Bosse, Chair, House Committee on Civil
Practices
FROM: John Keel, Director, Legislative Budget Board
IN RE: HJR22 by Wilson (Proposing a constitutional amendment
relating to the sovereign immunity of the state and its
political subdivisions.), As Introduced
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* Estimated Two-year Net Impact to General Revenue Related Funds for *
* HJR22, As Introduced: negative impact of $(15,950,000) through *
* the biennium ending August 31, 2003. *
* *
* In addition to amounts identified for legal staff at the Attorney *
* General's and state agency offices, costs include $80,000 to the *
* state for publication of the resolution in the first year. *
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General Revenue-Related Funds, Five-Year Impact:
****************************************************
* Fiscal Year Probable Net Positive/(Negative) *
* Impact to General Revenue Related *
* Funds *
* 2002 $(8,310,000) *
* 2003 (7,640,000) *
* 2004 (7,640,000) *
* 2005 (7,640,000) *
* 2006 (7,640,000) *
****************************************************
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 $(8,310,000) 150.0 *
* 2003 (7,640,000) 150.0 *
* 2004 (7,640,000) 150.0 *
* 2005 (7,640,000) 150.0 *
* 2006 (7,640,000) 150.0 *
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Fiscal Analysis
This resolution proposes an amendment to the state constitution that
would completely abolish sovereign immunity from suit and liability for
all units of government and provide that they may be sued for damages in
the same manner that an individual may sue a private person or entity.
Additionally, the amendment provides that the Legislature may by general
law establish immunity from suit for all units of government. Also, by
special law, the Legislature may waive immunity from suit to a specific
claim, or waive or modify any limit on liability for a specific claim.
Finally, special provision is made to allow suits arising from the Texas
A&M bonfire accident that occurred on November 18, 1999.
The amendment would be effective upon passage. Due to the resolution's
temporary provision, the amendment would apply to claims that accrued on
or after November 18, 1999 that are filed by November 6, 2002. The
temporary provision expires on December 31, 2003. After that time, the
amendment would apply to all claims that accrue after the date the
amendment became effective.
Methodology
The constitutional abolishment of sovereign immunity, if not
reestablished by general law, would result in an increase in the number
of lawsuits filed against the state. The Office of the Attorney General
(OAG) estimates that additional legal staff would be necessary to handle
the expected increase in lawsuits. The OAG would need 94 additional
full-time-equivalent employees - 51 attorneys and 43 legal support staff.
The cost for FY 2002 is $5,230,000 and $4,640,000 for each fiscal year
thereafter.
In addition to increased legal workload at the Office of the Attorney
General, various state agencies and institutions of higher education
would also need increased legal staff to perform work related to the
expected increase in the number of lawsuits. It is estimated that an
additional 60 attorneys and legal support staff at an annual cost of $3.0
million would be needed at the agencies and institutions.
There would also be an additional negative fiscal impact to the state for
the costs associated with any judgments or settlements resulting from
these lawsuits.
Local Government Impact
The Texas Association of Counties (TAC) Risk Management Pool covers about
27 percent of the 97,000 county employees statewide. An actuarial report
prepared for TAC indicates that the provisions of the bill would result
in an annual increase of approximately $17 million in costs to Texas
counties. This cost estimate is based on estimated indemnity payments;
defense costs; an anticipated 25 percent increase in litigation
frequency; and, expected reductions in the number of mediated lower
settlements because claimants would likely seek higher damages under the
proposed provisions of the bill.
Municipalities do not currently have sovereign immunity, but instead have
a cap on liability, and are therefore already incurring costs associated
with lawsuits.
Source Agencies: 307 Secretary of State, 710 The Texas A&M
University System, 302 Office of the Attorney
General
LBB Staff: JK, TB, MF, SC, DB