SRC-JEC, EPT H.B. 4 78(R)   BILL ANALYSIS


Senate Research Center   H.B. 4
By: Nixon (Ratliff)
State Affairs
4/5/2003
Engrossed


DIGEST AND PURPOSE 

H.B. 4 is the comprehensive tort reform bill addressing many issues
affecting the court system today.  The authors' stated intent is to bring
more balance to the Texas civil justice system, reduce litigation costs,
and address the role of litigation in society.  H.B. 4 contains elements
addressing:  class action lawsuits, offers of settlement, venue and forum
non conveniens, proportionate responsibility, products liability,
interest, appeal bonds, seat belts, medical malpractice, charitable
immunity and liability, admissibility of evidence regarding nursing homes,
liability relating to asbestos claims, and assignment of judges in health
care liability claims. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the commissioner of insurance
in SECTION 10A.01 (Article 5.163, Insurance Code) of this bill, and to the
Texas Supreme Court in SECTION  12.01 (Section 62.105, Government Code) of
this bill. 

SECTION BY SECTION ANALYSIS

ARTICLE 1.  CLASS ACTIONS

SECTION 1.01.  Amends Subtitle B, Title 2, Civil Practice and Remedies
Code, by adding Chapter 26, as follows: 

CHAPTER 26. CLASS ACTIONS INVOLVING JURISDICTION OF STATE AGENCY
 
Sec. 26.001.  DEFINITIONS.  Defines terms used in this chapter.
     
Sec. 26.002.  APPLICABILITY.  Provides that this chapter applies only to
certain actions.  

Sec. 26.003.  HEARING.  (a)  Requires a court, on motion of a party, to
conduct a hearing to determine whether an action should be dismissed or
abated under this chapter. 
 
(b)  Requires notice of the hearing to be given to the named parties to
the action on or before the 21st day before the date of the hearing. 

Sec. 26.004.  DISMISSAL FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES.
(a)  Requires a court to dismiss an action without prejudice if certain
conditions exist. 
  
(b)  Requires the court's dismissal order to identify the state agency
having exclusive jurisdiction and state the administrative remedy
available to the claimant. 

(c)  Provides that the limitations period applicable to an action
dismissed under this section is suspended for members of the class or
putative class with respect to the defendants named in the class action
commenced in a court of this state for a period beginning on the date the
dismissal order is signed and continuing while  the class representatives
diligently pursue the administrative remedy identified in the dismissal
order. 
 
Sec. 26.005.  ABATEMENT OR DISMISSAL.  (a)  Requires a court, on motion of
a party filed on or before the 30th day after the date the court signed
the order certifying the action as a class action, to abate or dismiss
without prejudice an action if the court makes certain determinations. 
  
(b)  Requires the court's abatement or dismissal order to identify the
state agency and state the agency statute or rule on which the order is
based. 

(c)  Requires a court that abates an action under this section to take
certain actions. 
  
(d)  Provides that the limitations period applicable to an action
dismissed under this section is suspended for members of the class or
putative class with respect to the defendants named in the class action
commenced in a court of this state for a period beginning on the date the
dismissal order is signed and continuing while the class representatives
diligently pursue the administrative remedy identified in the dismissal
order. 
 
Sec. 26.006.  ABATEMENT PERIOD.  (a)  Requires the order to provide that
the abatement period is at least six months from the date the court signs
the abatement order. 

(b)  Authorizes the court to extend the abatement period if the court
determines that the state agency is proceeding diligently to resolve the
matters the court referred to the agency. 
 
(c)  Provides that the abatement period ends when certain conditions are
met. 
 
Sec. 26.007.  PROCEEDING AFTER ABATEMENT; DISMISSAL.  (a)  Requires the
court, after the abatement period ends,  to decide whether to dismiss the
action, proceed with the action as an individual action, or proceed with
the action as a class action. 
 
(b)  Requires a court to dismiss an action if the court makes certain
determinations. 
 
(c)  Requires the court, if it does not dismiss the action, to determine
whether to proceed with the action as a class action or as an individual
action by considering or reconsidering the case in light of class
certification criteria.  Requires the court, in determining whether a
class action is superior to other available methods for the fair and
efficient adjudication of the controversy, to consider the availability of
judicial review of the state agency's decision and of declaratory relief
under Section 2001.038 (Declaratory Judgment), Government Code, concerning
the validity and applicability of agency rules. 
 
(d)  Provides that relief awarded to a claimant may be adequate even if
the relief does not include exemplary damages, multiple damages,
attorney's fees, or costs of court. 
 
(e)  Authorizes the court, if a person seeks judicial review of a state
agency's decision on an issue referred to the agency by the court, to
transfer the action to a county of proper venue for the judicial review if
the court makes certain determinations. 
  
(f)  Requires the court to transfer the action to Travis County if a
person seeks declaratory relief under Section 2001.038, (Declaratory
Judgment) Government Code, concerning the validity or applicability of a
state agency rule involved in a state agency's decision on a matter
referred to the agency by the court. 
  
SECTION 1.02.  Amends Title 6, Civil Practice and Remedies Code, by adding
Chapter 140, as follows: 

CHAPTER 140.  ATTORNEY'S FEES AWARDED IN CLASS ACTIONS
 
Sec. 140.001.  APPLICABILITY.  (a)  Provides that, except as provided by
Subsection (b), this chapter applies to an award of attorney's fees in a
class action notwithstanding certain rules or agreements. 
   
(b)  Provides that this chapter does not apply to fees payable to the
attorney or attorneys by a named plaintiff client out of that client's
funds, including the client's share of the common fund recovered for the
class, under an agreement between the attorney or attorneys and the
client. 
 
Sec. 140.002.  NO RIGHT TO FEES CREATED.  Provides that this chapter does
not create a right to an award of attorney's fees. 
 
Sec. 140.003.  AWARD OF FEES.  Provides that if a court awards a fee in a
class action to the attorney or attorneys for the class, the fee must be
awarded out of a common fund or as measured by a common benefit recovered
for the class, and the fee must be computed as provided by this chapter. 
 
Sec. 140.004.  DETERMINATION OF BASE FEE.  (a)  Requires the court, in any
class action in which an award of attorney's fees is to be made, to first
determine the base fee as provided by this section. 

(b)  Sets forth requirements regarding what the court is required to find
in the determination of the base fee. 
  
(c)  Requires the rates in Subsection (b)(2) to be based on and not to
exceed the rates customarily charged in the locality for similar legal
services in nonclass litigation. 

(d)  Requires the court, to compute the base fee, to multiply the hours
found in Subsection (b)(1) by the rates found in Subsection (b)(2). 
 
Sec. 140.005.  INCREASE OR DECREASE OF BASE FEE.  (a)  Authorizes the
court, except as provided by Subsection (b), to increase or decrease the
base fee determined under Section 140.004 by applying certain factors. 
  
(b)  Sets forth a formula to determine a ceiling for the total fees
awarded by the court. 
 
Sec. 140.006.  ACTUAL EXPENSES AND COSTS.  Authorizes the court, in
addition to the fee determined under this chapter, to award the attorney
or attorneys representing the class all reasonable expenses and costs of
litigation actually incurred by the attorney or attorneys on behalf of the
class. 
 
SECTION 1.03.  Amends Section 22.225, Government Code, by amending
Subsections (b) and (d) and adding Subsection (e), as follows: 

(b)  Provides that, except as provided by Subsection (c) or (d), a
judgment of a court of appeals is conclusive on the law and facts, and a
petition for review, rather than a writ of error, is not allowed to,
rather than from, the supreme court, in certain civil cases. 
  
(d)  Provides that a petition for review, rather than a writ of error, is
allowed to, rather than from, the supreme court for an appeal from an
interlocutory order described by Section 51.014(a)(3) or (6), rather than
51.014(6), Civil Practice and Remedies Code. 
 
(e)  Provides that, for purposes of Subsection (c), one court holds
differently from another when there is inconsistency in their respective
decisions that should be clarified to remove unnecessary uncertainty in
the law and unfairness to litigants. 
 
SECTION 1.04.  Amends Sections 51.014(a), (b), and (c), Civil Practice and
Remedies Code, as follows: 

 (a)  Authorizes a person to appeal from an interlocutory order of a
district court, county  court at law, or county court that performs
certain actions, including denying all or part of the relief sought by a
motion under Section 13.01(b) (regarding defendant bond filing), Article
4590i (Medical Liability and Insurance Improvement Act), V.T.C.S., or
granting relief sought by a motion under Section 13.01(l) (regarding the
adequacy of an expert report), Article 4590i, V.T.C.S. 

(b)  Provides that an interlocutory appeal under Subsection (a)(3), (5),
or (8) stays all other proceedings in the trial court pending resolution
of that appeal.  Makes a nonsubstantive change. 

 (c)  Makes a conforming change.
 
SECTION 1.05.  Amends Section 22.001, Government Code, by adding
Subsection (e), as follows: 

(e)  Provides that for purposes of Subsection (a)(2), one court holds
differently from another when there is inconsistency in their respective
decisions that should be clarified to remove unnecessary uncertainty in
the law and unfairness to litigants. 

ARTICLE 2.  SETTLEMENT
 
SECTION 2.01.  Amends Subtitle C, Title 2, Civil Practice and Remedies
Code, by adding Chapter 42, as follows: 

CHAPTER 42.  SETTLEMENT AND RECOVERY OF LITIGATION COSTS

SUBCHAPTER A.  GENERAL PROVISIONS
 
Sec. 42.001.  DEFINITIONS.  Defines terms used in this chapter.

Sec. 42.002.  APPLICABILITY AND EFFECT.  (a) and (b) Set forth actions to
which this chapter does not apply. 

(c)  Provides that this chapter does not limit or affect the ability of
any person to make certain offers to settle a claim. 
   
(d)  Provides that an offer to settle or compromise that does not comply
with Section 42.051 or an offer to settle or compromise made in an action
to which this chapter does not apply does not entitle the offering party
to recover litigation costs under this chapter. 
 
  (e)  Sets forth actions to which this chapter does not apply.
 
Sec. 42.003.  MODIFICATION OF TIME LIMITS.  Authorizes a court to modify
the time limits specified in this chapter by order resulting from a
pretrial conference conducted under Rule 166, Texas Rules of Civil
Procedure. 
 
Sec. 42.004.  SERVICE.  Provides that, when this chapter requires a
writing to be served on another party, service is adequate if it is
performed in a manner described in Rule 21a, Texas Rules of Civil
Procedure. 
 
 Sec. 42.005.  APPLICABILITY OF CHAPTER IN RELATION TO CERTAIN CRIMINAL
BEHAVIOR.  Sets forth actions to which this chapter does not apply.  
 
Sec. 42.006.  ADDITIONAL APPLICABILITY PROVISION; CERTAIN CRIMINAL
BEHAVIOR.  Sets forth actions to which this chapter does not apply. 
 
Sec. 42.007.  APPLICABILITY OF CHAPTER:  NONMONETARY TERMS.  Provides
that, notwithstanding any other provision of this chapter, if a monetary
settlement offer is made conditioned on terms other than monetary relief
pled by the party to whom the settlement offer was made and recoverable by
that party in law or in equity, other than the requirement for a release
and indemnity of claim by and through the claimant, then this chapter does
not apply unless the defendant succeeds in obtaining those other terms in
the judgment. 

[Reserves Sections 42.008-42.050 for expansion.]

SUBCHAPTER B.  AWARDING LITIGATION COSTS

Sec. 42.051.  SETTLEMENT OFFER.  (a)  Authorizes a defendant or a group of
defendants to serve on a claimant an offer to settle all claims in the
action between that defendant or those defendants and the claimant. 

 (b)  Sets forth requirements for the settlement offer.
 
(c)  Prohibits a defendant or group of defendants from making a settlement
offer under this section before the 90th day after the later of two dates. 
  
(d)  Prohibits a defendant or group of defendants from making a settlement
offer under this section after the 30th day before the date set for trial. 

(e)  Provides that the parties are not required to file a settlement offer
with the court. 
 
Sec. 42.052.  ACCEPTANCE OF SETTLEMENT OFFER.  (a)  Authorizes a claimant
to accept a settlement offer made under this chapter on or before 5 p.m.
on the 30th day after the date the claimant received the settlement offer
or before the deadline stated in the settlement offer, whichever is later. 

 (b)  Sets forth requirements for the acceptance of a settlement offer.
  
Sec. 42.053.  WITHDRAWING SETTLEMENT OFFER.  (a)  Authorizes a defendant
or group of defendants to withdraw a settlement offer by serving a written
withdrawal on the claimant to whom the settlement offer was made before
the claimant accepts the settlement offer.  Prohibits a claimant from
accepting a settlement offer after it is withdrawn. 

(b)  Provides that if a settlement offer is withdrawn, the defendant or
group of defendants that made the settlement offer is not entitled to
recover litigation costs under this chapter. 
 
Sec. 42.054.  REJECTION OF SETTLEMENT OFFER.   Sets forth situations in
which, for purposes of this chapter, a settlement offer is rejected. 
   
Sec. 42.055.  AWARD OF LITIGATION COSTS.  (a)  Requires that any defendant
who makes a settlement offer under this chapter to a claimant seeking
monetary relief recover litigation costs from the claimant under certain
circumstances. 
  
(b)  Sets forth circumstances under which any defendant who makes a
settlement offer to a claimant seeking nonmonetary relief, other than
injunctive relief, may  recover litigation costs from the claimant.  

 (c)  Provides that litigation costs awarded to a defendant under this
section include only those litigation costs incurred by the defendant who
made a settlement offer after the rejection of the earliest settlement
offer that entitles the defendant to an award of litigation costs under
this section. 

  (d)  Sets forth requirements regarding litigation costs awarded under
this section. 
  
(e)  Requires the court to determine the amount of litigation costs
awarded based on written or oral evidence presented to the court.  Sets
forth evidence rules for jury trials. 
 
(f)  Requires the trial judge who presided over the trial of the case to
act as the finder of fact in regard to the award of litigation costs under
this section.  Requires the local presiding judge, if the trial judge is
unable to do so, to appoint another judge to hear and determine all issues
related to the award. 
 
  (g)  Authorizes an award of litigation costs under this section to be
reviewed on   appeal from a final judgment for abuse of discretion. 
 
Sec. 42.056.  LIMITATION ON LITIGATION COSTS.  (a)  Prohibits the amount
of litigation costs awarded under this chapter from exceeding the
claimant's total recovery, less any statutory liens, in connection with
the transactions or occurrences giving rise to the claim. 

 (b)  Provides that the claimant's total recovery under this section does
not include the proceeds of an insurance policy paid to the claimant as a
beneficiary of the policy, unless the proceeds are the subject of the
litigation.   

(c)  Provides that the claimant's total recovery under this section
includes certain amounts of money. 
  
(d)  Prohibits a claimant, if litigation costs are awarded against the
claimant under this chapter, from being awarded any attorney's fees,
expenses, or costs to which the claimant would otherwise be entitled under
any other law that were incurred by the claimant after the claimant's
rejection of the earliest settlement offer that entitles the defendant or
group of defendants to an award of litigation costs under this section. 
 
Sec. 42.057.  ADMISSIBILITY OF EVIDENCE.  (a)  Provides that this chapter
does not affect the admissibility or inadmissibility of evidence as
provided in the Texas Rules of Evidence. 
 
(b)  Prohibits the provisions of this chapter from being made known to the
jury through any means, including voir dire, introduction into evidence,
instruction, or argument. 

ARTICLE 3.  VENUE; FORUM NON CONVENIENS
 
SECTION 3.01.  Amends Chapter 15, Civil Practice and Remedies Code, by
adding Subchapter F, as follows: 

SUBCHAPTER F.  CONSOLIDATION OF MULTIDISTRICT LITIGATION FOR PRETRIAL
PROCEEDINGS 
 
Sec. 15.151.  PURPOSE.  Sets forth the purpose of this subchapter and
provides that to accomplish this purpose, this subchapter shall be
construed in harmony with federal judicial interpretation of comparable
federal multidistrict litigation statutes to the extent  consistent with
this purpose. 
 
Sec. 15.152.  DEFINITIONS.  Defines "panel" and "related" for this
subchapter. 
 
Sec. 15.153.  APPLICABILITY.  Sets forth actions to which this subchapter
does and does not apply.   
 
Sec. 15.154.  TRANSFER FOR COORDINATED OR CONSOLIDATED PRETRIAL
PROCEEDINGS.  Authorizes the panel to transfer any case to which this
subchapter applies to any district court for the purpose of allowing
coordinated or consolidated pretrial proceedings in related cases. 
 
Sec. 15.155.  INITIATION OF TRANSFER PROCEEDINGS.  (a)  Authorizes
proceedings to transfer a case under this subchapter to be initiated by
certain persons. 
  
  (b)  Sets forth requirements regarding a  motion filed under Subsection
(a)(2). 
 
 (c)  Requires a copy of the motion to be filed by the movant in each case
identified in Subsections (b)(1) and (2). 
 
Sec. 15.156.  DETERMINATION OF TRANSFER.  (a)  Requires the panel, after
notice to all parties in all related cases that may be subject to
coordinated or consolidated pretrial proceedings, and a hearing, to order
the transfer of any or all related cases to one or more district courts
for coordinated or consolidated pretrial proceedings if it determines that
transfer is for the convenience of parties and witnesses and will promote
the just and efficient conduct of the actions. 

 (b)  Authorizes any party to any case that would be affected by the
proceedings under this subchapter to appear at the hearing and offer
evidence on the propriety of coordinated or consolidated pretrial
proceedings in the related cases. 

(c)  Requires the panel's order directing or denying transfer to be
supported by findings of fact and conclusions of law. 
 
Sec. 15.157.  FILING OF PANEL ORDERS.  (a)  Requires any order of the
panel to be filed by the panel in the district court in which the transfer
hearing is to be or has been held. 
 
(b)  Requires a copy of an order directing or denying transfer of related
cases to be sent by the panel to both the transferee and transferor
courts. 
 
(c)  Provides that an order directing the transfer of related cases for
coordinated or consolidated pretrial proceedings is effective when filed
in the district court in which the transfer hearing was held. 
 
Sec. 15.158.  REVIEW OF PANEL ORDERS.  (a)  Provides that review of an
order of the panel is by extraordinary writ. 

(b)  Requires a petition for an extraordinary writ to review an order of
the panel in regard to setting a transfer hearing, or to review any other
order of the panel made before the order either directing or denying
transfer is made, to be filed in the court of appeals having jurisdiction
over the district in which the transfer hearing is to be or has been held. 
 
(c)  Requires a petition for an extraordinary writ to review an order
directing the transfer of one or more related cases, or to review any
order made after the transfer order is made, to be filed in the court of
appeals having jurisdiction over the transferee district. 
 
 (d)  Prohibits an order of the panel denying a motion to transfer for
coordinated or consolidated pretrial proceedings from being appealed or
reviewed. 
 
Sec. 15.159.  ASSIGNMENT.  (a)  Authorizes, on request of the panel, a
district judge to be assigned to preside in the transferee district over
coordinated or consolidated pretrial proceedings being conducted pursuant
to this subchapter. 

(b)  Authorizes the assignment to be made by the chief justice of the
supreme court or by the presiding judge of the administrative judicial
region in which the transferee court sits, in accordance with Chapter 74C
(Administrative Judicial Regions), Government Code. 
 
Sec. 15.160.  CONDUCT OF PROCEEDINGS.  (a)  Requires the coordinated or
consolidated pretrial proceedings to be conducted by the judge or judges
to whom the cases are assigned by the panel. 

(b)  Authorizes the judge or judges to whom the cases are assigned, the
members of the panel, and other district judges designated when needed by
the panel, when conducting pretrial proceedings in cases coordinated or
consolidated for pretrial proceedings, to exercise the powers of a
district judge in any district, including deciding motions to transfer
venue and motions for summary judgment. 

(c)  Requires the judge or judges to whom the cases are assigned to give
priority to the pretrial proceedings in cases coordinated or consolidated
under this subchapter over all other matters pending before them. 
 
Sec. 15.161.  REMAND.  Requires a court to which a case is transferred
under this subchapter to remand the transferred case, at or before the
conclusion of pretrial proceedings, to the district court from which it
was transferred unless it has been terminated, except that the court is
authorized to separate any claim, cross-claim, counterclaim, or
third-party claim and remand the separated claim before the remainder of
the case is remanded. 
 
SECTION 3.02.  Amends Chapter 74, Government Code, by adding Subchapter H,
as follows: 

SUBCHAPTER H.  JUDICIAL PANEL ON MULTIDISTRICT LITIGATION
 
Sec. 74.161.  JUDICIAL PANEL.  (a)  Provides that the judicial panel on
multidistrict litigation consists of seven justices of the courts of
appeals designated from time to time by the chief justice of the supreme
court.  Prohibits two panel members from being from the same court of
appeals district. 
 
(b)  Requires the concurrence of four members to be necessary to any
action by the panel. 
 
Sec. 74.162.  OPERATION; RULES.  (a)  Requires the judicial panel on
multidistrict litigation to operate subject to rules of administration for
multidistrict litigation practice and procedure adopted by the supreme
court under Section 74.024 (Rules). 

(b)  Authorizes the panel to prescribe additional rules for the conduct of
its business not inconsistent with Chapter 15F, Civil Practice and
Remedies Code, and the rules of administration for multidistrict
litigation practice and procedure, as adopted by the supreme court. 
 
SECTION 3.03.  Amends Section 15.003, Civil Practice and Remedies Code, as
follows: 
 
Sec. 15.003.  MULTIPLE PLAINTIFFS AND INTERVENING PLAINTIFFS.  (a)
Provides that in a suit in which there is more than one plaintiff, whether
the plaintiffs are included by joinder, by intervention, because the
lawsuit was begun by more than one  plaintiff, or otherwise, each
plaintiff is required, independently of every other plaintiff, to
establish proper venue.  Requires, if a plaintiff cannot independently
establish proper venue, that plaintiff's part of the suit, including all
of that plaintiff's claims and causes of action, to be transferred to a
county of proper venue or dismissed, as is appropriate. Makes conforming
and nonsubstantive changes.  
   
(b)  Provides that an interlocutory appeal may be taken of a trial court's
determination under Subsection (a) that a plaintiff did or did not
independently establish proper venue or a plaintiff that did not
independently establish proper venue did or did not establish the items
prescribed by  Subsections (a)(1)-(4). Deletes text regarding a person's
prohibition from joining or intervening in a pending suit as a plaintiff
unless the person performs certain actions. 

(c)  Requires an interlocutory appeal permitted by Subsection (b) to be
taken to the court of appeals district in which the trial court is located
under the procedures established for interlocutory appeals.  Deletes text
regarding a person seeking intervention or joinder. Authorizes the appeal
to be taken by a party that is affected by the trial court's determination
under Subsection (a).  Deletes text regarding the date by which the appeal
must be perfected.  Makes conforming changes. 
 
(d)  Provides that an interlocutory appeal under Subsection (b) has the
effect of staying the commencement of trial in the trial court pending
resolution of the appeal. 
 
SECTION 3.04.  Amends Section 71.051, Civil Practice and Remedies Code, by
amending Subsection (a) and adding Subsection (j), as follows: 
 
(a)  Deletes reference to a plaintiff who is not a legal resident of the
United States. Requires, rather than authorizes, a court of this state, if
it finds that in the interest of justice a claim or action to which this
section applies would be more properly heard in a forum outside this
state, to decline to exercise jurisdiction under the doctrine of forum non
conveniens and to stay or dismiss the claim or action on any conditions
that may be just.  Deletes reference to whole or part of the claim or
action being styles or dismissed in whole or in part. 
 
(j)  Provides that this section does not affect the application of the
common law doctrine of forum non conveniens to actions other than actions
for personal injury or wrongful death. 
 
SECTION 3.05.  Amends Section 23.101(a), Government Code, to require the
trial courts of this state to regularly and frequently set hearings and
trials of pending matters, giving preference to hearings and trials of
multidistrict litigation, among other things. 
 
SECTION 3.06.  Repealers:  

(1) Sections 71.051(b) (related to forum non conveniens for a plaintiff
who is a legal resident of the United States), (c) (relating to staying or
dismissing a claim), (d) (relating to a timely request for stay or
dismissal), (e) (relating to the prohibition against a stay or dismissal
for a legal resident of the state), (f) (relating to the prohibition
against a stay or dismissal when a party opposing the motion provides
certain evidence), (g) (relating to the extension of a time limit), and
(h) (relating to definitions), Civil Practice and Remedies Code; and  

(2) Section 71.052 (Jurisdiction; Election; Stipulations),  Civil Practice
and Remedies Code. 
  
ARTICLE 4.  PROPORTIONATE RESPONSIBILITY AND
DESIGNATION OF RESPONSIBLE PARTIES
  
SECTION 4.01.  Amends Section 33.002(a), Civil Practice and Remedies Code,
to remove the exception provided by Subsections (b) and (c) to the
application of this chapter.  Makes this chapter applicable to any action
brought under the Deceptive Trade Practices-Consumer Protection Act
(Subchapter E, Chapter 17, Business & Commerce Code) in which a defendant,
settling person, or responsible third party is found responsible for a
percentage of the harm for which relief is sought. 
 
SECTION 4.02.  Amends Section 33.003, Civil Practice and Remedies Code, as
follows: 
 
Sec. 33.003.  DETERMINATION OF PERCENTAGE OF RESPONSIBILITY.  (a) Requires
the trier of fact, as to each cause of action asserted, to determine the
percentage of responsibility, stated in whole numbers, for each
responsible third party who has been designated, rather than joined, under
Section 33.004. 

(b)  Provides that this section does not require a submission to the jury
of a question regarding conduct by any person without sufficient evidence
to support the submission. 
 
SECTION 4.03.  Amends the heading to Section 33.004, Civil Practice and
Remedies Code, to read as follows: 
 
 Sec. 33.004.  DESIGNATION OF RESPONSIBLE THIRD PARTY. 

SECTION 4.04.  Amends Section 33.004, Civil Practice and Remedies Code, by
amending Subsections (a) and (b) and adding Subsections (f)-(j), as
follows: 
 
(a)  Deletes text regarding Subsections (d) and (e) and the expiration of
limitations on a claimant's claim for damages.  Authorizes a defendant to
seek to designate a person as, rather than join, a responsible third party
by filing a motion for leave to designate that person as a responsible
third party, rather than who has not been sued by the claimant. Requires
the motion to be filed on or before the 60th day before the trial date
unless the court finds good cause to allow the motion to be filed at a
later date. 
 
(b)  Makes nonsubstantive changes.
 
(f)  Requires a court to grant leave to designate the named person as a
responsible third party unless another party files an objection to the
motion for leave on or before the 15th day after the date the motion is
served. 
 
(g)  Requires the court, if an objection to the motion for leave is timely
filed, to grant leave to designate the person as a responsible third party
unless the objecting party establishes certain facts. 
   
(h)  Provides that by granting a motion for leave to designate a person as
a responsible third party, the person named in the motion is designated as
a responsible third party for purposes of this chapter without further
action by the court or any party. 
 
(i)  Requires the court, for a person whose identity is not known, to
grant a motion for leave to designate that person as a responsible third
party if the court determines that the motion otherwise should be granted
under Subsection (f) or (g) and the defendant has stated in the motion all
known identifying characteristics of the person.  Provides that in that
circumstance, the person will be denominated as "Jane Doe" or "John Doe"
until the person's identity is known. 
 
(j)  Provides that the filing or granting of a motion for leave to
designate a person as a responsible third party or a finding of fault
against the person does not by itself impose liability on the person and
may not be used in any other proceeding, on the basis of res judicata,
collateral estoppel, or any other legal theory, to impose liability on the
person. 
  
SECTION 4.05.  Amends Sections 33.011(1), (2), (5), and (6), Civil
Practice and Remedies Code, as follows: 

 (1)  Redefines "claimant."

 (2)  Redefines "defendant."
  
 (5)  Redefines "settling person." 

 (6)  Redefines "responsible third party."
 
SECTION 4.06.  Amends Section 33.013, Civil Practice and Remedies Code, by
amending Subsections (a) and (b) and adding Subsections (e) and (f), as
follows: 

 (a)  Removes exception as provided in Subsection (c).
 
(b)  Provides that, notwithstanding Subsection (a), each liable defendant
is, in addition to his liability under Subsection (a), jointly and
severally liable for the damages recoverable by the claimant under Section
33.012 with respect to a cause of action if certain conditions are met. 
  
(e)  Provides that, notwithstanding anything to the contrary stated in the
provisions of the Penal Code listed in Subsection (b)(2), that subsection
applies only if the claimant proves the defendant acted or failed to act
with specific intent to do harm.  Provides that a defendant acts with
specific intent to do harm with respect to the nature of the defendant's
conduct and the result of the person's conduct when it is the person's
conscious effort or desire to engage in the conduct for the purpose of
doing substantial harm to others. 

(f)  Prohibits the jury from being made aware through voir dire,
introduction into evidence, instruction, or any other means that the
conduct to which Subsection (b)(2) refers is defined by the Penal Code. 
 
SECTION 4.07.  Amends Section 33.017, Civil Practice and Remedies Code, to
remove references to Article 4413(36), V.T.C.S.  
 
SECTION 4.08.  Amends Section 417.001(b), Labor Code, to provide that the
insurance carrier's subrogation interest is limited to the amount of the
total benefits paid or assumed by the carrier to the employee or the legal
beneficiary, less the amount by which the court reduces the judgment based
on the percentage of responsibility determined by the trier of fact under
Section 33.003 (Determination of Percentage of Responsibility), Civil
Practice and Remedies Code, attributable to the employer.  Provides that
if the recovery is for an amount greater than the amount of the insurance
carrier's subrogation interest the insurance carrier shall pay certain
amounts.  Makes a conforming change. 

SECTION 4.09.  Repealers:

(1)  33.002(b) (relating to liability for certain crimes under the Penal
Code), (d) (relating to the non-applicability of Subsection (b)), (e)
(relating to the intent to do harm), (f) (relating to submission of a
conduct question to the jury), (g) (relating to what the jury can know),
and (h) (relating to applicability of this chapter), Civil Practice and
Remedies Code; 

(2)  33.004(c) (relating to a seller as a responsible third party), (d)
(relating to a third party claim by a defendant under this section), and
(e) (relating to a joinder time limit), Civil Practice and Remedies Code; 

  (3)  33.011(7) (defining a toxic tort), Civil Practice and Remedies Code;

 (4)  33.012(c) (relating to reduction of damages recoverable), Civil
Practice and Remedies Code; and 

(5)  33.013(c) (relating to a defendant's percentage of responsibility),
Civil Practice and Remedies Code. 
 
SECTION 4.10.  Provides that it is not the intent or purpose of this
article to affect workers' compensation law. 

ARTICLE 5.  PRODUCTS LIABILITY
 
SECTION 5.01.  Amends Section 16.012, Civil Practice and Remedies Code, as
follows: 
 
Sec. 16.012.  New heading:  PRODUCTS LIABILITY.  (a)  Removes the
definition of "manufacturing equipment."  

(b)  Makes conforming changes. 

(c)  Makes conforming changes.

(d)  Provides that this section does not apply to a products liability
action in which the claimant alleges a product caused a disease the
symptoms of which did not, before the end of 15 years after the date of
the sale of the product by the defendant, manifest themselves to a degree
and for a duration that would put a reasonable person on notice that the
person suffers some injury.  Makes a conforming change. 

  (e)  Makes a conforming change.

  (f)  Makes a conforming change.
 
SECTION 5.02.  Amends Section 82.001(2), Civil Practice and Remedies Code,
to redefine "products liability action." 
 
SECTION 5.03.  Amends Chapter 82, Civil Practice and Remedies Code, by
adding Sections 82.003, 82.007, 82.008, and 82.009, as follows: 
 
Sec. 82.003.  LIABILITY OF NONMANUFACTURING SELLERS.  Provides that a
seller that did not manufacture a product is not liable for harm caused to
the claimant by that product unless the claimant proves certain facts. 

Sec. 82.007.  MEDICINES.  (a)  Provides that the defendant or defendants,
including a health care provider, manufacturer, distributor, and
prescriber, in a products liability action alleging that an injury was
caused by a failure to provide adequate warnings or information with
regard to a pharmaceutical product, are not liable with respect to the
allegations if certain conditions are met. 

(b)  Provides that this section does not apply if the manufacturer, before
or after pre-market approval or licensing of the product, withheld from or
misrepresented to the Food and Drug Administration required information
that was material and relevant to the performance of the product and was
causally related to the claimant's injury. 
 
Sec. 82.008.  EVIDENCE OF SUBSEQUENT IMPROVEMENTS AND MEASURES. Prohibits
a court from admitting, except for purposes of impeachment, in a products
liability action, evidence of a subsequent improvement made or measure
taken with respect to the defect alleged to have caused harm, or a similar
product, that, if made or taken before the product was supplied, would
have made the claimant's harm less likely. 
 
 Sec. 82.009.  COMPLIANCE WITH GOVERNMENT STANDARDS.  (a)  Provides that
in a products liability action brought against a product manufacturer or
seller, there is a rebuttable presumption that the product manufacturer or
seller is not liable for any injury to a claimant caused by some aspect of
the formulation, labeling, or design of a product if the product
manufacturer or seller establishes that the product's formula, labeling,
or design complied with mandatory safety standards or regulations adopted
and promulgated by the federal government, or an agency of the federal
government, that were applicable to the product at the time of
manufacture, and that governed the product risk that allegedly caused
harm. 

(a-1)  Authorizes the claimant to rebut the presumption in Subsection (a)
by establishing certain facts. 

(b)  Provides that in a products liability action brought against a
product manufacturer or seller, there is a rebuttable presumption that the
product manufacturer or seller is not liable for any injury to a claimant
allegedly caused by some aspect of the formulation, labeling, or design of
a product if the product manufacturer or seller establishes that the
product was subject to pre-market licensing or approval by the federal
government, or an agency of the federal government, that the manufacturer
complied with all of the government's or agency's procedures and
requirements with respect to pre-market licensing or approval, and that
after full consideration of the product's risks and benefits the product
was approved or licensed for sale by the government or agency. Authorizes
the claimant to rebut this presumption by establishing certain facts. 
  
(c)  Provides that this section does not extend to manufacturing flaws or
defects even though the product manufacturer has complied with all quality
control and manufacturing practices mandated by the federal government or
an agency of the federal government. 

ARTICLE 6.  INTEREST
 
SECTION 6.01.  Amends Section 304.003(c), Finance Code, to set forth
formulas for the postjudgment interest rate. 
 
SECTION 6.02.  Amends Chapter 304B, Finance Code, by adding Section
304.1045, as follows: 
 
Sec. 304.1045.  FUTURE DAMAGES.  Prohibits prejudgment interest from being
assessed or recovered on an award of future damages. 

ARTICLE 7.  APPEAL BONDS
 
SECTION 7.01.  Amends Section 35.006, Civil Practice and Remedies Code, as
follows: 
 
Sec. 35.006.  STAY.  (a)  Provides that if the judgment debtor shows the
court that an appeal from the foreign judgment is pending or will be
taken, that the time for taking an appeal has not expired, or that a stay
of execution has been granted, has been requested, or will be requested,
and proves that the judgment debtor has furnished or will furnish the
security for the satisfaction of the judgment required by the state in
which it was rendered, the court is required stay enforcement of the
foreign judgment until the appeal is concluded, the time for appeal
expires, or the stay of execution expires or is vacated. 

(b)  Requires the court, if the judgment debtor shows the court a ground
on which enforcement of a judgment of the court of this state would be
stayed, to stay enforcement of the foreign judgment for an appropriate
period and require the same security for suspending enforcement, rather
than satisfaction, of the judgment that is required in this state in
accordance with Section 52.006. 
 
SECTION 7.02.  Amends Chapter 52, Civil Practice and Remedies Code, by
adding Section  52.006, as follows: 
 
Sec. 52.006.  AMOUNT OF SECURITY FOR MONEY JUDGMENT.  (a)  Requires, when
a judgment is for money, the amount of security, subject to Subsection
(b), to equal the sum of the amount of compensatory damages awarded in the
judgment; interest for the estimated duration of the appeal; and costs
awarded in the judgment. 
    
(b)  Provides that, notwithstanding any other law or rule of court, when a
judgment is for money, the amount of security must not exceed the lesser
of 50 percent of the judgment debtor's net worth; or $25 million. 

(c)  Requires the trial court on a showing by the judgment debtor that the
judgment debtor is likely to suffer substantial economic harm if required
to post security in an amount required under Subsection (a) or (b), to
lower the amount of the security to an amount that will not cause the
judgment debtor substantial economic harm. 

(d)  Authorizes an appellate court to review the amount of security as
allowed under Rule 24, Texas Rules of Appellate Procedure, except that
when a judgment is for money, the appellate court is prohibited from
modifying the amount of security to exceed the amount allowed under this
section. 
 
SECTION 7.03.  Repealers:
  
(1)  Section 52.002 (Bond or Deposit for Money Judgment), Civil Practice
and Remedies Code; 

(2)  Section 52.003 (Review for Sufficiency), Civil Practice and Remedies
Code; and 

(3)  Section 52.004 (Review for Excessiveness), Civil Practice and
Remedies Code. 

ARTICLE 8.  EVIDENCE RELATING TO SEAT BELTS
 
SECTION 8.01.  Repealer:  Section 545.413(g) (relating to the
inadmissibility of information about the use or nonuse of a safety belt in
a civil trial), Transportation Code. 

ARTICLE 9.  BENEVOLENT GESTURES
 
SECTION 9.01.  Repealer:  Section 18.061(c) (relating to the admissibility
of a communication including statements of culpability or liability),
Civil Practice and Remedies Code. 
 
SECTION 9.02.  Makes application of this article prospective.

ARTICLE 10.  HEALTH CARE
 
SECTION 10.01.  Amends Section 1.03(a), Article 4590i, V.T.C.S., by
amending Subdivisions (3), (4), and (8) and adding Subdivisions (10)-(22),
as follows: 

 (3)(A) and (B)  Redefine "health care provider." 
   
(4)  Redefines "health care liability claim." 

 (8)  Redefines "physician."

 (10)  Defines "affiliate." 

 (11)  Defines "claimant." 
 
 (12)  Defines "control." 

 (13)  Defines "economic damages."

 (14)  Defines "emergency medical care." 

 (15)  Defines "emergency medical services provider." 

 (16)  Defines "home and community support services agency."

 (17)  Defines "intermediate care facility for the mentally retarded."

 (18)  Defines "noneconomic damages."

 (19)  Defines "nursing home."

 (20)  Defines "professional or administrative services."

 (21)  Defines "hospice."

 (22)  Defines "hospital system."
 
SECTION 10.02.  Amends Subchapter A, Article 4590i, V.T.C.S., by adding
Sections 1.04 and 1.05, as follows: 
 
Sec. 1.04.  CONFLICT WITH OTHER LAW AND RULES OF CIVIL PROCEDURE. (a)
Provides that in the event of a conflict between this Act and another law,
including a rule of procedure or evidence or court rule, this Act controls
to the extent of the conflict. 

(b)  Provides that notwithstanding Subsection (a) of this section, in the
event of a conflict between this Act and Section 101.023, 102.003, or
108.002, Civil Practice and Remedies Code, those sections of the Civil
Practice and Remedies Code control to the extent of the conflict. 

(c)  Provides that notwithstanding Section 22.004, (Rules of Civil
Procedure) Government Code, and except as otherwise provided by this Act,
the supreme court is prohibited from amending or adopting rules in
conflict with this Act. 

(d)  Prohibits the district courts and statutory county courts in a county
from adopting local rules in conflict with this Act. 
 
Sec. 1.05.  SOVEREIGN IMMUNITY NOT WAIVED.  Provides that this Act does
not waive sovereign immunity from suit or from liability. 
 
SECTION 10.03.  Amends Section 4.01, Article 4590i, V.T.C.S., by adding
Subsection (f), as follows: 

(f)(1)  Prohibits a deposition,  notwithstanding the provisions of Rule
202, Texas Rules of Civil Procedure, from being taken of a physician or
health care provider for the purpose of investigating a health care
liability claim before the filing of a lawsuit unless certain
circumstances exist regarding notice and records. 

(2)  Entitles the patient, the patient's family, or the patient's
representative, notwithstanding Section 13.01(u) of this Act, if the
physician or health care provider fails to provide the records as required
under this section, to one deposition under Rule 202, Texas Rules of Civil
Procedure, in addition to the deposition allowed under Section 13.01(u) of
this Act, sufficient to provide the information needed for them to
appropriately evaluate any potential health care liability claim and make
decisions about inclusion or not of potential defendants. 
  
SECTION 10.04.  Amends the heading to Subchapter G, Article 4590i,
V.T.C.S., to read as follows: 
 
SUBCHAPTER G.  EVIDENTIARY MATTERS
 
SECTION 10.05.  Amends Subchapter G, Article 4590i, V.T.C.S.,by adding
Sections 7.03 and 7.04, as follows: 
 
Sec. 7.03.  FEDERAL OR STATE INCOME TAXES.  (a)  Provides that,
notwithstanding any other law, in a health care liability claim, if any
claimant seeks recovery for loss of earnings, loss of earning capacity,
loss of contributions of a pecuniary value, or loss of inheritance,
evidence to prove the loss must be presented in the form of a net
after-tax loss that either was or should have been paid by the injured
party or decedent through which the alleged loss has occurred. 

(b)  Requires the court, in a health care liability claim, if any claimant
seeks recovery for loss of earnings, loss of earning capacity, loss of
contributions of a pecuniary value, or loss of inheritance, to instruct
the jury whether any recovery for compensatory damages sought by the
claimant is subject to federal or state income taxes. 
 
Sec. 7.04.  JURY INSTRUCTIONS IN CASES INVOLVING EMERGENCY MEDICAL CARE.
(a)  Requires the court, in a health care liability claim that involves a
claim of negligence arising from the provision of emergency medical care,
to instruct the jury to consider, together with all other relevant matters
certain facts and circumstances. 
  
(b)  Provides that the provisions of Subsection (a) of this section do not
apply to medical care or treatment that occurs after the patient is
stabilized and is capable of receiving medical treatment as a nonemergency
patient, or that is unrelated to the original medical emergency. 
 
SECTION 10.06.  Amends the heading to Subchapter I, Article 4590i,
V.T.C.S., to read as follows: 

SUBCHAPTER I.  PAYMENT OF MEDICAL OR HEALTH CARE EXPENSES 

SECTION 10.07.  Amends Subchapter I, Article 4590i, V.T.C.S., by adding
Section 9.01, as follows: 
 
Sec. 9.01.  RECOVERY OF PAST MEDICAL OR HEALTH CARE EXPENSES. Requires
recovery of past medical or health care expenses in a health care
liability claim to be limited to the amount actually paid or incurred by
or on behalf of the claimant. 
 
SECTION 10.08.  Amends Section 10.01, Article 4590i, V.T.C.S., as follows:
 
Sec. 10.01.  LIMITATION ON HEALTH CARE LIABILITY CLAIMS.  (a)  Makes
changes conforming to Subsection (b) of this section. 

(b)  Requires a claimant to bring a health care liability claim not later
than 10 years after the date of the act or omission that gives rise to the
claim.  Provides that this subsection is intended as a statute of repose
so that all claims must be brought within 10 years or they are time
barred. 
 
SECTION 10.09.  Amends Section 11.02, Article 4590i, V.T.C.S., by adding
Subsections (e) and (f), as follows: 

(e)  Provides that the limitation on health care liability claims
contained in Subsection (a) of this section includes punitive damages. 
 
(f)  Requires the limitation on health care liability claims contained in
Subsection (a) of this section to be applied on a per-claimant basis. 
 
SECTION 10.10.  Amends Section 11.03, Article 4590i, V.T.C.S., as follows:
 
Sec. 11.03.  New heading:  LIMITATION ON NONECONOMIC DAMAGES.  Provides
that in an action on a health care liability claim where final judgment is
rendered against a physician or health care provider, the limit of civil
liability for noneconomic damages of the physician or health care provider
shall be limited to an amount not to exceed $250,000 for each claimant,
regardless of the number of defendant physicians or health care providers
against whom the claim is asserted or the number of separate causes of
action on which the claim is based.  Provides that this section does not
apply to a health care liability claim based solely on intentional denial
of medical treatment that a patient is otherwise qualified to receive,
against the wishes of a patient, or, if the patient is incompetent,
against the wishes of the patient's guardian, on the basis of the
patient's present or predicted age, disability, degree of medical
dependency, or quality of life unless the medical treatment is denied
under Chapter 166, (Advance Directives)Health and Safety Code.  Deletes
text relating to a $150,000 limit on nonpecuniary damages in the event
that Section 11.02(a) of this subchapter is stricken or invalidated.  
 
SECTION 10.11.  Amends Subchapter K, Article 4590i, V.T.C.S., by adding
Section 11.031, as follows: 
 
Sec. 11.031.  ALTERNATIVE LIMITATION ON NONECONOMIC DAMAGES.  (a) Provides
that in the event that Section 11.03 of this subchapter is stricken from
this subchapter or is otherwise to any extent invalidated by a method
other than through legislative means, the following, subject to the
provisions of this section, shall become effective: 

In an action on a health care liability claim where final judgment is
rendered against a physician or health care provider, the limit of civil
liability for all damages and losses, other than economic damages, shall
be limited to an amount not to exceed $250,000 for each claimant,
regardless of the number of defendant physicians or health care providers
against whom the claim is asserted or the number of separate causes of
action on which the claim is based. 

(b)  Provides that, effective before September 1, 2005, Subsection (a) of
this section applies to any physician or health care provider that
provides evidence of financial responsibility in the following amounts in
effect for any act or omission to which this subchapter applies: 

(1)  at least $100,000 for each health care liability claim and at least
$300,000 in aggregate for all health care liability claims occurring in an
insurance policy year, calendar year, or fiscal year for a physician
participating in an approved residency program; 

(2)  at least $200,000 for each health care liability claim and at least
$600,000 in aggregate for all health care liability claims occurring in an
insurance policy year, calendar year, or fiscal year for a physician or
health care provider, other than a hospital; and 

(3)  at least $500,000 for each health care liability claim and at least
$1.5 million in aggregate for all health care liability claims occurring
in an insurance policy year, calendar year, or fiscal year for a hospital. 

(c)  Provides that, effective September 1, 2005, Subsection (a) of this
section applies to any physician or health care provider that provides
evidence of financial responsibility in the following amounts in effect
for any act or omission to which  this subchapter applies: 

(1)  at least $100,000 for each health care liability claim and at least
$300,000 in aggregate for all health care liability claims occurring in an
insurance policy year, calendar year, or fiscal year for a physician
participating in an approved residency program; 

(2)  at least $300,000 for each health care liability claim and at least
$900,000 in aggregate for all health care liability claims occurring in an
insurance policy year, calendar year, or fiscal year for a physician or
health care provider, other than a hospital; and 

(3)  at least $750,000 for each health care liability claim and at least
$2.25 million in aggregate for all health care liability claims occurring
in an insurance policy year, calendar year, or fiscal year for a hospital. 

(d)  Provides that, effective September 1, 2007, Subsection (a) of this
section applies to any physician or health care provider that provides
evidence of financial responsibility in the following amounts in effect
for any act or omission to which this subchapter applies: 

(1)  at least $100,000 for each health care liability claim and at least
$300,000 in aggregate for all health care liability claims occurring in an
insurance policy year, calendar year, or fiscal year for a physician
participating in an approved residency program; 

(2)  at least $500,000 for each health care liability claim and at least
$1 million in aggregate for all health care liability claims occurring in
an insurance policy year, calendar year, or fiscal year for a physician or
health care provider, other than a hospital; and 

(3)  at least $1 million for each health care liability claim and at least
$3 million in aggregate for all health care liability claims occurring in
an insurance policy year, calendar year, or fiscal year for a hospital. 

(e)  Authorizes evidence of financial responsibility to be established at
the time of judgment by providing proof of the purchase of a certain
contract or plan of insurance or coverage. 

(f)  Provides that this section does not apply to a health care liability
claim based solely on intentional denial of medical treatment that a
patient is otherwise qualified to receive, against the wishes of a
patient, or, if the patient is incompetent, against the wishes of the
patient's guardian, on the basis of the patient's present or predicted
age, disability, degree of medical dependency, or quality of life unless
the medical treatment is denied under Chapter 166, Health and Safety Code. 
 
SECTION 10.12.  Amends Section 11.04, Article 4590i, V.T.C.S., as follows:
 
Sec. 11.04.  New heading:  ADJUSTMENT OF LIABILITY LIMIT.  Makes
conforming changes. 
 
SECTION 10.13.  Amends Subchapter L, Article 4590i, V.T.C.S., by adding
Section 12.02, as follows: 
 
Sec. 12.02.  STANDARD OF PROOF IN CASES INVOLVING EMERGENCY MEDICAL CARE.
Authorizes a person bringing a suit involving a health care liability
claim against a physician or health care provider for injury to or death
of a patient arising out of the provision of emergency medical care to
prove that the treatment or lack of  treatment by the physician or health
care provider departed from accepted standards of medical care or health
care only if the person shows by clear and convincing evidence that the
physician or health care provider did not use the degree of care and skill
that is reasonably expected of an ordinarily prudent physician or health
care provider in the same or similar circumstances. 
 
SECTION 10.14.  Amends the heading to Section 13.01, Article 4590i,
V.T.C.S., as follows: 
 
 Sec. 13.01.  New heading: EXPERT REPORT.
 
SECTION 10.15.  Amends Section 13.01, Article 4590i, V.T.C.S., by amending
Subsections (a), (b), (i), (j), (k), and (l) and adding Subsections (s),
(t), and (u), as follows: 

(a)  Requires a claimant in a health care liability claim, not later than
the 90th day after the date the claim was filed, to serve on each party or
the party's attorney one or more expert reports, with a curriculum vitae
of each expert listed in the report for each physician or health care
provider against whom a liability claim is asserted.  Deletes text
regarding filing a cost bond, placing cash in an escrow account, or filing
an expert. 

(b)  Requires the court, if, as to a defendant physician or health care
provider, an expert report has not been served within the period specified
by Subsection (a) of this section, on the motion of the affected physician
or health care provider, to enter an order that: 

(1)  awards to the affected physician or health care provider reasonable
attorney's fees and costs of court incurred by the physician or health
care provider, rather than requires the filing of a $7,500 cost bond with
respect to the physician or health care provider not later than the 21st
day after the date of the order; and 

(2)  dismisses the claim, rather than provides that if the claimant fails
to comply with the order, the action shall be dismissed for want of
prosecution, with respect to the physician or health care provider, with
prejudice to the refiling of the claim, rather than subject to
reinstatement in accordance with the applicable rules of civil procedure
and Subsection (c) of this section. 

 Makes conforming changes.

 (i)  Makes conforming changes.

 (j)  Makes a conforming change.

 (k)  Makes conforming changes.

(l)  Requires a court to grant a motion challenging the adequacy of an
expert report only if it appears to the court, after hearing, that the
report does not represent an objective good faith effort, rather than a
good faith effort, to comply with the definition of an expert report in
Subsection (r)(6) of this section. 

(s)  Provides that, until a claimant has served the expert report and
curriculum vitae, as required by Subsection (a) of this section, all
discovery in a health care liability claim is stayed except for the
acquisition of the patient's medical records, medical or psychological
studies, or tissue samples through: 

  (1)  written discovery as defined in Rule 192.7, Texas Rules of Civil
Procedure; 

(2)  depositions on written questions under Rule 200, Texas Rules of Civil
Procedure; and 

  (3)  discovery from nonparties under Rule 205, Texas Rules of Civil
Procedure. 

 (t)  Provides that if an expert report is used by the claimant in the
course of the action for any purpose other than to meet the service
requirement of Subsection (a) of this section, the restrictions imposed by
Subsection (k) of this section on use of the expert report by any party
are waived. 

(u)  Provides that, notwithstanding any other provision of this section,
after a claim is filed all claimants, collectively, may take not more than
one deposition before the expert report is served as required by
Subsection (a) of this section. 
 
SECTION 10.16.  Amends Section 13.01(r)(5), Article 4590i, V.T.C.S., to
redefine "expert." 

SECTION 10.17.  Amends Sections 14.01(e) and (g), Article 4590i, V.T.C.S.,
as follows: 

 (e)  Makes a nonsubstantive change.

 (g)  Redefines "physician."
 
SECTION 10.18.  Amends Subchapter N, Article 4590i, V.T.C.S., by adding
Sections 14.02 and 14.03, as follows: 
 
 Sec. 14.02.  QUALIFICATIONS OF EXPERT WITNESS IN SUIT AGAINST HEALTH
CARE PROVIDER.  (a)  Defines "practicing health care."  

(b)  Provides that in a suit involving a health care liability claim
against a health care provider, a person may qualify as an expert witness
on the issue of whether the health care provider departed from accepted
standards of care only if the person has certain qualifications. 
  
(c)  Requires the court, in determining whether a witness is qualified on
the basis of training or experience, to consider whether, at the time the
claim arose or at the time the testimony is given, the witness has certain
qualifications. 

(d)  Requires the court to apply the criteria specified in Subsections
(a), (b), and (c) of this section in determining whether an expert is
qualified to offer expert testimony on the issue of whether the defendant
health care provider departed from accepted standards of health care but
authorizes the court to depart from those criteria if, under the
circumstances, the court determines that there is good reason to admit the
expert's testimony.  Requires the court to state on the record the reason
for admitting the testimony if the court departs from the criteria. 

(e)  Provides that this section does not prevent a health care provider
who is a defendant, or an employee of the defendant health care provider,
from qualifying as an expert. 

(f)  Requires a pretrial objection to the qualifications of a witness
under this section to be made not later than the later of the 21st day
after the date the objecting party receives a copy of the witness's
curriculum vitae or the 21st day after the date of the witness's
deposition.  Provides that if circumstances arise after the date on which
the objection must be made that could not have been reasonably anticipated
by a party before that date and that the party believes in good faith
provide a basis for an objection to a witness's qualifications, and if an
objection was not made previously, this subsection does not prevent the
party from making an objection as soon as practicable under the
circumstances.  Requires the court to conduct a hearing to determine
whether the witness is qualified as soon as practicable after the filing
of an objection and, if possible, before trial.  Requires the hearing, if
the objecting party is unable to object in time for it to be conducted
before the trial, to be conducted outside the presence of the jury.
Provides that this subsection does not prevent a party from examining or
cross-examining a witness at trial about the witness's qualifications. 
  
Sec. 14.03.  QUALIFICATIONS OF EXPERT WITNESS ON CAUSATION IN HEALTH CARE
LIABILITY CLAIM.  (a)  Authorizes a person, except as provided by
Subsections (b) and (c) of this section, in a suit involving a health care
liability claim against a physician or health care provider, to qualify as
an expert witness on the issue of the causal relationship between the
alleged departure from accepted standards of care and the injury, harm, or
damages claimed only if the person is a physician and is otherwise
qualified to render opinions on that causal relationship under the Texas
Rules of Evidence. 

(b)  Authorizes a person, in a suit involving a health care liability
claim against a dentist, to qualify as an expert witness on the issue of
the causal relationship between the alleged departure from accepted
standards of care and the injury, harm, or damages claimed if the person
is a dentist and is otherwise qualified to render opinions on that causal
relationship under the Texas Rules of Evidence. 

(c)  Authorizes a person, in a suit involving a health care liability
claim against a podiatrist, to qualify as an expert witness on the issue
of the causal relationship between the alleged departure from accepted
standards of care and the injury, harm, or damages claimed if the person
is a podiatrist and is otherwise qualified to render opinions on that
causal relationship under the Texas Rules of Evidence. 

 (d)  Makes conforming changes.
 
SECTION 10.19.  Amends Section 16.01, Article 4590i, V.T.C.S., as follows:
 
 Sec. 16.01.  Makes nonsubstantive changes.
 
SECTION 10.20.  Amends Sections 16.02(b) and (c), Article 4590i, V.T.C.S.,
as follows: 
 
(b)  Provides that, subject to Subchapter K of this Act, rather than in a
health care liability claim that is not settled within the period
specified by Subsection (a) of this section, the judgment must include
prejudgment interest on past damages awarded in the judgment, rather than
found by the trier of fact, but shall not include prejudgment interest on
future damages awarded in the judgment, rather than found by the trier of
fact. 

 (c)  Makes nonsubstantive changes.
 
SECTION 10.21.  Amends Article 4590i, V.T.C.S., by adding Subchapters R,
S, and T, as follows: 

SUBCHAPTER R.  PAYMENT FOR FUTURE LOSSES
 
Sec. 18.01.  DEFINITIONS.  Defines "future damages," "future loss of
earnings," and "periodic payments."  

Sec. 18.02.  SCOPE OF SUBCHAPTER.  Provides that this subchapter applies
only to an action on a health care liability claim against a physician or
health care provider in which the present value of the award of future
damages, as determined by the court, equals or exceeds $100,000. 
 
Sec. 18.03.  COURT ORDER FOR PERIODIC PAYMENTS.  (a)  Requires the court,
at the request of a defendant physician or health care provider or
claimant, to order that future damages awarded in a health care liability
claim be paid in whole or in part in periodic payments rather than by a
lump-sum payment. 

(b)  Requires the court to make a specific finding of the dollar amount of
periodic payments that will compensate the claimant for the future
damages. 

 (c)  Requires the court to specify in its judgment ordering the payment
of future damages by periodic payments the recipient of the payments;
dollar amount of the payments; interval between payments; and number of
payments or the period of time over which payments must be made. 
 
Sec. 18.04.  RELEASE.  Provides that the entry of an order for the payment
of future damages by periodic payments constitutes a release of the health
care liability claim filed by the claimant. 
 
Sec. 18.05.  FINANCIAL RESPONSIBILITY.  (a)  Requires the court, as a
condition to authorizing periodic payments of future damages, to require a
defendant who is not adequately insured to provide evidence of financial
responsibility in an amount adequate to assure full payment of damages
awarded by the judgment. 

(b)  Requires the judgment to provide for payments to be funded by certain
methods. 

(c)  Requires the court, on termination of periodic payments of future
damages, to order the return of the security, or as much as remains, to
the defendant. 
 
Sec. 18.06.  DEATH OF RECIPIENT.  (a)  Provides that on the death of the
recipient, money damages awarded for loss of future earnings continue to
be paid to the estate of the recipient of the award without reduction. 

(b)  Provides that periodic payments, other than future loss of earnings,
terminate on the death of the recipient. 

(c)  Authorizes the court, if the recipient of periodic payments dies
before all payments required by the judgment are paid, to modify the
judgment to award and apportion the unpaid damages for future loss of
earnings in an appropriate manner. 

(d)  Provides that following the satisfaction or termination of any
obligations specified in the judgment for periodic payments, any
obligation of the defendant physician or health care provider to make
further payments ends and any security given reverts to the defendant. 

Sec. 18.07.  AWARD OF ATTORNEY'S FEES.  Requires the court, for purposes
of computing the award of attorney's fees when the claimant is awarded a
recovery that will be paid in periodic payments, to place a total value on
the payments based on the claimant's projected life expectancy, and reduce
the amount in Subdivision (1) to present value. 

SUBCHAPTER S.  ATTORNEY'S FEES

 Sec. 19.01.  DEFINITION.  Defines "recovered."
 
Sec. 19.02.  APPLICABILITY.  Provides that the limitations in this
subchapter apply without regard to whether the recovery is by settlement,
arbitration, or judgment, or the person for whom the recovery is sought is
an adult, a minor, or an incapacitated person. 
 
Sec. 19.03.  PERIODIC PAYMENTS.  Requires the court, if periodic payments
are recovered by the claimant, to place a total value on these payments
based on the claimant's projected life expectancy and then reduce this
amount to present value for purposes of computing the award of attorney's
fees. 

SUBCHAPTER T.  DECLARATORY JUDGMENTS; INJUNCTIONS; APPEALS
 
Sec. 20.01.  APPLICABILITY.  Provides that this subchapter applies only to
an  amendment to this Act that is effective on or after January 1, 2003. 
 
 Sec. 20.02.  DECLARATORY JUDGMENT.  Provides that the constitutionality
and other validity under the state or federal constitution of all or any
part of an amendment to this Act may be determined in an action for
declaratory judgment in a district court in Travis County under Chapter
37, Civil Practice and Remedies Code, if it is alleged that the amendment
or a part of the amendment affects the rights, status, or legal relation
of a party in a civil action with respect to any other party in the civil
action. 
 
Sec. 20.03.  ACCELERATED APPEAL.  (a)  Provides that an appeal of a
declaratory judgment or order, however characterized, of a district court,
including an appeal of the judgment of an appellate court, holding or
otherwise determining, under Section 20.02 of this subchapter, that all or
any part of an amendment to this Act is constitutional or
unconstitutional, or otherwise valid or invalid, under the state or
federal constitution is an accelerated appeal. 
   
(b)  Provides that if the judgment or order is interlocutory, an
interlocutory appeal may be taken from the judgment or order and is an
accelerated appeal. 
 
Sec. 20.04.  INJUNCTIONS.  Authorizes a district court in Travis County to
grant or deny a temporary or otherwise interlocutory injunction or a
permanent injunction on the grounds of the constitutionality or
unconstitutionality, or other validity or invalidity, under the state or
federal constitution of all or any part of an amendment to this Act. 
 
Sec. 20.05.  DIRECT APPEAL.  (a)  Provides that there is a direct appeal
to the supreme court from an order, however characterized, of a trial
court granting or denying a temporary or otherwise interlocutory
injunction or a permanent injunction on the grounds of the
constitutionality or unconstitutionality, or other validity or invalidity,
under the state or federal constitution of all or any part of any
amendment to this Act. 

  (b)  Provides that the direct appeal is an accelerated appeal.

(c)  Provides that this section exercises the authority granted by Section
3-b, Article V, Texas Constitution. 
 
Sec. 20.06.  STANDING OF AN ASSOCIATION OR ALLIANCE TO SUE.  (a) Provides
that an association or alliance has standing to sue for and obtain the
relief described by Subsection (b) of this section if it is alleged that
the association or alliance has more than one member who has standing to
sue in the member's own right; the interests the association or alliance
seeks to protect are germane to a purpose of the association or alliance;
and the claim asserted and declaratory relief requested by the association
or alliance relate to all or a specified part of the amendment involved in
the action being found constitutional or unconstitutional on its face, or
otherwise found valid or invalid on its face, under the state or federal
constitution. 

(b)  Provides that the association or alliance has standing to sue for,
obtain, and appeal for certain orders and judgments. 

Sec. 20.07.  RULES FOR APPEALS.  Provides that an appeal under this
subchapter, including an interlocutory, accelerated, or direct appeal, is
governed, as applicable, by the Texas Rules of Appellate Procedure,
including Rules 25.1(d)(6), 26.1(b), 28.1, 28.3, 32.1(g), 37.3(a)(1),
38.6(a) and (b), 40.1(b), and 49.4. 
 
SECTION 10.22.  Amends Section 84.003, Civil Practice and Remedies Code,
by adding Subdivision (6), to define "hospital system." 

SECTION 10.23.  Amends Section 84.003, Civil Practice and Remedies Code,
by adding Subdivision (7) to define "person responsible for the patient."
guardian of the patient; or 

 SECTION 10.24.  Amends Section 84.004, Civil Practice and Remedies Code,
by adding Subsection (f) to provide that Subsection (c) applies even if
the patient is incapacitated due to illness or injury and cannot sign the
acknowledgment statement required by that subsection, or 
the patient is a minor or is otherwise legally incompetent and the person
responsible for the patient is not reasonably available to sign the
acknowledgment statement required by that subsection. 
 
SECTION 10.25.  Amends Chapter 84, Civil Practice and Remedies Code, by
adding Section 84.0065, as follows: 
 
Sec. 84.0065.  ORGANIZATION LIABILITY OF HOSPITALS.  (a)  Provides that,
except as provided by Section 84.007, in any civil action brought against
a hospital or hospital system, or its employees, officers, directors, or
volunteers, for damages based on an act or omission by the hospital or
hospital system, or its employees, officers, directors, or volunteers, the
liability of the hospital or hospital system is limited to money damages
in a maximum amount of $500,000 for any act or omission resulting in
death, damage, or injury to a patient if the patient or, if the patient is
a minor or is otherwise legally incompetent, the person responsible for
the patient, signs a written statement that acknowledges certain facts. 

(b)  Provides that Subsection (a) applies even if the patient is
incapacitated due to illness or injury and cannot sign the acknowledgment
statement required by that subsection, or the patient is a minor or is
otherwise legally incompetent and the person responsible for the patient
is not reasonably available to sign the acknowledgment statement required
by that subsection. 
 
SECTION 10.26.  Amends Article 5.15-1, Insurance Code, by adding Section
11, as follows: 
 
Sec. 11.  VENDOR'S ENDORSEMENT.  Prohibits an insurer from excluding or
otherwise limiting coverage for physicians or health care providers under
a vendor's endorsement issued to a manufacturer, as that term is defined
by Section 82.001, Civil Practice and Remedies Code.  Provides that a
physician or health care provider shall be considered a vendor for
purposes of coverage under a vendor's endorsement or a manufacturer's
general liability or products liability policy. 
 
SECTION 10.27.  Repealers:

 (1)  Section 11.02(c) (relating to the Stower's Doctrine), Article 4590i,
V.T.C.S.; 

(2)  Sections 13.01(c) (relating to reinstatement of a dismissed claim),
(d) (relating to provision of information on expert reports), (e)
(relating to failure to comply with information provision requirements),
(f) (relating to time extensions), (g) (relating to failure to comply with
deadlines), (h) (relating to agreement to time extensions), (m) (relating
to release of cost bond or cash deposit), (n) (relating to nonsuit and
refiling a claim), (o) (relating to a claimant without an attorney), and
(r)(3) (defining a claimant), Article 4590i, V.T.C.S.; 

 (3)  Section 16.02(a) (relating to prejudgment interest), Article 4590i,
V.T.C.S.; and 

 (4)  Section 242.0372 (Liability Insurance Coverage), Health and Safety
Code. 
 
SECTION 10.28.  (a)  Sets forth legislative findings regarding health care
liability claims.  

 (b)  Sets forth legislative intent regarding health care liability claims.
 
SECTION 10.29.  (a)  Makes application of Subchapter S, Article 4590i,
V.T.C.S., as added by this article, prospective to January 1, 2004.  

(b)  Provides that this article does not make any change in law with
respect to the  adjustment under Section 11.04, Article 4590i, V.T.C.S.,
of the liability limit prescribed in Section 11.02(a) of that Act, and
that law is continued in effect only for that liability limit. 

ARTICLE 10A.  RATES FOR PROFESSIONAL LIABILITY INSURANCE FOR
 PHYSICIANS AND HEALTH CARE PROVIDERS

SECTION 10A.01.  Amends Chapter 5, Insurance Code, by adding Subchapter R,
as follows: 

SUBCHAPTER R.  RATES FOR PROFESSIONAL LIABILITY INSURANCE
FOR PHYSICIANS AND HEALTH CARE PROVIDERS

Art. 5.161.  FINDINGS.  Sets forth legislative findings.
   
Art. 5.162.  SCOPE OF SUBCHAPTER.  (a)  Sets forth insurers to which this
subchapter applies. 

(b)  Sets forth legislative intent.  

(c)  Provides that this subchapter applies only to professional liability
insurance for physicians and health care providers. 
 
Art. 5.163.  EQUITABLE RATE REDUCTION
 
Sec. 1.  HEARING.  (a)  Requires the commissioner of insurance
(commissioner), not later than September 1 of each year, to hold a
rulemaking hearing under Chapter 2001, Government Code, to determine the
percentage of equitable reductions in insurance rates required on an
individual basis of each insurer writing professional liability insurance
for physicians and health care providers. 

(b)  Requires the commissioner, not later than October 1 of each year, to
issue rules mandating the appropriate rate reductions to rates for
professional liability insurance for physicians and health care providers
and developed without consideration of the effect of the changes described
by Article 5.161 of this code. 

(c)  Requires the commissioner to set the percentage of the rate reduction
for professional liability insurance for physicians and health care
providers and authorizes the commissioner to set different rate reductions
for different types of policies.  Requires the commissioner's order
establishing the rate reductions to be based on the evidence adduced at
the rulemaking hearing, including the adequacy of the rate at the time of
the hearing. Requires rates resulting from the rate reductions imposed by
this article to comply with Section 3(d), Article 5.15-1, of this code. 

(d)  Provides that the rate reductions adopted under this section are
applicable to each policy or coverage delivered, issued for delivery, or
renewed on and after January 1, 2004, and to each policy or coverage
delivered, issued for delivery, or renewed on and after the 90th day after
the date of each subsequent rule adopted under this section.  Requires an
insurer, as defined by Article 5.162 of this code, to apply the rate
reduction to the rates used by the insurer. 

(e)  Provides that any rule or order of the commissioner that determines,
approves, or sets a rate reduction under this section and is appealed or
challenged remains in effect during the pendency of the appeal or
challenge.  Requires an insurer, during the pendency of the appeal or
challenge, to use rates that reflect the rate reduction provided in the
order being appealed or challenged.  Provides that the rate reduction is
lawful  and valid during the appeal or challenge. 
 
Sec. 2.  ADMINISTRATIVE RELIEF.  (a)  Provides that, except as provided by
Subsection (b) of this section, a rate filed under Articles 5.13-2 and
5.15-1 of this code for professional liability insurance for physicians
and health care providers on and after January 1, 2004, and a rate filed
under those articles on and after the 90th day following the effective
date of a subsequent rule adopted under Section 1(b) of this article,
shall reflect each rate reduction imposed under Section 1 of this article. 

(b)  Requires the commissioner, notwithstanding Articles 5.13-2 and 5.151
of this code, after notice and opportunity for hearing, to disapprove a
filed rate, without regard to whether the rate complies with Articles
5.13-2 and 5.15-1 of this code, if the commissioner finds that the filed
rate does not reflect the rate reduction imposed under Section 1 of this
article. Provides that a proceeding under this section is a contested case
under Chapter 2001, Government Code. 

 (c)  Authorizes the commissioner to approve a filed rate that reflects
less than the full amount of the rate reduction imposed by Section 1 of
this article if the commissioner determines based on a preponderance of
the evidence presented by an insurer that certain facts are true. 

Sec. 3.  DURATION OF REDUCTION.  Provides that unless the commissioner
grants relief under Section 2 of this article, each rate reduction
required under Section 1 of this article remains in effect for the period
specified in the commissioner's rule or order. 
 
Sec. 4.  MODIFICATION.  Authorizes the commissioner, by bulletin or
directive, based on the evidence accumulated by the commissioner before
the bulletin or directive is issued, to modify a rate reduction mandated
by the commissioner under this article if a final, unappealable judgment
of a court with appropriate jurisdiction stays the effect of, enjoins, or
otherwise modifies or declares unconstitutional any legislation described
by Article 5.161 of this code on which the commissioner based the rate
reduction. 
 
Sec. 5.  HEARINGS AND ORDERS.  Requires that, notwithstanding Chapter 40
of this code, a rulemaking hearing under this article to be held before
the commissioner or the commissioner's designee.  Provides that the
rulemaking procedures established by this section do not apply to any
other rate promulgation proceeding. 
 
Sec. 6.  PENDING RATE MATTERS.  Provides that a rate filed pursuant to a
commissioner's order issued before May 1, 2003, is not subject to the rate
reductions required by this article before January 1, 2004. 
 
Sec. 7.  RECOMMENDATIONS TO LEGISLATURE.  Requires the commissioner to
assemble information, conduct hearings, and take other appropriate
measures to assess and evaluate changes in the marketplace resulting from
the implementation of this article and to report findings and
recommendations to the legislature. 
 
Art. 5.164.  CONTINGENT ROLLBACK.  (a)  Prohibits an insurer, if a
$250,000 cap on noneconomic damages in all health care liability claims,
without exception, becomes constitutional by voter approval of an
amendment to the Texas Constitution or is determined to be constitutional
by the supreme court, that delivers, issues for delivery, or renews a
policy of professional liability insurance for physicians or health care
providers in this state on or after the 30th day after the effective date
of the constitutional amendment or the date the cap was determined to be
constitutional from charging more  for the policy than 85 percent of the
amount the insurer charged that insured for the same coverage immediately
before the effective date of the constitutional amendment or the date that
the cap was determined to be constitutional, or, if the insurer did not
insure that insured immediately before that date, 85 percent of the amount
the insurer would have charged that insured, provided that the rate was
adequate and not artificially inflated prior to the determination of
constitutionality.  Authorizes an insurer to petition the commissioner for
an exception to the rate reduction.  Provides that a proceeding under this
article is a contested case under Chapter 2001, Government Code. Prohibits
the commissioner from granting the exception unless the insurer proves by
a preponderance of the evidence that the rate reduction is confiscatory.
Authorizes the commissioner, if the insurer meets this evidentiary burden,
to grant the exception only to the extent that the reduction is
confiscatory.  Provides that the contingent rate rollback required by this
article does not apply to a policy or coverage delivered, issued for
delivery, or renewed for a public hospital in this state. 

(b)  Prohibits an insurer, if the commissioner makes no determination as
to a rate reduction in accordance with Section 1, Article 5.163, from
charging an insured for professional liability insurance for physicians
and health care providers issued or renewed on or after the second
anniversary of the 30th day after the effective date of the constitutional
amendment containing a $250,000 cap on noneconomic damages in all health
care liability claims or the date the cap was determined to be
constitutional and before the third anniversary of the 30th day after the
effective date of the constitutional amendment or the date the cap was
determined to be constitutional an amount that exceeds 80 percent of the
amount the insurer charged or would have charged the insured for the same
coverage. 

(c)  Prohibits an insurer, if the commissioner makes no determination as
to a rate reduction in accordance with Section 1, Article 5.163, from
charging an insured for professional liability insurance for physicians
and health care providers issued or renewed on or after the third
anniversary of the 30th day after the effective date of the constitutional
amendment containing a $250,000 cap on noneconomic damages in all health
care liability claims or the date the cap was determined to be
constitutional and before the fourth anniversary of the 30th day after the
effective date of the constitutional amendment or the date the cap was
determined to be constitutional an amount that exceeds 75 percent of the
amount the insurer charged or would have charged the insured for the same
coverage. 
 
Art. 5.165.  FILING OF RATE INFORMATION WITH DEPARTMENT; REPORT TO
LEGISLATURE 
 
Sec. 1.  PURPOSE.  Sets forth the purpose of this article. 
 
Sec. 2.  DEFINITIONS.  Defines "insurer," "supplementary rating
information," and "security" or "securities."  

Sec. 3.  RATE INFORMATION.  (a)  Requires insurers to file rates for
professional liability insurance for physicians and health care providers
and supporting information with the commissioner in accordance with the
requirements determined by the commissioner under this article. 

(b)  Requires filings made by each insurer to be sufficient to respond to
the commissioner's request for information under this article and to
provide both current rates and estimated rates for the year following the
required filing date of this article based on information reasonably known
to the insurer at the time of filing. 

(c)  Requires the insurer to file, in a format specified by the
commissioner, including an electronic format, certain information on
rates, actuarial support, fees, losses, costs, computer models, and
underwriting guidelines. 
 
(d)  Requires the commissioner to determine the date on which the filing
is due. 

(e)  Authorizes the commissioner to require additional information as
provided by Section 4 of this article. 

(f)  Requires the commissioner to issue an order specifying the
information that insurers must file to comply with this article and the
date on which the filing is due. 

(g)  Provides that the commissioner is not required to hold a hearing
before issuing the order required under Subsection (f) of this section. 

(h)  Requires the commissioner to notify an affected insurer of the order
requiring the rate filing information under this section on the day the
order is issued. 
 
Sec. 4.  ADDITIONAL INFORMATION.  Authorizes the commissioner, after the
initial rate submission under Section 3 of this article, to require an
insurer to provide additional, reasonable information for purposes of the
clarification or completeness of the initial rate submission. 
 
Sec. 5.  USE OF FILED RATE INFORMATION.  (a)  Provides that information
filed by an insurer with the Texas Department of Insurance (TDI) under
this article that is confidential under a law that applied to the insurer
before the effective date of this article remains confidential and is not
subject to disclosure under Chapter 552 (Public Information), Government
Code, except that the information may be disclosed as provided by Section
552.008, Government Code, relating to information for legislative
purposes.  Requires information disclosed pursuant to Section 552.008,
Government Code, to be provided in a commonly used electronic format,
including in spreadsheet or comma-delimited format, if so requested.
Prohibits the release of the information to the public except in summary
form in the report required under Section 6 of this article. 

(b)  Provides that Subsection (a) of this section does not preclude the
use of information filed under this article as evidence in prosecuting a
violation of this code.  Provides that confidential information described
by Subsection (a) of this section that is used in prosecuting a violation
is subject to a protective order until all appeals of the case have been
exhausted.  Provides that if an insurer is found, after the exhaustion of
all appeals, to have violated this code, a copy of the confidential
information used as evidence of the violation is no longer presumed to be
confidential. 

Sec. 6.  REPORT.  (a)  Requires the commissioner, on a date determined by
the commissioner, to submit a report to the governor, the lieutenant
governor, the speaker of the house of representatives, and the members of
the legislature on the information collected from the filings required
under this article.  Authorizes the report to be created based on a sample
of the information provided under Section 3 of this article. 

(b)  Requires the report required under this section to provide a summary
review of the rates currently charged and estimated to be charged over the
year following the date of the report, presented in a manner that protects
the identity of individual insurers to inform the legislature as to
whether the rates are just, adequate, and reasonable and not excessive or
unfairly discriminatory, and to assist the legislature in the
determination of the most effective and efficient regulatory system for
professional liability insurance for physicians and health care providers
in this state. 
 
 Sec. 7.  NOTIFICATION; NONCOMPLIANCE.  Requires the commissioner to
notify the governor, the lieutenant governor, the speaker of the house of
representatives, and the members of the legislature of the names of the
insurers that the commissioner requested to make the rate filings under
this article and the names of the insurers that did not respond in whole
or in part to the commissioner's request.  Requires this notification to
be made by separate letter on the fourth day following the date on which
the commissioner determines the filing is due under Section 3(f) of this
article. 
 
Sec. 8.  APPLICATION OF CERTAIN LAW.  Provides that Chapter 40 of this
code does not apply to an action of the commissioner under Section 3(f) of
this article. 
 
Sec. 9.  FAILURE TO COMPLY.  Provides that an insurer that fails to comply
with any request for information issued by the commissioner under this
article is subject, after notice and opportunity for hearing, to sanctions
as provided by Chapters 82 and 84 of this code. 
 
SECTION 10A.02.  Requires the commissioner to commence a hearing under
Section 1, Article 5.163, Insurance Code, as added by this article, on
September 1, 2003, and to issue rules mandating any appropriate rate
reductions under Section 1, Article 5.163, Insurance Code, not later than
October 1, 2003. 

ARTICLE 11.  CLAIMS AGAINST EMPLOYEES OR VOLUNTEERS OF A GOVERNMENTAL UNIT
 
SECTION 11.01.  Amends Sections 108.002(a) and (b), Civil Practice and
Remedies Code, as follows: 
 
(a)  Removes text regarding a health care provider being personally liable
for certain damages. 
  
 (b)  Makes a conforming change. 

SECTION 11.02.  Amends Chapter 261, Health and Safety Code, by adding
Subchapter C, as follows: 

SUBCHAPTER C.  LIABILITY OF NONPROFIT MANAGEMENT CONTRACTOR
 
Sec. 261.051.  DEFINITION.  Defines "municipal hospital management
contractor." 
 
Sec. 261.052.  LIABILITY OF MUNICIPAL HOSPITAL MANAGEMENT CONTRACTOR.
Provides that a municipal hospital management contractor and any employee
of the contractor are, while performing services under the contract for
the benefit of the hospital, employees of the municipality for the
purposes of Chapters 101, 102, and 108, Civil Practice and Remedies Code. 
 
SECTION 11.03.  Amends Section 285.071, Health and Safety Code, to
redefine hospital district management contractor." 
 
SECTION 11.04.  Repealer:  Section 108.002(c) (defining a provider of
health care), Civil Practice and Remedies Code. 

ARTICLE 12.  JUROR QUALIFICATION

SECTION 12.01.  Amends Section 62.105, Government Code, as follows:
 
 Sec. 62.105. (a)  Makes a nonsubstantive change.
  
 (b)(1)  Provides that in an action seeking damages for personal injury or
death, a person's answer in voir dire that the person could not award a
certain sum of money damages based on a hypothetical set of circumstances
does not, in and of itself, establish a bias or prejudice in favor of or
against a party in the action that warrants disqualification under
Subsection (a)(4).   

(2)  Defines "side."  Requires a trial court in a civil action to follow
certain procedures regarding voir dire.  Provides that the time allocated
in this subsection shall not include time consumed in making preemptory
challenges or challenges for cause to jurors or in making or responding to
objections.  Authorizes the Texas Supreme Court (supreme court) to adopt
rules consistent with the provisions of this section.  Provides that to
the extent that any rule conflicts with the provisions of this section,
this section controls. 

ARTICLE 13.  EXEMPLARY DAMAGES
 
SECTION 13.01.  Amends Section 41.001(1), Civil Practice and Remedies
Code, to redefine "claimant." 
 
SECTION 13.02.  Amends Section 41.008(b), Civil Practice and Remedies
Code, to make clarifying changes. 

ARTICLE 14.  ASSIGNMENT OF JUDGES
 
SECTION 14.01.  Amends Chapter 74B, Government Code, by adding Section
74.0241, as follows: 
 
Sec. 74.0241.  ASSIGNMENT OF JUDGES FOR HEALTH CARE LIABILITY CLAIMS.  (a)
Defines "health care liability claim."  

(b)  Requires the supreme court, notwithstanding any other law or rule,
and on motion of a party to a health care liability claim, to assign a
judge for the health care liability claim and any action or suit that
includes the claim.  Requires a motion to assign a judge to be made under
certain guidelines. 
  
(c)  Requires the supreme court to provide each party to the health care
liability claim and any action or suit that includes the claim a list of
the judges from whom the assigned judge will be selected. 

(d)  Authorizes certain groups, within a period specified by the supreme
court, to file with the supreme court a written objection to one of the
judges on the list provided under Subsection (c) who is not a regular
judge in the county in which the suit is pending. 

(e)  Provides that after the period specified for filing an objection
under Subsection (d) has expired, no further objection may be made.
Requires the supreme court to assign one judge on the list who has not
been timely objected to under Subsection (d) to serve as the assigned
judge for the health care liability claim and any action or suit that
includes the claim. 

(f)  Provides that, notwithstanding any other law or rule, the supreme
court has authority to issue any rule necessary or appropriate to
implement this section. 

ARTICLE 15.  CLAIMS AGAINST SCHOOL DISTRICT TRUSTEES AND EMPLOYEES OF
ELEMENTARY AND SECONDARY SCHOOLS 

SECTION 15.01.  Amends Chapter 11C, Education Code, by adding Section
11.064, as follows: 
 
 Sec. 11.064.  CIVIL IMMUNITY.  Provides that a member of the board of
trustees of a school district is considered to be a professional employee
of the district for purposes of Chapter 22B. 
 
SECTION 15.02.  Amends Chapter 22B, Education Code, by amending Section
22.051 and adding Sections 22.0511-22.0516, as follows: 

 Sec. 22.051.  DEFINITION.  Defines "professional employee of a school
district."  
 
Sec. 22.0511.  New heading:  IMMUNITY FROM LIABILITY. Redesignated from
existing Section 22.051.  Deletes definition of "professional employee." 
 
Sec. 22.0512.  PROTECTION UNDER FEDERAL LAW.  (a)  Defines "school" and
"teacher."  

(b)  Entitles a teacher, in addition to the immunity provided by Section
22.0511 and other state law, to any immunity and other protections
afforded under the Paul D. Coverdell Teacher Protection Act of 2001 (20
U.S.C. Section 6731 et seq.) and its subsequent amendments. 

(c)  Provides that this section may not be construed as limiting or
abridging any immunity or protection afforded a teacher under state law. 
 
Sec. 22.0513.  NOTICE OF CLAIM.  (a)  Requires a person filing an action
against a professional employee of a school district involving an act that
is incident to or within the scope of duties of the employee's position of
employment, not later than the 90th day before the date the claim is
filed, to give written notice to the employee of the claim, reasonably
describing the act from which the claim arises. 

(b)  Authorizes a professional employee of a school district against whom
an action is pending who did not receive written notice as required by
Subsection (a) to file a plea in abatement not later than the 30th day
after the date the employee files an original answer in the court in which
the action is pending. 

(c)  Requires the court to abate the action if the court, after a hearing,
finds that the employee is entitled to an abatement because notice was not
provided as required by this section. 

(d)  Provides that an abatement under Subsection (c) continues until the
90th day after the date written notice is given to the employee as
provided by Subsection (a). 
 
Sec. 22.0514.  EXHAUSTION OF REMEDIES.  Prohibits a person from filing an
action against a professional employee of a school district involving an
act that is incident to or within the scope of duties of the employee's
position of employment unless the person has exhausted any remedies
provided by the school district for resolving the complaint. 
 
Sec. 22.0515.  ALTERNATIVE DISPUTE RESOLUTION.  Authorizes a court in
which an action is brought against a professional employee of a school
district involving an act that is incident to or within the scope of
duties of the employee's position of employment to refer the case to an
alternative dispute resolution procedure as described by Chapter 154,
Civil Practice and Remedies Code. 
 
Sec. 22.0516.  RECOVERY OF ATTORNEY'S FEES IN ACTION AGAINST PROFESSIONAL
EMPLOYEE.  Entitles a professional employee of a school district, in an
action against the employee involving an act that is incident to or within
the scope of duties of the employee's position of employment and brought
against the employee in the employee's individual capacity, to recover
attorney's fees and court costs from the plaintiff if the employee is
immune from liability under this subchapter. 
  
SECTION 15.03.  Amends Section 22.053(a), Education Code, to make a
conforming change. 

SECTION 15.04.  Amends Section 30.024(c), Education Code, to make
conforming changes. 

SECTION 15.05.  Amends Section 30.055(c), Education Code, to make
conforming changes. 

SECTION 15.06.  Amends Section 105.301(e), Education Code, to make
conforming changes. 

SECTION 15.07.  Makes application of this article prospective to September
1, 2003. 

ARTICLE 16.  ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTIONS

SECTION 16.01.  Amends Chapter 32B, Human Resources Code, by adding
Section 32.060, as follows: 
 
Sec. 32.060.  ADMISSIBILITY OF CERTAIN EVIDENCE RELATING TO NURSING
INSTITUTIONS.  (a)  Sets forth findings that are not admissible as
evidence in a civil action. 
  
(b)  Provides that this section does not apply in an enforcement action in
which the state or an agency or political subdivision of the state is a
party. 

(c)  Provides that, notwithstanding any other provision of this section,
evidence described by Subsection (a) is admissible as evidence in a civil
action only if the evidence meets certain criteria. 

SECTION 16.02.  Amends Chapter 242A, Health and Safety Code, by adding
Section 242.017, as follows: 
 
Sec. 242.017.  ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTIONS.  (a)
Sets forth findings that are not admissible as evidence in a civil action. 

(b)  Provides that this section does not apply in an enforcement action in
which the state or an agency or political subdivision of the state is a
party. 

(c)  Provides that, notwithstanding any other provision of this section,
evidence described by Subsection (a) is admissible as evidence in a civil
action only if the evidence meets certain criteria. 

SECTION 16.03.  Repealers:

(1)  Sections 32.021(i) (relating to the admissibility of certain
institutional records) and (k) (relating to testimony of a surveyor or
investigator), Human Resources Code; and 

(2)  Section 242.050 (Drug Testing of Employees), Health and Safety Code,
as added by Chapter 1284, Acts of the 77th Legislature, Regular Session,
2001. 
 
SECTION 16.04.  Makes application of this article prospective to the
effective date of this article. 

ARTICLE 17.  LIMITATIONS IN CIVIL ACTIONS OF LIABILITIES
RELATING TO CERTAIN MERGERS OR CONSOLIDATIONS

SECTION 17.01.  Amends Title 6, Civil Practice and Remedies Code, by
adding Chapter 149, as follows: 

CHAPTER 149.  LIMITATIONS IN CIVIL ACTIONS OF LIABILITIES RELATING TO
CERTAIN MERGERS OR CONSOLIDATIONS 
 
Sec. 149.001.  DEFINITIONS.  Defines "asbestos claim," "corporation,"
"successor asbestos-related liabilities," and "transferor." 
 
Sec. 149.002.  APPLICABILITY.  (a)  Provides that the limitation in
Section 149.003 applies to a merger or consolidation effected under the
laws of this state or another jurisdiction. 

 (b)  Sets forth claims to which the limitation in Section 149.003 does
not apply. 
 
Sec. 149.003.  LIMITATION ON SUCCESSOR ASBESTOS-RELATED LIABILITIES. (a)
Provides that except as provided by Subsection (b), the cumulative
successor asbestos-related liabilities of a corporation are limited to the
fair market value of the total gross assets of the transferor determined
as of the time of the merger or consolidation and any policies of
insurance.  Provides that the corporation does not have any responsibility
for successor asbestos-related liabilities in excess of this limitation. 

(b)  Provides that if the transferor had assumed or incurred successor
asbestosrelated liabilities in connection with a prior merger or
consolidation with a prior transferor, the cumulative successor
asbestos-related liabilities of a corporation are limited to the fair
market value of the total gross assets of the prior transferor, determined
as of the time of the earlier merger or consolidation. 
 
Sec. 149.004.  ESTABLISHING FAIR MARKET VALUE OF TOTAL GROSS ASSETS.  (a)
Authorizes a corporation to establish the fair market value of total gross
assets for the purpose of the limitation under Section 149.003 through any
method reasonable under the circumstances, including certain methods. 

 (b)  Provides that total gross assets include intangible assets.

Sec. 149.005.  ADJUSTMENT.  (a)  Sets forth a rate formula for the annual
increase of the fair market value of total gross assets at the time of a
merger or consolidation. 

  (b)  Provides that the rate in Subsection (a) is not compounded.

(c)  Provides that the adjustment of fair market value of total gross
assets continues as provided under Subsection (a) until the date the
adjusted value is exceeded by the cumulative amounts of successor
asbestos-related liabilities paid or committed to be paid by or on behalf
of the corporation, or by or on behalf of a transferor, after the time of
the merger or consolidation for which the fair market value of total gross
assets is determined. 
 
Sec. 149.006.  SCOPE OF CHAPTER.  Requires the courts in this state to
apply, to the fullest extent permissible under the United States
Constitution, this state's substantive law, including the limitation under
this chapter, to the issue of successor asbestos-related liabilities. 
 
SECTION 17.02.  Provides that Chapter 149, Civil Practice and Remedies
Code, as added by this article, applies to all asbestos claims, including
existing asbestos claims, and all litigation, including existing
litigation, in the courts of this state, without regard to whether a suit
was commenced before, on, or after the effective date of this article. 

ARTICLE 18.  CHARITABLE IMMUNITY AND LIABILITY

SECTION 18.01.  Amends Sections 84.004(a) and (c), Civil Practice and
Remedies Code, as follows: 

(a)  Removes the specification that a volunteer who is immune from civil
liability under  this section be an officer, director, or trustee of an
organization.  

(c)  Removes the specification that a volunteer health care provider who
is immune from civil liability under this section be serving as a direct
service volunteer of a charitable organization.  Removes the caveat that
the volunteer be acting in good faith and in the course of scope of the
volunteer's duties or functions within the organization. Makes
nonsubstantive changes. 
 
SECTION 18.02.  Amends Section 84.007(a), Civil Practice and Remedies
Code, to remove the word "wantonly."  

SECTION 18.03.  Repealers:

(1)  Section 84.003(4) (defining "good faith"), Civil Practice and
Remedies Code; and 

(2)  Section 84.004(b) (relating to a direct service volunteer at a
charitable organization), Civil Practice and Remedies Code. 
 
SECTION 18.04.  Makes application of this article prospective to the
effective date of this article. 

ARTICLE 19.  LIABILITY OF VOLUNTEER FIRE DEPARTMENTS
AND VOLUNTEER FIRE FIGHTERS

SECTION 19.01.  FINDINGS AND PURPOSE.  Sets forth legislative findings and
purpose.   
SECTION 19.02.  AMENDMENT.  Amends Chapter 78, Civil Practice and Remedies
Code, by adding Subchapter C, as follows: 
 
SUBCHAPTER C.  FIRE-FIGHTING SERVICES
 
Sec. 78.101.  DEFINITIONS.  Defines "emergency response," volunteer fire
department," and  "volunteer fire fighter." 
 
Sec. 78.102.  APPLICABILITY OF SUBCHAPTER:  EMERGENCY RESPONSE. Provides
that this subchapter applies only to damages for personal injury, death,
or property damage, other than property damage to which Subchapter A
applies, arising from an error or omission of a volunteer fire department
while involved in or providing an emergency response, or a volunteer fire
fighter while involved in or providing an emergency response as a member
of a volunteer fire department. 
 
Sec. 78.103.  LIABILITY OF VOLUNTEER FIRE DEPARTMENT.  Provides that a
volunteer fire department is liable for damages described by Section
78.102 only to the extent that a county providing the same or similar
services would be liable under Chapter 101, and is entitled to the
exclusions, exceptions, and defenses applicable to a county under Chapter
101 and other statutory or common law. 
 
Sec. 78.104.  LIABILITY OF VOLUNTEER FIRE FIGHTER.  Provides that a
volunteer fire fighter is liable for damages described by Section 78.102
only to the extent that an employee providing the same or similar services
for a county would be liable, and entitled to the exclusions, exceptions,
immunities, and defenses applicable to an employee of a county under
Chapter 101 and other statutory or common law. 
 
SECTION 19.03.  TRANSITION.  Makes application of Chapter 78C, Civil
Practice and Remedies Code, as added by this article, prospective to the
effective date of this article. 

ARTICLE 20.  CERTAIN PROVISIONS IN CONTRACTS

 SECTION 20.01.  Amends Title 6, Civil Practice and Remedies Code, by
adding Chapter 145, as follows: 

CHAPTER 145.  CERTAIN PROVISIONS IN CONSTRUCTION CONTRACTS

Sec. 145.001.  DEFINITION.  Defines "construction contract."

Sec. 145.002.  AGREEMENT VOID AND UNENFORCEABLE.  (a)  Provides that,
except as provided by Subsection (b), a covenant, promise, or agreement
contained in a construction contract, or in an agreement collateral to or
affecting a construction contract, is void and unenforceable to the extent
that it indemnifies a person against all or any portion of loss or
liability for damage that is caused by, results from, or arises from
certain people or circumstances. 

(b)  Authorizes a covenant, promise, or agreement, contained in a
construction contract, or in an agreement collateral to or affecting a
construction contract, to provide for a person to indemnify, hold
harmless, or defend another person against loss or liability for damage
that is caused by or results from the sole, joint, or concurrent
negligence of the indemnitee or its agent or employee and arises from the
bodily injury or death of an employee of certain persons. 

Sec. 145.003.  CERTAIN LAWS AND CONTRACTS UNAFFECTED.  (a)  Provides that
this chapter does not affect the validity and enforceability of an
insurance contract; benefits and protections under the workers'
compensation laws of this state; or any statutory right of contribution. 

(b)  Provides that this chapter does not affect a contract covered by
Section 2252.902, Government Code. 
 
Sec. 145.004.  WAIVER PROHIBITED.  Prohibits this chapter from being
waived by contract or otherwise. 
 
SECTION 20.02.  Makes application of this article prospective to the
effective date of this article. 

ARTICLE 21.  EFFECTIVE DATE
 
SECTION 21.01.  (a)  Effective date: for all articles of this Act, other
than Article 10, September 1, 2003. 

 (b)  Effective date of Article 10 of this Act:  upon passage or September
1, 2003. 

(c)  Makes application of this Act, except as otherwise provided in
Articles 10, 15, 18, 19, and 20, prospective.