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


Senate Research CenterC.S.H.B. 4
78R16545 EBy: Nixon (Ratliff)
State Affairs
5/14/2003
Committee Report (Substituted)


DIGEST AND PURPOSE 

C.S.H.B. 4 is the comprehensive tort reform bill addressing many issues
affecting the civil court system.  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.  C.S.H.B. 4 contains
elements addressing:  class action lawsuits, offers of settlement, venue
and forum non conveniens, proportionate responsibility, products
liability, prejudgement and postjudgement interest, appeal bonds, seat
belts and child safety seats, medical malpractice, charitable volunteer
immunity and liability, admissibility of evidence regarding nursing homes,
and liability relating to asbestos claims. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Supreme Court in
SECTION  1.01 (Section 26.001, Civil Practice and Remedies Code) and
SECTION 2.01 (Section 42.005, Civil Practice and Remedies Code) of this
bill. 

Rulemaking authority granted to the Texas Supreme Court is modified in
SECTION 3.02 (Section 74.163, Civil Practice and Remedies Code), of this
bill. 

Rulemaking authority is expressly granted to the Judicial Panel on
Multidistrict Litigation in SECTION  3.02 (Section 74.163, 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

SUBCHAPTER A.  SUPREME COURT RULES

Sec. 26.001.  ADOPTION OF RULES BY SUPREME COURT.  (a)  Requires the Texas
Supreme Court (supreme court) to adopt rules to provide for the fair and
efficient resolution of class actions. 

(b)  Requires the supreme court to adopt rules under this chapter on or
before December 31, 2003. 

Sec. 26.002.  MANDATORY GUIDELINES.  Requires rules adopted under Section
26.001 to comply with the mandatory guidelines established by this
chapter. 

Sec. 26.003.  ATTORNEY'S FEES.  (a)  Provides that if an award of
attorney's fees is available under applicable substantive law, the rules
adopted under this chapter must provide that the trial court is required
to use the Lodestar method to calculate the amount of attorney's fees to
be awarded class counsel.  Authorizes the rules to give the trial court
discretion to increase or decrease the fee award calculated by using the
Lodestar method  by no more than four times based on specified factors. 

(b)  Requires rules adopted under this chapter to provide that in a class
action, if any portion of the benefits recovered for the class are in the
form of coupons or other noncash common benefits, the attorney's fees
awarded in the action must be in cash and noncash amounts in the same
proportion as the recovery for the class. 

[Reserves Sections 26.004-26.050 for expansion.]

SUBCHAPTER B.  CLASS ACTIONS INVOLVING JURISDICTION OF STATE AGENCY

Sec. 26.051.  STATE AGENCY WITH EXCLUSIVE OR PRIMARY JURISDICTION. (a)
Requires a trial court, before hearing or deciding a motion to certify a
class action, to hear and rule on all pending pleas to the jurisdiction
asserting that an agency of this state has exclusive or primary
jurisdiction of the action or a part of the action, or asserting that a
party has failed to exhaust administrative remedies.  Requires the court's
ruling to be reflected in a written order. 

(b)  Authorizes a person, if a plea to the jurisdiction described by
Subsection (a) is denied and a class is subsequently certified, as part of
an appeal of the order certifying the class action, to obtain appellate
review of the order denying the plea to the jurisdiction. 

(c)  Provides that this section does not alter or abrogate a person's
right to appeal or pursue an original proceeding in an appellate court in
regard to a trial court's order granting or denying a plea to the
jurisdiction if the right exists under statutory or common law in effect
at the time review is sought. 

SECTION 1.02.  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 writ of error, is not allowed to, rather
than from, the supreme court, in certain civil cases. 

(d)  Makes conforming changes.

(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 1.03.  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 74.351(b), except that an appeal may not be taken from an
order granting an extension under Section 74.351; or granting relief
sought by a motion under Section 74.351(l). 

(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)  Deletes text pertaining an automatic stay, specifically of the
commencement of trial.  

SECTION 1.04.  Amends Section 22.001, Government Code, by adding
Subsection (e), to provide 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. 

SECTION 1.05.  (a)  Makes application of the changes in law made in
Section 1.02 of this Act to Section 22.225(d), Government Code,
prospective. 

(b)  Provides that the changes in law made by Section 1.03 of this Act to
Sections 51.014(b) and (c), Civil Practice and Remedies Code, apply to any
case in which an appeal allowed by Section 51.014(a), Civil Practice and
Remedies Code, as amended by this Act, is taken and the notice of appeal
is filed on or after the effective date of this Act. 

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

Sec. 42.001.  DEFINITIONS.  Defines "claim," "claimant," "defendant,"
"governmental unit," "litigation costs," and "settlement offer." 

Sec. 42.002.  APPLICABILITY AND EFFECT.  (a)  Provides that the settlement
procedures provided in this chapter apply only to claims for monetary
relief. 

(b)  Provides that this chapter does not apply to a class action, a
shareholder's derivative action, an action by or against a governmental
unit, an action brought under the Family Code, or an action to collect
workers' compensation benefits under Subtitle A, Title 5, Labor Code. 

(c)  Provides that this chapter does not apply until a defendant files a
declaration that the settlement procedure allowed by this chapter is
available in the action. Provides that if there is more than one
defendant, the settlement procedure allowed by this chapter is available
only in relation to the defendant that filed the declaration and to the
parties that make or receive offers of settlement in relation to that
defendant. 

(d)  Provides that this chapter does not limit or affect the ability of
any person to make an offer to settle or compromise a claim that does not
comply with this chapter, or to offer to settle or compromise a claim to
which this chapter does not apply. 

(e)  Provides that an offer to settle or compromise that is not made under
this chapter 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. 

Sec. 42.003.  MAKING SETTLEMENT OFFER.  Sets forth requirements for making
a settlement offer.  

Sec. 42.004.  AWARDING LITIGATION COSTS.  (a)  Requires an offering party,
if a settlement offer is made and rejected and the judgment to be rendered
will be significantly less favorable to the rejecting party than was the
settlement offer, to recover litigation costs from the rejecting party. 

(b)  Sets forth parameters for a judgment being significantly less
favorable to the rejecting party than is the settlement offer. 

(c)  Limits the litigation costs that may be recovered by the offering
party under this section to those litigation costs incurred by the
offering party after the date the rejecting party rejected the settlement
offer. 
 
(d)  Prohibits the litigation costs that may be awarded under this chapter
from being greater than an amount computed by a certain formula. 

(e)  Prohibits a claimant or defendant from recovering litigation costs in
addition to the fees and costs recoverable under another law, if that
claimant or defendant is entitled to recover fees and costs under that
law. 

(f)  Prohibits the court, if a claimant or defendant is entitled to
recover fees and costs under another law, from including fees and costs
incurred by that claimant or defendant after the date of rejection of the
settlement offer when calculating the amount of the judgment to be
rendered under Subsection (a). 

(g)  Requires litigation costs, if they are to be awarded against a
claimant, to be awarded to the defendant in the judgment as an offset
against the claimant's recovery from that defendant. 

Sec. 42.005.  SUPREME COURT TO MAKE RULES.  (a)  Requires the supreme
court to promulgate rules implementing this chapter.  Requires the rules
to be limited to settlement offers made under this chapter.  Requires the
rules to be in effect on January 1, 2004. 

(b)  Sets forth requirements for the rules promulgated by the supreme
court. 

(c)  Requires the rules promulgated by the supreme court to address
actions in which there are multiple parties and to provide that if the
offering party joins another party or designates a responsible third party
after making the settlement offer, the party to whom the settlement offer
was made is authorized to declare the offer void. 

(d)  Authorizes the rules promulgated by the supreme court to designate
other actions to which the settlement procedure of this chapter does not
apply, and address other matters considered necessary by the supreme court
to the implementation of this chapter. 

SECTION 2.02.  Makes application of the changes in law provided by this
article prospective to January 1, 2004. 

ARTICLE 3.  VENUE; FORUM NON CONVENIENS

SECTION 3.01.  Amends Section 74.024(c), Government Code, to authorize the
supreme court to consider the adoption of rules relating to transfer of
related cases for consolidated or coordinated pretrial proceedings. 

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 ON MULTIDISTRICT LITIGATION.  (a)  Provides
that the judicial panel on multidistrict litigation (panel) consists of
five members designated from time to time by the chief justice of the
supreme court.  Requires the members of the panel to be active court of
appeals justices or administrative judges. 

(b)  Provides that the concurrence of three panel members is necessary to
any action by the panel. 

Sec. 74.162.  TRANSFER OF CASES BY PANEL.  Authorizes the panel,
notwithstanding any other law to the contrary, to transfer civil actions
involving one or more common questions of fact pending in the same or
different constitutional courts, county courts at law, probate courts, or
district courts to any district court for  consolidated or coordinated
pretrial proceedings, including summary judgment or other dispositive
motions, but not for trial on the merits.  Authorizes a transfer to be
made by the panel on its determination that the transfer will be for the
convenience of the parties and witnesses, and promote the just and
efficient conduct of the actions. 

Sec. 74.163.  OPERATION; RULES.  (a)  Requires the panel to operate
according to rules of practice and procedure adopted by the supreme court
under Section 74.024.  Sets forth requirements for the rules adopted by
the supreme court. 

(b)  Authorizes the panel to prescribe additional rules for the conduct of
its business not inconsistent with the law or rules adopted by the supreme
court. 

Sec. 74.164.  AUTHORITY TO PRESIDE.  Authorizes a judge who is qualified
and authorized by law to preside in the court to which an action is
transferred under this subchapter, notwithstanding any other law to the
contrary, to preside over the transferred action as if the transferred
action were originally filed in the transferor court. 

SECTION 3.03.  Amends Section 15.003, Civil Practice and Remedies Code, as
follows: 

Sec. 15.003.  MULTIPLE PLAINTIFFS AND INTERVENING PLAINTIFFS.  (a)
Requires each plaintiff in a suit in which there is more than one
plaintiff, independently of every other plaintiff, whether the plaintiffs
are included by joinder, by intervention, because the lawsuit was begun by
more than one plaintiff, or otherwise, to establish proper venue.
Requires a plaintiff's part of the suit, including all of that plaintiff's
claims and causes of action, if the plaintiff cannot independently
establish proper venue, to be transferred to a county of proper venue or
dismissed, as is appropriate, unless that plaintiff, independently of
every other plaintiff, establishes certain facts. 

(b)  Authorizes an interlocutory appeal to be taken of a trial court's
determination under Subsection (a) of certain facts. 

(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.  Authorizes
the appeal to be taken by a party that is affected by the trial court's
determination under Subsection (a).  Removes text regarding the perfection
of the appeal by a certain deadline.  Requires the court of appeals to
determine whether the trial court's order, rather than joinder or
intervention,  is proper based on an independent determination from the
record and not under either an abuse of discretion or substantial evidence
standard, and render judgment, rather than its decision,  not later than
the 120th day after the date the appeal is perfected.  Makes conforming
and nonsubstantive 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(b), Civil Practice and Remedies Code,
to require a court of this state, if the court, on written motion of a
party, finds that in the interest of justice and for the convenience of
the parties 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.  Sets forth considerations that the court may
use in determining whether to grant a motion to stay or dismiss an action
under the doctrine of forum non conveniens.  Makes conforming changes. 

SECTION 3.05.  Amends Section 5A, Texas Probate Code, by adding Subsection
(f), to provide that, notwithstanding any other provision of this chapter,
the proper venue for an action by or against a personal representative for
personal injury, death, or property damages is determined under Section
15.007, Civil Practice and Remedies Code. 

 SECTION 3.06.  Amends Section 5B, Texas Probate Code, as follows:

Sec. 5B.  TRANSFER OF PROCEEDING.  (a)  Subsection created from existing
text. 

(b)  Provides that, notwithstanding any other provision of this chapter,
the proper venue for an action by or against a personal representative for
personal injury, death, or property damages is determined under Section
15.007, Civil Practice and Remedies Code. 

SECTION 3.07.  Amends Section 607, Texas Probate Code, by adding
Subsection (e), as follows: 

(e)  Provides that, notwithstanding any other provision of this chapter,
the proper venue for an action by or against a personal representative for
personal injury, death, or property damages is determined under Section
15.007, Civil Practice and Remedies Code. 

SECTION 3.08.  Amends Section 281.056(a), Health and Safety Code, to
authorize a health care liability claim, as defined by Section 74.001,
Civil Practice and Remedies Code, to be brought against the district only
in the county in which the district is established. 

SECTION 3.09.  Repealers:  Sections 71.051(a) (regarding a forum non
conveniens) and 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 exceptions to the applicability of this chapter as provided by
Subsections (b) and (c), and to provide that this chapter is 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)
Subsection created from existing text.  Makes a conforming change related
to the designation of a responsible third party. 

(b)  Provides that this section does not allow 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), (b), and (e) and adding Subsections (f)-(l), as
follows: 

(a)  Removes an exception as provided in Subsections (d) and (e) and a
reference to the expiration of limitations on a claim.  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.  Deletes a reference to the third
party not having 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.

(e)  Makes conforming and 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)  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. 

(j)  Requires the court, notwithstanding any other provision of this
section, if, not later than 60 days after the filing of the defendant's
original answer, the defendant alleges in an answer filed with the court
that an unknown person committed a criminal act that was a cause of the
loss or injury that is the subject of the lawsuit, to grant a motion for
leave to designate the unknown person as a responsible third party if
certain conditions are met. 

(k)  Provides that an unknown person designated as a responsible third
party under Subsection (j) is denominated as "Jane Doe" or "John Doe"
until the person's identity is known. 

(l)  Authorizes a party, after adequate time for discovery, to move to
strike the designation of a responsible third party on the ground that
there is no evidence that the designated person is responsible for any
portion of the claimant's alleged injury or damage.  Requires the court to
grant the motion to strike unless a defendant produces sufficient evidence
to raise a genuine issue of fact regarding the designated person's
responsibility for the claimant's injury or damage. 

SECTION 4.05.  Amends Sections 33.011(1), (2), (5), and (6), Civil
Practice and Remedies Code, to redefine "claimant," "defendant," "settling
person," and "responsible third party." 

SECTION 4.06.  Amends Section 33.012(b), Civil Practice and Remedies Code,
to require the court, if the claimant has settled with one or more
persons, to further reduce the amount of damages to be recovered by the
claimant with respect to a cause of action by a percentage equal to each
settling person's percentage of responsibility, rather than credit equal
to one of certain sums. 

SECTION 4.07.  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 a reference to Subsection (c).

(b)  Modifies the conditions under which 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. 

(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 4.08.  Amends Section 33.017, Civil Practice and Remedies Code, to
delete statutory references and to make conforming and nonsubstantive
changes. 

SECTION 4.09.  Amends Section 417.001(b), Labor Code, to limit an
insurance carrier's subrogation interest 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, Civil Practice and Remedies Code, attributable to the
employer.  Sets forth requirements for the insurance carrier if the
recovery is for an amount greater than the amount of the insurance
carrier's subrogation interest, rather than  that paid or assumed by the
insurance carrier to the employee or the legal beneficiary. 

SECTION 4.10.  Repealers:  Civil Practice and Remedies Code, Sections:

  (1)  33.002(b), (d), (e), (f), (g), and (h) (pertaining to applicability
of this chapter); 

  (2)  33.004(c) and (d) (pertaining to a joinder of responsible third
parties); 

  (3)  33.011(7) (defining toxic tort);

(4)  33.012(c) (regarding the reduction of the amount of damages
recoverable by a claimant); 

  (5)  33.013(c) (relating to the amount of liability of a defendant); and

  (6)  33.014 (Election of Credit for Settlements).

SECTION 4.11.  Provides that nothing in the changes to Chapter 33, Civil
Practice and Remedies Code, made by this article allowing an employer
covered by workers' compensation insurance to be designated as a
responsible third party affects or impairs the immunity granted to the
employer by workers' compensation law. 

SECTION 4.12.  Requires the supreme court to amend Rule 194.2, Texas Rules
of Civil Procedure, as soon as practical following the effective date of
this article, to include disclosures of the name, address, and telephone
number of any person who may be designated as a responsible third party. 

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)  Redefines
"claimant." Defines "products liability action."  Removes the definition
of "manufacturing equipment." 

(b)  Modifies statutory references to conform to changes in the law.
Makes conforming changes.   

(c)  Requires a claimant, if a manufacturer or seller expressly warrants
in writing, rather than represents, that the product has a useful safe
life of longer than 15 years, to commence a products liability action
against that manufacturer or seller  of the product before the end of the
number of years warranted after the date of the sale of the product by
that seller.  Makes conforming changes. 

(d)  Sets forth circumstances under which this section does not apply to a
products liability action seeking damages for personal injury or wrongful
death. 

(d-1)  Created from existing text.  Makes conforming changes.

(e)  Makes a conforming change.

(f)  Makes a conforming change.

SECTION 5.02.  Amends Chapter 82, Civil Practice and Remedies Code, by
adding Sections 82.003, 82.007, and 82.008, as follows: 

Sec. 82.003.  LIABILITY OF NONMANUFACTURING SELLERS.  (a)  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. 

(b)  Provides that this section does not apply to a manufacturer or seller
whose liability in a products liability action is governed by Chapter
2301, Occupations Code.  Provides that in the event of a conflict, Chapter
2301, Occupations Code, prevails over this section. 
 
Sec. 82.007.  MEDICINES.  (a)  Provides that 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, there is
a rebuttable presumption that the defendant or defendants, including a
health care provider, manufacturer, distributor, and prescriber, are not
liable with respect to the allegations if certain circumstances exist. 

(b)  Authorizes the claimant to rebut the presumption in Subsection (a) as
to each defendant by establishing certain facts. 

Sec. 82.008.  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. 

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

[As drafted, Section 82.008, as added by SECTION 5.02 of this Act,
contains no Subsection (c).] 

(d)  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. 

(e)  Provides that this section does not extend to products covered by
Section 82.007. 

SECTION 5.03.  Requires the supreme court, as soon as practicable after
the effective date of this Act, to amend Rule 407(a), Texas Rules of
Evidence, to conform that rule to Rule 407,  Federal Rules of Evidence. 

ARTICLE 6.  INTEREST

SECTION 6.01.  Amends Section 304.003(c), Finance Code, to provide that
the postjudgment interest rate is the prime rate as published by the
Federal Reserve Bank of New York on the date of computation.  Deletes
other methods of calculating the interest rate. 

SECTION 6.02.  Amends Subchapter B, Chapter 304, 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. 

SECTION 6.03.  Repealer:  Section 304.108 (Accrual of Prejudgment Interest
During Periods of Trial Delay), Finance Code. 

SECTION 6.04.  Makes application of the changes in law made by this
article prospective. 

ARTICLE 7.  APPEAL BONDS

SECTION 7.01.  Amends Section 35.006, Civil Practice and Remedies Code, as
follows: 

Sec. 35.006.  STAY.  (a)  Requires the court, 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, to 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)   Provides that,
subject to Subsection (b), when a judgment is for money, the amount of
security must equal the sum of certain amounts. 

(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 certain amounts. 

(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. 

 (e)  Provides that nothing in this section prevents a trial court from
enjoining the judgment debtor from dissipating or transferring assets to
avoid satisfaction of the judgment, but prohibits the trial court from
making any order that interferes with the judgment debtor's use, transfer,
conveyance, or dissipation of assets in the normal course of business. 

SECTION 7.03.  Repealers:  Civil Practice and Remedies Code, Sections:

  (1)  52.002 (Bond or Deposit for Money Judgment);

  (2)  52.003 (Review for Sufficiency); and

  (3)  52.004 (Review for Excessiveness).

SECTION 7.04.  (a)  and (b)  Make application of this article prospective.

ARTICLE 8.  EVIDENCE RELATING TO SEAT BELTS

SECTION 8.01.  Repealers:  Sections 545.412(d) (pertaining to the
inadmissibility of the use of a child safety seat) and 545.413(g)
(pertaining to the inadmissibility of the use of a safety belt),
Transportation Code. 

ARTICLE 9.  RESERVED

ARTICLE 10.  HEALTH CARE

SECTION 10.01.  Amends Chapter 74, Civil Practice and Remedies Code, as
follows: 

CHAPTER 74.  New heading:  MEDICAL LIABILITY

SUBCHAPTER A.  GENERAL PROVISIONS

Sec. 74.001.  DEFINITIONS.  (a) Defines "affiliate," "claimant,"
"control," "court," "disclosure panel," "economic damages," "emergency
medical care," "emergency medical services provider," "gross negligence,"
"health care," "health care institution," "health care provider," "health
care liability claim," "home and community support services agency,"
"hospice," "hospital," "hospital system," "intermediate care facility for
the mentally retarded," "medical care," "noneconomic damages," "nursing
home," "pharmacist, "physician," "professional or administrative
services," and "representative." 

(b) Provides that any legal term or word of art used in this chapter, not
otherwise defined in this chapter, shall have such meaning as is
consistent with the common law. 

Sec. 74.002.  CONFLICT WITH OTHER LAW AND RULES OF CIVIL PROCEDURE. (a)
Provides that in the event of a conflict between this chapter and another
law, including a rule of procedure or evidence or court rule, this chapter
controls to the extent of the conflict. 

(b)  Provides that, notwithstanding Subsection (a), in the event of a
conflict between this chapter and Section 101.023, 102.003, or 108.002,
those sections of this code control to the extent of the conflict. 

(c)  Prohibits the district courts and statutory county courts in a county
from adopting local rules in conflict with this chapter. 

Sec. 74.003.  SOVEREIGN IMMUNITY NOT WAIVED.  Provides that this chapter
does not waive sovereign immunity from suit or from liability. 

 Sec. 74.004.  EXCEPTION FROM CERTAIN LAWS.  (a)  Provides that,
notwithstanding any other law, Sections 17.41-17.63, Business & Commerce
Code, do not apply to physicians or health care providers with respect to
claims for damages for personal injury or death resulting, or alleged to
have resulted, from negligence on the part of any physician or health care
provider. 

  (b)  Provides that this section does not apply to pharmacists.

[Reserves Sections 74.005-74.050 for expansion.]

SUBCHAPTER B.  NOTICE AND PLEADINGS

Sec. 74.051.  NOTICE.  (a)  Requires any person or the person's authorized
agent asserting a health care liability claim to give written notice of
such claim by certified mail, return receipt requested, to each physician
or health care provider against whom such claim is being made at least 60
days before the filing of a suit in any court of this state based upon a
health care liability claim.  Requires the notice to be accompanied by the
authorization form for release of protected health information as required
under Section 74.052. 

(b)  Requires each party, in such pleadings as are subsequently filed in
any court, to state that it has fully complied with the provisions of this
section and Section 74.052 and to provide such evidence thereof as the
judge of the court may require to determine if the provisions of this
chapter have been met. 

(c)  Requires notice given as provided in this chapter to toll the
applicable statute of limitations to and including a period of 75 days
following the giving of the notice, and requires this tolling to apply to
all parties and potential parties. 

(d)  Requires all parties to be entitled to obtain complete and unaltered
copies of the patient's medical records from any other party within 45
days from the date of receipt of a written request for such records;
provided, however, that the receipt of a medical authorization in the form
required by Section 74.052 executed by the claimant herein shall be
considered compliance by the claimant with this subsection. 

(e)  Requires, for the purposes of this section, and notwithstanding
Chapter 159, Occupations Code, or any other law, a request for the medical
records of a deceased person or a person who is incompetent to be deemed
to be valid if accompanied by an authorization in the form required by
Section 74.052 signed by a parent, spouse, or adult child of the deceased
or incompetent person. 

Sec. 74.052.  AUTHORIZATION FORM FOR RELEASE OF PROTECTED HEALTH
INFORMATION.  (a)  Requires notice of a health care claim under Section
74.051 to be accompanied by a medical authorization in the form specified
by this section.  Provides that failure to provide this authorization
along with the notice of health care claim shall abate all further
proceedings against the physician or health care provider receiving the
notice until 60 days following receipt by the physician or health care
provider of the required authorization. 

(b)  Provides that if the authorization required by this section is
modified or revoked, the physician or health care provider to whom the
authorization has been given shall have the option to abate all further
proceedings until 60 days following receipt of a replacement authorization
that must comply with the form specified by this section. 
 
(c)  Requires the medical authorization required by this section to be in
a certain form and to be construed in accordance with the "Standards for
Privacy of Individually Identifiable Health Information" (45 C.F.R. Parts
160 and 164).  Sets  forth the form for the authorization. 

Sec. 74.053.  PLEADINGS NOT TO STATE DAMAGE AMOUNT; SPECIAL EXCEPTION;
EXCLUSION FROM SECTION.  Prohibits pleadings in a suit based on a health
care liability claim from specifying an amount of money claimed as
damages. Authorizes the defendant to file a special exception to the
pleadings on the ground the suit is not within the court's jurisdiction,
in which event the plaintiff is required to inform the court and defendant
in writing of the total dollar amount claimed.  Provides that this section
does not prevent a party from mentioning the total dollar amount claimed
in examining prospective jurors on voir dire or in argument to the court
or jury. 

[Reserves Sections 74.054-74.100 for expansion.]

SUBCHAPTER C.  INFORMED CONSENT

Sec. 74.101.  THEORY OF RECOVERY.  Provides that in a suit against a
physician or health care provider involving a health care liability claim
that is based on the failure of the physician or health care provider to
disclose or adequately disclose the risks and hazards involved in the
medical care or surgical procedure rendered by the physician or health
care provider, the only theory on which recovery may be obtained is that
of negligence in failing to disclose the risks or hazards that could have
influenced a reasonable person in making a decision to give or withhold
consent. 

Sec. 74.102.  TEXAS MEDICAL DISCLOSURE PANEL.  (a)  Creates the Texas
Medical Disclosure Panel (TMDP) to determine which risks and hazards
related to medical care and surgical procedures are required to be
disclosed by health care providers or physicians to their patients or
persons authorized to consent for their patients and to establish the
general form and substance of such disclosure. 

(b)  Provides that the TMDP established herein is administratively
attached to the Texas Department of Health (TDH).  Requires TDH, at the
request of TMDP, to provide administrative assistance to TMDP; and
requires TDH and TMDP to coordinate administrative responsibilities in
order to avoid unnecessary duplication of facilities and services.
Requires TDH, at the request of TMDP, to submit the TMDP's budget request
to the legislature.  Requires TMDP to be subject, except where
inconsistent, to the rules and procedures of TDH; however, requires that
the duties and responsibilities of TMDP as set forth in this chapter be
exercised solely by TMDP, and requires that the Texas Board of Health or
TDH have no authority or responsibility with respect to same. 

(c)  Sets forth the composition of TMDP and requires that its members be
selected by the commissioner of health (commissioner). 

(d)  Requires the commissioner, at the expiration of the term of each
member of TMDP so appointed, to select a successor, and requires such
successor to serve for a term of six years, or until the next successor is
selected.  Authorizes any member who is absent for three consecutive
meetings without the consent of a majority of TMDP present at each meeting
to be removed by the commissioner at the request of TMDP submitted in
writing and signed by the chair.  Requires the commissioner, on the death,
resignation, or removal of any member, to fill the vacancy by selection
for the unexpired portion of the term. 

(e)  Provides that members of TMDP are not entitled to compensation for
their services, but each panelist is entitled to reimbursement of any
necessary expense incurred in the performance of the member's duties on
the panel, including necessary travel expenses. 

(f)  Requires meetings of TMDP to be held at the call of the chair or on
petition of at least three members of TMDP. 
 
(g)  Requires the members, at the first meeting of TMDP each year after
its members assume their positions, to select one of the members to serve
as chair and one of the members to serve as vice chair, and requires each
officer to serve for a term of one year.  Requires the chair to preside at
meetings of the panel, and in the chair's absence, requires the vice chair
to preside. 

(h)  Requires employees of TDH to serve as the staff for TMDP.

Sec. 74.103.  DUTIES OF DISCLOSURE PANEL.  (a)  Requires TMDP, to the
extent feasible, to identify and make a thorough examination of all
medical treatments and surgical procedures in which physicians and health
care providers may be involved in order to determine which of those
treatments and procedures do and do not require disclosure of the risks
and hazards to the patient or person authorized to consent for the
patient. 

(b)  Requires TMDP to prepare separate lists of those medical treatments
and surgical procedures that do and do not require disclosure and, for
those treatments and procedures that do require disclosure, to establish
the degree of disclosure required and the form in which the disclosure
will be made. 

(c)  Requires lists prepared under Subsection (b) together with written
explanations of the degree and form of disclosure to be published in the
Texas Register. 

(d)  Requires TMDP, at least annually, or at such other period TMDP may
determine from time to time, to identify and examine any new medical
treatments and surgical procedures that have been developed since its last
determinations, to assign them to the proper list, and to establish the
degree of disclosure required and the form in which the disclosure will be
made.  Requires TMDP also to examine the treatments and procedures for the
purpose of revising lists previously published.  Requires these
determinations to be published in the Texas Register. 

Sec. 74.104.  DUTY OF PHYSICIAN OR HEALTH CARE PROVIDER.  Requires a
physician or health care provider, before a patient or a person authorized
to consent for a patient gives consent to any medical care or surgical
procedure that appears on TMDP's list requiring disclosure, to disclose to
the patient or person authorized to consent for the patient the risks and
hazards involved in that kind of care or procedure.  Provides that a
physician or health care provider shall be considered to have complied
with the requirements of this section if disclosure is made as provided in
Section 74.105. 

Sec. 74.105.  MANNER OF DISCLOSURE.  Provides that consent to medical care
that appears on TMDP's list requiring disclosure shall be considered
effective under this chapter if it is given in writing, signed by the
patient or a person authorized to give the consent and by a competent
witness, and if the written consent specifically states the risks and
hazards that are involved in the medical care or surgical procedure in the
form and to the degree required by the disclosure panel under Section
74.103. 

Sec. 74.106.  EFFECT OF DISCLOSURE.  (a)  Provides that in a suit against
a physician or health care provider involving a health care liability
claim that is based on the negligent failure of the physician or health
care provider to disclose or adequately disclose the risks and hazards
involved in the medical care or surgical procedure rendered by the
physician or health care provider, disclosure and failure to disclose
certain matters has certain legal ramifications. 

(b)  Provides that if medical care or surgical procedure is rendered with
respect to which TMDP has made no determination either way regarding a
duty of disclosure, the physician or health care provider is under the
duty otherwise imposed by law. 

 Sec. 74.107.  INFORMED CONSENT FOR HYSTERECTOMIES.  (a)  Requires TMDP to
develop and prepare written materials to inform a patient or person
authorized to consent for a patient of the risks and hazards of a
hysterectomy. 

(b)  Requires the materials to be available in English, Spanish, and any
other language TMDP considers appropriate.  Requires that the information
be presented in a manner understandable to a layperson. 

  (c)  Requires the materials to include certain information.

(d)  Requires the physician or health care provider to obtain informed
consent under this section and Section 74.104 from the patient or person
authorized to consent for the patient before performing a hysterectomy
unless the hysterectomy is performed in a life-threatening situation in
which the physician determines obtaining informed consent is not
reasonably possible.  Requires the physician or health care provider, if
obtaining informed consent is not reasonably possible, to include in the
patient's medical records a written statement signed by the physician
certifying the nature of the emergency. 

(e)  Prohibits TMDP from prescribing materials under this section without
first consulting with the Texas State Board of Medical Examiners. 

[Reserves Sections 74.108-74.150 for expansion.]

SUBCHAPTER D.  EMERGENCY CARE

Sec. 74.151.  Redesignated from Section 74.001. (a)  Removes a stipulation
that a person administering emergency care in good faith be at the scene
of an emergency but not in a hospital or other health care facility or
means of medical transport.  

(b)  Provides that this section does not apply to care administered for or
in expectation of remuneration, provided that being legally entitled to
receive remuneration for the emergency care rendered shall not determine
whether or not the care was administered for or in anticipation of
remuneration. 

(c)  Provides that this section does not apply to a physician or other
health care provider whose day-to-day responsibilities include the
administration of care in a hospital emergency room for or in expectation
of remuneration if the scene of an emergency is in a hospital or other
health care facility or means of medical transport.  Makes conforming
changes.  

(d)  Makes a conforming change.

(e)  Makes no changes to this subsection.

Sec. 74.152.  Redesignated from Section 74.002.  Provides that persons not
licensed or certified, rather than not licensed, in the healing arts who
in good faith administer emergency care as emergency medical service
personnel are not liable in civil damages for an act performed in
administering the care unless the act is wilfully or wantonly negligent.  

Sec. 74.153.  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 in a
hospital emergency room or department, 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 a preponderance of the 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. 

Sec. 74.154.  JURY INSTRUCTIONS IN CASES INVOLVING EMERGENCY MEDICAL CARE.
(a)  Sets forth considerations for a jury in an action for damages that
involves a claim of negligence arising from the provision of emergency
medical care in a hospital emergency room or department,  

(b)  Provides that the provisions of Subsection (a) 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; that
is unrelated to the original medical emergency; or that is related to an
emergency caused in whole or in part by the negligence of the defendant. 

[Reserves Sections 74.155-74.200 for expansion.]

SUBCHAPTER E.  RES IPSA LOQUITUR

Sec. 74.201.  APPLICATION OF RES IPSA LOQUITUR.  Provides that the common
law doctrine of res ipsa loquitur shall only apply to health care
liability claims against health care providers or physicians in those
cases to which it has been applied by the appellate courts of this state
as of August 29, 1977. 

[Reserves Sections 74.202-74.250 reserved for expansion.]

SUBCHAPTER F.  STATUTE OF LIMITATIONS

Sec. 74.251.  STATUTE OF LIMITATIONS ON HEALTH CARE LIABILITY CLAIMS.  (a)
Provides that, notwithstanding any other law and subject to Subsection
(b), no health care liability claim may be commenced unless the action is
filed within two years from the occurrence of the breach or tort or from
the date the medical or health care treatment that is the subject of the
claim or the hospitalization for which the claim is made is completed;
provided that, minors under the age of 12 years shall have until their
14th birthday in which to file, or have filed on their behalf, the claim.
Provides that, except as herein provided, this section applies to all
persons regardless of minority or other legal disability. 

(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. 

[Reserves Sections 74.252-74.300 for expansion.]

SUBCHAPTER G.  LIABILITY LIMITS

Sec. 74.301.  LIMITATION ON NONECONOMIC DAMAGES.  (a)  Requires the limit
of civil liability for noneconomic damages for each defendant physician or
health care provider other than a health care institution, inclusive of
all persons and entities for which vicarious liability theories may apply,
in an action on a health care liability claim where final judgment is
rendered against a physician or health care provider other than a health
care institution, to be limited to an amount not to exceed $250,000. 

(b)  Requires the limit of civil liability for noneconomic damages for
each health care institution, inclusive of all persons and entities for
which vicarious liability theories may apply, in an action on a health
care liability claim where final judgment is rendered against a health
care institution, to be limited to an amount not to exceed $500,000. 

(c)  Requires the limit of civil liability for all noneconomic damages, in
an action  on a health care liability claim where final judgment is
rendered against a physician or health care provider, to be limited to an
amount not to exceed $750,000 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. 

Sec. 74.302.  ALTERNATIVE LIMITATION ON NONECONOMIC DAMAGES.  (a) Requires
certain actions, in the event that Section 74.301 is stricken from this
subchapter or is otherwise to any extent invalidated by a method other
than through legislative means, subject to the provisions of this section,
to become effective. 

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

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

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

(e)  Authorizes evidence of financial responsibility to be established at
the time of judgment by providing proof of certain facts. 

Sec. 74.303.  LIMITATION ON DAMAGES.  (a)  Requires the limit of civil
liability for damages of the physician or health care provider, in an
action for wrongful death on a health care liability claim where final
judgment is rendered against a physician or health care provider, to be
limited to an amount not to exceed $500,000. 

(b)  Requires the liability limit prescribed in Subsection (a), when there
is an increase or decrease in the consumer price index with respect to the
amount of that index on August 29, 1977, to be increased or decreased, as
applicable, by a sum equal to the amount of such limit multiplied by the
percentage increase or decrease in the consumer price index, as published
by the Bureau of Labor Statistics of the United States Department of
Labor, that measures the average changes in prices of goods and services
purchased by urban wage earners and clerical workers' families and single
workers living alone (CPI-W: Seasonally Adjusted U.S. City Average -- All
Items), between August 29, 1977, and the time at which damages subject to
such limits are awarded by final judgment or settlement. 

(c)  Provides that Subsection (a) does not apply to the amount of damages
awarded on a health care liability claim for the expenses of necessary
medical, hospital, and custodial care received before judgment or required
in the future for treatment of the injury. 

(d)  Prohibits the liability of any insurer under the common law theory of
recovery commonly known in Texas as the "Stowers Doctrine" from exceeding
the liability of the insured. 

(e)  Requires certain instructions, in any action on a health care
liability claim that is tried by a jury in any court in this state, to be
included in the court's written instructions to the jurors. 

 [Reserves Sections 74.304-74.350 for expansion.]

SUBCHAPTER H.  PROCEDURAL PROVISIONS

Sec. 74.351.  EXPERT REPORT.  (a)  Requires a claimant, in a health care
liability claim, not later than the 150th 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.  Authorizes the date for serving the report to be extended by
written agreement of the affected parties.  Requires each defendant
physician or health care provider whose conduct is implicated in a report
to file and serve any objection to the sufficiency of the report not later
than the 21st day after the date it was served, failing which all
objections are waived. 

  (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), on the motion of the affected physician or health care
provider, subject to Subsection (c), to enter a certain order. 

(c)  Authorizes the court, if an expert report has not been served within
the period specified by Subsection (a) because elements of the report are
found deficient, to grant a 30-day extension to the claimant in order to
cure the deficiency.  Requires the 30-day extension to run from the date
the plaintiff first received the notice, if the claimant does not receive
notice of the court's ruling granting the extension until after the
150-day deadline has passed. 

(d)  Requires the court to extend the deadline until 30 days after
complete discovery has been provided, if, on the motion of a claimant
filed before the expiration of the 150-day period referred to in
Subsection (a), the court finds that a claimant has been hindered in
complying with Subsection (a) because a defendant physician or health care
provider has failed to provide timely and complete discovery permitted
under Subsection (s) or (u). 

[Reserves Subsections (e)-(h).]

(i)  Authorizes a claimant, notwithstanding any other provision of this
section, to satisfy any requirement of this section for serving an expert
report by serving reports of separate experts regarding different
physicians or health care providers or regarding different issues arising
from the conduct of a physician or health care provider, such as issues of
liability and causation.  Requires nothing in this section to be construed
to mean that a single expert must address all liability and causation
issues with respect to all physicians or health care providers or with
respect to both liability and causation issues for a physician or health
care provider. 

(j)  Requires nothing in this section to be construed to require the
serving of an expert report regarding any issue other than an issue
relating to liability or causation. 

(k)  Provides that, subject to Subsection (t), an expert report served
under this section is not admissible in evidence by any party, prohibits
it from being used in a deposition, trial, or other proceeding, and
prohibits it from being referred to by any party during the course of the
action for any purpose. 

(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 to comply with
the definition of an expert report in Subsection (r)(6). 

 [Reserves Subsections (m)-(q).]

(r)  Defines "affected parties," "claim," "defendant," "expert," and
"expert report." 

(s)  Provides that until a claimant has served the expert report and
curriculum vitae as required by Subsection (a), all discovery in a health
care liability claim is stayed except for the acquisition by the claimant
of information, including medical or hospital records or other documents
or tangible things, related to the patient's health care or a defendant's
liability through certain means. 

(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), the restrictions imposed by Subsection (k)
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
two depositions before the expert report is served as required by
Subsection (a).  Authorizes the court to allow additional deposition
discovery on a showing by a plaintiff that additional information is
needed for the completion of an expert report that cannot otherwise
practicably be obtained in a timely manner under this subsection and
Subsection (s). 

Sec. 74.352.  DISCOVERY PROCEDURES.  (a)  Requires the plaintiff, in every
health care liability claim, within 45 days after the date of filing of
the original petition, to serve on the defendant's attorney or, if no
attorney has appeared for the defendant, on the defendant full and
complete answers to the appropriate standard set of interrogatories and
full and complete responses to the appropriate standard set of requests
for production of documents and things promulgated by the Health Care
Liability Discovery Panel. 

(b)  Requires every physician or health care provider who is a defendant
in a health care liability claim, within 45 days after the date on which
an answer to the petition was due, to serve on the plaintiff's attorney
or, if the plaintiff is not represented by an attorney, on the plaintiff
full and complete answers to the appropriate standard set of
interrogatories and complete responses to the standard set of requests for
production of documents and things promulgated by the Health Care
Liability Discovery Panel. 

(c)  Authorizes no objection, except on motion and for good cause shown,
to be asserted regarding any standard interrogatory or request for
production of documents and things, but requires that no response be
required where a particular interrogatory or request is clearly
inapplicable under the circumstances of the case. 

(d)  Requires failure to file full and complete answers and responses to
standard interrogatories and requests for production of documents and
things in accordance with Subsections (a) and (b) or the making of a
groundless objection under Subsection (c) to be grounds for sanctions by
the court in accordance with the Texas Rules of Civil Procedure on motion
of any party. 

(e)  Authorizes the time limits imposed under Subsections (a) and (b) to
be extended by the court on the motion of a responding party for good
cause shown and requires it to be extended if agreed in writing between
the responding party and all opposing parties.  Requires time limits, in
no event, to be extended for a period of more than an additional 30 days. 

(f)  Requires the new party, if a party is added by an amended pleading,
intervention, or otherwise, to file full and complete answers to the
appropriate  standard set of interrogatories and full and complete
responses to the standard set of requests for production of documents and
things no later than 45 days after the date of filing of the pleading by
which the party first appeared in the action. 

(g)  Requires the party to supplement the answers and responses in
accordance with the Texas Rules of Civil Procedure, if information or
documents required to provide full and complete answers and responses as
required by this section are not in the possession of the responding party
or attorney when the answers or responses are filed, 

(h)  Requires nothing in this section to preclude any party from taking
additional non-duplicative discovery of any other party.  Prohibits the
standard sets of interrogatories provided for in this section from
constituting, as to each plaintiff and each physician or health care
provider who is a defendant, the first of the two sets of interrogatories
permitted under the Texas Rules of Civil Procedure. 

[Reserves Sections 74.353-74.400 for expansion.]

SUBCHAPTER I.  EXPERT WITNESSES

Sec. 74.401.  QUALIFICATIONS OF EXPERT WITNESS IN SUIT AGAINST PHYSICIAN.
(a)  Authorizes a person, in a suit involving a health care liability
claim against a physician for injury to or death of a patient, to qualify
as an expert witness on the issue of whether the physician departed from
accepted standards of medical care only if the person is a physician who
meets certain criteria. 

  (b)  Defines "practicing medicine" and "medical practice."

(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 meets
certain criteria. 

(d)  Requires the court to apply the criteria specified in Subsections
(a), (b), and (c) in determining whether an expert is qualified to offer
expert testimony on the issue of whether the physician departed from
accepted standards of medical care, but authorizes the court to depart
from those criteria if, under the circumstances, the court determines that
there is a 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)  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 the hearing 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. 

(f)  Provides that this section does not prevent a physician who is a
defendant from qualifying as an expert. 

   (g)  Defines "physician."

Sec. 74.402.  QUALIFICATIONS OF EXPERT WITNESS IN SUIT AGAINST HEALTH CARE
PROVIDER.  (a)  Defines "practicing health care." 

(b)  Authorizes a person, in a suit involving a health care liability
claim against a health care provider, to qualify as an expert witness on
the issue of whether the health care provider departed from accepted
standards of care only if the person meets certain criteria. 

(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 meets
certain criteria. 

(d)  Requires the court to apply the criteria specified in Subsections
(a), (b), and (c) 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 it
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 the hearing 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. 74.403.  QUALIFICATIONS OF EXPERT WITNESS ON CAUSATION IN HEALTH CARE
LIABILITY CLAIM.  (a)  Authorizes a person, except as provided by
Subsections (b) and (c), 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 or physician 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 or physician and is otherwise qualified to render opinions
on that causal relationship under the Texas Rules of Evidence. 

(d)  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 the hearing 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. 

[Reserves Sections 74.404-74.450 for expansion.]

SUBCHAPTER J.  ARBITRATION AGREEMENTS

Sec. 74.451.  ARBITRATION AGREEMENTS.  (a)  Requires that no physician,
professional association of physicians, or other health care provider
request or require a patient or prospective patient to execute an
agreement to arbitrate a health care liability claim unless the form of
agreement delivered to the patient contains a certain clearly and
conspicuously written notice in 10-point boldface. 

(b)  Provides that a violation of this section by a physician or
professional association of physicians constitutes a violation of Subtitle
B, Title 3, Occupations Code, and requires it to be subject to the
enforcement provisions and sanctions contained in that subtitle. 

(c)  Requires a violation of this section by a health care provider other
than a physician to constitute a false, misleading, or deceptive act or
practice in the conduct of trade or commerce within the meaning of Section
17.46 of the Deceptive Trade Practices-Consumer Protection Act (Subchapter
E, Chapter 17, Business & Commerce Code), and to be subject to an
enforcement action by the consumer protection division under that act and
subject to the penalties and remedies contained in Section 17.47, Business
& Commerce Code, notwithstanding Section 74.004 or any other law. 

(d)  Requires a person who is found to be in violation of this section for
the first time, notwithstanding any other provision of this section, to be
subject only to injunctive relief or other appropriate order requiring the
person to cease and desist from such violation, and not to any other
penalty or sanction. 

[Reserves Sections 74.452-74.500 for expansion.]

SUBCHAPTER K.  PAYMENT FOR FUTURE LOSSES

Sec. 74.501.  DEFINITIONS.  Defines "future damages," "future loss of
earnings," and "periodic payments." 

Sec. 74.502.  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. 74.503.  COURT ORDER FOR PERIODIC PAYMENTS.  (a)  Authorizes 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. 74.504.  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. 74.505.  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 means. 

(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. 74.506.  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. 74.507.  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. 

SECTION 10.02.  Amends Section 84.003, Civil Practice and Remedies Code,
by adding Subdivision (6), to define "hospital system." 

SECTION 10.03.  Amends Section 84.003, Civil Practice and Remedies Code,
by adding Subdivision (7), to define "person responsible for the patient." 
   
 SECTION 10.04.  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 10.05.  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.  Requires a physician
or health care provider to be considered a vendor for purposes of coverage
under a vendor's endorsement or a manufacturer's general liability or
products liability policy. 

SECTION 10.06.  Amends Section 242.0372, Health and Safety Code, by adding
Subsection (f), to provide that an institution is not required to comply
with this section before September 1, 2005.  Provides that this subsection
expires September 2, 2005. 

SECTION 10.07.  Repealer:  Article 4590i (Medical Liability and Insurance
Improvement Act), 
V.T.C.S.

SECTION 10.08.  Provides that unless otherwise removed as provided by law,
a member of the TMDP serving on the effective date of this Act continues
to serve for the term to which the member was appointed. 

SECTION 10.09.  (a)  Sets forth legislative findings.

(b)  Provides that because of the conditions stated in Subsection (a) of
this section, it is the purpose of this article to improve and modify the
system by which health care liability claims are determined in order to
perform certain tasks. 

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)  Provides that, except in an action arising under the constitution or
laws of the United States, a public servant is not personally liable for
damages in excess of $100,000 arising from personal injury, death, or
deprivation of a right, privilege, or immunity if certain criteria exists.
Deletes text regarding an exception to a provider of health care as that
term is defined in Section 108.002(c). 

(b)  Provides that, except in an action arising under the constitution or
laws of the United States, a public servant is not liable for damages in
excess of $100,000 for property damage if certain criteria exists.
Deletes text regarding an exception to a provider of health care as that
term is defined in Section 108.002(c). 

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 A MUNICIPAL HOSPITAL MANAGEMENT CONTRACTOR.
Provides that a municipal hospital management contractor in its
management or operation of a hospital under a contract with a municipality
is considered a governmental unit for purposes of Chapters 101, 102, and
108, Civil Practice and Remedies Code, and any employee of the contractor
is, while performing services under the contract for the benefit of the
hospital, an employee 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.  Amends Section 285.072, Health and Safety Code, as follows:
 
Sec. 285.072.  LIABILITY OF A HOSPITAL DISTRICT MANAGEMENT CONTRACTOR.
Provides that a hospital district management contractor in its management
or operation of a hospital under a contract with a hospital district is
considered a governmental unit for purposes of Chapters 101, 102, and 108,
Civil Practice and Remedies Code, and any employee of the contractor is,
while performing services under the contract for the benefit of the
hospital, an employee, rather than are employees, of the hospital district
for the purposes of Chapters 101, 102, and 108, Civil Practice and
Remedies Code. 
 
SECTION 11.05.  Amends Section 101.106, Civil Practice and Remedies Code,
as follows: 
 
Sec. 101.106.  New heading: ELECTION OF REMEDIES.  (a)  Provides that the
filing of a suit under this chapter against a governmental unit
constitutes an irrevocable election by the plaintiff and immediately and
forever bars any suit or recovery by the plaintiff against any individual
employee of the governmental unit regarding the same subject matter. 
 
(b)  Provides that the filing of a suit against any employee of a
governmental unit constitutes an irrevocable election by the plaintiff and
immediately and forever bars any suit or recovery by the plaintiff against
the governmental unit regarding the same subject matter unless the
governmental unit consents. 
 
(c)  Requires the settlement of a claim arising under this chapter to
immediately and forever bar the claimant from any suit against or recovery
from any employee of the same governmental unit regarding the same subject
matter. 

(d)  Requires a judgment against an employee of a governmental unit to
immediately and forever bar the party obtaining the judgment from any suit
against or recovery from the governmental unit. 

(e)  Requires the employees, if a suit is filed under this chapter against
both a governmental unit and any of its employees, to immediately be
dismissed on the filing of a motion by the governmental unit. 

(f)  Provides that if a suit is filed against an employee of a
governmental unit based on conduct within the general scope of that
employee's employment and if it could have been brought under this chapter
against the governmental unit, the suit is considered to be against the
employee in the employee's official capacity only. Requires the suit
against the employee, on the employee's motion, to be dismissed unless the
plaintiff files amended pleadings dismissing the employee and naming the
governmental unit as defendant on or before the 30th day after the date
the motion is filed.  

Deletes existing Section 101.106 titled EMPLOYEES NOT LIABLE AFTER
SETTLEMENT OR JUDGMENT, and relating to a judgment in an action or a
settlement of a claim under this chapter barring any action involving the
same subject matter by the claimant against the employee of the
governmental unit whose act or omission gave rise to the claim. 

 SECTION 11.06.  Amends Section108.001, Civil Practice and Remedies Code,
by adding Subdivision (3) to define "public servant." 

SECTION 11.07.  Repealer:  Section108.002(c) (listing licensed health care
providers), Civil Practice and Remedies Code. 

ARTICLE 12.  RESERVED

ARTICLE 13.  DAMAGES
 
SECTION 13.01.  Amends the heading to Chapter 41, Civil Practice and
Remedies Code, to read as follows: 

CHAPTER 41.  DAMAGES

SECTION 13.02.  Amends Section 41.001, Civil Practice and Remedies Code,
by amending Subdivisions (1), (3), (4), (5), and (7) and adding
Subdivisions (8)-(13), to redefine "claimant," "defendant," "economic
damages," "exemplary damages," and "malice," and to define "compensatory
damages," "future damages," "future loss of earnings," "gross negligence,"
"noneconomic damages," and "periodic payments." 

SECTION 13.03.  Amends Sections 41.002(a) and (b), Civil Practice and
Remedies Code, as follows: 

(a)  Provides that this chapter applies to any action in which a claimant
seeks damages, rather than exemplary damages,  relating to a cause of
action. 

(b)  Makes conforming changes.

SECTION 13.04.  Amends Section 41.003, Civil Practice and Remedies Code,
by amending Subsection (a) and adding Subsections (d) and (e) as follows: 

(a)  Provides that, except as provided by Subsection (c), exemplary
damages may be awarded only if the claimant proves by clear and convincing
evidence that the harm with respect to which the claimant seeks recovery
of exemplary damages results from fraud, malice, or gross negligence,
rather than wilful act or omission or gross neglect in wrongful death
actions brought by or on behalf of a surviving spouse or heirs of the
decedent's body under a statute enacted under Section 26, Article XVI,
Texas Constitution.  Deletes the requirement to provide the definition of
"gross neglect" in the instruction submitted to the jury. 

(d)  Authorizes exemplary damages to be awarded only if the jury was
unanimous in regard to finding liability for and the amount of exemplary
damages. 

(e)  Requires, in all cases where the issue of exemplary damages is
submitted to the jury, certain instruction to be included in the charge of
the court. 

SECTION 13.05.  Amends Section 41.004(b), Civil Practice and Remedies
Code, to prohibit exemplary damages from being awarded to a claimant who
elects to have the plaintiff's recovery multiplied under another statute.
Deletes existing Subsection (b) relating to authorizing a claimant to
recover exemplary damages, even if only nominal damages are awarded, if
the claimant establishes by clear and convincing evidence that the harm
with respect to which the claimant seeks recovery of exemplary damages
results from malice as defined in Section 41.001(7)(A).  

SECTION 13.06.  Amends Section 41.008, Civil Practice and Remedies Code,
as follows: 

(a)  Makes a conforming change.

 (b)  No changes made to this subsection. 

(c)  Provides that this section, rather than Subsection (b), does not
apply to a cause of action against a defendant from whom a plaintiff seeks
recovery of exemplary damages based on conduct described as a felony in
certain sections of the Penal Code if, except for Sections 49.07 and
49.08, the conduct was committed knowingly or intentionally under certain
sections, including Section 22.04 (injury to a child, elderly individual,
or disabled individual, but not if the conduct occurred while providing
health care as defined by Section 74.001). 

(d)  No changes made to this subsection.

(e)  Prohibits the provisions of this section, rather than Subsections (a)
and (b), from being made known to a jury by any means, including voir
dire, introduction into evidence, argument, or instruction. 

(f)  Prohibits this section, rather than Subsection (b), from applying to
a cause of action for damages arising from the manufacture of
methamphetamine as described by Chapter 99. 

SECTION 13.07.  Amends Section 41.010(b), Civil Practice and Remedies
Code, to provide that, subject to Section 41.008, the determination of
whether to award exemplary damages and the amount of exemplary damages to
be awarded is within the discretion of the trier of fact. 

SECTION 13.08.  Amends Chapter 41, Civil Practice and Remedies Code, by
adding Section 41.0105, as follows: 

Sec. 41.0105.  EVIDENCE RELATING TO AMOUNT OF ECONOMIC DAMAGES. (a)
Provides that, in addition to any other limitation under law, recovery of
medical or health care expenses incurred is limited to the amount actually
paid or incurred by or on behalf of the claimant. 

(b)  Authorizes a defendant to introduce evidence of any amount payable to
the claimant as a collateral benefit arising from the event in the cause
of action under certain laws. 

(c)  Authorizes the plaintiff, if the defendant introduces evidence under
Subsection (b), to introduce evidence of any legal obligation to reimburse
any subrogated entity. 

SECTION 13.09.  Amends Chapter 18, Civil Practice and Remedies Code, by
adding Subchapter D, as follows: 

SUBCHAPTER D.  CERTAIN LOSSES

Sec. 18.091.  PROOF OF CERTAIN LOSSES; JURY INSTRUCTION.  (a)  Provides
that, notwithstanding any other law, 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 loss after reduction for income tax
payments or unpaid tax liability pursuant to any federal income tax law. 

(b)  Requires the court to instruct the jury as to whether any recovery
for compensatory damages sought by the claimant is subject to federal or
state income taxes, if any claimant seeks recovery for loss of earnings,
loss of earning capacity, loss of contributions of a pecuniary value, or
loss of inheritance,  

ARTICLE 14.  RESERVED

ARTICLE 15.  SCHOOL EMPLOYEES
 
SECTION 15.01.  Amends Subchapter B, Chapter 22, Education Code, by
amending Section 22.051, and adding Sections 22.0511 through 22.0517, as
follows: 

Sec. 22.051.  DEFINITION.  Defines "professional employee of a school
district." 

Sec. 22.0511.  Redesignated from Section 22.051.  New heading:  IMMUNITY
FROM LIABILITY. 

(c)  Provides that in addition to the immunity provided under this section
and under other provisions of state law, an individual is entitled to any
immunity and any other protections afforded under the Paul D. Coverdell
Teacher Protection Act of 2001 (20 U.S.C. Section 6731 et seq.), as
amended.  Provides that nothing in this subsection shall be construed to
limit or abridge any immunity or protection afforded an individual under
state law.  Defines "individual" for purposes of this subsection.  Deletes
definition of "professional employee." 

Sec. 22.0512.  IMMUNITY FROM DISCIPLINARY PROCEEDINGS FOR PROFESSIONAL
EMPLOYEES.  (a)  Prohibits a professional employee of a school district
from being subject to disciplinary proceedings for the employee's use of
physical force against a student to the extent justified under Section
9.62, Penal Code. 

(b)  Defines "disciplinary proceeding."

(c)  Provides that nothing in this section shall prohibit a school
district from enforcing a policy relating to corporal punishment. 

Sec. 22.0513.  NOTICE OF CLAIM.  (a)  Requires a person, not later than
the 90th day before the date the person files a suit against a
professional employee of a school district, to give written notice to the
employee of the claim, reasonably describing the incident from which the
claim arose. 

(b)  Authorizes a professional employee of a school district against whom
a suit is pending who does 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 person files an original answer in the court in which
the suit is pending. 

(c)  Requires the court to abate the suit if the court, after a hearing,
finds that the person 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 professional
employee of a school district as provided by Subsection (a). 

Sec. 22.0514.  EXHAUSTION OF REMEDIES.  Prohibits a person from filing
suit against a professional employee of a school district unless the
person has exhausted the remedies provided by the school district for
resolving the complaint. 

Sec. 22.0515.  LIMITATION ON DAMAGES.  (a)  Provides that subject to
Subsection (b), the liability of a professional employee of a school
district for an act incident to or within the scope of duties of the
employee's position of employment may not exceed $100,000.  Provides that
the limitation on liability provided by this subsection does not apply to
any attorney's fees or court costs that may be awarded against the
professional employee under Section 22.0517. 

(b)  Provides that the limitation on liability provided by Subsection (a)
does not apply if the actions of the professional employee of a school
district constitute gross negligence. 
 
Sec. 22.0516.  ALTERNATIVE DISPUTE RESOLUTION.  Authorizes a court in
which a judicial proceeding is being brought against a professional
employee of a school district to refer the case to an alternative dispute
resolution procedure as described by Chapter 154, Civil Practice and
Remedies Code. 

Sec. 22.0517.  RECOVERY OF ATTORNEY'S FEES IN ACTION AGAINST PROFESSIONAL
EMPLOYEE.  Provides that in an action against a professional employee of a
school district based on an allegation that the employee physically abused
a student, the employee is entitled to recover attorney's fees and court
costs from the plaintiff if the employee substantially prevails. 

SECTION 15.02.  Amends Section 22.053(a), Education Code, to provide that
a volunteer who is serving as a direct service volunteer of a school
district is immune from civil liability to the same extent as a
professional employee of a school district under Section 22.0511, rather
than Section 22.051. 

SECTION 15.03.  Amends Section 30.024(c), Education Code, to provide that
in addition to any other federal and state statutes limiting the liability
of employees at the school, Sections 22.0511, 22.0512, 22.052, and 22.053,
respectively, apply to professional employees and volunteers of the
school.  Deletes a reference to Section 22.051. 

SECTION 15.04.  Amends Section 30.055(c), Education Code, to make a
conforming change. 

SECTION 15.05.  Amends Section 105.301(e), Education Code, to make a
conforming change.  

SECTION 15.06.  Makes application of this article prospective.

ARTICLE 16.  ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTION

SECTION 16.01.  Amends Subchapter B, Chapter 32, Human Resources Code, by
adding Section 32.060, as follows: 

Sec. 32.060.  ADMISSIBILITY OF CERTAIN EVIDENCE RELATING TO NOT-FORPROFIT
NURSING INSTITUTIONS.  (a)  Sets forth items 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. 

SECTION 16.02.  Amends Subchapter A, Chapter 242, Health and Safety Code,
by adding Section 242.017, as follows: 

Sec. 242.017.  ADMISSIBILITY OF CERTAIN EVIDENCE IN CIVIL ACTIONS.  (a)
Sets forth items 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. 

SECTION 16.03.  Repealers:  Sections 32.021(i) and (k) (regarding
testimony and records in a civil action), Human Resources Code; and
Section 242.050 (Drug Testing of Employees), Health and Safety Code, as
added by Chapter 1284, Acts of the 77th Legislature, Regular Session,
2001. 

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," "successor," and "transferor." 

Sec. 149.002.  APPLICABILITY.  (a)  Requires the limitations in Section
149.003 to apply to a domestic corporation or a foreign corporation that
has had a certificate of authority to transact business in this state or
has done business in this state and that is a successor which became a
successor prior to May 13, 1968, or which is any of that successor
corporation's successors, but in the latter case only to the extent of the
limitation of liability applied under Section 149.003(b) and subject also
to the limitations found in this chapter, including those in Subsection
(b). 

(b)  Prohibits the limitations in Section 149.003 from applying to certain
benefits, claims, obligations, and entities. 

Sec. 149.003.  LIMITATIONS ON SUCCESSOR ASBESTOS-RELATED LIABILITIES.  (a)
Provides that, except as further limited in 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.  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, then the fair market value of the
total assets of the prior transferor, determined as of the time of such
earlier merger or consolidation, is required to be substituted for the
limitation set forth in Subsection (a) for purposes of determining the
limitation of liability of a corporation. 

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 limitations under Section 149.003 through
any method reasonable under the circumstances, including by reference to
the going concern value of the assets or to the purchase price
attributable to or paid for the assets in an arm's-length transaction, or,
in the absence of other readily available information from which fair
market value can be determined, by reference to the value of the assets
recorded on a balance sheet. 

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

(c)  Provides that total gross assets include the aggregate coverage under
any applicable liability insurance that was issued to the transferor whose
assets are being valued for purposes of this section and which insurance
has been collected or is collectable to cover successor asbestos-related
liabilities (except compensation for liabilities arising from workers'
exposure to asbestos solely during the course of their employment by the
transferor).  Requires a settlement of a dispute concerning such insurance
coverage entered into by a transferor or successor with the insurers of
the transferor 10 years or more before the enactment of this chapter to be
determinative of the aggregate coverage of such liability insurance to be
included in the calculation of the transferor's total gross assets. 

(d)  Requires the fair market value of total gross assets to reflect no
deduction for any liabilities arising from any asbestos claim. 

Sec. 149.005.  ADJUSTMENT.  (a)  Provides that, except as provided in
Subsections (b), (c), and (d), the fair market value of total gross assets
at the time of a merger or consolidation increases annually at a rate
equal to the sum of:  the prime rate as listed in the first edition of the
Wall Street Journal published for each calendar year since the  merger or
consolidation; and one percent. 

(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 a predecessor, 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. 

(d)  Provides that no adjustment of the fair market value of total gross
assets shall be applied to any liability insurance otherwise included in
the definition of total gross assets by Section 149.004(c). 

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 actions commenced on or
after the effective date of this Act, or pending on that effective date
and in which the trial, or any new trial or retrial following motion,
appeal, or otherwise, begins on or after that effective date. 

ARTICLE 18.  CHARITABLE IMMUNITY AND LIABILITY

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

(a)  Provides that, except as provided by Subsection (d) and Section
84.007, a volunteer, rather than a volunteer who is serving as an officer,
director, or trustee, of a charitable organization is immune from civil
liability for any act or omission resulting in death, damage, or injury if
the volunteer was acting in the course and scope of the volunteer's,
rather than his, duties or functions, including as an officer, director,
or trustee within the organization. 

(c)  Provides that, except as provided by Subsection (d) and Section
84.007, a volunteer health care provider who is serving as a direct
service volunteer of a charitable organization is immune from civil
liability for any act or omission resulting in death, damage, or injury to
a patient if the volunteer commits the act or omission in the course of
providing health care services to the patient, the services provided are
within the scope of the license of the volunteer, and before the volunteer
provides health care services, the patient or, if the patient is a minor
or is otherwise legally incompetent, the person responsible for, rather
than the patient's parent, managing conservator, legal guardian, or other
person with legal responsibility for the care of, the patient signs a
written statement that acknowledges certain facts. 

SECTION 18.02.  Amends Section 84.007(a), Civil Practice and Remedies
Code, to provide that this chapter does not apply to an act or omission
that is intentional, wilfully negligent, or done with conscious
indifference or reckless disregard for the safety of others.  Deletes
existing text "or wantonly" as a modifier for "negligent." 

SECTION 18.03.  Repealers: Section 84.003(4) (defining "good faith") and
Section 84.004(b) (regarding a volunteer being immune from civil
liability), Civil Practice and Remedies Code. 

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

 SECTION 19.01.  (a)  Sets forth legislative findings.

(b)  Provides that the purpose of this article is to reduce the exposure
to liability of a volunteer fire department while involved in or providing
an emergency response, and a volunteer fire fighter while acting as a
member of a volunteer fire department. 

SECTION 19.02.  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 is entitled to the exclusions,
exceptions, immunities, and defenses applicable to an employee of a county
under Chapter 101 and other statutory or common law. 

ARTICLE 20.  DESIGN PROFESSIONALS

SECTION 20.01.  Amends Title 6, Civil Practice and Remedies Code, by
adding Chapter 150, as follows: 

CHAPTER 150.  DESIGN PROFESSIONALS

Sec. 150.001.  DEFINITION.  Defines "design professional."

Sec. 150.002.  CERTIFICATE OF MERIT.  (a)  Requires the plaintiff, in any
action for damages alleging professional negligence by a design
professional, to be required to file with the complaint an affidavit of a
third-party registered architect or licensed professional engineer
competent to testify and practicing in the same area of practice as the
defendant, which affidavit is required to set forth specifically at least
one negligent act, error, or omission claimed to exist and the factual
basis for each such claim. Requires the third-party professional engineer
or registered architect to be licensed in this state and actively engaged
in the practice of architecture or engineering. 
 
(b)  Prohibits the contemporaneous filing requirement of Subsection (a)
from applying to any case in which the period of limitation will expire
within 10 days of the date of filing and, because of such time
constraints, the plaintiff has alleged that an affidavit of a third-party
registered architect or professional engineer could not be prepared.
Requires the plaintiff, in such cases, to have 30 days after the filing of
the complaint to supplement the pleadings with the affidavit.  Authorizes
the trial court to, on motion, after hearing and for good cause, extend
such time as it determines justice requires. 
 
(c)  Prohibits the defendant from being required to file an answer to the
complaint and affidavit until 30 days after the filing of such affidavit. 

(d)  Provides that the plaintiff's failure to file the affidavit in
accordance with Subsection (a) or (b) may result in dismissal with
prejudice of the complaint against the defendant. 

(e)  Prohibits this statute from being construed to extend any applicable
period of limitation or repose. 

ARTICLE 21.  LIMITATIONS OF LIABILITY

SECTION 21.01.  Amends Section75.002, Civil Practice and Remedies Code, by
adding Subsection (h), to provide that an owner, lessee, or occupant of
real property in this state is liable for trespass as a result of
migration or transport of any air contaminant, as defined in Section
382.003(2), Health and Safety Code, other than odor, only upon a showing
of actual and substantial damages by a plaintiff in a civil action. 

ARTICLE 22.  COMMUNITY BENEFITS AND CHARITY CARE

SECTION 22.01.  Amends Section 311.041, Health and Safety Code, as follows:

Sec. 311.041.  POLICY STATEMENT.  Provides that it is the purpose of this
subchapter to clarify and set forth the duties, responsibilities, and
benefits that apply to hospitals for providing community benefits that
include charity care, rather than to clarify and set forth the duties and
responsibilities of nonprofit hospitals. 
 
SECTION 22.02.  Amends Subchapter D, Chapter 311, Health and Safety Code,
by adding Section 311.0456, as follows: 
 
Sec. 311.0456.  ELIGIBILITY AND CERTIFICATION FOR LIMITED LIABILITY.  (a)
Defines "department." 

(b)  Provides that this section applies only to a nonprofit hospital or
hospital system that is certified by the Texas Department of Health (TDH)
under Subsection (d), or a hospital that is licensed under Chapter 241, is
not a nonprofit hospital, and is certified by TDH under Subsection (g). 

(c)  Provides that to be eligible for certification under Subsection (d),
a nonprofit hospital or hospital system must provide charity care and
community benefits in a certain amount, and at least 40 percent of the
charity care required by the county in which the hospital is located. 

(d)  Provides that to be certified under this subsection, a nonprofit
hospital or hospital system is required to submit a report based on its
most recent completed and audited prior fiscal year to TDH not later than
April 30 of each year stating that the hospital or system is eligible for
certification.  Requires TDH to verify the information in the report not
later than May 31 of the year in which TDH receives the report by checking
the information against the report filed by the hospital or system under
Section 311.046.  Requires TDH, after TDH has verified the information in
the report,  to certify that the hospital or hospital system has met the
requirements for certification.  Provides that the certification issued
under this subsection to a nonprofit hospital or hospital system takes
effect on May 31 of that year and expires on the anniversary of that date. 

(e)  Provides that for the purposes of Subsection (b)(1), a corporation
certified by the Texas State Board of Medical Examiners as a nonprofit
organization under Section 162.001, Occupations Code, whose sole member is
a qualifying hospital or hospital system is considered a nonprofit
hospital or hospital system. 
 
(f)  Provides that to be eligible for certification under Subsection (g),
a hospital described by Subsection (b)(2) must provide charity care and
community benefits in a certain amount, and must provide at least 40
percent of the charity care required by the county in which the hospital
is located. 

(g)  Requires a hospital described by Subsection (b)(2), to be certified
under this subsection, to submit a report based on its most recent
completed and audited prior fiscal year to TDH not later than April 30 of
each year  stating that the hospital is eligible for certification.
Requires the report to include the information described by Sections
311.046(a)(3), (4), and (5).  Requires TDH to verify the information in
the report not later than May 31 of the year in which TDH receives the
report.  Requires TDH, after TDH has verified the information in the
report, to certify that the hospital has met the requirements for
certification.  Provides that the certification issued under this
subsection to a hospital takes effect on May 31 of that year and expires
on the anniversary of that date. 

(h)  Provides that, notwithstanding any other law, the liability of a
hospital or hospital system for a cause of action that accrues during the
period that the hospital or system is certified under this section is
subject to the limitations specified by Section 101.023(b), Civil Practice
and Remedies Code, and Subsection (c) of that section does not apply. 

SECTION 22.03.  Amends the heading to Subchapter D, Chapter 311, Health
and Safety Code, to read as follows: 

SUBCHAPTER D.  COMMUNITY BENEFITS AND CHARITY CARE

ARTICLE 23.  INVERSE CONDEMNATION

SECTION 23.01.  Amends Title 4, Property Code, by adding Chapter 30, as
follows: 

CHAPTER 30.  INVERSE CONDEMNATION
 
Sec. 30.001.  CONCURRENT JURISDICTION.  Provides that district courts and
county courts at law have concurrent jurisdiction in inverse condemnation
cases.  Provides that a county court has no jurisdiction in inverse
condemnation cases. 

Sec. 30.002.  TRANSFER OF CASES.  Requires the judge, if an inverse
condemnation case is pending in a county court at law and the court
determines that the case involves an issue of title or any other matter
that cannot be fully adjudicated in that court, to transfer the case to a
district court. 

Sec. 30.003.  DISTRICT COURT AUTHORITY.  Authorizes a district court to
determine all issues in an inverse condemnation case, including whether
property has been taken or damaged for a public purpose without
compensation and the assessment of damages, in any suit in which this
state, a political subdivision of this state, a person, an association of
persons, or a corporation is a party. 
 
Sec. 30.004.  STANDARD PROCEDURE.  (a)  Requires the judge of a court in
which an inverse condemnation petition is filed to order a bench trial to
determine whether the property owned by the plaintiff was taken or damaged
for a public purpose without compensation, and to resolve any
jurisdictional matters. 

(b)  Requires the judge, if requested, if the judge determines that the
taking of or damage to the property occurred, to conduct a jury trial on
valuation issues. 

(c)  Requires the judge, if the judge determines that the taking of or
damage to the property has not occurred, to dismiss the petition. 

 Sec. 30.005.  VENUE IN CERTAIN CASES.  Requires an inverse condemnation
action arising from flooding, the impoundment of water, the discharge of
water into a natural watercourse, or the construction or operation of dams
for flood control, to be brought in the county in which the principal
office of the defendant is located. 

SECTION 23.02.  Provides that Chapter 30, Property Code, as added by this
article, applies only to an inverse condemnation action filed on or after
the effective date of this article.  Provides that an inverse condemnation
action filed before the effective date of this article is governed by the
law in effect on the date the action was filed, and the former law is
continued in effect for that purpose. 

ARTICLE 24.  ACCELERATED APPEAL;
EFFECTIVE DATE; SEVERABILITY

SECTION 24.01.  (a)  Authorizes the constitutionality and other validity
under the state or federal constitution of all or any part of Article 10
of this Act to 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 all or any part of Article 10 of this
Act affects the rights, status, or legal relation of a party in a civil
action with respect to any other party in the civil action. 

(b)  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 that all or any part
of Article 10 of this Act is constitutional or unconstitutional, or
otherwise valid or invalid, under the state or federal constitution is an
accelerated appeal. 

(c)  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. 

(d)  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 Article 10 of this Act. 

(e)  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 Article 10 this Act.  Provides that the direct appeal is an
accelerated appeal. 

(f)  Provides that this section exercises the authority granted by Section
3-b, Article V, Texas Constitution. 

(g)  Provides that an appeal under this section, 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 24.02.  (a)  Effective date:  Provides that all articles of this
Act, other than Article 17, take effect September 1, 2003. 

(b)  Provides that Article 17 of this Act takes effect upon passage or
September 1, 2003. 

(c)  Makes application of Articles 4, 5, and 8 of this Act prospective to
May 30, 2003.   

(d)  Makes application of this Act prospective, except as otherwise
provided in this section or by a specific provision in an article. 
 
SECTION 24.03.  Provides that if any provision of this Act or its
application to any person or circumstance is held invalid, the invalidity
does not affect other provisions or applications of this Act that can be
given effect without the invalid provision or application, and to this end
the provisions of this Act are declared to be severable.