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A BILL TO BE ENTITLED
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AN ACT
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relating to the subrogation interests of certain political |
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subdivisions or insurance carriers providing reinsurance for |
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subdivisions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 172.015, Local Government Code, is |
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amended to read as follows: |
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Sec. 172.015. SUBROGATION; ADEQUATE RECOVERY. (a) In this |
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section, "covered individual" means a person who is covered by the |
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pool. The term includes an official, an employee, a retiree, and an |
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employee of an affiliated service contractor and their dependents. |
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(b) The payor of employee benefits, whether a political |
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subdivision, group of political subdivisions, pool, or carrier |
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providing reinsurance to one of those entities, is [shall be] |
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subrogated to a covered individual's [the employees'] right of |
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recovery for personal injuries caused by the tortious conduct of a |
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third party. |
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(c) A payor of employee benefits whose interest is not |
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actively represented by an attorney in a third-party action shall |
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pay to an attorney representing the covered individual a fee in an |
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amount determined under an agreement entered into between the |
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attorney and the payor of employee benefits. Except as provided by |
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Subsection (f), in the absence of an agreement, the court shall |
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award to the attorney, payable out of the recovery of the payor of |
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employee benefits, a reasonable fee for recovery of the interest of |
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the payor of employee benefits, not to exceed one-third of the |
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payor's recovery. |
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(d) If the injured covered individual is not able to realize |
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a complete and adequate recovery for injuries sustained as a result |
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of the actionable fault of a third party, the payor of employee |
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benefits is entitled to a pro rata recovery described by Subsection |
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(e). A common law doctrine that requires that an injured party be |
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made whole before a subrogee makes a recovery does not apply to the |
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recovery of the payor of employee benefits under this subsection. |
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(e) Unless otherwise agreed by a covered individual and the |
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payor of employee benefits, the payor's pro rata share under |
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Subsection (d) is an amount that is equal to the lesser of: |
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(1) one-third of the covered individual's total |
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recovery; or |
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(2) the total cost of employee benefits paid by the |
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payor as a direct result of the tortious conduct of the third party. |
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(f) Notwithstanding Subsection (c), a payor of employee |
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benefits may not be assessed out of the recovery to which the payor |
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is entitled under Subsection (e) any attorney's fees under any |
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theory or rule of law, including the common fund doctrine. |
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SECTION 2. Section 172.015, Local Government Code, as |
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amended by this Act, applies only to a cause of action that accrues |
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on or after the effective date of this Act. An action that accrued |
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before the effective date of this Act is governed by the law |
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applicable to the action immediately before the effective date of |
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this Act, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |