BILL ANALYSIS

S.B. 2237

By: Bettencourt

Intergovernmental Affairs

Committee Report (Unamended)

BACKGROUND AND PURPOSE

The bill sponsor has informed the committee that many public employee contracts include "golden parachutes"—payout clauses that can result in substantial taxpayer-funded payments, even in cases of misconduct or poor performance. The bill sponsor has also informed the committee that while some states, including Florida, Illinois, and California, have restricted severance pay for government employees, Texas law places limited restrictions on severance pay for school district superintendents but lacks broader regulation of severance payments to government employees. S.B. 2237 seeks to address this issue by limiting the amount of severance pay that may be paid from public funds to executive employees of political subdivisions and prohibiting the provision of any severance pay if such an individual is terminated for misconduct.

CRIMINAL JUSTICE IMPACT

It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.

ANALYSIS

S.B. 2237 amends the Local Government Code to require a political subdivision that enters into an employment agreement, or renewal or renegotiation of an existing employment agreement, that contains a provision for severance pay with an executive employee to include the following:

· a requirement that severance pay that is paid from tax revenue may not exceed the amount of compensation, at the rate at the termination of employment, the executive employee would have been paid for 20 weeks, excluding paid time off or accrued vacation leave; and

· a prohibition of the provision of severance pay when the executive employee is terminated for misconduct.

The bill requires a political subdivision to post each severance agreement in a prominent place on the political subdivision's website. The bill prohibits a court from issuing a writ of execution or mandamus in connection with a judgment in an action brought against a political subdivision by an executive employee of the political subdivision arising from the termination of the person's employment if the judgment does not comply with the bill's provisions.

S.B. 2237 establishes that a person is an executive employee of a political subdivision for the purposes of these provisions if the person is a chief executive officer of a political subdivision other than a public school district, an agency or department head, or the superintendent of a district or the chief executive officer of an open-enrollment charter school. The bill defines the following terms:

· "misconduct" as an act or omission by an employee of a political subdivision in the performance of the employee's duties that the governing body of the political subdivision determines to be misconduct, including any finding of criminal conduct; and

· "severance pay" as dismissal or separation income paid on termination of the employment of an employee that is in addition to the employee's usual earnings from the employer at the time of termination.

S.B. 2237 applies only to an employment agreement or contract entered into or an action filed on or after the bill's effective date.

EFFECTIVE DATE

September 1, 2025.