H.B. No. 1734
AN ACT
relating to litigation involving certain defects in school district
facilities and enforcement of certain duties following that
litigation; authorizing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 44, Education Code, is amended by adding
Subchapter E and adding a subchapter heading to read as follows:
SUBCHAPTER E. LITIGATION INVOLVING SCHOOL DISTRICT FACILITY
SECTION 2. Section 46.0111, Education Code, is transferred
to Subchapter E, Chapter 44, Education Code, as added by this Act,
redesignated as Section 44.151, Education Code, and amended to read
as follows:
Sec. 44.151 [46.0111]. ACTIONS BROUGHT FOR DEFECTIVE
DESIGN, CONSTRUCTION, RENOVATION, OR IMPROVEMENT OF SCHOOL
DISTRICT [INSTRUCTIONAL] FACILITY. (a) In this section:
(1) "Instructional facility" has the meaning assigned
by Section 46.001.
(2) "Net proceeds" means the difference between the
amount recovered by or on behalf of a school district in an action,
by settlement or otherwise, and the legal fees and litigation costs
incurred by the district in prosecuting the action.
(3) [(2)] "State's share" means an amount equal to the
district's net proceeds from the recovery multiplied by a
percentage determined by dividing the amount of state assistance
under Subchapter A, Chapter 46, [this subchapter] used to pay the
principal of and interest on bonds issued in connection with the
instructional facility that is the subject of the action by the
total amount of principal and interest paid on the bonds as of the
date of the judgment or settlement.
(b) A school district that brings an action for recovery of
damages for the defective design, construction, renovation, or
improvement of a district [an instructional] facility financed by
bonds [for which the district receives state assistance under this
subchapter] shall provide the commissioner with written notice of
the action by registered or certified mail, return receipt
requested, not later than the 30th day after the date the action is
filed. If the school district fails to comply with this subsection,
the court or an arbitrator or other adjudicating authority shall
dismiss the action without prejudice. The dismissal of an action
under this subsection extends the statute of limitations on the
action for a period of 90 days.
(b-1) The notice required under Subsection (b) must
include:
(1) a copy of the petition; and
(2) an itemized list of the defects in the design,
construction, renovation, or improvement for which the district is
seeking damages under the action.
(c) In an action brought under Subsection (b) involving an
instructional facility financed by bonds for which the school
district receives state assistance under Subchapter A, Chapter 46,
the [The] commissioner may join in the action on behalf of the state
to protect the state's share in the action.
(d) A school district that brings an action under Subsection
(b) shall use the net proceeds from the [an] action for:
(1) the [brought by the district for the defective
design, construction, renovation, or improvement of an
instructional facility financed by bonds for which the district
receives state assistance under this subchapter to] repair of the
defective design, construction, renovation, or improvement of the
[instructional] facility on which the action is brought, including
the repair of any ancillary damage to furniture and fixtures;
(2) the replacement of [or to replace] the facility on
which the action is brought;
(3) the reimbursement of the district for a repair or
replacement made under Subdivision (1) or (2); or
(4) any other purpose with written approval from the
commissioner.
(d-1) Section 46.008 applies to the repair.
(e) A school district shall provide to the commissioner an
itemized accounting of any repairs made under Subsection (d).
(f) The state's share resulting from an action brought under
Subsection (b) involving an instructional facility financed by
bonds for which the school district receives state assistance under
Subchapter A, Chapter 46, is state property. The [school] district
shall send to the comptroller any portion of the state's share not
used by the [school] district to repair the defective design,
construction, renovation, or improvement of the instructional
facility on which the action is brought or to replace the facility.
Section 42.258 applies to the state's share under this subsection.
SECTION 3. Subchapter E, Chapter 44, Education Code, as
added by this Act, is amended by adding Section 44.152 to read as
follows:
Sec. 44.152. ATTORNEY GENERAL ENFORCEMENT OF SCHOOL
DISTRICT DUTIES FOLLOWING CERTAIN ACTIONS; REPORT. (a) If the
attorney general believes that a school district has violated or is
violating Section 44.151(d), (e), or (f), the attorney general may,
after providing at least two weeks' notice to the district, bring an
action on behalf of the state to enjoin the district from violating
those sections.
(b) In an action brought under Subsection (a), the attorney
general may request and the court may order any other appropriate
relief that is in the public interest, including payment of:
(1) a civil penalty in an amount not to exceed $20,000
for each violation of Section 44.151(d), (e), or (f);
(2) the attorney general's reasonable costs for
investigating and prosecuting the violation; or
(3) if applicable, the amount of the state's share
under Section 44.151(f).
(c) Not later than December 1 of each year, the attorney
general shall submit to the governor, the lieutenant governor, the
members of the legislature, and the commissioner a report on any
actions brought under this section during the preceding year. The
report must include the following information for each action:
(1) the filing date;
(2) the cause number;
(3) the school district that is the subject of the
action; and
(4) the court in which the action was brought.
SECTION 4. Section 44.151, Education Code, as transferred,
redesignated, and amended by this Act, applies only to an action
brought on or after the effective date of this Act. An action
brought before the effective date of this Act is governed by the law
applicable to the action immediately before the effective date of
this Act, and that law is continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1734 was passed by the House on April
24, 2019, by the following vote: Yeas 111, Nays 30, 2 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 1734 on May 23, 2019, and requested the appointment of a
conference committee to consider the differences between the two
houses; and that the House adopted the conference committee report
on H.B. No. 1734 on May 26, 2019, by the following vote: Yeas 123,
Nays 21, 2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 1734 was passed by the Senate, with
amendments, on May 16, 2019, by the following vote: Yeas 31, Nays
0; at the request of the House, the Senate appointed a conference
committee to consider the differences between the two houses; and
that the Senate adopted the conference committee report on H.B. No.
1734 on May 26, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor