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| 5 | 5 | | |
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| 6 | 6 | | |
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| 7 | 7 | | A BILL TO BE ENTITLED |
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| 8 | 8 | | AN ACT |
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| 9 | 9 | | relating to severance pay for political subdivision employees and |
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| 10 | 10 | | independent contractors. |
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| 11 | 11 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 12 | 12 | | SECTION 1. Chapter 180, Local Government Code, is amended |
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| 13 | 13 | | by adding Section 180.011 to read as follows: |
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| 14 | 14 | | Sec. 180.011. LIMITATION ON SEVERANCE PAY FOR EMPLOYEES AND |
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| 15 | 15 | | INDEPENDENT CONTRACTORS. (a) In this section: |
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| 16 | 16 | | (1) "Misconduct" means an act or omission by an |
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| 17 | 17 | | employee or contractor of a political subdivision in the |
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| 18 | 18 | | performance of the employee's or contractor's duties that the |
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| 19 | 19 | | governing body of the political subdivision determines to be |
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| 20 | 20 | | misconduct. The term includes any finding of criminal conduct. |
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| 21 | 21 | | (2) "Severance pay" means dismissal or separation |
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| 22 | 22 | | income paid on termination of: |
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| 23 | 23 | | (A) the employment of an employee that is in |
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| 24 | 24 | | addition to the employee's usual earnings from the employer at the |
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| 25 | 25 | | time of termination; or |
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| 26 | 26 | | (B) the contract of an independent contractor |
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| 27 | 27 | | that is in addition to the contractor's usual compensation from the |
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| 28 | 28 | | employer as prescribed by the contract. |
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| 29 | 29 | | (b) This section does not apply to a public or teaching |
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| 30 | 30 | | hospital. |
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| 31 | 31 | | (c) A political subdivision that enters into a contract or |
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| 32 | 32 | | employment agreement, or renewal or renegotiation of an existing |
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| 33 | 33 | | contract or employment agreement, that contains a provision for |
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| 34 | 34 | | severance pay with an employee or independent contractor must |
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| 35 | 35 | | include: |
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| 36 | 36 | | (1) a requirement that severance pay that is paid from |
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| 37 | 37 | | tax revenue may not exceed the amount of compensation, at the rate |
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| 38 | 38 | | at the termination of employment or the contract, the employee or |
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| 39 | 39 | | independent contractor would have been paid for 20 weeks, excluding |
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| 40 | 40 | | paid time off or accrued vacation leave; and |
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| 41 | 41 | | (2) a prohibition of the provision of severance pay |
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| 42 | 42 | | when the employee or independent contractor is terminated for |
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| 43 | 43 | | misconduct. |
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| 44 | 44 | | (d) A political subdivision shall post each severance |
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| 45 | 45 | | agreement in a prominent place on the political subdivision's |
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| 46 | 46 | | Internet website. |
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| 47 | 47 | | (e) This subsection applies to an action brought against a |
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| 48 | 48 | | political subdivision by an employee or independent contractor of |
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| 49 | 49 | | the political subdivision arising from the termination of the |
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| 50 | 50 | | person's employment or contract. A court may not issue a writ of |
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| 51 | 51 | | execution or mandamus in connection with a judgment in the action if |
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| 52 | 52 | | the judgment does not comply with this section. |
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| 53 | 53 | | SECTION 2. Section 180.011, Local Government Code, as added |
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| 54 | 54 | | by this Act, applies only to a contract entered into or an action |
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| 55 | 55 | | filed on or after the effective date of this Act. |
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| 56 | 56 | | SECTION 3. This Act takes effect September 1, 2025. |
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