Bill Text: TX HB762 | 2025-2026 | 89th Legislature | Enrolled

Texas House Bill 762

Bill Title: Relating to severance pay for political subdivision employees and independent contractors.

Sponsorship: Partisan Bill (Republican 8)

Status: (Passed) 2025-06-22 - Effective on 9/1/25 [HB762 Detail]

Download: Texas-2025-HB762-Enrolled.html



	H.B. No. 762




	AN ACT
	relating to severance pay for political subdivision employees and
	independent contractors.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1. Chapter 180, Local Government Code, is amended
	by adding Section 180.011 to read as follows:
	Sec. 180.011. LIMITATION ON SEVERANCE PAY FOR EMPLOYEES AND
	INDEPENDENT CONTRACTORS. (a) In this section:
	(1) "Misconduct" means an act or omission by an
	employee or contractor of a political subdivision in the
	performance of the employee's or contractor's duties that the
	governing body of the political subdivision determines to be
	misconduct. The term includes any finding of criminal conduct.
	(2) "Severance pay" means dismissal or separation
	income paid on termination of:
	(A) the employment of an employee that is in
	addition to the employee's usual earnings from the employer at the
	time of termination; or
	(B) the contract of an independent contractor
	that is in addition to the contractor's usual compensation from the
	employer as prescribed by the contract.
	(b) This section does not apply to a public or teaching
	hospital.
	(c) A political subdivision that enters into a contract or
	employment agreement, or renewal or renegotiation of an existing
	contract or employment agreement, that contains a provision for
	severance pay with an employee or independent contractor must
	include:
	(1) a requirement that severance pay that is paid from
	public money may not exceed the amount of compensation, at the rate
	at the termination of employment or the contract, the employee or
	independent contractor would have been paid for 20 weeks, excluding
	paid time off or accrued vacation leave; and
	(2) a prohibition of the provision of severance pay
	when the employee or independent contractor is terminated for
	misconduct.
	(d) A political subdivision shall post each severance
	agreement in a prominent place on the political subdivision's
	Internet website.
	(e) This subsection applies to an action brought against a
	political subdivision by an employee or independent contractor of
	the political subdivision arising from the termination of the
	person's employment or contract. A court may not issue a writ of
	execution or mandamus in connection with a judgment in the action if
	the judgment does not comply with this section.
	SECTION 2. Section 180.011, Local Government Code, as added
	by this Act, applies only to a contract entered into or an action
	filed on or after the effective date of this Act.
	SECTION 3. This Act takes effect September 1, 2025.


	______________________________	______________________________
	President of the Senate	Speaker of the House


	I certify that H.B. No. 762 was passed by the House on May 1,
	2025, by the following vote: Yeas 128, Nays 6, 1 present, not
	voting; and that the House concurred in Senate amendments to H.B.
	No. 762 on May 28, 2025, by the following vote: Yeas 121, Nays 13,
	1 present, not voting.

	______________________________
	Chief Clerk of the House

	I certify that H.B. No. 762 was passed by the Senate, with
	amendments, on May 21, 2025, by the following vote: Yeas 30, Nays
	1.

	______________________________
	Secretary of the Senate
	APPROVED: __________________
	Date

	__________________
	Governor