HB 762

relating to severance pay for political subdivision employees and
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
(A)  the employment of an employee that is in
addition to the employee's usual earnings from the employer at the
(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
(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
(1)  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 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
(d)  A political subdivision shall post each severance
agreement in a prominent place on the political subdivision's
(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.