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