2025 · Regular session · House bill
HB762
HB762 requires covered local-government employment and independent-contractor agreements that provide severance pay to include two restrictions: severance paid from public money cannot exceed 20 weeks of compensation at the rate …
Official caption: Relating to severance pay for political subdivision employees and independent contractors.
Official report lists House author(s): Leach, Cook, Slawson, Landgraf. This does not identify sponsors or amendment drafters.
Bill explanation published · Version and amendment review scope is stated below · Individual amendment records may not be separately annotated.
Bill highlights
Selected points from the published explanation. Follow each point to its source-linked context; conditions and limits may matter.
- HB762 requires covered local-government employment and independent-contractor agreements that provide severance pay to include two restrictions: severance paid from public money cannot exceed 20 weeks of compensation at the rate in effect when employment or the contract ends, excluding paid time off or accrued vacation leave; and no severance may be provided when the person is terminated for misconduct.
- Severance means dismissal or separation income beyond the employee's usual earnings or the contractor's usual contractual compensation. “Misconduct” is an act or omission in performing duties that the political subdivision's governing body determines to be misconduct, including a finding of criminal conduct.
- The political subdivision must post each severance agreement prominently on its website.
- The law also limits enforcement of judgments in employee or contractor lawsuits arising from termination: a court may not issue a writ of execution or mandamus in connection with a judgment that does not comply with the section.
- The act took effect September 1, 2025, and applies only to a contract entered into or an action filed on or after that date.
What does it do?
HB762 requires covered local-government employment and independent-contractor agreements that provide severance pay to include two restrictions: severance paid from public money cannot exceed 20 weeks of compensation at the rate in effect when employment or the contract ends, excluding paid time off or accrued vacation leave; and no severance may be provided when the person is terminated for misconduct. The requirement covers new agreements and renewals or renegotiations of existing ones. It does not require a government to offer severance. Final law
Severance means dismissal or separation income beyond the employee’s usual earnings or the contractor’s usual contractual compensation. “Misconduct” is an act or omission in performing duties that the political subdivision’s governing body determines to be misconduct, including a finding of criminal conduct. It is therefore not limited to a criminal conviction.
The political subdivision must post each severance agreement prominently on its website. Public and teaching hospitals are exempt from this section.
The law also limits enforcement of judgments in employee or contractor lawsuits arising from termination: a court may not issue a writ of execution or mandamus in connection with a judgment that does not comply with the section. These are court orders used to enforce a judgment or compel action. The provision does not say that no termination lawsuit can be filed or that every form of relief is automatically barred.
The act took effect September 1, 2025, and applies only to a contract entered into or an action filed on or after that date. The separate action-filing trigger matters; it is not simply a rule about the date someone was hired. Official history
What changed along the way?
The introduced bill, House committee report, engrossed version and Senate committee text were identical in their operative provisions. They limited severance paid from tax revenue.
The Senate adopted Bettencourt’s single floor amendment on May 21, replacing “tax revenue” with “public money.” That broadens the funding sources covered by the cap; the other provisions remained unchanged. The amendment index lists only that adopted amendment. The House concurred May 28, and the governor signed June 22. There was no conference version.
For the full amendment record, open the official amendment index.
Official bill versions
Compare the published text versions in the official text index. A change is not attributed to a specific amendment here without a verified record.
Who could benefit—and who could bear the costs?
Taxpayers and local governments may benefit from limits on separation payouts and easier public access to agreements. Posting allows residents to examine the actual terms rather than relying on a description of a payment. The law does not guarantee a specific amount of savings.
Employees and independent contractors may receive smaller severance packages, or no severance following a misconduct termination. Governments lose some flexibility in negotiating separations and must account for the restrictions in agreements and covered litigation. The hospital exemption limits the law’s reach.
The latest fiscal note expected no state fiscal impact and no significant local-government fiscal impact. It does not estimate individual payouts, litigation effects or statewide savings.
Official sources
- Bill history and latest recorded action
- Bill versions, analyses and fiscal notes
- Action history and votes
- Amendment index
Catalog report retrieved 2026-10-25. Check the official record for corrections or later changes.