HBA-MSH C.S.H.B. 798 77(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 798 By: Gallego County Affairs 4/22/2001 Committee Report (Substituted) BACKGROUND AND PURPOSE Under current law, the amount of money that may be offered to an employee of a political subdivision as a part of a severance package or employment termination agreement is not limited. Cities wishing to hire a new city manager may be forced to buy out the remaining term of a city manager's contract. This could be rather expensive, especially for small cities. C.S.H.B. 798 limits the duration of a contract for employment with a political subdivision and the money contained in a severance package or employment termination agreement. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS C.S.H.B. 798 amends the Local Government Code to prohibit the duration of a contract for employment with a political subdivision from exceeding the length of the term a member of the governing body of the political subdivision is elected to serve. The bill prohibits a political subdivision from making a payment to an employee as part of a severance package or as part of any other agreement or settlement made in relation to the termination of employment in an amount that exceeds the amount of the employee's salary for 50 percent of the time remaining on an employment contract. The bill provides that the amount an employee may be paid for other benefits accrued during employment is not limited. EFFECTIVE DATE September 1, 2001. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 798 modifies the original by removing the provisions that limits the amount of a payment made as part of an employee termination agreement and adding a provision that limits the amount of a payment made as part of any agreement or settlement made in relation to the termination of a person's employment.