Settlements and Judgments

Provisions of the General Appropriations Act (GAA), Article IX, Section 16.04

Cases brought against state agencies by persons claiming harm or damage due to the actions or negligence of the state are often resolved through two types of actions:

• Negotiated or mediated settlement
• A judgment issued by a court

The Legislature authorized state agencies to make settlement and judgment payments out of their agency appropriations for cases brought against the state of Texas in a state or federal court.

If the attorney general prosecuted or defended a settlement or judgment obtained against the state of Texas or a state agency, funds appropriated to the agency by the General Appropriations Act (GAA) may be used to pay the settlement or judgment, if:

• The expenditure complies with Article IX, Section 16.04 of the GAA.
• An item of appropriation in the GAA or other law specifically provides funds and authorization for an agency to pay the settlement or judgment.

Note: the above does not apply to a cause of action arising under Civil Practice and Remedies Code, Chapter 105.

Agencies may pay a settlement or judgment if:

• The payment is approved by the attorney general and governor.
• In the case of a judgment:
  • The judgment is rendered in a federal or state court and an appeal or rehearing (or an application for an appeal or rehearing) is not pending nor have the time limitations for an appeal or rehearing expired.
    –or–
  • The payment would be made in full satisfaction of the judgment.
• The payment of a settlement or judgment:
  • Does not exceed $250,000.
  • Does not exceed one percent of the total amount of funds (excluding federal funds) appropriated to the agency for expenditure by that state agency for that fiscal year.
  • Would not cumulatively exceed 10 percent of the total amount of funds available for expenditure by that state agency for that fiscal year.
• The person receiving the payment executes a release that releases the state of Texas from any further claims against the state.

State agencies must report a claim for property damage to the Attorney General ’s office no later than the second working day after the date the agency receives the claim.

Other Resources

For more information on settlements and judgments, see Settlement and Judgment Processing Guidelines (FPP E.041).

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