FMX Home
Glenn Hegar  ·  Texas Comptroller of Public Accounts

Settlement and Judgment Processing Guidelines

FPP E.041

Settlement and Judgment Payment Guidelines

Settlements and judgments must first be paid from the agency’s budget, under Article IX of the General Appropriations Act (GAA). Then, in certain instances, the balance of any unpaid portion of the settlement or judgment may be paid from the Comptroller’s Fiscal Programs appropriation.

Payment of Settlements and Judgments by Agencies

Agencies must pay settlements and judgments in compliance with Article IX, Section 16.04 of the GAA, 85th Legislature, SB1, 2017, R.S., (IX-77). The payment of a settlement or judgment from an agency’s appropriation:

  • May not exceed $250,000; and
  • The payment of a settlement or judgment may not exceed 1 percent of the total amount of funds appropriated by this Act for expenditure by that agency for that fiscal year (not including federal funds); and
  • The payment of the settlement or judgment would not cause the total amount of settlement and judgment payments made by the payer agency for that fiscal year to exceed 10 percent of the total amount of funds available for expenditure by that agency for the fiscal year; and
  • The payment of a settlement or judgment may be made only with a complete release from any and all related claims and causes against the state and, in the case of a judgment, the payment may be made only in full satisfaction of that judgment.
  • Any remaining unpaid balance may be eligible to be paid from the Comptroller’s Fiscal Programs appropriation for settlements and judgments, depending on the particular cause of action involved in the litigation and whether there are any remaining available funds for payment.

Appropriation Year Determination for Settlements and Judgments

The General Appropriations Act (GAA) Senate Bill 1, Article IX, Section 16.04 sets the requirements for Settlements and Judgments. Sec. 16.04 (b.1) requires the approval by the Governor and the Attorney General according to Subsection (d), which requires approval by the Attorney General for payments of all judgments and settlements prosecuted by or defended by the Attorney General.

An agency must charge a settlement or judgment to the appropriation year in which the claim was finalized and approved by both the Governor and the Attorney General. For this purpose, the Comptroller’s office uses the date of the transmittal letter received from the Attorney General as the final approval date.

In the event settlement or judgment requires legislative approval, the legislature will decide the appropriation year.

Payment of Settlements and Judgments by the Comptroller’s Fiscal Programs Appropriation

If the settlement or judgment exceeds the $250,000 and 10 percent limitations discussed above, the balance of any unpaid portion of the settlement or judgment may be paid from the Comptroller’s Fiscal Programs Article I-22, Strategy A.1.3, and riders 4-5 appropriation in the current GAA.

The types of litigation claims to be paid from the Comptroller’s Fiscal Programs Article I appropriation are limited to:

  • Settlements and judgments related to state liability for the conduct of public servants under Chapter 101 and Chapter 104, Civil Practice and Remedies Code, including indemnification for criminal prosecution under Section 104.0035, Civil Practice and Remedies Code, or
  • Federal Court settlements and judgments, or
  • Eligible medical malpractice claims in conformance with Chapter 59, Texas Education Code.

Note: Litigation claims paid from an agency’s budget under Article IX are not limited to the types of litigation claims listed in the Comptroller’s Fiscal Programs appropriation in Article I.

If the settlement or judgment exceeds the $250,000 and 10 percent limitations and is not the type of settlement or judgment that may be paid from the Comptroller’s Fiscal Programs appropriation, neither the Comptroller’s office nor the agency has the authority to make a payment (full or partial) and the claim will require legislative approval before payment can be made.

Note: “Judgment” means a judgment order rendered in a federal court or a court in this state for which an appeal or rehearing or application therefore is not pending and for which the time limitations for appeal or rehearing have expired.

Glenn Hegar
Texas Comptroller of Public Accounts
Questions? Contact statewide.accounting@cpa.texas.gov
Comptroller.Texas.Gov | FMX
FMX Sitemap | Contact FM
Accessibility Policy | Privacy and Security Policy