H.B. No. 4317 introduces new regulations regarding severance pay for employees and independent contractors of political subdivisions in Texas. The bill adds Section 180.011 to the Local Government Code, which defines "misconduct" and "severance pay." It stipulates that any employment agreement or contract that includes severance pay must limit the severance amount to a maximum of 12 weeks of compensation at the time of termination, excluding paid time off or accrued vacation leave. Additionally, severance pay cannot be provided if the employee or contractor is terminated for misconduct.

The bill also mandates that political subdivisions must post each severance agreement prominently on their websites. Furthermore, it establishes that courts cannot issue a writ of execution or mandamus related to judgments in actions against political subdivisions if those judgments do not comply with the new severance pay regulations. This section applies only to agreements or actions initiated on or after the effective date of the Act, which is set for September 1, 2025.

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