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A BILL TO BE ENTITLED
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AN ACT
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relating to federal income tax liability for certain damages |
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awarded in certain civil actions. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Chapter 41, Civil Practice and Remedies Code, is |
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amended by adding Section 41.015 to read as follows: |
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Sec. 41.015. FEDERAL INCOME TAX LIABILITY FOR CERTAIN |
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DAMAGES. If compensatory damages awarded to a claimant for loss of |
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earnings, loss of earning capacity, loss of contributions of a |
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pecuniary value, or loss of inheritance are reduced for federal |
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income tax payments or liability as described by Section 18.091(a) |
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and are awarded based on a finding or instruction that a recovery |
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for those damages is not subject to federal income tax, and if the |
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claimant is later determined to be liable for federal income tax on |
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that recovery, a defendant found liable for those damages must pay |
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the claimant an amount sufficient to satisfy the claimant's federal |
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income tax liability for that recovery. |
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SECTION 2. The change in law made by this Act applies only |
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to an action that commences on or after the effective date of this |
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Act. An action that commences before the effective date of this Act |
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is governed by the law applicable to the action immediately before |
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the effective date of this Act, and that law is continued in effect |
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for that purpose. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2015. |