ACTIONS BROUGHT FOR DEFECTIVE DESIGN, CONSTRUCTION, RENOVATION, OR IMPROVEMENT OF SCHOOL DISTRICT FACILITY.

(a) In this section:

(1) "Instructional facility" has the meaning assigned by Section 46.001.

(2) "Net proceeds" means the difference between the amount recovered by or on behalf of a school district in an action, by settlement or otherwise, and the legal fees and litigation costs incurred by the district in prosecuting the action.

(3) "State's share" means an amount equal to the district's net proceeds from the recovery multiplied by a percentage determined by dividing the amount of state assistance under Subchapter A, Chapter 46, used to pay the principal of and interest on bonds issued in connection with the instructional facility that is the subject of the action by the total amount of principal and interest paid on the bonds as of the date of the judgment or settlement.

(b) A school district that brings an action for recovery of damages for the defective design, construction, renovation, or improvement of a district facility financed by bonds shall provide the commissioner with written notice of the action by registered or certified mail, return receipt requested, not later than the 30th day after the date the action is filed. If the school district fails to comply with this subsection, the court or an arbitrator or other adjudicating authority shall dismiss the action without prejudice. The dismissal of an action under this subsection extends the statute of limitations on the action for a period of 90 days.

(b-1) The notice required under Subsection (b) must include:

(1) a copy of the petition; and

(2) an itemized list of the defects in the design, construction, renovation, or improvement for which the district is seeking damages under the action.

(c) In an action brought under Subsection (b) involving an instructional facility financed by bonds for which the school district receives state assistance under Subchapter A, Chapter 46, the commissioner may join in the action on behalf of the state to protect the state's share in the action.

(d) A school district that brings an action under Subsection (b) shall use the net proceeds from the action for:

(1) the repair of the defective design, construction, renovation, or improvement of the facility on which the action is brought, including the repair of any ancillary damage to furniture and fixtures;

(2) the replacement of the facility on which the action is brought;

(3) the reimbursement of the district for a repair or replacement made under Subdivision (1) or (2); or

(4) any other purpose with written approval from the commissioner.

(d-1) Section 46.008 applies to the repair.

(e) A school district shall provide to the commissioner an itemized accounting of any repairs made under Subsection (d).

(f) The state's share resulting from an action brought under Subsection (b) involving an instructional facility financed by bonds for which the school district receives state assistance under Subchapter A, Chapter 46, is state property. The district shall send to the comptroller any portion of the state's share not used by the district to repair the defective design, construction, renovation, or improvement of the instructional facility on which the action is brought or to replace the facility. Section 48.272 applies to the state's share under this subsection.