H.B. No. 354
1-1 AN ACT
1-2 relating to the reporting of certain financial transactions, to the
1-3 creation of offenses relating to certain financial transactions,
1-4 and to the creation of the attorney general law enforcement
1-5 account; making an appropriation.
1-6 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-7 SECTION 1. The legislature finds that the banking industry
1-8 and other financial institutions may be strong allies in the fight
1-9 against money laundering and that filing certain financial
1-10 transaction reports required by law does not in itself imply
1-11 knowledge of an illegal money laundering activity.
1-12 SECTION 2. Title 7, Penal Code, is amended by adding Chapter
1-13 34 to read as follows:
1-14 CHAPTER 34. MONEY LAUNDERING
1-15 Sec. 34.01. DEFINITIONS. In this chapter:
1-16 (1) "Criminal activity" means any offense, including
1-17 any preparatory offense, that is:
1-18 (A) classified as a felony under the laws of
1-19 this state or the United States; or
1-20 (B) punishable by confinement for more than one
1-21 year under the laws of another state.
1-22 (2) "Funds" includes:
1-23 (A) coin or paper money of the United States or
1-24 any other country that is designated as legal tender and that
2-1 circulates and is customarily used and accepted as a medium of
2-2 exchange in the country of issue;
2-3 (B) United States silver certificates, United
2-4 States Treasury notes, and Federal Reserve System notes; and
2-5 (C) official foreign bank notes that are
2-6 customarily used and accepted as a medium of exchange in a foreign
2-7 country and foreign bank drafts.
2-8 (3) "Peace officer" means a person who is elected,
2-9 appointed, or employed by a governmental entity and who is a peace
2-10 officer under Article 2.12, Code of Criminal Procedure, or other
2-11 law.
2-12 (4) "Proceeds" means funds acquired or derived
2-13 directly or indirectly from, produced through, or realized through
2-14 an act.
2-15 Sec. 34.02. MONEY LAUNDERING. (a) A person commits an
2-16 offense if the person knowingly:
2-17 (1) acquires or maintains an interest in, receives,
2-18 conceals, possesses, transfers, or transports the proceeds of
2-19 criminal activity;
2-20 (2) conducts, supervises, or facilitates a transaction
2-21 involving the proceeds of criminal activity; or
2-22 (3) invests, expends, or receives, or offers to
2-23 invest, expend, or receive, the proceeds of criminal activity or
2-24 funds that the person believes are the proceeds of criminal
2-25 activity.
2-26 (b) For purposes of Subsection (a)(3) of this section, a
2-27 person is presumed to believe that funds are the proceeds of
3-1 criminal activity if a peace officer or a person acting at the
3-2 direction of a peace officer represents to the person that the
3-3 funds are proceeds of criminal activity, regardless of whether the
3-4 peace officer or person acting at the peace officer's direction
3-5 discloses the person's status as a peace officer or that the person
3-6 is acting at the direction of a peace officer.
3-7 (c) It is a defense to prosecution under this section that
3-8 the person acted with intent to facilitate the lawful seizure,
3-9 forfeiture, or disposition of funds or other legitimate law
3-10 enforcement purpose pursuant to the laws of this state or the
3-11 United States.
3-12 (d) It is a defense to prosecution under this section that
3-13 the transaction was necessary to preserve a person's right to
3-14 representation as guaranteed by the Sixth Amendment of the United
3-15 States Constitution and by Article 1, Section 10, of the Texas
3-16 Constitution or that the funds were received as bona fide legal
3-17 fees by a licensed attorney and at the time of their receipt, the
3-18 attorney did not have actual knowledge that the funds were derived
3-19 from criminal activity.
3-20 (e) An offense under this section is:
3-21 (1) a felony of the third degree if the value of the
3-22 funds is $3,000 or more but less than $20,000;
3-23 (2) a felony of the second degree if the value of the
3-24 funds is $20,000 or more but less than $100,000; or
3-25 (3) a felony of the first degree if the value of the
3-26 funds is $100,000 or more.
3-27 Sec. 34.03. ASSISTANCE BY ATTORNEY GENERAL. The attorney
4-1 general, if requested to do so by a prosecuting attorney, may
4-2 assist in the prosecution of an offense under this chapter.
4-3 SECTION 3. Section 71.02, Penal Code, is amended to read as
4-4 follows:
4-5 Sec. 71.02. ENGAGING IN ORGANIZED CRIMINAL ACTIVITY. (a) A
4-6 person commits an offense if, with the intent to establish,
4-7 maintain, or participate in a combination or in the profits of a
4-8 combination or as a member of a criminal street gang, he commits or
4-9 conspires to commit one or more of the following:
4-10 (1) murder, capital murder, arson, aggravated robbery,
4-11 robbery, burglary, theft, aggravated kidnapping, kidnapping,
4-12 aggravated assault, aggravated sexual assault, sexual assault, or
4-13 forgery;
4-14 (2) any felony gambling offense;
4-15 (3) promotion of prostitution, aggravated promotion of
4-16 prostitution, or compelling prostitution;
4-17 (4) unlawful manufacture, transportation, repair, or
4-18 sale of firearms or prohibited weapons;
4-19 (5) unlawful manufacture, delivery, dispensation, or
4-20 distribution of a controlled substance or dangerous drug, or
4-21 unlawful possession of a controlled substance or dangerous drug
4-22 through forgery, fraud, misrepresentation, or deception;
4-23 (6) any unlawful wholesale promotion or possession of
4-24 any obscene material or obscene device with the intent to wholesale
4-25 promote the same;
4-26 (7) any unlawful employment, authorization, or
4-27 inducing of a child younger than 17 years of age in an obscene
5-1 sexual performance;
5-2 (8) any felony offense under Chapter 32, Penal Code;
5-3 <or>
5-4 (9) any offense under Chapter 36, Penal Code; or
5-5 (10) any offense under Chapter 34, Penal Code.
5-6 (b) Except as provided in Subsection (c) of this section, an
5-7 offense under this section is one category higher than the most
5-8 serious offense listed in Subdivisions (1) through (10) <(9)> of
5-9 Subsection (a) of this section that was committed, and if the most
5-10 serious offense is a Class A misdemeanor, the offense is a felony
5-11 of the third degree, except that if the most serious offense is a
5-12 felony of the first degree, the offense is a felony of the first
5-13 degree.
5-14 (c) Conspiring to commit an offense under this section is of
5-15 the same degree as the most serious offense listed in Subdivisions
5-16 (1) through (10) <(9)> of Subsection (a) of this section that the
5-17 person conspired to commit.
5-18 SECTION 4. Sections 71.05(a) and (c), Penal Code, are
5-19 amended to read as follows:
5-20 (a) It is an affirmative defense to prosecution under
5-21 Section 71.02 of this code that under circumstances manifesting a
5-22 voluntary and complete renunciation of his criminal objective the
5-23 actor withdrew from the combination before commission of an offense
5-24 listed in Subdivisions (1) through (7) or Subdivision (10) of
5-25 Subsection (a) of Section 71.02 of this code and took further
5-26 affirmative action that prevented the commission of the offense.
5-27 (c) Evidence that the defendant withdrew from the
6-1 combination before commission of an offense listed in Subdivisions
6-2 (1) through (7) or Subdivision (10) of Subsection (a) of Section
6-3 71.02 of this code and made substantial effort to prevent the
6-4 commission of an offense listed in Subdivisions (1) through (7) or
6-5 Subdivision (10) of Subsection (a) of Section 71.02 of this code
6-6 shall be admissible as mitigation at the hearing on punishment if
6-7 he has been found guilty under Section 71.02 of this code, and in
6-8 the event of a finding of renunciation under this subsection, the
6-9 punishment shall be one grade lower than that provided under
6-10 Section 71.02 of this code.
6-11 SECTION 5. Subdivision (2), Article 59.01, Code of Criminal
6-12 Procedure, is amended to read as follows:
6-13 (2) "Contraband" means property of any nature,
6-14 including real, personal, tangible, or intangible, that is:
6-15 (A) used in the commission of:
6-16 (i) any first or second degree felony
6-17 under the Penal Code;
6-18 (ii) any felony under Chapters 29, 30, 31,
6-19 or 32, Penal Code; or
6-20 (iii) any felony under The Securities Act
6-21 (Article 581-1 et seq., Vernon's Texas Civil Statutes);
6-22 (B) used or intended to be used in the
6-23 commission of:
6-24 (i) any felony under Chapter 481, Health
6-25 and Safety Code (Texas Controlled Substances Act);
6-26 (ii) any felony under Chapter 483, Health
6-27 and Safety Code; <or>
7-1 (iii) a felony under Article 350, Revised
7-2 Statutes;
7-3 (iv) any felony under Chapter 34, Penal
7-4 Code; or
7-5 (v) any felony under The Sale of Checks
7-6 Act (Article 489d, Vernon's Texas Civil Statutes);
7-7 (C) the proceeds gained from the commission of a
7-8 felony listed in Paragraph (A) or (B) of this subdivision; or
7-9 (D) acquired with proceeds gained from the
7-10 commission of a felony listed in Paragraph (A) or (B) of this
7-11 subdivision.
7-12 SECTION 6. Title 16, Revised Statutes, is amended by adding
7-13 Article 351 to read as follows:
7-14 Art. 351. FINANCIAL TRANSACTION REPORTING REQUIREMENTS
7-15 Sec. 1. CURRENCY AND FOREIGN TRANSACTIONS--CRIMINAL REFERRAL
7-16 FORM REPORTING REQUIREMENTS. (a) Except as provided by Subsection
7-17 (b) of this section, a financial institution in this state that is
7-18 required to file a report under the Currency and Foreign
7-19 Transactions Reporting Act (31 U.S.C. Section 5311 et seq.), 31
7-20 C.F.R. Part 103, or 12 C.F.R. Section 21.11, and their subsequent
7-21 amendments, shall file a duplicate copy of the report with the
7-22 attorney general.
7-23 (b) A financial institution that timely files a report
7-24 required by this section with the appropriate federal agency as
7-25 required by federal law is considered to be in compliance with this
7-26 section unless the attorney general:
7-27 (1) notifies the financial institution that the
8-1 required report is not one that is regularly and comprehensively
8-2 transmitted by the federal agency to the attorney general following
8-3 the attorney general's request to that agency;
8-4 (2) requests that the financial institution provide
8-5 the attorney general with a duplicate copy of the report; and
8-6 (3) reimburses the financial institution the actual
8-7 cost of duplicating and delivering the report or 25 cents per page,
8-8 whichever is less.
8-9 (c) In this section, "financial institution" has the meaning
8-10 assigned by 31 U.S.C. Section 5312 and its subsequent amendments.
8-11 Sec. 2. CASH RECEIPTS OF MORE THAN $10,000 REPORTING
8-12 REQUIREMENT. (a) Except as provided by Subsection (b) of this
8-13 section, a person engaged in a trade or business who, in the course
8-14 of the trade or business, receives more than $10,000 in one
8-15 transaction or in two or more related transactions and who is
8-16 required to file a return under Section 6050I, Internal Revenue
8-17 Code of 1986 (26 U.S.C. Section 6050I), or 26 C.F.R. Section
8-18 1.6050I, and their subsequent amendments, shall file a duplicate
8-19 copy of the return with the attorney general.
8-20 (b) A person who timely files a return required by this
8-21 section with the appropriate federal agency as required by federal
8-22 law is considered to be in compliance with this section unless the
8-23 attorney general:
8-24 (1) notifies the person that the required return is
8-25 not one that is regularly and comprehensively transmitted by the
8-26 federal agency to the attorney general; and
8-27 (2) requests that the person provide the attorney
9-1 general with a duplicate copy of the return.
9-2 Sec. 3. USE OF REPORTED INFORMATION. The attorney general
9-3 may report any possible violation indicated by analysis of a report
9-4 or return required by this article or information obtained under
9-5 this article to an appropriate law enforcement agency for use in
9-6 the proper discharge of the agency's official duties.
9-7 Sec. 4. FAILURE TO COMPLY WITH REPORTING REQUIREMENTS;
9-8 CRIMINAL OFFENSE; PENALTY. (a) A person commits an offense if the
9-9 person:
9-10 (1) is requested by the attorney general to submit
9-11 information required by Section 1 or 2 of this article to the
9-12 attorney general; and
9-13 (2) knowingly fails to provide the requested
9-14 information to the attorney general before the 30th day after the
9-15 date of the request.
9-16 (b) An offense under this section is a Class A misdemeanor.
9-17 Sec. 5. SUPPRESSION OF PHYSICAL EVIDENCE; CRIMINAL OFFENSE;
9-18 PENALTY. (a) A person commits an offense if the person knowingly
9-19 suppresses physical evidence connected with information contained
9-20 in a report or return required by this article through concealment,
9-21 alteration, or destruction.
9-22 (b) An offense under this section is a Class A misdemeanor.
9-23 Sec. 6. NOTIFICATION TO TARGET OF CRIMINAL INVESTIGATION;
9-24 CRIMINAL OFFENSE; PENALTY. (a) A person commits an offense if the
9-25 person:
9-26 (1) is required to submit a report or return under
9-27 this article; and
10-1 (2) knowingly notifies an individual who is the target
10-2 of criminal investigation involving an offense under Chapter 34,
10-3 Penal Code, that:
10-4 (A) the attorney general has requested the
10-5 person to provide information required by this article related to
10-6 the targeted individual; or
10-7 (B) the individual may be subject to impending
10-8 criminal prosecution.
10-9 (b) An offense under this section is a Class A misdemeanor.
10-10 SECTION 7. Section 402.005, Government Code, is amended to
10-11 read as follows:
10-12 Sec. 402.005. ACCEPTANCE OF GIFTS, GRANTS, AND FORFEITED
10-13 ASSETS; CREATION OF SPECIAL ACCOUNT <MONEY>. (a) The attorney
10-14 general may not accept or use money offered by an individual, firm,
10-15 partnership, corporation, or association for investigating or
10-16 prosecuting a matter.
10-17 (b) The attorney general law enforcement account is created
10-18 as a dedicated account in the general revenue fund in the state
10-19 treasury. The account shall consist of law enforcement-related
10-20 gifts and grants, and forfeited assets, and shall be administered
10-21 by the attorney general.
10-22 (c) The attorney general may accept gifts and grants on
10-23 behalf of the state for purposes related to law enforcement duties
10-24 performed by the attorney general, unless the acceptance is
10-25 prohibited under Subsection (a) or other law. Money received under
10-26 this subsection shall be deposited in the law enforcement account
10-27 established pursuant to Subsection (b) and may be appropriated only
11-1 for the purpose for which the money was given.
11-2 SECTION 8. All moneys deposited to the credit of the
11-3 attorney general law enforcement account, and all interest accruing
11-4 from the deposit of that money, are appropriated to the Office of
11-5 the Attorney General for the fiscal biennium ending August 31,
11-6 1995, for the purposes provided by Section 402.005, Government
11-7 Code, as amended by this Act.
11-8 SECTION 9. This Act takes effect September 1, 1993.
11-9 SECTION 10. The importance of this legislation and the
11-10 crowded condition of the calendars in both houses create an
11-11 emergency and an imperative public necessity that the
11-12 constitutional rule requiring bills to be read on three several
11-13 days in each house be suspended, and this rule is hereby suspended.
11-14 I do hereby certify that the amounts appropriated in the
11-15 herein H.B. No. 354, Regular Session of the 73rd Legislature, are
11-16 within amounts estimated to be available in the affected fund.
11-17 Certified_________________________
11-18 __________________________________
11-19 Comptroller of Public Accounts
11-20 APPROVED: _____________________
11-21 Date
11-22 _____________________
11-23 Governor