1-1 By: Cuellar of Webb (Senate Sponsor - Whitmire) H.B. No. 354
1-2 (In the Senate - Received from the House April 26, 1993;
1-3 April 27, 1993, read first time and referred to Committee on
1-4 Criminal Justice; May 12, 1993, reported adversely, with favorable
1-5 Committee Substitute by the following vote: Yeas 4, Nays 0;
1-6 May 12, 1993, sent to printer.)
1-7 COMMITTEE VOTE
1-8 Yea Nay PNV Absent
1-9 Whitmire x
1-10 Brown x
1-11 Nelson x
1-12 Sibley x
1-13 Sims x
1-14 Turner x
1-15 West x
1-16 COMMITTEE SUBSTITUTE FOR H.B. No. 354 By: Whitmire
1-17 A BILL TO BE ENTITLED
1-18 AN ACT
1-19 relating to the reporting of certain financial transactions, to the
1-20 creation of offenses relating to certain financial transactions,
1-21 and to the creation of the attorney general law enforcement
1-22 account; making an appropriation.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. The legislature finds that the banking industry
1-25 and other financial institutions may be strong allies in the fight
1-26 against money laundering and that filing certain financial
1-27 transaction reports required by law does not in itself imply
1-28 knowledge of an illegal money laundering activity.
1-29 SECTION 2. Title 7, Penal Code, is amended by adding Chapter
1-30 34 to read as follows:
1-31 CHAPTER 34. MONEY LAUNDERING
1-32 Sec. 34.01. DEFINITIONS. In this chapter:
1-33 (1) "Criminal activity" means any offense, including
1-34 any preparatory offense, that is:
1-35 (A) classified as a felony under the laws of
1-36 this state or the United States; or
1-37 (B) punishable by confinement for more than one
1-38 year under the laws of another state.
1-39 (2) "Funds" includes:
1-40 (A) coin or paper money of the United States or
1-41 any other country that is designated as legal tender and that
1-42 circulates and is customarily used and accepted as a medium of
1-43 exchange in the country of issue;
1-44 (B) United States silver certificates, United
1-45 States Treasury notes, and Federal Reserve System notes; and
1-46 (C) official foreign bank notes that are
1-47 customarily used and accepted as a medium of exchange in a foreign
1-48 country and foreign bank drafts.
1-49 (3) "Peace officer" means a person who is elected,
1-50 appointed, or employed by a governmental entity and who is a peace
1-51 officer under Article 2.12, Code of Criminal Procedure, or other
1-52 law.
1-53 (4) "Proceeds" means funds acquired or derived
1-54 directly or indirectly from, produced through, or realized through
1-55 an act.
1-56 Sec. 34.02. MONEY LAUNDERING. (a) A person commits an
1-57 offense if the person knowingly:
1-58 (1) acquires or maintains an interest in, receives,
1-59 conceals, possesses, transfers, or transports the proceeds of
1-60 criminal activity;
1-61 (2) conducts, supervises, or facilitates a transaction
1-62 involving the proceeds of criminal activity; or
1-63 (3) invests, expends, or receives, or offers to
1-64 invest, expend, or receive, the proceeds of criminal activity or
1-65 funds that the person believes are the proceeds of criminal
1-66 activity.
1-67 (b) For purposes of Subsection (a)(3) of this section, a
1-68 person is presumed to believe that funds are the proceeds of
2-1 criminal activity if a peace officer or a person acting at the
2-2 direction of a peace officer represents to the person that the
2-3 funds are proceeds of criminal activity, regardless of whether the
2-4 peace officer or person acting at the peace officer's direction
2-5 discloses the person's status as a peace officer or that the person
2-6 is acting at the direction of a peace officer.
2-7 (c) It is a defense to prosecution under this section that
2-8 the person acted with intent to facilitate the lawful seizure,
2-9 forfeiture, or disposition of funds or other legitimate law
2-10 enforcement purpose pursuant to the laws of this state or the
2-11 United States.
2-12 (d) It is a defense to prosecution under this section that
2-13 the transaction was necessary to preserve a person's right to
2-14 representation as guaranteed by the Sixth Amendment of the United
2-15 States Constitution and by Article 1, Section 10, of the Texas
2-16 Constitution or that the funds were received as bona fide legal
2-17 fees by a licensed attorney and at the time of their receipt, the
2-18 attorney did not have actual knowledge that the funds were derived
2-19 from criminal activity.
2-20 (e) An offense under this section is:
2-21 (1) a felony of the third degree if the value of the
2-22 funds is $3,000 or more but less than $20,000;
2-23 (2) a felony of the second degree if the value of the
2-24 funds is $20,000 or more but less than $100,000; or
2-25 (3) a felony of the first degree if the value of the
2-26 funds is $100,000 or more.
2-27 Sec. 34.03. ASSISTANCE BY ATTORNEY GENERAL. The attorney
2-28 general, if requested to do so by a prosecuting attorney, may
2-29 assist in the prosecution of an offense under this chapter.
2-30 SECTION 3. Section 71.02, Penal Code, is amended to read as
2-31 follows:
2-32 Sec. 71.02. ENGAGING IN ORGANIZED CRIMINAL ACTIVITY. (a) A
2-33 person commits an offense if, with the intent to establish,
2-34 maintain, or participate in a combination or in the profits of a
2-35 combination or as a member of a criminal street gang, he commits or
2-36 conspires to commit one or more of the following:
2-37 (1) murder, capital murder, arson, aggravated robbery,
2-38 robbery, burglary, theft, aggravated kidnapping, kidnapping,
2-39 aggravated assault, aggravated sexual assault, sexual assault, or
2-40 forgery;
2-41 (2) any felony gambling offense;
2-42 (3) promotion of prostitution, aggravated promotion of
2-43 prostitution, or compelling prostitution;
2-44 (4) unlawful manufacture, transportation, repair, or
2-45 sale of firearms or prohibited weapons;
2-46 (5) unlawful manufacture, delivery, dispensation, or
2-47 distribution of a controlled substance or dangerous drug, or
2-48 unlawful possession of a controlled substance or dangerous drug
2-49 through forgery, fraud, misrepresentation, or deception;
2-50 (6) any unlawful wholesale promotion or possession of
2-51 any obscene material or obscene device with the intent to wholesale
2-52 promote the same;
2-53 (7) any unlawful employment, authorization, or
2-54 inducing of a child younger than 17 years of age in an obscene
2-55 sexual performance;
2-56 (8) any felony offense under Chapter 32, Penal Code;
2-57 <or>
2-58 (9) any offense under Chapter 36, Penal Code; or
2-59 (10) any offense under Chapter 34, Penal Code.
2-60 (b) Except as provided in Subsection (c) of this section, an
2-61 offense under this section is one category higher than the most
2-62 serious offense listed in Subdivisions (1) through (10) <(9)> of
2-63 Subsection (a) of this section that was committed, and if the most
2-64 serious offense is a Class A misdemeanor, the offense is a felony
2-65 of the third degree, except that if the most serious offense is a
2-66 felony of the first degree, the offense is a felony of the first
2-67 degree.
2-68 (c) Conspiring to commit an offense under this section is of
2-69 the same degree as the most serious offense listed in Subdivisions
2-70 (1) through (10) <(9)> of Subsection (a) of this section that the
3-1 person conspired to commit.
3-2 SECTION 4. Sections 71.05(a) and (c), Penal Code, are
3-3 amended to read as follows:
3-4 (a) It is an affirmative defense to prosecution under
3-5 Section 71.02 of this code that under circumstances manifesting a
3-6 voluntary and complete renunciation of his criminal objective the
3-7 actor withdrew from the combination before commission of an offense
3-8 listed in Subdivisions (1) through (7) or Subdivision (10) of
3-9 Subsection (a) of Section 71.02 of this code and took further
3-10 affirmative action that prevented the commission of the offense.
3-11 (c) Evidence that the defendant withdrew from the
3-12 combination before commission of an offense listed in Subdivisions
3-13 (1) through (7) or Subdivision (10) of Subsection (a) of Section
3-14 71.02 of this code and made substantial effort to prevent the
3-15 commission of an offense listed in Subdivisions (1) through (7) or
3-16 Subdivision (10) of Subsection (a) of Section 71.02 of this code
3-17 shall be admissible as mitigation at the hearing on punishment if
3-18 he has been found guilty under Section 71.02 of this code, and in
3-19 the event of a finding of renunciation under this subsection, the
3-20 punishment shall be one grade lower than that provided under
3-21 Section 71.02 of this code.
3-22 SECTION 5. Subdivision (2), Article 59.01, Code of Criminal
3-23 Procedure, is amended to read as follows:
3-24 (2) "Contraband" means property of any nature,
3-25 including real, personal, tangible, or intangible, that is:
3-26 (A) used in the commission of:
3-27 (i) any first or second degree felony
3-28 under the Penal Code;
3-29 (ii) any felony under Chapters 29, 30, 31,
3-30 or 32, Penal Code; or
3-31 (iii) any felony under The Securities Act
3-32 (Article 581-1 et seq., Vernon's Texas Civil Statutes);
3-33 (B) used or intended to be used in the
3-34 commission of:
3-35 (i) any felony under Chapter 481, Health
3-36 and Safety Code (Texas Controlled Substances Act);
3-37 (ii) any felony under Chapter 483, Health
3-38 and Safety Code; <or>
3-39 (iii) a felony under Article 350, Revised
3-40 Statutes;
3-41 (iv) any felony under Chapter 34, Penal
3-42 Code; or
3-43 (v) any felony under The Sale of Checks
3-44 Act (Article 489d, Vernon's Texas Civil Statutes);
3-45 (C) the proceeds gained from the commission of a
3-46 felony listed in Paragraph (A) or (B) of this subdivision; or
3-47 (D) acquired with proceeds gained from the
3-48 commission of a felony listed in Paragraph (A) or (B) of this
3-49 subdivision.
3-50 SECTION 6. Title 16, Revised Statutes, is amended by adding
3-51 Article 351 to read as follows:
3-52 Art. 351. FINANCIAL TRANSACTION REPORTING REQUIREMENTS
3-53 Sec. 1. CURRENCY AND FOREIGN TRANSACTIONS--CRIMINAL REFERRAL
3-54 FORM REPORTING REQUIREMENTS. (a) Except as provided by Subsection
3-55 (b) of this section, a financial institution in this state that is
3-56 required to file a report under the Currency and Foreign
3-57 Transactions Reporting Act (31 U.S.C. Section 5311 et seq.), 31
3-58 C.F.R. Part 103, or 12 C.F.R. Section 21.11, and their subsequent
3-59 amendments, shall file a duplicate copy of the report with the
3-60 attorney general.
3-61 (b) A financial institution that timely files a report
3-62 required by this section with the appropriate federal agency as
3-63 required by federal law is considered to be in compliance with this
3-64 section unless the attorney general:
3-65 (1) notifies the financial institution that the
3-66 required report is not one that is regularly and comprehensively
3-67 transmitted by the federal agency to the attorney general following
3-68 the attorney general's request to that agency;
3-69 (2) requests that the financial institution provide
3-70 the attorney general with a duplicate copy of the report; and
4-1 (3) reimburses the financial institution the actual
4-2 cost of duplicating and delivering the report or 25 cents per page,
4-3 whichever is less.
4-4 (c) In this section, "financial institution" has the meaning
4-5 assigned by 31 U.S.C. Section 5312 and its subsequent amendments.
4-6 Sec. 2. CASH RECEIPTS OF MORE THAN $10,000 REPORTING
4-7 REQUIREMENT. (a) Except as provided by Subsection (b) of this
4-8 section, a person engaged in a trade or business who, in the course
4-9 of the trade or business, receives more than $10,000 in one
4-10 transaction or in two or more related transactions and who is
4-11 required to file a return under Section 6050I, Internal Revenue
4-12 Code of 1986 (26 U.S.C. Section 6050I), or 26 C.F.R. Section
4-13 1.6050I, and their subsequent amendments, shall file a duplicate
4-14 copy of the return with the attorney general.
4-15 (b) A person who timely files a return required by this
4-16 section with the appropriate federal agency as required by federal
4-17 law is considered to be in compliance with this section unless the
4-18 attorney general:
4-19 (1) notifies the person that the required return is
4-20 not one that is regularly and comprehensively transmitted by the
4-21 federal agency to the attorney general; and
4-22 (2) requests that the person provide the attorney
4-23 general with a duplicate copy of the return.
4-24 Sec. 3. USE OF REPORTED INFORMATION. The attorney general
4-25 may report any possible violation indicated by analysis of a report
4-26 or return required by this article or information obtained under
4-27 this article to an appropriate law enforcement agency for use in
4-28 the proper discharge of the agency's official duties.
4-29 Sec. 4. FAILURE TO COMPLY WITH REPORTING REQUIREMENTS;
4-30 CRIMINAL OFFENSE; PENALTY. (a) A person commits an offense if the
4-31 person:
4-32 (1) is requested by the attorney general to submit
4-33 information required by Section 1 or 2 of this article to the
4-34 attorney general; and
4-35 (2) knowingly fails to provide the requested
4-36 information to the attorney general before the 30th day after the
4-37 date of the request.
4-38 (b) An offense under this section is a Class A misdemeanor.
4-39 Sec. 5. SUPPRESSION OF PHYSICAL EVIDENCE; CRIMINAL OFFENSE;
4-40 PENALTY. (a) A person commits an offense if the person knowingly
4-41 suppresses physical evidence connected with information contained
4-42 in a report or return required by this article through concealment,
4-43 alteration, or destruction.
4-44 (b) An offense under this section is a Class A misdemeanor.
4-45 Sec. 6. NOTIFICATION TO TARGET OF CRIMINAL INVESTIGATION;
4-46 CRIMINAL OFFENSE; PENALTY. (a) A person commits an offense if the
4-47 person:
4-48 (1) is required to submit a report or return under
4-49 this article; and
4-50 (2) knowingly notifies an individual who is the target
4-51 of criminal investigation involving an offense under Chapter 34,
4-52 Penal Code, that:
4-53 (A) the attorney general has requested the
4-54 person to provide information required by this article related to
4-55 the targeted individual; or
4-56 (B) the individual may be subject to impending
4-57 criminal prosecution.
4-58 (b) An offense under this section is a Class A misdemeanor.
4-59 SECTION 7. Section 402.005, Government Code, is amended to
4-60 read as follows:
4-61 Sec. 402.005. ACCEPTANCE OF GIFTS, GRANTS, AND FORFEITED
4-62 ASSETS; CREATION OF SPECIAL ACCOUNT <MONEY>. (a) The attorney
4-63 general may not accept or use money offered by an individual, firm,
4-64 partnership, corporation, or association for investigating or
4-65 prosecuting a matter.
4-66 (b) The attorney general law enforcement account is created
4-67 as a dedicated account in the general revenue fund in the state
4-68 treasury. The account shall consist of law enforcement-related
4-69 gifts and grants, and forfeited assets, and shall be administered
4-70 by the attorney general.
5-1 (c) The attorney general may accept gifts and grants on
5-2 behalf of the state for purposes related to law enforcement duties
5-3 performed by the attorney general, unless the acceptance is
5-4 prohibited under Subsection (a) or other law. Money received under
5-5 this subsection shall be deposited in the law enforcement account
5-6 established pursuant to Subsection (b) and may be appropriated only
5-7 for the purpose for which the money was given.
5-8 SECTION 8. All moneys deposited to the credit of the
5-9 attorney general law enforcement account, and all interest accruing
5-10 from the deposit of that money, are appropriated to the Office of
5-11 the Attorney General for the fiscal biennium ending August 31,
5-12 1995, for the purposes provided by Section 402.005, Government
5-13 Code, as amended by this Act.
5-14 SECTION 9. This Act takes effect September 1, 1993.
5-15 SECTION 10. The importance of this legislation and the
5-16 crowded condition of the calendars in both houses create an
5-17 emergency and an imperative public necessity that the
5-18 constitutional rule requiring bills to be read on three several
5-19 days in each house be suspended, and this rule is hereby suspended.
5-20 * * * * *
5-21 Austin,
5-22 Texas
5-23 May 12, 1993
5-24 Hon. Bob Bullock
5-25 President of the Senate
5-26 Sir:
5-27 We, your Committee on Criminal Justice to which was referred H.B.
5-28 No. 354, have had the same under consideration, and I am instructed
5-29 to report it back to the Senate with the recommendation that it do
5-30 not pass, but that the Committee Substitute adopted in lieu thereof
5-31 do pass and be printed.
5-32 Whitmire,
5-33 Chairman
5-34 * * * * *
5-35 WITNESSES
5-36 FOR AGAINST ON
5-37 ___________________________________________________________________
5-38 Name: Robert Koppe, Jr. x
5-39 Representing: Financial Crimes Enforcement
5-40 City: Arlington
5-41 -------------------------------------------------------------------
5-42 Name: Don Clemmer x
5-43 Representing: Office of the Atty General
5-44 City: Austin
5-45 -------------------------------------------------------------------
5-46 Name: Jose M. Garza x
5-47 Representing: Tx Dept of Public Safety
5-48 City: Austin
5-49 -------------------------------------------------------------------
5-50 Name: Brian Kelley Johnson x
5-51 Representing: Harris County DA's Office
5-52 City: Houston
5-53 -------------------------------------------------------------------
5-54 Name: Mike Scott x
5-55 Representing: TX DPS-Narcotics Division
5-56 City: Austin
5-57 -------------------------------------------------------------------