By Smithee H.B. No. 2005 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to avoidance of liability by correction of certain 1-3 violations of state credit law. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Article 1.06, Title 79, Revised Statutes (Article 1-6 5069-1.06, Vernon's Texas Civil Statutes), is amended by adding 1-7 Sections (4) and (5) to read as follows: 1-8 (4)(A) A person has no liability to an obligor for a 1-9 violation of this Subtitle if: 1-10 (i) within 60 days after the date the person 1-11 actually discovered the violation the person corrects the violation 1-12 as to the obligor by taking whatever actions and by making whatever 1-13 adjustments are necessary to correct the violation, including the 1-14 payment of interest on a refund, if any, at the applicable rate 1-15 provided for in the contract of the parties; and 1-16 (ii) the person gives written notice to the 1-17 obligor of the violation before the obligor has given written 1-18 notice of or has filed an action alleging the violation of this 1-19 Subtitle. 1-20 (B) For the purposes of this Section, the term 1-21 "actually discovered" means either the time when, through 1-22 reasonable diligence, an ordinarily prudent person could or should 1-23 have discovered or known as a matter of law or fact of the 1-24 violation in question or the actual time of the discovery of the 2-1 violation in fact, whichever is earlier. For purposes of this 2-2 Section the giving of written notice shall be accomplished by and 2-3 on the delivery of the notice to the person to whom the notice is 2-4 directed or to the person's duly authorized agent or attorney of 2-5 record. The delivery shall be made in person or by United States 2-6 mail to the address shown on the most recent documents in the 2-7 transaction. Deposit of the notice as registered or certified mail 2-8 in a postage paid, properly addressed wrapper in a post office or 2-9 official depository under the care and custody of the United States 2-10 Postal Service constitutes prima facie evidence of the delivery of 2-11 the notice to the person. 2-12 (C) A person has no liability to an obligor for a 2-13 violation of this Subtitle if: 2-14 (i) before March 1, 1994, the person corrects 2-15 the violation as to the obligor by taking whatever actions and by 2-16 making whatever adjustments are necessary to correct the violation, 2-17 including the payment of interest on a refund, if any, at the 2-18 applicable rate provided for in the contract of the parties; and 2-19 (ii) the person gives written notice to the 2-20 obligor of the correction before the obligor has given written 2-21 notice of or has filed an action alleging the violation of this 2-22 Subtitle. 2-23 (5) The action of a person who corrects a violation of this 2-24 Subtitle as provided by Section (4) of this Article is effective as 2-25 to all persons in the same transaction, and those persons are 2-26 entitled to the same protection as that provided by Section (4) of 2-27 this Article to the person who makes the correction. 3-1 SECTION 2. The importance of this legislation and the 3-2 crowded condition of the calendars in both houses create an 3-3 emergency and an imperative public necessity that the 3-4 constitutional rule requiring bills to be read on three several 3-5 days in each house be suspended, and this rule is hereby suspended, 3-6 and that this Act take effect and be in force from and after its 3-7 passage, and it is so enacted.