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.