H.B. No. 2005 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 1-13 whatever adjustments are necessary to correct the violation, 1-14 including the payment of interest on a refund, if any, at the 1-15 applicable rate 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" may not be construed, interpreted, or applied 1-22 in a manner that refers to the time or date when, through 1-23 reasonable diligence, an ordinarily prudent person could or should 1-24 have discovered or known as a matter of law or fact of the 2-1 violation in question, but the term shall be construed, 2-2 interpreted, and applied to refer to the time of the discovery of 2-3 the violation in fact. However, the actual discovery of a 2-4 violation in one transaction may constitute actual discovery of the 2-5 same violation in other transactions if the violation actually 2-6 discovered is of such a nature that it would necessarily be 2-7 repeated and would be clearly apparent in the other transactions 2-8 without the necessity of examining all the other transactions. For 2-9 purposes of this Section the giving of written notice shall be 2-10 accomplished by and on the delivery of the notice to the person to 2-11 whom the notice is directed or to the person's duly authorized 2-12 agent or attorney of record. The delivery shall be made in person 2-13 or by United States mail to the address shown on the most recent 2-14 documents in the transaction. Deposit of the notice as registered 2-15 or certified mail in a postage paid, properly addressed wrapper in 2-16 a post office or official depository under the care and custody of 2-17 the United States Postal Service constitutes prima facie evidence 2-18 of the delivery of the notice to the person. 2-19 (C) A person has no liability to an obligor for a 2-20 violation of this Subtitle if: 2-21 (i) before March 1, 1994, the person corrects 2-22 the violation as to the obligor by taking whatever actions and by 2-23 making whatever adjustments are necessary to correct the violation, 2-24 including the payment of interest on a refund, if any, at the 2-25 applicable rate provided for in the contract of the parties; and 2-26 (ii) the person gives written notice to the 2-27 obligor of the correction before the obligor has given written 3-1 notice of or has filed an action alleging the violation of this 3-2 Subtitle. 3-3 (5) The action of a person who corrects a violation of this 3-4 Subtitle as provided by Section (4) of this Article is effective as 3-5 to all persons in the same transaction, and those persons are 3-6 entitled to the same protection as that provided by Section (4) of 3-7 this Article to the person who makes the correction. 3-8 SECTION 2. The importance of this legislation and the 3-9 crowded condition of the calendars in both houses create an 3-10 emergency and an imperative public necessity that the 3-11 constitutional rule requiring bills to be read on three several 3-12 days in each house be suspended, and this rule is hereby suspended, 3-13 and that this Act take effect and be in force from and after its 3-14 passage, and it is so enacted.