73R1996 LJD-F 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 performing the required duty or act or by 1-13 refunding any amount in excess of that authorized by law; and 1-14 (ii) the person gives written notice to the 1-15 obligor of the violation before the obligor has given written 1-16 notice of or has filed an action alleging the violation of this 1-17 Subtitle. 1-18 (B) For the purposes of this section, the term 1-19 "actually discovered" may not be construed, interpreted, or applied 1-20 in a manner that refers to the time or date when, through 1-21 reasonable diligence, an ordinarily prudent person could or should 1-22 have discovered or known as a matter of law or fact of the 1-23 violation in question, but the term shall be construed, 1-24 interpreted, and applied to refer to the time of the discovery of 2-1 the violation in fact. However, the actual discovery of a 2-2 violation in one transaction may constitute actual discovery of the 2-3 same violation in other transactions if the violation actually 2-4 discovered is of such a nature that it would necessarily be 2-5 repeated and would be clearly apparent in the other transactions 2-6 without the necessity of examining all the other transactions. For 2-7 purposes of this Section the giving of written notice shall be 2-8 accomplished by and on the delivery of the notice to the person to 2-9 whom the notice is directed or to the person's duly authorized 2-10 agent or attorney of record. The delivery shall be made in person 2-11 or by United States mail to the address shown on the most recent 2-12 documents in the transaction. Deposit of the notice as registered 2-13 or certified mail in a postage paid, properly addressed wrapper in 2-14 a post office or official depository under the care and custody of 2-15 the United States Postal Service constitutes prima facie evidence 2-16 of the delivery of the notice to the person. 2-17 (C) A person has no liability to an obligor for a 2-18 violation of this Subtitle if: 2-19 (i) before March 1, 1994, the person corrects 2-20 the violation as to the obligor by performing the required duty or 2-21 act or by refunding any amount in excess of that authorized by law; 2-22 and 2-23 (ii) the person gives written notice to the 2-24 obligor of the correction before the obligor has given written 2-25 notice of or has filed an action alleging the violation of this 2-26 Subtitle. 2-27 (5) The action of a person who corrects a violation of this 3-1 Subtitle as provided by Section (4) of this Article is effective as 3-2 to all persons in the same transaction, and those persons are 3-3 entitled to the same protection as that provided by Section (4) of 3-4 this Article to the person who makes the correction. 3-5 SECTION 2. The importance of this legislation and the 3-6 crowded condition of the calendars in both houses create an 3-7 emergency and an imperative public necessity that the 3-8 constitutional rule requiring bills to be read on three several 3-9 days in each house be suspended, and this rule is hereby suspended, 3-10 and that this Act take effect and be in force from and after its 3-11 passage, and it is so enacted. 3-12 COMMITTEE AMENDMENT NO. 1 3-13 Amend H.B. 2005 by deleting line 12 after "obligor by" and 3-14 line 13 on p. 1, and by substituting the following: 3-15 taking whatever actions and by making whatever adjustments 3-16 are necessary to correct the violation, including the payment of 3-17 interest on a refund, if any, at the applicable rate provided for 3-18 in the contract of the parties; and ; 3-19 and by deleting line 20 after "obligor by" and line 21 on p. 3-20 2, and by substituting the following: 3-21 taking whatever actions and by making whatever adjustments 3-22 are necessary to correct the violation, including the payment of 3-23 interest on a refund, if any, at the applicable rate provided for 3-24 in the contract of the parties; 3-25 Marchant