1-1 By: Parker S.B. No. 605 1-2 (In the Senate - Filed March 3, 1993; March 4, 1993, read 1-3 first time and referred to Committee on Economic Development; 1-4 March 30, 1993, reported favorably by the following vote: Yeas 11, 1-5 Nays 0; March 30, 1993, sent to printer.) 1-6 COMMITTEE VOTE 1-7 Yea Nay PNV Absent 1-8 Parker x 1-9 Lucio x 1-10 Ellis x 1-11 Haley x 1-12 Harris of Dallas x 1-13 Harris of Tarrant x 1-14 Leedom x 1-15 Madla x 1-16 Rosson x 1-17 Shapiro x 1-18 Wentworth x 1-19 A BILL TO BE ENTITLED 1-20 AN ACT 1-21 relating to avoidance of liability by correction of certain 1-22 violations of state credit law. 1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-24 SECTION 1. Article 1.06, Title 79, Revised Statutes (Article 1-25 5069-1.06, Vernon's Texas Civil Statutes), is amended by adding 1-26 Sections (4) and (5) to read as follows: 1-27 (4)(A) A person has no liability to an obligor for a 1-28 violation of this Subtitle if: 1-29 (i) within 60 days after the date the person 1-30 actually discovered the violation the person corrects the violation 1-31 as to the obligor by performing the required duty or act or by 1-32 refunding any amount in excess of that authorized by law; and 1-33 (ii) the person gives written notice to the 1-34 obligor of the violation before the obligor has given written 1-35 notice of or has filed an action alleging the violation of this 1-36 Subtitle. 1-37 (B) For the purposes of this section, the term 1-38 "actually discovered" may not be construed, interpreted, or applied 1-39 in a manner that refers to the time or date when, through 1-40 reasonable diligence, an ordinarily prudent person could or should 1-41 have discovered or known as a matter of law or fact of the 1-42 violation in question, but the term shall be construed, 1-43 interpreted, and applied to refer to the time of the discovery of 1-44 the violation in fact. However, the actual discovery of a 1-45 violation in one transaction may constitute actual discovery of the 1-46 same violation in other transactions if the violation actually 1-47 discovered is of such a nature that it would necessarily be 1-48 repeated and would be clearly apparent in the other transactions 1-49 without the necessity of examining all the other transactions. For 1-50 purposes of this Section the giving of written notice shall be 1-51 accomplished by and on the delivery of the notice to the person to 1-52 whom the notice is directed or to the person's duly authorized 1-53 agent or attorney of record. The delivery shall be made in person 1-54 or by United States mail to the address shown on the most recent 1-55 documents in the transaction. Deposit of the notice as registered 1-56 or certified mail in a postage paid, properly addressed wrapper in 1-57 a post office or official depository under the care and custody of 1-58 the United States Postal Service constitutes prima facie evidence 1-59 of the delivery of the notice to the person. 1-60 (C) A person has no liability to an obligor for a 1-61 violation of this Subtitle if: 1-62 (i) before March 1, 1994, the person corrects 1-63 the violation as to the obligor by performing the required duty or 1-64 act or by refunding any amount in excess of that authorized by law; 1-65 and 1-66 (ii) the person gives written notice to the 1-67 obligor of the correction before the obligor has given written 1-68 notice of or has filed an action alleging the violation of this 2-1 Subtitle. 2-2 (5) The action of a person who corrects a violation of this 2-3 Subtitle as provided by Section (4) of this Article is effective as 2-4 to all persons in the same transaction, and those persons are 2-5 entitled to the same protection as that provided by Section (4) of 2-6 this Article to the person who makes the correction. 2-7 SECTION 2. The importance of this legislation and the 2-8 crowded condition of the calendars in both houses create an 2-9 emergency and an imperative public necessity that the 2-10 constitutional rule requiring bills to be read on three several 2-11 days in each house be suspended, and this rule is hereby suspended, 2-12 and that this Act take effect and be in force from and after its 2-13 passage, and it is so enacted. 2-14 * * * * * 2-15 Austin, 2-16 Texas 2-17 March 30, 1993 2-18 Hon. Bob Bullock 2-19 President of the Senate 2-20 Sir: 2-21 We, your Committee on Economic Development to which was referred 2-22 S.B. No. 605, have had the same under consideration, and I am 2-23 instructed to report it back to the Senate with the recommendation 2-24 that it do pass and be printed. 2-25 Parker, 2-26 Chairman 2-27 * * * * * 2-28 WITNESSES 2-29 FOR AGAINST ON 2-30 ___________________________________________________________________ 2-31 Name: William G. McNinch x 2-32 Representing: Texas Bankers Association 2-33 City: Beaumont 2-34 ------------------------------------------------------------------- 2-35 Name: Pamela Brown x 2-36 Representing: Consumers Union 2-37 City: Austin 2-38 ------------------------------------------------------------------- 2-39 Name: Rob Norcross x 2-40 Representing: Texas Bankers Association 2-41 City: Austin 2-42 ------------------------------------------------------------------- 2-43 Name: Don Adams x 2-44 Representing: Ind. Bankers Assn. of Texas 2-45 City: Austin 2-46 -------------------------------------------------------------------