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 -------------------------------------------------------------------