By Lucio                                               S.B. No. 459
       74R3420 PB-F
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to dedicating interest earned on trust accounts of title
    1-3  insurance companies to the housing trust fund.
    1-4        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-5        SECTION 1.  Chapter 9, Insurance Code, is amended by adding
    1-6  Article 9.45A to read as follows:
    1-7        Art. 9.45A.  INTEREST EARNED ON TRUST ACCOUNTS DEDICATED TO
    1-8  HOUSING TRUST FUND.  (a)  Each title insurance company, title
    1-9  insurance agent, direct operation, or escrow officer controlling
   1-10  escrow funds shall maintain a pooled interest-bearing trust account
   1-11  in a financial institution for the deposit of escrow funds.
   1-12        (b)  Except as provided by Subsection (e) of this article,
   1-13  the deposit agreement for each trust account must provide that the
   1-14  financial institution:
   1-15              (1)  pay at least quarterly to the state treasurer
   1-16  interest earned on the account at a rate of interest not less than
   1-17  the financial institution's highest current passbook savings
   1-18  account rate, less reasonable service charges computed in
   1-19  accordance with the financial institution's standard accounting
   1-20  practice;
   1-21              (2)  send a quarterly statement to the state treasurer
   1-22  showing the name of the title insurance company, title insurance
   1-23  agent, direct operation, or escrow officer for whom the payment is
   1-24  made, the rate of interest applied, the amount of service charges
    2-1  deducted, and the account balance for the period for which the
    2-2  report is made; and
    2-3              (3)  is not allowed a right of set-off against money
    2-4  owed it by the title insurance company, title insurance agent,
    2-5  direct operation, or escrow officer.
    2-6        (c)  The state treasurer shall credit amounts collected under
    2-7  this article to the housing trust fund established under Subchapter
    2-8  I, Chapter 2306, Government Code.
    2-9        (d)  This article does not require a financial institution to
   2-10  perform administrative functions or assume responsibilities or
   2-11  obligations in connection with a trust account except as provided
   2-12  by this article.
   2-13        (e)  This article does not prevent a title insurance company,
   2-14  title insurance agent, direct operation, or escrow officer from
   2-15  depositing funds of a principal, client, or other person in a
   2-16  separate interest-bearing account established on behalf of and for
   2-17  the benefit of the principal, client, or person if a written
   2-18  agreement between the title insurance company, title insurance
   2-19  agent, direct operation, or escrow officer and the party depositing
   2-20  the funds expressly provides for a separate account not subject to
   2-21  this article and for interest earned on the account to be paid as
   2-22  provided by that agreement.
   2-23        SECTION 2.  This Act takes effect September 1, 1995.
   2-24        SECTION 3.  The importance of this legislation and the
   2-25  crowded condition of the calendars in both houses create an
   2-26  emergency and an imperative public necessity that the
   2-27  constitutional rule requiring bills to be read on three several
    3-1  days in each house be suspended, and this rule is hereby suspended.