1-1                                   AN ACT

 1-2     relating to approval by a lienholder required for payment of an

 1-3     insurance claim; providing a civil penalty.

 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 1-5           SECTION 1.  Title 132, Revised Statutes, is amended by adding

 1-6     Article 9031 to read as follows:

 1-7           Art. 9031.  LIENHOLDER APPROVAL OF INSURANCE CLAIM PAYMENT

 1-8           Sec. 1.  If payment of an insurance claim relating to

 1-9     personal property requires the endorsement of a check or draft by a

1-10     holder of a lien on the property or otherwise requires approval of

1-11     the lienholder, the lienholder, not later than the 14th business

1-12     day after the date the lienholder receives a request for the

1-13     endorsement or other approval, shall:

1-14                 (1)  provide the endorsement or other approval; or

1-15                 (2)  provide the person who requested the endorsement

1-16     or other approval a written statement of the reason for denial of

1-17     the endorsement or other approval.

1-18           Sec. 2.  (a)  A lienholder who violates Section 1 of this

1-19     article is liable for a civil penalty not to exceed $500 for each

1-20     violation.

1-21           (b)  The attorney general may sue to collect a civil penalty

1-22     under this section.

1-23           SECTION 2.  This Act takes effect September 1, 1997.

1-24           SECTION 3.  The importance of this legislation and the

 2-1     crowded condition of the calendars in both houses create an

 2-2     emergency and an imperative public necessity that the

 2-3     constitutional rule requiring bills to be read on three several

 2-4     days in each house be suspended, and this rule is hereby suspended.

         _______________________________     _______________________________

             President of the Senate              Speaker of the House

               I certify that H.B. No. 906 was passed by the House on March

         25, 1997, by a non-record vote; and that the House concurred in

         Senate amendments to H.B. No. 906 on May 16, 1997, by a non-record

         vote.

                                             _______________________________

                                                 Chief Clerk of the House

               I certify that H.B. No. 906 was passed by the Senate, with

         amendments, on May 14, 1997, by a viva-voce vote.

                                             _______________________________

                                                 Secretary of the Senate

         APPROVED:  _____________________

                            Date

                    _____________________

                          Governor