1-1     By:  McCall (Senate Sponsor - Duncan)                  H.B. No. 906

 1-2           (In the Senate - Received from the House March 26, 1997;

 1-3     April 2, 1997, read first time and referred to Committee on

 1-4     Jurisprudence; May 6, 1997, reported favorably by the following

 1-5     vote:  Yeas 6, Nays 0; May 6, 1997, sent to printer.)

 1-6                            A BILL TO BE ENTITLED

 1-7                                   AN ACT

 1-8     relating to approval by a lienholder required for payment of an

 1-9     insurance claim; providing a civil penalty.

1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-11           SECTION 1.  Title 132, Revised Statutes, is amended by adding

1-12     Article 9031 to read as follows:

1-13           Art. 9031.  LIENHOLDER APPROVAL OF INSURANCE CLAIM PAYMENT

1-14           Sec. 1.  If payment of an insurance claim relating to

1-15     personal property requires the endorsement of a check or draft by a

1-16     holder of a lien on the property or otherwise requires approval of

1-17     the lienholder, the lienholder, not later than the 14th day after

1-18     the date the lienholder receives a request for the endorsement or

1-19     other approval, shall:

1-20                 (1)  provide the endorsement or other approval; or

1-21                 (2)  provide the person who requested the endorsement

1-22     or other approval a written statement of the reason for denial of

1-23     the endorsement or other approval.

1-24           Sec. 2.  (a)  A lienholder who violates Section 1 of this

1-25     article is liable for a civil penalty not to exceed $500 for each

1-26     violation.

1-27           (b)  The attorney general may sue to collect a civil penalty

1-28     under this section.

1-29           SECTION 2.  This Act takes effect September 1, 1997.

1-30           SECTION 3.  The importance of this legislation and the

1-31     crowded condition of the calendars in both houses create an

1-32     emergency and an imperative public necessity that the

1-33     constitutional rule requiring bills to be read on three several

1-34     days in each house be suspended, and this rule is hereby suspended.

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