By Place H.B. No. 3412
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of corporate sureties that write bail
1-3 bonds.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 2, Chapter 550, Acts of the 63rd
1-6 Legislature, Regular Session, 1973 (Article 2372p-3, Vernon's Texas
1-7 Civil Statutes), is amended by amending Subdivisions (1) and (2)
1-8 and adding Subdivision (7) to read as follows:
1-9 (1) "Person" means an individual [or corporation].
1-10 (2) "Bondsman" means any person or corporation who for
1-11 hire or for any compensation deposits any cash or bonds or other
1-12 securities, or executes as surety or cosurety any bond for other
1-13 persons.
1-14 (7) "Corporation" means a corporation holding a
1-15 certificate of authority pursuant to Article 8.20, Insurance Code,
1-16 that is authorized to act as a surety.
1-17 SECTION 2. Sections 3(a) and (d), Chapter 550, Acts of the
1-18 63rd Legislature, Regular Session, 1973 (Article 2372p-3, Vernon's
1-19 Texas Civil Statutes), are amended to read as follows:
1-20 (a) In a county that has a board, no person may act as a
1-21 bondsman except:
1-22 (1) persons licensed under this Act, [and]
1-23 (2) persons licensed to practice law in this state who
1-24 meet the requirements of Section 3(e) [set forth in Subsection (e)
2-1 of Section 3] of this Act, and
2-2 (3) persons who are licensed agents of a corporation
2-3 licensed under this Act.
2-4 (d) No corporation is eligible to be licensed unless:
2-5 (1) it is chartered or admitted to do business in this
2-6 state; [and]
2-7 (2) it is qualified to write fidelity, guaranty and
2-8 surety bonds under the [Texas] Insurance Code; and
2-9 (3) the corporation holds a certificate of authority
2-10 from the Texas Department of Insurance [, as amended].
2-11 SECTION 3. Section 6(a), Chapter 550, Acts of the 63rd
2-12 Legislature, Regular Session, 1973 (Article 2372p-3, Vernon's Texas
2-13 Civil Statutes), is amended to read as follows:
2-14 (a) Any person or corporation desiring to act as a bondsman
2-15 in any court of the county shall file with the County Bail Bond
2-16 Board a sworn application for a license. The application shall be
2-17 in such form and shall contain such information as the board may
2-18 prescribe including the following:
2-19 (1) The name, age, and address of the applicant, and
2-20 if the applicant is a surety corporation, and whether chartered or
2-21 admitted to do business in this state and qualified to write
2-22 fidelity, guaranty, and surety bonds under the [Texas] Insurance
2-23 Code[, as amended];
2-24 (2) The name under which the business shall be
2-25 conducted;
2-26 (3) The name of the place or places, including street
2-27 address and city, wherein the business is to be conducted;
3-1 (4) A statement listing any nonexempt real estate
3-2 owned by the applicant that the applicant intends to convey in
3-3 trust to the board to secure payment of any obligations incurred by
3-4 the applicant in the bonding business if the license is granted.
3-5 The following shall be included for each parcel listed:
3-6 (A) a legal description equivalent to the
3-7 description required to convey the property by general warranty
3-8 deed;
3-9 (B) current statements from each taxing unit
3-10 with power to assess or collect taxes against the property
3-11 indicating that there are no outstanding tax liens against the
3-12 property and indicating the net value of the property according to
3-13 the current appraisal made by a real estate appraiser who is a
3-14 member in good standing of a nationally recognized professional
3-15 appraiser society or trade organization that has an established
3-16 code of ethics, educational program, and professional certification
3-17 program, accompanied by a statement from the applicant agreeing to
3-18 keep all taxes paid on the property while it remains in trust;
3-19 (C) a statement of the applicant that he will
3-20 not further encumber the property after conveying it in trust to
3-21 the County Bail Bond Board, without notifying and obtaining the
3-22 permission of the board;
3-23 (D) an agreement to insure and keep current the
3-24 insurance on any improvements on the property against any damage or
3-25 destruction while the property remains in trust, in the full amount
3-26 of the value claimed for the improvements;
3-27 (E) a statement indicating whether the applicant
4-1 is married and, if so, a sworn statement from the spouse agreeing
4-2 to transfer to the board, as a part of the trust, any right, title,
4-3 or interest that the spouse may have in the property; and the
4-4 spouse must execute the deeds of trust to any community property
4-5 placed in the security deposit required under this section;
4-6 (5) A statement indicating the amount of cash or cash
4-7 value of any certificate of deposit or cashier's checks which the
4-8 applicant intends to place on deposit with the county treasurer to
4-9 secure payment of any obligations incurred by the applicant in the
4-10 bonding business if the license is granted;
4-11 (6) A complete, sworn financial statement;
4-12 (7) A declaration by the applicant that he will comply
4-13 with this Act and the rules prescribed by the board.
4-14 SECTION 4. Sections 7(b)-(e), Chapter 550, Acts of the 63rd
4-15 Legislature, Regular Session, 1973 (Article 2372p-3, Vernon's Texas
4-16 Civil Statutes), are amended to read as follows:
4-17 (b) The certificate of authority to do business in this
4-18 state issued to a corporation by the Texas Department of Insurance
4-19 [State Board of Insurance] pursuant to Article 8.20, Insurance Code
4-20 [, as amended], shall be conclusive evidence as to the sufficiency
4-21 of the security, the corporation's solvency, or its credits for all
4-22 purposes under this Act.
4-23 (c) Any corporation which acts as a surety shall, before
4-24 executing any bail bond, first file in the office of the county
4-25 clerk of the county where such bail bond is given a power of
4-26 attorney designating and authorizing the named agent of such
4-27 corporation to execute such bail bonds by such agent. This power
5-1 of attorney shall be a valid and binding obligation of the
5-2 corporation. A separate license is required for each agent
5-3 operating under a corporate power of attorney. A corporation may
5-4 not be granted an initial license for an agent if, at the time the
5-5 initial license application is considered by the board, the agent
5-6 personally has then pending an outstanding final judgment on any
5-7 forfeited bail bond in any county in this state that has not been
5-8 paid within 30 days of the date of the final judgment.
5-9 (d) Notwithstanding any statutory requirements to the
5-10 contrary, any agent so designated and licensed or approved under
5-11 this Act [hereunder] for the purpose of writing bail bonds shall
5-12 not be required to be licensed as a local recording agent as
5-13 defined in Article 21.14, [Texas] Insurance Code[, as amended], for
5-14 the purpose of this Act. However, an agent licensed as a local
5-15 recording agent may write bail bonds if licensed under this Act.
5-16 (e) It shall be the duty of the board to notify promptly the
5-17 Texas Department [State Board] of Insurance of default by a
5-18 corporation on any financial obligation which it undertakes in the
5-19 county. Nothing in this Act shall be construed to prevent the
5-20 Commissioner of Insurance from promulgating rules related to
5-21 corporations or licensed recording agents of corporations writing
5-22 bail bonds in this state.
5-23 SECTION 5. Section 8, Chapter 550, Acts of the 63rd
5-24 Legislature, Regular Session, 1973 (Article 2372p-3, Vernon's Texas
5-25 Civil Statutes), is amended by adding Subsection (d) to read as
5-26 follows:
5-27 (d) A corporation may not renew a license for an agent if,
6-1 at the time the license renewal application is considered by the
6-2 board, the agent personally has then pending an outstanding final
6-3 judgment on any forfeited bail bond in any court of competent
6-4 jurisdiction within the county of the licensee that has not been
6-5 paid within 30 days of the date of final judgment.
6-6 SECTION 6. Sections 12(a) and (c), Chapter 550, Acts of the
6-7 63rd Legislature, Regular Session, 1973 (Article 2372p-3, Vernon's
6-8 Texas Civil Statutes), are amended to read as follows:
6-9 (a) No bondsman [person] who executes a bail bond as a
6-10 surety for a principal may surrender the principal without the
6-11 written permission of the judge having jurisdiction of the case
6-12 after the person who executed the bail bond has executed an
6-13 affidavit to be filed with the clerk of the court stating:
6-14 (1) the date the bond was made;
6-15 (2) the fee paid for the bond; and
6-16 (3) the reason for the surrender.
6-17 (c) If the court determines that the bondsman [person] who
6-18 surrendered the principal did so without reasonable cause, the
6-19 court in its discretion may require that all or a part of the fees
6-20 paid as a condition for making the bail bond shall be returned to
6-21 the principal. In making the determination the court shall
6-22 determine what fees, whether denominated fees for the making of the
6-23 bond or not, were in fact paid for the purpose of inducing the
6-24 surety to make the bond.
6-25 SECTION 7. Article 21.14, Insurance Code, is amended by
6-26 adding Section 17 to read as follows:
6-27 Sec. 17. The Commissioner may promulgate rules related to
7-1 corporations and local recording agents acting as sureties on
7-2 criminal court appearance bonds.
7-3 SECTION 8. The importance of this legislation and the
7-4 crowded condition of the calendars in both houses create an
7-5 emergency and an imperative public necessity that the
7-6 constitutional rule requiring bills to be read on three several
7-7 days in each house be suspended, and this rule is hereby suspended.