Bill not drafted by TLC or Senate E&E. Line and page numbers may not match official copy. By Maxey H.B. No. 3525 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to funding of the housing trust fund administered by the 1-3 Department of Housing and Community Affairs. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Chapter 2306.201, Government Code, is amended to 1-6 read as follows: 1-7 Sec. 2306.201. Housing Trust Fund. (a) The housing trust 1-8 fund is a fund: 1-9 (1) administered by the department through the housing 1-10 finance division; and 1-11 (2) placed with the Texas Treasury Safekeeping Trust 1-12 Company. 1-13 (b) The fund consists of: 1-14 (1) appropriations or transfers made to the fund; 1-15 (2) unencumbered fund balances; and 1-16 (3) public or private gifts or grants; and 1-17 (4) funds generated from security deposit accounts 1-18 under section 2306.499. 1-19 SECTION 2. Chapter 2306, Government Code, is amended by 1-20 adding Section 2306.499 to read as follows: 1-21 Sec. 2306.499. SECURITY DEPOSIT ACCOUNTS. (a) A landlord 1-22 or apartment owner who receives a security deposit pursuant to 1-23 Subchapter C, Texas Property Code, shall notify the department in 1-24 writing of the location, terms and account number of the account 2-1 holding the security deposit not later than 90 days after the date 2-2 the landlord receives the security deposit from a tenant. 2-3 (b) A landlord or apartment owner is not required to notify 2-4 the department of the location, terms and account number of the 2-5 account each time the landlord receives a new security deposit from 2-6 a tenant as long as the security deposit is placed into an account 2-7 previously disclosed according to subsection (a). 2-8 (c) A landlord or apartment owner who receives a security 2-9 deposit from a previous owner of a rental premises shall notify the 2-10 department of the location, terms and account number of the account 2-11 holding the security deposit not later than 30 days from the date 2-12 the landlord receives the deposit. 2-13 (d) The landlord or apartment owner shall direct the bank 2-14 holding a security deposit account to electronically transfer 2-15 accrued interest promptly on or before February 1 for each calendar 2-16 year following the opening date of the account into the housing 2-17 trust fund. 2-18 (e) This section does not apply to a landlord or apartment 2-19 owner who owns ten or fewer rental dwellings and does not use a 2-20 management company or managing agent to manage the rental 2-21 dwellings. 2-22 (f) In addition to other remedies provided by law, the 2-23 department may bring suit against a landlord or apartment owner 2-24 violating this section and be entitled to actual damages, a civil 2-25 penalty of $1,000, injunctive relief, reasonable attorney fees and 2-26 court costs. 2-27 SECTION 3. Chapter 92, Property Code, is amended by adding 2-28 Section 92.1021 to read as follows: 2-29 Sec. 92.1021. PLACEMENT IN SEPARATE ACCOUNT. (a) At the 2-30 expiration of 60 days from the receipt of a tenant's security 3-1 deposit from a tenant, a landlord shall not commingle a tenant's 3-2 security deposit with assets of the landlord or apartment owner. 3-3 The landlord may commingle the security deposits of multiple 3-4 tenants. 3-5 (b) On or before the expiration of 60 days from the receipt 3-6 of a tenant's security deposit from a tenant, the landlord shall 3-7 deposit a tenant's security deposit in an interest bearing account 3-8 in a bank in which the account accrues interest at a rate not less 3-9 than two percent per year. 3-10 (c) A landlord may not withdraw a tenant's security deposit 3-11 from the account unless: 3-12 (1) the landlord in refunding the deposit according to 3-13 Section 92.103; 3-14 (2) the landlord is retaining the deposit according to 3-15 Section 92.104 and 92.1031; or 3-16 (3) the landlord in transferring the deposit to 3-17 another account for good cause in accordance with the terms of this 3-18 section. 3-19 (d) Upon cessation of the owner's interest in the rental 3-20 premises, all funds in the security deposit account shall be 3-21 transferred to the new landlord, but remain in a separate account 3-22 accruing interest in accordance with subsection (a), (b) and (c) of 3-23 this section. 3-24 (e) This section does not apply to a landlord or apartment 3-25 owner who owns ten or fewer rental dwellings and does not use a 3-26 management company or agent to manage the rental dwellings. 3-27 SECTION 4. Section 92.109, Property Code, is amended by 3-28 adding Subsection (e) to read as follows: 3-29 (e) A landlord who violates 92.1021: 3-30 (1) forfeits the right to withhold any portion of the 4-1 deposit: 4-2 (2) is liable to the tenant or a governmental entity 4-3 or civic organization acting on behalf of the tenant for actual 4-4 damages, a civil penalty in an amount equal to the amount of the 4-5 security deposit, court costs and reasonable attorney's fees: and 4-6 (3) may be enjoined from future violations in a suit 4-7 brought by the tenant or a governmental entity or civic 4-8 organization acting on behalf of the tenant. 4-9 SECTION 5. This Act takes effect September 1, 1997. The 4-10 change in the law made by this Act applies to security deposit 4-11 funds received from a tenant after the effective date of this Act 4-12 Section 6. The importance of this legislation and the 4-13 crowded condition of the calendars in both houses create an 4-14 emergency and an imperative public necessity that the 4-15 constitutional rule requiring bills to be read on three several 4-16 days in each house be suspended, and this rule is hereby suspended