By:  Brown                                             S.B. No. 358

                                A BILL TO BE ENTITLED

                                       AN ACT

 1-1     relating to the continuation and functions of the Credit Union

 1-2     Commission.


 1-4           SECTION 1.  Section 2.03, Texas Credit Union Act (Article

 1-5     2461-2.03, Vernon's Texas Civil Statutes), is amended to read as

 1-6     follows:

 1-7           Sec. 2.03.  INCORPORATION PROCEDURE.  (a)  The incorporators

 1-8     shall file with the commissioner:

 1-9                 (1)  the original articles of incorporation in

1-10     duplicate;

1-11                 (2)  standard bylaws for the general operation of the

1-12     credit union in duplicate;

1-13                 (3)  a completed application in a form prescribed by

1-14     the commission; and

1-15                 (4)  the fees required and set by the commission.

1-16           (b)  The commissioner may conduct any investigation and

1-17     obtain any information or report from any person, including a law

1-18     enforcement agency, that the commissioner considers necessary.

1-19           (c)  [The commission shall adopt rules establishing

1-20     procedures concerning notice of applications to incorporate and

1-21     conditions under which a hearing may be available.]

1-22           [(d)]  The commissioner shall approve the application for

1-23     incorporation if the incorporators have complied with this Act and

 2-1     the rules adopted under this Act and the commissioner finds from

 2-2     the information furnished with the application, the results of any

 2-3     investigation, the evidence submitted at any hearing, and the

 2-4     information in the official records in the department that:

 2-5                 (1)  the character and general fitness of the

 2-6     incorporators and the members of the initial board of directors

 2-7     warrant belief that the business and affairs of the credit union

 2-8     will be properly administered in accordance with this Act and the

 2-9     rules adopted under this Act;

2-10                 (2)  the character and size of the field of membership

2-11     proposed to be served by the credit union conforms with this Act

2-12     and the rules adopted under this Act and are favorable to the

2-13     economic viability of the credit union; and

2-14                 (3)  the incorporators and the members of the initial

2-15     board of directors are acting in good faith and are making the

2-16     application in accordance with the purposes of this Act.

2-17           (d) [(e)]  In addition to the findings under Subsection (c)

2-18     [(d)] of this section, the commissioner shall, in accordance with

2-19     rules the commission may adopt, consider the effect of overlapping

2-20     fields of membership on the applicant credit union and existing

2-21     state or federal credit unions doing business in this state, and

2-22     the commissioner may, as a condition of approval of the

2-23     application, require the applicant credit union to limit or

2-24     eliminate overlaps, in accordance with the rules, if any, in order

2-25     to achieve the purposes of this Act and promote the welfare and

 3-1     stability of those credit unions.  The commissioner also may

 3-2     consider the availability and adequacy of financial services in the

 3-3     local community and the effect that the incorporation of the credit

 3-4     union would have on the local community.

 3-5           (e)  The [(f)  Not later than 90 days after the later of the

 3-6     date on which an application is filed or the date on which a

 3-7     hearing on the application is held, the] commissioner shall state

 3-8     his findings in a written order that approves or denies the

 3-9     application to incorporate.

3-10           (f) [(g)]  The commission shall adopt rules providing for

3-11     appeal by an incorporator or aggrieved person.  The commissioner's

3-12     order may be appealed to the commission not later than 60 days

3-13     after the date of the order.  The commission shall, by written

3-14     order, affirm or reverse the decision of the commissioner after

3-15     reviewing the information or evidence it considers necessary or

3-16     relevant.

3-17           (g) [(h)]  An order of the commissioner or commission shall

3-18     be promptly mailed to the incorporators by registered or certified

3-19     mail.  If the application is approved by the commissioner, in the

3-20     absence of an appeal, or by the commission after conclusion of an

3-21     appeal, the commissioner shall issue a certificate of

3-22     incorporation, deliver copies of the approved articles of

3-23     incorporation and bylaws to the incorporators, and retain copies of

3-24     these documents in the department's permanent files.

3-25           SECTION 2.  Subsection (b), Section 2.06, Texas Credit Union

 4-1     Act (Article 2461-2.06, Vernon's Texas Civil Statutes), is amended

 4-2     to read as follows:

 4-3           (b)  The board of directors may amend the articles of

 4-4     incorporation or bylaws and shall submit amendments to the

 4-5     commissioner.  The commissioner shall approve or disapprove an

 4-6     amendment in writing [not later than 60 days after the date of

 4-7     submission, the date of any required publication in the

 4-8     department's newsletter, or the date on which a hearing on the

 4-9     amendment is held, whichever is later].  In approving an amendment,

4-10     the commissioner shall make the findings and may take the actions

4-11     provided by Subsections (c) and (d) [and (e)] of Section 2.03 of

4-12     this Act.  The commissioner may not approve an amendment if the

4-13     commissioner finds that it violates this Act or the rules adopted

4-14     under this Act.  The commissioner shall state the reasons for a

4-15     disapproval with reasonable specificity.  Amendments become

4-16     effective on approval by the commissioner.

4-17           SECTION 3.  Section 10.03, Texas Credit Union Act (Article

4-18     2461-10.03, Vernon's Texas Civil Statutes), is amended by adding

4-19     Subsections (g) and (h) to read as follows:

4-20           (g)  In determining whether to approve or disapprove the

4-21     merger or consolidation, the commissioner shall consider the

4-22     availability and adequacy of financial services in the local

4-23     community and the effect that the merger or consolidation would

4-24     have on the local community.  The commission by rule shall

4-25     establish other appropriate criteria that the commissioner must

 5-1     consider in making the determination.

 5-2           (h)  The rules adopted under this section must specify in

 5-3     detail the procedures that:

 5-4                 (1)  a credit union must follow to obtain commissioner

 5-5     approval of a merger or consolidation; and

 5-6                 (2)  the commissioner must follow in approving or

 5-7     disapproving the merger or consolidation.

 5-8           SECTION 4.  Subsections (b) and (c), Section 11.01, Texas

 5-9     Credit Union Act (Article 2461-11.01, Vernon's Texas Civil

5-10     Statutes), are amended to read as follows:

5-11           (b)  The Credit Union Department is composed of the Credit

5-12     Union Commission and a Credit Union Commissioner, together with

5-13     other officers and employees within the department.  The department

5-14     shall supervise and shall regulate, as provided in this Act, all

5-15     credit unions organized under the laws of the State of Texas.  The

5-16     department shall periodically make comprehensive studies of the

5-17     statutes of this state as they pertain to credit union operations.

5-18     The commissioner shall report the recommendations of the department

5-19     when and as necessary to the legislature for consideration. The

5-20     [During January of each year, the] department shall prepare

5-21     annually [file with the governor and the presiding officer of each

5-22     house of the legislature] a complete and detailed written report

5-23     accounting for all funds received and disbursed by the department

5-24     during the preceding year.  The annual report must meet the

5-25     reporting requirements applicable to financial reporting provided

 6-1     in the General Appropriations Act.  The financial transactions of

 6-2     the department are subject to audit by the state auditor in

 6-3     accordance with Chapter 321, Government Code.

 6-4           (c)  The Credit Union Commission is subject to Chapter 325,

 6-5     Government Code (Texas Sunset Act).  Unless continued in existence

 6-6     as provided by that chapter, the commission is abolished [and this

 6-7     Act expires] September 1, 2009 [1997].

 6-8           SECTION 5.  Section 11.02, Texas Credit Union Act (Article

 6-9     2461-11.02, Vernon's Texas Civil Statutes), is amended to read as

6-10     follows:

6-11           Sec. 11.02.  ELIGIBILITY OF MEMBERS.  (a)  Four [Six] members

6-12     of the commission must be individuals who are currently engaged in

6-13     the exercise of the duties, responsibilities, rights, and powers of

6-14     a duly authorized director, officer, or committee member of a

6-15     credit union that is organized and doing business in this state

6-16     under this Act or the Federal Credit Union Act and that has its

6-17     principal office in this state, and who have five years or more of

6-18     active experience as such a director, officer, or committee member.

6-19     No more than one person from a federal credit union may serve on

6-20     the commission at any time.  Experience as a commissioner, deputy

6-21     commissioner, or examiner is equivalent to the type of experience

6-22     required by this subsection.  If a person holding a position in

6-23     accordance with this subsection ceases to be engaged in the

6-24     exercise of the duties, responsibilities, rights, and powers

6-25     prescribed by this subsection for a period exceeding 90 days, the

 7-1     person is ineligible to serve as a member and the person's position

 7-2     on the commission is vacant.

 7-3           (b)  Five [Three] members of the commission are

 7-4     representatives of the general public.  A person is not eligible

 7-5     for appointment as a public member of [An individual appointed to

 7-6     serve in that capacity may not, at the time of the individual's

 7-7     appointment to or while serving on] the commission if the person or

 7-8     the person's spouse:

 7-9                 (1)  is employed by or participates [be engaged] in the

7-10     management or direction of:

7-11                       (A)  a financial institution; or

7-12                       (B)  an organization, other than a financial

7-13     institution, regulated by any financial institution regulatory

7-14     agency or receiving funds from such agency[, such as a credit

7-15     union, bank, or savings and loan association]; [or]

7-16                 (2)  has [have], other than as a member or customer, a

7-17     financial interest in:

7-18                       (A)  a financial institution; or

7-19                       (B)  an organization, other than a financial

7-20     institution, regulated by any financial institution regulatory

7-21     agency or receiving funds from such agency; or

7-22                 (3)  uses or receives a substantial amount of tangible

7-23     goods, services, or funds from the department, other than

7-24     compensation or reimbursement authorized by law for commission

7-25     membership, attendance, or expenses[, such as a credit union, bank,

 8-1     or savings and loan association].

 8-2           (c)  No two members of the commission may be residents of the

 8-3     same state senatorial district.

 8-4           (d)  An officer, employee, or paid consultant of a [A person

 8-5     currently serving as chairman, first vice-chairman, president,

 8-6     vice-president, secretary, or treasurer of a state] trade

 8-7     association representing or affiliated with a financial institution

 8-8     group or any entity affiliated with financial institutions [in the

 8-9     credit union industry, or an employee of such an organization,] may

8-10     not serve as a member of the commission and may not be an employee

8-11     of the department who is exempt from the state's position

8-12     classification plan or is compensated at or above the amount

8-13     prescribed by the General Appropriations Act for step 1, salary

8-14     group 17, of the position classification salary schedule.

8-15           (e)  A person who is the spouse of an officer, manager, or

8-16     paid consultant of a trade association representing or affiliated

8-17     with a financial institution group or any entity affiliated with

8-18     financial institutions may not be a member of the commission and

8-19     may not be an employee of the department who is exempt from the

8-20     state's position classification plan or is compensated at or above

8-21     the amount prescribed by the General Appropriations Act for step 1,

8-22     salary group 17, of the position classification salary schedule.

8-23           (f)  For the purposes of this section, a trade association is

8-24     a nonprofit, cooperative, and voluntarily joined association of

8-25     business or professional competitors designed to assist its members

 9-1     and its industry or profession in dealing with mutual business or

 9-2     professional problems and in promoting their common interest.

 9-3           (g) [(e)] A person may not serve as a member of the

 9-4     commission or act as the general counsel to the commission or the

 9-5     department if the person [who] is required to register as a

 9-6     lobbyist under Chapter 305, Government Code, because of the

 9-7     person's activities for compensation on behalf of a profession

 9-8     related to the operation of [may not serve as a member of the

 9-9     commission or act as the general counsel to] the commission.

9-10           SECTION 6.  Subsection (a), Section 11.03, Texas Credit Union

9-11     Act (Article 2461-11.03, Vernon's Texas Civil Statutes), is amended

9-12     to read as follows:

9-13           (a)  The members of the commission are appointed, without

9-14     regard to race, color, creed, disability, sex, religion, age, or

9-15     national origin, by the governor, with the advice and consent of

9-16     the senate, for terms of six years, with the terms of three members

9-17     expiring February 15 of each odd-numbered year.  The governor shall

9-18     appoint the members who are representatives of the general public

9-19     on the basis of recognized business ability.

9-20           SECTION 7.  Chapter 11, Texas Credit Union Act (Article

9-21     2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

9-22     adding Section 11.031 to read as follows:

9-23           Sec. 11.031.  TRAINING PROGRAM.  (a)  Before a member of the

9-24     commission may assume the member's duties and before the member may

9-25     be confirmed by the senate, the member must complete at least one

 10-1    course of the training program established under this section.

 10-2          (b)  A training program established under this section shall

 10-3    provide information to the member regarding:

 10-4                (1)  the enabling legislation that created the

 10-5    department and its policy-making body to which the member is

 10-6    appointed to serve;

 10-7                (2)  the programs operated by the department;

 10-8                (3)  the role and functions of the department;

 10-9                (4)  the rules of the commission with an emphasis on

10-10    the rules that relate to disciplinary and investigatory authority;

10-11                (5)  the current budget for the department;

10-12                (6)  the results of the most recent formal audit of the

10-13    department;

10-14                (7)  the requirements of the:

10-15                      (A)  open meetings law, Chapter 551, Government

10-16    Code;

10-17                      (B)  open records law, Chapter 552, Government

10-18    Code; and

10-19                      (C)  administrative procedure law, Chapter 2001,

10-20    Government Code;

10-21                (8)  the requirements of the conflict of interest laws

10-22    and other laws relating to public officials;

10-23                (9)  any applicable ethics policies adopted by the

10-24    department or the Texas Ethics Commission; and

10-25                (10)  the basic principles and responsibilities of

 11-1    credit union management.

 11-2          SECTION 8.  Section 11.04, Texas Credit Union Act (Article

 11-3    2461-11.04, Vernon's Texas Civil Statutes), is amended to read as

 11-4    follows:

 11-5          Sec. 11.04.  VACANCIES; REMOVAL.  (a)  [The office of a

 11-6    member of the commission becomes vacant on January 1 if the member

 11-7    failed to attend more than one-half of the meetings of the

 11-8    commission held during the preceding calendar year, excluding any

 11-9    meetings held before the member assumed office.]

11-10          [(b)]  The governor may remove a member from the member's

11-11    position on the commission for neglect of duty, incompetence, or

11-12    fraudulent or criminal conduct.

11-13          (b) [(c)]  It is grounds for removal from the commission if a

11-14    member:

11-15                (1)  does not have at the time of appointment the

11-16    qualifications required by Section 11.02;

11-17                (2)  does not maintain during service on the commission

11-18    the qualifications required by Section 11.02;

11-19                (3)  violates a prohibition established by Section

11-20    11.02;

11-21                (4)  cannot because of illness or disability discharge

11-22    the member's duties for a substantial part of the term for which

11-23    the member is appointed; or

11-24                (5)  is absent from more than half of the regularly

11-25    scheduled commission meetings that the member is eligible to attend

 12-1    during a calendar year unless the absence is excused by majority

 12-2    vote of the commission.

 12-3          (c)  The validity of an action of the commission is not

 12-4    affected by the fact that it is taken when a ground for removal of

 12-5    a commission member exists.

 12-6          (d)  If the commissioner has knowledge that a potential

 12-7    ground for removal exists, the commissioner shall notify the

 12-8    presiding officer of the commission of the potential ground.  The

 12-9    presiding officer shall then notify the governor and the attorney

12-10    general that a potential ground for removal exists.  If the

12-11    potential ground for removal involves the presiding officer, the

12-12    commissioner shall notify the next highest officer of the

12-13    commission, who shall notify the governor and the attorney general

12-14    that a potential ground for removal exists [violates a prohibition

12-15    established by Section 11.02(e) of this Act].

12-16          (e) [(d)]  The office of a member of the commission is vacant

12-17    in the event of the death, resignation, or removal of the member,

12-18    or if the member ceases to have the qualifications necessary to

12-19    serve as a member.

12-20          (f) [(e)]  In the event of a vacancy on the commission for

12-21    any cause, the governor, with the advice and consent of the senate,

12-22    shall promptly appoint a qualified person to fill the unexpired

12-23    term.

12-24          [(f)  The validity of an action of the commission is not

12-25    affected by the fact that it was taken when a ground for removal of

 13-1    a member of the commission existed.]

 13-2          SECTION 9.  Subsections (a), (c), and (e), Section 11.06,

 13-3    Texas Credit Union Act (Article 2461-11.06, Vernon's Texas Civil

 13-4    Statutes), are amended to read as follows:

 13-5          (a)  The commission shall hold regular meetings at least

 13-6    twice each year.  The chairman of the commission, the commissioner,

 13-7    or any five members of the commission may call special meetings.

 13-8    The commission shall adopt reasonable rules governing the time and

 13-9    place of meetings and the conduct of all meetings, including the

13-10    form in which minutes of the meetings are maintained.  The [All

13-11    meetings of the] commission is [are] subject to the Open Meetings

13-12    Law, Chapter 551, Government Code, and the administrative procedure

13-13    law, Chapter 2001, Government Code [271, Acts of the 60th

13-14    Legislature, 1967, as amended (Article 6252-17, Vernon's Texas

13-15    Civil Statutes)].

13-16          (c)  The governor shall designate a member of the commission

13-17    as presiding officer of the commission to serve in that capacity at

13-18    the pleasure of the governor [commission shall annually elect a

13-19    chairman and vice-chairman from among its members.  The chairman

13-20    shall preside at all meetings of the commission, and the

13-21    vice-chairman shall preside in the absence of the chairman.  If

13-22    both the chairman and vice-chairman are absent from a meeting, the

13-23    most senior member of the commission in attendance at the meeting

13-24    shall serve as acting chairman].

13-25          (e)  No commission member may act on matters under

 14-1    consideration which directly affect [and specifically relate to]

 14-2    any credit union of which the member of the commission is an

 14-3    officer, director, or member.  The commission shall adopt rules

 14-4    relating to recusal of members, requiring that a member who has a

 14-5    personal or private interest in a measure, proposal, or decision

 14-6    pending before the commission shall publicly disclose the fact to

 14-7    the commission at a meeting held in compliance with Chapter 551,

 14-8    Government Code.  The member may not vote or otherwise participate

 14-9    in the decision.  The disclosure shall be entered into the minutes

14-10    of the meeting.

14-11          SECTION 10.  Chapter 11, Texas Credit Union Act (Article

14-12    2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

14-13    adding Section 11.061 to read as follows:

14-14          Sec. 11.061.  RECEIPT OF PUBLIC COMMENTS; NOTICE OF

14-15    COMMISSION ACTIVITIES.  (a)  The commission shall develop and

14-16    implement policies that provide the public with a reasonable

14-17    opportunity to appear before the commission and to speak on any

14-18    issue under the jurisdiction of the department.

14-19          (b)  The commission shall adopt rules providing for public

14-20    notice of department activities.

14-21          SECTION 11.  Section 11.07, Texas Credit Union Act (Article

14-22    2461-11.07, Vernon's Texas Civil Statutes), is amended by adding

14-23    Subsections (d) and (e) to read as follows:

14-24          (d)  The commission may not adopt rules restricting

14-25    competitive bidding or advertising by a credit union except to

 15-1    prohibit false, misleading, or deceptive practices.

 15-2          (e)  In its rules to prohibit false, misleading, or deceptive

 15-3    practices, the commission may not include a rule that:

 15-4                (1)  restricts the use of any medium for advertising;

 15-5                (2)  relates to the size or duration of an

 15-6    advertisement by the credit union; or

 15-7                (3)  restricts the credit union's advertisement under a

 15-8    trade name.

 15-9          SECTION 12.  Chapter 11, Texas Credit Union Act (Article

15-10    2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

15-11    adding Section 11.071 to read as follows:

15-12          Sec. 11.071.  SEPARATION OF RESPONSIBILITIES.  The commission

15-13    shall develop and implement policies that clearly separate the

15-14    policy-making responsibilities of the commission and the management

15-15    responsibilities of the commissioner and the staff of the

15-16    department.

15-17          SECTION 13.  Section 11.10, Texas Credit Union Act (Article

15-18    2461-11.10, Vernon's Texas Civil Statutes), is amended to read as

15-19    follows:

15-20          Sec. 11.10.  POWERS OF CREDIT UNION COMMISSIONER.  (a)  On

15-21    the appointment and qualification of a commissioner, the

15-22    commissioner shall supervise and regulate all credit unions doing

15-23    business in this state, except federal credit unions organized and

15-24    existing under federal law, in accordance with this Act and the

15-25    rules and regulations promulgated under this Act.

 16-1          (b)  The commissioner shall enforce the provisions of this

 16-2    Act and the rules and regulations promulgated from time to time.

 16-3          (c)  The commissioner shall levy and collect all supervision

 16-4    fees, charges, and revenues required to be paid by credit unions as

 16-5    provided by Subsection (c), Section 11.07, of this Act.  All money

 16-6    paid to the department [collected] under this Act is subject to

 16-7    Subchapter F, Chapter 404, Government Code [shall be deposited in

 16-8    the credit union department expense fund, which is created as a

 16-9    special fund in the state treasury.  Money in the fund may be used

16-10    only for the administration of this Act.  Income earned on the

16-11    money deposited in the credit union department expense fund shall

16-12    be credited to that fund].

16-13          (d)  The commissioner or the commissioner's designee shall

16-14    provide to members of the commission and to department employees,

16-15    as often as necessary, information regarding their qualification

16-16    for office or employment under this Act and their responsibilities

16-17    under applicable laws relating to standards of conduct for state

16-18    officers or employees.

16-19          (e)  The commission shall promulgate, and the commissioner

16-20    shall enforce, reasonable rules requiring credit unions to provide

16-21    or cause to be provided share and deposit insurance protection for

16-22    their members and depositors, including the authorization and

16-23    establishment of a share and deposit guaranty corporation or credit

16-24    union under the exclusive regulation of the department to enable

16-25    the department to carry out the purposes of this Act.  Share and

 17-1    deposit insurance protection may also be provided through other

 17-2    sources approved by the department, including such a program of the

 17-3    National Credit Union Administration.

 17-4          (f)  The commissioner shall supervise the establishment and

 17-5    maintenance of files regarding each written complaint filed with

 17-6    [complaints about credit unions received by] the department that

 17-7    the department has authority to resolve.  The files must include

 17-8    all relevant information regarding the nature, status, and

 17-9    disposition of the complaints.  The department [commissioner] shall

17-10    provide to the person filing the complaint and the persons or

17-11    entities complained about the department's policies and procedures

17-12    pertaining to complaint investigation and resolution.  The

17-13    department, at least [take the steps that the commissioner

17-14    determines to be necessary to notify each complainant of the

17-15    procedures and remedies available for the resolution of complaints.

17-16    After a written complaint is filed, the commissioner, at least as

17-17    frequently as] quarterly and until final disposition of the

17-18    complaint, shall notify the parties to the complaint of the status

17-19    of the complaint unless the notice would jeopardize an undercover

17-20    investigation.

17-21          (g)  The department shall keep information about each

17-22    complaint filed with the department.  The information shall

17-23    include:

17-24                (1)  the date the complaint is received;

17-25                (2)  the name of the complainant;

 18-1                (3)  the subject matter of the complaint;

 18-2                (4)  a record of all persons contacted in relation to

 18-3    the complaint;

 18-4                (5)  a summary of the results of the review or

 18-5    investigation of the complaint; and

 18-6                (6)  for complaints for which the department took no

 18-7    action, an explanation of the reason the complaint was closed

 18-8    without action.

 18-9          (h)  The commissioner shall supervise the preparation of

18-10    public interest information describing [regarding] the [regulatory]

18-11    functions of the department, procedures for filing and resolution

18-12    of complaints, and other matters of general interest regarding

18-13    [the] credit unions.  The commissioner [union movement and] shall

18-14    make the [supervise the dissemination of that] information

18-15    available to the general public and appropriate state agencies.

18-16          (i)  The commission by rule shall establish methods by which

18-17    consumers and service recipients are notified of the name, mailing

18-18    address, and telephone number of the department for the purpose of

18-19    directing complaints to the department.  The commission may provide

18-20    for that notification:

18-21                (1)  on each registration form, application, or written

18-22    contract for services of a credit union regulated under this Act;

18-23                (2)  on a sign prominently displayed in the place of

18-24    business of each credit union regulated under this Act; or

18-25                (3)  in a bill for service provided by a credit union

 19-1    regulated under this Act.

 19-2          (j)  The department shall comply with federal and state laws

 19-3    related to program and facility accessibility.  The commissioner

 19-4    shall also prepare and maintain a written plan that describes how a

 19-5    person who does not speak English can be provided reasonable access

 19-6    to the department's programs and services.

 19-7          SECTION 14.  Section 11.18, Texas Credit Union Act (Article

 19-8    2461-11.18, Vernon's Texas Civil Statutes), is amended to read as

 19-9    follows:


19-11    (a)  The commissioner or the commissioner's [his] designee shall

19-12    develop an intra-agency career ladder program that addresses

19-13    opportunities for mobility and advancement for employees within the

19-14    department.  The program shall require[, one part of which shall be

19-15    an] intra-agency posting of all nonentry level positions

19-16    concurrently with [for at least 10 days before] any public posting.

19-17          (b)  The commissioner or the commissioner's [his] designee

19-18    shall develop a system of annual performance evaluations that are

19-19    based on documented employee performance [measurable job tasks].

19-20    All merit pay for department employees must be based on the system

19-21    established under this section.

19-22          SECTION 15.  Chapter 11, Texas Credit Union Act (Article

19-23    2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

19-24    adding Section 11.19 to read as follows:

19-25          Sec. 11.19.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  The

 20-1    commissioner or the commissioner's designee shall prepare and

 20-2    maintain a written policy statement to assure implementation of a

 20-3    program of equal employment opportunity under which all personnel

 20-4    transactions are made without regard to race, color, disability,

 20-5    sex, religion, age, or national origin.  The policy statement must

 20-6    include:

 20-7                (1)  personnel policies, including policies relating to

 20-8    recruitment, evaluation, selection, appointment, training, and

 20-9    promotion of personnel that are in compliance with requirements of

20-10    Chapter 21, Labor Code;

20-11                (2)  a comprehensive analysis of the department

20-12    workforce that meets federal and state guidelines;

20-13                (3)  procedures by which a determination can be made

20-14    about the extent of underuse in the department workforce of all

20-15    persons for whom federal or state guidelines encourage a more

20-16    equitable balance; and

20-17                (4)  reasonable methods to appropriately address those

20-18    areas of underuse.

20-19          (b)  A policy statement prepared under Subsection (a) must

20-20    cover an annual period, be updated annually and reviewed by the

20-21    Texas Commission on Human Rights for compliance with Subsection

20-22    (a)(1), and be filed with the governor's office.

20-23          (c)  The governor's office shall deliver a biennial report to

20-24    the legislature based on the information received under Subsection

20-25    (b).  The report may be made separately or as a part of other

 21-1    biennial reports made to the legislature.

 21-2          SECTION 16.  Section 12.01, Texas Credit Union Act (Article

 21-3    2461-12.01, Vernon's Texas Civil Statutes), is amended to read as

 21-4    follows:

 21-5          Sec. 12.01.  HEARINGS.  (a)  The conduct of all hearings held

 21-6    under this Act and the judicial review of the final decisions

 21-7    following those hearings are governed by the administrative

 21-8    procedure law, Chapter 2001, Government Code [the Administrative

 21-9    Procedure and Texas Register Act, as amended (Article 6252-13a,

21-10    Vernon's Texas Civil Statutes)].   The commission may adopt rules

21-11    of procedure consistent with that chapter [the Administrative

21-12    Procedure and Texas Register Act, as amended,] for the fair hearing

21-13    and adjudication of all issues in a hearing held under this Act.

21-14    This section does not apply to a meeting under Section 12.03 of

21-15    this Act.

21-16          (b)  If the commission proposes to suspend or revoke a credit

21-17    union's certificate of incorporation, the credit union is entitled

21-18    to a hearing conducted by the State Office of Administrative

21-19    Hearings.  Proceedings for a disciplinary action are governed by

21-20    the administrative procedure law, Chapter 2001, Government Code.

21-21    Rules of practice adopted by the commission under Section 2001.004,

21-22    Government Code, applicable to the proceedings for a disciplinary

21-23    action may not conflict with rules adopted by the State Office of

21-24    Administrative Hearings.

21-25          SECTION 17.  Chapter 12, Texas Credit Union Act (Article

 22-1    2461-12.01 et seq., Vernon's Texas Civil Statutes), is amended by

 22-2    adding Section 12.03 to read as follows:

 22-3          Sec. 12.03.  PROCEDURE FOR CERTAIN APPROVALS.  (a)  This

 22-4    section applies to a request for approval by the commissioner of:

 22-5                (1)  an application for incorporation under Section

 22-6    2.03 of this Act;

 22-7                (2)  a request for approval of an amendment to a credit

 22-8    union's articles of incorporation under Section 2.06 of this Act,

 22-9    including an amendment to expand the credit union's field of

22-10    membership; and

22-11                (3)  a merger or consolidation under Section 10.03 of

22-12    this Act.

22-13          (b)  Before approving a request to which this section

22-14    applies, the commissioner shall submit notice of the request to the

22-15    secretary of state for publication in the Texas Register.  The

22-16    commission by rule shall provide for other appropriate public

22-17    notice of the request.  The commissioner may waive the requirements

22-18    of this subsection or permit delayed public notice on a

22-19    determination that waiver or delay is in the public interest.  If

22-20    the requirements of this subsection are waived, the information

22-21    that would be contained in a public notice becomes public

22-22    information under Chapter 552, Government Code, on the 35th day

22-23    after the date the request is made.

22-24          (c)  Before making a determination on a request to which this

22-25    section applies, the commissioner must accept comment from any

 23-1    interested party that wishes to comment.  This comment may be in

 23-2    the form of written testimony or may be provided at a meeting with

 23-3    the commissioner held for the purpose of receiving this comment.

 23-4    This meeting shall be held if requested by any interested party.

 23-5    The commissioner may hold the meeting regardless of whether an

 23-6    interested party requests the meeting.  The commission may

 23-7    establish reasonable rules governing the circumstances and conduct

 23-8    of the meeting.  Chapter 2001, Government Code, does not apply to

 23-9    the meeting.  Not later than the 60th day after the date the notice

23-10    is published in the Texas Register, or if the notice is not

23-11    published, after the date the request is received, the commissioner

23-12    shall approve or disapprove the application.

23-13          SECTION 18.  The Sunset Advisory Commission, as part of its

23-14    evaluation of agencies preceding the meeting of the 77th

23-15    Legislature in 2001, shall:

23-16                (1)  evaluate the organizational structure of the

23-17    state's financial regulatory agencies; and

23-18                (2)  study the potential effects of placing the Credit

23-19    Union Commission under the jurisdiction of the Finance Commission

23-20    of Texas.

23-21          SECTION 19.  (a)  The Credit Union Commission and the Finance

23-22    Commission of Texas shall jointly review state law, including

23-23    rules, governing financial institutions in this state.  The review

23-24    must include an examination of differences in the authority granted

23-25    by law to the different state regulatory officers and agencies and

 24-1    how the officers and agencies differ in their manner of regulating

 24-2    the institutions under their respective jurisdictions.

 24-3          (b)  A report of the review shall be submitted to the Sunset

 24-4    Advisory Commission before September 1, 1999.

 24-5          SECTION 20.  If after the effective date of this Act a

 24-6    vacancy exists in a position of member of the Credit Union

 24-7    Commission that was held by an individual described by Subsection

 24-8    (a), Section 11.02, Texas Credit Union Act (Article 2461-11.02,

 24-9    Vernon's Texas Civil Statutes), the vacancy shall be filled by

24-10    appointment of an individual described by Subsection (b) of Section

24-11    11.02 of that Act until the number of public members and members

24-12    who represent credit unions are as prescribed by those sections, as

24-13    amended by this Act.

24-14          SECTION 21.  This Act takes effect September 1, 1997.

24-15          SECTION 22.  The importance of this legislation and the

24-16    crowded condition of the calendars in both houses create an

24-17    emergency and an imperative public necessity that the

24-18    constitutional rule requiring bills to be read on three several

24-19    days in each house be suspended, and this rule is hereby suspended.