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

1-24     the rules adopted under this Act and the commissioner finds from

 2-1     the information furnished with the application, the results of any

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

 2-3     information in the official records in the department that:

 2-4                 (1)  the character and general fitness of the

 2-5     incorporators and the members of the initial board of directors

 2-6     warrant belief that the business and affairs of the credit union

 2-7     will be properly administered in accordance with this Act and the

 2-8     rules adopted under this Act;

 2-9                 (2)  the character and size of the field of membership

2-10     proposed to be served by the credit union conforms with this Act

2-11     and the rules adopted under this Act and are favorable to the

2-12     economic viability of the credit union; and

2-13                 (3)  the incorporators and the members of the initial

2-14     board of directors are acting in good faith and are making the

2-15     application in accordance with the purposes of this Act.

2-16           (d) [(e)]  In addition to the findings under Subsection (c)

2-17     [(d)] of this section, the commissioner shall, in accordance with

2-18     rules the commission may adopt, consider the effect of overlapping

2-19     fields of membership on the applicant credit union and existing

2-20     state or federal credit unions doing business in this state, and

2-21     the commissioner may, as a condition of approval of the

2-22     application, require the applicant credit union to limit or

2-23     eliminate overlaps, in accordance with the rules, if any, in order

2-24     to achieve the purposes of this Act and promote the welfare and

2-25     stability of those credit unions.  The commissioner also may

2-26     consider the availability and adequacy of financial services in the

2-27     local community and the effect that the incorporation of the credit

 3-1     union would have on the local community.

 3-2           (e)  The [(f)  Not later than 90 days after the later of the

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

 3-4     hearing on the application is held, the] commissioner shall state

 3-5     his findings in a written order that approves or denies the

 3-6     application to incorporate.

 3-7           (f) [(g)]  The commission shall adopt rules providing for

 3-8     appeal by an incorporator or aggrieved person.  The commissioner's

 3-9     order may be appealed to the commission not later than 60 days

3-10     after the date of the order.  The commission shall, by written

3-11     order, affirm or reverse the decision of the commissioner after

3-12     reviewing the information or evidence it considers necessary or

3-13     relevant.

3-14           (g) [(h)]  An order of the commissioner or commission shall

3-15     be promptly mailed to the incorporators by registered or certified

3-16     mail.  If the application is approved by the commissioner, in the

3-17     absence of an appeal, or by the commission after conclusion of an

3-18     appeal, the commissioner shall issue a certificate of

3-19     incorporation, deliver copies of the approved articles of

3-20     incorporation and bylaws to the incorporators, and retain copies of

3-21     these documents in the department's permanent files.

3-22           SECTION 2.  Subsection (b), Section 2.06, Texas Credit Union

3-23     Act (Article 2461-2.06, Vernon's Texas Civil Statutes), is amended

3-24     to read as follows:

3-25           (b)  The board of directors may amend the articles of

3-26     incorporation or bylaws and shall submit amendments to the

3-27     commissioner.  The commissioner shall approve or disapprove an

 4-1     amendment in writing [not later than 60 days after the date of

 4-2     submission, the date of any required publication in the

 4-3     department's newsletter, or the date on which a hearing on the

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

 4-5     the commissioner shall make the findings and may take the actions

 4-6     provided by Subsections (c) and (d) [and (e)] of Section 2.03 of

 4-7     this Act.  The commissioner may not approve an amendment if the

 4-8     commissioner finds that it violates this Act or the rules adopted

 4-9     under this Act.  The commissioner shall state the reasons for a

4-10     disapproval with reasonable specificity.  Amendments become

4-11     effective on approval by the commissioner.

4-12           SECTION 3.  Section 10.03, Texas Credit Union Act (Article

4-13     2461-10.03, Vernon's Texas Civil Statutes), is amended by adding

4-14     Subsections (g) and (h) to read as follows:

4-15           (g)  In determining whether to approve or disapprove the

4-16     merger or consolidation, the commissioner shall consider the

4-17     availability and adequacy of financial services in the local

4-18     community and the effect that the merger or consolidation would

4-19     have on the local community.  The commission by rule shall

4-20     establish other appropriate criteria that the commissioner must

4-21     consider in making the determination.

4-22           (h)  The rules adopted under this section must specify in

4-23     detail the procedures that:

4-24                 (1)  a credit union must follow to obtain commissioner

4-25     approval of a merger or consolidation; and

4-26                 (2)  the commissioner must follow in approving or

4-27     disapproving the merger or consolidation.

 5-1           SECTION 4.  Subsections (b) and (c), Section 11.01, Texas

 5-2     Credit Union Act (Article 2461-11.01, Vernon's Texas Civil

 5-3     Statutes), are amended to read as follows:

 5-4           (b)  The Credit Union Department is composed of the Credit

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

 5-6     other officers and employees within the department.  The department

 5-7     shall supervise and shall regulate, as provided in this Act, all

 5-8     credit unions organized under the laws of the State of Texas.  The

 5-9     department shall periodically make comprehensive studies of the

5-10     statutes of this state as they pertain to credit union operations.

5-11     The commissioner shall report the recommendations of the department

5-12     when and as necessary to the legislature for consideration. The

5-13     [During January of each year, the] department shall prepare

5-14     annually [file with the governor and the presiding officer of each

5-15     house of the legislature] a complete and detailed written report

5-16     accounting for all funds received and disbursed by the department

5-17     during the preceding year.  The annual report must meet the

5-18     reporting requirements applicable to financial reporting provided

5-19     in the General Appropriations Act.  The financial transactions of

5-20     the department are subject to audit by the state auditor in

5-21     accordance with Chapter 321, Government Code.

5-22           (c)  The Credit Union Commission is subject to Chapter 325,

5-23     Government Code (Texas Sunset Act).  Unless continued in existence

5-24     as provided by that chapter, the commission is abolished [and this

5-25     Act expires] September 1, 2009 [1997].

5-26           SECTION 5.  Section 11.02, Texas Credit Union Act (Article

5-27     2461-11.02, Vernon's Texas Civil Statutes), is amended to read as

 6-1     follows:

 6-2           Sec. 11.02.  ELIGIBILITY OF MEMBERS.  (a)  Four [Six] members

 6-3     of the commission must be individuals who are currently engaged in

 6-4     the exercise of the duties, responsibilities, rights, and powers of

 6-5     a duly authorized director, officer, or committee member of a

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

 6-7     under this Act or the Federal Credit Union Act and that has its

 6-8     principal office in this state, and who have five years or more of

 6-9     active experience as such a director, officer, or committee member.

6-10     No more than one person from a federal credit union may serve on

6-11     the commission at any time.  Experience as a commissioner, deputy

6-12     commissioner, or examiner is equivalent to the type of experience

6-13     required by this subsection.  If a person holding a position in

6-14     accordance with this subsection ceases to be engaged in the

6-15     exercise of the duties, responsibilities, rights, and powers

6-16     prescribed by this subsection for a period exceeding 90 days, the

6-17     person is ineligible to serve as a member and the person's position

6-18     on the commission is vacant.

6-19           (b)  Five [Three] members of the commission are

6-20     representatives of the general public.  A person is not eligible

6-21     for appointment as a public member of [An individual appointed to

6-22     serve in that capacity may not, at the time of the individual's

6-23     appointment to or while serving on] the commission if the person or

6-24     the person's spouse:

6-25                 (1)  is employed by or participates [be engaged] in the

6-26     management or direction of:

6-27                       (A)  a financial institution; or

 7-1                       (B)  an organization, other than a financial

 7-2     institution, regulated by any financial institution regulatory

 7-3     agency or receiving funds from such agency[, such as a credit

 7-4     union, bank, or savings and loan association]; [or]

 7-5                 (2)  has [have], other than as a member or customer, a

 7-6     financial interest in:

 7-7                       (A)  a financial institution; or

 7-8                       (B)  an organization, other than a financial

 7-9     institution, regulated by any financial institution regulatory

7-10     agency or receiving funds from such agency; or

7-11                 (3)  uses or receives a substantial amount of tangible

7-12     goods, services, or funds from the department, other than

7-13     compensation or reimbursement authorized by law for commission

7-14     membership, attendance, or expenses[, such as a credit union, bank,

7-15     or savings and loan association].

7-16           (c)  No two members of the commission may be residents of the

7-17     same state senatorial district.

7-18           (d)  An officer, employee, or paid consultant of a [A person

7-19     currently serving as chairman, first vice-chairman, president,

7-20     vice-president, secretary, or treasurer of a state] trade

7-21     association representing or affiliated with a financial institution

7-22     group or any entity affiliated with financial institutions [in the

7-23     credit union industry, or an employee of such an organization,] may

7-24     not serve as a member of the commission and may not be an employee

7-25     of the department who is exempt from the state's position

7-26     classification plan or is compensated at or above the amount

7-27     prescribed by the General Appropriations Act for step 1, salary

 8-1     group 17, of the position classification salary schedule.

 8-2           (e)  A person who is the spouse of an officer, manager, or

 8-3     paid consultant of a trade association representing or affiliated

 8-4     with a financial institution group or any entity affiliated with

 8-5     financial institutions may not be a member of the commission and

 8-6     may not be an employee of the department who is exempt from the

 8-7     state's position classification plan or is compensated at or above

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

 8-9     salary group 17, of the position classification salary schedule.

8-10           (f)  For the purposes of this section, a trade association is

8-11     a nonprofit, cooperative, and voluntarily joined association of

8-12     business or professional competitors designed to assist its members

8-13     and its industry or profession in dealing with mutual business or

8-14     professional problems and in promoting their common interest.

8-15           (g) [(e)] A person may not serve as a member of the

8-16     commission or act as the general counsel to the commission or the

8-17     department if the person [who] is required to register as a

8-18     lobbyist under Chapter 305, Government Code, because of the

8-19     person's activities for compensation on behalf of a profession

8-20     related to the operation of [may not serve as a member of the

8-21     commission or act as the general counsel to] the commission.

8-22           SECTION 6.  Subsection (a), Section 11.03, Texas Credit Union

8-23     Act (Article 2461-11.03, Vernon's Texas Civil Statutes), is amended

8-24     to read as follows:

8-25           (a)  The members of the commission are appointed, without

8-26     regard to race, color, creed, disability, sex, religion, age, or

8-27     national origin, by the governor, with the advice and consent of

 9-1     the senate, for terms of six years, with the terms of three members

 9-2     expiring February 15 of each odd-numbered year.  The governor shall

 9-3     appoint the members who are representatives of the general public

 9-4     on the basis of recognized business ability.

 9-5           SECTION 7.  Chapter 11, Texas Credit Union Act (Article

 9-6     2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

 9-7     adding Section 11.031 to read as follows:

 9-8           Sec. 11.031.  TRAINING PROGRAM.  (a)  Before a member of the

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

9-10     be confirmed by the senate, the member must complete at least one

9-11     course of the training program established under this section.

9-12           (b)  A training program established under this section shall

9-13     provide information to the member regarding:

9-14                 (1)  the enabling legislation that created the

9-15     department and its policy-making body to which the member is

9-16     appointed to serve;

9-17                 (2)  the programs operated by the department;

9-18                 (3)  the role and functions of the department;

9-19                 (4)  the rules of the commission with an emphasis on

9-20     the rules that relate to disciplinary and investigatory authority;

9-21                 (5)  the current budget for the department;

9-22                 (6)  the results of the most recent formal audit of the

9-23     department;

9-24                 (7)  the requirements of the:

9-25                       (A)  open meetings law, Chapter 551, Government

9-26     Code;

9-27                       (B)  open records law, Chapter 552, Government

 10-1    Code; and

 10-2                      (C)  administrative procedure law, Chapter 2001,

 10-3    Government Code;

 10-4                (8)  the requirements of the conflict of interest laws

 10-5    and other laws relating to public officials;

 10-6                (9)  any applicable ethics policies adopted by the

 10-7    department or the Texas Ethics Commission; and

 10-8                (10)  the basic principles and responsibilities of

 10-9    credit union management.

10-10          SECTION 8.  Section 11.04, Texas Credit Union Act (Article

10-11    2461-11.04, Vernon's Texas Civil Statutes), is amended to read as

10-12    follows:

10-13          Sec. 11.04.  VACANCIES; REMOVAL.  (a)  [The office of a

10-14    member of the commission becomes vacant on January 1 if the member

10-15    failed to attend more than one-half of the meetings of the

10-16    commission held during the preceding calendar year, excluding any

10-17    meetings held before the member assumed office.]

10-18          [(b)]  The governor may remove a member from the member's

10-19    position on the commission for neglect of duty, incompetence, or

10-20    fraudulent or criminal conduct.

10-21          (b) [(c)]  It is grounds for removal from the commission if a

10-22    member:

10-23                (1)  does not have at the time of appointment the

10-24    qualifications required by Section 11.02;

10-25                (2)  does not maintain during service on the commission

10-26    the qualifications required by Section 11.02;

10-27                (3)  violates a prohibition established by Section

 11-1    11.02;

 11-2                (4)  cannot because of illness or disability discharge

 11-3    the member's duties for a substantial part of the term for which

 11-4    the member is appointed; or

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

 11-6    scheduled commission meetings that the member is eligible to attend

 11-7    during a calendar year unless the absence is excused by majority

 11-8    vote of the commission.

 11-9          (c)  The validity of an action of the commission is not

11-10    affected by the fact that it is taken when a ground for removal of

11-11    a commission member exists.

11-12          (d)  If the commissioner has knowledge that a potential

11-13    ground for removal exists, the commissioner shall notify the

11-14    presiding officer of the commission of the potential ground.  The

11-15    presiding officer shall then notify the governor and the attorney

11-16    general that a potential ground for removal exists.  If the

11-17    potential ground for removal involves the presiding officer, the

11-18    commissioner shall notify the next highest officer of the

11-19    commission, who shall notify the governor and the attorney general

11-20    that a potential ground for removal exists [violates a prohibition

11-21    established by Section 11.02(e) of this Act].

11-22          (e) [(d)]  The office of a member of the commission is vacant

11-23    in the event of the death, resignation, or removal of the member,

11-24    or if the member ceases to have the qualifications necessary to

11-25    serve as a member.

11-26          (f) [(e)]  In the event of a vacancy on the commission for

11-27    any cause, the governor, with the advice and consent of the senate,

 12-1    shall promptly appoint a qualified person to fill the unexpired

 12-2    term.

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

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

 12-5    a member of the commission existed.]

 12-6          SECTION 9.  Subsections (a), (c), and (e), Section 11.06,

 12-7    Texas Credit Union Act (Article 2461-11.06, Vernon's Texas Civil

 12-8    Statutes), are amended to read as follows:

 12-9          (a)  The commission shall hold regular meetings at least

12-10    twice each year.  The chairman of the commission, the commissioner,

12-11    or any five members of the commission may call special meetings.

12-12    The commission shall adopt reasonable rules governing the time and

12-13    place of meetings and the conduct of all meetings, including the

12-14    form in which minutes of the meetings are maintained.  The [All

12-15    meetings of the] commission is [are] subject to the Open Meetings

12-16    Law, Chapter 551, Government Code, and the administrative procedure

12-17    law, Chapter 2001, Government Code [271, Acts of the 60th

12-18    Legislature, 1967, as amended (Article 6252-17, Vernon's Texas

12-19    Civil Statutes)].

12-20          (c)  The governor shall designate a member of the commission

12-21    as presiding officer of the commission to serve in that capacity at

12-22    the pleasure of the governor [commission shall annually elect a

12-23    chairman and vice-chairman from among its members.  The chairman

12-24    shall preside at all meetings of the commission, and the

12-25    vice-chairman shall preside in the absence of the chairman.  If

12-26    both the chairman and vice-chairman are absent from a meeting, the

12-27    most senior member of the commission in attendance at the meeting

 13-1    shall serve as acting chairman].

 13-2          (e)  No commission member may act on matters under

 13-3    consideration which directly affect [and specifically relate to]

 13-4    any credit union of which the member of the commission is an

 13-5    officer, director, or member.  The commission shall adopt rules

 13-6    relating to recusal of members, requiring that a member who has a

 13-7    personal or private interest in a measure, proposal, or decision

 13-8    pending before the commission shall publicly disclose the fact to

 13-9    the commission at a meeting held in compliance with Chapter 551,

13-10    Government Code.  The member may not vote or otherwise participate

13-11    in the decision.  The disclosure shall be entered into the minutes

13-12    of the meeting.

13-13          SECTION 10.  Chapter 11, Texas Credit Union Act (Article

13-14    2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

13-15    adding Section 11.061 to read as follows:

13-16          Sec. 11.061.  RECEIPT OF PUBLIC COMMENTS; NOTICE OF

13-17    COMMISSION ACTIVITIES.  (a)  The commission shall develop and

13-18    implement policies that provide the public with a reasonable

13-19    opportunity to appear before the commission and to speak on any

13-20    issue under the jurisdiction of the department.

13-21          (b)  The commission shall adopt rules providing for public

13-22    notice of department activities.

13-23          SECTION 11.  Section 11.07, Texas Credit Union Act (Article

13-24    2461-11.07, Vernon's Texas Civil Statutes), is amended by adding

13-25    Subsections (d) and (e) to read as follows:

13-26          (d)  The commission may not adopt rules restricting

13-27    competitive bidding or advertising by a credit union except to

 14-1    prohibit false, misleading, or deceptive practices.

 14-2          (e)  In its rules to prohibit false, misleading, or deceptive

 14-3    practices, the commission may not include a rule that:

 14-4                (1)  restricts the use of any medium for advertising;

 14-5                (2)  relates to the size or duration of an

 14-6    advertisement by the credit union; or

 14-7                (3)  restricts the credit union's advertisement under a

 14-8    trade name.

 14-9          SECTION 12.  Chapter 11, Texas Credit Union Act (Article

14-10    2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

14-11    adding Section 11.071 to read as follows:

14-12          Sec. 11.071.  SEPARATION OF RESPONSIBILITIES.  The commission

14-13    shall develop and implement policies that clearly separate the

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

14-15    responsibilities of the commissioner and the staff of the

14-16    department.

14-17          SECTION 13.  Section 11.10, Texas Credit Union Act (Article

14-18    2461-11.10, Vernon's Texas Civil Statutes), is amended to read as

14-19    follows:

14-20          Sec. 11.10.  POWERS OF CREDIT UNION COMMISSIONER.  (a)  On

14-21    the appointment and qualification of a commissioner, the

14-22    commissioner shall supervise and regulate all credit unions doing

14-23    business in this state, except federal credit unions organized and

14-24    existing under federal law, in accordance with this Act and the

14-25    rules and regulations promulgated under this Act.

14-26          (b)  The commissioner shall enforce the provisions of this

14-27    Act and the rules and regulations promulgated from time to time.

 15-1          (c)  The commissioner shall levy and collect all supervision

 15-2    fees, charges, and revenues required to be paid by credit unions as

 15-3    provided by Subsection (c), Section 11.07, of this Act.  All money

 15-4    paid to the department [collected] under this Act is subject to

 15-5    Subchapter F, Chapter 404, Government Code [shall be deposited in

 15-6    the credit union department expense fund, which is created as a

 15-7    special fund in the state treasury.  Money in the fund may be used

 15-8    only for the administration of this Act.  Income earned on the

 15-9    money deposited in the credit union department expense fund shall

15-10    be credited to that fund].

15-11          (d)  The commissioner or the commissioner's designee shall

15-12    provide to members of the commission and to department employees,

15-13    as often as necessary, information regarding their qualification

15-14    for office or employment under this Act and their responsibilities

15-15    under applicable laws relating to standards of conduct for state

15-16    officers or employees.

15-17          (e)  The commission shall promulgate, and the commissioner

15-18    shall enforce, reasonable rules requiring credit unions to provide

15-19    or cause to be provided share and deposit insurance protection for

15-20    their members and depositors, including the authorization and

15-21    establishment of a share and deposit guaranty corporation or credit

15-22    union under the exclusive regulation of the department to enable

15-23    the department to carry out the purposes of this Act.  Share and

15-24    deposit insurance protection may also be provided through other

15-25    sources approved by the department, including such a program of the

15-26    National Credit Union Administration.

15-27          (f)  The commissioner shall supervise the establishment and

 16-1    maintenance of files regarding each written complaint filed with

 16-2    [complaints about credit unions received by] the department that

 16-3    the department has authority to resolve.  The files must include

 16-4    all relevant information regarding the nature, status, and

 16-5    disposition of the complaints.  The department [commissioner] shall

 16-6    provide to the person filing the complaint and the persons or

 16-7    entities complained about the department's policies and procedures

 16-8    pertaining to complaint investigation and resolution.  The

 16-9    department, at least [take the steps that the commissioner

16-10    determines to be necessary to notify each complainant of the

16-11    procedures and remedies available for the resolution of complaints.

16-12    After a written complaint is filed, the commissioner, at least as

16-13    frequently as] quarterly and until final disposition of the

16-14    complaint, shall notify the parties to the complaint of the status

16-15    of the complaint unless the notice would jeopardize an undercover

16-16    investigation.

16-17          (g)  The department shall keep information about each

16-18    complaint filed with the department.  The information shall

16-19    include:

16-20                (1)  the date the complaint is received;

16-21                (2)  the name of the complainant;

16-22                (3)  the subject matter of the complaint;

16-23                (4)  a record of all persons contacted in relation to

16-24    the complaint;

16-25                (5)  a summary of the results of the review or

16-26    investigation of the complaint; and

16-27                (6)  for complaints for which the department took no

 17-1    action, an explanation of the reason the complaint was closed

 17-2    without action.

 17-3          (h)  The commissioner shall supervise the preparation of

 17-4    public interest information describing [regarding] the [regulatory]

 17-5    functions of the department, procedures for filing and resolution

 17-6    of complaints, and other matters of general interest regarding

 17-7    [the] credit unions.  The commissioner [union movement and] shall

 17-8    make the [supervise the dissemination of that] information

 17-9    available to the general public and appropriate state agencies.

17-10          (i)  The commission by rule shall establish methods by which

17-11    consumers and service recipients are notified of the name, mailing

17-12    address, and telephone number of the department for the purpose of

17-13    directing complaints to the department.  The commission may provide

17-14    for that notification:

17-15                (1)  on each registration form, application, or written

17-16    contract for services of a credit union regulated under this Act;

17-17                (2)  on a sign prominently displayed in the place of

17-18    business of each credit union regulated under this Act; or

17-19                (3)  in a bill for service provided by a credit union

17-20    regulated under this Act.

17-21          (j)  The department shall comply with federal and state laws

17-22    related to program and facility accessibility.  The commissioner

17-23    shall also prepare and maintain a written plan that describes how a

17-24    person who does not speak English can be provided reasonable access

17-25    to the department's programs and services.

17-26          SECTION 14.  Section 11.18, Texas Credit Union Act (Article

17-27    2461-11.18, Vernon's Texas Civil Statutes), is amended to read as

 18-1    follows:


 18-3    (a)  The commissioner or the commissioner's [his] designee shall

 18-4    develop an intra-agency career ladder program that addresses

 18-5    opportunities for mobility and advancement for employees within the

 18-6    department.  The program shall require[, one part of which shall be

 18-7    an] intra-agency posting of all nonentry level positions

 18-8    concurrently with [for at least 10 days before] any public posting.

 18-9          (b)  The commissioner or the commissioner's [his] designee

18-10    shall develop a system of annual performance evaluations that are

18-11    based on documented employee performance [measurable job tasks].

18-12    All merit pay for department employees must be based on the system

18-13    established under this section.

18-14          SECTION 15.  Chapter 11, Texas Credit Union Act (Article

18-15    2461-11.01 et seq., Vernon's Texas Civil Statutes), is amended by

18-16    adding Section 11.19 to read as follows:

18-17          Sec. 11.19.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  The

18-18    commissioner or the commissioner's designee shall prepare and

18-19    maintain a written policy statement to assure implementation of a

18-20    program of equal employment opportunity under which all personnel

18-21    transactions are made without regard to race, color, disability,

18-22    sex, religion, age, or national origin.  The policy statement must

18-23    include:

18-24                (1)  personnel policies, including policies relating to

18-25    recruitment, evaluation, selection, appointment, training, and

18-26    promotion of personnel that are in compliance with requirements of

18-27    Chapter 21, Labor Code;

 19-1                (2)  a comprehensive analysis of the department

 19-2    workforce that meets federal and state guidelines;

 19-3                (3)  procedures by which a determination can be made

 19-4    about the extent of underuse in the department workforce of all

 19-5    persons for whom federal or state guidelines encourage a more

 19-6    equitable balance; and

 19-7                (4)  reasonable methods to appropriately address those

 19-8    areas of underuse.

 19-9          (b)  A policy statement prepared under Subsection (a) must

19-10    cover an annual period, be updated annually and reviewed by the

19-11    Texas Commission on Human Rights for compliance with Subsection

19-12    (a)(1), and be filed with the governor's office.

19-13          (c)  The governor's office shall deliver a biennial report to

19-14    the legislature based on the information received under Subsection

19-15    (b).  The report may be made separately or as a part of other

19-16    biennial reports made to the legislature.

19-17          SECTION 16.  Section 12.01, Texas Credit Union Act (Article

19-18    2461-12.01, Vernon's Texas Civil Statutes), is amended to read as

19-19    follows:

19-20          Sec. 12.01.  HEARINGS.  (a)  The conduct of all hearings held

19-21    under this Act and the judicial review of the final decisions

19-22    following those hearings are governed by the administrative

19-23    procedure law, Chapter 2001, Government Code [the Administrative

19-24    Procedure and Texas Register Act, as amended (Article 6252-13a,

19-25    Vernon's Texas Civil Statutes)].   The commission may adopt rules

19-26    of procedure consistent with that chapter [the Administrative

19-27    Procedure and Texas Register Act, as amended,] for the fair hearing

 20-1    and adjudication of all issues in a hearing held under this Act.

 20-2    This section does not apply to a meeting under Section 12.03 of

 20-3    this Act.

 20-4          (b)  If the commission proposes to suspend or revoke a credit

 20-5    union's certificate of incorporation, the credit union is entitled

 20-6    to a hearing conducted by the State Office of Administrative

 20-7    Hearings.  Proceedings for a disciplinary action are governed by

 20-8    the administrative procedure law, Chapter 2001, Government Code.

 20-9    Rules of practice adopted by the commission under Section 2001.004,

20-10    Government Code, applicable to the proceedings for a disciplinary

20-11    action may not conflict with rules adopted by the State Office of

20-12    Administrative Hearings.

20-13          SECTION 17.  Chapter 12, Texas Credit Union Act (Article

20-14    2461-12.01 et seq., Vernon's Texas Civil Statutes), is amended by

20-15    adding Section 12.03 to read as follows:

20-16          Sec. 12.03.  PROCEDURE FOR CERTAIN APPROVALS.  (a)  This

20-17    section applies to a request for approval by the commissioner of:

20-18                (1)  an application for incorporation under Section

20-19    2.03 of this Act;

20-20                (2)  a request for approval of an amendment to a credit

20-21    union's articles of incorporation under Section 2.06 of this Act,

20-22    including an amendment to expand the credit union's field of

20-23    membership; and

20-24                (3)  a merger or consolidation under Section 10.03 of

20-25    this Act.

20-26          (b)  Before approving a request to which this section

20-27    applies, the commissioner shall submit notice of the request to the

 21-1    secretary of state for publication in the Texas Register.  The

 21-2    commission by rule shall provide for other appropriate public

 21-3    notice of the request.  The commissioner may waive the requirements

 21-4    of this subsection or permit delayed public notice on a

 21-5    determination that waiver or delay is in the public interest.  If

 21-6    the requirements of this subsection are waived, the information

 21-7    that would be contained in a public notice becomes public

 21-8    information under Chapter 552, Government Code, on the 35th day

 21-9    after the date the request is made.

21-10          (c)  Before making a determination on a request to which this

21-11    section applies, the commissioner must accept comment from any

21-12    interested party that wishes to comment.  This comment may be in

21-13    the form of written testimony or may be provided at a meeting with

21-14    the commissioner held for the purpose of receiving this comment.

21-15    This meeting shall be held if requested by any interested party.

21-16    The commissioner may hold the meeting regardless of whether an

21-17    interested party requests the meeting.  The commission may

21-18    establish reasonable rules governing the circumstances and conduct

21-19    of the meeting.  Chapter 2001, Government Code, does not apply to

21-20    the meeting.  Not later than the 60th day after the date the notice

21-21    is published in the Texas Register, or if the notice is not

21-22    published, after the date the request is received, the commissioner

21-23    shall approve or disapprove the application.

21-24          SECTION 18.  The Sunset Advisory Commission, as part of its

21-25    evaluation of agencies preceding the meeting of the 77th

21-26    Legislature in 2001, shall:

21-27                (1)  evaluate the organizational structure of the

 22-1    state's financial regulatory agencies; and

 22-2                (2)  study the potential effects of placing the Credit

 22-3    Union Commission under the jurisdiction of the Finance Commission

 22-4    of Texas.

 22-5          SECTION 19.  (a)  The Credit Union Commission and the Finance

 22-6    Commission of Texas shall jointly review state law, including

 22-7    rules, governing financial institutions in this state.  The review

 22-8    must include an examination of differences in the authority granted

 22-9    by law to the different state regulatory officers and agencies and

22-10    how the officers and agencies differ in their manner of regulating

22-11    the institutions under their respective jurisdictions.

22-12          (b)  A report of the review shall be submitted to the Sunset

22-13    Advisory Commission before September 1, 1999.

22-14          SECTION 20.  If after the effective date of this Act a

22-15    vacancy exists in a position of member of the Credit Union

22-16    Commission that was held by an individual described by Subsection

22-17    (a), Section 11.02, Texas Credit Union Act (Article 2461-11.02,

22-18    Vernon's Texas Civil Statutes), the vacancy shall be filled by

22-19    appointment of an individual described by Subsection (b) of Section

22-20    11.02 of that Act until the number of public members and members

22-21    who represent credit unions are as prescribed by those sections, as

22-22    amended by this Act.

22-23          SECTION 21.  This Act takes effect September 1, 1997.

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

22-25    crowded condition of the calendars in both houses create an

22-26    emergency and an imperative public necessity that the

22-27    constitutional rule requiring bills to be read on three several

 23-1    days in each house be suspended, and this rule is hereby suspended.