1-1     By:  Brown                                             S.B. No. 358

 1-2           (In the Senate - Filed February 24, 1997; February 26, 1997,

 1-3     read first time and referred to Committee on State Affairs;

 1-4     April 8, 1997, reported favorably, as amended, by the following

 1-5     vote:  Yeas 13, Nays 0; April 8, 1997, sent to printer.)

 1-6     COMMITTEE AMENDMENT NO. 1                               By:  Nelson

 1-7     Amend S.B. No. 358 on page 5 by striking lines 33-41 and

 1-8     substituting:

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

1-10     management or direction of:

1-11                       (A)  a financial institution; or

1-12                       (B)  an organization, other than a financial

1-13     institution, regulated by the department or receiving funds from

1-14     the department [, such as a credit union, bank, or savings and loan

1-15     association]; [or]

1-16                 (2)  has [have], other than as a member or customer, a

1-17     financial interest in:

1-18                       (A)  a financial institution; or

1-19                       (B)  an organization, other than a financial

1-20     institution, regulated by the department or receiving funds from

1-21     the department; or

1-22     COMMITTEE AMENDMENT NO. 2                   By:  Gallegos, Galloway

1-23     Amend Committee Amendment No. 1:

1-24           (1)  On line 13, by striking "the department" and replacing

1-25     it with "any financial institution regulatory agency".

1-26           (2)  On line 14, by striking "the department" and replacing

1-27     it with "such agency".

1-28           (3)  On line 20, by striking "the department" and replacing

1-29     it with "any financial institution regulatory agency".

1-30           (4)  On line 21, by striking "the department" and replacing

1-31     it with "such agency".

1-32     COMMITTEE AMENDMENT NO. 3                                By:  Nixon

1-33     Amend S.B. No. 358 by striking SECTION 8 of the bill and

1-34     substituting the following:

1-35           SECTION 8.  Section 11.04, Texas Credit Union Act (Article

1-36     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

1-37     read as follows:

1-38           Sec. 11.04.  VACANCIES; REMOVAL.  (a)  [The office of a

1-39     member of the commission becomes vacant on January 1 if the member

1-40     failed to attend more than one-half of the meetings of the

1-41     commission held during the preceding calendar year, excluding any

1-42     meetings held before the member assumed office.]

1-43           [(b)]  The governor may remove a member from the member's

1-44     position on the commission for neglect of duty, incompetence, or

1-45     fraudulent or criminal conduct.

1-46           (b) [(c)]  It is grounds for removal from the commission if a

1-47     member:

1-48                 (1)  does not have at the time of appointment the

1-49     qualifications required by Section 11.02;

1-50                 (2)  does not maintain during service on the commission

1-51     the qualifications required by Section 11.02;

1-52                 (3)  violates a prohibition established by Section

1-53     11.02;

1-54                 (4)  cannot because of illness or disability discharge

1-55     the member's duties for a substantial part of the term for which

1-56     the member is appointed; or

1-57                 (5)  is absent from more than half of the regularly

1-58     scheduled commission meetings that the member is eligible to attend

1-59     during a calendar year unless the absence is excused by majority

1-60     vote of the commission.

1-61           (c)  The validity of an action of the commission is not

1-62     affected by the fact that it is taken when a ground for removal of

1-63     a commission member exists.

1-64           (d)  If the commissioner has knowledge that a potential

 2-1     ground for removal exists, the commissioner shall notify the

 2-2     presiding officer of the commission of the potential ground.  The

 2-3     presiding officer shall then notify the governor and the attorney

 2-4     general that a potential ground for removal exists.  If the

 2-5     potential ground for removal involves the presiding officer, the

 2-6     commissioner shall notify the next highest officer of the

 2-7     commission, who shall notify the governor and the attorney general

 2-8     that a potential ground for removal exists [violates a prohibition

 2-9     established by Section 11.02(e) of this Act].

2-10           (e) [(d)]  The office of a member of the commission is vacant

2-11     in the event of the death, resignation, or removal of the member,

2-12     or if the member ceases to have the qualifications necessary to

2-13     serve as a member.

2-14           (f) [(e)]  In the event of a vacancy on the commission for

2-15     any cause, the governor, with the advice and consent of the senate,

2-16     shall promptly appoint a qualified person to fill the unexpired

2-17     term.

2-18           [(f)  The validity of an action of the commission is not

2-19     affected by the fact that it was taken when a ground for removal of

2-20     a member of the commission existed.]

2-21     COMMITTEE AMENDMENT NO. 4                               By:  Carona

2-22     Amend S.B. 358, SECTION 17, by striking Subsection (c) of proposed

2-23     Section 12.03, and inserting the following:

2-24           (c)  Before making a determination on a request to which this

2-25     section applies, the commissioner must accept comment from any

2-26     person who wishes to comment.  This comment may be in the form of

2-27     written testimony or may be provided at a hearing which the

2-28     commissioner may hold, in accordance with rules established by the

2-29     commission, for the purpose of receiving this comment.  Chapter

2-30     2001, Government Code, does not apply to the hearing.  Not later

2-31     than the 60th day after the date the notice is published in the

2-32     Texas Register or the date on which a hearing on the application is

2-33     held, the commissioner shall approve or disapprove the application.

2-34     If the notice is not published, the commissioner shall approve or

2-35     disapprove the application not later than the 60th day after the

2-36     date the request is received.

2-37     COMMITTEE AMENDMENT NO. 5                               By:  Carona

2-38     Amend S.B. No. 358, SECTION 9, Section 11.06, Texas Credit Union

2-39     Act, on page 7, line 54, by striking "affect [and specifically

2-40     relate to]" and substituting "and specifically relate to".

2-41     COMMITTEE AMENDMENT NO. 6                             By:  Gallegos

2-42     Amend S.B. No. 358 in SECTION 4 of the bill on page 5, lines 5-6,

2-43     in Section 11.01(c), Texas Credit Union Act (Article 2461-1.01 et

2-44     seq., Vernon's Texas Civil Statutes), by striking the words "and

2-45     this Act expires September 1, 2001" and replacing with the words

2-46     "September 1, 2009".

2-47     COMMITTEE AMENDMENT NO. 7                             By:  Gallegos

2-48     Amend S.B. No. 358, SECTION 5, as follows:

2-49           (1)  On page 5, line 49, by striking the word "Texas"; and

2-50           (2)  On page 5, line 52, by striking the words "in the credit

2-51     union industry" and replacing with the words "representing or

2-52     affiliated with a financial institution group or any entity

2-53     affiliated with financial institutions [in the credit union

2-54     industry]"; and

2-55           (3)  On page 5, line 59, by striking the word "Texas"; and

2-56           (4)  On page 5, line 60, by striking the words "in the credit

2-57     union industry" and replacing with the words "representing or

2-58     affiliated with a financial institution group or any entity

2-59     affiliated with financial institutions"; and

2-60           (5)  On page 5, line 65, by striking the word "Texas"; and

2-61           (6)  On page 5, line 67, by striking the words "in this

2-62     state"

2-63     COMMITTEE AMENDMENT NO. 8                                By:  Nixon

2-64     Amend S.B. No. 358, SECTION 7, on page 6, line 49, by adding

2-65                 "(10)  the basic principles and responsibilities of

2-66     credit union management".

2-67                            A BILL TO BE ENTITLED

2-68                                   AN ACT

2-69     relating to the continuation and functions of the Credit Union

 3-1     Commission.

 3-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

 3-3           SECTION 1.  Section 2.03, Texas Credit Union Act (Article

 3-4     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

 3-5     read as follows:

 3-6           Sec. 2.03.  INCORPORATION PROCEDURE.  (a)  The incorporators

 3-7     shall file with the commissioner:

 3-8                 (1)  the original articles of incorporation in

 3-9     duplicate;

3-10                 (2)  standard bylaws for the general operation of the

3-11     credit union in duplicate;

3-12                 (3)  a completed application in a form prescribed by

3-13     the commission; and

3-14                 (4)  the fees required and set by the commission.

3-15           (b)  The commissioner may conduct any investigation and

3-16     obtain any information or report from any person, including a law

3-17     enforcement agency, that the commissioner considers necessary.

3-18           (c)  [The commission shall adopt rules establishing

3-19     procedures concerning notice of applications to incorporate and

3-20     conditions under which a hearing may be available.]

3-21           [(d)]  The commissioner shall approve the application for

3-22     incorporation if the incorporators have complied with this Act and

3-23     the rules adopted under this Act and the commissioner finds from

3-24     the information furnished with the application, the results of any

3-25     investigation, the evidence submitted at any hearing, and the

3-26     information in the official records in the department that:

3-27                 (1)  the character and general fitness of the

3-28     incorporators and the members of the initial board of directors

3-29     warrant belief that the business and affairs of the credit union

3-30     will be properly administered in accordance with this Act and the

3-31     rules adopted under this Act;

3-32                 (2)  the character and size of the field of membership

3-33     proposed to be served by the credit union conforms with this Act

3-34     and the rules adopted under this Act and are favorable to the

3-35     economic viability of the credit union; and

3-36                 (3)  the incorporators and the members of the initial

3-37     board of directors are acting in good faith and are making the

3-38     application in accordance with the purposes of this Act.

3-39           (d) [(e)]  In addition to the findings under Subsection (c)

3-40     [(d)] of this section, the commissioner shall, in accordance with

3-41     rules the commission may adopt, consider the effect of overlapping

3-42     fields of membership on the applicant credit union and existing

3-43     state or federal credit unions doing business in this state, and

3-44     the commissioner may, as a condition of approval of the

3-45     application, require the applicant credit union to limit or

3-46     eliminate overlaps, in accordance with the rules, if any, in order

3-47     to achieve the purposes of this Act and promote the welfare and

3-48     stability of those credit unions.  The commissioner also may

3-49     consider the availability and adequacy of financial services in the

3-50     local community and the effect that the incorporation of the credit

3-51     union would have on the local community.

3-52           (e)  The [(f)  Not later than 90 days after the later of the

3-53     date on which an application is filed or the date on which a

3-54     hearing on the application is held, the] commissioner shall state

3-55     his findings in a written order that approves or denies the

3-56     application to incorporate.

3-57           (f) [(g)]  The commission shall adopt rules providing for

3-58     appeal by an incorporator or aggrieved person.  The commissioner's

3-59     order may be appealed to the commission not later than 60 days

3-60     after the date of the order.  The commission shall, by written

3-61     order, affirm or reverse the decision of the commissioner after

3-62     reviewing the information or evidence it considers necessary or

3-63     relevant.

3-64           (g) [(h)]  An order of the commissioner or commission shall

3-65     be promptly mailed to the incorporators by registered or certified

3-66     mail.  If the application is approved by the commissioner, in the

3-67     absence of an appeal, or by the commission after conclusion of an

3-68     appeal, the commissioner shall issue a certificate of

3-69     incorporation, deliver copies of the approved articles of

 4-1     incorporation and bylaws to the incorporators, and retain copies of

 4-2     these documents in the department's permanent files.

 4-3           SECTION 2.  Subsection (b), Section 2.06, Texas Credit Union

 4-4     Act (Article 2461-1.01 et seq., Vernon's Texas Civil Statutes), is

 4-5     amended to read as follows:

 4-6           (b)  The board of directors may amend the articles of

 4-7     incorporation or bylaws and shall submit amendments to the

 4-8     commissioner.  The commissioner shall approve or disapprove an

 4-9     amendment in writing [not later than 60 days after the date of

4-10     submission, the date of any required publication in the

4-11     department's newsletter, or the date on which a hearing on the

4-12     amendment is held, whichever is later].  In approving an amendment,

4-13     the commissioner shall make the findings and may take the actions

4-14     provided by Subsections (c) and (d) [and (e)] of Section 2.03 of

4-15     this Act.  The commissioner may not approve an amendment if the

4-16     commissioner finds that it violates this Act or the rules adopted

4-17     under this Act.  The commissioner shall state the reasons for a

4-18     disapproval with reasonable specificity.  Amendments become

4-19     effective on approval by the commissioner.

4-20           SECTION 3.  Section 10.03, Texas Credit Union Act (Article

4-21     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

4-22     adding Subsections (g) and (h) to read as follows:

4-23           (g)  In determining whether to approve or disapprove the

4-24     merger or consolidation, the commissioner shall consider the

4-25     availability and adequacy of financial services in the local

4-26     community and the effect that the merger or consolidation would

4-27     have on the local community.  The commission by rule shall

4-28     establish other appropriate criteria that the commissioner must

4-29     consider in making the determination.

4-30           (h)  The rules adopted under this section must specify in

4-31     detail the procedures that:

4-32                 (1)  a credit union must follow to obtain commissioner

4-33     approval of a merger or consolidation; and

4-34                 (2)  the commissioner must follow in approving or

4-35     disapproving the merger or consolidation.

4-36           SECTION 4.  Subsections (b) and (c), Section 11.01, Texas

4-37     Credit Union Act (Article 2461-1.01 et seq., Vernon's Texas Civil

4-38     Statutes), are amended to read as follows:

4-39           (b)  The Credit Union Department is composed of the Credit

4-40     Union Commission and a Credit Union Commissioner, together with

4-41     other officers and employees within the department.  The department

4-42     shall supervise and shall regulate, as provided in this Act, all

4-43     credit unions organized under the laws of the State of Texas.  The

4-44     department shall periodically make comprehensive studies of the

4-45     statutes of this state as they pertain to credit union operations.

4-46     The commissioner shall report the recommendations of the department

4-47     when and as necessary to the legislature for consideration. The

4-48     [During January of each year, the] department shall prepare

4-49     annually [file with the governor and the presiding officer of each

4-50     house of the legislature] a complete and detailed written report

4-51     accounting for all funds received and disbursed by the department

4-52     during the preceding year.  The annual report must meet the

4-53     reporting requirements applicable to financial reporting provided

4-54     in the General Appropriations Act.  The financial transactions of

4-55     the department are subject to audit by the state auditor in

4-56     accordance with Chapter 321, Government Code.

4-57           (c)  The Credit Union Commission is subject to Chapter 325,

4-58     Government Code (Texas Sunset Act).  Unless continued in existence

4-59     as provided by that chapter, the commission is abolished and this

4-60     Act expires September 1, 2001 [1997].

4-61           SECTION 5.  Section 11.02, Texas Credit Union Act (Article

4-62     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

4-63     read as follows:

4-64           Sec. 11.02.  ELIGIBILITY OF MEMBERS.  (a)  Four [Six] members

4-65     of the commission must be individuals who are currently engaged in

4-66     the exercise of the duties, responsibilities, rights, and powers of

4-67     a duly authorized director, officer, or committee member of a

4-68     credit union that is organized and doing business in this state

4-69     under this Act or the Federal Credit Union Act and that has its

 5-1     principal office in this state, and who have five years or more of

 5-2     active experience as such a director, officer, or committee member.

 5-3     No more than one person from a federal credit union may serve on

 5-4     the commission at any time.  Experience as a commissioner, deputy

 5-5     commissioner, or examiner is equivalent to the type of experience

 5-6     required by this subsection.  If a person holding a position in

 5-7     accordance with this subsection ceases to be engaged in the

 5-8     exercise of the duties, responsibilities, rights, and powers

 5-9     prescribed by this subsection for a period exceeding 90 days, the

5-10     person is ineligible to serve as a member and the person's position

5-11     on the commission is vacant.

5-12           (b)  Five [Three] members of the commission are

5-13     representatives of the general public.  A person is not eligible

5-14     for appointment as a public member of [An individual appointed to

5-15     serve in that capacity may not, at the time of the individual's

5-16     appointment to or while serving on] the commission if the person or

5-17     the person's spouse:

5-18                 (1)  is employed by or participates [be engaged] in the

5-19     management or direction of a financial institution or other

5-20     organization regulated by the department or receiving funds from

5-21     the department[, such as a credit union, bank, or savings and loan

5-22     association]; [or]

5-23                 (2)  has [have], other than as a member or customer, a

5-24     financial interest in a financial institution or other organization

5-25     regulated by the department or receiving funds from the department;

5-26     or

5-27                 (3)  uses or receives a substantial amount of tangible

5-28     goods, services, or funds from the department, other than

5-29     compensation or reimbursement authorized by law for commission

5-30     membership, attendance, or expenses[, such as a credit union, bank,

5-31     or savings and loan association].

5-32           (c)  No two members of the commission may be residents of the

5-33     same state senatorial district.

5-34           (d)  An officer, employee, or paid consultant of a Texas [A

5-35     person currently serving as chairman, first vice-chairman,

5-36     president, vice-president, secretary, or treasurer of a state]

5-37     trade association in the credit union industry[, or an employee of

5-38     such an organization,] may not serve as a member of the commission

5-39     and may not be an employee of the department who is exempt from the

5-40     state's position classification plan or is compensated at or above

5-41     the amount prescribed by the General Appropriations Act for step 1,

5-42     salary group 17, of the position classification salary schedule.

5-43           (e)  A person who is the spouse of an officer, manager, or

5-44     paid consultant of a Texas trade association in the credit union

5-45     industry may not be a member of the commission and may not be an

5-46     employee of the department who is exempt from the state's position

5-47     classification plan or is compensated at or above the amount

5-48     prescribed by the General Appropriations Act for step 1, salary

5-49     group 17, of the position classification salary schedule.

5-50           (f)  For the purposes of this section, a Texas trade

5-51     association is a nonprofit, cooperative, and voluntarily joined

5-52     association of business or professional competitors in this state

5-53     designed to assist its members and its industry or profession in

5-54     dealing with mutual business or professional problems and in

5-55     promoting their common interest.

5-56           (g) [(e)] A person may not serve as a member of the

5-57     commission or act as the general counsel to the commission or the

5-58     department if the person [who] is required to register as a

5-59     lobbyist under Chapter 305, Government Code, because of the

5-60     person's activities for compensation on behalf of a profession

5-61     related to the operation of [may not serve as a member of the

5-62     commission or act as the general counsel to] the commission.

5-63           SECTION 6.  Subsection (a), Section 11.03, Texas Credit Union

5-64     Act (Article 2461-1.01 et seq., Vernon's Texas Civil Statutes), is

5-65     amended to read as follows:

5-66           (a)  The members of the commission are appointed, without

5-67     regard to race, color, creed, disability, sex, religion, age, or

5-68     national origin, by the governor, with the advice and consent of

5-69     the senate, for terms of six years, with the terms of three members

 6-1     expiring February 15 of each odd-numbered year.  The governor shall

 6-2     appoint the members who are representatives of the general public

 6-3     on the basis of recognized business ability.

 6-4           SECTION 7.  Chapter 11, Texas Credit Union Act (Article

 6-5     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

 6-6     adding Section 11.031 to read as follows:

 6-7           Sec. 11.031.  TRAINING PROGRAM.  (a)  Before a member of the

 6-8     commission may assume the member's duties and before the member may

 6-9     be confirmed by the senate, the member must complete at least one

6-10     course of the training program established under this section.

6-11           (b)  A training program established under this section shall

6-12     provide information to the member regarding:

6-13                 (1)  the enabling legislation that created the

6-14     department and its policy-making body to which the member is

6-15     appointed to serve;

6-16                 (2)  the programs operated by the department;

6-17                 (3)  the role and functions of the department;

6-18                 (4)  the rules of the commission with an emphasis on

6-19     the rules that relate to disciplinary and investigatory authority;

6-20                 (5)  the current budget for the department;

6-21                 (6)  the results of the most recent formal audit of the

6-22     department;

6-23                 (7)  the requirements of the:

6-24                       (A)  open meetings law, Chapter 551, Government

6-25     Code;

6-26                       (B)  open records law, Chapter 552, Government

6-27     Code; and

6-28                       (C)  administrative procedure law, Chapter 2001,

6-29     Government Code;

6-30                 (8)  the requirements of the conflict of interest laws

6-31     and other laws relating to public officials; and

6-32                 (9)  any applicable ethics policies adopted by the

6-33     department or the Texas Ethics Commission.

6-34           SECTION 8.  Section 11.04, Texas Credit Union Act (Article

6-35     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

6-36     read as follows:

6-37           Sec. 11.04.  VACANCIES; REMOVAL.  (a)  The office of a member

6-38     of the commission becomes vacant on January 1 if the member failed

6-39     to attend more than one-half of the meetings of the commission held

6-40     during the preceding calendar year, excluding any meetings held

6-41     before the member assumed office.

6-42           (b)  The governor may remove a member from the member's

6-43     position on the commission for neglect of duty, incompetence, or

6-44     fraudulent or criminal conduct.

6-45           (c)  It is grounds for removal from the commission if a

6-46     member:

6-47                 (1)  does not have at the time of appointment the

6-48     qualifications required by Section 11.02;

6-49                 (2)  does not maintain during service on the commission

6-50     the qualifications required by Section 11.02;

6-51                 (3)  violates a prohibition established by Section

6-52     11.02;

6-53                 (4)  cannot because of illness or disability discharge

6-54     the member's duties for a substantial part of the term for which

6-55     the member is appointed; or

6-56                 (5)  is absent from more than half of the regularly

6-57     scheduled commission meetings that the member is eligible to attend

6-58     during a calendar year unless the absence is excused by majority

6-59     vote of the commission.

6-60           (d)  The validity of an action of the commission is not

6-61     affected by the fact that it is taken when a ground for removal of

6-62     a commission member exists.

6-63           (e)  If the commissioner has knowledge that a potential

6-64     ground for removal exists, the commissioner shall notify the

6-65     presiding officer of the commission of the potential ground.  The

6-66     presiding officer shall then notify the governor and the attorney

6-67     general that a potential ground for removal exists.  If the

6-68     potential ground for removal involves the presiding officer, the

6-69     commissioner shall notify the next highest officer of the

 7-1     commission, who shall notify the governor and the attorney general

 7-2     that a potential ground for removal exists [violates a prohibition

 7-3     established by Section 11.02(e) of this Act].

 7-4           (f) [(d)]  The office of a member of the commission is vacant

 7-5     in the event of the death, resignation, or removal of the member,

 7-6     or if the member ceases to have the qualifications necessary to

 7-7     serve as a member.

 7-8           (g) [(e)]  In the event of a vacancy on the commission for

 7-9     any cause, the governor, with the advice and consent of the senate,

7-10     shall promptly appoint a qualified person to fill the unexpired

7-11     term.

7-12           [(f)  The validity of an action of the commission is not

7-13     affected by the fact that it was taken when a ground for removal of

7-14     a member of the commission existed.]

7-15           SECTION 9.  Subsections (a), (c), and (e), Section 11.06,

7-16     Texas Credit Union Act (Article 2461-1.01 et seq., Vernon's Texas

7-17     Civil Statutes), are amended to read as follows:

7-18           (a)  The commission shall hold regular meetings at least

7-19     twice each year.  The chairman of the commission, the commissioner,

7-20     or any five members of the commission may call special meetings.

7-21     The commission shall adopt reasonable rules governing the time and

7-22     place of meetings and the conduct of all meetings, including the

7-23     form in which minutes of the meetings are maintained.  The [All

7-24     meetings of the] commission is [are] subject to the Open Meetings

7-25     Law, Chapter 551, Government Code, and the administrative procedure

7-26     law, Chapter 2001, Government Code [271, Acts of the 60th

7-27     Legislature, 1967, as amended (Article 6252-17, Vernon's Texas

7-28     Civil Statutes)].

7-29           (c)  The governor shall designate a member of the commission

7-30     as presiding officer of the commission to serve in that capacity at

7-31     the pleasure of the governor [commission shall annually elect a

7-32     chairman and vice-chairman from among its members.  The chairman

7-33     shall preside at all meetings of the commission, and the

7-34     vice-chairman shall preside in the absence of the chairman.  If

7-35     both the chairman and vice-chairman are absent from a meeting, the

7-36     most senior member of the commission in attendance at the meeting

7-37     shall serve as acting chairman].

7-38           (e)  No commission member may act on matters under

7-39     consideration which directly affect [and specifically relate to]

7-40     any credit union of which the member of the commission is an

7-41     officer, director, or member.  The commission shall adopt rules

7-42     relating to recusal of members, requiring that a member who has a

7-43     personal or private interest in a measure, proposal, or decision

7-44     pending before the commission shall publicly disclose the fact to

7-45     the commission at a meeting held in compliance with Chapter 551,

7-46     Government Code.  The member may not vote or otherwise participate

7-47     in the decision.  The disclosure shall be entered into the minutes

7-48     of the meeting.

7-49           SECTION 10.  Chapter 11, Texas Credit Union Act (Article

7-50     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

7-51     adding Section 11.061 to read as follows:

7-52           Sec. 11.061.  RECEIPT OF PUBLIC COMMENTS; NOTICE OF

7-53     COMMISSION ACTIVITIES.  (a)  The commission shall develop and

7-54     implement policies that provide the public with a reasonable

7-55     opportunity to appear before the commission and to speak on any

7-56     issue under the jurisdiction of the department.

7-57           (b)  The commission shall adopt rules providing for public

7-58     notice of department activities.

7-59           SECTION 11.  Section 11.07, Texas Credit Union Act (Article

7-60     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

7-61     adding Subsections (d) and (e) to read as follows:

7-62           (d)  The commission may not adopt rules restricting

7-63     competitive bidding or advertising by a credit union except to

7-64     prohibit false, misleading, or deceptive practices.

7-65           (e)  In its rules to prohibit false, misleading, or deceptive

7-66     practices, the commission may not include a rule that:

7-67                 (1)  restricts the use of any medium for advertising;

7-68                 (2)  relates to the size or duration of an

7-69     advertisement by the credit union; or

 8-1                 (3)  restricts the credit union's advertisement under a

 8-2     trade name.

 8-3           SECTION 12.  Chapter 11, Texas Credit Union Act (Article

 8-4     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

 8-5     adding Section 11.071 to read as follows:

 8-6           Sec. 11.071.  SEPARATION OF RESPONSIBILITIES.  The commission

 8-7     shall develop and implement policies that clearly separate the

 8-8     policy-making responsibilities of the commission and the management

 8-9     responsibilities of the commissioner and the staff of the

8-10     department.

8-11           SECTION 13.  Section 11.10, Texas Credit Union Act (Article

8-12     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

8-13     read as follows:

8-14           Sec. 11.10.  POWERS OF CREDIT UNION COMMISSIONER.  (a)  On

8-15     the appointment and qualification of a commissioner, the

8-16     commissioner shall supervise and regulate all credit unions doing

8-17     business in this state, except federal credit unions organized and

8-18     existing under federal law, in accordance with this Act and the

8-19     rules and regulations promulgated under this Act.

8-20           (b)  The commissioner shall enforce the provisions of this

8-21     Act and the rules and regulations promulgated from time to time.

8-22           (c)  The commissioner shall levy and collect all supervision

8-23     fees, charges, and revenues required to be paid by credit unions as

8-24     provided by Subsection (c), Section 11.07, of this Act.  All money

8-25     paid to the department [collected] under this Act is subject to

8-26     Subchapter F, Chapter 404, Government Code [shall be deposited in

8-27     the credit union department expense fund, which is created as a

8-28     special fund in the state treasury.  Money in the fund may be used

8-29     only for the administration of this Act.  Income earned on the

8-30     money deposited in the credit union department expense fund shall

8-31     be credited to that fund].

8-32           (d)  The commissioner or the commissioner's designee shall

8-33     provide to members of the commission and to department employees,

8-34     as often as necessary, information regarding their qualification

8-35     for office or employment under this Act and their responsibilities

8-36     under applicable laws relating to standards of conduct for state

8-37     officers or employees.

8-38           (e)  The commission shall promulgate, and the commissioner

8-39     shall enforce, reasonable rules requiring credit unions to provide

8-40     or cause to be provided share and deposit insurance protection for

8-41     their members and depositors, including the authorization and

8-42     establishment of a share and deposit guaranty corporation or credit

8-43     union under the exclusive regulation of the department to enable

8-44     the department to carry out the purposes of this Act.  Share and

8-45     deposit insurance protection may also be provided through other

8-46     sources approved by the department, including such a program of the

8-47     National Credit Union Administration.

8-48           (f)  The commissioner shall supervise the establishment and

8-49     maintenance of files regarding each written complaint filed with

8-50     [complaints about credit unions received by] the department that

8-51     the department has authority to resolve.  The files must include

8-52     all relevant information regarding the nature, status, and

8-53     disposition of the complaints.  The department [commissioner] shall

8-54     provide to the person filing the complaint and the persons or

8-55     entities complained about the department's policies and procedures

8-56     pertaining to complaint investigation and resolution.  The

8-57     department, at least [take the steps that the commissioner

8-58     determines to be necessary to notify each complainant of the

8-59     procedures and remedies available for the resolution of complaints.

8-60     After a written complaint is filed, the commissioner, at least as

8-61     frequently as] quarterly and until final disposition of the

8-62     complaint, shall notify the parties to the complaint of the status

8-63     of the complaint unless the notice would jeopardize an undercover

8-64     investigation.

8-65           (g)  The department shall keep information about each

8-66     complaint filed with the department.  The information shall

8-67     include:

8-68                 (1)  the date the complaint is received;

8-69                 (2)  the name of the complainant;

 9-1                 (3)  the subject matter of the complaint;

 9-2                 (4)  a record of all persons contacted in relation to

 9-3     the complaint;

 9-4                 (5)  a summary of the results of the review or

 9-5     investigation of the complaint; and

 9-6                 (6)  for complaints for which the department took no

 9-7     action, an explanation of the reason the complaint was closed

 9-8     without action.

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

9-10     public interest information describing [regarding] the [regulatory]

9-11     functions of the department, procedures for filing and resolution

9-12     of complaints, and other matters of general interest regarding

9-13     [the] credit unions.  The commissioner [union movement and] shall

9-14     make the [supervise the dissemination of that] information

9-15     available to the general public and appropriate state agencies.

9-16           (i)  The commission by rule shall establish methods by which

9-17     consumers and service recipients are notified of the name, mailing

9-18     address, and telephone number of the department for the purpose of

9-19     directing complaints to the department.  The commission may provide

9-20     for that notification:

9-21                 (1)  on each registration form, application, or written

9-22     contract for services of a credit union regulated under this Act;

9-23                 (2)  on a sign prominently displayed in the place of

9-24     business of each credit union regulated under this Act; or

9-25                 (3)  in a bill for service provided by a credit union

9-26     regulated under this Act.

9-27           (j)  The department shall comply with federal and state laws

9-28     related to program and facility accessibility.  The commissioner

9-29     shall also prepare and maintain a written plan that describes how a

9-30     person who does not speak English can be provided reasonable access

9-31     to the department's programs and services.

9-32           SECTION 14.  Section 11.18, Texas Credit Union Act (Article

9-33     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

9-34     read as follows:

9-35           Sec. 11.18.  CAREER PROGRAM; PERFORMANCE EVALUATION.

9-36     (a)  The commissioner or the commissioner's [his] designee shall

9-37     develop an intra-agency career ladder program that addresses

9-38     opportunities for mobility and advancement for employees within the

9-39     department.  The program shall require[, one part of which shall be

9-40     an] intra-agency posting of all nonentry level positions

9-41     concurrently with [for at least 10 days before] any public posting.

9-42           (b)  The commissioner or the commissioner's [his] designee

9-43     shall develop a system of annual performance evaluations that are

9-44     based on documented employee performance [measurable job tasks].

9-45     All merit pay for department employees must be based on the system

9-46     established under this section.

9-47           SECTION 15.  Chapter 11, Texas Credit Union Act (Article

9-48     2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

9-49     adding Section 11.19 to read as follows:

9-50           Sec. 11.19.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  The

9-51     commissioner or the commissioner's designee shall prepare and

9-52     maintain a written policy statement to assure implementation of a

9-53     program of equal employment opportunity under which all personnel

9-54     transactions are made without regard to race, color, disability,

9-55     sex, religion, age, or national origin.  The policy statement must

9-56     include:

9-57                 (1)  personnel policies, including policies relating to

9-58     recruitment, evaluation, selection, appointment, training, and

9-59     promotion of personnel that are in compliance with requirements of

9-60     Chapter 21, Labor Code;

9-61                 (2)  a comprehensive analysis of the department

9-62     workforce that meets federal and state guidelines;

9-63                 (3)  procedures by which a determination can be made

9-64     about the extent of underuse in the department workforce of all

9-65     persons for whom federal or state guidelines encourage a more

9-66     equitable balance; and

9-67                 (4)  reasonable methods to appropriately address those

9-68     areas of underuse.

9-69           (b)  A policy statement prepared under Subsection (a) must

 10-1    cover an annual period, be updated annually and reviewed by the

 10-2    Texas Commission on Human Rights for compliance with Subsection

 10-3    (a)(1), and be filed with the governor's office.

 10-4          (c)  The governor's office shall deliver a biennial report to

 10-5    the legislature based on the information received under Subsection

 10-6    (b).  The report may be made separately or as a part of other

 10-7    biennial reports made to the legislature.

 10-8          SECTION 16.  Section 12.01, Texas Credit Union Act (Article

 10-9    2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended to

10-10    read as follows:

10-11          Sec. 12.01.  HEARINGS.  (a)  The conduct of all hearings held

10-12    under this Act and the judicial review of the final decisions

10-13    following those hearings are governed by the administrative

10-14    procedure law, Chapter 2001, Government Code [the Administrative

10-15    Procedure and Texas Register Act, as amended (Article 6252-13a,

10-16    Vernon's Texas Civil Statutes)].   The commission may adopt rules

10-17    of procedure consistent with that chapter [the Administrative

10-18    Procedure and Texas Register Act, as amended,] for the fair hearing

10-19    and adjudication of all issues in a hearing held under this Act.

10-20    This section does not apply to a hearing under Section 12.03 of

10-21    this Act.

10-22          (b)  If the commission proposes to suspend or revoke a credit

10-23    union's certificate of incorporation, the credit union is entitled

10-24    to a hearing conducted by the State Office of Administrative

10-25    Hearings.  Proceedings for a disciplinary action are governed by

10-26    the administrative procedure law, Chapter 2001, Government Code.

10-27    Rules of practice adopted by the commission under Section 2001.004,

10-28    Government Code, applicable to the proceedings for a disciplinary

10-29    action may not conflict with rules adopted by the State Office of

10-30    Administrative Hearings.

10-31          SECTION 17.  Chapter 12, Texas Credit Union Act (Article

10-32    2461-1.01 et seq., Vernon's Texas Civil Statutes), is amended by

10-33    adding Section 12.03 to read as follows:

10-34          Sec. 12.03.  PROCEDURE FOR CERTAIN APPROVALS.  (a)  This

10-35    section applies to a request for approval by the commissioner of:

10-36                (1)  an application for incorporation under Section

10-37    2.03 of this Act;

10-38                (2)  a request for approval of an amendment to a credit

10-39    union's articles of incorporation under Section 2.06 of this Act,

10-40    including an amendment to expand the credit union's field of

10-41    membership; and

10-42                (3)  a merger or consolidation under Section 10.03 of

10-43    this Act.

10-44          (b)  Before approving a request to which this section

10-45    applies, the commissioner shall submit notice of the request to the

10-46    secretary of state for publication in the Texas Register.  The

10-47    commission by rule shall provide for other appropriate public

10-48    notice of the request.  The commissioner may waive the requirements

10-49    of this subsection or permit delayed public notice on a

10-50    determination that waiver or delay is in the public interest.  If

10-51    the requirements of this subsection are waived, the information

10-52    that would be contained in a public notice becomes public

10-53    information under Chapter 552, Government Code, on the 35th day

10-54    after the date the request is made.

10-55          (c)  Before making a determination on a request to which this

10-56    section applies, the commissioner must accept comment from any

10-57    person who wishes to comment.  This comment may be in the form of

10-58    written testimony or may be provided at a commissioner hearing held

10-59    for the purpose of receiving this comment.  This hearing shall be

10-60    held if requested by any person.  The commissioner may hold the

10-61    hearing regardless of whether a person requests the hearing.  The

10-62    hearing is confidential.  Chapter 2001, Government Code, does not

10-63    apply to the hearing.  Not later than the 60th day after the date

10-64    the notice is published in the Texas Register, or if the notice is

10-65    not published, after the date the request is received, the

10-66    commissioner shall approve or disapprove the application.

10-67          SECTION 18.  The Sunset Advisory Commission, as part of its

10-68    evaluation of agencies preceding the meeting of the 77th

10-69    Legislature in 2001, shall:

 11-1                (1)  evaluate the organizational structure of the

 11-2    state's financial regulatory agencies; and

 11-3                (2)  study the potential effects of placing the Credit

 11-4    Union Commission under the jurisdiction of the Finance Commission

 11-5    of Texas.

 11-6          SECTION 19.  (a)  The Credit Union Commission and the Finance

 11-7    Commission of Texas shall jointly review state law, including

 11-8    rules, governing financial institutions in this state.  The review

 11-9    must include an examination of differences in the authority granted

11-10    by law to the different state regulatory officers and agencies and

11-11    how the officers and agencies differ in their manner of regulating

11-12    the institutions under their respective jurisdictions.

11-13          (b)  A report of the review shall be submitted to the Sunset

11-14    Advisory Commission before September 1, 1999.

11-15          SECTION 20.  If after the effective date of this Act a

11-16    vacancy exists in a position of member of the Credit Union

11-17    Commission that was held by an individual described by Subsection

11-18    (a), Section 11.02, Texas Credit Union Act (Article 2461-1.01 et

11-19    seq., Vernon's Texas Civil Statutes), the vacancy shall be filled

11-20    by appointment of an individual described by Subsection (b) of

11-21    Section 11.02 of that Act until the number of public members and

11-22    members who represent credit unions are as prescribed by those

11-23    sections, as amended by this Act.

11-24          SECTION 21.  This Act takes effect September 1, 1997.

11-25          SECTION 22.  The importance of this legislation and the

11-26    crowded condition of the calendars in both houses create an

11-27    emergency and an imperative public necessity that the

11-28    constitutional rule requiring bills to be read on three several

11-29    days in each house be suspended, and this rule is hereby suspended.

11-30                                 * * * * *