SRC-AXB H.B. 2101 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 2101
76R12605  DAK-FBy: Pitts (Ellis)
Jurisprudence
5/13/1999
Engrossed


DIGEST 

Under current law, a judgment creditor is not required to provide
information to a financial institution before the institution turns over
assets of a judgment debtor to the judgment creditor. There is concern that
problems may arise between the financial institution and its customer, due
to the threat of sanctions from the judgment creditors for noncompliance.
H.B. 2101 requires a financial institution to be provided, and authorizes
it to rely on, a certified copy of the order or injunction of the court, or
a certified copy of the order of appointment of a receiver, if the
institution receives a request to turn over assets or financial information
of a judgment debtor to a judgment creditor or a receiver under a turnover
order or receivership order. It also entitles a compliant financial
institution to recover certain reasonable costs, including reasonable
attorney's fees, if contested. 

PURPOSE

As proposed, HB. 2101 requires a financial institution to be provided, and
authorizes it to rely on, a certified copy of the order or injunction of
the court, or a certified copy of the order of appointment of a receiver,
if the institution receives a request to turn over assets or financial
information of a judgment debtor to a judgment creditor or a receiver under
a turnover order or receivership order. It also entitles a compliant
financial institution to recover certain reasonable costs, including
reasonable attorney's fees, if contested. 

RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Chapter 31, Civil Practice and Remedies Code, by adding
Section 31.010, as follows:  

Sec. 31.010. TURNOVER BY FINANCIAL INSTITUTION.  Requires a financial
institution that receives a request to turn over assets or financial
information of a judgment debtor to a judgment creditor or a receiver under
a turnover order or receivership under Section 31.002 (Collection of
Judgment Through Court Proceeding) to be provided, and provides that the
institution may rely on: a certified copy of the order or injunction of the
court; or a certified copy of the order of appointment of a receiver under
Section 64.001 (Availability of Remedy), including any document
establishing the qualifications of the receiver under Section 64.021
(Qualifications; Residence Requirement), the sworn affidavit under Section
64.022 (Oath),and the bond under Section 64.023 (Bond).  Provides that a
financial institution that complies with this section is not liable to
certain entities for compliance with a court order, injunction, or
receivership authorized by Section 31.002. Entitles a financial institution
that complies with this section to recover certain reasonable costs,
including reasonable attorney's fees, if there is a contest.  Defines
"financial institution" for the purposes of this section. 

SECTION 2. Effective date: September 1, 1999. Makes application of this Act
prospective.  

SECTION 3. Emergency clause.