HBA-NLM C.S.H.B. 2101 76(R)BILL ANALYSIS Office of House Bill AnalysisC.S.H.B. 2101 By: Pitts Financial Institutions 4/21/1999 Committee Report (Substituted) BACKGROUND AND PURPOSE 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. C.S.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. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. 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. (a) 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). (b) 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. (c) Entitles a financial institution that complies with this section to recover certain reasonable costs, including reasonable attorney's fees, if there is a contest. (d) 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. COMPARISON OF ORIGINAL TO SUBSTITUTE C.S.H.B. 2101 modifies the original in SECTION 1 (proposed Section 31.010(a), Civil Practice and Remedies Code), by requiring a financial institution described by this section 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). The substitute modifies the original Subsection (a) to clarify that the information provided to a financial institution must be certified. C.S.H.B. 2101 modifies the original in SECTION 1 (proposed Section 31.010(c), Civil Practice and Remedies Code), by entitling a financial institution that complies with this section to recover certain reasonable costs, including reasonable attorney's fees, if there is a contest.