1-1 By: Woolley (Senate Sponsor - Cain) H.B. No. 2585 1-2 (In the Senate - Received from the House May 10, 1999; 1-3 May 10, 1999, read first time and referred to Committee on Economic 1-4 Development; May 14, 1999, reported favorably by the following 1-5 vote: Yeas 4, Nays 0; May 14, 1999, sent to printer.) 1-6 A BILL TO BE ENTITLED 1-7 AN ACT 1-8 relating to the substitution of and equivalency for the single 1-9 currency of the European Union in certain contracts, securities, 1-10 and instruments. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Title 4, Business & Commerce Code, is amended by 1-13 adding Chapter 42 to read as follows: 1-14 CHAPTER 42. EUROPEAN UNION CURRENCY CONVERSION 1-15 Sec. 42.001. DEFINITIONS. In this chapter: 1-16 (1) "Euro" means the currency of the member states of 1-17 the European Community, as amended by the Treaty on European Union. 1-18 The term is abbreviated as EUR. 1-19 (2) "European currency unit" means the currency basket 1-20 that is periodically used as the unit of account of the European 1-21 Community, as defined by Regulation No. 3320/94 of the Council of 1-22 the European Union and as referred to in Article 109g of the treaty 1-23 establishing the European Community, as amended by the Treaty on 1-24 European Union. The term is abbreviated as ECU. 1-25 (3) "Treaty on European Union" means the Treaty on 1-26 European Union of February 7, 1992. 1-27 (4) "Introduction of the euro" means the periodic 1-28 implementation of economic and monetary union in member states of 1-29 the European Union in accordance with the Treaty on European Union. 1-30 Sec. 42.002. APPLICABILITY OF CHAPTER. (a) This chapter 1-31 applies to each contract, security, and instrument, including a 1-32 commercial contract, governed by the laws of this state. 1-33 (b) With respect to currency alteration, other than the 1-34 introduction of the euro, this chapter does not create any negative 1-35 inference or negative presumption regarding the validity or 1-36 enforceability of a contract, security, or instrument denominated 1-37 wholly or partly in a currency affected by the alteration. 1-38 Sec. 42.003. CONFLICTS OF LAW. This chapter prevails to the 1-39 extent of any conflict between this chapter and any other law of 1-40 this state. 1-41 Sec. 42.004. CONTINUITY OF CONTRACT. (a) If a subject or 1-42 medium of payment of a contract, security, or instrument is the 1-43 European currency unit or a currency that has been substituted or 1-44 replaced by the euro, the euro is a commercially reasonable 1-45 substitute and substantial equivalent that may be: 1-46 (1) used in determining the value of the European 1-47 currency unit or currency, as appropriate; or 1-48 (2) tendered, in each case, at the conversion rate 1-49 specified in, and otherwise computed in accordance with, the 1-50 regulations adopted by the Council of the European Union. 1-51 (b) A person may perform any obligation described by 1-52 Subsection (a) in euros or in the currency or currencies 1-53 originally designated in the contract, security, or instrument if 1-54 that currency or those currencies remain legal tender, but the 1-55 person may not perform those obligations in any other currency, 1-56 regardless of whether that other currency: 1-57 (1) has been substituted or replaced by the euro; or 1-58 (2) is considered a denomination of the euro and has a 1-59 fixed conversion rate with respect to the euro. 1-60 (c) The following occurrences are not considered a 1-61 discharge of, do not excuse performance under, and do not give a 1-62 party the right to unilaterally alter or terminate a contract, 1-63 security, or instrument: 1-64 (1) the introduction of the euro; 2-1 (2) the tender of euros in connection with any 2-2 obligation described by Subsection (a); 2-3 (3) the determination of the value of any obligation 2-4 described by Subsection (a); or 2-5 (4) the computation or determination of the subject or 2-6 medium of payment of a contract, security, or instrument with 2-7 reference to an interest rate or any other basis that has been 2-8 substituted or replaced because of the introduction of the euro and 2-9 that is a commercially reasonable substitute and substantial 2-10 equivalent. 2-11 Sec. 42.005. EFFECT ON CERTAIN AGREEMENTS. This chapter 2-12 does not alter or impair an agreement between parties that 2-13 specifically relates to the introduction of the euro. 2-14 SECTION 2. The importance of this legislation and the 2-15 crowded condition of the calendars in both houses create an 2-16 emergency and an imperative public necessity that the 2-17 constitutional rule requiring bills to be read on three several 2-18 days in each house be suspended, and this rule is hereby suspended, 2-19 and that this Act take effect and be in force from and after its 2-20 passage, and it is so enacted. 2-21 * * * * *