By:  Harris                                            S.B. No. 172
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to qualified commercial loans.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Subdivision (9), Article 1H.001, Title 79,
 1-4     Revised Statutes (Article 5069-1H.001, Vernon's Texas Civil
 1-5     Statutes), is amended to read as follows:
 1-6                 (9)  "Qualified commercial loan" means:
 1-7                       (A)  a commercial loan in which one or more
 1-8     persons, as part of the same transaction, lends, advances, borrows,
 1-9     or receives or is obligated to lend or advance or is entitled to
1-10     borrow or receive funds or credit with an aggregate value [the
1-11     original principal amount] of $250,000 [$3,000,000] or more; or
1-12                       (B)  a renewal or extension of a commercial loan
1-13     described in Paragraph (A) of this subdivision [in the original
1-14     principal amount of $3,000,000 or more], whether or not the
1-15     principal amount of the loan at the time of the [its] renewal or
1-16     extension is $250,000 [$3,000,000] or more.
1-17                       (C)  A qualified commercial loan under $3 million
1-18     may not be secured by real estate.
1-19           SECTION 2.  Article 1H.101, Title 79, Revised Statutes
1-20     (Article 5069-1H.101, Vernon's Texas Civil Statutes), is amended by
1-21     amending Subsection (b) and adding Subsection (d) to read as
1-22     follows:
1-23           (b)  The parties may contract for the following additional
1-24     charges:
 2-1                 (1)  a discount or commission that an obligor has paid
 2-2     or agreed to pay to one or more underwriters of securities issued
 2-3     by the obligor;
 2-4                 (2)  an option or right to exchange, redeem, or convert
 2-5     all or a portion of the principal amount of the loan, or interest
 2-6     on the principal amount, for or into capital stock or other equity
 2-7     securities of an obligor or of an affiliate of the obligor;
 2-8                 (3)  an option or right to purchase capital stock or
 2-9     other equity securities of an obligor or of an affiliate of the
2-10     obligor;
2-11                 (4)  an option or other right, whether by contract,
2-12     conveyance, or otherwise, to participate in or own a share of the
2-13     income, revenues, production, appreciation in value, or profits:
2-14                       (A)  of an obligor or of an affiliate of the
2-15     obligor;
2-16                       (B)  of any segment of the business or operations
2-17     of an obligor or of an affiliate of the obligor; or
2-18                       (C)  derived or to be derived from any ownership
2-19     rights of an obligor or of an affiliate of the obligor in real or
2-20     personal property, including any proceeds of the sale or other
2-21     disposition of ownership rights; or
2-22                 (5)  any compensation realized as a result of the
2-23     receipt, exercise, sale, or other disposition of any option or
2-24     other right described by this subsection.
2-25           (d)  The provisions of this article do not apply to a loan
2-26     made to a licensee of the Motor Vehicle Board of the Texas
 3-1     Department of Transportation.
 3-2           SECTION 3.  The importance of this legislation and the
 3-3     crowded condition of the calendars in both houses create an
 3-4     emergency and an imperative public necessity that the
 3-5     constitutional rule requiring bills to be read on three several
 3-6     days in each house be suspended, and this rule is hereby suspended,
 3-7     and that this Act take effect and be in force from and after its
 3-8     passage, and it is so enacted.