AN ACT
 1-1     relating to nonsubstantive additions to and corrections in enacted
 1-2     codes, including the nonsubstantive codification of various laws
 1-3     omitted from enacted codes, and to conforming codifications enacted
 1-4     by the 75th Legislature to other Acts of that legislature.
 1-5           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-6                       ARTICLE 1.  GENERAL PROVISIONS
 1-7           SECTION 1.01.  This Act is enacted as part of the state's
 1-8     continuing statutory revision program under Chapter 323, Government
 1-9     Code.  This Act is a revision for purposes of Section 43, Article
1-10     III, Texas Constitution, and has the purposes of:
1-11                 (1)  codifying without substantive change various
1-12     statutes that were omitted from enacted codes;
1-13                 (2)  conforming codifications enacted by the 75th
1-14     Legislature to other Acts of that legislature that amended the laws
1-15     codified or added new law to subject matter codified;
1-16                 (3)  making necessary corrections to enacted
1-17     codifications; and
1-18                 (4)  renumbering titles, chapters, and sections of
1-19     codes that duplicate title, chapter, or section numbers.
1-20           SECTION 1.02.  (a)  The repeal of a statute by this Act does
1-21     not affect an amendment, revision, or reenactment of the statute by
1-22     the 76th Legislature, Regular Session, 1999.  The amendment,
1-23     revision, or reenactment is preserved and given effect as part of
1-24     the code provision that revised the statute so amended, revised, or
 2-1     reenacted.
 2-2           (b)  If any provision of this Act conflicts with a statute
 2-3     enacted by the 76th Legislature, Regular Session, 1999, the statute
 2-4     controls.
 2-5           SECTION 1.03.  (a)  A transition or saving provision of a law
 2-6     codified by this Act applies to the codified law to the same extent
 2-7     as it applied to the original law.
 2-8           (b)  The repeal of a transition or saving provision by this
 2-9     Act does not affect the application of the provision to the
2-10     codified law.
2-11           (c)  In this section, "transition provision" includes any
2-12     temporary provision providing for a special situation in the
2-13     transition period between the existing law and the establishment or
2-14     implementation of the new law.
2-15           ARTICLE 2.  CHANGES RELATING TO ALCOHOLIC BEVERAGE CODE
2-16           SECTION 2.01.  Section 106.115, Alcoholic Beverage Code, as
2-17     amended by Chapters 577 and 1013, Acts of the 75th Legislature,
2-18     Regular Session, 1997, is amended and reenacted to read as follows:
2-19           Sec. 106.115.  ATTENDANCE AT ALCOHOL AWARENESS COURSE;
2-20     LICENSE SUSPENSION.  (a)  On conviction of a minor of an offense
2-21     under Section 106.02, 106.025, 106.04, 106.041, 106.05, or 106.07
2-22     the court, in addition to assessing a fine as provided by those
2-23     sections, shall require a defendant who has not been previously
2-24     convicted of an offense under one of those sections to attend an
2-25     alcohol awareness program approved by the Texas Commission on
2-26     Alcohol and Drug Abuse.  If the defendant has been previously
 3-1     convicted once or more of an offense under one or more of those
 3-2     sections, the court may require the defendant to attend the alcohol
 3-3     awareness course.  If the defendant is younger than 18 years of
 3-4     age, the court may require the parent or guardian of the defendant
 3-5     to attend the program with the defendant.  The Texas Commission on
 3-6     Alcohol and Drug Abuse:
 3-7                 (1)  is responsible for the administration of the
 3-8     certification of approved alcohol awareness programs;
 3-9                 (2)  may charge a nonrefundable application fee for:
3-10                       (A)  initial certification of the approval; or
3-11                       (B)  renewal of the certification;
3-12                 (3)  shall adopt rules regarding alcohol awareness
3-13     programs approved under this section; and
3-14                 (4)  shall monitor, coordinate, and provide training to
3-15     a person who provides an alcohol awareness program.
3-16           [(b)  If the defendant resides in a rural or other area in
3-17     which access to an alcohol awareness program is not readily
3-18     available, the court shall require the defendant to perform eight
3-19     to 12 hours of community service instead of participating in an
3-20     alcohol awareness program.]
3-21           (b)  When requested, an alcohol awareness program may be
3-22     taught in languages other than English.
3-23           (c)  The court shall require the defendant to present to the
3-24     court, within 90 days of the date of final conviction, evidence in
3-25     the form prescribed by the court that the defendant, as ordered by
3-26     the court, has satisfactorily completed an alcohol awareness
 4-1     program or performed the required hours of community service.  For
 4-2     good cause the court may extend this period by not more than 90
 4-3     days.  If the defendant presents the required evidence within the
 4-4     prescribed period, the court may reduce the assessed fine to an
 4-5     amount equal to no less than one-half of the amount of the initial
 4-6     fine.
 4-7           (d)  If the defendant does not present the required evidence
 4-8     within the prescribed period, the court shall order the Department
 4-9     of Public Safety to suspend the defendant's driver's license or
4-10     permit for a period not to exceed six months or, if the defendant
4-11     does not have a license or permit, to deny the issuance of a
4-12     license or permit to the defendant for that period.
4-13           (e)  The Department of Public Safety shall send notice of the
4-14     suspension or prohibition order issued under Subsection (d) by
4-15     certified mail, return receipt requested, to the defendant.  The
4-16     notice must include the date of the suspension or prohibition
4-17     order, the reason for the suspension or prohibition, and the period
4-18     covered by the suspension or prohibition.
4-19                   ARTICLE 3.  CHANGES RELATING TO CODE OF
4-20                             CRIMINAL PROCEDURE
4-21           SECTION 3.01.  Subsection (c), Article 2.121, Code of
4-22     Criminal Procedure, is amended to correct references to read as
4-23     follows:
4-24           (c)  A railroad peace officer may not issue a traffic
4-25     citation for a violation of Chapter 521, Transportation Code [173,
4-26     Acts of the 47th Legislature, Regular Session, 1941 (Article 6687b,
 5-1     Vernon's Texas Civil Statutes)], or Subtitle C, Title 7,
 5-2     Transportation Code [the Uniform Act Regulating Traffic on Highways
 5-3     (Article 6701d, Vernon's Texas Civil Statutes)].
 5-4           SECTION 3.02.  Subsection (g), Article 14.03, Code of
 5-5     Criminal Procedure, is amended to correct a reference to read as
 5-6     follows:
 5-7           (g)  A peace officer [who is] listed in Subdivision (1), (2),
 5-8     (3), or (4), Article 2.12, who is licensed under Chapter 415,
 5-9     Government Code, and is outside of the officer's jurisdiction may
5-10     arrest without a warrant a person who commits any offense within
5-11     the officer's presence or view, except that an officer who is
5-12     outside the officer's jurisdiction may arrest a person for a
5-13     violation of Subtitle C, Title 7, Transportation Code, [the Uniform
5-14     Act Regulating Traffic on Highways (Article 6701d, Vernon's Texas
5-15     Civil Statutes)] only if the officer is listed in Subdivision (4),
5-16     Article 2.12.  A peace officer making an arrest under this
5-17     subsection shall as soon as practicable after making the arrest
5-18     notify a law enforcement agency having jurisdiction where the
5-19     arrest was made.  The law enforcement agency shall then take
5-20     custody of the person committing the offense and take the person
5-21     before a magistrate in compliance with Article 14.06.
5-22           SECTION 3.03.  Article 42.111, Code of Criminal Procedure, is
5-23     amended to correct references to read as follows:
5-24           Art. 42.111.  DEFERRAL OF PROCEEDINGS IN CASES APPEALED TO
5-25     COUNTY COURT.  If a defendant convicted of a misdemeanor punishable
5-26     by fine only appeals the conviction to a county court, on the trial
 6-1     in county court the defendant may enter a plea of guilty or nolo
 6-2     contendere to the offense.  If the defendant enters a plea of
 6-3     guilty or nolo contendere, the court may defer further proceedings
 6-4     without entering an adjudication of guilt in the same manner as
 6-5     provided for the deferral of proceedings in justice court or
 6-6     municipal court under Article 45.54 of this code.  This article
 6-7     does not apply to a misdemeanor case disposed of under Subchapter
 6-8     B, Chapter 543, Transportation Code [by Section 143A, Uniform Act
 6-9     Regulating Traffic on Highways (Article 6701d, Vernon's Texas Civil
6-10     Statutes)], or a serious traffic violation as defined in Section
6-11     522.003 of that code [3(26), Texas Commercial Driver's License Act
6-12     (Article 6687b-2, Revised Statutes)].
6-13           SECTION 3.04.  Subsections (g), (h), (i), (j), (k), and (m),
6-14     Section 13, Article 42.12, Code of Criminal Procedure, are amended
6-15     to correct references to read as follows:
6-16           (g)  A jury that recommends community supervision for a
6-17     person convicted of an offense under Sections 49.04-49.08, Penal
6-18     Code, may recommend that any driver's license issued to the
6-19     defendant under Chapter 521, Transportation Code [173, Acts of the
6-20     47th Legislature, Regular Session, 1941 (Article 6687b, Vernon's
6-21     Texas Civil Statutes)], not be suspended.
6-22           (h)  If a person convicted of an offense under Sections
6-23     49.04-49.08, Penal Code, is placed on community supervision, the
6-24     judge shall require, as a condition of the community supervision,
6-25     that the defendant attend and successfully complete before the
6-26     181st day after the day community supervision is granted an
 7-1     educational program jointly approved by the Texas Commission on
 7-2     Alcohol and Drug Abuse, the Department of Public Safety, the
 7-3     Traffic Safety Section of the Texas Department of Transportation,
 7-4     and the community justice assistance division of the Texas
 7-5     Department of Criminal Justice designed to rehabilitate persons who
 7-6     have driven while intoxicated.  The Texas Commission on Alcohol and
 7-7     Drug Abuse shall publish the jointly approved rules and shall
 7-8     monitor, coordinate, and provide training to persons providing the
 7-9     educational programs.  The Texas Commission on Alcohol and Drug
7-10     Abuse is responsible for the administration of the certification of
7-11     approved educational programs and may charge a nonrefundable
7-12     application fee for the initial certification of approval and for
7-13     renewal of a certificate.  The judge may waive the educational
7-14     program requirement or may grant an extension of time to
7-15     successfully complete the program that expires not later than one
7-16     year after the beginning date of the person's community supervision
7-17     [probation], however, if the defendant by a motion in writing shows
7-18     good cause.  In determining good cause, the judge may consider but
7-19     is not limited to:  the defendant's school and work schedule, the
7-20     defendant's health, the distance that the defendant must travel to
7-21     attend an educational program, and the fact that the defendant
7-22     resides out of state, has no valid driver's license, or does not
7-23     have access to transportation.  The judge shall set out the finding
7-24     of good cause for waiver in the judgment.  If a defendant is
7-25     required, as a condition of community supervision, to attend an
7-26     educational program or if the court waives the educational program
 8-1     requirement, the court clerk shall immediately report that fact to
 8-2     the Department of Public Safety, on a form prescribed by the
 8-3     department, for inclusion in the person's driving record.  If the
 8-4     court grants an extension of time in which the person may complete
 8-5     the program, the court clerk shall immediately report that fact to
 8-6     the Department of Public Safety on a form prescribed by the
 8-7     department.  The report must include the beginning date of the
 8-8     person's community supervision.  Upon the successful completion of
 8-9     the educational program, the person shall give notice to the
8-10     community supervision and corrections department.  The department
8-11     shall then forward the notice to the court clerk.  The court clerk
8-12     shall then report the date of successful completion of the
8-13     educational program to the Department of Public Safety for
8-14     inclusion in the defendant's driving record.  If the department
8-15     does not receive notice that a defendant required to complete an
8-16     educational program has successfully completed the program within
8-17     the period required by this section, as shown on department
8-18     records, the department shall revoke the defendant's driver's
8-19     license, permit, or privilege or prohibit the person from obtaining
8-20     a license or permit, as provided by Sections 521.344(e) and (f),
8-21     Transportation Code [Section 24(g)(2), Chapter 173, Acts of the
8-22     47th Legislature, Regular Session, 1941 (Article 6687b, Vernon's
8-23     Texas Civil Statutes)].  The department may not reinstate a license
8-24     suspended under this subsection unless the person whose license was
8-25     suspended makes application to the department for reinstatement of
8-26     the person's license and pays to the department a reinstatement fee
 9-1     of $50.  The department shall remit all fees collected under this
 9-2     subsection to the comptroller for deposit in the general revenue
 9-3     fund.  This subsection does not apply to a defendant if a jury
 9-4     recommends community supervision for the defendant and also
 9-5     recommends that the defendant's driver's license not be suspended.
 9-6           (i)  If a person convicted of an offense under Sections
 9-7     49.04-49.08, Penal Code, is placed on community supervision, the
 9-8     court may require as a condition of community supervision that the
 9-9     defendant have a device installed, on the motor vehicle owned by
9-10     the defendant or on the vehicle most regularly driven by the
9-11     defendant, that uses a deep-lung breath analysis mechanism to make
9-12     impractical the operation of the motor vehicle if ethyl alcohol is
9-13     detected in the breath of the operator and that the defendant not
9-14     operate any motor vehicle that is not equipped with that device.
9-15     If the person is convicted of an offense under Sections
9-16     49.04-49.06, Penal Code, and punished under Section 49.09(a) or
9-17     (b), Penal Code, or of a second or subsequent offense under Section
9-18     49.07 or 49.08, Penal Code, and the person after conviction of
9-19     either offense is placed on community supervision, the court shall
9-20     require as a condition of community supervision that the defendant
9-21     have the device installed on the appropriate vehicle and that the
9-22     defendant not operate any motor vehicle unless the vehicle is
9-23     equipped with that device.  Before placing on community supervision
9-24     a person convicted of an offense under Sections 49.04-49.08, Penal
9-25     Code, the court shall determine from criminal history record
9-26     information maintained by the Department of Public Safety whether
 10-1    the person has one or more previous convictions under Sections
 10-2    49.04-49.08, Penal Code, or has one previous conviction under
 10-3    Sections 49.04-49.07, Penal Code, or one previous conviction under
 10-4    Section 49.08, Penal Code.  If the court determines that the person
 10-5    has one or more such previous convictions, the court shall require
 10-6    as a condition of community supervision that the defendant have
 10-7    that device installed on the motor vehicle owned by the defendant
 10-8    or on the vehicle most regularly driven by the defendant and that
 10-9    the defendant not operate any motor vehicle unless the vehicle is
10-10    equipped with the device described in this subsection.  The court
10-11    shall require the defendant to obtain the device at the defendant's
10-12    own cost before the 30th day after the date of conviction unless
10-13    the court finds that to do so would not be in the best interest of
10-14    justice and enters its findings on record.  The court shall require
10-15    the defendant to provide evidence to the court within the 30-day
10-16    period that the device has been installed on the appropriate
10-17    vehicle and order the device to remain installed on that vehicle
10-18    for a period not less than 50 percent of the supervision period.
10-19    If the court determines the offender is unable to pay for the
10-20    device, the court may impose a reasonable payment schedule not to
10-21    exceed twice the period of the court's order.  The Department of
10-22    Public Safety shall approve devices for use under this subsection.
10-23    Section 521.247, Transportation Code, applies [The provisions of
10-24    Section 23A(f), Chapter 173, Acts of the 47th Legislature, Regular
10-25    Session, 1941 (Article 6687b, Vernon's Texas Civil Statutes),
10-26    apply] to the approval of a device under this subsection and the
 11-1    consequences of that approval.  Notwithstanding the provisions of
 11-2    this section, if a person is required to operate a motor vehicle in
 11-3    the course and scope of the person's employment and if the vehicle
 11-4    is owned by the employer, the person may operate that vehicle
 11-5    without installation of an approved ignition interlock device if
 11-6    the employer has been notified of that driving privilege
 11-7    restriction and if proof of that notification is with the vehicle.
 11-8    This employment exemption does not apply, however, if the business
 11-9    entity that owns the vehicle is owned or controlled by the person
11-10    whose driving privilege has been restricted.
11-11          (j)  The judge shall require a defendant who is punished
11-12    under Section 49.09, Penal Code, as a condition of community
11-13    supervision, to attend and successfully complete an educational
11-14    program for repeat offenders approved by the Texas Commission on
11-15    Alcohol and Drug Abuse.  The Texas Commission on Alcohol and Drug
11-16    Abuse shall adopt rules and shall monitor, coordinate, and provide
11-17    training to persons providing the educational programs.  The Texas
11-18    Commission on Alcohol and Drug Abuse is responsible for the
11-19    administration of the certification of approved educational
11-20    programs and may charge a nonrefundable application fee for initial
11-21    certification of approval or for renewal of the certification.  The
11-22    judge may waive the educational program requirement only if the
11-23    defendant by a motion in writing shows good cause.  In determining
11-24    good cause, the judge may consider the defendant's school and work
11-25    schedule, the defendant's health, the distance that the defendant
11-26    must travel to attend an educational program, and whether the
 12-1    defendant resides out of state or does not have access to
 12-2    transportation.  The judge shall set out the finding of good cause
 12-3    in the judgment.  If a defendant is required, as a condition of
 12-4    community supervision, to attend an educational program, the court
 12-5    clerk shall immediately report that fact to the Department of
 12-6    Public Safety, on a form prescribed by the department, for
 12-7    inclusion in the defendant's driving record.  The report must
 12-8    include the beginning date of the defendant's community
 12-9    supervision.  On the successful completion of the educational
12-10    program for repeat offenders, the defendant shall give notice to
12-11    the community supervision and corrections department.  The
12-12    community supervision and corrections department shall then forward
12-13    the notice to the court clerk.  The court clerk shall then report
12-14    the date of successful completion of the educational program to the
12-15    Department of Public Safety for inclusion in the defendant's
12-16    driving record.  If the Department of Public Safety does not
12-17    receive notice that a defendant required to complete an educational
12-18    program has successfully completed the program for repeat offenders
12-19    within the period required by the judge, as shown on department
12-20    records, the department shall revoke the defendant's driver's
12-21    license, permit, or privilege or prohibit the defendant from
12-22    obtaining a license or permit, as provided by Sections 521.344(e)
12-23    and (f), Transportation Code [Section 24(g)(2), Chapter 173, Acts
12-24    of the 47th Legislature, Regular Session, 1941 (Article 6687b,
12-25    Vernon's Texas Civil Statutes)].
12-26          (k)  Notwithstanding Sections 521.344(d)-(i), Transportation
 13-1    Code [Section 24(g), Chapter 173, Acts of the 47th Legislature,
 13-2    Regular Session, 1941 (Article 6687b, Vernon's Texas Civil
 13-3    Statutes)], if the judge, under Subsection (h) or (j) of this
 13-4    section, permits or requires a defendant punished under  Section
 13-5    49.09, Penal Code, to attend an educational program as a condition
 13-6    of community supervision, or waives the required attendance for
 13-7    such a program, and the defendant has previously been required to
 13-8    attend such a program, or the required attendance at the program
 13-9    had been waived, the judge nonetheless shall order the suspension
13-10    of the driver's license, permit, or operating privilege of that
13-11    person for a period determined by the judge according to the
13-12    following schedule:
13-13                (1)  not less than 90 days or more than 365 days, if
13-14    the defendant is convicted under Sections 49.04-49.08, Penal Code;
13-15    or
13-16                (2)  not less than 180 days or more than two years, if
13-17    the defendant is punished under Section 49.09, Penal Code.
13-18          (m)  If a judge revokes the community supervision of a
13-19    defendant for an offense under Section 49.04, Penal Code, or an
13-20    offense involving the operation of a motor vehicle under Section
13-21    49.07, Penal Code, and the driver's license or privilege to operate
13-22    a motor vehicle has not previously been ordered by the judge to be
13-23    suspended, or if the suspension was previously probated, the judge
13-24    shall suspend the license or privilege for a period provided under
13-25    Subchapter O, Chapter 521, Transportation Code [Section 24, Chapter
13-26    173, Acts of the 47th Legislature, Regular Session, 1941 (Article
 14-1    6687b, Vernon's Texas Civil Statutes)].  The suspension shall be
 14-2    reported to the Department of Public Safety as provided under
 14-3    Section 521.347, Transportation Code [25, Chapter 173, Acts of the
 14-4    47th Legislature, Regular Session, 1941 (Article 6687b, Vernon's
 14-5    Texas Civil Statutes)].
 14-6          SECTION 3.05.  Article 45.06, Code of Criminal Procedure, is
 14-7    amended to correct references to read as follows:
 14-8          Art. 45.06.  FINES AND SPECIAL EXPENSES.  The governing body
 14-9    of each incorporated city, town or village shall by ordinance
14-10    prescribe such rules, not inconsistent with any law of this State,
14-11    as may be proper to enforce, by execution against the property of
14-12    the defendant, or imprisonment of the defendant, the collection of
14-13    all fines imposed by such court, and shall also have power to adopt
14-14    such rules and regulations concerning the practice and procedure in
14-15    such court as said governing body may deem proper, not inconsistent
14-16    with any law of this State.  All such fines; a special expense, not
14-17    to exceed $25 for the issuance and service of a warrant of arrest
14-18    for an offense under Section 38.10, Penal Code, or under Section
14-19    543.009, Transportation Code [149, Uniform Act Regulating Traffic
14-20    on Highways (Article 6701d, Vernon's Texas Civil Statutes)]; and
14-21    the special expenses described in Article 17.04 dealing with the
14-22    requisites of a personal bond and a special expense for the
14-23    issuance and service of a warrant of arrest, after due notice, not
14-24    to exceed $25, shall be paid into the city treasury for the use and
14-25    benefit of the city, town or village.  The governing body of each
14-26    incorporated city, town or village may by ordinance authorize a
 15-1    municipal court to collect a special expense for services performed
 15-2    in cases in which the laws of this State require that the case be
 15-3    dismissed because of actions by or on behalf of the defendant which
 15-4    were subsequent to the date of the alleged offense.  Such actions
 15-5    are limited to compliance with Sections 543.102-543.104,
 15-6    Transportation Code [the provisions of Subsection (a), Section
 15-7    143A, Uniform Act Regulating Traffic on Highways (Article 6701d,
 15-8    Vernon's Texas Civil Statutes)].  Such special expense shall not
 15-9    exceed the actual expenses incurred for the services or $10,
15-10    whichever is less.
15-11          SECTION 3.06.  Subdivisions (1), (2), and (3), Article 45.54,
15-12    Code of Criminal Procedure, are amended to correct references to
15-13    read as follows:
15-14                (1)  On a plea of guilty or nolo contendere by a
15-15    defendant or on a finding of guilt in a misdemeanor case punishable
15-16    by fine only and payment of all court costs, the justice may defer
15-17    further proceedings without entering an adjudication of guilt and
15-18    place the defendant on probation for a period not to exceed 180
15-19    days.  This article does not apply to a misdemeanor case disposed
15-20    of under Subchapter B, Chapter 543, Transportation Code [by Section
15-21    143A, Uniform Act Regulating Traffic on Highways (Article 6701d,
15-22    Vernon's Texas Civil Statutes)], or a serious traffic violation as
15-23    defined in Section 522.003 of that code [3(26), Texas Commercial
15-24    Driver's License Act (Article 6687b-2, Revised Statutes)].
15-25                (2)  During the deferral period, the justice shall
15-26    require the defendant to successfully complete a Texas [Central]
 16-1    Education Agency-approved driving safety course, if the offense
 16-2    alleged is an offense involving the operation of a motor vehicle,
 16-3    other than a commercial motor vehicle, as defined in Section
 16-4    522.003, Transportation Code [Subdivision (6), Section 3, Texas
 16-5    Commercial Driver's License Act (Article 6687b-2, Revised
 16-6    Statutes)], and the defendant:
 16-7                      (A)  has completed an approved driving safety
 16-8    course within the preceding 12 months; or
 16-9                      (B)  is a first-time offender who elects deferred
16-10    adjudication.
16-11                (3)  During said deferral period, the justice may
16-12    require the defendant to:
16-13                      (a)  post a bond in the amount of the fine
16-14    assessed to secure payment of the fine;
16-15                      (b)  pay restitution to the victim of the offense
16-16    in an amount not to exceed the fine assessed;
16-17                      (c)  submit to professional counseling;
16-18                      (d)  comply with any other reasonable condition;
16-19    and
16-20                      (e)  require the defendant to successfully
16-21    complete a Texas [Central] Education Agency approved driving safety
16-22    course, if:
16-23                            (1)  the offense alleged is an offense
16-24    involving the operation of a motor vehicle, other than a commercial
16-25    motor vehicle, as defined in Section 522.003, Transportation Code
16-26    [Subdivision (6), Section 3, Texas Commercial Driver's License Act
 17-1    (Article 6687b-2, Revised Statutes)]; and
 17-2                            (2)  the defendant has not completed an
 17-3    approved driving safety course within the preceding 12 months.
 17-4          SECTION 3.07.  Article 47.01, Code of Criminal Procedure, is
 17-5    amended to correct a reference to read as follows:
 17-6          Art. 47.01.  SUBJECT TO ORDER OF COURT.  An officer who comes
 17-7    into custody of property alleged to have been stolen must hold it
 17-8    subject to the order of the proper court, except that if the
 17-9    officer recovers, within 14 days from the date it was reported
17-10    stolen, property which is subject to Chapter 501, Transportation
17-11    Code [the Certificate of Title Act (Article 6687-1, Vernon's Texas
17-12    Civil Statutes)], [then] the officer need not hold the property
17-13    subject to the order of the proper court but may release the
17-14    property to the owner, as shown on the certificate of title.
17-15          SECTION 3.08.  Article 55.06, Code of Criminal Procedure, is
17-16    amended to correct references to read as follows:
17-17          Art. 55.06.  LICENSE SUSPENSIONS AND REVOCATIONS.  A person
17-18    may not use the provisions of this chapter to expunge records
17-19    relating to the suspension or revocation of a driver's license,
17-20    permit, or privilege to operate a motor vehicle except as provided
17-21    in Section 524.015, Transportation Code [5(d), Article 6687b-1,
17-22    Revised Statutes], or Section 724.048 of that code [2(r), Chapter
17-23    434, Acts of the 61st Legislature, Regular Session, 1969 (Article
17-24    6701l-5, Vernon's Texas Civil Statutes)].
17-25          SECTION 3.09.  Subdivision (3), Article 59.01, Code of
17-26    Criminal Procedure, is amended to correct a reference to read as
 18-1    follows:
 18-2                (3)  "Crime of violence" means:
 18-3                      (A)  any criminal offense defined in the Penal
 18-4    Code or in a federal criminal law that results in a personal injury
 18-5    to a victim; or
 18-6                      (B)  an act that is not an offense under the
 18-7    Penal Code involving the operation of a motor vehicle, aircraft, or
 18-8    water vehicle that results in injury or death sustained in an
 18-9    accident caused by a driver in violation of Section 550.021,
18-10    Transportation Code [38, Uniform Act Regulating Traffic on Highways
18-11    (Article 6701d, Vernon's Texas Civil Statutes)].
18-12          SECTION 3.10.  Article 62.001(3), Code of Criminal Procedure
18-13    (formerly Section 79.001(3), Human Resources Code, redesignated as
18-14    Article 62.001(3) by Chapter 1427, Acts of the 75th Legislature,
18-15    Regular Session, 1997), is redesignated as Article 63.001(3), Code
18-16    of Criminal Procedure, and amended and reenacted to conform to
18-17    Chapters 51 and 1427, Acts of the 75th Legislature, Regular
18-18    Session, 1997, to read as follows:
18-19                (3)  "Missing child" means a child whose whereabouts
18-20    are unknown to the child's legal custodian, the circumstances of
18-21    whose absence indicate that:
18-22                      (A)  the child did not voluntarily leave the care
18-23    and control of the custodian, and the taking of the child was not
18-24    authorized by law;
18-25                      (B)  the child voluntarily left the care and
18-26    control of his legal custodian without the custodian's consent and
 19-1    without intent to return; or
 19-2                      (C)  the child was taken or retained in violation
 19-3    of the [express] terms of a court order [or judgment governing
 19-4    custody of] for possession of or access to the child.
 19-5          SECTION 3.11.  Article 62.009(a), Code of Criminal Procedure
 19-6    (formerly Section 79.008(a), Human Resources Code, redesignated as
 19-7    Article 62.009(a) by Chapter 1427, Acts of the 75th Legislature,
 19-8    Regular Session, 1997), is redesignated as Article 63.009(a), Code
 19-9    of Criminal Procedure, and amended and reenacted to conform to
19-10    Chapters 51 and 771, Acts of the 75th Legislature, Regular Session,
19-11    1997, to read as follows:
19-12          (a)  Local law enforcement agencies, on receiving a report of
19-13    a missing child or a missing person, shall:
19-14                (1)  if the subject of the report is a child and the
19-15    well-being of the child is in danger, immediately start an
19-16    investigation in order to determine the present location of the
19-17    child;
19-18                (2)  if the subject of the report is a person other
19-19    than a child or if the subject of the report is a child whose
19-20    well-being is not considered to be in danger, start an
19-21    investigation with due diligence in order to determine the present
19-22    location of the person;
19-23                (3)  immediately enter the name of the child or person
19-24    into the clearinghouse and the national crime information center
19-25    missing person file if the child or person meets the center's
19-26    criteria, with all available identifying features such as dental
 20-1    records, fingerprints, other physical characteristics, and a
 20-2    description of the clothing worn when last seen, and all available
 20-3    information describing any person reasonably believed to have taken
 20-4    or retained the missing child or missing person; and
 20-5                [(4)  on determining the location of a child under
 20-6    Subdivision (1) or (2), other than a child who is subject to the
 20-7    continuing jurisdiction of a district court, an officer may take
 20-8    possession of the child and shall deliver or arrange for the
 20-9    delivery of the child to a person entitled to possession of the
20-10    child.  If the person entitled to possession of the child is not
20-11    immediately available, the law enforcement officer shall deliver
20-12    the child to the Department of Protective and Regulatory Services.]
20-13                (4)  inform the person who filed the report of the
20-14    missing child or missing person that the information will be
20-15    entered into the clearinghouse and the national crime information
20-16    center missing person file.
20-17          SECTION 3.12.  Article 62.009, Code of Criminal Procedure
20-18    (formerly Section 79.008, Human Resources Code, redesignated as
20-19    Article 62.009 by Chapter 1427, Acts of the 75th Legislature,
20-20    Regular Session, 1997), is redesignated as Article 63.009, Code of
20-21    Criminal Procedure, and amended to conform to Chapter 51, Acts of
20-22    the 75th Legislature, Regular Session, 1997, by adding Subsection
20-23    (g) to read as follows:
20-24          (g)  On determining the location of a child under Subsection
20-25    (a)(1) or (2), other than a child who is subject to the continuing
20-26    jurisdiction of a district court, an officer may take possession of
 21-1    the child and shall deliver or arrange for the delivery of the
 21-2    child to a person entitled to possession of the child.  If the
 21-3    person entitled to possession of the child is not immediately
 21-4    available, the law enforcement officer shall deliver the child to
 21-5    the Department of Protective and Regulatory Services.
 21-6              ARTICLE 4.  CHANGES RELATING TO EDUCATION CODE
 21-7          SECTION 4.01.  Section 29.153(g), Education Code, is amended
 21-8    to properly reflect the name of the agency to which the section
 21-9    refers to read as follows:
21-10          (g)  If a school district contracts with a private entity for
21-11    the operation of the district's prekindergarten program, the
21-12    program must at a minimum comply with the applicable child-care
21-13    licensing standards adopted by the [Texas] Department of Protective
21-14    and Regulatory [Human] Services under Section 42.042, Human
21-15    Resources Code.
21-16          SECTION 4.02.  (a)  Section 51.751(b), Education Code, is
21-17    amended to conform to Section 7.10, Chapter 347, Acts of the 73rd
21-18    Legislature, Regular Session, 1993, to read as follows:
21-19          (b)  The center shall examine the efficiency of the public
21-20    school system and the effectiveness of instructional methods and
21-21    curricular programs and[.  The center shall] promote the use of
21-22    successful methods and programs.  The center shall monitor and
21-23    evaluate the implementation of the accountability system under
21-24    Chapter 39 and provide annual progress reports to the governor,
21-25    Legislative Budget Board, and commissioner of education.
21-26          (b)  Section 7.10, Chapter 347, Acts of the 73rd Legislature,
 22-1    Regular Session, 1993, is repealed.
 22-2          SECTION 4.03.  Sections 51.927(e)-(k), Education Code, as
 22-3    amended by Chapters 627 and 1142, Acts of the 75th Legislature,
 22-4    Regular Session, 1997, are reenacted and amended to read as
 22-5    follows:
 22-6          (e)  Before entering into a contract for energy conservation
 22-7    measures, the board shall require the provider of the energy
 22-8    conservation measures to file with the board a payment and
 22-9    performance bond that is in an amount the board finds reasonable
22-10    and necessary to protect the interests of the institution and is
22-11    conditioned on the faithful execution of the terms of the contract.
22-12          (f)  The board may enter into a contract for a period of more
22-13    than one year for energy conservation measures with an entity if
22-14    the board finds that the amount the institution would spend on the
22-15    energy conservation measures will not exceed the amount to be saved
22-16    in energy and operating costs over 10 years from the date of
22-17    installation.  If the term of a contract for energy conservation
22-18    measures exceeds one year, the board's contractual obligation in
22-19    any year during the term of the contract beginning after the final
22-20    date of installation may not exceed the total energy and operating
22-21    cost savings, including but not limited to electrical, gas, or
22-22    other utility cost savings and operating cost savings resulting
22-23    from automatic monitoring and control, as determined by the board
22-24    in this subsection, divided by the number of years in the contract
22-25    term beginning after the final date of installation.  The board
22-26    shall consider all costs of the energy conservation measures,
 23-1    including costs of design, engineering, installation, maintenance,
 23-2    repairs, and debt service.
 23-3          (g)  A contract for energy conservation measures may be a
 23-4    lease/purchase contract, with a term not to exceed 10 years after
 23-5    the final date of installation, that meets federal tax requirements
 23-6    for tax-free municipal leasing or long-term financing.  The
 23-7    contract shall contain provisions pursuant to which the provider of
 23-8    the energy conservation measures guarantees the amount of the
 23-9    savings to be realized by the institution of higher education under
23-10    the contract.  The Master Equipment Lease Purchase Program operated
23-11    by the Texas Public Finance Authority may be utilized by an
23-12    institution to fund a contract for energy conservation measures so
23-13    long as the costs of the energy conservation measures, including
23-14    costs of design, engineering, installation, maintenance, repairs,
23-15    and anticipated debt service requirements of the Master Equipment
23-16    Lease Purchase Program, do not exceed the total energy and
23-17    operating cost savings, as described in Subsection (f) [(e)],
23-18    beginning after the final date of installation.
23-19          (h)  A contract under this section may be let under
23-20    competitive sealed proposal procedures.  Notice of the request for
23-21    proposals shall be given in the manner provided for in Chapter
23-22    2156, Government Code.  The Texas Higher Education Coordinating
23-23    Board, in consultation with the State Energy Conservation Office
23-24    and the Texas Energy Coordination Council, shall establish
23-25    guidelines and an approval process for contracts awarded under this
23-26    section.  The State Energy Conservation Office and the Texas Energy
 24-1    Coordination Council shall review the selected proposal before a
 24-2    contract is awarded.  The State Energy Conservation Office may
 24-3    provide a cost-benefit analysis of the proposals and analysis of
 24-4    the guaranteed savings projected by offerors and may charge a fee
 24-5    for this service.   The contract shall be awarded to the
 24-6    responsible offeror whose proposal, following negotiations, is
 24-7    determined by the institution to be the most advantageous to the
 24-8    institution considering the guaranteed savings and other evaluation
 24-9    factors set forth in the request for proposals, except that if the
24-10    institution finds that no offer is acceptable, it shall refuse all
24-11    offers.
24-12          (i)  In accordance with regulations adopted by the
24-13    institution, the institution may conduct discussions with offerors
24-14    who submit proposals and who are determined to be reasonably
24-15    qualified for the award of the contract.  Offerors shall be treated
24-16    fairly and equally with respect to any opportunity for discussion
24-17    and revision of proposals.  To obtain the best final offers, the
24-18    institution may allow proposal revisions after submissions and
24-19    before the award of the contract.
24-20          (j)  If provided in a request for proposals under Subsection
24-21    (h) [(g) of this section], proposals shall be opened in a manner
24-22    that avoids disclosure of the contents to competing offerors and
24-23    keeps the proposals secret during negotiations.  All proposals are
24-24    open for public inspection after a contract is awarded unless the
24-25    information is excepted from disclosure under Chapter 552,
24-26    Government Code.
 25-1          (k)  The legislature shall base an institution's
 25-2    appropriation for energy costs during a fiscal year on the sum of:
 25-3                (1)  the institution's estimated energy costs for that
 25-4    fiscal year; and
 25-5                (2)  if a contract under this section is in effect, the
 25-6    institution's estimated net savings resulting from the contract
 25-7    during the contract term, divided by the number of years in the
 25-8    contract term.
 25-9               ARTICLE 5.  CHANGES RELATING TO ELECTION CODE
25-10          SECTION 5.01.  Section 13.146(b), Election Code, is amended
25-11    to be consistent with the terminology used elsewhere in the code in
25-12    similar contexts, to read as follows:
25-13          (b)  If the applicant fails to submit [deliver] a response to
25-14    the registrar in accordance with Section 15.053, the registrar
25-15    shall enter the applicant's name on the suspense list.
25-16          SECTION 5.02.  Section 14.023(b), Election Code, is amended
25-17    to be consistent with the terminology used elsewhere in the code in
25-18    similar contexts, to read as follows:
25-19          (b)  If the voter fails to submit [deliver] a response to the
25-20    registrar in accordance with Section 15.053, the voter's name
25-21    remains on the suspense list.
25-22          SECTION 5.03.  Section 15.021(a), Election Code, is amended
25-23    to be consistent with the terminology used elsewhere in the code in
25-24    similar contexts, to read as follows:
25-25          (a)  If a voter discovers incorrect information on the
25-26    voter's registration certificate or if any of the information
 26-1    becomes incorrect because of a change in circumstances, the voter
 26-2    shall promptly submit [deliver] to the registrar a written, signed
 26-3    notice of the incorrect information and the corresponding
 26-4    correction.
 26-5          SECTION 5.04.  Section 15.052(a), Election Code, is amended
 26-6    to be consistent with the terminology used elsewhere in the code in
 26-7    similar contexts, to read as follows:
 26-8          (a)  The officially prescribed form for a confirmation notice
 26-9    must include:
26-10                (1)  a statement that, if the voter fails to submit
26-11    [deliver] to the registrar a written, signed response confirming
26-12    the voter's current residence on or before the 30th day after the
26-13    date the confirmation notice is mailed:
26-14                      (A)  the voter is subject to submission of a
26-15    statement of residence before the voter may be accepted for voting
26-16    in an election held after that deadline; or
26-17                      (B)  for a notice delivered under Section 14.023,
26-18    the voter will remain subject to submission of a statement of
26-19    residence before the voter may be accepted for voting in an
26-20    election; and
26-21                (2)  a warning that the voter's registration is subject
26-22    to cancellation if the voter fails to confirm the voter's current
26-23    residence either by notifying the registrar in writing or voting on
26-24    a statement of residence before November 30 following the second
26-25    general election for state and county officers that occurs after
26-26    the date the confirmation notice is mailed.
 27-1          SECTION 5.05.  Section 15.053(a), Election Code, is amended
 27-2    to be consistent with the terminology used elsewhere in the code in
 27-3    similar contexts, to read as follows:
 27-4          (a)  Not later than the 30th day after the date a
 27-5    confirmation notice is mailed, the voter shall submit [deliver] to
 27-6    the registrar a written, signed response to the notice that
 27-7    confirms the voter's current residence.
 27-8          SECTION 5.06.  Section 15.081(a), Election Code, is amended
 27-9    to be consistent with the terminology used elsewhere in the code in
27-10    similar contexts, to read as follows:
27-11          (a)  The registrar shall maintain a suspense list containing
27-12    the name of each voter who fails to submit [deliver] a response to
27-13    the registrar in accordance with Section 15.053 or whose renewal
27-14    certificate is returned to the registrar in accordance with
27-15    Subchapter B, Chapter 14.
27-16          SECTION 5.07.  Section 16.0921(b), Election Code, is amended
27-17    to be consistent with the terminology used elsewhere in the code in
27-18    similar contexts, to read as follows:
27-19          (b)  If the voter fails to submit [deliver] a response to the
27-20    registrar in accordance with Section 15.053, the registrar shall
27-21    enter the voter's name on the suspense list.
27-22          SECTION 5.08.  Section 31.002(a), Election Code, is amended
27-23    to conform to changes made by Chapter 304, Acts of the 72nd
27-24    Legislature, Regular Session, 1991, to read as follows:
27-25          (a)  The secretary of state shall prescribe the design and
27-26    content, consistent with this code, of the forms necessary for the
 28-1    administration of this code other than Title 15.  The design and
 28-2    content must enhance the ability of a person to understand the
 28-3    applicable requirements and to physically furnish the required
 28-4    information in the space provided.
 28-5          SECTION 5.09.  Section 52.068(a), Election Code, is amended
 28-6    to be consistent with the terminology used elsewhere in the code in
 28-7    similar contexts, to read as follows:
 28-8          (a)  If no candidate's name is to appear on the ballot for a
 28-9    particular office to be voted on at an election in which write-in
28-10    votes for the office are permitted by law, the authority
28-11    responsible for having the official ballot prepared shall have the
28-12    office title printed on the ballot and shall provide a space for a
28-13    write-in vote as required by this code.  However, in an election in
28-14    which write-in votes may be counted only for names appearing on a
28-15    list of write-in candidates, if no candidate's name is to appear on
28-16    the ballot or the list of write-in candidates for a particular
28-17    office, the office title is not printed on the ballot.
28-18          SECTION 5.10.  Section 101.004(j), Election Code, is amended
28-19    to be consistent with the terminology used elsewhere in the code in
28-20    similar contexts, to read as follows:
28-21          (j)  If the early voting clerk determines that an application
28-22    that is submitted before the time prescribed by Subsection (e)(1)
28-23    does not contain the information that is required for registration
28-24    under Title 2, the clerk shall notify the applicant of that fact.
28-25    If the applicant submits the missing information before the time
28-26    prescribed by Subsection (e)(1), the applicant is entitled to
 29-1    receive a full ballot to be voted by mail under this chapter.  If
 29-2    the applicant submits the missing information after the time
 29-3    prescribed by Subsection (e)(1), the applicant is entitled to
 29-4    receive a full ballot to be voted by mail for the next election
 29-5    that occurs:
 29-6                (1)  in the same calendar year; and
 29-7                (2)  at least 30 days after the date the information is
 29-8    submitted.
 29-9          SECTION 5.11.  Section 105.002(a), Election Code, as added by
29-10    Section 45, Chapter 1349, Acts of the 75th Legislature, Regular
29-11    Session, 1997, is amended to be consistent with the terminology
29-12    used elsewhere in the code in similar contexts, to read as follows:
29-13          (a)  The secretary of state shall prescribe procedures to
29-14    allow a voter to apply for and cast a state write-in ballot before
29-15    the time a voter may receive a regular ballot to be voted by mail
29-16    if the voter:
29-17                (1)  is a member of the armed forces of the United
29-18    States or the spouse or a dependent of a member;
29-19                (2)  is unable to cast a ballot on election day or
29-20    during the regular period for early voting because of a military
29-21    contingency; and
29-22                (3)  makes an application on an official [a] federal
29-23    postcard application form that:
29-24                      (A)  indicates that the person desires a state
29-25    write-in ballot; and
29-26                      (B)  contains the information that is required
 30-1    for registration under Title 2.
 30-2          SECTION 5.12.  The heading of Section 171.023, Election Code,
 30-3    is amended to conform to the changes in terminology made by Chapter
 30-4    864, Acts of the 75th Legislature, Regular Session, 1997, to read
 30-5    as follows:
 30-6          Sec. 171.023.  RESIDENCE OF PRECINCT CHAIR [CHAIRMAN].
 30-7          SECTION 5.13.  Section 172.021(c), Election Code, is amended
 30-8    to be consistent with the terminology used elsewhere in the code in
 30-9    similar contexts, to read as follows:
30-10          (c)  An application filed by mail is considered to be filed
30-11    at the time of its receipt by the appropriate authority.
30-12          SECTION 5.14.  Section 174.022(d), Election Code, is amended
30-13    to be consistent with the terminology used elsewhere in the code in
30-14    similar contexts, to read as follows:
30-15          (d)  The place [location] selected for a precinct convention
30-16    must meet the same requirements for access by elderly and
30-17    physically handicapped persons as a polling place under Section
30-18    43.034(a) unless the state executive committee for a political
30-19    party issues an order that the places [locations] for precinct
30-20    conventions for that political party are [do] not required [have]
30-21    to meet the same requirements as a polling place under Section
30-22    43.034(a).  The order must be entered in the minutes of the state
30-23    executive committee not later than the 30th day [30 days] before
30-24    the date precinct conventions are to be held.
30-25          SECTION 5.15.  The heading of Subchapter B, Chapter 251,
30-26    Election Code, is amended to be consistent with terminology used
 31-1    elsewhere in the code in similar contexts, to read as follows:
 31-2                 SUBCHAPTER B.  DUTIES OF [THE] COMMISSION
 31-3          SECTION 5.16.  Section 253.157(a), Election Code, as amended
 31-4    by Section 2, Chapter 552, Acts of the 75th Legislature, Regular
 31-5    Session, 1997, is amended to reconcile the amendment to Subsection
 31-6    (a) by Section 5, Chapter 479, Acts of the 75th Legislature,
 31-7    Regular Session, 1997, to read as follows:
 31-8          (a)  A judicial candidate or officeholder or a
 31-9    specific-purpose committee for supporting or opposing a judicial
31-10    candidate may not accept a political contribution in excess of $50
31-11    from a person if:
31-12                (1)  the person is a law firm, a member of a law firm,
31-13    or a general-purpose committee established or controlled by a law
31-14    firm; and
31-15                (2)  the contribution when aggregated with all
31-16    political contributions accepted by the candidate, officeholder, or
31-17    committee from the law firm, other members of the law firm, or
31-18    [from] a general-purpose committee established or controlled by the
31-19    law firm in connection with the election would exceed six times the
31-20    applicable contribution limit under Section 253.155.
31-21          SECTION 5.17.  Sections 255.006(a), (b), and (c), Election
31-22    Code, are amended to be consistent with the terminology used
31-23    elsewhere in the code in similar contexts, to read as follows:
31-24          (a)  A person commits an offense if the person knowingly
31-25    enters into a contract or other agreement to print, publish, or
31-26    broadcast political advertising with the intent to represent to an
 32-1    ordinary and prudent person that a candidate holds a public office
 32-2    that the candidate does not hold at the time the agreement is made.
 32-3          (b)  A person commits an offense if the person knowingly
 32-4    represents in a campaign communication that a candidate holds a
 32-5    public office that the candidate does not hold at the time the
 32-6    representation is made.
 32-7          (c)  For purposes of this section, a person represents that a
 32-8    candidate holds a public office that the candidate does not hold
 32-9    if:
32-10                (1)  the candidate does not hold the office that the
32-11    candidate seeks; and
32-12                (2)  the political advertising or campaign
32-13    communication states the public office sought but does not use the
32-14    word "for" to clarify that the candidate does not hold that office.
32-15                ARTICLE 6.  CHANGES RELATING TO FAMILY CODE
32-16          SECTION 6.01.  (a)  Section 2.009(c), Family Code, is amended
32-17    to conform to Chapter 698, Acts of the 75th Legislature, Regular
32-18    Session, 1997, to read as follows:
32-19          (c)  On the proper execution of the application, the clerk
32-20    shall:
32-21                (1)  prepare the license;
32-22                (2)  enter on [record on the reverse side of] the
32-23    license the names of the licensees, the date that the license is
32-24    issued, and, if applicable, the name of the person appointed to act
32-25    as proxy for an absent applicant, if any;
32-26                (3)  record the time at which the license was issued;
 33-1    and
 33-2                (4)  distribute to each applicant printed materials
 33-3    about acquired immune deficiency syndrome (AIDS) and human
 33-4    immunodeficiency virus (HIV) and note on the license that the
 33-5    distribution was made.
 33-6          (b)  Chapter 698, Acts of the 75th Legislature, Regular
 33-7    Session, 1997, is repealed.
 33-8          SECTION 6.02.  Section 32.101, Family Code, is amended to
 33-9    conform to Section 4, Chapter 123, Acts of the 74th Legislature,
33-10    Regular Session, 1995, by adding Subsection (f) to read as follows:
33-11          (f)  Consent to immunization must meet the requirements of
33-12    Section 32.002(a).
33-13          SECTION 6.03.  Section 6.404(c), Family Code, is amended to
33-14    correct a reference to read as follows:
33-15          (c)  The statement prescribed by Subsection (a) is not
33-16    required for:
33-17                (1)  a pleading in which citation on all respondents
33-18    entitled to service of citation is requested, issued, and given by
33-19    publication;
33-20                (2)  a motion or pleading that seeks a protective order
33-21    as provided by Title 4 [Chapter 71]; or
33-22                (3)  a special appearance under Rule 120a, Texas Rules
33-23    of Civil Procedure.
33-24          SECTION 6.04.  Section 6.405, Family Code, is amended to
33-25    correct a reference to read as follows:
33-26          Sec. 6.405.  PROTECTIVE ORDER.  (a)  The petition in a suit
 34-1    for dissolution of a marriage must state whether a protective order
 34-2    under Title 4 [Chapter 71] is in effect or if an application for a
 34-3    protective order is pending with regard to the parties to the suit.
 34-4          (b)  The petitioner shall attach to the petition a copy of
 34-5    each protective order issued under Title 4 [Chapter 71] in which
 34-6    one of the parties to the suit was the applicant and the other
 34-7    party was the respondent without regard to the date of the order.
 34-8    If a copy of the protective order is not available at the time of
 34-9    filing, the petition must state that a copy of the order will be
34-10    filed with the court before any hearing.
34-11          SECTION 6.05.  Section 8.002, Family Code, is amended to
34-12    correct a reference to read as follows:
34-13          Sec. 8.002.  ELIGIBILITY FOR MAINTENANCE.  In a suit for
34-14    dissolution of a marriage or in a proceeding for maintenance in a
34-15    court with personal jurisdiction over both former spouses following
34-16    the dissolution of their marriage by a court that lacked personal
34-17    jurisdiction over an absent spouse, the court may order maintenance
34-18    for either spouse only if:
34-19                (1)  the spouse from whom maintenance is requested was
34-20    convicted of or received deferred adjudication for a criminal
34-21    offense that also constitutes an act of family violence under Title
34-22    4 [Chapter 71] and the offense occurred:
34-23                      (A)  within two years before the date on which a
34-24    suit for dissolution of the marriage is filed; or
34-25                      (B)  while the suit is pending; or
34-26                (2)  the duration of the marriage was 10 years or
 35-1    longer, the spouse seeking maintenance lacks sufficient property,
 35-2    including property distributed to the spouse under this code, to
 35-3    provide for the spouse's minimum reasonable needs, as limited by
 35-4    Section 8.005, and the spouse seeking maintenance:
 35-5                      (A)  is unable to support himself or herself
 35-6    through appropriate employment because of an incapacitating
 35-7    physical or mental disability;
 35-8                      (B)  is the custodian of a child who requires
 35-9    substantial care and personal supervision because a physical or
35-10    mental disability makes it necessary, taking into consideration the
35-11    needs of the child, that the spouse not be employed outside the
35-12    home; or
35-13                      (C)  clearly lacks earning ability in the labor
35-14    market adequate to provide support for the spouse's minimum
35-15    reasonable needs, as limited by Section 8.005.
35-16          SECTION 6.06.  Section 45.106(a), Family Code, is amended to
35-17    correct a reference to read as follows:
35-18          (a)  A person whose name is changed under Section 6.706
35-19    [3.64] or 45.105 may apply to the clerk of the court ordering the
35-20    name change for a change of name certificate.
35-21          SECTION 6.07.  Section 51.12, Family Code, as amended by
35-22    Chapters 772 and 1374, Acts of the 75th Legislature, Regular
35-23    Session, 1997, is amended and reenacted to read as follows:
35-24          Sec. 51.12.  PLACE AND CONDITIONS OF DETENTION.  (a)  Except
35-25    as provided by Subsection (h), a child may be detained only in a:
35-26                (1)  juvenile processing office in compliance with
 36-1    Section 52.025;
 36-2                (2)  place of nonsecure custody in compliance with
 36-3    Section 52.027;
 36-4                (3)  certified juvenile detention facility that
 36-5    complies with the requirements of Subsection (f); or
 36-6                (4)  secure detention facility as provided by
 36-7    Subsection (j) [(i)].
 36-8          (b)  The proper authorities in each county shall provide a
 36-9    suitable place of detention for children who are parties to
36-10    proceedings under this title, but the juvenile court shall control
36-11    the conditions and terms of detention and detention supervision and
36-12    shall permit visitation with the child at all reasonable times.
36-13          (c)  In each county, each judge of the juvenile court and the
36-14    members of the juvenile board shall personally inspect the juvenile
36-15    pre-adjudication secure detention facilities and any public or
36-16    private juvenile secure correctional facilities used for
36-17    post-adjudication confinement that are located in the county and
36-18    operated under authority of the juvenile board at least annually
36-19    and shall certify in writing to the authorities responsible for
36-20    operating and giving financial support to the facilities and to the
36-21    Texas Juvenile Probation Commission that they are suitable or
36-22    unsuitable for the detention of children in accordance with:
36-23                (1)  the requirements of Subsections (a), (f), and (g);
36-24    and
36-25                (2)  minimum professional standards for the detention
36-26    of children in pre-adjudication or post-adjudication secure
 37-1    confinement promulgated by the Texas Juvenile Probation Commission
 37-2    or, at the election of the juvenile board, the current standards
 37-3    promulgated by the American Correctional Association.
 37-4          (d)  Except as provided by Subsection (j) [(i)], a child may
 37-5    not be placed in a facility that has not been certified under
 37-6    Subsection (c) as suitable for the detention of children and
 37-7    registered under Subsection (i) [of this section].  Except as
 37-8    provided by Subsection (j) [(i)], a child detained in a facility
 37-9    that has not been certified under Subsection (c) as suitable for
37-10    the detention of children or that has not been registered under
37-11    Subsection (i) [of this section] shall be entitled to immediate
37-12    release from custody in that facility.
37-13          (e)  If there is no certified place of detention in the
37-14    county in which the petition is filed, the designated place of
37-15    detention may be in another county.
37-16          (f)  A child detained in a building that contains a jail,
37-17    lockup, or other place of secure confinement, including an alcohol
37-18    or other drug treatment facility, shall be separated by sight and
37-19    sound from adults detained in the same building.  Children and
37-20    adults are separated by sight and sound only if they are unable to
37-21    see each other and conversation between them is not possible.  The
37-22    separation must extend to all areas of the facility, including
37-23    sally ports and passageways, and those areas used for admission,
37-24    counseling, sleeping, toileting, showering, dining, recreational,
37-25    educational, or vocational activities, and health care.  The
37-26    separation may be accomplished through architectural design.
 38-1          (g)  Except for a child detained in a juvenile processing
 38-2    office, a place of nonsecure custody, or a secure detention
 38-3    facility as provided by Subsection (j) [(i)], a child detained in a
 38-4    building that contains a jail or lockup may not have any contact
 38-5    with:
 38-6                (1)  part-time or full-time security staff, including
 38-7    management, who have contact with adults detained in the same
 38-8    building; or
 38-9                (2)  direct-care staff who have contact with adults
38-10    detained in the same building.
38-11          (h)  This section does not apply to a person:
38-12                (1)  after transfer to criminal court for prosecution
38-13    under Section 54.02; or
38-14                (2)  who is at least 18 years of age and who has been
38-15    taken into custody after having:
38-16                      (A)  escaped from a juvenile facility; or
38-17                      (B)  violated a condition of probation or of
38-18    release under supervision of the Texas Youth Commission.
38-19          (i)  Except for a facility operated or certified by the Texas
38-20    Youth Commission, a governmental unit or private entity that
38-21    operates or contracts for the operation of a juvenile
38-22    pre-adjudication secure detention facility or a juvenile
38-23    post-adjudication secure correctional facility in this state shall:
38-24                (1)  register the facility annually with the Texas
38-25    Juvenile Probation Commission; and
38-26                (2)  adhere to all applicable minimum standards for the
 39-1    facility.
 39-2          (j) [(i)]  After being taken into custody, a child may be
 39-3    detained in a secure detention facility until the child is released
 39-4    under Section 53.01, 53.012, or 53.02 or until a detention hearing
 39-5    is held under Section 54.01(a), regardless of whether the facility
 39-6    has been certified under Subsection (c), if:
 39-7                (1)  a certified juvenile detention facility is not
 39-8    available in the county in which the child is taken into custody;
 39-9                (2)  the detention facility complies with:
39-10                      (A)  the short-term detention standards adopted
39-11    by the Texas Juvenile Probation Commission; and
39-12                      (B)  the requirements of Subsection (f); and
39-13                (3)  the detention facility has been designated by the
39-14    county juvenile board for the county in which the facility is
39-15    located.
39-16          (k) [(j)]  If a child who is detained under Subsection (j)
39-17    [(i)] is not released from detention at the conclusion of the
39-18    detention hearing for a reason stated in Section 54.01(e), the
39-19    child may be detained after the hearing only in a certified
39-20    juvenile detention facility.
39-21          SECTION 6.08.  Section 52.02(a), Family Code, is amended to
39-22    correct a reference to read as follows:
39-23          (a)  Except as provided by Subsection (c), a person taking a
39-24    child into custody, without unnecessary delay and without first
39-25    taking the child to any place other than a juvenile processing
39-26    office designated under Section 52.025, shall do one of the
 40-1    following:
 40-2                (1)  release the child to a parent, guardian, custodian
 40-3    of the child, or other responsible adult upon that person's promise
 40-4    to bring the child before the juvenile court as requested by the
 40-5    court;
 40-6                (2)  bring the child before the office or official
 40-7    designated by the juvenile court if there is probable cause to
 40-8    believe that the child engaged in delinquent conduct or conduct
 40-9    indicating a need for supervision;
40-10                (3)  bring the child to a detention facility designated
40-11    by the juvenile court;
40-12                (4)  bring the child to a secure detention facility as
40-13    provided by Section 51.12(j) [51.12(i)];
40-14                (5)  bring the child to a medical facility if the child
40-15    is believed to suffer from a serious physical condition or illness
40-16    that requires prompt treatment; or
40-17                (6)  dispose of the case under Section 52.03.
40-18          SECTION 6.09.  Section 52.026(b), Family Code, is amended to
40-19    correct a reference to read as follows:
40-20          (b)  If the juvenile detention facility is located outside
40-21    the county in which the child is taken into custody, it shall be
40-22    the duty of the sheriff of that county to transport the child to
40-23    the appropriate juvenile detention facility unless the child is:
40-24                (1)  detained in a secure detention facility under
40-25    Section 51.12(j) [51.12(i)]; or
40-26                (2)  released to the parent, guardian, or custodian of
 41-1    the child.
 41-2          SECTION 6.10.  (a)  Chapter 84, Family Code, is amended to
 41-3    conform to Section 4, Chapter 752, Acts of the 75th Legislature,
 41-4    Regular Session, 1997, by adding Section 84.005 to read as follows:
 41-5          Sec. 84.005.  LEGISLATIVE CONTINUANCE.  If a proceeding for
 41-6    which a legislative continuance is sought under Section 30.003,
 41-7    Civil Practice and Remedies Code, includes an application for a
 41-8    protective order, the continuance is discretionary with the court.
 41-9          (b)  Section 4, Chapter 752, Acts of the 75th Legislature,
41-10    Regular Session, 1997, is repealed.
41-11          SECTION 6.11.  Section 102.0085(a), Family Code, is amended
41-12    to correct a reference to read as follows:
41-13          (a)  A party to a proceeding brought under this title
41-14    [chapter and Chapters 151, 153, 154, 156, 160, and 161] shall
41-15    include in the first pleading filed by the party in the proceeding
41-16    the following statement:
41-17          "I AM AWARE THAT IT IS THE POLICY OF THE STATE OF TEXAS
41-18          TO PROMOTE THE AMICABLE AND NONJUDICIAL SETTLEMENT OF
41-19          DISPUTES INVOLVING CHILDREN AND FAMILIES. I AM AWARE OF
41-20          ALTERNATIVE DISPUTE RESOLUTION METHODS, INCLUDING
41-21          MEDIATION. WHILE I RECOGNIZE THAT ALTERNATIVE DISPUTE
41-22          RESOLUTION IS AN ALTERNATIVE TO AND NOT A SUBSTITUTE
41-23          FOR A TRIAL AND THAT THIS CASE MAY BE TRIED IF IT IS
41-24          NOT SETTLED, I REPRESENT TO THE COURT THAT I WILL
41-25          ATTEMPT IN GOOD FAITH TO RESOLVE BEFORE FINAL TRIAL
41-26          CONTESTED ISSUES IN THIS CASE BY ALTERNATIVE DISPUTE
 42-1          RESOLUTION WITHOUT THE NECESSITY OF COURT
 42-2          INTERVENTION."
 42-3          SECTION 6.12.  Section 102.009(a), Family Code, as amended by
 42-4    Section 1, Chapter 561, Acts of the 75th Legislature, Regular
 42-5    Session, 1997, and Section 1, Chapter 599, Acts of the 75th
 42-6    Legislature, Regular Session, 1997, is reenacted and amended to
 42-7    read as follows:
 42-8          (a)  Except as provided by Subsection (b), the following are
 42-9    entitled to service of citation on the filing of a petition in an
42-10    original suit:
42-11                (1)  a managing conservator;
42-12                (2)  a possessory conservator;
42-13                (3)  a person having possession of or access to the
42-14    child under an order;
42-15                (4)  a person required by law or by order to provide
42-16    for the support of the child;
42-17                (5)  a guardian of the person of the child;
42-18                (6)  a guardian of the estate of the child;
42-19                (7)  each parent as to whom the parent-child
42-20    relationship has not been terminated or process has not been waived
42-21    under Chapter 161;
42-22                (8)  an alleged father, unless there is attached to the
42-23    petition an affidavit of waiver of interest in a child executed by
42-24    the alleged father as provided by Chapter 161 or unless the
42-25    petitioner has complied with the provisions of Section
42-26    161.002(b)(2) or (b)(3);
 43-1                (9)  a man who has filed a notice of intent to claim
 43-2    paternity as provided by Subchapter D, Chapter 160; [and]
 43-3                (10)  the Department of Protective and Regulatory
 43-4    Services, if the petition requests that the department be appointed
 43-5    as managing conservator of the child; and[.]
 43-6                (11) [(10)]  the attorney general, if the petition
 43-7    requests the termination of the parent-child relationship and the
 43-8    Title IV-D agency has filed with the court a notice of assignment
 43-9    under Chapter 231 with respect to the support rights of the child.
43-10          SECTION 6.13.  Section 102.012(b), Family Code, is amended to
43-11    correct a reference to read as follows:
43-12          (b)  The court's authority to resolve all issues in
43-13    controversy between the parties may be restricted because the court
43-14    lacks:
43-15                (1)  the required personal jurisdiction over a
43-16    nonresident party;
43-17                (2)  the required jurisdiction under Chapter 152; or
43-18                (3)  the required jurisdiction under Chapter 159 [157].
43-19          SECTION 6.14.  Section 103.001(a), Family Code, is amended to
43-20    correct a reference to read as follows:
43-21          (a)  Except as otherwise provided by this title, an original
43-22    suit shall be filed in the county where the child resides, unless:
43-23                (1)  another court has continuing exclusive
43-24    jurisdiction under Chapter 155; or
43-25                (2)  venue is fixed in a suit for dissolution of a
43-26    marriage under Subchapter D, Chapter 6 [Chapter 3].
 44-1          SECTION 6.15.  Section 107.0135, Family Code, is amended to
 44-2    correct a reference to read as follows:
 44-3          Sec. 107.0135.  Appointment of Attorney ad Litem Not
 44-4    Required; Certain Cases.  A court is not required under this
 44-5    chapter [section] to appoint an attorney ad litem in a proceeding
 44-6    in which:
 44-7                (1)  a suit for the dissolution of a marriage is
 44-8    uncontested; or
 44-9                (2)  the issues of possession of and access to a child
44-10    are agreed to by both parents.
44-11          SECTION 6.16.  Section 108.003(a), Family Code, is amended to
44-12    correct a reference to read as follows:
44-13          (a)  The clerk of a court that renders a decree of adoption
44-14    shall, not later than the 10th day of the first month after the
44-15    month in which the adoption is rendered, transmit to the central
44-16    registry of the bureau of vital statistics certified report of
44-17    adoption that includes:
44-18                (1)  the name of the adopted child after adoption as
44-19    shown in the adoption order;
44-20                (2)  the birth date of the adopted child;
44-21                (3)  the docket number of the adoption suit;
44-22                (4)  the identity of the court rendering the adoption;
44-23                (5)  the date of the adoption order;
44-24                (6)  the name and address of each parent, guardian,
44-25    managing conservator, or other person whose consent to adoption was
44-26    required or waived under Chapter 162 [159], or whose parental
 45-1    rights were terminated in the adoption suit;
 45-2                (7)  the identity of the licensed child placing agency,
 45-3    if any, through which the adopted child was placed for adoption;
 45-4    and
 45-5                (8)  the identity, address, and telephone number of the
 45-6    registry through which the adopted child may register as an
 45-7    adoptee.
 45-8          SECTION 6.17.  Section 109.002(b), Family Code, is amended to
 45-9    correct a reference to read as follows:
45-10          (b)  An appeal may be taken by any party to a suit from a
45-11    final order rendered under this title [subtitle].
45-12          SECTION 6.18.  (a)  Subchapter A, Chapter 151, Family Code,
45-13    is amended to conform to Section 3(b), Chapter 1225, Acts of the
45-14    75th Legislature, Regular Session, 1997, by adding Section 151.005
45-15    to read as follows:
45-16          Sec. 151.005.  LIMITATION ON STATE AGENCY ACTION.  A state
45-17    agency may not adopt rules or policies or take any other action
45-18    that violates the fundamental right and duty of a parent to direct
45-19    the upbringing of the parent's child.
45-20          (b)  Section 3(b), Chapter 1225, Acts of the 75th
45-21    Legislature, Regular Session, 1997, is repealed.
45-22          SECTION 6.19.  Section 155.001(a), Family Code, is amended to
45-23    correct a reference to read as follows:
45-24          (a)  Except as otherwise provided by this section, a court
45-25    acquires continuing, exclusive jurisdiction over the matters
45-26    provided for by this title [subtitle] in connection with a child on
 46-1    the rendition of a final order.
 46-2          SECTION 6.20.  Section 155.002, Family Code, is amended to
 46-3    correct a reference to read as follows:
 46-4          Sec. 155.002.  RETAINING CONTINUING, EXCLUSIVE JURISDICTION.
 46-5    Except as otherwise provided by this subchapter, a court with
 46-6    continuing, exclusive jurisdiction retains jurisdiction of the
 46-7    parties and matters provided by this title [subtitle].
 46-8          SECTION 6.21.  Section 156.301, Family Code, is amended to
 46-9    correct a reference to read as follows:
46-10          Sec. 156.301.  GROUNDS FOR MODIFICATION OF POSSESSION AND
46-11    ACCESS.  The court may modify an order that sets the terms and
46-12    conditions for possession of or access to a child or that
46-13    prescribes the relative rights, privileges, duties, and powers of
46-14    conservators if:
46-15                (1)  the circumstances of the child or a person
46-16    affected by the order have materially and substantially changed
46-17    since the date of the rendition of the order;
46-18                (2)  the order has become unworkable or inappropriate
46-19    under existing circumstances;
46-20                (3)  the notice of change of a conservator's residence
46-21    required by Chapter 105 [153] was not given or there was a change
46-22    in a conservator's residence to a place outside this state; or
46-23                (4)  a conservator has repeatedly failed to give notice
46-24    of an inability to exercise possessory rights.
46-25          SECTION 6.22.  Section 156.402(a), Family Code, is amended to
46-26    correct a reference to read as follows:
 47-1          (a)  The court may consider the child support guidelines in
 47-2    Chapter 154 [153] to determine whether there has been a material or
 47-3    substantial change of circumstances under this chapter that
 47-4    warrants a modification of an existing child support order if the
 47-5    modification is in the best interest of the child.
 47-6          SECTION 6.23.  Section 156.406, Family Code, is amended to
 47-7    correct a reference to read as follows:
 47-8          Sec. 156.406.  USE OF GUIDELINES FOR CHILDREN IN MORE THAN
 47-9    ONE HOUSEHOLD.  In applying the child support guidelines in a suit
47-10    under this subchapter, if the obligor has the duty to support
47-11    children in more than one household, the court shall apply the
47-12    percentage guidelines for multiple families in Chapter 154 [153].
47-13          SECTION 6.24.  Section 157.003(a), Family Code, is amended to
47-14    correct a reference to read as follows:
47-15          (a)  A party requesting enforcement may join in the same
47-16    proceeding any claim and remedy provided for in this chapter, other
47-17    provisions of this title [subtitle], or other rules of law.
47-18          SECTION 6.25.  Section 157.165, Family Code, is amended to
47-19    correct a reference to read as follows:
47-20          Sec. 157.165.  PROBATION OF CONTEMPT ORDER.  The court may
47-21    place the respondent on community supervision and suspend
47-22    commitment if the court finds that the respondent is in contempt of
47-23    court for failure or refusal to obey an order rendered as provided
47-24    in this title [subtitle].
47-25          SECTION 6.26.  Section 201.1085, Family Code, as added by
47-26    Section 62, Chapter 1022, Acts of the 75th Legislature, Regular
 48-1    Session, 1997, is repealed because it is substantively identical to
 48-2    Section 201.1085, Family Code, as added by Section 3, Chapter 600,
 48-3    Acts of the 75th Legislature, Regular Session, 1997.
 48-4          SECTION 6.27.  Section 231.002(e), Family Code, as relettered
 48-5    by Section 1, Chapter 874, Acts of the 75th Legislature, Regular
 48-6    Session, 1997, and amended by Section 68, Chapter 911, Acts of the
 48-7    75th Legislature, Regular Session, 1997; Section 231.002(e), Family
 48-8    Code, as added by Section 68, Chapter 911, Acts of the 75th
 48-9    Legislature, Regular Session, 1997; and Section 231.002(f), Family
48-10    Code, are relettered and amended to correct a reference to read as
48-11    follows:
48-12          (e)  The Title IV-D agency may take the following
48-13    administrative actions with respect to the location of a parent,
48-14    the determination of parentage, and the establishment,
48-15    modification, and enforcement of child support and medical support
48-16    orders required by 42 U.S.C. Section 666(c), without obtaining an
48-17    order from any other judicial or administrative tribunal:
48-18                (1)  issue an administrative subpoena, as provided by
48-19    Section 231.303, to obtain financial or other information;
48-20                (2)  order genetic testing for parentage determination,
48-21    as provided by Chapter 233;
48-22                (3)  order income withholding, as provided by Chapter
48-23    233, and issue an administrative writ of withholding, as provided
48-24    by Chapter 158; and
48-25                (4)  take any action with respect to execution,
48-26    collection, and release of a judgment or lien for child support
 49-1    necessary to satisfy the judgment or lien, as provided by Chapter
 49-2    157.
 49-3          (f) [(e)]  The Title IV-D agency shall recognize and enforce
 49-4    the authority of the Title IV-D agency of another state to take
 49-5    actions similar to the actions listed in Subsection (e) [(d)].
 49-6          (g) [(f)]  The Title IV-D agency shall develop and use
 49-7    procedures for the administrative enforcement of interstate cases
 49-8    meeting the requirements of 42 U.S.C. Section 666(a)(14) under
 49-9    which the agency:
49-10                (1)  shall respond within five business days to a
49-11    request made by another state for assistance in a Title IV-D case;
49-12    and
49-13                (2)  may, by electronic or other means, transmit to
49-14    another state a request for assistance in a Title IV-D case.
49-15          SECTION 6.28.  Section 231.302(b), Family Code, as amended by
49-16    Section 20, Chapter 420, Acts of the 75th Legislature, Regular
49-17    Session, 1997, and Section 77, Chapter 911, Acts of the 75th
49-18    Legislature, Regular Session, 1997, is reenacted to read as
49-19    follows:
49-20          (b)  A government agency, private company, institution, or
49-21    other entity shall provide the information requested under
49-22    Subsection (a) and shall, subject to safeguards on privacy and
49-23    information security, provide the information in the most efficient
49-24    and expeditious manner available, including electronic or automated
49-25    transfer and interface.  Any individual or entity disclosing
49-26    information under this section in response to a request from a
 50-1    Title IV-D agency may not be held liable in any civil action or
 50-2    proceeding to any person for the disclosure of information under
 50-3    this subsection.
 50-4          SECTION 6.29.  Section 261.101(b), Family Code, as amended by
 50-5    Section 1, Chapter 162, and Section 65, Chapter 1022, Acts of the
 50-6    75th Legislature, Regular Session, 1997, is amended and reenacted
 50-7    to read as follows:
 50-8          (b)  If a professional has cause to believe that a child has
 50-9    been abused or neglected or may be abused or neglected or that a
50-10    child is a victim of an offense under Section 21.11, Penal Code,
50-11    [and that the professional has cause to believe that the child has
50-12    been abused as defined by Section 261.001,] the professional shall
50-13    make a report not later than the 48th hour after the hour the
50-14    professional first suspects that the child has been or may be
50-15    abused or neglected or is a victim of an offense under Section
50-16    21.11, Penal Code.  A professional may not delegate to or rely on
50-17    another person to make the report.  In this subsection,
50-18    "professional" means an individual who is licensed or certified by
50-19    the state or who is an employee of a facility licensed, certified,
50-20    or operated by the state and who, in the normal course of official
50-21    duties or duties for which a license or certification is required,
50-22    has direct contact with children.  The term includes teachers,
50-23    nurses, doctors, day-care employees, employees of a clinic or
50-24    health care facility that provides reproductive services, juvenile
50-25    probation officers, and juvenile detention or correctional
50-26    officers.
 51-1          SECTION 6.30.  Section 261.107, Family Code, as amended by
 51-2    Section 2, Chapter 575, and Section 68, Chapter 1022, Acts of the
 51-3    75th Legislature, Regular Session, 1997, is reenacted to read as
 51-4    follows:
 51-5          Sec. 261.107.  FALSE REPORT; PENALTY.  (a)  A person commits
 51-6    an offense if the person knowingly or intentionally makes a report
 51-7    as provided in this chapter that the person knows is false or lacks
 51-8    factual foundation.  An offense under this section is a Class A
 51-9    misdemeanor unless it is shown on the trial of the offense that the
51-10    person has previously been convicted under this section, in which
51-11    case the offense is a state jail felony.
51-12          (b)  A finding by a court in a suit affecting the
51-13    parent-child relationship that a report made under this chapter
51-14    before or during the suit was false or lacking factual foundation
51-15    may be grounds for the court to modify an order providing for
51-16    possession of or access to the child who was the subject of the
51-17    report by restricting further access to the child by the person who
51-18    made the report.
51-19          (c)  The appropriate county prosecuting attorney shall be
51-20    responsible for the prosecution of an offense under this section.
51-21          SECTION 6.31.  (a)  Section 262.201(c), Family Code, as
51-22    amended by Section 5, Chapter 600; Section 1, Chapter 603; Section
51-23    77, Chapter 1022; and Section 3, Chapter 752, Acts of the 75th
51-24    Legislature, Regular Session, 1997, is reenacted and amended to
51-25    correct references to read as follows:
51-26          (c)  If the court finds sufficient evidence to satisfy a
 52-1    person of ordinary prudence and caution that there is a continuing
 52-2    danger to the physical health or safety of the child and for the
 52-3    child to remain in the home is contrary to the welfare of the
 52-4    child, the court shall issue an appropriate temporary order under
 52-5    Chapter 105 and inform each parent in open court that parental and
 52-6    custodial rights and duties may be subject to restriction or to
 52-7    termination unless the parent or parents are willing and able to
 52-8    provide the child with a safe environment.  If the court finds that
 52-9    the child requires protection from family violence by a member of
52-10    the child's family or household, the court shall render a
52-11    protective order under Title 4 [Chapter 71] for the child.  In this
52-12    subsection, "family violence" has the meaning assigned by Section
52-13    71.004 [71.01].
52-14          (b)  Subsection (e), Section 262.201, Family Code, as added
52-15    by Section 21, Chapter 575, Acts of the 75th Legislature, Regular
52-16    Session, 1997, is relettered as Subsection (f), Section 262.201,
52-17    Family Code.
52-18               ARTICLE 7.  CHANGES RELATING TO FINANCE CODE
52-19    PART 1.  CHANGES RELATING TO CREDIT UNIONS
52-20    PART 2.  CHANGES RELATING TO TRUST COMPANIES
52-21    PART 3.  CHANGES RELATING TO CREDIT
52-22    PART 4.  CODIFICATION OF CERTAIN ARTICLES
52-23    PART 5.  OTHER CHANGES RELATING TO FINANCE CODE
52-24    PART 6.  CROSS-REFERENCE CHANGES
52-25                PART 1.  CHANGES RELATING TO CREDIT UNIONS
52-26          SECTION 7.01.  (a)  Section 122.005, Finance Code, is amended
 53-1    to conform to Sections 1 and 17, Chapter 338, Acts of the 75th
 53-2    Legislature, Regular Session, 1997, to read as follows:
 53-3          Sec. 122.005.  PROCEDURE FOR CERTAIN APPROVALS.  (a)  This
 53-4    section applies to a request for approval by the commissioner of:
 53-5                (1)  an application for incorporation under this
 53-6    subchapter;
 53-7                (2)  a request for approval of an amendment to a credit
 53-8    union's articles of incorporation under Section 122.011, including
 53-9    an amendment to expand the credit union's field of membership; and
53-10                (3)  a merger or consolidation under Subchapter D.
53-11          (b)  Before approving a request to which this section
53-12    applies, the commissioner shall submit notice of the request to the
53-13    secretary of state for publication in the Texas Register.  The
53-14    commission by rule shall provide for other appropriate public
53-15    notice of the request.  The commissioner may waive the requirements
53-16    of this subsection or permit delayed public notice on a
53-17    determination that waiver or delay is in the public interest.  If
53-18    the requirements of this subsection are waived, the information
53-19    that would be contained in a public notice becomes public
53-20    information under Chapter 552, Government Code, on the 35th day
53-21    after the date the request is made.
53-22          (c)  Before making a determination on a request to which this
53-23    section applies, the commissioner must accept comment from any
53-24    interested party that wishes to comment.  This comment may be in
53-25    the form of written testimony or may be provided at a meeting with
53-26    the commissioner held for the purpose of receiving the comment.
 54-1    This meeting shall be held if requested by any interested party.
 54-2    The commissioner may hold the meeting regardless of whether an
 54-3    interested party requests the meeting.  The commission may
 54-4    establish reasonable rules governing the circumstances and conduct
 54-5    of the meeting.  Chapter 2001, Government Code, does not apply to
 54-6    the meeting.  Not later than the 60th day after the date the notice
 54-7    is published in the Texas Register, or if the notice is not
 54-8    published, after the date the request is received, the commissioner
 54-9    shall approve or disapprove the application.  [NOTICE OF
54-10    APPLICATION; HEARING.  The commission by rule shall establish:]
54-11                [(1)  procedures for giving notice of an application to
54-12    incorporate; and]
54-13                [(2)  conditions under which a hearing may be
54-14    available.]
54-15          (b)  Sections 122.006(b) and (c), Finance Code, are amended
54-16    to conform to Section 1, Chapter 338, Acts of the 75th Legislature,
54-17    Regular Session, 1997, to read as follows:
54-18          (b)  In addition to the findings under Subsection (a) and in
54-19    accordance with commission rules, the commissioner shall consider
54-20    the effect of overlapping fields of membership on the applicant
54-21    credit union and existing state or federal credit unions doing
54-22    business in this state.  The commissioner may consider the
54-23    availability and adequacy of financial services in the local
54-24    community and the effect that the incorporation of the credit union
54-25    would have on the local community.  As a condition of approval of
54-26    the application, the commissioner may require the applicant credit
 55-1    union to limit or eliminate overlaps, in accordance with the rules,
 55-2    to achieve the purposes of this subtitle and promote the welfare
 55-3    and stability of those credit unions.
 55-4          (c)  The [Not later than the 90th day after the date an
 55-5    application is filed or the date a hearing on the application is
 55-6    held, whichever is later, the] commissioner by written order shall
 55-7    state the findings required by Subsection (a) and approve or deny
 55-8    the application.
 55-9          (c)  Sections 1 and 17, Chapter 338, Acts of the 75th
55-10    Legislature, Regular Session, 1997, are repealed.
55-11          SECTION 7.02.  (a)  Section 122.011(b), Finance Code, is
55-12    amended to conform to Section 2, Chapter 338, Acts of the 75th
55-13    Legislature, Regular Session, 1997, to read as follows:
55-14          (b)  The commissioner in writing shall approve or disapprove
55-15    an amendment [not later than the 60th day after the date of
55-16    submission, the date of required publication in the department's
55-17    newsletter, or the date of a hearing on the amendment, whichever is
55-18    latest].
55-19          (b)  Section 2, Chapter 338, Acts of the 75th Legislature,
55-20    Regular Session, 1997, is repealed.
55-21          SECTION 7.03.  (a)  Subchapter D, Chapter 122, Finance Code,
55-22    is amended to conform to Section 3, Chapter 338, Acts of the 75th
55-23    Legislature, Regular Session, 1997, by adding Sections 122.1531 and
55-24    122.156 to read as follows:
55-25          Sec. 122.1531.  CONSIDERATIONS IN DETERMINATION.  In
55-26    determining whether to approve or disapprove the merger or
 56-1    consolidation, the commissioner shall consider the availability and
 56-2    adequacy of financial services in the local community and the
 56-3    effect that the merger or consolidation would have on the local
 56-4    community.  The commission by rule shall establish other
 56-5    appropriate criteria that the commissioner must consider in making
 56-6    the determination.
 56-7          Sec. 122.156.  RULES TO ADDRESS CERTAIN PROCEDURES.  The
 56-8    rules adopted under this subchapter must specify in detail the
 56-9    procedures that:
56-10                (1)  a credit union must follow to obtain commissioner
56-11    approval of a merger or consolidation; and
56-12                (2)  the commissioner must follow in approving or
56-13    disapproving the merger or consolidation.
56-14          (b)  Section 3, Chapter 338, Acts of the 75th Legislature,
56-15    Regular Session, 1997, is repealed.
56-16          SECTION 7.04.  (a)  Section 15.104, Finance Code, is amended
56-17    to conform to Section 4, Chapter 338, Acts of the 75th Legislature,
56-18    Regular Session, 1997, to read as follows:
56-19          Sec. 15.104.  FISCAL REPORT.  (a)  The [During January of
56-20    each year, the] department shall annually prepare [file with the
56-21    governor and the presiding officer of each house of the
56-22    legislature] a complete and detailed written report accounting for
56-23    all money received and disbursed by the department during the
56-24    preceding year.
56-25          (b)  The report must meet the reporting requirements
56-26    applicable to financial reporting provided by the General
 57-1    Appropriations Act.
 57-2          (b)  Section 15.212, Finance Code, is amended to conform to
 57-3    Section 4, Chapter 338, Acts of the 75th Legislature, Regular
 57-4    Session, 1997, to read as follows:
 57-5          Sec. 15.212.  SUNSET PROVISION.  The Credit Union Commission
 57-6    is subject to Chapter 325, Government Code (Texas Sunset Act).
 57-7    Unless continued in existence as provided by that chapter, the
 57-8    commission is abolished [and this chapter and Subtitle D, Title 3,
 57-9    expire] September 1, 2009 [1997].
57-10          (c)  Section 4, Chapter 338, Acts of the 75th Legislature,
57-11    Regular Session, 1997, is repealed.
57-12          SECTION 7.05.  (a)  Section 15.001, Finance Code, is amended
57-13    to conform to Section 5, Chapter 338, Acts of the 75th Legislature,
57-14    Regular Session, 1997, to read as follows:
57-15          Sec. 15.001.  DEFINITIONS.  (a)  In this chapter, "trade
57-16    association" means a nonprofit, cooperative, and voluntarily joined
57-17    association of business or professional competitors designed to
57-18    assist its members and its industry or profession in dealing with
57-19    mutual business or professional problems and in promoting their
57-20    common interest.
57-21          (b)  The definitions provided by Section 121.002 apply to
57-22    this chapter.
57-23          (b)  Section 15.202(b), Finance Code, is amended to conform
57-24    to Section 5, Chapter 338, Acts of the 75th Legislature, Regular
57-25    Session, 1997, to read as follows:
57-26          (b)  A commission member may not be:
 58-1                (1)  an officer, [or] employee, or paid consultant of a
 58-2    [state] trade association representing or affiliated with a
 58-3    financial institution group or an entity affiliated with financial
 58-4    institutions [in the credit union industry]; [or]
 58-5                (2)  a spouse of an officer, manager, or paid
 58-6    consultant of a trade association representing or affiliated with a
 58-7    financial institution group or an entity affiliated with financial
 58-8    institutions; or
 58-9                (3)  a person who is required to register as a lobbyist
58-10    under Chapter 305, Government Code, because of the person's
58-11    activities for compensation on behalf of a profession related to
58-12    the operation of the commission.
58-13          (c)  Section 15.203(a), Finance Code, is amended to conform
58-14    to Section 5, Chapter 338, Acts of the 75th Legislature, Regular
58-15    Session, 1997, to read as follows:
58-16          (a)  Four [Six] commission members must be individuals who:
58-17                (1)  have five years or more of active experience as a
58-18    director, officer, or committee member of a credit union that:
58-19                      (A)  is organized and doing business in this
58-20    state under Subtitle D, Title 3, or the Federal Credit Union Act
58-21    (12 U.S.C. Section 1751 et seq.); and
58-22                      (B)  has its principal office in this state; and
58-23                (2)  are engaged in exercising the powers and duties of
58-24    a director, officer, or committee member of such a credit union.
58-25          (d)  Section 15.204(a), Finance Code, is amended to conform
58-26    to Section 5, Chapter 338, Acts of the 75th Legislature, Regular
 59-1    Session, 1997, to read as follows:
 59-2          (a)  Five [Three] commission members must be representatives
 59-3    of the public.  A person is not eligible for appointment as a
 59-4    public member of the commission if the person or the person's
 59-5    spouse [who, at the time of appointment or while serving on the
 59-6    commission]:
 59-7                (1)  is employed by or participates [are not engaged]
 59-8    in managing or directing:
 59-9                      (A)  a financial institution; or
59-10                      (B)  an organization, other than a financial
59-11    institution, regulated by or receiving money from a financial
59-12    institution regulatory agency; [and]
59-13                (2)  has [do not have], other than as a member or
59-14    customer, a financial interest in:
59-15                      (A)  a financial institution; or
59-16                      (B)  an organization, other than a financial
59-17    institution, regulated by or receiving money from a financial
59-18    institution regulatory agency; or
59-19                (3)  uses or receives a substantial amount of tangible
59-20    goods, services, or money from the department, other than
59-21    compensation or reimbursement authorized by law for commission
59-22    membership, attendance, or expenses.
59-23          (e)  Section 15.305, Finance Code, is amended to conform to
59-24    Section 5, Chapter 338, Acts of the 75th Legislature, Regular
59-25    Session, 1997, to read as follows:
59-26          Sec. 15.305.  GENERAL COUNSEL.  A person who is required to
 60-1    register as a lobbyist under Chapter 305, Government Code, because
 60-2    of the person's activities for compensation on behalf of a
 60-3    profession related to the operation of the commission, may not
 60-4    serve as general counsel to the commission.
 60-5          (f)  Subchapter D, Chapter 15, Finance Code, is amended to
 60-6    conform to Section 5, Chapter 338, Acts of the 75th Legislature,
 60-7    Regular Session, 1997, by adding Section 15.311 to read as follows:
 60-8          Sec. 15.311.  QUALIFICATIONS OF EMPLOYEES.  A person may not
 60-9    be an employee of the department who is exempt from the state's
60-10    position classification plan or is compensated at or above the
60-11    amount prescribed by the General Appropriations Act for step 1,
60-12    salary group 17, of the position classification salary schedule, if
60-13    the person is:
60-14                (1)  an officer, employee, or paid consultant of a
60-15    trade association representing or affiliated with a financial
60-16    institution group or an entity affiliated with financial
60-17    institutions; or
60-18                (2)  a spouse of an officer, manager, or paid
60-19    consultant of a trade association representing or affiliated with a
60-20    financial institution group or an entity affiliated with financial
60-21    institutions.
60-22          (g)  Section 5, Chapter 338, Acts of the 75th Legislature,
60-23    Regular Session, 1997, is repealed.
60-24          SECTION 7.06.  (a)  Section 15.201(c), Finance Code, is
60-25    amended to conform to Section 6, Chapter 338, Acts of the 75th
60-26    Legislature, Regular Session, 1997, to read as follows:
 61-1          (c)  An appointment to the commission must be made without
 61-2    regard to the race, color, creed, disability, sex, religion, age,
 61-3    or national origin of the appointee.
 61-4          (b)  Section 6, Chapter 338, Acts of the 75th Legislature,
 61-5    Regular Session, 1997, is repealed.
 61-6          SECTION 7.07.  (a)  Subchapter C, Chapter 15, Finance Code,
 61-7    is amended to conform to Section 7, Chapter 338, Acts of the 75th
 61-8    Legislature, Regular Session, 1997, by adding Section 15.2041 to
 61-9    read as follows:
61-10          Sec. 15.2041.  TRAINING PROGRAM.  (a)  To be eligible to take
61-11    office as a member of the commission, a person appointed to the
61-12    commission must complete at least one course of a training program
61-13    that complies with this section.  A commission member must complete
61-14    a training program that complies with Subsection (b) not later than
61-15    the 180th day after the date on which the person takes office.
61-16          (b)  A training program established under this section must
61-17    provide information to the member regarding:
61-18                (1)  the enabling legislation that created the
61-19    department and its policy-making body to which the member is
61-20    appointed to serve;
61-21                (2)  the programs operated by the department;
61-22                (3)  the role and functions of the department;
61-23                (4)  the rules of the commission with an emphasis on
61-24    the rules that relate to disciplinary and investigatory authority;
61-25                (5)  the current budget for the department;
61-26                (6)  the results of the most recent formal audit of the
 62-1    department;
 62-2                (7)  the requirements of the:
 62-3                      (A)  open meetings law, Chapter 551, Government
 62-4    Code;
 62-5                      (B)  open records law, Chapter 552, Government
 62-6    Code; and
 62-7                      (C)  administrative procedure law, Chapter 2001,
 62-8    Government Code;
 62-9                (8)  the requirements of the conflict of interest laws
62-10    and other laws relating to public officials;
62-11                (9)  any applicable ethics policies adopted by the
62-12    department or the Texas Ethics Commission; and
62-13                (10)  the basic principles and responsibilities of
62-14    credit union management.
62-15          (c)  A person appointed to the commission is entitled to
62-16    reimbursement for travel expenses incurred in attending the
62-17    training program, as provided by the General Appropriations Act and
62-18    as if the person were a member of the commission.
62-19          (b)  Section 7, Chapter 338, Acts of the 75th Legislature,
62-20    Regular Session, 1997, is repealed.
62-21          SECTION 7.08.  (a)  Section 15.205, Finance Code, is amended
62-22    to conform to Section 8, Chapter 338, Acts of the 75th Legislature,
62-23    Regular Session, 1997, to read as follows:
62-24          Sec. 15.205.  VACANCIES.  The office of a commission member
62-25    becomes vacant:
62-26                (1)  on the death, resignation, or removal of the
 63-1    member; or
 63-2                (2)  if the member ceases to have the qualifications
 63-3    required for service as a member[; or]
 63-4                [(3)  on January 1 if the member has failed to attend
 63-5    more than half of the meetings of the commission held during the
 63-6    preceding calendar year, excluding a meeting held before the member
 63-7    assumed office].
 63-8          (b)  Section 15.206, Finance Code, is amended to conform to
 63-9    Section 8, Chapter 338, Acts of the 75th Legislature, Regular
63-10    Session, 1997, to read as follows:
63-11          Sec. 15.206.  REMOVAL.  (a)  A ground for removal of a
63-12    commission member by the governor exists if a member:
63-13                (1)  neglects the member's duty;
63-14                (2)  is incompetent; or
63-15                (3)  commits fraudulent or criminal conduct[; or]
63-16                [(4)  is a person required to register as a lobbyist
63-17    under Chapter 305, Government Code].
63-18          (b)  It is grounds for removal from the commission if a
63-19    member:
63-20                (1)  does not have at the time of appointment the
63-21    applicable qualifications required by Sections 15.202, 15.203, and
63-22    15.204;
63-23                (2)  does not maintain during service on the commission
63-24    the applicable qualifications required by Sections 15.202, 15.203,
63-25    and 15.204;
63-26                (3)  violates a prohibition established by Section
 64-1    15.202, 15.203, or 15.204;
 64-2                (4)  cannot because of illness or disability discharge
 64-3    the member's duties for a substantial part of the term for which
 64-4    the member is appointed; or
 64-5                (5)  is absent from more than half of the regularly
 64-6    scheduled commission meetings that the member is eligible to attend
 64-7    during a calendar year.
 64-8          (c)  The validity of an action of the commission is not
 64-9    affected by the fact that it was taken when a ground for removal of
64-10    a commission member existed.
64-11          (d)  If the commissioner has knowledge that a potential
64-12    ground for removal exists, the commissioner shall notify the
64-13    presiding officer of the commission of the potential ground.  The
64-14    presiding officer shall then notify the governor and the attorney
64-15    general that a potential ground for removal exists.  If the
64-16    potential ground for removal involves the presiding officer, the
64-17    commissioner shall notify the next highest officer of the
64-18    commission, who shall notify the governor and the attorney general
64-19    that a potential ground for removal exists.
64-20          (c)  Section 8, Chapter 338, Acts of the 75th Legislature,
64-21    Regular Session, 1997, is repealed.
64-22          SECTION 7.09.  (a)  Section 15.208, Finance Code, is amended
64-23    to conform to Section 9, Chapter 338, Acts of the 75th Legislature,
64-24    Regular Session, 1997, to read as follows:
64-25          Sec. 15.208.  MATTER IN WHICH COMMISSION MEMBER HAS PERSONAL
64-26    INTEREST.  (a)  A commission member may not act on a matter under
 65-1    the commission's  consideration that directly affects [and
 65-2    specifically relates to] a credit union of which the member is an
 65-3    officer, director, or member.
 65-4          (b)  The commission shall adopt rules relating to recusal of
 65-5    members, requiring that a member who has a personal or private
 65-6    interest in a measure, proposal, or decision pending before the
 65-7    commission shall publicly disclose the fact to the commission at a
 65-8    meeting held in compliance with Chapter 551, Government Code.  The
 65-9    member may not vote or otherwise participate in the decision.  The
65-10    disclosure shall be entered into the minutes of the meeting.
65-11          (b)  Section 15.209, Finance Code, is amended to conform to
65-12    Section 9, Chapter 338, Acts of the 75th Legislature, Regular
65-13    Session, 1997, by adding Subsection (d) to read as follows:
65-14          (d)  The commission is subject to the:
65-15                (1)  open meetings law, Chapter 551, Government Code;
65-16    and
65-17                (2)  administrative procedure law, Chapter 2001,
65-18    Government Code.
65-19          (c)  Section 15.210, Finance Code, is amended to conform to
65-20    Section 9, Chapter 338, Acts of the 75th Legislature, Regular
65-21    Session, 1997, to read as follows:
65-22          Sec. 15.210.  PRESIDING OFFICER.  The governor shall
65-23    designate a member of the commission as presiding officer of the
65-24    commission to serve in that capacity at the will of the governor.
65-25    [OFFICERS.  (a)  The commission annually shall elect a chairman and
65-26    vice chairman from its members.]
 66-1          [(b)  The chairman presides at each meeting of the
 66-2    commission, and the vice chairman presides in the absence of the
 66-3    chairman.  If both the chairman and the vice chairman are absent
 66-4    from a meeting, the most senior commission member attending the
 66-5    meeting presides.]
 66-6          (d)  Section 9, Chapter 338, Acts of the 75th Legislature,
 66-7    Regular Session, 1997, is repealed.
 66-8          SECTION 7.10.  (a)  Subchapter E, Chapter 15, Finance Code,
 66-9    is amended to conform to Sections 10, 11, and 12, Chapter 338, Acts
66-10    of the 75th Legislature, Regular Session, 1997, by adding Sections
66-11    15.4021, 15.4022, and 15.4023 to read as follows:
66-12          Sec. 15.4021.  RECEIPT OF PUBLIC COMMENTS; NOTICE OF
66-13    COMMISSION ACTIVITIES.  (a)  The commission shall develop and
66-14    implement policies that provide the public with a reasonable
66-15    opportunity to appear before the commission and to speak on any
66-16    issue under the jurisdiction of the department.
66-17          (b)  The commission shall adopt rules providing for public
66-18    notice of department activities.
66-19          Sec. 15.4022.  RULES RELATING TO COMPETITIVE BIDDING AND
66-20    ADVERTISING.  (a)  The commission may not adopt rules restricting
66-21    competitive bidding or advertising by a credit union except to
66-22    prohibit false, misleading, or deceptive practices.
66-23          (b)  In its rules to prohibit false, misleading, or deceptive
66-24    practices, the commission may not include a rule that:
66-25                (1)  restricts the use of any medium for advertising;
66-26                (2)  relates to the size or duration of an
 67-1    advertisement by the credit union; or
 67-2                (3)  restricts the credit union's advertisement under a
 67-3    trade name.
 67-4          Sec. 15.4023.  SEPARATION OF RESPONSIBILITIES.  The
 67-5    commission shall develop and implement policies that clearly
 67-6    separate the policy-making responsibilities of the commission and
 67-7    the management responsibilities of the commissioner and the staff
 67-8    of the department.
 67-9          (b)  Sections 10, 11, and 12, Chapter 338, Acts of the 75th
67-10    Legislature, Regular Session, 1997, are repealed.
67-11          SECTION 7.11.  (a)  Subchapter D, Chapter 15, Finance Code,
67-12    is amended to conform to Section 13, Chapter 338, Acts of the 75th
67-13    Legislature, Regular Session, 1997, by adding Section 15.312 to
67-14    read as follows:
67-15          Sec. 15.312.  INFORMATION PROVIDED TO MEMBERS AND EMPLOYEES.
67-16    The commissioner or the commissioner's designee shall provide to
67-17    members of the commission and to department employees, as often as
67-18    necessary, information regarding their qualification for office or
67-19    employment under this chapter and their responsibilities under
67-20    applicable laws relating to standards of conduct for state officers
67-21    or employees.
67-22          (b)  Section 15.408, Finance Code, is amended to conform to
67-23    Section 13, Chapter 338, Acts of the 75th Legislature, Regular
67-24    Session, 1997, to read as follows:
67-25          Sec. 15.408.  COLLECTION OF MONEY.  The commissioner shall
67-26    collect all supervision fees, charges, and revenues required to be
 68-1    paid by a credit union under Section 15.402(c).  All money paid to
 68-2    the department under this chapter and Subtitle D, Title 3, is
 68-3    subject to Subchapter F, Chapter 404, Government Code.
 68-4          (c)  Section 15.409, Finance Code,  is amended to conform to
 68-5    Section 13, Chapter 338, Acts of the 75th Legislature, Regular
 68-6    Session, 1997, by amending Subsections (a), (b), (d), and (e) and
 68-7    adding Subsections (f) and (g) to read as follows:
 68-8          (a)  The commissioner shall [supervise]:
 68-9                (1)  supervise the preparation of public interest
68-10    information describing [regarding]:
68-11                      (A)  [regulatory] functions of the department;
68-12                      (B)  procedures for filing and resolving
68-13    complaints; and
68-14                      (C)  other matters of general interest relating
68-15    to credit unions; and
68-16                (2)  make the information prepared under Subdivision
68-17    (1) available [the dissemination] to the public and appropriate
68-18    state agencies [of information prepared under Subdivision (1)].
68-19          (b)  The commissioner shall supervise the establishment and
68-20    maintenance of files regarding each written complaint [complaints]
68-21    filed with the department that the department has authority to
68-22    resolve [relating to a credit union regulated by the department].
68-23          (d)  The department [commissioner] shall provide to a person
68-24    filing a complaint and the persons complained about the
68-25    department's policies and procedures concerning complaint
68-26    investigation and resolution [notify each complainant of the
 69-1    procedures and remedies available for resolving a complaint].
 69-2          (e)  At least quarterly until final disposition of any
 69-3    written complaint that is filed with the department [commission],
 69-4    the department [commissioner] shall notify the parties to the
 69-5    complaint of its status unless the notice would jeopardize an
 69-6    undercover investigation.
 69-7          (f)  The department shall keep information about each
 69-8    complaint filed with the department.  The information must include:
 69-9                (1)  the date the complaint is received;
69-10                (2)  the name of the complainant;
69-11                (3)  the subject matter of the complaint;
69-12                (4)  a record of all persons contacted in relation to
69-13    the complaint;
69-14                (5)  a summary of the results of the review or
69-15    investigation of the complaint; and
69-16                (6)  for a complaint that the department closed without
69-17    taking action, an explanation of the reason the complaint was
69-18    closed without action.
69-19          (g)  The commission by rule shall establish methods by which
69-20    consumers and service recipients are notified of the name, mailing
69-21    address, and telephone number of the department for the purpose of
69-22    directing complaints to the department.  The commission may provide
69-23    for that notification:
69-24                (1)  on each registration form, application, or written
69-25    contract for services of a credit union regulated under this
69-26    chapter and Subtitle D, Title 3;
 70-1                (2)  on a sign prominently displayed in the place of
 70-2    business of each credit union regulated under this chapter and
 70-3    Subtitle D, Title 3; or
 70-4                (3)  in a bill for service provided by a credit union
 70-5    regulated under this chapter and Subtitle D, Title 3.
 70-6          (d)  Subchapter E, Chapter 15, Finance Code, is amended to
 70-7    conform to Section 13, Chapter 338, Acts of the 75th Legislature,
 70-8    Regular Session, 1997, by adding Section 15.4091 to read as
 70-9    follows:
70-10          Sec. 15.4091.  ACCESS TO DEPARTMENT FACILITIES, PROGRAMS, AND
70-11    SERVICES.  (a)  The department shall comply with federal and state
70-12    laws related to program and facility accessibility.
70-13          (b)  The commissioner shall prepare and maintain a written
70-14    plan that describes how a person who does not speak English can be
70-15    provided reasonable access to the department's programs and
70-16    services.
70-17          (e)  Section 13, Chapter 338, Acts of the 75th Legislature,
70-18    Regular Session, 1997, is repealed.
70-19          SECTION 7.12.  (a)  Section 15.309, Finance Code, is amended
70-20    to conform to Section 14, Chapter 338, Acts of the 75th
70-21    Legislature, Regular Session, 1997, to read as follows:
70-22          Sec. 15.309.  INTRA-AGENCY CAREER LADDER.  (a)  The
70-23    commissioner or a person designated by the commissioner shall
70-24    develop an intra-agency career ladder program that addresses
70-25    opportunities for mobility and advancement for employees within the
70-26    department.
 71-1          (b)  The program must require [include] intra-agency posting
 71-2    of all non-entry-level positions concurrently with [for at least 10
 71-3    days before] public posting.
 71-4          (b)  Section 15.310(a), Finance Code, is amended to conform
 71-5    to Section 14, Chapter 338, Acts of the 75th Legislature, Regular
 71-6    Session, 1997, to read as follows:
 71-7          (a)  The commissioner or a person designated by the
 71-8    commissioner shall develop a system of annual performance
 71-9    evaluations that are based on documented employee performance
71-10    [measurable job tasks].
71-11          (c)  Section 14, Chapter 338, Acts of the 75th Legislature,
71-12    Regular Session, 1997, is repealed.
71-13          SECTION 7.13.  (a)  Subchapter D, Chapter 15, Finance Code,
71-14    is amended to conform to Section 15, Chapter 338, Acts of the 75th
71-15    Legislature, Regular Session, 1997, by adding Section 15.313 to
71-16    read as follows:
71-17          Sec. 15.313.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  The
71-18    commissioner or a person designated by the commissioner shall
71-19    prepare and maintain a written policy statement to assure
71-20    implementation of a program of equal employment opportunity under
71-21    which all personnel transactions are made without regard to race,
71-22    color, disability, sex, religion, age, or national origin.  The
71-23    policy statement must include:
71-24                (1)  personnel policies, including policies relating to
71-25    recruitment, evaluation, selection, appointment, training, and
71-26    promotion of personnel that comply with requirements of Chapter 21,
 72-1    Labor Code;
 72-2                (2)  a comprehensive analysis of the department
 72-3    workforce that meets federal and state law, including rules and
 72-4    regulations, and instructions adopted directly from that law;
 72-5                (3)  procedures by which a determination can be made
 72-6    about the extent of underuse in the department workforce of all
 72-7    persons for whom federal or state laws, including rules and
 72-8    regulations, and instructions adopted directly from that law,
 72-9    encourage a more equitable balance; and
72-10                (4)  reasonable methods to appropriately address those
72-11    areas of underuse.
72-12          (b)  A policy statement prepared under Subsection (a) must:
72-13                (1)  cover an annual period;
72-14                (2)  be updated annually and reviewed by the Commission
72-15    on Human Rights for compliance with Subsection (a)(1); and
72-16                (3)  be filed with the governor's office.
72-17          (c)  The governor's office shall deliver a biennial report to
72-18    the legislature based on the information received under Subsection
72-19    (b).  The report may be made separately or as a part of other
72-20    biennial reports made to the legislature.
72-21          (b)  Section 15, Chapter 338, Acts of the 75th Legislature,
72-22    Regular Session, 1997, is repealed.
72-23          SECTION 7.14.  (a)  Section 121.005, Finance Code, is amended
72-24    to conform to Section 16, Chapter 338, Acts of the 75th
72-25    Legislature, Regular Session, 1997, by adding Subsection (c) to
72-26    read as follows:
 73-1          (c)  This section does not apply to a meeting under Section
 73-2    122.005.
 73-3          (b)  Chapter 121, Finance Code, is amended to conform to
 73-4    Section 16, Chapter 338, Acts of the 75th Legislature, Regular
 73-5    Session, 1997, by adding Section 121.006 to read as follows:
 73-6          Sec. 121.006.  PROCEDURE AND RULES APPLICABLE TO CERTAIN
 73-7    PROCEEDINGS.  (a)  If the commission proposes to suspend or revoke
 73-8    a credit union's certificate of incorporation, the credit union is
 73-9    entitled to a hearing conducted by the State Office of
73-10    Administrative Hearings.
73-11          (b)  A proceeding for a disciplinary action is governed by
73-12    Chapter 2001, Government Code. Rules of practice adopted by the
73-13    commission under Section 2001.004, Government Code, applicable to a
73-14    proceeding for a disciplinary action may not conflict with rules
73-15    adopted by the State Office of Administrative Hearings.
73-16          (c)  Section 16, Chapter 338, Acts of the 75th Legislature,
73-17    Regular Session, 1997, is repealed.
73-18          SECTION 7.15.  Chapter 121, Finance Code, is amended to more
73-19    closely conform to the law from which it was derived by adding
73-20    Section 121.0011 to read as follows:
73-21          Sec. 121.0011.  POLICY.  The purposes of this subtitle are to
73-22    safeguard the public interest, to promote public confidence in
73-23    credit unions doing business in this state, to provide for the
73-24    protection of the interests, shares, and deposits of credit unions,
73-25    to delegate to the department rulemaking and discretionary
73-26    authority that may be necessary to assure that credit unions
 74-1    operating under this subtitle may be sufficiently flexible and
 74-2    readily responsive to changes in economic conditions and practices,
 74-3    to maintain sound credit union growth and financial integrity,
 74-4    fiscal responsibility, and independent judgment in the management
 74-5    of the business affairs of credit unions, to permit credit unions
 74-6    to effectively provide a full array of financial and financially
 74-7    related services, to provide effective supervision and regulation
 74-8    of credit unions and their fields of membership, and to clarify and
 74-9    modernize the law governing the credit unions doing business in
74-10    this state.  This subtitle is the public policy of this state and
74-11    necessary to the public welfare.
74-12               PART 2.  CHANGES RELATING TO TRUST COMPANIES
74-13          SECTION 7.16.  (a)  Title 3, Finance Code, is amended to
74-14    codify Section 1, Chapter 769, Acts of the 75th Legislature,
74-15    Regular Session, 1997 (Article 342a-1.001 et seq., Vernon's Texas
74-16    Civil Statutes), by adding Subtitle F to read as follows:
74-17                       SUBTITLE F.  TRUST COMPANIES
74-18                     CHAPTER 181.  GENERAL PROVISIONS
74-19                     SUBCHAPTER A.  GENERAL PROVISIONS
74-20          Sec. 181.001.  SHORT TITLE.  This subtitle may be cited as
74-21    the Texas Trust Company Act.
74-22          Sec. 181.002.  DEFINITIONS.  (a)  In this subtitle:
74-23                (1)  "Account" means the client relationship
74-24    established with a trust company involving the transfer of funds or
74-25    property to the trust company, including a relationship in which
74-26    the trust company acts as trustee, executor, administrator,
 75-1    guardian, custodian, conservator, receiver, registrar, or agent.
 75-2                (2)  "Affiliate" means a company that directly or
 75-3    indirectly controls, is controlled by, or is under common control
 75-4    with a state trust company or other company.
 75-5                (3)  "Bank" means a state or national bank.
 75-6                (4)  "Banking commissioner" means the banking
 75-7    commissioner of Texas or a person designated by the banking
 75-8    commissioner and acting under the banking commissioner's direction
 75-9    and authority.
75-10                (5)  "Board" means the board of directors, managers, or
75-11    managing participants of, or a person or group of persons acting in
75-12    a comparable capacity for, a state trust company or other entity.
75-13                (6)  "Branch" means a location of a state trust
75-14    company, other than the trust company's home office, at which the
75-15    state trust company engages in the trust business.
75-16                (7)  "Capital" means:
75-17                      (A)  the sum of:
75-18                            (i)  the par value of all shares or
75-19    participation shares of a state trust company having a par value
75-20    that have been issued;
75-21                            (ii)  the consideration set by the board in
75-22    the manner provided by the Texas Business Corporation Act for all
75-23    shares or participation shares of the state trust company without
75-24    par value that have been issued, except the part of that
75-25    consideration that:
75-26                                           (a)  has been actually
 76-1    received;
 76-2                                           (b)  is less than all of
 76-3    that consideration; and
 76-4                                           (c)  the board, by
 76-5    resolution adopted not later than the 60th day after the date of
 76-6    issuance of those shares, has allocated to surplus with the prior
 76-7    approval of the banking commissioner; and
 76-8                            (iii)  an amount not included in
 76-9    Subparagraphs (i) and (ii) that has been transferred to capital of
76-10    the state trust company, on the payment of a share dividend or on
76-11    adoption by the board of a resolution directing that all or part of
76-12    surplus be transferred to capital, minus each reduction made as
76-13    permitted by law; less
76-14                      (B)  all amounts otherwise included in Paragraphs
76-15    (A)(i) and (ii) that are attributable to the issuance of securities
76-16    by the state trust company and that the banking commissioner
76-17    determines, after notice and an opportunity for hearing, should be
76-18    classified as debt rather than equity securities.
76-19                (8)  "Certified surplus" means the part of surplus
76-20    designated by a vote of the board of a state trust company under
76-21    Section 182.105 and recorded in the board minutes as certified.
76-22                (9)  "Charter" means a corporate charter issued under
76-23    this subtitle to engage in a trust business.
76-24                (10)  "Client" means a person to whom a trust company
76-25    owes a duty or obligation under a trust or other account
76-26    administered by the trust company, regardless of whether the trust
 77-1    company owes a fiduciary duty to the person.  The term includes a
 77-2    beneficiary of a trust for whom the trust company acts as trustee
 77-3    and a person for whom the trust company acts as agent, custodian,
 77-4    or bailee.
 77-5                (11)  "Company" includes a bank, trust company,
 77-6    corporation, partnership, association, business trust, or another
 77-7    trust.
 77-8                (12)  "Conservator" means the banking commissioner or
 77-9    an agent of the banking commissioner exercising the powers and
77-10    duties provided by Subchapter B, Chapter 185.
77-11                (13)  "Control" means:
77-12                      (A)  the ownership of or ability or power to
77-13    vote, directly, acting through one or more other persons, or
77-14    otherwise indirectly, 25 percent or more of the outstanding shares
77-15    of a class of voting securities of a state trust company or other
77-16    company;
77-17                      (B)  the ability to control the election of a
77-18    majority of the board of the state trust company or other company;
77-19                      (C)  the power to exercise, directly or
77-20    indirectly, a controlling influence over the management or policies
77-21    of the state trust company or other company as determined by the
77-22    banking commissioner after notice and an opportunity for hearing;
77-23    or
77-24                      (D)  the conditioning of the transfer of 25
77-25    percent or more of the outstanding shares or participation shares
77-26    of a class of voting securities of the state trust company or other
 78-1    company on the transfer of 25 percent or more of the outstanding
 78-2    shares of a class of voting securities of another state trust
 78-3    company or other company.
 78-4                (14)  "Department" means the Texas Department of
 78-5    Banking.
 78-6                (15)  "Depository institution" means an entity with the
 78-7    power to accept deposits under applicable law.
 78-8                (16)  "Equity capital" means the amount by which the
 78-9    total assets of a state trust company exceed the total  liabilities
78-10    of the state trust company.
78-11                (17)  "Equity security" means:
78-12                      (A)  stock or a similar security, any security
78-13    convertible, with or without consideration, into such a security, a
78-14    warrant or right to subscribe to or purchase such a security, or a
78-15    security carrying such a warrant or right;
78-16                      (B)  a certificate of interest or participation
78-17    in a profit-sharing agreement, collateral-trust certificate,
78-18    preorganization certificate or subscription, transferable share or
78-19    participation share, investment contract, voting-trust certificate,
78-20    or partnership interest; and
78-21                      (C)  a certificate of interest or participation
78-22    in, temporary or interim certificate for, or receipt for a security
78-23    described by this subdivision that evidences an existing or
78-24    contingent equity ownership interest.
78-25                (18)  "Fiduciary record" means a matter written,
78-26    transcribed, recorded, received, or otherwise in the possession of
 79-1    a trust company that is necessary to preserve information
 79-2    concerning an act or event relevant to an account of a trust
 79-3    company.
 79-4                (19)  "Finance commission" means the Finance Commission
 79-5    of Texas.
 79-6                (20)  "Foreign corporation" means a company
 79-7    incorporated or organized under the laws of a jurisdiction other
 79-8    than this state.  The  term does not include a depository
 79-9    institution incorporated or organized under the laws of the United
79-10    States and domiciled in this state.
79-11                (21)  "Full liability participant" means a participant
79-12    that agrees under the terms of a participation agreement to be
79-13    liable under a judgment, decree, or order of court for the entire
79-14    amount of all debts, obligations, or liabilities of a limited trust
79-15    association.
79-16                (22)  "Hazardous condition" means:
79-17                      (A)  a refusal by a trust company or an affiliate
79-18    of a trust company to permit an examination of its books, papers,
79-19    accounts, records, or affairs by the banking commissioner as
79-20    provided by Section 181.104;
79-21                      (B)  a violation by a trust company of a
79-22    condition of its chartering or an agreement entered into between
79-23    the trust company and the banking commissioner or the department;
79-24    or
79-25                      (C)  a circumstance or condition in which an
79-26    unreasonable risk of loss is threatened to clients or creditors of
 80-1    a trust company, excluding risk of loss to a client that arises as
 80-2    a result of the client's decisions or actions, but including a
 80-3    circumstance or condition in which a trust company:
 80-4                            (i)  is unable or lacks the means to meet
 80-5    its current obligations as they come due in the regular and
 80-6    ordinary course of business, even if the book or fair market value
 80-7    of its assets exceeds its liabilities;
 80-8                            (ii)  has equity capital less than the
 80-9    amount of restricted capital the trust company is required to
80-10    maintain under Section 182.008, or has equity capital the adequacy
80-11    of which is threatened, as determined under regulatory accounting
80-12    principles;
80-13                            (iii)  has concentrated an excessive or
80-14    unreasonable portion of its assets in a particular type or
80-15    character of investment;
80-16                            (iv)  violates or refuses to comply with
80-17    this subtitle, another statute or regulation applicable to trust
80-18    companies, or a final and enforceable order of the banking
80-19    commissioner;
80-20                            (v)  is in a condition that renders the
80-21    continuation of a particular business practice hazardous to its
80-22    clients and creditors; or
80-23                            (vi)  conducts business in an unsafe or
80-24    unsound manner, including conducting business with:
80-25                                           (a)  inexperienced or
80-26    inattentive management;
 81-1                                           (b)  weak or potentially
 81-2    dangerous operating practices;
 81-3                                           (c)  infrequent or
 81-4    inadequate audits;
 81-5                                           (d)  administration of
 81-6    assets that is notably deficient in relation to the volume and
 81-7    character of or responsibility for asset holdings;
 81-8                                           (e)  unsound administrative
 81-9    practices;
81-10                                           (f)  frequent and
81-11    uncorrected material occurrences of violations of law, including
81-12    rules, or terms of the governing instruments; or
81-13                                           (g)  a notable degree of
81-14    conflicts of interest and engaging in self-dealing.
81-15                (23)  "Home office" means a location registered with
81-16    the banking commissioner as a state trust company's home office at
81-17    which:
81-18                      (A)  the trust company does business;
81-19                      (B)  the trust company keeps its corporate books
81-20    and records; and
81-21                      (C)  at least one executive officer of the trust
81-22    company maintains an office.
81-23                (24)  "Insider" means:
81-24                      (A)  each director, manager, managing
81-25    participant, officer, and principal shareholder or participant of a
81-26    state trust company;
 82-1                      (B)  each affiliate of the state trust company
 82-2    and each director, officer, and employee of the affiliate;
 82-3                      (C)  any person who participates or has authority
 82-4    to participate, other than in the capacity of a director, in major
 82-5    policy-making functions of the state trust company, whether or not
 82-6    the person has an official title or the officer is serving without
 82-7    salary or compensation; or
 82-8                      (D)  each company controlled by a person
 82-9    described by Paragraph (A), (B), or (C).
82-10                (25)  "Insolvent" means a circumstance or condition in
82-11    which a state trust company:
82-12                      (A)  is unable or lacks the means to meet its
82-13    current obligations as they come due in the regular and ordinary
82-14    course of business, even if the value of its assets exceeds its
82-15    liabilities;
82-16                      (B)  has equity capital less than $500,000, as
82-17    determined under regulatory accounting principles;
82-18                      (C)  fails to maintain deposit insurance for its
82-19    deposits with the Federal Deposit Insurance Corporation or its
82-20    successor, or fails to maintain adequate security for its deposits
82-21    as provided by Section 184.301(c);
82-22                      (D)  sells or attempts to sell substantially all
82-23    of its assets or merges or attempts to merge substantially all of
82-24    its assets or business with another entity other than as provided
82-25    by Chapter 182; or
82-26                      (E)  attempts to dissolve or liquidate other than
 83-1    as provided by Chapter 186.
 83-2                (26)  "Investment security" means a marketable
 83-3    obligation evidencing indebtedness of a person in the form of a
 83-4    bond, note, debenture, or other debt instrument not otherwise
 83-5    classified as a loan or extension of credit.
 83-6                (27)  "Limited trust association" means a state trust
 83-7    company organized as a limited trust association, authorized to
 83-8    issue participation shares, and controlled by its participants.
 83-9                (28)  "Loans and extensions of credit" means direct or
83-10    indirect advances of money by a state trust company to a person
83-11    that are conditioned on the obligation of the person to repay the
83-12    funds or that are repayable from specific property pledged by or on
83-13    behalf of the person.
83-14                (29)  "Manager" means a person elected to the board of
83-15    a limited trust association.
83-16                (30)  "Managing participant" means a participant in a
83-17    limited trust association in which management has been retained by
83-18    the participants.
83-19                (31)  "Mutual funds" means equity securities of an
83-20    investment company registered under the Investment Company Act of
83-21    1940 (15 U.S.C. Section 80a-1 et seq.) and the Securities Act of
83-22    1933 (15 U.S.C. Section 77a et seq.).  The term does not include
83-23    money market funds.
83-24                (32)  "Officer" means the presiding officer of the
83-25    board, the principal executive officer, or another officer
83-26    appointed by the board of a state trust company or other company,
 84-1    or a person or group of persons acting in a comparable capacity for
 84-2    the state trust company or other company.
 84-3                (33)  "Operating subsidiary" means a company for which
 84-4    a state trust company has the ownership, ability, or power to vote,
 84-5    directly, acting through one or more other persons, or otherwise
 84-6    indirectly, more than 50 percent of the outstanding shares of each
 84-7    class of voting securities or its equivalent of the company.
 84-8                (34)  "Participant" means an owner of a participation
 84-9    share in a limited trust association.
84-10                (35)  "Participant-transferee" means a transferee of a
84-11    participation share who has not received the unanimous consent of
84-12    all participants to be a participant, or who becomes a
84-13    participant-transferee under Subchapter C, Chapter 183.
84-14                (36)  "Participation agreement" means the instrument
84-15    stating the agreement among the participants of a limited trust
84-16    association relating to the rights and duties of the participants
84-17    and participant-transferees, including allocations of income, loss,
84-18    deduction, credit, distributions, liquidation rights, redemption
84-19    rights, liabilities of participants, priority rights of
84-20    participant-transferees to transfer participation shares, rights of
84-21    participants to purchase participation shares of
84-22    participant-transferees, the procedures for elections and voting by
84-23    participants, and any other matter not prohibited by or
84-24    inconsistent with this subtitle.
84-25                (37)  "Participation shares" means the units into which
84-26    the proprietary interests of a limited trust association are
 85-1    divided or subdivided by means of classes, series, relative rights,
 85-2    or preferences.
 85-3                (38)  "Principal shareholder" means a person who owns
 85-4    or has the ability or power to vote, directly, acting through one
 85-5    or more other persons, or otherwise indirectly, 10 percent or more
 85-6    of the outstanding shares or participation shares of any class of
 85-7    voting securities of a state trust company or other company.
 85-8                (39)  "Restricted capital" means the sum of capital and
 85-9    certified surplus.
85-10                (40)  "Regulatory accounting principles" means
85-11    generally accepted accounting principles as modified by rules
85-12    adopted under:
85-13                      (A)  this subtitle; or
85-14                      (B)  an applicable federal statute or regulation.
85-15                (41)  "Secondary capital" means the amount by which the
85-16    assets of a state trust company exceed restricted capital, required
85-17    by Section 182.008, and liabilities.
85-18                (42)  "Shareholder" means an owner of a share in a
85-19    state trust company.
85-20                (43)  "Shares" means the units into which the
85-21    proprietary interests of a state trust company are divided or
85-22    subdivided by means of classes, series, relative rights, or
85-23    preferences.
85-24                (44)  "State bank" means a banking association or
85-25    limited banking association organized or reorganized under Subtitle
85-26    A, including an association organized under the laws of this state
 86-1    before September 1, 1997, with the express power to receive and
 86-2    accept deposits and possessing other rights and powers granted by
 86-3    that subtitle expressly or by implication.  The term does not
 86-4    include a savings association, savings bank, or credit union.
 86-5                (45)  "State trust company" means a trust association
 86-6    or limited trust association organized or reorganized under this
 86-7    subtitle, including an association organized under the laws of this
 86-8    state before September 1, 1997.
 86-9                (46)  "Subsidiary" means a state trust company or other
86-10    company that is controlled by another person.  The term includes a
86-11    subsidiary of a subsidiary.
86-12                (47)  "Supervisor" means the banking commissioner or an
86-13    agent of the banking commissioner exercising the powers and duties
86-14    specified in Subchapter B, Chapter 185.
86-15                (48)  "Trust association" means a trust company
86-16    organized as a trust association,  authorized to issue shares of
86-17    stock, and controlled by its shareholders.
86-18                (49)  "Trust business" means the business of a company
86-19    holding itself out to the public as a fiduciary for hire or
86-20    compensation to  hold or administer accounts.
86-21                (50)  "Trust deposits" means client funds held by a
86-22    state trust company and authorized to be deposited with itself as a
86-23    permanent investment or pending investment, distribution, or
86-24    payment of debts on behalf of the client.
86-25                (51)  "Unauthorized trust activity" means an act or
86-26    practice within this state by a person without a charter, license,
 87-1    permit, registration, or other authority issued or granted by the
 87-2    banking commissioner or other appropriate  regulatory authority for
 87-3    which such a charter, license, permit, registration, or other
 87-4    authority is required to conduct trust business.
 87-5                (52)  "Undivided profits" means the part of equity
 87-6    capital of a state trust company equal to the balance of its net
 87-7    profits, income, gains, and losses since the date of its formation
 87-8    minus subsequent distributions to shareholders or participants and
 87-9    transfers to surplus or capital under share dividends or
87-10    appropriate board resolutions.  The term includes amounts allocated
87-11    to undivided profits as a result of a merger.
87-12                (53)  "Voting security" means a share, participation
87-13    share, or other evidence of proprietary interest in a state trust
87-14    company or other company that has as an attribute the right to vote
87-15    or participate in the election of the board of the trust company or
87-16    other company, regardless of whether the right is limited to the
87-17    election of fewer than all of the board members.  The term includes
87-18    a security that is convertible or exchangeable into a voting
87-19    security and a nonvoting participation share of a managing
87-20    participant.
87-21          (b)  The definitions provided by this section shall be
87-22    liberally construed to accomplish the purposes of this subtitle.
87-23          (c)  The finance commission by rule may adopt other
87-24    definitions to accomplish the purposes of this subtitle.
87-25          Sec. 181.003.  TRUST COMPANY RULES.  (a)  The finance
87-26    commission may adopt rules to accomplish the purposes of this
 88-1    subtitle, including rules necessary or reasonable to:
 88-2                (1)  implement and clarify this subtitle;
 88-3                (2)  preserve or protect the safety and soundness of
 88-4    state trust companies;
 88-5                (3)  grant the same rights and privileges to state
 88-6    trust companies with respect to the exercise of fiduciary powers
 88-7    that are or may be granted to a state or national bank that is
 88-8    domiciled in this state and exercising fiduciary powers;
 88-9                (4)  provide for recovery of the cost of maintenance
88-10    and operation of the department and the cost of enforcing this
88-11    subtitle through the imposition and collection of ratable and
88-12    equitable fees for notices, applications, and examinations; and
88-13                (5)  facilitate the fair hearing and adjudication of
88-14    matters  before  the  banking  commissioner  and  the  finance
88-15    commission.
88-16          (b)  The presence or absence in this subtitle of a specific
88-17    reference to rules regarding a particular subject does not enlarge
88-18    or diminish the rulemaking authority conferred by this section.
88-19          Sec. 181.004.  IMPLYING THAT PERSON IS TRUST COMPANY.  (a)  A
88-20    person or company may not use in a business name or advertising the
88-21    words "trust," "trust company," or any similar term or phrase, any
88-22    word pronounced "trust" or "trust company," any foreign word that
88-23    means "trust" or "trust company," or any term that tends to imply
88-24    that the business is holding out to the public that it engages in
88-25    the business of a fiduciary for hire unless the banking
88-26    commissioner has approved the use in writing after finding that the
 89-1    use will not be misleading.  This subsection does not prohibit an
 89-2    individual from engaging in the business of a fiduciary for
 89-3    compensation or from using the words "trust" or "trustee" for the
 89-4    purpose of identifying assets held or actions taken in an existing
 89-5    capacity.
 89-6          (b)  Subsection (a) does not apply to:
 89-7                (1)  a state or national bank, a state or federal
 89-8    savings bank, a state or federal savings association, a state or
 89-9    federal credit union, or a depository or trust company institution
89-10    authorized under this subtitle to conduct a trust business in this
89-11    state; or
89-12                (2)  another entity organized under the laws of this
89-13    state, another state, the United States, or a foreign sovereign
89-14    state to the extent that:
89-15                      (A)  the entity is authorized under its charter
89-16    or the laws of this state or the United States to use a term, word,
89-17    character, ideogram, phonogram, or phrase prohibited by Subsection
89-18    (a); and
89-19                      (B)  the entity is authorized by the laws of this
89-20    state or the United States to conduct the activities in which the
89-21    entity is engaged in this state.
89-22          Sec. 181.005.  LIABILITY OF TRUST COMPANY DIRECTORS AND
89-23    PERSONNEL.  (a)  The provisions of the Texas Business Corporation
89-24    Act regarding liability, defenses, and indemnification of a
89-25    director, officer, agent, or employee apply to a director, officer,
89-26    agent, or employee of a state trust company in this state.  Except
 90-1    as limited by those provisions, a disinterested director, manager,
 90-2    managing participant, officer, or employee of a state trust company
 90-3    may not be held personally liable in an action seeking monetary
 90-4    damages arising from the conduct of the state trust company's
 90-5    affairs unless the damages resulted from the gross negligence or
 90-6    wilful or intentional misconduct of the person during the person's
 90-7    term of office or service with the state trust company.
 90-8          (b)  A director, manager, managing participant, officer, or
 90-9    employee of a state trust company is disinterested with respect to
90-10    a decision or transaction if:
90-11                (1)  the person fully discloses any interest in the
90-12    decision or transaction and does not participate in the decision or
90-13    transaction; or
90-14                (2)  the decision or transaction does not involve any
90-15    of the following:
90-16                      (A)  personal profit for the person through
90-17    dealing with the state trust company or usurping an opportunity of
90-18    the trust company;
90-19                      (B)  buying or selling assets of the state trust
90-20    company in a transaction in which the person has a direct or
90-21    indirect pecuniary interest;
90-22                      (C)  dealing with another state trust company or
90-23    other person in which the person  is a director, manager, managing
90-24    participant, officer, or employee or otherwise has a significant
90-25    direct or indirect financial interest; or
90-26                      (D)  dealing with a family member of the person.
 91-1          (c)  A director, manager, managing participant, or officer
 91-2    who, in performing the person's duties and functions, acts in good
 91-3    faith and reasonably believes that reliance is warranted is
 91-4    entitled to rely on information, including an opinion, report,
 91-5    financial statement or other type of statement or financial data,
 91-6    decision, judgment, or performance,  that is prepared, presented,
 91-7    made, or rendered by:
 91-8                (1)  one or more directors, managers, managing
 91-9    participants, officers, or employees of the state trust company, or
91-10    of an entity under joint or common control with the state trust
91-11    company, whom the director, manager, managing participant, or
91-12    officer reasonably believes merits confidence;
91-13                (2)  legal counsel, a public accountant, or another
91-14    person whom the director, manager, managing participant, or officer
91-15    reasonably believes merits confidence; or
91-16                (3)  a committee of the board of the state trust
91-17    company of which the director, manager, or managing participant is
91-18    not a member.
91-19          (d)  In this section, "family member" means a person's:
91-20                (1)  spouse;
91-21                (2)  minor child; or
91-22                (3)  adult child who resides in the person's home.
91-23          Sec. 181.006.  EXEMPTION OF TRUST COMPANY DIRECTORS AND
91-24    PERSONNEL FROM SECURITIES LAW.  An officer, director, manager,
91-25    managing participant, or employee of a state trust company with
91-26    fewer than 500 shareholders or participants or a holding company
 92-1    with fewer than 500 shareholders or participants that controls a
 92-2    state trust company is exempt from the registration and licensing
 92-3    provisions of The Securities Act (Article 581-1 et seq., Vernon's
 92-4    Texas Civil Statutes) with respect to that person's participation
 92-5    in a transaction, including a sale, involving securities issued by
 92-6    the state trust company or the holding company of which that person
 92-7    is an officer, director, manager, managing participant, or employee
 92-8    if the person is not compensated for the person's participation in
 92-9    the transaction.
92-10          Sec. 181.007.  ATTACHMENT, INJUNCTION, OR EXECUTION.  (a)  An
92-11    attachment, injunction, or execution may not be issued against a
92-12    state trust company located in this state to collect a money
92-13    judgment or secure a prospective money judgment against the state
92-14    trust company before the judgment is final and all appeals have
92-15    been exhausted or foreclosed by law.
92-16          (b)  This section does not affect an attachment, injunction,
92-17    execution, or writ of garnishment issued to or served on a state
92-18    trust company for the purpose of collecting a money judgment or
92-19    securing a prospective money judgment against a client of or client
92-20    account in the state trust company.
92-21             (Sections 181.008-181.100 reserved for expansion
92-22          SUBCHAPTER B.  REGULATION OF TRUST COMPANIES BY BANKING
92-23                                DEPARTMENT
92-24          Sec. 181.101.  ISSUANCE OF INTERPRETIVE STATEMENTS.  (a)  The
92-25    banking commissioner:
92-26                (1)  may issue interpretive statements containing
 93-1    matters of general policy for the guidance of state trust
 93-2    companies;
 93-3                (2)  shall file the statements for publication in the
 93-4    Texas Register; and
 93-5                (3)  may amend or repeal a published interpretive
 93-6    statement by  issuing an amended statement or notice of repeal of a
 93-7    statement and filing the statement or notice for publication in the
 93-8    Texas Register.
 93-9          (b)  The secretary of state shall publish the filed
93-10    statements and  notices in the Texas Register and in a designated
93-11    chapter of the Texas Administrative Code.
93-12          Sec. 181.102.  ISSUANCE OF OPINION.  (a)  In response to a
93-13    specific request from a member of the public or the state trust
93-14    company industry, the banking commissioner may issue an opinion
93-15    directly or through the deputy banking commissioner or the
93-16    department's attorneys.
93-17          (b)  If the banking commissioner determines that the opinion
93-18    is useful for the general guidance of trust companies, the banking
93-19    commissioner may file the opinion for publication in the Texas
93-20    Register.  A published opinion must be redacted to preserve the
93-21    confidentiality of the requesting party unless the requesting party
93-22    consents to be identified in the published opinion.
93-23          (c)  The banking commissioner may amend or repeal a published
93-24    opinion by issuing an amended opinion or notice  of repeal of an
93-25    opinion and filing the opinion or notice for publication in the
93-26    Texas Register.  The requesting party, however, may rely on the
 94-1    original opinion if:
 94-2                (1)  all material facts were originally disclosed to
 94-3    the banking commissioner;
 94-4                (2)  the safety and soundness of the affected trust
 94-5    companies will not be affected by further reliance on the original
 94-6    opinion; and
 94-7                (3)  the text and interpretation of relevant governing
 94-8    provisions of this subtitle have not been changed by legislative or
 94-9    judicial action.
94-10          (d)  The secretary of state shall publish the filed opinions
94-11    and notices in the Texas Register and a designated chapter of the
94-12    Texas Administrative Code.
94-13          Sec. 181.103.  EFFECT OF INTERPRETIVE STATEMENT OR OPINION.
94-14    An interpretive statement or opinion issued under this subchapter
94-15    does not have the force of law and is not a rule for the purposes
94-16    of Chapter 2001, Government Code, unless adopted as a rule by the
94-17    finance commission as provided by Chapter 2001, Government Code.
94-18    An interpretive statement or opinion is an administrative
94-19    construction of this subtitle entitled to great weight if the
94-20    construction is reasonable and does not conflict with this
94-21    subtitle.
94-22          Sec. 181.104.  EXAMINATION REQUIREMENT.  (a)  The banking
94-23    commissioner shall examine each state trust company annually.
94-24          (b)  The banking commissioner may examine a state trust
94-25    company more often than annually as the banking commissioner
94-26    considers necessary to:
 95-1                (1)  safeguard the interests of clients, creditors,
 95-2    shareholders, participants, or participant-transferees; and
 95-3                (2)  enforce this subtitle.
 95-4          (c)  The banking commissioner may defer an examination for
 95-5    not more than six months if the banking commissioner considers the
 95-6    deferment necessary for the efficient enforcement of this subtitle.
 95-7          (d)  The banking commissioner shall report the results of the
 95-8    examination in writing to the officers and directors, managers, or
 95-9    managing participants of the state trust company.  A report of an
95-10    examination under this section is confidential and may be disclosed
95-11    only under the circumstances provided by this subchapter.
95-12          (e)  The banking commissioner may:
95-13                (1)  accept an examination of a state trust company, a
95-14    third-party contractor, or an affiliate of the state trust company
95-15    by a federal or other governmental agency in lieu of an examination
95-16    under this section; or
95-17                (2)  conduct an examination of a state trust company, a
95-18    third-party contractor, or an affiliate of the state trust company
95-19    jointly with a federal or other governmental agency.
95-20          (f)  The banking commissioner may administer oaths and
95-21    examine persons under oath on any subject that the banking
95-22    commissioner considers pertinent to the financial condition or the
95-23    safety and soundness of the activities of a state trust company.
95-24          Sec. 181.105.  COST OF REGULATION.               Each state
95-25    trust company shall pay, through the imposition and collection of
95-26    fees established by the finance commission under Section
 96-1    181.003(a)(4):
 96-2                (1)  the cost of examination;
 96-3                (2)  the equitable or proportionate cost of maintenance
 96-4    and operation of the department; and
 96-5                (3)  the cost of enforcement of this subtitle.
 96-6          Sec. 181.106.  REGULATION AND EXAMINATION OF RELATED
 96-7    ENTITIES.  (a)  The banking commissioner may regulate and examine,
 96-8    to the same extent as if the services or activities were performed
 96-9    by a state trust company on its own premises:
96-10                (1)  the activities of a state trust company affiliate;
96-11    and
96-12                (2)  the performance of data processing, electronic
96-13    fund transfers, or other services or activities performed on behalf
96-14    of a state trust company by a third-party contractor.
96-15          (b)  The banking commissioner may collect a fee from the
96-16    state trust company to cover the cost of the examination.
96-17          Sec. 181.107.  STATEMENTS OF CONDITION AND INCOME; PENALTY.
96-18    (a)  Each state trust company periodically shall file with the
96-19    banking commissioner a copy of its statement of condition and
96-20    income.
96-21          (b)  The finance commission by rule may:
96-22                (1)  require the statement to be filed with the banking
96-23    commission at the intervals the finance commission determines;
96-24                (2)  specify the form of the statement of condition and
96-25    income, including specified confidential and public information to
96-26    be in the statement; and
 97-1                (3)  require public information in the statement to be
 97-2    published at the times and in the publications and locations the
 97-3    finance commission determines.
 97-4          (c)  Except for portions designated to be confidential by the
 97-5    banking commissioner, a statement of condition and income is a
 97-6    public record.
 97-7          (d)  A state trust company that fails to file a statement of
 97-8    condition and income on or before the date it is due is, after
 97-9    notice and hearing, subject to a penalty of not more than $500 a
97-10    day for each day of noncompliance.
97-11          Sec. 181.108.  LIABILITY OF COMMISSION AND DEPARTMENT
97-12    OFFICERS AND PERSONNEL LIMITED.  (a)  The banking commissioner, a
97-13    member of the finance commission, the deputy banking commissioner,
97-14    or an examiner, assistant examiner, supervisor, conservator, agent,
97-15    or other officer or employee of the department is not personally
97-16    liable for damages arising from the person's official act or
97-17    omission, unless the act or omission is corrupt or malicious.
97-18          (b)  The attorney general shall defend an action brought
97-19    against a person because of an official act or omission under
97-20    Subsection (a), regardless of whether the defendant has terminated
97-21    service with the department before the action commences.
97-22             (Sections 181.109-181.200 reserved for expansion
97-23                  SUBCHAPTER C.  ADMINISTRATIVE PROCEDURE
97-24          Sec. 181.201.  BANKING COMMISSIONER HEARING.  (a)  The
97-25    banking commissioner may convene a hearing to receive evidence and
97-26    argument regarding any matter before the banking commissioner for
 98-1    decision or review under this subtitle.  The hearing must be
 98-2    conducted under Chapter 2001, Government Code.  A matter made
 98-3    confidential by law must be considered by the banking commissioner
 98-4    in a closed hearing.
 98-5          (b)  A hearing before the banking commissioner that is
 98-6    required or authorized by law may be conducted by a hearings
 98-7    officer on behalf of the banking commissioner.
 98-8          (c)  This section does not grant a right to hearing to a
 98-9    person that is not otherwise granted by governing law.
98-10          Sec. 181.202.  APPEAL OF BANKING COMMISSIONER DECISION OR
98-11    ORDER.  Except as expressly provided otherwise by this subtitle, a
98-12    person affected by a decision or order of the banking commissioner
98-13    made under this subtitle after hearing may appeal the decision or
98-14    order:
98-15                (1)  to the finance commission; or
98-16                (2)  directly to a district court in Travis County as
98-17    provided by Section 181.204.
98-18          Sec. 181.203.  APPEAL TO FINANCE COMMISSION.  (a)  In an
98-19    appeal to the finance commission, the finance commission shall
98-20    consider the questions raised by the application for review and may
98-21    also consider additional matters pertinent to the appeal.
98-22          (b)  An order of the banking commissioner continues in effect
98-23    pending review unless the order is stayed by the finance
98-24    commission.  The finance commission may impose any condition before
98-25    granting a stay of the appealed order.
98-26          (c)  The finance commission may not be required to accept
 99-1    additional evidence or hold an evidentiary hearing if a hearing was
 99-2    held and a record made before the banking commissioner.  The
 99-3    finance commission shall remand the proceeding to the banking
 99-4    commissioner to receive any additional evidence the finance
 99-5    commission chooses to consider.
 99-6          (d)  A hearing before the finance commission that is required
 99-7    or authorized by law may be conducted by a hearings officer on
 99-8    behalf of the finance commission.
 99-9          (e)  A matter made confidential by law must be considered by
99-10    the finance commission in a closed hearing.
99-11          Sec. 181.204.  DIRECT APPEAL TO COURT OR APPEAL OF FINANCE
99-12    COMMISSION ORDER.  A person affected by a final order of the
99-13    banking commissioner who elects to appeal directly to district
99-14    court, or a person affected by a final order of the finance
99-15    commission under this subchapter, may appeal the final order by
99-16    filing a petition for judicial review as provided by Chapter 2001,
99-17    Government Code.  A petition for judicial review filed in the
99-18    district court does not stay or vacate the appealed order unless
99-19    the court, after notice and hearing, expressly stays or vacates the
99-20    order.
99-21             (Sections 181.205-181.300 reserved for expansion
99-22               SUBCHAPTER D.  CONFIDENTIALITY OF INFORMATION
99-23          Sec. 181.301.  DISCLOSURE BY DEPARTMENT PROHIBITED.
99-24    (a)  Except as expressly provided otherwise by this subtitle or a
99-25    rule adopted under Section 181.003(a)(1), the following are
99-26    confidential and may not be disclosed by the banking commissioner
 100-1   or an employee of the department:
 100-2               (1)  information directly or indirectly obtained by the
 100-3   department in any manner, including through an application or
 100-4   examination, concerning the financial condition or business affairs
 100-5   of a state trust company or a present, former, or prospective
 100-6   shareholder, participant, officer, director, manager, affiliate, or
 100-7   service provider of the state trust company, other than the public
 100-8   portions of a report of condition or income statement; and
 100-9               (2)  each related file or record of the department.
100-10         (b)  Information obtained by the department from a federal or
100-11   state regulatory agency that is confidential under federal or state
100-12   law may not be disclosed except as provided by federal or state
100-13   law.
100-14         Sec. 181.302.  DISCLOSURE TO FINANCE COMMISSION.
100-15   Confidential information may not be disclosed to a member of the
100-16   finance commission.  A member of the finance commission may not be
100-17   given access to the files and records of the department except that
100-18   the banking commissioner may disclose to the finance commission
100-19   information, files, and records pertinent to a hearing or matter
100-20   pending before the finance commission.
100-21         Sec. 181.303.  DISCLOSURE TO OTHER AGENCIES.  (a)  On request
100-22   and on execution of an appropriate confidentiality agreement
100-23   approved by the banking commissioner, the banking commissioner may:
100-24               (1)  disclose to a federal banking regulatory agency
100-25   confidential information concerning a state trust company within
100-26   the agency's jurisdiction or an affiliate or service provider of
 101-1   the state trust company; and
 101-2               (2)  permit the agency access to files and records or
 101-3   reports relating to the state trust company or its affiliate or
 101-4   service provider.
 101-5         (b)  The banking commissioner may, as the banking
 101-6   commissioner considers necessary or proper to the enforcement of
 101-7   the laws of this state, another state, the United States, or a
 101-8   foreign sovereign state, or in the best interest of the public,
 101-9   disclose or authorize release of confidential information to
101-10   another department of this state, another state, the United States,
101-11   a foreign sovereign state, or any related agency or
101-12   instrumentality.
101-13         Sec. 181.304.  OTHER DISCLOSURE PROHIBITED; PENALTY.
101-14   (a)  Confidential information that is provided to a state trust
101-15   company, affiliate, or service provider of the state trust company,
101-16   whether in the form of a report of examination or otherwise, is the
101-17   confidential property of the department.  The information may not
101-18   be made public or disclosed by the recipient or by an officer,
101-19   director, manager, employee, or agent of the recipient to a person
101-20   not officially connected to the recipient as officer, director,
101-21   employee, attorney, auditor, independent auditor, or bonding
101-22   company, except as authorized by rules adopted under this subtitle.
101-23         (b)  A person commits an offense if the person discloses or
101-24   uses the confidential information in violation of this section.  An
101-25   offense under this subsection is punishable as if it were an
101-26   offense under Section 37.10, Penal Code.
 102-1         Sec. 181.305.  CIVIL DISCOVERY.  Discovery of confidential
 102-2   information from a person subject to this subchapter under subpoena
 102-3   or other legal process in a civil proceeding must comply with rules
 102-4   adopted under this subtitle and other applicable law.  The rules
 102-5   may:
 102-6               (1)  restrict release of confidential information to
 102-7   the portion directly relevant to the legal dispute at issue; and
 102-8               (2)  require that a protective order, in the form and
 102-9   under circumstances specified by the rules, be issued by a court
102-10   before release of the confidential information.
102-11         Sec. 181.306.  INVESTIGATIVE INFORMATION.  Notwithstanding
102-12   any other law, the banking commissioner may refuse to release
102-13   information or records concerning a state trust company in the
102-14   custody of the department if, in the opinion of the banking
102-15   commissioner, release of the information or records might
102-16   jeopardize an ongoing investigation of potentially unlawful
102-17   activity.
102-18         Sec. 181.307.  EMPLOYMENT INFORMATION.  (a)  A person may
102-19   provide employment information concerning the known or suspected
102-20   involvement of a present or former employee, officer, or director
102-21   of a state trust company in a violation of any state or federal
102-22   law, rule, or regulation that has been reported to appropriate
102-23   state or federal authorities to:
102-24               (1)  a state trust company; or
102-25               (2)  a person providing employment information to a
102-26   state trust company.
 103-1         (b)  A person may not be held liable for providing
 103-2   information under Subsection (a) unless the information provided is
 103-3   false and the person provided the information with disregard for
 103-4   the truth.
 103-5         Sec. 181.308.  SHAREHOLDER INSPECTION RIGHTS.
 103-6   (a)  Notwithstanding Article 2.44, Texas Business Corporation Act,
 103-7   a shareholder or participant of a state trust company may not
 103-8   examine:
 103-9               (1)  a report of examination or other confidential
103-10   property of the department that is in the possession of the state
103-11   trust company; or
103-12               (2)  a book or record of the state trust company that
103-13   directly or indirectly pertains to financial or other information
103-14   maintained by the state trust company on behalf of its clients,
103-15   including a specific item in the minutes of the board  or a
103-16   committee of the board regarding client account review and approval
103-17   or any report that would tend to identify the state trust company's
103-18   client.
103-19         (b)  This section does not affect the rights of a shareholder
103-20   or participant of a state trust company acting in another capacity.
103-21     CHAPTER 182.  POWERS, ORGANIZATION, AND FINANCIAL REQUIREMENTS
103-22            SUBCHAPTER A.  ORGANIZATION AND POWERS IN GENERAL
103-23         Sec. 182.001.  ORGANIZATION AND GENERAL POWERS OF STATE TRUST
103-24   COMPANY.  (a)  Subject to the other provisions of this chapter, one
103-25   or more persons may organize and charter a state trust company as a
103-26   state trust association or a limited trust association.
 104-1         (b)  A state trust company may perform any act as a fiduciary
 104-2   that a state bank or national bank exclusively exercising trust
 104-3   powers may perform under the laws of this state, including:
 104-4               (1)  acting as trustee under a written agreement;
 104-5               (2)  receiving money and other property in its capacity
 104-6   as trustee for investment in real or personal property;
 104-7               (3)  acting as trustee and performing the fiduciary
 104-8   duties committed or transferred to it by order of a court;
 104-9               (4)  acting as executor, administrator, or trustee of
104-10   the estate of a deceased person;
104-11               (5)  acting as a custodian, guardian, conservator, or
104-12   trustee for a minor or incapacitated person;
104-13               (6)  acting as a successor fiduciary to a depository
104-14   institution;
104-15               (7)  receiving for safekeeping personal property;
104-16               (8)  acting as custodian, assignee, transfer agent,
104-17   escrow agent, registrar, or receiver;
104-18               (9)  acting as investment advisor, agent, or attorney
104-19   in fact according to an applicable agreement;
104-20               (10)  exercising additional powers expressly conferred
104-21   by rule of the finance commission; and
104-22               (11)  exercising any incidental power that is
104-23   reasonably necessary to enable it to fully exercise the powers
104-24   expressly conferred according to commonly accepted fiduciary
104-25   customs and usages.
104-26         (c)  Subject to Section 182.009, a state trust company may
 105-1   exercise the powers of a Texas business corporation that are
 105-2   reasonably necessary to enable exercise of its specific powers
 105-3   under this subtitle.
 105-4         (d)  A state trust company may contribute to a community fund
 105-5   or to a charitable, philanthropic, or benevolent instrumentality
 105-6   conducive to public welfare an amount that the state trust
 105-7   company's board considers appropriate and in the interests of the
 105-8   state trust company.
 105-9         (e)  Subject to Section 184.301, a state trust company may
105-10   deposit trust funds with itself.
105-11         (f)  A state trust company insured by the Federal Deposit
105-12   Insurance Corporation may receive and pay deposits, with or without
105-13   interest, made by the United States, the state, a county, or a
105-14   municipality.
105-15         Sec. 182.002.  ARTICLES OF ASSOCIATION OF STATE TRUST
105-16   COMPANY.  (a)  The articles of association of a state trust company
105-17   must be signed and acknowledged by each organizer and must contain:
105-18               (1)  the name of the state trust company, subject to
105-19   Subsection (b);
105-20               (2)  the period of the state trust company's duration,
105-21   which may be perpetual;
105-22               (3)  the powers of the state trust company, which may
105-23   be stated as:
105-24                     (A)  all powers granted to a state trust company
105-25   in this state; or
105-26                     (B)  a list of the specific powers that the state
 106-1   trust company chooses and is authorized to exercise;
 106-2               (4)  the aggregate number of shares, or participation
 106-3   shares in the case of a limited trust association, that the state
 106-4   trust company will be authorized to issue, and the number of
 106-5   classes of shares or participation shares, which may be one or
 106-6   more;
 106-7               (5)  if the shares or participation shares are to be
 106-8   divided into classes:
 106-9                     (A)  the designation of each class and statement
106-10   of the preferences, limitations, and relative rights of the shares
106-11   or participation shares of each class, which in the  case of a
106-12   limited trust association may be more fully set forth in the
106-13   participation agreement;
106-14                     (B)  the number of shares or participation shares
106-15   of each class; and
106-16                     (C)  a statement of the par value of the shares
106-17   or participation shares of each class or that the shares or
106-18   participation shares are to be without par value;
106-19               (6)  any provision limiting or denying to shareholders
106-20   or participants the preemptive right to acquire additional or
106-21   treasury shares or participation shares of the state trust company;
106-22               (7)  any provision granting the right of shareholders
106-23   or participants to cumulative voting in the election of directors
106-24   or managers;
106-25               (8)  the aggregate amount of consideration to be
106-26   received for all shares or participation shares initially issued by
 107-1   the state trust company and a statement that:
 107-2                     (A)  all authorized shares or participation
 107-3   shares have been subscribed; and
 107-4                     (B)  all subscriptions received provide for the
 107-5   consideration to be fully paid in cash before issuance of the
 107-6   charter;
 107-7               (9)  any provision consistent with law that the
 107-8   organizers elect to set forth in the articles of association for
 107-9   the regulation of the internal affairs of the state trust company
107-10   or that is otherwise required by this subtitle to be set forth in
107-11   the articles of association;
107-12               (10)  the street address of the state trust company's
107-13   home office; and
107-14               (11)  either:
107-15                     (A)  the number of directors or managers
107-16   constituting the initial board and the names and street addresses
107-17   of the persons who are to serve as directors or managers until the
107-18   first annual meeting of shareholders or participants or until
107-19   successor directors or managers have been elected and qualified; or
107-20                     (B)  the statement described by Subsection (c).
107-21         (b)  The banking commissioner may determine that a proposed
107-22   state trust company name is potentially misleading to the public
107-23   and require the organizers to select a different name.
107-24         (c)  The organizers of a limited trust association that will
107-25   have not fewer than five or more than 25 participants may include
107-26   in the articles of association a statement that management is
 108-1   vested in a board composed of all participants, with management
 108-2   authority vested in each participant in proportion to the
 108-3   participant's contribution to capital as adjusted from time to time
 108-4   to properly reflect any additional contribution, and the names and
 108-5   street addresses of the persons who are to be the initial managing
 108-6   participants.
 108-7         Sec. 182.003.  APPLICATION FOR STATE TRUST COMPANY CHARTER;
 108-8   STANDARDS FOR APPROVAL.  (a)  An application for a state trust
 108-9   company charter must be made under oath and in the form required by
108-10   the banking commissioner.  The application must be supported by
108-11   information, records, and opinions of counsel that the banking
108-12   commissioner requires.  The application must be accompanied by all
108-13   charter fees and deposits required by statute or rule.
108-14         (b)  The banking commissioner shall grant a state trust
108-15   company charter only on proof satisfactory to the banking
108-16   commissioner that public convenience and advantage will be promoted
108-17   by the establishment of the state trust company.  In determining
108-18   whether public convenience and advantage will be promoted, the
108-19   banking commissioner shall consider the convenience of the public
108-20   to be served and whether:
108-21               (1)  the organizational and capital structure and
108-22   amount of initial capitalization is adequate for the business and
108-23   location;
108-24               (2)  the anticipated volume and nature of business
108-25   indicates a reasonable probability of success and profitability
108-26   based on the market sought to be served;
 109-1               (3)  the proposed officers, directors, and managers, or
 109-2   managing participants, as a group have sufficient fiduciary
 109-3   experience, ability, standing, competence, trustworthiness, and
 109-4   integrity to justify a belief that the state trust company will
 109-5   operate in compliance with law and that success of the state trust
 109-6   company is probable;
 109-7               (4)  each principal shareholder or participant has
 109-8   sufficient experience, ability, standing, competence,
 109-9   trustworthiness, and integrity to justify a belief that the state
109-10   trust company will be free from improper or unlawful influence or
109-11   interference with respect to the state trust company's operation in
109-12   compliance with law; and
109-13               (5)  the organizers are acting in good faith.
109-14         (c)  The organizers bear the burden of proof to establish
109-15   that public convenience and advantage will be promoted by the
109-16   establishment of the state trust company. The failure of an
109-17   applicant to furnish required information, opinions of counsel, and
109-18   other material, or the required fee, is considered an abandonment
109-19   of the application.
109-20         Sec. 182.004.  NOTICE AND INVESTIGATION OF CHARTER
109-21   APPLICATION.  (a)  The banking commissioner shall notify the
109-22   organizers when the application is complete and accepted for filing
109-23   and all required fees and deposits have been paid.  Promptly after
109-24   the notification, the organizers shall publish notice of the
109-25   application and solicit comments and protests, in the form
109-26   specified by the banking commissioner, in a newspaper of general
 110-1   circulation in the county where the initial home office of the
 110-2   proposed state trust company is to be located.  The banking
 110-3   commissioner may require the organizers to publish the notice at
 110-4   other locations reasonably necessary to solicit the views of
 110-5   potentially affected persons.
 110-6         (b)  At the expense of the organizers, the banking
 110-7   commissioner shall thoroughly investigate the application and
 110-8   inquire fully into the identity and character of each proposed
 110-9   director, manager, officer, managing participant, and principal
110-10   shareholder or participant.  The banking commissioner shall prepare
110-11   a written report of the investigation, and any person, other than a
110-12   person protesting under Section 182.005, may request a copy of the
110-13   nonconfidential portions of the application and written report as
110-14   provided by Chapter 552, Government Code.
110-15         (c)  Rules adopted under this subtitle may specify the
110-16   confidential or nonconfidential character of information obtained
110-17   by the department under this section.  Except as provided by
110-18   Subchapter D, Chapter 181, or in rules regarding confidential
110-19   information, the financial statement of a proposed officer,
110-20   director, manager, or managing participant is confidential and not
110-21   subject to public disclosure.
110-22         Sec. 182.005.  PROTEST; HEARING; DECISION ON CHARTER
110-23   APPLICATION.  (a)  Any person may file a protest of an application
110-24   with the banking commissioner.
110-25         (b)  If a protest of the application is not filed on or
110-26   before the 15th day after the last date the notice was published
 111-1   under Section 182.004, the banking commissioner may immediately
 111-2   determine whether all of the necessary conditions set forth in
 111-3   Section 182.003(b) have been established, based on the application
 111-4   and investigation.  The banking commissioner shall approve the
 111-5   application for charter or set the charter application for hearing.
 111-6         (c)  If a protest of the application is timely filed,
 111-7   accompanied by the fees and deposits required by statute or rule,
 111-8   or if the banking commissioner sets a hearing, the banking
 111-9   commissioner shall conduct a public hearing and as many prehearing
111-10   conferences and opportunities for discovery as the banking
111-11   commissioner considers advisable and consistent with governing
111-12   statutes and rules.  A person protesting the application is
111-13   entitled to the confidential portions of the application under a
111-14   protective order that restricts the use of confidential information
111-15   to the charter proceedings.
111-16         (d)  Based on the record of the hearing, the banking
111-17   commissioner shall determine whether all of the necessary
111-18   conditions set forth in Section 182.003(b) have been established
111-19   and shall enter an order granting or denying the charter.
111-20         (e)  The banking commissioner may make approval of any
111-21   application conditional.  The banking commissioner shall include
111-22   any conditions in the order granting the charter.
111-23         (f)  Chapter 2001, Government Code, does not apply to a
111-24   charter application filed for the purpose of assuming all or any
111-25   portion of the assets, liabilities, and accounts of any depository
111-26   institution or state trust company considered by the banking
 112-1   commissioner to be in hazardous condition.
 112-2         Sec. 182.006.  ISSUANCE OF CHARTER.  A state trust company
 112-3   may not engage in the trust business until it receives its charter
 112-4   from the banking commissioner.  The banking commissioner may not
 112-5   deliver the charter until the state trust company has:
 112-6               (1)  received cash in at least the full amount of
 112-7   restricted  capital  from subscriptions for the issuance of shares
 112-8   or participation shares;
 112-9               (2)  elected or qualified the initial officers and
112-10   directors or managers, as appropriate, named in the application for
112-11   charter or other officers and directors or managers approved by the
112-12   banking commissioner; and
112-13               (3)  complied with all other requirements of this
112-14   subtitle relating to the organization of the state trust company.
112-15         Sec. 182.007.  DEADLINE TO BEGIN BUSINESS.  If a state trust
112-16   company does not open and engage in the trust business within six
112-17   months after the date it receives its charter or conditional
112-18   approval of application for charter, the banking commissioner may
112-19   revoke the charter or cancel the conditional approval of
112-20   application for charter without judicial action.
112-21         Sec. 182.008.  RESTRICTED CAPITAL.  (a)  The banking
112-22   commissioner may not issue a charter to a state trust company
112-23   having restricted capital of less than $1 million.
112-24         (b)  The banking commissioner may, on a case-by-case basis,
112-25   require additional restricted capital for a proposed or existing
112-26   state trust company if the banking commissioner finds the condition
 113-1   and operations of the existing state trust company or the proposed
 113-2   scope or type of operations of the proposed state trust company
 113-3   requires additional restricted capital to protect the safety and
 113-4   soundness of the state trust company.  The safety and soundness
 113-5   factors to be considered by the banking commissioner in the
 113-6   exercise of discretion include:
 113-7               (1)  the nature and type of business the state trust
 113-8   company conducts;
 113-9               (2)  the nature and degree of liquidity in assets held
113-10   in a corporate capacity;
113-11               (3)  the amount, type, and depository of fiduciary
113-12   assets that the state trust company manages;
113-13               (4)  the complexity of the state trust company's
113-14   fiduciary duties and degree of discretion undertaken;
113-15               (5)  the competence and experience of the state trust
113-16   company's management;
113-17               (6)  the extent and adequacy of internal controls
113-18   maintained by the state trust company;
113-19               (7)  the presence or absence of annual unqualified
113-20   audits by an independent certified public accountant;
113-21               (8)  the reasonableness of the state trust company's
113-22   business plans for retaining or acquiring additional restricted
113-23   capital; and
113-24               (9)  the existence and adequacy of insurance obtained
113-25   or held by the state trust company to protect its clients,
113-26   beneficiaries, and grantors.
 114-1         (c)  The effective date of an order under Subsection (b) must
 114-2   be stated in the order and must be on or after the 21st day after
 114-3   the date the order is mailed or delivered.  Unless the state trust
 114-4   company requests a hearing before the banking commissioner in
 114-5   writing before the effective date of the order, the order takes
 114-6   effect and is final and nonappealable.  This subsection does not
 114-7   prohibit an application to reduce capital requirements of an
 114-8   existing state trust company under Subsection (e) or under Section
 114-9   182.011.
114-10         (d)  Subject to Subsection (e) and Section 182.011, a state
114-11   trust company to which the banking commissioner issues a charter
114-12   shall at all times maintain restricted capital in at least the
114-13   amount required under Subsection (a) and in any additional amount
114-14   the banking commissioner requires under Subsection (b).
114-15         (e)  Notwithstanding Subsection (a), on application, the
114-16   banking commissioner may, on a case-by-case basis in the exercise
114-17   of discretion, reduce the amount of minimum restricted capital
114-18   required for a state trust company in a manner consistent with
114-19   protecting the state trust company's safety and soundness.  In
114-20   making a determination under this subsection, the banking
114-21   commissioner shall consider the factors listed by Subsection (b).
114-22         Sec. 182.009.  APPLICATION OF LAWS RELATING TO GENERAL
114-23   BUSINESS CORPORATIONS.  (a)  The Texas Business Corporation Act and
114-24   the Texas Miscellaneous Corporation Laws Act (Article 1302-1.01 et
114-25   seq., Vernon's Texas Civil Statutes) are incorporated into this
114-26   chapter and apply to a state trust company as if they were part of
 115-1   this subtitle to the extent not inconsistent with this subtitle or
 115-2   the proper business of a state trust company, except that:
 115-3               (1)  a reference to the secretary of state means the
 115-4   banking commissioner unless the context requires otherwise; and
 115-5               (2)  the right of shareholders or participants to
 115-6   cumulative voting in the election of directors or managers exists
 115-7   only if granted by the state trust company's articles of
 115-8   association.
 115-9         (b)  Unless expressly authorized by this subtitle or a rule
115-10   of the finance commission, a state trust company may not take an
115-11   action authorized by the Texas Business Corporation Act regarding
115-12   its corporate status, capital structure, or a matter of corporate
115-13   governance, of the type for which the Texas Business Corporation
115-14   Act would require a filing with the secretary of state if the state
115-15   trust company were a business corporation, without submitting the
115-16   filing to the banking commissioner for prior written approval of
115-17   the action.
115-18         (c)  The finance commission may adopt rules to alter or
115-19   supplement the procedures and requirements of the Texas Business
115-20   Corporation Act or the Texas Miscellaneous Corporation Laws Act
115-21   (Article 1302-1.01 et seq., Vernon's Texas Civil Statutes)
115-22   applicable to an action taken under this chapter by a state trust
115-23   company.
115-24         (d)  This chapter may not be construed to mean that a state
115-25   trust company is a corporation incorporated under or governed by
115-26   the Texas Business Corporation Act or the Texas Miscellaneous
 116-1   Corporation Laws Act (Article 1302-1.01 et seq., Vernon's Texas
 116-2   Civil Statutes).
 116-3         Sec. 182.010.  PARITY.  (a)  A state trust company has the
 116-4   same rights and privileges with respect to the exercise of
 116-5   fiduciary powers that are or may be granted to a state or national
 116-6   bank that is domiciled in this state and exercising fiduciary
 116-7   powers.
 116-8         (b)  A state trust company that intends to exercise a right
 116-9   or privilege with respect to the exercise of fiduciary powers
116-10   granted to a regulated financial institution described in
116-11   Subsection (a) that is not authorized for state trust companies
116-12   under the statutes and rules of this state other than under this
116-13   section shall submit a letter to the banking commissioner,
116-14   describing in detail the activity in which the state trust company
116-15   intends to engage and the specific authority for the regulated
116-16   financial institution described in Subsection (a) to undertake the
116-17   proposed activity.  The state trust company shall attach copies, if
116-18   available, of relevant state and federal law, including regulations
116-19   and interpretive letters.  The state trust company may begin to
116-20   perform the proposed activity after the 30th day after the date the
116-21   banking commissioner receives the state trust company's letter
116-22   unless the banking commissioner specifies an earlier or later date
116-23   or prohibits the activity.  The banking commissioner may prohibit
116-24   the state trust company from performing the activity only if the
116-25   banking commissioner finds that:
116-26               (1)  a regulated financial institution described in
 117-1   Subsection (a) that is domiciled in this state does not possess the
 117-2   specific right or privilege to perform the activity the state trust
 117-3   company seeks to perform; or
 117-4               (2)  the performance of the activity by the state trust
 117-5   company would adversely affect the safety and soundness of the
 117-6   requesting state trust company.
 117-7         (c)  The banking commissioner may extend the 30-day period
 117-8   under Subsection (b) if the banking commissioner determines that
 117-9   the state trust company's letter raises issues requiring additional
117-10   information or additional time for analysis.  If the 30-day period
117-11   is extended, the state trust company may perform the proposed
117-12   activity only on prior written approval by the banking
117-13   commissioner, except that the banking commissioner must approve or
117-14   prohibit the proposed activity or convene a hearing under Section
117-15   181.201 not later than the 60th day after the date the commissioner
117-16   receives the state trust company's letter.  If a hearing is
117-17   convened, the banking commissioner must approve or prohibit the
117-18   proposed activity not later than the 30th day after the date the
117-19   hearing is completed.
117-20         (d)  A state trust company that is denied the requested right
117-21   or privilege to engage in an activity by the banking commissioner
117-22   under this section may appeal as provided by Sections
117-23   181.202-181.204 or may resubmit a letter under this section with
117-24   additional information or authority relevant to the banking
117-25   commissioner's determination.  A denial is immediately final for
117-26   purposes of appeal.
 118-1         (e)  The finance commission may adopt rules implementing the
 118-2   method or manner in which a state trust company exercises specific
 118-3   rights and privileges, including rules regarding the exercise of
 118-4   rights and privileges that would be prohibited to state trust
 118-5   companies.  The finance commission may not adopt rules under this
 118-6   subsection unless it finds that:
 118-7               (1)  regulated financial institutions described in
 118-8   Subsection (a) that are domiciled in this state possess the rights
 118-9   or privileges to perform activities the rules would permit state
118-10   trust companies to perform; and
118-11               (2)  the rules contain adequate safeguards and
118-12   controls, consistent with safety and soundness, to address the
118-13   concern of the legislature evidenced by the state law the rules
118-14   would impact.
118-15         (f)  The exercise of rights and privileges by a state trust
118-16   company in compliance with and in the manner authorized by this
118-17   section is not a violation of any statute of this state.
118-18         Sec. 182.011.  EXEMPTION FROM STATUTORY PROVISIONS FOR
118-19   CERTAIN STATE TRUST COMPANIES.  (a)  A state trust company may
118-20   request in writing that it be exempted from specified provisions of
118-21   this subtitle.  The banking commissioner may grant the exemption in
118-22   whole or in part if the banking commissioner finds that the state
118-23   trust company does not transact business with the public.  A state
118-24   trust company does not transact business with the public if it does
118-25   not make any sale, solicitation, arrangement, agreement, or
118-26   transaction to provide a trust or other business service, whether
 119-1   or not for a fee, commission, or any other type of remuneration,
 119-2   with:
 119-3               (1)  an individual who is not related within the fourth
 119-4   degree of affinity or consanguinity to an individual who controls
 119-5   the state trust company; or
 119-6               (2)  a sole proprietorship, partnership, joint venture,
 119-7   association, trust, estate, business trust, or corporation that is
 119-8   not wholly owned by one or more individuals related within the
 119-9   fourth degree of affinity or consanguinity to an individual who
119-10   controls the state trust company.
119-11         (b)  At the expense of a state trust company, the banking
119-12   commissioner may examine or investigate the state trust company in
119-13   connection with an application for an exemption.  Unless the
119-14   application presents novel or unusual questions, the banking
119-15   commissioner shall approve the application for exemption or set the
119-16   application for hearing not later than the 61st day after the date
119-17   the banking commissioner considers the application complete and
119-18   accepted for filing.  The banking commissioner may require the
119-19   submission of additional information as considered necessary to an
119-20   informed decision.
119-21         (c)  An exemption granted under this section may be made
119-22   subject to conditions or limitations imposed by the banking
119-23   commissioner consistent with this subtitle.
119-24         (d)  A state trust company that is or has been exempt from a
119-25   provision of this subtitle under this section or a predecessor
119-26   statute may not transact business with the public unless the
 120-1   banking commissioner determines, as provided by Section 182.003,
 120-2   that public convenience and advantage will be promoted by
 120-3   permitting the state trust company to engage in the trust business
 120-4   with the public.
 120-5         (e)  The finance commission may adopt rules:
 120-6               (1)  defining other circumstances under which a state
 120-7   trust company may be exempted from a provision of this subtitle
 120-8   because it does not transact business with the public;
 120-9               (2)  specifying the provisions of this subtitle that
120-10   are subject to an exemption request; and
120-11               (3)  establishing procedures and requirements for
120-12   obtaining, maintaining, or revoking an exemption.
120-13         Sec. 182.012.  APPLICATION FOR EXEMPTION.  (a)  A state trust
120-14   company requesting an exemption under Section 182.011 shall file an
120-15   application with the banking commissioner that includes:
120-16               (1)  a nonrefundable application fee set by the finance
120-17   commission;
120-18               (2)  a detailed sworn statement showing the state trust
120-19   company's assets and liabilities as of the end of the calendar
120-20   month preceding the filing of the application;
120-21               (3)  a sworn statement of the reason for requesting the
120-22   exemption;
120-23               (4)  a sworn statement that the state trust company is
120-24   not transacting business with the public and that the company will
120-25   not transact business with the public without the prior written
120-26   permission of the banking commissioner;
 121-1               (5)  the current street mailing address and telephone
 121-2   number of the physical location in this state at which the state
 121-3   trust company will maintain its books and records, with a sworn
 121-4   statement that the address given is true and correct and is not a
 121-5   United States Postal Service post office box or a private mail box,
 121-6   postal box, or mail drop; and
 121-7               (6)  a list of the specific provisions of this subtitle
 121-8   for which the request for an exemption is made.
 121-9         (b)  The banking commissioner may not approve an exemption
121-10   unless the application is completed as required by Subsection (a).
121-11         Sec. 182.013.  ANNUAL CERTIFICATION FOR EXEMPT STATE TRUST
121-12   COMPANY.  (a)  Before June 30 of each year, an exempt state trust
121-13   company shall file a certification on a form provided by the
121-14   banking commissioner that it is maintaining the conditions and
121-15   limitations of its exemption.  The certification must be
121-16   accompanied by a fee set by the finance commission.  The
121-17   certification is not valid unless it bears an acknowledgment
121-18   stamped by the department.
121-19         (b)  The department shall return a copy of the acknowledged
121-20   annual certification to the state trust company not later than the
121-21   30th day after the date the certification is filed.  The state
121-22   trust company shall notify the department of any failure to return
121-23   an acknowledged copy of any annual certification within this
121-24   period.
121-25         (c)  The banking commissioner may examine or investigate the
121-26   state trust company periodically as necessary to verify the
 122-1   certification.
 122-2         Sec. 182.014.  LIMITATION ON EFFECT OF EXEMPTION.  (a)  An
 122-3   exempt state trust company shall comply with the home office
 122-4   provisions of Section 182.202.
 122-5         (b)  The grant of an exemption to a state trust company does
 122-6   not affect the state trust company's obligation to pay any
 122-7   corporate franchise tax required by state law.
 122-8         Sec. 182.015.  CHANGE OF CONTROL OF EXEMPT STATE TRUST
 122-9   COMPANY.  Control of an exempt state trust company may not be sold
122-10   or transferred with exempt status.  If control of an exempt state
122-11   trust company is transferred, the acquiring person must comply with
122-12   Sections 182.003, 182.004, 182.005, and 183.001 and the exempt
122-13   status of the state trust company automatically terminates on the
122-14   effective date of the transfer.  The acquiring person must file a
122-15   separate application to obtain an exemption under Section 182.011.
122-16         Sec. 182.016.  GROUNDS FOR REVOCATION OF EXEMPTION.  The
122-17   banking commissioner may revoke an exemption of a state trust
122-18   company if the trust company:
122-19               (1)  makes a false statement under oath on any document
122-20   required to be filed by this subtitle or finance commission rule;
122-21               (2)  fails to submit to an examination as required by
122-22   Section 181.104;
122-23               (3)  withholds requested information from the banking
122-24   commissioner; or
122-25               (4)  violates any provision of this subtitle applicable
122-26   to an exempt state trust company.
 123-1         Sec. 182.017.  NOTICE AND EFFECT OF REVOCATION OF EXEMPTION.
 123-2   (a)  If the banking commissioner determines from examination or
 123-3   other credible evidence that an exempt state trust company has
 123-4   violated any of the requirements of this subchapter relating to an
 123-5   exempt state trust company, the banking commissioner may by
 123-6   personal delivery or registered or certified mail, return receipt
 123-7   requested, notify the state trust company in writing that the state
 123-8   trust company's exemption has been revoked.  The notice must state
 123-9   grounds for the revocation with reasonable certainty.  The notice
123-10   must state its effective date, which may not be earlier than the
123-11   fifth day after the date the notification is mailed or delivered.
123-12         (b)  The revocation takes effect for the state trust company
123-13   if the state trust company does not request a hearing in writing
123-14   before the effective date.  After taking effect the revocation is
123-15   final and nonappealable as to that state trust company, and the
123-16   state trust company is subject to all of the requirements and
123-17   provisions of this subtitle applicable to nonexempt state trust
123-18   companies.
123-19         Sec. 182.018.  ACTION AFTER REVOCATION OF EXEMPTION.  (a)  A
123-20   state trust company must comply with all of the provisions of
123-21   Sections 182.003(b) and (c) not later than the fifth day after the
123-22   date the revocation of the exemption takes effect.  If, however,
123-23   the banking commissioner determines at the time of revocation that
123-24   the state trust company has been engaging in or attempting to
123-25   engage in acts intended or designed to deceive or defraud the
123-26   public, the banking commissioner, in the banking commissioner's
 124-1   sole discretion, may waive the compliance period provided by this
 124-2   subsection.
 124-3         (b)  If within the period prescribed by Subsection (a) the
 124-4   state trust company does not comply with all of the provisions of
 124-5   this subtitle, including capitalization requirements determined by
 124-6   the banking commissioner as necessary to assure the safety and
 124-7   soundness of the state trust company, the banking commissioner may:
 124-8               (1)  institute any action or remedy prescribed by this
 124-9   subtitle or any applicable rule; or
124-10               (2)  refer the state trust company to the attorney
124-11   general for institution of a quo warranto proceeding to revoke the
124-12   state trust company's charter.
124-13         Sec. 182.019.  PRIOR EXEMPTION.  A state trust company that
124-14   was exempt under a predecessor to this subtitle is considered
124-15   exempt under this subtitle.
124-16         Sec. 182.020.  FOREIGN CORPORATION EXERCISING TRUST POWERS.
124-17   (a)  A foreign corporation may not conduct a trust business in this
124-18   state.  A foreign corporation may control a state trust company in
124-19   this state if the state trust company is formed or acquired and
124-20   operated as provided by this subtitle and applicable rules.
124-21         (b)  A foreign corporation or other entity chartered or
124-22   domiciled in another jurisdiction as a trust company or depository
124-23   institution with trust powers may act as a trustee in this state
124-24   only as provided by Section 105A, Texas Probate Code.
124-25         Sec. 182.021.  ACTIVITIES NOT REQUIRING CHARTER.  A company
124-26   does not engage in the trust business in a manner requiring a state
 125-1   charter by:
 125-2               (1)  acting in a manner authorized by law and in the
 125-3   scope of authority as an agent of a state trust company;
 125-4               (2)  rendering a service customarily performed as an
 125-5   attorney in a manner approved and authorized by the Supreme Court
 125-6   of Texas or State Bar of Texas;
 125-7               (3)  acting as trustee under a deed of trust made only
 125-8   as security for the payment of money or for the performance of
 125-9   another act;
125-10               (4)  conducting a trust business under a charter that
125-11   authorizes the exercise of trust powers as a depository
125-12   institution, if the exercise of trust powers in this state by the
125-13   depository institution is not otherwise prohibited by law;
125-14               (5)  engaging in a business regulated by the Office of
125-15   Consumer Credit Commissioner, except as limited by rules adopted by
125-16   the finance commission;
125-17               (6)  receiving and distributing rents and proceeds of
125-18   sale as a licensed real estate broker on behalf of a principal in a
125-19   manner authorized by the Texas Real Estate Commission;
125-20               (7)  engaging in a securities transaction or providing
125-21   an investment advisory service as a licensed and registered dealer,
125-22   salesman, or advisor to the extent that the activity is regulated
125-23   by the State Securities Board or the Securities and Exchange
125-24   Commission;
125-25               (8)  engaging in the sale and administration of an
125-26   insurance product by an insurance company or agent licensed by the
 126-1   Texas Department of Insurance to the extent that the activity is
 126-2   regulated by the Texas Department of Insurance;
 126-3               (9)  engaging in the lawful sale of prepaid funeral
 126-4   benefits under a permit issued by the banking commissioner under
 126-5   Chapter 154;
 126-6               (10)  engaging in the lawful business of a perpetual
 126-7   care cemetery corporation under Chapter 712, Health and Safety
 126-8   Code;
 126-9               (11)  engaging in the lawful sale of checks under a
126-10   license issued by the banking commissioner under Chapter 152;
126-11               (12)  acting as trustee under a voting trust as
126-12   provided by Article 2.30, Texas Business Corporation Act;
126-13               (13)  acting as trustee by a public, private, or
126-14   independent institution of higher education or a university system,
126-15   as defined by Section 61.003, Education Code, including an
126-16   affiliated foundation or corporation of such an institution or
126-17   system acting as trustee as provided by the Education Code;
126-18               (14)  engaging in another activity expressly excluded
126-19   from the application of this subtitle by rule of the finance
126-20   commission;
126-21               (15)  rendering services customarily performed by a
126-22   certified accountant in a manner authorized by the Texas State
126-23   Board of Public Accountancy;
126-24               (16)  serving as trustee of a charitable trust as
126-25   provided by Article 2.31, Texas Non-Profit Corporation Act (Article
126-26   1396-2.31, Vernon's Texas Civil Statutes);
 127-1               (17)  performing escrow or settlement services if
 127-2   licensed under Chapter 9, Insurance Code; or
 127-3               (18)  acting as a qualified intermediary in a tax
 127-4   deferred exchange under Section 1031, Internal Revenue Code of
 127-5   1986, and applicable regulations.
 127-6            (Sections 182.022-182.100 reserved for expansion
 127-7        SUBCHAPTER B.  AMENDMENT OF ARTICLES; CHANGES IN CAPITAL
 127-8                               AND SURPLUS
 127-9         Sec. 182.101.  AMENDMENT OR RESTATEMENT OF STATE TRUST
127-10   COMPANY ARTICLES OF ASSOCIATION.  (a)  A state trust company that
127-11   has been granted a charter under Section 182.006 or a predecessor
127-12   statute may amend or restate its articles of association for any
127-13   lawful purpose, including the creation of authorized but unissued
127-14   shares or participation shares in one or more classes or series.
127-15         (b)  An amendment authorizing the issuance of shares or
127-16   participation shares in series must contain:
127-17               (1)  the designation of each series and a statement of
127-18   any variations in the preferences, limitations, and relative rights
127-19   among series to the extent that the preferences, limitations, and
127-20   relative rights are to be established in the articles of
127-21   association; and
127-22               (2)  a statement of any authority to be vested in the
127-23   board to establish series and determine the preferences,
127-24   limitations, and relative rights of each series.
127-25         (c)  A limited trust association may not amend its articles
127-26   of association to extend its period of existence for a perpetual
 128-1   period or for any period of years, unless the period of existence
 128-2   is expressly contingent on those events resulting in dissolution of
 128-3   the trust association under Section 183.208.
 128-4         (d)  Amendment or restatement of the articles of association
 128-5   of a state trust company and approval of the board and shareholders
 128-6   or participants must be made or obtained in accordance with the
 128-7   Texas Business Corporation Act for the amendment or restatement of
 128-8   articles of incorporation, except as otherwise provided by this
 128-9   subtitle or rules adopted under this subtitle.  The original and
128-10   one copy of the articles of amendment or restated articles of
128-11   association must be filed with the banking commissioner for
128-12   approval.  Unless the submission presents novel or unusual
128-13   questions, the banking commissioner shall approve or reject the
128-14   amendment or restatement not later than the 31st day after the date
128-15   the banking commissioner considers the submission informationally
128-16   complete and accepted for filing.  The banking commissioner may
128-17   require the submission of additional information as considered
128-18   necessary to an informed decision to approve or reject any
128-19   amendment or restatement of articles of association under this
128-20   section.
128-21         (e)  If the banking commissioner finds that the amendment or
128-22   restatement conforms to law and any conditions imposed by the
128-23   banking commissioner, and any required filing fee has been paid,
128-24   the banking commissioner shall:
128-25               (1)  endorse the face of the original and copy with the
128-26   date of approval and the word "Approved";
 129-1               (2)  file the original in the department's records; and
 129-2               (3)  deliver a certified copy of the amendment or
 129-3   restatement to the state trust company.
 129-4         (f)  An amendment or restatement, if approved, takes effect
 129-5   on the date of approval, unless the amendment or restatement
 129-6   provides for a different effective date.
 129-7         Sec. 182.102.  ESTABLISHING SERIES OF SHARES OR PARTICIPATION
 129-8   SHARES.  (a)  If the articles of association expressly give the
 129-9   board authority to establish series and determine the preferences,
129-10   limitations, and relative rights of each series, the board may do
129-11   so only on compliance with this section and any rules adopted under
129-12   this chapter.
129-13         (b)  A series of shares or participation shares may be
129-14   established in the manner provided by the Texas Business
129-15   Corporation Act as if a state trust company were a domestic
129-16   corporation, but the shares or participation shares of the series
129-17   may not be issued and sold except on compliance with Section
129-18   182.103.  The state trust company shall file the original and one
129-19   copy of the statement of action required by the Texas Business
129-20   Corporation Act with the banking commissioner.
129-21         (c)  Unless the submission presents novel or unusual
129-22   questions, the banking commissioner shall approve or reject the
129-23   series not later than the 31st day after the date the banking
129-24   commissioner considers the submission informationally complete and
129-25   accepted for filing.  The banking commissioner may require the
129-26   submission of additional information as considered necessary to an
 130-1   informed decision.
 130-2         (d)  If the banking commissioner finds that the interests of
 130-3   the clients and creditors of the state trust company will not be
 130-4   adversely affected by the series, that the series otherwise
 130-5   conforms to law and any conditions imposed by the banking
 130-6   commissioner, and that any required filing fee has been paid, the
 130-7   banking commissioner shall:
 130-8               (1)  endorse the face of the original and copy of the
 130-9   statement with the date of approval and the word "Approved";
130-10               (2)  file the original in the department's records; and
130-11               (3)  deliver a certified copy of the statement to the
130-12   state trust company.
130-13         Sec. 182.103.  CHANGE IN RESTRICTED CAPITAL.  (a)  A state
130-14   trust company may not reduce or increase its restricted capital
130-15   through dividend, redemption, issuance of shares or participation
130-16   shares, or otherwise without the prior approval of the banking
130-17   commissioner, except as permitted by this section or rules adopted
130-18   under this chapter.
130-19         (b)  Unless otherwise restricted by rules, prior approval is
130-20   not required for an increase in restricted capital accomplished
130-21   through:
130-22               (1)  issuance of shares of common stock or their
130-23   equivalent in participation shares for cash;
130-24               (2)  declaration and payment of pro rata share
130-25   dividends as defined by the Texas Business Corporation Act; or
130-26               (3)  adoption by the board of a resolution directing
 131-1   that all or part of undivided profits be transferred to restricted
 131-2   capital.
 131-3         (c)  Prior approval is not required for a decrease in
 131-4   restricted capital caused by incurred losses in excess of undivided
 131-5   profits.
 131-6         Sec. 182.104.  CAPITAL NOTES OR DEBENTURES.  (a)  With the
 131-7   prior written approval of the banking commissioner, a state trust
 131-8   company may at any time through action of its board, and without
 131-9   requiring action of its shareholders or participants, issue and
131-10   sell its capital notes or debentures.  The notes or debentures must
131-11   be subordinate to the claims of depositors and may be subordinate
131-12   to other claims, including the claims of other creditors or classes
131-13   of creditors or the shareholders or participants.
131-14         (b)  Capital notes or debentures may be convertible into
131-15   shares or participation shares of any class or series.  The
131-16   issuance and sale of convertible capital notes or debentures are
131-17   subject to satisfaction of preemptive rights, if any, to the extent
131-18   provided by law.
131-19         (c)  Without the prior written approval of the banking
131-20   commissioner, a state trust company may not pay interest due or
131-21   principal repayable on outstanding capital notes or debentures when
131-22   the state trust company is in hazardous condition or insolvent, as
131-23   determined by the banking commissioner, or to the extent that
131-24   payment will cause the state trust company to be in hazardous
131-25   condition or insolvent.
131-26         (d)  The amount of any outstanding capital notes or
 132-1   debentures that meet the requirements of this section and that are
 132-2   subordinated to unsecured creditors of the state trust company may
 132-3   be included in equity capital of the state trust company for
 132-4   purposes of determining hazardous condition or insolvency, and for
 132-5   such other purposes provided by rules adopted under this subtitle.
 132-6         Sec. 182.105.  BOARD DESIGNATION OF CERTIFIED SURPLUS.
 132-7   Periodically the board may vote to designate and record in its
 132-8   minutes the amount of certified surplus.  Except to absorb losses
 132-9   in excess of undivided profits and uncertified surplus, certified
132-10   surplus may not be reduced without the prior written approval of
132-11   the banking commissioner.
132-12            (Sections 182.106-182.200 reserved for expansion
132-13               SUBCHAPTER C.  STATE TRUST COMPANY OFFICES
132-14         Sec. 182.201.  CONDUCT OF TRUST BUSINESS.  A state trust
132-15   company may engage in the trust business at its home office and at
132-16   other locations as permitted by this subchapter.
132-17         Sec. 182.202.  HOME OFFICE.  (a)  Each state trust company
132-18   must have and continuously maintain in this state a home office.
132-19   The home office must be a location at which the state trust company
132-20   does business and keeps its corporate books and records.  At least
132-21   one executive officer must maintain an office at the home office.
132-22         (b)  Each officer at the home office is an agent for service
132-23   of process for the state trust company.
132-24         (c)  A state trust company may change its home office to any
132-25   location in this state, if the location that is the home office
132-26   before the change remains an office of the state trust company at
 133-1   which the state trust company does business.  To change the
 133-2   location of its home office, the state trust company must file a
 133-3   written notice with the banking commissioner setting forth the name
 133-4   of the state trust company, the street address of its home office
 133-5   before the change, the street address to which the home office is
 133-6   to be changed, and a copy of the resolution adopted by the board
 133-7   authorizing the change.  The change of home office takes effect on
 133-8   the 31st day after the date the banking commissioner receives the
 133-9   notice.
133-10         (d)  A relocation of a state trust company's home office may
133-11   not be made, and another action that would effect an abandonment of
133-12   the state trust company's initial home office may not be taken,
133-13   without the prior written approval of the banking commissioner.
133-14   The state trust company must establish to the satisfaction of the
133-15   banking commissioner that the abandonment is consistent with the
133-16   original determination of public convenience and advantage for the
133-17   establishment of a state trust company at that location.
133-18         Sec. 182.203.  ADDITIONAL OFFICES.  (a)  A state trust
133-19   company may establish and maintain additional offices anywhere in
133-20   this state.  To establish an additional office, the state trust
133-21   company must file a written notice with the banking commissioner
133-22   setting forth the name of the state trust company, the street
133-23   address of the proposed additional office, a description of the
133-24   activities proposed to be conducted at the additional office, and a
133-25   copy of the resolution adopted by the board authorizing the
133-26   additional office.
 134-1         (b)  A state trust company may not commence business at the
 134-2   additional office before the 31st day after the date the banking
 134-3   commissioner receives the notice, unless the banking commissioner
 134-4   specifies an earlier or later date.  The banking commissioner may
 134-5   specify a later date on a determination that the written notice
 134-6   raises issues that require additional information or additional
 134-7   time for analysis.  If a later date is specified, the state trust
 134-8   company may establish the additional office only on prior written
 134-9   approval by the banking commissioner.  The banking commissioner may
134-10   deny permission to establish an additional office of the state
134-11   trust company if the banking commissioner has a significant
134-12   supervisory or regulatory concern regarding the proposed additional
134-13   office, the applicant, or an affiliate.
134-14            (Sections 182.204-182.300 reserved for expansion
134-15                          SUBCHAPTER D.  MERGER
134-16         Sec. 182.301.  MERGER AUTHORITY.  (a)  Subject to this
134-17   subchapter and with the prior written approval of the banking
134-18   commissioner, a state trust company may merge with another person
134-19   to the same extent as a business corporation under the Texas
134-20   Business Corporation Act.
134-21         (b)  Implementation of the plan of merger by the parties and
134-22   approval of the board, shareholders, participants, or owners of the
134-23   parties must be made or obtained as provided by the Texas Business
134-24   Corporation Act as if the state trust company were a domestic
134-25   corporation and all other parties to the merger were foreign
134-26   corporations and other entities, except as otherwise provided by
 135-1   rules adopted under this chapter.
 135-2         Sec. 182.302.  MERGER APPLICATION; GROUNDS FOR APPROVAL.
 135-3   (a)  To apply for approval of a merger, the parties must submit the
 135-4   original articles of merger, a number of copies of the articles of
 135-5   merger equal to the number of surviving, new, and acquiring
 135-6   entities, and an application in the form required by the banking
 135-7   commissioner.  The banking commissioner may require the submission
 135-8   of additional information as considered necessary to an informed
 135-9   decision.
135-10         (b)  The banking commissioner shall investigate the condition
135-11   of the merging parties.
135-12         (c)  The banking commissioner may approve the merger if:
135-13               (1)  each resulting state trust company:
135-14                     (A)  has complied with the statutes and rules
135-15   relating to the organization of a state trust company; and
135-16                     (B)  will be solvent and have adequate
135-17   capitalization for its business and location;
135-18               (2)  all obligations and liabilities of each trust
135-19   company that is a party to the merger have been properly discharged
135-20   or otherwise lawfully assumed or retained by a trust company or
135-21   other fiduciary;
135-22               (3)  each surviving, new, or acquiring person that is
135-23   not authorized to engage in the trust business will not engage in
135-24   the trust business and has complied with the laws of this state;
135-25   and
135-26               (4)  all conditions imposed by the banking commissioner
 136-1   have been satisfied or otherwise resolved.
 136-2         Sec. 182.303.  APPROVAL OF BANKING COMMISSIONER.  (a)  If the
 136-3   banking commissioner approves the merger and finds that all
 136-4   required filing fees and investigative costs have been paid, the
 136-5   banking commissioner shall:
 136-6               (1)  endorse the face of the original and each copy of
 136-7   the articles of merger with the date of approval and the word
 136-8   "Approved";
 136-9               (2)  file the original in the department's records; and
136-10               (3)  deliver a certified copy of the articles of merger
136-11   to each surviving, new, or acquiring entity.
136-12         (b)  A merger is effective on the date of approval, unless
136-13   the merger agreement provides and the banking commissioner consents
136-14   to a different effective date.
136-15         Sec. 182.304.  RIGHTS OF DISSENTERS TO MERGER.  A
136-16   shareholder, participant, or participant-transferee may dissent
136-17   from the merger to the extent and by following the procedure
136-18   provided by the Texas Business Corporation Act or rules adopted
136-19   under this subtitle.
136-20            (Sections 182.305-182.400 reserved for expansion
136-21                SUBCHAPTER E.  PURCHASE OR SALE OF ASSETS
136-22         Sec. 182.401.  AUTHORITY TO PURCHASE ASSETS OF ANOTHER
136-23   FINANCIAL INSTITUTION.  (a)  A state trust company with the prior
136-24   written approval of the banking commissioner may purchase all or
136-25   substantially all of the assets of another regulated financial
136-26   institution, including the right to control accounts established
 137-1   with the state trust company.
 137-2         (b)  Except as otherwise expressly provided by another
 137-3   statute, the purchase of all or part of the assets of the selling
 137-4   institution does not make the purchasing state trust company
 137-5   responsible for any liability or obligation of the selling
 137-6   institution that the purchasing state trust company does not
 137-7   expressly assume.
 137-8         (c)  Except as otherwise provided by this subtitle, this
 137-9   subchapter does not govern or prohibit the purchase by a state
137-10   trust company of all or part of the assets of a corporation or
137-11   other entity that is not a state trust company.
137-12         (d)  To make a purchase under this section, an application in
137-13   the form required by the banking commissioner must be filed with
137-14   the banking commissioner.  The banking commissioner shall
137-15   investigate the condition of the purchaser and seller and may
137-16   require the submission of additional information as considered
137-17   necessary to make an informed decision.
137-18         (e)  The banking commissioner shall approve the purchase if:
137-19               (1)  the purchasing state trust company:
137-20                     (A)  has complied with all applicable statutes
137-21   and rules; and
137-22                     (B)  will be solvent and have sufficient
137-23   capitalization for its business and location;
137-24               (2)  all obligations and liabilities of each trust
137-25   company that is a party to the purchase or sale of assets have been
137-26   properly discharged or otherwise lawfully assumed or retained by a
 138-1   trust company or other fiduciary;
 138-2               (3)  all conditions imposed by the banking commissioner
 138-3   have been satisfied or otherwise resolved; and
 138-4               (4)  all fees and costs have been paid.
 138-5         (f)  A purchase is effective on the date of approval unless
 138-6   the purchase agreement provides for and the banking commissioner
 138-7   consents to a different effective date.
 138-8         Sec. 182.402.  AUTHORITY TO ACT AS DISBURSING AGENT.
 138-9   (a)  The purchasing state trust company may hold the purchase price
138-10   and any additional funds delivered to it by the selling institution
138-11   in trust for the selling institution and may act as agent of the
138-12   selling institution in disbursing those funds in trust by paying
138-13   the creditors of the selling institution.
138-14         (b)  If the purchasing state trust company acts under written
138-15   contract of agency approved by the banking commissioner that
138-16   specifically names each creditor and the amount to be paid each,
138-17   and if the agency is limited to the purely ministerial act of
138-18   paying creditors the amounts due them as determined by the selling
138-19   institution and reflected in the contract of agency and does not
138-20   involve discretionary duties or authority other than the
138-21   identification of the creditors named, the purchasing trust
138-22   company:
138-23               (1)  may rely on the contract of agency and the
138-24   instructions included in it; and
138-25               (2)  is not responsible for:
138-26                     (A)  any error made by the selling institution in
 139-1   determining its liabilities and creditors to whom the liabilities
 139-2   are due or the amounts due the creditors; or
 139-3                     (B)  any preference that results from the
 139-4   payments made under the contract of agency and the instructions
 139-5   included in it.
 139-6         Sec. 182.403.  LIQUIDATION OF SELLING INSTITUTION.  If the
 139-7   selling institution is at any time after the sale of assets
 139-8   voluntarily or involuntarily closed for liquidation by a state or
 139-9   federal regulatory agency, the purchasing state trust company shall
139-10   pay to the receiver of the selling institution the balance of the
139-11   money held by it in trust for the selling institution and not yet
139-12   paid to the creditors of the selling institution.  Without further
139-13   action the purchasing state trust company is discharged of all
139-14   responsibilities to the selling institution, its receiver, or its
139-15   creditors, shareholders, participants, or participant-transferees.
139-16         Sec. 182.404.  PAYMENT TO CREDITORS.  The purchasing state
139-17   trust company may pay a creditor of the selling institution the
139-18   amount to be paid the creditor under the terms of the contract of
139-19   agency by opening an agency account in the name of the creditor,
139-20   crediting the account with the amount to be paid the creditor under
139-21   the terms of the agency contract, and mailing or personally
139-22   delivering a duplicate ticket evidencing the credit to the creditor
139-23   at the creditor's address shown in the records of the selling
139-24   institution.  The relationship between the purchasing state trust
139-25   company and the creditor is that of agent to creditor only to the
139-26   extent of the credit reflected by the ticket.
 140-1         Sec. 182.405.  SALE OF ASSETS.  (a)  The board of a state
 140-2   trust company, with the banking commissioner's approval, may cause
 140-3   the state trust company to sell all or substantially all of its
 140-4   assets, including the right to control accounts established with
 140-5   the state trust company, without shareholder or participant
 140-6   approval if:
 140-7               (1)  the banking commissioner finds that the interests
 140-8   of the state trust company's clients, depositors, and creditors are
 140-9   jeopardized because of the hazardous condition of the state trust
140-10   company and that the sale is in their best interest; and
140-11               (2)  the Federal Deposit Insurance Corporation or its
140-12   successor approves the transaction, if the deposits of the state
140-13   trust company are insured.
140-14         (b)  A sale under this section must include an assumption and
140-15   promise by the buyer to pay or otherwise discharge:
140-16               (1)  all of a state trust company's liabilities to
140-17   clients and depositors;
140-18               (2)  all of the state trust company's liabilities for
140-19   salaries of the state trust company's employees incurred before the
140-20   date of the sale;
140-21               (3)  obligations incurred by the banking commissioner
140-22   arising out of the supervision or sale of the state trust company;
140-23   and
140-24               (4)  fees and assessments due the department.
140-25         (c)  This section does not limit the incidental power of a
140-26   state trust company to buy and sell assets in the ordinary course
 141-1   of business.
 141-2         (d)  This section does not affect the banking commissioner's
 141-3   right to take action under another law.  The sale by a state trust
 141-4   company of all or substantially all of its assets with shareholder
 141-5   or participant approval is considered a  voluntary dissolution and
 141-6   liquidation and is governed by Subchapter B, Chapter 186.
 141-7            (Sections 182.406-182.500 reserved for expansion
 141-8     SUBCHAPTER F.  CERTAIN MERGERS, REORGANIZATIONS, OR CONVERSIONS
 141-9                           INTO NATIONAL BANK
141-10         Sec. 182.501.  MERGER, REORGANIZATION, OR CONVERSION OF STATE
141-11   TRUST COMPANY INTO NATIONAL BANK EXERCISING FIDUCIARY POWERS.
141-12   (a)  A state trust company may act as necessary under the laws of
141-13   the United States or this state to merge, reorganize, or convert
141-14   into a national bank exercising fiduciary powers.
141-15         (b)  The merger, reorganization, or conversion must be made
141-16   and approval of the state trust company's board, shareholders, or
141-17   participants must be obtained in accordance with the Texas Business
141-18   Corporation Act as if the state trust company were a domestic
141-19   corporation and all other parties to the transaction, if any, were
141-20   foreign corporations or other entities, except as may be otherwise
141-21   provided by rule.  For purposes of this subsection, a conversion is
141-22   considered a merger into the successor national bank exercising
141-23   fiduciary powers.
141-24         (c)  The state trust company does not cease to be a state
141-25   trust company subject to the supervision of the banking
141-26   commissioner unless:
 142-1               (1)  the banking commissioner has been given written
 142-2   notice of the intention to merge, reorganize, or convert before the
 142-3   31st day before the date of the proposed transaction;
 142-4               (2)  the state trust company has published notice of
 142-5   the transaction, in the form and frequency specified by the banking
 142-6   commissioner, in:
 142-7                     (A)  a newspaper of general circulation published
 142-8   in the county of its home office or, if such a newspaper is not
 142-9   published in the county, in an adjacent county; and
142-10                     (B)  other locations that the banking
142-11   commissioner considers appropriate;
142-12               (3)  the state trust company has filed with the banking
142-13   commissioner:
142-14                     (A)  a copy of the application filed with the
142-15   successor regulatory authority, including a copy of each contract
142-16   evidencing or implementing the merger, reorganization, or
142-17   conversion, or other documents sufficient to show compliance with
142-18   applicable law;
142-19                     (B)  a certified copy of all minutes of board
142-20   meetings and shareholder or participant meetings at which action
142-21   was taken regarding the merger, reorganization, or conversion; and
142-22                     (C)  a publisher's certificate showing
142-23   publication of the required notice;
142-24               (4)  the banking commissioner determines that:
142-25                     (A)  all accounts and liabilities of the state
142-26   trust company are fully discharged, assumed, or otherwise retained
 143-1   by the successor national bank exercising fiduciary powers;
 143-2                     (B)  any conditions imposed by the banking
 143-3   commissioner for the protection of clients and creditors have been
 143-4   met or otherwise resolved; and
 143-5                     (C)  any required filing fees have been paid; and
 143-6               (5)  the state trust company has received a certificate
 143-7   of authority to do business as a national bank exercising fiduciary
 143-8   powers.
 143-9      CHAPTER 183.  OWNERSHIP AND MANAGEMENT OF STATE TRUST COMPANY
143-10              SUBCHAPTER A.  TRANSFER OF OWNERSHIP INTEREST
143-11         Sec. 183.001.  ACQUISITION OF CONTROL.  (a)  Except as
143-12   expressly permitted by this subtitle, without the prior written
143-13   approval of the banking commissioner a person may not directly or
143-14   indirectly acquire a legal or beneficial interest in voting
143-15   securities of a state trust company or a corporation or other
143-16   entity owning voting securities of a state trust company if, after
143-17   the acquisition, the person would control the state trust company.
143-18         (b)  For purposes of this subchapter and except as otherwise
143-19   provided by rules adopted under this subtitle, the principal
143-20   shareholder or principal participant of a state trust company that
143-21   directly or indirectly owns or has the power to vote a greater
143-22   percentage of voting securities of the state trust company than any
143-23   other shareholder or participant is considered to control the state
143-24   trust company.
143-25         (c)  This subchapter does not prohibit a person from
143-26   negotiating to acquire, but not acquiring, control of a state trust
 144-1   company or a person that controls a state trust company.
 144-2         (d)  This section does not apply to:
 144-3               (1)  the acquisition of securities in connection with
 144-4   the exercise of a security interest or otherwise in full or partial
 144-5   satisfaction of a debt previously contracted for in good faith if
 144-6   the acquiring person files written notice of acquisition with the
 144-7   banking commissioner before the person votes the securities
 144-8   acquired;
 144-9               (2)  the acquisition of voting securities in any class
144-10   or series by a controlling person who has previously complied with
144-11   and received approval under this subchapter or who was identified
144-12   as a controlling person in a prior application filed with and
144-13   approved by the banking commissioner;
144-14               (3)  an acquisition or transfer by operation of law,
144-15   will, or intestate succession if the acquiring person files written
144-16   notice of acquisition with the banking commissioner before the
144-17   person votes the securities acquired; or
144-18               (4)  a transaction exempted by the banking commissioner
144-19   or by rules adopted under this subtitle because the transaction is
144-20   not within the purposes of this subchapter or the regulation of
144-21   which is not necessary or appropriate to achieve the objectives of
144-22   this subchapter.
144-23         Sec. 183.002.  APPLICATION REGARDING ACQUISITION OF CONTROL.
144-24   (a)  The transferee in an acquisition of control of a state trust
144-25   company or of a person that controls a state trust company must
144-26   file an application for approval of the acquisition.  The
 145-1   application must:
 145-2               (1)  be under oath and on a form prescribed by the
 145-3   banking commissioner;
 145-4               (2)  contain all information that:
 145-5                     (A)  is required by rules adopted under this
 145-6   subtitle; or
 145-7                     (B)  the banking commissioner requires in a
 145-8   particular application as necessary to an informed decision to
 145-9   approve or reject the acquisition; and
145-10               (3)  be accompanied by any filing fee required by
145-11   statute or rule.
145-12         (b)  If a person proposing to acquire voting securities in a
145-13   transaction subject to this section includes a group of persons
145-14   acting in concert, the information required by the banking
145-15   commissioner may be required of each member of the group.
145-16         (c)  Information obtained by the banking commissioner under
145-17   this section is confidential and may not be disclosed by the
145-18   banking commissioner or any employee of the department except as
145-19   provided by Subchapter D, Chapter 181.
145-20         (d)  The applicant shall publish notice of the application,
145-21   its date of filing, the identity of each applicant, and, if the
145-22   applicant includes a group, the identity of each group member.  The
145-23   notice must be published:
145-24               (1)  promptly after the banking commissioner notifies
145-25   the applicant that the application is complete and accepted for
145-26   filing;
 146-1               (2)  in the form specified by the banking commissioner;
 146-2   and
 146-3               (3)  in a newspaper of general circulation in the
 146-4   county where the state trust company's home office is located.
 146-5         (e)  The applicant may defer publication of the notice until
 146-6   not later than the 34th day after the date the application is filed
 146-7   if:
 146-8               (1)  the application is filed in contemplation of a
 146-9   public tender offer subject to 15 U.S.C. Section 78n(d)(1);
146-10               (2)  the applicant requests confidential treatment and
146-11   represents that a public announcement of the tender offer and the
146-12   filing of appropriate forms with the Securities and Exchange
146-13   Commission or the appropriate federal banking agency, as
146-14   applicable, will occur within the period of deferral; and
146-15               (3)  the banking commissioner determines that the
146-16   public interest will not be harmed by the requested confidential
146-17   treatment.
146-18         (f)  The banking commissioner may waive the requirement that
146-19   a notice be published or permit delayed publication on a
146-20   determination that waiver or delay is in the public interest.  If
146-21   publication of notice is waived under this subsection, the
146-22   information that would be contained in a published notice becomes
146-23   public information under Chapter 552, Government Code, on the 35th
146-24   day after the date the application is filed.
146-25         Sec. 183.003.  HEARING AND DECISION ON ACQUISITION OF
146-26   CONTROL.  (a)  Not later than the 60th day after the date the
 147-1   notice is published, the banking commissioner shall approve the
 147-2   application or set the application for hearing.  If the banking
 147-3   commissioner sets a hearing, the department shall participate as
 147-4   the opposing party and the banking commissioner shall conduct a
 147-5   hearing and one or more prehearing conferences and opportunities
 147-6   for discovery as the banking commissioner considers advisable and
 147-7   consistent with governing statutes and rules.  A hearing held under
 147-8   this section is confidential and closed to the public.
 147-9         (b)  Based on the record, the banking commissioner may issue
147-10   an order denying an application if:
147-11               (1)  the acquisition would substantially lessen
147-12   competition, be in restraint of trade, result in a monopoly, or be
147-13   in furtherance of a combination or conspiracy to monopolize or
147-14   attempt to monopolize the trust industry in any part of this state,
147-15   unless:
147-16                     (A)  the anticompetitive effects of the
147-17   acquisition are clearly outweighed in the public interest by the
147-18   probable effect of acquisition in meeting the convenience and needs
147-19   of the community to be served; and
147-20                     (B)  the acquisition is not in violation of the
147-21   law of this state or the United States;
147-22               (2)  the financial condition of the transferee, or any
147-23   member of a group comprising the transferee, might jeopardize the
147-24   financial stability of the state trust company being acquired;
147-25               (3)  plans or proposals to operate, liquidate, or sell
147-26   the state trust company or its assets are not in the best interest
 148-1   of the state trust company;
 148-2               (4)  the experience, ability, standing, competence,
 148-3   trustworthiness, and integrity of the transferee, or any member of
 148-4   a group comprising the transferee, are insufficient to justify a
 148-5   belief that the state trust company will be free from improper or
 148-6   unlawful influence or interference with respect to the state trust
 148-7   company's operation in compliance with law;
 148-8               (5)  the state trust company will not be solvent, have
 148-9   adequate capitalization, or be in compliance with the laws of this
148-10   state after the acquisition;
148-11               (6)  the transferee has failed to furnish all
148-12   information pertinent to the application reasonably required by the
148-13   banking commissioner; or
148-14               (7)  the transferee is not acting in good faith.
148-15         (c)  If the banking commissioner approves the application,
148-16   the transaction may be consummated.  If the approval is conditioned
148-17   on a written commitment from the transferee offered to and accepted
148-18   by the banking commissioner, the commitment is:
148-19               (1)  enforceable against the state trust company and
148-20   the transferee; and
148-21               (2)  considered for all purposes an agreement under
148-22   this subtitle.
148-23         Sec. 183.004.  APPEAL FROM ADVERSE DECISION.  (a)  If a
148-24   hearing has been held, the banking commissioner has entered an
148-25   order denying the application, and the order has become final, the
148-26   transferee may appeal the final order by filing a petition for
 149-1   judicial review.
 149-2         (b)  The filing of an appeal under this section does not stay
 149-3   the order of the banking commissioner.
 149-4         Sec. 183.005.  OBJECTION TO OTHER TRANSFER.  This subchapter
 149-5   does not prevent the banking commissioner from investigating,
 149-6   commenting on, or seeking to enjoin or set aside a transfer of
 149-7   voting securities that evidence a direct or indirect interest in a
 149-8   state trust company, regardless of whether the transfer is governed
 149-9   by this subchapter, if the banking commissioner considers the
149-10   transfer to be against the public interest.
149-11         Sec. 183.006.  CIVIL ENFORCEMENT; CRIMINAL PENALTY.  (a)  If
149-12   the banking commissioner believes that a person has violated or is
149-13   about to violate this subchapter or a rule or order of the banking
149-14   commissioner relating to this subchapter, the attorney general on
149-15   behalf of the banking commissioner may apply to a district court in
149-16   Travis County for an order enjoining the violation and for other
149-17   equitable relief the nature of the case requires.
149-18         (b)  A person who knowingly fails or refuses to file the
149-19   application required by Section 183.002 commits an offense.  An
149-20   offense under this subsection is a Class A misdemeanor.
149-21            (Sections 183.007-183.100 reserved for expansion
149-22                    SUBCHAPTER B.  BOARD AND OFFICERS
149-23         Sec. 183.101.  VOTING SECURITIES HELD BY TRUST COMPANY.
149-24   (a)  Voting securities of a state trust company held by the state
149-25   trust company in a fiduciary capacity under a will or trust,
149-26   whether registered in its own name or in the name of its nominee,
 150-1   may not be voted in the election of directors or managers or on a
 150-2   matter affecting the compensation of directors, managers, officers,
 150-3   or employees of the state trust company in that capacity, unless:
 150-4               (1)  under the terms of the will or trust, the manner
 150-5   in which the voting securities are to be voted may be determined by
 150-6   a donor or beneficiary of the will or trust and the donor or
 150-7   beneficiary actually makes the determination in the matter at
 150-8   issue;
 150-9               (2)  the terms of the will or trust expressly direct
150-10   the manner in which the securities must be voted to the extent that
150-11   discretion is not vested in the state trust company as fiduciary;
150-12   or
150-13               (3)  the securities are voted solely by a cofiduciary
150-14   that is not an affiliate of the state trust company, as if the
150-15   cofiduciary were the sole fiduciary.
150-16         (b)  Voting securities of a state trust company that cannot
150-17   be voted under this section are considered to be authorized but
150-18   unissued for purposes of determining the procedures for and results
150-19   of the affected vote.
150-20         Sec. 183.102.  BYLAWS.  Except as provided by Section
150-21   183.207, each state trust company shall adopt bylaws and may amend
150-22   its bylaws from time to time for the purposes and in accordance
150-23   with the procedures set forth in the Texas Business Corporation
150-24   Act.
150-25         Sec. 183.103.  BOARD OF DIRECTORS, MANAGERS, OR MANAGING
150-26   PARTICIPANTS.  (a)  The board of a state trust company must consist
 151-1   of not fewer than five or more than 25 directors, managers, or
 151-2   managing participants, the majority of whom must be residents of
 151-3   this state.  Except for a limited trust association in which
 151-4   management has been retained by its participants, the principal
 151-5   executive officer of the state trust company is a member of the
 151-6   board.  The principal executive officer acting in the capacity of
 151-7   board member is the board's presiding officer unless the board
 151-8   elects a different presiding officer to perform the duties as
 151-9   designated by the board.
151-10         (b)  Unless the banking commissioner consents otherwise in
151-11   writing, a person may not serve as director, manager, or managing
151-12   participant of a state trust company if:
151-13               (1)  the state trust company incurs an unreimbursed
151-14   loss attributable to a charged-off obligation of or holds a
151-15   judgment against:
151-16                     (A)  the person; or
151-17                     (B)  an entity that was controlled by the person
151-18   at the time of funding and at the time of default on the loan that
151-19   gave rise to the judgment or charged-off obligation;
151-20               (2)  the person has been convicted of a felony; or
151-21               (3)  the person has violated, with respect to a trust
151-22   under which the state trust company has fiduciary responsibility,
151-23   Section 113.052 or 113.053(a), Property Code, relating to loan of
151-24   trust funds and purchase or sale of trust property by the trustee,
151-25   and the violation has not been corrected.
151-26         (c)  If a state trust company other than a limited trust
 152-1   association operated by managing participants does not elect
 152-2   directors or managers before the 61st day after the date of its
 152-3   regular annual meeting, the banking commissioner may appoint a
 152-4   conservator under Chapter 185 to operate the state trust company
 152-5   and elect directors or managers, as appropriate.  If the
 152-6   conservator is unable to locate or elect persons willing and able
 152-7   to serve as directors or managers, the banking commissioner may
 152-8   close the state trust company for liquidation.
 152-9         (d)  A vacancy on the board that reduces the number of
152-10   directors, managers, or managing participants to fewer than five
152-11   must be filled not later than the 30th day after the date the
152-12   vacancy occurs.  A limited trust association with fewer than five
152-13   managing participants must add one or more new participants or
152-14   elect a board of managers of not fewer than five persons to resolve
152-15   the vacancy.  After the 30th day after the date the vacancy occurs,
152-16   the banking commissioner may appoint a conservator under Chapter
152-17   185 to operate the state trust company and elect a board of not
152-18   fewer than five persons to resolve the vacancy.  If the conservator
152-19   is unable to locate or elect five persons willing and able to serve
152-20   as directors or managers, the banking commissioner may close the
152-21   state trust company for liquidation.
152-22         (e)  Before each term to which a person is elected to serve
152-23   as a director or manager of a state trust company, or annually for
152-24   a person who is a managing participant, the person shall submit an
152-25   affidavit for filing in the minutes of the state trust company
152-26   stating that the person, to the extent applicable:
 153-1               (1)  accepts the position and is not disqualified from
 153-2   serving in the position;
 153-3               (2)  will not violate or knowingly permit an officer,
 153-4   director, manager, managing participant, or employee of the state
 153-5   trust company to violate any law applicable to the conduct of
 153-6   business of the trust company; and
 153-7               (3)  will diligently perform the duties of the
 153-8   position.
 153-9         Sec. 183.104.  ADVISORY DIRECTOR OR ADVISORY MANAGER.  An
153-10   advisory director or advisory manager is not considered to be a
153-11   director if the advisory director or advisory manager:
153-12               (1)  is not elected by the shareholders or participants
153-13   of the state trust company;
153-14               (2)  does not vote on matters before the board or a
153-15   committee of the board;
153-16               (3)  is not counted for purposes of determining a
153-17   quorum of the board or committee; and
153-18               (4)  provides solely general policy advice to the
153-19   board.
153-20         Sec. 183.105.  REQUIRED QUARTERLY BOARD MEETING.  (a)  The
153-21   board of a state trust company shall hold at least one regular
153-22   meeting each quarter.
153-23         (b)  At each regular meeting the board shall review and
153-24   approve the minutes of the preceding meeting and review the
153-25   operations, activities, and financial condition of the state trust
153-26   company.  The board may designate committees from among its members
 154-1   to perform those duties and approve or disapprove the committees'
 154-2   reports at each regular meeting.
 154-3         (c)  All actions of the board must be recorded in its
 154-4   minutes.
 154-5         Sec. 183.106.  OFFICERS.  (a)  The board shall annually
 154-6   appoint the officers of the state trust company, who serve at the
 154-7   will of the board.
 154-8         (b)  The state trust company must have a principal executive
 154-9   officer primarily responsible for the execution of board policies
154-10   and operation of the state trust company and an officer responsible
154-11   for the maintenance and storage of all corporate books and records
154-12   of the state trust company and for required attestation of
154-13   signatures.  Those positions may not be held by the same person.
154-14         (c)  The board may appoint other officers of the state trust
154-15   company as the board considers necessary.
154-16         Sec. 183.107.  LIMITATION ON ACTION OF OFFICER OR EMPLOYEE IN
154-17   RELATION TO ASSET OR LIABILITY.  Unless expressly authorized by a
154-18   resolution of the board recorded in its minutes, an officer or
154-19   employee may not create or dispose of a state trust company asset
154-20   or create or incur a liability on behalf of the state trust
154-21   company.
154-22         Sec. 183.108.  CERTAIN CRIMINAL OFFENSES.  (a)  An officer,
154-23   director, manager, managing participant, employee, shareholder, or
154-24   participant of a state trust company commits an offense if the
154-25   person knowingly:
154-26               (1)  conceals information or removes, destroys, or
 155-1   conceals a book or record of the state trust company for the
 155-2   purpose of concealing information from the banking commissioner or
 155-3   an agent of the banking commissioner; or
 155-4               (2)  for the purpose of concealing, removes or destroys
 155-5   any book or record of the state trust company that is material to a
 155-6   pending or anticipated legal or administrative proceeding.
 155-7         (b)  An officer, director, manager, managing participant, or
 155-8   employee of a state trust company commits an offense if the person
 155-9   knowingly makes a false entry in a book, record, report, or
155-10   statement of the state trust company.
155-11         (c)  An offense under this section is a felony of the third
155-12   degree.
155-13         Sec. 183.109.  TRANSACTIONS WITH MANAGEMENT AND AFFILIATES.
155-14   (a)  Without the prior approval of a disinterested majority of the
155-15   board recorded in the minutes, or if a disinterested majority
155-16   cannot be obtained, the prior written approval of the banking
155-17   commissioner, a state trust company may not directly or indirectly:
155-18               (1)  sell or lease an asset of the state trust company
155-19   to an officer, director, manager, managing participant, or
155-20   principal shareholder or participant of the state trust company or
155-21   an affiliate of the state trust company;
155-22               (2)  purchase or lease an asset in which an officer,
155-23   director, manager, managing participant, or principal shareholder
155-24   or participant of the state trust company or an affiliate of the
155-25   state trust company has an interest; or
155-26               (3)  subject to Section 184.201, extend credit to an
 156-1   officer, director, manager, managing participant, or principal
 156-2   shareholder or participant of the state trust company or an
 156-3   affiliate of the state trust company.
 156-4         (b)  Notwithstanding Subsection (a), a lease transaction
 156-5   described in Subsection (a)(2) involving real property may not be
 156-6   consummated, renewed, or extended without the prior written
 156-7   approval of the banking commissioner.  For purposes of this
 156-8   subsection only, an affiliate of a state trust company does not
 156-9   include a subsidiary of the state trust company.
156-10         (c)  Subject to Section 184.201, a state trust company may
156-11   not directly or indirectly extend credit to an employee, officer,
156-12   director, manager, managing participant, or principal shareholder
156-13   or participant of the state trust company or to an affiliate of the
156-14   state trust company, unless:
156-15               (1)  the extension of credit is made on substantially
156-16   the same terms, including interest rates and collateral, as those
156-17   prevailing at the time for comparable transactions by the state
156-18   trust company with persons who are not employees, officers,
156-19   directors, managers, managing participants, principal shareholders,
156-20   participants, or affiliates of the state trust company;
156-21               (2)  the extension of credit does not involve more than
156-22   the normal risk of repayment or present other unfavorable features;
156-23   and
156-24               (3)  the state trust company follows credit
156-25   underwriting procedures that are not less stringent than those
156-26   applicable to comparable transactions by the state trust company
 157-1   with persons who are not employees, officers, directors, managers,
 157-2   managing participants, principal shareholders, participants, or
 157-3   affiliates of the state trust company.
 157-4         (d)  An officer, director, manager, or managing participant
 157-5   of a state trust company who knowingly participates in or permits a
 157-6   violation of this section commits an offense.  An offense under
 157-7   this subsection is a felony of the third degree.
 157-8         (e)  The finance commission may adopt rules to administer and
 157-9   carry out this section, including rules to establish limits,
157-10   requirements, or exemptions other than those specified by this
157-11   section for particular categories of transactions.
157-12         Sec. 183.110.  FIDUCIARY RESPONSIBILITY.  The board of a
157-13   state trust company is responsible for the proper exercise of
157-14   fiduciary powers by the state trust company and each matter
157-15   pertinent to the exercise of fiduciary powers, including:
157-16               (1)  the determination of policies;
157-17               (2)  the investment and disposition of property held in
157-18   a fiduciary capacity; and
157-19               (3)  the direction and review of the actions of each
157-20   officer, employee, and committee used by the state trust company in
157-21   the exercise of its fiduciary powers.
157-22         Sec. 183.111.  RECORDKEEPING.  A state trust company shall
157-23   keep its fiduciary records separate and distinct from other records
157-24   of the state trust company in compliance with applicable rules
157-25   adopted under this subtitle.  The fiduciary records must contain
157-26   all appropriate material information relative to each account.
 158-1         Sec. 183.112.  BONDING REQUIREMENTS.  (a)  The board of a
 158-2   state trust company shall require a bond for the protection and
 158-3   indemnity of clients, in reasonable amounts established by rules
 158-4   adopted under this subtitle, against dishonesty, fraud,
 158-5   defalcation, forgery, theft, and other similar insurable losses.
 158-6   The bond must be with a corporate insurance or surety company:
 158-7               (1)  authorized to do business in this state; or
 158-8               (2)  acceptable to the banking commissioner and
 158-9   otherwise lawfully permitted to issue the coverage against those
158-10   losses in this state.
158-11         (b)  Except as otherwise provided by rule, a bond is required
158-12   to cover each director, manager, managing participant, officer, and
158-13   employee of a state trust company without regard to whether the
158-14   person receives salary or other compensation.
158-15         (c)  A state trust company may apply to the banking
158-16   commissioner for permission to eliminate the bonding requirement of
158-17   this section for a particular individual.  The banking commissioner
158-18   shall approve the application if the banking commissioner finds
158-19   that the bonding requirement is unnecessary or burdensome.  Unless
158-20   the application presents novel or unusual questions, the banking
158-21   commissioner shall approve the application or set the application
158-22   for hearing not later than the 61st day after the date the banking
158-23   commissioner considers the application complete and accepted for
158-24   filing.
158-25         Sec. 183.113.  REPORTS OF APPARENT CRIME.  (a)  A state trust
158-26   company that is the victim of a robbery, has a shortage of
 159-1   corporate or fiduciary funds in excess of  $5,000, or is the victim
 159-2   of an apparent or suspected misapplication of its corporate or
 159-3   fiduciary funds or property in any amount by a director, manager,
 159-4   managing participant, officer, or employee shall report the
 159-5   robbery, shortage, or apparent or suspected misapplication of funds
 159-6   or property to the banking commissioner within 48 hours after the
 159-7   time it is discovered.  The initial report may be oral if the
 159-8   report is promptly confirmed in writing.  The state trust company
 159-9   or a director, manager, managing participant, officer, employee, or
159-10   agent is not subject to liability for defamation or another charge
159-11   resulting from information supplied in the report.
159-12         (b)  A report filed with the banking commissioner under this
159-13   section may be a copy of a written report filed with an appropriate
159-14   federal agency.
159-15            (Sections 183.114-183.200 reserved for expansion
159-16                SUBCHAPTER C.  LIMITED TRUST ASSOCIATION
159-17         Sec. 183.201.  LIABILITY OF PARTICIPANTS AND MANAGERS.
159-18   (a)  Except as provided by Subsection (b), a participant,
159-19   participant-transferee, or manager of a limited trust association
159-20   is not liable for a debt, obligation, or liability of the limited
159-21   trust association, including a debt, obligation, or liability under
159-22   a judgment, decree, or order of court.  A participant, other than a
159-23   full liability participant, or a manager of a limited trust
159-24   association is not a proper party to a proceeding by or against a
159-25   limited trust association unless the object of the proceeding is to
159-26   enforce the participant's or manager's right against or liability
 160-1   to a limited trust association.
 160-2         (b)  A full liability participant of a limited trust
 160-3   association is liable under a judgment, decree, or order of court
 160-4   for a debt, obligation, or liability of the limited  trust
 160-5   association that accrued during the participation of the full
 160-6   liability participant in the limited trust association and before
 160-7   the full liability participant or a successor in interest filed
 160-8   with the banking commissioner a notice of withdrawal as a full
 160-9   liability participant from the limited trust association.  The
160-10   filed notice of withdrawal is a public record.
160-11         Sec. 183.202.  FILING OF NOTICE OF FULL LIABILITY.  (a)  A
160-12   limited trust association shall file with the banking commissioner
160-13   a copy of any participation agreement by which a participant of the
160-14   limited trust association agrees to become a full liability
160-15   participant and the name and address of each full liability
160-16   participant.  Only the portion of the filed copy containing the
160-17   designation of each full liability participant is a public record.
160-18         (b)  The banking commissioner may require a complete copy of
160-19   the participation agreement to be filed with the department,
160-20   regardless of whether a state trust company has a full liability
160-21   participant, except that the provisions of the participation
160-22   agreement other than those by which a participant of the limited
160-23   trust association agrees to become a full liability participant are
160-24   confidential and subject to release only as provided by Subchapter
160-25   D, Chapter 181.
160-26         Sec. 183.203.  CONTRACTING FOR DEBT OR OBLIGATION.  Except as
 161-1   provided by this section or the articles of association of the
 161-2   limited trust  association, a debt, liability, or other obligation
 161-3   may be contracted for or incurred on behalf of a limited trust
 161-4   association only by:
 161-5               (1)  a majority of the managers, if management of the
 161-6   limited trust association has been vested in a board of managers;
 161-7               (2)  a majority of the managing participants; or
 161-8               (3)  an officer or other agent vested with actual or
 161-9   apparent authority to contract for or incur the debt, liability, or
161-10   other obligation.
161-11         Sec. 183.204.  MANAGEMENT OF LIMITED TRUST ASSOCIATION.
161-12   (a)  Management of a limited trust  association is vested in the
161-13   participants in proportion to each participant's contribution to
161-14   capital, as adjusted periodically to properly reflect any
161-15   additional contribution.  The articles of association may provide
161-16   that management of a limited trust  association is vested in a
161-17   board of managers to be elected annually by the participants as
161-18   prescribed by the bylaws.
161-19         (b)  Participants of a limited trust association may not
161-20   retain management and must elect a board of managers if:
161-21               (1)  any participant is disqualified from serving as a
161-22   managing participant under Section 183.103;
161-23               (2)  the limited trust association has fewer than five
161-24   or more than 25 participants; or
161-25               (3)  any participant has been removed by the banking
161-26   commissioner under Subchapter A, Chapter 185.
 162-1         (c)  The articles of association, bylaws, and participation
 162-2   agreement of a limited trust association may use the term
 162-3   "director" instead of "manager" and the term "board" instead of
 162-4   "board of managers."
 162-5         Sec. 183.205.  WITHDRAWAL OR REDUCTION OF PARTICIPANT'S
 162-6   CONTRIBUTION TO CAPITAL.  (a)  Except as otherwise provided by this
 162-7   chapter, a participant may not receive from a limited trust
 162-8   association any part of the participant's contribution to capital
 162-9   unless:
162-10               (1)  all liabilities of the limited trust association,
162-11   except liabilities to participants on account of contribution to
162-12   capital, have been paid;
162-13               (2)  after the withdrawal or reduction, sufficient
162-14   property of the limited trust association will remain to pay all
162-15   liabilities of the limited trust association, except liabilities to
162-16   participants on account of contribution to capital;
162-17               (3)  all participants consent; or
162-18               (4)  the articles of association are canceled or
162-19   amended to set out the withdrawal or reduction.
162-20         (b)  A participant may demand the return of the participant's
162-21   contribution to capital on the dissolution of the association and
162-22   the failure of the full liability participants to exercise the
162-23   right to carry on the business of the limited trust association as
162-24   provided by Section 183.208.
162-25         (c)  A participant may demand the return of the participant's
162-26   contribution to capital only in cash unless a different form of
 163-1   return of the contribution is allowed by the articles of
 163-2   association or by the unanimous consent of all participants.
 163-3         Sec. 183.206.  INTEREST IN LIMITED TRUST ASSOCIATION;
 163-4   TRANSFERABILITY OF INTEREST.  (a)  The interest of a participant or
 163-5   participant-transferee in a limited trust association is the
 163-6   personal property of the participant or the participant-transferee
 163-7   and may be transferred as provided by the bylaws or the
 163-8   participation agreement.
 163-9         (b)  A transferee of a participant's interest has the status
163-10   of a participant-transferee and does not by the transfer become a
163-11   participant or obtain a right to participate in the management of
163-12   the limited trust association.
163-13         (c)  A participant-transferee is entitled to receive only a
163-14   share of profits, return of contribution, or other distributive
163-15   benefit in respect to the interest transferred to which the
163-16   participant who transferred the interest would have been entitled.
163-17         (d)  A participant-transferee may become a participant only
163-18   as provided by the bylaws or the participation agreement.
163-19         (e)  A limited trust association may add additional
163-20   participants in the same manner as participant-transferees after
163-21   payment in full of the capital contribution to the limited trust
163-22   association payable for the issuance of additional participation
163-23   interests.
163-24         Sec. 183.207.  BYLAWS OF LIMITED TRUST ASSOCIATION.  (a)  A
163-25   limited trust association in which management is retained by the
163-26   participants is not required to adopt bylaws if the provisions
 164-1   required by law to be contained in the bylaws are contained in the
 164-2   articles of association or the participation agreement.
 164-3         (b)  If a limited trust association has adopted bylaws that
 164-4   designate each full liability participant, the limited trust
 164-5   association shall file a copy of the bylaws with the banking
 164-6   commissioner. Only the portion of the bylaws designating each full
 164-7   liability participant is a public record.
 164-8         Sec. 183.208.  DISSOLUTION.  (a)  A limited trust association
 164-9   organized under this chapter is dissolved on:
164-10               (1)  the expiration of the period fixed for the
164-11   duration of the limited trust association;
164-12               (2)  a vote to dissolve or the execution of a written
164-13   consent to dissolve by all full liability participants, if any, and
164-14   a sufficient number of other participants that, combined with all
164-15   full liability participants, hold at least two-thirds of the
164-16   participation shares in each class in the association, or a greater
164-17   fraction as provided by the articles of association;
164-18               (3)  except as provided by the articles of association,
164-19   the death, insanity, expulsion, bankruptcy, retirement, or
164-20   resignation of a participant unless a majority in interest of all
164-21   remaining participants elect in writing not later than the 90th day
164-22   after the date of the event to continue the business of the
164-23   association; or
164-24               (4)  the occurrence of an event of dissolution
164-25   specified in the articles of association.
164-26         (b)  A dissolution under this section is considered to be the
 165-1   initiation of a voluntary dissolution under Subchapter B, Chapter
 165-2   186.
 165-3         (c)  An event of dissolution described by Subsection (a)(3)
 165-4   does not cancel or revoke a contract to which the limited trust
 165-5   association is a party, including a trust indenture or agreement or
 165-6   voluntary dissolution under Subchapter B, Chapter 186, until the
 165-7   period for the remaining participants to continue the business of
 165-8   the limited trust association has expired without the remaining
 165-9   participants having completed the necessary action to continue the
165-10   business of the limited trust association.
165-11         Sec. 183.209.  ALLOCATION OF PROFITS AND LOSSES.  The profits
165-12   and losses of a limited trust association may be allocated among
165-13   the participants and among classes of participants as provided by
165-14   the participation agreement.  Without the prior written approval of
165-15   the banking commissioner to use a different allocation method, the
165-16   profits and losses must be allocated according to the relative
165-17   interests of the participants as reflected in the articles of
165-18   association and related documents filed with and approved by the
165-19   banking commissioner.
165-20         Sec. 183.210.  DISTRIBUTIONS.  Subject to Section 182.103,
165-21   distributions of cash or other assets of a limited trust
165-22   association may be made to the participants as provided by the
165-23   participation agreement.  Without the prior written approval of the
165-24   banking commissioner to use a different distribution method,
165-25   distributions must be made to the participants according to the
165-26   relative interests of the participants as reflected in the articles
 166-1   of association and related documents filed with and approved by the
 166-2   banking commissioner.
 166-3         Sec. 183.211.  APPLICATION OF OTHER PROVISIONS TO LIMITED
 166-4   TRUST ASSOCIATIONS.  For purposes of applying the provisions of
 166-5   this subtitle other than this subchapter to a limited trust
 166-6   association, as the context requires:
 166-7               (1)  a manager and the board of managers are considered
 166-8   to be a director and the board of directors;
 166-9               (2)  if there is not a board of managers, a participant
166-10   is considered to be a director and all of the participants are
166-11   considered to be the board of directors;
166-12               (3)  a participant or participant-transferee is
166-13   considered to be a shareholder;
166-14               (4)  a participation share is considered to be a share
166-15   of stock; and
166-16               (5)  a distribution is considered to be a dividend.
166-17             CHAPTER 184.  INVESTMENTS, LOANS, AND DEPOSITS
166-18            SUBCHAPTER A.  ACQUISITION AND OWNERSHIP OF TRUST
166-19               COMPANY FACILITIES AND OTHER REAL PROPERTY
166-20         Sec. 184.001.  DEFINITION.  In this subchapter, "state trust
166-21   company facility" means real property, including an improvement,
166-22   that a state trust company owns or leases, to the extent the lease
166-23   or the leasehold improvement is capitalized, for the purpose of:
166-24               (1)  providing space for state trust company employees
166-25   to perform their duties and for state trust company employees and
166-26   customers to park;
 167-1               (2)  conducting trust business, including meeting the
 167-2   reasonable needs and convenience of the public and the state trust
 167-3   company's clients, computer operations, document and other item
 167-4   processing, maintenance, and record retention and storage;
 167-5               (3)  holding, improving, and occupying as an incident
 167-6   to future expansion of the state trust company's facilities; or
 167-7               (4)  conducting another activity authorized by rules
 167-8   adopted under this subtitle.
 167-9         Sec. 184.002.  INVESTMENT IN STATE TRUST COMPANY FACILITIES.
167-10   (a)  Without the prior written approval of the banking
167-11   commissioner, a state trust company may not directly or indirectly
167-12   invest an amount in excess of 60 percent of its restricted capital
167-13   in state trust company facilities, furniture, fixtures, and
167-14   equipment.  Except as otherwise provided by rules adopted under
167-15   this subtitle, in computing the limitation provided by this
167-16   subsection a state trust company:
167-17               (1)  shall include:
167-18                     (A)  its direct investment in state trust company
167-19   facilities;
167-20                     (B)  an investment in equity or investment
167-21   securities of a company holding title to a facility used by the
167-22   state trust company for the purposes specified by Section 184.001;
167-23                     (C)  a loan made by the state trust company to or
167-24   on the security of equity or investment securities issued by a
167-25   company holding title to a facility used by the state trust
167-26   company; and
 168-1                     (D)  any indebtedness incurred on state trust
 168-2   company facilities by a company:
 168-3                           (i)  that holds title to the facility;
 168-4                           (ii)  that is an affiliate of the state
 168-5   trust company; and
 168-6                           (iii)  in which the state trust company is
 168-7   invested in the manner described by Paragraph (B) or (C); and
 168-8               (2)  may exclude an amount included under Subdivisions
 168-9   (1)(B)-(D) to the extent any lease of a facility from the company
168-10   holding title to the facility is capitalized on the books of the
168-11   state trust company.
168-12         (b)  Real property described by Subsection 184.001(3) and not
168-13   improved and occupied by the state trust company ceases to be a
168-14   state trust company facility on the third anniversary of the date
168-15   of its acquisition unless the banking commissioner on application
168-16   grants written approval to further delay in the improvement and
168-17   occupation of the property by the state trust company.
168-18         (c)  A state trust company shall comply with regulatory
168-19   accounting principles in accounting for its investment in and
168-20   depreciation of state trust company facilities, furniture,
168-21   fixtures, and equipment.
168-22         Sec. 184.003.  OTHER REAL PROPERTY.  (a)  A state trust
168-23   company may not invest its restricted capital in real property
168-24   except:
168-25               (1)  as permitted by this subtitle or rules adopted
168-26   under this subtitle; or
 169-1               (2)  as necessary to avoid or minimize a loss on a loan
 169-2   or investment previously made in good faith.
 169-3         (b)  With the prior written approval of the banking
 169-4   commissioner, a state trust company may:
 169-5               (1)  exchange real property for other real property or
 169-6   personal property;
 169-7               (2)  invest additional money in or improve real
 169-8   property acquired under this subsection or Subsection (a); or
 169-9               (3)  acquire additional real property to avoid or
169-10   minimize loss on real property acquired as permitted by Subsection
169-11   (a).
169-12         (c)  A state trust company shall dispose of any real property
169-13   subject to Subsection (a) not later than:
169-14               (1)  the fifth anniversary of the date the real
169-15   property:
169-16                     (A)  was acquired, except as otherwise provided
169-17   by rules adopted under this subtitle; or
169-18                     (B)  ceases to be used as a state trust company
169-19   facility; or
169-20               (2)  the second anniversary of the date the real
169-21   property ceases to be a state trust company facility as provided by
169-22   Section 184.002(b).
169-23         (d)  The banking commissioner on application may grant one or
169-24   more extensions of time for disposing of real property under
169-25   Subsection (c) if the banking commissioner determines that:
169-26               (1)  the state trust company has made a good faith
 170-1   effort to dispose of the real property; or
 170-2               (2)  disposal of the real property would be detrimental
 170-3   to the state trust company.
 170-4         (e)  Subject to the exercise of prudent judgment, a state
 170-5   trust company may invest its secondary capital in real property.
 170-6   The factors to be considered by a state trust company in exercise
 170-7   of prudent judgment include the factors contained in Section
 170-8   184.101(f).
 170-9            (Sections 184.004-184.100 reserved for expansion
170-10                       SUBCHAPTER B.  INVESTMENTS
170-11         Sec. 184.101.  SECURITIES.  (a)  A state trust company may
170-12   invest its restricted capital in any type or character of  equity
170-13   or investment securities under the limitations provided by this
170-14   section.
170-15         (b)  Unless the banking commissioner in writing approves
170-16   maintenance of a lesser amount, a state trust company must invest
170-17   and maintain an amount equal to at least 40 percent of the state
170-18   trust company's restricted capital under Section 182.008 in
170-19   investment securities that are readily marketable and can be
170-20   converted to cash within four business days.
170-21         (c)  Subject to Subsection (d), the total investment of its
170-22   restricted capital in equity and investment securities of any one
170-23   issuer, obligor, or maker, and the total investment  of its
170-24   restricted capital in mutual funds, held by the state trust company
170-25   for its own account, may not exceed an amount equal to 15 percent
170-26   of the state trust company's restricted capital.  The banking
 171-1   commissioner may authorize investments in excess of this limitation
 171-2   on written application if the banking commissioner determines that:
 171-3               (1)  the excess investment is not prohibited by other
 171-4   applicable law; and
 171-5               (2)  the safety and soundness of the requesting state
 171-6   trust company is not adversely affected.
 171-7         (d)  Notwithstanding Subsection (c), a state trust company
 171-8   may invest its restricted capital, without limitation and subject
 171-9   only to the exercise of prudent judgment, in:
171-10               (1)  bonds and other legally created general
171-11   obligations of a state, an agency or political subdivision of a
171-12   state, the United States, or an agency or instrumentality of the
171-13   United States;
171-14               (2)  investment securities that this state, an agency
171-15   or political subdivision of this state, the United States, or an
171-16   agency or instrumentality of the United States has unconditionally
171-17   agreed to purchase, insure, or guarantee;
171-18               (3)  securities that are offered and sold under 15
171-19   U.S.C. Section 77d(5);
171-20               (4)  mortgage related securities, as defined in 15
171-21   U.S.C. Section 78c(a), except that notwithstanding Section 347 of
171-22   the Riegle Community Development and Regulatory Improvement Act of
171-23   1994, a note or obligation that is secured by a first lien on one
171-24   or more parcels of real property on which is located one or more
171-25   commercial structures is subject to the limitations of Subsection
171-26   (c);
 172-1               (5)  investment securities issued or guaranteed by the
 172-2   Federal Home Loan Mortgage Corporation, the Federal National
 172-3   Mortgage Association, the Government National Mortgage Association,
 172-4   the Federal Agricultural Mortgage Corporation, or the Federal Farm
 172-5   Credit Banks Funding Corporation;
 172-6               (6)  investment securities issued or guaranteed by the
 172-7   North American Development Bank; or
 172-8               (7)  securities issued by a Federal Home Loan Bank.
 172-9         (e)  Notwithstanding 15 U.S.C. Section 77r-1(c), Subsection
172-10   (c) applies to investments in small business related securities as
172-11   defined by 15 U.S.C. Section 78c(a).
172-12         (f)  In the exercise of prudent judgment, a state trust
172-13   company shall, at a minimum:
172-14               (1)  exercise care and caution to make and implement
172-15   investment and management decisions for the entire investment
172-16   portfolio, taking into consideration the safety and soundness of
172-17   the state trust company;
172-18               (2)  pursue an overall investment strategy to enable
172-19   management to make appropriate present and future decisions; and
172-20               (3)  consider, to the extent relevant to the decision
172-21   or action:
172-22                     (A)  the size, diversification, and liquidity of
172-23   its corporate assets;
172-24                     (B)  the general economic conditions;
172-25                     (C)  the possible effect of inflation or
172-26   deflation;
 173-1                     (D)  the expected tax consequences of the
 173-2   investment decisions or strategies;
 173-3                     (E)  the role that each investment or course of
 173-4   action plays within the investment portfolio; and
 173-5                     (F)  the expected total return of the portfolio.
 173-6         (g)  A state trust company may invest its secondary capital
 173-7   in any type or character of equity or investment securities subject
 173-8   to the exercise of prudent judgment according to the standards
 173-9   provided by Subsection (f).
173-10         (h)  The finance commission may adopt rules to administer and
173-11   carry out this section, including rules to:
173-12               (1)  establish limits, requirements, or exemptions
173-13   other than those specified by this section for particular classes
173-14   or categories of investment; or
173-15               (2)  limit or expand investment authority for state
173-16   trust companies for particular classes or categories of securities
173-17   or other property.
173-18         Sec. 184.102.  TRANSACTIONS IN STATE TRUST COMPANY SHARES OR
173-19   PARTICIPATION SHARES.  Except with the prior written approval of
173-20   the banking commissioner:
173-21               (1)  a state trust company may not acquire its own
173-22   shares or participation shares  unless the amount of its undivided
173-23   profits is sufficient to fully absorb the acquisition of the shares
173-24   or participation shares under regulatory accounting principles; and
173-25               (2)  a state trust company may not acquire a lien on
173-26   its own shares or participation shares unless the amount of
 174-1   indebtedness secured is less than the amount of the state trust
 174-2   company's undivided profits.
 174-3         Sec. 184.103.  STATE TRUST COMPANY SUBSIDIARIES.  (a)  Except
 174-4   as otherwise provided by this subtitle or rules adopted under this
 174-5   subtitle, and subject to the exercise of prudent judgment, a state
 174-6   trust company may invest its secondary capital to acquire or
 174-7   establish one or more subsidiaries to conduct any activity that may
 174-8   lawfully be conducted through the form of organization chosen for
 174-9   the subsidiary.  The factors to be considered by a state trust
174-10   company in exercise of prudent judgment include the factors
174-11   contained in Section 184.101(f).
174-12         (b)  A state trust company that intends to acquire,
174-13   establish, or perform new activities through a subsidiary shall
174-14   submit a letter to the banking commissioner describing in detail
174-15   the proposed activities of the subsidiary.
174-16         (c)  The state trust company may acquire or establish a
174-17   subsidiary or begin performing new activities in an existing
174-18   subsidiary on the 31st day after the date the banking commissioner
174-19   receives the state trust company's letter, unless the banking
174-20   commissioner specifies an earlier or later date.  The banking
174-21   commissioner may extend the 30-day period on a determination that
174-22   the state trust company's letter raises issues that require
174-23   additional information or additional time for analysis.  If the
174-24   period is extended, the state trust company may acquire or
174-25   establish the subsidiary, or perform new activities in an existing
174-26   subsidiary, only on prior written approval of the banking
 175-1   commissioner.
 175-2         (d)  A subsidiary of a state trust company is subject to
 175-3   regulation by the banking commissioner to the extent provided by
 175-4   this subtitle or rules adopted under this section.  In the absence
 175-5   of limiting rules, the banking commissioner may regulate a
 175-6   subsidiary as if it were a state trust company.
 175-7         Sec. 184.104.  OTHER INVESTMENT PROVISIONS.  (a)  Without the
 175-8   prior written approval of the banking commissioner, a state trust
 175-9   company may not make any investment of its secondary capital in any
175-10   investment that incurs or may incur, under regulatory accounting
175-11   principles, a liability or contingent liability for the state trust
175-12   company.
175-13         (b)  The banking commissioner may, on a case-by-case basis,
175-14   require a state trust company to dispose of any investment of its
175-15   secondary capital, if the banking commissioner finds that the
175-16   divestiture of the asset is necessary to protect the safety and
175-17   soundness of the state trust company.  The banking commissioner in
175-18   the exercise of discretion under this subsection shall consider
175-19   safety and soundness factors, including those contained in Section
175-20   182.008(b).  The proposed effective date of an order requiring a
175-21   state trust company to dispose of an asset must be stated in the
175-22   order and must be on or after the 21st day after the date the
175-23   proposed order is mailed or delivered.  Unless the state trust
175-24   company requests a hearing before the banking commissioner in
175-25   writing before the effective date of the proposed order, the order
175-26   becomes effective and is final and nonappealable.
 176-1         (c)  Subject to Subsections (a) and (b), to Section 184.105,
 176-2   and to the exercise of prudent judgment, a state trust company may
 176-3   invest  its secondary capital in any type or character of
 176-4   investment for the purpose of generating income or profit.  The
 176-5   factors to be considered by a state trust company in exercise of
 176-6   prudent judgment include the factors contained in Section
 176-7   184.101(f).
 176-8         Sec. 184.105.  ENGAGING IN COMMERCE PROHIBITED.  Except as
 176-9   otherwise provided by this subtitle or rules adopted under this
176-10   subtitle, a state trust company may not invest its funds in trade
176-11   or commerce by buying, selling, or otherwise dealing goods or by
176-12   owning or operating a business not part of the state trust
176-13   business, except as necessary to fulfill a fiduciary obligation to
176-14   a client.
176-15            (Sections 184.106-184.200 reserved for expansion
176-16                          SUBCHAPTER C.  LOANS
176-17         Sec. 184.201.  LENDING LIMITS.  (a)  A state trust company's
176-18   total outstanding loans and extensions of credit to a person other
176-19   than an insider may not exceed an amount equal to 15 percent of the
176-20   state trust company's restricted capital.
176-21         (b)  The aggregate loans and extensions of credit outstanding
176-22   at any time to insiders of the state trust company may not exceed
176-23   an amount equal to 15 percent of the state trust company's
176-24   restricted capital.  All covered transactions between an insider
176-25   and a state trust company must be engaged in only on terms and
176-26   under circumstances, including credit standards, that are
 177-1   substantially the same as those for comparable transactions with a
 177-2   person other than an insider.
 177-3         (c)  The finance commission may adopt rules to administer
 177-4   this section, including rules to:
 177-5               (1)  establish limits, requirements, or exemptions
 177-6   other than those specified by this section for particular classes
 177-7   or categories of loans or extensions of credit; and
 177-8               (2)  establish collective lending and investment
 177-9   limits.
177-10         (d)  The banking commissioner may determine whether a loan or
177-11   extension of credit putatively made to a person will be attributed
177-12   to another person for purposes of this section.
177-13         (e)  A state trust company may not lend trust deposits,
177-14   except that a trustee may make a loan to a beneficiary of the trust
177-15   if the loan is expressly authorized or directed by the instrument
177-16   or transaction establishing the trust.
177-17         Sec. 184.202.  VIOLATION OF LENDING LIMIT.  (a)  An officer,
177-18   director, manager, managing participant, or employee of a state
177-19   trust company who approves or participates in the approval of a
177-20   loan with actual knowledge that the loan violates Section 184.201
177-21   is jointly and severally liable to the state trust company for the
177-22   lesser of the amount by which the loan exceeded applicable lending
177-23   limits or the state trust company's actual loss.  The person
177-24   remains liable for that amount until the loan and all prior
177-25   indebtedness of the borrower to the state trust company have been
177-26   fully repaid.
 178-1         (b)  The state trust company may initiate a proceeding to
 178-2   collect an amount due under this section at any time before the
 178-3   date the borrower defaults on the subject loan or any prior
 178-4   indebtedness or before the fourth anniversary of that date.
 178-5         (c)  A person who is liable for and pays amounts to the state
 178-6   trust company under this section is entitled to an assignment of
 178-7   the state trust company's claim against the borrower to the extent
 178-8   of the payments.
 178-9         (d)  For purposes of this section, an officer, director,
178-10   manager, managing participant, or employee of a state trust company
178-11   is presumed to know the amount of the state trust company's lending
178-12   limit under Section 184.201 and the amount of the borrower's
178-13   aggregate outstanding indebtedness to the state trust company
178-14   immediately before a new loan or extension of credit to that
178-15   borrower.
178-16         Sec. 184.203.  LEASE FINANCING TRANSACTION.  (a)  Subject to
178-17   rules adopted under this subtitle, a state trust company may become
178-18   the owner and lessor of tangible personal property for lease
178-19   financing transactions on a net lease basis on the specific request
178-20   and for the use of a client.  Without  the written approval of the
178-21   banking commissioner to continue holding property acquired for
178-22   leasing purposes under this subsection, the state trust company may
178-23   not hold the property more than six months after the date of
178-24   expiration of the original or any extended or renewed lease period
178-25   agreed to by the client for whom the property was acquired or by a
178-26   subsequent lessee.
 179-1         (b)  A rental payment received by the state trust company in
 179-2   a lease financing transaction under this section is considered to
 179-3   be rent and not interest or compensation for the use, forbearance,
 179-4   or detention of money.  However, a lease financing transaction is
 179-5   considered to be a loan or extension of credit for purposes of
 179-6   Sections 184.201 and 184.202.
 179-7         Sec. 184.204.  GENERAL BANKING PRIVILEGES NOT CONFERRED.
 179-8   This subchapter does not confer general banking privileges on a
 179-9   state trust company.
179-10            (Sections 184.205-184.300 reserved for expansion
179-11                      SUBCHAPTER D.  TRUST DEPOSITS
179-12         Sec. 184.301.  TRUST DEPOSITS.  (a)  A state trust company
179-13   may deposit trust funds with itself as an investment if:
179-14               (1)  the deposit is authorized by the settlor or
179-15   beneficiary;
179-16               (2)  the state trust company maintains as security for
179-17   the deposit a separate fund of securities, legal for trust
179-18   investments, under control of a federal reserve bank or a clearing
179-19   corporation, as defined by Section 8.102, Business & Commerce Code,
179-20   within or outside this state;
179-21               (3)  the total market value of the security is at all
179-22   times at least equal to the amount of the deposit; and
179-23               (4)  the separate fund is designated as a separate
179-24   fund.
179-25         (b)  A state trust company may make periodic withdrawals from
179-26   or additions to a securities fund required by Subsection (a) as
 180-1   long as the required value is maintained.  Income from the
 180-2   securities in the fund belongs to the state trust company.
 180-3         (c)  Security for a deposit under this section is not
 180-4   required for a deposit under Subsection (a) to the extent the
 180-5   deposit is insured by the Federal Deposit Insurance Corporation or
 180-6   its successor.
 180-7         Sec. 184.302.  GENERAL BANKING PRIVILEGES NOT CONFERRED.
 180-8   This subchapter does not confer general banking privileges on a
 180-9   state trust company.
180-10            (Sections 184.303-184.400 reserved for expansion
180-11             SUBCHAPTER E.  LIABILITIES AND PLEDGE OF ASSETS
180-12         Sec. 184.401.  BORROWING LIMIT.  Except with the prior
180-13   written approval of the banking commissioner, a state trust company
180-14   may not have outstanding liabilities, excluding trust deposit
180-15   liabilities arising under Section 184.301, that exceed an amount
180-16   equal to five times its restricted capital.
180-17         Sec. 184.402.  PLEDGE OF ASSETS.  (a)  A state trust company
180-18   may not pledge or create a lien on any of its assets except to
180-19   secure:
180-20               (1)  the repayment of money borrowed;
180-21               (2)  trust deposits as specifically authorized or
180-22   required by:
180-23                     (A)  Section 184.301;
180-24                     (B)  Title 9, Property Code; or
180-25                     (C)  rules adopted under this chapter; or
180-26               (3)  deposits made by:
 181-1                     (A)  the United States;
 181-2                     (B)  a state, county, or municipality; or
 181-3                     (C)  an agency of the United States or a state,
 181-4   county, or municipality.
 181-5         (b)  An act, deed, conveyance, pledge, or contract in
 181-6   violation of this section is void.
 181-7                    CHAPTER 185.  ENFORCEMENT ACTIONS
 181-8                    SUBCHAPTER A.  ENFORCEMENT ORDERS
 181-9         Sec. 185.001.  DETERMINATION LETTER.  (a)  If the banking
181-10   commissioner determines from examination or other credible evidence
181-11   that a state trust company is in a condition that may warrant the
181-12   issuance of an enforcement order under this chapter, the banking
181-13   commissioner may notify the state trust company in writing of the
181-14   determination, the requirements the state trust company must
181-15   satisfy to abate the determination, and the time in which the
181-16   requirements must be satisfied to avert further administrative
181-17   action.  The determination letter must be delivered by personal
181-18   delivery or by registered or certified mail, return receipt
181-19   requested.
181-20         (b)  The determination letter may be issued in connection
181-21   with the issuance of a cease and desist, removal, or prohibition
181-22   order under this subchapter or an order of supervision or
181-23   conservatorship under Subchapter B.
181-24         Sec. 185.002.  CEASE AND DESIST ORDER.  (a)  The banking
181-25   commissioner has grounds to issue a cease and desist order to an
181-26   officer, employee, director, manager, or managing participant of a
 182-1   state trust company, or the state trust company itself acting
 182-2   through an authorized person, if the banking commissioner
 182-3   determines from examination or other credible evidence that the
 182-4   state trust company or person directly or indirectly has:
 182-5               (1)  violated this subtitle or another applicable law
 182-6   or rule;
 182-7               (2)  engaged in a breach of trust or other fiduciary
 182-8   duty;
 182-9               (3)  refused to submit to examination or examination
182-10   under oath;
182-11               (4)  conducted business in an unsafe or unsound manner;
182-12   or
182-13               (5)  violated a condition of the state trust company's
182-14   charter or an agreement between the state trust company or the
182-15   person and the banking commissioner or the department.
182-16         (b)  If the banking commissioner has grounds for action under
182-17   Subsection (a) and finds that an order to cease and desist from a
182-18   violation or other conduct described by Subsection (a) appears to
182-19   be necessary and in the best interest of a state trust company
182-20   involved and its clients, creditors, and shareholders or
182-21   participants, the banking commissioner may serve a proposed cease
182-22   and desist order on the state trust company and each person who
182-23   committed or participated in the violation.  The order must:
182-24               (1)  be delivered by personal delivery or by registered
182-25   or certified mail, return receipt requested;
182-26               (2)  state with reasonable certainty the grounds for
 183-1   the order; and
 183-2               (3)  state the effective date of the order, which may
 183-3   not be earlier than the 21st day after the date the order is mailed
 183-4   or delivered.
 183-5         (c)  The order takes effect if the state trust company or
 183-6   person against whom the order is directed does not request a
 183-7   hearing in writing before the effective date.  After taking effect,
 183-8   the order is final and nonappealable as to that state trust company
 183-9   or person.
183-10         Sec. 185.003.  REMOVAL OR PROHIBITION ORDER.  (a)  The
183-11   banking commissioner has grounds to remove a present or former
183-12   officer, director, manager, managing participant, or employee of a
183-13   state trust company from office or employment in, or prohibit a
183-14   controlling shareholder or participant or other person
183-15   participating in the affairs of the state trust company from
183-16   participation in the affairs of, the state trust company or a state
183-17   bank or other entity chartered or licensed by the banking
183-18   commissioner under the laws of this state if the banking
183-19   commissioner determines from examination or other credible evidence
183-20   that:
183-21               (1)  the person:
183-22                     (A)  intentionally committed or participated in
183-23   the commission of an act described by Section 185.002(a) with
183-24   regard to the affairs of the state trust company; or
183-25                     (B)  violated a final cease  and desist order
183-26   issued in response to the same or a similar act;
 184-1               (2)  because of that action by the person:
 184-2                     (A)  the state trust company has suffered or will
 184-3   probably suffer financial loss or other damage;
 184-4                     (B)  the interests of the trust company's clients
 184-5   have been or could be prejudiced; or
 184-6                     (C)  the person has received financial gain or
 184-7   other benefit by reason of the violation; and
 184-8               (3)  that action by the person:
 184-9                     (A)  involves personal dishonesty on the part of
184-10   the person; or
184-11                     (B)  demonstrates wilful or continuing disregard
184-12   for the safety or soundness of the state trust company.
184-13         (b)  If the banking commissioner has grounds for action under
184-14   Subsection (a) and finds that a removal or prohibition order
184-15   appears to be necessary and in the best interest of the state trust
184-16   company involved and its clients, creditors, and shareholders or
184-17   participants, the banking commissioner may serve a proposed removal
184-18   or prohibition order, as appropriate, on an officer, employee,
184-19   director, manager or managing participant, controlling shareholder
184-20   or participant, or other person alleged to have committed or
184-21   participated in the violation or other conduct described by Section
184-22   185.002(a).  The order must:
184-23               (1)  be delivered by personal delivery or by registered
184-24   or certified mail, return receipt requested;
184-25               (2)  state with reasonable certainty the grounds for
184-26   removal or prohibition; and
 185-1               (3)  state the effective date of the order, which may
 185-2   not be earlier than the 21st day after the date the order is mailed
 185-3   or delivered.
 185-4         (c)  The order takes effect if the person against whom the
 185-5   order is directed does not request a hearing in writing before the
 185-6   effective date.  After taking effect the order is final and
 185-7   nonappealable as to that person.
 185-8         Sec. 185.004.  HEARING ON PROPOSED ORDER.  (a)  A requested
 185-9   hearing on a proposed order shall be held not later than the 30th
185-10   day after the date the first request for a hearing on the order was
185-11   received by the banking commissioner unless the parties agree to a
185-12   later hearing date.  Not later than the 11th day before the date of
185-13   the hearing, each party shall be given written notice by personal
185-14   delivery or by registered or certified mail, return receipt
185-15   requested, of the date set by the banking commissioner for the
185-16   hearing.  At the hearing, the banking commissioner has the burden
185-17   of proof, and each person against whom the order is directed may
185-18   cross-examine witnesses and present evidence to show why the order
185-19   should not be issued.
185-20         (b)  After the hearing, the banking commissioner shall issue
185-21   or decline to issue the order.  The order may be modified as
185-22   necessary to conform to the findings at the hearing and to require
185-23   the board to take necessary affirmative action to correct the
185-24   conditions cited in the order.
185-25         (c)  An order issued under this section is immediately final
185-26   for purposes of enforcement and appeal.  The order may be appealed
 186-1   as provided by Sections 181.202-181.204.
 186-2         Sec. 185.005.  EMERGENCY ORDER.  (a)  If the banking
 186-3   commissioner believes that immediate action is needed to prevent
 186-4   immediate and irreparable harm to the state trust company and its
 186-5   clients, creditors, and shareholders or participants, the banking
 186-6   commissioner may issue one or more cease and desist, removal, or
 186-7   prohibition orders as emergency orders to become effective
 186-8   immediately on service without prior notice or hearing.  Service
 186-9   must be by personal delivery or by registered or certified mail,
186-10   return receipt requested.
186-11         (b)  In each emergency order the banking commissioner shall
186-12   notify the state trust company and any person against whom the
186-13   order is directed of:
186-14               (1)  the specific conduct requiring the order;
186-15               (2)  the citation of each statute or rule alleged to
186-16   have been violated;
186-17               (3)  the immediate and irreparable harm alleged to be
186-18   threatened; and
186-19               (4)  the right to a hearing.
186-20         (c)  Unless a person against whom the order is directed
186-21   requests a hearing in writing before the 11th day after the date
186-22   the order is served on the person, the order is final and
186-23   nonappealable as to that person.
186-24         (d)  A hearing requested under Subsection (c) must be:
186-25               (1)  given priority over all other matters pending
186-26   before the banking commissioner; and
 187-1               (2)  held not later than the 20th day after the date
 187-2   the hearing is requested unless the parties agree to a later
 187-3   hearing date.
 187-4         (e)  After the hearing, the banking commissioner may affirm,
 187-5   modify, or set aside in whole or part the emergency order.  An
 187-6   order affirming or modifying the order is immediately final for
 187-7   purposes of enforcement and appeal.  The order may be appealed as
 187-8   provided by Sections 181.202-181.204.
 187-9         (f)  An emergency order continues in effect unless the order
187-10   is stayed by the banking commissioner.  The banking commissioner
187-11   may impose any condition before granting a stay of the emergency
187-12   order.
187-13         Sec. 185.006.  COPY OF LETTER OR ORDER IN STATE TRUST COMPANY
187-14   RECORDS.  A copy of any determination letter, proposed order,
187-15   emergency order, or final order issued by the banking commissioner
187-16   under this subchapter shall be immediately brought to the attention
187-17   of the board of the affected state trust company, regardless of
187-18   whether the state trust company is a party, and filed in the
187-19   minutes of the board.  Each director, manager, or managing
187-20   participant shall immediately certify to the banking commissioner
187-21   in writing that the certifying person has read and understood the
187-22   determination letter, proposed order, emergency order, or final
187-23   order.  The required certification may not be considered an
187-24   admission of a person in a subsequent legal or administrative
187-25   proceeding.
187-26         Sec. 185.007.  EFFECT OF FINAL REMOVAL OR PROHIBITION ORDER.
 188-1   (a)  Without the prior written approval of the banking
 188-2   commissioner, a person subject to a final and enforceable removal
 188-3   or prohibition order issued by the banking commissioner under this
 188-4   subchapter may not:
 188-5               (1)  serve as a director, officer, or employee of any
 188-6   state trust company, state bank, or other entity chartered or
 188-7   licensed by the banking commissioner under the laws of this state
 188-8   while the order is in effect;
 188-9               (2)  directly or indirectly participate in any manner
188-10   in the management of such an entity;
188-11               (3)  directly or indirectly vote for a director of such
188-12   an entity; or
188-13               (4)  solicit, procure, transfer, attempt to transfer,
188-14   vote, or attempt to vote a proxy, consent, or authorization with
188-15   respect to voting rights in such an entity.
188-16         (b)  The person subject to the order remains entitled to
188-17   receive dividends or a share of profits, return of contribution, or
188-18   other distributive benefit from an entity identified in Subsection
188-19   (a)(1) with respect to voting securities in the entity owned by the
188-20   person.
188-21         (c)  If voting securities of an entity identified in
188-22   Subsection (a)(1) cannot be voted under this section, the voting
188-23   securities are considered to be authorized but unissued for
188-24   purposes of determining the procedures for and results of the
188-25   affected vote.
188-26         (d)  Participants of a limited trust association in which a
 189-1   participant has been finally removed or prohibited from
 189-2   participation in the state trust company's affairs under this
 189-3   subchapter shall elect a board of managers.
 189-4         (e)  This section and Section 185.008 do not prohibit a
 189-5   removal or prohibition order that has indefinite duration or that
 189-6   by its terms is perpetual.
 189-7         Sec. 185.008.  LIMITATION ON ACTION.  The banking
 189-8   commissioner may not initiate an enforcement action under this
 189-9   subchapter later than the fifth anniversary of the date the banking
189-10   commissioner discovered or reasonably should have discovered the
189-11   conduct involved.
189-12         Sec. 185.009.  ENFORCEMENT OF FINAL ORDER.  (a)  If the
189-13   banking commissioner reasonably believes that a state trust company
189-14   or person has violated a final and enforceable cease and desist,
189-15   removal, or prohibition order issued under this subchapter, the
189-16   banking commissioner may:
189-17               (1)  initiate administrative penalty proceedings
189-18   against the state trust company under Section 185.010;
189-19               (2)  refer the matter to the attorney general for
189-20   enforcement by injunction or other available remedy; or
189-21               (3)  pursue any other action the banking commissioner
189-22   considers appropriate under applicable law.
189-23         (b)  If the attorney general prevails in an action brought
189-24   under Subsection (a)(2), the attorney general is entitled to
189-25   recover reasonable attorney's fees from a state trust company or
189-26   person violating the order.
 190-1         Sec. 185.010.  ADMINISTRATIVE PENALTY.  (a)  The banking
 190-2   commissioner may initiate a proceeding for an administrative
 190-3   penalty against a state trust company by serving on the state trust
 190-4   company notice of the time and place of a hearing on the penalty.
 190-5   The hearing may not be held earlier than the 20th day after the
 190-6   date the notice is served.  The notice must:
 190-7               (1)  be served by personal delivery or registered or
 190-8   certified mail, return receipt requested; and
 190-9               (2)  contain a statement of the conduct alleged to be
190-10   in violation of the order.
190-11         (b)  In determining whether an order has been violated, the
190-12   banking commissioner shall consider the maintenance of procedures
190-13   reasonably adopted to ensure compliance with the order.
190-14         (c)  If the banking commissioner determines after the hearing
190-15   that an order has been violated, the banking commissioner may
190-16   impose an administrative penalty against a state trust company in
190-17   an amount not to exceed $500 for each day the state trust company
190-18   violates the final order.
190-19         Sec. 185.011.  PAYMENT OR APPEAL OF ADMINISTRATIVE PENALTY.
190-20   (a)  When a penalty order under Section 185.010 becomes final, a
190-21   state trust company shall pay the penalty or appeal by filing a
190-22   petition for judicial review.
190-23         (b)  The petition for judicial review stays the penalty order
190-24   during the period preceding the decision of the court.  If the
190-25   court sustains the order, the court shall order the state trust
190-26   company to pay the full amount of the penalty or a lower amount
 191-1   determined by the court.  If the court does not sustain the order,
 191-2   a penalty is not owed.  If the final judgment of the court requires
 191-3   payment of a penalty, interest accrues on the penalty, at the rate
 191-4   charged on loans to depository institutions by the New York Federal
 191-5   Reserve Bank, beginning on the date the judgment is final and
 191-6   ending on the date the penalty and interest are paid.
 191-7         (c)  If the state trust company does not pay the penalty
 191-8   imposed under a final and nonappealable penalty order, the banking
 191-9   commissioner shall refer the matter to the attorney general for
191-10   enforcement.  The attorney general is entitled to recover
191-11   reasonable attorney's fees from the state trust company if the
191-12   attorney general prevails in judicial action necessary for
191-13   collection of the penalty.
191-14         Sec. 185.012.  CONFIDENTIALITY OF RECORDS.  A copy of a
191-15   notice, correspondence, transcript, pleading, or other document in
191-16   the records of the department relating to an order issued under
191-17   this subchapter is confidential and may be released only as
191-18   provided by Subchapter D, Chapter 181, except that the banking
191-19   commissioner periodically shall publish all final removal and
191-20   prohibition orders.  The banking commissioner may release a final
191-21   cease and desist order or information relating to the existence of
191-22   the order to the public if the banking commissioner concludes that
191-23   the release would enhance effective enforcement of the order.
191-24         Sec. 185.013.  COLLECTION OF FEES.  The banking commissioner
191-25   may sue to enforce the collection of a fee owed to the department
191-26   under a law administered by the banking commissioner.  In the suit
 192-1   a certificate by the banking commissioner showing the delinquency
 192-2   is prima facie evidence of:
 192-3               (1)  the levy of the fee or the delinquency of the
 192-4   stated fee amount; and
 192-5               (2)  compliance by the banking commissioner with the
 192-6   law relating to the computation and levy of the fee.
 192-7            (Sections 185.014-185.100 reserved for expansion
 192-8             SUBCHAPTER B.  SUPERVISION AND CONSERVATORSHIP
 192-9         Sec. 185.101.  ORDER OF SUPERVISION.  (a)  The banking
192-10   commissioner by order may appoint a supervisor over a state trust
192-11   company if the banking commissioner determines from examination or
192-12   other credible evidence that the state trust company is in
192-13   hazardous condition and that an order of supervision appears to be
192-14   necessary and in the best interest of the state trust company and
192-15   its clients, creditors, and shareholders or participants, or the
192-16   public.
192-17         (b)  The banking commissioner may issue the order without
192-18   prior notice.
192-19         (c)  The supervisor serves until the earlier of:
192-20               (1)  the expiration of the period stated in the order
192-21   of supervision; or
192-22               (2)  the date the banking commissioner determines that
192-23   the requirements for abatement of the order have been satisfied.
192-24         Sec. 185.102.  ORDER OF CONSERVATORSHIP.  (a)  The banking
192-25   commissioner by order may appoint a conservator for a state trust
192-26   company if the banking commissioner determines from examination or
 193-1   other credible evidence that the state trust company is in
 193-2   hazardous condition and immediate and irreparable harm is
 193-3   threatened to the state trust company, its clients, creditors, or
 193-4   shareholders or participants, or the public.
 193-5         (b)  The banking commissioner may issue the order without
 193-6   prior notice at any time before, during, or after the period of
 193-7   supervision.
 193-8         (c)  An order of conservatorship issued under this section
 193-9   must specifically state the basis for the order.
193-10         Sec. 185.103.  HEARING.  (a)  An order issued under Section
193-11   185.101 or 185.102 must contain or be accompanied by a notice that,
193-12   at the request of the state trust company, a hearing will be held
193-13   before the banking commissioner at which the state trust company
193-14   may cross-examine witnesses and present evidence to contest the
193-15   order or show that it has satisfied all requirements for abatement
193-16   of the order.  The banking commissioner has the burden of proof for
193-17   any continuation of the order or the issuance of a new order.
193-18         (b)  To contest or modify the order or demonstrate that it
193-19   has satisfied all requirements for abatement of the order, the
193-20   state trust company shall submit to the banking commissioner a
193-21   written request for a hearing.  The request must state the grounds
193-22   for the request to set aside or modify the order.  On receiving a
193-23   request for hearing, the banking commissioner shall serve notice of
193-24   the time and place of the hearing, which must be not later than the
193-25   10th day after the date the banking commissioner receives the
193-26   request for a hearing unless the parties agree to a later hearing
 194-1   date.  The notice must be delivered by personal delivery or by
 194-2   registered or certified mail, return receipt requested.
 194-3         (c)  The banking commissioner may:
 194-4               (1)  delay a decision for a prompt examination of the
 194-5   state trust company; and
 194-6               (2)  reopen the record as necessary to allow
 194-7   presentation of the results of the examination and appropriate
 194-8   opportunity for cross-examination and presentation of other
 194-9   relevant evidence.
194-10         Sec. 185.104.  POST-HEARING ORDER.  (a)  If after the hearing
194-11   the banking commissioner finds that the state trust company has
194-12   been rehabilitated, that its hazardous condition has been remedied,
194-13   that irreparable harm is no longer threatened, or that the state
194-14   trust company should otherwise be released from the order, the
194-15   banking commissioner shall release the state trust company from the
194-16   order, subject to conditions the banking commissioner from the
194-17   evidence believes are warranted to preserve the safety and
194-18   soundness of the state trust company.
194-19         (b)  If after the hearing the banking commissioner finds that
194-20   the state trust company has failed to comply with the lawful
194-21   requirements of the banking commissioner, has not been
194-22   rehabilitated, is insolvent, or otherwise continues in hazardous
194-23   condition, the banking commissioner by order shall:
194-24               (1)  appoint or reappoint a supervisor pursuant to
194-25   Section 185.101;
194-26               (2)  appoint or reappoint a conservator pursuant to
 195-1   Section 185.102; or
 195-2               (3)  take other appropriate action authorized by law.
 195-3         (c)  An order issued under Subsection (b) is immediately
 195-4   final for purposes of appeal.  The order may be appealed as
 195-5   provided by Sections 181.202-181.204.
 195-6         Sec. 185.105.  CONFIDENTIALITY OF RECORDS.  An order issued
 195-7   under this subchapter and a copy of a notice, correspondence,
 195-8   transcript, pleading, or other document in the records of the
 195-9   department relating to the order are confidential and may be
195-10   released only as provided by Subchapter D, Chapter 181, except that
195-11   the banking commissioner may release to the public an order or
195-12   information relating to the existence of an order if the banking
195-13   commissioner concludes that the release would enhance effective
195-14   enforcement of the order.
195-15         Sec. 185.106.  DUTIES OF STATE TRUST COMPANY UNDER
195-16   SUPERVISION.  During a period of supervision, a state trust
195-17   company, without the prior approval of the banking commissioner or
195-18   the supervisor or as otherwise permitted or restricted by the order
195-19   of supervision, may not:
195-20               (1)  dispose of, sell, transfer, convey, or encumber
195-21   the state trust company's assets;
195-22               (2)  lend or invest the state trust company's funds;
195-23               (3)  incur a debt, obligation, or liability;
195-24               (4)  pay a cash dividend to the state trust company's
195-25   shareholders or participants; or
195-26               (5)  solicit or accept any new client accounts.
 196-1         Sec. 185.107.  POWERS AND DUTIES OF CONSERVATOR.  (a)  A
 196-2   conservator appointed under this subchapter shall immediately take
 196-3   charge of the state trust company and all of its property, books,
 196-4   records, and affairs on behalf and at the direction and control of
 196-5   the banking commissioner.
 196-6         (b)  Subject to any limitation contained in the order of
 196-7   appointment or other direction of the banking commissioner, the
 196-8   conservator has all the powers of the directors, managers, managing
 196-9   participants, officers, and shareholders or participants of a state
196-10   trust company and shall conduct the business of the state trust
196-11   company and take all steps the conservator considers appropriate to
196-12   remove the causes and conditions requiring the conservatorship.
196-13   During the conservatorship, the board may not direct or participate
196-14   in the affairs of the state trust company.
196-15         (c)  Except as otherwise provided by this subchapter, by
196-16   rules adopted under this subtitle, or by Section 12.106, the
196-17   conservator has the rights and privileges and is subject to the
196-18   duties, restrictions, penalties, conditions, and limitations of the
196-19   directors, officers, and employees of state trust companies.
196-20         Sec. 185.108.  QUALIFICATIONS OF APPOINTEE.  The banking
196-21   commissioner may appoint as a supervisor or conservator any person
196-22   who in the judgment of the banking commissioner is qualified to
196-23   serve.  The banking commissioner may serve as, or may appoint an
196-24   employee of the department to serve as, a supervisor or
196-25   conservator.
196-26         Sec. 185.109.  EXPENSES.  (a)  The banking commissioner shall
 197-1   determine and approve the reasonable expenses attributable to the
 197-2   service of a supervisor or conservator, including costs incurred by
 197-3   the department and the compensation and expenses of the supervisor
 197-4   or conservator and any professional employees appointed to
 197-5   represent or assist the supervisor or conservator.  The banking
 197-6   commissioner or an employee of the department may not receive
 197-7   compensation in addition to salary for serving as supervisor or
 197-8   conservator, but the department may receive reimbursement for the
 197-9   fully allocated personnel cost associated with service of the
197-10   banking commissioner or an employee as supervisor or conservator.
197-11         (b)  All approved expenses shall be paid by the state trust
197-12   company as the banking commissioner determines.  The banking
197-13   commissioner has a lien against the assets and funds of the state
197-14   trust company to secure payment of approved expenses.  The lien has
197-15   a higher priority than any other lien against the state trust
197-16   company.
197-17         (c)  Notwithstanding any other provision of this subchapter,
197-18   the state trust company may employ an attorney and other persons
197-19   the state trust company selects to assist the state trust company
197-20   in contesting or satisfying the requirements of an order of
197-21   supervision or conservatorship.  The banking commissioner shall
197-22   authorize the payment of reasonable fees and expenses from the
197-23   state trust company for the attorney or other persons as expenses
197-24   of the supervision or conservatorship.
197-25         (d)  The banking commissioner may defer collection of
197-26   assessment and examination fees by the department from the state
 198-1   trust company during a period of supervision or conservatorship if
 198-2   deferral appears to aid prospects for rehabilitation.  As a
 198-3   condition of release from supervision or conservatorship, the
 198-4   banking commissioner may require the rehabilitated state trust
 198-5   company to pay or develop a reasonable plan for payment of deferred
 198-6   fees.
 198-7         Sec. 185.110.  REVIEW OF SUPERVISOR OR CONSERVATOR DECISIONS.
 198-8   (a)  Notwithstanding Section 185.107(b), a majority of the state
 198-9   trust company's board, acting directly or through counsel who
198-10   affirmatively represents that the requisite majority has been
198-11   obtained, may request in writing that the banking commissioner
198-12   review an action taken or proposed by the supervisor or
198-13   conservator.  The request must specify why the action would not be
198-14   in the best interest of the state trust company.  The banking
198-15   commissioner shall investigate to the extent necessary and make a
198-16   prompt written ruling on the request.  If the action has not yet
198-17   been taken or if the effect of the action can be postponed, the
198-18   banking commissioner may stay the action on request pending review.
198-19         (b)  If a majority of the state trust company's board objects
198-20   to the banking commissioner's ruling, the majority may request a
198-21   hearing before the banking commissioner.  The request must be made
198-22   not later than the 10th day after the date the state trust company
198-23   is notified of the ruling.
198-24         (c)  The banking commissioner shall give the board notice of
198-25   the time and place of the hearing by personal delivery or by
198-26   registered or certified mail, return receipt requested.  The
 199-1   hearing may not be held later than the 10th day after the date the
 199-2   banking commissioner receives the request for a hearing unless the
 199-3   parties agree to a later hearing date.  At the hearing the board
 199-4   has the burden of proof to demonstrate that the action is not in
 199-5   the best interest of the state trust company.
 199-6         (d)  After the hearing, the banking commissioner may affirm,
 199-7   modify, or set aside in whole or part the prior ruling.  An order
 199-8   supporting the action contested by the board is immediately final
 199-9   for purposes of appeal.  The order may be appealed as provided by
199-10   Sections 181.202-181.204.  If the order is appealed to the finance
199-11   commission, the finance commission may:
199-12               (1)  affirm, terminate, or modify the order;
199-13               (2)  continue or end supervision or conservatorship;
199-14   and
199-15               (3)  order further relief as justice, equity, and
199-16   protection of clients, creditors, and the public require.
199-17         Sec. 185.111.  SUIT FILED AGAINST OR ON BEHALF OF STATE TRUST
199-18   COMPANY UNDER SUPERVISION OR CONSERVATORSHIP.  (a)  A suit filed
199-19   against a state trust company while the state trust company is
199-20   under conservatorship, or against a person in connection with an
199-21   action taken or decision made by that person as a supervisor or
199-22   conservator of a state trust company, must be brought in Travis
199-23   County regardless of whether the state trust company remains under
199-24   an order of supervision or conservatorship.
199-25         (b)  A conservator may sue a person on the trust company's
199-26   behalf to preserve, protect, or recover state trust company assets,
 200-1   including claims or causes of action.  The suit may be in:
 200-2               (1)  Travis County; or
 200-3               (2)  another location where jurisdiction and venue
 200-4   against that person may be obtained under law.
 200-5         Sec. 185.112.  DURATION.  A supervisor or conservator serves
 200-6   for the period necessary to accomplish the purposes of the
 200-7   supervision or conservatorship as intended by this subchapter.  A
 200-8   rehabilitated state trust company shall be returned to its former
 200-9   or new management under conditions  reasonable and necessary to
200-10   prevent recurrence of the conditions causing the supervision or
200-11   conservatorship.
200-12         Sec. 185.113.  ADMINISTRATIVE ELECTION OF REMEDIES.  The
200-13   banking commissioner may take any action authorized under Chapter
200-14   186 regardless of the existence of supervision or conservatorship.
200-15   A period of supervision or conservatorship is not required before a
200-16   trust company is closed for liquidation or other remedial action is
200-17   taken.
200-18         Sec. 185.114.  RELEASE BEFORE HEARING.  This subchapter does
200-19   not prevent release of a state trust company from supervision or
200-20   conservatorship before a hearing if the banking commissioner is
200-21   satisfied that requirements for abatement have been adequately
200-22   satisfied.
200-23            (Sections 185.115-185.200 reserved for expansion
 201-1       SUBCHAPTER C.  UNAUTHORIZED TRUST ACTIVITY:  INVESTIGATION
 201-2                             AND ENFORCEMENT
 201-3         Sec. 185.201.  INVESTIGATION OF UNAUTHORIZED TRUST ACTIVITY.
 201-4   (a)  If the banking commissioner has reason to believe that a
 201-5   person  has engaged, is engaging, or is likely to engage in an
 201-6   unauthorized trust activity, the banking commissioner may:
 201-7               (1)  investigate as necessary within or outside this
 201-8   state to:
 201-9                     (A)  determine whether the unauthorized trust
201-10   activity has occurred or is likely to occur; or
201-11                     (B)  aid in the enforcement of the laws
201-12   administered by the banking commissioner;
201-13               (2)  initiate appropriate disciplinary action as
201-14   provided by this subchapter; and
201-15               (3)  report any unauthorized trust activity to a law
201-16   enforcement agency or another regulatory agency with appropriate
201-17   jurisdiction.
201-18         (b)  The banking commissioner may:
201-19               (1)  on written request furnish to a law enforcement
201-20   agency evidence the banking commissioner has compiled in connection
201-21   with the unauthorized activity, including materials, documents,
201-22   reports, and complaints; and
201-23               (2)  assist the law enforcement agency or other
201-24   regulatory agency as requested.
201-25         (c)  A person acting without malice, fraudulent intent, or
201-26   bad faith is not subject to liability, including liability for
 202-1   libel, slander, or other relevant tort, because the person files a
 202-2   report or furnishes, orally or in writing, information concerning a
 202-3   suspected, anticipated, or completed unauthorized activity to a law
 202-4   enforcement agency, the banking commissioner or another regulatory
 202-5   agency with appropriate jurisdiction, or an agent or employee of a
 202-6   law enforcement agency, the banking commissioner, or other
 202-7   regulatory agency.  The person is entitled to attorney's fees and
 202-8   court costs if the person prevails in an action for libel, slander,
 202-9   or any other relevant tort based on the report or other information
202-10   the person furnished as provided by this subchapter.
202-11         (d)  This section does not:
202-12               (1)  affect or modify a common law or statutory
202-13   privilege or immunity;
202-14               (2)  preempt the authority or relieve the duty of a law
202-15   enforcement agency or other regulatory agency with appropriate
202-16   jurisdiction to investigate and prosecute suspected criminal acts;
202-17               (3)  prohibit a person from voluntarily disclosing
202-18   information to a law enforcement agency or other regulatory agency;
202-19   or
202-20               (4)  limit a power or duty granted to the banking
202-21   commissioner under this subtitle or other law.
202-22         Sec. 185.202.  SUBPOENA AUTHORITY.  (a)  This section applies
202-23   only to an investigation of an unauthorized trust activity as
202-24   provided by Section 185.201, and does not affect the conduct of a
202-25   contested case under Chapter 2001, Government Code.
202-26         (b)  The banking commissioner may issue a subpoena to compel
 203-1   the attendance and testimony of a witness or the production of a
 203-2   book, account, record, paper, or correspondence relating to a
 203-3   matter that the banking commissioner has authority to consider or
 203-4   investigate at the department's offices in Austin or at another
 203-5   place the banking commissioner designates.
 203-6         (c)  The subpoena must be signed and issued by the banking
 203-7   commissioner or the deputy banking commissioner.
 203-8         (d)  A person who is required by subpoena to attend a
 203-9   proceeding before the banking commissioner is entitled to receive:
203-10               (1)  reimbursement for mileage, in the amount provided
203-11   for travel by a state employee, for traveling to or returning from
203-12   a proceeding that is more than 25 miles from the witness's
203-13   residence; and
203-14               (2)  a fee for each day or part of a day the witness is
203-15   necessarily present as a witness in an amount equal to the per diem
203-16   travel allowance of a state employee.
203-17         (e)  The banking commissioner may serve the subpoena or have
203-18   it served by an authorized agent of the banking commissioner, a
203-19   sheriff, or a constable.  The sheriff or constable's fee for
203-20   serving the subpoena is the same as the fee paid the sheriff or
203-21   constable for similar services.
203-22         (f)  A person possessing materials located outside this state
203-23   that are requested by the banking commissioner may make the
203-24   materials available to the banking commissioner or a representative
203-25   of the banking commissioner for examination at the place where the
203-26   materials are located.  The banking commissioner may:
 204-1               (1)  designate a representative, including an official
 204-2   of the state in which the materials are located, to examine the
 204-3   materials; and
 204-4               (2)  respond to a similar request from an official of
 204-5   another state, the United States, or a foreign country.
 204-6         (g)  A subpoena issued under this section to a financial
 204-7   institution is not subject to Section 30.007, Civil Practice and
 204-8   Remedies Code.
 204-9         Sec. 185.203.  ENFORCEMENT OF SUBPOENA.  (a)  If necessary,
204-10   the banking commissioner may apply to a district court in Travis
204-11   County or in the county in which the subpoena was served for
204-12   enforcement of the subpoena, and the court may issue an order
204-13   compelling compliance.
204-14         (b)  If the court orders compliance with the subpoena or
204-15   finds the person in contempt for failure to obey the order, the
204-16   banking commissioner, or the attorney general if representing the
204-17   banking commissioner, may recover reasonable court costs,
204-18   attorney's fees, and investigative costs incurred in the
204-19   proceeding.
204-20         Sec. 185.204.  CONFIDENTIALITY OF SUBPOENAED RECORDS.  (a)  A
204-21   book, account, record, paper, correspondence, or other document
204-22   subpoenaed and produced under Section 185.202 that is otherwise
204-23   made privileged or confidential by law remains privileged or
204-24   confidential unless admitted into evidence  at an administrative
204-25   hearing or in a court.  The banking commissioner may issue an order
204-26   protecting the confidentiality or privilege of the document and
 205-1   restricting its use or distribution by any person or in any
 205-2   proceeding, other than a proceeding before the banking
 205-3   commissioner.
 205-4         (b)  Subject to Subchapter D, Chapter 181, and
 205-5   confidentiality provisions of other law administered by the banking
 205-6   commissioner, information or material acquired under Section
 205-7   185.202 under a subpoena is not a public record for the period the
 205-8   banking commissioner considers reasonably necessary to complete the
 205-9   investigation, protect the person being investigated from
205-10   unwarranted injury, or serve the public interest.  The information
205-11   or material is not subject to a subpoena, except a grand jury
205-12   subpoena, until released for public inspection by the banking
205-13   commissioner or, after notice and a hearing, a district court
205-14   determines that the public interest and any investigation by the
205-15   banking commissioner would not be jeopardized by obeying the
205-16   subpoena.  The district court order may not apply to:
205-17               (1)  a record or communication received from another
205-18   law enforcement or regulatory agency except on compliance with the
205-19   confidentiality laws governing the records of the other agency; or
205-20               (2)  an internal note, memorandum, report, or
205-21   communication made in connection with a matter that the banking
205-22   commissioner has the authority to consider or investigate, except
205-23   on good cause and compliance with applicable confidentiality laws.
205-24         Sec. 185.205.  EVIDENCE.  (a)  On certification by the
205-25   banking commissioner, a book, record, paper, or document produced
205-26   or testimony taken as provided by Section 185.202 and held by the
 206-1   department is admissible as evidence in any case without prior
 206-2   proof of its correctness and without other proof.  The certified
 206-3   book, record, document, or paper, or a certified copy, is prima
 206-4   facie evidence of the facts it contains.
 206-5         (b)  This section does not limit another provision of this
 206-6   subtitle or a law that provides for the admission of evidence or
 206-7   its evidentiary value.
 206-8         Sec. 185.206.  CEASE AND DESIST ORDER REGARDING UNAUTHORIZED
 206-9   TRUST ACTIVITY.  (a)  The banking commissioner may serve a proposed
206-10   cease and desist order on a person the banking commissioner
206-11   believes is engaging or is likely to engage in an unauthorized
206-12   trust activity.  The order must:
206-13               (1)  be delivered by personal delivery or registered or
206-14   certified mail, return receipt requested, to the person's last
206-15   known address;
206-16               (2)  state the acts or practices alleged to be an
206-17   unauthorized activity; and
206-18               (3)  state the effective date of the order, which may
206-19   not be earlier than the 21st day after the date the proposed order
206-20   is  mailed or delivered.
206-21         (b)  Unless the person against whom the proposed order is
206-22   directed requests a hearing in writing before the effective date of
206-23   the proposed order, the order takes effect and is final and
206-24   nonappealable as to that person.
206-25         (c)  A requested hearing on a proposed order shall be held
206-26   not later than the 30th day after the date the first written
 207-1   request for a hearing on the order is received by the banking
 207-2   commissioner unless the parties agree to a later hearing date.  At
 207-3   the hearing, the banking commissioner has the burden of proof and
 207-4   must present evidence in support of the order.  Each person against
 207-5   whom the order is directed may cross-examine witnesses and show
 207-6   cause why the order should not be issued.
 207-7         (d)  After the hearing, the banking commissioner shall issue
 207-8   or decline to issue a cease and desist order.  The proposed order
 207-9   may be modified as necessary to conform to the findings at the
207-10   hearing.  An order issued under this subsection:
207-11               (1)  is immediately final for purposes of enforcement
207-12   and appeal; and
207-13               (2)  must require the person to immediately cease and
207-14   desist from the unauthorized trust activity.
207-15         (e)  The banking commissioner may release a final cease and
207-16   desist order issued under this section or information relating to
207-17   the existence of the order to the public if the banking
207-18   commissioner finds that the release would enhance the effective
207-19   enforcement of the order or will serve the public interest.
207-20         Sec. 185.207.  EMERGENCY CEASE AND DESIST ORDER.  (a)  The
207-21   banking commissioner may issue an emergency cease and desist order
207-22   to a person who the banking commissioner reasonably believes is
207-23   engaging in a continuing unauthorized trust activity that is
207-24   fraudulent or threatens immediate and irreparable public harm.
207-25         (b)  The order must:
207-26               (1)  be delivered on issuance to each person affected
 208-1   by the order by personal delivery or registered or certified mail,
 208-2   return receipt requested, to the person's last known address;
 208-3               (2)  state the specific charges and require the person
 208-4   immediately to cease and desist from the unauthorized activity; and
 208-5               (3)  contain a notice that a request for hearing may be
 208-6   filed under this section.
 208-7         (c)  Unless a person against whom the emergency order is
 208-8   directed requests a hearing in writing before the 11th day after
 208-9   the date it is served on the person, the emergency order is final
208-10   and nonappealable as to that person.  A request for a hearing must:
208-11               (1)  be in writing and directed to the banking
208-12   commissioner; and
208-13               (2)  state the grounds for the request to set aside or
208-14   modify the order.
208-15         (d)  On receiving a request for a hearing, the banking
208-16   commissioner shall serve notice of the time and place of the
208-17   hearing by personal delivery or registered or certified mail,
208-18   return receipt requested.  The hearing must be held not later than
208-19   the 10th day after the date the banking commissioner receives the
208-20   request for a hearing unless the parties agree to a later hearing
208-21   date.  At the hearing, the banking commissioner has the burden of
208-22   proof and must present evidence in support of the order.  The
208-23   person requesting the hearing may cross-examine witnesses and show
208-24   cause why the order should not be affirmed.
208-25         (e)  After the hearing, the banking commissioner shall
208-26   affirm, modify, or set aside in whole or part the emergency cease
 209-1   and desist order.  An order affirming or modifying the emergency
 209-2   cease and desist order is immediately final for purposes of
 209-3   enforcement and appeal.
 209-4         (f)  An order continues in effect unless the order is stayed
 209-5   by the banking commissioner.  The banking commissioner may impose
 209-6   any condition before granting a stay of the order.
 209-7         (g)  The banking commissioner may release a final cease and
 209-8   desist order issued under this section or information regarding the
 209-9   existence of the order to the public if the banking commissioner
209-10   finds that the release would enhance the effective enforcement of
209-11   the order or will serve the public interest.
209-12         Sec. 185.208.  APPEAL OF CEASE AND DESIST ORDER.  (a)  A
209-13   person affected by a cease and desist order issued, affirmed, or
209-14   modified after a hearing may file a petition for judicial review.
209-15         (b)  A filed petition for judicial review does not stay or
209-16   vacate the order unless the court, after hearing, specifically
209-17   stays or vacates the order.
209-18         Sec. 185.209.  VIOLATION OF FINAL CEASE AND DESIST ORDER.
209-19   (a)  If the banking commissioner reasonably believes that a person
209-20   has violated a final and enforceable cease and desist order, the
209-21   banking commissioner may:
209-22               (1)  initiate administrative penalty proceedings under
209-23   Section 185.210;
209-24               (2)  refer the matter to the attorney general for
209-25   enforcement by injunction and any other available remedy; or
209-26               (3)  pursue any other action the banking commissioner
 210-1   considers appropriate under applicable law.
 210-2         (b)  If the attorney general prevails in an action brought
 210-3   under Subsection (a)(2), the attorney general is entitled to
 210-4   reasonable attorney's fees.
 210-5         Sec. 185.210.  ADMINISTRATIVE PENALTY.  (a)  The banking
 210-6   commissioner may initiate an action for an administrative penalty
 210-7   against a person for a violation of a cease and desist order by
 210-8   serving on the person notice of the time and place of a hearing on
 210-9   the penalty.  The notice must be delivered by personal delivery or
210-10   registered or certified mail, return receipt requested, to the
210-11   person's last known address.  The hearing may not be held earlier
210-12   than the 20th day after the date the notice is served.  The notice
210-13   must contain a statement of the facts or conduct alleged to be in
210-14   violation of the cease and desist order.
210-15         (b)  In determining whether a cease and desist order has been
210-16   violated, the banking commissioner shall consider the maintenance
210-17   of procedures reasonably adopted to ensure compliance with the
210-18   order.
210-19         (c)  If the banking commissioner after the hearing determines
210-20   that a cease and desist order has been violated, the banking
210-21   commissioner may:
210-22               (1)  impose an administrative penalty in an amount not
210-23   to exceed $25,000 for each separate act of unauthorized activity;
210-24               (2)  direct the person against whom the order was
210-25   issued to make complete restitution, in the form and amount and
210-26   within the period determined by the banking commissioner, to each
 211-1   resident of this state and entity operating in this state damaged
 211-2   by the violation; or
 211-3               (3)  both impose the penalty and direct restitution.
 211-4         (d)  In determining the amount of the penalty and whether to
 211-5   impose restitution, the banking commissioner shall consider:
 211-6               (1)  the seriousness of the violation, including the
 211-7   nature, circumstances, extent, and gravity of any prohibited act;
 211-8               (2)  the economic harm caused by the violation;
 211-9               (3)  the history of previous violations;
211-10               (4)  the amount necessary to deter future violations;
211-11               (5)  efforts to correct the violation;
211-12               (6)  whether the violation was intentional or
211-13   unintentional;
211-14               (7)  the financial ability of the person against whom
211-15   the penalty is to be assessed; and
211-16               (8)  any other matter that justice may require.
211-17         Sec. 185.211.  PAYMENT AND APPEAL OF ADMINISTRATIVE PENALTY.
211-18   (a)  When an administrative penalty order under Section 185.210
211-19   becomes final, a person affected by the order, within the time
211-20   permitted by law for appeal, shall:
211-21               (1)  pay the amount of the penalty;
211-22               (2)  pay the amount of the penalty and file a petition
211-23   for judicial review contesting the occurrence of the violation, the
211-24   amount of the penalty, or both; or
211-25               (3)  without paying the amount of the penalty, file a
211-26   petition for judicial review contesting the occurrence of the
 212-1   violation, the amount of the penalty, or both.
 212-2         (b)  Within the time permitted by law for appeal, a person
 212-3   who acts under Subsection (a)(3) may:
 212-4               (1)  stay enforcement of the penalty by:
 212-5                     (A)  paying the amount of the penalty to the
 212-6   court for placement in an escrow account; or
 212-7                     (B)  giving the court a supersedeas bond that is
 212-8   approved by the court for the amount of the penalty and that is
 212-9   effective until all judicial review of the order is final; or
212-10               (2)  request the court to stay enforcement of the
212-11   penalty by:
212-12                     (A)  filing with the court a sworn affidavit of
212-13   the person stating that the person is financially unable to pay the
212-14   amount of the penalty and is financially unable to give the
212-15   supersedeas bond; and
212-16                     (B)  giving a copy of the affidavit to the
212-17   banking commissioner by certified mail.
212-18         (c)  Not later than the fifth day after the date the banking
212-19   commissioner receives a copy of an affidavit under Subsection
212-20   (b)(2), the banking commissioner may file with the court a contest
212-21   to the affidavit.  The court shall hold a hearing on the facts
212-22   alleged in the affidavit as soon as practicable and shall stay the
212-23   enforcement of the penalty on finding that the alleged facts are
212-24   true.  The person who files an affidavit has the burden of proving
212-25   that the person is financially unable to pay the amount of the
212-26   penalty and to give a supersedeas bond.
 213-1         (d)  If the person does not pay the amount of the penalty and
 213-2   the enforcement of the penalty is not stayed, the banking
 213-3   commissioner may refer the matter to the attorney general for
 213-4   collection of the amount of the penalty.
 213-5         Sec. 185.212.  JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY.
 213-6   (a)  If on judicial review the court sustains the penalty order,
 213-7   the court shall order the person to pay the full amount of the
 213-8   penalty or a lower amount determined by the court.  If the court
 213-9   does not sustain the order, a penalty is not owed.
213-10         (b)  When the judgment of the court becomes final, if the
213-11   person paid the amount of the penalty and if that amount is reduced
213-12   or is not upheld by the court, the court shall order that the
213-13   appropriate amount plus accrued interest computed at the annual
213-14   rate of 10 percent be remitted to the person.  The interest shall
213-15   be paid for the period beginning on the date the penalty was paid
213-16   and ending on the date the penalty is remitted.  If the person gave
213-17   a supersedeas bond and the amount of the penalty is not upheld by
213-18   the court, the court shall order the release of the bond.  If the
213-19   person gave a supersedeas bond and the amount of the penalty is
213-20   reduced, the court shall order the release of the bond after the
213-21   person pays the amount of the penalty.
213-22         (c)  If the judgment of the court requires payment of a
213-23   penalty that has not previously been paid, the court shall order as
213-24   part of its judgment that interest accrues on the penalty at the
213-25   annual rate of 10 percent, beginning on the date the judgment is
213-26   final and ending on the date the penalty and interest are paid.
 214-1               CHAPTER 186.  DISSOLUTION AND RECEIVERSHIP
 214-2                    SUBCHAPTER A.  GENERAL PROVISIONS
 214-3         Sec. 186.001.  DEFINITION.  In this chapter, "administrative
 214-4   expense" means:
 214-5               (1)  an expense designated as an administrative expense
 214-6   by Subchapter C or D;
 214-7               (2)  court costs and expenses of operation and
 214-8   liquidation of a state trust company estate;
 214-9               (3)  wages owed to an employee of a state trust company
214-10   for services rendered within three months before the date the state
214-11   trust company was closed for liquidation and not exceeding:
214-12                     (A)  $2,000 to each employee; or
214-13                     (B)  another amount set by rules adopted under
214-14   this subtitle;
214-15               (4)  current wages owed to a state trust company
214-16   employee whose services are retained by the receiver for services
214-17   rendered after the date the state trust company is closed for
214-18   liquidation;
214-19               (5)  an unpaid expense of supervision or
214-20   conservatorship of the state trust company before its closing for
214-21   liquidation; and
214-22               (6)  any unpaid fees or assessments owed to the
214-23   department.
214-24         Sec. 186.002.  REMEDIES EXCLUSIVE.  (a)  Unless the banking
214-25   commissioner so requests, a court may not:
214-26               (1)  order the closing or suspension of operation of a
 215-1   state trust company; or
 215-2               (2)  appoint for a state trust company a receiver,
 215-3   supervisor, conservator, or liquidator, or other person with
 215-4   similar responsibility.
 215-5         (b)  A person may not be designated receiver, supervisor,
 215-6   conservator, or liquidator without the voluntary approval and
 215-7   concurrence of the banking commissioner.
 215-8         (c)  This chapter prevails over any other conflicting law of
 215-9   this state.
215-10         Sec. 186.003.  FEDERAL DEPOSIT INSURANCE CORPORATION AS
215-11   LIQUIDATOR.  (a)  The banking commissioner without court action may
215-12   tender a state trust company that has been closed for liquidation
215-13   to the Federal Deposit Insurance Corporation or its successor as
215-14   receiver and liquidating agent if the trust deposits of the state
215-15   trust company were insured by the Federal Deposit Insurance
215-16   Corporation or its successor on the date of closing.
215-17         (b)  After acceptance of tender of the state trust company,
215-18   the Federal Deposit Insurance Corporation or its successor shall
215-19   perform the acts and duties as receiver of the state trust company
215-20   that it considers necessary or desirable and that are permitted or
215-21   required by federal law or this chapter.
215-22         (c)  If the Federal Deposit Insurance Corporation or its
215-23   successor refuses to accept tender of the state trust company, the
215-24   banking commissioner shall act as receiver.
215-25         Sec. 186.004.  APPOINTMENT OF INDEPENDENT RECEIVER.  (a)  On
215-26   request of the banking commissioner, the court in which a
 216-1   liquidation proceeding is pending may:
 216-2               (1)  appoint an independent receiver; and
 216-3               (2)  require a suitable bond of the independent
 216-4   receiver.
 216-5         (b)  On appointment of an independent receiver, the banking
 216-6   commissioner is discharged as receiver and remains a party to the
 216-7   liquidation proceeding with standing to initiate or contest any
 216-8   motion.  The views of the banking  commissioner are entitled to
 216-9   deference unless they are inconsistent with the plain meaning of
216-10   this chapter.
216-11         Sec. 186.005.  SUCCESSION OF TRUST POWERS.  (a)  If a state
216-12   trust company in the process of voluntary or involuntary
216-13   dissolution and liquidation is acting as trustee, guardian,
216-14   executor, administrator, or escrow agent, or in another fiduciary
216-15   or custodial capacity, the banking commissioner may authorize the
216-16   sale of the state trust company's administration of fiduciary
216-17   accounts to a successor entity with fiduciary powers.
216-18         (b)  The successor entity, without the necessity of action by
216-19   a court or the creator or a beneficiary of the fiduciary
216-20   relationship, shall:
216-21               (1)  continue the office, trust, or fiduciary
216-22   relationship; and
216-23               (2)  perform all the duties and exercise all the powers
216-24   connected with or incidental to the fiduciary relationship as if
216-25   the successor entity had been originally designated as the
216-26   fiduciary.
 217-1         (c)  This section applies to all fiduciary relationships,
 217-2   including a trust established for the benefit of a minor by court
 217-3   order under Section 142.005, Property Code.  This section does not
 217-4   affect any right of a court or a party to the instrument governing
 217-5   the fiduciary relationship to subsequently designate another
 217-6   trustee as the successor fiduciary.
 217-7            (Sections 186.006-186.100 reserved for expansion
 217-8                  SUBCHAPTER B.  VOLUNTARY DISSOLUTION
 217-9         Sec. 186.101.  INITIATING VOLUNTARY DISSOLUTION.  (a)  A
217-10   state trust company may initiate voluntary dissolution and
217-11   surrender its charter as provided by this subchapter:
217-12               (1)  with the approval of the banking commissioner;
217-13               (2)  after complying with the provisions of the Texas
217-14   Business Corporation Act regarding board and shareholder approval
217-15   for voluntary dissolution; and
217-16               (3)  by filing the notice of dissolution as provided by
217-17   Section 186.102.
217-18         (b)  The shareholders or participants of a state trust
217-19   company initiating voluntary dissolution by resolution shall
217-20   appoint one or more persons to act as liquidating agent or
217-21   committee.  The liquidating agent or committee shall conduct the
217-22   liquidation as provided by law and under the supervision of the
217-23   board.  The board, in consultation with the banking commissioner,
217-24   shall require the liquidating agent or committee to give a suitable
217-25   bond.
217-26         Sec. 186.102.  FILING RESOLUTIONS WITH BANKING COMMISSIONER.
 218-1   After resolutions to dissolve and liquidate a state trust company
 218-2   have been adopted by the board and shareholders or participants, a
 218-3   majority of the directors, managers, or managing participants shall
 218-4   verify and file with the banking commissioner duplicate certified
 218-5   copies of:
 218-6               (1)  the resolutions of the shareholders or
 218-7   participants that:
 218-8                     (A)  are adopted at a meeting for which proper
 218-9   notice was given or by unanimous written consent; and
218-10                     (B)  approve the dissolution and liquidation of
218-11   the state trust company;
218-12               (2)  the resolutions of the board approving the
218-13   dissolution and liquidation of the  state trust company if the
218-14   trust company is operated by a board of directors or managers;
218-15               (3)  a copy of the notice to the shareholders or
218-16   participants informing them of the meeting described by Subdivision
218-17   (1)(A); and
218-18               (4)  a plan of liquidation.
218-19         Sec. 186.103.  BANKING COMMISSIONER INVESTIGATION AND
218-20   CONSENT.  The banking commissioner shall review the documentation
218-21   submitted under Section 186.102 and conduct any necessary
218-22   investigation or examination.  If the proceedings appear to have
218-23   been properly conducted and the bond to be given by the liquidating
218-24   agent or committee is adequate for its purposes, the banking
218-25   commissioner shall consent to dissolution and direct the state
218-26   trust company to publish notice of its pending dissolution.
 219-1         Sec. 186.104.  NOTICE OF PENDING DISSOLUTION.  (a)  A state
 219-2   trust company shall publish notice of its pending dissolution in a
 219-3   newspaper of general circulation in each community where its home
 219-4   office or a branch is located:
 219-5               (1)  at least once each week for eight consecutive
 219-6   weeks; or
 219-7               (2)  at other times specified by the banking
 219-8   commissioner or rules adopted under this subtitle.
 219-9         (b)  The notice must:
219-10               (1)  be in the form and include the information
219-11   required by the banking commissioner; and
219-12               (2)  state that:
219-13                     (A)  the state trust company is liquidating;
219-14                     (B)  clients, depositors, and creditors must
219-15   present their claims for payment on or before a specific date; and
219-16                     (C)  all safe deposit box holders and bailors of
219-17   property left with the state trust company should remove their
219-18   property on or before a specified date.
219-19         (c)  The dates selected by the state trust company under
219-20   Subsection (b) must:
219-21               (1)  be approved by the banking commissioner;
219-22               (2)  allow the affairs of the state trust company to be
219-23   wound up as quickly as feasible; and
219-24               (3)  allow creditors, clients, and owners of property
219-25   adequate time for presentation of claims, withdrawal of accounts,
219-26   and redemption of property.
 220-1         (d)  The banking commissioner may adjust the dates under
 220-2   Subsection (b) with or without republication of notice if
 220-3   additional time appears needed for the activities to which the
 220-4   dates pertain.
 220-5         (e)  At the time of or promptly after publication of the
 220-6   notice, the state trust company shall mail to each of the state
 220-7   trust company's known clients, depositors, creditors, safe deposit
 220-8   box holders, and bailors of property left with the state trust
 220-9   company, at the mailing address shown on the state trust company's
220-10   records, an individual notice containing:
220-11               (1)  the information required in a notice under
220-12   Subsection (b); and
220-13               (2)  specific information pertinent to the account or
220-14   property of the addressee.
220-15         Sec. 186.105.  SAFE DEPOSITS AND OTHER BAILMENTS.  (a)  A
220-16   contract between the state trust company and a person for bailment,
220-17   of deposit for hire, or for the lease of a safe, vault, or box,
220-18   ceases on the date specified in the notice as the date for removal
220-19   of property or a later date approved by the banking commissioner.
220-20   A person who has paid rental or storage charges for a period
220-21   extending beyond the date designated for removal of property has an
220-22   unsecured claim against the state trust company for a refund of the
220-23   unearned amount paid.
220-24         (b)  If the property is not removed by the date the contract
220-25   ceases, an officer of the state trust company shall inventory the
220-26   property.  In making the inventory, the officer may open a safe,
 221-1   vault, box, package, parcel, or receptacle in the custody or
 221-2   possession of the state trust company.  The inventory must be made
 221-3   in the presence of a notary public who is not an officer or
 221-4   employee of the state trust company and who is bonded in an amount
 221-5   and by sureties approved by the banking commissioner.  The property
 221-6   shall be marked to identify, to the extent possible, its owner or
 221-7   the person who left it with the state trust company.
 221-8         (c)  After all property belonging to others that is in the
 221-9   state trust company's custody and control has been inventoried, a
221-10   master list certified by the state trust company officer and the
221-11   notary public shall be furnished to the banking commissioner.  The
221-12   master list shall be kept in a place and dealt with in a manner the
221-13   banking commissioner specifies pending delivery of the property to
221-14   its owner or to the comptroller as unclaimed property.
221-15         Sec. 186.106.  OFFICES TO REMAIN OPEN.  Unless the banking
221-16   commissioner directs or consents otherwise, the home office and all
221-17   branch offices of a state trust company initiating voluntary
221-18   dissolution shall remain open for business during normal business
221-19   hours until the last date specified in published notices for
221-20   presentation of claims, withdrawal of accounts, and redemption of
221-21   property.
221-22         Sec. 186.107.  FIDUCIARY ACTIVITIES.  (a)  As soon as
221-23   practicable after publication of the notice of dissolution, the
221-24   state trust company shall:
221-25               (1)  terminate all fiduciary positions it holds;
221-26               (2)  surrender all property held by it as a fiduciary;
 222-1   and
 222-2               (3)  settle its fiduciary accounts.
 222-3         (b)  Unless all fiduciary accounts are settled and
 222-4   transferred by the last date specified in published notices or by
 222-5   the banking commissioner and unless the banking commissioner
 222-6   directs otherwise, the state trust company shall mail a notice to
 222-7   each trustor and beneficiary of any remaining trust, escrow
 222-8   arrangement, or other fiduciary relationship.  The notice must
 222-9   state:
222-10               (1)  the location of an office open during normal
222-11   business hours where administration of the remaining fiduciary
222-12   accounts will continue until settled or transferred; and
222-13               (2)  a telephone number at that office.
222-14         Sec. 186.108.  FINAL LIQUIDATION.  (a)  After the state trust
222-15   company has taken all of the actions specified by Sections 186.102,
222-16   186.104, 186.105, and 186.107, paid all its debts and obligations,
222-17   and transferred all property for which a legal claimant has been
222-18   found after the time for presentation of claims has expired, the
222-19   state trust company shall make a list from its books of the names
222-20   of each depositor, creditor, owner of personal property in the
222-21   state trust company's possession or custody, or lessee of any safe,
222-22   vault, or box, who has not claimed or has not received a deposit,
222-23   debt, dividend, interest, balance, or other amount or property due
222-24   to the person.  The list must be sworn to or affirmed by a majority
222-25   of the board or managing participants of the state trust company.
222-26         (b)  The state trust company shall:
 223-1               (1)  file the list and any necessary identifying
 223-2   information with the banking commissioner;
 223-3               (2)  pay any unclaimed money and deliver any unclaimed
 223-4   property to the comptroller as provided by Chapter 74, Property
 223-5   Code; and
 223-6               (3)  certify to the banking commissioner that the
 223-7   unclaimed money has been paid and unclaimed property has been
 223-8   delivered to the comptroller.
 223-9         (c)  After the banking commissioner has reviewed the list and
223-10   has reconciled the unclaimed cash and property with the amounts of
223-11   money and property reported and transferred to the comptroller, the
223-12   banking commissioner shall allow the state trust company to
223-13   distribute the state trust company's remaining assets, if any,
223-14   among its shareholders, participants, or participant-transferees as
223-15   their ownership interests appear.
223-16         (d)  After distribution of all remaining assets under
223-17   Subsection (c), the state trust company shall file with the
223-18   department:
223-19               (1)  an affidavit and schedules sworn to or affirmed by
223-20   a majority of the board or managing participants, showing the
223-21   distribution to each shareholder, participant, or
223-22   participant-transferee;
223-23               (2)  all copies of reports of examination of the state
223-24   trust company in its possession;
223-25               (3)  its original charter or an affidavit stating that
223-26   the original charter is lost; and
 224-1               (4)  any branch certificates of authority.
 224-2         (e)  After verifying the submitted information and documents,
 224-3   the banking commissioner shall issue a certificate canceling the
 224-4   charter of the state trust company.
 224-5         Sec. 186.109.  APPLICATION OF LAW TO STATE TRUST COMPANY IN
 224-6   DISSOLUTION.  A state trust company in the process of voluntary
 224-7   dissolution and liquidation remains subject to this subtitle,
 224-8   including provisions for examination by the banking commissioner,
 224-9   and the state trust company shall furnish reports required by the
224-10   banking commissioner.
224-11         Sec. 186.110.  AUTHORIZATION OF DEVIATION FROM PROCEDURES.
224-12   The banking commissioner may authorize a deviation from the
224-13   procedures for voluntary dissolution provided by this subchapter if
224-14   the banking commissioner determines that the interests of claimants
224-15   are not jeopardized by the deviation.
224-16         Sec. 186.111.  CLOSURE BY BANKING COMMISSIONER FOR
224-17   INVOLUNTARY DISSOLUTION AND LIQUIDATION.  The banking commissioner
224-18   may close the state trust company for involuntary dissolution and
224-19   liquidation under this chapter if the banking commissioner
224-20   determines that:
224-21               (1)  the voluntary liquidation is:
224-22                     (A)  being conducted in an improper or illegal
224-23   manner; or
224-24                     (B)  not in the best interests of the state trust
224-25   company's clients and creditors; or
224-26               (2)  the state trust company is insolvent or imminently
 225-1   insolvent.
 225-2         Sec. 186.112.  APPLICATION FOR NEW CHARTER.  After a state
 225-3   trust company's charter has been voluntarily surrendered and
 225-4   canceled, the state trust company may not resume business or reopen
 225-5   except on application for and approval of a new charter.
 225-6            (Sections 186.113-186.200 reserved for expansion
 225-7         SUBCHAPTER C.  INVOLUNTARY DISSOLUTION AND LIQUIDATION
 225-8         Sec. 186.201.  ACTION TO CLOSE STATE TRUST COMPANY.  (a)  The
 225-9   banking commissioner may close and liquidate a state trust company
225-10   on finding that:
225-11               (1)  the interests of its clients and creditors are
225-12   jeopardized by the state trust company's insolvency or imminent
225-13   insolvency; and
225-14               (2)  the best interests of clients and creditors would
225-15   be served by requiring that the state trust company be closed and
225-16   its assets liquidated.
225-17         (b)  A majority of the state trust company's directors,
225-18   managers, or managing participants may voluntarily close the state
225-19   trust company and place it with the banking commissioner for
225-20   liquidation.
225-21         Sec. 186.202.  NOTICE AND EFFECT OF CLOSURE; APPOINTMENT OF
225-22   RECEIVER.  (a)  After closing a state trust company under Section
225-23   186.201, the banking commissioner shall place a sign at its main
225-24   entrance stating that the state trust company has been closed and
225-25   the findings on which the closing of the state trust company is
225-26   based.  A correspondent bank of the closed state trust company may
 226-1   not pay an item drawn on the account of the closed state trust
 226-2   company that is presented for payment after the correspondent has
 226-3   received actual notice of closing unless it previously certified
 226-4   the item for payment.
 226-5         (b)  As soon as practicable after posting the sign at the
 226-6   state trust company's main entrance, the banking commissioner shall
 226-7   tender the state trust company to the Federal Deposit Insurance
 226-8   Corporation as provided by Section 186.003 or initiate a
 226-9   receivership proceeding by filing a copy of the notice contained on
226-10   the sign in district court in the county where the state trust
226-11   company's home office is located.  The court in which the notice is
226-12   filed shall docket it as a case styled, "In re liquidation of ____"
226-13   (inserting the name of the state trust company).  When the notice
226-14   is filed, the court has constructive custody of all the state trust
226-15   company's assets and any action that seeks to directly or
226-16   indirectly affect state trust company assets is considered an
226-17   intervention in the receivership proceeding and subject to this
226-18   subchapter and Subchapter D.
226-19         (c)  Venue for an action instituted to effect, contest, or
226-20   intervene in the liquidation of a state trust company is in Travis
226-21   County, except that on motion filed and served concurrently with or
226-22   before the filing of the answer, the court may, on a finding of
226-23   good cause, transfer the action to the county of the state trust
226-24   company's home office.
226-25         Sec. 186.203.  NATURE AND DURATION OF RECEIVERSHIP.  (a)  The
226-26   court may not require a bond from the banking commissioner as
 227-1   receiver.
 227-2         (b)  A reference in this chapter to the receiver is a
 227-3   reference to the banking commissioner as receiver and to any
 227-4   successors in office, the Federal Deposit Insurance Corporation if
 227-5   acting as receiver as provided by Section 186.003 and federal law,
 227-6   or an independent receiver appointed at the request of the banking
 227-7   commissioner as provided by Section 186.004.
 227-8         (c)  The receiver has all the powers of the directors,
 227-9   managers, managing participants, officers, and shareholders or
227-10   participants of the state trust company as necessary to support an
227-11   action taken on behalf of the state trust company.
227-12         (d)  The receiver and all employees and agents acting on
227-13   behalf of the receiver are acting in an official capacity and are
227-14   protected by Section 12.106.  An act of the receiver is an act of
227-15   the state trust company in liquidation.  This state or a political
227-16   subdivision of this state is not liable and may not be held
227-17   accountable for any debt or obligation of a state trust company in
227-18   receivership.
227-19         (e)  Section 64.072, Civil Practice and Remedies Code,
227-20   applies to the receivership of a state trust company except as
227-21   provided by this subsection.  A state trust company receivership
227-22   shall be administered continuously for the length of time necessary
227-23   to complete its purposes, and a period prescribed by other law
227-24   limiting the time for the administration of a receivership or of
227-25   corporate affairs generally, including Section 64.072(d), Civil
227-26   Practice and Remedies Code, does not apply.
 228-1         Sec. 186.204.  CONTEST OF LIQUIDATION.  (a)  A state trust
 228-2   company, acting through a majority of its directors, managers, or
 228-3   managing participants, may intervene in an action filed by the
 228-4   banking commissioner closing a state trust company to challenge the
 228-5   banking commissioner's closing of the state trust company and to
 228-6   enjoin the banking commissioner or other receiver from liquidating
 228-7   its assets.  The state trust company must file the intervention not
 228-8   later than the second business day after the closing of the state
 228-9   trust company, excluding legal holidays.  The court may issue an ex
228-10   parte order restraining the receiver from liquidating state trust
228-11   company assets pending a hearing on the injunction.  The receiver
228-12   shall comply with the restraining order but may petition the court
228-13   for permission to liquidate an asset as necessary to prevent its
228-14   loss or diminution pending the outcome of the injunction action.
228-15         (b)  The court shall hear an action under Subsection (a) as
228-16   quickly as possible and shall give it priority over other business.
228-17         (c)  The state trust company or receiver may appeal the
228-18   court's judgment as in other civil cases, except that the receiver
228-19   shall retain all state trust company assets pending a final
228-20   appellate court order even if the banking commissioner does not
228-21   prevail in the trial court.  If the banking commissioner prevails
228-22   in the trial court, liquidation of the state trust company may
228-23   proceed unless the trial court or appellate court orders otherwise.
228-24   If liquidation is enjoined or stayed pending appeal, the trial
228-25   court retains jurisdiction to permit liquidation of an asset as
228-26   necessary to prevent its loss or diminution pending the outcome of
 229-1   the appeal.
 229-2         Sec. 186.205.  NOTICE OF STATE TRUST COMPANY CLOSING.
 229-3   (a)  As soon as reasonably practicable after initiation of the
 229-4   receivership proceeding, the receiver shall publish notice, in a
 229-5   newspaper of general circulation in each community where the state
 229-6   trust company's home office or a branch is located.  The notice
 229-7   must state that:
 229-8               (1)  the state trust company has been closed for
 229-9   liquidation;
229-10               (2)  clients and creditors must present their claims
229-11   for payment on or before a specific date; and
229-12               (3)  all safe deposit box holders and bailors of
229-13   property left with the state trust company should remove their
229-14   property not later than a specified date.
229-15         (b)  A date that the receiver selects under Subsection (a):
229-16               (1)  may not be earlier than the 121st day after the
229-17   date of the notice; and
229-18               (2)  must allow:
229-19                     (A)  the affairs of the state trust company to be
229-20   wound up as quickly as feasible; and
229-21                     (B)  creditors, clients, and owners of property
229-22   adequate time for presentation of claims, withdrawal of accounts,
229-23   and redemption of property.
229-24         (c)  The receiver may adjust the dates under Subsection (a)
229-25   with the approval of the court and with or without republication of
229-26   notice if additional time appears needed for those activities.
 230-1         (d)  As soon as reasonably practicable given the state of
 230-2   state trust company records and the adequacy of staffing, the
 230-3   receiver shall mail to each of the state trust company's known
 230-4   clients, creditors, safe deposit box holders, and bailors of
 230-5   property left with the state trust company, at the mailing address
 230-6   shown on the state trust company's records, an individual notice
 230-7   containing the information required in a notice under Subsection
 230-8   (a) and specific information pertinent to the account or property
 230-9   of the addressee.
230-10         (e)  The receiver may determine the form and content of
230-11   notices under this section.
230-12         Sec. 186.206.  INVENTORY.  As soon as reasonably practicable
230-13   given the state of state trust company records and the adequacy of
230-14   staffing, the receiver shall prepare a comprehensive inventory of
230-15   the state trust company's assets for filing with the court.  The
230-16   inventory is open to inspection.
230-17         Sec. 186.207.  RECEIVER'S TITLE AND PRIORITY.  (a)  The
230-18   receiver has the title to all the state trust company's property,
230-19   contracts, and rights of action, wherever located, beginning on the
230-20   date the state trust company is closed for liquidation.
230-21         (b)  The rights of the receiver have priority over a
230-22   contractual lien or statutory landlord's lien under Chapter 54,
230-23   Property Code, judgment lien, attachment lien, or voluntary lien
230-24   that arises after the date of the closing of the state trust
230-25   company for liquidation.
230-26         (c)  The filing or recording of a receivership order in a
 231-1   record office of this state gives the same notice that would be
 231-2   given by a deed, bill of sale, or other evidence of title filed or
 231-3   recorded by the state trust company in liquidation.  The recording
 231-4   clerk shall index a recorded receivership order in the records to
 231-5   which the order relates.
 231-6         Sec. 186.208.  RIGHTS FIXED.  The rights and liabilities of
 231-7   the state trust company in liquidation and of a client, creditor,
 231-8   officer, director, manager, managing participant, employee,
 231-9   shareholder, participant, participant-transferee, agent, or other
231-10   person interested in the state trust company's estate are fixed on
231-11   the date of closing of the state trust company for liquidation
231-12   except as otherwise directed by the court or as expressly provided
231-13   otherwise by this subchapter or Subchapter D.
231-14         Sec. 186.209.  DEPOSITORIES.  (a)  The receiver may deposit
231-15   money collected on behalf of the state trust company estate in:
231-16               (1)  the Texas Treasury Safekeeping Trust Company in
231-17   accordance with procedures established by the comptroller; or
231-18               (2)  one or more depository institutions in this state,
231-19   the deposits of which are insured by the Federal Deposit Insurance
231-20   Corporation or its successor, if the receiver, using sound
231-21   financial judgment, determines that it would be advantageous to do
231-22   so.
231-23         (b)  If receivership money deposited in an account at a state
231-24   bank exceeds the maximum insured amount, the receiver shall require
231-25   the excess deposit to be adequately secured through pledge of
231-26   securities or otherwise, without approval of the court.  The
 232-1   depository bank may secure the deposits of the state trust company
 232-2   in liquidation on behalf of the receiver, notwithstanding any other
 232-3   provision of this subtitle.
 232-4         Sec. 186.210.  PENDING LAWSUIT.  (a)  A judgment or order of
 232-5   a court of this state or of another jurisdiction in an action
 232-6   pending by or against the state trust company, rendered after the
 232-7   date the state trust company was closed for liquidation, is not
 232-8   binding on the receiver unless the receiver was made a party to the
 232-9   suit.
232-10         (b)  Before the first anniversary of the date the state trust
232-11   company was closed for liquidation, the receiver may not be
232-12   required to plead to any suit pending against the state trust
232-13   company in a court in this state on the date the state trust
232-14   company was closed for liquidation and in which the receiver is a
232-15   proper plaintiff or defendant.
232-16         (c)  Sections 64.052, 64.053, and 64.056, Civil Practice and
232-17   Remedies Code, do not apply to a state trust company estate being
232-18   administered under this subchapter and Subchapter D.
232-19         Sec. 186.211.  NEW LAWSUIT.  (a)  Except as otherwise
232-20   provided by this section, the court in which a receivership
232-21   proceeding is pending under this subchapter has exclusive
232-22   jurisdiction to hear and determine all actions or proceedings
232-23   instituted by or against the state trust company or receiver after
232-24   the receivership proceeding begins.
232-25         (b)  The receiver may file in any jurisdiction an ancillary
232-26   suit that may be helpful to obtain jurisdiction or venue over a
 233-1   person or property.
 233-2         (c)  Exclusive venue lies in Travis County for an action or
 233-3   proceeding instituted against the receiver or the receiver's
 233-4   employee, including an employee of the department, that asserts
 233-5   personal liability on the part of the receiver or employee.
 233-6         Sec. 186.212.  OBTAINING RECORD OR OTHER PROPERTY IN
 233-7   POSSESSION OF OTHER PERSON.  (a)  Each state trust company
 233-8   affiliate, officer, director, manager, managing participant,
 233-9   employee, shareholder, participant, participant-transferee,
233-10   trustee, agent, servant, employee, attorney, attorney-in-fact, or
233-11   correspondent shall immediately deliver to the receiver, without
233-12   cost to the receiver, any record or other property of the state
233-13   trust company or that relates to the business of the state trust
233-14   company.
233-15         (b)  If by contract or otherwise a record or other property
233-16   that can be copied is the property of a person listed in Subsection
233-17   (a), it shall be copied and the copy shall be delivered to the
233-18   receiver.  The owner shall retain the original until notification
233-19   by the receiver that it is no longer required in the administration
233-20   of the state trust company's estate or until another time the
233-21   court, after notice and hearing, directs.  The copy is considered
233-22   to be a record of the state trust company in liquidation under
233-23   Section 186.225.
233-24         Sec. 186.213.  INJUNCTION IN AID OF LIQUIDATION.  (a)  On
233-25   application by the receiver, the court with or without notice may
233-26   issue an injunction:
 234-1               (1)  restraining each state trust company officer,
 234-2   director, manager, managing participant, employee, shareholder,
 234-3   participant, participant-transferee, trustee, agent, servant,
 234-4   employee, attorney, attorney-in-fact, accountant or accounting
 234-5   firm, correspondent, or other person from transacting the state
 234-6   trust company's business or wasting or disposing of its property;
 234-7   or
 234-8               (2)  requiring the delivery of the state trust
 234-9   company's property or assets to the receiver subject to the further
234-10   order of the court.
234-11         (b)  At any time during a proceeding under this subchapter,
234-12   the court may issue another injunction or order considered
234-13   necessary or desirable to prevent:
234-14               (1)  interference with the receiver or the proceeding;
234-15               (2)  waste of the assets of the state trust company;
234-16               (3)  the beginning or prosecution of an action;
234-17               (4)  the obtaining of a preference, judgment,
234-18   attachment, garnishment, or other lien; or
234-19               (5)  the making of a levy against the state trust
234-20   company or against its assets.
234-21         Sec. 186.214.  SUBPOENA.  (a)  The receiver may request the
234-22   court ex parte to issue a subpoena to compel the attendance and
234-23   testimony of a witness before the receiver and the production of a
234-24   record relating to the receivership estate.  For that purpose the
234-25   receiver or the receiver's designated representative may administer
234-26   an oath or affirmation, examine a witness, or receive evidence.
 235-1   The court has statewide subpoena power and may compel attendance
 235-2   and production of a record before the receiver at the state trust
 235-3   company, the office of the receiver, or another location.
 235-4         (b)  A person served with a subpoena under this section may
 235-5   file a motion with the court for a protective order as provided by
 235-6   Rule 166b, Texas Rules of Civil Procedure.  In a case of
 235-7   disobedience of a subpoena or the contumacy of a witness appearing
 235-8   before the receiver or the receiver's designated representative,
 235-9   the receiver may request and the court may issue an order requiring
235-10   the person subpoenaed to obey the subpoena, give evidence, or
235-11   produce a record relating to the matter in question.
235-12         (c)  A witness who is required to appear before the receiver
235-13   is entitled to receive:
235-14               (1)  reimbursement for mileage, in the amount for
235-15   travel by a state employee, for traveling to or returning from a
235-16   proceeding that is more than 25 miles from the witness's residence;
235-17   and
235-18               (2)  a fee for each day or part of a day the witness is
235-19   necessarily present as a witness in an amount set by the receiver
235-20   with the approval of the court of not less than $10 a day and not
235-21   more than an amount equal to the per diem travel allowance of a
235-22   state employee.
235-23         (d)  A payment of fees under Subsection (c) is an
235-24   administrative expense.
235-25         (e)  The receiver may serve the subpoena or have it served by
235-26   the receiver's authorized agent, a sheriff, or a constable.  The
 236-1   sheriff's or constable's fee for serving a subpoena must be the
 236-2   same as the fee paid the sheriff or constable for similar services.
 236-3         (f)  A subpoena issued under this section to a financial
 236-4   institution is not subject to Section 30.007, Civil Practice and
 236-5   Remedies Code.
 236-6         (g)  On certification by the receiver under official seal, a
 236-7   record produced or testimony taken as provided by this section and
 236-8   held by the receiver is admissible in evidence in any case without
 236-9   proof of its correctness or other proof, except the certificate of
236-10   the receiver that the record or testimony was received from the
236-11   person producing the record or testifying.  The certified record or
236-12   a certified copy of the record is prima facie evidence of the facts
236-13   it contains.  This section does not limit another provision of this
236-14   subchapter, Subchapter D, or another law that provides for the
236-15   admission of evidence or its evidentiary value.
236-16         Sec. 186.215.  EXECUTORY CONTRACT; ORAL AGREEMENT.  (a)  Not
236-17   later than six months after the date the receivership proceeding
236-18   begins, the receiver may terminate any executory contract to which
236-19   the state trust company is a party or any obligation of the state
236-20   trust company as a lessee.  A lessor who receives notice of the
236-21   receiver's election to terminate the lease before the 60th day
236-22   before the termination date is not entitled to rent or damages for
236-23   termination, other than rent accrued to the date of termination.
236-24         (b)  An agreement that tends to diminish or defeat the
236-25   interest of the estate in a state trust company asset is not valid
236-26   against the receiver unless the agreement:
 237-1               (1)  is in writing;
 237-2               (2)  was executed by the state trust company and any
 237-3   person claiming an adverse interest under the agreement, including
 237-4   the obligor, when the state trust company acquired the asset;
 237-5               (3)  was approved by the board of the state trust
 237-6   company or its designated committee, and the approval is reflected
 237-7   in the minutes of the board or committee; and
 237-8               (4)  has been continuously since its execution an
 237-9   official record of the state trust company.
237-10         Sec. 186.216.  PREFERENCES.  (a)  A transfer of or lien on
237-11   the property or assets of a state trust company is voidable by the
237-12   receiver if the transfer or lien:
237-13               (1)  was made or created after:
237-14                     (A)  four months before the date the state trust
237-15   company is closed for liquidation; or
237-16                     (B)  one year before the date the state trust
237-17   company is closed for liquidation if the receiving creditor was at
237-18   the time an affiliate, officer, director, manager, managing
237-19   participant, principal shareholder, or participant of the state
237-20   trust company or an affiliate of the trust company;
237-21               (2)  was made or created with the intent of giving to a
237-22   creditor or depositor, or enabling a creditor or depositor to
237-23   obtain, a greater percentage of the claimant's debt than is given
237-24   or obtained by another claimant of the same class; and
237-25               (3)  is accepted by a creditor or depositor having
237-26   reasonable cause to believe that a preference will occur.
 238-1         (b)  Each state trust company officer, director, manager,
 238-2   managing participant, employee, shareholder, participant,
 238-3   participant-transferee, trustee, agent, servant, employee,
 238-4   attorney-in-fact, or correspondent, or other person acting on
 238-5   behalf of the state trust company, who has participated in
 238-6   implementing a voidable transfer or lien, and each person receiving
 238-7   property or the benefit of property of the state trust company as a
 238-8   result of the voidable transfer or lien, is personally liable for
 238-9   the property or benefit received and shall account to the receiver
238-10   for the benefit of the clients and creditors of the state trust
238-11   company.
238-12         (c)  The receiver may avoid a transfer of or lien on the
238-13   property or assets of a state trust company that a client,
238-14   creditor, shareholder, participant, or participant-transferee of
238-15   the state trust company could have avoided and may recover the
238-16   property transferred or its value from the person to whom it was
238-17   transferred or from a person who has received it unless the
238-18   transferee or recipient was a bona fide holder for value before the
238-19   date the state trust company was closed for liquidation.
238-20         Sec. 186.217.  EMPLOYEES OF RECEIVER.  The receiver may
238-21   employ agents, legal counsel, accountants, appraisers, consultants,
238-22   and other personnel the receiver considers necessary to assist in
238-23   the performance of the receiver's duties.  The receiver may use
238-24   personnel of the department if the receiver considers the use to be
238-25   advantageous or desirable.  The expense of employing those persons
238-26   is an administrative expense.
 239-1         Sec. 186.218.  DISPOSAL OF PROPERTY; SETTLING OF CLAIM.
 239-2   (a)  In liquidating a state trust company, the receiver on order of
 239-3   the court entered with or without hearing may:
 239-4               (1)  sell all or part of the property of the state
 239-5   trust company;
 239-6               (2)  borrow money and pledge all or part of the assets
 239-7   of the state trust company to secure the debt created, except that
 239-8   the receiver may not be held personally liable to repay borrowed
 239-9   funds;
239-10               (3)  compromise or compound a doubtful or uncollectible
239-11   debt or claim owed by or owing to the state trust company; and
239-12               (4)  enter another agreement on behalf of the state
239-13   trust company that the receiver considers necessary or proper to
239-14   the management, conservation, or liquidation of its assets.
239-15         (b)  If the amount of a debt or claim owed by or owing to the
239-16   state trust company or the value of an item of property of the
239-17   trust company does not exceed $20,000, excluding interest, the
239-18   receiver may compromise or compound the debt or claim or sell the
239-19   property on terms the receiver considers to be in the best interest
239-20   of the state trust company estate without obtaining the approval of
239-21   the court.
239-22         (c)  With the approval of the court, the receiver may sell or
239-23   offer or agree to sell an asset of the state trust company, other
239-24   than a fiduciary asset, to a depositor or creditor of the state
239-25   trust company.  Payment may be in whole or in part out of
239-26   distributions payable to the purchasing creditor or depositor on
 240-1   account of an approved claim against the state trust company's
 240-2   estate.  On application by the receiver, the court may designate
 240-3   one or more representatives to act for certain clients or creditors
 240-4   as a class in the purchase, holding, and management of assets
 240-5   purchased by the class under this section, and the receiver may
 240-6   with the approval of the court advance the expenses of the
 240-7   appointed representative against the security of the claims of the
 240-8   class.
 240-9         Sec. 186.219.  COURT ORDER; NOTICE AND HEARING.  If the court
240-10   requires notice and hearing before entering an order, the court
240-11   shall set the time and place of the hearing and prescribe whether
240-12   the notice is to be given by service on specific parties, by
240-13   publication, or by a combination of those methods.  The court may
240-14   not enter an order requested by a person other than the receiver
240-15   without notice to the receiver and an opportunity for the receiver
240-16   to be heard.
240-17         Sec. 186.220.  RECEIVER'S REPORTS; EXPENSES.  (a)  The
240-18   receiver shall file with the court:
240-19               (1)  a quarterly report showing the operation,
240-20   receipts, expenditures, and general condition of the state trust
240-21   company in liquidation; and
240-22               (2)  a final report regarding the liquidated state
240-23   trust company showing all receipts and expenditures and giving a
240-24   full explanation and a statement of the disposition of all assets
240-25   of the state trust company.
240-26         (b)  The receiver shall pay all administrative expenses out
 241-1   of money or other assets of the state trust company.  Each quarter
 241-2   the receiver shall swear to and submit to the court an itemized
 241-3   report of those expenses.  The court shall approve the report
 241-4   unless an objection is filed before the 11th day after the date it
 241-5   is submitted.  An objection may be made only by a party in interest
 241-6   and must specify each item objected to and the ground for the
 241-7   objection.  The court shall set the objection for hearing and
 241-8   notify the parties of this action.  The objecting party has the
 241-9   burden of proof to show that the item objected to is improper,
241-10   unnecessary, or excessive.
241-11         (c)  The court may prescribe whether the notice of the
241-12   receiver's report is to be given by service on specific parties, by
241-13   publication, or by a combination of those methods.
241-14         Sec. 186.221.  COURT-ORDERED AUDIT.  (a)  The court may order
241-15   an audit of the books and records of the receiver that relate to
241-16   the receivership.  A report of an audit ordered under this section
241-17   shall be filed with the court.  The receiver shall make the books
241-18   and records relating to the receivership available to the auditor
241-19   as required by the court order.
241-20         (b)  The receiver shall pay the expenses of an audit ordered
241-21   under this section as an administrative expense.
241-22         Sec. 186.222.  SAFE DEPOSITS AND OTHER BAILMENTS.  (a)  A
241-23   contract between the state trust company and another person for
241-24   bailment, of deposit for hire, or for the lease of a safe, vault,
241-25   or box ceases on the date specified for removal of property in the
241-26   notices that were published and mailed or a later date approved by
 242-1   the receiver or the court.  A person who has paid rental or storage
 242-2   charges for a period extending beyond the date designated for
 242-3   removal of property has a claim against the state trust company
 242-4   estate for a refund of the unearned amount paid.
 242-5         (b)  If the property is not removed by the date the contract
 242-6   ceases, the receiver shall inventory the property.  In making the
 242-7   inventory, the receiver may open a safe, vault, or box, or any
 242-8   package, parcel, or receptacle, in the custody or possession of the
 242-9   receiver.  The property shall be marked to identify, to the extent
242-10   possible, its owner or the person who left it with the state trust
242-11   company.  After all property belonging to others that is in the
242-12   receiver's custody and control has been inventoried, the receiver
242-13   shall compile a master list that is divided for each office of the
242-14   state trust company that received property that remains unclaimed.
242-15   The receiver shall publish, in a newspaper of general circulation
242-16   in each community in which the state trust company had an office
242-17   that received property that remains unclaimed, the list and the
242-18   names of the owners of the property as shown in the state trust
242-19   company's records.  The published notice shall specify a procedure
242-20   for claiming the property unless the court, on application of the
242-21   receiver, approves an alternate procedure.
242-22         Sec. 186.223.  FIDUCIARY ACTIVITIES.  (a)  As soon after
242-23   beginning the receivership proceeding as is practicable, the
242-24   receiver shall:
242-25               (1)  terminate all fiduciary positions the state trust
242-26   company holds;
 243-1               (2)  surrender all property held by the state trust
 243-2   company as a fiduciary; and
 243-3               (3)  settle the state trust company's fiduciary
 243-4   accounts.
 243-5         (b)  The receiver shall release all segregated and
 243-6   identifiable fiduciary property held by the state trust company to
 243-7   successor fiduciaries.
 243-8         (c)  With the approval of the court, the receiver may sell
 243-9   the administration of all or substantially all remaining fiduciary
243-10   accounts to one or more successor fiduciaries on terms that appear
243-11   to be in the best interest of the state trust company's estate and
243-12   the persons interested in the fiduciary accounts.
243-13         (d)  If commingled fiduciary money held by the state trust
243-14   company as trustee is insufficient to satisfy all fiduciary claims
243-15   to the commingled money, the receiver shall distribute commingled
243-16   money pro rata to all fiduciary claimants of commingled money based
243-17   on their proportionate interests after payment of administrative
243-18   expenses related solely to the fiduciary claims.  The fictional
243-19   tracing rule does not apply.
243-20         (e)  The receiver may require a fiduciary claimant to file a
243-21   proof of claim if the records of the state trust company are
243-22   insufficient to identify the claimant's interest.
243-23         Sec. 186.224.  DISPOSITION AND MAINTENANCE OF RECORDS.
243-24   (a)  On approval by the court, the receiver may dispose of records
243-25   of the state trust company in liquidation that are obsolete and
243-26   unnecessary to the continued administration of the receivership
 244-1   proceeding.
 244-2         (b)  The receiver may devise a method for the effective,
 244-3   efficient, and economical maintenance of the records of the state
 244-4   trust company and of the receiver's office.  The methods may
 244-5   include maintaining those records on any medium approved by the
 244-6   records management division of the Texas State Library.
 244-7         (c)  To maintain the records of the liquidated state trust
 244-8   company after the closing of the receivership proceeding, the
 244-9   receiver may reserve assets of an estate, deposit them in an
244-10   account, and use them for maintenance, storage, and disposal of
244-11   records in closed receivership estates.
244-12         (d)  Records of a liquidated state trust company are not
244-13   government records for any purpose, including Chapter 552,
244-14   Government Code, but shall be preserved and disposed of as if they
244-15   were records of the department under Chapter 441, Government Code.
244-16   Those records are confidential as provided by:
244-17               (1)  Subchapter D, Chapter 181;
244-18               (2)  rules adopted under this subtitle; and
244-19               (3)  Section 30.007, Civil Practice and Remedies Code.
244-20         Sec. 186.225.  RECORDS ADMITTED.  (a)  A record of a state
244-21   trust company in liquidation obtained by the receiver and held in
244-22   the course of the receivership proceeding or a certified copy of
244-23   the record under the official seal of the receiver is admissible in
244-24   evidence in all cases without proof of correctness or other proof,
244-25   except the certificate of the receiver that the record was received
244-26   from the custody of the state trust company or found among its
 245-1   effects.
 245-2         (b)  The receiver may certify the correctness of a record of
 245-3   the receiver's office, including a record described by Subsection
 245-4   (a), and may certify any fact contained in the record.  The record
 245-5   is admissible in evidence in all cases in which the original would
 245-6   be evidence.
 245-7         (c)  The original record or a certified copy of the record is
 245-8   prima facie evidence of the facts it contains.
 245-9         (d)  A copy of an original record or another record that is
245-10   maintained on a medium approved by the records management division
245-11   of the Texas State Library, within the scope of this section, and
245-12   produced by the receiver or the receiver's authorized
245-13   representative under this section:
245-14               (1)  has the same effect as the original record; and
245-15               (2)  may be used the same as the original record in a
245-16   judicial or administrative proceeding in this state.
245-17         Sec. 186.226.  RESUMPTION OF BUSINESS.  (a)  A state trust
245-18   company closed under Section 186.201 may not be reopened without
245-19   the approval of the banking commissioner unless a contest of
245-20   liquidation under Section 186.204 is finally resolved adversely to
245-21   the banking commissioner and the court authorizes its reopening.
245-22         (b)  The banking commissioner may place temporary limits on
245-23   the right of withdrawals by, or payments to, individual clients and
245-24   creditors of a state trust company reopened under this section, in
245-25   accordance with applicable law.
245-26         (c)  As a depositor or creditor of a reopened state trust
 246-1   company, this state or a political subdivision of this state may
 246-2   agree to temporary limits that the banking commissioner places on
 246-3   payments or withdrawals.
 246-4         Sec. 186.227.  ASSETS DISCOVERED AFTER CLOSE OF RECEIVERSHIP.
 246-5   (a)  The banking commissioner shall report to the court discovery
 246-6   of an asset having value that:
 246-7               (1)  the banking commissioner discovers after the
 246-8   receivership was closed by final order of the court; and
 246-9               (2)  was abandoned as worthless or unknown during
246-10   receivership.
246-11         (b)  The court may reopen the receivership proceeding for
246-12   continued liquidation if the value of the after-discovered assets
246-13   justifies the reopening.
246-14         (c)  If the banking commissioner suspects that the
246-15   information concerning after-disclosed assets may have been
246-16   intentionally or fraudulently concealed, the banking commissioner
246-17   shall notify appropriate civil and criminal authorities to
246-18   determine any applicable penalties.
246-19            (Sections 186.228-186.300 reserved for expansion
246-20            SUBCHAPTER D.  CLAIMS AGAINST RECEIVERSHIP ESTATE
246-21         Sec. 186.301.  FILING CLAIM.  (a)  This section applies only
246-22   to a claim by a person, other than a shareholder, participant, or
246-23   participant-transferee acting in that capacity, who has a claim
246-24   against a state trust company in liquidation, including a claimant
246-25   with a secured claim or a claimant under a fiduciary relationship
246-26   that has been ordered by the receiver to file a claim pursuant to
 247-1   Section 186.223.
 247-2         (b)  To receive payment of a claim, the person must present
 247-3   proof of the claim to the receiver:
 247-4               (1)  at a place specified by the receiver; and
 247-5               (2)  within the period specified by the receiver under
 247-6   Section 186.205.
 247-7         (c)  Receipt of the required proof of claim by the receiver
 247-8   is a condition precedent to the payment of the claim.
 247-9         (d)  A claim that is not filed within the period specified by
247-10   the receiver may not participate in a distribution of the assets by
247-11   the receiver, except that, subject to court approval, the receiver
247-12   may accept a claim filed not later than the 180th day after the
247-13   date notice of the claimant's right to file a proof of claim is
247-14   mailed to the claimant.
247-15         (e)  A claim accepted under this section and approved is
247-16   subordinate to an approved claim of a general creditor.
247-17         (f)  Interest does not accrue on a claim after the date the
247-18   state trust company is closed for liquidation.
247-19         Sec. 186.302.  PROOF OF CLAIM.  (a)  A proof of claim must be
247-20   in writing, be signed by the claimant, and include:
247-21               (1)  a statement of the claim;
247-22               (2)  a description of the consideration for the claim;
247-23               (3)  a statement of whether collateral is held or a
247-24   security interest is asserted against the claim and, if so, a
247-25   description of the collateral or security interest;
247-26               (4)  a statement of any right of priority of payment
 248-1   for the claim or other specific right asserted by the claimant;
 248-2               (5)  a statement of whether a payment has been made on
 248-3   the claim and, if so, the amount and source of the payment, to the
 248-4   extent known by the claimant;
 248-5               (6)  a statement that the amount claimed is justly owed
 248-6   by the state trust company in liquidation to the claimant; and
 248-7               (7)  any other matter that is required by the court.
 248-8         (b)  The receiver may designate the form of the proof of
 248-9   claim.  A proof of claim must be filed under oath unless the oath
248-10   is waived by the receiver.  A proof of claim filed with the
248-11   receiver is considered filed in an official proceeding for purposes
248-12   of Chapter 37, Penal Code.
248-13         (c)  If a claim is founded on a written instrument, the
248-14   original instrument, unless lost or destroyed, must be filed with
248-15   the proof of claim.  After the instrument is filed, the receiver
248-16   may permit the claimant to substitute a copy of the instrument
248-17   until the final disposition of the claim.  If the instrument is
248-18   lost or destroyed, a statement of that fact and of the
248-19   circumstances of the loss or destruction must be filed under oath
248-20   with the claim.
248-21         Sec. 186.303.  JUDGMENT AS PROOF OF CLAIM.  (a)  A judgment
248-22   entered against a state trust company in liquidation before the
248-23   date the state trust company was closed for liquidation may not be
248-24   given higher priority than a claim of an unsecured creditor unless
248-25   the judgment creditor in a proof of claim proves the allegations
248-26   supporting the judgment to the receiver's satisfaction.
 249-1         (b)  A judgment against the state trust company taken by
 249-2   default or by collusion before the date the state trust company was
 249-3   closed for liquidation may not be considered as conclusive evidence
 249-4   of the liability of the state trust company to the judgment
 249-5   creditor or of the amount of damages to which the judgment creditor
 249-6   is entitled.
 249-7         (c)  A judgment against the state trust company entered after
 249-8   the date the state trust company was closed for liquidation may not
 249-9   be considered as evidence of liability or of the amount of damages.
249-10         Sec. 186.304.  SECURED CLAIM.  (a)  The owner of a secured
249-11   deposit may file a claim as a creditor against a state trust
249-12   company in liquidation.  The value of security shall be determined
249-13   under supervision of the court by converting the security into
249-14   money.
249-15         (b)  The owner of a secured claim against a state trust
249-16   company in liquidation may:
249-17               (1)  surrender the security and file a claim as a
249-18   general creditor; or
249-19               (2)  apply the security to the claim and discharge the
249-20   claim.
249-21         (c)  If the owner applies the security and discharges the
249-22   claim under Subsection (b), any deficiency shall be treated as a
249-23   claim against the general assets of the state trust company on the
249-24   same basis as a claim of an unsecured creditor.  The amount of the
249-25   deficiency shall be determined as provided by Section 186.305,
249-26   except that if the amount of the deficiency has been adjudicated by
 250-1   a court in a proceeding in which the receiver has had notice and an
 250-2   opportunity to be heard, the court's decision is conclusive as to
 250-3   the amount.
 250-4         (d)  The value of security held by a secured creditor shall
 250-5   be determined under supervision of the court by:
 250-6               (1)  converting the security into money according to
 250-7   the terms of the agreement under which the security was delivered
 250-8   to the creditor; or
 250-9               (2)  agreement, arbitration, compromise, or litigation
250-10   between the creditor and the receiver.
250-11         Sec. 186.305.  UNLIQUIDATED OR UNDETERMINED CLAIM.  (a)  A
250-12   claim based on an unliquidated or undetermined demand shall be
250-13   filed within the period provided by Subchapter C for the filing of
250-14   a claim.  The claim may not share in any distribution to claimants
250-15   until the claim is definitely liquidated, determined, and allowed.
250-16   After the claim is liquidated, determined, and allowed, the claim
250-17   shares ratably with the claims of the same class in all subsequent
250-18   distributions.
250-19         (b)  For the purposes of this section, a demand is considered
250-20   unliquidated or undetermined if the right of action on the demand
250-21   accrued while a state trust company was closed for liquidation and
250-22   the liability on the demand has not been determined or the amount
250-23   of the demand has not been liquidated.
250-24         (c)  If the receiver in all other respects is in a position
250-25   to close the receivership proceeding, the proposed closing is
250-26   sufficient grounds for the rejection of any remaining claim based
 251-1   on an unliquidated or undetermined demand.  The receiver shall
 251-2   notify the claimant of the intention to close the proceeding.  If
 251-3   the demand is not liquidated or determined before the 61st day
 251-4   after the date of the notice, the receiver may reject the claim.
 251-5         Sec. 186.306.  SET-OFF.  (a)  Mutual credits and mutual debts
 251-6   shall be set off and only the balance allowed or paid, except that
 251-7   a set-off may not be allowed in favor of a person if:
 251-8               (1)  the obligation of a state trust company to the
 251-9   person on the date the state trust company was closed for
251-10   liquidation did not entitle the person to share as a claimant in
251-11   the assets of the state trust company;
251-12               (2)  the obligation of the state trust company to the
251-13   person was purchased by or transferred to the person after the date
251-14   the state trust company was closed for liquidation or for the
251-15   purpose of increasing set-off rights; or
251-16               (3)  the obligation of the person or the state trust
251-17   company is as a trustee or fiduciary.
251-18         (b)  On request, the receiver shall provide a person with an
251-19   accounting statement identifying each debt that is due and payable.
251-20   A person who owes a state trust company an amount that is due and
251-21   payable against which the person asserts set-off of mutual credits
251-22   that may become due and payable from the state trust company in the
251-23   future shall promptly pay to the receiver the amount due and
251-24   payable.  The  receiver shall promptly refund, to the extent of the
251-25   person's prior payment, mutual credits that become due and payable
251-26   to the person by the state trust company in liquidation.
 252-1         Sec. 186.307.  ACTION ON CLAIM.  (a)  Not later than six
 252-2   months after the last day permitted for the filing of claims or a
 252-3   later date allowed by the court, the receiver shall accept or
 252-4   reject in whole or in part each claim filed against the state trust
 252-5   company in liquidation, except for an unliquidated or undetermined
 252-6   claim governed by Section 186.305.  The receiver shall reject a
 252-7   claim if the receiver doubts its validity.
 252-8         (b)  The receiver shall mail written notice to each claimant,
 252-9   specifying the disposition of the person's claim.  If a claim is
252-10   rejected in whole or in part, the receiver in the notice shall
252-11   specify the basis for rejection and advise the claimant of the
252-12   procedures and deadline for appeal.
252-13         (c)  The receiver shall send each claimant a summary schedule
252-14   of approved and rejected claims by priority class and notify the
252-15   claimant:
252-16               (1)  that a copy of a schedule of claims disposition
252-17   including only the name of the claimant, the amount of the claim
252-18   allowed, and the amount of the claim rejected is available on
252-19   request; and
252-20               (2)  of the procedure and deadline for filing an
252-21   objection to an approved claim.
252-22         (d)  The receiver or an agent or employee of the receiver,
252-23   including an employee of the department, is not liable, and a cause
252-24   of action may not be brought against the person, for an act or
252-25   omission of the person relating to the adjustment, negotiation, or
252-26   settlement of a claim.
 253-1         Sec. 186.308.  OBJECTION TO APPROVED CLAIM.  The receiver
 253-2   with court approval shall set a deadline for an objection to an
 253-3   approved claim.  On or before that date a depositor, creditor,
 253-4   other claimant, shareholder, participant, or participant-transferee
 253-5   of the state trust company may file an objection to an approved
 253-6   claim.  The objection shall be heard and determined by the court.
 253-7   If the objection is sustained, the court shall direct an
 253-8   appropriate modification of the schedule of claims.
 253-9         Sec. 186.309.  APPEAL OF REJECTED CLAIM.  (a)  The receiver's
253-10   rejection of a claim may be appealed in the court in which the
253-11   receivership proceeding is pending.  The appeal must be brought
253-12   within three months after the date of service of notice of the
253-13   rejection.
253-14         (b)  If the appeal is timely brought, review is de novo as if
253-15   it were an action originally filed in the court, and is subject to
253-16   the rules of procedure and appeal applicable to civil cases.  An
253-17   action to appeal rejection of a claim by the receiver is separate
253-18   from the receivership proceeding, and may not be initiated by a
253-19   claimant intervening in the receivership proceeding.
253-20         (c)  If the action is not timely brought, the action of the
253-21   receiver is final and not subject to review.
253-22         Sec. 186.310.  PAYMENT OF CLAIM.  (a)  Except as expressly
253-23   provided otherwise by this subchapter or Subchapter C, without the
253-24   approval of the court the receiver may not make a payment on a
253-25   claim, other than a claim for an obligation incurred by the
253-26   receiver for administrative expenses.
 254-1         (b)  The banking commissioner shall deposit in one or more
 254-2   banks located in this state all money available for the benefit of
 254-3   nonclaiming depositors and creditors.  The banking commissioner
 254-4   shall pay the depositors or creditors on demand any amount held for
 254-5   their benefit.
 254-6         (c)  The receiver may periodically make partial distribution
 254-7   to the holders of approved claims if:
 254-8               (1)  all objections have been heard and decided as
 254-9   provided by Section 186.308;
254-10               (2)  the time for filing appeals has expired as
254-11   provided by Section 186.309;
254-12               (3)  money has been made available to provide for the
254-13   payment of all nonclaiming depositors and creditors in accordance
254-14   with Subsection (b); and
254-15               (4)  a proper reserve is established for the pro rata
254-16   payment of:
254-17                     (A)  rejected claims that have been appealed; and
254-18                     (B)  any claims based on unliquidated or
254-19   undetermined demands governed by Section 186.305.
254-20         (d)  As soon as practicable after the determination of all
254-21   objections, appeals, and claims based on previously unliquidated or
254-22   undetermined demands governed by Section 186.305 and money has been
254-23   made available to provide for the payment of all nonclaiming
254-24   depositors and creditors in accordance with Subsection (b), the
254-25   receiver shall distribute the assets of the state trust company in
254-26   satisfaction of approved claims other than claims asserted in a
 255-1   person's capacity as a shareholder, participant, or
 255-2   participant-transferee.
 255-3         Sec. 186.311.  PRIORITY OF CLAIMS AGAINST INSURED STATE TRUST
 255-4   COMPANY.  The distribution of assets from the estate of a state
 255-5   trust company the trust deposits of which are insured by the
 255-6   Federal Deposit Insurance Corporation or its successor shall be
 255-7   made in the same order of priority as assets would be distributed
 255-8   on liquidation or purchase of assets and assumption of liabilities
 255-9   of a national bank under federal law.
255-10         Sec. 186.312.  PRIORITY OF CLAIMS AGAINST UNINSURED STATE
255-11   TRUST COMPANY.  (a)  The priority of distribution of assets from
255-12   the estate of a state trust company the trust deposits of which are
255-13   not insured by the Federal Deposit Insurance Corporation or its
255-14   successor shall be in accordance with the order of each class as
255-15   provided by this section.  Every claim in each class shall be paid
255-16   in full, or adequate money shall  be retained for that payment,
255-17   before a member of the next class may receive any payment.  A
255-18   subclass may not be established within a class, except for a
255-19   preference or subordination within a class expressly created by
255-20   contract or other instrument or in the articles of association.
255-21         (b)  Assets shall be distributed in the following order of
255-22   priority:
255-23               (1)  administrative expenses;
255-24               (2)  approved claims of secured trust deposits to the
255-25   extent of the value of the security as provided by Section
255-26   186.304(a);
 256-1               (3)  approved claims of secured creditors to the extent
 256-2   of the value of the security as provided by Section 186.304(b);
 256-3               (4)  approved claims by beneficiaries of insufficient
 256-4   commingled fiduciary money or missing fiduciary property and
 256-5   approved claims of clients of the state trust company;
 256-6               (5)  other approved claims of general creditors not
 256-7   falling within a higher priority under this section, including
 256-8   unsecured claims for taxes and debts due the federal government or
 256-9   a state or local government;
256-10               (6)  approved claims of a type described by
256-11   Subdivisions (1)-(5) that were not filed within the period
256-12   prescribed by this subchapter; and
256-13               (7)  claims of capital note or debenture holders or
256-14   holders of similar obligations and proprietary claims of
256-15   shareholders, participants, participant-transferees, or other
256-16   owners according to the terms established by issue, class, or
256-17   series.
256-18         (c)  Subject to Sections 186.310 and 186.313, the banking
256-19   commissioner may make a ratable distribution to approved claimants
256-20   within a particular class or priority if:
256-21               (1)  all timely filed and approved claims of a higher
256-22   priority have been satisfied; and
256-23               (2)  there is insufficient money to fully satisfy all
256-24   of those claims, after reserving money for administrative expenses
256-25   as necessary.
256-26         Sec. 186.313.  EXCESS ASSETS.  (a)  If state trust company
 257-1   assets remain after the receiver has provided for unclaimed
 257-2   distributions and all of the liabilities of the state trust company
 257-3   in liquidation, the receiver shall distribute the remaining assets
 257-4   to the shareholders or participants of the state trust company.
 257-5         (b)  If the remaining assets are not liquid or if they
 257-6   otherwise require continuing administration, the receiver may call
 257-7   a meeting of the shareholders or participants and
 257-8   participant-transferees of the state trust company.  The receiver
 257-9   shall give notice of the meeting:
257-10               (1)  in a newspaper of general circulation in the
257-11   county where the home office of the state trust company was
257-12   located; and
257-13               (2)  by written notice to the shareholders or
257-14   participants and participant-transferees of record at their last
257-15   known addresses.
257-16         (c)  At the meeting, the shareholders or participants shall
257-17   appoint one or more agents to take over the affairs to continue the
257-18   liquidation for the benefit of the shareholders or participants and
257-19   participant-transferees.  Voting privileges are governed by the
257-20   state trust company's bylaws and articles of association.  If a
257-21   quorum cannot be obtained at the meeting, the banking commissioner
257-22   shall appoint an agent.  An agent appointed under this subsection
257-23   shall execute and file with the court a bond approved by the court,
257-24   conditioned on the faithful performance of all the duties of the
257-25   trust.
257-26         (d)  Under order of the court the receiver shall transfer and
 258-1   deliver to one or more agents for continued liquidation under the
 258-2   court's supervision all assets of the state trust company remaining
 258-3   in the receiver's hands.  The court shall discharge the receiver
 258-4   from further liability to the state trust company and its clients,
 258-5   creditors, shareholders, participants, and participant-transferees.
 258-6         (e)  The state trust company may not resume business and the
 258-7   charter of the state trust company is void on the date the court
 258-8   issues the order directing the receiver to transfer and deliver the
 258-9   remaining assets of the state trust company to one or more agents.
258-10         Sec. 186.314.  UNCLAIMED PROPERTY.  After completion of the
258-11   liquidation, any unclaimed property remaining with the receiver
258-12   shall be delivered to the comptroller as provided by Chapter 74,
258-13   Property Code.
258-14                 CHAPTER 199.  MISCELLANEOUS PROVISIONS
258-15         Sec. 199.001.  SLANDER OR LIBEL OF STATE TRUST COMPANY.
258-16   (a)  A person commits an offense if the person:
258-17               (1)  knowingly makes, circulates, or transmits to
258-18   another person an untrue statement that is derogatory to the
258-19   financial condition of a state trust company located in this state;
258-20   or
258-21               (2)  intentionally, to injure the state trust company,
258-22   counsels, aids, procures, or induces another person to knowingly
258-23   make, circulate, or transmit to another person an untrue statement
258-24   that is derogatory to the financial condition of a state trust
258-25   company located in this state.
258-26         (b)  An offense under this section is a state jail felony.
 259-1         Sec. 199.002.  AUTHORITY TO ACT AS NOTARY PUBLIC.  A notary
 259-2   public is not disqualified from taking an acknowledgment or proof
 259-3   of a written instrument as provided by Section 406.016, Government
 259-4   Code, solely because of the person's ownership of stock or
 259-5   participation interest in or employment by a state trust company
 259-6   that is an interested party in the underlying transaction.
 259-7         Sec. 199.003.  SUCCESSION OF TRUST POWERS.  (a)  If, at the
 259-8   time of a merger, reorganization, conversion, or sale of
 259-9   substantially all of its assets under Chapter 182 or other
259-10   applicable law, a reorganizing or selling state trust company is
259-11   acting as trustee, guardian, executor, or administrator, or in
259-12   another fiduciary capacity, the successor entity with fiduciary
259-13   powers may, without the necessity of judicial action or action by
259-14   the creator of the trust, continue the office, trust, or fiduciary
259-15   relationship.
259-16         (b)  The successor entity may perform all the duties and
259-17   exercise all the powers connected with or incidental to the
259-18   fiduciary relationship in the same manner as if the successor
259-19   entity had been originally designated as the fiduciary.
259-20         Sec. 199.004.  DISCOVERY OF CLIENT RECORDS.  Civil discovery
259-21   of a client record maintained by a state trust company is governed
259-22   by Section 30.007, Civil Practice and Remedies Code.
259-23         Sec. 199.005.  COMPLIANCE REVIEW COMMITTEE.  (a)  A state
259-24   trust company or an affiliate of a state trust company, including
259-25   its holding company, may establish a compliance review committee to
259-26   test, review, or evaluate the institution's conduct, transactions,
 260-1   or potential transactions for the purpose of monitoring and
 260-2   improving or enforcing compliance with:
 260-3               (1)  a statutory or regulatory requirement;
 260-4               (2)  financial reporting to a governmental agency;
 260-5               (3)  the policies and procedures of the state trust
 260-6   company or its affiliates; or
 260-7               (4)  safe, sound, and fair lending practices.
 260-8         (b)  Except as provided by Subsection (c):
 260-9               (1)  a compliance review document is confidential and
260-10   is not discoverable or admissible in evidence in a civil action;
260-11               (2)  an individual serving on a compliance review
260-12   committee or acting under the direction of a compliance review
260-13   committee may not be required to testify in a civil action as to:
260-14                     (A)  the contents or conclusions of a compliance
260-15   review document; or
260-16                     (B)  an action taken or discussions conducted by
260-17   or for a compliance review committee; and
260-18               (3)  a compliance review document or an action taken or
260-19   discussion conducted by or for a compliance review committee that
260-20   is disclosed to a governmental agency remains confidential and is
260-21   not discoverable or admissible in a civil action.
260-22         (c)  Subsection (b)(2) does not apply to an individual who
260-23   has management responsibility for the operations, records,
260-24   employees, or activities being examined or evaluated by the
260-25   compliance review committee.
260-26         (d)  This section does not limit the discovery or
 261-1   admissibility in a civil action of a document that is not a
 261-2   compliance review document.
 261-3         (e)  In this section:
 261-4               (1)  "Civil action" means a civil proceeding pending in
 261-5   a court or other adjudicatory tribunal with jurisdiction to issue a
 261-6   request or subpoena for records, including a voluntary or required
 261-7   alternative dispute resolution mechanism under which a party may
 261-8   compel the production of records.  The term does not include an
 261-9   examination or enforcement proceeding initiated by the Federal
261-10   Deposit Insurance Corporation or its successor and the board of
261-11   governors of the Federal Reserve System or its successor, in
261-12   exercise of their jurisdiction.
261-13               (2)  "Compliance review document" means a document
261-14   prepared for or created by a compliance review committee.
261-15         (b)  Section 1, Chapter 769, Acts of the 75th Legislature,
261-16   Regular Session, 1997 (Article 342a-1.001 et seq., Vernon's Texas
261-17   Civil Statutes), is repealed.
261-18         SECTION 7.17.  Chapter 151, Finance Code, is repealed.
261-19                   PART 3.  CHANGES RELATING TO CREDIT
261-20         SECTION 7.18.  (a)  Subtitle A, Title 4, Finance Code, is
261-21   amended to conform to Sections 1 and 48, Chapter 1396; Section 1,
261-22   Chapter 81; Section 4, Chapter 906; and Section 7, Chapter 1111,
261-23   Acts of the 75th Legislature, Regular Session, 1997, to read as
261-24   follows:
 262-1                          SUBTITLE A.  INTEREST
 262-2                    CHAPTER 301.  GENERAL PROVISIONS
 262-3         Sec. 301.001.  SHORT TITLE.  This title may be cited as the
 262-4   Texas Credit Title.
 262-5         Sec. 301.002.  DEFINITIONS.  (a)  In this subtitle:
 262-6               (1)  "Contract interest" means interest that an obligor
 262-7   has paid or agreed to pay to a creditor under a written contract of
 262-8   the parties.  The term does not include judgment interest.
 262-9               (2)  "Credit card transaction" means a transaction for
262-10   personal, family, or household use in which a credit card, plate,
262-11   coupon book, or credit card cash advance check may be used or is
262-12   used to debit an open-end account in connection with:
262-13                     (A)  a purchase or lease of goods or services; or
262-14                     (B)  a loan of money.
262-15               (3)  "Creditor" means a person who loans money or
262-16   otherwise extends credit.  The term does not include a judgment
262-17   creditor.
262-18               (4)  "Interest" means compensation for the use,
262-19   forbearance, or detention of money.  The term does not include time
262-20   price differential, regardless of how it is denominated.
262-21               (5)  "Judgment creditor" means a person to whom a money
262-22   judgment is payable.
262-23               (6)  "Judgment debtor" means a person obligated to pay
262-24   a money judgment.
262-25               (7)  "Judgment interest" means interest on a money
262-26   judgment, whether the interest accrues before, on, or after the
 263-1   date the judgment is rendered.
 263-2               (8)  "Legal interest" means interest charged or
 263-3   received in the absence of any agreement by an obligor to pay
 263-4   contract interest.  The term does not include judgment interest.
 263-5               (9)  "Lender credit card agreement":
 263-6                     (A)  means an agreement between a creditor and an
 263-7   obligor that provides that:
 263-8                           (i)  the obligor, by means of a credit card
 263-9   transaction for personal, family, or household use, may:
263-10                                          (a)  obtain loans from the
263-11   creditor directly or through other participating persons; and
263-12                                          (b)  lease or purchase goods
263-13   or services from more than one participating lessor or seller who
263-14   honors the creditor's credit card;
263-15                           (ii)  the creditor or another person acting
263-16   in cooperation with the creditor is to reimburse the participating
263-17   persons, lessors, or sellers for the loans or the goods or services
263-18   purchased or leased;
263-19                           (iii)  the obligor is to pay the creditor
263-20   the amount of the loan or cost of the lease or purchase;
263-21                           (iv)  the unpaid balance of the loan,
263-22   lease, or purchase and interest on that unpaid balance are debited
263-23   to the obligor's account under the agreement;
263-24                           (v)  interest may be computed on the
263-25   balances of the obligor's account but is not precomputed; and
263-26                           (vi)  the obligor and the creditor may
 264-1   agree that payment of part of the balance may be deferred;
 264-2                     (B)  includes an agreement under Section 342.455
 264-3   or Section 346.003(b) or (c) for an open-end account under which
 264-4   credit card transactions may be made or a merchant discount may be
 264-5   taken; and
 264-6                     (C)  does not include:
 264-7                           (i)  an agreement, including an open-end
 264-8   account credit agreement, between a seller and a buyer or between a
 264-9   lessor and a lessee; or
264-10                           (ii)  an agreement under which:
264-11                                          (a)  the entire balance is
264-12   due in full each month; and
264-13                                          (b)  no interest is charged
264-14   if the obligor pays the entire balance each month.
264-15               (10)  "Loan" means an advance of money that is made to
264-16   or on behalf of an obligor, the principal amount of which the
264-17   obligor has an obligation to pay the creditor.  The term does not
264-18   include a judgment.
264-19               (11)  "Merchant discount" means the consideration,
264-20   including a fee, charge, discount, or compensating balance, that a
264-21   creditor requires, or that a creditor, subsidiary, or parent
264-22   company of the creditor, or subsidiary of the creditor's parent
264-23   company, receives directly or indirectly from a person other than
264-24   the obligor in connection with a credit card transaction under a
264-25   lender credit card agreement between the obligor and the creditor.
264-26   The term does not include consideration received by a creditor from
 265-1   the obligor in connection with the credit card transaction.
 265-2               (12)  "Money judgment" means a judgment for money.  For
 265-3   purposes of this subtitle, the term includes legal interest or
 265-4   contract interest, if any, that is payable to a judgment creditor
 265-5   under a judgment.
 265-6               (13)  "Obligor" means a person to whom money is loaned
 265-7   or credit is otherwise extended.  The term does not include:
 265-8                     (A)  a judgment debtor; or
 265-9                     (B)  a surety, guarantor, or similar person.
265-10               (14)  "Open-end account":
265-11                     (A)  means an account under a written contract
265-12   between a creditor and an obligor in connection with which:
265-13                           (i)  the creditor reasonably contemplates
265-14   repeated transactions and the obligor is authorized to make
265-15   purchases or borrow money;
265-16                           (ii)  interest or time price differential
265-17   may be charged from time to time on an outstanding unpaid balance;
265-18   and
265-19                           (iii)  the amount of credit that may be
265-20   extended during the term of the account is generally made available
265-21   to the extent that any outstanding balance is repaid; and
265-22                     (B)  includes an account under an agreement
265-23   described by Section 342.455 or Chapter 345 or 346.
265-24               (15)  "Prepayment penalty" means consideration agreed
265-25   on and contracted for a discharge of a loan, other than a loan
265-26   governed by Chapter 306, before its maturity or a regularly
 266-1   scheduled date of payment, as a result of an obligor's election to
 266-2   pay all of the principal amount before its stated maturity or a
 266-3   regularly scheduled date of payment.
 266-4               (16)  "Time price differential" means an amount,
 266-5   however denominated or expressed, that is:
 266-6                     (A)  added to the price at which a seller offers
 266-7   to sell services or property to a purchaser for cash payable at the
 266-8   time of sale; and
 266-9                     (B)  paid or payable to the seller by the
266-10   purchaser for the privilege of paying the offered sales price after
266-11   the time of sale.
266-12               (17)  "Usurious interest" means interest that exceeds
266-13   the applicable maximum amount allowed by law.
266-14         (b)  These definitions shall be liberally construed to
266-15   accomplish the purposes of this subtitle.
266-16         (c)  The Finance Commission of Texas by rule may adopt other
266-17   definitions to accomplish the purposes of this subtitle.
266-18                      CHAPTER 302.  INTEREST RATES
266-19                    SUBCHAPTER A.  USURIOUS INTEREST
266-20         Sec. 302.001.  CONTRACTING FOR, CHARGING, OR RECEIVING
266-21   INTEREST OR TIME PRICE DIFFERENTIAL; USURIOUS INTEREST.  (a)  A
266-22   creditor may contract for, charge, and receive from an obligor
266-23   interest or time price differential.
266-24         (b)  The maximum rate or amount of interest is 10 percent a
266-25   year except as otherwise provided by law.  A greater rate of
266-26   interest than 10 percent a year is usurious unless otherwise
 267-1   provided by law.  All contracts for usurious interest are contrary
 267-2   to public policy  and subject to the appropriate penalty prescribed
 267-3   by Chapter 305.
 267-4         (c)  To determine the interest rate of a loan under this
 267-5   subtitle, all interest at any time contracted for shall be
 267-6   aggregated and amortized using the actuarial method during the
 267-7   stated term of the loan.
 267-8         Sec. 302.002.  ACCRUAL OF INTEREST WHEN NO RATE SPECIFIED.
 267-9   If a creditor has not agreed with an obligor to charge the obligor
267-10   any interest, the creditor may charge and receive from the obligor
267-11   legal interest at the rate of six percent a year on the principal
267-12   amount of the credit extended beginning on the 30th day after the
267-13   date on which the amount is due.  If an obligor has agreed to pay
267-14   to a creditor any compensation that constitutes interest, the
267-15   obligor is considered to have agreed on the rate produced by the
267-16   amount of that interest, regardless of whether that rate is stated
267-17   in the agreement.
267-18                SUBCHAPTER B.  OTHER RATES AND PROVISIONS
267-19                    ON LOANS SECURED BY REAL PROPERTY
267-20         Sec. 302.101.  DETERMINING RATES OF INTEREST BY SPREADING.
267-21   (a)  To determine whether a loan secured in any part by an interest
267-22   in real property, including a lien, mortgage, or security interest,
267-23   is usurious, the interest rate is computed by amortizing or
267-24   spreading, using the actuarial method during the stated term of the
267-25   loan, all interest at any time contracted for, charged, or received
267-26   in connection with the loan.
 268-1         (b)  If a loan described by Subsection (a) is paid in full
 268-2   before the end of the stated term of the loan and the amount of
 268-3   interest received for the period that the loan exists exceeds the
 268-4   amount that produces the maximum rate authorized by law for that
 268-5   period, the lender shall:
 268-6               (1)  refund the amount of the excess to the borrower;
 268-7   or
 268-8               (2)  credit the amount of the excess against amounts
 268-9   owing under the loan.
268-10         (c)  A lender who complies with Subsection (b) is not subject
268-11   to any of the penalties provided by law for contracting for,
268-12   charging, or receiving interest in excess of the maximum rate
268-13   authorized.
268-14         Sec. 302.102.  PROHIBITION ON PREPAYMENT PENALTY.  If the
268-15   interest rate on a loan for property that is to be the residential
268-16   homestead of the borrower is greater than 12 percent a year, a
268-17   prepayment penalty may not be collected on the loan unless the
268-18   penalty is required by an agency created by federal law.
268-19         Sec. 302.103.  EFFECT OF FEDERAL PREEMPTION ON LATE CHARGES.
268-20   On loans subject to 12 U.S.C. Sections 1735f-7 and 1735f-7a, as
268-21   amended, any late charges assessed are interest that is included in
268-22   computing the amount or rate of interest on the loan and,
268-23   therefore, covered by the federal preemption of state interest rate
268-24   limitations.
268-25         Sec. 302.104.  LOAN TO PURCHASE INTEREST IN ENTITY WITH
268-26   FOREIGN REAL PROPERTY AS PRINCIPAL ASSET.  (a)  A loan the proceeds
 269-1   of which are used primarily to purchase an interest in a trust or
 269-2   other entity that has as its principal asset real property located
 269-3   outside the United States is:
 269-4               (1)  not subject to Subtitle B; and
 269-5               (2)  subject to the interest rate limitations of
 269-6   Chapter 303.
 269-7         (b)  For the purpose of determining the interest rate on a
 269-8   loan to which this section applies, all interest contracted for,
 269-9   charged, or received shall be amortized, prorated, allocated, and
269-10   spread over the full stated term of the loan.
269-11         (c)  This section does not affect application of a law of
269-12   this state governing collateral that may be used to secure a loan
269-13   to which this section applies.
269-14                  CHAPTER 303.  OPTIONAL RATE CEILINGS
269-15       SUBCHAPTER A.  RATE CEILINGS:  APPLICABILITY, COMPUTATION,
269-16                             AND PUBLICATION
269-17         Sec. 303.001.  USE OF CEILINGS.  (a)  Except as provided by
269-18   Subchapter B, a person may contract for, charge, or receive a rate
269-19   or amount that does not exceed the applicable interest rate ceiling
269-20   provided by this chapter.  The use of a ceiling provided by this
269-21   chapter for any contract is optional, and a contract may provide
269-22   for a rate or amount allowed by other applicable law.
269-23         (b)  A contract that is subject to Chapter 342, 345, 347, or
269-24   348, including a contract for an open-end account, may, as an
269-25   alternative to an interest rate or amount of time price
269-26   differential allowed under that chapter, provide for a simple or
 270-1   precomputed rate or amount of time price differential that does not
 270-2   exceed the applicable ceiling provided by this chapter or by the
 270-3   equivalent yield authorized by Chapter 342, 345, 347, or 348.
 270-4         (c)  Except as inconsistent with this chapter, a party to a
 270-5   contract that is subject to Chapter 342, 345, 347, or 348, or the
 270-6   party's assignee, has all rights, duties, and obligations under the
 270-7   applicable chapter, including those relating to refund credits on
 270-8   prepayment or acceleration.
 270-9         Sec. 303.002.  WEEKLY CEILING.  The parties to a written
270-10   agreement may agree to an interest rate, or in an agreement
270-11   described by Chapter 345, 347, or 348, an amount of time price
270-12   differential producing a rate, that does not exceed the applicable
270-13   weekly ceiling.
270-14         Sec. 303.003.  COMPUTATION OF WEEKLY CEILING.  (a)  The
270-15   weekly ceiling is computed by:
270-16               (1)  multiplying the auction rate by two; and
270-17               (2)  rounding the result obtained under Subdivision (1)
270-18   to the nearest one-quarter of one percent.
270-19         (b)  The weekly rate ceiling becomes effective on Monday of
270-20   each week and remains in effect through the following Sunday.
270-21         (c)  In this section, "auction rate" means the auction
270-22   average rate quoted on a bank discount basis for 26-week treasury
270-23   bills issued by the United States government, as published by the
270-24   Federal Reserve Board, for the week preceding the week in which the
270-25   weekly rate ceiling is to take effect.
270-26         Sec. 303.004.  MONTHLY CEILING.  (a)  The monthly ceiling may
 271-1   be used as an alternative to the weekly ceiling only for a contract
 271-2   that:
 271-3               (1)  provides for a variable rate, including a contract
 271-4   for an open-end account; and
 271-5               (2)  is not made for personal, family, or household
 271-6   use.
 271-7         (b)  A contract that provides for the use of the monthly
 271-8   ceiling may not provide for the use of another rate ceiling
 271-9   provided under this subchapter.
271-10         (c)  If the parties agree that the rate may be adjusted
271-11   monthly, they may agree that the rate from time to time in effect
271-12   may not exceed the monthly ceiling from time to time in effect, and
271-13   the monthly ceiling is the ceiling on those contracts.
271-14         Sec. 303.005.  COMPUTATION OF MONTHLY CEILING.  (a)  The
271-15   consumer credit commissioner shall compute the monthly ceiling on
271-16   the first business day of the calendar month in which the rate
271-17   applies.  The monthly ceiling is effective for one month beginning
271-18   on the first calendar day of each month.
271-19         (b)  The monthly ceiling is computed by averaging all of the
271-20   weekly ceilings computed using rates from auctions held during the
271-21   calendar month preceding the computation date of the monthly
271-22   ceiling.
271-23         Sec. 303.006.  QUARTERLY CEILING.  (a)  A written contract,
271-24   including a contract that involves an open-end account, may, as an
271-25   alternative to the weekly ceiling, provide for an interest rate or
271-26   an amount of time price differential producing a rate that does not
 272-1   exceed the applicable quarterly ceiling.
 272-2         (b)  A variable rate contract authorized under Section
 272-3   303.015 may not provide for use of both the weekly ceiling and the
 272-4   quarterly ceiling.
 272-5         (c)  Notwithstanding other provisions of this subchapter, the
 272-6   rate of interest on an open-end account authorized under Section
 272-7   342.455 or 346.003, or an amount owed for a credit card transaction
 272-8   under another type of credit card agreement, in connection with
 272-9   which a merchant discount is imposed or received by the creditor
272-10   may not exceed the applicable quarterly ceiling.
272-11         Sec. 303.007.  ANNUALIZED CEILING.  The annualized ceiling
272-12   may be used as an alternative to the weekly ceiling only for a
272-13   written contract that involves an open-end account.
272-14         Sec. 303.008.  COMPUTATION OF QUARTERLY AND ANNUALIZED
272-15   CEILING.  (a)  On December 1, March 1, June 1, and September 1 of
272-16   each year, the consumer credit commissioner shall compute the
272-17   quarterly ceiling and annualized ceiling for the calendar quarter
272-18   effective the following January 1, April 1, July 1, and October 1,
272-19   respectively.  The quarterly ceiling becomes effective for
272-20   three-month periods beginning on the effective dates set out in
272-21   this subsection and is subject to adjustment after each three-month
272-22   period.  The annualized ceiling becomes effective on each of the
272-23   effective dates set out in this subsection and remains in effect
272-24   for a period of 12 months, after which it is subject to adjustment.
272-25         (b)  The quarterly ceiling and annualized ceiling are
272-26   computed by averaging all of the weekly ceilings computed using
 273-1   average auction rates during the three calendar months preceding
 273-2   the computation date of the ceiling.
 273-3         Sec. 303.009.  MAXIMUM AND MINIMUM WEEKLY, MONTHLY,
 273-4   QUARTERLY, OR ANNUALIZED CEILING.  (a)  Except as provided by
 273-5   Subsection (e), if the rate computed for the weekly, monthly,
 273-6   quarterly, or annualized ceiling is less than 18 percent a year,
 273-7   the ceiling is 18 percent a year.
 273-8         (b)  Except as provided by Subsection (c), (d), or (e), if
 273-9   the rate computed for the weekly, monthly, quarterly, or annualized
273-10   ceiling is more than 24 percent a year, the ceiling is 24 percent a
273-11   year.
273-12         (c)  For a contract made, extended, or renewed under which
273-13   credit is extended for a business, commercial, investment, or
273-14   similar purpose and the amount of the credit extension is $250,000
273-15   or more, the 24-percent limitation on the ceilings in Subsection
273-16   (b) does not apply, and the limitation on the ceilings determined
273-17   by those computations is 28 percent a year.
273-18         (d)  For an open-end account credit agreement that provides
273-19   for credit card transactions on which a merchant discount is not
273-20   imposed or received by the creditor, if the rate computed for the
273-21   weekly ceiling, monthly ceiling, quarterly ceiling, or annualized
273-22   ceiling is more than 21 percent a year, the ceiling is 21 percent a
273-23   year.
273-24         (e)  For an open-end account authorized under Section 342.455
273-25   or 346.003, in connection with which credit card transactions are
273-26   authorized or a merchant discount is imposed or received by the
 274-1   creditor:
 274-2               (1)  if the rate computed for the quarterly ceiling is
 274-3   less than 14 percent a year, the quarterly ceiling is 14 percent a
 274-4   year; and
 274-5               (2)  if the rate computed for the quarterly ceiling is
 274-6   more than 22 percent a year, the quarterly ceiling is 22 percent a
 274-7   year.
 274-8         (f)  In this chapter, "weekly ceiling," "monthly ceiling,"
 274-9   "quarterly ceiling," or "annualized ceiling" refers to that ceiling
274-10   as determined after the application of this section.
274-11         Sec. 303.010.  COMPUTATION OF CEILING IF INFORMATION
274-12   UNAVAILABLE.  If any of the information required to compute a
274-13   ceiling is discontinued or is otherwise not available to the
274-14   consumer credit commissioner from the Federal Reserve Board in the
274-15   time required for the computation, the ceiling last computed
274-16   remains in effect until the information becomes available and a new
274-17   ceiling is computed from the obtained information.
274-18         Sec. 303.011.  PUBLICATION OF RATE CEILINGS.  (a)  The
274-19   consumer credit commissioner shall send the rate ceilings computed
274-20   under this subchapter to the secretary of state for publication in
274-21   the Texas Register.
274-22         (b)  The monthly, quarterly, or annualized ceiling shall be
274-23   published before the 11th day after the date on which the ceiling
274-24   is computed.
274-25         Sec. 303.012.  JUDICIAL NOTICE.  A court may take judicial
274-26   notice of interpretations issued by the consumer credit
 275-1   commissioner or information published in the Texas Register under
 275-2   Section 303.011.
 275-3         Sec. 303.013.  DETERMINATION OF CEILING FOR CONTRACT TO RENEW
 275-4   OR EXTEND DEBT PAYMENT.  The rate ceiling for a contract to renew
 275-5   or extend the terms of payment of a debt is the ceiling in effect
 275-6   under this chapter when the contract for renewal or extension is
 275-7   made, regardless of when the debt is incurred.
 275-8         Sec. 303.014.  RATE FOR LENDER CREDIT CARD AGREEMENT WITH
 275-9   MERCHANT DISCOUNT.  On an amount owed for a credit card transaction
275-10   under a lender credit card agreement that imposes or allows the
275-11   creditor to receive a merchant discount, the creditor may not
275-12   contract for, charge, or receive:
275-13               (1)  a rate that exceeds the ceiling provided under
275-14   Section 303.006(c); or
275-15               (2)  a fee or charge that:
275-16                     (A)  is not allowed under Chapter 346; or
275-17                     (B)  exceeds the amount allowed under Chapter
275-18   346.
275-19         Sec. 303.015.  VARIABLE RATE.  (a)  The parties to a
275-20   contract, including a contract for an open-end account, may agree
275-21   to any index, formula, or provision of law by which the interest
275-22   rate or amount of time price differential will be determined, but
275-23   the agreed rate of interest or yield from an amount of time price
275-24   differential may not exceed the amount that would be produced by
275-25   the rate ceiling applicable to the contract.
275-26         (b)  A variable contract rate described by this section may
 276-1   not be used in a contract in which the interest or time price
 276-2   differential is precomputed and added into the amount of the
 276-3   contract at the time the contract is made.
 276-4         (c)  A variable rate agreement for credit extended primarily
 276-5   for personal, family, or household use must include the disclosures
 276-6   identified for variable rate contracts required by regulations
 276-7   issued by the Federal Reserve Board under the Truth in Lending Act
 276-8   (15 U.S.C. Section 1601 et seq.), as amended, except that if that
 276-9   Act does not apply because of the amount of the transaction, the
276-10   following disclosure must be included in a size equal to at least
276-11   10-point type that is boldface, capitalized, underlined, or
276-12   otherwise set out from surrounding material so as to be
276-13   conspicuous:
276-14         "NOTICE TO CONSUMER:  UNDER TEXAS LAW, IF YOU CONSENT
276-15         TO THIS AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE
276-16         AS HIGH AS 24 PERCENT PER YEAR."
276-17         Sec. 303.016.  CHARGING OF RATE LOWER THAN AGREED RATE.  A
276-18   creditor may charge an interest rate or amount of time price
276-19   differential that is lower than the rate or amount agreed to in the
276-20   contract.
276-21                    SUBCHAPTER B.  OPEN-END ACCOUNTS
276-22         Sec. 303.101.  OPEN-END ACCOUNT:  CEILINGS.  (a)  To use the
276-23   quarterly or annualized ceiling for setting the interest rate on
276-24   current and future open-end account balances, the agreement must
276-25   provide for use of the ceiling, and the creditor must give notice
276-26   of the interest rate after the date on which the quarterly or
 277-1   annualized ceiling is computed but before the last day of the next
 277-2   succeeding calendar quarter.
 277-3         (b)  If the annualized ceiling is used, the rate is effective
 277-4   for the 12-month period beginning on the date on which the rate
 277-5   takes effect for the account.
 277-6         (c)  If the quarterly ceiling is used, the rate is effective
 277-7   for the three-month period beginning on the date on which the rate
 277-8   takes effect for the account.  For an open-end account authorized
 277-9   under Section 342.455 or 346.003, in connection with which credit
277-10   card transactions are authorized or a merchant discount is imposed
277-11   or received by the creditor, the quarterly ceiling shall be
277-12   adjusted, at the option of the creditor, on:
277-13               (1)  the effective dates provided by Section 303.008;
277-14   or
277-15               (2)  the first day of the first billing cycle of the
277-16   account beginning after those dates.
277-17         (d)  If a quarterly or annualized ceiling is being used for
277-18   an account and if the rate for the applicable period is less than
277-19   or equal to the ceiling to be in effect for the succeeding period
277-20   of equal length, the creditor may leave that rate in effect for the
277-21   succeeding period.
277-22         (e)  A creditor who has disclosed to an obligor that an
277-23   election may be renewed under Subsection (d) is not required to
277-24   give additional notice of a renewal under that subsection.
277-25         (f)  To increase a previously agreed rate, a creditor shall
277-26   comply with Section 303.103 before the end of the last calendar
 278-1   quarter of the period in which the rate previously agreed to is in
 278-2   effect.  The ceiling in effect for that period remains the ceiling
 278-3   until the parties to the agreement agree to a new rate.
 278-4         Sec. 303.102.  VARIABLE RATE OPEN-END ACCOUNT:  CEILINGS.
 278-5   The applicable rate ceiling for an open-end account agreement that
 278-6   provides for a variable rate or amount according to an index,
 278-7   formula, or provision of law disclosed to the obligor, other than a
 278-8   variable rate commercial contract that is subject to Section
 278-9   303.004, is the annualized, quarterly, or weekly ceiling as
278-10   disclosed to the obligor.  The annualized ceiling shall be adjusted
278-11   after each 12-month period, the quarterly ceiling shall be adjusted
278-12   after each three-month period, and the weekly ceiling shall be
278-13   adjusted weekly.
278-14         Sec. 303.103.  OPEN-END ACCOUNT:  CHANGE OF AGREEMENT TERM.
278-15   (a)  An agreement covering an open-end account may provide that the
278-16   creditor may change the terms of the agreement for current and
278-17   future balances of that account by giving notice of the change to
278-18   the obligor.
278-19         (b)  A notice under this section to change a provision of an
278-20   account, including the rate, or the index or formula used to
278-21   compute the rate, must include:
278-22               (1)  the new provision, the new rate, or the index or
278-23   formula to be used to compute the rate;
278-24               (2)  the date on which the change is to take effect;
278-25               (3)  the period for which the change is to be effective
278-26   or after which the rate will be adjusted;
 279-1               (4)  a statement of whether the change is to affect
 279-2   current and future balances; and
 279-3               (5)  the obligor's rights under this section and the
 279-4   procedures for the obligor to exercise those rights.
 279-5         (c)  A creditor who increases a rate shall include with a
 279-6   notice required by this section a form that may be returned at the
 279-7   expense of the creditor and on which the obligor may indicate by
 279-8   checking or marking an appropriate box or by a similar arrangement
 279-9   the obligor's decision not to continue the account.  The form may
279-10   be included on a part of the account statement that is to be
279-11   returned to the creditor or on a separate sheet.  In addition to
279-12   the requirements of Subsection (b), the notice must include:
279-13               (1)  the address to which the obligor may send notice
279-14   of the obligor's election not to continue the open-end account; and
279-15               (2)  the following statement printed in not less than
279-16   10-point type or computer equivalent:
279-17         "YOU MAY TERMINATE THIS AGREEMENT IF YOU DO NOT WISH TO
279-18         PAY THE NEW RATE."
279-19         (d)  An obligor is considered to have agreed to a change
279-20   under this section if the creditor mails a notice required by this
279-21   section to the obligor's most recent address shown in the
279-22   creditor's records and:
279-23               (1)  the obligor chooses to retain the privilege of
279-24   using the open-end account;
279-25               (2)  the obligor or a person authorized by the obligor
279-26   accepts or uses an extension of credit after the fifth day after
 280-1   the date on which the notice is mailed; or
 280-2               (3)  the obligor does not notify the creditor in
 280-3   writing before the 21st day after the date on which the notice is
 280-4   mailed that the obligor does not wish to continue to use the
 280-5   open-end account.
 280-6         (e)  An obligor who rejects a rate change in accordance with
 280-7   this section is entitled to pay the balance on the open-end account
 280-8   at the rate and over the period in effect immediately before the
 280-9   date of the proposed change and under the same minimum payment
280-10   terms provided by the agreement.  Rejection of a new rate does not
280-11   accelerate payment of the balance due.
280-12         (f)  The procedure provided by this section for changing the
280-13   terms of an agreement is in addition to other means of amending the
280-14   agreement provided by law.
280-15         Sec. 303.104.  DISCLOSURE OF DECREASE IN INTEREST RATE NOT
280-16   REQUIRED ON OPEN-END ACCOUNTS INVOLVING CREDIT CARD TRANSACTION OR
280-17   MERCHANT DISCOUNT.  On an open-end account authorized under Section
280-18   342.455 or 346.003, in connection with which credit card
280-19   transactions are authorized or a merchant discount is imposed or
280-20   received by the creditor and on which interest is charged under
280-21   this chapter, the creditor is not required to disclose a decrease
280-22   in the applicable interest rate.
280-23         Sec. 303.105.  OPEN-END ACCOUNT:  DISCLOSURE OF CERTAIN RATE
280-24   VARIATIONS.  (a)  Except as provided by Subsection (b), a variation
280-25   in an interest rate on an account resulting from operation of the
280-26   previously disclosed index, formula, or provision of law is not
 281-1   required to be disclosed under Section 303.101 or 303.103.
 281-2         (b)  Except as inconsistent with federal law, the creditor on
 281-3   an open-end account agreement that provides for a variable interest
 281-4   rate according to an index, formula, or provision of law, that is
 281-5   primarily for personal, family, or household use, and that is
 281-6   subject to this chapter shall give to the obligor notice of a
 281-7   change in the rate resulting from operation of the index, formula,
 281-8   or provision of law.  The notice must be given:
 281-9               (1)  by a document mailed on or before the beginning of
281-10   the first cycle for which the change becomes effective; or
281-11               (2)  on or with:
281-12                     (A)  the billing statement for a billing cycle
281-13   that precedes the cycle for which the change becomes effective, if
281-14   the account is covered by Section 303.006(c); or
281-15                     (B)  any billing statement, if the account is not
281-16   covered by Section 303.006(c).
281-17         Sec. 303.106.  OPEN-END ACCOUNT: CEILING FOR PLAN OR
281-18   ARRANGEMENT.  If a creditor implements a quarterly or annualized
281-19   ceiling for a majority of the creditor's open-end accounts that are
281-20   under a particular plan or arrangement and that are for obligors in
281-21   this state, that ceiling is also the ceiling for all open-end
281-22   accounts that are opened or activated under that plan for obligors
281-23   in this state during the period that the election is in effect.
281-24             SUBCHAPTER C.  PROVISIONS APPLICABLE TO CERTAIN
281-25               CONSUMER LOANS AND SECONDARY MORTGAGE LOANS
281-26         Sec. 303.201.  LICENSE REQUIRED.  A person engaged in the
 282-1   business of making loans for which the rate is authorized under
 282-2   this chapter must obtain a license under Chapter 342 unless the
 282-3   person is not required to obtain a license under Section 342.051.
 282-4         Sec. 303.202.  APPLICABILITY OF SUBTITLE B.  Except as
 282-5   inconsistent with this chapter:
 282-6               (1)  a person engaged in the business of extending
 282-7   open-end credit primarily for personal, family, or household use
 282-8   and who charges on an open-end account a rate or amount under
 282-9   authority of this chapter is subject to the applicable chapter in
282-10   Subtitle B; and
282-11               (2)  a party to an account described by Subdivision (1)
282-12   or the party's assignees have all the rights, duties, and
282-13   obligations under that applicable chapter.
282-14         SUBCHAPTER D.  LIMITATIONS ON APPLICABILITY OF CHAPTER
282-15         Sec. 303.301.  AGREEMENT TO WHICH CHAPTER DOES NOT APPLY.
282-16   The rate ceilings provided by this chapter do not apply to an
282-17   agreement:
282-18               (1)  under which credit is extended by the seller, or
282-19   an owner, subsidiary, or corporate affiliate of the seller, for a
282-20   transaction governed by Chapter 39, Business & Commerce Code; and
282-21               (2)  that is secured by a lien on the obligor's
282-22   homestead.
282-23         Sec. 303.302.  REQUIREMENTS INCONSISTENT WITH FEDERAL LAW.
282-24   (a)  A person is not required to comply with a disclosure or notice
282-25   requirement of this chapter that is inconsistent with federal
282-26   statute or regulation.
 283-1         (b)  A creditor may modify a disclosure or notice requirement
 283-2   of this chapter to conform to federal law.
 283-3                       SUBCHAPTER E.  ENFORCEMENT
 283-4         Sec. 303.401.  WHEN ACT OR OMISSION NOT VIOLATION.  An act or
 283-5   omission does not violate this title if the act or omission
 283-6   conforms to an interpretation of this title that is in effect at
 283-7   the time of the act or omission and that was made by:
 283-8               (1)  the consumer credit commissioner under Section
 283-9   14.108; or
283-10               (2)  an appellate court of this state or the United
283-11   States.
283-12         Sec. 303.402.  PENALTY FOR VIOLATION OF CHAPTER FOR CERTAIN
283-13   CONTRACTS SUBJECT TO SUBTITLE B.  (a)  A person who contracts for,
283-14   charges, or receives under a contract subject to Chapter 342, 345,
283-15   346, 347, or 348, including a contract for an open-end account, a
283-16   rate or amount of time price differential that exceeds the maximum
283-17   applicable rate or amount authorized by the applicable chapter or
283-18   this chapter is subject to a penalty for that violation determined
283-19   under Chapter 349.
283-20         (b)  For a contract described by Subsection (a) that contains
283-21   a rate or amount authorized under this chapter, the failure to
283-22   perform a duty or comply with a prohibition provided by this
283-23   chapter is subject to Chapter 349 as if this chapter were in
283-24   Subtitle B.
283-25         Sec. 303.403.  PENALTY FOR VIOLATION OF CEILING IN CERTAIN
283-26   CONTRACTS.  A written contract, other than a contract to which
 284-1   Section 303.402 applies, that directly or indirectly provides for a
 284-2   rate that exceeds the rate authorized by this chapter and that is
 284-3   not otherwise authorized by law, is subject to the penalty
 284-4   prescribed by Chapter 305.
 284-5         Sec. 303.404.  ENFORCEMENT BY CONSUMER CREDIT COMMISSIONER.
 284-6   Subject to Subchapter B, Chapter 341, the consumer credit
 284-7   commissioner shall enforce Subtitles B and C as they apply to
 284-8   contracts subject to those chapters.
 284-9         Sec. 303.405.  EXAMINATION OF RECORDS; INSPECTIONS; RULES.
284-10   (a)  Section 342.552 applies to a transaction:
284-11               (1)  that is made by a person who holds a license under
284-12   Chapter 342;
284-13               (2)  that is subject to Chapter 342 or 346; and
284-14               (3)  the rate of which is authorized by this chapter.
284-15         (b)  Subchapter L, Chapter 342, applies to a loan:
284-16               (1)  that is subject to Chapter 342; and
284-17               (2)  the rate of which is authorized by this chapter.
284-18         Sec. 303.406.  ENFORCEMENT BY CREDIT UNION COMMISSIONER.  The
284-19   credit union commissioner shall enforce this chapter as it applies
284-20   to contracts subject to Subtitle D, Title 3.
284-21         Sec. 303.407.  ENFORCEMENT BY DEPARTMENT OF INSURANCE.  The
284-22   Texas Department of Insurance shall enforce this chapter as it
284-23   applies to contracts subject to Chapter 24, Insurance Code.
284-24     SUBCHAPTER F.  EFFECT ON OTHER STATUTES OF USING OPTIONAL RATE
284-25         Sec. 303.501.  APPLICABILITY OF CREDIT UNION ACT.  Except as
284-26   inconsistent with this chapter:
 285-1               (1)  a person subject to Subtitle D, Title 3, who
 285-2   contracts for, charges, or receives a rate or amount authorized by
 285-3   this chapter remains subject to that subtitle; and
 285-4               (2)  a party to a transaction described by Subdivision
 285-5   (1) has all the rights provided by that subtitle.
 285-6         Sec. 303.502.  APPLICABILITY OF CHAPTER 24, INSURANCE CODE.
 285-7   (a)  Except as inconsistent with this chapter:
 285-8               (1)  a person subject to Chapter 24, Insurance Code,
 285-9   who contracts for, charges, or receives an interest rate authorized
285-10   by this chapter remains subject to that chapter; and
285-11               (2)  a party to an insurance premium finance agreement,
285-12   including an agreement for an open-end account, has all the rights
285-13   provided by Chapter 24, Insurance Code.
285-14         (b)  The licensing requirements of Chapter 342 do not apply
285-15   to a transaction described by Subsection (a)(1).  The penalty
285-16   provisions of this title do not apply to a transaction described by
285-17   Subsection (a)(1).
285-18                     CHAPTER 304.  JUDGMENT INTEREST
285-19                    SUBCHAPTER A.  GENERAL PROVISIONS
285-20         Sec. 304.001.  INTEREST RATE REQUIRED IN JUDGMENT.  A money
285-21   judgment of a court in this state must specify the postjudgment
285-22   interest rate applicable to that judgment.
285-23         Sec. 304.002.  JUDGMENT INTEREST RATE:  INTEREST RATE OR TIME
285-24   PRICE DIFFERENTIAL IN CONTRACT.  A money judgment of a court of
285-25   this state on a contract that provides for interest or time price
285-26   differential earns postjudgment interest at a rate equal to the
 286-1   lesser of:
 286-2               (1)  the rate specified in the contract, which may be a
 286-3   variable rate; or
 286-4               (2)  18 percent a year.
 286-5         Sec. 304.003.  JUDGMENT INTEREST RATE:  INTEREST RATE OR TIME
 286-6   PRICE DIFFERENTIAL NOT IN CONTRACT.  (a)  A money judgment of a
 286-7   court of this state to which Section 304.002 does not apply,
 286-8   including court costs awarded in the judgment and prejudgment
 286-9   interest, if any, earns postjudgment interest at the rate
286-10   determined under this section.
286-11         (b)  On the 15th day of each month, the consumer credit
286-12   commissioner shall determine the postjudgment interest rate to be
286-13   applied to a money judgment rendered during the succeeding calendar
286-14   month.
286-15         (c)  The postjudgment interest rate is:
286-16               (1)  the auction rate quoted on a discount basis for
286-17   52-week treasury bills issued by the United States government as
286-18   most recently published by the Federal Reserve Board before the
286-19   date of computation;
286-20               (2)  10 percent a year if the auction rate described by
286-21   Subdivision (1) is less than 10 percent; or
286-22               (3)  20 percent a year if the auction rate described by
286-23   Subdivision (1) is more than 20 percent.
286-24         Sec. 304.004.  PUBLICATION OF JUDGMENT INTEREST RATE.  The
286-25   consumer credit commissioner shall send to the secretary of state
286-26   the postjudgment interest rate for publication, and the secretary
 287-1   shall publish the rate in the Texas Register.
 287-2         Sec. 304.005.  ACCRUAL OF JUDGMENT INTEREST.  (a)  Except as
 287-3   provided by Subsection (b), postjudgment interest on a money
 287-4   judgment of a court in this state accrues during the period
 287-5   beginning on the date the judgment is rendered and ending on the
 287-6   date the judgment is satisfied.
 287-7         (b)  If a case is appealed and a motion for extension of time
 287-8   to file a brief is granted for a party who was a claimant at trial,
 287-9   interest does not accrue for the period of extension.
287-10         Sec. 304.006.  COMPOUNDING OF JUDGMENT INTEREST.
287-11   Postjudgment interest on a judgment of a court in this state
287-12   compounds annually.
287-13         Sec. 304.007.  JUDICIAL NOTICE OF JUDGMENT INTEREST RATE.  A
287-14   court of this state shall take judicial notice of a published
287-15   postjudgment interest rate.
287-16         SUBCHAPTER B.  PREJUDGMENT INTEREST IN WRONGFUL DEATH,
287-17                PERSONAL INJURY, OR PROPERTY DAMAGE CASE
287-18         Sec. 304.101.  APPLICABILITY OF SUBCHAPTER.  This subchapter
287-19   applies only to a wrongful death, personal injury, or property
287-20   damage case of a court of this state.
287-21         Sec. 304.102.  PREJUDGMENT INTEREST REQUIRED IN CERTAIN
287-22   CASES.  A judgment in a wrongful death, personal injury, or
287-23   property damage case earns prejudgment interest.
287-24         Sec. 304.103.  PREJUDGMENT INTEREST RATE FOR WRONGFUL DEATH,
287-25   PERSONAL INJURY, OR PROPERTY DAMAGE CASE.  The prejudgment interest
287-26   rate is equal to the  postjudgment interest rate applicable at the
 288-1   time of judgment.
 288-2         Sec. 304.104.  ACCRUAL OF PREJUDGMENT INTEREST.  Except as
 288-3   provided by Section 304.105 or 304.108, prejudgment interest
 288-4   accrues on the amount of a judgment during the period beginning on
 288-5   the earlier of the 180th day after the date the defendant receives
 288-6   written notice of a claim or the date the suit is filed and ending
 288-7   on the day preceding the date judgment is rendered.  Prejudgment
 288-8   interest is computed as simple interest and does not compound.
 288-9         Sec. 304.105.  EFFECT OF SETTLEMENT OFFER ON ACCRUAL OF
288-10   PREJUDGMENT INTEREST.  (a)  If judgment for a claimant is equal to
288-11   or less than the amount of a settlement offer of the defendant,
288-12   prejudgment interest does not accrue on the amount of the judgment
288-13   during the period that the offer may be accepted.
288-14         (b)  If judgment for a claimant is more than the amount of a
288-15   settlement offer of the defendant, prejudgment interest does not
288-16   accrue on the amount of the settlement offer during the period that
288-17   the offer may be accepted.
288-18         Sec. 304.106.  SETTLEMENT OFFER REQUIREMENTS TO PREVENT
288-19   PREJUDGMENT INTEREST ACCRUAL.  To prevent the accrual of
288-20   prejudgment interest under this subchapter, a settlement offer must
288-21   be in writing and delivered to the claimant or the claimant's
288-22   attorney or representative.
288-23         Sec. 304.107.  VALUE OF SETTLEMENT OFFER FOR COMPUTING
288-24   PREJUDGMENT INTEREST.  If a settlement offer does not provide for
288-25   cash payment at the time of settlement, the amount of the
288-26   settlement offer for the purpose of computing prejudgment interest
 289-1   is the cost or fair market value of the settlement offer at the
 289-2   time it is made.
 289-3         Sec. 304.108.  ACCRUAL OF PREJUDGMENT INTEREST DURING PERIODS
 289-4   OF TRIAL DELAY.  (a)  In addition to the exceptions provided by
 289-5   Section 304.105, a court may order that prejudgment interest does
 289-6   not accrue during periods of delay in the trial.
 289-7         (b)  A court shall consider:
 289-8               (1)  periods of delay caused by a defendant; and
 289-9               (2)  periods of delay caused by a claimant.
289-10          SUBCHAPTER C.  OTHER PREJUDGMENT INTEREST PROVISIONS
289-11         Sec. 304.201.  PREJUDGMENT INTEREST RATE FOR CONDEMNATION
289-12   CASE.  The prejudgment interest rate in a condemnation case is
289-13   equal to the postjudgment interest rate at the time of judgment and
289-14   is computed as simple interest.
289-15           SUBCHAPTER D.  EXCEPTIONS TO APPLICATION OF CHAPTER
289-16         Sec. 304.301.  EXCEPTION FOR DELINQUENT TAXES.  This chapter
289-17   does not apply to a judgment:
289-18               (1)  in favor of a taxing unit in a delinquent tax suit
289-19   under Subchapter C, Chapter 33, Tax Code; or
289-20               (2)  that earns interest at a rate set by Title 2, Tax
289-21   Code.
289-22         Sec. 304.302.  EXCEPTION FOR DELINQUENT CHILD SUPPORT.  This
289-23   chapter does not apply to interest that accrues on an amount of
289-24   unpaid child support under Section 157.265, Family Code.
 290-1                  CHAPTER 305.  PENALTIES AND REMEDIES
 290-2            SUBCHAPTER A.  CIVIL LIABILITY; CRIMINAL PENALTY
 290-3         Sec. 305.001.  LIABILITY FOR USURIOUS INTEREST.  (a)  A
 290-4   creditor who contracts for, charges, or receives interest that is
 290-5   greater than the amount authorized by this subtitle is liable to
 290-6   the obligor for an amount that is equal to the greater of:
 290-7               (1)  three times the amount computed by subtracting the
 290-8   amount of interest allowed by law from the total amount of interest
 290-9   contracted for, charged, or received; or
290-10               (2)  $2,000 or 20 percent of the amount of the
290-11   principal, whichever is less.
290-12         (b)  This section applies only to a contract or transaction
290-13   subject to this subtitle.
290-14         (c)  A creditor who charges or receives interest in excess of
290-15   the amount contracted for, but not in excess of the maximum amount
290-16   authorized by law, is not subject to penalties for usurious
290-17   interest but may be liable for other remedies and relief as
290-18   provided by law.
290-19         Sec. 305.002.  ADDITIONAL LIABILITY FOR MORE THAN TWICE
290-20   AUTHORIZED RATE OF INTEREST.  (a)  In addition to the amount
290-21   determined under Section 305.001, a creditor who charges and
290-22   receives interest that is greater than twice the amount authorized
290-23   by this subtitle is liable to the obligor for:
290-24               (1)  the principal amount on which the interest is
290-25   charged and received; and
290-26               (2)  the interest and all other amounts charged and
 291-1   received.
 291-2         (b)  This section applies only to a contract or transaction
 291-3   subject to this subtitle.
 291-4         Sec. 305.003.  LIABILITY FOR USURIOUS LEGAL INTEREST.  (a)  A
 291-5   creditor who charges or receives legal interest that is greater
 291-6   than the amount authorized by this subtitle is liable to the
 291-7   obligor for an amount that is equal to the greater of:
 291-8               (1)  three times the amount computed by subtracting the
 291-9   amount of legal interest allowed by law from the total amount of
291-10   interest charged or received; or
291-11               (2)  $2,000 or 20 percent of the amount of the
291-12   principal, whichever is less.
291-13         (b)  This section applies only to a transaction subject to
291-14   this subtitle.
291-15         Sec. 305.004.  ADDITIONAL LIABILITY FOR MORE THAN TWICE
291-16   AUTHORIZED RATE OF LEGAL INTEREST.  (a)  In addition to the amount
291-17   determined under Section 305.003, a creditor who charges and
291-18   receives legal interest that is greater than twice the amount
291-19   authorized by this subtitle is liable to the obligor for:
291-20               (1)  the principal amount on which the interest is
291-21   charged and received; and
291-22               (2)  the interest and all other amounts charged and
291-23   received.
291-24         (b)  This section applies only to a transaction subject to
291-25   this subtitle.
291-26         Sec. 305.005.  ATTORNEY'S FEES.  A creditor who is liable
 292-1   under Section 305.001 or 305.003 is also liable to the obligor for
 292-2   reasonable attorney's fees set by the court.
 292-3         Sec. 305.006.  LIMITATION ON FILING SUIT.  (a)  An action
 292-4   under this chapter must be brought within four years after the date
 292-5   on which the usurious interest was contracted for, charged, or
 292-6   received.  The action must be brought in the county in which:
 292-7               (1)  the transaction was entered into;
 292-8               (2)  the usurious interest was charged or received;
 292-9               (3)  the creditor resides at the time of the cause of
292-10   action, if the creditor is an individual;
292-11               (4)  the creditor maintains its principal office, if
292-12   the creditor is not an individual; or
292-13               (5)  the obligor resides at the time of the accrual of
292-14   the cause of action.
292-15         (b)  Not later than the 61st day before the date an obligor
292-16   files a suit seeking penalties for a transaction in which a
292-17   creditor has contracted for or charged usurious interest, the
292-18   obligor shall give the creditor written notice stating in
292-19   reasonable detail the nature and amount of the violation.
292-20         (c)  A creditor who receives a notice under this section may
292-21   correct the violation as provided by Section 305.103 during the
292-22   period beginning on the date the notice is received and ending on
292-23   the 60th day after that date.  A creditor who corrects a violation
292-24   as provided by this section is not liable to an obligor for the
292-25   violation.
292-26         (d)  The notice requirement of Subsection (b) does not apply
 293-1   to a defendant filing a counterclaim action alleging usurious
 293-2   interest in an original action by the creditor.
 293-3         Sec. 305.007.  PENALTIES EXCLUSIVE.  The penalties provided
 293-4   by this chapter are the only penalties for violation of this
 293-5   subtitle for contracting for, charging, or receiving interest in an
 293-6   amount that produces a rate in excess of the maximum rate allowed
 293-7   by law.  Common law penalties do not apply.
 293-8         Sec. 305.008.  CRIMINAL PENALTY.  (a)  A person commits an
 293-9   offense if the person contracts for, charges, or receives interest
293-10   on a transaction for personal, family, or household use that is
293-11   greater than twice the amount authorized by this subtitle.
293-12         (b)  An offense under this section is a misdemeanor
293-13   punishable by a fine of not more than $1,000.
293-14         (c)  Each contract or transaction that violates this section
293-15   is a separate offense.
293-16         (d)  This section applies only to a contract or transaction
293-17   subject to this subtitle.
293-18                 SUBCHAPTER B.  EXCEPTION FROM LIABILITY
293-19         Sec. 305.101.  ACCIDENTAL AND BONA FIDE ERROR.  A creditor is
293-20   not subject to penalty under this chapter for any usurious interest
293-21   that results from an accidental and bona fide error.
293-22         Sec. 305.102.  LEGAL INTEREST DURING INTEREST-FREE PERIOD.  A
293-23   person is not liable to an obligor solely because the person
293-24   charges or receives legal interest before the 30th day after the
293-25   date on which the debt is due.
293-26         Sec. 305.103.  CORRECTION OF VIOLATION.  (a)  A creditor is
 294-1   not liable to an obligor for a violation of this subtitle if:
 294-2               (1)  not later than the 60th day after the date the
 294-3   creditor actually discovered the violation, the creditor corrects
 294-4   the violation as to that obligor by taking any necessary action and
 294-5   making any necessary adjustment, including the payment of interest
 294-6   on a refund, if any, at the applicable rate provided for in the
 294-7   contract of the parties; and
 294-8               (2)  the creditor gives written notice to the obligor
 294-9   of the violation before the obligor gives written notice of the
294-10   violation or files an action alleging the violation.
294-11         (b)  For the purposes of Subsection (a), a violation is
294-12   actually discovered at the time of the discovery of the violation
294-13   in fact and not at the time when an ordinarily prudent person,
294-14   through reasonable diligence, could or should have discovered or
294-15   known of the violation.  Actual discovery of a violation in one
294-16   transaction may constitute actual discovery of the same violation
294-17   in other transactions if the violation is of such a nature that it
294-18   would necessarily be repeated and would be clearly apparent in the
294-19   other transactions without the necessity of examining all the other
294-20   transactions.
294-21         (c)  For purposes of Subsection (a), written notice is given
294-22   when the notice is delivered to the person or to the person's
294-23   authorized agent or attorney of record personally, by telecopier,
294-24   or by United States mail to the address shown on the most recent
294-25   documents in the transaction.  Deposit of the notice as registered
294-26   or certified mail in a postage paid, properly addressed wrapper in
 295-1   a post office or official depository under the care and custody of
 295-2   the United States Postal Service is prima facie evidence of the
 295-3   delivery of the notice to the person to whom the notice is
 295-4   addressed.
 295-5         Sec. 305.104.  CORRECTION EXCEPTION AVAILABLE TO ALL
 295-6   SIMILARLY SITUATED.  If in a single transaction more than one
 295-7   creditor may be liable for a violation of this subtitle, compliance
 295-8   with Section 305.103 by any of those creditors entitles each to the
 295-9   same protection provided by that section.
295-10         Sec. 305.105.  AMOUNTS PAYABLE PURSUANT TO A FINAL JUDGMENT.
295-11   A creditor is not liable to an obligor for a violation of this
295-12   subtitle if the creditor receives interest that has been awarded
295-13   pursuant to a final judgment that is no longer subject to
295-14   modification or reversal.
295-15                  CHAPTER 306.  COMMERCIAL TRANSACTIONS
295-16                    SUBCHAPTER A.  GENERAL PROVISIONS
295-17         Sec. 306.001.  DEFINITIONS.  In this chapter:
295-18               (1)  "Account purchase transaction" means an agreement
295-19   under which a person engaged in a commercial enterprise sells
295-20   accounts, instruments, documents, or chattel paper subject to this
295-21   subtitle at a discount, regardless of whether the person has a
295-22   repurchase obligation related to the transaction.
295-23               (2)  "Affiliate of an obligor" means a person who
295-24   directly or indirectly, through one or more intermediaries,
295-25   controls, is controlled by, or is under common control with the
295-26   obligor.  In this subdivision "control" means the possession,
 296-1   directly or indirectly, of the power to direct or cause the
 296-2   direction of the management and policies of a person, whether
 296-3   through the ownership of voting securities, by contract, or
 296-4   otherwise.
 296-5               (3)  "Asset-backed securities" means debt obligations
 296-6   or certificates of beneficial ownership that:
 296-7                     (A)  are a part of a single issue or single
 296-8   series of securities in an aggregate of $1 million or more and
 296-9   issuable in one or more classes;
296-10                     (B)  are secured by a pledge of, or represent an
296-11   undivided ownership interest in:
296-12                           (i)  one or more fixed or revolving
296-13   financial assets that by their terms convert into cash within a
296-14   definite period; and
296-15                           (ii)  rights or other assets designed to
296-16   assure the servicing or timely distribution of proceeds to security
296-17   holders; and
296-18                     (C)  are issued for a business, commercial,
296-19   agricultural, investment, or similar purpose by a pass-through
296-20   entity.
296-21               (4)  "Business entity" means a partnership,
296-22   corporation, joint venture, limited liability company, or other
296-23   business organization or business association, however organized.
296-24               (5)  "Commercial loan" means a loan that is made
296-25   primarily for business, commercial, investment, agricultural, or
296-26   similar purposes.  The term does not include a loan made primarily
 297-1   for personal, family, or household use.
 297-2               (6)  "Guaranty" means an agreement under which a
 297-3   person:
 297-4                     (A)  assumes, guarantees, or otherwise becomes
 297-5   primarily or contingently liable for the payment or performance of
 297-6   an obligation of another person;
 297-7                     (B)  provides security, by creation of a lien or
 297-8   security interest or otherwise, for the payment or performance of
 297-9   an obligation of another person; or
297-10                     (C)  agrees to purchase or to advance
297-11   consideration to purchase an obligation of another person or
297-12   property that is security for the payment or performance of the
297-13   obligation.
297-14               (7)  "Pass-through entity" means a business entity,
297-15   association, grantor or common-law trust under state law, or
297-16   segregated pool of assets under federal tax law that, on the date
297-17   of original issuance of asset-backed securities, does not have
297-18   significant assets other than:
297-19                     (A)  assets pledged to or held for the benefit of
297-20   holders of the asset-backed securities; or
297-21                     (B)  assets pledged to or held for the benefit of
297-22   holders of other asset-backed securities previously issued.
297-23               (8)  "Prepayment penalty" means compensation paid by or
297-24   that is or will become due from an obligor to a creditor solely as
297-25   a result or condition of the payment or maturity of all or a
297-26   portion of the principal amount of a loan before its stated
 298-1   maturity or a regularly scheduled date of payment, as a result of
 298-2   an obligor's election to pay all or a portion of the principal
 298-3   amount before its stated maturity or a regularly scheduled date of
 298-4   payment.
 298-5               (9)  "Qualified commercial loan" means:
 298-6                     (A)  a commercial loan in the original principal
 298-7   amount of $3 million or more; or
 298-8                     (B)  a renewal or extension of a commercial loan
 298-9   in the original principal amount of $3 million or more, regardless
298-10   of whether the principal amount of the loan when renewed or
298-11   extended is $3 million or more.
298-12         Sec. 306.002.  INTEREST; APPLICATION OF OTHER PROVISIONS OF
298-13   SUBTITLE.  (a)  A creditor may contract for, charge, and receive
298-14   from an obligor on a commercial loan a rate or amount of interest
298-15   that does not exceed the applicable ceilings computed in accordance
298-16   with Chapter 303.
298-17         (b)  All other applicable provisions, remedies, and penalties
298-18   of this subtitle apply to a commercial loan unless this chapter
298-19   expressly provides otherwise.
298-20         Sec. 306.003.  COMPUTATION OF TERM.  A creditor and an
298-21   obligor may agree to compute the term and rate of a commercial loan
298-22   based on a 360-day year consisting of 12 30-day months.  For
298-23   purposes of this chapter, each rate ceiling expressed as a rate per
298-24   year may mean a rate per year consisting of 360 days and of 12
298-25   30-day months.
298-26         Sec. 306.004.  DETERMINING RATES OF INTEREST BY SPREADING.
 299-1   (a)  To determine whether a commercial loan is usurious, the
 299-2   interest rate is computed by amortizing or spreading, using the
 299-3   actuarial method during the stated term of the loan, all interest
 299-4   at any time contracted for, charged, or received in connection with
 299-5   the loan.
 299-6         (b)  If a commercial loan is paid in full before the end of
 299-7   the stated term of the loan and the amount of interest received for
 299-8   the period that the loan exists exceeds the amount that produces
 299-9   the maximum rate authorized by law for that period, the lender
299-10   shall:
299-11               (1)  refund the amount of the excess to the borrower;
299-12   or
299-13               (2)  credit the amount of the excess against amounts
299-14   owing under the loan.
299-15         (c)  A lender who complies with Subsection (b) is not subject
299-16   to any of the penalties provided by law for contracting for,
299-17   charging, or receiving interest in excess of the maximum rate
299-18   authorized.
299-19         Sec. 306.005.  PREPAYMENT PENALTY.  A creditor and an obligor
299-20   may agree to a prepayment penalty in a loan subject to this
299-21   chapter.  A prepayment penalty is not interest.
299-22         Sec. 306.006.  CERTAIN AUTHORIZED CHARGES ON COMMERCIAL
299-23   LOANS.  In addition to the interest authorized by this chapter, the
299-24   parties to a commercial loan may agree and stipulate for:
299-25               (1)  a delinquency charge on the amount of any
299-26   installment or other amount in default for a period of not less
 300-1   than 10 days in a reasonable amount not to exceed five percent of
 300-2   the total amount of the installment; and
 300-3               (2)  a returned check fee in an amount not to exceed
 300-4   $25 on any check, draft, order, or other instrument or form of
 300-5   remittance that is returned unpaid or dishonored for any reason.
 300-6         SUBCHAPTER B.  PROVISIONS RELATING TO SPECIFIC TYPES OF
 300-7                    COMMERCIAL LOANS OR TRANSACTIONS
 300-8         Sec. 306.101.  QUALIFIED COMMERCIAL LOAN.  (a)  The parties
 300-9   to a qualified commercial loan agreement may contract for a rate or
300-10   amount of interest that does not exceed the applicable rate
300-11   ceiling.
300-12         (b)  The parties to a qualified commercial loan agreement may
300-13   contract for the following charges:
300-14               (1)  a discount or commission that an obligor has paid
300-15   or agreed to pay to one or more underwriters of securities issued
300-16   by the obligor;
300-17               (2)  an option or right to exchange, redeem, or convert
300-18   all or a portion of the principal amount of the loan, or interest
300-19   on the principal amount, for or into capital stock or other equity
300-20   securities of an obligor or of an affiliate of an obligor;
300-21               (3)  an option or right to purchase capital stock or
300-22   other equity securities of an obligor or of an affiliate of an
300-23   obligor;
300-24               (4)  an option or other right created by contract,
300-25   conveyance, or otherwise, to participate in or own a share of the
300-26   income, revenues, production, or profits:
 301-1                     (A)  of an obligor or of an affiliate of an
 301-2   obligor;
 301-3                     (B)  of any segment of the business or operations
 301-4   of an obligor or of an affiliate of an obligor; or
 301-5                     (C)  derived or to be derived from ownership
 301-6   rights of an obligor or of an affiliate of an obligor in property,
 301-7   including any proceeds of the sale or other disposition of
 301-8   ownership rights; or
 301-9               (5)  compensation realized as a result of the receipt,
301-10   exercise, sale, or other disposition of an option or other right
301-11   described by this subsection.
301-12         (c)  A charge under Subsection (b) is not interest.
301-13         Sec. 306.102.  ASSET-BACKED SECURITIES TRANSACTION.  An
301-14   amount that is paid, passed through, or obligated to be paid or to
301-15   be passed through in connection with asset-backed securities or
301-16   that is not paid as a result of a discounted sale price to the
301-17   holders of asset-backed securities by a pass-through entity is not
301-18   interest.  This section does not affect interest that is agreed on
301-19   and fixed by the parties to a written contract and paid, charged,
301-20   or received on the ultimate underlying assets pledged to or held
301-21   for the benefit of holders of asset-backed securities.
301-22         Sec. 306.103.  ACCOUNT PURCHASE TRANSACTION.  (a)  An amount
301-23   of a discount in, or charged under, an account purchase transaction
301-24   is not interest.
301-25         (b)  For the purposes of this chapter, the parties'
301-26   characterization of an account purchase transaction as a purchase
 302-1   is conclusive that the account purchase transaction is not a
 302-2   transaction for the use, forbearance, or detention of money.
 302-3       CHAPTER 339.  MISCELLANEOUS PROVISIONS RELATING TO INTEREST
 302-4         Sec. 339.001.  IMPOSITION OF SURCHARGE FOR USE OF CREDIT
 302-5   CARD.  (a)  In a sale of goods or services, a seller may not impose
 302-6   a surcharge on a buyer who uses a credit card for an extension of
 302-7   credit instead of cash, a check, or a similar means of payment.
 302-8         (b)  This section does not apply to a state agency, county,
 302-9   local governmental entity, or other governmental entity that
302-10   accepts a credit card for the payment of fees, taxes, or other
302-11   charges.
302-12         Sec. 339.002.  BILLING CYCLE INTEREST LIMITATION ON OPEN-END
302-13   ACCOUNT WITHOUT MERCHANT DISCOUNT.  (a)  This section applies to an
302-14   open-end account agreement that provides for credit card
302-15   transactions:
302-16               (1)  in which the creditor relies on one of the
302-17   ceilings authorized by Chapter 303 for the rate of interest; and
302-18               (2)  in connection with which the creditor does not
302-19   impose or receive a merchant discount.
302-20         (b)  Interest or time price differential may not be charged
302-21   for a billing cycle of an open-end account credit agreement if:
302-22               (1)  the total amount of the obligor's payments during
302-23   the cycle equal or exceed the balance owed under the agreement at
302-24   the end of the preceding billing cycle; or
302-25               (2)  an amount is not owed under the agreement at the
302-26   end of the preceding billing cycle.
 303-1         Sec. 339.003.  SALE OF OPEN-END ACCOUNT WITHOUT MERCHANT
 303-2   DISCOUNT.  A seller or lessor may sell an open-end account credit
 303-3   agreement described by Section 339.002(a) or any balance under that
 303-4   agreement to a purchaser who purchases a substantial part of the
 303-5   seller's or lessor's open-end account credit agreements or balances
 303-6   under those agreements in accordance with Subchapter G, Chapter
 303-7   345.  A charge, fee, or discount on that sale:
 303-8               (1)  is not a merchant discount;
 303-9               (2)  does not disqualify the open-end account credit
303-10   agreement or a balance under that agreement from being subject to
303-11   Chapter 303 or from coverage under this section; and
303-12               (3)  does not subject the account to the limitations
303-13   provided by Section 303.006(c).
303-14         Sec. 339.004.  APPLICATION OF LICENSING REQUIREMENT AND
303-15   SUBTITLE B TO CREDIT UNION OR EMPLOYEE BENEFIT PLAN.  (a)  A credit
303-16   union is not subject to Subtitle B and is not required to obtain a
303-17   license under this title.
303-18         (b)  With respect to a loan that an employee benefit plan
303-19   that is subject to Title I of the Employee Retirement Income
303-20   Security Act of 1974 (29 U.S.C. Sections 1001-1114) makes to a
303-21   participant in the plan or a participant's beneficiary, the plan is
303-22   not subject to Subtitle B and is not required to obtain a license
303-23   under this title.
303-24                         [SUBTITLE A.  INTEREST]
303-25                    [CHAPTER 301.  GENERAL PROVISIONS]
303-26         [Sec. 301.001.  DEFINITIONS.  In Subtitles A and B:]
 304-1               [(1)  "Credit card transaction" means a transaction in
 304-2   which a card that may be used for personal, family, or household
 304-3   use is used to debit an open-end account in connection with:]
 304-4                     [(A)  a purchase or lease of goods or services;
 304-5   or]
 304-6                     [(B)  a loan of money.]
 304-7               [(2)  "Merchant discount" means the consideration,
 304-8   including a charge, fee, discount, or compensating balance, that a
 304-9   creditor requires, or that a creditor, subsidiary or parent company
304-10   of the creditor, or subsidiary of the creditor's parent company
304-11   receives directly or indirectly, from a person other than the
304-12   obligor in connection with a credit card transaction under a lender
304-13   credit card agreement between the obligor and the creditor.  The
304-14   term does not include consideration received by a creditor from the
304-15   obligor in connection with the credit card transaction.]
304-16               [(3)  "Open-end account" means an account under a
304-17   written contract between a creditor and an obligor that authorizes
304-18   the obligor to make purchases or borrow money from time to time and
304-19   authorizes the charging of interest or time price differential
304-20   computed on an outstanding unpaid balance.  The term includes an
304-21   account under an agreement described by Section 342.610 or 343.305
304-22   or Chapter 345 or 346.]
304-23               [(4)  "Usury" means interest that exceeds the
304-24   applicable maximum amount allowed by law.]
304-25         [Sec. 301.002.  INTEREST.  (a)  Interest is the compensation
304-26   allowed by law for the use, forbearance, or detention of money.]
 305-1         [(b)  Time price differential, regardless of how it is
 305-2   denominated, arising out of a credit sale is not interest.]
 305-3         [(c)  An amount that is paid, passed through, or obligated to
 305-4   be paid or passed through in connection with asset-backed
 305-5   securities or that is not paid as a result of a discounted sale
 305-6   price to the holders of asset-backed securities by a pass-through
 305-7   entity, regardless of the denomination of the amount under the
 305-8   terms of the asset-backed securities, is not interest.  This
 305-9   subsection does not affect interest that is agreed on and fixed by
305-10   the parties to a written contract and paid, charged, or received on
305-11   the ultimate underlying assets pledged to or held for the benefit
305-12   of the holders of asset-backed securities.]
305-13         [(d)  In this section:]
305-14               [(1)  "Asset-backed securities" means debt obligations
305-15   or certificates of beneficial ownership that:]
305-16                     [(A)  are a part of a single issue or single
305-17   series of securities in an aggregate of $1 million or more and
305-18   issuable in one or more classes;]
305-19                     [(B)  are secured by a pledge of, or represent an
305-20   undivided ownership interest in:]
305-21                           [(i)  one or more fixed or revolving
305-22   financial assets that by their terms convert into cash within a
305-23   definite period; and]
305-24                           [(ii)  rights or other assets designed to
305-25   assure the servicing or timely distribution of proceeds to security
305-26   holders; and]
 306-1                     [(C)  are issued for a business, commercial,
 306-2   agricultural, investment, or similar purpose by a pass-through
 306-3   entity.]
 306-4               [(2)  "Pass-through entity" means a corporation,
 306-5   limited liability company, association, general partnership,
 306-6   registered limited liability partnership, limited partnership or
 306-7   business, grantor or common-law trust under state law, or
 306-8   segregated pool of assets under federal tax law that on the date of
 306-9   original issuance of asset-backed securities does not have
306-10   significant assets other than:]
306-11                     [(A)  assets pledged to or held for the benefit
306-12   of holders of the asset-backed securities; or]
306-13                     [(B)  assets pledged to or held for the benefit
306-14   of holders of other asset-backed securities previously issued.]
306-15         [Sec. 301.003.  LENDER CREDIT CARD AGREEMENT.  (a)  An
306-16   agreement between a creditor and an obligor is a lender credit card
306-17   agreement if the agreement provides that:]
306-18               [(1)  the obligor, by means of a credit card and for
306-19   personal, family, or household use, may:]
306-20                     [(A)  obtain loans from the creditor directly or
306-21   through other participating persons; and]
306-22                     [(B)  lease or purchase goods or services from
306-23   more than one participating lessor or seller who honors the
306-24   creditor's credit card;]
306-25               [(2)  the creditor or another person acting in
306-26   cooperation with the creditor is to reimburse the participating
 307-1   persons, lessors, or sellers for the loans or the goods or services
 307-2   purchased or leased;]
 307-3               [(3)  the obligor is to pay the creditor the amount of
 307-4   the loan or cost of the lease or purchase;]
 307-5               [(4)  the unpaid balance of the loan, lease, or
 307-6   purchase and interest on that unpaid balance are debited to the
 307-7   obligor's account under the agreement;]
 307-8               [(5)  interest may be computed on the balances of the
 307-9   obligor's account from time to time outstanding but is not
307-10   precomputed; and]
307-11               [(6)  the obligor may defer payment of any part of the
307-12   balance.]
307-13         [(b)  An agreement under Section 342.610, 343.305, or 346.003
307-14   for an open-end account under which credit card transactions may be
307-15   made or a merchant discount may be taken is a lender credit card
307-16   agreement.]
307-17         [(c)  The following is not a lender credit card agreement:]
307-18               [(1)  an agreement, including an open-end account
307-19   credit agreement, between a seller and a buyer or between a lessor
307-20   and a lessee; or]
307-21               [(2)  an agreement under which:]
307-22                     [(A)  the entire balance is due in full each
307-23   month; and]
307-24                     [(B)  no interest is charged if the obligor pays
307-25   the entire balance each month.]
307-26         [(d)  On an amount owed for a credit card transaction under a
 308-1   lender credit card agreement in connection with which a merchant
 308-2   discount is imposed or received by the creditor, the creditor may
 308-3   not contract for, charge, or receive a fee or charge that:]
 308-4               [(1)  is not allowed under Chapter 346; or]
 308-5               [(2)  exceeds the amount allowed under Chapter 346.]
 308-6                      [CHAPTER 302.  INTEREST RATES]
 308-7                   [SUBCHAPTER A.  GENERAL PROVISIONS]
 308-8         [Sec. 302.001.  ALLOWABLE INTEREST IN ABSENCE OF OTHER LAW.
 308-9   (a)  Except as otherwise fixed by law, the maximum rate of interest
308-10   is 10 percent per year.]
308-11         [(b)  Unless otherwise authorized by law, a rate of interest
308-12   greater than 10 percent per year is usurious.  A contract for usury
308-13   is contrary to public policy and is subject to the appropriate
308-14   penalties under Chapter 305.]
308-15         [Sec. 302.002.  ALLOWABLE INTEREST WHEN NO RATE SPECIFIED.
308-16   When no specified rate of interest is agreed on by the parties,
308-17   interest at the rate of six percent per year is allowed on all
308-18   accounts and contracts ascertaining the amount payable, beginning
308-19   on the 30th day after the date on which the amount is due and
308-20   payable.]
308-21     [SUBCHAPTER B.  INTEREST PROVISIONS APPLICABLE TO CERTAIN LOANS]
308-22         [Sec. 302.101.  DETERMINING USURY BY AMORTIZING, PRORATING,
308-23   ALLOCATING, AND SPREADING INTEREST.  (a)  To determine whether a
308-24   loan secured, in whole or part, by an interest, including a lien,
308-25   mortgage, or security interest, in real property is usurious, the
308-26   interest rate is computed by amortizing, prorating, allocating, and
 309-1   spreading, in equal parts during the stated term of the loan, all
 309-2   interest at any time contracted for, charged, or received in
 309-3   connection with the loan.]
 309-4         [(b)  If a loan described by Subsection (a) is paid in full
 309-5   before the end of the loan's stated term and the amount of interest
 309-6   received for the period that the loan exists exceeds the amount
 309-7   that produces the maximum lawful rate for that period, the lender
 309-8   shall:]
 309-9               [(1)  refund the amount of the excess to the borrower;
309-10   or]
309-11               [(2)  credit the amount of the excess against amounts
309-12   owing under the loan.]
309-13         [(c)  A lender who complies with Subsection (b) is not
309-14   subject to any of the penalties provided by law for contracting
309-15   for, charging, or receiving interest in excess of the maximum
309-16   lawful rate.]
309-17         [Sec. 302.102.  INTEREST RATE ON AMOUNTS OF $250,000 OR MORE.
309-18   (a)  The maximum interest rate under such an agreement is 18
309-19   percent a year if the loan's interest rate is set out in a written
309-20   contract, including a bond or note, that provides for:]
309-21               [(1)  a loan or other extension of credit the original
309-22   principal amount of which is $250,000 or more;]
309-23               [(2)  a series of advances the total amount of which is
309-24   to be $250,000 or more; or]
309-25               [(3)  an extension or renewal of a loan or other
309-26   extension of credit described by this subsection, regardless of the
 310-1   amount of outstanding principal balance at the time of the renewal
 310-2   or extension.]
 310-3         [(b)  As to a contract that satisfies Subsection (a), the
 310-4   claim or defense of usury may not be used by:]
 310-5               [(1)  a party to the agreement or that person's heirs,
 310-6   personal representatives, successors, or substitute or another
 310-7   person acting on that person's behalf;]
 310-8               [(2)  a person acting with respect to the agreement as
 310-9   a guarantor, surety, accommodation maker, or endorser;]
310-10               [(3)  a person who becomes liable for payment of the
310-11   obligation; or]
310-12               [(4)  a person owning or acquiring property that is
310-13   subject to a lien securing the obligation.]
310-14         [(c)  This section does not apply to a loan or other
310-15   extension of credit secured by a lien on:]
310-16               [(1)  a building, constructed or to be constructed,
310-17   that is:]
310-18                     [(A)  used or intended to be used as a single
310-19   one-to-four-family residence; and]
310-20                     [(B)  occupied or intended to be occupied by a
310-21   person obligated to pay the loan or other extension of credit; or]
310-22               [(2)  land intended to be used primarily for
310-23   agricultural or ranching purposes.]
310-24         [Sec. 302.103.  INTEREST RATE ON OIL AND GAS LOANS OF
310-25   $500,000 OR MORE.  (a)  The maximum interest rate on a loan for the
310-26   payment of the direct or indirect costs of exploration for oil and
 311-1   gas, the development of oil and gas properties, or the reworking of
 311-2   oil or gas wells is equal to the maximum rate applicable to a
 311-3   corporation, other than a nonprofit corporation, if:]
 311-4               [(1)  the principal amount of the loan is $500,000 or
 311-5   more; and]
 311-6               [(2)  at the time the loan is made the lender
 311-7   reasonably estimates that the value of the collateral securing the
 311-8   loan is more than the amount of the loan.]
 311-9         [(b)  A loan that satisfies Subsection (a) is not subject to
311-10   the defense of usury or a penalty for usury.]
311-11         [Sec. 302.104.  INTEREST RATE ON LOAN MADE ON OR BEFORE
311-12   AUGUST 31, 1981, AND SECURED BY RESIDENCE.  (a)  The maximum
311-13   interest rate on a loan that is secured in any part by an interest,
311-14   including a lien, mortgage, or security interest, in real property
311-15   on which one or more single-family dwellings or dwelling units for
311-16   not more than four families in the aggregate are located is a rate
311-17   permitted by other applicable law or the lesser of:]
311-18               [(1)  12 percent a year; or]
311-19               [(2)  the rate computed by:]
311-20                     [(A)  adding two percent a year to the average
311-21   annual market yield rate adjusted to constant maturities on 10-year
311-22   United States Treasury notes and bonds as published by the board of
311-23   governors of the Federal Reserve System for the second calendar
311-24   month preceding the month in which the lender becomes legally bound
311-25   to make the loan; and]
311-26                     [(B)  rounding the result under Paragraph (A) to
 312-1   the nearest quarter of one percent a year.]
 312-2         [(b)  Before the 20th day of each month, the savings and loan
 312-3   commissioner shall publish in the Texas Register the average annual
 312-4   market yield rate adjusted to constant maturities on 10-year United
 312-5   States Treasury notes and bonds for the preceding calendar month.]
 312-6         [(c)  On a loan described by Subsection (a) that has an
 312-7   interest rate that is more than the applicable rate authorized by
 312-8   Chapter 303, a prepayment charge or penalty may not be collected
 312-9   unless the collection of the charge or penalty is required by an
312-10   agency created by federal law.]
312-11         [(d)  The interest rates authorized by this section are not
312-12   applicable to a loan made after August 31, 1981, unless the lender
312-13   became legally bound to make that loan before September 1, 1981.]
312-14         [(e)  In this section, "dwelling unit" means a unified
312-15   combination of rooms that is designed for residential use by one
312-16   family.]
312-17         [Sec. 302.105.  INTEREST RATE ON LOANS FOR RESIDENCES BY
312-18   FINANCIAL INSTITUTIONS USING CERTAIN DISCRIMINATORY PRACTICES.
312-19   (a)  A financial institution may not charge interest on a loan
312-20   under Section 302.104 and the maximum interest rate on the loan is
312-21   10 percent a year if in connection with the loan the financial
312-22   institution:]
312-23               [(1)  discriminates in providing or granting financial
312-24   assistance to purchase, rehabilitate, improve, or refinance a
312-25   housing accommodation due, in whole or part, to the consideration
312-26   of:]
 313-1                     [(A)  conditions, characteristics, or trends in
 313-2   the neighborhood where the property is located, unless the
 313-3   financial institution can demonstrate that such a consideration for
 313-4   that loan is required to avoid an unsafe or unsound business
 313-5   practice; or]
 313-6                     [(B)  race, color, religion, sex, marital status,
 313-7   national origin, or ancestry; or]
 313-8               [(2)  in appraising a housing accommodation or in
 313-9   determining whether, or under what conditions, to provide financial
313-10   assistance to purchase, rehabilitate, improve, or refinance a
313-11   housing accommodation, considers:]
313-12                     [(A)  the racial, ethnic, religious, or national
313-13   origin composition of the neighborhood or geographic area
313-14   surrounding the property; or]
313-15                     [(B)  whether the composition described by
313-16   Paragraph (A) is undergoing or is expected to undergo change.]
313-17         [(b)  In this section:]
313-18               [(1)  "Financial institution" means a state or national
313-19   bank, state or federal savings and loan association, mortgage
313-20   banking institution, or credit union.]
313-21               [(2)  "Housing accommodation" means improved or
313-22   unimproved real property, or a part of that property, that is used
313-23   or occupied or is intended, arranged, or designed to be used or
313-24   occupied as the residence of one or more individuals.]
313-25         [Sec. 302.106.  OPTIONAL INTEREST RATES.  The optional
313-26   interest rate ceilings provided by Chapter 303 apply to a loan or
 314-1   other extension of credit described by this subchapter regardless
 314-2   of whether the rates provided by this subchapter are applicable to
 314-3   the loan or extension of credit.]
 314-4         [Sec. 302.107.  PROHIBITION ON PREPAYMENT CHARGE OR PENALTY.
 314-5   If a loan for property that is to be the residential homestead of
 314-6   the borrower is made at an interest rate that is greater than the
 314-7   rate provided by Section 302.104, a prepayment charge or penalty
 314-8   may not be collected on the loan unless the charge or penalty is
 314-9   required by an agency created by federal law.]
314-10                   [SUBCHAPTER C.  OTHER SPECIAL RATES]
314-11         [Sec. 302.201.  INTEREST CHARGED BY REGISTERED SECURITIES
314-12   BROKERS OR DEALERS.  (a)  A broker or dealer registered under the
314-13   federal Securities Exchange Act of 1934 (15 U.S.C. Section 77b et
314-14   seq.), including subsequent amendments to that Act, and The
314-15   Securities Act (Article 581-1 et seq., Vernon's Texas Civil
314-16   Statutes) may charge in accordance with this section interest for
314-17   carrying in an account for a customer a debit balance that is:]
314-18               [(1)  payable on demand or at will by the customer
314-19   without penalty; and]
314-20               [(2)  secured by stocks, bonds, or other securities.]
314-21         [(b)  The interest rate charged under this section may not
314-22   exceed the greater of:]
314-23               [(1)  the rate authorized under Chapter 303; or]
314-24               [(2)  1-1/2 percent a month on the monthly debit
314-25   balance.]
314-26         [(c)  Interest charged under this section is not subject to
 315-1   any other provision of this title.]
 315-2         [Sec. 302.202.  LOANS GUARANTEED OR INSURED BY AN AGENCY OF
 315-3   THE UNITED STATES.  (a)  A loan insured by the Department of
 315-4   Housing and Urban Development under the National Housing Act (12
 315-5   U.S.C. Section 1701 et seq.), including subsequent amendments to
 315-6   that Act, may accrue interest, or be discounted, at a rate
 315-7   permitted under that Act and regulations adopted under it.]
 315-8         [(b)  A loan guaranteed or insured by the Department of
 315-9   Veterans Affairs or its successor under the federal veterans'
315-10   benefits laws (38 U.S.C. Section 3701 et seq.), including
315-11   subsequent amendments, may accrue interest, or be discounted, at a
315-12   rate permitted under those laws and regulations adopted under those
315-13   laws.]
315-14             [CHAPTER 303.  OPTIONAL INTEREST RATE CEILINGS]
315-15                   [SUBCHAPTER A.  GENERAL PROVISIONS]
315-16         [Sec. 303.001.  USE OF CEILINGS.  (a)  Except as provided by
315-17   Subchapter B, a person may contract for, charge, or receive a rate
315-18   or amount that does not exceed the applicable ceiling provided by
315-19   this chapter.  The use of a ceiling provided by this chapter for a
315-20   contract, including a contract for an open-end account, is
315-21   optional.  A contract may provide for any rate or amount allowed by
315-22   other applicable law.]
315-23         [(b)  A contract that is subject to Chapter 343, 344, 345,
315-24   347, or 348, including a contract for an open-end account, may, as
315-25   an alternative to a rate or amount allowed under that chapter,
315-26   provide for a simple or precomputed rate or amount that does not
 316-1   exceed the applicable ceiling provided by this chapter.]
 316-2         [(c)  Except as inconsistent with this chapter, a party to a
 316-3   contract that is subject to Chapter 342, 343, 344, 345, 347, or 348
 316-4   or the party's assignee has all the rights, duties, and obligations
 316-5   under the applicable chapter, including those relating to refund
 316-6   credits on prepayment or acceleration.]
 316-7         [Sec. 303.002.  CHARGING OF RATE LOWER THAN AGREED RATE.
 316-8   Unless the creditor and debtor agree otherwise, an agreement by the
 316-9   creditor and debtor to a rate is considered an agreement to any
316-10   lower rate that the creditor may elect or that is required under
316-11   Section 303.401 or 303.402.]
316-12         [Sec. 303.003.  DETERMINATION OF CEILING FOR CONTRACT TO
316-13   RENEW OR EXTEND DEBT PAYMENT.  The ceiling for a contract to renew
316-14   or extend the terms of payment of a debt is the ceiling in effect
316-15   under this chapter when the contract for renewal or extension is
316-16   made, regardless of when the debt was incurred.]
316-17         [SUBCHAPTER B.  LIMITATIONS ON APPLICABILITY OF CHAPTER]
316-18         [Sec. 303.101.  AGREEMENT TO WHICH CHAPTER DOES NOT APPLY.
316-19   The ceilings provided by this chapter do not apply to an agreement:]
316-20               [(1)  under which credit is extended by the seller or
316-21   an owner, subsidiary, or corporate affiliate of the seller for a
316-22   transaction to which Chapter 39, Business & Commerce Code, applies;
316-23   and]
316-24               [(2)  that is secured by a lien on the obligor's
316-25   homestead.]
316-26         [Sec. 303.102.  RATE FOR LENDER CREDIT CARD AGREEMENT WITH
 317-1   MERCHANT DISCOUNT.  On an amount owed for a credit card transaction
 317-2   under a lender credit card agreement in connection with which a
 317-3   merchant discount is imposed or received by the creditor, the
 317-4   creditor may not contract for, charge, or receive:]
 317-5               [(1)  a rate that exceeds the ceiling provided under
 317-6   Section 303.205, subject to Sections 303.304(b) and 303.305(d); or]
 317-7               [(2)  a fee or charge that:]
 317-8                     [(A)  is not allowed under Chapter 346; or]
 317-9                     [(B)  exceeds the amount allowed under Chapter
317-10   346.]
317-11        [SUBCHAPTER C.  INTEREST RATE CEILINGS; VARIABLE INTEREST
317-12                                  RATE]
317-13         [Sec. 303.201.  WEEKLY CEILING.  The parties to a written
317-14   contract may agree to an interest rate, or in an agreement under
317-15   Chapter 345, 347, or 348, an amount of time price differential
317-16   producing a rate, that does not exceed the applicable weekly
317-17   ceiling.]
317-18         [Sec. 303.202.  QUARTERLY CEILING.  A written contract,
317-19   including a contract that involves an open-end account, may as an
317-20   alternative to the weekly ceiling provide for an interest rate, or
317-21   in an agreement under Chapter 345, 347, or 348, an amount of time
317-22   price differential producing a rate, that does not exceed the
317-23   applicable quarterly ceiling.]
317-24         [Sec. 303.203.  ANNUALIZED CEILING.  The annualized ceiling
317-25   may be used as an alternative to the weekly ceiling only for a
317-26   written contract, including an agreement under Chapter 345, 347, or
 318-1   348, that involves an open-end account.]
 318-2         [Sec. 303.204.  MONTHLY CEILING.  (a)  The monthly ceiling
 318-3   may be used as an alternative to the weekly ceiling only for a
 318-4   contract:]
 318-5               [(1)  that provides for a variable rate, including a
 318-6   contract for an open-end account;]
 318-7               [(2)  that is not made for personal, family, or
 318-8   household use; and]
 318-9               [(3)  under which the parties agree that the interest
318-10   rate is subject to monthly adjustment and that the monthly ceiling
318-11   applies.]
318-12         [(b)  A contract that provides for the use of the monthly
318-13   ceiling may not provide for the use of another ceiling provided
318-14   under this subchapter.]
318-15         [Sec. 303.205.  CEILING ON OPEN-END ACCOUNT INVOLVING CREDIT
318-16   CARD TRANSACTION OR MERCHANT DISCOUNT.  Notwithstanding other
318-17   provisions of this subchapter, the rate of interest on an open-end
318-18   account authorized under Section 342.610, 343.305, or 346.003, or
318-19   an amount owed for a lender credit card transaction under another
318-20   type of credit card agreement, in connection with which a merchant
318-21   discount is imposed or received by the creditor may not exceed the
318-22   quarterly ceiling, subject to Sections 303.304(b) and 303.305(d).]
318-23         [Sec. 303.206.  VARIABLE RATE.  (a)  A contract, including a
318-24   contract for an open-end account, may provide for any index,
318-25   formula, or provision of law by which the rate or amount is
318-26   determined.]
 319-1         [(b)  The rate or amount determined under Subsection (a) may
 319-2   not exceed the applicable ceiling from time to time in effect, for
 319-3   as long as the debt is outstanding under the contract.]
 319-4         [(c)  A variable contract rate described by this section may
 319-5   not be used in a contract in which the interest or time price
 319-6   differential is precomputed and added into the amount of the
 319-7   contract at the time the contract is made.]
 319-8         [(d)  A variable rate contract described by this section that
 319-9   does not involve an open-end account may not provide for use of
319-10   both the weekly ceiling and the quarterly ceiling.]
319-11         [Sec. 303.207.  EFFECT OF APPLYING MAXIMUM AND MINIMUM TO
319-12   CEILINGS.  In this chapter, "weekly ceiling," "monthly ceiling,"
319-13   "quarterly ceiling," or "annualized ceiling" refers to that ceiling
319-14   as determined after the application of Sections 303.304 and
319-15   303.305.]
319-16         [SUBCHAPTER D.  COMPUTATION AND PUBLICATION OF CEILINGS]
319-17         [Sec. 303.301.  COMPUTATION OF WEEKLY CEILING.  (a)  The
319-18   weekly ceiling is computed by:]
319-19               [(1)  multiplying the auction rate by two; and]
319-20               [(2)  rounding the result obtained under Subdivision
319-21   (1) to the nearest one-quarter of one percent.]
319-22         [(b)  In this section, "auction rate" means the auction
319-23   average rate quoted on a bank discount basis for 26-week treasury
319-24   bills issued by the United States government, as published by the
319-25   Board of Governors of the Federal Reserve System, for the week
319-26   preceding the week in which the weekly ceiling is to take effect.]
 320-1         [Sec. 303.302.  COMPUTATION OF QUARTERLY AND ANNUALIZED
 320-2   CEILING.  (a)  On December 1, March 1, June 1, and September 1 of
 320-3   each year, the consumer credit commissioner shall compute the
 320-4   quarterly ceiling and annualized ceiling for the calendar quarter
 320-5   beginning the following January 1, April 1, July 1, and October 1,
 320-6   respectively.]
 320-7         [(b)  The quarterly ceiling or annualized ceiling is computed
 320-8   by averaging all of the weekly ceilings computed using average
 320-9   rates from auctions held during the three calendar months preceding
320-10   the computation date of the ceiling.]
320-11         [Sec. 303.303.  COMPUTATION OF MONTHLY CEILING.  (a)  The
320-12   consumer credit commissioner shall compute the monthly ceiling on
320-13   the first business day of the calendar month in which the rate
320-14   applies.]
320-15         [(b)  The monthly ceiling is computed by averaging all of the
320-16   weekly ceilings computed using rates from auctions held during the
320-17   calendar month preceding the computation date of the monthly
320-18   ceiling.]
320-19         [Sec. 303.304.  MINIMUM WEEKLY, MONTHLY, QUARTERLY, OR
320-20   ANNUALIZED CEILING.  (a)  Except as provided by Subsection (b), if
320-21   the rate computed for the weekly ceiling, monthly ceiling,
320-22   quarterly ceiling, or annualized ceiling is less than 18 percent a
320-23   year, the ceiling is 18 percent a year.]
320-24         [(b)  For an open-end account authorized under Section
320-25   342.610, 343.305, or 346.003, in connection with which credit card
320-26   transactions are authorized or a merchant discount is imposed or
 321-1   received by the creditor, if the rate computed for the quarterly
 321-2   ceiling is less than 14 percent a year, the quarterly ceiling is 14
 321-3   percent a year.]
 321-4         [Sec. 303.305.  MAXIMUM WEEKLY, MONTHLY, QUARTERLY, OR
 321-5   ANNUALIZED CEILING.  (a)  Except as provided by Subsection (b),
 321-6   (c), or (d), if the rate computed for the weekly ceiling, monthly
 321-7   ceiling, quarterly ceiling, or annualized ceiling is more than 24
 321-8   percent a year, the ceiling is 24 percent a year.]
 321-9         [(b)  For a contract made, extended, or renewed under which
321-10   credit is extended in any part for a business, commercial,
321-11   investment, or similar purpose, but excluding a contract that is
321-12   not for any of those purposes and is primarily for personal,
321-13   family, household, or agricultural use, and the amount of the
321-14   credit extension is more than $250,000, if the rate computed for
321-15   the weekly ceiling, monthly ceiling, quarterly ceiling, or
321-16   annualized ceiling is more than 28 percent a year, the ceiling is
321-17   28 percent a year.]
321-18         [(c)  For an open-end account credit agreement that provides
321-19   for credit card transactions on which a merchant discount is not
321-20   imposed or received by the creditor, if the rate computed for the
321-21   weekly ceiling, monthly ceiling, quarterly ceiling, or annualized
321-22   ceiling is more than 21 percent a year, the ceiling is 21 percent a
321-23   year.]
321-24         [(d)  For an open-end account authorized under Section
321-25   342.610, 343.305, or 346.003, in connection with which credit card
321-26   transactions are authorized or a merchant discount is imposed or
 322-1   received by the creditor, if the rate computed for the quarterly
 322-2   ceiling is more than 22 percent a year, the quarterly ceiling is 22
 322-3   percent a year.]
 322-4         [Sec. 303.306.  COMPUTATION OF CEILING IF INFORMATION
 322-5   UNAVAILABLE.  (a)  If any of the information required to compute a
 322-6   ceiling under this subchapter is not available to the consumer
 322-7   credit commissioner from the Federal Reserve Board in the time
 322-8   required for the computation, the consumer credit commissioner
 322-9   shall obtain that information from a reliable source satisfactory
322-10   to the commissioner.]
322-11         [(b)  If information is not available, the ceiling last
322-12   computed remains in effect until the ceiling is computed from the
322-13   obtained information.]
322-14         [Sec. 303.307.  PUBLICATION OF CEILINGS.  (a)  The consumer
322-15   credit commissioner shall send the ceilings computed under this
322-16   subchapter to the secretary of state for publication in the Texas
322-17   Register.]
322-18         [(b)  The monthly, quarterly, or annualized ceiling shall be
322-19   published before the 11th day after the day on which the ceiling is
322-20   computed and the weekly ceiling shall be published from time to
322-21   time.]
322-22         [Sec. 303.308.  JUDICIAL NOTICE.  A court may take judicial
322-23   notice of information published in the Texas Register under Section
322-24   303.307.]
322-25                    [SUBCHAPTER E.  OPEN-END ACCOUNTS]
322-26         [Sec. 303.401.  OPEN-END ACCOUNT:  CEILINGS.  (a)  To use the
 323-1   quarterly or annualized ceiling for setting the rate on the current
 323-2   and future balances of an open-end account, the agreement for the
 323-3   account must provide for use of the ceiling, and the creditor must
 323-4   give notice of the rate after the date on which the quarterly or
 323-5   annualized ceiling is computed and before the last day of the next
 323-6   succeeding calendar quarter.]
 323-7         [(b)  If the annualized ceiling is used, the rate is
 323-8   effective for the 12-month period beginning on the date on which
 323-9   the rate takes effect for the account.]
323-10         [(c)  If the quarterly ceiling is used, the rate is effective
323-11   for the three-month period beginning on the date on which the rate
323-12   takes effect for the account.  For an open-end account authorized
323-13   under Section 342.610, 343.305, or 346.003, in connection with
323-14   which credit card transactions are authorized or a merchant
323-15   discount is imposed or received by the creditor, the quarterly
323-16   ceiling shall be adjusted, at the option of the creditor, on:]
323-17               [(1)  the effective dates provided by Section 303.302;
323-18   or]
323-19               [(2)  the first day of the first billing cycle of the
323-20   account beginning after those dates.]
323-21         [(d)  If a quarterly or annualized ceiling is being used for
323-22   an account and if the rate for the applicable period is less than
323-23   or equal to the ceiling to be in effect for the succeeding period
323-24   of equal length, the creditor may leave that rate in effect for
323-25   that succeeding period.]
323-26         [(e)  A creditor who has disclosed to an obligor that an
 324-1   election may be renewed under Subsection (d) is not required to
 324-2   give additional notice of a renewal under that subsection.]
 324-3         [(f)  To increase a previously agreed rate, a creditor shall
 324-4   comply with Section 303.403 before the end of the last calendar
 324-5   quarter of the period in which the rate previously agreed to is in
 324-6   effect.  The ceiling in effect for that period remains the ceiling
 324-7   until the parties to the agreement agree to a new rate.]
 324-8         [Sec. 303.402.  VARIABLE RATE OPEN-END ACCOUNT:  CEILINGS.
 324-9   The applicable ceiling for an open-end account agreement that
324-10   provides for a variable rate or amount according to an index,
324-11   formula, or provision of law disclosed to the obligor, other than a
324-12   variable rate commercial contract that is subject to Section
324-13   303.204, is the annualized ceiling, quarterly ceiling, or weekly
324-14   ceiling as disclosed to the obligor.  The annualized ceiling shall
324-15   be adjusted after each 12-month period, the quarterly ceiling shall
324-16   be adjusted after each three-month period, and the weekly ceiling
324-17   shall be adjusted weekly.]
324-18         [Sec. 303.403.  OPEN-END ACCOUNT:  CHANGE OF AGREEMENT TERM.
324-19   (a)  An agreement covering an open-end account may provide that the
324-20   creditor may change the terms of the agreement for current and
324-21   future balances of that account by giving notice of the change to
324-22   the obligor.]
324-23         [(b)  A notice under this section to change the rate on an
324-24   account or the index, formula, or provision of law used to compute
324-25   the rate must include:]
324-26               [(1)  the new rate, or the new index, formula, or
 325-1   provision to be used to compute the rate;]
 325-2               [(2)  the date on which the change is to take effect;]
 325-3               [(3)  the period for which the change is to be
 325-4   effective or after which the rate will be adjusted;]
 325-5               [(4)  a statement of whether the change is to affect
 325-6   current and future balances or only future balances;]
 325-7               [(5)  the obligor's rights under this section and the
 325-8   procedures for the obligor to exercise those rights;]
 325-9               [(6)  the address to which the obligor may send notice
325-10   of the obligor's election not to continue the open-end account; and]
325-11               [(7)  if the rate is increased, the following statement
325-12   printed in not less than 10-point type or computer equivalent:]
325-13         ["YOU MAY TERMINATE THIS AGREEMENT IF YOU DO NOT WISH
325-14         TO PAY THE NEW RATE."]
325-15         [(c)  A creditor shall include with a notice required by this
325-16   section a form that may be returned at the expense of the creditor
325-17   and on which the obligor may indicate by checking or marking an
325-18   appropriate box or by a similar arrangement the obligor's decision
325-19   not to continue the account.  The form may be included on a part of
325-20   the account statement that is to be returned to the creditor or on
325-21   a separate sheet.]
325-22         [(d)  An obligor is considered to have agreed to a change
325-23   under this section if the creditor mails a notice required by this
325-24   section to the obligor's most recent address shown in the
325-25   creditor's records and:]
325-26               [(1)  the obligor chooses to retain the privilege of
 326-1   using the open-end account;]
 326-2               [(2)  the obligor or a person authorized by the obligor
 326-3   accepts or uses an extension of credit after the fifth day after
 326-4   the date on which the notice is mailed; or]
 326-5               [(3)  the obligor does not notify the creditor in
 326-6   writing before the 21st day after the date on which the notice is
 326-7   mailed that the obligor does not wish to continue to use the
 326-8   open-end account.]
 326-9         [(e)  An obligor who rejects a rate change in accordance with
326-10   this section is entitled to pay the balance existing on the
326-11   open-end account at the rate and over the period in effect
326-12   immediately before the date of the proposed change and under the
326-13   same minimum payment terms provided by the agreement.  Rejection of
326-14   a new rate does not accelerate payment of the balance due.]
326-15         [(f)  The procedure provided by this section for changing the
326-16   terms of an agreement is in addition to other means of amending the
326-17   agreement provided by law.]
326-18         [Sec. 303.404.  DISCLOSURE OF DECREASE IN INTEREST RATE NOT
326-19   REQUIRED ON OPEN-END ACCOUNTS INVOLVING CREDIT CARD TRANSACTION OR
326-20   MERCHANT DISCOUNT.  On an open-end account authorized under Section
326-21   342.610, 343.305, or 346.003, in connection with which credit card
326-22   transactions are authorized or a merchant discount is imposed or
326-23   received by the creditor and on which interest is charged under
326-24   this chapter, the creditor is not required to disclose a decrease
326-25   in the applicable interest rate.]
326-26         [Sec. 303.405.  OPEN-END ACCOUNT:  DISCLOSURE OF CERTAIN RATE
 327-1   VARIATIONS.  (a)  Except as provided by Subsection (b), a variation
 327-2   in a rate on an account resulting from operation of the previously
 327-3   disclosed index, formula, or provision of law is not required to be
 327-4   disclosed under Section 303.401 or 303.403.]
 327-5         [(b)  The creditor on an open-end account agreement that
 327-6   provides for a variable rate according to an index, formula, or
 327-7   provision of law, that is primarily for personal, family, or
 327-8   household use, and that is subject to this chapter shall give to
 327-9   the obligor notice of a change in the rate resulting from operation
327-10   of the index, formula, or provision of law.  The notice must be
327-11   given:]
327-12               [(1)  by a document mailed on or before the beginning
327-13   of the first cycle for which the change becomes effective; or]
327-14               [(2)  on or with:]
327-15                     [(A)  the billing statement for a billing cycle
327-16   that precedes the cycle for which the change becomes effective, if
327-17   the account is covered by Section 339.002 or 303.205; or]
327-18                     [(B)  any billing statement, if the account is
327-19   not covered by Section 339.002 or 303.205.]
327-20         [Sec. 303.406.  OPEN-END ACCOUNT:  CEILING FOR PLAN OR
327-21   ARRANGEMENT.  If a creditor implements a quarterly or annualized
327-22   ceiling for a majority of the creditor's open-end accounts that are
327-23   under a particular plan or arrangement and that are for obligors in
327-24   this state, that ceiling is also the ceiling for all open-end
327-25   accounts that are opened or activated under that plan for obligors
327-26   in this state during the period that ceiling is in effect.]
 328-1           [SUBCHAPTER F.  ADDITIONAL REQUIREMENTS FOR CERTAIN
 328-2                   CONSUMER AND OTHER LOAN AGREEMENTS]
 328-3         [Sec. 303.501.  NOTICE FOR VARIABLE RATE CONSUMER AGREEMENT.
 328-4   (a)  This section applies only to an agreement for the extension of
 328-5   credit, or an amendment to such an agreement, that:]
 328-6               [(1)  is primarily for personal, family, or household
 328-7   use;]
 328-8               [(2)  provides for a variable rate or amount; and]
 328-9               [(3)  provides for a rate that is authorized by this
328-10   chapter.]
328-11         [(b)  An agreement or amendment must contain or be
328-12   accompanied by the following statement in not less than 10-point
328-13   type or computer equivalent:]
328-14         ["NOTICE TO CONSUMER:  UNDER TEXAS LAW, IF YOU CONSENT
328-15         TO THIS AGREEMENT, YOU MAY BE SUBJECT TO A FUTURE RATE
328-16         AS HIGH AS 24 PERCENT A YEAR."]
328-17         [(c)  If the agreement or amendment provides for a maximum
328-18   rate of less than 24 percent a year, the statement required by this
328-19   section may be amended to set out that maximum rate.]
328-20         [(d)  This section does not apply to an agreement or
328-21   amendment for which a disclosure relating to variable rates or
328-22   amounts is required or provided by federal law, including a
328-23   regulation or interpretation.]
328-24         [Sec. 303.502.  CONSUMER INSTALLMENT AND SECONDARY MORTGAGE
328-25   LOANS; OPEN-END CONSUMER ACCOUNTS.  (a)  A loan the rate of which
328-26   is authorized under this chapter is subject to:]
 329-1               [(1)  Chapter 343 if the loan is:]
 329-2                     [(A)  extended primarily for:]
 329-3                           [(i)  personal, family, or household use
 329-4   and not extended for a business, commercial, investment,
 329-5   agricultural, or similar purpose; or]
 329-6                           [(ii)  the purchase of a motor vehicle
 329-7   other than a heavy commercial vehicle as defined by Section
 329-8   348.001;]
 329-9                     [(B)  payable in two or more installments;]
329-10                     [(C)  not secured by a lien on real estate; and]
329-11                     [(D)  made by a person engaged in the business of
329-12   making or negotiating those types of loans; or]
329-13               [(2)  Chapter 344 if the loan is:]
329-14                     [(A)  extended primarily for personal, family, or
329-15   household use and not for a business, commercial, investment,
329-16   agricultural, or similar purpose;]
329-17                     [(B)  predominantly payable in monthly
329-18   installments;]
329-19                     [(C)  described by Sections 344.001, 344.101,
329-20   344.102, and 344.405; and]
329-21                     [(D)  made, negotiated, or arranged by a person
329-22   engaged in the business of making, negotiating, or arranging those
329-23   types of loans.]
329-24         [(b)  A person other than a bank or savings and loan
329-25   association engaged in the business of making loans described by
329-26   Subsection (a) must obtain a license under Chapter 342.]
 330-1         [(c)  Except as inconsistent with this chapter:]
 330-2               [(1)  a person engaged in the business of extending
 330-3   open-end credit primarily for personal, family, or household use
 330-4   who charges on an open-end account a rate or amount under authority
 330-5   of this chapter is subject to the applicable chapter in Subtitle B;
 330-6   and]
 330-7               [(2)  a party to an account described by Subdivision
 330-8   (1) or the party's assignee has all the rights, duties, and
 330-9   obligations under that applicable chapter.]
330-10         [(d)  Subsection (c) does not apply to a person who is
330-11   subject to Chapter 24, Insurance Code.]
330-12         [Sec. 303.503.  EXAMINATIONS; RULES.  (a)  Sections 342.502
330-13   and 342.606 apply to a transaction:]
330-14               [(1)  that is made by a person who holds a license
330-15   under Chapter 342;]
330-16               [(2)  that is subject to Chapter 343, 344, or 346; and]
330-17               [(3)  the rate of which is authorized by this chapter.]
330-18         [(b)  Sections 342.501, 342.504, and 342.505 apply to a loan:]
330-19               [(1)  that is subject to Chapter 343; and]
330-20               [(2)  the rate of which is authorized by this chapter.]
330-21                       [SUBCHAPTER G.  ENFORCEMENT]
330-22         [Sec. 303.601.  WHEN ACT OR OMISSION NOT VIOLATION.  An act
330-23   or omission does not violate this title if the act or omission
330-24   conforms to:]
330-25               [(1)  this chapter;]
330-26               [(2)  a provision determined by the consumer credit
 331-1   commissioner; or]
 331-2               [(3)  an interpretation of this title that is in effect
 331-3   at the time of the act or omission and that was made by:]
 331-4                     [(A)  the consumer credit commissioner under
 331-5   Section 14.108; or]
 331-6                     [(B)  an appellate court of this state or the
 331-7   United States.]
 331-8         [Sec. 303.602.  PENALTY FOR VIOLATION OF CHAPTER FOR CERTAIN
 331-9   CONTRACTS SUBJECT TO SUBTITLE B.  (a)  A person who contracts for,
331-10   charges, or receives under a contract subject to Chapter 343, 344,
331-11   345, 346, 347, or 348, including a contract for an open-end
331-12   account, an interest rate or amount of time price differential that
331-13   exceeds the maximum applicable rate or amount authorized by that
331-14   chapter or this chapter is subject to a penalty for that violation
331-15   determined under Chapter 349.]
331-16         [(b)  For a contract that contains a rate or amount
331-17   authorized under this chapter, the failure to perform a duty or
331-18   comply with a prohibition provided by this chapter is subject to
331-19   Chapter 349 as if this chapter were in Subtitle B.]
331-20         [Sec. 303.603.  PENALTY FOR VIOLATION OF CEILING IN CERTAIN
331-21   CONTRACTS.  A written contract, other than a contract to which
331-22   Section 303.602 applies, that directly or indirectly provides for a
331-23   rate that exceeds the rate authorized by this chapter and that is
331-24   not otherwise authorized by law is subject to the penalty
331-25   prescribed by Chapter 305.]
331-26         [Sec. 303.604.  ENFORCEMENT BY CONSUMER CREDIT COMMISSIONER.
 332-1   Subject to Subchapters C and D, Chapter 14, the consumer credit
 332-2   commissioner shall enforce this chapter as it applies to contracts
 332-3   subject to Subtitle B or C.]
 332-4         [Sec. 303.605.  ENFORCEMENT BY CREDIT UNION COMMISSIONER.
 332-5   The credit union commissioner shall enforce this chapter as it
 332-6   applies to contracts subject to Subtitle D, Title 3.]
 332-7         [Sec. 303.606.  ENFORCEMENT BY DEPARTMENT OF INSURANCE.  The
 332-8   Texas Department of Insurance shall enforce this chapter as it
 332-9   applies to contracts subject to Chapter 24, Insurance Code.]
332-10                [SUBCHAPTER H.  EFFECT ON OTHER STATUTES]
332-11         [Sec. 303.701.  RETAIL INSTALLMENT SALES AND MANUFACTURED
332-12   HOME AND MOTOR VEHICLE TRANSACTIONS.  A contract subject to Chapter
332-13   345, 347, or 348, including a contract for an open-end account,
332-14   that provides for an interest rate or amount of time price
332-15   differential authorized under this chapter is not subject to
332-16   Chapter 342, 343, or 344.]
332-17         [Sec. 303.702.  APPLICABILITY OF CREDIT UNION ACT.  Except as
332-18   inconsistent with this chapter:]
332-19               [(1)  a person subject to Subtitle D, Title 3, who
332-20   contracts for, charges, or receives a rate authorized by this
332-21   chapter remains subject to that subtitle; and]
332-22               [(2)  a party to a transaction described by Subdivision
332-23   (1) has all the rights provided by Subtitle D, Title 3.]
332-24         [Sec. 303.703.  APPLICABILITY OF CHAPTER 24, INSURANCE CODE.
332-25   (a)  Except as inconsistent with this chapter:]
332-26               [(1)  a person subject to Chapter 24, Insurance Code,
 333-1   who contracts for, charges, or receives a rate authorized by this
 333-2   chapter remains subject to that chapter; and]
 333-3               [(2)  a party to an insurance premium finance
 333-4   agreement, including an agreement for an open-end account, has all
 333-5   the rights provided by Chapter 24, Insurance Code.]
 333-6         [(b)  The licensing requirements of Subtitle B do not apply
 333-7   to a transaction described by Subsection (a)(1).]
 333-8         [Sec. 303.704.  NOTICE REQUIREMENTS IN FEDERAL LAW.  (a)  If
 333-9   a disclosure or notice requirement of this chapter is inconsistent
333-10   with or conflicts with a disclosure or notice requirement of
333-11   federal statute, regulation, or interpretation, the federal
333-12   statute, regulation, or interpretation controls, and a person is
333-13   not required to comply with the inconsistent or conflicting
333-14   requirement of this chapter.]
333-15         [(b)  A creditor may modify the disclosure and notice
333-16   requirements of this chapter to conform to the terminology or other
333-17   provisions required or provided under federal statute, regulation,
333-18   or interpretation.]
333-19                    [CHAPTER 304.  JUDGMENT INTEREST]
333-20                   [SUBCHAPTER A.  GENERAL PROVISIONS]
333-21         [Sec. 304.001.  INTEREST RATE REQUIRED IN JUDGMENT.  A
333-22   judgment of a court of this state must state the interest rate
333-23   applicable to that judgment.]
333-24         [Sec. 304.002.  JUDGMENT INTEREST RATE:  INTEREST RATE IN
333-25   CONTRACT.  A judgment of a court of this state on a contract that
333-26   provides for a specific interest rate earns interest at a rate
 334-1   equal to the lesser of:]
 334-2               [(1)  the rate specified in the contract; or]
 334-3               [(2)  18 percent a year.]
 334-4         [Sec. 304.003.  JUDGMENT INTEREST RATE:  INTEREST RATE NOT IN
 334-5   CONTRACT.  (a)  A judgment of a court of this state to which
 334-6   Section 304.002 does not apply, including court costs awarded in
 334-7   the judgment, earns interest at the rate determined under this
 334-8   section.]
 334-9         [(b)  On the 15th of each month, the consumer credit
334-10   commissioner shall determine the interest rate to be applied to a
334-11   judgment rendered during the succeeding calendar month.]
334-12         [(c)  The judgment interest rate is:]
334-13               [(1)  the auction rate quoted on a discount basis for
334-14   52-week treasury bills issued by the United States government as
334-15   most recently published by the Federal Reserve Board before the
334-16   date of the computation;]
334-17               [(2)  10 percent if the auction rate described by
334-18   Subdivision (1) is less than 10 percent; or]
334-19               [(3)  20 percent if the auction rate described by
334-20   Subdivision (1) is more than 20 percent.]
334-21         [Sec. 304.004.  PUBLICATION OF JUDGMENT INTEREST RATE.  The
334-22   consumer credit commissioner shall send to the secretary of state
334-23   the judgment interest rate for publication in the Texas Register at
334-24   the same time other rates computed by the consumer credit
334-25   commissioner under this code are required to be published.]
334-26         [Sec. 304.005.  ACCRUAL OF JUDGMENT INTEREST.  (a)  Except as
 335-1   provided by Subsection (b), interest on a judgment of a court of
 335-2   this state accrues during the period beginning on the day the
 335-3   judgment is rendered and ending on the day the judgment is
 335-4   satisfied.]
 335-5         [(b)  If a case is appealed and a motion for extension of
 335-6   time to file a brief is granted for a party who was a plaintiff at
 335-7   trial, interest does not accrue for the period of extension.]
 335-8         [Sec. 304.006.  COMPOUNDING OF JUDGMENT INTEREST.  Interest
 335-9   on a judgment of a court of this state compounds annually.]
335-10         [Sec. 304.007.  JUDICIAL NOTICE OF JUDGMENT INTEREST RATE.  A
335-11   court of this state shall take judicial notice of a published
335-12   judgment interest rate.]
335-13         [SUBCHAPTER B.  PREJUDGMENT INTEREST IN WRONGFUL DEATH,
335-14                PERSONAL INJURY, OR PROPERTY DAMAGE CASE]
335-15         [Sec. 304.101.  APPLICABILITY OF SUBCHAPTER.  This subchapter
335-16   applies only to a wrongful death, personal injury, or property
335-17   damage case.]
335-18         [Sec. 304.102.  PREJUDGMENT INTEREST REQUIRED IN CERTAIN
335-19   CASES.  A judgment in a wrongful death, personal injury, or
335-20   property damage case must include prejudgment interest.]
335-21         [Sec. 304.103.  PREJUDGMENT INTEREST RATE FOR WRONGFUL DEATH,
335-22   PERSONAL INJURY, OR PROPERTY DAMAGE CASE.  The prejudgment interest
335-23   rate is equal to the postjudgment interest rate applicable at the
335-24   time of judgment and is computed as simple interest.]
335-25         [Sec. 304.104.  ACCRUAL OF PREJUDGMENT INTEREST.  Except as
335-26   provided by Section 304.105 or 304.108, prejudgment interest
 336-1   accrues on the amount of a judgment during the period beginning on
 336-2   the 180th day after the date the defendant receives written notice
 336-3   of a claim or on the date the suit is filed, whichever is earlier,
 336-4   and ending on the day preceding the date judgment is rendered.]
 336-5         [Sec. 304.105.  EFFECT OF SETTLEMENT OFFER ON ACCRUAL OF
 336-6   PREJUDGMENT INTEREST.  (a)  If judgment for a claimant is less than
 336-7   the amount of a settlement offer of the defendant, prejudgment
 336-8   interest does not accrue on the amount of the judgment during the
 336-9   period that the offer may be accepted.]
336-10         [(b)  If judgment for a claimant is more than the amount of a
336-11   settlement offer of the defendant, prejudgment interest does not
336-12   accrue on the amount of the settlement offer during the period that
336-13   the offer may be accepted.]
336-14         [Sec. 304.106.  SETTLEMENT OFFER REQUIREMENTS TO PREVENT
336-15   PREJUDGMENT INTEREST ACCRUAL.  To prevent the accrual of
336-16   prejudgment interest under this subchapter, a settlement offer must
336-17   be in writing and delivered to the claimant or the claimant's
336-18   attorney or representative.]
336-19         [Sec. 304.107.  VALUE OF SETTLEMENT OFFER FOR COMPUTING
336-20   PREJUDGMENT INTEREST.  If a settlement offer does not provide for
336-21   cash payment at the time of settlement, the amount of the
336-22   settlement offer for the purpose of computing prejudgment interest
336-23   is the cost or fair market value of the settlement offer at the
336-24   time it is made.]
336-25         [Sec. 304.108.  ACCRUAL OF PREJUDGMENT INTEREST DURING
336-26   PERIODS OF TRIAL DELAY.  (a)  In addition to the exceptions
 337-1   provided by Section 304.105, a court may order that prejudgment
 337-2   interest does not accrue during periods of delay in the trial.]
 337-3         [(b)  A court shall consider:]
 337-4               [(1)  periods of delay caused by a defendant; and]
 337-5               [(2)  periods of delay caused by a claimant.]
 337-6          [SUBCHAPTER C.  OTHER PREJUDGMENT INTEREST PROVISIONS]
 337-7         [Sec. 304.201.  PREJUDGMENT INTEREST RATE FOR CONDEMNATION
 337-8   CASE.  The prejudgment interest rate in a condemnation case is
 337-9   equal to the postjudgment interest rate applicable at the time of
337-10   judgment and is computed as simple interest.]
337-11          [SUBCHAPTER D.  EXCEPTIONS TO APPLICATION OF CHAPTER]
337-12         [Sec. 304.301.  EXCEPTION FOR DELINQUENT TAXES.  This chapter
337-13   does not apply to a judgment that earns interest at a rate set by
337-14   Title 2, Tax Code.]
337-15         [Sec. 304.302.  EXCEPTION FOR DELINQUENT CHILD SUPPORT.  This
337-16   chapter does not apply to interest that accrues on an amount of
337-17   unpaid child support under Section 157.265, Family Code.]
337-18                [CHAPTER 305.  PENALTIES AND LIABILITIES]
337-19            [SUBCHAPTER A.  CIVIL LIABILITY; CRIMINAL PENALTY]
337-20         [Sec. 305.001.  LIABILITY FOR CONTRACTING FOR, CHARGING, OR
337-21   RECEIVING EXCESSIVE INTEREST.  (a)  A person who contracts for,
337-22   charges, or receives interest that is greater than the amount
337-23   authorized by this subtitle is liable to the obligor for an amount
337-24   that is equal to the greater of:]
337-25               [(1)  three times the amount computed by subtracting
337-26   the amount of interest allowed by law from the total amount of the
 338-1   interest contracted for, charged, or received; or]
 338-2               [(2)  $2,000 or 20 percent of the amount of the
 338-3   principal, whichever is less.]
 338-4         [(b)  This section applies only to a contract or transaction
 338-5   subject to this subtitle.]
 338-6         [Sec. 305.002.  ADDITIONAL LIABILITY FOR INTEREST GREATER
 338-7   THAN TWICE AMOUNT AUTHORIZED.  (a)  In addition to the amount
 338-8   determined under Section 305.001, a person who contracts for,
 338-9   charges, or receives interest that is greater than twice the amount
338-10   authorized by this subtitle is liable to the obligor for the
338-11   principal amount on which the interest is contracted for, charged,
338-12   or received as well as interest and all other charges.]
338-13         [(b)  This section applies only to a contract or transaction
338-14   subject to this subtitle.]
338-15         [Sec. 305.003.  ATTORNEY'S FEES.  A person who is liable
338-16   under Section 305.001 or 305.002 is also liable for reasonable
338-17   attorney's fees set by the court.]
338-18         [Sec. 305.004.  LIMITATION ON FILING SUIT.  An action under
338-19   this chapter must be brought before the fourth anniversary of the
338-20   date on which the usurious interest was received or collected.  The
338-21   action must be brought in the county in which:]
338-22               [(1)  the defendant resides;]
338-23               [(2)  the usurious interest was received or collected;]
338-24               [(3)  the transaction was entered into; or]
338-25               [(4)  the person who paid the usurious interest:]
338-26                     [(A)  resides; or]
 339-1                     [(B)  resided when the transaction occurred.]
 339-2         [Sec. 305.005.  CRIMINAL PENALTY.  (a)  A person commits an
 339-3   offense if the person contracts for, charges, or receives interest
 339-4   that is greater than twice the amount authorized by this subtitle.]
 339-5         [(b)  Contracting for, charging, or receiving interest
 339-6   authorized under Section 302.001 before the 30th day after the date
 339-7   on which the debt is due is not an offense.]
 339-8         [(c)  An offense under this section is a misdemeanor
 339-9   punishable by a fine of not more than $1,000.]
339-10         [(d)  Each contract or transaction that violates this section
339-11   is a separate offense.]
339-12         [(e)  This section applies only to a contract or transaction
339-13   subject to this subtitle.]
339-14                [SUBCHAPTER B.  EXCEPTION FROM LIABILITY]
339-15         [Sec. 305.101.  ACCIDENTAL AND BONA FIDE ERROR.  A person is
339-16   not subject to penalty under this chapter for any usurious interest
339-17   that results from an accidental and bona fide error.]
339-18         [Sec. 305.102.  INTEREST IF NO RATE SPECIFIED.  A person is
339-19   not liable to an obligor solely because the person contracts for,
339-20   charges, or receives the interest authorized under Section 302.002
339-21   before the 30th day after the date on which the debt is due.]
339-22         [Sec. 305.103.  CORRECTION OF VIOLATION.  (a)  A person is
339-23   not liable to an obligor for a violation of this subtitle if:]
339-24               [(1)  not later than the 60th day after the date that
339-25   the person actually discovered the violation, the person corrects
339-26   the violation as to that obligor by taking any necessary action and
 340-1   making any necessary adjustment, including the payment of interest
 340-2   on a refund, if any, at the applicable rate provided for in the
 340-3   contract of the parties; and]
 340-4               [(2)  the person gives written notice to the obligor of
 340-5   the violation before the obligor gives written notice of the
 340-6   violation or files an action alleging the violation.]
 340-7         [(b)  For the purposes of Subsection (a), "actually
 340-8   discovered" refers to the time of the discovery of the violation in
 340-9   fact and not to the time when an ordinarily prudent person, through
340-10   reasonable diligence, could or should have discovered or known of
340-11   the violation.  Actual discovery of a violation in one transaction
340-12   may constitute actual discovery of the same violation in other
340-13   transactions if the violation is of such a nature that it would
340-14   necessarily be repeated and would be clearly apparent in the other
340-15   transactions without the necessity of examining all the other
340-16   transactions.]
340-17         [(c)  For the purposes of Subsection (a), written notice is
340-18   given when the notice is delivered to the person or to the person's
340-19   duly authorized agent or attorney of record personally or by United
340-20   States mail to the address shown on the most recent documents in
340-21   the transaction.  Deposit of the notice as registered or certified
340-22   mail in a postage paid, properly addressed wrapper in a post office
340-23   or official depository under the care and custody of the United
340-24   States Postal Service is prima facie evidence of the delivery of
340-25   the notice to the person to whom the notice is addressed.]
340-26         [(d)  A person is not liable to an obligor for a violation of
 341-1   this subtitle if:]
 341-2               [(1)  before March 1, 1994, the person corrected the
 341-3   violation as to the obligor by taking actions and making
 341-4   adjustments necessary to correct the violation, including the
 341-5   payment of interest on a refund, if any, at the applicable rate
 341-6   provided for in the contract of the parties; and]
 341-7               [(2)  the person gives written notice to the obligor of
 341-8   the correction before the obligor has given written notice of or
 341-9   has filed an action alleging the violation of this subtitle.]
341-10         [Sec. 305.104.  CORRECTION EXCEPTION AVAILABLE TO ALL PERSONS
341-11   SIMILARLY SITUATED.  If in a single transaction more than one
341-12   person may be liable for a violation of this subtitle, compliance
341-13   with Section 305.103 by any of those persons entitles each to the
341-14   protection provided by that section.]
341-15      [CHAPTER 339.  MISCELLANEOUS PROVISIONS RELATING TO INTEREST]
341-16         [Sec. 339.001.  IMPOSITION OF SURCHARGE FOR USE OF CREDIT
341-17   CARD.  (a)  In a  sale of goods or services, a seller may not
341-18   impose a surcharge on a buyer who uses a credit card for an
341-19   extension of credit instead of cash, a check, or a similar means of
341-20   payment.]
341-21         [(b)  This section does not apply to a state agency, county,
341-22   local governmental entity, or other governmental entity that
341-23   accepts a credit card for the payment of fees, taxes, or other
341-24   charges.]
341-25         [Sec. 339.002.  BILLING CYCLE INTEREST LIMITATION ON OPEN-END
341-26   ACCOUNT WITHOUT MERCHANT DISCOUNT.  (a)  This section applies to an
 342-1   open-end account agreement that provides for credit card
 342-2   transactions:]
 342-3               [(1)  in which the creditor relies on one of the
 342-4   ceilings authorized by Chapter 303 for the rate of interest; and]
 342-5               [(2)  in connection with which the creditor does not
 342-6   impose or receive a merchant discount.]
 342-7         [(b)  Interest or time price differential may not be charged
 342-8   for a billing cycle of an open-end account credit agreement if:]
 342-9               [(1)  the total amount of the obligor's payments during
342-10   the cycle equal or exceed the balance owed under the agreement at
342-11   the end of the preceding billing cycle; or]
342-12               [(2)  an amount is not owed under the agreement at the
342-13   end of the preceding billing cycle.]
342-14         [Sec. 339.003.  SALE OF OPEN-END ACCOUNT WITHOUT MERCHANT
342-15   DISCOUNT.  A seller or lessor may sell an open-end account credit
342-16   agreement described by Section 339.002(a) or any balance under that
342-17   agreement to a purchaser who purchases a substantial part of the
342-18   seller's or lessor's open-end account credit agreements or balances
342-19   under those agreements in accordance with Subchapter G, Chapter
342-20   345.  A charge, fee, or discount on that sale:]
342-21               [(1)  is not a merchant discount;]
342-22               [(2)  does not disqualify the open-end account credit
342-23   agreement or a balance under that agreement from being subject to
342-24   Chapter 303 or from coverage under this section; and]
342-25               [(3)  does not subject the account to the limitations
342-26   provided by Section 303.205.]
 343-1         [Sec. 339.004.  ACCOUNT PURCHASE TRANSACTION.  (a)  In this
 343-2   section, "account purchase transaction" means an agreement under
 343-3   which a person engaged in a commercial enterprise sells accounts,
 343-4   instruments, documents, or chattel paper subject to this subtitle
 343-5   at a discount, regardless of whether the person has a related
 343-6   repurchase obligation.]
 343-7         [(b)  For the purposes of this subtitle, the amount of a
 343-8   discount in, or charged under, an account purchase transaction is
 343-9   not compensation contracted for, charged, or received with respect
343-10   to that account purchase transaction.]
343-11         [(c)  For the purposes of this subtitle, the parties'
343-12   characterization of an account purchase transaction as a purchase
343-13   is conclusive that the account purchase transaction is not a
343-14   transaction for the use, forbearance, or detention of money.]
343-15         [Sec. 339.005.  APPLICATION OF LICENSING REQUIREMENTS AND
343-16   SUBTITLE B TO CREDIT UNION OR EMPLOYEE BENEFIT PLAN.  (a)  A credit
343-17   union is not subject to Subtitle B and is not required to obtain a
343-18   license under this title.]
343-19         [(b)  With respect to a loan that an employee benefit plan
343-20   that is subject to Title I of the Employee Retirement Income
343-21   Security Act of 1974 (29 U.S.C. Sections 1001-1114) makes to a
343-22   participant in the plan or a participant's beneficiary, the plan is
343-23   not subject to Subtitle B and is not required to obtain a license
343-24   under this title.]
343-25         (b)  Section 1, Chapter 1396; Section 1, Chapter 81; Section
343-26   4, Chapter 906; and Section 7, Chapter 1111, Acts of the 75th
 344-1   Legislature, Regular Session, 1997, are repealed.
 344-2         SECTION 7.19.  (a)  Chapter 342, Finance Code, is amended to
 344-3   conform to Sections 2 and 48, Chapter 1396, and Section 2, Chapter
 344-4   164, Acts of the 75th Legislature, Regular Session, 1997, to read
 344-5   as follows:
 344-6                      CHAPTER 342.  CONSUMER LOANS
 344-7       SUBCHAPTER A.  GENERAL PROVISIONS; APPLICABILITY OF CHAPTER
 344-8         Sec. 342.001.  DEFINITIONS.  In this chapter:
 344-9               (1)  "Irregular transaction" means a loan:
344-10                     (A)  that is payable in installments that are not
344-11   consecutive, monthly, and substantially equal in amount; or
344-12                     (B)  the first scheduled installment of which is
344-13   due later than one month and 15 days after the date of the loan.
344-14               (2)  "Regular transaction" means a loan:
344-15                     (A)  that is payable in installments that are
344-16   consecutive, monthly, and substantially equal in amount; and
344-17                     (B)  the first scheduled installment of which is
344-18   due within one month and 15 days after the date of the loan.
344-19               (3)  "Secondary mortgage loan" means a loan that is:
344-20                     (A)  secured in whole or in part by an interest,
344-21   including a lien or security interest, in real property that is:
344-22                           (i)  improved by a dwelling designed for
344-23   occupancy by four or fewer families; and
344-24                           (ii)  subject to one or more liens,
344-25   security interests, prior mortgages, or deeds of trust; and
344-26                     (B)  not to be repaid before the 91st day after
 345-1   the date of the loan.
 345-2         Sec. 342.002.  INTEREST COMPUTATION METHODS.  (a)  The
 345-3   scheduled  installment earnings method is a method to compute an
 345-4   interest charge by applying a daily rate to the unpaid balance of
 345-5   the amount financed as if each payment will be made on its
 345-6   scheduled installment date.  A payment received before or after the
 345-7   due date does not affect the amount of the scheduled principal
 345-8   reduction.
 345-9         (b)  The true daily earnings method is a method to compute an
345-10   interest charge by applying a daily rate to the unpaid balance of
345-11   the amount financed.  The earned finance charge is computed by
345-12   multiplying the daily rate by the number of days the principal
345-13   balance is outstanding.
345-14         (c)  For the purposes of Subsections (a) and (b), the daily
345-15   rate is 1/365th of the equivalent contract rate.
345-16         Sec. 342.003.  PURCHASE FROM MORTGAGEE.  For the purposes of
345-17   this chapter, a purchase from a mortgagee of an interest in a
345-18   secondary mortgage loan that was made to secure that loan is
345-19   treated as if it were a secondary mortgage loan.
345-20         Sec. 342.004.  CONSTITUTIONAL INTEREST; EXEMPTION FOR LOAN
345-21   WITH INTEREST RATE OF 10 PERCENT OR LESS.  (a)  Except as otherwise
345-22   fixed by law, the maximum rate of interest is 10 percent a year.
345-23         (b)  A loan providing for a rate of interest that is 10
345-24   percent a year or less is not subject to this chapter.
345-25         Sec. 342.005.  APPLICABILITY OF CHAPTER.  A loan is subject
345-26   to this chapter if the loan:
 346-1               (1)  provides for interest in excess of 10 percent a
 346-2   year;
 346-3               (2)  is extended primarily for personal, family, or
 346-4   household use;
 346-5               (3)  is made by a person engaged in the business of
 346-6   making, arranging, or negotiating those types of loans; and
 346-7               (4)  either:
 346-8                     (A)  is not secured by a lien on real property;
 346-9   or
346-10                     (B)  is described by Section 342.001(3), 342.301,
346-11   or 342.456 and is predominantly payable in monthly installments.
346-12         Sec. 342.006.  EXEMPTION FOR CERTAIN SECONDARY MORTGAGE
346-13   LOANS.  This chapter does not apply to a secondary mortgage loan
346-14   made by a seller of property to secure all or part of the unpaid
346-15   purchase price.
346-16              SUBCHAPTER B.  AUTHORIZED ACTIVITIES; LICENSE
346-17         Sec. 342.051.  LICENSE REQUIRED.  (a)  A person must hold a
346-18   license issued under this chapter to:
346-19               (1)  engage in the business of making, transacting, or
346-20   negotiating loans subject to this chapter; and
346-21               (2)  contract for, charge, or receive, directly or
346-22   indirectly, in connection with a loan subject to this chapter, a
346-23   charge, including interest, compensation, consideration, or another
346-24   expense, authorized under this chapter that in the aggregate
346-25   exceeds the charges authorized under other law.
346-26         (b)  A person may not use any device, subterfuge, or pretense
 347-1   to evade the application of this section.
 347-2         (c)  A person is not required to obtain a license under
 347-3   Subsection (a) if the person is:
 347-4               (1)  a bank, savings bank, or savings and loan
 347-5   association; or
 347-6               (2)  subject to Chapter 24, Insurance Code.
 347-7         (d)  An insurance agent licensed under Article 21.14,
 347-8   Insurance Code, is not required to obtain a license to negotiate or
 347-9   arrange a loan on behalf of a bank, savings bank, or savings and
347-10   loan association provided that the insurance agent or the bank,
347-11   savings bank, or savings and loan association does not make the
347-12   provision of insurance a condition to apply for or obtain a loan or
347-13   service from the bank, savings bank, or savings and loan
347-14   association.
347-15         Sec. 342.052.  ISSUANCE OF MORE THAN ONE LICENSE FOR A
347-16   PERSON.  (a)  The commissioner may issue more than one license to a
347-17   person on compliance with this chapter for each license.
347-18         (b)  A person who is required to hold a license under this
347-19   chapter must hold a separate license for each office at which loans
347-20   are made, negotiated, or collected under this chapter.
347-21         (c)  A license is not required under this chapter for a place
347-22   of business:
347-23               (1)  devoted to accounting or other recordkeeping; and
347-24               (2)  at which loans are not made, negotiated, or
347-25   collected under this chapter or Chapter 346.
347-26         Sec. 342.053.  AREA OF BUSINESS; LOANS BY MAIL.  (a)  A
 348-1   lender is not limited to making loans to residents of the community
 348-2   in which the office for which the license or other authority is
 348-3   granted.
 348-4         (b)  A lender may make, negotiate, arrange, and collect loans
 348-5   by mail from a licensed office.
 348-6         SUBCHAPTER C.  APPLICATION FOR AND ISSUANCE OF LICENSE
 348-7         Sec. 342.101.  APPLICATION REQUIREMENTS.  (a)  The
 348-8   application for a license under this chapter must:
 348-9               (1)  be under oath;
348-10               (2)  give the approximate location from which business
348-11   is to be conducted;
348-12               (3)  identify the business's principal parties in
348-13   interest; and
348-14               (4)  contain other relevant information that the
348-15   commissioner requires for the findings required under Section
348-16   342.104.
348-17         (b)  On the filing of one or more license applications, the
348-18   applicant shall pay to the commissioner an investigation fee of
348-19   $200.
348-20         (c)  On the filing of each license application, the applicant
348-21   shall pay to the commissioner for the license's year of issuance a
348-22   license fee of:
348-23               (1)  $100 if the license is granted not later than June
348-24   30; or
348-25               (2)  $50 if the license is granted after June 30.
348-26         Sec. 342.102.  BOND.  (a)  If the commissioner requires, an
 349-1   applicant for a license under this chapter shall file with the
 349-2   application a bond that is:
 349-3               (1)  in an amount not to exceed the total of:
 349-4                     (A)  $5,000 for the first license; and
 349-5                     (B)  $1,000 for each additional license;
 349-6               (2)  satisfactory to the commissioner; and
 349-7               (3)  issued by a surety company qualified to do
 349-8   business as a surety in this state.
 349-9         (b)  The bond must be in favor of this state for the use of
349-10   this state and the use of a person who has a cause of action under
349-11   this chapter against the license holder.
349-12         (c)  The bond must be conditioned on:
349-13               (1)  the license holder's faithful performance under
349-14   this chapter and rules adopted under this chapter; and
349-15               (2)  the payment of all amounts that become due to the
349-16   state or another person under this chapter during the calendar year
349-17   for which the bond is given.
349-18         (d)  The aggregate liability of a surety to all persons
349-19   damaged by the license holder's violation of this chapter may not
349-20   exceed the amount of the bond.
349-21         Sec. 342.103.  INVESTIGATION OF APPLICATION.  On the filing
349-22   of an application and, if required, a bond, and on payment of the
349-23   required fees, the commissioner shall conduct an investigation to
349-24   determine whether to issue the license.
349-25         Sec. 342.104.  APPROVAL OR DENIAL OF APPLICATION.  (a)  The
349-26   commissioner shall approve the application and issue to the
 350-1   applicant a license to make loans under this chapter if the
 350-2   commissioner finds that:
 350-3               (1)  the financial responsibility, experience,
 350-4   character, and general fitness of the applicant are sufficient to:
 350-5                     (A)  command the confidence of the public; and
 350-6                     (B)  warrant the belief that the business will be
 350-7   operated lawfully and fairly, within the purposes of this chapter;
 350-8   and
 350-9               (2)  the applicant has net assets of at least $25,000
350-10   available for the operation of the business.
350-11         (b)  If the commissioner does not find the eligibility
350-12   requirements of Subsection (a), the commissioner shall notify the
350-13   applicant.
350-14         (c)  If an applicant requests a hearing on the application
350-15   not later than the 30th day after the date of notification under
350-16   Subsection (b), the applicant is entitled to a hearing  not later
350-17   than the 60th day after the date of the request.
350-18         (d)  The commissioner shall approve or deny the application
350-19   not later than the 60th day after the date of the filing of a
350-20   completed application with payment of the required fees, or if a
350-21   hearing is held, after the date of the completion of the hearing on
350-22   the application.  The commissioner and the applicant may agree to a
350-23   later date in writing.
350-24         Sec. 342.105.  DISPOSITION OF FEES ON DENIAL OF APPLICATION.
350-25   If the commissioner denies the application, the commissioner shall
350-26   retain the investigation fee and shall return to the applicant the
 351-1   license fee submitted with the application.
 351-2                         SUBCHAPTER D.  LICENSE
 351-3         Sec. 342.151.  NAME AND PLACE ON LICENSE.  (a)  A license
 351-4   must state:
 351-5               (1)  the name of the license holder; and
 351-6               (2)  the address of the office from which the business
 351-7   is to be conducted.
 351-8         (b)  A license holder may not conduct business under this
 351-9   chapter under a name or at a place of business in this state other
351-10   than the name or office stated on the license.
351-11         Sec. 342.152.  LICENSE DISPLAY.  A license holder shall
351-12   display a license at the place of business provided on the license.
351-13         Sec. 342.153.  MINIMUM ASSETS FOR LICENSE.  (a)  Except as
351-14   provided by Subsection (b) or (c), a license holder shall maintain
351-15   for each office for which a license is held net assets of at least
351-16   $25,000 that are used or readily available for use in conducting
351-17   the business of that office.
351-18         (b)  A license holder who held a license under the Texas
351-19   Regulatory Loan Act and was issued a license to make loans under
351-20   that chapter as provided by Section 4, Chapter 274, Acts of the
351-21   60th Legislature, Regular Session, 1967, shall maintain for the
351-22   office for which that license is held net assets of at least
351-23   $15,000 that are used or readily available for use in conducting
351-24   the business of that office.
351-25         (c)  A license holder who paid the pawnbroker's occupational
351-26   tax for 1967 and was issued a license to make loans under that
 352-1   chapter as provided by Section 4, Chapter 274, Acts of the 60th
 352-2   Legislature, Regular Session, 1967, is exempt from the minimum
 352-3   assets requirement of Subsection (a) for the office for which that
 352-4   license is held.
 352-5         (d)  If a license holder holds a license to which Subsection
 352-6   (b) or (c) applies and subsequently transfers the license to
 352-7   another person, the minimum assets required under Subsection (a)
 352-8   shall apply to the license and the subsequent license holder.
 352-9         Sec. 342.154.  ANNUAL LICENSE FEE.  (a)  Not later than
352-10   December 1, a license holder shall pay to the commissioner for each
352-11   license held an annual fee for the year beginning the next January
352-12   1.
352-13         (b)  The annual fee for a license under this chapter is $200
352-14   except that if, on September 30 preceding the date on which the
352-15   annual fee is due, the gross unpaid balance of loans regulated
352-16   under this chapter in the office for which the license is issued is
352-17   $100,000 or less, the annual fee is $100.
352-18         Sec. 342.155.  EXPIRATION OF LICENSE ON FAILURE TO PAY ANNUAL
352-19   FEE.  If the annual fee for a license is not paid before the 16th
352-20   day after the date on which the written notice of delinquency of
352-21   payment has been given to the license holder, the license expires
352-22   on the later of:
352-23               (1)  that day; or
352-24               (2)  December 31 of the last year for which an annual
352-25   fee was paid.
352-26         Sec. 342.156.  LICENSE SUSPENSION OR REVOCATION.  After
 353-1   notice and a hearing the commissioner may suspend or revoke a
 353-2   license if the commissioner finds that:
 353-3               (1)  the license holder failed to pay the annual
 353-4   license fee, an examination fee, an investigation fee, or another
 353-5   charge imposed by the commissioner under this chapter;
 353-6               (2)  the license holder, knowingly or without the
 353-7   exercise of due care, violated this chapter or a rule adopted or
 353-8   order issued under this chapter; or
 353-9               (3)  a fact or condition exists that, if it had existed
353-10   or had been known to exist at the time of the original application
353-11   for the license, clearly would have justified the commissioner's
353-12   denial of the application.
353-13         Sec. 342.157.  CORPORATE CHARTER FORFEITURE.  (a)  A license
353-14   holder who violates this chapter is subject to revocation of the
353-15   holder's license and, if the license holder is a corporation,
353-16   forfeiture of its charter.
353-17         (b)  When the attorney general is notified of a violation of
353-18   this chapter and revocation of a license, the attorney general
353-19   shall file suit in a district court in Travis County, if the
353-20   license holder is a corporation, for forfeiture of the license
353-21   holder's charter.
353-22         Sec. 342.158.  LICENSE SUSPENSION OR REVOCATION FILED WITH
353-23   PUBLIC RECORDS.  The decision of the commissioner on the suspension
353-24   or revocation of a license and the evidence considered by the
353-25   commissioner in making the decision shall be filed in the public
353-26   records of the commissioner.
 354-1         Sec. 342.159.  REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
 354-2   OF NEW LICENSE AFTER REVOCATION.  The commissioner may reinstate a
 354-3   suspended license or issue a new license on application to a person
 354-4   whose license has been revoked if at the time of the reinstatement
 354-5   or issuance no fact or condition exists that clearly would have
 354-6   justified the commissioner's denial of an original application for
 354-7   the license.
 354-8         Sec. 342.160.  SURRENDER OF LICENSE.  A license holder may
 354-9   surrender a license issued under this chapter by delivering to the
354-10   commissioner:
354-11               (1)  the license; and
354-12               (2)  a written notice of the license's surrender.
354-13         Sec. 342.161.  EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
354-14   SURRENDER.  (a)  The suspension, revocation, or surrender of a
354-15   license issued under this chapter does not affect the obligation of
354-16   a contract between the license holder and a debtor entered into
354-17   before the revocation, suspension, or surrender.
354-18         (b)  Surrender of a license does not affect the license
354-19   holder's civil or criminal liability for an act committed before
354-20   surrender.
354-21         Sec. 342.162.  MOVING AN OFFICE.  (a)  A license holder shall
354-22   give written notice to the commissioner before the 30th day
354-23   preceding the date the license holder moves an office from the
354-24   location provided on the license.
354-25         (b)  The commissioner shall amend a license holder's license
354-26   accordingly.
 355-1         Sec. 342.163.  TRANSFER OR ASSIGNMENT OF LICENSE.  A license
 355-2   may be transferred or assigned only with the approval of the
 355-3   commissioner.
 355-4       SUBCHAPTER E.  INTEREST CHARGES ON NON-REAL PROPERTY LOANS
 355-5         Sec. 342.201.  MAXIMUM INTEREST CHARGE.  (a)  A loan contract
 355-6   under this chapter that is a regular transaction and is not secured
 355-7   by real property may provide for an interest charge on the cash
 355-8   advance that does not exceed the amount of add-on interest equal to
 355-9   the amount computed for the full term of the contract at an add-on
355-10   interest amount equal to:
355-11               (1)  $18 for each $100 per year on the part of the cash
355-12   advance that is less than or equal to the amount computed under
355-13   Subchapter C, Chapter 341, using the reference base amount of $300;
355-14   and
355-15               (2)  $8 for each $100 per year on the part of the cash
355-16   advance that is more than the amount computed for Subdivision (1)
355-17   but less than or equal to an amount computed under Subchapter C,
355-18   Chapter 341, using the reference base amount of $2,500.
355-19         (b)  For the purpose of Subsection (a):
355-20               (1)  when the loan is made an interest charge may be
355-21   computed for the full term of the loan contract;
355-22               (2)  if the period before the first installment due
355-23   date includes a part of a month that is longer than 15 days, that
355-24   portion of a month may be considered a full month; and
355-25               (3)  if a loan contract provides for precomputed
355-26   interest, the amount of the loan is the total of:
 356-1                     (A)  the cash advance; and
 356-2                     (B)  the amount of precomputed interest.
 356-3         (c)  A loan contract under this chapter that is an irregular
 356-4   transaction and is not secured by real property may provide for an
 356-5   interest charge, using any method or formula, that does not exceed
 356-6   the amount that, having due regard for the schedule of installment
 356-7   payments, would produce the same effective return as allowed under
 356-8   Subsection (a) if the loan were payable in equal successive monthly
 356-9   installments beginning one month from the date of the contract.
356-10         (d)  A loan contract under this chapter that is not secured
356-11   by real property may provide for a rate or amount of interest
356-12   computed using the true daily earnings method or the scheduled
356-13   installment earnings method that does not exceed the alternative
356-14   interest rate as computed under Subchapter A, Chapter 303.
356-15   Interest may accrue on the principal balance and amounts added to
356-16   principal after the date of the loan contract from time to time
356-17   unpaid at the rate provided for by the contract until the date of
356-18   payment in full or demand for payment in full.
356-19         Sec. 342.202.  MAXIMUM CHARGE FOR LOAN WITH SINGLE REPAYMENT.
356-20   A loan contract that exceeds the maximum cash advance under Section
356-21   342.251 and that is payable in a single installment may provide for
356-22   an interest charge on the cash advance that does not exceed a rate
356-23   or amount that would produce the same effective return as allowed
356-24   under Section 342.201 considering the amount and term of the loan.
356-25   If a loan under this section is prepaid in full, the lender may
356-26   earn a minimum interest charge of $25.
 357-1         Sec. 342.203.  ADDITIONAL INTEREST FOR DEFAULT:  REGULAR
 357-2   TRANSACTION.  (a)  A loan contract that includes precomputed
 357-3   interest and that is a regular transaction may provide for
 357-4   additional interest for default if any part of an installment
 357-5   remains unpaid after the 10th day after the date on which the
 357-6   installment is due, including Sundays and holidays.
 357-7         (b)  A loan contract that uses the scheduled installment
 357-8   earnings method and that is a regular transaction may provide for
 357-9   additional interest for default if any part of an installment
357-10   remains unpaid after the 10th day after the date on which the
357-11   installment is due, including Sundays and holidays.
357-12         (c)  The additional interest may not exceed five cents for
357-13   each $1 of a scheduled installment.
357-14         (d)  Interest under this section may not be collected more
357-15   than once on the same installment.
357-16         Sec. 342.204.  ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT:
357-17   REGULAR TRANSACTION.  (a)  On a loan contract that includes
357-18   precomputed interest and is a regular transaction, an authorized
357-19   lender may charge additional interest for the deferment of an
357-20   installment if:
357-21               (1)  the entire amount of the installment is unpaid;
357-22               (2)  no interest for default has been collected on the
357-23   installment; and
357-24               (3)  payment of the installment is deferred for one or
357-25   more full months and the maturity of the contract is extended for a
357-26   corresponding period.
 358-1         (b)  The interest for deferment under Subsection (a) may not
 358-2   exceed the amount computed by:
 358-3               (1)  taking the difference between the refund that
 358-4   would be required for prepayment in full as of the date of
 358-5   deferment and the refund that would be required for prepayment in
 358-6   full one month before the date of deferment; and
 358-7               (2)  multiplying the results under Subdivision (1) by
 358-8   the number of months in the deferment period.
 358-9         (c)  The amount of interest applicable to each deferred
358-10   balance or installment period occurring after a deferment period
358-11   remains the amount applicable to that balance or period under the
358-12   original loan contract.
358-13         (d)  If a loan is prepaid in full during the deferment
358-14   period, the borrower shall receive, in addition to the refund
358-15   required under Subchapter H, a pro rata refund of that part of the
358-16   interest for deferment applicable to the number of full months
358-17   remaining in the deferment period on the payment date.
358-18         (e)  For the purposes of this section, a deferment period is
358-19   the period during which a payment is not required or made because
358-20   of the deferment and begins on the day after the due date of the
358-21   scheduled installment that precedes the first installment being
358-22   deferred.
358-23         Sec. 342.205.  COLLECTION OF DEFAULT OR DEFERMENT INTEREST.
358-24   Interest for default under Section 342.203 or for installment
358-25   deferment under Section 342.204 may be collected when it accrues or
358-26   at any time after it accrues.
 359-1         Sec. 342.206.  ADDITIONAL INTEREST FOR DEFAULT:  IRREGULAR
 359-2   TRANSACTION.  A loan contract that includes precomputed interest
 359-3   and that is an irregular transaction may provide for additional
 359-4   interest for default using the true daily earnings method for the
 359-5   period from the maturity date of an installment until the date the
 359-6   installment is paid.  The rate of the additional interest may not
 359-7   exceed the maximum contract interest rate.
 359-8           SUBCHAPTER F.  ALTERNATE CHARGES FOR CERTAIN LOANS
 359-9         Sec. 342.251.  MAXIMUM CASH ADVANCE.  The maximum cash
359-10   advance of a loan made under this subchapter is an amount computed
359-11   under Subchapter C, Chapter 341, using the reference base amount of
359-12   $100.
359-13         Sec. 342.252.  ALTERNATE INTEREST CHARGE.  Instead of the
359-14   charges authorized by Section 342.201, a loan contract may provide
359-15   for:
359-16               (1)  on a cash advance of less than $30, an acquisition
359-17   charge that is not more than $1 for each $5 of the cash advance;
359-18               (2)  on a cash advance equal to or more than $30 but
359-19   not more than $100:
359-20                     (A)  an acquisition charge that is not more than
359-21   the amount equal to one-tenth of the amount of the cash advance;
359-22   and
359-23                     (B)  an installment account handling charge that
359-24   is not more than:
359-25                           (i)  $3 a month if the cash advance is not
359-26   more than $35;
 360-1                           (ii)  $3.50 a month if the cash advance is
 360-2   more than $35 but not more than $70; or
 360-3                           (iii)  $4 a month if the cash advance is
 360-4   more than $70; or
 360-5               (3)  on a cash advance of more than $100:
 360-6                     (A)  an acquisition charge that is not more than
 360-7   $10; and
 360-8                     (B)  an installment account handling charge that
 360-9   is not more than the ratio of $4 a month for each $100 of cash
360-10   advance.
360-11         Sec. 342.253.  MAXIMUM INTEREST CHARGE FOR LOAN WITH SINGLE
360-12   REPAYMENT.  A loan contract to which Section 342.251 applies and
360-13   that is payable in a single installment may provide for an
360-14   acquisition charge and an interest charge on the cash advance that
360-15   does not exceed a rate or amount that would produce the same
360-16   effective return as allowed under Section 342.252 considering the
360-17   amount and term of the loan.  If a loan under this section is
360-18   prepaid in full, the lender may earn a minimum of the acquisition
360-19   charge and interest charge for one month.
360-20         Sec. 342.254.  NO OTHER CHARGES AUTHORIZED.  (a)  On a loan
360-21   made under this subchapter a lender may not contract for, charge,
360-22   or receive an amount unless this subchapter authorizes the amount
360-23   to be charged.
360-24         (b)  An insurance charge is not authorized on a loan made
360-25   under this subchapter.
360-26         Sec. 342.255.  MAXIMUM LOAN TERM.  The maximum term of a loan
 361-1   made under this subchapter is:
 361-2               (1)  for a loan of $100 or less, the lesser of:
 361-3                     (A)  one month for each multiple of $10 of cash
 361-4   advance; or
 361-5                     (B)  six months; and
 361-6               (2)  for a loan of more than $100, one month for each
 361-7   multiple of $20 of cash advance.
 361-8         Sec. 342.256.  REFUND.  (a)  An acquisition charge authorized
 361-9   under Section 342.252(1) or (2) is considered to be earned at the
361-10   time a loan is made and is not subject to refund.
361-11         (b)  On the prepayment of a loan with a cash advance of $30
361-12   or more but not more than $100, the installment account handling
361-13   charge authorized under Section 342.252(2) is subject to refund in
361-14   accordance with Subchapter H.
361-15         (c)  On the prepayment of a loan with a cash advance of more
361-16   than $100, the acquisition charge and the installment account
361-17   handling charge authorized under Section 342.252(3) are subject to
361-18   refund in accordance with Subchapter H.
361-19         Sec. 342.257.  DEFAULT CHARGE; DEFERMENT OF PAYMENT.  The
361-20   provisions of Subchapter E relating to additional interest for
361-21   default and additional interest for the deferment of installments
361-22   apply to a loan made under this subchapter.
361-23         Sec. 342.258.  SCHEDULES FOR WEEKLY, BIWEEKLY, OR SEMIMONTHLY
361-24   INSTALLMENTS.  The commissioner may prepare schedules that may be
361-25   used by an authorized lender for the repayment of a loan made under
361-26   this subchapter by weekly, biweekly, or semimonthly installments.
 362-1         SUBCHAPTER G.  INTEREST AND OTHER CHARGES ON SECONDARY
 362-2                             MORTGAGE LOANS
 362-3         Sec. 342.301.  MAXIMUM INTEREST CHARGE.  (a)  A secondary
 362-4   mortgage loan that is a regular transaction may provide for an
 362-5   interest charge on the cash advance that is precomputed and that
 362-6   does not exceed a rate or amount that would produce the same
 362-7   effective return as allowed under Subchapter A, Chapter 303.
 362-8         (b)  For the purpose of Subsection (a):
 362-9               (1)  when the loan is made an interest charge may be
362-10   computed for the full term of the loan contract;
362-11               (2)  if the period before the first installment due
362-12   date includes a part of a month that is longer than 15 days, that
362-13   portion of a month may be considered a full month; and
362-14               (3)  if a loan contract provides for precomputed
362-15   interest, the amount of the loan is the total of:
362-16                     (A)  the cash advance; and
362-17                     (B)  the amount of precomputed interest.
362-18         (c)  A secondary mortgage loan may provide for a rate or
362-19   amount of interest calculated using the true daily earnings method
362-20   or the scheduled installment earnings method that does not exceed
362-21   the alternative rate ceiling in Subchapter A, Chapter 303.
362-22   Interest may accrue on the principal balance and amounts added to
362-23   principal after the date of the loan contract from time to time
362-24   unpaid at the rate provided for by the contract until the date of
362-25   payment in full or demand for payment in full.  An interest charge
362-26   under this subsection may not be precomputed.
 363-1         Sec. 342.302.  ADDITIONAL INTEREST FOR DEFAULT:  REGULAR
 363-2   TRANSACTION.  (a)  A secondary mortgage loan that includes
 363-3   precomputed interest and that is a regular transaction may provide
 363-4   for additional interest for default if any part of an installment
 363-5   remains unpaid after the 10th day after the date on which the
 363-6   installment is due, including Sundays and holidays.
 363-7         (b)  A secondary mortgage loan contract that uses the
 363-8   scheduled installment earnings method and that is a regular
 363-9   transaction may provide for additional interest for default if any
363-10   part of an installment remains unpaid after the 10th day after the
363-11   date on which the installment is due, including Sundays and
363-12   holidays.
363-13         (c)  The additional interest for default may not exceed five
363-14   cents for each $1 of a scheduled installment.
363-15         (d)  Interest under this section may not be collected more
363-16   than once on the same installment.
363-17         Sec. 342.303.  ADDITIONAL INTEREST FOR INSTALLMENT DEFERMENT:
363-18   REGULAR TRANSACTIONS.  (a)  On a secondary mortgage loan that
363-19   includes precomputed interest and is a regular transaction, an
363-20   authorized lender may charge additional interest for the deferment
363-21   of an installment if:
363-22               (1)  the entire amount of the installment is unpaid;
363-23               (2)  no interest for default has been collected on the
363-24   installment; and
363-25               (3)  payment of the installment is deferred for one or
363-26   more full months and the maturity of the contract is extended for a
 364-1   corresponding period.
 364-2         (b)  The interest for deferment under Subsection (a) may not
 364-3   exceed the amount computed by:
 364-4               (1)  taking the difference between the refund that
 364-5   would be required for prepayment in full as of the date of
 364-6   deferment and the refund that would be required for prepayment in
 364-7   full one month before the date of deferment; and
 364-8               (2)  multiplying the results under Subdivision (1) by
 364-9   the number of months in the deferment period.
364-10         (c)  The amount of interest applicable to each deferred
364-11   balance or installment period occurring after a deferment period
364-12   remains the amount applicable to that balance or period under the
364-13   original loan contract.
364-14         (d)  If a loan is prepaid in full during the deferment
364-15   period, the borrower shall receive, in addition to the refund
364-16   required under Subchapter H, a pro rata refund of that part of the
364-17   interest for deferment applicable to the number of full months
364-18   remaining in the deferment period on the payment date.
364-19         (e)  For the purposes of this section, a deferment period is
364-20   the period during which a payment is not required or made because
364-21   of the deferment and begins on the day after the due date of the
364-22   scheduled installment that precedes the first installment being
364-23   deferred.
364-24         Sec. 342.304.  COLLECTION OF DEFAULT OR DEFERMENT INTEREST.
364-25   Interest for default under Section 342.302 or for installment
364-26   deferment under Section 342.303 may be collected when it accrues or
 365-1   at any time after it accrues.
 365-2         Sec. 342.305.  ADDITIONAL INTEREST FOR DEFAULT:  IRREGULAR
 365-3   TRANSACTION.  A secondary mortgage loan that includes precomputed
 365-4   interest and that is an irregular transaction may provide for
 365-5   additional interest for default using the true daily earnings
 365-6   method for the period from the maturity date of an installment
 365-7   until the date the installment is paid.  The rate of the additional
 365-8   interest may not exceed the maximum contract interest rate.
 365-9         Sec. 342.306.  DATE OF FIRST SCHEDULED INSTALLMENT.  On a
365-10   secondary mortgage loan made under this chapter the due date of the
365-11   first installment may not be scheduled later than three months
365-12   after the date of the loan.
365-13         Sec. 342.307.  AMOUNTS AUTHORIZED TO BE INCLUDED IN CONTRACT.
365-14   A secondary mortgage loan contract may provide for:
365-15               (1)  reasonable fees or charges paid to the trustee in
365-16   connection with a deed of trust or similar instrument executed in
365-17   connection with the secondary mortgage loan, including fees for
365-18   enforcing the lien against or posting for sale, selling, or
365-19   releasing the property secured by the deed of trust;
365-20               (2)  reasonable fees paid to an attorney who is not an
365-21   employee of the creditor in the collection of a delinquent
365-22   secondary mortgage loan;
365-23               (3)  court costs and fees incurred in the collection of
365-24   the loan or foreclosure of a lien created by the loan; and
365-25               (4)  a fee that does not exceed $15 for the return by a
365-26   depository institution of a dishonored check, negotiable order of
 366-1   withdrawal, or share draft offered in full or partial payment of a
 366-2   secondary mortgage loan.
 366-3         Sec. 342.308.  AMOUNTS AUTHORIZED TO BE COLLECTED OR ADDED TO
 366-4   LOAN.  (a)  A lender or a person who is assigned a secondary
 366-5   mortgage loan may collect on or before the closing of the loan, or
 366-6   include in the principal of the loan:
 366-7               (1)  reasonable fees for:
 366-8                     (A)  title examination and preparation of an
 366-9   abstract of title by:
366-10                           (i)  an attorney who is not an employee of
366-11   the lender; or
366-12                           (ii)  a title company or property search
366-13   company authorized to do business in this state; or
366-14                     (B)  premiums or fees for title insurance or
366-15   title search for the benefit of the mortgagee and, at the
366-16   mortgagor's option, for title insurance or title search for the
366-17   benefit of the mortgagor;
366-18               (2)  reasonable fees charged to the lender by an
366-19   attorney who is not a salaried employee of the lender for
366-20   preparation of the loan documents in connection with the mortgage
366-21   loan if the fees are evidenced by a statement for services rendered
366-22   addressed to the lender;
366-23               (3)  charges prescribed by law that are paid to public
366-24   officials for determining the existence of a security interest or
366-25   for perfecting, releasing, or satisfying a security interest;
366-26               (4)  reasonable fees for an appraisal of real property
 367-1   offered as security for the loan prepared by a certified appraiser
 367-2   who is not a salaried employee of the lender;
 367-3               (5)  the reasonable cost of a credit report;
 367-4               (6)  reasonable fees for a survey of real property
 367-5   offered as security for the loan prepared by a registered surveyor
 367-6   who is not a salaried employee of the lender;
 367-7               (7)  the premiums received in connection with the sale
 367-8   of credit life insurance, credit accident and health insurance, or
 367-9   other insurance that protects the mortgagee against default by the
367-10   mortgagor, the benefits of which are applied in whole or in part to
367-11   reduce or extinguish the loan balance; and
367-12               (8)  reasonable fees relating to real property offered
367-13   as security for the loan that are incurred to comply with a
367-14   federally mandated program if the collection of the fees or the
367-15   participation in the program is required by a federal agency.
367-16         (b)  Premiums for property insurance that conform with
367-17   Section 342.401 may be added to the loan contract.
367-18              SUBCHAPTER H.  REFUND OF PRECOMPUTED INTEREST
367-19         Sec. 342.351.  REFUND OF PRECOMPUTED INTEREST:  REGULAR
367-20   TRANSACTION.  (a)  This section applies to a loan contract that
367-21   includes precomputed interest and that is a regular transaction.
367-22         (b)  If the contract is prepaid in full, including payment in
367-23   cash or by a new loan or renewal of the loan, or if the lender
367-24   demands payment in full of the unpaid balance, after the first
367-25   installment due date but before the final installment due date, the
367-26   lender shall refund or credit to the borrower the amount computed
 368-1   by:
 368-2               (1)  dividing the sum of the periodic balances
 368-3   scheduled to follow the installment date after the date of the
 368-4   prepayment or demand, as appropriate, by the sum of all the
 368-5   periodic balances under the schedule of payments set out in the
 368-6   loan contract; and
 368-7               (2)  multiplying the total interest contracted for
 368-8   under Section 342.201, 342.252, or 342.301, as appropriate, by the
 368-9   result under Subdivision (1).
368-10         (c)  If the prepayment in full or demand for payment in full
368-11   occurs before the first installment due date, the lender shall:
368-12               (1)  retain an amount computed by:
368-13                     (A)  dividing 30 into the amount that could be
368-14   retained if the first installment period were one month and the
368-15   loan were prepaid in full on the date the first installment is due;
368-16   and
368-17                     (B)  multiplying the result under Paragraph (A)
368-18   by the number of days in the period beginning on the date the loan
368-19   was made and ending on the date of the prepayment or demand; and
368-20               (2)  refund or credit to the borrower the amount
368-21   computed by subtracting the amount retained under Subdivision (1)
368-22   from the interest contracted for under Section 342.201, 342.252, or
368-23   342.301, as appropriate.
368-24         Sec. 342.352.  REFUND OF PRECOMPUTED INTEREST ON CONTRACT:
368-25   IRREGULAR TRANSACTION OR TERM OF MORE THAN 60 MONTHS.  (a)  This
368-26   section applies to a loan contract:
 369-1               (1)  that includes precomputed interest and to which
 369-2   Section 342.351 does not apply; or
 369-3               (2)  that has a term of more than 60 months.
 369-4         (b)  If the contract is prepaid in full, including payment in
 369-5   cash or by a new loan or renewal of the loan, or if the lender
 369-6   demands payment in full of the unpaid balance before final maturity
 369-7   of the contract, the lender earns interest for the period beginning
 369-8   on the date of the loan and ending on the date of the prepayment or
 369-9   demand, as applicable, an amount that does not exceed the amount
369-10   allowed by Subsection (f) using the simple annual interest rate
369-11   under the contract.
369-12         (c)  If prepayment in full or demand for payment in full
369-13   occurs during an installment period, the lender may retain, in
369-14   addition to interest that accrued during any elapsed installment
369-15   periods, an amount computed by:
369-16               (1)  multiplying the simple annual interest rate under
369-17   the contract by the unpaid principal balance of the loan determined
369-18   according to the schedule of payments to be outstanding on the
369-19   preceding installment due date;
369-20               (2)  dividing 365 into the product under Subdivision
369-21   (1); and
369-22               (3)  multiplying the number of days in the period
369-23   beginning on the day after the installment due date and ending on
369-24   the date of the prepayment or demand, as appropriate, by the result
369-25   obtained under Subdivision (2).
369-26         (d)  The lender may also earn interest on an addition to
 370-1   principal, or other  permissible charges, added to the loan after
 370-2   the date of the loan contract, accruing at the simple annual
 370-3   interest rate under the contract from the date of the addition
 370-4   until the date paid or the date the lender demands payment in full
 370-5   of the total unpaid balance under the loan contract.
 370-6         (e)  The lender shall refund or credit to the borrower the
 370-7   amount computed by subtracting the total amount retained under
 370-8   Subsections (b), (c), and (d) from the total amount of interest
 370-9   contracted for and precomputed in the amount of the loan.
370-10         (f)  For the purposes of this section, the simple annual
370-11   interest rate under a contract is equal to the rate that the
370-12   contract would have produced over its full term if, assuming that
370-13   each scheduled payment under the contract is paid on the date due
370-14   and considering the amount of each scheduled installment and the
370-15   time of each scheduled installment period, the rate were applied to
370-16   the unpaid principal amounts determined to be outstanding from time
370-17   to time according to the schedule of payments.
370-18         Sec. 342.353.  NO REFUND ON PARTIAL PREPAYMENT OR OF AMOUNT
370-19   LESS THAN $1.  A refund is not required under this subchapter for a
370-20   partial prepayment or if the amount to be refunded is less than $1.
370-21                        SUBCHAPTER I.  INSURANCE
370-22         Sec. 342.401.  REQUIRED PROPERTY INSURANCE.  (a)  On a loan
370-23   that is subject to Subchapter E with a cash advance of $300 or
370-24   more, a lender may request or require a borrower to insure tangible
370-25   personal property offered as security for the loan.
370-26         (b)  On a secondary mortgage loan, a lender may request or
 371-1   require a borrower to provide property insurance as security
 371-2   against reasonable risks of loss, damage, and destruction.
 371-3         (c)  The insurance coverage and the premiums or charges for
 371-4   the coverage must bear a reasonable relationship to:
 371-5               (1)  the amount, term, and conditions of the loan;
 371-6               (2)  the value of the collateral; and
 371-7               (3)  the existing hazards or risk of loss, damage, or
 371-8   destruction.
 371-9         (d)  The insurance may not:
371-10               (1)  cover unusual or exceptional risks; or
371-11               (2)  provide coverage not ordinarily included in
371-12   policies issued to the general public.
371-13         (e)  A creditor may not require the purchase of duplicate
371-14   property insurance if the creditor has knowledge that the borrower:
371-15               (1)  has valid and collectible insurance covering the
371-16   property; and
371-17               (2)  has provided a loss payable endorsement sufficient
371-18   to protect the creditor.
371-19         (f)  For purposes of determining the knowledge required under
371-20   Subsection (e), a creditor may rely on a written consent to
371-21   purchase insurance in which the borrower is given the opportunity
371-22   to disclose the existence of other coverage.
371-23         Sec. 342.402.  CREDIT LIFE INSURANCE, CREDIT HEALTH AND
371-24   ACCIDENT INSURANCE, OR INVOLUNTARY UNEMPLOYMENT INSURANCE.  (a)  On
371-25   a loan made under this chapter that is subject to Subchapter E with
371-26   a cash advance of $100 or more, a lender may:
 372-1               (1)  offer or request that a borrower provide credit
 372-2   life insurance and credit health and accident insurance as
 372-3   additional protection for the loan; and
 372-4               (2)  offer involuntary unemployment insurance to the
 372-5   borrower at the time the loan is made.
 372-6         (b)  A lender may not require that the borrower accept or
 372-7   provide the insurance described by Subsection (a).
 372-8         (c)  On a secondary mortgage loan made under this chapter, a
 372-9   lender may request or require that a borrower provide credit life
372-10   insurance and credit accident and health insurance as additional
372-11   protection for the loan.
372-12         Sec. 342.403.  MAXIMUM AMOUNT OF INSURANCE COVERAGE.  (a)  At
372-13   any time the total amount of the policies of credit life insurance
372-14   in force on one borrower on one loan contract may not exceed the
372-15   greater of:
372-16               (1)  the total amount repayable under the loan contract
372-17   if the loan is an irregular transaction; or
372-18               (2)  the greater of the scheduled or actual amount of
372-19   unpaid indebtedness if the loan is a regular transaction.
372-20         (b)  At any time the total amount of the policies of credit
372-21   accident and health insurance or involuntary unemployment insurance
372-22   in force on one borrower on one loan contract may not exceed the
372-23   total amount repayable under the loan contract, and the amount of
372-24   each periodic indemnity payment may not exceed the scheduled
372-25   periodic installment payment on the loan.
372-26         Sec. 342.404.  INSURANCE NOTICE.  (a)  If insurance is
 373-1   required on a loan made under this chapter, the lender shall give
 373-2   to the borrower written notice that clearly and conspicuously
 373-3   states that:
 373-4               (1)  insurance is required in connection with the loan;
 373-5   and
 373-6               (2)  the borrower as an option may furnish the required
 373-7   insurance coverage through an insurance policy that is in existence
 373-8   and that is owned or controlled by the borrower or an insurance
 373-9   policy obtained from an insurance company authorized to do business
373-10   in this state.
373-11         (b)  If insurance requested or required on a loan made under
373-12   this chapter is sold or obtained by a lender at a premium or rate
373-13   of charge that is not fixed or approved by the commissioner of
373-14   insurance, the lender shall notify the borrower of that fact.  If
373-15   notice is required under Subsection (a), the lender shall include
373-16   that fact in the notice required by Subsection (a).
373-17         (c)  A notice required under this section may be:
373-18               (1)  a separate writing delivered with the loan
373-19   contract; or
373-20               (2)  a part of the loan contract.
373-21         Sec. 342.405.  INSURANCE MAY BE FURNISHED BY BORROWER.
373-22   (a)  If insurance is required on a loan made under this chapter,
373-23   the borrower may furnish the insurance coverage through an
373-24   insurance policy that is in existence and that is owned or
373-25   controlled by the borrower or an insurance policy obtained by the
373-26   borrower from an insurance company authorized to do business in
 374-1   this state.
 374-2         (b)  If  insurance is required on a loan made under this
 374-3   chapter and the insurance is sold or obtained by the lender at a
 374-4   premium or rate of charge that is not fixed or approved by the
 374-5   commissioner of insurance, the borrower has the option of
 374-6   furnishing the required insurance under this section at any time
 374-7   before the sixth day after the date of the loan.
 374-8         Sec. 342.406.  BORROWER'S FAILURE TO PROVIDE REQUIRED
 374-9   INSURANCE.  (a)  If a borrower fails to obtain or maintain
374-10   insurance coverage required under a loan contract or requests the
374-11   lender to obtain that coverage, the lender may obtain substitute
374-12   insurance coverage that is substantially equivalent to or more
374-13   limited than the coverage originally required.
374-14         (b)  If a loan is subject to Subchapter E, the lender may
374-15   obtain insurance to cover only the interest of the lender as a
374-16   secured party if the borrower does not request that the borrower's
374-17   interest be covered.
374-18         (c)  Insurance obtained under this section must comply with
374-19   Sections 342.407 and 342.408.
374-20         (d)  The lender may add the amount advanced by the lender for
374-21   insurance coverage obtained under this section to the unpaid
374-22   balance of the loan contract and may charge interest on that amount
374-23   from the time it is added to the unpaid balance until it is paid.
374-24   The rate of additional interest may not exceed the rate that the
374-25   loan contract would produce over its full term if each scheduled
374-26   payment were paid on the due date.
 375-1         Sec. 342.407.  REQUIREMENTS FOR INCLUDING INSURANCE CHARGE IN
 375-2   CONTRACT.  Insurance for which a charge is included in a loan
 375-3   contract must be written:
 375-4               (1)  at lawful rates;
 375-5               (2)  in accordance with the Insurance Code; and
 375-6               (3)  by a company authorized to do business in this
 375-7   state.
 375-8         Sec. 342.408.  FURNISHING OF INSURANCE DOCUMENT TO BORROWER.
 375-9   If a lender obtains insurance for which a charge is included in the
375-10   loan contract, the lender, not later than the 30th day after the
375-11   date on which the loan contract is executed, shall deliver, mail,
375-12   or cause to be mailed to the borrower at the borrower's address
375-13   specified in the contract one or more policies or certificates of
375-14   insurance that clearly set forth:
375-15               (1)  the amount of the premium;
375-16               (2)  the kind of insurance provided;
375-17               (3)  the coverage of the insurance; and
375-18               (4)  all terms, including options, limitations,
375-19   restrictions, and conditions, of each insurance policy.
375-20         Sec. 342.409.  LENDER'S DUTY IF INSURANCE IS ADJUSTED OR
375-21   TERMINATED.  (a)  If insurance for which a charge is included in or
375-22   added to the loan contract is canceled, adjusted, or terminated,
375-23   the lender shall:
375-24               (1)  credit to the amount unpaid on the loan the amount
375-25   of the refund received by the lender for unearned insurance
375-26   premiums, less the amount of the refund that is applied to the
 376-1   purchase by the lender of similar insurance; and
 376-2               (2)  if the amount to be credited under Subdivision (1)
 376-3   is more than the unpaid balance, refund promptly to the borrower
 376-4   the difference between those amounts.
 376-5         (b)  A cash refund is not required under this section if the
 376-6   amount of the refund is less than $1.
 376-7         Sec. 342.410.  PAYMENT FOR INSURANCE FROM LOAN PROCEEDS.  A
 376-8   lender, including an officer, agent, or employee of the lender, who
 376-9   accepts insurance under this subchapter as protection for a loan:
376-10               (1)  may deduct the premium or identifiable charge for
376-11   the insurance from the proceeds of the loan; and
376-12               (2)  shall pay the deducted amounts to the insurance
376-13   company writing the insurance.
376-14         Sec. 342.411.  INSURANCE GAIN NOT INTEREST.  Any gain or
376-15   advantage to the lender or the lender's employee, officer,
376-16   director, agent, general agent, affiliate, or associate from
376-17   insurance under this subchapter or the provision or sale of
376-18   insurance under this subchapter is not additional interest or an
376-19   additional charge in connection with a loan made under this chapter
376-20   except as specifically provided by this chapter.
376-21         Sec. 342.412.  ACTION UNDER SUBCHAPTER NOT SALE OF INSURANCE.
376-22   Arranging for insurance or collecting an identifiable charge as
376-23   authorized by this subchapter is not a sale of insurance.
376-24         Sec. 342.413.  REQUIRED AGENT OR BROKER PROHIBITED.  A lender
376-25   may not by any direct or indirect method require the purchase of
376-26   insurance from an agent or broker designated by the lender.
 377-1         Sec. 342.414.  DECLINATION OF EQUAL INSURANCE COVERAGE
 377-2   PROHIBITED.  A lender may not decline at any time existing
 377-3   insurance coverage providing substantially equal benefits that
 377-4   comply with this subchapter.
 377-5         Sec. 342.415.  EFFECT OF UNAUTHORIZED INSURANCE CHARGE.
 377-6   (a)  If a lender charges for insurance an amount that is not
 377-7   authorized under this subchapter, the lender:
 377-8               (1)  is not entitled to collect an amount for insurance
 377-9   or interest on an amount for insurance; and
377-10               (2)  shall refund to the borrower or credit to the
377-11   borrower's account all amounts collected for insurance and interest
377-12   collected on those amounts.
377-13         (b)  An overcharge that results from an accidental or bona
377-14   fide error may be corrected as provided by Subchapter C, Chapter
377-15   349.
377-16         (c)  The remedy provided by this section is not exclusive of
377-17   any other remedy or penalty provided by this subtitle.
377-18         Sec. 342.416.  NONFILING INSURANCE.  (a)  Instead of charging
377-19   fees for the filing, recording, and releasing of a document
377-20   securing a loan to which Subchapter E applies, an authorized lender
377-21   may include in the loan contract a charge for a nonfiling insurance
377-22   premium.
377-23         (b)  The amount of a charge under Subsection (a) may not
377-24   exceed the amount of fees authorized for filing and recording an
377-25   original financing statement in the standard form prescribed by the
377-26   secretary of state.
 378-1         (c)  A lender may receive an amount authorized under this
 378-2   section only if the lender purchases nonfiling insurance in
 378-3   connection with the loan contract.
 378-4         (d)  A lender is not required to furnish to a borrower a
 378-5   policy or certificate of insurance evidencing nonfiling insurance.
 378-6         SUBCHAPTER J.  AUTHORIZED LENDER'S DUTIES AND AUTHORITY
 378-7         Sec. 342.451.  DELIVERY OF INFORMATION TO BORROWER.
 378-8   (a)  When a loan is made under this chapter, the lender shall
 378-9   deliver to the borrower, or to one borrower if there is more than
378-10   one, a copy of each document signed by the borrower, including the
378-11   note or loan contract, and a written statement in English that
378-12   contains:
378-13               (1)  the names and addresses of the borrower and the
378-14   lender; and
378-15               (2)  any type of insurance for which a charge is
378-16   included in the loan contract and the charge to the borrower for
378-17   the insurance.
378-18         (b)  If the note or loan contract shows the information
378-19   required by Subsection (a), the written statement is not required.
378-20         Sec. 342.452.  RECEIPT FOR CASH PAYMENT.  A lender shall give
378-21   a receipt to a person making a cash payment on a loan.
378-22         Sec. 342.453.  ACCEPTANCE OF PREPAYMENT.  At any time during
378-23   regular business hours, the lender shall accept prepayment of a
378-24   loan in full or, if the amount tendered is less than the amount
378-25   required to prepay the loan in full, prepayment of an amount equal
378-26   to one or more full installments.
 379-1         Sec. 342.454.  RETURN OF INSTRUMENTS TO BORROWER ON
 379-2   REPAYMENT.  Within a reasonable time after a loan is repaid in full
 379-3   or an open-end account is terminated according to the terms of the
 379-4   contract, a lender shall cancel and return to a borrower any
 379-5   instrument, including a note, assignment, security agreement, or
 379-6   mortgage, or pledged property that:
 379-7               (1)  secured the loan; and
 379-8               (2)  does not secure another indebtedness of the
 379-9   borrower to the lender.
379-10         Sec. 342.455.  AGREEMENT FOR MORE THAN ONE LOAN OR CASH
379-11   ADVANCE.  (a)  A lender and a borrower may enter an agreement under
379-12   which one or more loans or cash advances are from time to time made
379-13   to or for the account of the borrower.
379-14         (b)  An agreement under this section may provide for a
379-15   maximum loan charge on the unpaid principal amounts from time to
379-16   time outstanding at a rate that does not exceed the rate that
379-17   produces the maximum interest charge computed under Section 342.201
379-18   for an equivalent loan amount.
379-19         (c)  An agreement under this section must be written and
379-20   signed by the lender and borrower.
379-21         (d)  An agreement under this section must contain:
379-22               (1)  the date of the agreement;
379-23               (2)  the name and address of each borrower; and
379-24               (3)  the name and address of the lender.
379-25         (e)  If a charge for insurance coverage is to be included in
379-26   a loan contract, an agreement under this section must clearly set
 380-1   forth a simple statement of the amount of the charge or the method
 380-2   by which the charge is to be computed.
 380-3         (f)  The lender shall deliver a copy of an agreement under
 380-4   this section to the borrower.
 380-5         (g)  The commissioner may prescribe monthly rates of charge
 380-6   that produce the maximum interest charge computed under Section
 380-7   342.201 for use under Subsection (b).
 380-8         Sec. 342.456.  AGREEMENT TO MODIFY TERM OF SECONDARY MORTGAGE
 380-9   LOAN CONTRACT.  (a)  A lender and a borrower may enter into an
380-10   agreement under which a term of a secondary mortgage loan contract
380-11   is amended, restated, or rescheduled.
380-12         (b)  An agreement under this section must be written and
380-13   signed by the lender and borrower.
380-14         (c)  An agreement under this section must contain:
380-15               (1)  the date of the agreement;
380-16               (2)  the name and address of the lender; and
380-17               (3)  the name and address of each borrower.
380-18         (d)  The lender shall deliver a copy of an agreement under
380-19   this section to the borrower.
380-20             SUBCHAPTER K.  LIMITATIONS ON AUTHORIZED LENDER
380-21         Sec. 342.501.  OBLIGATION UNDER MORE THAN ONE CONTRACT.
380-22   (a)  An authorized lender may not induce or permit a person or a
380-23   husband and wife to be directly or indirectly obligated under more
380-24   than one loan contract at any time for the purpose or with the
380-25   effect of obtaining an amount of interest greater than the amount
380-26   of interest otherwise authorized under this chapter for a loan of
 381-1   that aggregate amount with a maximum interest charge computed under
 381-2   Section 342.201(a), Section 342.252, or both of those sections.
 381-3         (b)  Subsection (a) does not prohibit the purchase of a bona
 381-4   fide retail installment contract or revolving charge agreement of a
 381-5   borrower for the purchase of goods or services.
 381-6         (c)  A lender who purchases all or substantially all of the
 381-7   loan contracts of another authorized lender and who at the time of
 381-8   purchase has a loan contract with a borrower whose loan contract is
 381-9   purchased may collect principal and authorized charges according to
381-10   the terms of each loan contract.
381-11         Sec. 342.502.  AMOUNT AUTHORIZED.  (a)  A lender may not
381-12   directly or indirectly charge, contract for, or receive an amount
381-13   that is not authorized under this chapter in connection with a loan
381-14   to which this chapter applies, including any fee, compensation,
381-15   bonus, commission, brokerage, discount, expense, and any other
381-16   charge of any nature, whether or not listed by this subsection.
381-17         (b)  On a loan subject to Subchapter E or a secondary
381-18   mortgage loan subject to Subchapter G a lender may assess and
381-19   collect from the borrower:
381-20               (1)  an amount incurred by the lender for:
381-21                     (A)  court costs;
381-22                     (B)  attorney's fees assessed by a court;
381-23                     (C)  a fee authorized by law for filing,
381-24   recording, or releasing in a public office a security for a loan;
381-25                     (D)  a reasonable amount spent for repossessing,
381-26   storing, preparing for sale, or selling any security;
 382-1                     (E)  a fee for recording a lien on or
 382-2   transferring a certificate of title to a motor vehicle offered as
 382-3   security for a loan made under this chapter; or
 382-4                     (F)  a premium or an identifiable charge received
 382-5   in connection with the sale of insurance authorized under this
 382-6   chapter; and
 382-7               (2)  an administrative fee, subject to Subsection (c),
 382-8   in an amount not to exceed:
 382-9                     (A)  $25 for a loan of more than $1,000; or
382-10                     (B)  $10 for a loan of $1,000 or less.
382-11         (c)  An administrative fee under Subsection (b)(2) is
382-12   considered earned when the loan is made or refinanced and is not
382-13   subject to refund.  A lender refinancing the loan may not contract
382-14   for or receive an administrative fee for the loan more than once in
382-15   a 180-day period.  Fifty cents of each administrative fee shall be
382-16   deposited with the comptroller for use in carrying out the finance
382-17   commission's responsibilities under Section 11.305.
382-18         Sec. 342.503.  SECURITY FOR LOAN.  (a)  A lender may not take
382-19   as security for a loan made under this chapter an assignment of
382-20   wages.
382-21         (b)  A lender may not take as security for a loan made under
382-22   Subchapter E or F a lien on real property other than a lien created
382-23   by law on the recording of an abstract of judgment.
382-24         (c)  A lender may take as security for a loan made under
382-25   Subchapter E or F an assignment of:
382-26               (1)  a warrant drawn against a state fund; or
 383-1               (2)  a claim against a state fund or a state agency.
 383-2         Sec. 342.504.  CONFESSION OF JUDGMENT; POWER OF ATTORNEY.  A
 383-3   lender may not take a confession of judgment or a power of attorney
 383-4   authorizing the lender or a third person to confess judgment or to
 383-5   appear for a borrower in a judicial proceeding.
 383-6         Sec. 342.505.  DISCLOSURE OF AMOUNT FINANCED AND SCHEDULE OF
 383-7   PAYMENTS.  A lender may not take a promise to pay or loan
 383-8   obligation that does not disclose the amount financed and the
 383-9   schedule of payments, except for an open-end account.
383-10         Sec. 342.506.  INSTRUMENT WITH BLANK PROHIBITED.  A lender
383-11   may not take an instrument in which a blank is left to be filled in
383-12   after the loan is made.
383-13         Sec. 342.507.  WAIVER OF BORROWER'S RIGHT PROHIBITED.  A
383-14   lender may not take an instrument in which a borrower waives any
383-15   right accruing to the borrower under this chapter.
383-16         Sec. 342.508.  MAXIMUM LOAN TERM.  A lender may not enter a
383-17   loan contract under Section 342.201(a) under which the borrower
383-18   agrees to make a scheduled payment of principal more than:
383-19               (1)  37 calendar months after the date on which the
383-20   contract is made, if the contract is for a cash advance of $1,500
383-21   or less;
383-22               (2)  49 calendar months after the date on which the
383-23   contract is made, if the contract is for a cash advance of more
383-24   than $1,500 but not more than $3,000; or
383-25               (3)  60 months after the date on which the contract is
383-26   made, if the contract is for a cash advance of more than $3,000.
 384-1                SUBCHAPTER L.  ADMINISTRATION OF CHAPTER
 384-2         Sec. 342.551.  ADOPTION OF RULES.  (a)  The Finance
 384-3   Commission of Texas may adopt rules to enforce this chapter.
 384-4         (b)  The commissioner shall recommend proposed rules to the
 384-5   Finance Commission of Texas.
 384-6         (c)  A rule shall be entered in a permanent book.  The book
 384-7   is a public record and shall be kept in the office of the
 384-8   commissioner.
 384-9         Sec. 342.552.  EXAMINATION OF LENDERS; ACCESS TO RECORDS.
384-10   (a)  The commissioner or the commissioner's representative shall,
384-11   at the times the commissioner considers necessary:
384-12               (1)  examine each place of business of each authorized
384-13   lender; and
384-14               (2)  investigate the lender's transactions, including
384-15   loans, and records, including books, accounts, papers, and
384-16   correspondence, to the extent the transactions and records pertain
384-17   to the business regulated under this chapter.
384-18         (b)  The lender shall:
384-19               (1)  give the commissioner or the commissioner's
384-20   representative free access to the lender's office, place of
384-21   business, files, safes, and vaults; and
384-22               (2)  allow the commissioner or the commissioner's
384-23   authorized representative to make a copy of an item that may be
384-24   investigated under Subsection (a)(2).
384-25         (c)  During an examination the commissioner or the
384-26   commissioner's representative may administer oaths and examine any
 385-1   person under oath on any subject pertinent to a matter that the
 385-2   commissioner is authorized or required to consider, investigate, or
 385-3   secure information about under this chapter.
 385-4         (d)  Information obtained under this section is confidential.
 385-5         (e)  A lender's violation of Subsection (b) is a ground for
 385-6   the suspension or revocation of the lender's license.
 385-7         Sec. 342.553.  GENERAL INVESTIGATION.  (a)  To discover a
 385-8   violation of this chapter or to obtain information required under
 385-9   this chapter, the commissioner or the commissioner's representative
385-10   may investigate the records, including books, accounts, papers, and
385-11   correspondence, of a person, including an authorized lender, who
385-12   the commissioner has reasonable cause to believe is violating this
385-13   chapter regardless of whether the person claims to not be subject
385-14   to this chapter.
385-15         (b)  For the purposes of this section, a person who
385-16   advertises, solicits, or otherwise represents that the person is
385-17   willing to make a loan with a cash advance less than or equal to
385-18   the amount computed under Subchapter C, Chapter 341, using the
385-19   reference base amount of $2,500 is presumed to be engaged in the
385-20   business described by Section 342.051.
385-21         Sec. 342.554.  CERTIFICATE; CERTIFIED DOCUMENT.  On
385-22   application by any person and on payment of any associated cost,
385-23   the commissioner shall furnish under the commissioner's seal and
385-24   signed by the commissioner or an assistant of the commissioner:
385-25               (1)  a certificate of good standing; or
385-26               (2)  a certified copy of a license, rule, or order.
 386-1         Sec. 342.555.  TRANSCRIPT OF HEARING:  PUBLIC.  The
 386-2   transcript of a hearing held by the commissioner under this chapter
 386-3   is a public record.
 386-4         Sec. 342.556.  APPOINTMENT OF AGENT.  (a)  An authorized
 386-5   lender shall maintain on file with the commissioner a written
 386-6   appointment of a resident of this state as the lender's agent for
 386-7   service of all judicial or other process or legal notice, unless
 386-8   the lender has appointed an agent under another statute of this
 386-9   state.
386-10         (b)  If an authorized lender does not comply with this
386-11   section, service of all judicial or other process or legal notice
386-12   may be made on the commissioner.
386-13         Sec. 342.557.  PAYMENT OF EXAMINATION COSTS AND
386-14   ADMINISTRATION EXPENSES.  An authorized lender shall pay to the
386-15   commissioner an amount assessed by the commissioner to cover the
386-16   direct and indirect cost of an examination of the lender under
386-17   Section 342.552 and a proportionate share of general administrative
386-18   expense.
386-19         Sec. 342.558.  AUTHORIZED LENDER'S RECORDS.  (a)  An
386-20   authorized lender shall maintain a record of each loan made under
386-21   this chapter as is necessary to enable the commissioner to
386-22   determine whether the lender is complying with this chapter.
386-23         (b)  An authorized lender shall keep the record, make it
386-24   available in this state, or, if the lender makes, transacts, or
386-25   negotiates loans principally by mail, keep the record or make it
386-26   available at the lender's principal place of business, until the
 387-1   later of:
 387-2               (1)  the fourth anniversary of the date of the loan; or
 387-3               (2)  the second anniversary of the date on which the
 387-4   final entry is made in the record.
 387-5         (c)  A record described by Subsection (a) must be prepared in
 387-6   accordance with accepted accounting practices.
 387-7         (d)  The commissioner shall accept a lender's system of
 387-8   records if the system discloses the information reasonably required
 387-9   under Subsection (a).
387-10         (e)  An authorized lender shall keep each obligation signed
387-11   by a borrower at an office in this state designated by the lender
387-12   unless the obligation is transferred under an agreement that gives
387-13   the commissioner access to the obligation.
387-14         Sec. 342.559.  ANNUAL REPORT.  (a)  Each year, not later than
387-15   May 1 or a later date set by the commissioner, an authorized lender
387-16   shall file with the commissioner a report that contains relevant
387-17   information required by the commissioner concerning the lender's
387-18   business and operations during the preceding calendar year for each
387-19   office of the lender in this state where business is conducted
387-20   under this chapter.
387-21         (b)  A report under this section must be:
387-22               (1)  under oath; and
387-23               (2)  in the form prescribed by the commissioner.
387-24         (c)  A report under this section is confidential.
387-25         (d)  Annually the commissioner shall prepare and publish a
387-26   consolidated analysis and recapitulation of reports filed under
 388-1   this section.
 388-2         Sec. 342.560.  CONDUCTING ASSOCIATED BUSINESS.  An authorized
 388-3   lender may conduct business under this chapter in an office, office
 388-4   suite, room, or place of business in which any other business is
 388-5   conducted or in combination with any other business unless the
 388-6   commissioner:
 388-7               (1)  finds after a hearing that the lender's conducting
 388-8   of the other business in that office, office suite, room, or place
 388-9   of business has concealed an evasion of this chapter; and
388-10               (2)  orders the lender in writing to desist from that
388-11   conduct in that office, office suite, room, or place of business.
388-12                [CHAPTER 342.  CERTAIN CASH ADVANCE LOANS]
388-13           [SUBCHAPTER A.  DESCRIPTION OF AND REQUIREMENTS FOR
388-14                          AUTHORIZED ACTIVITIES]
388-15         [Sec. 342.001.  AUTHORIZED ACTIVITIES; CEILING AMOUNT.
388-16   (a)  Only an authorized lender may:]
388-17               [(1)  engage in the business of making, transacting, or
388-18   negotiating loans with cash advances less than or equal to the
388-19   amount computed under Subchapter C, Chapter 341, using the
388-20   reference amount of $2,500; and]
388-21               [(2)  contract for, charge, or receive, directly or
388-22   indirectly, in connection with a loan described by Subdivision (1),
388-23   charges, including interest, compensation, consideration, or other
388-24   expenses, authorized under this chapter that in the aggregate
388-25   exceed the charges authorized under other law.]
388-26         [(b)  A person may not use any device, subterfuge, or
 389-1   pretense to evade the application of this section.]
 389-2         [Sec. 342.002.  ISSUANCE OF MORE THAN ONE LICENSE FOR A
 389-3   PERSON.  (a)  The commissioner may issue more than one license to a
 389-4   person on compliance with this chapter for each license.]
 389-5         [(b)  A person who is required to hold a license must hold a
 389-6   separate license for each office at which operations requiring a
 389-7   license are conducted.]
 389-8         [(c)  A license is not required under this chapter for a
 389-9   place of business devoted to accounting or other recordkeeping and
389-10   at which loans are not made under this chapter.]
389-11         [Sec. 342.003.  AREA OF BUSINESS; LOANS BY MAIL.  This
389-12   chapter does not:]
389-13               [(1)  limit the loans of an authorized lender to
389-14   residents of the community in which the office for which the
389-15   license or other authority is granted is located; or]
389-16               [(2)  prohibit an authorized lender from making loans
389-17   by mail.]
389-18         [SUBCHAPTER B.  APPLICATION FOR AND ISSUANCE OF LICENSE]
389-19         [Sec. 342.101.  APPLICATION REQUIREMENTS.  (a)  The
389-20   application for a license under this chapter must:]
389-21               [(1)  be under oath;]
389-22               [(2)  give the approximate location from which business
389-23   is to be conducted;]
389-24               [(3)  identify the business's principal parties in
389-25   interest; and]
389-26               [(4)  contain other relevant information that the
 390-1   commissioner requires for the findings required under Section
 390-2   342.104.]
 390-3         [(b)  On the filing of one or more license applications, the
 390-4   applicant shall pay to the consumer credit commissioner an
 390-5   investigation fee of $200.]
 390-6         [(c)  On the filing of each license application, the
 390-7   applicant shall pay to the commissioner for the license's year of
 390-8   issuance a license fee of:]
 390-9               [(1)  $100 if the license is granted not later than
390-10   June 30; or]
390-11               [(2)  $50 if the license is granted after June 30.]
390-12         [Sec. 342.102.  BOND.  (a)  If the commissioner requires, an
390-13   applicant for a license under this chapter shall file with the
390-14   application a bond that is:]
390-15               [(1)  in an amount not to exceed the total of:]
390-16                     [(A)  $5,000 for the first license; and]
390-17                     [(B)  $1,000 for each additional license;]
390-18               [(2)  satisfactory to the commissioner; and]
390-19               [(3)  issued by a surety company qualified to do
390-20   business as surety in this state.]
390-21         [(b)  The bond must be in favor of this state for the use of
390-22   this state and the use of a person who has a cause of action under
390-23   this chapter against the license holder.]
390-24         [(c)  The bond must be conditioned on:]
390-25               [(1)  the license holder's faithful performance under
390-26   this chapter and rules adopted under this chapter; and]
 391-1               [(2)  the payment of all amounts that become due to the
 391-2   state or another person under this chapter during the calendar year
 391-3   for which the bond is given.]
 391-4         [(d)  The aggregate liability of a surety to all persons
 391-5   damaged by the license holder's violation of this chapter may not
 391-6   exceed the amount of the bond.]
 391-7         [Sec. 342.103.  INVESTIGATION OF APPLICATION.  On the filing
 391-8   of an application and, if required, a bond and on payment of the
 391-9   required fees, the commissioner shall conduct an investigation to
391-10   determine whether to issue the license.]
391-11         [Sec. 342.104.  APPROVAL OR DENIAL OF APPLICATION.  (a)  The
391-12   commissioner shall approve the application and issue to the
391-13   applicant a license to make loans under this chapter if the
391-14   commissioner finds that:]
391-15               [(1)  the financial responsibility, experience,
391-16   character, and general fitness of the applicant are sufficient to:]
391-17                     [(A)  command the confidence of the public; and]
391-18                     [(B)  warrant the belief that the business will
391-19   be operated lawfully and fairly, within the purposes of this
391-20   chapter; and]
391-21               [(2)  the applicant has net assets of at least $25,000
391-22   available for the operation of the business.]
391-23         [(b)  If the commissioner does not so find, the commissioner
391-24   shall notify the applicant.]
391-25         [(c)  If an applicant requests a hearing on the application
391-26   not later than the 30th day after the date of notification under
 392-1   Subsection (b), the applicant is entitled to a hearing within 60
 392-2   days after the date of the request.]
 392-3         [(d)  Unless the applicant and the commissioner agree in
 392-4   writing to a later date, the commissioner shall approve or deny the
 392-5   application within 60 days after the later of the date on which:]
 392-6               [(1)  the application is filed and the required fees
 392-7   are paid; or]
 392-8               [(2)  a hearing on the application is completed.]
 392-9         [Sec. 342.105.  DISPOSITION OF FEES ON DENIAL OF APPLICATION.
392-10   If the commissioner denies the application, the commissioner shall
392-11   retain the investigation fee and shall return to the applicant the
392-12   license fee submitted with the application.]
392-13                         [SUBCHAPTER C.  LICENSE]
392-14         [Sec. 342.151.  NAME AND PLACE ON LICENSE.  (a)  A license
392-15   must state:]
392-16               [(1)  the name of the license holder; and]
392-17               [(2)  the address of the office from which the business
392-18   is to be conducted.]
392-19         [(b)  A license holder may not conduct business under a name
392-20   or at a place of business in this state other than the name or
392-21   office stated on the license.]
392-22         [Sec. 342.152.  LICENSE DISPLAY.  A license holder shall
392-23   display a license at the place of business provided on the license.]
392-24         [Sec. 342.153.  MINIMUM ASSETS FOR LICENSE.  (a)  Except as
392-25   provided by Subsection (b) or (c), a license holder shall maintain
392-26   for each office for which a license is held net assets of at least
 393-1   $25,000 that are used or readily available for use in conducting
 393-2   the business of that office.]
 393-3         [(b)  A license holder who held a license under the Texas
 393-4   Regulatory Loan Act and was issued a license to make loans under
 393-5   this chapter as provided by Section 4, Chapter 274, Acts of the
 393-6   60th Legislature, Regular Session, 1967, shall maintain for the
 393-7   office for which that license is held net assets of at least
 393-8   $15,000 that are used or readily available for use in conducting
 393-9   the business of that office.]
393-10         [(c)  A license holder who paid the pawnbroker's occupational
393-11   tax for 1967 and was issued a license to make loans under this
393-12   chapter as provided by Section 4, Chapter 274, Acts of the 60th
393-13   Legislature, Regular Session, 1967, is exempt from the minimum
393-14   assets requirement of Subsection (a) for the office for which that
393-15   license is held.]
393-16         [(d)  If a license holder to which Subsection (b) or (c)
393-17   applies transfers the license, the person to whom the license is
393-18   transferred is subject to the minimum net assets requirement of
393-19   Subsection (a).]
393-20         [Sec. 342.154.  ANNUAL LICENSE FEE.  (a)  Not later than
393-21   December 1, a license holder shall pay to the commissioner for each
393-22   license held an annual fee for the year beginning the next January
393-23   1.]
393-24         [(b)  The annual fee for a license under this chapter is $200
393-25   except that if, on September 30 preceding the date on which the
393-26   annual fee is due, the gross unpaid balance of loans regulated
 394-1   under this chapter in the office for which the license is issued is
 394-2   $100,000 or less, the annual fee is $100.]
 394-3         [Sec. 342.155.  EXPIRATION OF LICENSE ON FAILURE TO PAY
 394-4   ANNUAL FEE.  If the annual fee for a license is not paid before the
 394-5   16th day after the date on which written notice of delinquency of
 394-6   payment has been given to the license holder by the commissioner,
 394-7   the license expires on the later of:]
 394-8               [(1)  that day; or]
 394-9               [(2)  December 31 of the last year for which an annual
394-10   fee was paid.]
394-11         [Sec. 342.156.  LICENSE FORFEITURE.  (a)  A license holder
394-12   who violates this chapter is subject to forfeiture of the holder's
394-13   license and, if the license holder is a corporation, forfeiture of
394-14   its charter.]
394-15         [(b)  When the attorney general is notified of a violation of
394-16   this chapter, the attorney general shall file suit in a district
394-17   court in Travis County for forfeiture of the license holder's
394-18   license and, if the license holder is a corporation, for forfeiture
394-19   of the license holder's charter.]
394-20         [Sec. 342.157.  LICENSE SUSPENSION OR REVOCATION.  After
394-21   notice and a hearing the commissioner may suspend or revoke a
394-22   license if the commissioner finds that:]
394-23               [(1)  the license holder failed to pay the annual
394-24   license fee or an examination fee, investigation fee, or other
394-25   charge imposed by the commissioner under this chapter;]
394-26               [(2)  the license holder, knowingly or without the
 395-1   exercise of due care, violated this chapter or a rule adopted or
 395-2   order issued under this chapter; or]
 395-3               [(3)  a fact or condition exists that, if it had
 395-4   existed or had been known to exist at the time of the original
 395-5   application for the license, clearly would have justified the
 395-6   commissioner's denial of the application.]
 395-7         [Sec. 342.158.  LICENSE SUSPENSION OR REVOCATION FILED WITH
 395-8   PUBLIC RECORDS.  The decision of the commissioner on the suspension
 395-9   or revocation of a license and the evidence considered by the
395-10   commissioner in making the decision shall be filed with the public
395-11   records of the commissioner.]
395-12         [Sec. 342.159.  REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
395-13   OF NEW LICENSE AFTER REVOCATION.  The commissioner may reinstate a
395-14   suspended license or issue a new license to a person whose license
395-15   has been revoked if at the time of the reinstatement or issuance no
395-16   fact or condition exists that clearly would have justified the
395-17   commissioner's denial of an original application for the license.]
395-18         [Sec. 342.160.  SURRENDER OF LICENSE.  A license holder may
395-19   surrender a license issued under this chapter by delivering to the
395-20   commissioner:]
395-21               [(1)  the license; and]
395-22               [(2)  a written notice of the license's surrender.]
395-23         [Sec. 342.161.  EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
395-24   SURRENDER.  (a)  The suspension, revocation, or surrender of a
395-25   license issued under this chapter does not affect the obligation of
395-26   a contract between the license holder and a debtor entered into
 396-1   before the revocation, suspension, or surrender.]
 396-2         [(b)  Surrender of a license does not affect the license
 396-3   holder's civil or criminal liability for an act committed before
 396-4   surrender.]
 396-5         [Sec. 342.162.  MOVING AN OFFICE.  (a)  A license holder
 396-6   shall give written notice to the commissioner before the 30th day
 396-7   preceding the date the license holder moves an office from the
 396-8   location provided on the license.]
 396-9         [(b)  The commissioner shall amend a holder's license
396-10   accordingly.]
396-11         [Sec. 342.163.  TRANSFER OR ASSIGNMENT OF LICENSE.  A license
396-12   may be transferred or assigned only with the approval of the
396-13   commissioner.]
396-14                    [SUBCHAPTER D.  INTEREST CHARGES]
396-15         [Sec. 342.201.  MAXIMUM INTEREST CHARGE.  (a)  A loan
396-16   contract under this chapter that is payable in consecutive monthly
396-17   installments, substantially equal in amount, may provide for an
396-18   interest charge that does not exceed an add-on charge, computed for
396-19   the full term of the contract as follows:]
396-20               [(1)  $18 per $100 per year on the part of the cash
396-21   advance that is less than or equal to the amount computed under
396-22   Subchapter C, Chapter 341, using the reference amount of $300; and]
396-23               [(2)  $8 per $100 per year on the part of the cash
396-24   advance that is more than the amount computed for Subdivision (1)
396-25   but less than or equal to an amount computed under Subchapter C,
396-26   Chapter 341, using the reference amount of $2,500.]
 397-1         [(b)  For the purpose of Subsection (a):]
 397-2               [(1)  when the loan is made, an interest charge may be
 397-3   computed for the full term of the loan contract;]
 397-4               [(2)  a part of a month that is longer than 15 days may
 397-5   be considered a full month; and]
 397-6               [(3)  if a loan contract provides for precomputed
 397-7   interest, the amount of the loan is the total of:]
 397-8                     [(A)  the cash advance; and]
 397-9                     [(B)  the amount of precomputed interest.]
397-10         [(c)  A loan contract under this chapter that is payable
397-11   other than in substantially equal consecutive monthly installments
397-12   may provide for an interest charge, using any method or formula,
397-13   that does not exceed the amount that, having due regard for the
397-14   schedule of installment payments, would produce the same effective
397-15   return under Subsection (a) if the loan were payable in
397-16   substantially equal successive monthly installments beginning one
397-17   month from the date of the contract.]
397-18         [Sec. 342.202.  ADDITIONAL INTEREST FOR DEFAULT:  CONTRACT
397-19   WITH EQUAL MONTHLY INSTALLMENTS.  (a)  A loan contract that
397-20   includes precomputed interest and that is payable in substantially
397-21   equal successive monthly installments may provide for additional
397-22   interest for default if any part of an installment remains unpaid
397-23   after the 10th day after the date on which the installment is due,
397-24   including Sundays and holidays.  The additional interest may not
397-25   exceed five cents for each $1 of a scheduled installment.]
397-26         [(b)  Interest under Subsection (a) may not be collected more
 398-1   than once on the same installment.]
 398-2         [Sec. 342.203.  ADDITIONAL INTEREST FOR INSTALLMENT
 398-3   DEFERMENT:  CONTRACT WITH EQUAL MONTHLY INSTALLMENTS.  (a)  On a
 398-4   loan contract that includes precomputed interest and is payable in
 398-5   substantially equal successive monthly installments, an authorized
 398-6   lender may charge additional interest for the deferment of an
 398-7   installment if:]
 398-8               [(1)  the entire amount of the installment is unpaid;]
 398-9               [(2)  no interest for default has been collected on the
398-10   installment; and]
398-11               [(3)  payment of the installment is deferred for one or
398-12   more full months and the maturity of the contract is extended for a
398-13   corresponding period.]
398-14         [(b)  The interest for deferment under Subsection (a) may not
398-15   exceed the amount computed by:]
398-16               [(1)  taking the difference between the refund that
398-17   would be required for prepayment in full on the date of deferment
398-18   and the refund that would be required for prepayment in full one
398-19   month before the date of deferment; and]
398-20               [(2)  multiplying the results under Subdivision (1) by
398-21   the number of months in the deferment period.]
398-22         [(c)  The amount of interest applicable to each deferred
398-23   balance or installment period occurring after a deferment period
398-24   remains the amount applicable to that balance or period under the
398-25   original loan contract.]
398-26         [(d)  If a loan is prepaid in full during the deferment
 399-1   period, the borrower shall receive, in addition to the refund
 399-2   required under Subchapter E, a pro rata refund of that part of the
 399-3   interest for deferment applicable to the number of full months
 399-4   remaining in the deferment period on the payment date.]
 399-5         [(e)  For the purposes of this section, a deferment period is
 399-6   the period during which a payment is not required or made because
 399-7   of the deferment and begins on the day after the due date of the
 399-8   scheduled installment that precedes the first installment being
 399-9   deferred.]
399-10         [Sec. 342.204.  COLLECTION OF DEFAULT OR DEFERMENT INTEREST.
399-11   Interest for default under Section 342.202 or for installment
399-12   deferment under Section 342.203 may be collected when it accrues or
399-13   at any time after it accrues.]
399-14         [Sec. 342.205.  ADDITIONAL INTEREST FOR CONTRACT WITHOUT
399-15   EQUAL MONTHLY INSTALLMENTS.  A loan contract that includes
399-16   precomputed interest and that is not payable in substantially equal
399-17   successive monthly installments may provide for additional interest
399-18   for default for the period from the maturity date of an installment
399-19   until the date the installment is paid.  The rate of the additional
399-20   interest may not exceed the highest lawful contract rate.]
399-21         [Sec. 342.206.  ADDITIONAL INTEREST FOR CONTRACT WITHOUT
399-22   PRECOMPUTED INTEREST.  On a loan contract that does not contain
399-23   precomputed interest, interest may accrue on the principal balance
399-24   and amounts added to principal after the date of the loan contract,
399-25   from time to time unpaid, at the rate provided for by the contract,
399-26   until the date of payment in full or demand for payment in full.]
 400-1             [SUBCHAPTER E.  REFUND OF PRECOMPUTED INTEREST]
 400-2         [Sec. 342.251.  REFUND OF PRECOMPUTED INTEREST ON CONTRACT
 400-3   WITH EQUAL MONTHLY INSTALLMENTS.  (a)  This section applies to a
 400-4   loan contract that includes precomputed interest and that is
 400-5   payable in substantially equal successive monthly installments
 400-6   beginning within one month and 15 days after the date of the
 400-7   contract.]
 400-8         [(b)  If the contract is prepaid in full, including payment
 400-9   in cash or by a new loan or renewal of the loan, or if the lender
400-10   demands payment in full of the unpaid balance, after the first
400-11   installment due date but before the final installment due date, the
400-12   lender shall refund or credit to the borrower the amount computed
400-13   by:]
400-14               [(1)  dividing the total amount of the periodic
400-15   balances scheduled to follow the installment date after the date of
400-16   the prepayment or demand, as appropriate, by the total amount of
400-17   all the periodic balances under the schedule of payments set out in
400-18   the loan contract; and]
400-19               [(2)  multiplying the total interest contracted for
400-20   under Section 342.201 by the result under Subdivision (1).]
400-21         [(c)  If the prepayment in full or demand for payment in full
400-22   occurs before the first installment due date, the lender shall:]
400-23               [(1)  retain an amount computed by:]
400-24                     [(A)  dividing 30 into the amount that could be
400-25   retained if the first installment period were one month and the
400-26   loan were prepaid in full on the date the first installment is due;
 401-1   and]
 401-2                     [(B)  multiplying the result under Paragraph (A)
 401-3   by the number of days in the period beginning on the date the loan
 401-4   was made and ending on the date of the prepayment or demand; and]
 401-5               [(2)  refund or credit to the borrower the amount
 401-6   computed by subtracting the amount retained under Subdivision (1)
 401-7   from the interest contracted for under Section 342.201.]
 401-8         [Sec. 342.252.  REFUND OF PRECOMPUTED INTEREST ON CONTRACT
 401-9   WITHOUT EQUAL MONTHLY INSTALLMENTS.  (a)  This section applies to a
401-10   loan contract that includes precomputed interest and to which
401-11   Section 342.251 does not apply.]
401-12         [(b)  If the contract is prepaid in full, including payment
401-13   in cash or by a new loan or renewal of the loan, or if the lender
401-14   demands payment in full of the unpaid balance before final maturity
401-15   of the contract, the lender may retain as interest for the period
401-16   beginning on the date of the loan and ending on the date of the
401-17   prepayment or demand, as applicable, an amount that does not exceed
401-18   the amount computed using the simple annual interest rate described
401-19   by Subsection (f).]
401-20         [(c)  If prepayment in full or demand for payment in full
401-21   occurs during an installment period, the lender may retain, in
401-22   addition to interest that accrued during any elapsed installment
401-23   periods, an amount computed by:]
401-24               [(1)  multiplying the simple annual interest rate
401-25   described by Subsection (f) by the unpaid principal balance of the
401-26   loan determined according to the schedule of payments to be
 402-1   outstanding on the preceding installment due date;]
 402-2               [(2)  dividing 365 into the product under Subdivision
 402-3   (1); and]
 402-4               [(3)  multiplying the number of days in the period
 402-5   beginning on the day after the installment due date and ending on
 402-6   the date of the prepayment or demand, as appropriate, by the result
 402-7   obtained under Subdivision (2).]
 402-8         [(d)  The lender may also retain interest on any additions to
 402-9   principal or other permissible charges, added to the loan after the
402-10   date of the loan contract, accruing at the simple annual interest
402-11   rate under the contract described by Subsection (f) from the date
402-12   of the addition until the date paid or the date the lender demands
402-13   payment in full of the total unpaid balance under the loan
402-14   contract.]
402-15         [(e)  The lender shall refund or credit to the borrower the
402-16   amount computed by subtracting the total amount retained under
402-17   Subsections (b), (c), and (d) from the total amount of interest
402-18   contracted for and precomputed in the amount of loan.]
402-19         [(f)  For the purposes of this section, the simple annual
402-20   interest rate is equal to the rate that the contract would have
402-21   produced over its full term if, assuming that each scheduled
402-22   payment under the contract is paid on the date due and considering
402-23   the amount of each scheduled installment and the time of each
402-24   scheduled installment period, the rate were applied to the unpaid
402-25   principal amounts determined to be outstanding from time to time
402-26   according to the schedule of payments.]
 403-1         [Sec. 342.253.  NO REFUND ON PARTIAL PREPAYMENT OR OF AMOUNT
 403-2   LESS THAN $1.  A refund is not required under this subchapter for a
 403-3   partial prepayment or if the amount to be refunded is less than $1.]
 403-4           [SUBCHAPTER F.  ALTERNATE CHARGES FOR CERTAIN LOANS]
 403-5         [Sec. 342.301.  MAXIMUM CASH ADVANCE.  The maximum cash
 403-6   advance of a loan made under this subchapter is an amount computed
 403-7   under Subchapter C, Chapter 341, using the reference amount of
 403-8   $100.]
 403-9         [Sec. 342.302.  ALTERNATE INTEREST CHARGE.  Instead of the
403-10   charges authorized by Section 342.201, a loan contract may provide
403-11   for:]
403-12               [(1)  on a cash advance of less than $30, an
403-13   acquisition charge that is not more than $1 for each $5 of the cash
403-14   advance;]
403-15               [(2)  on a cash advance equal to or more than $30 but
403-16   not more than $100:]
403-17                     [(A)  an acquisition charge that is not more than
403-18   the amount equal to one-tenth of the amount of the cash advance;
403-19   and]
403-20                     [(B)  an installment account handling charge that
403-21   is not more than:]
403-22                           [(i)  $3 a month if the cash advance is not
403-23   more than $35;]
403-24                           [(ii)  $3.50 a month if the cash advance is
403-25   more than $35 but not more than $70; or]
403-26                           [(iii)  $4 a month if the cash advance is
 404-1   more than $70; or]
 404-2               [(3)  on a cash advance of more than $100:]
 404-3                     [(A)  an acquisition charge that is not more than
 404-4   $10; and]
 404-5                     [(B)  an installment account handling charge that
 404-6   is not more than the ratio of $4 a month for each $100 of cash
 404-7   advance.]
 404-8         [Sec. 342.303.  NO OTHER CHARGES AUTHORIZED.  (a)  On a loan
 404-9   made under this subchapter a lender may not contract for, charge,
404-10   or receive an amount unless this subchapter authorizes the amount
404-11   to be charged.]
404-12         [(b)  An insurance charge is not authorized on a loan made
404-13   under this subchapter.]
404-14         [Sec. 342.304.  MAXIMUM LOAN TERM.  The maximum term of a
404-15   loan made under this subchapter is:]
404-16               [(1)  for a loan of $100 or less the lesser of:]
404-17                     [(A)  one month for each $10 of cash advance; or]
404-18                     [(B)  six months; and]
404-19               [(2)  for a loan of more than $100, one month for each
404-20   $20 of cash advance.]
404-21         [Sec. 342.305.  REFUND.  (a)  An acquisition charge
404-22   authorized under Section 342.302(1) or (2) is considered to be
404-23   earned at the time a loan is made and is not subject to refund.]
404-24         [(b)  On the prepayment of a loan with a cash advance of $30
404-25   or more but not more than $100, the installment account handling
404-26   charge authorized under Section 342.302(2) is subject to refund in
 405-1   accordance with Subchapter E.]
 405-2         [(c)  On the prepayment of a loan with a cash advance of more
 405-3   than $100, the acquisition charge and the installment account
 405-4   handling charge authorized under Section 342.302(3) are subject to
 405-5   refund in accordance with Subchapter E.]
 405-6         [Sec. 342.306.  DEFAULT CHARGE; DEFERMENT OF PAYMENT.  The
 405-7   provisions of Subchapter D relating to additional interest for
 405-8   default and additional interest for the deferment of installments
 405-9   apply to a loan made under this subchapter.]
405-10         [Sec. 342.307.  SCHEDULES FOR WEEKLY, BIWEEKLY, OR
405-11   SEMIMONTHLY INSTALLMENTS.  The commissioner may prepare schedules
405-12   that may be used by an authorized lender for the repayment of a
405-13   loan made under this subchapter by weekly, biweekly, or semimonthly
405-14   installments.]
405-15                        [SUBCHAPTER G.  INSURANCE]
405-16         [Sec. 342.401.  PROPERTY INSURANCE.  (a)  On a loan with a
405-17   cash advance of $300 or more, a lender may request or require a
405-18   borrower to insure tangible personal property offered as security
405-19   for the loan.]
405-20         [(b)  The insurance and the premiums or charges for the
405-21   coverage must bear a reasonable relationship to:]
405-22               [(1)  the amount, term, and conditions of the loan;]
405-23               [(2)  the value of the collateral; and]
405-24               [(3)  the existing hazards or risk of loss, damage, or
405-25   destruction.]
405-26         [(c)  The insurance may not:]
 406-1               [(1)  cover unusual or exceptional risks; or]
 406-2               [(2)  provide coverage not ordinarily included in
 406-3   policies issued to the general public.]
 406-4         [Sec. 342.402.  CREDIT LIFE, CREDIT HEALTH AND ACCIDENT, OR
 406-5   INVOLUNTARY UNEMPLOYMENT INSURANCE.  (a)  On a loan made under this
 406-6   chapter with a cash advance of $100 or more, a lender may:]
 406-7               [(1)  offer or request that a borrower provide credit
 406-8   life insurance and credit health and accident insurance as
 406-9   additional protection for the loan; and]
406-10               [(2)  offer involuntary unemployment insurance to the
406-11   borrower at the time the loan is made and include the premium for
406-12   that insurance, if accepted, in the loan contract.]
406-13         [(b)  A lender may not require that the borrower accept or
406-14   provide the insurance described by Subsection (a).]
406-15         [Sec. 342.403.  MAXIMUM AMOUNT OF INSURANCE COVERAGE.
406-16   (a)  At any time the total amount of the policies of credit life
406-17   insurance in force on one borrower on one loan contract may not
406-18   exceed the total amount repayable under the loan contract, and if
406-19   the loan is repayable in substantially equal installments, the
406-20   greater of the scheduled or actual amount of unpaid indebtedness.]
406-21         [(b)  At any time the total amount of the policies of credit
406-22   accident and health insurance or involuntary unemployment insurance
406-23   in force on one borrower on one loan contract may not exceed the
406-24   total amount repayable under the loan contract, and the amount of
406-25   each periodic indemnity payment may not exceed the scheduled
406-26   periodic installment payment on the loan.]
 407-1         [Sec. 342.404.  INSURANCE STATEMENT.  (a)  If insurance is
 407-2   required on a loan made under this chapter, the lender shall give
 407-3   to the borrower a written statement that clearly and conspicuously
 407-4   states that:]
 407-5               [(1)  insurance is required in connection with the
 407-6   loan; and]
 407-7               [(2)  the borrower as an option may furnish the
 407-8   required insurance coverage through:]
 407-9                     [(A)  an existing policy of insurance owned or
407-10   controlled by the borrower; or]
407-11                     [(B)  an insurance policy obtained from an
407-12   insurance company authorized to do business in this state.]
407-13         [(b)  If requested or required insurance is sold or obtained
407-14   by a lender at a premium or rate of charge that is not fixed or
407-15   approved by the commissioner of insurance, the lender shall include
407-16   that fact in the statement.]
407-17         [(c)  A statement under this section may be provided with or
407-18   as part of the loan contract or separately.]
407-19         [Sec. 342.405.  INSURANCE MAY BE FURNISHED BY BORROWER.  If
407-20   insurance is requested or required on a loan made under this
407-21   chapter and the loan contract includes a premium or rate of charge
407-22   that is not fixed or approved by the commissioner of insurance, the
407-23   borrower is entitled to furnish the insurance coverage not later
407-24   than the fifth day after the date of the loan through:]
407-25               [(1)  an existing policy of insurance owned or
407-26   controlled by the borrower; or]
 408-1               [(2)  an insurance policy obtained from an insurance
 408-2   company authorized to do business in this state.]
 408-3         [Sec. 342.406.  BORROWER'S FAILURE TO PROVIDE REQUIRED
 408-4   INSURANCE.  (a)  If a borrower fails to obtain or maintain
 408-5   insurance coverage required under a loan contract or requests the
 408-6   lender to obtain that coverage, the lender may obtain:]
 408-7               [(1)  substitute insurance coverage that is
 408-8   substantially equivalent to or more limited than the coverage
 408-9   originally required; or]
408-10               [(2)  insurance to cover only the interest of the
408-11   lender as a secured party if the borrower does not request that the
408-12   borrower's interest be covered.]
408-13         [(b)  Insurance obtained under this section must comply with
408-14   Sections 342.407 and 342.408.]
408-15         [(c)  The lender may add the amount advanced by the lender
408-16   for insurance coverage obtained under Subsection (a) to the unpaid
408-17   balance of the loan contract and may charge interest on that amount
408-18   from the time it is added to the unpaid balance until it is paid.
408-19   The rate of additional interest may not exceed the rate that the
408-20   loan contract would produce over its full term if each scheduled
408-21   payment were paid on the due date.]
408-22         [Sec. 342.407.  REQUIREMENTS FOR INCLUDING INSURANCE CHARGE
408-23   IN CONTRACT.  If insurance is included as a charge in a loan
408-24   contract, the insurance must be written:]
408-25               [(1)  at lawful rates;]
408-26               [(2)  in accordance with the Insurance Code; and]
 409-1               [(3)  by a company authorized to do business in this
 409-2   state.]
 409-3         [Sec. 342.408.  DELIVERY OF INSURANCE DOCUMENT TO BORROWER.
 409-4   If a lender obtains insurance for which a charge is included in the
 409-5   loan contract, the lender, not later than the 30th day after the
 409-6   date on which the loan contract is executed, shall deliver, mail,
 409-7   or cause to be mailed to the borrower at the borrower's address
 409-8   specified in the contract one or more policies or certificates of
 409-9   insurance that clearly set forth:]
409-10               [(1)  the amount of the premium;]
409-11               [(2)  the kind of insurance provided;]
409-12               [(3)  the coverage of the insurance; and]
409-13               [(4)  all terms, including options, limitations,
409-14   restrictions, and conditions, of each insurance policy.]
409-15         [Sec. 342.409.  LENDER'S DUTY IF INSURANCE IS ADJUSTED OR
409-16   TERMINATED.  (a)  If insurance for which a charge is included in or
409-17   added to the loan contract is canceled, adjusted, or terminated,
409-18   the lender shall:]
409-19               [(1)  credit to the amount unpaid on the loan the
409-20   amount of the refund received by the lender for unearned insurance
409-21   premiums, except for the amount of the refund that is applied to
409-22   the purchase by the lender of similar insurance; and]
409-23               [(2)  if the amount to be credited under Subdivision
409-24   (1) is more than the unpaid balance, refund promptly to the
409-25   borrower the difference between those amounts.]
409-26         [(b)  A cash refund is not required under this section if the
 410-1   amount of the refund is less than $1.]
 410-2         [Sec. 342.410.  PAYMENT FOR INSURANCE FROM LOAN PROCEEDS.  A
 410-3   lender, including an officer, agent, or employee of the lender, who
 410-4   accepts insurance under this subchapter as protection for a loan:]
 410-5               [(1)  may deduct the premium or identifiable charge for
 410-6   the insurance from the proceeds of the loan; and]
 410-7               [(2)  shall pay the deducted amounts to the insurance
 410-8   company writing the insurance.]
 410-9         [Sec. 342.411.  GAIN OR ADVANTAGE FROM INSURANCE NOT
410-10   INTEREST.  Any gain or advantage to the lender or the lender's
410-11   employee, officer, director, agent, general agent, affiliate, or
410-12   associate from insurance under this subchapter or the provision or
410-13   sale of insurance under this subchapter is not additional interest
410-14   or an additional charge in connection with a loan made under this
410-15   chapter except as specifically provided by this chapter.]
410-16         [Sec. 342.412.  ACTION UNDER SUBCHAPTER NOT SALE OF
410-17   INSURANCE.  Arranging for insurance or collecting an identifiable
410-18   charge as authorized by this subchapter is not a sale of insurance.]
410-19         [Sec. 342.413.  REQUIRED AGENT OR BROKER PROHIBITED.  A
410-20   lender may not by any direct or indirect method require the
410-21   purchase of insurance from an agent or broker designated by the
410-22   lender.]
410-23         [Sec. 342.414.  DECLINATION OF EQUAL INSURANCE COVERAGE
410-24   PROHIBITED.  A lender may not decline at any time existing
410-25   insurance coverage that:]
410-26               [(1)  provides benefits substantially equal to the
 411-1   benefits of coverage required by the lender; or]
 411-2               [(2)  complies with this subchapter.]
 411-3         [Sec. 342.415.  EFFECT OF UNAUTHORIZED INSURANCE CHARGE.
 411-4   (a)  If a lender charges for insurance an amount that is not
 411-5   authorized under this subchapter, the lender:]
 411-6               [(1)  is not entitled to collect an amount for
 411-7   insurance or interest on an amount for insurance; and]
 411-8               [(2)  shall refund to the borrower or credit to the
 411-9   borrower's account all amounts collected for insurance and interest
411-10   collected on those amounts.]
411-11         [(b)  An overcharge that results from an accidental or bona
411-12   fide error may be corrected as provided by Subchapter C, Chapter
411-13   349.]
411-14         [(c)  The remedy provided by this section is not exclusive of
411-15   any other remedy or penalty provided by this subtitle.]
411-16         [Sec. 342.416.  NONFILING INSURANCE.  (a)  Instead of
411-17   charging fees for the filing, recording, and releasing of a
411-18   document securing a loan to which Subchapter D applies, an
411-19   authorized lender may include in the loan contract a charge for a
411-20   nonfiling insurance premium.]
411-21         [(b)  The amount of a charge under Subsection (a) may not
411-22   exceed the amount of fees authorized for filing and recording an
411-23   original financing statement in the standard form prescribed by the
411-24   secretary of state.]
411-25         [(c)  An authorized lender may include a charge for nonfiling
411-26   insurance only if the lender purchases nonfiling insurance in
 412-1   connection with the loan contract.]
 412-2         [(d)  A lender is not required to furnish to a borrower a
 412-3   policy or certificate of insurance evidencing nonfiling insurance.]
 412-4                [SUBCHAPTER H.  ADMINISTRATION OF CHAPTER]
 412-5         [Sec. 342.501.  ADOPTION OF RULES.  (a)  The Finance
 412-6   Commission of Texas may adopt rules to enforce this chapter.]
 412-7         [(b)  The commissioner shall recommend proposed rules to the
 412-8   Finance Commission of Texas.]
 412-9         [(c)  A rule shall be entered in a permanent book.  The book
412-10   is a public record and shall be kept in the office of the
412-11   commissioner.]
412-12         [(d)  A copy of a rule shall be mailed to each authorized
412-13   lender.]
412-14         [Sec. 342.502.  EXAMINATION OF LENDERS; ACCESS TO RECORDS.
412-15   (a)  The commissioner or the commissioner's representative shall,
412-16   at the times the commissioner considers necessary:]
412-17               [(1)  examine each place of business of each authorized
412-18   lender; and]
412-19               [(2)  investigate the lender's transactions, including
412-20   loans, and records, including books, accounts, papers, and
412-21   correspondence, to the extent the transactions and records pertain
412-22   to the business regulated under this chapter.]
412-23         [(b)  The lender shall:]
412-24               [(1)  give the commissioner or the commissioner's
412-25   representative free access to the lender's office, place of
412-26   business, files, safes, and vaults; and]
 413-1               [(2)  allow the commissioner or the commissioner's
 413-2   authorized representative to make a copy of an item that may be
 413-3   investigated under Subsection (a)(2).]
 413-4         [(c)  During an examination the commissioner or the
 413-5   commissioner's representative may administer oaths and examine any
 413-6   person under oath on any subject pertinent to a matter about which
 413-7   the commissioner is authorized or required to consider,
 413-8   investigate, or secure information under this chapter.]
 413-9         [(d)  Information obtained under this section is
413-10   confidential.]
413-11         [(e)  A lender's violation of Subsection (b) is a ground for
413-12   the suspension or revocation of the lender's license.]
413-13         [Sec. 342.503.  GENERAL INVESTIGATION.  (a)  To discover a
413-14   violation of this chapter or to obtain information required under
413-15   this chapter, the commissioner or the commissioner's representative
413-16   may investigate the records, including books, accounts, papers, and
413-17   correspondence, of a person, including an authorized lender, whom
413-18   the commissioner has reasonable cause to believe is violating this
413-19   chapter regardless of whether the person claims to not be subject
413-20   to this chapter.]
413-21         [(b)  For the purposes of this section, a person who
413-22   advertises, solicits, or otherwise represents that the person is
413-23   willing to make a loan with a cash advance in an amount to which
413-24   Section 342.001 applies is presumed to be engaged in the business
413-25   described by Section 342.001.]
413-26         [Sec. 342.504.  CERTIFICATE; CERTIFIED DOCUMENT.  On
 414-1   application by any person and on payment of any associated cost,
 414-2   the commissioner shall furnish under the commissioner's seal and
 414-3   signed by the commissioner or an assistant of the commissioner:]
 414-4               [(1)  a certificate of good standing; or]
 414-5               [(2)  a certified copy of a license, rule, or order.]
 414-6         [Sec. 342.505.  TRANSCRIPT OF HEARING:  PUBLIC.  The
 414-7   transcript of a hearing held by the commissioner under this chapter
 414-8   is a public record.]
 414-9        [SUBCHAPTER I.  AUTHORIZED LENDER'S DUTIES AND AUTHORITY]
414-10         [Sec. 342.601.  DELIVERY OF INFORMATION TO BORROWER.
414-11   (a)  When a loan is made under this chapter, the lender shall
414-12   deliver to the borrower, or to one borrower if there is more than
414-13   one, a copy of each document signed by the borrower, including the
414-14   note or loan contract, and a written statement in English that
414-15   contains:]
414-16               [(1)  the names and addresses of the borrower and the
414-17   lender; and]
414-18               [(2)  any type of insurance for which a charge is
414-19   included in the loan contract and the charge to the borrower for
414-20   the insurance.]
414-21         [(b)  If the note or loan contract shows the information
414-22   required by Subsection (a), the written statement is not required.]
414-23         [Sec. 342.602.  RECEIPT FOR CASH PAYMENT.  A lender shall
414-24   give a receipt to a person making a cash payment on a loan.]
414-25         [Sec. 342.603.  ACCEPTANCE OF PREPAYMENT.  At any time during
414-26   regular business hours, the lender shall accept prepayment of a
 415-1   loan in full or, if the amount tendered is less than the amount
 415-2   required to prepay the loan in full, prepayment of an amount equal
 415-3   to one or more full installments.]
 415-4         [Sec. 342.604.  RETURN OF INSTRUMENTS TO BORROWER ON
 415-5   REPAYMENT.  Within a reasonable time after a loan is repaid in
 415-6   full, a lender shall cancel and return to a borrower any
 415-7   instrument, including a note, assignment, security agreement, or
 415-8   mortgage, or pledged property that:]
 415-9               [(1)  secured the loan; and]
415-10               [(2)  does not secure another indebtedness of the
415-11   borrower to the lender.]
415-12         [Sec. 342.605.  APPOINTMENT OF AGENT.  (a)  An authorized
415-13   lender shall maintain on file with the commissioner a written
415-14   appointment of a resident of this state as the lender's agent for
415-15   service of all judicial or other process or legal notice, unless
415-16   the lender has appointed an agent under another statute of this
415-17   state.]
415-18         [(b)  If an authorized lender does not comply with this
415-19   section, service of all judicial or other process or legal notice
415-20   may be made on the commissioner.]
415-21         [Sec. 342.606.  PAYMENT OF EXAMINATION COSTS AND
415-22   ADMINISTRATION EXPENSES.  An authorized lender shall pay to the
415-23   commissioner an amount assessed by the commissioner to cover the
415-24   direct and indirect cost of an examination of the lender under
415-25   Section 342.502 and a proportionate share of general administrative
415-26   expense.]
 416-1         [Sec. 342.607.  AUTHORIZED LENDER'S RECORDS.  (a)  An
 416-2   authorized lender shall maintain records relating to loans made
 416-3   under this chapter as is necessary to enable the commissioner to
 416-4   determine whether the lender is complying with this chapter.]
 416-5         [(b)  An authorized lender shall keep each record, make it
 416-6   available in this state, or, if the lender makes, transacts, or
 416-7   negotiates loans principally by mail, keep the record or make it
 416-8   available at the lender's principal place of business, until the
 416-9   later of:]
416-10               [(1)  the fourth anniversary of the date of the loan;
416-11   or]
416-12               [(2)  the second anniversary of the date on which the
416-13   final entry is made in the record.]
416-14         [(c)  Each record described by Subsection (a) must be
416-15   prepared in accordance with accepted accounting practices.]
416-16         [(d)  The commissioner shall accept a lender's system of
416-17   records if the system discloses the information reasonably required
416-18   under Subsection (a).]
416-19         [(e)  An authorized lender shall keep all obligations signed
416-20   by borrowers at an office in this state designated by the lender
416-21   unless an obligation is transferred under an agreement that gives
416-22   the commissioner access to the obligation.]
416-23         [Sec. 342.608.  ANNUAL REPORT.  (a)  Each year, not later
416-24   than April 1, or a subsequent date set by the commissioner, an
416-25   authorized lender shall file with the commissioner a report that
416-26   contains relevant information required by the commissioner
 417-1   concerning the business and operations during the preceding
 417-2   calendar year for each office of the lender in this state where
 417-3   business is conducted under this chapter.]
 417-4         [(b)  A report under this section must be:]
 417-5               [(1)  under oath; and]
 417-6               [(2)  in the form prescribed by the commissioner.]
 417-7         [(c)  A report under this section is confidential.]
 417-8         [(d)  Annually the commissioner shall prepare and publish a
 417-9   consolidated analysis and recapitulation of reports filed under
417-10   this section.]
417-11         [Sec. 342.609.  CONDUCTING ASSOCIATED BUSINESS.  An
417-12   authorized lender may conduct business under this chapter in an
417-13   office, office suite, room, or place of business in which any other
417-14   business is conducted or in combination with any other business
417-15   unless the commissioner:]
417-16               [(1)  after a hearing, finds that the lender's
417-17   conducting of the other business in that office, office suite,
417-18   room, or place of business has concealed evasions of this chapter;
417-19   and]
417-20               [(2)  orders the lender in writing to desist from that
417-21   conduct in that office, office suite, room, or place of business.]
417-22         [Sec. 342.610.  AGREEMENT FOR MORE THAN ONE LOAN OR CASH
417-23   ADVANCE.  (a)  An authorized lender and a borrower may enter an
417-24   agreement under which one or more loans or cash advances are from
417-25   time to time made to or for the account of the borrower.]
417-26         [(b)  An agreement under this section may provide for a
 418-1   maximum loan charge on the unpaid principal amounts from time to
 418-2   time outstanding at a rate that does not exceed the rate that
 418-3   produces the maximum interest charge computed under Section 342.201
 418-4   for an equivalent loan amount.]
 418-5         [(c)  An agreement under this section must be written and
 418-6   signed by the lender and borrower.]
 418-7         [(d)  An agreement under this section must contain:]
 418-8               [(1)  the date of the agreement;]
 418-9               [(2)  the name and address of each borrower; and]
418-10               [(3)  the name and address of the lender.]
418-11         [(e)  An agreement under this section must clearly set forth:]
418-12               [(1)  the insurance coverage made available to the
418-13   borrower through the lender; and]
418-14               [(2)  if the borrower is to be charged for the
418-15   insurance coverage, a simple statement of the amount of the charge
418-16   or the method by which the charge is to be computed.]
418-17         [(f)  The lender shall deliver a copy of an agreement under
418-18   this section to the borrower.]
418-19         [(g)  The commissioner shall prescribe monthly rates of
418-20   charge that produce the maximum interest charge computed under
418-21   Section 342.201 for use under Subsection (b).]
418-22            [SUBCHAPTER J.  PROHIBITIONS ON AUTHORIZED LENDER]
418-23         [Sec. 342.651.  OBLIGATION UNDER MORE THAN ONE CONTRACT.
418-24   (a)  An authorized lender may not induce or permit a person or a
418-25   husband and wife to be directly or indirectly obligated under more
418-26   than one loan contract under this chapter simultaneously for the
 419-1   purpose or with the effect of obtaining an amount of interest that
 419-2   is more than the amount of interest that is otherwise authorized
 419-3   under this chapter for a loan of that aggregate amount.]
 419-4         [(b)  Subsection (a) does not prohibit the purchase of a bona
 419-5   fide retail installment contract or revolving charge agreement of a
 419-6   borrower for the purchase of goods or services.]
 419-7         [(c)  An authorized lender who purchases all or substantially
 419-8   all of the loan contracts of another authorized lender and who at
 419-9   the time of purchase has a loan contract with a borrower whose loan
419-10   contract is purchased may collect principal and authorized charges
419-11   according to the terms of each loan contract.]
419-12         [Sec. 342.652.  AMOUNT AUTHORIZED.  (a)  An authorized lender
419-13   may not directly or indirectly charge, contract for, or receive an
419-14   amount that is not authorized under this chapter in connection with
419-15   a loan to which this chapter applies, including a fee,
419-16   compensation, bonus, commission, brokerage, discount, expense, and
419-17   any other amount, regardless of the form of the amount or whether
419-18   it is contracted for, that is received by the lender or any other
419-19   person:]
419-20               [(1)  in connection with the investigating, arranging,
419-21   negotiating, procuring, guaranteeing, making, servicing,
419-22   collecting, or enforcing of a loan;]
419-23               [(2)  for the forbearance of money, credit, goods, or
419-24   things in action; or]
419-25               [(3)  for any other service performed or offered.]
419-26         [(b)  Subsection (a) does not apply to  an amount incurred by
 420-1   the lender for:]
 420-2               [(1)  court costs;]
 420-3               [(2)  attorney's fees assessed by a court;]
 420-4               [(3)  a fee authorized by law for filing, recording, or
 420-5   releasing in a public office a security for a loan;]
 420-6               [(4)  a reasonable amount spent for repossessing,
 420-7   storing, preparing for sale, or selling any security;]
 420-8               [(5)  a fee for recording a lien on or transferring a
 420-9   certificate of title to a motor vehicle offered as security for a
420-10   loan made under this chapter; or]
420-11               [(6)  a premium or an identifiable charge received in
420-12   connection with the sale of insurance authorized under this
420-13   chapter.]
420-14         [Sec. 342.653.  SECURITY FOR LOAN.  (a)  An authorized lender
420-15   may not take as security for a loan made under this chapter:]
420-16               [(1)  an assignment of wages; or]
420-17               [(2)  a lien on real property other than a lien created
420-18   by law on the recording of an abstract of judgment.]
420-19         [(b)  An authorized lender may take as security for a loan
420-20   made under this chapter an assignment of:]
420-21               [(1)  a warrant drawn against a state fund; or]
420-22               [(2)  a claim against a state fund or a state agency.]
420-23         [Sec. 342.654.  CONFESSION OF JUDGMENT; POWER OF ATTORNEY.
420-24   An authorized lender may not take a confession of judgment or a
420-25   power of attorney under which the lender or a third person is
420-26   authorized to confess judgment or to appear for a borrower in a
 421-1   judicial proceeding.]
 421-2         [Sec. 342.655.  DISCLOSURE OF AMOUNT FINANCED AND SCHEDULE OF
 421-3   PAYMENTS.  An authorized lender may not take a promise to pay or
 421-4   loan obligation that does not disclose the amount financed and the
 421-5   schedule of payments.]
 421-6         [Sec. 342.656.  INSTRUMENT WITH BLANK PROHIBITED.  Except as
 421-7   specifically provided by Section 342.610, an authorized lender may
 421-8   not take an instrument that contains blank spaces.]
 421-9         [Sec. 342.657.  WAIVER OF BORROWER'S RIGHT PROHIBITED.  An
421-10   authorized lender may not take an instrument in which a borrower
421-11   waives any right accruing to the borrower under this chapter.]
421-12         [Sec. 342.658.  MAXIMUM LOAN TERM.  An authorized lender may
421-13   not enter a loan contract under this chapter under which the
421-14   borrower agrees to make a scheduled payment of principal more than:]
421-15               [(1)  37 calendar months after the date on which the
421-16   contract is made, if the contract is for a cash advance of $1,500
421-17   or less;]
421-18               [(2)  49 calendar months after the date on which the
421-19   contract is made, if the contract is for a cash advance of more
421-20   than $1,500 but not more than $3,000; or]
421-21               [(3)  60 months after the date on which the contract is
421-22   made, if the contract is for a cash advance of more than $3,000.]
421-23         (b)  Section 2, Chapter 1396, and Section 2, Chapter 164,
421-24   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
421-25         SECTION 7.20.  (a)  Chapters 343 and 344, Finance Code, are
421-26   repealed to conform to Section 48, Chapter 1396, Acts of the 75th
 422-1   Legislature, Regular Session, 1997.
 422-2         (b)  Section 48, Chapter 1396, Acts of the 75th Legislature,
 422-3   Regular Session, 1997, is repealed.
 422-4         SECTION 7.21.  (a)  Section 347.301(b), Finance Code, is
 422-5   amended to conform to Section 17, Chapter 791, Acts of the 75th
 422-6   Legislature, Regular Session, 1997, to read as follows:
 422-7         (b)  Only a fee or tax that is paid by the creditor as
 422-8   required by law, including a rule, or a fee or tax paid on behalf
 422-9   of the consumer to a governmental entity in relation to the credit
422-10   transaction may be charged to the consumer.
422-11         (b)  Section 17, Chapter 791, Acts of the 75th Legislature,
422-12   Regular Session, 1997, is repealed.
422-13         SECTION 7.22.  (a)  Section 348.123, Finance Code, is amended
422-14   to conform to Section 36, Chapter 639, Acts of the 75th
422-15   Legislature, Regular Session, 1997, by amending Subsection (b) and
422-16   adding Subsection (c) to read as follows:
422-17         (b)  This section does not apply to:
422-18               (1)  a lease;
422-19               (2)  a retail installment transaction for a vehicle
422-20   that is to be used primarily for a purpose other than personal,
422-21   family, or household use;
422-22               (3)  a transaction for which the payment schedule is
422-23   adjusted to the seasonal or irregular income or scheduled payments
422-24   or obligations of the buyer; [or]
422-25               (4)  a transaction of a type that the commissioner
422-26   determines does not require the protection for the buyer provided
 423-1   by this section; or
 423-2               (5)  a retail installment transaction in which:
 423-3                     (A)  the seller is a franchised dealer licensed
 423-4   under the Texas Motor Vehicle Commission Code (Article 4413(36),
 423-5   Vernon's Texas Civil Statutes); and
 423-6                     (B)  the buyer is entitled, at the end of the
 423-7   term of the retail installment contract, to choose one of the
 423-8   following:
 423-9                           (i)  sell the vehicle back to the holder
423-10   according to a written agreement:
423-11                                          (a)  entered into between
423-12   the buyer and holder concurrently with or as a part of the
423-13   transaction; and
423-14                                          (b)  under which the buyer
423-15   will be released from liability or obligation for the final
423-16   scheduled payment under the contract on compliance with the
423-17   agreement;
423-18                           (ii)  pay the final scheduled payment under
423-19   the contract; or
423-20                           (iii)  if the buyer is not in default under
423-21   the contract, refinance the final scheduled payment with the holder
423-22   for repayment in not fewer than 24 equal monthly installments or on
423-23   other terms agreed to by the buyer and holder at the time of
423-24   refinancing and at a rate of time price differential not to exceed
423-25   the lesser of:
423-26                                          (a)  a rate equal to the
 424-1   maximum rate authorized under this subchapter; or
 424-2                                          (b)  an annual percentage
 424-3   rate of five percent a year more than the annual percentage rate of
 424-4   the original contract.
 424-5         (c)  A retail installment contract under Subsection (b)(5)
 424-6   must disclose that any refinancing may be for any period and
 424-7   payment schedule to which the buyer and holder agree.
 424-8         (b)  Section 36, Chapter 639, Acts of the 75th Legislature,
 424-9   Regular Session, 1997, is repealed.
424-10         SECTION 7.23.  Chapter 50, Title 79, Revised Statutes
424-11   (Article 5069-50.01 et seq., Vernon's Texas Civil Statutes), is
424-12   repealed to conform to Chapter 1008, Acts of the 75th Legislature,
424-13   Regular Session, 1997.
424-14         SECTION 7.24.  (a)  Section 349.001, Finance Code, is amended
424-15   to conform to Section 19, Chapter 1396, Acts of the 75th
424-16   Legislature, Regular Session, 1997, to read as follows:
424-17         Sec. 349.001.  LIABILITY FOR CONTRACTING FOR, CHARGING, OR
424-18   RECEIVING EXCESSIVE AMOUNT.  (a)  A person who violates this
424-19   subtitle by contracting for, charging, or receiving interest or[,]
424-20   time price differential[, or other charges] greater than the amount
424-21   authorized by this subtitle is liable to the obligor for an amount
424-22   equal to:
424-23               (1)  twice the amount of the interest or time price
424-24   differential [and default and deferment charges] contracted for,
424-25   charged, or received; and
424-26               (2)  reasonable attorney's fees set by the court.
 425-1         (b)  A person who violates this subtitle by contracting for,
 425-2   charging, or receiving a charge, other than interest or time price
 425-3   differential, greater than the amount authorized by this subtitle
 425-4   is liable to the obligor for an amount equal to:
 425-5               (1)  the greater of:
 425-6                     (A)  three times the amount computed by
 425-7   subtracting the amount of the charge authorized by this subtitle
 425-8   from the amount of the charge contracted for, charged, or received;
 425-9   or
425-10                     (B)  $2,000 or 20 percent of the amount of the
425-11   principal balance, whichever is less; and
425-12               (2)  reasonable attorney's fees set by the court.
425-13         (b)  Section 19, Chapter 1396, Acts of the 75th Legislature,
425-14   Regular Session, 1997, is repealed.
425-15         SECTION 7.25.  (a)  Section 349.002(a), Finance Code, is
425-16   amended to conform to Section 21, Chapter 1396, Acts of the 75th
425-17   Legislature, Regular Session, 1997, to read as follows:
425-18         (a)  A person who violates this subtitle by contracting for,
425-19   charging, or receiving interest or[,] time price differential[, or
425-20   other charges] that in an aggregate amount exceeds [exceed] twice
425-21   the total amount of interest or[,] time price differential[, and
425-22   other charges] authorized by this subtitle is liable to the obligor
425-23   as an additional penalty for all principal or principal balance, as
425-24   well as all interest or time price differential [and all other
425-25   charges].
425-26         (b)  Section 21, Chapter 1396, Acts of the 75th Legislature,
 426-1   Regular Session, 1997, is repealed.
 426-2                PART 4.  CODIFICATION OF CERTAIN ARTICLES
 426-3         SECTION 7.26.  (a)  Subtitle Z, Title 3, Finance Code, is
 426-4   amended to codify Chapter 71, Acts of the 66th Legislature, Regular
 426-5   Session, 1979 (Article 1528i, Vernon's Texas Civil Statutes), by
 426-6   adding Chapter 275 to read as follows:
 426-7         CHAPTER 275.  TEXAS MUTUAL TRUST INVESTMENT COMPANY ACT
 426-8                    SUBCHAPTER A.  GENERAL PROVISIONS
 426-9         Sec. 275.001.  SHORT TITLE.  This chapter may be cited as the
426-10   Texas Mutual Trust Investment Company Act.
426-11         Sec. 275.002.  DEFINITIONS.  In this chapter:
426-12               (1)  "Fiduciary institution" means a:
426-13                     (A)  state bank with trust powers;
426-14                     (B)  national bank with trust powers; or
426-15                     (C)  trust company.
426-16               (2)  "Stock" means a unit of participation in the net
426-17   asset value of one or more of the investment funds of a mutual
426-18   trust investment company.
426-19         Sec. 275.003.  APPLICATION OF GENERAL CORPORATION LAW.
426-20   Except as provided by this chapter, a mutual trust investment
426-21   company must be incorporated under and is subject to the general
426-22   corporation laws of this state.
426-23         Sec. 275.004.  INVESTMENT OF CORPORATION ASSETS.  A mutual
426-24   trust investment company may invest its assets only in investments
426-25   in which a trustee may invest under the laws of this state.
426-26            (Sections 275.005-275.050 reserved for expansion
 427-1       SUBCHAPTER B.  CREATION OF MUTUAL TRUST INVESTMENT COMPANY
 427-2         Sec. 275.051.  CREATION OF MUTUAL TRUST INVESTMENT COMPANY.
 427-3   (a)  One or more fiduciary institutions may incorporate a mutual
 427-4   trust investment company as provided by this chapter to be a medium
 427-5   for the common investment of trust funds held in a fiduciary
 427-6   capacity for fiduciary purposes, by those entities alone or with
 427-7   one or more cofiduciaries.
 427-8         (b)  A mutual trust investment company must be an open-end
 427-9   investment company as defined by, and must be subject to, the
427-10   Investment Company Act of 1940 (15 U.S.C. Section 80a-1 et seq.).
427-11         Sec. 275.052.  INCORPORATORS.  (a)  To incorporate, a mutual
427-12   trust investment company must have five or more persons subscribe
427-13   and acknowledge the company's articles of incorporation.
427-14         (b)  A person subscribing and acknowledging the articles of
427-15   incorporation of a mutual trust investment company must be an
427-16   officer or director of a fiduciary institution causing the mutual
427-17   trust investment company to be incorporated.
427-18         Sec. 275.053.  CONTENTS OF ARTICLES OF INCORPORATION.  In
427-19   addition to the information required by the general corporation
427-20   laws, the articles of incorporation shall state:
427-21               (1)  the name of each fiduciary institution causing the
427-22   corporation to be incorporated; and
427-23               (2)  the amount of stock originally subscribed for by
427-24   each fiduciary institution.
427-25            (Sections 275.054-275.100 reserved for expansion
 428-1                SUBCHAPTER C.  ADMINISTRATIVE PROVISIONS
 428-2         Sec. 275.101.  DIRECTORS.  (a)  Except as provided by
 428-3   Subsection (b), a mutual trust investment company must have at
 428-4   least five directors, each of whom is not required to be a
 428-5   stockholder but must be an officer or director of a bank or trust
 428-6   company that is located in this state.
 428-7         (b)  An officer or director of a bank or trust company not
 428-8   located in this state may serve as a director of a mutual trust
 428-9   investment company only if that officer's or director's bank or
428-10   trust company owns stock in a fiduciary capacity in the mutual
428-11   trust investment company.
428-12         Sec. 275.102.  AUDITS AND REPORTS.  (a)  At least once each
428-13   year, a mutual trust investment company shall cause an adequate
428-14   audit to be made of the company by auditors responsible only to the
428-15   board of directors of the company.
428-16         (b)  A mutual trust investment company shall furnish annually
428-17   a copy of the company's audited financial statement to each
428-18   corporate fiduciary owning stock in the company.
428-19         (c)  The mutual trust investment company shall pay the:
428-20               (1)  reasonable expenses of an audit required by this
428-21   section made by an independent public accountant or certified
428-22   public accountant; and
428-23               (2)  costs of preparing and distributing a report
428-24   required by this section.
428-25            (Sections 275.103-275.150 reserved for expansion
 429-1          SUBCHAPTER D.  MUTUAL TRUST INVESTMENT COMPANY STOCK
 429-2         Sec. 275.151.  OWNERSHIP.  The stock of a mutual trust
 429-3   investment company may be owned only by fiduciary institutions
 429-4   acting as fiduciaries and any of their cofiduciaries.
 429-5         Sec. 275.152.  REGISTRATION.  The stock of a mutual trust
 429-6   investment company may be registered in the name of one or more
 429-7   nominees of the owner of the stock.
 429-8         Sec. 275.153.  TRANSFER AND ASSIGNMENT.  The stock of a
 429-9   mutual trust investment company may not be transferred except to:
429-10               (1)  the mutual trust investment company; or
429-11               (2)  a fiduciary or cofiduciary that becomes successor
429-12   to a stockholder and that is a bank or trust company qualified to
429-13   hold the stock under this chapter.
429-14         Sec. 275.154.  OWNERSHIP BY MUTUAL TRUST INVESTMENT COMPANY.
429-15   A mutual trust investment company may acquire its own stock and
429-16   shall bind itself, by contract or its bylaws, to acquire its own
429-17   stock, but may not vote on shares of its own stock.
429-18            (Sections 275.155-275.200 reserved for expansion
429-19      SUBCHAPTER E.  INVESTMENT IN MUTUAL TRUST INVESTMENT COMPANY
429-20         Sec. 275.201.  PURCHASE BY FIDUCIARY; AUTHORITY AND
429-21   RESTRICTIONS.  A fiduciary institution, alone or with one or more
429-22   cofiduciaries, acting as a fiduciary for fiduciary purposes with
429-23   the consent of any cofiduciaries, may invest and reinvest funds
429-24   held in a fiduciary capacity, exercising the care of a prudent
429-25   investor, in the shares of stock of a mutual trust investment
429-26   company unless a will, trust indenture, or other instrument under
 430-1   which the fiduciary is acting prohibits that investment.
 430-2         Sec. 275.202.  RESPONSIBILITY OF MUTUAL TRUST INVESTMENT
 430-3   COMPANY.  (a)  A mutual trust investment company is not:
 430-4               (1)  required to determine the investment powers of a
 430-5   fiduciary that purchases its stock; or
 430-6               (2)  liable for accepting funds from a fiduciary in
 430-7   violation of the restrictions of a will, trust indenture, or other
 430-8   instrument under which the fiduciary is acting in the absence of
 430-9   actual knowledge of the violation.
430-10         (b)  A mutual trust investment company is:
430-11               (1)  accountable only to a fiduciary who is an owner of
430-12   its stock; and
430-13               (2)  permitted to rely on the written statement of any
430-14   bank or trust company purchasing its stock that the purchase
430-15   complies with Section 275.201.
430-16         (b)  Chapter 71, Acts of the 66th Legislature, Regular
430-17   Session, 1979 (Article 1528i, Vernon's Texas Civil Statutes), is
430-18   repealed.
430-19         SECTION 7.27.  (a)  Subtitle Z, Title 3, Finance Code, is
430-20   amended to codify Article 360, Revised Statutes, by adding Chapter
430-21   276 to read as follows:
430-22              CHAPTER 276.  FINANCIAL INSTITUTION ACCOUNTS
430-23         Sec. 276.001.  ACCOUNTS FOR CANDIDATES FOR PUBLIC OFFICE.
430-24   (a)  A financial institution may not open an account in the name of
430-25   a candidate without obtaining that candidate's consent and
430-26   signature.  This subsection does not require that the candidate be
 431-1   a signatory to the account.
 431-2         (b)  In this section:
 431-3               (1)  "Candidate" has the meaning assigned by Section
 431-4   251.001, Election Code.
 431-5               (2)  "Financial institution" means a bank, savings and
 431-6   loan association, savings bank, or credit union.
 431-7         (b)  Article 360, Revised Statutes, is repealed.
 431-8         SECTION 7.28.  (a)  Title 5, Finance Code, is amended to
 431-9   codify Article 352, Revised Statutes, by adding Chapter 395 to read
431-10   as follows:
431-11             CHAPTER 395.  COMMUNITY REINVESTMENT WORK GROUP
431-12                SUBCHAPTER A.  COMPOSITION AND OPERATION
431-13         Sec. 395.001.  COMPOSITION.  The community reinvestment work
431-14   group is composed of:
431-15               (1)  a representative of the comptroller's office,
431-16   appointed by the comptroller;
431-17               (2)  a representative of the Texas Department of
431-18   Housing and Community Affairs, appointed by the executive director
431-19   of that department;
431-20               (3)  a representative of the Texas Department of
431-21   Economic Development, appointed by the executive director of that
431-22   department;
431-23               (4)  a representative of the Texas Department of
431-24   Banking, appointed by the banking commissioner of Texas; and
431-25               (5)  a representative of the Texas Department of
431-26   Insurance, appointed by the commissioner of insurance.
 432-1         Sec. 395.002.  OFFICERS.  The representative of the
 432-2   comptroller's office serves as presiding officer of the work group.
 432-3   The members of the work group  may elect other necessary officers.
 432-4         Sec. 395.003.  MEETINGS.  The work group shall meet quarterly
 432-5   and may meet more often at the call of the presiding officer.
 432-6         Sec. 395.004.  TERM OF OFFICE; REMOVAL.  A member of the work
 432-7   group serves a two-year term  and may be removed for any reason by
 432-8   the appointing authority.
 432-9         Sec. 395.005.  EXPENSES; COMPENSATION.  The appointing
432-10   authority is responsible for the expenses of a member's service on
432-11   the work group.  A member of the work group receives no additional
432-12   compensation for serving on the work group.
432-13            (Sections 395.006-395.100 reserved for expansion
432-14                          SUBCHAPTER B.  DUTIES
432-15         Sec. 395.101.  GENERAL DUTIES.  The work group shall work in
432-16   conjunction with the banking community in this state to:
432-17               (1)  develop statewide community reinvestment
432-18   strategies using existing investment pools and other  investment
432-19   vehicles to leverage private capital from banks, insurance
432-20   companies, and other entities for community development in the
432-21   state;
432-22               (2)  consult and coordinate with representatives from
432-23   appropriate federal regulatory agencies, including the Office of
432-24   the Comptroller of the Currency, the Federal Reserve Board of
432-25   Governors, the Federal Deposit Insurance Corporation, and the
432-26   Office of Thrift Supervision; and
 433-1               (3)  monitor and evaluate the strategies developed
 433-2   under this section.
 433-3         Sec. 395.102.  DEVELOPING STRATEGIES.  In developing the
 433-4   strategies required by Section 395.101, the work group shall:
 433-5               (1)  explore innovative qualified investment
 433-6   strategies;
 433-7               (2)  ensure to the extent possible that the strategies
 433-8   encourage financial institutions in this state to lend money to
 433-9   low-income and moderate-income families and individuals in the
433-10   state;
433-11               (3)  coordinate its efforts to attract private capital
433-12   through investments that meet the requirements of the Community
433-13   Reinvestment Act of 1977 (12 U.S.C. Section 2901 et seq.); and
433-14               (4)  ensure to the extent possible that the strategies
433-15   augment existing Community Reinvestment Act of 1977 programs in the
433-16   state, including the operation of local community development
433-17   corporations.
433-18         Sec. 395.103.  REPORT TO LEGISLATURE.  Each biennium the work
433-19   group shall submit to the legislature a written report on the
433-20   effectiveness of the strategies the work group is required to
433-21   develop under this chapter.
433-22         (b)  Article 352, Revised Statutes, is repealed.
433-23             PART 5.  OTHER CHANGES RELATING TO FINANCE CODE
433-24         SECTION 7.29.  Section 14.251, Finance Code, is amended to
433-25   more accurately reflect the source law from which it was derived to
433-26   read as follows:
 434-1         Sec. 14.251.  ASSESSMENT OF PENALTY; RESTITUTION ORDER.
 434-2   (a)  The commissioner may assess an administrative penalty against
 434-3   a person who knowingly and wilfully violates or causes a violation
 434-4   of this chapter, [subtitle or] Chapter 394, or Subtitle B, Title 4,
 434-5   or a rule adopted under this chapter, [subtitle or] Chapter 394, or
 434-6   Subtitle B, Title 4.
 434-7         (b)  The commissioner may order a person who violates or
 434-8   causes a violation of this chapter, [subtitle or] Chapter 394, or
 434-9   Subtitle B, Title 4, or a rule adopted under this chapter,
434-10   [subtitle or] Chapter 394, or Subtitle B, Title 4, to make
434-11   restitution to an identifiable person injured by the violation.
434-12         SECTION 7.30.  Section 59.107(a), Finance Code, is amended to
434-13   more accurately reflect the source law from which it was derived to
434-14   read as follows:
434-15         (a)  A safe deposit company may not relocate a safe deposit
434-16   box rented for a term of at least six months if the box rental is
434-17   not delinquent or [.  A safe deposit company may not] open a safe
434-18   deposit box to relocate its contents to another safe deposit box or
434-19   other location except:
434-20               (1)  in the presence of the lessee;
434-21               (2)  with the lessee's written authorization; or
434-22               (3)  as otherwise provided by this section or Section
434-23   59.108.
434-24         SECTION 7.31.  (a)  Subchapter A, Chapter 89, Finance Code,
434-25   is amended to conform to Section 4, Chapter 994, Acts of the 75th
434-26   Legislature, Regular Session, 1997, by adding Section 89.008 to
 435-1   read as follows:
 435-2         Sec. 89.008.  OFFICES OF FEDERAL ASSOCIATIONS.  A federal
 435-3   association that has been merged, consolidated, or converted into a
 435-4   domestic or foreign savings bank or association is entitled to
 435-5   retain any authorized office under the terms provided for a foreign
 435-6   savings bank under Subchapter I, Chapter 92.
 435-7         (b)  Section 4, Chapter 994, Acts of the 75th Legislature,
 435-8   Regular Session, 1997, is repealed.
 435-9         SECTION 7.32.  (a)  Section 91.002(12), Finance Code, is
435-10   amended to conform to Section 1, Chapter 994, Acts of the 75th
435-11   Legislature, Regular Session, 1997, to read as follows:
435-12               (12)  "Federal savings bank" means a savings bank
435-13   incorporated under the laws of the United States[, the principal
435-14   business office of which is located in this state].
435-15         (b)  Section 1, Chapter 994, Acts of the 75th Legislature,
435-16   Regular Session, 1997, is repealed.
435-17         SECTION 7.33.  (a)  Section 92.152(b), Finance Code, is
435-18   amended to conform to Section 1, Chapter 993, Acts of the 75th
435-19   Legislature, Regular Session, 1997, to read as follows:
435-20         (b)  The members or shareholders shall elect the board by a
435-21   majority vote at the [each] annual meeting.  The directors may be
435-22   elected for staggered terms of longer than one year as provided by
435-23   the savings bank's bylaws or articles of incorporation.
435-24         (b)  Section 1, Chapter 993, Acts of the 75th Legislature,
435-25   Regular Session, 1997, is repealed.
435-26         SECTION 7.34.  (a)  Section 92.204, Finance Code, is amended
 436-1   to conform to Section 1, Chapter 995, Acts of the 75th Legislature,
 436-2   Regular Session, 1997, to read as follows:
 436-3         Sec. 92.204.  QUALIFICATION UNDER [INTERNAL REVENUE CODE]
 436-4   ASSET TEST OR QUALIFIED THRIFT LENDER TEST.  (a)  A savings bank
 436-5   must qualify under and continue to meet:
 436-6               (1)  the asset test of Section 7701(a)(19), Internal
 436-7   Revenue Code of 1986 (26 U.S.C. Section 7701(a)(19)); or
 436-8               (2)  the qualified thrift lender test of Section 10(m),
 436-9   Home Owners' Loan Act (12 U.S.C. Section 1467a(m)).
436-10         (b)  The commissioner may grant temporary or limited
436-11   exceptions to the requirements of this section as the commissioner
436-12   considers necessary.
436-13         (b)  Section 1, Chapter 995, Acts of the 75th Legislature,
436-14   Regular Session, 1997, is repealed.
436-15         SECTION 7.35.  (a)  Subchapter A, Chapter 98, Finance Code,
436-16   is amended to conform to Section 2, Chapter 994, Acts of the 75th
436-17   Legislature, Regular Session, 1997, by adding Section 98.005 to
436-18   read as follows:
436-19         Sec. 98.005.  AUTHORIZATION TO RETAIN OFFICES.  A federal
436-20   savings bank that has been merged, consolidated, or converted into
436-21   a domestic or foreign savings bank or association is entitled to
436-22   retain any authorized office under the terms provided for a foreign
436-23   savings bank under Subchapter I, Chapter 92.
436-24         (b)  Section 2, Chapter 994, Acts of the 75th Legislature,
436-25   Regular Session, 1997, is repealed.
436-26         SECTION 7.36.  Section 126.254, Finance Code, is amended to
 437-1   correct a typographical error to read as follows:
 437-2         Sec. 126.254.  POSSESSION, CONSOLIDATION, AND DISPOSITION OF
 437-3   ASSETS.  The liquidating agent shall:
 437-4               (1)  receive and take possession of the books, records,
 437-5   assets, and property of the credit union;
 437-6               (2)  [. . .] sell, enforce collection of, and liquidate
 437-7   assets and property; and
 437-8               (3)  sell or assign assets to the liquidating agent
 437-9   subject to Section 126.353.
437-10         SECTION 7.37.  (a)  Section 152.201, Finance Code, is amended
437-11   to conform to Section 1, Chapter 395, Acts of the 75th Legislature,
437-12   Regular Session, 1997, to read as follows:
437-13         Sec. 152.201.  LICENSE REQUIRED.  Except as provided by
437-14   Section 152.202, a person [engaged in the business of selling
437-15   checks, as a service or for consideration,] must hold a license
437-16   issued under this chapter to:
437-17               (1)  engage in the business of selling checks, as a
437-18   service or for consideration; or
437-19               (2)  maintain, use, or otherwise control an account in
437-20   this state for the purpose of engaging in the business of selling
437-21   checks.
437-22         (b)  Section 1, Chapter 395, Acts of the 75th Legislature,
437-23   Regular Session, 1997, is repealed.
437-24         SECTION 7.38.  Section 152.301(a), Finance Code, is amended
437-25   to more accurately reflect the source law from which it was derived
437-26   to read as follows:
 438-1         (a)  A license holder shall maintain at all times while the
 438-2   license is in effect:
 438-3               (1)  a surety bond or deposit in the amount prescribed
 438-4   by Section 152.206 or 152.207;
 438-5               (2)  a net worth of not less than the amount prescribed
 438-6   by Section 152.203; and
 438-7               (3)  a surety bond or letter of credit, or have on hand
 438-8   permissible investments, in an amount equal to:
 438-9                     (A)  the aggregate face amount of all outstanding
438-10   checks sold in the United States for which the license holder is
438-11   liable for payment, less the amount of the surety bond or deposit
438-12   maintained under Section 152.206 or 152.207, if the license holder
438-13   has a net worth of less than $5 million; or
438-14                     (B)  at least 50 percent of the amount required
438-15   by Paragraph (A) [Subdivision (1)] if the license holder has a net
438-16   worth of at least $5 million.
438-17         SECTION 7.39.  Section 153.117(a), Finance Code, is amended
438-18   to more accurately reflect the source law from which it was derived
438-19   to read as follows:
438-20         (a)  The following persons are not required to be licensed
438-21   under this chapter:
438-22               (1)  a bank, foreign bank agency, credit union, savings
438-23   bank, or savings and loan association, whether organized under the
438-24   laws of this state or of the United States;
438-25               (2)  a license holder under Chapter 152, except that
438-26   the license holder is required to comply with the other provisions
 439-1   of this chapter to the extent [unless] the license holder engages
 439-2   in currency exchange, transportation, or transmission transactions;
 439-3   or
 439-4               (3)  a person registered as a securities dealer under
 439-5   The Securities Act (Article 581-1 et seq., Vernon's Texas Civil
 439-6   Statutes).
 439-7         SECTION 7.40.  (a)  Section 154.002, Finance Code, is amended
 439-8   to conform to Section 1, Chapter 1389, Acts of the 75th
 439-9   Legislature, Regular Session, 1997, by amending Subdivision (8) and
439-10   adding Subdivisions (10), (11), and (12) to read as follows:
439-11               (8)  "Prepaid funeral benefits" means prearranged or
439-12   prepaid funeral or cemetery services or funeral merchandise,
439-13   including an alternative container, casket, or outer burial
439-14   container [a casket, grave vault, or other article of merchandise
439-15   incidental to a funeral service].  The term does not include a
439-16   grave, [lot, grave space, grave] marker, monument, tombstone,
439-17   crypt, niche, plot, or lawn crypt [mausoleum] unless it is sold in
439-18   contemplation of trade for a funeral service or funeral merchandise
439-19   to which this chapter applies.
439-20               (10)  "Crypt," "grave," "lawn crypt," "niche," and
439-21   "plot" have the meanings assigned by Section 711.001, Health and
439-22   Safety Code.
439-23               (11)  "Funeral merchandise" or "merchandise" means
439-24   goods sold or offered for sale on a preneed basis directly to the
439-25   public for use in connection with funeral services.
439-26               (12)  "Funeral service" or "service" means a service
 440-1   sold or offered for sale on a preneed basis that may be used to:
 440-2                     (A)  care for and prepare a deceased human body
 440-3   for burial, cremation, or other final disposition; and
 440-4                     (B)  arrange, supervise, or conduct a funeral
 440-5   ceremony or the final disposition of a deceased human body.
 440-6         (b)  Section 1, Chapter 1389, Acts of the 75th Legislature,
 440-7   Regular Session, 1997, is repealed.
 440-8         SECTION 7.41.  (a)  Section 154.258, Finance Code, is amended
 440-9   to conform to Section 2, Chapter 1389, Acts of the 75th
440-10   Legislature, Regular Session, 1997, by adding Subsection (e) to
440-11   read as follows:
440-12         (e)  The commissioner may waive a limitation provided by
440-13   Subsection (b), (c), or (d), on written request of a permit holder,
440-14   if the commissioner concludes that the waiver does not threaten an
440-15   unreasonable risk of loss to the prepaid funeral benefits trust
440-16   funds.  The commissioner by order shall approve or disapprove the
440-17   request not later than the 60th day after the date the commissioner
440-18   receives the request.  If the commissioner does not disapprove the
440-19   request before the expiration of that period, the request is
440-20   approved.  If the permit holder does not request a hearing before
440-21   the 11th day after the date of an order of disapproval, the order
440-22   takes effect on that 11th day.  If a hearing is timely requested,
440-23   the hearing shall be conducted as a contested case under Chapter
440-24   2001, Government Code.
440-25         (b)  Section 2, Chapter 1389, Acts of the 75th Legislature,
440-26   Regular Session, 1997, is repealed.
 441-1         SECTION 7.42.  Section 392.001(7), Finance Code, is amended
 441-2   to more accurately reflect the source law from which it was derived
 441-3   to read as follows:
 441-4               (7)  "Third-party debt collector" means a debt
 441-5   collector, as defined by 15 U.S.C. Section 1692a(6), but does not
 441-6   include [includes] an attorney collecting a debt as an attorney on
 441-7   behalf of and in the name of a client unless [if] the attorney has
 441-8   nonattorney employees who:
 441-9                     (A)  are regularly engaged to solicit debts for
441-10   collection; or
441-11                     (B)  regularly make contact with debtors for the
441-12   purpose of collection or adjustment of debts.
441-13         SECTION 7.43.  (a)  Section 393.302, Finance Code, is amended
441-14   to conform to Section 1, Chapter 576, Acts of the 75th Legislature,
441-15   Regular Session, 1997, to read as follows:
441-16         Sec. 393.302.  CHARGE OR RECEIPT OF CONSIDERATION BEFORE
441-17   COMPLETION OF SERVICES.  A credit services organization or a
441-18   representative of the organization may charge or receive from a
441-19   consumer valuable consideration before completely performing all
441-20   the services the organization has agreed to perform for the
441-21   consumer only if the organization has obtained a surety bond for
441-22   each of its locations or established and maintained a surety
441-23   account for each of its locations in accordance with Subchapter E.
441-24         (b)  Section 1, Chapter 576, Acts of the 75th Legislature,
441-25   Regular Session, 1997, is repealed.
441-26         SECTION 7.44.  (a)  Section 393.101, Finance Code, is amended
 442-1   to conform to Section 2, Chapter 576, Acts of the 75th Legislature,
 442-2   Regular Session, 1997, by adding Subsection (d) to read as follows:
 442-3         (d)  A registration certificate expires on the first
 442-4   anniversary of its date of issuance.  A registered credit services
 442-5   organization may renew a registration certificate by filing a
 442-6   renewal application, in the form prescribed by the secretary of
 442-7   state, and paying the renewal fee.
 442-8         (b)  Section 393.104, Finance Code, is amended to conform to
 442-9   Section 2, Chapter 576, Acts of the 75th Legislature, Regular
442-10   Session, 1997, to read as follows:
442-11         Sec. 393.104.  FILING FEE.  The secretary of state may charge
442-12   a credit services organization a reasonable fee to cover the cost
442-13   of filing a [the] registration statement or renewal application in
442-14   an amount not to exceed $100.
442-15         (c)  Section 2, Chapter 576, Acts of the 75th Legislature,
442-16   Regular Session, 1997, is repealed.
442-17                    PART 6.  CROSS-REFERENCE CHANGES
442-18         SECTION 7.45.  Section 3.112(b), Business & Commerce Code, is
442-19   amended to conform to Chapter 1008, Acts of the 75th Legislature,
442-20   Regular Session, 1997, to read as follows:
442-21         (b)  Interest may be stated in an instrument as a fixed or
442-22   variable amount of money or it may be expressed as a fixed or
442-23   variable rate or rates.  The amount or rate of interest may be
442-24   stated or described in the instrument in any manner and may require
442-25   reference to information not contained in the instrument.  If an
442-26   instrument provides for interest, but the amount of interest
 443-1   payable cannot be ascertained from the description, interest is
 443-2   payable at the judgment rate in effect at the place of payment of
 443-3   the instrument and at the time interest first accrues, and the
 443-4   instrument shall not by virtue of this sentence be considered to
 443-5   violate the provisions of Title 4, Finance Code [79, Revised
 443-6   Statutes (Article 5069-1.01 et seq., Vernon's Texas Civil
 443-7   Statutes)].
 443-8         SECTION 7.46.  Section 9.203(e), Business & Commerce Code, is
 443-9   amended to conform to Chapter 1008, Acts of the 75th Legislature,
443-10   Regular Session, 1997, to read as follows:
443-11         (e)  A transaction, although subject to this chapter, is also
443-12   subject to Title 4, Finance Code [79, Revised Statutes], and in the
443-13   case of conflict between the provisions of this Chapter and any
443-14   such statute, the provisions of such statute control.  Failure to
443-15   comply with any applicable statute has only the effect which is
443-16   specified therein.
443-17         SECTION 7.47.  Section 26.02(a)(2), Business & Commerce Code,
443-18   is amended to conform to Chapter 1008, Acts of the 75th
443-19   Legislature, Regular Session, 1997, to read as follows:
443-20               (2)  "Loan agreement" means one or more promises,
443-21   promissory notes, agreements, undertakings, security agreements,
443-22   deeds of trust or other documents, or commitments, or any
443-23   combination of those actions or documents, pursuant to which a
443-24   financial institution loans or delays repayment of or agrees to
443-25   loan or delay repayment of money, goods, or another thing of value
443-26   or to otherwise extend credit or make a financial accommodation.
 444-1   The term does not include a promise, promissory note, agreement,
 444-2   undertaking, document, or commitment relating to:
 444-3                     (A)  a credit card or charge card; or
 444-4                     (B)  an open-end account, as that term is defined
 444-5   by Section 301.002, Finance Code [Article 1B.002, Title 79, Revised
 444-6   Statutes], intended or used primarily for personal, family, or
 444-7   household use.
 444-8         SECTION 7.48.  Article 59.01(2), Code of Criminal Procedure,
 444-9   is amended to conform to Chapter 1008, Acts of the 75th
444-10   Legislature, Regular Session, 1997, to read as follows:
444-11               (2)  "Contraband" means property of any nature,
444-12   including real, personal, tangible, or intangible, that is:
444-13                     (A)  used in the commission of:
444-14                           (i)  any first or second degree felony
444-15   under the Penal Code;
444-16                           (ii)  any felony under Section 38.04 or
444-17   Chapters 29, 30, 31, 32, 33, 33A, or 35, Penal Code; or
444-18                           (iii)  any felony under The Securities Act
444-19   (Article 581-1 et seq., Vernon's Texas Civil Statutes);
444-20                     (B)  used or intended to be used in the
444-21   commission of:
444-22                           (i)  any felony under Chapter 481, Health
444-23   and Safety Code (Texas Controlled Substances Act);
444-24                           (ii)  any felony under Chapter 483, Health
444-25   and Safety Code;
444-26                           (iii)  a felony under Chapter 153, Finance
 445-1   Code [Article 350, Revised Statutes];
 445-2                           (iv)  any felony under Chapter 34, Penal
 445-3   Code;
 445-4                           (v)  a Class A misdemeanor under Subchapter
 445-5   B, Chapter 365, Health and Safety Code, if the defendant has been
 445-6   previously convicted twice of an offense under that subchapter; or
 445-7                           (vi)  any felony under Chapter 152, Finance
 445-8   Code [The Sale of Checks Act (Article 489d, Vernon's Texas Civil
 445-9   Statutes)];
445-10                     (C)  the proceeds gained from the commission of a
445-11   felony listed in Paragraph (A) or (B) of this subdivision or a
445-12   crime of violence; or
445-13                     (D)  acquired with proceeds gained from the
445-14   commission of a felony listed in Paragraph (A) or (B) of this
445-15   subdivision or a crime of violence.
445-16         SECTION 7.49.  Section 45.201(2), Education Code, is amended
445-17   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
445-18   Session, 1997, to read as follows:
445-19               (2)  "Bank" means a state bank authorized and regulated
445-20   under the laws of this state pertaining to banking, in particular
445-21   Subtitle A, Title 3, Finance Code [The Texas Banking Code (Article
445-22   342-101 et seq., Vernon's Texas Civil Statutes)], a national bank,
445-23   a savings and loan association or savings bank authorized and
445-24   regulated by federal law, or a savings and loan association or
445-25   savings bank organized under the laws of this state.  The term does
445-26   not include any bank the deposits of which are not insured by the
 446-1   Federal Deposit Insurance Corporation.
 446-2         SECTION 7.50.  Section 31.101, Finance Code, is amended to
 446-3   conform to Chapter 769, Acts of the 75th Legislature, Regular
 446-4   Session, 1997, to read as follows:
 446-5         Sec. 31.101.  GENERAL DUTIES OF BANKING COMMISSIONER.  The
 446-6   banking commissioner shall:
 446-7               (1)  supervise and regulate, as provided by this
 446-8   subtitle, Subtitle F, and Chapter [and Chapters] 12 [and 151],
 446-9   state banks, trust companies, and state-licensed foreign bank
446-10   agencies;
446-11               (2)  administer and enforce this subtitle and Chapter
446-12   12 in person or through the deputy banking commissioner or an
446-13   examiner, supervisor, conservator, or other agent; and
446-14               (3)  administer and enforce laws other than this
446-15   subtitle and Chapter 12 as directed by those other laws.
446-16         SECTION 7.51.  Section 274.001(4), Finance Code, is amended
446-17   to conform to Chapter 769, Acts of the 75th Legislature, Regular
446-18   Session, 1997, to read as follows:
446-19               (4)  "Fiduciary account" means an account involving the
446-20   exercise of a corporate purpose specified by Section 182.001(b)
446-21   [151.052 or 151.103].
446-22         SECTION 7.52.  Section 274.003, Finance Code, is amended to
446-23   conform to Chapter 769, Acts of the 75th Legislature, Regular
446-24   Session, 1997, to read as follows:
446-25         Sec. 274.003.  SUBSIDIARY TRUST COMPANY.  An entity is a
446-26   subsidiary trust company of a bank holding company if:
 447-1               (1)  the entity is a:
 447-2                     (A)  corporation incorporated under Subchapter A
 447-3   [B], Chapter 182 [151];
 447-4                     (B)  national bank that:
 447-5                           (i)  is organized to conduct a trust
 447-6   business and any incidental business or to exercise trust powers;
 447-7   and
 447-8                           (ii)  has its main office in this state; or
 447-9                     (C)  state bank that is organized to exercise
447-10   trust powers and has its main office in this state; and
447-11               (2)  more than 50 percent of the voting stock of the
447-12   entity is directly or indirectly owned by the bank holding company.
447-13         SECTION 7.53.  Section 345.152(b), Finance Code, is amended
447-14   to conform to Section 11, Chapter 1396, Acts of the 75th
447-15   Legislature, Regular Session, 1997, to read as follows:
447-16         (b)  The market competitive rate ceiling is:
447-17               (1)  the lowest rate determined under Subsection (a)
447-18   except as provided by Subdivision (2) or (3);
447-19               (2)  the ceiling provided by Section 303.009(d)
447-20   [303.305(c)] if the rate described by Subdivision (1) is more than
447-21   the ceiling provided by Section 303.009(d) [303.305(c)]; or
447-22               (3)  the ceiling provided by Section 303.009(a)
447-23   [303.304(a)] if the rate described by Subdivision (1) is less than
447-24   the ceiling provided by Section 303.009(a) [303.304(a)].
447-25         SECTION 7.54.  Section 345.154(a), Finance Code, is amended
447-26   to conform to Section 11, Chapter 1396, Acts of the 75th
 448-1   Legislature, Regular Session, 1997, to read as follows:
 448-2         (a)  The holder of a retail charge agreement that provides
 448-3   for a time price differential under this chapter or under Chapter
 448-4   303 may change the terms of the agreement under Section 303.103
 448-5   [303.403] to implement the market competitive rate ceiling.
 448-6         SECTION 7.55.  Section 346.201, Finance Code, is amended to
 448-7   conform to Section 25, Chapter 1396, Acts of the 75th Legislature,
 448-8   Regular Session, 1997, to read as follows:
 448-9         Sec. 346.201.  INSURANCE; COLLATERAL.  In connection with a
448-10   revolving credit account, a creditor may require or take insurance
448-11   or collateral subject to the provisions of Chapter 342 [343],
448-12   relating to insurance and security, as if the revolving credit
448-13   account were a loan contract under that chapter.
448-14         SECTION 7.56.  Section 349.004, Finance Code, is amended to
448-15   conform to Section 22, Chapter 1396, Acts of the 75th Legislature,
448-16   Regular Session, 1997, to read as follows:
448-17         Sec. 349.004.  LIABILITY RELATED TO CRIMINAL OFFENSE.  In
448-18   addition to other applicable penalties, a person who commits an
448-19   offense under Section 349.502 is liable to the obligor for an
448-20   amount equal to:
448-21               (1)  the principal of and all charges contracted for or
448-22   collected on each loan made without the authority required by
448-23   Chapter 342[, 343, 344,] or 346; and
448-24               (2)  reasonable attorney's fees incurred by the
448-25   obligor.
448-26         SECTION 7.57.  Sections 349.502(a) and (c), Finance Code, are
 449-1   amended to conform to Section 22, Chapter 1396, Acts of the 75th
 449-2   Legislature, Regular Session, 1997, to read as follows:
 449-3         (a)  A person commits an offense if the person engages in a
 449-4   business that is subject to Chapter 342[, 343, 344,] or 346 without
 449-5   holding the license or other authorization required under that
 449-6   chapter.
 449-7         (c)  Each loan made without the authority required by Chapter
 449-8   342[, 343, 344,] or 346 is a separate offense.
 449-9         SECTION 7.58.  Section 404.031(g), Government Code, is
449-10   amended to conform to Chapter 1008, Acts of the 75th Legislature,
449-11   Regular Session, 1997, to read as follows:
449-12         (g)  In this section, "permitted institution" means a Federal
449-13   Reserve Bank, a Federal Home Loan Bank, a "clearing corporation" as
449-14   defined by  Section 8.102[(c)], Business & Commerce Code, the Texas
449-15   Treasury Safekeeping Trust Company, a state depository, and any
449-16   state or nationally chartered bank or trust company that is
449-17   controlled by a bank holding company that controls a state
449-18   depository.  Neither the state depository that pledges the
449-19   securities nor any bank that is controlled by a bank holding
449-20   company that controls that state depository may be the permitted
449-21   institution with respect to the particular securities pledged by
449-22   that state depository.  A custodian holding in trust securities of
449-23   a state depository under Subsections (e) and (f) may deposit the
449-24   pledged securities with a permitted institution if the permitted
449-25   institution is the third party to the transaction.  The securities
449-26   shall be held by the permitted institution to secure funds
 450-1   deposited by the comptroller in the state depository pledging the
 450-2   securities.  On receipt of the securities, the permitted
 450-3   institution shall immediately issue to the custodian an advice of
 450-4   transaction or other document evidencing the deposit of the
 450-5   securities.  When the pledged securities held by a custodian are
 450-6   deposited, the permitted institution may apply book entry
 450-7   procedures to the securities.  The records of the permitted
 450-8   institution shall at all times reflect the name of the custodian
 450-9   depositing the pledged securities.  The custodian shall immediately
450-10   issue and deliver to the comptroller controlled trust receipts for
450-11   the pledged securities.  The trust receipts shall indicate that the
450-12   custodian has deposited with the permitted institution the pledged
450-13   securities held in trust for the state depository pledging the
450-14   securities.  A legal action or proceeding brought by or against the
450-15   state, arising out of or in connection with the duties of the state
450-16   depository, the custodian, or other permitted institution under
450-17   this subchapter must be brought and maintained in state district
450-18   court in Travis County.  In this section, "control" and "bank
450-19   holding company" have the meanings assigned by Section 31.002(a),
450-20   Finance Code [Article 2, Chapter I, The Texas Banking Code (Article
450-21   342-102, Vernon's Texas Civil Statutes)].
450-22         SECTION 7.59.  Section 411.092(a), Government Code, is
450-23   amended to conform to Chapter 1008, Acts of the 75th Legislature,
450-24   Regular Session, 1997, to read as follows:
450-25         (a)  The banking commissioner is entitled to obtain from the
450-26   department criminal history record information maintained by the
 451-1   department that relates to a person who is:
 451-2               (1)  an applicant for a license, charter, or other
 451-3   authority granted or issued by the banking commissioner under:
 451-4                     (A)  Subtitle A, Title 3, Finance Code [The Texas
 451-5   Banking Code (Article 342-101 et seq., Vernon's Texas Civil
 451-6   Statutes)], or any successor to that law; or
 451-7                     (B)  Chapter 152, 153, or 154, Finance Code
 451-8   [Article 350, Revised Statutes;]
 451-9                     [(C)  The Sale of Checks Act (Article 489d,
451-10   Vernon's Texas Civil Statutes); or]
451-11                     [(D)  Chapter 512, Acts of the 54th Legislature,
451-12   Regular Session, 1955 (Article 548b, Vernon's Texas Civil
451-13   Statutes)]; or
451-14               (2)  a principal of an applicant under Subdivision (1).
451-15         SECTION 7.60.  Section 411.095(a), Government Code, is
451-16   amended to conform to Chapter 1008, Acts of the 75th Legislature,
451-17   Regular Session, 1997, to read as follows:
451-18         (a)  The consumer credit commissioner is entitled to obtain
451-19   from the department criminal history record information that
451-20   relates to a person who is:
451-21               (1)  an applicant for a license under Chapter 371,
451-22   Finance Code [the Texas Pawnshop Act (Article 5069-51.01 et seq.,
451-23   Vernon's Texas Civil Statutes)]; or
451-24               (2)  the holder of a license under that Act.
451-25         SECTION 7.61.  Section 603.009(b), Government Code, is
451-26   repealed to conform to Chapter 1008, Acts of the 75th Legislature,
 452-1   Regular Session, 1997.
 452-2         SECTION 7.62.  Section 2001.223, Government Code, is amended
 452-3   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
 452-4   Session, 1997, to read as follows:
 452-5         Sec. 2001.223.  EXCEPTIONS FROM DECLARATORY JUDGMENT, COURT
 452-6   ENFORCEMENT, AND CONTESTED CASE PROVISIONS.  Section 2001.038 and
 452-7   Subchapters C through H  do not apply to:
 452-8               (1)  the granting, payment, denial, or withdrawal of
 452-9   financial or medical assistance or benefits under service programs
452-10   of the Texas Department of Human Services;
452-11               (2)  action by the Banking Commissioner or the Finance
452-12   Commission of Texas regarding the issuance of a state bank or state
452-13   trust company charter for a bank or trust company to assume the
452-14   assets and liabilities of a financial institution that the
452-15   commissioner considers to be in hazardous condition as defined by
452-16   Section 31.002(a) or 181.002(a), Finance Code [1.002(a), Texas
452-17   Banking Act (Article 342-1.002, Vernon's Texas Civil Statutes), or
452-18   Section  1.002(a), Texas Trust Company Act], as applicable;
452-19               (3)  a hearing or interview conducted by the Board of
452-20   Pardons and Paroles or the pardons and paroles division of the
452-21   Texas Department of Criminal Justice relating to the grant,
452-22   rescission, or revocation of parole or other form of administrative
452-23   release; or
452-24               (4)  the suspension, revocation, or termination of the
452-25   certification of a breath analysis operator or technical supervisor
452-26   under the rules of the Department of Public Safety.
 453-1         SECTION 7.63.  Section 2257.002, Government Code, is amended
 453-2   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
 453-3   Session, 1997, to read as follows:
 453-4         Sec. 2257.002.  DEFINITIONS.  In this chapter:
 453-5               (1)  "Bank holding company" has the meaning assigned by
 453-6   Section 31.002(a), Finance Code [1.002(a), Texas Banking Act].
 453-7               (2) [(3)]  "Control" has the meaning assigned by
 453-8   Section 31.002(a), Finance Code [1.002(a), Texas Banking Act].
 453-9               (3) [(4)]  "Deposit of public funds" means public funds
453-10   of a public entity that:
453-11                     (A)  the comptroller does not manage under
453-12   Chapter 404; and
453-13                     (B)  are held as a demand or time deposit by a
453-14   depository institution expressly authorized by law to accept a
453-15   public entity's demand or time deposit.
453-16               (4) [(5)]  "Eligible security" means:
453-17                     (A)  a surety bond;
453-18                     (B)  an investment security;
453-19                     (C)  an ownership or beneficial interest in an
453-20   investment security, other than an option contract to purchase or
453-21   sell an investment security;
453-22                     (D)  a fixed-rate collateralized mortgage
453-23   obligation that has an expected weighted average life of 10 years
453-24   or less and does not constitute a high-risk mortgage security; or
453-25                     (E)  a floating-rate collateralized mortgage
453-26   obligation that does not constitute a high-risk mortgage security.
 454-1               (5) [(6)]  "Investment security" means:
 454-2                     (A)  an obligation that in the opinion of the
 454-3   attorney general of the United States is a general obligation of
 454-4   the United States and backed by its full faith and credit;
 454-5                     (B)  a general or special obligation issued by a
 454-6   public agency that is payable from taxes, revenues, or a
 454-7   combination of taxes and revenues; or
 454-8                     (C)  a security in which a public entity may
 454-9   invest under Subchapter A, Chapter 2256.
454-10               (6) [(7)]  "Permitted institution" means:
454-11                     (A)  a Federal Reserve Bank;
454-12                     (B)  a clearing corporation, as defined by
454-13   Section 8.102[(c)], Business & Commerce Code;
454-14                     (C)  a bank eligible to be a custodian under
454-15   Section 2257.041; or
454-16                     (D)  a state or nationally chartered bank that is
454-17   controlled by a bank holding company that controls a bank eligible
454-18   to be a custodian under Section 2257.041.
454-19               (7) [(8)]  "Public agency" means a state or a political
454-20   or governmental entity, agency, instrumentality, or subdivision of
454-21   a state, including a municipality, an institution of higher
454-22   education, as defined by Section 61.003, Education Code, a junior
454-23   college, a district created under Article XVI, Section 59, of the
454-24   Texas Constitution, and a public hospital.
454-25               (8) [(9)]  "Public entity" means a public agency in
454-26   this state, but does not include an institution of higher
 455-1   education, as defined by Section 61.003, Education Code.
 455-2               (9) [(10)]  "State agency" means a public entity that:
 455-3                     (A)  has authority that is not limited to a
 455-4   geographic portion of the state; and
 455-5                     (B)  was created by the constitution or a
 455-6   statute.
 455-7               (10) [(11)]  "Trust receipt" means evidence of receipt,
 455-8   identification, and recording, including:
 455-9                     (A)  a physical controlled trust receipt; or
455-10                     (B)  a written or electronically transmitted
455-11   advice of transaction.
455-12         SECTION 7.64.  Section 242.098(b), Health and Safety Code, is
455-13   amended to conform to Chapter 1008, Acts of the 75th Legislature,
455-14   Regular Session, 1997, to read as follows:
455-15         (b)  Interest on unreimbursed amounts begins to accrue on the
455-16   date on which the funds were disbursed to the home.  The rate of
455-17   interest is the rate determined under Section 304.003, Finance Code
455-18   [Article 1E.003, Title 79, Revised Statutes], to be applicable to
455-19   judgments rendered during the month in which the money was
455-20   disbursed to the home.
455-21         SECTION 7.65.  Section 712.042, Health and Safety Code, is
455-22   amended to conform to Chapter 1008, Acts of the 75th Legislature,
455-23   Regular Session, 1997, to read as follows:
455-24         Sec. 712.042.  FEES.  [(a)]  On filing a statement of funds
455-25   under Section 712.041, a corporation shall pay the commissioner a
455-26   reasonable and necessary fee set annually by the commissioner to
 456-1   defray the cost of administering this chapter.
 456-2         [(b)  The banking department shall receive and disburse
 456-3   revenues collected under this chapter in accordance with Section
 456-4   2.006, Texas Banking Act.]
 456-5         SECTION 7.66.  Section 712.0441(h), Health and Safety Code,
 456-6   is amended to conform to Chapter 1008, Acts of the 75th
 456-7   Legislature, Regular Session, 1997, to read as follows:
 456-8         (h)  If a fund is misappropriated by its trustee or is not
 456-9   otherwise handled as required by this chapter, the commissioner may
456-10   take action against the trustee as provided in Chapter 185, Finance
456-11   Code [6, Texas Trust Company Act].
456-12         SECTION 7.67.  Section 1, Article 9.05, Insurance Code, is
456-13   amended to conform to Chapter 1008, Acts of the 75th Legislature,
456-14   Regular Session, 1997, to read as follows:
456-15         Sec. 1.  Any corporation heretofore chartered under the
456-16   provisions of Article 9.03 of this Act, or its antecedents, Article
456-17   9.01, Texas Insurance Code, or Chapter 40, Acts, 41st Legislature,
456-18   1929 (codified as Article 1302a, Vernon's Texas Civil Statutes),
456-19   having as one of its powers "to act as trustee under any lawful
456-20   trust committed to it by contract or will, appointment by any court
456-21   having jurisdiction of the subject matter, as trustee, receiver or
456-22   guardian and as executor or guardian under the terms of any will
456-23   and as any administrator of the estates of decedents under the
456-24   appointment of the court" may transfer and assign to a state bank
456-25   created under the provisions of Subtitle A, Title 3, Finance Code,
456-26   [the Texas Banking Act (Article 342-1.001 et seq., Vernon's Texas
 457-1   Civil Statutes)] or a predecessor of that law [Act], as amended, or
 457-2   to a state trust company created under the provisions of Chapter
 457-3   181, Finance Code, [the Texas Trust Company Act] or a predecessor
 457-4   of that law [Act], as amended, all of its fiduciary business in
 457-5   which such corporation is named or acting as guardian, trustee,
 457-6   executor, administrator or in any other fiduciary capacity,
 457-7   whereupon said state bank or trust company shall, without the
 457-8   necessity of any judicial action in the courts of the State of
 457-9   Texas or any action by the creator or beneficiary of such trust or
457-10   estate, continue the guardianship, trusteeship, executorship,
457-11   administration or other fiduciary relationship, and perform all of
457-12   the duties and obligations of such corporation, and exercise all of
457-13   the powers and authority relative thereto now being exercised by
457-14   such corporation, and provided further that the transfer or
457-15   assignment by such corporation of such fiduciary business being
457-16   conducted by it under the powers granted in its original charter,
457-17   as amended, shall not constitute or be deemed a resignation or
457-18   refusal to act upon the part of such corporation as to any such
457-19   guardianship, trust, executorship, administration, or any other
457-20   fiduciary capacity; and provided further that the naming or
457-21   designation by a testator or the creator of a living trust of such
457-22   corporation to act as trustee, guardian, executor, or in any other
457-23   fiduciary capacity, shall be considered the naming or designation
457-24   of the state bank or trust company and authorizing such state bank
457-25   or trust company to act in said fiduciary capacity.  All transfers
457-26   and assignments of fiduciary business by such corporations to a
 458-1   state bank or trust company consistent with the provisions of this
 458-2   Act are hereby validated.
 458-3         SECTION 7.68.  Article 9.50, Insurance Code, is amended to
 458-4   conform to Chapter 1008, Acts of the 75th Legislature, Regular
 458-5   Session, 1997, to read as follows:
 458-6         Art. 9.50.  HOME SOLICITATION TRANSACTIONS ACT AS CONSUMER
 458-7   PROTECTION LAW.  Chapter 39, Business & Commerce Code [Chapter 246,
 458-8   Acts of the 63rd Legislature, Regular Session, 1973 (Article
 458-9   5069-13.01 through Article 5069-13.06, Vernon's Texas Civil
458-10   Statutes)], shall be deemed and considered a consumer protection
458-11   law when construed in connection with any policy of title insurance
458-12   issued in this state.
458-13         SECTION 7.69.  Section 1C(a), Article 21.07, Insurance Code,
458-14   is amended to conform to Chapter 1008, Acts of the 75th
458-15   Legislature, Regular Session, 1997, to read as follows:
458-16         (a)  In this article, "bank" means a national banking
458-17   association organized and existing under the National Bank Acts (12
458-18   U.S.C. Section 21 et seq.), a state bank organized and existing
458-19   under Subtitle A, Title 3, Finance Code [the Texas Banking Act
458-20   (Article 342-1.001 et seq., Vernon's Texas Civil Statutes)], a
458-21   state savings bank organized and existing under Subtitle C, Title
458-22   3, Finance Code [the Texas Savings Bank Act (Article 489e, Vernon's
458-23   Texas Civil Statutes)], a bank branch, or a bank operating
458-24   subsidiary, as defined by state or federal law, that is located and
458-25   doing business in this state in a place with a population of 5,000
458-26   or less.
 459-1         SECTION 7.70.  Section 1C, Chapter 213, Acts of the 54th
 459-2   Legislature, Regular Session, 1955 (Article 21.07-1, Vernon's Texas
 459-3   Insurance Code), is amended to conform to Chapter 1008, Acts of the
 459-4   75th Legislature, Regular Session, 1997, to read as follows:
 459-5         Sec. 1C.  DEFINITION.  In this Act, "bank" means a national
 459-6   banking association organized and existing under the National Bank
 459-7   Acts (12 U.S.C. Section 21 et seq.), a state bank organized and
 459-8   existing under Subtitle A, Title 3, Finance Code [the Texas Banking
 459-9   Act (Article 342-1.001 et seq., Vernon's Texas Civil Statutes)], a
459-10   state savings bank organized and existing under Subtitle C, Title
459-11   3, Finance Code [the Texas Savings Bank Act (Article 489e, Vernon's
459-12   Texas Civil Statutes)], a bank branch, or a bank operating
459-13   subsidiary, as defined by state or federal law, that is located and
459-14   doing business in this state in a place with a population of 5,000
459-15   or less.  A bank operating subsidiary located and doing business in
459-16   a place with a population of 5,000 or less may own a licensed
459-17   corporate agent that is also located and doing business in a place
459-18   with a population of 5,000 or less, and is subject to Section 3(b)
459-19   of this Act.
459-20         SECTION 7.71.  Section 5(h), Managing General Agents'
459-21   Licensing Act (Article 21.07-3, Vernon's Texas Insurance Code), is
459-22   amended to conform to Chapter 1008, Acts of the 75th Legislature,
459-23   Regular Session, 1997, to read as follows:
459-24         (h)  Except as provided herein, a licensee that qualifies
459-25   under this section may not be owned in whole or in part, either
459-26   directly or indirectly, by a state bank, national bank, or bank
 460-1   holding company, as those terms are defined in Section 31.002,
 460-2   Finance Code [Article 2, Chapter I, The Texas Banking Code of 1943,
 460-3   as amended (Article 342-102, Vernon's Texas Civil Statutes)], or by
 460-4   a subsidiary of one of those financial institutions.  This
 460-5   subsection shall not apply to any licensee that on June 1, 1981, is
 460-6   owned by a state bank, national bank, or bank holding company or by
 460-7   a subsidiary of one of those financial institutions so long as
 460-8   ownership continues;  nor shall this subsection apply to a licensee
 460-9   for which on July 15, 1981, a state bank, national bank, or bank
460-10   holding company, or a subsidiary of one of those financial
460-11   institutions has, pursuant to the applicable law, filed an
460-12   application for prior approval of ownership or other notice of
460-13   ownership with the governmental agency having regulatory authority
460-14   over the financial institution or subsidiary.  Before renewing a
460-15   license issued under this section, the commissioner shall require
460-16   the licensee to certify compliance with or exemption from this
460-17   subsection.
460-18         SECTION 7.72.  Sections 3(d) and (g), Article 21.14,
460-19   Insurance Code, are amended to conform to Chapter 1008, Acts of the
460-20   75th Legislature, Regular Session, 1997, to read as follows:
460-21         (d)  The department shall issue a license to a bank if the
460-22   department finds that:
460-23               (1)  the bank is a national banking association
460-24   organized and existing under the National Bank Acts (12 U.S.C.
460-25   Section 21 et seq.), a state bank organized and existing under
460-26   Subtitle A, Title 3, Finance Code [the Texas Banking Act (Article
 461-1   342-1.001 et seq., Vernon's Texas Civil Statutes)], a state savings
 461-2   bank organized and existing under Subtitle C, Title 3, Finance Code
 461-3   [the Texas Savings Bank Act (Article 489e, Vernon's Texas Civil
 461-4   Statutes)], or a bank operating subsidiary, as defined by state or
 461-5   federal law, that is located and doing business in this state in a
 461-6   place with a population of 5,000 or less;
 461-7               (2)  at least one officer of the bank and each
 461-8   individual who will be performing any acts of an agent for the bank
 461-9   are individually licensed under this Article; and
461-10               (3)  the bank will have the ability to pay any sums up
461-11   to $25,000 that it might become legally obligated to pay on account
461-12   of any claim made against it by a customer and caused by a
461-13   negligent act, error, or omission of the bank or any person for
461-14   whose acts the bank is legally liable in the conduct of its
461-15   business as a local recording agent.  The term "customer" means any
461-16   person, firm, or corporation to whom the bank sells or attempts to
461-17   sell a policy of insurance or from whom the bank accepts an
461-18   application for insurance.  That ability shall be proven through:
461-19                     (A)  an errors and omissions policy insuring the
461-20   bank against errors and omissions, in at least the sum of $100,000
461-21   with not more than a $10,000 deductible feature, or the sum of at
461-22   least $300,000 with not more than a $25,000 deductible feature,
461-23   issued by an insurance company licensed to do business in this
461-24   state or, if a policy cannot be obtained from a company licensed to
461-25   do business in this state, a policy issued by a company not
461-26   licensed to do business in this state, on filing an affidavit with
 462-1   the department stating the inability to obtain coverage and
 462-2   receiving the department's approval;
 462-3                     (B)  a bond executed by the bank as principal and
 462-4   a surety company authorized to do business in this state, as
 462-5   surety, in the principal sum of $25,000, payable to the department
 462-6   for the use and benefit of customers of the bank, conditioned that
 462-7   the bank shall pay any final judgment recovered against it by a
 462-8   customer; or
 462-9                     (C)  a deposit with the comptroller of cash or
462-10   securities of the class authorized by Articles 2.08 and 2.10 of
462-11   this code, with a fair market value of $25,000. The comptroller
462-12   shall accept and receive the deposit and hold it exclusively for
462-13   the protection of a customer of the bank who recovers a final
462-14   judgment against the bank.  The deposit may be withdrawn only on
462-15   filing with the department satisfactory evidence that the bank has
462-16   withdrawn from the business of insurance and has no unsecured
462-17   liabilities outstanding or that the bank has provided for the
462-18   protection of its customers by furnishing an errors and omissions
462-19   policy or a bond as provided by this subsection.  Securities so
462-20   deposited may be exchanged from time to time for other qualified
462-21   securities.
462-22         A binding commitment to issue such a policy or bond, or the
462-23   tender of applicable securities, is sufficient in connection with
462-24   an application for license.
462-25         Nothing in this subsection shall be construed to permit an
462-26   unlicensed employee or agent of a bank to perform any act of a
 463-1   local recording agent without obtaining a local recording agent's
 463-2   license.  The department may not require a bank to take the
 463-3   examination provided by Section 6 of this Article.
 463-4         A bank licensed as an agent under this Article may have
 463-5   additional offices from which the business of insurance is
 463-6   conducted only in a place with a population of 5,000 or less and
 463-7   must comply with the department's regulations regarding additional
 463-8   offices.
 463-9         A bank licensed as an agent under this article must maintain
463-10   its insurance records, including all files relating to and
463-11   reflecting customer complaints, separate from records relating to
463-12   banking transactions of the bank.
463-13         If a bank that holds a local recording agent's license does
463-14   not maintain the qualifications necessary to obtain a license, the
463-15   license of that bank to act as a local recording agent shall be
463-16   canceled or denied in accordance with Sections 16 and 18 of this
463-17   article.
463-18         Each bank licensed as a local recording agent shall file
463-19   under oath with its application for license renewal a list of the
463-20   name and address of each individual who will be acting as an agent
463-21   on behalf of the bank and of each officer and director of the bank,
463-22   as defined by Article 21.02 of this code, and other biographical
463-23   information as required by the department.
463-24         Each bank licensed as a local recording agent shall notify
463-25   the department of any change in its officers and directors and any
463-26   change in other persons who will be performing any acts of an
 464-1   agent, as defined by Article 21.02 of this code, and submit
 464-2   biographical information on those officers, directors, and persons
 464-3   as required by the department not later than the 30th day after the
 464-4   date on which the change takes effect.
 464-5         The term "firm," as that term applies to local recording
 464-6   agents in Sections 2, 12, and 16 of this article, includes
 464-7   corporations and banks.
 464-8         (g)  In this article, the term "bank" means a national
 464-9   banking association organized and existing under the National Bank
464-10   Acts (12 U.S.C. Section 21 et seq.), a state bank organized and
464-11   existing under Subtitle A, Title 3, Finance Code [the Texas Banking
464-12   Act (Article 342-1.001 et seq., Vernon's Texas Civil Statutes)], a
464-13   state savings bank organized and existing under Subtitle C, Title
464-14   3, Finance Code [the Texas Savings Bank Act (Article 489e, Vernon's
464-15   Texas Civil Statutes)], a bank branch, or a bank operating
464-16   subsidiary, as defined by state or federal law, that is located and
464-17   doing business in this state in a place with a population of 5,000
464-18   or less.  A bank operating subsidiary, as defined by state or
464-19   federal law, located and doing business in a place in this state
464-20   with a population of 5,000 or less may own a licensed corporate
464-21   agent that is also located and doing business in a place with a
464-22   population of 5,000 or less, and is subject to Section 3a(5) of
464-23   this Article.
464-24         SECTION 7.73.  Article 24.03(g), Insurance Code, is amended
464-25   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
464-26   Session, 1997, to read as follows:
 465-1         (g)  Any person holding a license under Chapter 342, Finance
 465-2   Code [3A, Title 79, Revised Statutes], on the effective date of
 465-3   this chapter is required only to pay the license fee required under
 465-4   this article and is not required to pay the investigation fee
 465-5   required by Section (a) of this article.
 465-6         SECTION 7.74.  Article 24.11(h), Insurance Code, is amended
 465-7   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
 465-8   Session, 1997, to read as follows:
 465-9         (h)  Those additions may be accomplished by a memorandum of
465-10   agreement between the agent and the insured, if before the first
465-11   scheduled payment date of the amended transaction the premium
465-12   finance company gives to the insured the following information in
465-13   writing:
465-14               (1)  the amount of the premium increase;
465-15               (2)  the down payment on increase;
465-16               (3)  the principal amount of increase;
465-17               (4)  the total amount of finance charge on increase;
465-18               (5)  the total of additional balance due;
465-19               (6)  the outstanding balance of original agreement;
465-20               (7)  the consolidated agreement balance;
465-21               (8)  the annual percentage rate of finance charge on
465-22   additional balance due;
465-23               (9)  the revised schedule of payments;
465-24               (10)  the amount or method of computing the amount of
465-25   any default, deferment, or similar charges authorized in Chapter
465-26   342, Finance Code [3A, Title 79, Revised Statutes], payable in the
 466-1   event of late payments; and
 466-2               (11)  identification of the method of computing any
 466-3   unearned portion of the finance charge in the event of prepayment
 466-4   of the obligation.
 466-5         SECTION 7.75.  Article 24.15, Insurance Code, is amended to
 466-6   conform to Chapter 1008, Acts of the 75th Legislature, Regular
 466-7   Session, 1997, to read as follows:
 466-8         Art. 24.15.  SERVICES CHARGES; LIMITATION OF CHARGES;
 466-9   COMPUTATION.  A premium finance company may not take or receive
466-10   from an insured a greater rate or charge than is provided by
466-11   Chapter 342, Finance Code [3A, Title 79, Revised Statutes]. Those
466-12   charges begin on the date from which the insurance company requires
466-13   payment of the premium and payment was made to the insurance
466-14   company for the financed policy or on the effective date of the
466-15   policy, whichever is earlier.  The finance charge shall be computed
466-16   on the balance of the premiums due after subtracting the down
466-17   payment made by the insured in accordance with the premium finance
466-18   agreement.  On insurance premium finance agreements made under this
466-19   chapter, no insurance charges or any other charge or fee, except
466-20   those authorized by this chapter, are permitted.
466-21         SECTION 7.76.  Article 24.16, Insurance Code, is amended to
466-22   conform to Chapter 1008, Acts of the 75th Legislature, Regular
466-23   Session, 1997, to read as follows:
466-24         Art. 24.16.  PREPAYMENT; REFUND.  Notwithstanding the
466-25   provisions of any premium finance agreement to the contrary, any
466-26   insured may pay it in full at any time before the maturity of the
 467-1   final installment of the balance of the agreement, and if the
 467-2   insured does so and the agreement included an amount for a charge,
 467-3   the insured shall receive for the prepayment either by cash or by
 467-4   renewal a refund credit in accordance with the provisions for
 467-5   refunds contained in Subchapter H, Chapter 342, Finance Code [3A,
 467-6   Title 79, Revised Statutes], and the regulations issued under that
 467-7   article.  Where the amount of the credit for anticipation of
 467-8   payments is less than $1, no refund need be made.
 467-9         SECTION 7.77.  Article 24.17(a), Insurance Code, is amended
467-10   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
467-11   Session, 1997, to read as follows:
467-12         (a)  A premium finance agreement may provide for the payment
467-13   of a default charge by the insured as provided in Section 342.203,
467-14   Finance Code [Article 3A.303, Title 79, Revised Statutes], the
467-15   Insurance Code, and the regulations issued under those statutes.
467-16         SECTION 7.78.  Article 24.20, Insurance Code, is amended to
467-17   conform to Chapter 1008, Acts of the 75th Legislature, Regular
467-18   Session, 1997, to read as follows:
467-19         Art. 24.20.  AUTHORITY OF LICENSED LOCAL RECORDING AGENTS TO
467-20   CHARGE INTEREST TO CERTAIN PURCHASERS OF INSURANCE.
467-21   Notwithstanding any other provision of law, any person,
467-22   partnership, or corporation duly licensed as a local recording
467-23   agent under Article 21.14, Insurance Code, as amended, may enter
467-24   into or establish a written agreement with any purchaser of
467-25   insurance from the agent providing for the payment of interest to
467-26   the agent in an amount not to exceed the greater of a rate allowed
 468-1   by Chapter 303, Finance Code [1D, Title 79, Revised Statutes], or
 468-2   the rate of one percent a month, on any amount due and owing to the
 468-3   agent for insurance purchased by the purchaser.  In those instances
 468-4   the claim or defense of usury is prohibited.
 468-5         SECTION 7.79.  Sections 105.001(13) and (14), Local
 468-6   Government Code, are amended to conform to Chapter 1008, Acts of
 468-7   the 75th Legislature, Regular Session, 1997, to read as follows:
 468-8               (13)  "State bank" has the meaning assigned by Section
 468-9   31.002(a), Finance Code [1.002(a), Texas Banking Act].
468-10               (14)  "State credit union" means a credit union
468-11   organized under Subtitle D, Title 3, Finance Code [the Texas Credit
468-12   Union Act (Article 2461-1.01 et seq., Vernon's Texas Civil
468-13   Statutes)].
468-14         SECTION 7.80.  Section 143.1215(c), Local Government Code, is
468-15   amended to conform to Chapter 1008, Acts of the 75th Legislature,
468-16   Regular Session, 1997, to read as follows:
468-17         (c)  Interest under Subsection (b) accrues beginning on the
468-18   date of the fire fighter's or police officer's reinstatement at a
468-19   rate equal to three percent plus the rate for court judgments under
468-20   Chapter 304, Finance Code [1E, Title 79, Revised Statutes], that is
468-21   in effect on the date of the person's reinstatement.
468-22         SECTION 7.81.  Section 211.0035, Local Government Code, is
468-23   amended to conform to Chapter 1008, Acts of the 75th Legislature,
468-24   Regular Session, 1997, to read as follows:
468-25         Sec. 211.0035.  ZONING REGULATIONS AND DISTRICT BOUNDARIES
468-26   APPLICABLE TO PAWNSHOPS.  (a)  In this section, "pawnshop" has the
 469-1   meaning assigned by Section 371.003, Finance Code [2, Texas
 469-2   Pawnshop Act (Article 5069-51.02, Vernon's Texas Civil Statutes)].
 469-3         (b)  For the purposes of zoning regulation and determination
 469-4   of zoning district boundaries, the governing body of a municipality
 469-5   shall designate pawnshops that have been licensed to transact
 469-6   business by the Consumer Credit Commissioner under Chapter 371,
 469-7   Finance Code, [the Texas Pawnshop Act (Article 5069-51.01 et seq.,
 469-8   Vernon's Texas Civil Statutes)] as a permitted use in one or more
 469-9   zoning classifications.
469-10         (c)  The governing body of a municipality may not impose a
469-11   specific use permit requirement or any requirement similar in
469-12   effect to a specific use permit requirement on a pawnshop that has
469-13   been licensed to transact business by the Consumer Credit
469-14   Commissioner under Chapter 371, Finance Code [the Texas Pawnshop
469-15   Act (Article 5069-51.01 et seq., Vernon's Texas Civil Statutes)].
469-16         SECTION 7.82.  Section 395.025(d), Local Government Code, is
469-17   amended to conform to Chapter 1008, Acts of the 75th Legislature,
469-18   Regular Session, 1997, to read as follows:
469-19         (d)  Any refund shall bear interest calculated from the date
469-20   of collection to the date of refund at the statutory rate as set
469-21   forth in Section 302.002, Finance Code [Article 1C.002, Title 79,
469-22   Revised Statutes], or its successor statute.
469-23         SECTION 7.83.  Section 32.35(a)(5), Penal Code, is amended to
469-24   conform to Chapter 1008, Acts of the 75th Legislature, Regular
469-25   Session, 1997, to read as follows:
469-26               (5)  "Creditor" means a person licensed under Chapter
 470-1   342, Finance Code [3A, Subtitle 2, Title 79, Revised Statutes], a
 470-2   bank, savings and loan association, credit union, or other
 470-3   regulated financial institution that lends money or otherwise
 470-4   extends credit to a cardholder through a credit card and that
 470-5   authorizes other persons to honor the credit card.
 470-6         SECTION 7.84.  Section 41.006(a), Property Code, is amended
 470-7   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
 470-8   Session, 1997, to read as follows:
 470-9         (a)  Except as provided by Subsection (c), any sale or
470-10   purported sale in whole or in part of a homestead at a fixed
470-11   purchase price that is less than the appraised fair market value of
470-12   the property at the time of the sale or purported sale, and in
470-13   connection with which the buyer of the property executes a lease of
470-14   the property to the seller at lease payments that exceed the fair
470-15   rental value of the property, is considered to be a loan with all
470-16   payments made from the seller to the buyer in excess of the sales
470-17   price considered to be interest subject to Title 4, Finance Code
470-18   [79, Revised Statutes (Article 5069-1.01 et seq., Vernon's Texas
470-19   Civil Statutes)].
470-20         SECTION 7.85.  Section 73.003(c), Property Code, is amended
470-21   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
470-22   Session, 1997, to read as follows:
470-23         (c)  This section does not affect the provisions of
470-24   Subchapter B, Chapter 59, Finance Code [8, Texas Banking Act
470-25   (Article 342-8.101 et seq., Vernon's Texas Civil Statutes)].
470-26         SECTION 7.86.  Section 74.101(a), Property Code, is amended
 471-1   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
 471-2   Session, 1997, to read as follows:
 471-3         (a)  Each holder who on June 30 holds property that is
 471-4   presumed abandoned under Chapter 72, 73, or 75 of this code [,] or
 471-5   under Chapter 154, Finance Code [512, Acts of the 54th Legislature,
 471-6   1955 (Article 548b, Vernon's Texas Civil Statutes)], shall file a
 471-7   report of that property on or before the following November 1.  The
 471-8   comptroller may require the report to be in a particular format,
 471-9   including a format that can be read by a computer.
471-10         SECTION 7.87.  Section 221.024(a), Property Code, is amended
471-11   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
471-12   Session, 1997, to read as follows:
471-13         (a)  The commission may prescribe and publish forms and adopt
471-14   rules necessary to carry out the provisions of this chapter and may
471-15   suspend or revoke the registration of any seller if, after notice
471-16   and hearing, the commission determines that a seller has materially
471-17   violated this chapter, the Deceptive Trade Practices-Consumer
471-18   Protection Act (Subchapter E, Chapter 17, Business & Commerce
471-19   Code), or  the Contest and Gift Giveaway Act (Chapter 40, Business
471-20   & Commerce Code [S.B. No. 1695, Acts of the 71st Legislature,
471-21   1989]).  The commission may bring suit in a district court of
471-22   Travis County, Texas, to enjoin a violation of this Act or for any
471-23   other relief as the court may deem appropriate.
471-24         SECTION 7.88.  Section 11.02(b), Tax Code, is amended to
471-25   conform to Chapter 1008, Acts of the 75th Legislature, Regular
471-26   Session, 1997, to read as follows:
 472-1         (b)  Intangible [property of a transportation business listed
 472-2   in Subchapter A, Chapter 24 of this code, and intangible] property
 472-3   governed by Article 4.01, Insurance Code, or by Section 89.003,
 472-4   Finance Code, is [11.09, Texas Savings and Loan Act, are] taxable
 472-5   as provided by law, unless exempt by law, if this state has
 472-6   jurisdiction to tax those intangibles.
 472-7         SECTION 7.89.  Section 21.08(b), Tax Code, is amended to
 472-8   conform to Chapter 1008, Acts of the 75th Legislature, Regular
 472-9   Session, 1997, to read as follows:
472-10         (b)  The taxable situs of intangible property owned by a
472-11   savings and loan association is determined as provided by Section
472-12   89.003, Finance Code [11.09, Texas Savings and Loan Act].
472-13         SECTION 7.90.  Section 23.16, Tax Code, is amended to conform
472-14   to Chapter 1008, Acts of the 75th Legislature, Regular Session,
472-15   1997, to read as follows:
472-16         Sec. 23.16.  INTANGIBLES OF A SAVINGS AND LOAN ASSOCIATION.
472-17   Intangible property owned by a savings and loan association is
472-18   appraised as provided by Section 89.003, Finance Code [11.09, Texas
472-19   Savings and Loan Act].
472-20         SECTION 7.91.  Sections 32.065(d) and (e), Tax Code, are
472-21   amended to conform to Chapter 1008, Acts of the 75th Legislature,
472-22   Regular Session, 1997, to read as follows:
472-23         (d)  Chapters 342 [3A] and 346, Finance Code, [15] and
472-24   Section 302.102, Finance Code [Article 1C.102, Title 79, Revised
472-25   Statutes], do not apply to a transaction covered by this section.
472-26   The transferee of a tax lien under this section is not required to
 473-1   obtain a license under Title 4, Finance Code [79, Revised Statutes
 473-2   (Article 5069-1.01 et seq., Vernon's Texas Civil Statutes)].
 473-3         (e)  If in a contract under this section a person contracts
 473-4   for, charges, or receives a rate or amount of interest that exceeds
 473-5   the rate or amount allowed by this section, the amount of the
 473-6   penalty for which the person is obligated is determined in the
 473-7   manner provided by Chapter 349, Finance Code [8, Title 79, Revised
 473-8   Statutes (Article 5069-8.01 et seq., Vernon's Texas Civil
 473-9   Statutes)].
473-10         SECTION 7.92.  Section 171.001(b)(1), Tax Code, is amended to
473-11   conform to Chapter 1008, Acts of the 75th Legislature, Regular
473-12   Session, 1997, to read as follows:
473-13               (1)  "Banking corporation" means each state, national,
473-14   domestic, or foreign bank, including a limited banking association,
473-15   as defined by Section 31.002(a), Finance Code [1.002(a), Texas
473-16   Banking Act], and each bank organized under Section 25(a), Federal
473-17   Reserve Act (12 U.S.C. Secs. 611-631) (edge corporations), but does
473-18   not include a bank holding company as that term is defined by
473-19   Section 2, Bank Holding Company Act of 1956 (12 U.S.C. Sec. 1841).
473-20         SECTION 7.93.  Section 171.077, Tax Code, is amended to
473-21   conform to Chapter 1008, Acts of the 75th Legislature, Regular
473-22   Session, 1997, to read as follows:
473-23         Sec. 171.077.  EXEMPTION--CREDIT UNION.  A credit union
473-24   incorporated under Subtitle D, Title 3, Finance Code, [the Texas
473-25   Credit Union Act (Article 2461-1.01 et seq., Vernon's Texas Civil
473-26   Statutes)] is exempted from the franchise tax.
 474-1         SECTION 7.94.  Section 171.1031(c), Tax Code, is amended to
 474-2   conform to Chapter 1008, Acts of the 75th Legislature, Regular
 474-3   Session, 1997, to read as follows:
 474-4         (c)  To the extent that this subsection is not preempted by
 474-5   federal law, the Texas Department of Banking is required to appoint
 474-6   a conservator under Subchapter B, Chapter 35, Finance Code [6,
 474-7   Texas Banking Act], to pay the franchise tax of any banking
 474-8   corporation certified by the Comptroller as being delinquent in the
 474-9   payment of its franchise tax.
474-10         SECTION 7.95.  Section 171.317(a), Tax Code, is amended to
474-11   conform to Chapter 1008, Acts of the 75th Legislature, Regular
474-12   Session, 1997, to read as follows:
474-13         (a)  Except as prohibited by Subtitle B, Title 3, Finance
474-14   Code [the Texas Savings and Loan Act (Article 852a, Vernon's Texas
474-15   Civil Statutes)], the Savings and Loan Commissioner shall revoke
474-16   the charter of a savings and loan association that the comptroller
474-17   certifies is delinquent in the payment of the tax imposed under
474-18   this chapter.
474-19         SECTION 7.96.  Section 26.342(7), Water Code, is amended to
474-20   conform to Chapter 1008, Acts of the 75th Legislature, Regular
474-21   Session, 1997, to read as follows:
474-22               (7)  "Lender" means:
474-23                     (A)  a state or national bank;
474-24                     (B)  a state or federal savings and loan
474-25   association or savings bank;
474-26                     (C)  a credit union;
 475-1                     (D)  a state or federal agency that customarily
 475-2   provides financing; or
 475-3                     (E)  an entity that is registered with the Office
 475-4   of Consumer Credit Commissioner pursuant to Chapter 348, Finance
 475-5   Code [7, Title 79, Revised Statutes (Article 5069-7.01 et seq.,
 475-6   Vernon's Texas Civil Statutes)], if the entity is regularly engaged
 475-7   in the business of extending credit and if extending credit
 475-8   represents the majority of the entity's total business activity.
 475-9         SECTION 7.97.  Section 35-1, The Securities Act (Article
475-10   581-35-1, Vernon's Texas Civil Statutes), is amended to conform to
475-11   Chapter 1008, Acts of the 75th Legislature, Regular Session, 1997,
475-12   to read as follows:
475-13         Sec. 35-1.  FEES FOR SALES OF EXCESS SECURITIES.  A.  An
475-14   offeror who sells securities in this State in excess of the
475-15   aggregate amount of securities registered for the offering may
475-16   apply to register the excess securities by paying three times the
475-17   difference between the initial fee paid and the fee required under
475-18   Subsection E of Section 35, plus, if the registration is no longer
475-19   in effect, interest on that amount computed at the rate provided by
475-20   Section 302.002, Finance Code [Article 1C.002, Title 79, Revised
475-21   Statutes], from the date the registration was no longer in effect
475-22   until the date the subsequent application is filed, for the
475-23   securities sold to persons within this State, plus the amendment
475-24   fee prescribed by Subsection D of Section 35.  Registration of the
475-25   excess securities, if granted, shall be effective retroactively to
475-26   the effective date of the initial registration for the offering.
 476-1         B.  An offeror who has filed a notice to claim a limited
 476-2   offering exemption, who paid less than the maximum fee prescribed
 476-3   in Subsection J of Section 35, and who offered a greater amount of
 476-4   securities in the offering than authorized pursuant to the formula
 476-5   prescribed in Subsection J of Section 35, may file an amended
 476-6   notice disclosing the amount of securities offered and paying three
 476-7   times the difference between the fee initially paid and the fee
 476-8   which should have been paid, plus interest on that amount computed
 476-9   at the rate provided by Section 302.002, Finance Code [Article
476-10   1C.002, Title 79, Revised Statutes], from the date the original
476-11   notice was received by the Commissioner until the date the amended
476-12   notice is received by the Commissioner.  The amended notice shall
476-13   be retroactive to the date of the initial filing.
476-14         SECTION 7.98.  Section 35-2, The Securities Act (Article
476-15   581-35-2, Vernon's Texas Civil Statutes), is amended to conform to
476-16   Chapter 1008, Acts of the 75th Legislature, Regular Session, 1997,
476-17   to read as follows:
476-18         Sec. 35-2.  FEES FOR SALES OF UNREGISTERED SECURITIES.  If,
476-19   after notice and hearing, the commissioner or any court of
476-20   competent jurisdiction finds that an offeror has sold securities in
476-21   this State pursuant to an offering no part of which has been
476-22   registered under Section 7 or 10 of this Act and for which the
476-23   transactions or securities are not exempt under Section 5 or 6  of
476-24   this Act, the commissioner or said court may impose a fee equal to
476-25   six times the amount that would have been paid if the issuer had
476-26   filed an application to register the securities and paid the fee
 477-1   prescribed by Subsection E of Section 35 based on the aggregate
 477-2   amount of sales made in this State within the prior three years,
 477-3   plus interest on that amount at the rate provided by Section
 477-4   302.002, Finance Code, [Article 1C.002, Title 79, Revised
 477-5   Statutes,] from the date of the first such sale made in this State
 477-6   until the date the fee is paid.  The payment of the fee prescribed
 477-7   by this Section does not effect registration of the securities or
 477-8   affect the application of any other Section of this Act.  The
 477-9   payment of the fee prescribed by this Section is not an admission
477-10   that the transactions or securities were not exempt and is not
477-11   admissible as evidence in a suit or proceeding for failure to
477-12   register the securities.
477-13         SECTION 7.99.  Article 2.09A, Texas Miscellaneous Corporation
477-14   Laws Act (Article 1302-2.09A, Vernon's Texas Civil Statutes), is
477-15   amended to conform to Chapter 1008, Acts of the 75th Legislature,
477-16   Regular Session, 1997, to read as follows:
477-17         Art. 2.09A.  ALTERNATIVE RATE.  Notwithstanding the
477-18   provisions of Article 2.09 of this Act, any corporation, domestic
477-19   or foreign, including but not limited to any charitable or
477-20   religious corporation, may agree to and stipulate for any rate of
477-21   interest that does not exceed a rate authorized by Chapter 303,
477-22   Finance Code [1D, Title 79, Revised Statutes].
477-23         SECTION 7.100.  Section A(2), Article 7.06, Texas
477-24   Miscellaneous Corporation Laws Act (Article 1302-7.06, Vernon's
477-25   Texas Civil Statutes), is amended to conform to Chapter 1008, Acts
477-26   of the 75th Legislature, Regular Session, 1997, to read as follows:
 478-1               (2)  "Corporation" means:
 478-2                     (a)  Any corporation, association, or other
 478-3   organization incorporated or organized under the Texas Business
 478-4   Corporation Act, the Texas Non-Profit Corporation Act (Article
 478-5   1396-1.01 et seq., Vernon's Texas Civil Statutes), Subtitle A, B,
 478-6   C, or D, Title 3, Finance Code, [the Texas Banking Act (Article
 478-7   342-1.001 et seq., Vernon's Texas Civil Statutes)] or a predecessor
 478-8   of that law [Act], Chapter 181, Finance Code, [the Texas Trust
 478-9   Company Act] or a predecessor of that law [Act], the Insurance
478-10   Code, [the Texas Savings and Loan Act (Article 852a, Vernon's Texas
478-11   Civil Statutes),] Chapter 76, Acts of the 43rd Legislature, 1st
478-12   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
478-13   Statutes), [the Texas Credit Union Act (Article 2461-1.01 et seq.,
478-14   Vernon's Texas Civil Statutes),] the Cooperative Association Act
478-15   (Article 1396-50.01, Vernon's Texas Civil Statutes), Articles 1399
478-16   through 1407, Revised Statutes, Article 1448, Revised Statutes,
478-17   Section 2, Chapter 42, Acts of the 42nd Legislature, 3rd Called
478-18   Session, 1932 (Article 1524c, Vernon's Texas Civil Statutes), the
478-19   State Housing Law (Article 1528a, Vernon's Texas Civil Statutes),
478-20   the Electric Cooperative Corporation Act (Article 1528b, Vernon's
478-21   Texas Civil Statutes), the Telephone Cooperative Act (Article
478-22   1528c, Vernon's Texas Civil Statutes), the Automobile Club Services
478-23   Act (Article 1528d, Vernon's Texas Civil Statutes), the Texas
478-24   Professional Corporation Act (Article 1528e, Vernon's Texas Civil
478-25   Statutes), the Texas Professional Association Act (Article 1528f,
478-26   Vernon's Texas Civil Statutes), the Texas Mutual Trust Investment
 479-1   Company Act (Article 1528i, Vernon's Texas Civil Statutes), Chapter
 479-2   221, Health and Safety Code, the Texas Transportation Corporation
 479-3   Act (Article 1528l, Vernon's Texas Civil Statutes), the Cultural
 479-4   Education Facilities Corporation Act (Article 1528m, Vernon's Texas
 479-5   Civil Statutes), Chapter 262, Health and Safety Code, Chapter 264,
 479-6   Health and Safety Code, Title 4, Agriculture Code, Subchapter A,
 479-7   Chapter 301, Health and Safety Code, Subchapter B, Chapter 301,
 479-8   Health and Safety Code, or the Higher Education Authority Act,
 479-9   Chapter 53, Education Code;
479-10                     (b)  Any corporation, association, or other
479-11   organization incorporated or organized under the laws of this state
479-12   that is governed in whole or in part by the Texas Business
479-13   Corporation Act, the Texas Non-Profit Corporation Act (Article
479-14   1396-1.01 et seq., Vernon's Texas Civil Statutes), or the Texas
479-15   Miscellaneous Corporation Laws Act (Article 1302-1.01 et seq.,
479-16   Vernon's Texas Civil Statutes); or
479-17                     (c)  To the extent permitted by federal law, any
479-18   federally chartered bank, savings and loan association, or credit
479-19   union.
479-20         SECTION 7.101.  Section 1.04(c), Texas Revised Partnership
479-21   Act (Article 6132b-1.04, Vernon's Texas Civil Statutes), is amended
479-22   to conform to Chapter 1008, Acts of the 75th Legislature, Regular
479-23   Session, 1997, to read as follows:
479-24         (c)  Interest Rate.  If an obligation to pay interest arises
479-25   under this Act and the rate is not specified, the rate is the rate
479-26   specified by Section 302.002, Finance Code [Article 1C.002, Title
 480-1   79, Revised Statutes], or a successor statute.
 480-2         SECTION 7.102.  Section 1(a), Chapter 617, Acts of the 68th
 480-3   Legislature, Regular Session, 1983 (Article 9022, Vernon's Texas
 480-4   Civil Statutes), is amended to conform to Chapter 1008, Acts of the
 480-5   75th Legislature, Regular Session, 1997, to read as follows:
 480-6         (a)  The holder of a check or its assignee, agent,
 480-7   representative, or any other person retained by the holder to seek
 480-8   collection of the face value of the dishonored check on return of
 480-9   the check to the holder following its dishonor by a payor may
480-10   charge the drawer or endorser a reasonable processing fee, which
480-11   shall not exceed $25.  A person may not charge a processing fee to
480-12   a drawer or endorser under this subsection if the fee has been
480-13   collected under Article 102.007(e) or Article 102.0071, Code of
480-14   Criminal Procedure.  If a processing fee has been collected under
480-15   this subsection and the holder subsequently receives a fee
480-16   collected under Article 102.007(e) or Article 102.0071, Code of
480-17   Criminal Procedure, the holder shall immediately refund the fee
480-18   previously collected from the drawer or endorser.  Notwithstanding
480-19   any other provisions of law, a loan agreement made under Chapter
480-20   342, Finance Code [3A, Title 79, Revised Statutes], may provide
480-21   that on return of a dishonored check given in payment under the
480-22   agreement, the holder may charge the obligor under the agreement
480-23   the processing fee authorized by this Act, and the fee may be added
480-24   to the unpaid balance owed under the agreement, except that
480-25   interest may not be charged on the fee during the term of the
480-26   agreement.
 481-1             ARTICLE 8.  CHANGES RELATING TO GOVERNMENT CODE
 481-2         SECTION 8.01.  Section 305.005(d), Government Code, which
 481-3   requires the deposit in the state ethics fund of fees collected for
 481-4   lobbyist registration, is repealed to conform to the abolishment of
 481-5   that fund by Chapter 1037, Acts of the 75th Legislature, Regular
 481-6   Session, 1997.
 481-7         SECTION 8.02.  Section 317.005(e), Government Code, is
 481-8   amended to correct a citation to the General Appropriations Act to
 481-9   read as follows:
481-10         (e)  Neither the governor nor the board may adopt an order
481-11   under this section:
481-12               (1)  expressly postponing the time, whether set by
481-13   appropriations act or general law, that an appropriation is
481-14   distributed or otherwise made available to a state agency, for a
481-15   period that exceeds 180 days;
481-16               (2)  reducing or eliminating an appropriation for the
481-17   salary of an elected state official or a member of a board or
481-18   commission appointed by the governor; or
481-19               (3)  reducing or eliminating an appropriation to a
481-20   state agency that receives appropriations under the article
481-21   [Article VI] of the General Appropriations Act that makes
481-22   appropriations to the legislative branch.
481-23         SECTION 8.03.  (a)  Section 403.026, Government Code, as
481-24   added by Section 76, Chapter 1035, Acts of the 75th Legislature,
481-25   Regular Session, 1997, is repealed because it is substantively
481-26   identical to Section 403.026, Government Code, as added by Section
 482-1   61, Chapter 1040, Acts of the 75th Legislature, Regular Session,
 482-2   1997.
 482-3         (b)  Section 76, Chapter 1035, Acts of the 75th Legislature,
 482-4   Regular Session, 1997, is repealed.
 482-5         SECTION 8.04.  Section 403.302(d), Government Code, as
 482-6   amended by Section 44, Chapter 1039, Section 63, Chapter 1040, and
 482-7   Section 27, Chapter 1071, Acts of the 75th Legislature, Regular
 482-8   Session, 1997, is reenacted to read as follows:
 482-9         (d)  For the purposes of this section, "taxable value" means
482-10   the market value of all taxable property less:
482-11               (1)  the total dollar amount of any residence homestead
482-12   exemptions lawfully granted under Section 11.13(b) or (c), Tax
482-13   Code, in the year that is the subject of the study for each school
482-14   district;
482-15               (2)  the total dollar amount of any exemptions granted
482-16   before May 31, 1993, within a reinvestment zone under agreements
482-17   authorized by Chapter 312, Tax Code;
482-18               (3)  the total dollar amount of any captured appraised
482-19   value of property that is located in a reinvestment zone on August
482-20   31, 1999, generates a tax increment paid into a tax increment fund,
482-21   and is eligible for tax increment financing under Chapter 311, Tax
482-22   Code, under a reinvestment zone financing plan approved under
482-23   Section 311.011(d), Tax Code, before September 1, 1999;
482-24               (4)  the total dollar amount of any exemptions granted
482-25   under Section 11.251, Tax Code;
482-26               (5)  the difference between the comptroller's estimate
 483-1   of the market value and the productivity value of land that
 483-2   qualifies for appraisal on the basis of its productive capacity,
 483-3   except that the productivity value estimated by the comptroller may
 483-4   not exceed the fair market value of the land;
 483-5               (6)  the portion of the appraised value of residence
 483-6   homesteads of the elderly on which school district taxes are not
 483-7   imposed in the year that is the subject of the study, calculated as
 483-8   if the residence homesteads were appraised at the full value
 483-9   required by law;
483-10               (7)  a portion of the market value of property not
483-11   otherwise fully taxable by the district at market value because of
483-12   action required by statute or the constitution of this state that,
483-13   if the tax rate adopted by the district is applied to it, produces
483-14   an amount equal to the difference between the tax that the district
483-15   would have imposed on the property if the property were fully
483-16   taxable at market value and the tax that the district is actually
483-17   authorized to impose on the property, if this subsection does not
483-18   otherwise require that portion to be deducted;
483-19               (8)  the market value of all tangible personal
483-20   property, other than manufactured homes, owned by a family or
483-21   individual and not held or used for the production of income;
483-22               (9)  the appraised value of property the collection of
483-23   delinquent taxes on which is deferred under Section 33.06, Tax
483-24   Code;
483-25               (10)  the portion of the appraised value of property
483-26   the collection of delinquent taxes on which is deferred under
 484-1   Section 33.065, Tax Code; and
 484-2               (11)  the amount by which the market value of a
 484-3   residence homestead to which Section 23.23, Tax Code, applies
 484-4   exceeds the appraised value of that property as calculated under
 484-5   that section.
 484-6         SECTION 8.05.  Section 404.024(a), Government Code, as
 484-7   amended by Chapters 891, 1311, and 1423, Acts of the 75th
 484-8   Legislature, Regular Session, 1997, is reenacted and amended to
 484-9   read as follows:
484-10         (a)  The comptroller [board] may determine and designate the
484-11   amount of state funds to be deposited in time deposits in state
484-12   depositories.  [The comptroller shall recommend to the board a
484-13   maximum limit for state funds deposited by the comptroller at
484-14   approved state depositories.]  The percentage of state funds to be
484-15   deposited in state depositories shall be based on the interest
484-16   rates available in competing investments, the demand for funds from
484-17   Texas banks, and the state's liquidity requirements.  [The
484-18   comptroller shall provide periodic investment reports to the
484-19   board.]
484-20         SECTION 8.06.  Section 411.114(a)(2), Government Code, as
484-21   amended by Chapters 648 and 664, Acts of the 75th Legislature,
484-22   Regular Session, 1997, is amended to properly letter subdivisions
484-23   to read as follows:
484-24               (2)  The Department of Protective and Regulatory
484-25   Services shall obtain from the department criminal history record
484-26   information maintained by the department that relates to a person
 485-1   who is:
 485-2                     (A)  an applicant for a license, registration, or
 485-3   certification under Chapter 42, Human Resources Code, or a person
 485-4   who registers with or has been issued a certificate to operate
 485-5   under accreditation by the Department of Protective and Regulatory
 485-6   Services under Subchapter E, Chapter 42, Human Resources Code;
 485-7                     (B)  an owner or employee of or an applicant for
 485-8   employment by a child-care facility or family home licensed,
 485-9   registered, or certified under Chapter 42, Human Resources Code, or
485-10   by a child-care facility or child-placing agency that is seeking to
485-11   register with or has been issued a certificate to operate under
485-12   accreditation by the Department of Protective and Regulatory
485-13   Services under Subchapter E, Chapter 42, Human Resources Code;
485-14                     (C)  a resident of a registered family home, but
485-15   not a child in the home's care or a parent of the child;
485-16                     (D)  an applicant for a position with the
485-17   Department of Protective and Regulatory Services, the duties of
485-18   which include direct delivery of protective services to children,
485-19   elderly persons, or persons with a disability;
485-20                     (E)  an employee of, an applicant for employment
485-21   with, or a volunteer or an applicant volunteer with a business
485-22   entity or person that contracts with the Department of Protective
485-23   and Regulatory Services to provide direct delivery of protective
485-24   services to children, elderly persons, or persons with a
485-25   disability, if the person's duties or responsibilities include
485-26   direct contact with children, elderly persons, or persons with a
 486-1   disability;
 486-2                     (F)  a volunteer or applicant volunteer with the
 486-3   Department of Protective and Regulatory Services;
 486-4                     (G)  a person providing or applying to provide
 486-5   adoptive or foster care for children in the care of the Department
 486-6   of Protective and Regulatory Services and other adults living with
 486-7   that person in the residence in which the child will reside;
 486-8                     (H)  a Department of Protective and Regulatory
 486-9   Services employee who is engaged in the direct delivery of
486-10   protective services to children, elderly persons, or persons with a
486-11   disability;
486-12                     (I)  a person who is the subject of a report the
486-13   department receives alleging that the person has abused or
486-14   neglected a child, an elderly person, or a person with a
486-15   disability, provided that report has proven to have merit;
486-16                     (J)  a relative providing or applying to provide
486-17   in-home care for a child in the care of the Department of
486-18   Protective and Regulatory Services and other adults living with
486-19   that relative in the residence in which the child will reside; [or]
486-20                     (K)  a person providing child care for a child
486-21   who is in the care of the Department of Protective and Regulatory
486-22   Services and who is or will be receiving adoptive, foster, or
486-23   in-home care;[.]
486-24                     (L) [(Q)]  through a contract with a nonprofit
486-25   management center, an employee of, an applicant for employment
486-26   with, or a volunteer or an applicant volunteer with a nonprofit,
 487-1   tax-exempt organization that provides any service that involves the
 487-2   care of or access to children, elderly persons, or persons with a
 487-3   disability;[.]
 487-4                     (M) [(Q)]  an operator of a child-care facility
 487-5   or child-placing agency that is seeking to register with or has
 487-6   been issued a certificate to operate under accreditation by the
 487-7   Department of Protective and Regulatory Services under Subchapter
 487-8   E, Chapter 42, Human Resources Code, subject to Section 42.105,
 487-9   Human Resources Code; or
487-10                     (N) [(R)]  a child-care administrator seeking
487-11   accreditation as provided by Section 43.003, Human Resources Code.
487-12         SECTION 8.07.  Section 413.009(a), Government Code, as
487-13   amended by Chapters 298 and 445, Acts of the 75th Legislature,
487-14   Regular Session, 1997, is amended to properly number subdivisions
487-15   to read as follows:
487-16         (a)  To accomplish its duties the policy council shall:
487-17               (1)  conduct an in-depth analysis of the criminal
487-18   justice system;
487-19               (2)  determine the long-range needs of the criminal
487-20   justice system and recommend policy priorities for the system;
487-21               (3)  identify critical problems in the criminal justice
487-22   system and recommend strategies to solve those problems;
487-23               (4)  assess the cost-effectiveness of the use of state
487-24   and local funds in the criminal justice system;
487-25               (5)  recommend means to improve the deterrent and
487-26   rehabilitative capabilities of the criminal justice system;
 488-1               (6)  advise and assist the legislature in developing
 488-2   plans, programs, and proposed legislation for improving the
 488-3   effectiveness of the criminal justice system;
 488-4               (7)  evaluate the rehabilitative capabilities of a
 488-5   state-administered sex offender treatment program and, based on
 488-6   that evaluation, determine if the program is necessary;
 488-7               (8)  make computations of daily costs and compare
 488-8   interagency costs on services provided by agencies that are a part
 488-9   of the criminal justice system;
488-10               (9)  make population computations for use in planning
488-11   for the long-range needs of the criminal justice system;
488-12               (10)  determine long-range information needs of the
488-13   criminal justice system and acquire that information;
488-14               (11)  engage in other activities consistent with the
488-15   responsibilities of the policy council; and
488-16               (12) [(11)]  cooperate with the Crime Victims'
488-17   Institute by providing information and assistance to the institute
488-18   relating to the improvement of crime victims' services.
488-19         SECTION 8.08.  Section 420.003, Government Code, as amended
488-20   by Chapters 775 and 784, Acts of the 75th Legislature, Regular
488-21   Session, 1997, is amended to properly number subdivisions to read
488-22   as follows:
488-23         Sec. 420.003.  DEFINITIONS.  In this chapter:
488-24               (1)  "Advocate" means a person who provides advocacy
488-25   services as an employee or volunteer of a sexual assault program.
488-26               (2) [(1)]  "Program" means a sexual assault program.
 489-1               (3) [(2)]  "Service" means the Sexual Assault
 489-2   Prevention and Crisis Service.
 489-3               (4) [(3)]  "Sexual assault" means any act or attempted
 489-4   act as described by Section 21.11,  22.011,  22.021, or  25.02,
 489-5   Penal Code.
 489-6               (5) [(4)]  "Sexual assault examiner" means a person who
 489-7   uses a service-approved evidence collection kit and protocol to
 489-8   collect and preserve evidence of a sexual assault or other sex
 489-9   offense.
489-10               (6) [(5)]  "Sexual assault nurse examiner" means a
489-11   registered nurse who has completed a service-approved examiner
489-12   training course.
489-13               (7) [(6)]  "Sexual assault program" means any local
489-14   public or private nonprofit corporation, independent of a law
489-15   enforcement agency or prosecutor's office, that is operated as an
489-16   independent program or as part of a municipal, county, or state
489-17   agency and that provides the minimum services established by this
489-18   chapter.
489-19               (8) [(7)]  "Survivor" means an individual who is a
489-20   victim of a sexual assault, regardless of whether a report or
489-21   conviction is made in the incident.
489-22         SECTION 8.09.  Subchapter A, Chapter 496, Government Code, is
489-23   amended to conform more closely to the law from which it was
489-24   derived by adding Section 496.0032 to read as follows:
489-25         Sec. 496.0032.  AGRICULTURAL LEASE.  The board under terms
489-26   advantageous to the department may lease real property for use by
 490-1   the department for agricultural purposes and lease fixtures and
 490-2   appurtenances to the property.
 490-3         SECTION 8.10.  Section 501.014(e), Government Code, as
 490-4   amended by Chapters 807 and 1409, Acts of the 75th Legislature,
 490-5   Regular Session, 1997, is reenacted and amended to read as follows:
 490-6         (e)  On notification by a court, the department shall
 490-7   withdraw from an inmate's trust fund account any amount the inmate
 490-8   is ordered to pay by order of the court under this subsection.  The
 490-9   department shall make a payment under this subsection as ordered by
490-10   the court to either the court or the party specified in the court
490-11   order.  The department is not liable for withdrawing or failing to
490-12   withdraw money or making payments or failing to make payments under
490-13   this subsection.  The department shall make withdrawals and
490-14   payments from an inmate's trust fund account under this subsection
490-15   according to the following schedule of priorities:
490-16               (1)  as payment in full for all orders for child
490-17   support;
490-18               (2)  as payment in full for all orders for restitution;
490-19               (3)  as payment in full for all orders for
490-20   reimbursement of the Texas Department of Human Services for
490-21   financial assistance provided for the child's health needs under
490-22   Chapter 31, Human Resources Code, to a child of the inmate;
490-23               (4) [(3)]  as payment in full for all orders for court
490-24   fees and costs;
490-25               (5) [(4)]  as payment in full for all orders for fines;
490-26   and
 491-1               (6) [(5)]  as payment in full for any other court
 491-2   order, judgment, or writ.
 491-3         SECTION 8.11.  Section 531.024, Government Code, as amended
 491-4   by Chapters 165 and 342, Acts of the 75th Legislature, Regular
 491-5   Session, 1997, is amended to properly number subdivisions to read
 491-6   as follows:
 491-7         Sec. 531.024.  PLANNING AND DELIVERY OF HEALTH AND HUMAN
 491-8   SERVICES.  The commissioner shall:
 491-9               (1)  facilitate and enforce coordinated planning and
491-10   delivery of health and human services, including:
491-11                     (A)  compliance with the coordinated strategic
491-12   plan;
491-13                     (B)  co-location of services;
491-14                     (C)  integrated intake; and
491-15                     (D)  coordinated referral and case management;
491-16               (2)  develop with the Department of Information
491-17   Resources automation standards for computer systems to enable
491-18   health and human services agencies, including agencies operating at
491-19   a local level, to share pertinent data;
491-20               (3)  establish and enforce uniform regional boundaries
491-21   for all health and human services agencies;
491-22               (4)  carry out statewide health and human services
491-23   needs surveys and forecasting;
491-24               (5)  perform independent special-outcome evaluations of
491-25   health and human services programs and activities; [and]
491-26               (6)  at the request of a governmental entity identified
 492-1   under Section 531.022(e), assist that entity in implementing a
 492-2   coordinated plan that may include co-location of services,
 492-3   integrated intake, and coordinated referral and case management and
 492-4   is tailored to the needs and priorities of that entity; and[.]
 492-5               (7) [(6)]  promulgate uniform fair hearing rules for
 492-6   all Medicaid-funded services.
 492-7         SECTION 8.12.  Section 571.030(b), Government Code, as
 492-8   amended by Chapters 506, 507, and 1154, Acts of the 75th
 492-9   Legislature, Regular Session, 1997, which limited uses of money in
492-10   the state ethics fund, is repealed to conform to the abolishment of
492-11   that fund by Chapter 1037, Acts of the 75th Legislature, Regular
492-12   Session, 1997.
492-13         SECTION 8.13.  Section 571.091(a), Government Code, as
492-14   amended by Chapters 506, 507, and 1154, Acts of the 75th
492-15   Legislature, Regular Session, 1997, is amended to properly number
492-16   subdivisions to read as follows:
492-17         (a)  The commission shall prepare a written opinion answering
492-18   the request of a person subject to any of the following laws for an
492-19   opinion about the application of any of these laws to the person in
492-20   regard to a specified existing or hypothetical factual situation:
492-21               (1)  Chapter 302;
492-22               (2)  Chapter 303;
492-23               (3)  Chapter 305;
492-24               (4)  Chapter 2004;
492-25               (5) [(4)]  Chapter 572;
492-26               (6) [(4)]  Subchapter C, Chapter 159, Local Government
 493-1   Code, as provided by Section 571.061(a)(2);
 493-2               (7) [(5)]  Title 15, Election Code;
 493-3               (8) [(6)]  Chapter 36, Penal Code; or
 493-4               (9) [(7)]  Chapter 39, Penal Code.
 493-5         SECTION 8.14.  Section 601.002, Government Code, is amended
 493-6   to more closely conform to the law from which it was derived to
 493-7   read as follows:
 493-8         Sec. 601.002.  PERFORMANCE OF DUTIES BY FIRST ASSISTANT OR
 493-9   CHIEF DEPUTY.  (a)  The first assistant or chief deputy of a public
493-10   office in which a physical vacancy occurs shall conduct the affairs
493-11   of the office until a successor qualifies for the office.
493-12         (b)  The authority of a first assistant or chief deputy to
493-13   discharge the duties of an office under Subsection (a) ceases when
493-14   [on the earliest of:]
493-15               [(1)  the time] the successor to the office qualifies
493-16   for the office.[;]
493-17         (c)  If the vacancy occurs during a legislative session and
493-18   the successor to the office is subject to senate confirmation, the
493-19   authority of the first assistant or chief deputy to discharge the
493-20   duties of an office under Subsection (a) ceases on the earlier of:
493-21               (1) [(2)]  the end of the last day of the [any] session
493-22   [of the legislature occurring during the vacancy if the successor
493-23   to the office is subject to senate confirmation]; or
493-24               (2) [(3)]  the end of the 21st day after the day the
493-25   person began discharging the duties of the office [if the
493-26   legislature is in session on that day and the successor to the
 494-1   office is subject to senate confirmation].
 494-2         (d) [(c)]  This section does not apply to a vacancy on a
 494-3   board or commission.
 494-4         SECTION 8.15.  Section 821.001(7), Government Code, as
 494-5   amended by Section 34, Chapter 260, Acts of the 74th Legislature,
 494-6   Regular Session, 1995, and Section 1, Chapter 555, Acts of the 74th
 494-7   Legislature, Regular Session, 1995, is reenacted to read as
 494-8   follows:
 494-9               (7)  "Employer" means any agents or agencies in the
494-10   state responsible for public education, including the governing
494-11   board of any school district created under the laws of this state,
494-12   any county school board, the board of trustees, the board of
494-13   regents of any college or university, or any other legally
494-14   constituted board or agency of any public school, but excluding the
494-15   State Board of Education, the Texas Education Agency, and the State
494-16   Board for Educator Certification.
494-17         SECTION 8.16.  Section 822.201(b), Government Code, as
494-18   amended by Chapters 330 and 1035, Acts of the 75th Legislature,
494-19   Regular Session, 1997, is amended to properly number subdivisions
494-20   to read as follows:
494-21         (b)  "Salary and wages" as used in Subsection (a) means:
494-22               (1)  normal periodic payments of money for service the
494-23   right to which accrues on a regular basis in proportion to the
494-24   service performed;
494-25               (2)  amounts by which the member's salary is reduced
494-26   under a salary reduction agreement authorized by Chapter 610;
 495-1               (3)  amounts that would otherwise qualify as salary and
 495-2   wages under Subdivision (1) but are not received directly by the
 495-3   member pursuant to a good faith, voluntary written salary reduction
 495-4   agreement in order to finance payments to a deferred compensation
 495-5   or tax sheltered annuity program specifically authorized by state
 495-6   law or to finance benefit options under a cafeteria plan qualifying
 495-7   under Section 125 of the Internal Revenue Code of 1986 (26 U.S.C.
 495-8   Section 125), if:
 495-9                     (A)  the program or benefit options are made
495-10   available to all employees of the employer; and
495-11                     (B)  the benefit options in the cafeteria plan
495-12   are limited to one or more options that provide deferred
495-13   compensation, group health and disability insurance, group term
495-14   life insurance, dependent care assistance programs, or group legal
495-15   services plans; [and]
495-16               (4)  performance pay awarded to an employee by a school
495-17   district as part of a total compensation plan approved by the board
495-18   of trustees of the district; and[.]
495-19               (5) [(4)]  the benefit replacement pay a person earns
495-20   under Subchapter H, Chapter 659, as added by Chapter 417, Acts of
495-21   the 74th Legislature, 1995, except as provided by Subsection (c).
495-22         SECTION 8.17.  Chapter 2057, Government Code, is repealed to
495-23   conform to the repeal of the law from which that chapter was
495-24   derived by Section 6(4), Chapter 963, Acts of the 73rd Legislature,
495-25   Regular Session, 1993.
495-26         SECTION 8.18.  Section 2107.007(c), Government Code, is
 496-1   amended to correct a reference to read as follows:
 496-2         (c)  A collection fee may not be retained from amounts
 496-3   collected for the unemployment compensation fund established under
 496-4   Subchapter B, Chapter 203, Labor Code [by Section 9, Texas
 496-5   Unemployment Compensation Act (Article 5221b-7, Vernon's Texas
 496-6   Civil Statutes)].
 496-7         SECTION 8.19.  Section 2166.003(a), Government Code, as
 496-8   amended by Chapters 793 and 980, Acts of the 75th Legislature,
 496-9   Regular Session, 1997, is amended to properly number subdivisions
496-10   to read as follows:
496-11         (a)  Unless otherwise provided, this chapter does not apply
496-12   to:
496-13               (1)  a project constructed by and for the Texas
496-14   Department of Transportation;
496-15               (2)  a project constructed by and for a state
496-16   institution of higher education;
496-17               (3)  a pen, shed, or ancillary building constructed by
496-18   and for the Department of Agriculture for the processing of
496-19   livestock before export;
496-20               (4)  a project constructed by the Parks and Wildlife
496-21   Department;
496-22               (5)  a repair or rehabilitation project, except a major
496-23   renovation, of buildings and grounds on the commission inventory;
496-24               (6)  a repair and rehabilitation project of another
496-25   using agency, if all labor for the project is provided by the
496-26   regular maintenance force of the using agency under specific
 497-1   legislative authorization and the project does not require the
 497-2   advance preparation of working plans or drawings;
 497-3               (7)  a repair and rehabilitation project involving the
 497-4   use of contract labor, if the project has been excluded from this
 497-5   chapter by commission rule and does not require the advance
 497-6   preparation of working plans or drawings; [or]
 497-7               (8)  an action taken by the Texas Natural Resource
 497-8   Conservation Commission under Subchapter F or I, Chapter 361,
 497-9   Health and Safety Code; or[.]
497-10               (9) [(8)]  a repair, rehabilitation, or construction
497-11   project on property owned by the Texas Department of Housing and
497-12   Community Affairs or the Texas State Affordable Housing
497-13   Corporation.
497-14         SECTION 8.20.  Section 2253.001(9), Government Code, is
497-15   amended to more accurately reflect the source law from which it was
497-16   derived to read as follows:
497-17               (9)  "Subcontractor" means a person, firm, or
497-18   corporation that provides public work labor or material to fulfill
497-19   an obligation to a prime contractor or to a subcontractor
497-20   [contractor of the prime contractor] for the performance and
497-21   installation of any of the work required by a public work contract.
497-22         SECTION 8.21.  Section 2256.004, Government Code, as amended
497-23   by Chapters 505 and 1421, Acts of the 75th Legislature, Regular
497-24   Session, 1997, is amended to properly number subdivisions to read
497-25   as follows:
497-26         Sec. 2256.004.  APPLICABILITY.  This subchapter does not
 498-1   apply to:
 498-2               (1)  a public retirement system as defined by Section
 498-3   802.001;
 498-4               (2)  state funds invested as authorized by Section
 498-5   404.024;
 498-6               (3)  an institution of higher education having total
 498-7   endowments of at least $95 million in book value on May 1, 1995;
 498-8               (4)  funds invested by the Veterans' Land Board as
 498-9   authorized by Chapter 161, 162, or 164, Natural Resources Code;
498-10   [or]
498-11               (5)  registry funds deposited with the county or
498-12   district clerk under Chapter 117, Local Government Code; or[.]
498-13               (6) [(5)]  a deferred compensation plan that qualifies
498-14   under either Section 401(k) or 457 of the Internal Revenue Code of
498-15   1986 (26 U.S.C. Section 1 et seq.), as amended.
498-16         SECTION 8.22.  Section 2306.028, Government Code, as added by
498-17   Section 1, Chapter 268, Acts of the 73rd Legislature, Regular
498-18   Session, 1993, is repealed because of the repeal of the source law
498-19   from which it was derived by Section 21, Chapter 725, Acts of the
498-20   73rd Legislature, Regular Session, 1993.
498-21         SECTION 8.23.  (a)  Section 2308.312, Government Code, is
498-22   amended to conform to Section 1, Chapter 611, Acts of the 74th
498-23   Legislature, Regular Session, 1995, to read as follows:
498-24         Sec. 2308.312.  CAREER DEVELOPMENT CENTERS.  (a)  A board
498-25   shall establish career development centers accessible to students,
498-26   [and]  workers, and persons formerly sentenced to the institutional
 499-1   division or state jail division of the Texas Department of Criminal
 499-2   Justice throughout the workforce development area.  The board shall
 499-3   establish the centers not later than the 180th day after the date
 499-4   the board is certified.
 499-5         (b)  Each center shall provide access to information and
 499-6   services available in the workforce development area, including
 499-7   employment services,  and shall address the individual needs of
 499-8   students, [and] workers, and persons formerly sentenced to the
 499-9   institutional division or state jail division.
499-10         (c)  The services must include:
499-11               (1)  labor market information, including:
499-12                     (A)  available job openings; and
499-13                     (B)  education and training opportunities in the
499-14   local area, in the state, and, as feasible, in the nation;
499-15               (2)  uniform eligibility requirements and application
499-16   procedures for all workforce training and services;
499-17               (3)  independent assessment of individual needs and the
499-18   development of an individual service strategy;
499-19               (4)  centralized and continuous case management and
499-20   counseling;
499-21               (5)  individual referral for services, including basic
499-22   education, classroom skills training, on-the-job training, and
499-23   customized training; [and]
499-24               (6)  support services, including child care assistance,
499-25   student loans, and other forms of financial assistance required to
499-26   participate in and complete training; and
 500-1               (7)  job training and employment assistance for persons
 500-2   formerly sentenced to the institutional division or state jail
 500-3   division, provided in cooperation with Project RIO.
 500-4         (b)  Section 1, Chapter 611, Acts of the 74th Legislature,
 500-5   Regular Session, 1995, is repealed.
 500-6           ARTICLE 9.  CHANGES RELATING TO CONCEALED HANDGUNS
 500-7         SECTION 9.01.  (a)  Section 411.171(4), Government Code, is
 500-8   amended to conform to Section 1, Chapter 1261, Acts of the 75th
 500-9   Legislature, Regular Session, 1997, to read as follows:
500-10               (4)  "Convicted" means an adjudication of guilt or an
500-11   order of deferred adjudication entered against a person by a court
500-12   of competent jurisdiction whether or not[:]
500-13                     [(A)]  the imposition of the sentence is
500-14   subsequently probated and the person is discharged from community
500-15   supervision.  The term does not include an adjudication of guilt or
500-16   an order of deferred adjudication that has been subsequently:
500-17                     (A)  expunged; or
500-18                     (B)  pardoned under the authority of a state or
500-19   federal official[; or]
500-20                     [(B)  the person is pardoned for the offense,
500-21   unless the pardon is expressly granted for subsequent proof of
500-22   innocence].
500-23         (b)  Section 1, Chapter 1261, Acts of the 75th Legislature,
500-24   Regular Session, 1997, is repealed.
500-25         SECTION 9.02.  (a)  Section 411.171(8), Government Code, is
500-26   repealed to conform to Section 31, Chapter 1261, Acts of the 75th
 501-1   Legislature, Regular Session, 1997.
 501-2         (b)  Section 31, Chapter 1261, Acts of the 75th Legislature,
 501-3   Regular Session, 1997, is repealed.
 501-4         SECTION 9.03.  (a)  Section 411.172(a), Government Code, is
 501-5   amended to conform to Section 2, Chapter 1261, and Section 21.44,
 501-6   Chapter 1423, Acts of the 75th Legislature, Regular Session, 1997,
 501-7   to read as follows:
 501-8         (a)  A person is eligible for a license to carry a concealed
 501-9   handgun if the person:
501-10               (1)  is a legal resident of this state for the
501-11   six-month period preceding the date of application under this
501-12   subchapter or is otherwise eligible for a license under Section
501-13   411.173(a);
501-14               (2)  is at least 21 years of age;
501-15               (3)  has not been convicted of a felony;
501-16               (4)  is not charged with the commission of a Class A or
501-17   Class B misdemeanor or an offense under Section 42.01, Penal Code,
501-18   or of a felony under an information or indictment;
501-19               (5)  is not a fugitive from justice for a felony or a
501-20   Class A or Class B misdemeanor;
501-21               (6)  is not a chemically dependent person;
501-22               (7)  is not incapable of exercising sound judgment with
501-23   respect to the proper use and storage of a handgun [a person of
501-24   unsound mind];
501-25               (8)  has not, in the five years preceding the date of
501-26   application, been convicted of a Class A or Class B misdemeanor or
 502-1   an offense under Section 42.01, Penal Code;
 502-2               (9)  is fully qualified under applicable federal and
 502-3   state law to purchase a handgun;
 502-4               (10)  has not been finally determined to be delinquent
 502-5   in making a child support payment administered or collected by the
 502-6   attorney general;
 502-7               (11)  has not been finally determined to be delinquent
 502-8   in the payment of a tax or other money collected by the
 502-9   comptroller, the tax collector of a political subdivision of the
502-10   state, or any agency or subdivision of the state;
502-11               (12)  has not been finally determined to be in default
502-12   on a loan made under Chapter 57, Education Code;
502-13               (13)  is not currently restricted under a court
502-14   protective order or subject to a restraining order affecting the
502-15   spousal relationship, other than a restraining order solely
502-16   affecting property interests;
502-17               (14)  has not, in the 10 years preceding the date of
502-18   application, been adjudicated as having engaged in delinquent
502-19   conduct violating a penal law of the grade of felony; and
502-20               (15)  has not made any material misrepresentation, or
502-21   failed to disclose any material fact, in an application submitted
502-22   pursuant to Section 411.174 or in a request for application
502-23   submitted pursuant to Section 411.175.
502-24         (b)  Section 2, Chapter 1261, and Section 21.44, Chapter
502-25   1423, Acts of the 75th Legislature, Regular Session, 1997, are
502-26   repealed.
 503-1         SECTION 9.04.  (a)  Section 411.172, Government Code, is
 503-2   amended to conform to Section 3, Chapter 1261, Acts of the 75th
 503-3   Legislature, Regular Session, 1997, by adding Subsections (d), (e),
 503-4   and (f) to read as follows:
 503-5         (d)  For purposes of Subsection (a)(7), a person is incapable
 503-6   of exercising sound judgment with respect to the proper use and
 503-7   storage of a handgun if the person:
 503-8               (1)  has been diagnosed by a licensed physician as
 503-9   suffering from a psychiatric disorder or condition that causes or
503-10   is likely to cause substantial impairment in judgment, mood,
503-11   perception, impulse control, or intellectual ability;
503-12               (2)  suffers from a psychiatric disorder or condition
503-13   described by Subdivision (1) that:
503-14                     (A)  is in remission but is reasonably likely to
503-15   redevelop at a future time; or
503-16                     (B)  requires continuous medical treatment to
503-17   avoid redevelopment;
503-18               (3)  has been diagnosed by a licensed  physician or
503-19   declared by a court to be incompetent to manage the  person's own
503-20   affairs; or
503-21               (4)  has entered in a criminal proceeding a plea of not
503-22   guilty by reason of insanity.
503-23         (e)  The following constitutes evidence that a person has a
503-24   psychiatric disorder or condition described by Subsection (d)(1):
503-25               (1)  involuntary psychiatric hospitalization in the
503-26   preceding five-year period;
 504-1               (2)  psychiatric hospitalization in the preceding
 504-2   two-year period;
 504-3               (3)  inpatient or residential substance abuse treatment
 504-4   in the preceding five-year period;
 504-5               (4)  diagnosis in the preceding five-year period by a
 504-6   licensed physician that the person is dependent on alcohol, a
 504-7   controlled substance, or a similar substance; or
 504-8               (5)  diagnosis at any time by a licensed physician that
 504-9   the person suffers or has suffered from a psychiatric disorder or
504-10   condition consisting of or relating to:
504-11                     (A)  schizophrenia or delusional disorder;
504-12                     (B)  bipolar disorder;
504-13                     (C)  chronic dementia, whether caused by illness,
504-14   brain defect, or brain injury;
504-15                     (D)  dissociative identity disorder;
504-16                     (E)  intermittent explosive disorder; or
504-17                     (F)  antisocial personality disorder.
504-18         (f)  Notwithstanding Subsection (d), a person who has
504-19   previously been diagnosed as suffering from a psychiatric disorder
504-20   or condition described by Subsection (d) or listed in Subsection
504-21   (e) is not because of that disorder or condition incapable of
504-22   exercising sound judgment with respect to the proper use and
504-23   storage of a handgun if the person provides the department with a
504-24   certificate from a licensed physician whose primary practice is in
504-25   the field of psychiatry stating that the psychiatric disorder or
504-26   condition is in remission and is not reasonably likely to develop
 505-1   at a future time.
 505-2         (b)  Section 3, Chapter 1261, Acts of the 75th Legislature,
 505-3   Regular Session, 1997, is repealed.
 505-4         SECTION 9.05.  (a)  Section 411.173, Government Code, is
 505-5   amended to conform to Section 15, Chapter 1261, Acts of the 75th
 505-6   Legislature, Regular Session, 1997, to read as follows:
 505-7         Sec. 411.173.  NONRESIDENT [RECIPROCAL] LICENSE.  (a)  The
 505-8   department by rule shall establish a procedure for a person who is
 505-9   a legal resident of a state that does not provide for the issuance
505-10   of a license to carry a concealed handgun and who meets the
505-11   eligibility requirements of this subchapter other than the
505-12   residency requirement established by Section 411.172(a)(1) to
505-13   obtain a license under this subchapter.  The procedure must include
505-14   payment of a fee in an amount sufficient to recover the average
505-15   cost to the department of obtaining a criminal history record check
505-16   and investigation on a nonresident applicant.
505-17         (b)  The department shall negotiate an agreement with any
505-18   other state that provides for the issuance of a license to carry a
505-19   concealed handgun under which a license issued by the other state
505-20   is recognized in this state [On application by a person who has a
505-21   valid license to carry a concealed handgun issued by another state,
505-22   the department may issue to the person a license under this
505-23   subchapter without requiring that the person meet eligibility
505-24   requirements or pay fees otherwise imposed under this subchapter,
505-25   but only] if the department determines that:
505-26               (1)  the eligibility requirements imposed by the other
 506-1   state include background check requirements that meet or exceed
 506-2   background check [are at least as rigorous as the] requirements
 506-3   imposed by federal law as a condition of receiving a handgun [this
 506-4   subchapter]; and
 506-5               (2)  the other state recognizes [provides reciprocal
 506-6   licensing privileges to a person who holds] a license issued in
 506-7   [under] this [subchapter and applies for a license in the other]
 506-8   state.
 506-9         (b)  Section 15, Chapter 1261, Acts of the 75th Legislature,
506-10   Regular Session, 1997, is repealed.
506-11         SECTION 9.06.  (a)  Section 411.174(a), Government Code, is
506-12   amended to conform to Section 4, Chapter 1261, Acts of the 75th
506-13   Legislature, Regular Session, 1997, to read as follows:
506-14         (a)  An applicant for a license to carry a concealed handgun
506-15   must submit to the director's designee described by Section
506-16   411.176:
506-17               (1)  a completed application on a form provided by the
506-18   department that requires only the information listed in Subsection
506-19   (b);
506-20               (2)  two recent color passport photographs of the
506-21   applicant;
506-22               (3)  a certified copy of the applicant's birth
506-23   certificate or certified proof of age;
506-24               (4)  proof of residency in this state;
506-25               (5)  two complete sets of legible and classifiable
506-26   fingerprints of the applicant taken by a person [employed by a law
 507-1   enforcement agency who is] appropriately trained in recording
 507-2   fingerprints who is employed by a law enforcement agency or by a
 507-3   private entity designated by a law enforcement agency as an entity
 507-4   qualified to take fingerprints of an applicant for a license under
 507-5   this subchapter;
 507-6               (6)  a nonrefundable application and license fee of
 507-7   $140 paid to the department;
 507-8               (7)  a handgun proficiency certificate described by
 507-9   Section 411.189;
507-10               (8)  an affidavit signed by the applicant stating that
507-11   the applicant:
507-12                     (A)  has read and understands each provision of
507-13   this subchapter that creates an offense under the laws of this
507-14   state and each provision of the laws of this state related to use
507-15   of deadly force; and
507-16                     (B)  fulfills all the eligibility requirements
507-17   listed under Section 411.172; and
507-18               (9)  a form executed by the applicant that authorizes
507-19   the director to make an inquiry into any noncriminal history
507-20   records that are necessary to determine the applicant's eligibility
507-21   for a license under Section 411.172(a).
507-22         (b)  Section 4, Chapter 1261, Acts of the 75th Legislature,
507-23   Regular Session, 1997, is repealed.
507-24         SECTION 9.07.  (a)  Section 411.176(b), Government Code, is
507-25   amended to conform to Section 5, Chapter 1261, Acts of the 75th
507-26   Legislature, Regular Session, 1997, to read as follows:
 508-1         (b)  The director's designee as needed shall conduct an
 508-2   additional criminal history record check of the applicant and an
 508-3   investigation of the applicant's local official records to verify
 508-4   the accuracy of the application materials.  The scope of the record
 508-5   check and the investigation are at the sole discretion of the
 508-6   department, except that the director's designee shall complete the
 508-7   record check and investigation not later than the 60th day after
 508-8   the date the department receives the application materials.  The
 508-9   department shall send a fingerprint card to the Federal Bureau of
508-10   Investigation for a national criminal history check of the
508-11   applicant.  On completion of the investigation, the director's
508-12   designee shall return all materials and the result of the
508-13   investigation to the appropriate division of the department at its
508-14   Austin headquarters.  The director's designee may submit to the
508-15   appropriate division of the department, at the department's Austin
508-16   headquarters, along with the application materials a written
508-17   recommendation for disapproval of the application, accompanied by
508-18   an affidavit stating personal knowledge or naming persons with
508-19   personal knowledge of a ground for denial under Section 411.172.
508-20   The director's designee in the appropriate geographical area may
508-21   also submit the application and the recommendation that the license
508-22   be issued.  On receipt at the department's Austin headquarters of
508-23   the application materials and the result of the investigation by
508-24   the director's designee, the department shall conduct any further
508-25   record check or investigation the department determines is
508-26   necessary if a question exists with respect to the accuracy of the
 509-1   application materials or the eligibility of the applicant, except
 509-2   that the department shall complete the record check and
 509-3   investigation not later than the 180th day after the date the
 509-4   department receives the application materials from the applicant.
 509-5         (b)  Section 5, Chapter 1261, Acts of the 75th Legislature,
 509-6   Regular Session, 1997, is repealed.
 509-7         SECTION 9.08.  (a)  Section 411.177(b), Government Code, is
 509-8   amended to conform to Section 6, Chapter 1261, Acts of the 75th
 509-9   Legislature, Regular Session, 1997, to read as follows:
509-10         (b)  The department shall, not later than the 60th day after
509-11   the date of the receipt by the director's designee of the completed
509-12   application materials[, shall]:
509-13               (1)  issue the license; [or]
509-14               (2)  notify the applicant in writing that the
509-15   application was denied:
509-16                     (A)  on the grounds that the applicant failed to
509-17   qualify under the criteria listed in Section 411.172;
509-18                     (B)  based on the affidavit of the director's
509-19   designee submitted to the department under Section 411.176(b); or
509-20                     (C)  based on the affidavit of the qualified
509-21   handgun instructor submitted to the department under Section
509-22   411.189(c); or
509-23               (3)  notify the applicant in writing that the
509-24   department is unable to make a determination regarding the issuance
509-25   or denial of a license to the applicant within the 60-day period
509-26   prescribed by this subsection and include in that notification an
 510-1   explanation of the reason for the inability and an estimation of
 510-2   the amount of time the department will need to make the
 510-3   determination.
 510-4         (b)  Section 6, Chapter 1261, Acts of the 75th Legislature,
 510-5   Regular Session, 1997, is repealed.
 510-6         SECTION 9.09.  (a)  Section 411.186(a), Government Code, is
 510-7   amended to conform to Section 8, Chapter 1261, Acts of the 75th
 510-8   Legislature, Regular Session, 1997, to read as follows:
 510-9         (a)  A license may be revoked under this section if the
510-10   license holder:
510-11               (1)  was not entitled to the license at the time it was
510-12   issued;
510-13               (2)  gave false information on the application;
510-14               (3)  subsequently becomes ineligible for a license
510-15   under Section 411.172, unless the sole basis for the ineligibility
510-16   is that the license holder is charged with the commission of a
510-17   Class A or Class B misdemeanor or an offense under Section 42.01,
510-18   Penal Code, or of a felony under an information or indictment; [or]
510-19               (4)  is convicted of an offense under Section 46.035,
510-20   Penal Code; or
510-21               (5)  is determined by the department to have engaged in
510-22   conduct constituting a reason to suspend a license listed in
510-23   Section 411.187(a) after the person's license has been previously
510-24   suspended twice for the same reason.
510-25         (b)  Section 8, Chapter 1261, Acts of the 75th Legislature,
510-26   Regular Session, 1997, is repealed.
 511-1         SECTION 9.10.  (a)  Sections 411.187(a) and (c), Government
 511-2   Code, are amended to conform to Section 9, Chapter 1261, Acts of
 511-3   the 75th Legislature, Regular Session, 1997, to read as follows:
 511-4         (a)  A license may be suspended under this section if the
 511-5   license holder:
 511-6               (1)  is charged with the commission of a Class A or
 511-7   Class B misdemeanor or an offense [convicted of disorderly conduct
 511-8   punishable as a Class C misdemeanor] under Section 42.01, Penal
 511-9   Code, or of a felony under an information or indictment;
511-10               (2)  fails to display a license as required by Section
511-11   411.205;
511-12               (3)  fails to notify the department of a change of
511-13   address or name as required by Section 411.181;
511-14               (4)  carries a concealed handgun under the authority of
511-15   this subchapter of a different category than the license holder is
511-16   licensed to carry; or
511-17               (5)  [has been charged by indictment with the
511-18   commission of an offense that would make the license holder
511-19   ineligible for a license on conviction; or]
511-20               [(6)]  fails to return a previously issued license
511-21   after a license is modified as required by Section 411.184(d).
511-22         (c)  A license may be suspended under this section:
511-23               (1)  for 30 days, if the person's license is subject to
511-24   suspension for a reason listed in Subsection (a)(3), (4), or (5),
511-25   except as provided by Subdivision (3);
511-26               (2)  for 90 days, if the person's license is subject to
 512-1   suspension for a reason listed in Subsection (a)(2), except as
 512-2   provided by Subdivision (3);
 512-3               (3)  for not less than one year and not more than three
 512-4   years if the person's license is subject to suspension for a reason
 512-5   listed in Subsection (a), other than the reason listed in
 512-6   Subsection (a)(1), and the person's license has been previously
 512-7   suspended for the same reason; or
 512-8               (4)  until dismissal of the charges if the person's
 512-9   license is subject to suspension for the reason listed in
512-10   Subsection (a)(1).
512-11         (b)  Section 9, Chapter 1261, Acts of the 75th Legislature,
512-12   Regular Session, 1997, is repealed.
512-13         SECTION 9.11.  (a)  Section 411.188(a), Government Code, is
512-14   amended to conform to Section 10, Chapter 1261, Acts of the 75th
512-15   Legislature, Regular Session, 1997, to read as follows:
512-16         (a)  The director by rule shall establish minimum standards
512-17   for handgun proficiency and shall develop a course to teach handgun
512-18   proficiency and examinations to measure handgun proficiency.  The
512-19   course to teach handgun proficiency must contain training sessions
512-20   divided into two parts.  One part of the course must be classroom
512-21   instruction and the other part must be range instruction and an
512-22   actual demonstration by the applicant of the applicant's ability to
512-23   safely and proficiently use the category of handgun for which the
512-24   applicant seeks certification.  An applicant may not be certified
512-25   unless the applicant demonstrates, at a minimum, the degree of
512-26   proficiency that is required to effectively operate a [9-millimeter
 513-1   or .38-caliber] handgun of .32 caliber or above.  The department
 513-2   shall distribute the standards, course requirements, and
 513-3   examinations on request to any qualified handgun instructor.
 513-4         (b)  Section 10, Chapter 1261, Acts of the 75th Legislature,
 513-5   Regular Session, 1997, is repealed.
 513-6         SECTION 9.12.  (a)  Section 411.189(c), Government Code, is
 513-7   amended to conform to Section 11, Chapter 1261, Acts of the 75th
 513-8   Legislature, Regular Session, 1997, to read as follows:
 513-9         (c)  A qualified handgun instructor may submit to the
513-10   department a written recommendation for disapproval of the
513-11   application for a license, renewal, or modification of a license,
513-12   accompanied by an affidavit stating personal knowledge or naming
513-13   persons with personal knowledge of facts that lead the instructor
513-14   to believe that an applicant is not qualified for handgun
513-15   proficiency certification.  The department may use a written
513-16   recommendation submitted under this subsection as the basis for
513-17   denial of a license only if the department determines that the
513-18   recommendation is made in good faith and is supported by a
513-19   preponderance of the evidence.  The department shall make a
513-20   determination under this subsection not later than the 45th day
513-21   after the date the department receives the written recommendation.
513-22   The 60-day period in which the department must take action under
513-23   Section 411.177(b) is extended one day for each day a determination
513-24   is pending under this subsection.
513-25         (b)  Section 11, Chapter 1261, Acts of the 75th Legislature,
513-26   Regular Session, 1997, is repealed.
 514-1         SECTION 9.13.  (a)  Sections 411.190(c) and (f), Government
 514-2   Code, are amended to conform to Section 12, Chapter 1261, Acts of
 514-3   the 75th Legislature, Regular Session, 1997, to read as follows:
 514-4         (c)  The department shall provide training to an individual
 514-5   who applies for certification as a qualified handgun instructor.
 514-6   An applicant shall pay a fee of $100 to the department for the
 514-7   training.  An applicant must take and successfully complete the
 514-8   training offered by the department and pay the training fee before
 514-9   the department may certify the applicant as a qualified handgun
514-10   instructor.  The department shall issue [waive the requirements
514-11   regarding a handgun proficiency certification under Section 411.189
514-12   for an applicant for] a license to carry a concealed handgun under
514-13   the authority of this subchapter to any person who is certified as
514-14   a qualified handgun instructor and who pays to the department a fee
514-15   of $100 in addition to [takes and successfully completes training
514-16   under  this subsection and pays] the training fee.  The department
514-17   by rule may prorate or waive the training fee for an employee of
514-18   another governmental entity.
514-19         (f)  If the department determines that a reason exists to
514-20   revoke, suspend, or deny a license to carry a concealed handgun
514-21   with respect to a person who is a qualified handgun instructor or
514-22   an applicant for certification as a qualified handgun instructor,
514-23   the department shall take that action against the person's:
514-24               (1)  license to carry a concealed handgun if the person
514-25   is an applicant for or the holder of a license issued under this
514-26   subchapter; and
 515-1               (2)  certification as a qualified handgun instructor
 515-2   [regardless of whether the person has a license issued under this
 515-3   subchapter to carry a concealed handgun].
 515-4         (b)  Section 12, Chapter 1261, Acts of the 75th Legislature,
 515-5   Regular Session, 1997, is repealed.
 515-6         SECTION 9.14.  Sections 411.199(b) and (g), Government Code,
 515-7   are amended to conform to Section 13, Chapter 1261, Acts of the
 515-8   75th Legislature, Regular Session, 1997, to read as follows:
 515-9         (b)  The person shall submit two complete sets of legible and
515-10   classifiable fingerprints and a sworn statement from the head of
515-11   the law enforcement agency employing the applicant.  A head of a
515-12   law enforcement agency may not refuse to issue a statement under
515-13   this subsection.  If the applicant alleges that the statement is
515-14   untrue, the department shall investigate the validity of the
515-15   statement.  The statement must include:
515-16               (1)  the name and rank of the applicant;
515-17               (2)  the status of the applicant before retirement;
515-18               (3)  whether or not the applicant was accused of
515-19   misconduct at the time of the retirement;
515-20               (4)  the physical and mental condition of the
515-21   applicant;
515-22               (5)  the type of weapons the applicant had demonstrated
515-23   proficiency with during the last year of employment;
515-24               (6)  whether the applicant would be eligible for
515-25   reemployment with the agency, and if not, the reasons the applicant
515-26   is not eligible; and
 516-1               (7)  a recommendation from the agency head regarding
 516-2   the issuance of a license under this subchapter.
 516-3         (g)  A retired officer [criminal investigator] of the United
 516-4   States who was eligible to carry a firearm in the discharge of the
 516-5   officer's official duties [is designated as a "special agent"] is
 516-6   eligible for a license under this section.  An applicant described
 516-7   by this subsection may submit the application at any time after
 516-8   retirement.  The applicant shall submit with the application proper
 516-9   proof of retired status by presenting the following documents
516-10   prepared by the agency from which the applicant retired:
516-11               (1)  retirement credentials; and
516-12               (2)  a letter from the agency head stating the
516-13   applicant retired in good standing.
516-14         SECTION 9.15.  (a)  Subchapter H, Chapter 411, Government
516-15   Code, is amended to conform to Section 13, Chapter 1261, Acts of
516-16   the 75th Legislature, Regular Session, 1997, by adding Section
516-17   411.1991 to read as follows:
516-18         Sec. 411.1991.  ACTIVE PEACE OFFICERS.  (a)  A person who is
516-19   licensed as a peace officer under Chapter 415 and is employed
516-20   full-time as a peace officer by a law enforcement agency may apply
516-21   for a license under this subchapter.  The person shall submit to
516-22   the department two complete sets of legible and classifiable
516-23   fingerprints and a sworn statement of the head of the law
516-24   enforcement agency employing the applicant.  A head of a law
516-25   enforcement agency may not refuse to issue a statement under this
516-26   subsection.  If the applicant alleges that the statement is untrue,
 517-1   the department shall investigate the validity of the statement.
 517-2   The statement must include:
 517-3               (1)  the name and rank of the applicant;
 517-4               (2)  whether the applicant has been accused of
 517-5   misconduct at any time during the applicant's period of employment
 517-6   with the agency and the disposition of that accusation;
 517-7               (3)  a description of the physical and mental condition
 517-8   of the applicant;
 517-9               (4)  a list of the types of weapons the applicant has
517-10   demonstrated proficiency with during the preceding year; and
517-11               (5)  a recommendation from the agency head that a
517-12   license be issued to the person under this subchapter.
517-13         (b)  The department may issue a license under this subchapter
517-14   to an applicant under this section if the statement from the head
517-15   of the law enforcement agency employing the applicant complies with
517-16   Subsection (a) and indicates that the applicant is qualified and
517-17   physically and mentally fit to carry a handgun.
517-18         (c)  An applicant under this section shall pay a fee of $25
517-19   for a license issued under this subchapter.
517-20         (d)  A license issued under this section expires as provided
517-21   by Section 411.183.
517-22         (b)  Section 13, Chapter 1261, Acts of the 75th Legislature,
517-23   Regular Session, 1997, is repealed.
517-24         SECTION 9.16.  (a)  Section 411.204, Government Code, is
517-25   amended to conform to Section 14, Chapter 1261, Acts of the 75th
517-26   Legislature, Regular Session, 1997, by amending Subsections (a) and
 518-1   (c) and adding Subsections (d) and (e) to read as follows:
 518-2         (a)  A business that has a permit or license issued under
 518-3   Chapter 25, 28, 32, [or] 69, or 74, Alcoholic Beverage Code, and
 518-4   that derives 51 percent or more of its income from the sale of
 518-5   alcoholic beverages for on-premises consumption as determined by
 518-6   the Texas Alcoholic Beverage Commission under Section 104.06,
 518-7   Alcoholic Beverage Code, shall prominently display at each entrance
 518-8   to the business premises a sign that complies with the requirements
 518-9   of Subsection (c).
518-10         (c)  The sign required under Subsections (a) and (b) must
518-11   give notice in both English and Spanish that it is unlawful for a
518-12   person licensed under this subchapter to carry a handgun on the
518-13   premises.  The sign must appear in contrasting colors with block
518-14   letters at least one inch in height and must include on its face
518-15   the number "51" printed in solid red at least five inches in
518-16   height.  The sign shall be displayed in a conspicuous manner
518-17   clearly visible to the public.
518-18         (d)  A business that has a permit or license issued under the
518-19   Alcoholic Beverage Code and that is not required to display a sign
518-20   under this section may be required to display a sign under Section
518-21   11.041 or 61.11, Alcoholic Beverage Code.
518-22         (e)  This section does not apply to a business that has a
518-23   food and beverage certificate issued under the Alcoholic Beverage
518-24   Code.
518-25         (b)  Section 14, Chapter 1261, Acts of the 75th Legislature,
518-26   Regular Session, 1997, is repealed.
 519-1         SECTION 9.17.  (a)  Section 411.205, Government Code, is
 519-2   amended to conform to Section 7, Chapter 1261, Acts of the 75th
 519-3   Legislature, Regular Session, 1997, to read as follows:
 519-4         Sec. 411.205.  DISPLAYING LICENSE; PENALTY.  (a)  [On a
 519-5   demand by a magistrate or a peace officer that a license holder
 519-6   display the license holder's handgun license, the license holder
 519-7   shall display both the license and the license holder's driver's
 519-8   license or identification certificate issued by the department.]
 519-9         [(b)]  If a license holder is carrying a handgun on or about
519-10   the license holder's person when a magistrate or a peace officer
519-11   demands that the license holder display identification, the license
519-12   holder shall display both the license holder's driver's license or
519-13   identification certificate issued by the department and the license
519-14   holder's handgun license.  A person who fails or refuses to display
519-15   the license  and identification as required by this subsection is
519-16   subject to suspension of the person's license as provided by
519-17   Section 411.187.
519-18         (b) [(c)]  A person commits an offense if the person fails or
519-19   refuses to display the license and identification as required by
519-20   Subsection (a) after previously having had the person's license
519-21   suspended for a violation of that subsection [or (b)].  An offense
519-22   under this subsection is a Class B misdemeanor.
519-23         (b)  Section 7, Chapter 1261, Acts of the 75th Legislature,
519-24   Regular Session, 1997, is repealed.
519-25         SECTION 9.18.  Section 11.041(a), Alcoholic Beverage Code, is
519-26   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
 520-1   Legislature, Regular Session, 1997, to read as follows:
 520-2         (a)  Each holder of a permit who is not otherwise required to
 520-3   display a sign under Section 411.204, Government Code [31, Article
 520-4   4413(29ee), Revised Statutes], shall display in a prominent place
 520-5   on the permit holder's premises a sign giving notice that it is
 520-6   unlawful for a person to carry a weapon on the premises unless the
 520-7   weapon is a concealed handgun of the same category the person is
 520-8   licensed to carry under Subchapter H, Chapter 411, Government Code
 520-9   [Article 4413(29ee), Revised Statutes].
520-10         SECTION 9.19.  Section 11.61(e), Alcoholic Beverage Code, is
520-11   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
520-12   Legislature, Regular Session, 1997, to read as follows:
520-13         (e)  Except as provided by Subsection (f), the commission or
520-14   administrator shall cancel an original or renewal permit if it is
520-15   found, after notice and hearing, that the permittee knowingly
520-16   allowed a person to possess a firearm in a building on the licensed
520-17   premises.  This subsection does not apply to a person:
520-18               (1)  who holds a security officer commission issued by
520-19   the Texas Board of Private Investigators and Private Security
520-20   Agencies, if:
520-21                     (A)  the person is engaged in the performance of
520-22   the person's duties as a security officer;
520-23                     (B)  the person is wearing a distinctive uniform;
520-24   and
520-25                     (C)  the weapon is in plain view;
520-26               (2)  who is a peace officer;
 521-1               (3)  who is a permittee or an employee of a permittee
 521-2   if the person is supervising the operation of the premises; or
 521-3               (4)  who possesses a concealed handgun of the same
 521-4   category the person is licensed to carry under Subchapter H,
 521-5   Chapter 411, Government Code [Article 4413(29ee), Revised
 521-6   Statutes], unless the person is on the premises of a business
 521-7   described by Section 46.035(b)(1), Penal Code.
 521-8         SECTION 9.20.  Section 61.11(a), Alcoholic Beverage Code, is
 521-9   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
521-10   Legislature, Regular Session, 1997, to read as follows:
521-11         (a)  Each holder of a license who is not otherwise required
521-12   to display a sign under Section 411.204, Government Code [31,
521-13   Article 4413(29ee), Revised Statutes], shall display in a prominent
521-14   place on the license holder's premises a sign giving notice that it
521-15   is unlawful for a person to carry a weapon on the premises unless
521-16   the weapon is a concealed handgun of the same category the person
521-17   is licensed to carry under Subchapter H, Chapter 411, Government
521-18   Code [Article 4413(29ee), Revised Statutes].
521-19         SECTION 9.21.  Section 61.71(f), Alcoholic Beverage Code, is
521-20   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
521-21   Legislature, Regular Session, 1997, to read as follows:
521-22         (f)  Except as provided by Subsection (g), the commission or
521-23   administrator shall cancel an original or renewal dealer's
521-24   on-premises or off-premises license if it is found, after notice
521-25   and hearing, that the licensee knowingly allowed a person to
521-26   possess a firearm in a building on the licensed premises.  This
 522-1   subsection does not apply to a person:
 522-2               (1)  who holds a security officer commission issued by
 522-3   the Texas Board of Private Investigators and Private Security
 522-4   Agencies, if:
 522-5                     (A)  the person is engaged in the performance of
 522-6   the person's duties as a security officer;
 522-7                     (B)  the person is wearing a distinctive uniform;
 522-8   and
 522-9                     (C)  the weapon is in plain view;
522-10               (2)  who is a peace officer;
522-11               (3)  who is a licensee or an employee of a licensee if
522-12   the person is supervising the operation of the premises; or
522-13               (4)  who possesses a concealed handgun of the same
522-14   category the person is licensed to carry under Subchapter H,
522-15   Chapter 411, Government Code [Article 4413(29ee), Revised
522-16   Statutes], unless the person is on the premises of a business
522-17   described by Section 46.035(b)(1), Penal Code.
522-18         SECTION 9.22.  Section 104.06(c), Alcoholic Beverage Code, is
522-19   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
522-20   Legislature, Regular Session, 1997, to read as follows:
522-21         (c)  If the commission makes a determination under Subsection
522-22   (a) that a holder of a license or permit receives 51 percent or
522-23   more of the gross receipts of the premises from the sale or service
522-24   of alcoholic beverages, the holder shall comply with the
522-25   requirements of Section 411.204, Government Code [31, Article
522-26   4413(29ee), Revised Statutes], and shall continue to comply with
 523-1   those requirements until the commission determines that the holder
 523-2   receives less than 51 percent of the gross receipts of the premises
 523-3   from the sale or service of alcoholic beverages for on-premises
 523-4   consumption.
 523-5         SECTION 9.23.  Section 12.092(b), Health and Safety Code, is
 523-6   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
 523-7   Legislature, Regular Session, 1997, to read as follows:
 523-8         (b)  The medical advisory board shall assist the Department
 523-9   of Public Safety of the State of Texas in determining whether:
523-10               (1)  an applicant for a driver's license or a license
523-11   holder is capable of safely operating a motor vehicle; or
523-12               (2)  an applicant for or holder of a license to carry a
523-13   concealed handgun under the authority of Subchapter H, Chapter 411,
523-14   Government Code [Article 4413(29ee), Revised Statutes], is capable
523-15   of exercising sound judgment with respect to the proper use and
523-16   storage of a handgun.
523-17         SECTION 9.24.  Sections 30.06(a) and (c), Penal Code, are
523-18   amended to conform to Section 10.01, Chapter 165, Acts of the 75th
523-19   Legislature, Regular Session, 1997, to read as follows:
523-20         (a)  A license holder commits an offense if the license
523-21   holder:
523-22               (1)  carries a handgun under the authority of
523-23   Subchapter H, Chapter 411, Government Code [Article 4413(29ee),
523-24   Revised Statutes], on property of another without effective
523-25   consent; and
523-26               (2)  received notice that:
 524-1                     (A)  entry on the property by a license holder
 524-2   with a concealed handgun was forbidden; or
 524-3                     (B)  remaining on the property with a concealed
 524-4   handgun was forbidden and failed to depart.
 524-5         (c)  In this section:
 524-6               (1)  "Entry" has the meaning assigned by Section
 524-7   30.05(b).
 524-8               (2)  "License holder" has the meaning assigned by
 524-9   Section 46.035(f).
524-10               (3)  "Written communication" means:
524-11                     (A)  a card or other document on which is written
524-12   language identical to the following:  "Pursuant to Section 30.06,
524-13   Penal Code (trespass by holder of license to carry a concealed
524-14   handgun), a person licensed under Subchapter H, Chapter 411,
524-15   Government Code [Article 4413(29ee), Revised Statutes] (concealed
524-16   handgun law), may not enter this property with a concealed
524-17   handgun"; or
524-18                     (B)  a sign posted on the property that:
524-19                           (i)  includes the language described by
524-20   Paragraph (A) in both English and Spanish;
524-21                           (ii)  appears in contrasting colors with
524-22   block letters at least one inch in height; and
524-23                           (iii)  is displayed in a conspicuous manner
524-24   clearly visible to the public.
524-25         SECTION 9.25.  Section 46.15(a), Penal Code, is amended to
524-26   conform to Section 10.01, Chapter 165, Acts of the 75th
 525-1   Legislature, Regular Session, 1997, to read as follows:
 525-2         (a)  Sections 46.02 and 46.03 do not apply to:
 525-3               (1)  peace officers and neither section prohibits a
 525-4   peace officer from carrying a weapon in this state, regardless of
 525-5   whether the officer is engaged in the actual discharge of the
 525-6   officer's duties while carrying the weapon;
 525-7               (2)  parole officers and neither section prohibits an
 525-8   officer from carrying a weapon in this state if the officer is:
 525-9                     (A)  engaged in the actual discharge of the
525-10   officer's  duties while carrying the weapon; and
525-11                     (B)  in compliance with policies and procedures
525-12   adopted by the Texas Department of Criminal Justice regarding the
525-13   possession of a weapon by an officer while on duty;
525-14               (3)  community supervision and corrections department
525-15   officers appointed or employed under Section 76.004, Government
525-16   Code, and neither section prohibits an officer from carrying a
525-17   weapon in this state if the officer is:
525-18                     (A)  engaged in the actual discharge of the
525-19   officer's duties while carrying the weapon; and
525-20                     (B)  authorized to carry a weapon under Section
525-21   76.0051, Government Code; or
525-22               (4)  a judge or justice of the supreme court, the court
525-23   of criminal appeals, a court of appeals, a district court, a
525-24   criminal district court, a constitutional county court, a statutory
525-25   county court, a justice court, or a municipal court who is licensed
525-26   to carry a concealed handgun under Subchapter H, Chapter 411,
 526-1   Government Code [Article 4413(29ee), Revised Statutes].
 526-2                ARTICLE 10.  CHANGES RELATING TO BOARD OF
 526-3                           PARDONS AND PAROLES
 526-4         SECTION 10.01.  Section 508.001, Government Code, is amended
 526-5   to conform to Section 1, Chapter 161, Acts of the 75th Legislature,
 526-6   Regular Session, 1997, by renumbering existing Subdivision (8) as
 526-7   Subdivision (9) and adding a new Subdivision (8) to read as
 526-8   follows:
 526-9               (8)  "Policy board" means the Board of Pardons and
526-10   Paroles Policy Board.
526-11         SECTION 10.02.  Section 508.033(c), Government Code, is
526-12   amended to conform to Section 2, Chapter 161, Acts of the 75th
526-13   Legislature, Regular Session, 1997, to read as follows:
526-14         (c)  An employee or paid officer of or consultant to a trade
526-15   association in the field of criminal justice may not be:
526-16               (1)  a member of the board; or
526-17               (2)  an employee of the division or the board who is
526-18   exempt from the state's position classification plan or who is
526-19   compensated at or above the amount prescribed by the General
526-20   Appropriations Act for step 1, salary group A17, of the position
526-21   classification salary schedule.
526-22         SECTION 10.03.  Section 508.033(d), Government Code, is
526-23   amended to conform to Section 2, Chapter 161, Acts of the 75th
526-24   Legislature, Regular Session, 1997, to read as follows:
526-25         (d)  A person who is the spouse of an officer or [a] manager
526-26   of or paid consultant to a trade association in the field of
 527-1   criminal justice may not be:
 527-2               (1)  a member of the board; or
 527-3               (2)  an employee of the division or the board[,
 527-4   including an employee] who is:
 527-5                     (A)  exempt from the state's classification plan;
 527-6   or [and]
 527-7                     (B)  compensated at or above the amount
 527-8   prescribed by the General Appropriations Act for step 1, salary
 527-9   group A17 [17], of the position classification salary schedule.
527-10         SECTION 10.04.  Section 508.033(e), Government Code, is
527-11   amended to conform to Section 2, Chapter 161, Acts of the 75th
527-12   Legislature, Regular Session, 1997, to read as follows:
527-13         (e)  A person who is required to register as a lobbyist under
527-14   Chapter 305 because of the person's activities for compensation in
527-15   or on behalf of a profession related to the operation of the board
527-16   may not:
527-17               (1)  serve as a member of the board; or
527-18               (2)  act as the general counsel to the board or
527-19   division.
527-20         SECTION 10.05.  Section 508.034, Government Code, is amended
527-21   to conform to Section 2, Chapter 161, Acts of the 75th Legislature,
527-22   Regular Session, 1997, to read as follows:
527-23         Sec. 508.034.  GROUNDS FOR REMOVAL.  (a)  It is a ground for
527-24   removal from the board if a member:
527-25               (1)  at the time of appointment is not qualified under
527-26   Section 508.032 or 508.033(a) for appointment to the board;
 528-1               (2)  during the member's service on the board becomes
 528-2   ineligible under Section 508.033(a) for appointment to the board;
 528-3               (3)  violates Section 508.033(c), (d), or (e);
 528-4               (4)  is unable to discharge the member's duties for a
 528-5   substantial part of the term for which the member is [was]
 528-6   appointed because of illness or disability; or
 528-7               (5)  is absent from more than half of the regularly
 528-8   scheduled board or panel meetings that the member is eligible to
 528-9   attend during each calendar year, except when the absence is
528-10   excused by majority vote of the board.
528-11         (b)  It is a ground for removal from the board and the policy
528-12   board if a member of the policy board is absent from more than half
528-13   of the regularly scheduled policy board meetings that the member is
528-14   eligible to attend during each calendar year.
528-15         (c)  The board administrator or the board administrator's
528-16   designee shall provide to members of the board, to members of the
528-17   policy board, and to employees, as often as necessary, information
528-18   regarding their qualification for office or employment under this
528-19   chapter and their responsibilities under applicable laws relating
528-20   to standards of conduct for state officers or employees.
528-21         (d)  The validity of an action of:
528-22               (1)  the board or panel is not affected by the fact
528-23   that the action is [was] taken when a ground for removal of a board
528-24   member exists; and
528-25               (2)  the policy board is not affected by the fact that
528-26   the action is taken when a ground for removal of a member of the
 529-1   policy board exists [existed].
 529-2         (e) [(c)]  If the general counsel to the board [director] has
 529-3   knowledge that a potential ground for removal exists, the general
 529-4   counsel [director] shall notify the presiding officer of the board
 529-5   of the potential ground.  The presiding officer shall notify the
 529-6   governor and the attorney general that a potential ground for
 529-7   removal exists.  If the potential ground for removal involves the
 529-8   presiding officer, the general counsel to the board shall notify
 529-9   the governor and the attorney general that a potential ground for
529-10   removal exists.
529-11         SECTION 10.06.  Section 508.036, Government Code, is amended
529-12   to conform to Sections 4 and 5, Chapter 161, Acts of the 75th
529-13   Legislature, Regular Session, 1997, to read as follows:
529-14         Sec. 508.036.  POLICY BOARD:  COMPOSITION; GENERAL DUTIES.
529-15   (a)  The governor shall designate six members of the board to serve
529-16   as the Board of Pardons and Paroles Policy Board.  The governor
529-17   shall designate the  presiding officer of the board as one of the
529-18   six members of the policy board, and the presiding officer of the
529-19   board shall serve as presiding officer of the policy board.
529-20   Service on the policy board is an additional duty of office for
529-21   members appointed to the policy board.
529-22         (b)  Members of the board designated as members of the policy
529-23   board serve on the policy board for six-year terms that are
529-24   concurrent with their six-year terms on the board, with the service
529-25   of two members expiring February 1 of each odd-numbered year.
529-26         (c)  The policy board shall:
 530-1               (1)  adopt rules relating to the decision-making
 530-2   processes used by the board and parole panels;
 530-3               (2)  establish caseloads for members of the board and
 530-4   assign duties to members of the policy board that are in addition
 530-5   to the duties those members have in handling a caseload;
 530-6               (3)  update parole guidelines, assign precedential
 530-7   value to previous decisions of the board relating to the granting
 530-8   of parole and the revocation of parole or mandatory supervision,
 530-9   and develop policies to ensure that members of the board use
530-10   guidelines and previous decisions of the board in making decisions
530-11   under this chapter;
530-12               (4)  require members of the board to file activity
530-13   reports, on forms provided by the policy board, that provide
530-14   information on release decisions made by members of the board, the
530-15   workload of the members of the board, and the use of parole
530-16   guidelines by members of the board; and
530-17               (5)  report at least annually to the governor and the
530-18   legislature on board activities, parole release decisions, and the
530-19   use of parole guidelines by the board.  [EXECUTIVE COMMITTEE.
530-20   (a)  To facilitate the work of the board, the governor shall
530-21   appoint the presiding officer of the board to serve as presiding
530-22   officer of the executive committee.]
530-23         [(b)  The presiding officer shall appoint six board members
530-24   to serve on the executive committee.  An executive committee member
530-25   serves in that capacity at the pleasure of the presiding officer.]
530-26         [(c)  The executive committee shall:]
 531-1               [(1)  coordinate activities of the board;]
 531-2               [(2)  assure maximum efficiency and fair distribution
 531-3   of the caseload; and]
 531-4               [(3)  administer other matters as required by the
 531-5   presiding officer.]
 531-6         SECTION 10.07.  Subchapter B, Chapter 508, Government Code,
 531-7   is amended to conform to Section 6, Chapter 161, Acts of the 75th
 531-8   Legislature, Regular Session, 1997, by adding Section 508.0361 to
 531-9   read as follows:
531-10         Sec. 508.0361.  POLICY BOARD:  GENERAL ADMINISTRATIVE
531-11   PROVISIONS.  (a)  The policy board shall:
531-12               (1)  develop and implement policies that clearly
531-13   separate the policy-making responsibilities of the policy board and
531-14   the management responsibilities of the board administrator and the
531-15   staff of the board;
531-16               (2)  prepare information of public interest describing
531-17   the functions of the board and make the information available to
531-18   the public and appropriate state agencies;
531-19               (3)  comply with federal and state laws related to
531-20   program and facility accessibility; and
531-21               (4)  prepare annually a complete and detailed written
531-22   report that meets the reporting requirements applicable to
531-23   financial reporting provided in the General Appropriations Act and
531-24   accounts for all funds received and disbursed by the board during
531-25   the preceding fiscal year.
531-26         (b)  The board administrator shall prepare and maintain a
 532-1   written plan that describes how a person who does not speak English
 532-2   can be provided reasonable access to the board's programs and
 532-3   services.
 532-4         (c)  The policy board is subject to the open meetings law,
 532-5   Chapter 551, and the administrative procedure law, Chapter 2001, as
 532-6   if it were, respectively, a governmental body or a state agency
 532-7   under those laws.  This subsection does not affect the provisions
 532-8   of Section 2001.223 exempting hearings and interviews conducted by
 532-9   the board or the division from Section 2001.038 and Subchapters
532-10   C-H, Chapter 2001.
532-11         (d)  Members of the board who are not members of the policy
532-12   board may participate in policy board meetings but may not vote.
532-13         SECTION 10.08.  Subchapter B,  Chapter 508, Government Code,
532-14   is amended to conform to Section 7, Chapter 161, Acts of the 75th
532-15   Legislature, Regular Session, 1997, by adding Section 508.0362 to
532-16   read as follows:
532-17         Sec. 508.0362.  TRAINING REQUIRED.  (a)  To be eligible to
532-18   take office as a member of the board or the policy board, a person
532-19   appointed to the board or policy board must complete at least one
532-20   course of a training program that complies with this section.
532-21         (b)  A training program must provide information to the
532-22   person regarding:
532-23               (1)  the enabling legislation that created the board
532-24   and the policy board;
532-25               (2)  the programs operated by the board;
532-26               (3)  the role and functions of the board;
 533-1               (4)  the rules of the board;
 533-2               (5)  the current budget for the board;
 533-3               (6)  the results of the most recent formal audit of the
 533-4   board;
 533-5               (7)  the requirements of the:
 533-6                     (A)  open meetings law, Chapter 551;
 533-7                     (B)  open records law, Chapter 552; and
 533-8                     (C)  administrative procedure law, Chapter 2001;
 533-9               (8)  the requirements of the conflict of interest laws
533-10   and other laws relating to public officials; and
533-11               (9)  any applicable ethics policies adopted by the
533-12   policy board or the Texas Ethics Commission.
533-13         (c)  A person appointed to the board or policy board is
533-14   entitled to reimbursement for travel expenses incurred in attending
533-15   the training program, as provided by the General Appropriations Act
533-16   and as if the person were a member of the board or policy board.
533-17         SECTION 10.09.  Section 508.040, Government Code, is amended
533-18   to conform to Sections 5 and 6, Chapter 161, Acts of the 75th
533-19   Legislature, Regular Session, 1997, to read as follows:
533-20         Sec. 508.040.  PERSONNEL.  (a)  The policy board shall employ
533-21   and supervise:
533-22               (1)  a general counsel to the board;
533-23               (2)  a board administrator to manage the day-to-day
533-24   activities of the board [an administrative assistant];
533-25               (3)  hearing officers;
533-26               (4)  personnel to assist in clemency matters; and
 534-1               (5)  secretarial or clerical personnel.
 534-2         (b)  The board administrator or the board administrator's
 534-3   designee shall prepare and maintain a written policy statement to
 534-4   ensure implementation of a program of equal employment opportunity
 534-5   under which all personnel transactions of the board are made
 534-6   without regard to race, color, disability, sex, religion, age, or
 534-7   national origin.  The policy statement must include:
 534-8               (1)  personnel policies, including policies relating to
 534-9   recruitment, evaluation, selection, appointment, training, and
534-10   promotion of personnel that are in compliance with requirements of
534-11   Chapter 21, Labor Code;
534-12               (2)  a comprehensive analysis of the board workforce
534-13   that meets federal and state laws, rules, and regulations, and
534-14   instructions promulgated directly from those laws, rules, and
534-15   regulations;
534-16               (3)  procedures by which a determination can be made
534-17   about the extent of underuse in the board workforce of all persons
534-18   for whom federal or state laws, rules, and regulations, and
534-19   instructions promulgated directly from those laws, rules, and
534-20   regulations, encourage a more equitable balance; and
534-21               (4)  reasonable methods to appropriately address those
534-22   areas of underuse.
534-23         (c)  A policy statement prepared under Subsection (b) must
534-24   cover an annual period, be updated annually and reviewed by the
534-25   Commission on Human Rights for compliance with Subsection (b)(1),
534-26   and be filed with the governor's office.
 535-1         (d)  The governor's office shall deliver a biennial report to
 535-2   the legislature based on the information received under Subsection
 535-3   (c).  The report may be made separately or as a part of other
 535-4   biennial reports made to the legislature.
 535-5         (e)  The board administrator or the board administrator's
 535-6   designee shall develop an intra-agency career ladder program that
 535-7   addresses opportunities for mobility and advancement for employees
 535-8   within the board.  The program shall require intra-agency posting
 535-9   of all positions concurrently with any public posting.
535-10         (f)  The board administrator or the board administrator's
535-11   designee shall develop a system of annual performance evaluations
535-12   that are based on  documented employee performance.  All merit pay
535-13   for board employees must be based on the system established under
535-14   this subsection. [The board may adopt rules as necessary for the
535-15   employment and supervision of board personnel.]
535-16         [(c)  The board shall develop and implement personnel
535-17   policies.]
535-18         SECTION 10.10.  Section 508.041, Government Code, is amended
535-19   to conform to Sections 10 and 11, Chapter 161, Acts of the 75th
535-20   Legislature, Regular Session, 1997, to read as follows:
535-21         Sec. 508.041.  DESIGNEE TRAINING; HANDBOOK.  (a)  The policy
535-22   board shall develop and implement:
535-23               (1)  a training program that each newly hired employee
535-24   of the board designated to conduct hearings under Section 508.281
535-25   must complete before conducting a hearing without the assistance of
535-26   a board member or experienced designee; and
 536-1               (2)  a training program to provide an annual update to
 536-2   designees of the board on issues and procedures relating to the
 536-3   revocation process.
 536-4         (b)  The policy board shall prepare and biennially update a
 536-5   procedural manual to be used by designees of the board.  The policy
 536-6   board shall include in the manual:
 536-7               (1)  descriptions of decisions in previous hearings
 536-8   determined by the policy board to have value as precedents for
 536-9   decisions in subsequent hearings;
536-10               (2)  laws and court decisions relevant to decision
536-11   making in hearings; and
536-12               (3)  case studies useful in decision making in
536-13   hearings.
536-14         (c)  The policy board shall prepare and update as necessary a
536-15   handbook to be made available to participants in hearings under
536-16   Section 508.281, such as defense attorneys, persons released on
536-17   parole or mandatory supervision, and witnesses.  The handbook must
536-18   describe in plain language the procedures used in a hearing under
536-19   Section 508.281.  [TRAINING PROGRAM FOR DESIGNATED AGENTS.
536-20   (a)  The board shall develop and implement a training program for
536-21   designated agents of the board who conduct hearings under Section
536-22   508.281.]
536-23         [(b)  The training program must assist the designated agents
536-24   in understanding issues relating to the revocation process.]
536-25         SECTION 10.11.  Section 508.042(a), Government Code, is
536-26   amended to conform to Section 7, Chapter 161, Acts of the 75th
 537-1   Legislature, Regular Session, 1997, to read as follows:
 537-2         (a)  The policy board shall develop for board members a
 537-3   comprehensive training and education program on the criminal
 537-4   justice system, with special emphasis on the parole process.
 537-5         SECTION 10.12.  Section 508.044(c), Government Code, is
 537-6   amended to conform to Section 7, Chapter 161, Acts of the 75th
 537-7   Legislature, Regular Session, 1997, to read as follows:
 537-8         (c)  The policy board shall develop and implement a policy
 537-9   that clearly defines circumstances under which a board member
537-10   should disqualify himself or herself from voting on:
537-11               (1)  a parole decision; or
537-12               (2)  a decision to revoke parole or mandatory
537-13   supervision.
537-14         SECTION 10.13.  Section 508.044(d), Government Code, is
537-15   amended to conform to Section 8, Chapter 161, Acts of the 75th
537-16   Legislature, Regular Session, 1997, to read as follows:
537-17         (d)  The policy board may adopt reasonable rules as the
537-18   policy board considers proper or necessary relating to:
537-19               (1)  the eligibility of an inmate for release on parole
537-20   or release to mandatory supervision;
537-21               (2)  the conduct of a parole or mandatory supervision
537-22   hearing; or
537-23               (3)  conditions to be imposed on a releasee.
537-24         SECTION 10.14.  Section 508.044(e), Government Code, is
537-25   amended to conform to Section 7, Chapter 161, Acts of the 75th
537-26   Legislature, Regular Session, 1997, to read as follows:
 538-1         (e)  The policy board may provide a written plan for the
 538-2   administrative review of actions taken by a parole panel by the
 538-3   entire membership or by a subset of the entire membership of the
 538-4   board.
 538-5         SECTION 10.15.  Section 508.047(a), Government Code, is
 538-6   amended to conform to Section 7, Chapter 161, Acts of the 75th
 538-7   Legislature, Regular Session, 1997, to read as follows:
 538-8         (a)  The members of the policy board shall meet at least once
 538-9   in each quarter of the calendar year at a site determined by the
538-10   presiding officer.
538-11         SECTION 10.16.  Section 508.049, Government Code, is amended
538-12   to conform to Section 4, Chapter 161, Acts of the 75th Legislature,
538-13   Regular Session, 1997, to read as follows:
538-14         Sec. 508.049.  MISSION STATEMENT.  (a)  The policy board,
538-15   after consultation with the governor and the Texas Board of
538-16   Criminal Justice, shall adopt a mission statement that reflects the
538-17   responsibilities for the operation of the parole process that are
538-18   assigned to the policy board, the board, [and the responsibilities
538-19   that are assigned to] the division, the department, or the Texas
538-20   Board of Criminal Justice.
538-21         (b)  The policy board shall include in the mission statement
538-22   a description of specific locations at which the board intends to
538-23   conduct business related to the operation of the parole process.
538-24         SECTION 10.17.  Section 508.051, Government Code, is amended
538-25   to conform to Section 3, Chapter 161, Acts of the 75th Legislature,
538-26   Regular Session, 1997, to read as follows:
 539-1         Sec. 508.051.  SUNSET PROVISION.  The Board of Pardons and
 539-2   Paroles is subject to review under Chapter 325 (Texas Sunset Act),
 539-3   but is not abolished under that chapter. The board shall be
 539-4   reviewed during the period in which the Texas Department of
 539-5   Criminal Justice is reviewed.
 539-6         SECTION 10.18.  Section 508.082, Government Code, is amended
 539-7   to conform to Section 9, Chapter 161, Acts of the 75th Legislature,
 539-8   Regular Session, 1997, to read as follows:
 539-9         Sec. 508.082.  RULES.  The policy board shall adopt rules
539-10   relating to:
539-11               (1)  the submission and presentation of information and
539-12   arguments to the board, a parole panel, and the department for and
539-13   in behalf of an inmate; and
539-14               (2)  the time, place, and manner of contact between a
539-15   person representing an inmate and:
539-16                     (A)  a member of the board;
539-17                     (B)  an employee of the board; or
539-18                     (C)  an employee of the department.
539-19         SECTION 10.19.  Sections 508.115(a) and (c), Government Code,
539-20   are amended to conform to Section 1, Chapter 480, Acts of the 75th
539-21   Legislature, Regular Session, 1997, to read as follows:
539-22         (a)  Not later than the 11th day before the date the board
539-23   orders the release on parole of an inmate or not later than the
539-24   11th day after the date the board recommends that the governor
539-25   grant executive clemency, the division shall notify the sheriffs,
539-26   each chief of police, the prosecuting attorneys, and the district
 540-1   judges in the county in which the inmate was convicted and the
 540-2   county to which the inmate is released that the board is
 540-3   considering release on parole or the governor is considering
 540-4   clemency.
 540-5         (c)  Not later than the 10th day after the date a parole
 540-6   panel orders the transfer of an inmate to a halfway house under
 540-7   this chapter, the division shall give notice in accordance with
 540-8   Subsection (d) to:
 540-9               (1)  the sheriff of the county in which the inmate was
540-10   convicted;
540-11               (2)  the sheriff of the county in which the halfway
540-12   house is located and each chief of police in the county; and
540-13               (3)  the attorney who represents the state in the
540-14   prosecution of felonies in the county in which the halfway house is
540-15   located.
540-16         SECTION 10.20.  Section 508.119, Government Code, is amended
540-17   to conform to Section 2, Chapter 478, Acts of the 75th Legislature,
540-18   Regular Session, 1997, by adding Subsection (i) to read as follows:
540-19         (i)  The notice required by Subsection (d) must clearly state
540-20   that the proposed action concerns a facility in which persons who
540-21   have been released from prison on parole or to mandatory
540-22   supervision are to be housed.
540-23         SECTION 10.21.  Section 508.145(c), Government Code, is
540-24   amended to conform to Section 3, Chapter 665, Acts of the 75th
540-25   Legislature, Regular Session, 1997, to read as follows:
540-26         (c)  An inmate serving a life sentence under Section
 541-1   12.42(c)(2) [12.42(d)(2)], Penal Code, is not eligible for release
 541-2   on parole until the actual calendar time the inmate has served,
 541-3   without consideration of good conduct time, equals 35 calendar
 541-4   years.
 541-5         SECTION 10.22.  Section 508.149(a), Government Code, is
 541-6   amended to conform to Section 1, Chapter 238, Acts of the 75th
 541-7   Legislature, Regular Session, 1997, to read as follows:
 541-8         (a)  An inmate may not be released to mandatory supervision
 541-9   if the inmate is serving a sentence for or has been previously
541-10   convicted of:
541-11               (1)  an offense for which the judgment contains an
541-12   affirmative finding under Section 3g(a)(2), Article 42.12, Code of
541-13   Criminal Procedure;
541-14               (2)  a first degree felony or a second degree felony
541-15   under Section 19.02, Penal Code;
541-16               (3)  a capital felony under Section 19.03, Penal Code;
541-17               (4)  a first degree felony or a second degree felony
541-18   under Section 20.04, Penal Code;
541-19               (5)  a second degree felony or a third degree felony
541-20   under Section 21.11, Penal Code;
541-21               (6)  a second degree felony under Section 22.011, Penal
541-22   Code;
541-23               (7) [(6)]  a first degree felony or a second degree
541-24   felony under Section 22.02, Penal Code;
541-25               (8) [(7)]  a first degree felony under Section 22.021,
541-26   Penal Code;
 542-1               (9) [(8)]  a first degree felony under Section 22.04,
 542-2   Penal Code;
 542-3               (10) [(9)]  a first degree felony under Section 28.02,
 542-4   Penal Code;
 542-5               (11) [(10)]  a second degree felony under Section
 542-6   29.02, Penal Code;
 542-7               (12) [(11)]  a first degree felony under Section 29.03,
 542-8   Penal Code;
 542-9               (13) [(12)]  a first degree felony under Section 30.02,
542-10   Penal Code; or
542-11               (14) [(13)]  a felony for which the punishment is
542-12   increased under Section 481.134, Health and Safety Code.
542-13         SECTION 10.23.  Section 508.181, Government Code, is amended
542-14   to conform to Section 1, Chapter 836, Acts of the 75th Legislature,
542-15   Regular Session, 1997, by adding Subsection (g) to read as follows:
542-16         (g)  The division shall, on the first working day of each
542-17   month, notify the sheriff of any county in which the total number
542-18   of sex offenders under the supervision and control of the division
542-19   residing in the county exceeds 10 percent of the total number of
542-20   sex offenders in the state under the supervision and control of the
542-21   division.  If the total number of sex offenders under the
542-22   supervision and control of the division residing in a county
542-23   exceeds 22 percent of the total number of sex offenders in the
542-24   state under the supervision and control of the division, a parole
542-25   panel may require a sex offender to reside in that county only as
542-26   required by Subsection (a) or for the reason stated in Subsection
 543-1   (b)(2)(B).  In this subsection, "sex offender"  means a person who
 543-2   is released on parole or to mandatory supervision after serving a
 543-3   sentence for an offense described by Section 508.187(a).
 543-4         SECTION 10.24.  Section 508.181, Government Code, is amended
 543-5   to conform to Section 2, Chapter 480, Acts of the 75th Legislature,
 543-6   Regular Session, 1997, by adding Subsection (h) to read as follows:
 543-7         (h)  If a parole panel requires a releasee to reside in a
 543-8   county other than the county required under Subsection (a), the
 543-9   division shall include the reason for residency exemption in the
543-10   required notification to the sheriff of the county in which the
543-11   defendant is to reside, the chief of police of the municipality in
543-12   which the halfway house is located, and the attorney who represents
543-13   the state in the prosecution of felonies in that county.
543-14         SECTION 10.25.  Section 508.186(a), Government Code, is
543-15   amended to conform to Section 6, Chapter 668, Acts of the 75th
543-16   Legislature, Regular Session, 1997, to read as follows:
543-17         (a)  A parole panel shall require as a condition of parole or
543-18   mandatory supervision that a releasee required to register as a sex
543-19   offender under Chapter 62, Code of Criminal Procedure [Article
543-20   6252-13c.1, Revised Statutes]:
543-21               (1)  register under that chapter [article]; and
543-22               (2)  pay to the releasee's supervising officer an
543-23   amount equal to the cost, as evidenced by written receipt, incurred
543-24   by the applicable local law enforcement authority for providing
543-25   notice for publication to a newspaper as required by that chapter
543-26   [article].
 544-1         SECTION 10.26.  Subchapter F,  Chapter 508, Government Code,
 544-2   is amended to conform to Section 1, Chapter 670, Acts of the 75th
 544-3   Legislature, Regular Session, 1997, by adding Section 508.190 to
 544-4   read as follows:
 544-5         Sec. 508.190.  AVOIDING VICTIM OF STALKING OFFENSE.  (a)  A
 544-6   parole panel shall require as a condition of parole or mandatory
 544-7   supervision that a releasee serving a sentence for an offense under
 544-8   Section 42.072, Penal Code, not:
 544-9               (1)  communicate directly or indirectly with the
544-10   victim;
544-11               (2)  go to or near the residence, place of employment,
544-12   or business of the victim; or
544-13               (3)  go to or near a school, day-care facility, or
544-14   similar facility where a dependent child of the victim is in
544-15   attendance.
544-16         (b)  If a parole panel requires the prohibition contained in
544-17   Subsection (a)(2) or (3) as a condition of parole or mandatory
544-18   supervision, the parole panel shall specifically describe the
544-19   prohibited locations and the minimum distances, if any, that the
544-20   releasee must maintain from the locations.
544-21         SECTION 10.27.  Subchapter F, Chapter 508, Government Code,
544-22   is amended to conform to Section 2, Chapter 670, Acts of the 75th
544-23   Legislature, Regular Session, 1997, by adding Section 508.191 to
544-24   read as follows:
544-25         Sec. 508.191.  NO CONTACT WITH VICTIM.  (a)  If a parole
544-26   panel releases a defendant on parole or to mandatory supervision,
 545-1   the panel shall require as a condition of parole or mandatory
 545-2   supervision that the defendant not intentionally or knowingly
 545-3   communicate directly or indirectly with a victim of the offense or
 545-4   intentionally or knowingly go near a residence, school, place of
 545-5   employment, or business of a victim.  At any time after the
 545-6   defendant is released on parole or to mandatory supervision, a
 545-7   victim of the offense may petition the panel for a modification of
 545-8   the conditions of the defendant's parole or mandatory supervision
 545-9   allowing the defendant contact with the victim subject to
545-10   reasonable restrictions.
545-11         (b)  Notwithstanding Subsection (a), a defendant may
545-12   participate in victim-offender mediation authorized by Section
545-13   508.324 on the request of the victim or a guardian of the victim or
545-14   a close relative of a deceased victim.
545-15         (c)  In this section, "victim" has the meaning assigned by
545-16   Article 56.01(3), Code of Criminal Procedure.
545-17         SECTION 10.28.  Section 508.223, Government Code, is amended
545-18   to conform to Section 1, Chapter 188, and Section 7, Chapter 1,
545-19   Acts of the 75th Legislature, Regular Session, 1997, to read as
545-20   follows:
545-21         Sec. 508.223.  PSYCHOLOGICAL COUNSELING. [AVOIDING VICTIM.
545-22   (a)]  A parole panel may require as a condition of parole or
545-23   mandatory supervision that a releasee serving a sentence for an
545-24   offense under Section 42.072, Penal Code, attend psychological
545-25   counseling sessions of a type and for a duration as specified by
545-26   the parole panel, if the parole panel determines in consultation
 546-1   with a local mental health services provider that appropriate
 546-2   mental health services are available through the Texas Department
 546-3   of Mental Health and Mental Retardation in accordance with Section
 546-4   534.053, Health and Safety Code, or through another mental health
 546-5   services provider [not:]
 546-6               [(1)  communicate directly or indirectly with the
 546-7   victim;]
 546-8               [(2)  go to or near the residence, place of employment,
 546-9   or business of the victim; or]
546-10               [(3)  go to or near a school, day-care facility, or
546-11   similar facility where a dependent child of the victim is in
546-12   attendance.]
546-13         [(b)  If a parole panel requires the prohibition contained in
546-14   Subsection (a)(2) or (3) as a condition of parole or mandatory
546-15   supervision, the parole panel shall specifically describe the
546-16   prohibited locations and the minimum distances, if any, that the
546-17   releasee must maintain from the locations].
546-18         SECTION 10.29.  Subchapter G, Chapter 508, Government Code,
546-19   is amended to conform to Section 4, Chapter 144, Acts of the 75th
546-20   Legislature, Regular Session, 1997, by adding Section 508.225 to
546-21   read as follows:
546-22         Sec. 508.225.  ORCHIECTOMY AS CONDITION PROHIBITED.  A parole
546-23   panel may not require an inmate to undergo an orchiectomy as a
546-24   condition of release on parole or to mandatory supervision.
546-25         SECTION 10.30.  Section 508.252, Government Code, is amended
546-26   to conform to Section 3, Chapter 429, Acts of the 75th Legislature,
 547-1   Regular Session, 1997, to read as follows:
 547-2         Sec. 508.252.  GROUNDS FOR ISSUANCE OF WARRANT.  A warrant
 547-3   may be issued under Section 508.251 if:
 547-4               (1)  there is reason to believe that the person has
 547-5   been released although not eligible for release;
 547-6               (2)  the person has been arrested for an offense;
 547-7               (3)  there is a document that is self-authenticating as
 547-8   provided by Rule 902, Texas Rules of Evidence, [verified complaint]
 547-9   stating that the person violated a rule or condition of release; or
547-10               (4)  there is reliable evidence that the person has
547-11   exhibited behavior during the person's release that indicates to a
547-12   reasonable person that the person poses a danger to society that
547-13   warrants the person's immediate return to custody.
547-14         SECTION 10.31.  Section 508.281(a), Government Code, is
547-15   amended to conform to Section 2, Chapter 429, and Section 10,
547-16   Chapter 161, Acts of the 75th Legislature, Regular Session, 1997,
547-17   to read as follows:
547-18         (a)  A releasee, a person released although ineligible for
547-19   release, or a person granted a conditional pardon is entitled to a
547-20   hearing before a parole panel or a designated agent of the board
547-21   under the rules adopted by the policy board and within a period
547-22   that permits a parole panel, a designee of the board, or the
547-23   department to dispose of the charges within the periods established
547-24   by Sections 508.282(a) and (b) if the releasee or person:
547-25               (1)  is accused of a violation of the releasee's parole
547-26   or mandatory supervision or the person's conditional pardon, on
 548-1   information and complaint by a peace officer or parole officer; or
 548-2               (2)  is arrested after an ineligible release.
 548-3         SECTION 10.32.  Subchapter I, Chapter 508, Government Code,
 548-4   is amended to conform to Section 2, Chapter 429, Acts of the 75th
 548-5   Legislature, Regular Session, 1997, by adding Section 508.2811 to
 548-6   read as follows:
 548-7         Sec. 508.2811.  PRELIMINARY HEARING.  A parole panel or a
 548-8   designee of the board shall provide  within a reasonable time to an
 548-9   inmate or person described by Section 508.281(a) a preliminary
548-10   hearing to determine whether probable cause or reasonable grounds
548-11   exist to believe that the inmate or person has committed an act
548-12   that would constitute a violation of a condition of release, unless
548-13   the inmate or person:
548-14               (1)  waives the preliminary hearing; or
548-15               (2)  after release:
548-16                     (A)  has been charged only with an administrative
548-17   violation of a condition of release; or
548-18                     (B)  has been adjudicated guilty of or has
548-19   pleaded guilty or nolo contendere to an offense committed after
548-20   release, other than an offense punishable by fine only involving
548-21   the operation of a motor vehicle, regardless of whether the court
548-22   has deferred disposition of the case, imposed a  sentence in the
548-23   case, or placed the inmate or person on community supervision.
548-24         SECTION 10.33.  Section 508.282, Government Code, is amended
548-25   to conform to Section 2, Chapter 429, Acts of the 75th Legislature,
548-26   Regular Session, 1997, to read as follows:
 549-1         Sec. 508.282.  DEADLINES.  (a)  Except as provided by
 549-2   Subsection (b), a parole panel, a designee of the board, or the
 549-3   department shall dispose of the charges against an inmate or person
 549-4   described by Section 508.281(a):
 549-5               (1)  before the 61st day after the date on which:
 549-6                     (A)  a warrant issued as provided by Section
 549-7   508.251 is executed, if the inmate or person is arrested only on a
 549-8   charge that the inmate or person has committed an administrative
 549-9   violation of a condition of release, and the inmate or person is
549-10   not charged before the 61st day with the commission of an offense
549-11   described by Section 508.2811(2)(B); or
549-12                     (B)  the sheriff having custody of an inmate or
549-13   person alleged to have committed an offense after release notifies
549-14   the department that:
549-15                           (i)  the inmate or person  has  discharged
549-16   the sentence for the offense; or
549-17                           (ii)  the prosecution of the alleged
549-18   offense has been dismissed by the attorney representing the state
549-19   in the manner provided by Article 32.02, Code of Criminal
549-20   Procedure; or
549-21               (2)  within a reasonable time after the date on which
549-22   the inmate or person is returned to the custody of the department,
549-23   if:
549-24                     (A)  immediately before the return the inmate or
549-25   person was in custody in another state or in a federal correctional
549-26   system; or
 550-1                     (B)  the inmate or person is transferred to the
 550-2   custody of the department under Section 508.284.
 550-3         (b)  A parole panel, a designee of the board, or the
 550-4   department is not required to dispose of the charges against an
 550-5   inmate or person within the period required by Subsection (a) if:
 550-6               (1)  the inmate or person is in custody in another
 550-7   state or a federal correctional institution;
 550-8               (2)  the parole panel or a designee of the board is not
 550-9   provided a place by the sheriff to hold the hearing, in which event
550-10   the department, parole panel, or designee is not required to
550-11   dispose of the charges against the inmate or person until the 60th
550-12   day after the date on which the sheriff provides a place to hold
550-13   the hearing; or
550-14               (3)  the inmate or person is granted a continuance by a
550-15   parole panel or a designee of the board in the inmate's or person's
550-16   hearing under Section 508.281(a), but in no event may a parole
550-17   panel, a designee of the board, or the department dispose of the
550-18   charges against the person later than the 30th day after the date
550-19   on which the parole panel, designee, or department would otherwise
550-20   be required to dispose of the charges under this section, unless
550-21   the inmate or person is released from custody and a summons is
550-22   issued under Section 508.251 requiring the inmate or person to
550-23   appear for a hearing under Section 508.281.
550-24         (c)  In Subsections (a) and (b), charges against an inmate or
550-25   person are disposed of when:
550-26               (1)  the inmate's or person's conditional pardon,
 551-1   parole, or release to mandatory supervision is:
 551-2                     (A)  revoked; or
 551-3                     (B)  continued or modified and the inmate or
 551-4   person is released from the county jail;
 551-5               (2)  the warrant for the inmate or person issued under
 551-6   Section 508.251 is withdrawn; or
 551-7               (3)  the inmate or person is transferred to a facility
 551-8   described by Section 508.284 for further proceedings.
 551-9         (d)  A sheriff, not later than the 10th day before the date
551-10   on which the sheriff intends to release from custody an inmate or
551-11   person described by Section 508.281(a) or transfer the inmate or
551-12   person to the custody of an entity other than the department, shall
551-13   notify the department of the intended release or transfer.
551-14         (e)  If a warrant for an inmate or person issued under
551-15   Section 508.251 is withdrawn, a summons may be issued requiring the
551-16   inmate or person to appear for a hearing under Section 508.281.
551-17   [DATE OF HEARING; WITHDRAWAL OF WARRANT.  (a)  A hearing under
551-18   Section 508.281 must be held:]
551-19               [(1)  not later than the 70th day after the date of
551-20   arrest under a warrant issued by the director or a designated agent
551-21   of the director or by the board on order of the governor; and]
551-22               [(2)  at a time and place set by a parole panel or
551-23   designated agent of the board.]
551-24         [(b)  Except as provided by Subsection (c), the panel or
551-25   designated agent may hold the hearing at a date later than the date
551-26   required under Subsection (a) if the panel or designated agent
 552-1   determines a delay is necessary to assure due process for the
 552-2   person.]
 552-3         [(c)  The authority issuing the warrant shall immediately
 552-4   withdraw the warrant if the hearing is not held before the 121st
 552-5   day after the date of arrest unless:]
 552-6               [(1)  the person has been removed from the custody of a
 552-7   county sheriff by the department and placed in a community
 552-8   residential facility;]
 552-9               [(2)  the person is in custody in another state or in a
552-10   federal correctional facility;]
552-11               [(3)  the person, the attorney representing the person,
552-12   or the attorney representing the state is granted a continuance to
552-13   a date that is not later than the 181st day after the date of
552-14   arrest; or]
552-15               [(4)  the person is subject to pending criminal charges
552-16   that have not been adjudicated.]
552-17         SECTION 10.34.  Section 508.283, Government Code, is amended
552-18   to conform to Section 2, Chapter 429, Acts of the 75th Legislature,
552-19   Regular Session, 1997, to read as follows:
552-20         Sec. 508.283.  SANCTIONS.  (a)  After a parole panel or
552-21   designated agent of the board has held a hearing under Section
552-22   508.281, the board may, in any manner warranted by the evidence:
552-23               (1)  recommend to the governor to continue, revoke, or
552-24   modify the conditional pardon; or
552-25               (2)  continue, revoke, or modify the parole or
552-26   mandatory supervision.
 553-1         (b)  [The parole panel or designated agent shall make a
 553-2   recommendation or decision not later than the 30th day after the
 553-3   date the hearing is concluded.]
 553-4         [(c)]  If a person's parole, mandatory supervision, or
 553-5   conditional pardon is revoked, the person may be required to serve
 553-6   the remaining portion of the sentence on which the person was
 553-7   released.  The remaining portion is computed without credit for the
 553-8   time from the date of the person's release to the date of
 553-9   revocation.
553-10         (c) [(d)]  If a warrant is issued charging a violation of a
553-11   release condition or a summons is issued for a hearing under
553-12   Section 508.281, the sentence time credit may be suspended until a
553-13   determination is made in the case.  The suspended time credit may
553-14   be reinstated if the parole, mandatory supervision, or conditional
553-15   pardon is continued.
553-16         SECTION 10.35.  Subchapter I, Chapter 508, Government Code,
553-17   is amended to conform to Section 1, Chapter 429, Acts of the 75th
553-18   Legislature, Regular Session, 1997, by adding Section 508.284 to
553-19   read as follows:
553-20         Sec. 508.284.  TRANSFER PENDING REVOCATION HEARING.  The
553-21   department, as provided by Section 508.282(c), may authorize a
553-22   facility that is otherwise required to detain and house an inmate
553-23   or person to transfer the inmate or person to a correctional
553-24   facility operated by the department or under contract with the
553-25   department if:
553-26               (1)  the department determines that adequate space is
 554-1   available in the facility to which the inmate or person is to be
 554-2   transferred; and
 554-3               (2)  the facility to which the inmate or person is to
 554-4   be transferred is located not more than 150 miles from the facility
 554-5   from which the inmate or person is to be transferred.
 554-6         SECTION 10.36.  Section 508.313(e), Government Code, is
 554-7   amended to conform to Section 7, Chapter 668, Acts of the 75th
 554-8   Legislature, Regular Session, 1997, to read as follows:
 554-9         (e)  This section does not apply to information relating to a
554-10   sex offender that is authorized for release under Chapter 62, Code
554-11   of Criminal Procedure [Article 6252-13c.1, Revised Statutes].
554-12         SECTION 10.37.  Section 508.317, Government Code, is amended
554-13   to conform to Section 6, Chapter 1430, Acts of the 75th
554-14   Legislature, Regular Session, 1997, to read as follows:
554-15         Sec. 508.317.  INTENSIVE SUPERVISION PROGRAM; SUPER-INTENSIVE
554-16   SUPERVISION PROGRAM.  (a)  The department shall establish a program
554-17   to provide intensive supervision to inmates released under
554-18   Subchapter B, Chapter 499, and other inmates determined by a parole
554-19   panel or the department to require intensive supervision.
554-20         (b)  The Texas Board of Criminal Justice shall adopt rules
554-21   that establish standards for determining which inmates require
554-22   intensive supervision.
554-23         (c)  The program must provide the [highest] level of
554-24   supervision the department provides that is higher than any level
554-25   of supervision other than the level of supervision described by
554-26   Subsection (d).
 555-1         (d)  The department shall establish a program to provide
 555-2   super-intensive supervision to inmates released on parole or
 555-3   mandatory supervision and determined by parole panels to require
 555-4   super-intensive supervision.  The program must provide the highest
 555-5   level of supervision provided by the department.
 555-6         SECTION 10.38.  Subchapter J, Chapter 508, Government Code,
 555-7   is amended to conform to Section 3, Chapter 670, Acts of the 75th
 555-8   Legislature, Regular Session, 1997, by adding Section 508.324 to
 555-9   read as follows:
555-10         Sec. 508.324.  VICTIM-OFFENDER MEDIATION.  If the pardons and
555-11   paroles division receives notice from the victim services office of
555-12   the department that a victim of the defendant, or the victim's
555-13   guardian or close relative, wishes to participate in
555-14   victim-offender mediation with a person released on parole or to
555-15   mandatory supervision, the division shall cooperate and assist the
555-16   person if the person chooses to participate in the mediation
555-17   program provided by the office.  The pardons and paroles division
555-18   may not require the defendant to participate and may not reward the
555-19   person for participation by modifying conditions of release or the
555-20   person's level of supervision or by granting any other benefit to
555-21   the person.
555-22         SECTION 10.39.  The following provisions from the Acts of the
555-23   75th Legislature, Regular Session, 1997, are repealed:
555-24               (1)  Section 7, Chapter 1;
555-25               (2)  Section 4, Chapter 144;
555-26               (3)  Sections 1-11, Chapter 161;
 556-1               (4)  Section 1, Chapter 188;
 556-2               (5)  Section 1, Chapter 238;
 556-3               (6)  Sections 1-3, Chapter 429;
 556-4               (7)  Section 2, Chapter 478;
 556-5               (8)  Sections 1 and 2, Chapter 480;
 556-6               (9)  Section 3, Chapter 665;
 556-7               (10)  Sections 6 and 7, Chapter 668;
 556-8               (11)  Sections 1-3, Chapter 670;
 556-9               (12)  Section 1, Chapter 836; and
556-10               (13)  Section 6, Chapter 1430.
556-11               ARTICLE 11.  CHANGES RELATING TO HEALTH AND
556-12                               SAFETY CODE
556-13         SECTION 11.01.  Section 88.010, Health and Safety Code, as
556-14   added by Section 6, Chapter 893, Acts of the 75th Legislature,
556-15   Regular Session, 1997, is designated as Section 92.010, Health and
556-16   Safety Code, to conform to the renumbering of former Chapter 88,
556-17   Health and Safety Code (Injury Prevention and Control), as Chapter
556-18   92, Health and Safety Code, by Section 31.01(53), Chapter 165, Acts
556-19   of the 75th Legislature, Regular Session, 1997, and amended to read
556-20   as follows:
556-21         Sec. 92.010 [88.010].  COORDINATION WITH TEXAS REHABILITATION
556-22   COMMISSION.  The department and the Texas Rehabilitation Commission
556-23   shall enter into a memorandum of understanding to:
556-24               (1)  exchange relevant injury data on an ongoing basis
556-25   notwithstanding Section 92.006 [88.006];
556-26               (2)  maintain the confidentiality of injury data
 557-1   provided to the department by the commission in accordance with
 557-2   Section 92.006 [88.006] and  Section 111.057, Human Resources Code;
 557-3   and
 557-4               (3)  cooperate in conducting investigations of spinal
 557-5   cord and traumatic brain injuries.
 557-6         SECTION 11.02.  Section 88.011, Health and Safety Code, as
 557-7   added by Section 6, Chapter 893, Acts of the 75th Legislature,
 557-8   Regular Session, 1997, is designated as Section 92.011, Health and
 557-9   Safety Code, to conform to the renumbering of former Chapter 88,
557-10   Health and Safety Code (Injury Prevention and Control), as Chapter
557-11   92, Health and Safety Code, by Section 31.01(53), Chapter 165, Acts
557-12   of the 75th Legislature, Regular Session, 1997, and amended to read
557-13   as follows:
557-14         Sec. 92.011 [88.011].  COORDINATION WITH TEXAS TRAUMATIC
557-15   BRAIN INJURY ADVISORY COUNCIL.  The department and the Texas
557-16   Traumatic Brain Injury Advisory Council shall enter into a
557-17   memorandum of understanding to:
557-18               (1)  exchange relevant injury data on an ongoing basis
557-19   to the extent allowed by Section 92.006 [88.006];
557-20               (2)  maintain the confidentiality of injury data
557-21   provided to the council by the department in accordance with
557-22   Section 92.006 [88.006];
557-23               (3)  permit the council to review and comment on the
557-24   board's rules under Section 92.002(b) [88.002(b)] before the rules
557-25   are proposed; and
557-26               (4)  cooperate in conducting investigations of
 558-1   traumatic brain injuries.
 558-2         SECTION 11.03.  Section 247.045, Health and Safety Code, as
 558-3   amended by Chapters 416 and 1088, Acts of the 75th Legislature,
 558-4   Regular Session, 1997, is amended and reenacted to read as follows:
 558-5         Sec. 247.045.  CIVIL PENALTIES.  (a)  Except as provided by
 558-6   Subsections [Subsection] (b) and (c), a person who violates this
 558-7   chapter or who fails to comply with a rule adopted under this
 558-8   chapter and whose violation is determined by the department to
 558-9   threaten the health and safety of a resident of a personal care
558-10   facility is subject to a civil penalty of not less than $100 nor
558-11   more than $10,000 for each act of violation.  Each day of a
558-12   continuing violation constitutes a separate ground of recovery.
558-13         (b)  A person is subject to a civil penalty if the person:
558-14               (1)  is in violation of Section 247.021; or
558-15               (2)  has been determined to be in violation of Section
558-16   247.021 and violates any other provision of this chapter or fails
558-17   to comply with a rule adopted under this chapter.
558-18         [(b)  A person who does not possess a license for a personal
558-19   care facility as required by Section 247.021 is subject to a civil
558-20   penalty of not less than $1,000 nor more than $10,000 for each act
558-21   of violation.  Each day of a continuing violation constitutes a
558-22   separate ground for recovery.]
558-23         (c)  The amount of a civil penalty under Subsection (b) may
558-24   not be less than $1,000 or more than $10,000 for each act of
558-25   violation.  Each day of a continuing violation constitutes a
558-26   separate ground of recovery.
 559-1         (d) [(c)]  If the attorney general fails to take action
 559-2   within 30 days of referral from the department, the department
 559-3   shall refer the case to the local district attorney, county
 559-4   attorney, or city attorney.  The district attorney, county
 559-5   attorney, or city attorney shall file suit in a district court to
 559-6   collect and retain the penalty.
 559-7         (e) [(d)]  Investigation and attorney's fees may not be
 559-8   assessed or collected by or on behalf of the department or other
 559-9   state agency unless the department or other state agency assesses
559-10   and collects a penalty described under this chapter.
559-11         (f) [(e)]  The department and attorney general, or other
559-12   legal representative as described in Subsection (d) [(c)], shall
559-13   work in close cooperation throughout any legal proceedings
559-14   requested by the department.
559-15         (g) [(f)]  The commissioner of human services must approve
559-16   any settlement agreement to a suit brought under this chapter.
559-17         SECTION 11.04.  (a)  Section 382.003(9), Health and Safety
559-18   Code, is amended to conform to Chapter 3, Acts of the 72nd
559-19   Legislature, 1st Called Session, 1991, and Chapter 76, Acts of the
559-20   74th Legislature, Regular Session, 1995, to read as follows:
559-21               (9)  "Modification of existing facility" means any
559-22   physical change in, or change in the method of operation of, a
559-23   facility in a manner that increases the amount of any air
559-24   contaminant emitted by the facility into the atmosphere or that
559-25   results in the emission of any air contaminant not previously
559-26   emitted.  The term does not include:
 560-1                     (A)  insignificant increases in the amount of any
 560-2   air contaminant emitted that is authorized by one or more
 560-3   commission exemptions;
 560-4                     (B)  insignificant increases at a permitted
 560-5   facility;
 560-6                     (C)  maintenance or replacement of equipment
 560-7   components that do not increase or tend to increase the amount or
 560-8   change the characteristics of the air contaminants emitted into the
 560-9   atmosphere;
560-10                     (D)  an increase in the annual hours of operation
560-11   unless the existing facility has received a preconstruction permit
560-12   or has been exempted, pursuant to Section 382.057, from
560-13   preconstruction permit requirements;
560-14                     (E)  a physical change in, or change in the
560-15   method of operation of, a facility that does not result in a net
560-16   increase in allowable emissions of any air contaminant and that
560-17   does not result in the emission of any air contaminant not
560-18   previously emitted, provided that the facility:
560-19                           (i)  has received a preconstruction permit
560-20   or permit amendment or has been exempted pursuant to Section
560-21   382.057 from preconstruction permit requirements no earlier than
560-22   120 months before the change will occur; or
560-23                           (ii)  uses, regardless of whether the
560-24   facility has received a permit, an air pollution control method
560-25   that is at least as effective as the best available control
560-26   technology, considering technical practicability and economic
 561-1   reasonableness, that the commission [board] required or would have
 561-2   required for a facility of the same class or type as a condition of
 561-3   issuing a permit or permit amendment 120 months before the change
 561-4   will occur;
 561-5                     (F)  a physical change in, or change in the
 561-6   method of operation of, a facility where the change is within the
 561-7   scope of a flexible permit; or
 561-8                     (G)  a change in the method of operation of a
 561-9   natural gas processing, treating, or compression facility connected
561-10   to or part of a natural gas gathering or transmission pipeline
561-11   which does not result in an annual emission rate of a pollutant in
561-12   excess of the volume emitted at the maximum designed capacity,
561-13   provided that the facility is one for which:
561-14                           (i)  construction or operation started on
561-15   or before September 1, 1971, and at which either no modification
561-16   has occurred after September 1, 1971, or at which modifications
561-17   have occurred only pursuant to standard exemptions; or
561-18                           (ii)  construction started after September
561-19   1, 1971, and before March 1, 1972, and which registered in
561-20   accordance with Section 382.060 as that section existed prior to
561-21   September 1, 1991.
561-22         (b)  Sections 382.0512(b) and (c), Health and Safety Code,
561-23   are amended to conform to Chapter 3, Acts of the 72nd Legislature,
561-24   1st Called Session, 1991, and Chapter 76, Acts of the 74th
561-25   Legislature, Regular Session, 1995, to read as follows:
561-26         (b)  In determining whether a proposed change at an existing
 562-1   facility that meets the criteria of Section 382.003(9)(E) results
 562-2   in a net increase in allowable emissions, the commission [board]
 562-3   shall consider the effect on emissions of:
 562-4               (1)  any air pollution control method applied to the
 562-5   facility;
 562-6               (2)  any decreases in allowable emissions from other
 562-7   facilities that have received a preconstruction permit or permit
 562-8   amendment no earlier than 120 months before the change will occur;
 562-9   and
562-10               (3)  any decreases in actual emissions from other
562-11   facilities that meet the criteria of Section 382.003(9)(E)(i) or
562-12   (ii).
562-13         (c)  Nothing in this section shall be construed to limit the
562-14   application of otherwise applicable state or federal requirements,
562-15   nor shall this section be construed to limit the commission's
562-16   [board's] powers of enforcement under this chapter.
562-17         (c)  Section 382.056(e), Health and Safety Code, is amended
562-18   to conform to Chapter 3, Acts of the 72nd Legislature, 1st Called
562-19   Session, 1991, and Chapter 76, Acts of the 74th Legislature,
562-20   Regular Session, 1995, to read as follows:
562-21         (e)  Notwithstanding other provisions of this chapter, the
562-22   commission may hold a hearing on a permit amendment, modification,
562-23   or renewal if the commission [board] determines that the
562-24   application involves a facility for which the applicant's
562-25   compliance history contains violations which are unresolved and
562-26   which constitute a recurring pattern of egregious conduct which
 563-1   demonstrates a consistent disregard for the regulatory process,
 563-2   including the failure to make a timely and substantial attempt to
 563-3   correct the violations.
 563-4         (d)  Sections 382.134(b)-(d), Health and Safety Code, are
 563-5   amended to conform to Chapter 3, Acts of the 72nd Legislature, 1st
 563-6   Called Session, 1991, and Chapter 76, Acts of the 74th Legislature,
 563-7   Regular Session, 1995, to read as follows:
 563-8         (b)  The commission [board] by rule shall require a local
 563-9   government or a private person to ensure that its fleet vehicles
563-10   can operate on an alternative fuel.
563-11         (c)  Rules adopted by the commission [board] must require a
563-12   local government or private person to have a proportion of the
563-13   person's newly purchased fleet vehicles and a proportion of the
563-14   fleet vehicles in the person's total fleet able to operate on an
563-15   alternative fuel according to the following schedule:
563-16               (1)  30 percent of fleet vehicles purchased after
563-17   September 1, 1998, or at least 10 percent of the fleet vehicles in
563-18   the total fleet as of September 1, 1998;
563-19               (2)  50 percent of fleet vehicles purchased after
563-20   September 1, 2000; and
563-21               (3)  70 percent of light-duty fleet vehicles purchased
563-22   after September 1, 2002, and 50 percent of the heavy-duty fleet
563-23   vehicles purchased after September 1, 2002.
563-24         (d)  Rules adopted by the commission [board] may not require
563-25   a local government or private person to purchase a fleet vehicle
563-26   able to operate on an alternative fuel if the person maintains a
 564-1   proportion of 70 percent or more alternative fuel vehicles in the
 564-2   person's fleet.
 564-3         (e)  Sections 382.143(a)-(c) and (e)-(g), Health and Safety
 564-4   Code, are amended to conform to Chapter 3, Acts of the 72nd
 564-5   Legislature, 1st Called Session, 1991, and Chapter 76, Acts of the
 564-6   74th Legislature, Regular Session, 1995, to read as follows:
 564-7         (a)  The commission [board] by rule shall establish a Texas
 564-8   Mobile Emissions Reduction Credit (MERC) Program.
 564-9         (b)  Rules adopted under this section shall provide for the
564-10   following program elements:
564-11               (1)  program participation shall be as follows:
564-12                     (A)  entry into the program is voluntary; and
564-13                     (B)  both fleet owners or operators subject to
564-14   the percentage requirements of Sections 382.133 and 382.134 and
564-15   vehicle owners or operators who are not subject to those percentage
564-16   requirements may generate mobile emissions reduction credits under
564-17   this program, although the commission [board] may require a certain
564-18   minimum number of vehicles to participate;
564-19               (2)  mobile emissions reduction credits shall be
564-20   calculated on a per-pollutant basis and shall be granted to a
564-21   participating vehicle owner or operator for any of the following:
564-22                     (A)  purchase, lease, or acquisition of more or
564-23   cleaner vehicles than otherwise required by law; or
564-24                     (B)  entering into a binding contract with the
564-25   commission [board] to purchase, lease, or acquire at some future
564-26   date more or cleaner vehicles than otherwise required by law;
 565-1               (3)  mobile emissions reduction credit values shall be
 565-2   determined in accordance with United States Environmental
 565-3   Protection Agency rules and guidance;
 565-4               (4)  mobile emissions reduction credits may be used as
 565-5   follows:
 565-6                     (A)  to demonstrate compliance with any
 565-7   applicable mobile source emissions reductions requirements; and
 565-8                     (B)  to satisfy Reasonably Available Control
 565-9   Technology and Clean Air Act offset requirements, subject to the
565-10   appropriate trading ratios; and
565-11               (5)  all mobile emissions reduction credits generated
565-12   in accordance with this section may, within the same nonattainment
565-13   area, be sold, traded, or banked for later use among fleet vehicle
565-14   owners or other mobile or stationary sources of emissions without
565-15   discount or depreciation of such credits.
565-16         (c)(1)  Texas Mobile Emissions Reduction Credit Fund is
565-17   created and is to be administered by the commission [board].
565-18               (2)  Mobile emissions reduction credits shall be
565-19   assigned from the Texas Mobile Emissions Reduction Credit Fund to
565-20   vehicle owners or operators qualified under this section to
565-21   generate and receive mobile emissions reduction credits if the
565-22   following conditions are met:
565-23                     (A)  the vehicle owner or operator enters into a
565-24   binding contract with the commission [board], agreeing to purchase
565-25   and place in service in designated program areas clean-fuel
565-26   vehicles in accordance with the number of credits issued and the
 566-1   time frame specified by the commission [board]; and
 566-2                     (B)  the vehicle owner or operator agrees to name
 566-3   the United States Environmental Protection Agency as a third-party
 566-4   beneficiary of its contract with the commission [board].
 566-5               (3)  Contracts entered into under this section may be
 566-6   enforced in the courts of the State of Texas by an order of
 566-7   specific performance.
 566-8         (e)  The following shall be considered violations of the
 566-9   Texas Mobile Emissions Reduction Credit Program:
566-10               (1)  claiming a mobile emissions reduction credit
566-11   without meeting the appropriate acquisition requirements and
566-12   submitting any other data required by commission [board] rules; or
566-13               (2)  counterfeiting or dealing commercially in
566-14   counterfeit mobile emissions reduction credit certificates.
566-15         (f)  Any person found by the commission [board] to be in
566-16   violation under Subsection (e) shall be subject to a civil penalty
566-17   of not more than $25,000 per violation.
566-18         (g)  The credit trading program established by this section
566-19   shall be administered as follows:
566-20               (1)  Mobile emissions reduction credits must be banked
566-21   in accordance with the then existing commission [board] rules.
566-22               (2)  MERCs may be generated on a per-pollutant basis in
566-23   the following ways:
566-24                     (A)  after September 1, 1994, the use,
566-25   conversion, purchase, or acquisition of more clean-fuel vehicles
566-26   than required by the fleet percentage requirements of Sections
 567-1   382.133 and 382.134, according to the following formula:
 567-2                           (additional emissions benefit x VMT x CF)
 567-3   MERC grams per year  =  -----------------------------------------
 567-4                                               n
 567-5   where:
 567-6                           (i)  additional emissions benefit is the
 567-7   in-use emissions difference between the emission certification
 567-8   standard of the conventionally fueled baseline vehicle and the LEV
 567-9   emission standards.  For evaporative emissions, benefit will be
567-10   derived from the most recently EPA approved mobile emissions
567-11   estimation model;
567-12                           (ii)  VMT is the total remaining vehicle
567-13   miles to be traveled;
567-14                           (iii)  CF is the conversion factor for
567-15   heavy-duty vehicles which is:  brake specific fuel consumption x
567-16   fuel economy x fuel density;
567-17                           (iv)  n is the estimated fleet life of the
567-18   vehicle measured in years;
567-19                     (B)  the purchase or acquisition of vehicles
567-20   which meet emission standards more stringent than the LEV emission
567-21   standards, according to the following formula:
567-22                           (cleaner vehicle benefit x VMT x CF)
567-23   MERC grams per year  =  ------------------------------------
567-24                                            n
567-25   where cleaner vehicle benefit is the in-use emissions rate
567-26   difference between the LEV emission standards and the standard to
 568-1   which the vehicle is actually certified;
 568-2                     (C)  the purchase or acquisition of a vehicle
 568-3   with certified levels of evaporative emissions less than five grams
 568-4   per test, according to the following formula:
 568-5                           (vapor improvement x VMT)
 568-6   MERC grams per year  =  -------------------------
 568-7                                       n
 568-8   where vapor improvement is the in-use emissions rate difference
 568-9   between conventional and low vapor emission vehicles calculated
568-10   using the most recently approved EPA mobile emissions model.
568-11               (3)  The vehicle owners or operators applying for a
568-12   MERC shall submit a registration application to the commission
568-13   [board] using an approved MERC registration form.  The application
568-14   must clearly state the following information for each vehicle
568-15   generating credit:
568-16                     (A)  the emissions standard of the vehicle as
568-17   certified pursuant to this Act;
568-18                     (B)  the number of remaining vehicle miles to be
568-19   traveled;
568-20                     (C)  the number of years the vehicle will be used
568-21   as a fleet vehicle; and
568-22                     (D)  the results from the MERC calculation used
568-23   to estimate the credit value in grams per year.
568-24               (4)  The MERC registration must include information
568-25   sufficient to calculate the MERC's value under Subdivision (g)(2)
568-26   [of this section].
 569-1               (5)  The commission [board] will evaluate the claimed
 569-2   credits and may adjust the value of the MERCs based on the
 569-3   evaluation.
 569-4               (6)  MERC registration applications must be received at
 569-5   least 90 days prior to using the MERC.
 569-6               (7)  The commission [board] will have 30 days from the
 569-7   date of receipt to determine if the MERC registration application
 569-8   is complete.
 569-9               (8)  The commission [board] will have 90 days from date
569-10   of receipt of the completed application to approve or deny the MERC
569-11   registration.
569-12               (9)  The commission [board] may revoke approval of a
569-13   MERC registration under this section at any time on determining
569-14   that the requirements of this section are not being met.
569-15               ARTICLE 12.  CHANGES RELATING TO LABOR CODE
569-16         SECTION 12.01.  Section 63.002, Labor Code, is amended to
569-17   correct a reference to read as follows:
569-18         Sec. 63.002.  EXEMPTION.  This chapter does not affect
569-19   Section 22.002 [2.07], Education Code.
569-20         ARTICLE 13.  CHANGES RELATING TO LOCAL GOVERNMENT CODE
569-21                        PART 1.  GENERAL CHANGES
569-22         SECTION 13.01.  Section 6.002, Local Government Code, is
569-23   amended to omit provisions made unnecessary because the substance
569-24   of the provisions is contained in Section 7.002(a), Local
569-25   Government Code, to read as follows:
569-26         Sec. 6.002.  INCORPORATION PROCEDURE.  The procedure for
 570-1   incorporating as a Type A general-law municipality is the same as
 570-2   that prescribed for incorporating as a Type B general-law
 570-3   municipality [except the application to become incorporated must be
 570-4   signed by at least 50 qualified voters who are residents of the
 570-5   community].
 570-6         SECTION 13.02.  Section 81.002(c), Local Government Code, is
 570-7   amended for grammatical purposes to read as follows:
 570-8         (c)  Subject to the provisions of Chapter 171, the county
 570-9   judge or a county commissioner may serve as a member of the
570-10   governing body of or as an officer or director of an [another]
570-11   entity that does business with the county, excluding [except:]
570-12               [(1)]  a publicly traded corporation[;] or
570-13               [(2)]  a subsidiary, affiliate, or subdivision of a
570-14   publicly traded corporation[; that does business with the county].
570-15         SECTION 13.03.  (a)  Subtitle B, Title 3, Local Government
570-16   Code, is amended by adding a chapter heading for Chapter 89, Local
570-17   Government Code, to read as follows:
570-18    CHAPTER 89.  GENERAL PROVISIONS RELATING TO COUNTY ADMINISTRATION
570-19         (b)  Sections 81.023, 81.026, 81.030, 81.041, 81.042, and
570-20   81.043, Local Government Code, are transferred to Chapter 89, Local
570-21   Government Code, and designated as Sections 89.001, 89.002, 89.003,
570-22   89.004, 89.005, and 89.006, Local Government Code, respectively.
570-23         (c)  Section 81.027, Local Government Code, is designated as
570-24   Section 81.026, Local Government Code, and is amended to read as
570-25   follows:
570-26         Sec. 81.026 [81.027].  COMMISSIONERS COURT MEMBERSHIP ON
 571-1   ASSOCIATIONS AND NONPROFIT ORGANIZATIONS.  A county judge or county
 571-2   commissioner may serve on the governing body of or any committee
 571-3   serving an association of counties created or operating pursuant to
 571-4   the provisions of Section 89.002 [81.026].  A county judge or
 571-5   county commissioner may serve as a member of any board of trustees
 571-6   or board of directors or other governing body of any trust or other
 571-7   entity created pursuant to interlocal contract for the purpose of
 571-8   forming or administering any governmental pool, self-insurance
 571-9   pool, insurance pool, or any other fund or joint endeavor created
571-10   for the benefit of member counties and political subdivisions.  In
571-11   addition, a county judge or county commissioner may serve as a
571-12   member of the board of directors of any nonprofit corporation that
571-13   is created and exists solely for the purpose of providing
571-14   administrative or other services to such trust or other entity.  A
571-15   county judge or county commissioner, acting as a member of any such
571-16   board or committee, may perform any act necessary or appropriate
571-17   for the rendition of such service, including the casting of votes
571-18   and deliberations concerning and execution of contracts or claims
571-19   with or against any county.  A county judge or commissioner may
571-20   participate in deliberations concerning and cast any vote on any
571-21   matter before the commissioners court affecting the execution of
571-22   any contract with or the payment of claims, premiums, dues, or
571-23   contributions to any such trust, association, nonprofit
571-24   corporation, or entity or any related matter.
571-25         (d)  Sections 81.024 and 81.025, Local Government Code, are
571-26   designated as Sections 81.023 and 81.024, Local Government Code,
 572-1   respectively, Sections 81.028 and 81.029, Local Government Code,
 572-2   are designated as Sections 81.027 and 81.028, Local Government
 572-3   Code, respectively, and Section 81.031, Local Government Code, is
 572-4   designated as Section 81.030, Local Government Code.
 572-5         SECTION 13.04.  Section 155.001, Local Government Code, as
 572-6   amended by Section 1, Chapter 433, and Section 1, Chapter 817, Acts
 572-7   of the 74th Legislature, Regular Session, 1995, is amended and
 572-8   reenacted to read as follows:
 572-9         Sec. 155.001.  DEDUCTIONS AUTHORIZED IN COUNTIES; PURPOSES.
572-10   (a)  The commissioners court, on the request of a county employee,
572-11   may authorize a payroll deduction to be made from the employee's
572-12   wages or salary for payment to a credit union.
572-13         (b)  In a county with a population of 20,000 or more, the
572-14   commissioners court, on the request of a county employee, may
572-15   authorize a payroll deduction to be made from the employee's wages
572-16   or salary for:
572-17               (1)  payment of membership dues in a labor union or a
572-18   bona fide employees association; [or]
572-19               (2)  payment of fees for parking in a county-owned
572-20   facility; or
572-21               (3) [(4)]  payment to a charitable organization.
572-22         (c) [(b)]  In this section, "charitable organization" has the
572-23   meaning assigned by Section 659.131, Government Code [1, Article
572-24   6813h, Revised Statutes].
572-25         SECTION 13.05.  Section 159.032(1), Local Government Code, is
572-26   amended to conform to Section 18, Chapter 1134, Acts of the 75th
 573-1   Legislature, Regular Session, 1997, to read as follows:
 573-2               (1)  "County officer" means a sheriff, county tax
 573-3   assessor-collector, county clerk, district clerk, county treasurer,
 573-4   county auditor, or county purchasing agent. The term does not
 573-5   include a county [or district] officer as defined by Section
 573-6   159.002.
 573-7         SECTION 13.06.  (a)  Section 194.0065, Local Government Code,
 573-8   is transferred to Chapter 193, Local Government Code, for
 573-9   organization purposes, is designated as Section 193.013, Local
573-10   Government Code, and is amended to read as follows:
573-11         Sec. 193.013 [194.0065].  COMPUTERIZED INDEX FOR CERTAIN
573-12   [OFFICIAL PUBLIC] RECORDS.  An index for a [an official public]
573-13   record listed in Section 193.008(b) may be stored or maintained by
573-14   computer if[, provided that] a security or backup copy of the
573-15   [such] index is [be] created on a daily basis and stored in a
573-16   climate-controlled location that is[,] equipped with fire alarms
573-17   and sprinklers.  The storage location[, which] must be separate
573-18   [and apart] from the building in which the computer is located.
573-19         (b)  Sections 194.0025, 194.010, and 194.017, Local
573-20   Government Code, are repealed because those sections are superseded
573-21   by Subtitle C, Title 6, Local Government Code.
573-22         SECTION 13.07.  Section 219.003(a), Local Government Code, is
573-23   amended for clarification purposes to read as follows:
573-24         (a)  A comprehensive plan may be adopted or amended by
573-25   ordinance following:
573-26               (1)  a hearing at which the public is given the
 574-1   opportunity to give testimony and present written evidence; and
 574-2               (2)  [, if one exists,] review by the municipality's
 574-3   planning commission or department, if one exists.
 574-4         SECTION 13.08.  (a)  Section 363.051(a), Local Government
 574-5   Code, is amended to conform to Section 1, Chapter 1248, Acts of the
 574-6   75th Legislature, Regular Session, 1997, to read as follows:
 574-7         (a)  The creation of a crime control and prevention district
 574-8   may be proposed under this chapter by a majority vote of the
 574-9   governing body of a:
574-10               (1)  county with a population of more than 130,000; or
574-11               (2)  municipality that is partially or wholly located
574-12   in a county with a population of more than 5,000 [one million].
574-13         (b)  Section 363.055(a), Local Government Code, is amended to
574-14   conform to Section 2, Chapter 1248, Acts of the 75th Legislature,
574-15   Regular Session, 1997, to read as follows:
574-16         (a)  The proposed rate for the district sales and use tax
574-17   imposed under Subchapter B, Chapter 323, Tax Code, may be only:
574-18               (1)  one-eighth of one percent;
574-19               (2)  one-fourth of one percent;
574-20               (3)  three-eighths of one percent; or
574-21               (4) [(2)]  one-half of one percent.
574-22         (c)  Subchapter C, Chapter 363, Local Government Code, is
574-23   amended to conform to Section 3, Chapter 1248, Acts of the 75th
574-24   Legislature, Regular Session, 1997, by adding Section 363.1015 to
574-25   read as follows:
574-26         Sec. 363.1015.  ALTERNATE FORMS OF APPOINTMENT:  BOARD OF
 575-1   DIRECTORS.  (a)  The governing body of a municipality or county by
 575-2   resolution may appoint the governing body's membership as the board
 575-3   of directors of the district, if the appointment is approved by the
 575-4   voters in a creation election or continuation referendum under this
 575-5   chapter.
 575-6         (b)  A member of a governing body appointed under Subsection
 575-7   (a) serves a term as a director concurrent with the member's term
 575-8   on the governing body.
 575-9         (c)  In a district for which the board is not appointed under
575-10   Subsection (a), the  governing body of the municipality or county
575-11   may create a board by having each member of the governing body
575-12   appoint one director to the board.
575-13         (d)  A director appointed under Subsection (c) serves:
575-14               (1)  at the pleasure of the appointing member of the
575-15   governing body; and
575-16               (2)  for a term concurrent with the term of the
575-17   appointing member.
575-18         (d)  Subchapter F, Chapter 363, Local Government Code, is
575-19   amended to conform to Section 4, Chapter 1248, Acts of the 75th
575-20   Legislature, Regular Session, 1997, by adding Section 363.2515 to
575-21   read as follows:
575-22         Sec. 363.2515.  CONTINUATION OF DISTRICT:  CERTAIN POLITICAL
575-23   SUBDIVISIONS.  (a)  The following entities may specify the number
575-24   of years for which a district should be continued:
575-25               (1)  in a county with a population of one million or
575-26   more that created the district, the board or the commissioners
 576-1   court; and
 576-2               (2)  in a municipality with a population of 75,000 or
 576-3   less that created the district, the governing body of the
 576-4   municipality.
 576-5         (b)  A district may be continued under Subsection (a) only
 576-6   for 5, 10, 15, or 20 years.
 576-7         (c)  For a continuation referendum under this section, the
 576-8   ballot shall be printed to permit voting for or against the
 576-9   proposition:  "Whether the ____ Crime Control and Prevention
576-10   District should be continued for ____ years and the crime control
576-11   and prevention district sales tax should be continued for ____
576-12   years."
576-13         (e)  Section 363.301, Local Government Code, is amended to
576-14   conform to Section 5, Chapter 1248, Acts of the 75th Legislature,
576-15   Regular Session, 1997, by amending Subsection (a) and adding
576-16   Subsection (c) to read as follows:
576-17         (a)  The district is dissolved on the fifth anniversary of
576-18   the date the district began to levy taxes for district purposes
576-19   [was created] if the district has not held a continuation or
576-20   dissolution referendum.
576-21         (c)  Subsection (b) does not apply to a district that is
576-22   continued under Section 363.2515, and that district is dissolved at
576-23   the end of the period for which it was continued.
576-24         (f)  Sections 1-5, Chapter 1248, Acts of the 75th
576-25   Legislature, Regular Session, 1997, are repealed.
576-26         SECTION 13.09.  (a)  Section 376.052(a), Local Government
 577-1   Code, is amended to conform to Section 1, Chapter 591, Acts of the
 577-2   75th Legislature, Regular Session, 1997, to read as follows:
 577-3         (a)  The district has:
 577-4               (1)  all powers necessary or required to accomplish the
 577-5   purposes for which the district was created;
 577-6               (2)  the rights, powers, privileges, authority, and
 577-7   functions of a district created under Chapter 375;
 577-8               (3)  the powers given to a corporation under Section
 577-9   4B, the Development Corporation Act of 1979 (Article 5190.6,
577-10   Vernon's Texas Civil Statutes), and the power to own, operate,
577-11   acquire, construct, lease, improve, and maintain projects described
577-12   by that section;
577-13               (4)  the power to impose ad valorem taxes, assessments,
577-14   or impact fees in accordance with Chapter 375 to provide
577-15   improvements and services for a project or activity the district is
577-16   authorized to acquire, construct, improve, or provide under this
577-17   subchapter; [and]
577-18               (5)  the power to correct, add to, or delete
577-19   assessments from its assessment rolls after notice and hearing as
577-20   provided by Subchapter F, Chapter 375; and
577-21               (6)  the power to grant, without additional procedures,
577-22   abatements for taxes or assessments owed to the district under
577-23   Chapter 312, Tax Code.
577-24         (b)  Section 1, Chapter 591, Acts of the 75th Legislature,
577-25   Regular Session, 1997, is repealed.
577-26         SECTION 13.10.  (a)  Subtitle C, Title 12, Local Government
 578-1   Code, is amended to codify Chapter 831, Acts of the 75th
 578-2   Legislature, Regular Session, 1997 (Article 1269j-18, Vernon's
 578-3   Texas Civil Statutes), and Chapter 1207, Acts of the 75th
 578-4   Legislature, Regular Session, 1997 (Article 1269j-19, Vernon's
 578-5   Texas Civil Statutes), and to revise and more appropriately locate
 578-6   Chapter 2311, Government Code, by adding Chapter 396 to read as
 578-7   follows:
 578-8           CHAPTER 396.  REDEVELOPMENT AUTHORITIES CREATED BY
 578-9                   MORE THAN ONE POLITICAL SUBDIVISION
578-10           SUBCHAPTER A.  LUBBOCK REESE DEVELOPMENT AUTHORITY
578-11         Sec. 396.001.  DEFINITIONS.  In this subchapter:
578-12               (1)  "Authority" means the Lubbock Reese Redevelopment
578-13   Authority.
578-14               (2)  "Base property" means land described by Section
578-15   396.009.
578-16               (3)  "Board" means the board of directors of the
578-17   authority.
578-18               (4)  "County" means Lubbock County.
578-19               (5)  "Municipality" means the City of Lubbock.
578-20         Sec. 396.002.  ESTABLISHMENT.  The authority is established
578-21   as a political subdivision, with boundaries the same as the
578-22   boundaries of the real property described by Section 396.009, on
578-23   adoption of resolutions by both the municipality and the county
578-24   authorizing the authority's establishment.
578-25         Sec. 396.003.  BOARD.  (a)  The board consists of nine
578-26   members and is responsible for the management, operation, and
 579-1   control of the authority.
 579-2         (b)  The board is composed of:
 579-3               (1)  two members appointed by the governing body of the
 579-4   municipality;
 579-5               (2)  two members appointed by the governing body of the
 579-6   county;
 579-7               (3)  one member appointed by the South Plains
 579-8   Association of Governments; and
 579-9               (4)  four at-large members appointed by the majority
579-10   vote of the members appointed under Subdivisions (1), (2), and (3).
579-11         (c)  A vacancy on the board is filled in the same manner as
579-12   the original appointment.  Each board member serves for a term of
579-13   two years.
579-14         (d)  The members of the board shall elect from its membership
579-15   a president and a vice president.  The vice president shall preside
579-16   in the absence of the president.
579-17         (e)  The board shall adopt rules for its proceedings and may
579-18   employ and compensate persons to carry out the powers and duties of
579-19   the authority.
579-20         Sec. 396.004.  PURPOSE AND NATURE OF AUTHORITY.  (a)  The
579-21   authority may accept title, on approval by and in coordination with
579-22   the governor, from the United States to all or any portion of the
579-23   base property.
579-24         (b)  The authority is a public political entity and corporate
579-25   body that exercises public and essential governmental functions.
579-26         (c)  The exercise of a power granted by this subchapter is
 580-1   for a public purpose and is a matter of public necessity.
 580-2         (d)  The authority is a governmental unit under Chapter 101,
 580-3   Civil Practice and Remedies Code.  The operations of the authority
 580-4   are not proprietary functions for any purpose, including the
 580-5   application of Chapter 101, Civil Practice and Remedies Code.
 580-6         Sec. 396.005.  POWERS OF AUTHORITY.  (a)  The authority may
 580-7   exercise, on approval by and in coordination with the governor, all
 580-8   the powers necessary or convenient to carry out a purpose of this
 580-9   subchapter, including the power to:
580-10               (1)  sue and be sued to the extent permitted by law,
580-11   and plead and be impleaded, in its own name;
580-12               (2)  adopt an official seal and alter it as considered
580-13   advisable;
580-14               (3)  adopt and enforce bylaws and rules for the conduct
580-15   of its affairs that are not inconsistent with this subchapter;
580-16               (4)  acquire, hold, own, and dispose of its revenues,
580-17   income, receipts, funds, and money from every source;
580-18               (5)  select its depository;
580-19               (6)  set the fiscal year for the authority;
580-20               (7)  establish a complete system of accounts for the
580-21   authority;
580-22               (8)  invest funds in accordance with Chapter 2256,
580-23   Government Code;
580-24               (9)  acquire, use, own, rent, lease, accept, hold, or
580-25   dispose of any property, or licenses, patents, rights, and other
580-26   interest in that property, by purchase, exchange, gift, assignment,
 581-1   condemnation, sale, lease, or any other means, including
 581-2   rights-of-way or easements, and hold, manage, operate, or improve
 581-3   that property, to perform a duty or exercise a power under this
 581-4   subchapter;
 581-5               (10)  sell, assign, lease, encumber, mortgage, or
 581-6   otherwise dispose of any property comprising the base property, or
 581-7   any interest in that property, release or relinquish any right,
 581-8   title, claim, lien, interest, easement, or demand, however
 581-9   acquired, and, notwithstanding any other law, conduct any
581-10   transaction authorized by this subdivision by public or private
581-11   sale;
581-12               (11)  lease or rent any land or buildings, structures,
581-13   or facilities located on the base property to any person to carry
581-14   out the purposes of this subchapter;
581-15               (12)  request and accept any appropriations, grants,
581-16   allocations, subsidies, guaranties, aid, contributions, services,
581-17   labor, materials, gifts, donations, or money from the federal
581-18   government, the state, any public agency or political subdivision,
581-19   or any other source;
581-20               (13)  operate and maintain an office;
581-21               (14)  appoint and determine the duties, tenure,
581-22   qualifications, compensation, and removal of officers, employees,
581-23   agents, professional advisors, and counselors, including financial
581-24   consultants, accountants, attorneys, architects, engineers,
581-25   appraisers, and financing experts, as considered necessary or
581-26   advisable by the board;
 582-1               (15)  borrow money as necessary to acquire, improve, or
 582-2   operate facilities on the base property, not to exceed an amount
 582-3   determined by the governing body of the municipality;
 582-4               (16)  fix, revise, charge, and collect rents, rates,
 582-5   fees, and charges for its facilities and services;
 582-6               (17)  exercise the powers granted to municipalities
 582-7   under Chapter 380 for expansion of economic development and
 582-8   commercial activity; and
 582-9               (18)  adopt an annual operating budget for all major
582-10   expenditures before the beginning of the fiscal year.
582-11         (b)  In a suit described by Subsection (a)(1), the authority
582-12   may not be required to give security for costs or a supersedeas or
582-13   cost bond in an appeal of a judgment.
582-14         Sec. 396.006.  EXEMPTION FROM TAXATION.  The property,
582-15   revenues, and income of the authority are exempt from a tax levied
582-16   by the state or a political subdivision of the state.
582-17         Sec. 396.007.  DISSOLUTION.  (a)  The authority shall be
582-18   dissolved:
582-19               (1)  when all the functions of the authority are
582-20   performed and completed; and
582-21               (2)  on approval of the municipality and county after
582-22   all debts or obligations have been satisfied or retired with the
582-23   assets of the authority.
582-24         (b)  It is the intention of the legislature that the
582-25   authority be dissolved after conveyance and sale of all of the base
582-26   property.
 583-1         (c)  Any remaining assets of the authority shall be conveyed
 583-2   or transferred to the municipality and the county in accordance
 583-3   with the initial proportion of funds contributed by each.
 583-4         Sec. 396.008.  SUCCESSOR.  The authority is the successor in
 583-5   interest to the Lubbock Reese Redevelopment Authority Corporation,
 583-6   a nonprofit corporation organized under the Texas Non-Profit
 583-7   Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
 583-8   Statutes), and succeeds to all rights and liabilities of the
 583-9   corporation.
583-10         Sec. 396.009.  DESCRIPTION OF TRACTS.  (1)  FIRST TRACT.  All
583-11   of Section Four (4) and the East Half (E 1/2) of Section Twenty-six
583-12   (26) except that part of said Sections lying south of the north
583-13   right-of-way line of State Highway No. 290 as same now exists; and
583-14   the South Half (S 1/2) of Section Twenty-five (25), all in Block
583-15   D-6; and the Southeast Quarter (SE 1/4) of Section Forty-eight (48)
583-16   Block P, and containing 1387.66 acres more or less, and all
583-17   easements appurtenant thereto, together with any improvements and
583-18   personal property related therein;
583-19               (2)  SECOND TRACT.  A strip of land adjacent to and
583-20   extending fifty (50) feet in width on each side of the following
583-21   described line:  Commencing at the northeast corner of Section Five
583-22   (5), Block D-6; thence west along the north line of said Section
583-23   Five (5), a distance of two-hundred (200) feet; thence south at
583-24   right angles to said north line a distance of fifty (50) feet to
583-25   the point of beginning; thence continuing south at right angles to
583-26   said north line a distance of one-hundred sixty (160) feet, more or
 584-1   less, to a point of curve; thence southwesterly on a curve to the
 584-2   right with a radius of nine-hundred forty-two and twenty-nine
 584-3   hundredths (942.29) feet, a distance of one-thousand three-hundred
 584-4   ninety-six (1396) feet, more or less, to a point of intersection
 584-5   with a line parallel with and seventy-five (75) feet northeasterly
 584-6   from, measured at right angles to, the centerline of the main track
 584-7   of the South Plains and Santa Fe Railway Company, containing 3.57
 584-8   acres, more or less, and all easements appurtenant thereto,
 584-9   together with any improvements and personal property related
584-10   therein;
584-11               (3)  THIRD TRACT (Radio Transmitter Site).  A parcel of
584-12   land described as beginning at the northwest corner of the
584-13   southwest quarter (SW 1/4) of Section Two (2), Block D-6; thence
584-14   east six-hundred sixty (660) feet, thence south six-hundred sixty
584-15   (660) feet, thence west six-hundred sixty (660) feet, thence north
584-16   six-hundred sixty (660) feet to the place of beginning, containing
584-17   ten (10) acres, more or less, and all easements appurtenant
584-18   thereto, together with any improvements and personal property
584-19   related therein;
584-20               (4)  FOURTH TRACT (Radio Range Site).  A certain parcel
584-21   of land described as beginning at the southwest corner of the east
584-22   half (E 1/2) of Section Thirty-eight (38), Block JS, thence north
584-23   five-hundred twenty-two (522) feet, thence east five-hundred (500)
584-24   feet, thence south five-hundred twenty-two (522) feet, thence west
584-25   five-hundred (500) feet to the point of beginning containing six
584-26   (6) acres, more or less, all easements appurtenant thereto,
 585-1   together with any improvements and personal property related
 585-2   therein;
 585-3               (5)  FIFTH TRACT (Terry County Auxiliary Air Field).  A
 585-4   parcel of land situated in Section 27, Block E, E.L. & R.R. Co.
 585-5   Survey, County of Terry, State of Texas, being more particularly
 585-6   described as follows:  beginning at a 1/2" iron rod in the south
 585-7   line of Section 27 that bears west, a distance of 1820 feet from
 585-8   the section corner common to Sections 27 and 30, Block E for the
 585-9   southeast corner of this tract; Thence north 88 35' west, along the
585-10   south line of said Section 27, a distance of 1870 feet to a 1/2"
585-11   iron rod for the southwest corner of this tract; Thence north 02
585-12   23' east, a distance of 5195.4 feet to a 1/2" iron rod set under a
585-13   fence for the northwest corner of this tract; Thence south 88 33'
585-14   east, along an east-west fence line, a distance of 100 feet to a
585-15   point; Thence south 2 23' west, a distance of 200 feet to a 1/2"
585-16   iron pipe for an inside corner of this tract; Thence south 88 33'
585-17   east, a distance of 1770 feet to a 1/2" iron pipe for the northeast
585-18   corner of this tract which bears south, a distance of 200 feet from
585-19   an east-west fence; Thence south 02 23' west, a distance of 4993.2
585-20   feet to the point of beginning, containing an area of 214.86 acres,
585-21   more or less, and all easements appurtenant thereto, together with
585-22   any improvements and personal property related therein.
585-23               (6)  SIXTH TRACT (Terry County Auxiliary Air Field).  A
585-24   parcel of land situated in Section 30, Block E, E.L. & R.R. R.R.
585-25   Co. Survey, County of Terry, State of Texas, being more
585-26   particularly described as:  Beginning at a 1/2" iron rod in a line
 586-1   common to the north line of Section 30 and the south line of
 586-2   Section 27 which bears west, a distance of 1820 feet from the
 586-3   section corner common to Sections 27 and 30, Block E for the
 586-4   northeast corner of this tract; Thence south 02 23' west, a
 586-5   distance of 5208.1 feet to a point for the southeast corner of this
 586-6   tract which bears west, a distance of 1835.5 feet form the
 586-7   southeast corner of Section 30; Thence north 88 55' west, along an
 586-8   east-west fence on the south line of Section 30, a distance of 1855
 586-9   feet to a point for the southwest corner of this tract; Thence
586-10   north 43 16' west, a distance of 21.5 feet to a 1/2" iron rod, set
586-11   for a corner of this tract, which bears north, a distance of 15
586-12   feet from an east-west fence; Thence north 02 23' east, a distance
586-13   of 5203.4 feet to a 1/2" iron rod for the northwest corner of this
586-14   tract which bears east, a distance of 1590 feet from the northwest
586-15   corner of Section 30; Thence south 88 35' east, along the north
586-16   line of Section 30, a distance of 1870 feet to the point of
586-17   beginning, containing an area of 223.80 acres, more or less, and
586-18   all easements appurtenant thereto, together with any improvements
586-19   and personal property related therein.
586-20               (7)  SEVENTH TRACT (Terry County Auxiliary Air Field).
586-21   A parcel of land situated in Section 33, Block E, E. L. & R. R.
586-22   R.R. Co. Survey, County of Terry, State of Texas, being more
586-23   particularly described as follows:  Beginning at a point under a
586-24   fence along the north line of Section 33 that bears west, a
586-25   distance of 1835.5 feet form a 2" iron pipe marking the northeast
586-26   corner of Section 33; Thence south 02 23' west, a distance of 400
 587-1   feet to a 1/2" reinforcing rod for the southeast corner of this
 587-2   tract; Thence north 88 55' west, along a line parallel to and 400
 587-3   feet south of an east-west fence along the north line of Section
 587-4   33, a distance of 1455 feet to a 1/2" iron rod for the southwest
 587-5   corner of this tract; Thence north 43 16' west. a distance of 558.7
 587-6   feet to a point for the northwest corner of this tract; Thence
 587-7   south 88 55' east, with an east-west fence along the north line of
 587-8   Section 33, a distance of 1855 feet to the northeast corner of this
 587-9   tract and the point of beginning, containing an area of 15.20
587-10   acres, more or less, and all easements appurtenant thereto,
587-11   together with any improvements and personal property related
587-12   therein.
587-13               (8)  EIGHTH TRACT (Terry County Auxiliary Air Field).
587-14   A parcel of land situated in Section 33, Block E, E.L. & R.R.
587-15   Railroad Co., Survey, County of Terry, State of Texas, being more
587-16   particularly described as follows:  Beginning at a point that bears
587-17   west, a distance of 1835.5 feet and south 02 23' west, a distance
587-18   of 400 feet from the northeast corner of Section 33, Block E, E.L.
587-19   & R.R. Railroad Co., Survey; thence south 02 23' west, a distance
587-20   of 1500 feet; thence north 88 55' west, parallel to the north line
587-21   of Section 33, a distance of 1870 feet; thence north 02 23' east, a
587-22   distance of 1890.55 feet; thence south 88 55' east, a distance of
587-23   15.34 feet; thence south 43 16' east, a distance of 558.70 feet;
587-24   thence south 88 55' east, a distance of 1455.14 feet to the point
587-25   of beginning, containing 66.34 acres, more or less, and all
587-26   easements appurtenant thereto, together with any improvements and
 588-1   personal property related therein.
 588-2            (Sections 396.010-396.030 reserved for expansion
 588-3            SUBCHAPTER B.  WESTWORTH VILLAGE-WHITE SETTLEMENT
 588-4                         REDEVELOPMENT AUTHORITY
 588-5         Sec. 396.031.  DEFINITIONS.  In this subchapter:
 588-6               (1)  "Authority" means the Westworth Village-White
 588-7   Settlement Redevelopment Authority.
 588-8               (2)  "Board" means the board of directors of the
 588-9   authority.
588-10         Sec. 396.032.  ESTABLISHMENT.  The authority is established
588-11   as a political subdivision with boundaries the same as the
588-12   boundaries of Westworth Village and White Settlement if each
588-13   municipality:
588-14               (1)  adopts a resolution authorizing the authority's
588-15   establishment; and
588-16               (2)  appoints three members to the board of the
588-17   authority.
588-18         Sec. 396.033.  BOARD.  (a)  The board consists of six members
588-19   and is responsible for the management, operation, and control of
588-20   the authority.
588-21         (b)  The governing body of each municipality in the authority
588-22   shall appoint three members to the board.
588-23         (c)  Members of the board serve for terms of two years.
588-24         (d)  The board shall select from its membership a person to
588-25   serve as presiding officer and a person to serve as assistant
588-26   presiding officer.  The assistant presiding officer shall preside
 589-1   in the absence of the presiding officer.  The board shall also
 589-2   select a secretary-treasurer, who is not required to be a member of
 589-3   the board.
 589-4         (e)  A vacancy on the board is filled in the manner provided
 589-5   for the original appointment, and a person filling a vacancy serves
 589-6   for the unexpired term.
 589-7         (f)  The board may employ all persons necessary to carry out
 589-8   the functions of the authority.
 589-9         Sec. 396.034.  PURPOSE.  (a)  The authority is created:
589-10               (1)  to accept title, on approval by and in
589-11   coordination with the governor, from the United States to all or
589-12   any portion of the real property situated:
589-13                     (A)  within the boundaries of the authority,
589-14   together with any improvements located on the property and personal
589-15   property related to the property, commonly referred to as Parcel
589-16   A - 18 Hole Golf Course; Parcel B - Wherry Housing Area; Parcel
589-17   C - Kings Branch Housing Area; Parcel D - Stables Area and Vacant
589-18   Land; Parcel E - 5 acres; Parcel F - 18 acres; Parcel H - Firing
589-19   Range; and
589-20                     (B)  outside the boundaries of the authority
589-21   within an unincorporated area in Tarrant County, together with any
589-22   improvements located on the property and personal property related
589-23   to the property, commonly referred to as Parcel G - Weapons Storage
589-24   Area; and
589-25               (2)  to use the property and all assistance available
589-26   for the property from the United States and all other sources to
 590-1   replace and enhance the economic benefits generated for the
 590-2   property by Carswell Air Force Base with diversified activity,
 590-3   including planned land uses to foster creation of new jobs,
 590-4   economic development, industry, commerce, manufacturing, housing,
 590-5   and recreation and the construction, operation, and maintenance of
 590-6   facilities, improvements, and infrastructures on the property.
 590-7         (b)  Any use or development of land within Parcel G may not
 590-8   be undertaken without the prior written consent of the City of Fort
 590-9   Worth.
590-10         Sec. 396.035.  POWERS OF AUTHORITY.  The authority may
590-11   exercise, on approval by and in coordination with the governor, all
590-12   powers necessary or appropriate to carry out the purposes of this
590-13   subchapter, including the power to:
590-14               (1)  sue and be sued, and plead and be impleaded, in
590-15   its own name;
590-16               (2)  adopt an official seal, and alter the seal when
590-17   advisable;
590-18               (3)  adopt and enforce bylaws and rules for the conduct
590-19   of its affairs that are not inconsistent with this subchapter;
590-20               (4)  acquire, hold, use, and dispose of its revenues,
590-21   income, receipts, funds, and money from every source and to select
590-22   its depository;
590-23               (5)  acquire, own, rent, lease, accept, hold, or
590-24   dispose of any property or interest in property, including rights
590-25   or easements, in performing its duties and exercising its powers
590-26   under this subchapter by purchase, exchange, gift, assignment,
 591-1   condemnation, sale, lease, or otherwise and to hold, manage,
 591-2   operate, or improve the property;
 591-3               (6)  sell, assign, lease, encumber, mortgage, or
 591-4   otherwise dispose of any property or interest in property, and
 591-5   release or relinquish any right, title, claim, lien, interest,
 591-6   easement, or demand however acquired;
 591-7               (7)  perform an activity authorized by Subdivision (6)
 591-8   by public or private sale, with or without public bidding,
 591-9   notwithstanding any other law;
591-10               (8)  lease or rent any lands within the property and
591-11   buildings, structures, or facilities located on the property from
591-12   or to any person or municipality or other public agency or
591-13   political subdivision to carry out the purposes of this subchapter;
591-14               (9)  request and accept any appropriations, grants,
591-15   allocations, subsidies, guaranties, aid, contributions, services,
591-16   labor, materials, gifts, or donations from the federal government,
591-17   the state, any public agency or political subdivision, or any other
591-18   source;
591-19               (10)  operate and maintain an office and appoint and
591-20   determine the duties, tenure, qualifications, and compensation of
591-21   officers, employees, agents, and professional advisors and
591-22   counselors, including financial consultants, accountants,
591-23   attorneys, architects, engineers, appraisers, and financing
591-24   experts, as considered necessary or advisable by the board;
591-25               (11)  borrow money;
591-26               (12)  fix, revise, charge, and collect rents, rates,
 592-1   fees, and charges for its facilities and services;
 592-2               (13)  acquire land or any interest in land within the
 592-3   boundaries of the authority by condemnation in the manner provided
 592-4   by Chapter 21, Property Code, subject to the approval of each
 592-5   municipality in the authority; and
 592-6               (14)  exercise the powers granted to municipalities
 592-7   under Chapters 373 and 380 for the development of housing and
 592-8   expansion of economic development and commercial activity.
 592-9         Sec. 396.036.  EXEMPTION FROM TAXATION.  The properties,
592-10   revenues, and income of the authority are exempt from all taxes
592-11   levied by the state or a political subdivision of the state.
592-12         Sec. 396.037.  COMPETITIVE BIDS.  (a)  A contract in the
592-13   amount of more than $15,000 for the construction of improvements or
592-14   the purchase of material, machinery, equipment, supplies, or any
592-15   other property except real property may only be let on competitive
592-16   bids after notice is published in a newspaper of general
592-17   circulation in the authority before the 15th day before the date
592-18   set for receiving bids.
592-19         (b)  The board may adopt rules governing the receiving of
592-20   bids and the awarding of contracts.
592-21         (c)  This section does not apply to personal or professional
592-22   services or the acquisition or sale of the property.
592-23         Sec. 396.038.  DISSOLUTION.  (a)  The authority may be
592-24   dissolved by the board on approval of each municipality in the
592-25   authority after all debts or obligations have been satisfied or
592-26   retired. It is the intent of the legislature that the authority be
 593-1   dissolved after conveyance and sale of all of the property.
 593-2         (b)  Assets of the authority remaining after all debts or
 593-3   obligations have been satisfied are to be conveyed or transferred
 593-4   to the municipalities in the authority as approved by the board.
 593-5            (Sections 396.039-396.060 reserved for expansion
 593-6            SUBCHAPTER C.  RED RIVER REDEVELOPMENT AUTHORITY
 593-7         Sec. 396.061.  DEFINITIONS.  In this subchapter:
 593-8               (1)  "Authority" means the Red River Redevelopment
 593-9   Authority.
593-10               (2)  "Board" means the board of directors of the
593-11   authority.
593-12               (3)  "County" means Bowie County.
593-13               (4)  "Eligible municipality" includes only the cities
593-14   of Texarkana, New Boston, Hooks, Nash, Wake Village, Leary,
593-15   Redwater, Maud, and DeKalb.
593-16         Sec. 396.062.  ESTABLISHMENT.  The authority is established
593-17   as a political subdivision with boundaries the same as the
593-18   boundaries of the real property described in Section 396.064(1), if
593-19   each eligible municipality and the county:
593-20               (1)  adopts resolutions authorizing the authority's
593-21   establishment; and
593-22               (2)  appoints members to the board as provided by
593-23   Section 396.063.
593-24         Sec. 396.063.  BOARD.  (a)  The board consists of 15 members
593-25   and is responsible for the management, operation, and control of
593-26   the authority.
 594-1         (b)  The board is composed of the following members:
 594-2               (1)  two members appointed by the county judge of the
 594-3   county;
 594-4               (2)  one member appointed by the commissioners court of
 594-5   the county;
 594-6               (3)  three members appointed by the mayor of Texarkana;
 594-7               (4)  one member appointed by the mayor of New Boston;
 594-8               (5)  one member appointed by the mayor of Hooks;
 594-9               (6)  one member appointed by the mayor of Nash;
594-10               (7)  one member appointed by the mayor of Wake Village;
594-11               (8)  one member appointed by the mayor of Leary;
594-12               (9)  one member appointed by the mayor of Redwater;
594-13               (10)  one member appointed by the mayor of Maud;
594-14               (11)  one member appointed by the mayor of DeKalb; and
594-15               (12)  one at-large member elected by the appointed
594-16   members.
594-17         (c)  A vacancy on the board is filled in the same manner as
594-18   the original appointment.  Each board member serves for a term of
594-19   two years.
594-20         (d)  A board member who is also an elected official serves
594-21   for a term coinciding with the term of the elected office.
594-22         (e)  The board shall elect from its membership a president
594-23   and a vice president.  The vice president shall preside in the
594-24   absence of the president.
594-25         (f)  The board shall adopt rules to govern its proceedings.
594-26         (g)  The board may employ persons to carry out the powers and
 595-1   duties of the authority.
 595-2         (h)  A board member may be recalled at any time by the
 595-3   appointing official.
 595-4         Sec. 396.064.  PURPOSE.  The authority is created to:
 595-5               (1)  accept title on approval by and in coordination
 595-6   with the governor from the United States to all or any portion of
 595-7   the property situated within Red River Army Depot, as legally
 595-8   described by the United States Army Corps of Engineers, Fort Worth
 595-9   District, now or in the future life of the authority;
595-10               (2)  promote the location and development of new
595-11   businesses and industries on the property described in Subdivision
595-12   (1); and
595-13               (3)  undertake a project necessary or incidental to the
595-14   industrial, commercial, or business development, redevelopment,
595-15   maintenance, and expansion of new or existing businesses on the
595-16   property described in Subdivision (1), including the acquisition,
595-17   construction, operation, maintenance, or enhancement of:
595-18                     (A)  roads, bridges, and rights-of-way;
595-19                     (B)  housing;
595-20                     (C)  property;
595-21                     (D)  police, fire, medical, cultural,
595-22   educational, and research services, equipment, institutions, and
595-23   resources;
595-24                     (E)  other community support services;
595-25                     (F)  flood control, water, wastewater treatment,
595-26   and other utility facilities; and
 596-1                     (G)  other infrastructure improvements.
 596-2         Sec. 396.065.  POWERS OF AUTHORITY.  (a)  Except as provided
 596-3   by Subsection (b), the authority may exercise, on approval by and
 596-4   in coordination with the governor, all powers necessary or
 596-5   appropriate to carry out the purposes of this subchapter, including
 596-6   the power to:
 596-7               (1)  sue and be sued, and plead and be impleaded, in
 596-8   its own name;
 596-9               (2)  adopt an official seal, and alter the seal when
596-10   advisable;
596-11               (3)  adopt and enforce bylaws and rules for the conduct
596-12   of its affairs that are not inconsistent with this subchapter;
596-13               (4)  acquire, hold, own, and dispose of its revenues,
596-14   income, receipts, funds, and money from every source and to select
596-15   its depository;
596-16               (5)  acquire, own, rent, lease, accept, hold, or
596-17   dispose of any property, or any interest in property, including
596-18   rights or easements, in performing its duties and exercising its
596-19   powers under this subchapter, by purchase, exchange, gift,
596-20   assignment, condemnation, sale, lease, or otherwise, and to hold,
596-21   manage, operate, or improve the property;
596-22               (6)  sell, assign, lease, encumber, mortgage, or
596-23   otherwise dispose of any property, or any interest in property, and
596-24   release or relinquish any right, title, claim, lien, interest,
596-25   easement, or demand however acquired;
596-26               (7)  perform an activity authorized by Subdivision (6)
 597-1   by public or private sale, with or without public bidding,
 597-2   notwithstanding any other law;
 597-3               (8)  lease or rent any lands within the property and
 597-4   buildings, structures, or facilities located on the property from
 597-5   or to any person or municipality or other public agency or
 597-6   political subdivision to carry out the purposes of this subchapter;
 597-7               (9)  request and accept any appropriations, grants,
 597-8   allocations, subsidies, guaranties, aid, contributions, services,
 597-9   labor, materials, gifts, or donations from the federal government,
597-10   the state, any public agency or political subdivision, or any other
597-11   source;
597-12               (10)  operate and maintain an office and appoint and
597-13   determine the duties, tenure, qualifications, and compensation of
597-14   officers, employees, agents, professional advisors and counselors,
597-15   including financial consultants, accountants, attorneys,
597-16   architects, engineers, appraisers, and financing experts, as
597-17   considered necessary or advisable by the board;
597-18               (11)  borrow money;
597-19               (12)  fix, revise, charge, and collect rents, rates,
597-20   fees, and charges for its facilities and services;
597-21               (13)  exercise the powers granted to municipalities
597-22   under Chapters 373 and 380 for the development of housing and
597-23   expansion of economic development and commercial activity;
597-24               (14)  exercise the powers granted to general-law
597-25   districts under Chapter 49, Water Code, and to municipal utility
597-26   districts under Chapter 54, Water Code;
 598-1               (15)  exercise the powers granted to road utility
 598-2   districts under Chapter 441, Transportation Code; and
 598-3               (16)  exercise the powers granted to municipalities and
 598-4   counties under Subchapter C, Chapter 271.
 598-5         (b)  The authority may not use the power of eminent domain.
 598-6         Sec. 396.066.  EXEMPTION FROM TAXATION.  The properties,
 598-7   revenues, and income of the authority are exempt from all taxes
 598-8   levied by the state or a political subdivision of the state.
 598-9         Sec. 396.067.  DISSOLUTION.  (a)  The authority may be
598-10   dissolved by the board on approval of each eligible municipality
598-11   and the county after all debts or obligations have been satisfied
598-12   or retired.  It is the intent of the legislature that the authority
598-13   be dissolved after conveyance and sale of all of the property with
598-14   the approval of the governing bodies of the county and eligible
598-15   municipalities.
598-16         (b)  Assets of the authority remaining after all debts or
598-17   obligations have been satisfied are to be conveyed or transferred
598-18   to the county.
598-19         Sec. 396.068.  SUCCESSOR.  (a)  The authority is the
598-20   successor in interest to the Red River Local Redevelopment
598-21   Authority, a planning authority organized under the county and
598-22   recognized by the United States Department of the Army, and
598-23   succeeds to all rights and liabilities of the Red River Local
598-24   Redevelopment Authority.
598-25         (b)  Chapter 2311, Government Code, is repealed.
598-26         (c)  Chapter 831, Acts of the 75th Legislature, Regular
 599-1   Session, 1997 (Article 1269j-18, Vernon's Texas Civil Statutes),
 599-2   and Chapter 1207, Acts of the 75th Legislature, Regular Session,
 599-3   1997 (Article 1269j-19, Vernon's Texas Civil Statutes), are
 599-4   repealed.
 599-5                  PART 2.  DISPOSAL OF SECTION 81.028,
 599-6                          LOCAL GOVERNMENT CODE
 599-7         SECTION 13.11.  (a)  Section 81.028, Local Government Code,
 599-8   as renumbered as Section 81.027, Local Government Code, by Section
 599-9   13.03(d) of this Act, is amended to read as follows:
599-10         Sec. 81.027 [81.028].  SUPPORT OF PAUPERS [CERTAIN POWERS
599-11   SPECIFIED].  Each commissioners court may[:]
599-12               [(1)  establish public ferries whenever the public
599-13   interest may require;]
599-14               [(2)  lay out and establish, change, discontinue,
599-15   close, abandon, or vacate public roads and highways;]
599-16               [(3)  build bridges and keep them in repair;]
599-17               [(4)  appoint road overseers and apportion hands;]
599-18               [(5)  exercise general control over all roads,
599-19   highways, ferries, and bridges in their counties;]
599-20               [(6)]  provide for the support of paupers, residents of
599-21   their county, who are unable to support themselves.  [A county is
599-22   obligated to provide health care assistance to eligible residents
599-23   only to the extent prescribed by Chapter 61, Health and Safety
599-24   Code, but that chapter does not affect the authority of a
599-25   commissioners court to provide eligibility standards or other
599-26   requirements relating to other assistance programs or services that
 600-1   are not covered by Chapter 61; and]
 600-2               [(7)  establish a least cost review program for public
 600-3   improvements to be constructed by use of personnel, equipment, or
 600-4   facilities of the county that may exceed a cost of $100,000 or a
 600-5   lesser amount in the discretion of the commissioners court.]
 600-6         (b)  Subchapter A, Chapter 251, Transportation Code, is
 600-7   amended by adding Section 251.016 to read as follows:
 600-8         Sec. 251.016.  GENERAL COUNTY AUTHORITY OVER ROADS, HIGHWAYS,
 600-9   AND BRIDGES.  The commissioners court of a county may exercise
600-10   general control over all roads, highways, and bridges in the
600-11   county.
600-12         (c)  The subchapter heading to Subchapter A, Chapter 342,
600-13   Transportation Code, is amended to read as follows:
600-14       SUBCHAPTER A.  GOVERNMENT-OWNED FERRIES [STATE-OWNED FERRY]
600-15         (d)  Subchapter A, Chapter 342, Transportation Code, is
600-16   amended by adding Section 342.002, to read as follows:
600-17         Sec. 342.002.  COUNTY FERRIES.  The commissioners court of a
600-18   county may establish public ferries as required by the public
600-19   interest.
600-20         (e)  Subchapter C, Chapter 342, Transportation Code, is
600-21   amended by adding Section 342.108 to read as follows:
600-22         Sec. 342.108.  GENERAL COUNTY AUTHORITY OVER FERRIES.  The
600-23   commissioners court of a county may exercise general control over
600-24   all ferries in the county.
600-25         (f)  Subchapter A, Chapter 262, Local Government Code, is
600-26   amended by adding Section 262.006 to read as follows:
 601-1         Sec. 262.006.  LEAST COST REVIEW PROGRAM.  The commissioners
 601-2   court of a county may establish a least cost review program for
 601-3   public improvements to be constructed by the use of personnel,
 601-4   equipment, or facilities of the county that may exceed a cost of:
 601-5               (1)  $100,000; or
 601-6               (2)  an amount less than $100,000 as determined by the
 601-7   commissioners court.
 601-8         (g)  Subchapter B, Chapter 61, Health and Safety Code, is
 601-9   amended by adding Section 61.0221 to read as follows:
601-10         Sec. 61.0221.  AUTHORITY RELATING TO OTHER ASSISTANCE
601-11   PROGRAMS.  This subchapter does not affect the authority of the
601-12   commissioners court of a county to provide eligibility standards or
601-13   other requirements relating to assistance programs or services that
601-14   are not covered by this subchapter.
601-15                     PART 3.  CONFORMING TERMINOLOGY
601-16         SECTION 13.12.  Section 43.0751(f), Local Government Code, is
601-17   amended to conform to the terminology of the Local Government Code
601-18   to read as follows:
601-19         (f)  A strategic partnership agreement may provide for the
601-20   following:
601-21               (1)  limited-purpose annexation of the district under
601-22   the provisions of Subchapter F provided that the district shall
601-23   continue in existence during the period of limited-purpose
601-24   annexation;
601-25               (2)  such amendments to the timing requirements of
601-26   Sections 43.123(d)(2) and 43.127(b) as may be necessary or
 602-1   convenient to effectuate the purposes of the agreement;
 602-2               (3)  payments by the municipality to the district for
 602-3   services provided by the district;
 602-4               (4)  annexation of any commercial property in a
 602-5   district for full purposes by the municipality, notwithstanding any
 602-6   other provision of this code or the Water Code, except for the
 602-7   obligation of the municipality to provide, directly or through
 602-8   agreement with other units of government, full provision of
 602-9   municipal services to annexed territory, in lieu of any annexation
602-10   of residential property or payment of any fee on residential
602-11   property in lieu of annexation of residential property in the
602-12   district authorized by this subsection;
602-13               (5)  a full-purpose annexation provision that specifies
602-14   one of the following:
602-15                     (A)  the date on which the land included within
602-16   the district's boundaries shall be converted from the
602-17   municipality's limited-purpose jurisdiction to its full-purpose
602-18   jurisdiction, provided that such date shall not be later than 10
602-19   years after the effective date of the strategic partnership
602-20   agreement; or
602-21                     (B)(i)  terms for payment of an annual fee to the
602-22   municipality by the district in lieu of full-purpose annexation,
602-23   the form in which each such payment must be tendered, a method of
602-24   calculating the fee, and the date by which each such payment must
602-25   be made; failure by a district to timely make an annual payment in
602-26   lieu of full-purpose annexation in the amount and form required by
 603-1   a strategic partnership agreement shall be the only ground for
 603-2   termination of the agreement with respect to annexation at the
 603-3   option of the municipality;
 603-4                           (ii)  to determine a reasonable fee to be
 603-5   derived from residential property in a district, the municipality
 603-6   or the district may request a cost-of-service study by an
 603-7   independent third party agreeable to both parties if
 603-8   cost-of-service data prepared by the municipality is not
 603-9   acceptable.  Both parties shall be equally responsible for the cost
603-10   of the study, which shall include an evaluation of the estimated
603-11   annual cost of providing municipal services to the residential
603-12   portion of the district over the next 10 years and the estimated
603-13   annual amount of ad valorem taxes from residential property the
603-14   municipality [city] would receive on full-purpose annexation of the
603-15   district over the next 10 years.  The fee shall not exceed the
603-16   estimated annual amount of residential ad valorem taxes that would
603-17   be derived by full-purpose annexation of the district, less the
603-18   estimated annual amount required to provide municipal services to
603-19   the residential property in the district if annexed for full
603-20   purposes.  A fee determined through this methodology is subject to
603-21   renegotiation every 10 years at the request of either party to the
603-22   agreement following the same procedure used to set the fee in the
603-23   original agreement.  This methodology does not apply to fees from
603-24   commercial property;
603-25               (6)  conversion of the district to a limited district
603-26   including some or all of the land included within the boundaries of
 604-1   the district, which conversion shall be effective on the
 604-2   full-purpose annexation conversion date established under
 604-3   Subdivision (5)(A);
 604-4               (7)  agreements existing between districts and
 604-5   governmental bodies and private providers of municipal services in
 604-6   existence on the date a municipality evidences its intention by
 604-7   adopting a resolution to negotiate for a strategic partnership
 604-8   agreement with the district shall be continued and provision made
 604-9   for modifications to such existing agreements; and
604-10               (8)  such other lawful terms that the parties consider
604-11   appropriate.
604-12         SECTION 13.13.  Section 81.005(c), Local Government Code, is
604-13   amended to conform to the terminology of the Local Government Code
604-14   to read as follows:
604-15         (c)  Except as provided by Subsection (f) of this section,
604-16   the term shall be held at:
604-17               (1)  the county seat at the courthouse;
604-18               (2)  an auxiliary courthouse, courthouse annex, or
604-19   another building in the county acquired by the county under Chapter
604-20   292, 293, or 305 or another law, that houses county administration
604-21   offices or county or district courts, located inside the
604-22   municipal [city] limits of the county seat;
604-23               (3)  the regular meeting place of another political
604-24   subdivision if:
604-25                     (A)  the commissioners court meets with the
604-26   governing body of that political subdivision located wholly or
 605-1   partly within the county; and
 605-2                     (B)  the regular meeting place of that political
 605-3   subdivision is in the county;
 605-4               (4)  a meeting place in the county in a building owned
 605-5   by another political subdivision located wholly or partly in the
 605-6   county if:
 605-7                     (A)  the commissioners court meets with the
 605-8   governing body of that political subdivision;
 605-9                     (B)  the places where the commissioners court and
605-10   the governing body of the political subdivision regularly hold
605-11   their meetings are not large enough to accommodate the number of
605-12   persons expected to attend the meeting; and
605-13                     (C)  the meeting place in the building owned by
605-14   the political subdivision is large enough to accommodate the
605-15   expected number of persons; or
605-16               (5)  a meeting place in the county in a building owned
605-17   by the county if:
605-18                     (A)  the place where the commissioners court
605-19   regularly holds its meetings is not large enough to accommodate the
605-20   number of persons expected to attend the meeting; and
605-21                     (B)  the meeting place in the building owned by
605-22   the county is large enough to accommodate the expected number of
605-23   persons.
605-24         SECTION 13.14.  Section 101.0221, Local Government Code, is
605-25   amended to conform to the terminology of the Local Government Code
605-26   to read as follows:
 606-1         Sec. 101.0221.  FISCAL YEAR FOR CERTAIN MUNICIPALITIES.
 606-2   Notwithstanding any fiscal year provision in the municipal [city]
 606-3   charter, a municipality with a population in excess of 500,000
 606-4   which is situated in a county bordering the Republic of Mexico may
 606-5   prescribe its fiscal year by ordinance.
 606-6         SECTION 13.15.  Section 143.208, Local Government Code, is
 606-7   amended to conform to the terminology of the Local Government Code
 606-8   to read as follows:
 606-9         Sec. 143.208.  REPEAL OF AGREEMENT BY ELECTORATE.  Within 45
606-10   days after an agreement is ratified and signed by both the
606-11   municipality and the fire fighters association recognized as the
606-12   sole and exclusive bargaining agent, a petition signed by a number
606-13   of registered voters equal to 10 percent of the votes cast at the
606-14   most recent mayoral general election may be presented to the
606-15   municipal [city] secretary calling an election for the repeal of
606-16   the agreement.  Thereupon, the governing body shall reconsider the
606-17   agreement and, if it does not repeal the agreement, shall call an
606-18   election of the qualified voters to determine if they desire to
606-19   repeal the agreement.  The election shall be called for the next
606-20   municipal election or a special election called by the governing
606-21   body for that purpose.  If at the election a majority of the votes
606-22   are cast in favor of the repeal of the adoption of the agreement,
606-23   then the agreement shall become null and void.  The ballot shall be
606-24   printed to provide for voting FOR or AGAINST the proposition:
606-25         "Repeal of the adoption of the agreement ratified by the
606-26   municipality and the fire fighters association concerning wages,
 607-1   salaries, rates of pay, hours of work, and other terms and
 607-2   conditions of employment."
 607-3         SECTION 13.16.  Section 174.003(5), Local Government Code, is
 607-4   amended to conform to the terminology of the Local Government Code
 607-5   to read as follows:
 607-6               (5)  "Public employer" means the official or group of
 607-7   officials of a political subdivision whose duty is to establish the
 607-8   compensation, hours, and other conditions of employment of fire
 607-9   fighters, police officers, or both, and may include the mayor, city
607-10   manager, town manager, town administrator, municipal governing body
607-11   [city council], director of personnel, personnel board,
607-12   commissioners, or another official or combination of those persons.
607-13         SECTION 13.17.  Section 232.033(c), Local Government Code, is
607-14   amended to conform to the terminology of the Local Government Code
607-15   to read as follows:
607-16         (c)  Before an executory contract is signed by the purchaser,
607-17   the subdivider shall provide the purchaser with a written notice,
607-18   which must be attached to the executory contract, informing the
607-19   purchaser of the condition of the property that must, at a minimum,
607-20   be executed by the subdivider and purchaser, be acknowledged, and
607-21   read substantially similar to the following:
607-22                                 WARNING
607-23         IF ANY OF THE ITEMS BELOW HAVE NOT BEEN CHECKED, YOU
607-24         MAY NOT BE ABLE TO LIVE ON THE PROPERTY.
607-25         CONCERNING THE PROPERTY AT (street address or legal
607-26         description and municipality [city])
 608-1         THIS DOCUMENT STATES THE TRUE FACTS ABOUT THE LAND YOU
 608-2         ARE CONSIDERING PURCHASING.
 608-3         CHECK OFF THE ITEMS THAT ARE TRUE:
 608-4               ___  The property is in a recorded subdivision.
 608-5               ___  The property has water service that provides
 608-6                    potable water.
 608-7               ___  The property has sewer service or a septic
 608-8                    system.
 608-9               ___  The property has electric service.
608-10               ___  The property is not in a flood-prone area.
608-11               ___  The roads are paved.
608-12               ___  No person other than the subdivider:
608-13                     (1)  owns the property;
608-14                     (2)  has a claim of ownership to the
608-15                          property; or
608-16                     (3)  has an interest in the property.
608-17               ___  No person has a lien filed against the
608-18                    property.
608-19               ___  There are no back taxes owed on the
608-20                    property.
608-21                                 NOTICE
608-22         SELLER ADVISES PURCHASER TO:
608-23               (1)  OBTAIN A TITLE ABSTRACT OR TITLE COMMITMENT
608-24         REVIEWED BY AN ATTORNEY BEFORE SIGNING A CONTRACT OF
608-25         THIS TYPE;  AND
608-26               (2)  PURCHASE AN OWNER'S POLICY OF TITLE
 609-1         INSURANCE COVERING THE PROPERTY.
 609-2               _______________         _________________________
 609-3               (Date)                  (Signature of Subdivider)
 609-4               _______________         _________________________
 609-5               (Date)                   (Signature of Purchaser)
 609-6         SECTION 13.18.  Section 253.001(f), Local Government Code, is
 609-7   amended to conform to the terminology of the Local Government Code
 609-8   to read as follows:
 609-9         (f)  The election requirements of Subsection (b) do not apply
609-10   to a conveyance of a park if:
609-11               (1)  the park is owned by a home-rule municipality with
609-12   a population of more than one million;
609-13               (2)  it is a park of two acres or less;
609-14               (3)  the park is no longer usable and functional as a
609-15   park;
609-16               (4)  the proceeds of the sale will be used to acquire
609-17   land for park purposes;
609-18               (5)  a public hearing on the proposed conveyance is
609-19   held by the governing body of the home-rule municipality and that
609-20   body finds that the property is no longer usable and functional as
609-21   a park; and
609-22               (6)  the park is conveyed pursuant to an ordinance
609-23   adopted by the governing body of the home-rule municipality, unless
609-24   within 60 days from the date of the public hearing the governing
609-25   body of the home-rule municipality is presented with a petition
609-26   opposing the conveyance which contains the name, address, and date
 610-1   of signature of no less than 1,500 registered voters residing
 610-2   within the municipal [city] limits of the municipality; then, the
 610-3   governing body of the home-rule municipality shall either deny the
 610-4   conveyance or shall approve the conveyance subject to the election
 610-5   required in Subsection (b); or
 610-6               (7)  the conveyance involves an exchange of two
 610-7   existing parks, situated within a home-rule municipality with a
 610-8   population of more than one million, that together total 1.5 acres
 610-9   or less in size, that are located within 1,000 feet of each other,
610-10   that are located in an industrial area, that have been found in a
610-11   public hearing to no longer be usable and functional as parks, and
610-12   that are conveyed pursuant to an ordinance, adopted by the
610-13   governing body of that municipality, that has an effective date
610-14   before December 1, 1993.
610-15         SECTION 13.19.  Section 361.051(3), Local Government Code, is
610-16   amended to conform to the terminology of the Local Government Code
610-17   to read as follows:
610-18               (3)  "Entity" means a home-rule municipality [city] or
610-19   county or a nonprofit corporation acting on behalf of a home-rule
610-20   municipality [city] or county.
610-21         SECTION 13.20.  Section 375.263(b), Local Government Code, is
610-22   amended to conform to the terminology of the Local Government Code
610-23   to read as follows:
610-24         (b)  On the adoption of the ordinance, the district is
610-25   dissolved, and, in accordance with Section 43.075, the municipality
610-26   [city] succeeds to the property and assets of the district and
 611-1   assumes all bonds, debts, obligations, and liabilities of the
 611-2   district.
 611-3         SECTION 13.21.  Section 375.264, Local Government Code, is
 611-4   amended to conform to the terminology of the Local Government Code
 611-5   to read as follows:
 611-6         Sec. 375.264.  LIMITATION.  A district may not be dissolved
 611-7   by its board or by a municipality [city] if the district has any
 611-8   outstanding bonded indebtedness until that bonded indebtedness has
 611-9   been repaid or defeased in accordance with the order or resolution
611-10   authorizing the issuance of the bonds.
611-11         SECTION 13.22.  Section 402.044(8), Local Government Code, is
611-12   amended to conform to the terminology of the Local Government Code
611-13   to read as follows:
611-14               (8)  "Service area" means the municipal boundaries and
611-15   any other land areas outside the municipal boundaries which, as a
611-16   result of topography or hydraulics, contribute overland flow into
611-17   the watersheds served by the drainage system of a municipality;
611-18   provided, however, that in no event may a service area extend
611-19   farther than the boundaries of a municipality's current
611-20   extraterritorial jurisdiction, nor, except as provided by Section
611-21   402.0451, may a service area of one municipality extend into the
611-22   boundaries of another [incorporated town, city, or] municipality.
611-23   The service area is to be established in the ordinance establishing
611-24   the drainage utility.  Provided, that no municipality shall extend
611-25   a service area outside of its municipal boundaries except:
611-26                     (A)  a municipality of more than 400,000
 612-1   population located in one or more counties of less than 600,000
 612-2   population according to the most recent federal census;
 612-3                     (B)  a municipality all or part of which is
 612-4   located over or within the Edwards Aquifer recharge zone or the
 612-5   Edwards Aquifer transition zone, as designated by the Texas Natural
 612-6   Resource Conservation Commission; or
 612-7                     (C)  as provided by Section 402.0451.
 612-8         ARTICLE 14.  CHANGES RELATING TO NATURAL RESOURCES CODE
 612-9         SECTION 14.01.  (a)  Section 31.1571, Natural Resources Code,
612-10   is amended to correct a reference to read as follows:
612-11         Sec. 31.1571.  DISPOSAL OF UNUSED OR UNDERUSED PROPERTY.
612-12   (a)  Notwithstanding any other law, after the division has reported
612-13   a property unused or underused and the commissioner has made a
612-14   recommendation to the governor for a real estate transaction
612-15   involving the property, the state agency that owns or controls the
612-16   property may not develop, sell, or otherwise dispose of the
612-17   property before the earlier of:
612-18               (1)  the date the governor rejects a recommended real
612-19   estate transaction involving the property pursuant to Subchapter I
612-20   [Chapter 672, Acts of the 71st Legislature, Regular Session, 1989
612-21   (Article 5421t, Vernon's Texas Civil Statutes)]; or
612-22               (2)  two years from the date the recommendation is
612-23   approved by operation of law under Subchapter I [Chapter 672, Acts
612-24   of the 71st Legislature, Regular Session, 1989 (Article 5421t,
612-25   Vernon's Texas Civil Statutes)].
612-26         (b)  If a state agency that owns or controls property that
 613-1   the division has reported as unused or underused intends to dispose
 613-2   of or change the use of the property prior to the time provided by
 613-3   Subsection (a), the state agency shall submit to the governor a
 613-4   general development plan for future use of the property.  The plan
 613-5   shall be submitted no later than 30 days prior to the time that the
 613-6   real estate transaction would be approved by operation of law if
 613-7   not disapproved by the governor pursuant to Subchapter I [Chapter
 613-8   672, Acts  of the 71st Legislature, Regular Session, 1989 (Article
 613-9   5421t, Vernon's Texas Civil Statutes)].  The governor may take such
613-10   plan into consideration in determining whether to reject the
613-11   commissioner's recommendation.
613-12         (b)  Section 31.502, Natural Resources Code, is amended to
613-13   conform to Section 3, Chapter 484, Acts of the 74th Legislature,
613-14   Regular Session, 1995, to read as follows:
613-15         Sec. 31.502.  INAPPLICABILITY OF SUBCHAPTER.  This subchapter
613-16   does not apply to a real estate transaction involving real property
613-17   owned by this state that the division does not have a duty to
613-18   review under Section 31.155(d) [that:]
613-19               [(1)  is administered by a state agency that under
613-20   Chapter 2201, Government Code, is ineligible to benefit from the
613-21   Texas capital trust fund; or]
613-22               [(2)  involves permanent school fund land].
613-23         (c)  Sections 31.504 and 31.505, Natural Resources Code, are
613-24   amended to conform to Section 4, Chapter 484, Acts of the 74th
613-25   Legislature, Regular Session, 1995, to read as follows:
613-26         Sec. 31.504.  AUTHORITY TO CONDUCT TRANSACTION [DISAPPROVAL
 614-1   BY GOVERNOR OF RECOMMENDATION].  If the division reports a property
 614-2   as unused or underused and the commissioner recommends a real
 614-3   estate transaction involving the property, the commissioner may
 614-4   conduct the transaction unless the governor gives the commissioner
 614-5   written notice of disapproval of the recommendation not later than
 614-6   the 90th day after the date the governor receives the
 614-7   commissioner's written recommendation.  [(a)  If, not later than
 614-8   the 90th day after the date the governor receives the written
 614-9   recommendation, the governor disapproves the recommended
614-10   alternative use, the division may not enter into a real estate
614-11   transaction involving the property until authorized by the
614-12   legislature.]
614-13         [(b)  After the governor disapproves a recommendation, the
614-14   governor may request, and the division may make, additional
614-15   recommendations relating to the property.]
614-16         Sec. 31.505.  CHARGE AND CONTROL OF PROPERTY [PROPOSAL BY
614-17   GOVERNOR].  If a real estate transaction is authorized under
614-18   Section 31.504, the division shall take appropriate charge and
614-19   control of the real property to undertake the transaction.
614-20   [(a)  If the governor finds that a recommended real estate
614-21   transaction would be appropriate, the governor may propose that the
614-22   division complete the transaction.]
614-23         [(b)  The governor may make the proposal at any time except
614-24   during a regular or special session of the legislature.]
614-25         [(c)  The governor shall specify the details of the proposal,
614-26   give a legal description of the property, and direct the secretary
 615-1   of state to publish the proposal in the Texas Register.]
 615-2         (d)  Section 31.515(a), Natural Resources Code, is amended to
 615-3   conform to Section 3, Chapter 484, Acts of the 74th Legislature,
 615-4   Regular Session, 1995, to read as follows:
 615-5         (a)  The expenses incurred by the division in conducting a
 615-6   real estate transaction under this subchapter, including the
 615-7   payment of reasonable brokerage fees, may be deducted from the
 615-8   proceeds of the transaction before the proceeds are deposited [in
 615-9   the Texas capital trust fund or other appropriate depository
615-10   account].
615-11         (e)  Subchapter I, Chapter 31, Natural Resources Code, is
615-12   amended to conform to Section 3, Chapter 484, Acts of the 74th
615-13   Legislature, Regular Session, 1995, by adding Section 31.516 to
615-14   read as follows:
615-15         Sec. 31.516.  DEPOSIT OF PROCEEDS OF TRANSACTION.  Unless the
615-16   proceeds of the transaction are dedicated by the Texas
615-17   Constitution, the proceeds of the transaction shall be deposited:
615-18               (1)  to the credit of the Texas capital trust fund if
615-19   the agency is eligible under Chapter 2201, Government Code, to
615-20   participate in that fund;
615-21               (2)  in the state treasury to the credit of the
615-22   affected agency if the agency is not eligible under Chapter 2201,
615-23   Government Code, to participate in the Texas capital trust fund; or
615-24               (3)  notwithstanding Subdivisions (1) and (2), as
615-25   otherwise directed under the procedures of Chapter 317, Government
615-26   Code.
 616-1         (f)  Sections 31.506, 31.507, 31.508, 31.509, and 31.510,
 616-2   Natural Resources Code, are repealed to conform to Sections 4 and
 616-3   5, Chapter 484, Acts of the 74th Legislature, Regular Session,
 616-4   1995.
 616-5         (g)  Sections 3 and 4, Chapter 484, Acts of the 74th
 616-6   Legislature, Regular Session, 1995, are repealed.
 616-7               ARTICLE 15.  CHANGES RELATING TO PENAL CODE
 616-8         SECTION 15.01.  Section 12.42(g), Penal Code, is amended to
 616-9   correct a reference to read as follows:
616-10         (g)  For the purposes of Subsection (c)(2) [(d)(2)]:
616-11               (1)  a defendant has been previously convicted of an
616-12   offense listed under Subsection (c)(2)(B) [(d)(2)(B)] if the
616-13   defendant was adjudged guilty of the offense or entered a plea of
616-14   guilty or nolo contendere in return for a grant of deferred
616-15   adjudication, regardless of whether the sentence for the offense
616-16   was ever imposed or whether the sentence was probated and the
616-17   defendant was subsequently discharged from community supervision;
616-18   and
616-19               (2)  a conviction under the laws of another state for
616-20   an offense containing elements that are substantially similar to
616-21   the elements of an offense listed under Subsection (c)(2)(B)
616-22   [(d)(2)(B)] is a conviction of an offense listed under Subsection
616-23   (c)(2)(B) [(d)(2)(B)].
616-24         SECTION 15.02.  (a)  Section 22.01(e), Penal Code, is amended
616-25   to conform to Section 1, Chapter 34, Acts of the 75th Legislature,
616-26   Regular Session, 1997, to read as follows:
 617-1         (e)  In this section, "family" has the meaning assigned by
 617-2   Section 71.003 [71.01], Family Code.
 617-3         (b)  Section 22.04(k)(2), Penal Code, is amended to conform
 617-4   to Section 1, Chapter 34, Acts of the 75th Legislature, Regular
 617-5   Session, 1997, to read as follows:
 617-6               (2)  It is an affirmative defense to prosecution under
 617-7   this section that the act or omission was based on treatment in
 617-8   accordance with the tenets and practices of a recognized religious
 617-9   method of healing with a generally accepted record of efficacy.  It
617-10   is an affirmative defense to prosecution for a person charged with
617-11   an act of omission under this section causing to a child, elderly
617-12   individual, or disabled individual a condition described by
617-13   Subsection (a)(1), (2), or (3) that:
617-14                     (A)  there is no evidence that, on the date prior
617-15   to the offense charged, the defendant was aware of an incident of
617-16   injury to the child, elderly individual, or disabled individual and
617-17   failed to report the incident; and
617-18                     (B)  the person:
617-19                           (i)  was a victim of family violence, as
617-20   that term is defined by Section 71.004 [71.01], Family Code,
617-21   committed by a person who is also charged with an offense against
617-22   the child, elderly individual, or disabled individual under this
617-23   section or any other section of this title;
617-24                           (ii)  did not cause a condition described
617-25   by Subsection (a)(1), (2), or (3); and
617-26                           (iii)  did not reasonably believe at the
 618-1   time of the omission that an effort to prevent the person also
 618-2   charged with an offense against the child, elderly individual, or
 618-3   disabled individual from committing the offense would have an
 618-4   effect.
 618-5         (c)  Sections 25.07(b) and (f), Penal Code, are amended to
 618-6   conform to Section 1, Chapter 34, Acts of the 75th Legislature,
 618-7   Regular Session, 1997, to read as follows:
 618-8         (b)  For the purposes of this section, "family violence,"
 618-9   "family," "household," and "member of a household" have the
618-10   meanings assigned by Chapter 71 [Section 71.01], Family Code.
618-11         (f)  It is not a defense to prosecution under this section
618-12   that certain information has been excluded, as provided by Section
618-13   85.007 [71.111], Family Code, or Article 17.292, Code of Criminal
618-14   Procedure, from an order to which this section applies.
618-15         (d)  Section 42.07(b), Penal Code, is amended to conform to
618-16   Section 1, Chapter 34, Acts of the 75th Legislature, Regular
618-17   Session, 1997, to read as follows:
618-18         (b)  For purposes of Subsection (a)(1), "obscene" means
618-19   containing a patently offensive description of or a solicitation to
618-20   commit an ultimate sex act, including sexual intercourse,
618-21   masturbation, cunnilingus, fellatio, or anilingus, or a description
618-22   of an excretory function.  In this section, "family" has the
618-23   meaning assigned by Section 71.003 [71.01], Family Code.
618-24         (e)  Section 42.072(c), Penal Code, is amended to conform to
618-25   Section 1, Chapter 34, Acts of the 75th Legislature, Regular
618-26   Session, 1997, to read as follows:
 619-1         (c)  In this section, "family," "household," and "member of a
 619-2   household" have the meanings assigned by Chapter 71 [Section
 619-3   71.01], Family Code.
 619-4         (f)  Section 46.06(b), Penal Code, is amended to conform to
 619-5   Section 1, Chapter 34, Acts of the 75th Legislature, Regular
 619-6   Session, 1997, to read as follows:
 619-7         (b)  In this section:
 619-8               (1)  "Intoxicated" means substantial impairment of
 619-9   mental or physical capacity resulting from introduction of any
619-10   substance into the body.
619-11               (2)  "Active protective order" means a protective order
619-12   issued under Title 4 [Chapter 71], Family Code, that is in effect.
619-13   The term does not include a temporary protective order issued
619-14   before the court holds a hearing on the matter.
619-15         (g)  Section 46.13(f), Penal Code, is amended to conform to
619-16   Section 1, Chapter 34, Acts of the 75th Legislature, Regular
619-17   Session, 1997, to read as follows:
619-18         (f)  A peace officer or other person may not arrest the actor
619-19   before the seventh day after the date on which the offense is
619-20   committed if:
619-21               (1)  the actor is a member of the family, as defined by
619-22   Section 71.003 [71.01], Family Code, of the child who discharged
619-23   the firearm; and
619-24               (2)  the child in discharging the firearm caused the
619-25   death of or serious injury to the child.
 620-1                ARTICLE 16.  CHANGES RELATING TO TAX CODE
 620-2         SECTION 16.01.  Sections 11.26(g), (h), and (i), Tax Code, as
 620-3   added by Chapter 1059, Acts of the 75th Legislature, Regular
 620-4   Session, 1997, are repealed because they are substantively
 620-5   duplicative of Subsections (i), (j), and (k), Section 11.26, Tax
 620-6   Code, as added by Chapter 1039, Acts of the 75th Legislature,
 620-7   Regular Session, 1997.
 620-8         SECTION 16.02.  Section 11.43(d), Tax Code, as amended by
 620-9   Chapters 1039, 1059, and 1155, Acts of the 75th Legislature,
620-10   Regular Session, 1997, is reenacted to read as follows:
620-11         (d)  To receive an exemption the eligibility for which is
620-12   determined by the claimant's qualifications on January 1 of the tax
620-13   year, a person required to claim an exemption must file a completed
620-14   exemption application form before May 1 and must furnish the
620-15   information required by the form.  A person who after January 1 of
620-16   a tax year acquires property that qualifies for an exemption
620-17   covered by Section 11.42(c) must apply for the exemption for the
620-18   applicable portion of that tax year before the first anniversary of
620-19   the date the person acquires the property.  For good cause shown
620-20   the chief appraiser may extend the deadline for filing an exemption
620-21   application by written order for a single period not to exceed 60
620-22   days.
620-23         SECTION 16.03.  Section 11.43(j), Tax Code, as added by
620-24   Chapter 1059, Acts of the 75th Legislature, Regular Session, 1997,
620-25   is repealed because it is substantively duplicative of Subsection
620-26   (k), Section 11.43, Tax Code.
 621-1         SECTION 16.04.  Section 23.21, Tax Code, as added by Chapter
 621-2   980, Acts of the 75th Legislature, Regular Session, 1997, and
 621-3   Section 23.22, Tax Code, are revised as Section 23.21, Tax Code,
 621-4   and amended to read as follows:
 621-5         Sec. 23.21.  Property Used to Provide Affordable Housing.
 621-6   (a)  In appraising real property that is rented or leased to a
 621-7   low-income individual or family meeting income-eligibility
 621-8   standards established by the owner of the property under
 621-9   regulations or restrictions limiting to a percentage of the
621-10   individual's or the family's income the amount that the individual
621-11   or family may be required to pay for the rental or lease of the
621-12   property, the chief appraiser shall take into account the extent to
621-13   which that use and limitation reduce the market value of the
621-14   property.
621-15         (b)  [Sec. 23.22.  PROPERTY USED TO PROVIDE AFFORDABLE
621-16   HOUSING.]  In appraising real property that is rented or leased to
621-17   a low-income individual or family meeting income-eligibility
621-18   standards established by a governmental entity or under a
621-19   governmental contract for affordable housing limiting the amount
621-20   that the individual or family may be required to pay for the rental
621-21   or lease of the property, the chief appraiser shall take into
621-22   account the extent to which that use and limitation reduce the
621-23   market value of the property.
621-24         SECTION 16.05.  Section 23.21, Tax Code, as added by Chapter
621-25   1039, Acts of the 75th Legislature, Regular Session, 1997, is
621-26   renumbered as Section 23.22, Tax Code.
 622-1         SECTION 16.06.  Section 26.10(b), Tax Code, as added by
 622-2   Section 30, Chapter 1039, and Section 5, Chapter 1059, Acts of the
 622-3   75th Legislature, Regular Session, 1997, is reenacted and amended
 622-4   to read as follows:
 622-5         (b)  If the appraisal roll shows that a property is eligible
 622-6   for taxation at its full appraised value for only part of a year
 622-7   because a residence homestead exemption for an individual 65 years
 622-8   of age or older applicable on January 1 of that year terminated
 622-9   during the year, the tax due against the property is calculated by:
622-10               (1)  subtracting:
622-11                     (A)  the amount of the taxes that otherwise would
622-12   be imposed on the residence homestead for the entire year had the
622-13   individual qualified for the residence homestead exemption for the
622-14   entire year; from
622-15                     (B)  the amount of the taxes that otherwise would
622-16   be imposed on the residence homestead for the entire year had the
622-17   individual not qualified for the residence homestead exemption
622-18   during the year;
622-19               (2)  multiplying the remainder determined under
622-20   Subdivision (1) by a fraction, the denominator of which is 365 and
622-21   the numerator of which is the number of days that elapsed after the
622-22   date the exemption terminated; and
622-23               (3)  adding the product determined under Subdivision
622-24   (2) and the amount described by Subdivision (1)(A) [(1)(B)].
622-25         SECTION 16.07.  Section 34.05(a), Tax Code, as amended by
622-26   Section 9, Chapter 906, and Section 5, Chapter 1111, Acts of the
 623-1   75th Legislature, Regular Session, 1997, is reenacted to read as
 623-2   follows:
 623-3         (a)  If property is sold to a taxing unit that is a party to
 623-4   the judgment, the taxing unit may sell the property at any time and
 623-5   in any manner, by public or private sale, except as otherwise
 623-6   required by this section.  In selling the property, the taxing unit
 623-7   may, but is not required to, use the procedures provided by Section
 623-8   263.001, Local Government Code, or Section 272.001, Local
 623-9   Government Code.  The sale is subject to any right of redemption of
623-10   the former owner.  The redemption period begins on the date the
623-11   deed to the taxing unit is filed for record.
623-12          ARTICLE 17.  CHANGES RELATING TO TRANSPORTATION CODE
623-13         SECTION 17.01.  Section 361.003, Transportation Code, is
623-14   repealed to conform to the repeal of that section by Section 7.29,
623-15   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997.
623-16         SECTION 17.02.  Section 364.042, Transportation Code, is
623-17   amended to more closely conform to the law from which that section
623-18   was derived to read as follows:
623-19         Sec. 364.042.  AUTHORITY TO BORROW MONEY OR ACCEPT FEDERAL
623-20   ASSISTANCE.  (a)  To accomplish the purposes of this chapter, a
623-21   county may:
623-22               (1)  borrow money from any person or corporation; or
623-23               (2)  borrow money or accept grants from the United
623-24   States or a corporation or agency created by or authorized to act
623-25   as an agency of the United States.
623-26         (b)  In connection with a loan or grant under Subsection
 624-1   (a)(2) [from the United States], a county may enter into any
 624-2   related agreement that the United States, corporation, or agency
 624-3   requires.
 624-4         SECTION 17.03.  Section 391.063, Transportation Code, is
 624-5   amended to more closely conform to the law from which that section
 624-6   was derived to read as follows:
 624-7         Sec. 391.063.  LICENSE FEE.  The commission may [shall] set
 624-8   the amount of a license fee according to a scale graduated by the
 624-9   number of units of outdoor advertising owned by a license
624-10   applicant.
624-11         SECTION 17.04.  Section 431.023(d), Transportation Code, is
624-12   amended to more closely conform to the law from which it was
624-13   derived to read as follows:
624-14         (d)  The commission may authorize the creation of more than
624-15   one corporation to act within the same designated area.  The  [if
624-16   the] resolution authorizing each corporation must specify
624-17   [specifies] the public purpose of that [the] corporation.
624-18         SECTION 17.05.  Section 501.031(a), Transportation Code, is
624-19   amended to more accurately reflect the source law from which it was
624-20   derived to read as follows:
624-21         (a)  The department shall include on each certificate of
624-22   title a rights of survivorship agreement form.  The form must:
624-23               (1)  provide that if the agreement is signed by a
624-24   husband and wife the motor vehicle is held jointly with the
624-25   interest of either spouse who dies to survive to the surviving
624-26   spouse; and
 625-1               (2)  provide blanks for the signatures of the husband
 625-2   and wife.
 625-3         SECTION 17.06.  Section 502.202(a), Transportation Code, is
 625-4   amended to correct a reference to read as follows:
 625-5         (a)  The owner of a motor vehicle, trailer, or semitrailer
 625-6   may annually apply for registration under Section 502.201 and is
 625-7   exempt from the payment of a registration fee under this chapter if
 625-8   the vehicle is:
 625-9               (1)  owned by and used exclusively in the service of:
625-10                     (A)  the United States;
625-11                     (B)  this state; or
625-12                     (C)  a county, municipality, or school district
625-13   in this state;
625-14               (2)  owned by a commercial transportation company and
625-15   used exclusively to provide public school transportation services
625-16   to a school district under Section 34.008 [21.181], Education Code;
625-17               (3)  designed and used exclusively for fire fighting;
625-18               (4)  owned by a volunteer fire department and used
625-19   exclusively in the conduct of department business; or
625-20               (5)  privately owned and used by a volunteer
625-21   exclusively in county marine law enforcement activities, including
625-22   rescue operations, under the direction of the sheriff's department.
625-23         SECTION 17.07.  Section 543.004, Transportation Code, is
625-24   amended to more accurately reflect the source law from which it was
625-25   derived by adding Subsection (c) to read as follows:
625-26         (c)  The offenses specified by Subsection (a) are the only
 626-1   offenses for which issuance of a written notice to appear is
 626-2   mandatory.
 626-3         SECTION 17.08.  Section 544.011, Transportation Code, is
 626-4   amended to correct a reference to the agency that administers that
 626-5   section to read as follows:
 626-6         Sec. 544.011.  LANE USE SIGNS.  If, on a highway having more
 626-7   than one lane with vehicles traveling in the same direction, the
 626-8   Texas Department of Transportation [department] or a local
 626-9   authority places a sign that directs slower traffic to travel in a
626-10   lane other than the farthest left lane, the sign must read "left
626-11   lane for passing only."
626-12         SECTION 17.09.  Section 621.401, Transportation Code, is
626-13   amended to correct a reference to read as follows:
626-14         Sec. 621.401.  Definition.  In this subchapter, "weight
626-15   enforcement officer" means:
626-16               (1)  a license and weight inspector of the Department
626-17   of Public Safety;
626-18               (2)  a highway patrol officer;
626-19               (3)  a sheriff or sheriff's deputy;
626-20               (4)  a municipal police officer in a municipality with
626-21   a population of 100,000 or more; or
626-22               (5)  a police officer certified under Section 644.101
626-23   [Section 6, Article 6675d, Revised Statutes].
626-24         SECTION 17.10.  (a)  Section 643.002, Transportation Code, is
626-25   amended to conform to Section 1, Chapter 1061, Acts of the 75th
626-26   Legislature, Regular Session, 1997, to read as follows:
 627-1         Sec. 643.002.  EXEMPTIONS.  This chapter does not apply to:
 627-2               (1)  a motor vehicle registered under the single state
 627-3   registration system established under 49 U.S.C. Section 14504(c)
 627-4   when operating exclusively in interstate or international commerce;
 627-5               (2)  a motor vehicle registered as a cotton vehicle
 627-6   under Section 502.277; [or]
 627-7               (3)  a motor vehicle the department by rule exempts
 627-8   because the vehicle is subject to comparable registration and a
 627-9   comparable safety program administered by another governmental
627-10   entity;
627-11               (4)  a motor vehicle used to transport passengers
627-12   operated by an entity whose primary function is not the
627-13   transportation of passengers, such as a vehicle operated by a
627-14   hotel, day-care center, public or private school, nursing home,
627-15   governmental entity, or similar organization; or
627-16               (5)  a vehicle operating under a private carrier permit
627-17   issued under Chapter 42, Alcoholic Beverage Code [agency].
627-18         (b)  Section 1, Chapter 1061, Acts of the 75th Legislature,
627-19   Regular Session, 1997, is repealed.
627-20         SECTION 17.11.  (a)  Section 643.004, Transportation Code, is
627-21   amended to conform to Section 8, Chapter 1061, Acts of the 75th
627-22   Legislature, Regular Session, 1997, to read as follows:
627-23         Sec. 643.004.  PAYMENT OF FEES.  (a)  The department may
627-24   adopt rules on the method of payment of a fee under this chapter,
627-25   including:
627-26               (1)  authorizing the use of:
 628-1                     (A)  escrow accounts described by Subsection (b);
 628-2   and
 628-3                     (B)  electronic funds transfer or a credit card
 628-4   issued by a financial institution chartered by a state or the
 628-5   United States or by a nationally recognized credit organization
 628-6   approved by the department; and
 628-7               (2)  requiring the payment of a discount or service
 628-8   charge for a credit card payment in addition to the fee.
 628-9         (b)  The department may establish one or more escrow accounts
628-10   in the state highway fund for the prepayment of a fee under this
628-11   chapter.  Prepaid fees and any fees established by the department
628-12   for the administration of this section shall be:
628-13               (1)  administered under an agreement approved by the
628-14   department; and
628-15               (2)  deposited to the credit of the state highway fund
628-16   to be appropriated only to the department for the purposes of
628-17   administering this chapter.
628-18         (b)  Section 8, Chapter 1061, Acts of the 75th Legislature,
628-19   Regular Session, 1997, is repealed.
628-20         SECTION 17.12.  (a)  Section 643.054, Transportation Code, is
628-21   amended to conform to Section 1, Chapter 858, and Section 4.04,
628-22   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
628-23   by adding Subsection (c) to read as follows:
628-24         (c)  To avoid multiple registrations of a single motor
628-25   carrier, the department shall adopt simplified procedures for the
628-26   registration of motor carriers transporting household goods as
 629-1   agents for carriers required to register under this chapter.
 629-2         (b)  Section 1, Chapter 858, and Section 4.04, Chapter 1171,
 629-3   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
 629-4         SECTION 17.13.  (a)  Section 643.058, Transportation Code, is
 629-5   amended to conform to Section 4.01, Chapter 1171, Acts of the 75th
 629-6   Legislature, Regular Session, 1997, by redesignating Subsection (b)
 629-7   as Subsection (c) and adding a new Subsection (b) to read as
 629-8   follows:
 629-9         (b)  At least 30 days before the date on which a motor
629-10   carrier's registration expires, the department shall notify the
629-11   carrier of the impending expiration.  The notice must be in writing
629-12   and sent to the motor carrier's last known address according to the
629-13   records of the department.
629-14         (c)  A motor carrier may renew a registration under this
629-15   subchapter by:
629-16               (1)  supplementing the application with any new
629-17   information required under Section 643.056;
629-18               (2)  paying a $10 fee for each vehicle requiring
629-19   registration the carrier operates; and
629-20               (3)  providing the department evidence of continuing
629-21   insurance or financial responsibility in an amount at least equal
629-22   to the amount set by the department under Section 643.101.
629-23         (b)  Section 4.01, Chapter 1171, Acts of the 75th
629-24   Legislature, Regular Session, 1997, is repealed.
629-25         SECTION 17.14.  (a)  Subchapter B, Chapter 643,
629-26   Transportation Code, is amended to conform to Section 2, Chapter
 630-1   1061, Acts of the 75th Legislature, Regular Session, 1997, by
 630-2   adding Sections 643.061 and 643.062 to read as follows:
 630-3         Sec. 643.061.  LENGTH OF REGISTRATION PERIOD.  The department
 630-4   may vary the registration period under this subchapter by adopting
 630-5   rules that provide for:
 630-6               (1)  an optional two-year registration; and
 630-7               (2)  the issuance of a temporary registration permit
 630-8   that is valid for less than one year.
 630-9         Sec. 643.062.  LIMITATION ON INTERNATIONAL MOTOR CARRIER.
630-10   (a)  A foreign-based international motor carrier required to
630-11   register under this chapter or registered under Chapter 645 may not
630-12   transport persons or cargo in intrastate commerce in this state.
630-13         (b)  A person may not assist a foreign-based international
630-14   motor carrier in violating Subsection (a).
630-15         (b)  Section 2, Chapter 1061, Acts of the 75th Legislature,
630-16   Regular Session, 1997, is repealed.
630-17         SECTION 17.15.  (a)  Subchapter B, Chapter 643,
630-18   Transportation Code, is amended to conform to Section 3, Chapter
630-19   1061, Acts of the 75th Legislature, Regular Session, 1997, by
630-20   adding Section 643.063 to read as follows:
630-21         Sec. 643.063.  VEHICLES OPERATED UNDER SHORT-TERM LEASE AND
630-22   SUBSTITUTE VEHICLES.  (a)  In this section:
630-23               (1)  "Leasing business" means a person that leases
630-24   vehicles requiring registration.
630-25               (2)  "Short-term lease" means a lease of 30 days or
630-26   less.
 631-1         (b)  A vehicle requiring registration operated under a
 631-2   short-term lease is exempt from the registration requirements of
 631-3   Sections 643.052-643.059.  The department shall adopt rules
 631-4   providing for the operation of these vehicles under flexible
 631-5   procedures.  A vehicle requiring registration operated under a
 631-6   short-term lease is not required to carry a cab card or other proof
 631-7   of registration if a copy of the lease agreement is carried in the
 631-8   cab of the vehicle.
 631-9         (c)  A motor carrier may operate a substitute vehicle without
631-10   notifying the department in advance if the substitute is a
631-11   temporary replacement because of maintenance, repair, or other
631-12   unavailability of the vehicle originally leased.  A substitute
631-13   vehicle is not required to carry a cab card or other proof of
631-14   registration if a copy of the lease agreement for the vehicle
631-15   originally leased is carried in the cab of the substitute.
631-16         (d)  Instead of the registration procedures described by
631-17   Sections 643.052-643.059, the department shall adopt rules that
631-18   allow a leasing business to report annually to the department on
631-19   the number of vehicles requiring registration that the leasing
631-20   business actually operated in the previous 12 months.  The rules
631-21   may not require the vehicles operated to be described with
631-22   particularity.  The registration fee for each vehicle operated may
631-23   be paid at the time the report is filed.
631-24         (e)  A leasing business that registers its vehicles under
631-25   Subsection (d) may comply with the liability insurance requirements
631-26   of Subchapter C by filing evidence of a contingency liability
 632-1   policy satisfactory to the department.
 632-2         (f)  Rules adopted by the department under this section:
 632-3               (1)  must be designed to avoid requiring a vehicle to
 632-4   be registered more than once in a calendar year; and
 632-5               (2)  may allow a leasing  business to register a
 632-6   vehicle on behalf of a lessee.
 632-7         (b)  Section 3, Chapter 1061, Acts of the 75th Legislature,
 632-8   Regular Session, 1997, is repealed.
 632-9         SECTION 17.16.  Section 2, Chapter 858, and Section 4.05,
632-10   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
632-11   are repealed.
632-12         SECTION 17.17.  (a)  Section 643.106(a), Transportation Code,
632-13   is amended to conform to Section 4, Chapter 1061, Acts of the 75th
632-14   Legislature, Regular Session, 1997, to read as follows:
632-15         (a)  Notwithstanding any [contrary] provision of any law or
632-16   regulation, a motor carrier that is required to register under
632-17   Subchapter B and whose primary business is transportation for
632-18   compensation or hire between two or more municipalities shall
632-19   protect its employees by obtaining:
632-20               (1)  workers' compensation insurance coverage as
632-21   defined under Subtitle A, Title 5, Labor Code; or
632-22               (2)  accidental insurance coverage approved by the
632-23   department from a reliable insurance company authorized to write
632-24   accidental insurance policies in this state.
632-25         (b)  Section 4, Chapter 1061, Acts of the 75th Legislature,
632-26   Regular Session, 1997, is repealed.
 633-1         SECTION 17.18.  Section 5, Chapter 1061, Acts of the 75th
 633-2   Legislature, Regular Session, 1997, is repealed.
 633-3         SECTION 17.19.  (a)  Sections 643.153(a), (b), (c), and (f),
 633-4   Transportation Code, are amended to conform to Section 4, Chapter
 633-5   858, and Section 4.06, Chapter 1171, Acts of the 75th Legislature,
 633-6   Regular Session, 1997, to read as follows:
 633-7         (a)  The department shall adopt rules to protect a consumer
 633-8   using the service of a motor carrier who is transporting [required
 633-9   to register under Subchapter B and transports] household goods for
633-10   compensation.  [The rules must be at least as stringent as the
633-11   corresponding provisions of 49 C.F.R. Part 375.  The department may
633-12   adopt rules under this subsection that are more stringent than the
633-13   corresponding federal provisions.]
633-14         (b)  [A motor carrier that transports household goods shall
633-15   list a place of business with a street address in this state and
633-16   the carrier's registration number issued under Subchapter B in any
633-17   printed advertising published in this state.]
633-18         [(c)]  The department may adopt rules necessary to ensure
633-19   that a customer of a motor carrier transporting household goods is
633-20   protected from deceptive or unfair practices and unreasonably
633-21   hazardous activities.  The rules must [may]:
633-22               (1)  establish a formal process for resolving a dispute
633-23   over a fee or damage [apart from the method of mediation in Section
633-24   643.155];
633-25               (2)  require a motor carrier to indicate clearly to a
633-26   customer whether an estimate is binding or nonbinding and disclose
 634-1   the maximum price a customer could be required to pay; [and]
 634-2               (3)  create a centralized process for making complaints
 634-3   about a motor carrier that also allows a customer to inquire about
 634-4   a carrier's complaint record;
 634-5               (4)  require a motor carrier transporting household
 634-6   goods to list a place of business with a street address in this
 634-7   state and the carrier's registration number issued under this
 634-8   article in any print advertising published in this state;
 634-9               (5)  require motor carriers that are required to
634-10   register under Subsection (c) to file proof of cargo insurance in
634-11   amounts to be determined by the department that do not exceed the
634-12   amount required for a motor carrier transporting household goods
634-13   under federal law and allow alternative evidence of financial
634-14   responsibility, through surety bonds, letters of credit, or other
634-15   means satisfactory to the department, for contractual obligations
634-16   to customers that do not exceed $5,000 aggregate loss or damage to
634-17   total cargo shipped at any one time;
634-18               (6)  require motor carriers that are required to
634-19   register under Subsection (c) to conspicuously advise consumers
634-20   concerning limitation of any carrier liability for loss or damage
634-21   as determined under Subdivision (7); and
634-22               (7)  determine reasonable provisions governing
634-23   limitation of liability for loss or damage of motor carriers
634-24   required to register under Subsection (c), not to exceed 60 cents
634-25   per pound per article.
634-26         (c)  The department shall require motor carriers that are not
 635-1   required to register under Subchapter B to register their
 635-2   operations before transporting household goods for compensation.
 635-3   The department shall determine the forms and procedures for
 635-4   registration required under this subsection.  The department shall
 635-5   charge a motor carrier who registers under this subsection a fee
 635-6   that does not exceed the total of the fees imposed in Subchapter B.
 635-7         (f)  The unauthorized practice of the insurance business
 635-8   under Article 1.14-1, Insurance Code, does not include the offer of
 635-9   insurance by a motor carrier transporting household goods for the
635-10   full value of a customer's property if the offer is authorized by a
635-11   rule adopted under Subsection (b) [(c)].
635-12         (b)  Section 643.155, Transportation Code, is amended to
635-13   conform to Section 4, Chapter 858, and Section 4.06, Chapter 1171,
635-14   Acts of the 75th Legislature, Regular Session, 1997, to read as
635-15   follows:
635-16         Sec. 643.155.  RULES ADVISORY COMMITTEE [MEDIATION REQUIRED].
635-17   (a)  The department shall appoint a rules advisory committee
635-18   consisting of representatives of motor carriers transporting
635-19   household goods using small, medium, and large equipment, the
635-20   public, and the department.
635-21         (b)  Members of the committee serve at the pleasure of the
635-22   department and are not entitled to compensation or reimbursement of
635-23   expenses for serving on the committee.  The department may adopt
635-24   rules to govern the operations of the advisory committee.
635-25         (c)  The committee shall:
635-26               (1)  examine the rules adopted by the department under
 636-1   Sections 643.153(a) and (b) and make recommendations to the
 636-2   department on modernizing and streamlining the rules;
 636-3               (2)  conduct a study of the feasibility and necessity
 636-4   of requiring any vehicle liability insurance for household goods
 636-5   carriers required to register under Section 643.153(c); and
 636-6               (3)  recommend a maximum level of liability limitation
 636-7   under Section 643.153(b)(7) that does not exceed 60 cents per pound
 636-8   [A collective association of motor carriers transporting household
 636-9   goods or agents of the carriers that are parties to a collective
636-10   agreement approved under Section 643.154(e) shall provide for a
636-11   method of mediation to resolve customer disputes over fees,
636-12   damages, and services.  The association, the carriers, or their
636-13   agents shall pay for the cost of the mediation.]
636-14         [(b)  A party to a collective agreement approved under
636-15   Section 643.154(e) shall participate in customer complaint
636-16   resolution, including participation in the mediation process and
636-17   advertisement of the availability of mediation in each contract or
636-18   estimate proposal.]
636-19         [(c)  A complaint mediation that is not resolved to the
636-20   mutual agreement of all parties shall be reported to the
636-21   department.]
636-22         [(d)  The department shall adopt rules that require parties
636-23   to a collective agreement to provide notice to customers of their
636-24   right to seek resolution of a complaint directly from the
636-25   department under Section 643.153(c)].
636-26         (c)  Section 4, Chapter 858, and Section 4.06, Chapter 1171,
 637-1   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
 637-2         SECTION 17.20.  (a)  Subchapter D, Chapter 643,
 637-3   Transportation Code, is amended to conform to Section 4.03, Chapter
 637-4   1171, Acts of the 75th Legislature, Regular Session, 1997, by
 637-5   adding Section 643.156 to read as follows:
 637-6         Sec. 643.156.  REGULATION OF ADVERTISING.  (a)  The
 637-7   department may not by rule restrict competitive bidding or
 637-8   advertising by a motor carrier except to prohibit false,
 637-9   misleading, or deceptive practices.
637-10         (b)  A rule to prohibit false, misleading, or deceptive
637-11   practices may not:
637-12               (1)  restrict the use of:
637-13                     (A)  any medium for an advertisement;
637-14                     (B)  a motor carrier's advertisement under a
637-15   trade name; or
637-16                     (C)  a motor carrier's personal appearance or
637-17   voice in an advertisement, if the motor carrier is an individual;
637-18   or
637-19               (2)  relate to the size or duration of an advertisement
637-20   by a motor carrier.
637-21         (b)  Section 4.03, Chapter 1171, Acts of the 75th
637-22   Legislature, Regular Session, 1997, is repealed.
637-23         SECTION 17.21.  (a)  Section 643.252, Transportation Code, is
637-24   amended to conform to Section 4.02, Chapter 1171, Section 3,
637-25   Chapter 858, and Section 6, Chapter 1061, Acts of the 75th
637-26   Legislature, Regular Session, 1997, to read as follows:
 638-1         Sec. 643.252.  SUSPENSION AND REVOCATION OF REGISTRATION.
 638-2   (a)  The department may suspend or revoke a registration issued
 638-3   under this chapter or place on probation a motor carrier whose
 638-4   registration is suspended if a motor carrier:
 638-5               (1)  fails to maintain insurance or evidence of
 638-6   financial responsibility as required by Section 643.101(a), (b), or
 638-7   (c) or 643.153(b);
 638-8               (2)  fails to keep evidence of insurance in the cab of
 638-9   each vehicle as required by Section 643.103(b);
638-10               (3)  fails to register a vehicle requiring
638-11   registration; [or]
638-12               (4)  knowingly provides false information on any form
638-13   filed with the department under this chapter; or
638-14               (5)  violates a rule adopted under Section 643.063.
638-15         (b)  The Department of Public Safety may request that the
638-16   department suspend or revoke a registration issued under this
638-17   chapter or place on probation a motor carrier whose registration is
638-18   suspended if a motor carrier has:
638-19               (1)  an unsatisfactory safety rating under 49 C.F.R.
638-20   Part 385; or
638-21               (2)  multiple violations of Chapter 644, a rule adopted
638-22   under that chapter, or Subtitle C.
638-23         (c)  Except as provided by Subsection (d), a suspension or
638-24   revocation or the imposition of probation made under Subsection (a)
638-25   or (b) is a contested case under Chapter 2001, Government Code.
638-26         (d)  The department may suspend or revoke a registration
 639-1   issued under this chapter or place on probation a motor carrier
 639-2   whose registration is suspended without a hearing under Chapter
 639-3   2001, Government Code, if:
 639-4               (1)  the department provides notice to the motor
 639-5   carrier of:
 639-6                     (A)  the proposed suspension or revocation; and
 639-7                     (B)  the right of the carrier to request a
 639-8   hearing under Chapter 2001, Government Code; and
 639-9               (2)  the motor carrier fails to provide the department
639-10   with a written request for a hearing before the 11th day after the
639-11   date the carrier receives the notice described in Subdivision (1).
639-12         (e)  If the suspension of a motor carrier's registration is
639-13   probated, the department may require the carrier to report
639-14   regularly to the department on any matter that is the basis of the
639-15   probation.
639-16         (b)  Section 4.02, Chapter 1171, Section 3, Chapter 858, and
639-17   Section 6, Chapter 1061, Acts of the 75th Legislature, Regular
639-18   Session, 1997, are repealed.
639-19         SECTION 17.22.  (a)  Section 643.253, Transportation Code, is
639-20   amended to conform to Section 5, Chapter 858, and Section 4.07,
639-21   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
639-22   to read as follows:
639-23         Sec. 643.253.  CRIMINAL PENALTY.  (a)  A person commits an
639-24   offense if the person fails to:
639-25               (1)  register as required by Subchapter B or Section
639-26   643.153(c);
 640-1               (2)  maintain insurance or evidence of financial
 640-2   responsibility as required by Subchapter C or Section 643.153; or
 640-3               (3)  keep a cab card in the cab of a vehicle as
 640-4   required by Section 643.059.
 640-5         (b)  A person commits an offense if the person solicits the
 640-6   transportation of household goods for compensation and is not
 640-7   registered as required by Subchapter B or Section 643.153.
 640-8         (c)  An offense under this section is a Class C misdemeanor.
 640-9         (b)  Section 5, Chapter 858, and Section 4.07, Chapter 1171,
640-10   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
640-11         SECTION 17.23.  Section 7, Chapter 1061, Acts of the 75th
640-12   Legislature, Regular Session, 1997, is repealed.
640-13         SECTION 17.24.  (a)  Section 644.001(1), Transportation Code,
640-14   is amended to conform to Section 6, Chapter 858, and Section 4.08,
640-15   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
640-16   to read as follows:
640-17               (1)  "Commercial motor vehicle" means a motor vehicle
640-18   described [has the meaning assigned] by Section 548.001.
640-19         (b)  Section 6, Chapter 858, and Section 4.08, Chapter 1171,
640-20   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
640-21         SECTION 17.25.  (a)  Section 644.001(5), Transportation Code,
640-22   is amended to conform to Section 12, Chapter 1061, Acts of the 75th
640-23   Legislature, Regular Session, 1997, to read as follows:
640-24               (5)  "Federal motor carrier safety regulation" means a
640-25   federal regulation in Subchapter B, Chapter III, Subtitle B, Title
640-26   49, Code of Federal Regulations [49 C.F.R. Part 382, 385, or 386 or
 641-1   Parts 388-399].
 641-2         (b)  Section 12, Chapter 1061, Acts of the 75th Legislature,
 641-3   Regular Session, 1997, is repealed.
 641-4         SECTION 17.26.  (a)  Subchapter A, Chapter 644,
 641-5   Transportation Code, is amended to conform to Section 4.11(b),
 641-6   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
 641-7   by adding Section 644.004 to read as follows:
 641-8         Sec. 644.004.  APPLICABILITY TO FOREIGN COMMERCIAL MOTOR
 641-9   VEHICLES.  Except as otherwise provided by law, this chapter also
641-10   applies to a foreign commercial motor vehicle, as defined by
641-11   Section 648.001.
641-12         (b)  Section 4.11(b), Chapter 1171, Acts of the 75th
641-13   Legislature, Regular Session, 1997, is repealed.
641-14         SECTION 17.27.  (a)  Section 644.053, Transportation Code, is
641-15   amended  to conform to Section 10, Chapter 1061, Acts of the 75th
641-16   Legislature, Regular Session, 1997, by amending Subsection (a) and
641-17   adding Subsection (c) to read as follows:
641-18         (a)  A rule adopted under this chapter may not:
641-19               (1)  prevent an intrastate operator from operating a
641-20   vehicle up to 12 hours following eight consecutive hours off;
641-21               (2)  require a person to meet the medical standards
641-22   provided in the federal motor carrier safety regulations if the
641-23   person:
641-24                     (A)  was regularly employed in this state as a
641-25   commercial motor vehicle operator in intrastate commerce before
641-26   August 28, 1989; and
 642-1                     (B)  is not transporting property that requires a
 642-2   hazardous material placard; [or]
 642-3               (3)  require a person to maintain a government form,
 642-4   separate company form, operator's record of duty status, or
 642-5   operator's daily log for operations within a 150-mile radius of the
 642-6   normal work-reporting location if a general record of an operator's
 642-7   hours of service can be compiled from:
 642-8                     (A)  business records maintained by the owner
 642-9   that provide the date, time, and location of the delivery of a
642-10   product or service; or
642-11                     (B)  documents required to be maintained by law,
642-12   including delivery tickets or sales invoices, that provide the date
642-13   of delivery and the quantity of merchandise delivered; or
642-14               (4)  impose during a planting or harvesting season
642-15   maximum driving and on-duty times on an operator of a vehicle
642-16   transporting an agricultural commodity in intrastate commerce for
642-17   agricultural purposes from the source of the commodity to the first
642-18   place of processing or storage or the distribution point for the
642-19   commodity, if the place is located within 150 air miles of the
642-20   source.
642-21         (c)  In this section, "agricultural  commodity"  means  an
642-22   agricultural, horticultural, viticultural, silvicultural, or
642-23   vegetable product, bees or honey, planting seed, cottonseed, rice,
642-24   livestock or a livestock product, or poultry or a  poultry  product
642-25   that is produced  in this state, either in its natural form or as
642-26   processed by the producer, including woodchips.
 643-1         (b)  Section 644.053, Transportation Code, is amended to
 643-2   conform to Section 7, Chapter 858, and Section 4.09, Chapter 1171,
 643-3   Acts of the 75th Legislature, Regular Session, 1997, by adding
 643-4   Subsection (d) to read as follows:
 643-5         (d)  A rule adopted by the director under this chapter that
 643-6   relates to hours of service, an operator's record of duty status,
 643-7   or an operator's daily log, for operations outside a 150-mile
 643-8   radius of the normal work-reporting location, also applies to and
 643-9   must be complied with by a motor carrier of household goods not
643-10   using a commercial motor vehicle.  In this subsection:
643-11               (1)  "commercial motor vehicle" has the meaning
643-12   assigned by Section 548.001; and
643-13               (2)  "motor carrier" has the meaning assigned by
643-14   Section 643.001.
643-15         (c)  Section 10, Chapter 1061, Section 7, Chapter 858, and
643-16   Section 4.09, Chapter 1171, Acts of the 75th Legislature, Regular
643-17   Session, 1997, are repealed.
643-18         SECTION 17.28.  (a)  Subchapter B, Chapter 644,
643-19   Transportation Code, is amended to conform to Section 1, Chapter
643-20   476, Acts of the 75th Legislature, Regular Session, 1997, by adding
643-21   Section 644.054 to read as follows:
643-22         Sec. 644.054.  REGULATION OF CONTRACT CARRIERS OF CERTAIN
643-23   PASSENGERS.  (a)  This section applies only to a  contract  carrier
643-24   that transports an operating employee of a railroad on a road or
643-25   highway of this state in a vehicle designed to carry 15 or fewer
643-26   passengers.
 644-1         (b)  The department shall adopt rules regulating the
 644-2   operation of a contract carrier to which this section applies.  The
 644-3   rules must:
 644-4               (1)  prohibit a person from operating a vehicle for
 644-5   more than 12 hours in a day;
 644-6               (2)  require a person who operates a vehicle for the
 644-7   number of consecutive hours or days the department determines  is
 644-8   excessive to rest for a period determined by the department;
 644-9               (3)  require a contract carrier to keep a record of all
644-10   hours a vehicle subject to regulation under this section is
644-11   operated; and
644-12               (4)  be determined by the department to be necessary to
644-13   protect the safety of a passenger being transported or the general
644-14   public.
644-15         (b)  Section 1, Chapter 476, Acts of the 75th Legislature,
644-16   Regular Session, 1997, is repealed.
644-17         SECTION 17.29.  (a)  Section 644.101, Transportation Code, is
644-18   amended to conform to Section 1, Chapter 364, and Section 11,
644-19   Chapter 1061, Acts of the 75th Legislature, Regular Session, 1997,
644-20   to read as follows:
644-21         Sec. 644.101.  CERTIFICATION OF MUNICIPAL POLICE [PEACE]
644-22   OFFICERS.  (a)  The department shall establish procedures,
644-23   including training, for the certification of municipal police
644-24   [peace] officers to enforce this chapter.
644-25         (b)  A police [peace] officer of any of the following
644-26   municipalities is eligible to apply for certification under this
 645-1   section:
 645-2               (1)  a municipality with a population of 100,000 or
 645-3   more;
 645-4               (2)  a municipality with a population of 25,000 or more
 645-5   any part of which is located in a county with a population of 2.4
 645-6   million or more; or
 645-7               (3)  a municipality any part of which is located in a
 645-8   county bordering the United Mexican States.
 645-9         (c)  The department by rule shall establish reasonable fees
645-10   sufficient to recover from a municipality the cost of certifying
645-11   its police [peace] officers under this section.
645-12         (b)  Section 1, Chapter 364, and Section 11, Chapter 1061,
645-13   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
645-14         SECTION 17.30.  Section 21.66, Chapter 1423, Acts of the 75th
645-15   Legislature, Regular Session, 1997, is repealed.
645-16         SECTION 17.31.  (a)  Section 644.103, Transportation Code, is
645-17   amended to conform to Section 2, Chapter 364, Acts of the 75th
645-18   Legislature, Regular Session, 1997, to read as follows:
645-19         Sec. 644.103.  DETENTION OF VEHICLES.  (a)  An officer of the
645-20   department may enter or detain on a highway or at a port of entry a
645-21   motor vehicle that is subject to this chapter.
645-22         (b)  A police [peace] officer who is certified under Section
645-23   644.101 may detain on a highway or at a port of entry within the
645-24   territory of the municipality a motor vehicle that is subject to
645-25   this chapter.
645-26         (c)  An officer who detains a vehicle under this section may
 646-1   prohibit the further operation of the vehicle on a highway if the
 646-2   vehicle or operator of the vehicle is in violation of a federal
 646-3   safety regulation or a rule adopted under this chapter.
 646-4         (b)  Section 2, Chapter 364, Acts of the 75th Legislature,
 646-5   Regular Session, 1997, is repealed.
 646-6         SECTION 17.32.  (a)  Chapter 644, Transportation Code, is
 646-7   amended to conform to Section 1, Chapter 157, and Section 1,
 646-8   Chapter 1364, Acts of the 75th Legislature, Regular Session, 1997,
 646-9   by adding Subchapter E to read as follows:
646-10              SUBCHAPTER E.  ROUTING OF HAZARDOUS MATERIALS
646-11         Sec. 644.201.  ADOPTION OF RULES.  (a)  The Texas
646-12   Transportation Commission shall adopt rules under this subchapter
646-13   consistent with 49 C.F.R. Part 397 for the routing of
646-14   nonradioactive hazardous materials.
646-15         (b)  Rules concerning signage, public participation, and
646-16   procedural requirements may impose more stringent requirements than
646-17   provided by 49 C.F.R. Part 397.
646-18         (c)  The rules must provide for consultation with a political
646-19   subdivision when a route is being proposed within the jurisdiction
646-20   of the political subdivision.
646-21         Sec. 644.202.  DESIGNATION OF ROUTE.  (a)  A political
646-22   subdivision of this state or a state agency may designate a route
646-23   for the transportation of nonradioactive hazardous materials over a
646-24   public road or highway in this state only if the Texas Department
646-25   of Transportation approves the route.
646-26         (b)  A municipality with a population of more than 750,000
 647-1   shall develop a route for commercial motor vehicles carrying
 647-2   hazardous materials on a road or highway in the municipality and
 647-3   submit the route to the Texas Department of Transportation for
 647-4   approval.  If the Texas Department of Transportation determines
 647-5   that the route complies with all applicable federal and state
 647-6   regulations regarding the transportation of hazardous materials,
 647-7   the Texas Department of Transportation shall approve the route and
 647-8   notify the municipality of the approved route.
 647-9         (c)  The Texas Transportation Commission may designate a
647-10   route for the transportation of nonradioactive hazardous materials
647-11   over any public road or highway in this state.  The designation may
647-12   include a road or highway that is not a part of the state highway
647-13   system only on the approval of the governing body of the political
647-14   subdivision that maintains the road or highway.
647-15         Sec. 644.203.  SIGNS.  (a)  The Texas Department of
647-16   Transportation shall provide signs for a designated route under
647-17   Section 644.202(c) over a road or highway that is not part of the
647-18   state highway system.  Notwithstanding Section 222.001, the Texas
647-19   Department of Transportation may use money in the state highway
647-20   fund to pay for the signs.
647-21         (b)  The political subdivision that maintains the road or
647-22   highway shall bear the costs for installation and maintenance of
647-23   the signs.
647-24         (b)  Section 1, Chapter 157, and Section 1, Chapter 1364,
647-25   Acts of the 75th Legislature, Regular Session, 1997, are repealed.
647-26         SECTION 17.33.  (a)  Section 645.002, Transportation Code, is
 648-1   amended to conform to Section 9, Chapter 1061, Acts of the 75th
 648-2   Legislature, Regular Session, 1997, by amending Subsection (b) and
 648-3   adding Subsection (c) to read as follows:
 648-4         (b)  The department may adopt rules regarding the method of
 648-5   payment of a fee under this chapter.  The rules may:
 648-6               (1)  authorize the use of an escrow account described
 648-7   by Subsection (c), an electronic funds transfer, or a valid credit
 648-8   card issued by a financial institution chartered by a state or the
 648-9   United States or by a nationally recognized credit organization
648-10   approved by the department; and
648-11               (2)  require the payment of a discount or service
648-12   charge for a credit card payment in addition to the fee.
648-13         (c)  The department may establish one or more escrow accounts
648-14   in the state highway fund for the prepayment of a fee under this
648-15   chapter.  A prepaid fee or any fee established by the department
648-16   for the administration of this section shall be:
648-17               (1)  administered under an agreement approved by the
648-18   department; and
648-19               (2)  deposited to the credit of the state highway fund
648-20   to be appropriated only to the department for the purposes of
648-21   administering this chapter.
648-22         (b)  Section 9, Chapter 1061, Acts of the 75th Legislature,
648-23   Regular Session, 1997, is repealed.
648-24         SECTION 17.34.  (a)  Subtitle F, Title 7, Transportation
648-25   Code, is amended to codify Chapter 421, Acts of the 61st
648-26   Legislature, Regular Session, 1969 (Article 911g, Vernon's Texas
 649-1   Civil Statutes), by adding Chapter 647 to read as follows:
 649-2              CHAPTER 647.  MOTOR TRANSPORTATION OF MIGRANT
 649-3                          AGRICULTURAL WORKERS
 649-4         Sec. 647.001.  DEFINITIONS.  In this chapter:
 649-5               (1)  "Bus" means a motor vehicle that is designed,
 649-6   constructed, and used to transport passengers.  The term does not
 649-7   include a passenger automobile or a station wagon other than a
 649-8   taxicab.
 649-9               (2)  "Highway" has the meaning assigned by Section
649-10   541.302.
649-11               (3)  "Migrant agricultural worker" means a person who:
649-12                     (A)  performs or seeks to perform farm labor of a
649-13   seasonal nature, including labor necessary to process an
649-14   agricultural food product; and
649-15                     (B)  occupies living quarters other than the
649-16   individual's permanent home during the period of employment.
649-17               (4)  "Motor vehicle" means any vehicle, machine,
649-18   tractor, trailer, or semitrailer propelled or drawn by mechanical
649-19   power and used on a highway to transport passengers or property or
649-20   both.  The term does not include:
649-21                     (A)  a vehicle, locomotive, or car that operates
649-22   exclusively on one or more rails; or
649-23                     (B)  a trolley bus that operates on electricity
649-24   generated from a fixed overhead wire and that provides local
649-25   passenger transportation in street-railway service.
649-26               (5)  "Operator" means a person who operates a motor
 650-1   vehicle.
 650-2               (6)  "Semitrailer" has the meaning assigned by Section
 650-3   541.201.
 650-4               (7)  "Truck" has the meaning assigned by Section
 650-5   541.201.
 650-6               (8)  "Truck tractor" has the meaning assigned by
 650-7   Section 541.201.
 650-8         Sec. 647.002.  APPLICATION OF CHAPTER.  (a)  This chapter
 650-9   applies to any carrier, including a carrier under contract, who at
650-10   any time uses a motor vehicle to transport to or from a place of
650-11   employment in this state at least five migrant agricultural workers
650-12   for a total distance of more than 50 miles.
650-13         (b)  This chapter does not apply if:
650-14               (1)  the carrier is a common carrier;
650-15               (2)  the motor vehicle used is a station wagon or
650-16   passenger automobile; or
650-17               (3)  the carrier is a migrant agricultural worker
650-18   transporting the worker or a member of the worker's immediate
650-19   family.
650-20         Sec. 647.003.  TYPE OF VEHICLE ALLOWED.  (a)  A carrier may
650-21   transport migrant agricultural workers only in a:
650-22               (1)  bus;
650-23               (2)  truck to which a trailer is not attached; or
650-24               (3)  semitrailer attached to a truck tractor.
650-25         (b)  A carrier may not:
650-26               (1)  attach a trailer to a semitrailer described by
 651-1   Subsection (a)(3); or
 651-2               (2)  use a closed van that does not have windows or a
 651-3   method to ensure ventilation.
 651-4         Sec. 647.004.  COMPLIANCE WITH REQUIREMENTS OF CHAPTER.
 651-5   (a)  A carrier shall comply with the requirements and
 651-6   specifications of this chapter.
 651-7         (b)  An officer, agent, representative, or employee of a
 651-8   carrier who operates a motor vehicle used to transport migrant
 651-9   agricultural workers or who hires, supervises, trains, assigns, or
651-10   dispatches operators of those motor vehicles shall comply with the
651-11   requirements of Sections 647.006, 647.007, and 647.008.
651-12         (c)  An officer, agent, representative, operator, or employee
651-13   of a carrier who is directly involved in the management,
651-14   maintenance, or operation of a motor vehicle used to transport
651-15   migrant agricultural workers shall comply with the requirements of
651-16   Sections 647.003, 647.005, 647.009, 647.010, 647.011, 647.012,
651-17   647.014, 647.016, and 647.017.  The carrier shall instruct its
651-18   officers, agents, representatives, and operators with the
651-19   requirements of those sections and shall take necessary measures to
651-20   ensure compliance with those requirements.
651-21         (d)  An officer, agent, representative, operator, or employee
651-22   of a carrier who is directly involved with the installation or
651-23   maintenance of equipment and accessories of a motor vehicle used to
651-24   transport migrant agricultural workers shall comply with the
651-25   requirements and specifications of Sections 647.012, 647.013,
651-26   647.014, 647.015, and 647.016.  A carrier may not operate a motor
 652-1   vehicle transporting migrant agricultural workers or cause or
 652-2   permit the vehicle to be operated unless the vehicle is equipped as
 652-3   required by those sections.
 652-4         (e)  A carrier shall systematically inspect and maintain each
 652-5   motor vehicle used to transport migrant agricultural workers and
 652-6   their accessories subject to its control to ensure that the vehicle
 652-7   and its accessories are in safe and proper operating condition.
 652-8         Sec. 647.005.  OPERATION IN ACCORDANCE WITH LAW.  If this
 652-9   chapter imposes a greater affirmative obligation or restraint on
652-10   the operation of a motor vehicle transporting migrant agricultural
652-11   workers than the laws, ordinances, and regulations of the
652-12   jurisdiction in which the vehicle is operated, the operator shall
652-13   comply with this chapter.
652-14         Sec. 647.006.  OPERATOR AGE AND EXPERIENCE REQUIREMENTS.  A
652-15   person may not operate a motor vehicle transporting migrant
652-16   agricultural workers and a carrier may not permit or require a
652-17   person to operate the motor vehicle unless the person:
652-18               (1)  is at least 18 years of age;
652-19               (2)  has at least one year of experience in operating
652-20   any type of motor vehicle, including a private automobile, during
652-21   the different seasons;
652-22               (3)  is familiar with the law relating to operating a
652-23   motor vehicle; and
652-24               (4)  is authorized by law to operate that type of motor
652-25   vehicle.
652-26         Sec. 647.007.  OPERATOR PHYSICAL REQUIREMENTS.  (a)  A person
 653-1   may not operate a motor vehicle transporting migrant agricultural
 653-2   workers and a carrier may not permit or require a person to operate
 653-3   the motor vehicle if the person:
 653-4               (1)  is missing a foot, leg, hand, or arm;
 653-5               (2)  has a mental, nervous, organic, or functional
 653-6   disorder that is likely to interfere with the person's ability to
 653-7   safely operate the motor vehicle;
 653-8               (3)  is missing fingers, has impaired use of a foot,
 653-9   leg, finger, hand, or arm, or has another structural defect or
653-10   limitation likely to interfere with the person's ability to safely
653-11   operate the motor vehicle;
653-12               (4)  has a visual acuity of less than 20/40 (Snellen)
653-13   in each eye either without glasses or with corrective lenses;
653-14               (5)  has a form field of vision in the horizontal
653-15   median of less than a total of 140 degrees;
653-16               (6)  cannot distinguish the colors red, green, and
653-17   yellow;
653-18               (7)  has hearing ability of less than 10/20 in the
653-19   better ear for conversational tones without the use of a hearing
653-20   aid; or
653-21               (8)  is addicted to alcohol, narcotics, or
653-22   habit-forming drugs.
653-23         (b)  An operator who requires corrective lenses for vision
653-24   shall use properly prescribed corrective lenses when operating the
653-25   motor vehicle.
653-26         Sec. 647.008.  PHYSICAL EXAMINATION REQUIREMENT.  (a)  A
 654-1   person may not operate a motor vehicle transporting migrant
 654-2   agricultural workers and a carrier may not permit or require a
 654-3   person to operate the motor vehicle unless:
 654-4               (1)  the person has been physically examined by a
 654-5   licensed doctor of medicine or osteopathy during the preceding 36
 654-6   months; and
 654-7               (2)  the doctor certifies that the person is physically
 654-8   qualified in accordance with Section 647.007.
 654-9         (b)  The doctor's certificate must state:
654-10                          "Doctor's Certificate
654-11               (Operator of Migrant Agricultural Workers)
654-12   This is to certify that I have this day examined __________ in
654-13   accordance with the Texas law governing physical qualifications of
654-14   operators of migrant agricultural workers and that I find _________
654-15         Qualified under that law
654-16         Qualified only when wearing glasses or corrective lenses
654-17   I have kept on file in my office a completed examination.
654-18   _____________     _____________     (Signature of Examining Doctor)
654-19       (Date)           (Place)        _______________________________
654-20                 _________________           (Address of Doctor)
654-21   Signature of Operator _____________________________________________
654-22   Address of Operator  _____________________________________________"
654-23         (c)  A carrier shall keep in its files at the carrier's
654-24   principal place of business a legible doctor's certificate or a
654-25   legible photographically reproduced copy of the doctor's
654-26   certificate for each operator it employs or uses.
 655-1         (d)  An operator shall carry the operator's legible doctor's
 655-2   certificate or a legible photographically reproduced copy of the
 655-3   doctor's certificate when operating the motor vehicle.
 655-4         Sec. 647.009.  LIMITATION ON OPERATION OF MOTOR VEHICLE.
 655-5   (a)  Except in an emergency, a person assigned to operate a motor
 655-6   vehicle transporting migrant workers may  not  allow  another
 655-7   person to operate the motor vehicle without the carrier's
 655-8   authorization.
 655-9         (b)  A person may not operate a motor vehicle if the person's
655-10   alertness or ability to operate the vehicle is impaired for any
655-11   reason, including fatigue or illness, to the extent that it is not
655-12   safe for the person to begin or to continue.  This subsection does
655-13   not apply if there is a grave emergency in which failure to operate
655-14   a motor vehicle would result in a greater hazard to passengers.
655-15   However, the person may operate the motor vehicle only to the
655-16   nearest location at which the passengers' safety is ensured.
655-17         (c)  A carrier may not permit or require a person to operate
655-18   a motor vehicle from one location to another in a period that would
655-19   necessitate the operation of the vehicle at a speed in excess of
655-20   the applicable speed limit.
655-21         (d)  An operator shall make a meal stop of not less than 30
655-22   minutes at least every six hours.  The carrier shall provide for
655-23   reasonable rest stops at least once between each meal stop.
655-24         (e)  The operator of a truck transporting migrant
655-25   agricultural workers for more than 500 miles shall stop for at
655-26   least eight hours to provide rest for the operator and passengers
 656-1   either before or at the completion of each 500 miles.
 656-2         (f)  A person may not operate and a carrier may not permit or
 656-3   require the person to operate a motor vehicle for more than 10
 656-4   hours in the aggregate, excluding meal and rest stops, during any
 656-5   24-hour period unless the person rests for at least eight
 656-6   consecutive hours at the end of the 10-hour period.  For purposes
 656-7   of this subsection, the 24-hour period begins at the time the
 656-8   operator reports for duty.
 656-9         Sec. 647.010.  REQUIRED STOP AT RAILROAD CROSSING.  (a)  An
656-10   operator transporting migrant agricultural workers who approaches a
656-11   railroad grade crossing:
656-12               (1)  shall stop the motor vehicle not less than 15 feet
656-13   or more than 50 feet from the nearest rail of the crossing; and
656-14               (2)  may proceed only after the operator determines
656-15   that the course is clear.
656-16         (b)  An operator is not required to stop at:
656-17               (1)  a streetcar crossing that is in a municipal
656-18   business or residential district;
656-19               (2)  a railroad grade crossing at which a police
656-20   officer or traffic-control signal other than a railroad flashing
656-21   signal directs traffic to proceed; or
656-22               (3)  a grade crossing that the proper state authority
656-23   has clearly marked as being abandoned or exempted if the marking
656-24   can be read from the operator's position.
656-25         (c)  The  motor  vehicle  must display a sign on the rear of
656-26   the vehicle that states:  "This Vehicle Stops at Railroad
 657-1   Crossings."
 657-2         Sec. 647.011.  FUEL RESTRICTIONS.  (a)  An operator or
 657-3   carrier employee fueling a motor vehicle used to transport migrant
 657-4   agricultural workers may not:
 657-5               (1)  fuel the motor vehicle while the engine is running
 657-6   unless running the engine is required to fuel the vehicle;
 657-7               (2)  smoke or expose any open flame in the vicinity of
 657-8   the motor vehicle;
 657-9               (3)  fuel the motor vehicle when the nozzle of the fuel
657-10   hose is not in continuous contact with the intake pipe of the fuel
657-11   tank; or
657-12               (4)  permit any other person to engage in an activity
657-13   that would likely result in a fire or explosion.
657-14         (b)  A person may carry fuel on the motor vehicle for use in
657-15   the motor vehicle or an accessory only in a properly mounted fuel
657-16   tank.
657-17         Sec. 647.012.  REQUIRED VEHICLE EQUIPMENT; USE OF REQUIRED
657-18   EQUIPMENT.  (a)  A motor vehicle used to transport migrant
657-19   agricultural workers must be equipped with:
657-20               (1)  at least one properly mounted fire extinguisher;
657-21               (2)  road warning devices, including at least one
657-22   red-burning fusee and at least three red flares, red electric
657-23   lanterns, or red emergency reflectors;
657-24               (3)  coupling devices as prescribed by Subsection (c),
657-25   if the vehicle is a truck tractor or dolly; and
657-26               (4)  tires as prescribed by Subsection (d).
 658-1         (b)  A person may not operate a motor vehicle unless the
 658-2   person is satisfied that the equipment required under Subsection
 658-3   (a) and the following equipment is in good working order:
 658-4               (1)  the brakes, including service brakes, trailer
 658-5   brake connections, and hand parking brakes;
 658-6               (2)  lighting devices and reflectors;
 658-7               (3)  the steering mechanism;
 658-8               (4)  the horn;
 658-9               (5)  each windshield wiper; and
658-10               (6)  each rearview mirror.
658-11         (c)  Adequate means must be provided positively to prevent
658-12   the shifting of the lower half of each fifth wheel attached to the
658-13   frame of a truck tractor or dolly.  The lower half of each fifth
658-14   wheel must be securely fastened to the frame by U-bolts that are of
658-15   adequate size and are securely tightened. Another method may be
658-16   used if the method provides equivalent security.  A U-bolt may not
658-17   be of welded construction and must be installed so as not to crack,
658-18   warp, or deform the frame.  The upper half of each fifth wheel must
658-19   be fastened with at least the security required for the lower half.
658-20   A locking means must be provided in each fifth wheel mechanism,
658-21   including adapters when used, so that the upper and lower half will
658-22   not separate without the use of a positive manual release, such as
658-23   a release mechanism that the operator uses from the cab.  If the
658-24   fifth wheel is designed and constructed to be readily separable,
658-25   the requirement for a fifth wheel coupling device applies to a
658-26   vehicle manufactured after December 31, 1952.
 659-1         (d)  Vehicle tires must be of adequate capacity to support
 659-2   the vehicle's gross weight.  Each tire must have a tread
 659-3   configuration on the part of the tire that is in contact with the
 659-4   road and may not be so smooth as to expose any tread fabric.  A
 659-5   tire may not have a defect likely to cause failure.  A front tire
 659-6   may not be regrooved, recapped, or retreaded.
 659-7         (e)  An operator shall use required equipment as necessary.
 659-8         Sec. 647.013.  PASSENGER SAFETY PROVISIONS ON MOTOR VEHICLE
 659-9   OTHER THAN BUS.  (a)  A motor vehicle other than a bus transporting
659-10   migrant agricultural workers must have a passenger compartment in
659-11   accordance with this section.
659-12         (b)  The floor of the passenger compartment must be
659-13   substantially smooth and without cracks or holes.  Except as
659-14   necessary to secure the seats or other devices attached to the
659-15   floor, the floor may not have any object that protrudes more than
659-16   two inches in height.
659-17         (c)  The side walls and ends of the passenger compartment
659-18   must extend at least 60 inches from the floor.  If necessary,
659-19   sideboards may be attached to the body of the motor vehicle.  Stake
659-20   body construction meets the requirements of this subsection only if
659-21   the space six inches or larger between any two stakes is suitably
659-22   closed to prevent the passengers from falling off the vehicle.
659-23         (d)  The floor and interior of the sides and ends of the
659-24   passenger compartment must be free of protruding nails, screws,
659-25   splinters, or any other protruding object that is likely to injure
659-26   a passenger or the passenger's clothes.
 660-1         (e)  The motor vehicle must have an adequate means of exiting
 660-2   and entering the passenger compartment from the rear or from the
 660-3   right side of the vehicle.  Each exit and entrance must have a gate
 660-4   or door that has at least one latch or fastening device that will
 660-5   keep the gate or door securely closed during transportation.  The
 660-6   latch or fastening device must be readily operative without the use
 660-7   of tools.  An exit or entrance must:
 660-8               (1)  be at least 18 inches wide;
 660-9               (2)  have a top and clear opening of at least 60 inches
660-10   or as high as the passenger compartment side wall if the side wall
660-11   is less than 60 inches high; and
660-12               (3)  have a bottom that is at the floor of the
660-13   passenger compartment.
660-14         (f)  If the motor vehicle has a permanently attached roof,
660-15   the vehicle must have at least one emergency exit on a side or rear
660-16   of the vehicle that does not have a regular exit or entrance.  The
660-17   exit must have a gate or door and a latch and hold as prescribed by
660-18   Subsection (e).
660-19         (g)  If necessary, a ladder or steps shall be used to enter
660-20   and exit the passenger compartment.  The maximum vertical spacing
660-21   of footholds may not exceed 12 inches and the lowest step may not
660-22   be more than 18 inches above the ground when the vehicle is empty.
660-23         (h)  The motor vehicle must include handholds or other
660-24   devices that will enable passengers to enter and exit the vehicle
660-25   without hazard.
660-26         (i)  The motor vehicle must have a way for passengers to
 661-1   communicate with the operator, including a telephone, speaker tube,
 661-2   buzzer, pull cord, or other mechanical or electrical device.
 661-3         Sec. 647.014.  PASSENGER SEATING.  One seat must be provided
 661-4   for each passenger.  Passengers shall remain seated while the
 661-5   vehicle is in motion.
 661-6         Sec. 647.015.  PASSENGER SEATING REQUIREMENTS FOR CERTAIN
 661-7   TRIPS.  (a)  A motor vehicle transporting migrant agricultural
 661-8   workers for a total distance of 100 miles or more must have a
 661-9   passenger compartment in accordance with this section.
661-10         (b)  Each passenger seat must:
661-11               (1)  be securely attached to the vehicle during use;
661-12               (2)  be not less than 16 or more than 19 inches above
661-13   the floor;
661-14               (3)  be at least 13 inches deep;
661-15               (4)  be equipped with backrests that extend at least 36
661-16   inches above the floor;
661-17               (5)  have at least 24 inches of space between the
661-18   backrests or the edges of the opposite seats when positioned face
661-19   to face;
661-20               (6)  provide at least 18 inches of seat area for each
661-21   passenger;
661-22               (7)  not have any cracks that are more than one-fourth
661-23   inch wide;
661-24               (8)  not have any cracks in the backrests, if slatted,
661-25   that are more than two inches wide; and
661-26               (9)  have any exposed wood surfaces planed or sanded
 662-1   smooth and free of splinters.
 662-2         Sec. 647.016.  PASSENGER PROTECTION FROM WEATHER.  (a)  If
 662-3   necessary to protect passengers from inclement weather, including
 662-4   rain, snow, or sleet, the passenger compartment must be equipped
 662-5   with a top that is at least 80 inches above the floor and with a
 662-6   means of closing the sides and ends.  A tarpaulin or other
 662-7   removable protective device may be used if secured in place.
 662-8         (b)  The motor vehicle must have a safe method of protecting
 662-9   the passengers from cold or undue exposure.  A motor vehicle may
662-10   not have a heater that:
662-11               (1)  conducts engine exhaust gases or engine
662-12   compartment air into or through a space occupied by an individual;
662-13               (2)  uses a flame that is not completely enclosed;
662-14               (3)  might spill or leak fuel if the vehicle is tilted
662-15   or overturned;
662-16               (4)  uses heated or unheated air that comes from or
662-17   through the engine compartment or from direct contact with any part
662-18   of the exhaust system unless the heater ducts prevent contamination
662-19   of the air from the exhaust or engine compartment gases; or
662-20               (5)  is not securely fastened to the motor vehicle.
662-21         Sec. 647.017.  OPERATIONAL REQUIREMENTS.  (a)  A person may
662-22   not operate a motor vehicle transporting migrant agricultural
662-23   workers that is loaded or that has a load that is distributed or
662-24   secured in a manner that prevents the vehicle's safe operation.
662-25         (b)  A person may not operate a motor vehicle if:
662-26               (1)  a tailgate, tailboard, tarpaulin, door, fastening
 663-1   device, or equipment or rigging is not securely in place;
 663-2               (2)  an object:
 663-3                     (A)  obscures the operator's view in any
 663-4   direction;
 663-5                     (B)  interferes with the free movement of the
 663-6   operator's arms or legs;
 663-7                     (C)  obstructs the operator's access to emergency
 663-8   accessories; or
 663-9                     (D)  obstructs a person's entrance or exit from
663-10   the cab or operator's compartment; or
663-11               (3)  property on the vehicle is stowed so that it:
663-12                     (A)  restricts the operator's freedom of motion
663-13   in properly operating the vehicle;
663-14                     (B)  obstructs a person's exit from the vehicle;
663-15   or
663-16                     (C)  does not provide adequate protection to
663-17   passengers and others from injury resulting from a falling or
663-18   displaced article.
663-19         (c)  An operator who leaves a motor vehicle unattended shall
663-20   securely set the parking brake, chock the wheels, and take all
663-21   reasonable precautions to prevent the vehicle from moving.
663-22         Sec. 647.018.  CERTIFICATE OF COMPLIANCE.  A carrier is
663-23   considered to be in compliance with this chapter if the carrier
663-24   holds a certificate of compliance with the United States Department
663-25   of Transportation regulations governing transportation of migrant
663-26   agricultural workers in interstate commerce.
 664-1         Sec. 647.019.  PENALTY.  (a)  A carrier who violates this
 664-2   chapter commits an offense.
 664-3         (b)  An offense under this section is a misdemeanor
 664-4   punishable by a fine of not less than $5 or more than $50.
 664-5         (b)  Chapter 421, Acts of the 61st Legislature, Regular
 664-6   Session, 1969 (Article 911g, Vernon's Texas Civil Statutes), is
 664-7   repealed.
 664-8         SECTION 17.35.  (a)  Subtitle F, Title 7, Transportation
 664-9   Code, is amended to codify Article 6675c-2, Revised Statutes, as
664-10   added by Section 4.11(a), Chapter 1171, Acts of the 75th
664-11   Legislature, Regular Session, 1997, by adding Chapter 648 to read
664-12   as follows:
664-13          CHAPTER 648.  FOREIGN COMMERCIAL MOTOR TRANSPORTATION
664-14                    SUBCHAPTER A.  GENERAL PROVISIONS
664-15         Sec. 648.001.  DEFINITIONS.  In this chapter:
664-16               (1)  "Border" means the border between this state and
664-17   the United Mexican States.
664-18               (2)  "Border commercial zone" means a commercial zone
664-19   established under 49 C.F.R. Part 372, Subpart B, any portion of
664-20   which is contiguous to the border in this state.
664-21               (3)  "Commercial motor vehicle" includes a foreign
664-22   commercial motor vehicle.
664-23               (4)  "Foreign commercial motor vehicle" means a
664-24   commercial motor vehicle, as defined by 49 C.F.R. Section 390.5,
664-25   that is owned or controlled by a person or entity that is domiciled
664-26   in or a citizen of a country other than the United States.
 665-1               (5)  "Motor carrier" includes a foreign motor carrier
 665-2   and a foreign motor private carrier, as defined in 49 U.S.C.
 665-3   Sections 13102(6) and (7).
 665-4         Sec. 648.002.  RULES.  In addition to rules required by this
 665-5   chapter, the Texas Department of Transportation, the Department of
 665-6   Public Safety, and the Texas Department of Insurance may adopt
 665-7   other rules to carry out this chapter.
 665-8         Sec. 648.003.  REFERENCE TO FEDERAL STATUTE OR REGULATION.  A
 665-9   reference in this chapter to a federal statute or regulation
665-10   includes any subsequent amendment or redesignation of the statute
665-11   or regulation.
665-12            (Sections 648.004-648.050 reserved for expansion
665-13                  SUBCHAPTER B.  BORDER COMMERCIAL ZONE
665-14         Sec. 648.051.  BORDER COMMERCIAL ZONE EXCLUSIVE; BOUNDARIES.
665-15   (a)  A law or agreement of less than statewide application that is
665-16   adopted by an agency or political subdivision of this state and
665-17   that regulates motor carriers or commercial motor vehicles or the
665-18   operation of those carriers or vehicles in the transportation of
665-19   cargo across the border or within an area adjacent to the border by
665-20   foreign commercial motor vehicles has no effect unless the law or
665-21   agreement applies uniformly to an entire border commercial zone and
665-22   only in a border commercial zone.
665-23         (b)  This subchapter supersedes that portion of any paired
665-24   city, paired state, or similar understanding governing foreign
665-25   commercial motor vehicles or motor carriers entered into under
665-26   Section 502.054 or any other law.
 666-1         Sec. 648.052.  MODIFICATION OF ZONE BOUNDARIES.  The
 666-2   boundaries of a border commercial zone may be modified or
 666-3   established only as provided by federal law.
 666-4            (Sections 648.053-648.100 reserved for expansion
 666-5            SUBCHAPTER C.  REGULATION OF OPERATION OF FOREIGN
 666-6                        COMMERCIAL MOTOR VEHICLES
 666-7         Sec. 648.101.  REGISTRATION EXEMPTION IN BORDER COMMERCIAL
 666-8   ZONE.  (a)  A foreign commercial motor vehicle is exempt from
 666-9   Chapter 502 and any other law of this state requiring the vehicle
666-10   to be registered in this state, including a law providing for a
666-11   temporary registration permit, if:
666-12               (1)  the vehicle is engaged solely in transportation of
666-13   cargo across the border into or from a border commercial zone;
666-14               (2)  for each load of cargo transported the vehicle
666-15   remains in this state:
666-16                     (A)  not more than 24 hours; or
666-17                     (B)  not more than 48 hours, if:
666-18                           (i)  the vehicle is unable to leave this
666-19   state within 24 hours  because of circumstances beyond the control
666-20   of the motor carrier operating the vehicle; and
666-21                           (ii)  all financial responsibility
666-22   requirements applying to the vehicle are satisfied;
666-23               (3)  the vehicle is registered and licensed as required
666-24   by the law of another state or country as evidenced by a valid
666-25   metal license plate attached to the front or rear of the exterior
666-26   of the vehicle; and
 667-1               (4)  the country in which the person that owns or
 667-2   controls the vehicle is domiciled or is a citizen provides a
 667-3   reciprocal exemption for commercial motor vehicles owned or
 667-4   controlled by residents of this state.
 667-5         (b)  A foreign commercial motor vehicle operating under the
 667-6   exemption provided by this section and the vehicle's driver may be
 667-7   considered unregistered if the vehicle is operated in this state
 667-8   outside a border commercial zone or in violation of United States
 667-9   law.
667-10         Sec. 648.102.  FINANCIAL RESPONSIBILITY.  (a)  The Texas
667-11   Department of Transportation shall adopt rules that conform with 49
667-12   C.F.R. Part 387 requiring motor carriers operating foreign
667-13   commercial motor vehicles in this state to maintain financial
667-14   responsibility.
667-15         (b)  This chapter prevails over any other requirement of
667-16   state law relating to financial responsibility for operation of
667-17   foreign commercial motor vehicles in this state.
667-18         Sec. 648.103.  DOMESTIC TRANSPORTATION.  A foreign motor
667-19   carrier or foreign motor private carrier may not transport persons
667-20   or cargo in intrastate commerce in this state unless the carrier is
667-21   authorized to conduct operations in interstate and foreign commerce
667-22   domestically between points in the United States under federal law
667-23   or international agreement.
667-24         (b)  Article 6675c-2, Revised Statutes, as added by Section
667-25   4.11(a), Chapter 1171, Acts of the 75th Legislature, Regular
667-26   Session, 1997, is repealed.
 668-1         SECTION 17.36.  Sections 661.003(d)-(g), Transportation Code,
 668-2   are amended to conform those sections to the definition of
 668-3   "department" provided by Section 661.001, Transportation Code, to
 668-4   read as follows:
 668-5         (d)  The department [Department of Public Safety] shall issue
 668-6   a sticker to a person who:
 668-7               (1)  applies to the department on a form provided by
 668-8   the department;
 668-9               (2)  provides the department with evidence satisfactory
668-10   to the department showing that the person:
668-11                     (A)  is the owner of a motorcycle that is
668-12   currently registered in this state; and
668-13                     (B)  has successfully completed the training and
668-14   safety course described by Subsection (c) or has the insurance
668-15   coverage described by that subsection; and
668-16               (3)  pays a fee of $5 for the sticker.
668-17         (e)  A person may apply to the department [Department of
668-18   Public Safety] for a sticker for each motorcycle owned by the
668-19   applicant.
668-20         (f)  A sticker issued by the department [Department of Public
668-21   Safety] under Subsection (d) expires on the third anniversary of
668-22   the date of issuance.
668-23         (g)  A person operating or riding as a passenger on a
668-24   motorcycle that displays on the license plate of the motorcycle or
668-25   the license plate mounting bracket a sticker issued by the
668-26   department [Department of Public Safety] under Subsection (d) is
 669-1   presumed to have successfully completed the training and safety
 669-2   course described by Subsection (c) or to have the insurance
 669-3   coverage described by that subsection.
 669-4         SECTION 17.37.  (a)  Section 706.001, Transportation Code, is
 669-5   amended to conform to Section 1, Chapter 457, Acts of the 75th
 669-6   Legislature, Regular Session, 1997, to read as follows:
 669-7         Sec. 706.001.  DEFINITIONS.  In this chapter:
 669-8               (1)  "Complaint" means a notice of an offense as
 669-9   described by Article 27.14(d) or 45.01, Code of Criminal Procedure.
669-10               (2)  "Department" means the Department of Public
669-11   Safety.
669-12               (3)  "Driver's license" has the meaning assigned by
669-13   Section 521.001.
669-14               (4)  "Highway or street" has the meaning assigned by
669-15   Section 541.302.
669-16               (5)  "Motor vehicle" has the meaning assigned by
669-17   Section 541.201.
669-18               (6)  "Operator" has the meaning assigned by Section
669-19   541.001.
669-20               (7)  "Political subdivision" means a municipality or
669-21   county.
669-22               (8)  "Public place" has the meaning assigned by Section
669-23   1.07, Penal Code.
669-24               (9) [(5)]  "Traffic law" means a statute or ordinance,
669-25   a violation of which is a misdemeanor punishable by a fine in an
669-26   amount not to exceed $1,000, that [regulates]:
 670-1                     (A)  regulates an operator's conduct or condition
 670-2   while operating a motor vehicle on a highway or street or in a
 670-3   public place [highway]; [or]
 670-4                     (B)  regulates the condition of a motor vehicle
 670-5   while it is being operated on a highway or street;
 670-6                     (C)  relates to the driver's license status of an
 670-7   operator while operating a motor vehicle on a highway or street; or
 670-8                     (D)  relates to the registration status of a
 670-9   motor vehicle while it is being operated on a highway or street [or
670-10   highway].
670-11         (b)  Section 706.002(a), Transportation Code, is amended to
670-12   conform to Section 2, Chapter 457, Acts of the 75th Legislature,
670-13   Regular Session, 1997, to read as follows:
670-14         (a)  A political subdivision may contract with the department
670-15   to provide information necessary for the department to deny renewal
670-16   of the driver's license of a person who fails to appear for a
670-17   complaint, citation, or court order to pay a fine involving:
670-18               (1)  a violation of a traffic law;
670-19               (2)  an offense under Section 543.009(b) or 543.107(b);
670-20   or
670-21               (3)  an offense under Section 38.10, Penal Code, if the
670-22   underlying offense is a traffic offense.
670-23         (c)  Sections 706.004 and 706.005, Transportation Code, are
670-24   amended to conform to Section 3, Chapter 457, Acts of the 75th
670-25   Legislature, Regular Session, 1997, to read as follows:
670-26         Sec. 706.004.  DENIAL OF RENEWAL OF DRIVER'S LICENSE.
 671-1   (a)  If a political subdivision has contracted with the department,
 671-2   on receiving the necessary information from the political
 671-3   subdivision the department may deny renewal of the person's
 671-4   driver's license for failure to appear based on a complaint,
 671-5   citation, or court order to pay a fine involving a violation of a
 671-6   traffic law or an offense described by Section 706.002(a)(2) or
 671-7   (3).
 671-8         (b)  The information must include:
 671-9               (1)  the name, date of birth, and driver's license
671-10   number of the person;
671-11               (2)  the nature and date of the alleged violation;
671-12               (3)  a statement that the person failed to appear as
671-13   required by law for a traffic violation or an offense described by
671-14   Section 706.002(a)(2)  or (3); and
671-15               (4)  any other information required by the department.
671-16         Sec. 706.005.  NOTICE TO DEPARTMENT.  A political subdivision
671-17   shall notify the department that there is no cause to continue to
671-18   deny renewal of a person's driver's license based on the person's
671-19   previous failure to appear for a traffic violation or an offense
671-20   described by Section 706.002(a)(2) or (3), on payment of a fee as
671-21   provided by Section 706.006 and:
671-22               (1)  the entry of a judgment against the person;
671-23               (2)  the perfection of an appeal of the case for which
671-24   the warrant of arrest was issued;
671-25               (3)  the dismissal of the charge for which the warrant
671-26   of arrest was issued;
 672-1               (4)  the acquittal of the charge on which the person
 672-2   failed to appear;
 672-3               (5)  the posting of bond or the giving of other
 672-4   security to reinstate the charge for which the warrant was issued;
 672-5   or
 672-6               (6)  the payment of the fine owed on an outstanding
 672-7   court order to pay a fine.
 672-8         (d)  Section 706.006(a), Transportation Code, is amended to
 672-9   conform to Section 3, Chapter 457, Acts of the 75th Legislature,
672-10   Regular Session, 1997, to read as follows:
672-11         (a)  Unless a person has been acquitted of the [traffic]
672-12   offense for which the person failed to appear for a complaint,
672-13   citation, or court order to pay a fine involving a violation of a
672-14   traffic law or an offense described by Section 706.002(a)(2) or
672-15   (3), the political subdivision shall require the person to pay an
672-16   administrative fee of $30 for each violation for which the person
672-17   failed to appear.
672-18         (e)  Sections 1-3, Chapter 457, Acts of the 75th Legislature,
672-19   Regular Session, 1997, are repealed.
672-20         SECTION 17.38.  Section 721.005(b), Transportation Code, as
672-21   amended by Chapters 46 and 355, Acts of the 75th Legislature,
672-22   Regular Session, 1997, is amended to properly letter paragraphs to
672-23   read as follows:
672-24         (b)  The commissioners court of a county may exempt from the
672-25   requirements of Section 721.004:
672-26               (1)  an automobile when used to perform an official
 673-1   duty by a:
 673-2                     (A)  police department;
 673-3                     (B)  sheriff's office;
 673-4                     (C)  constable's office;
 673-5                     (D)  criminal district attorney's office;
 673-6                     (E)  district attorney's office;
 673-7                     (F)  county attorney's office;
 673-8                     (G)  magistrate as defined by Article 2.09, Code
 673-9   of Criminal Procedure; [or]
673-10                     (H)  county fire marshal's office; or
673-11                     (I) [(H)]  medical examiner; or
673-12               (2)  a juvenile probation department vehicle used to
673-13   transport children, when used to perform an official duty.
673-14             ARTICLE 18.  CHANGES RELATING TO UTILITIES CODE
673-15         SECTION 18.01.  (a)  Subchapter B, Chapter 14,  Utilities
673-16   Code, is amended to conform to Section 26, Chapter 1206, Acts of
673-17   the 75th Legislature, Regular Session, 1997, by adding Section
673-18   14.058 to read as follows:
673-19         Sec. 14.058.  FEES FOR ELECTRONIC ACCESS TO INFORMATION.  The
673-20   fees charged by the commission for electronic access to information
673-21   that is stored in the system established by the commission using
673-22   funds from the Texas Public Finance Authority and approved by the
673-23   Department of Information Resources shall be established:
673-24               (1)  by the commission in consultation with the General
673-25   Services Commission; and
673-26               (2)  in an amount reasonable and necessary to retire
 674-1   the debt to the Texas Public Finance Authority associated with
 674-2   establishing the electronic access system.
 674-3         (b)  Section 26, Chapter 1206, Acts of the 75th Legislature,
 674-4   Regular Session, 1997, is repealed.
 674-5         SECTION 18.02.  (a)  Section 36.302, Utilities Code, is
 674-6   amended to conform to Section 1, Chapter 1433, Acts of the 75th
 674-7   Legislature, Regular Session, 1997, by adding Subsection (c) to
 674-8   read as follows:
 674-9         (c)  Notwithstanding Subsection (a), the electric cooperative
674-10   may not be required to prepare or make available a cost-of-service
674-11   study if the rate change is uncontested and the commission
674-12   determines that a cost-of-service study is unnecessary.  The
674-13   commission shall make any determination of necessity without a
674-14   hearing.
674-15         (b)  Section 1, Chapter 1433, Acts of the 75th Legislature,
674-16   Regular Session, 1997, is repealed.
674-17         SECTION 18.03.  Section 36.306(b), Utilities Code, is amended
674-18   to more closely conform to the law from which that subsection was
674-19   derived, to read  as follows:
674-20         (b)  The standards described in Sections 36.007(a)-(c)
674-21   [Section 36.007] apply to the review of rates adopted under
674-22   Subsection (a).  In a review of the rates, the electric
674-23   cooperative's marginal cost shall be the lowest marginal cost of
674-24   any of the cooperative's wholesale power suppliers.
674-25         SECTION 18.04.  (a)  Section 52.102, Utilities Code, is
674-26   amended to conform to Section 2, Chapter 919, Acts of the 75th
 675-1   Legislature, Regular Session, 1997, to read as follows:
 675-2         Sec. 52.102.  LIMITED REGULATORY AUTHORITY.  Except as
 675-3   otherwise provided by this subchapter, Subchapters D and K [and
 675-4   Subchapter D], Chapter 55, and Section 55.011, the commission has
 675-5   only the following jurisdiction over a telecommunications utility
 675-6   subject to this subchapter:
 675-7               (1)  to require registration under Section 52.103;
 675-8               (2)  to conduct an investigation under Section 52.104;
 675-9               (3)  to require the filing of reports as the commission
675-10   periodically directs;
675-11               (4)  to require the maintenance of statewide average
675-12   rates or prices of telecommunications service;
675-13               (5)  to require access to telecommunications service
675-14   under Section 52.105; and
675-15               (6)  to require the quality of telecommunications
675-16   service provided to be adequate under Section 52.106.
675-17         (b)  Subchapter A, Chapter 55, Utilities Code, is amended to
675-18   conform to Section 1, Chapter 919, Acts of the 75th Legislature,
675-19   Regular Session, 1997, by adding Section 55.011 to read as follows:
675-20         Sec. 55.011.  NOTICE OF IDENTITY OF INTEREXCHANGE CARRIER.
675-21   (a)  A local exchange company shall print on the first page of each
675-22   bill sent to a customer of the local exchange company the name of
675-23   the customer's primary interexchange carrier if the company
675-24   provides billing services for that carrier.
675-25         (b)  The bill must contain instructions on how the customer
675-26   can contact the commission if the customer believes that the named
 676-1   carrier is not the customer's primary interexchange carrier.
 676-2         (c)  The commission may, for good cause, waive the billing
 676-3   requirement prescribed by this section in exchanges served by local
 676-4   exchange companies serving not more than 31,000 access lines.
 676-5         (c)  Chapter 55, Utilities Code, is amended to conform to
 676-6   Section 1, Chapter 919, Acts of the 75th Legislature, Regular
 676-7   Session, 1997, by adding Subchapter K to read as follows:
 676-8        SUBCHAPTER K.  SELECTION OF TELECOMMUNICATIONS UTILITIES
 676-9         Sec. 55.301.  STATE POLICY.  It is the policy of this state
676-10   to ensure that all customers are protected from the unauthorized
676-11   switching of a telecommunications utility selected by the customer
676-12   to provide telecommunications service.
676-13         Sec. 55.302.  COMMISSION RULES.  (a)  The commission shall
676-14   adopt nondiscriminatory and competitively neutral rules to
676-15   implement this subchapter, including rules that:
676-16               (1)  ensure that customers are protected from deceptive
676-17   practices in the obtaining of authorizations and verifications
676-18   required by this subchapter;
676-19               (2)  are applicable to all local exchange telephone
676-20   services, interexchange telecommunications service, and other
676-21   telecommunications service provided by telecommunications utilities
676-22   in this state;
676-23               (3)  are consistent with the rules and regulations
676-24   prescribed by the Federal Communications Commission for the
676-25   selection of telecommunications utilities;
676-26               (4)  permit telecommunications utilities to select any
 677-1   method of verification of a carrier-initiated change order
 677-2   authorized by Section 55.303;
 677-3               (5)  require telecommunications utilities to maintain
 677-4   records relating to a customer-initiated change in accordance with
 677-5   Section 55.304;
 677-6               (6)  require the reversal of  certain changes in the
 677-7   selection of a customer's telecommunications utility in accordance
 677-8   with Section 55.305(a);
 677-9               (7)  prescribe, in accordance with Section 55.305(b),
677-10   the duties of a telecommunications utility that initiates an
677-11   unauthorized customer change; and
677-12               (8)  provide for corrective action and the imposition
677-13   of penalties in accordance with Sections 55.306 and 55.307.
677-14         (b)  The commission is granted all necessary jurisdiction to
677-15   adopt rules required by this subchapter and to enforce those rules
677-16   and this subchapter.
677-17         (c)  The commission may notify customers of their rights
677-18   under the rules.
677-19         Sec. 55.303.  VERIFICATION OF CARRIER-INITIATED CHANGE.
677-20   (a)  A telecommunications utility may verify a carrier-initiated
677-21   change order by:
677-22               (1)  obtaining written authorization from the customer;
677-23               (2)  obtaining a toll-free electronic authorization
677-24   placed from the telephone number that is the subject of the change
677-25   order; or
677-26               (3)  an oral authorization obtained by an independent
 678-1   third party.
 678-2         (b)  In addition to the methods provided by Subsection (a), a
 678-3   telecommunications utility may verify a carrier-initiated change
 678-4   order by mailing to the customer an information package that is
 678-5   consistent with the requirements of 47 C.F.R. Section 64.1100(d)
 678-6   and that contains a postage-prepaid postcard or mailer.  The change
 678-7   is considered verified if the telecommunications utility does not
 678-8   receive a cancellation of the change order from the customer within
 678-9   14 days after the date of the mailing.
678-10         Sec. 55.304.  CUSTOMER-INITIATED CHANGE.  (a)  A
678-11   telecommunications utility to whom a customer has changed its
678-12   service on the initiative of the customer shall maintain a record
678-13   of nonpublic customer-specific information that could be used to
678-14   establish that the customer authorized the change.
678-15         (b)  Notwithstanding Subsection (a), if the Federal
678-16   Communications Commission requires verification, the
678-17   telecommunications utility shall use the verification methods
678-18   required by the Federal Communications Commission.
678-19         Sec. 55.305.  UNAUTHORIZED CHANGE.  (a)  If a change in the
678-20   selection of a customer's telecommunications utility is not made or
678-21   verified in accordance with this subchapter, the change, on request
678-22   by the customer, shall be reversed within a period established by
678-23   commission ruling.
678-24         (b)  A telecommunications utility that initiates an
678-25   unauthorized customer change shall:
678-26               (1)  pay all usual and customary charges associated
 679-1   with returning the customer to its original telecommunications
 679-2   utility;
 679-3               (2)  pay the telecommunications utility from which the
 679-4   customer was changed any amount paid by the customer that would
 679-5   have been paid to that telecommunications utility if the
 679-6   unauthorized change had not been made;
 679-7               (3)  return to the customer any amount paid by the
 679-8   customer that exceeds the charges that would have been imposed for
 679-9   identical services by the telecommunications utility from which the
679-10   customer was changed if the unauthorized change had not been made;
679-11   and
679-12               (4)  provide to the original telecommunications utility
679-13   from which the customer was changed all billing records to enable
679-14   that telecommunications utility to comply with this subchapter.
679-15         (c)  The telecommunications utility from which the customer
679-16   was changed shall provide to the customer all benefits associated
679-17   with the service on receipt of payment for service provided during
679-18   the unauthorized change.
679-19         Sec. 55.306.  CORRECTIVE ACTION AND PENALTIES.  (a)  If the
679-20   commission finds that a telecommunications utility has repeatedly
679-21   violated the commission's telecommunications utility selection
679-22   rules, the commission shall order the utility to take corrective
679-23   action as necessary.  In addition, the utility may be subject to
679-24   administrative penalties under Sections 15.023-15.027.
679-25         (b)  An administrative penalty collected under this section
679-26   shall be used to enforce this subchapter.
 680-1         Sec. 55.307.  REPEATED AND RECKLESS VIOLATION.  If the
 680-2   commission finds that a telecommunications utility has repeatedly
 680-3   and recklessly violated the commission's telecommunications utility
 680-4   selection rules, the commission may, if consistent with the public
 680-5   interest, suspend, restrict, or revoke the registration or
 680-6   certificate of the telecommunications utility and, by taking that
 680-7   action, deny the telecommunications utility the right to provide
 680-8   service in this state.
 680-9         (d)  Sections 1 and 2, Chapter 919, Acts of the 75th
680-10   Legislature, Regular Session, 1997, are repealed.
680-11         SECTION 18.05.  (a)  Section 55.103, Utilities Code, is
680-12   amended to conform to Section 1, Chapter 1402, Acts of the 75th
680-13   Legislature, Regular Session, 1997, and to more closely conform to
680-14   the law from which that section was derived, to read as follows:
680-15         Sec. 55.103.  PROVISION OF SERVICE.  (a)  A
680-16   telecommunications utility [or commercial mobile service provider]
680-17   may offer caller identification services under this subchapter only
680-18   if the utility [or provider] obtains written authorization from the
680-19   commission.
680-20         (b)  A commercial mobile service provider may offer caller
680-21   identification services in accordance with Sections 55.104, 55.105,
680-22   55.106, 55.1065, and 55.107.
680-23         (b)  Section 55.105, Utilities Code, is amended to conform to
680-24   Section 1, Chapter 1402, Acts of the 75th Legislature, Regular
680-25   Session, 1997, to read as follows:
680-26         Sec. 55.105.  PER-CALL BLOCKING.  Except as provided by
 681-1   Section 55.1065, the [The] commission shall require that a provider
 681-2   of caller identification service offer free per-call blocking to
 681-3   each telephone subscriber in the specific area in which the service
 681-4   is offered.
 681-5         (c)  Section 55.106(a), Utilities Code, is amended to conform
 681-6   to Section  1, Chapter 1402, Acts of the 75th Legislature, Regular
 681-7   Session, 1997, to read as follows:
 681-8         (a)  Except as provided by Section 55.1065, the [The]
 681-9   commission shall require that a provider of caller identification
681-10   service offer free per-line blocking to a particular customer if
681-11   the commission receives from the customer written certification
681-12   that the customer has a compelling need for per-line blocking.
681-13         (d)  Subchapter E, Chapter 55, Utilities Code, is amended to
681-14   conform to Section 1, Chapter 1402, Acts of the 75th Legislature,
681-15   Regular Session, 1997, by adding Section 55.1065 to read as
681-16   follows:
681-17         Sec. 55.1065.  USE OF BLOCKING BY TELEPHONE SOLICITOR.
681-18   (a)  A telephone solicitor may not use any method, including
681-19   per-call blocking or per-line blocking, that prevents caller
681-20   identification information for the telephone solicitor's lines used
681-21   to make consumer telephone calls from being shown by a device
681-22   capable of displaying caller identification information.
681-23         (b)  The caller identification information displayed must
681-24   contain a telephone number at which the telephone solicitor may
681-25   receive telephone calls if the telephone solicitor leaves a message
681-26   on a telephone answering device or uses an automated dial
 682-1   announcing device that plays a recorded message when a connection
 682-2   is completed to a telephone number.
 682-3         (c)  A telephone solicitor who violates this section is
 682-4   subject to an administrative penalty in an amount not to exceed
 682-5   $1,000 for each day or portion of a day on which the person uses a
 682-6   method prohibited by this section.  Section 55.137 applies to the
 682-7   imposition of a penalty under this section.
 682-8         (d)  In this section, "telephone solicitor" and "consumer
 682-9   telephone call" have the meanings assigned by Section 37.01,
682-10   Business & Commerce Code.
682-11         (e)  Section 55.107, Utilities Code, is amended to conform to
682-12   Section 1, Chapter 1402, Acts of the 75th Legislature, Regular
682-13   Session, 1997, to read as follows:
682-14         Sec. 55.107.  LIMITATION ON COMMISSION AUTHORITY.  The
682-15   commission may prescribe in relation to blocking only a requirement
682-16   authorized by Sections 55.105, [and] 55.106, and 55.1065.
682-17         (f)  Section 55.128, Utilities Code, is amended to conform to
682-18   Section 2, Chapter 1402, Acts of the 75th Legislature, Regular
682-19   Session, 1997, to read as follows:
682-20         Sec. 55.128.  DURATION OF RECORDED MESSAGE.  A person may not
682-21   use an automated dial announcing device to make for solicitation
682-22   purposes a telephone call in which the device plays a recorded
682-23   message when the connection is completed unless:
682-24               (1)  the recorded message is shorter than 30 seconds
682-25   [one minute]; or
682-26               (2)  the device has the technical capacity to:
 683-1                     (A)  recognize a telephone answering device on
 683-2   the called person's line; and
 683-3                     (B)  terminate the call within 30 seconds [one
 683-4   minute].
 683-5         (g)  Section 55.137, Utilities Code, is amended to conform to
 683-6   Section 3, Chapter 1402, Acts of the 75th Legislature, Regular
 683-7   Session, 1997, by adding Subsection (f) to read as follows:
 683-8         (f)  The proceeds of administrative penalties collected under
 683-9   this section shall be deposited to the credit of the commission.
683-10   The commission shall use the proceeds to enforce this subchapter.
683-11         (h)  Subchapter G, Chapter 55, Utilities Code, is amended to
683-12   conform to Section 4, Chapter 1402, Acts of the 75th Legislature,
683-13   Regular Session, 1997, by adding Section 55.153 to read as follows:
683-14         Sec. 55.153.  EDUCATIONAL PROGRAM.  (a)  In addition to the
683-15   notice required by Section 55.152, the commission shall conduct an
683-16   educational program designed to inform the public of their rights
683-17   under Section 55.151  and Section 37.02, Business & Commerce Code.
683-18         (b)  The educational program shall be directed to all
683-19   residential telephone subscribers and shall be conducted at least
683-20   annually if funds are available.
683-21         (i)  Sections 1-4, Chapter 1402, Acts of the 75th
683-22   Legislature, Regular Session, 1997, are repealed.
683-23         SECTION 18.06.  (a)  Section 55.203, Utilities Code, is
683-24   amended to conform to Section 2, Chapter 1186, Acts of the 75th
683-25   Legislature, Regular Session, 1997, to read as follows:
683-26         Sec. 55.203.  DIRECTORY PUBLISHED BY PRIVATE PUBLISHER.
 684-1   (a)  A private for-profit publisher of a residential telephone
 684-2   directory that is distributed to the public at minimal or no cost
 684-3   shall include in the directory a listing of any toll-free and local
 684-4   telephone numbers of:
 684-5               (1)  state agencies;
 684-6               (2)  state public services; and
 684-7               (3)  each state elected official who represents all or
 684-8   part of the geographical area for which the directory contains
 684-9   listings.
684-10         (b)  The listing required by this section[:]
684-11               [(1)]  must be:
684-12               (1) [(A)]  clearly identified; and
684-13               (2) [(B)]  located or clearly referenced at the front
684-14   of the directory before the main listing of residential and
684-15   business telephone numbers[; and]
684-16               [(2)  is not required to exceed a length equivalent to
684-17   two 8-1/2-inch by 11-inch pages, single-spaced in eight-point
684-18   type].
684-19         (c)  The commission by rule may specify:
684-20               (1)  the format of the listing; and
684-21               (2)  criteria for inclusion of agencies, services, and
684-22   officials.
684-23         (d)  The commission's rules must require a publisher to list:
684-24               (1)  the telephone number for state government
684-25   information; and
684-26               (2)  telephone numbers alphabetically by:
 685-1                     (A)  the subject matter of agency programs; and
 685-2                     (B)  agency name.
 685-3         (e)  The commission, with the cooperation of other state
 685-4   agencies, shall:
 685-5               (1)  compile relevant information to ensure accuracy of
 685-6   information in the listing; and
 685-7               (2)  provide the information to a telecommunications
 685-8   utility or telephone directory publisher within a reasonable time
 685-9   after a request by the utility or publisher.
685-10         (f)  The General Services Commission shall cooperate with the
685-11   commission and with publishers to ensure that the subject matter
685-12   listing of programs and telephone numbers in the telephone
685-13   directories are consistent with the categorization developed by the
685-14   Records Management Interagency Coordinating Council under Section
685-15   441.053, Government Code.
685-16         (b)  Section 2, Chapter 1186, Acts of the 75th Legislature,
685-17   Regular Session, 1997, is repealed.
685-18         SECTION 18.07.  (a)  Section 55.252(a), Utilities Code, is
685-19   amended to conform to Section 12.21, Chapter 165, Acts of the 75th
685-20   Legislature, Regular Session, 1997, to read as follows:
685-21         (a)  This section applies only to a telecommunications
685-22   utility that transports or provides an intrastate 900 service that
685-23   is:
685-24               (1)  covered by a contract authorized by Chapter 76 or
685-25   508, Government Code[, or Section 28, Article 42.18, Code of
685-26   Criminal Procedure]; and
 686-1               (2)  used by a defendant under the supervision of a
 686-2   community supervision and corrections department or the pardons and
 686-3   paroles division of the Texas Department of Criminal Justice to:
 686-4                     (A)  pay a fee or cost; or
 686-5                     (B)  comply with telephone reporting
 686-6   requirements.
 686-7         (b)  Section 12.21, Chapter 165, Acts of the 75th
 686-8   Legislature, Regular Session, 1997, is repealed.
 686-9         SECTION 18.08.  (a)  Section 56.021, Utilities Code, is
686-10   amended to conform to Section 4, Chapter 149, Acts of the 75th
686-11   Legislature, Regular Session, 1997, to read as follows:
686-12         Sec. 56.021.  UNIVERSAL SERVICE FUND ESTABLISHED.  The
686-13   commission shall adopt and enforce rules requiring local exchange
686-14   companies to establish a universal service fund to:
686-15               (1)  assist local exchange companies in providing basic
686-16   local telecommunications service at reasonable rates in high cost
686-17   rural areas;
686-18               (2)  reimburse local exchange companies for revenue
686-19   lost by providing tel-assistance service under Subchapter C;
686-20               (3)  reimburse the telecommunications carrier that
686-21   provides the statewide telecommunications relay access service
686-22   under Subchapter D; [and]
686-23               (4)  finance the specialized telecommunications device
686-24   assistance program established under Subchapter E; and
686-25               (5)  reimburse the department, the Texas Commission for
686-26   the Deaf and Hard of Hearing, and the commission for costs incurred
 687-1   in implementing this chapter and Chapter 57.
 687-2         (b)  Section 56.110(a), Utilities Code, is amended to conform
 687-3   to Section 3, Chapter 149, Acts of the 75th Legislature, Regular
 687-4   Session, 1997, to read as follows:
 687-5         (a)  An advisory committee to assist the commission in
 687-6   administering this subchapter is composed of the following persons
 687-7   appointed by the commission:
 687-8               (1)  one [two] deaf person [persons] recommended by the
 687-9   Texas Deaf Caucus;
687-10               (2)  one deaf person recommended by the Texas
687-11   Association of the Deaf;
687-12               (3) [(2)]  one person with a hearing impairment
687-13   recommended by Self-Help for the Hard of Hearing;
687-14               (4) [(3)]  one person with a hearing impairment
687-15   recommended by the American Association of Retired Persons;
687-16               (5) [(4)]  one deaf and blind person recommended by the
687-17   Texas Deaf/Blind Association;
687-18               (6) [(5)]  one person with a speech impairment and one
687-19   person with a speech and hearing impairment recommended by the
687-20   Coalition of Texans with Disabilities;
687-21               (7) [(6)]  two representatives of telecommunications
687-22   utilities, one representing a nonlocal exchange utility and one
687-23   representing a local exchange company, chosen from a list of
687-24   candidates provided by the Texas Telephone Association;
687-25               (8) [(7)]  two persons, at least one of whom is deaf,
687-26   with experience in providing relay services recommended by the
 688-1   Texas Commission for the Deaf and Hard of Hearing; and
 688-2               (9) [(8)]  two public members recommended by
 688-3   organizations representing consumers of telecommunications
 688-4   services.
 688-5         (c)  Section 56.111, Utilities Code, is amended to  conform
 688-6   to Section 3, Chapter 149, Acts of the 75th Legislature, Regular
 688-7   Session, 1997, to read as follows:
 688-8         Sec. 56.111.  ADVISORY COMMITTEE DUTIES.  The advisory
 688-9   committee shall:
688-10               (1)  monitor the establishment, administration, and
688-11   promotion of the statewide telecommunications relay access service;
688-12   [and]
688-13               (2)  advise the commission in pursuing a service that
688-14   meets the needs of persons with an impairment of hearing or speech
688-15   in communicating with other telecommunications services users; and
688-16               (3)  advise the commission and the Texas Commission for
688-17   the Deaf and Hard of Hearing, at the request of either commission,
688-18   regarding any issue related to the specialized telecommunications
688-19   device assistance program established under Subchapter E,
688-20   including:
688-21                     (A)  devices suitable to meet the needs of the
688-22   hearing-impaired and speech-impaired in communicating with other
688-23   users of telecommunications services; and
688-24                     (B)  oversight and administration of the program.
688-25         (d)  Section 56.112(b), Utilities Code, is amended to
688-26   conform to Section 3, Chapter 149, Acts of the 75th Legislature,
 689-1   Regular Session, 1997, to read as follows:
 689-2         (b)  The [commission's] costs associated with the advisory
 689-3   committee shall be reimbursed from the universal service fund.
 689-4         (e)  Chapter 56, Utilities Code, is amended to conform to
 689-5   Section 1, Chapter 149, Acts of the 75th Legislature, Regular
 689-6   Session, 1997, by adding Subchapter E to read as follows:
 689-7          SUBCHAPTER E.  SPECIALIZED TELECOMMUNICATIONS DEVICE
 689-8                           ASSISTANCE PROGRAM
 689-9         Sec. 56.151.  SPECIALIZED TELECOMMUNICATIONS DEVICE
689-10   ASSISTANCE PROGRAM.  The commission and the Texas Commission for
689-11   the Deaf and Hard of Hearing by rule shall establish a program to
689-12   provide financial assistance to certain individuals who are deaf or
689-13   have an impairment of hearing or speech to enable the individuals
689-14   to purchase specialized equipment to provide telephone network
689-15   access that is functionally equivalent to that enjoyed by
689-16   individuals without an impairment of hearing or speech.
689-17         Sec. 56.152.  ELIGIBILITY.  The Texas Commission for the Deaf
689-18   and Hard of Hearing by rule shall prescribe eligibility standards
689-19   for deaf individuals and individuals who have an impairment of
689-20   hearing or speech to receive an assistance voucher under the
689-21   program.  To be eligible, an individual must be a resident of this
689-22   state who has access to a telephone line in the individual's home
689-23   or place of business.
689-24         Sec. 56.153.  VOUCHERS.  (a)  The Texas Commission for the
689-25   Deaf and Hard of Hearing shall determine a reasonable price for a
689-26   basic telecommunications device for the deaf (TDD or TTY) and
 690-1   distribute to each eligible applicant a voucher that guarantees
 690-2   payment of that amount to a distributor of new specialized
 690-3   telecommunications devices.
 690-4         (b)  A voucher must have the value printed on its face.  The
 690-5   individual exchanging a voucher for the purchase of a specialized
 690-6   telecommunications device is responsible for payment of the
 690-7   difference between the voucher's value and the price of the device.
 690-8         (c)  The commission and the Texas Commission for the Deaf and
 690-9   Hard of Hearing by rule shall provide that a distributor will
690-10   receive not more than the full price of a specialized
690-11   telecommunications device if the recipient of a voucher exchanges
690-12   the voucher for a device that the distributor sells for less than
690-13   the voucher's value.
690-14         (d)  An individual who has exchanged a voucher for a
690-15   specialized telecommunications device is not eligible to receive
690-16   another voucher before the seventh anniversary of the date the
690-17   individual exchanged the previously issued voucher.  An individual
690-18   is not eligible for a voucher if the Texas Commission for the Deaf
690-19   and Hard of Hearing has issued a voucher to another individual in
690-20   the individual's household for a device to serve the same telephone
690-21   line.
690-22         (e)  The Texas Commission for the Deaf and Hard of Hearing
690-23   shall:
690-24               (1)  process each application for a voucher to
690-25   determine eligibility of the applicant; and
690-26               (2)  give each eligible applicant a voucher on payment
 691-1   of a $35 fee.
 691-2         (f)  The Texas Commission for the Deaf and Hard of Hearing
 691-3   shall maintain a record regarding each individual who receives a
 691-4   voucher under the program.
 691-5         (g)  The Texas Commission for the Deaf and Hard of Hearing
 691-6   shall deposit money collected under the program to the credit of
 691-7   the universal service fund.
 691-8         Sec. 56.154.  COMMISSION DUTIES.  (a)  Not later than the
 691-9   45th day after the date the commission receives a voucher a
691-10   telecommunications device distributor presents for payment, the
691-11   commission shall pay to the distributor the lesser of the value of
691-12   a voucher properly exchanged for a specialized telecommunications
691-13   device or the full price of the device for which a voucher
691-14   recipient exchanges the voucher.  The payments must be made from
691-15   the universal service fund.
691-16         (b)  The commission may investigate whether the presentation
691-17   of a voucher for payment represents a valid transaction for a
691-18   telecommunications device under the program.  The Texas Commission
691-19   for the Deaf and Hard of Hearing shall cooperate with and assist
691-20   the commission in an investigation under this subsection.
691-21         Sec. 56.155.  RECOVERY OF SPECIALIZED TELECOMMUNICATIONS
691-22   DEVICE ASSISTANCE PROGRAM SURCHARGE.  (a)  The commission shall
691-23   allow a telecommunications utility to recover the universal service
691-24   fund assessment related to the specialized telecommunications
691-25   device assistance program through a surcharge added to the
691-26   utility's customers' bills.
 692-1         (b)  The commission shall specify how each utility must
 692-2   determine the amount of the surcharge and by rule shall prohibit a
 692-3   utility from recovering an aggregation of more than 12 months of
 692-4   assessments in a single surcharge.  The rules must require a
 692-5   utility to apply for approval of a surcharge before the 91st day
 692-6   after the date the period during which the aggregated surcharges
 692-7   were assessed closes.
 692-8         (c)  If a utility chooses to impose the surcharge, the
 692-9   utility shall include the surcharge in the "universal service fund
692-10   surcharge" listing as provided by Section 56.107.
692-11         (f)  Sections 1-4, Chapter 149, Acts of the 75th Legislature,
692-12   Regular Session, 1997, are repealed.
692-13         SECTION 18.09.  (a)  Section 57.042, Utilities Code, is
692-14   amended to conform to Section 1, Chapter 145, Acts of the 75th
692-15   Legislature, Regular Session, 1997, by amending Subdivision (8) and
692-16   adding Subdivisions (9) and (10) to read as follows:
692-17               (8)  "Public school" means a public elementary or
692-18   secondary school, including an open-enrollment charter school, a
692-19   home-rule school district school, and a school with a campus or
692-20   campus program charter.
692-21               (9)  "Taxable telecommunications receipts" means
692-22   taxable telecommunications receipts reported under Chapter 151, Tax
692-23   Code.
692-24               (10)  "Telemedicine":
692-25                     (A)  means medical services delivered by
692-26   telecommunications technologies to rural or underserved public
 693-1   not-for-profit health care facilities or primary health care
 693-2   facilities in collaboration with an academic health center and an
 693-3   associated teaching hospital or tertiary center; and
 693-4                     (B)  includes consultive services, diagnostic
 693-5   services, interactive video consultation, teleradiology,
 693-6   telepathology, and distance education for working health care
 693-7   professionals.
 693-8         (b)  Section 57.043, Utilities Code, is amended to conform to
 693-9   Section 2, Chapter 145, Acts of the 75th Legislature, Regular
693-10   Session, 1997, to read as follows:
693-11         Sec. 57.043.  TELECOMMUNICATIONS INFRASTRUCTURE FUND AND
693-12   ACCOUNTS.  (a)  The telecommunications infrastructure fund is
693-13   composed of the public schools [telecommunications utilities]
693-14   account and the qualifying entities [commercial mobile service
693-15   providers] account.
693-16         (b)  The public schools account and qualifying entities
693-17   account are [The telecommunications utilities account is] financed
693-18   by an annual assessment imposed as prescribed by Section 57.048 on
693-19   each telecommunications utility and commercial mobile service
693-20   provider doing business in this state.  [A telecommunications
693-21   utility shall pay the annual assessment according to the ratio that
693-22   the annual taxable telecommunications receipts reported by that
693-23   telecommunications utility under Chapter 151, Tax Code, bears to
693-24   the total annual taxable telecommunications receipts reported by
693-25   all telecommunications utilities under that chapter.]
693-26         (c)  [The commercial mobile service providers account is
 694-1   financed by an annual assessment on each commercial mobile service
 694-2   provider doing business in this state.  Each commercial mobile
 694-3   service provider shall pay the annual assessment according to the
 694-4   ratio that the annual taxable telecommunications receipts reported
 694-5   by that provider under Chapter 151, Tax Code, bears to the total
 694-6   annual taxable telecommunications receipts reported by all
 694-7   commercial mobile service providers under that chapter.]
 694-8         [(d)]  Money in the fund may be appropriated only for a use
 694-9   consistent with the purposes of this subchapter.
694-10         (c)  Section 57.045(d), Utilities Code, is amended to conform
694-11   to Section 2, Chapter 145, Acts of the 75th Legislature, Regular
694-12   Session, 1997, to read as follows:
694-13         (d)  The board may:
694-14               (1)  enter into contracts with state agencies or
694-15   private entities necessary to perform the board's duties;
694-16               (2)  adopt rules as necessary to administer this
694-17   subchapter;
694-18               (3)  employ personnel reasonably necessary to perform
694-19   duties delegated by the board;
694-20               (4) [(3)]  appoint one or more committees to assist the
694-21   board in performing the board's duties; and
694-22               (5) [(4)]  accept a gift or grant and use it for the
694-23   purposes of this subchapter.
694-24         (d)  Subchapter C, Chapter 57, Utilities Code, is amended to
694-25   conform to Section 2, Chapter 145, Acts of the 75th Legislature,
694-26   Regular Session, 1997, by adding Section 57.0455 to read as
 695-1   follows:
 695-2         Sec. 57.0455.  MASTER PLAN FOR INFRASTRUCTURE DEVELOPMENT.
 695-3   (a)  The board shall adopt a master plan for infrastructure
 695-4   development.  The plan must:
 695-5               (1)  cover a five-year period;
 695-6               (2)  be updated annually; and
 695-7               (3)  describe the project, timeline, and resource
 695-8   allocation targets for each year included in the plan.
 695-9         (b)  The board shall publish each proposed amendment to the
695-10   plan and each proposed annual update in the Texas Register in
695-11   accordance with Subchapter B, Chapter 2002, Government Code.
695-12         (e)  Section 57.046, Utilities Code, is amended to conform to
695-13   Section 2, Chapter 145, Acts of the 75th Legislature, Regular
695-14   Session, 1997, to read as follows:
695-15         Sec. 57.046.  USE OF ACCOUNTS.  (a)  The board shall use
695-16   money in the public schools [telecommunications utilities] account
695-17   to award grants and loans in accordance with this subchapter to
695-18   fund:
695-19               (1)  [purchases of] equipment for public schools,
695-20   including computers, printers, computer labs, and video equipment;
695-21   and
695-22               (2)  intracampus and intercampus wiring to enable those
695-23   public schools to use the equipment.
695-24         (b)  The board shall use money in the qualifying entities
695-25   [commercial mobile service providers] account for any purpose
695-26   authorized  by this subchapter, including:
 696-1               (1)  equipment [purchases];
 696-2               (2)  wiring;
 696-3               (3)  material;
 696-4               (4)  program development;
 696-5               (5)  training;
 696-6               (6)  installation costs; and
 696-7               (7)  a statewide telecommunications network.
 696-8         (f)  Section 57.047, Utilities Code, is amended to conform to
 696-9   Section 2, Chapter 145, Acts of the 75th Legislature, Regular
696-10   Session, 1997, by amending Subsection (e) and adding Subsection (f)
696-11   to read as follows:
696-12         (e)  If a board member is an employee of an entity that
696-13   applies for a grant or loan under this subchapter, the board
696-14   member, before a vote on the grant or loan, shall disclose the fact
696-15   of the member's employment.  The disclosure must be entered into
696-16   the minutes of the meeting.  The board member may not vote on or
696-17   otherwise participate in the awarding of the grant or loan.  If the
696-18   board member does not comply with this subsection, the entity is
696-19   not eligible for the grant or loan.
696-20         (f)  A grant or loan awarded under this section is subject to
696-21   the limitations prescribed by Section 57.046.
696-22         (g)  Subchapter C, Chapter 57, Utilities Code, is amended to
696-23   conform to Section 2, Chapter 145, Acts of the 75th Legislature,
696-24   Regular Session, 1997, by amending Section 57.048 and adding
696-25   Section 57.0485 to read as follows:
696-26         Sec. 57.048.  ASSESSMENTS AND COLLECTIONS.  (a)  An annual
 697-1   assessment is imposed on each telecommunications utility and each
 697-2   commercial mobile service provider doing business in this state.
 697-3         (b)  The assessment is imposed at the rate of 1.25 percent of
 697-4   the taxable telecommunications receipts of the telecommunications
 697-5   utility or commercial mobile service provider, subject to this
 697-6   section.
 697-7         (c)  The total amount deposited to the credit of the fund,
 697-8   excluding interest and loan repayments, may not exceed $1.5
 697-9   billion.  Not later than August 31 of each year, the comptroller
697-10   shall determine the total amount, excluding interest and loan
697-11   repayments, that has been deposited to the credit of the fund
697-12   during that fiscal year and the preceding fiscal years.  If the
697-13   comptroller determines that a total of $1.2 billion or more,
697-14   excluding interest and loan repayments, has been deposited to the
697-15   credit of the fund, the comptroller shall impose  the assessment
697-16   during the next fiscal year at a rate that the comptroller
697-17   estimates is sufficient to produce the amount necessary to result
697-18   in the deposit in the fund of a total of not more than $1.5
697-19   billion, excluding interest and loan repayments.
697-20         (d)  The comptroller may not collect the assessment during a
697-21   fiscal year if the comptroller determines after the yearly review
697-22   that the total amount deposited to the credit of the fund during
697-23   that fiscal year and the preceding fiscal years is $1.49 billion or
697-24   more, excluding interest and loan repayments, and it is not
697-25   possible to impose the assessment during the next fiscal year at a
697-26   practical rate without collecting more than a total of $1.5
 698-1   billion, excluding interest and loan repayments.
 698-2         (e)  [For each fiscal year beginning before September 1,
 698-3   2005, the comptroller shall assess and collect an annual total of
 698-4   $75 million from telecommunications utilities and an annual total
 698-5   of $75 million from commercial mobile service providers.]
 698-6         [(b)  The comptroller shall  assess and collect the money
 698-7   each year without respect to whether the money previously collected
 698-8   and deposited in either account has been disbursed or spent.]
 698-9         [(c)]  The comptroller may require a telecommunications
698-10   utility or commercial mobile service provider to provide any report
698-11   or information necessary to fulfill the comptroller's duties under
698-12   this section.  Information provided to the comptroller under this
698-13   section is confidential and exempt from disclosure under Chapter
698-14   552, Government Code.
698-15         Sec. 57.0485.  ACCOUNTS.  (a)  The comptroller shall deposit
698-16   50 percent of the money [(d) Money] collected by the comptroller
698-17   [from a telecommunications utility] under Section 57.048 [this
698-18   section shall be deposited] to the credit of the public schools
698-19   [telecommunications utilities] account in the fund.  The
698-20   comptroller shall deposit the remainder of the money collected by
698-21   the comptroller under Section 57.048 to the credit of the
698-22   qualifying entities account in the fund.
698-23         (b)  Interest earned on money in an account shall be
698-24   deposited to the credit of that account.
698-25         [(e)  Money collected by the comptroller from a commercial
698-26   mobile service provider under this section shall be deposited to
 699-1   the credit of the commercial mobile service providers account in
 699-2   the fund.]
 699-3         (h)  Sections 1 and 2, Chapter 145, Acts of the 75th
 699-4   Legislature, Regular Session, 1997, are repealed.
 699-5         SECTION 18.10.  (a)  Section 57.051, Utilities Code, is
 699-6   amended to conform to Section 3.02, Chapter 1169, Acts of the 75th
 699-7   Legislature, Regular Session, 1997, to read as follows:
 699-8         Sec. 57.051.  SUNSET PROVISION.  The Telecommunications
 699-9   Infrastructure Fund Board [board] is subject to Chapter 325,
699-10   Government Code (Texas Sunset Act).  Unless continued in existence
699-11   as provided by that chapter, the board is abolished and this
699-12   subchapter expires September 1, 2005 [2006].
699-13         (b)  Section 3.02, Chapter 1169, Acts of the 75th
699-14   Legislature, Regular Session, 1997, is repealed.
699-15         SECTION 18.11.  Section 58.024(c), Utilities Code, is amended
699-16   to correct a cross-reference to read as follows:
699-17         (c)  The commission may not reclassify a service until each
699-18   competitive safeguard prescribed by Subchapters B-H [B-G], Chapter
699-19   60, is fully implemented.
699-20         SECTION 18.12.  (a)  Sections 121.201(a) and (b), Utilities
699-21   Code, are amended to conform to Section 1, Chapter 950, Acts of the
699-22   75th Legislature, Regular Session, 1997, to read as follows:
699-23         (a)  The railroad commission by rule may:
699-24               (1)  adopt safety standards for the transportation of
699-25   gas and for gas pipeline facilities;
699-26               (2)  require record maintenance and reports;
 700-1               (3)  inspect records and facilities to determine
 700-2   compliance with adopted safety standards; [and]
 700-3               (4)  make certifications and reports;
 700-4               (5)  seek designation by the United States secretary of
 700-5   transportation as an agent to conduct safety inspections of
 700-6   interstate gas pipeline facilities located in this state; and
 700-7               (6)  take any other requisite action in accordance with
 700-8   49 U.S.C. Section 60101 et seq. [Chapter 601, Title 49, United
 700-9   States Code (49 U.S.C. Section 60101 et seq.)], or a succeeding
700-10   law.
700-11         (b)  The power granted by Subsection (a) does not apply to
700-12   the transportation of gas or to gas facilities subject to the
700-13   exclusive control of the United States but applies to the
700-14   transportation of gas and gas pipeline facilities in this state to
700-15   the maximum degree permissible under 49 U.S.C. Section 60101 et
700-16   seq. [Chapter 601, Title 49, United States Code (49 U.S.C. Section
700-17   60101 et seq.)], or a succeeding law.
700-18         (b)  Subchapter E, Chapter 121, Utilities Code, is amended to
700-19   conform to Section 2, Chapter 950, Acts of the 75th Legislature,
700-20   Regular Session, 1997, by adding Section 121.2015 to read as
700-21   follows:
700-22         Sec. 121.2015.  REQUIRED SAFETY RULES.  The railroad
700-23   commission shall adopt rules regarding:
700-24               (1)  public education and awareness relating to gas
700-25   pipeline facilities; and
700-26               (2)  community liaison for responding to an emergency
 701-1   relating to a gas pipeline facility.
 701-2         (c)  Sections 1 and 2, Chapter 950, Acts of the 75th
 701-3   Legislature, Regular Session, 1997, are repealed.
 701-4         SECTION 18.13.  (a)  Chapter 121, Utilities Code, is amended
 701-5   to codify Article 6053-4, Revised Statutes, by adding Subchapter I
 701-6   to read as follows:
 701-7               SUBCHAPTER I.  SOUR GAS PIPELINE FACILITIES
 701-8         Sec. 121.451.  DEFINITIONS.  In this subchapter:
 701-9               (1)  "Affected party" means the owner or occupant of
701-10   real property located in the radius of exposure, as computed in
701-11   accordance with a methodology approved by the railroad commission,
701-12   of the proposed route of a sour gas pipeline facility.
701-13               (2)  "Construction" includes any activity conducted
701-14   during the initial construction of a pipeline, including the
701-15   removal of earth, vegetation, or obstructions along the proposed
701-16   pipeline right-of-way.  The term does not include:
701-17                     (A)  surveying or acquiring the right-of-way; or
701-18                     (B)  clearing the right-of-way with the consent
701-19   of the owner.
701-20               (3)  "Low-pressure gathering system" means a pipeline
701-21   that operates at a working pressure of less than 50 pounds per
701-22   square inch.
701-23               (4)  "Sour gas pipeline facility" means a pipeline
701-24   facility that contains a concentration of 100 parts per million or
701-25   more of hydrogen sulfide.
701-26         Sec. 121.452.  APPLICABILITY.  This subchapter does not apply
 702-1   to:
 702-2               (1)  an extension of an existing sour gas pipeline
 702-3   facility that is in compliance with the railroad commission's rules
 702-4   for oil, gas, or geothermal resource operation in a hydrogen
 702-5   sulfide area if:
 702-6                     (A)  the extension is not longer than five miles;
 702-7                     (B)  the nominal pipe size is not larger than six
 702-8   inches in diameter; and
 702-9                     (C)  the railroad commission is given notice of
702-10   the construction of the extension not later than 24 hours before
702-11   the start of construction;
702-12               (2)  a new or an extension of a low-pressure gathering
702-13   system; or
702-14               (3)  an interstate gas pipeline facility, as defined by
702-15   49 U.S.C. Section 60101, that is used for the transportation of
702-16   sour gas.
702-17         Sec. 121.453.  PERMIT APPLICATION.  (a)  A person may not
702-18   begin construction of a sour gas pipeline facility before the
702-19   person obtains from the railroad commission a permit to construct
702-20   the facility.
702-21         (b)  An applicant for a permit to construct a sour gas
702-22   pipeline facility must:
702-23               (1)  publish notice of the application in a form
702-24   determined by the railroad commission in a newspaper of general
702-25   circulation in each county that contains part of the proposed route
702-26   of the sour gas pipeline facility; and
 703-1               (2)  provide a copy of the application to the county
 703-2   clerk of each county that contains part of the proposed route.
 703-3         Sec. 121.454.  RAILROAD COMMISSION APPROVAL OR DENIAL.
 703-4   (a)  The railroad commission by order may approve an application
 703-5   for a permit to construct a sour gas pipeline facility if the
 703-6   railroad commission finds that the materials to be used in and
 703-7   method of construction and operation of the facility comply with
 703-8   the rules and safety standards adopted by the railroad commission.
 703-9         (b)  The railroad commission may issue an order under this
703-10   section without holding a hearing unless an affected party files a
703-11   written protest with the railroad commission not later than the
703-12   30th day after the date notice is published under Section 121.453.
703-13   If an affected party files a written protest, the railroad
703-14   commission shall:
703-15               (1)  hold a hearing not later than the 60th day after
703-16   the date the protest is filed; and
703-17               (2)  issue an order:
703-18                     (A)  approving the permit application; or
703-19                     (B)  denying the application and stating the
703-20   reasons for the denial.
703-21         (b)  Section 121.206(a), Utilities Code, is amended to
703-22   conform to Section 2, Chapter 675, Acts of the 75th Legislature,
703-23   Regular Session, 1997, to read as follows:
703-24         (a)  The railroad commission may assess an administrative
703-25   penalty against a person who violates Section 121.201 or Subchapter
703-26   I or a safety standard or rule relating to the transportation of
 704-1   gas and gas pipeline facilities adopted under those provisions
 704-2   [that section].
 704-3         (c)  Article 6053-4, Revised Statutes, and Section 2, Chapter
 704-4   675, Acts of the 75th Legislature, Regular Session, 1997, are
 704-5   repealed.
 704-6         SECTION 18.14.  (a)  Chapter 121, Utilities Code, is amended
 704-7   to codify Article 6053-2a, Revised Statutes, by adding Subchapter J
 704-8   to read as follows:
 704-9         SUBCHAPTER J.  TESTING OF NATURAL GAS PIPING SYSTEMS IN
704-10                       SCHOOL DISTRICT FACILITIES
704-11         Sec. 121.501.  DEFINITION.  In this subchapter, "supplier"
704-12   means an individual or company that sells and delivers natural gas
704-13   to a school district facility.  If more than one individual or
704-14   company sells and delivers natural gas to a facility of a school
704-15   district, each individual or company is a supplier for purposes of
704-16   this subchapter.
704-17         Sec. 121.502.  DUTY TO PRESSURE TEST.  (a)  Each school
704-18   district shall perform biennial pressure tests on the natural gas
704-19   piping system in each school district facility.  The school
704-20   district shall perform the tests before the beginning of the school
704-21   year.
704-22         (b)  The school district may perform the tests on a two-year
704-23   cycle under which the district pressure tests the natural gas
704-24   piping system in approximately one-half of the facilities each
704-25   year.
704-26         (c)  If a school district operates one or more school
 705-1   district facilities on a year-round calendar, the pressure test in
 705-2   each of those facilities must be conducted and reported not later
 705-3   than July 1 of the year in which the pressure test is performed.
 705-4         (d)  A test performed under a municipal code satisfies the
 705-5   pressure testing requirements prescribed by this section.
 705-6         Sec. 121.503.  REQUIREMENTS OF TEST.  (a)  The school
 705-7   district shall perform the pressure test to determine whether the
 705-8   natural gas piping downstream of the school district's meter holds
 705-9   at least normal operating pressure over a specified period
705-10   determined by the railroad commission.
705-11         (b)  During the pressure test, each system supply inlet and
705-12   outlet in the facility must be closed.
705-13         (c)  At the request of a school district, the railroad
705-14   commission shall assist the district in developing a procedure for
705-15   conducting the test.
705-16         Sec. 121.504.  NOTICE OF TEST.  (a)  A school district shall
705-17   provide written notice to the district's natural gas supplier
705-18   specifying the date and result of each pressure test or other
705-19   inspection.
705-20         (b)  The supplier shall maintain a copy of the notice until
705-21   at least the first anniversary of the date on which the supplier
705-22   received the notice.
705-23         Sec. 121.505.  TERMINATION OF SERVICE.  A supplier shall
705-24   terminate service to a school district facility if:
705-25               (1)  the supplier receives official notification from
705-26   the firm or individual conducting the test of a hazardous natural
 706-1   gas leakage in the facility piping system; or
 706-2               (2)  the district fails to perform a test or other
 706-3   inspection at the facility as required by this subchapter.
 706-4         Sec. 121.506.  REPORT TO BOARD OF TRUSTEES.  An identified
 706-5   natural gas leakage in a school district facility must be reported
 706-6   to the board of trustees of the district in which the facility is
 706-7   located.
 706-8         Sec. 121.507.  ENFORCEMENT.  The railroad commission shall
 706-9   enforce this subchapter.
706-10         (b)  Article 6053-2a, Revised Statutes, is repealed.
706-11         SECTION 18.15.  (a)  Section 161.121, Utilities Code, is
706-12   amended to conform to Section 4, Chapter 904, Acts of the 75th
706-13   Legislature, Regular Session, 1997, to read as follows:
706-14         Sec. 161.121.  GENERAL POWERS.  An electric cooperative may:
706-15               (1)  sue and be sued in its corporate name;
706-16               (2)  adopt and alter a corporate seal and use the seal
706-17   or a facsimile of the seal as required by law;
706-18               (3)  acquire, own, hold, maintain, exchange, or use
706-19   property or an interest in property, including plants, buildings,
706-20   works, machinery, supplies, equipment, apparatus, and transmission
706-21   and distribution lines or systems that are necessary, convenient,
706-22   or useful;
706-23               (4)  dispose of, mortgage, or lease as lessor any of
706-24   its property or assets;
706-25               (5)  borrow money and otherwise contract indebtedness,
706-26   issue obligations for its indebtedness, and secure the payment of
 707-1   indebtedness by mortgage, pledge, or deed of trust on any or all of
 707-2   its property or revenue;
 707-3               (6)  accept gifts or grants of money, services, or
 707-4   property;
 707-5               (7)  make any contracts necessary or convenient for the
 707-6   exercise of the powers granted by this chapter;
 707-7               (8)  conduct its business and have offices inside or
 707-8   outside this state;
 707-9               (9)  adopt and amend bylaws not inconsistent with the
707-10   articles of incorporation for the administration and regulation of
707-11   the affairs of the cooperative; and
707-12               (10)  perform any other acts for the cooperative or its
707-13   members or for another electric cooperative or its members, and
707-14   exercise any other power, that may be necessary, convenient, or
707-15   appropriate to accomplish the purpose for which the cooperative is
707-16   organized, including other or additional purposes that benefit
707-17   members and nonmembers, either directly or through affiliates,
707-18   described in Section A, Article 2.01, Texas Non-Profit Corporation
707-19   Act (Article 1396-2.01, Vernon's Texas Civil Statutes).
707-20         (b)  Section 4, Chapter 904, Acts of the 75th Legislature,
707-21   Regular Session, 1997, is repealed.
707-22         SECTION 18.16.  (a)  Subchapter B, Chapter 184, Utilities
707-23   Code, is amended to conform to Sections 1 and 2, Chapter 943, Acts
707-24   of the 75th Legislature, Regular Session, 1997, by adding Section
707-25   184.0125 to read as follows:
707-26         Sec. 184.0125.  HOUSING FOR OLDER PERSONS.  (a)  Section
 708-1   184.012 does not prohibit a political subdivision from issuing a
 708-2   permit for the construction of housing for older persons with 100
 708-3   or more dwelling units.
 708-4         (b)  Before issuing a permit, certificate, or other
 708-5   authorization for the construction of housing for older persons, a
 708-6   political subdivision shall require that the construction plan
 708-7   provide for the requirements prescribed by this section.
 708-8         (c)  To qualify for the exemption provided by this section,
 708-9   the housing, at a minimum, must have:
708-10               (1)  significant facilities and services specifically
708-11   designed to meet the physical or social needs of older persons or,
708-12   if the provision of those facilities and services is not
708-13   practicable, the housing must be necessary to provide important
708-14   housing opportunities for older persons;
708-15               (2)  at least 80 percent of the dwelling units set
708-16   aside for occupancy by at least one person 55 years of age or older
708-17   in each dwelling unit; and
708-18               (3)  policies and procedures that  demonstrate an
708-19   intent by the owner or manager to provide housing for persons 55
708-20   years of age or older.
708-21         (d)  The owner or manager must adhere to the policies and
708-22   procedures required by Subsection (c)(3).
708-23         (e)  In this section, "housing for older persons" means
708-24   housing:
708-25               (1)  intended for and solely occupied by persons 62
708-26   years of age or older; or
 709-1               (2)  intended and operated for occupancy by at least
 709-2   one person 55 years of age or older in each dwelling unit.
 709-3         (b)  Sections 1 and 2, Chapter 943, Acts of the 75th
 709-4   Legislature, Regular Session, 1997, are repealed.
 709-5         SECTION 18.17.  (a)  The Utilities Code is amended to codify
 709-6   Chapter 1407, Acts of the 75th Legislature, Regular Session, 1997
 709-7   (Article 9033, Vernon's Texas Civil Statutes), by adding Title 5 to
 709-8   read as follows:
 709-9             TITLE 5.  PROVISIONS AFFECTING THE OPERATION OF
709-10                           UTILITY FACILITIES
709-11                CHAPTER 251.  UNDERGROUND FACILITY DAMAGE
709-12                          PREVENTION AND SAFETY
709-13                    SUBCHAPTER A.  GENERAL PROVISIONS
709-14         Sec. 251.001.  SHORT TITLE.  This chapter may be cited as the
709-15   Underground Facility Damage Prevention and Safety Act.
709-16         Sec. 251.002.  DEFINITIONS.  In this chapter:
709-17               (1)  "Class A underground facility" means an
709-18   underground facility that is used to produce, store, convey,
709-19   transmit, or distribute:
709-20                     (A)  electrical energy;
709-21                     (B)  natural or synthetic gas;
709-22                     (C)  petroleum or petroleum products;
709-23                     (D)  steam;
709-24                     (E)  any form of telecommunications service,
709-25   including voice, data, video, or optical transmission, or cable
709-26   television service; or
 710-1                     (F)  any other liquid, material, or product not
 710-2   defined as a Class B underground facility.
 710-3               (2)  "Class B underground facility" means an
 710-4   underground facility that is used to produce, store, convey,
 710-5   transmit, or distribute:
 710-6                     (A)  water;
 710-7                     (B)  slurry; or
 710-8                     (C)  sewage.
 710-9               (3)  "Corporation" means the Texas Underground Facility
710-10   Notification Corporation.
710-11               (4)  "Damage" means:
710-12                     (A)  the defacing, scraping, displacement,
710-13   penetration, destruction, or partial or complete severance of an
710-14   underground facility or of any protective coating, housing, or
710-15   other protective device of an underground facility;
710-16                     (B)  the weakening of structural or lateral
710-17   support of an underground facility; or
710-18                     (C)  the failure to properly replace the backfill
710-19   covering an underground facility.
710-20               (5)  "Excavate" means to use explosives or a motor,
710-21   engine, hydraulic or pneumatically powered tool, or other
710-22   mechanized equipment of any kind and includes auguring,
710-23   backfilling, boring, compressing, digging, ditching, drilling,
710-24   dragging, dredging, grading, mechanical probing, plowing-in,
710-25   pulling-in, ripping, scraping, trenching, and tunneling to remove
710-26   or otherwise disturb soil to a depth of 16 or more inches.
 711-1               (6)  "Excavator" means a person that excavates or
 711-2   intends to excavate in this state.
 711-3               (7)  "Exploration and production underground facility"
 711-4   means an underground facility used by a person producing gas or
 711-5   oil, or both, for the production of that gas or oil, including
 711-6   facilities used for field separation, treatment, gathering, or
 711-7   storage of gas or oil.
 711-8               (8)  "High speed data transmission" means a method of
 711-9   data transmission that does not include facsimile or voice
711-10   transmission.
711-11               (9)  "Legal holiday" means a holiday specified as a
711-12   legal holiday by Subchapter B, Chapter 662, Government Code.
711-13               (10)  "Mechanized equipment" means equipment operated
711-14   by mechanical power, including a trencher, bulldozer, power shovel,
711-15   auger, backhoe, scraper, drill, cable or pipe plow, and other
711-16   equipment used to plow in or pull in cable or pipe.
711-17               (11)  "Operator" means a person that operates an
711-18   underground facility.
711-19               (12)  "Secured facility" means a parcel of land used
711-20   for commercial or industrial purposes that is surrounded entirely
711-21   by a fence or other means of preventing access, including a fence
711-22   with one or more gates that are locked at all times or monitored by
711-23   an individual who can prevent unauthorized access.
711-24               (13)  "Underground facility" means a line, cable,
711-25   pipeline system, conduit, or structure that is located partially or
711-26   totally underground and that is used to produce, store, convey,
 712-1   transmit, or distribute telecommunications, electricity, gas,
 712-2   water, sewage, steam, or liquids such as petroleum, petroleum
 712-3   products, or hazardous liquids.
 712-4               (14)  "Saturday notification" means a notice of intent
 712-5   to excavate provided by an excavator to a notification center on a
 712-6   Saturday before 11:59 a.m.
 712-7               (15)  "Violation" means a violation of Section 251.151,
 712-8   251.152, or 251.159.
 712-9         Sec. 251.003.  EXEMPTIONS.  The following are not subject to
712-10   this chapter as underground facilities:
712-11               (1)  an aboveground or underground storage tank, sump,
712-12   or impoundment or piping connected to an aboveground or underground
712-13   storage tank, sump, or impoundment located in the same tract of
712-14   land as the storage tank, sump, or impoundment;
712-15               (2)  an underground facility operated by the owner of a
712-16   secured facility and located entirely within the secured facility;
712-17               (3)  an underground facility that serves only the owner
712-18   of the underground facility or the owner's tenant and that is
712-19   located solely on the owner's property;
712-20               (4)  piping within a well bore;
712-21               (5)  the portion of an exploration and production
712-22   underground facility that is located within the boundaries of the
712-23   oil or gas field from which the oil and gas is produced and that is
712-24   not located in the boundaries of an established easement or
712-25   right-of-way granted for the benefit of a governmental entity or a
712-26   private entity if the easement or right-of-way is granted for a
 713-1   public purpose; or
 713-2               (6)  an underground facility that serves a cemetery and
 713-3   is located solely on the cemetery's property.
 713-4         Sec. 251.004.  APPLICATION TO CERTAIN CONTRACTORS AND STATE
 713-5   EMPLOYEES.  (a)  This chapter does not apply to a contractor
 713-6   working in the public right-of-way under a contract with the Texas
 713-7   Department of Transportation.
 713-8         (b)  Excavation by an employee of the Texas Department of
 713-9   Transportation on a segment of the state highway system is not
713-10   subject to this chapter if the excavation is:
713-11               (1)  less than 24 inches in depth; and
713-12               (2)  no more than 10 feet from the right-of-way line.
713-13         Sec. 251.005.  CONVERSION OF FACILITY OR OPERATOR.  (a)  An
713-14   operator of  an underground facility that is exempted under this
713-15   subchapter may voluntarily convert that facility to a Class A
713-16   underground facility by sending written communication from a
713-17   competent authority of the operator to the corporation advising of
713-18   the status change.
713-19         (b)  An operator of a Class B underground facility may
713-20   voluntarily convert to a Class A underground facility operator by
713-21   sending written communication from a competent authority of the
713-22   operator to the corporation advising of the status change.
713-23         Sec. 251.006.  COMPLIANCE BY PERMIT HOLDERS.  (a)  The fact
713-24   that a person has a legal permit, permission from the owner of the
713-25   property or the owner's licensee, or an easement to conduct
713-26   excavation operations does not  affect the person's duty to comply
 714-1   with this chapter.
 714-2         (b)  Compliance with this chapter does not affect a person's
 714-3   responsibility to obtain a permit required by law.
 714-4         Sec. 251.007.  FACILITY ON COUNTY OR MUNICIPAL ROAD.  This
 714-5   chapter does not affect a contractual or statutory right of a
 714-6   county or municipality to require an operator to relocate, replace,
 714-7   or repair its underground facility.
 714-8         Sec. 251.008.  EFFECT ON CIVIL REMEDIES.  Except as otherwise
 714-9   specifically provided by this chapter, this chapter, including
714-10   Section 251.201, does not affect any civil remedy for personal
714-11   injury or for property damage, including any damage to an
714-12   underground facility.
714-13         Sec. 251.009.  PROVISION OF GENERAL INFORMATION.  At least
714-14   once each calendar year, at intervals not exceeding 15 months, each
714-15   Class A underground facility operator who conveys, transmits, or
714-16   distributes by means of its underground facilities service directly
714-17   to more than one million residential customers within this state
714-18   shall provide all of its residential customers in this state
714-19   general information about excavation activities covered by this
714-20   chapter and the statewide toll-free telephone number established by
714-21   the corporation.
714-22            (Sections 251.010-251.050 reserved for expansion
714-23         SUBCHAPTER B.  TEXAS UNDERGROUND FACILITY NOTIFICATION
714-24                               CORPORATION
714-25         Sec. 251.051.  PURPOSE.  The Texas Underground Facility
714-26   Notification Corporation provides statewide notification services
 715-1   under this chapter.
 715-2         Sec. 251.052.  NONPROFIT CORPORATION.  The corporation is a
 715-3   public nonprofit corporation and has all the powers and duties
 715-4   incident to a nonprofit corporation under the Texas Non-Profit
 715-5   Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil
 715-6   Statutes), except that the corporation:
 715-7               (1)  may not make donations for the public welfare or
 715-8   for charitable, scientific, or educational purposes or in aid of
 715-9   war activities;
715-10               (2)  may not merge or consolidate with another
715-11   corporation;
715-12               (3)  is not subject to voluntary or involuntary
715-13   dissolution; and
715-14               (4)  may not be placed in receivership.
715-15         Sec. 251.053.  APPLICATION OF OPEN MEETINGS AND OPEN RECORDS
715-16   LAWS.  The corporation is subject to Chapters 551 and 552,
715-17   Government Code, except that the corporation may not disseminate,
715-18   make available, or otherwise distribute service area map data or
715-19   information provided by an operator unless that action is necessary
715-20   to perform the corporation's specific obligations under this
715-21   chapter.
715-22         Sec. 251.054.  EXPENSES AND LIABILITIES OF CORPORATION.
715-23   (a)  All expenses of the corporation shall be paid from income of
715-24   the corporation.
715-25         (b)  A liability created by the corporation is not a debt of
715-26   this state, and the corporation may not secure a liability with
 716-1   funds or assets of this state.
 716-2         Sec. 251.055.  BOARD OF DIRECTORS.  (a)  The board of
 716-3   directors of the corporation is composed of the following 12
 716-4   members appointed by the governor:
 716-5               (1)  six representatives of the general public;
 716-6               (2)  one representative of the gas industry;
 716-7               (3)  one representative of the telecommunications
 716-8   industry;
 716-9               (4)  one representative of the electric industry;
716-10               (5)  one representative of cable television companies;
716-11               (6)  one representative of municipalities; and
716-12               (7)  one representative of persons who engage in
716-13   excavation operations who are not also facility operators.
716-14         (b)  Board membership is voluntary and a director is not
716-15   entitled to receive compensation for serving on the board.
716-16         Sec. 251.056.  TERMS.  (a)  Directors serve staggered
716-17   three-year terms, with the terms of four directors expiring each
716-18   August 31.
716-19         (b)  A director serves until the director's successor is
716-20   appointed by the governor and assumes office.
716-21         Sec. 251.057.  DECLARATION OF BOARD VACANCY.  (a)  The board
716-22   may declare a director's office vacant if the director ceases to be
716-23   associated with the industry or an operator the director
716-24   represents.
716-25         (b)  Not later than the 60th day after the date a vacancy on
716-26   the board is declared, the governor shall appoint a person to fill
 717-1   the vacancy for the remainder of the unexpired term.
 717-2         Sec. 251.058.  OFFICERS.  (a)  The board shall elect from
 717-3   among its directors a chair and vice chair.
 717-4         (b)  The chair and vice chair serve for a term of one year
 717-5   and may be reelected.
 717-6         Sec. 251.059.  ENTITLEMENT TO VOTE.  The corporation's bylaws
 717-7   must provide that each director is entitled to one vote.
 717-8         Sec. 251.060.  DUTIES OF CORPORATION.  The corporation shall
 717-9   develop and implement processes to:
717-10               (1)  maintain a registration of:
717-11                     (A)  notification centers as provided by Section
717-12   251.101(a)(3);
717-13                     (B)  operators who elect to convert facilities to
717-14   Class A facilities under Section 251.005(a); or
717-15                     (C)  operators who elect to become Class A
717-16   underground facility operators under Section 251.005(b);
717-17               (2)  establish minimum technical standards used by
717-18   notification centers;
717-19               (3)  establish a statewide toll-free telephone number
717-20   to be used by excavators that incorporates the use of a call router
717-21   system that routes calls to the notification centers on a pro rata
717-22   basis;
717-23               (4)  oversee the bid process and select the vendor for
717-24   the statewide toll-free telephone number;
717-25               (5)  oversee the bid process and select the vendor for
717-26   the call router system;
 718-1               (6)  determine before May 1 of each year the
 718-2   cost-sharing between the notification centers of:
 718-3                     (A)  the toll-free telephone number; and
 718-4                     (B)  the call router system prescribed by Section
 718-5   251.102(4);
 718-6               (7)  develop public service announcements to educate
 718-7   the public about statewide one-call notification and its
 718-8   availability;
 718-9               (8)  establish a format for information transfer among
718-10   notification centers other than high speed data transmission, if
718-11   appropriate;
718-12               (9)  on a complaint concerning charges, investigate and
718-13   determine appropriate charges;
718-14               (10)  recommend a civil penalty against a notification
718-15   center that does not meet the requirements of this chapter of not
718-16   less than $1,000 or more than $5,000 for each violation;
718-17               (11)  refer the recommended penalty to the attorney
718-18   general, who shall institute a suit in a court of competent
718-19   jurisdiction to recover the penalty;
718-20               (12)  assist in dispute resolution among notification
718-21   centers or between a notification center and an operator;
718-22               (13)  assist any operator who encounters difficulty in
718-23   joining a notification center; and
718-24               (14)  review and study design standards for the
718-25   placement of underground facilities throughout this state.
718-26         Sec. 251.061.  CONTRACT FOR STATEWIDE TOLL-FREE NUMBER AND
 719-1   CALL ROUTER SYSTEM.  (a)  The corporation shall solicit proposals
 719-2   for the contract to establish and operate the statewide toll-free
 719-3   telephone number and the call router system by using a request for
 719-4   proposals process that includes specifications that have been
 719-5   approved by the board of directors in accordance with this chapter.
 719-6         (b)  The corporation is not required to award the contract to
 719-7   the lowest offeror if the terms of another proposal would result in
 719-8   a lower annual cost and are more advantageous to the corporation
 719-9   and its members.  The corporation may reject all proposals if the
719-10   corporation finds that none of the proposals is acceptable.
719-11         (c)  After the proposals are opened, each document relating
719-12   to the consideration of a proposal or the award of a contract and
719-13   the text of the contract are considered books and records of the
719-14   corporation for the purposes of Article 2.23, Texas Non-Profit
719-15   Corporation Act (Article 1396-2.23, Vernon's Texas Civil Statutes).
719-16         Sec. 251.062.  FEES AND RATES.  (a)  Except as provided by
719-17   this section, the corporation may not, for any reason, impose an
719-18   assessment, fee, or other charge, including a charge for inputting
719-19   data, against an operator.
719-20         (b)  Before January 15 of each year, a Class A facility
719-21   operator shall pay to the corporation a fee of $50 for services to
719-22   be performed by the corporation during that calendar year.  A fee
719-23   for a part of a year may not be prorated.
719-24            (Sections 251.063-251.100 reserved for expansion
719-25                   SUBCHAPTER C.  NOTIFICATION CENTERS
719-26         Sec. 251.101.  NOTIFICATION CENTER.  (a)  A notification
 720-1   center  is a legal entity that:
 720-2               (1)  operates a notification system capable of serving
 720-3   excavators and operators statewide;
 720-4               (2)  is created to:
 720-5                     (A)  receive notification of an intent to
 720-6   excavate and of damage to an underground facility and disseminate
 720-7   that information to member operators that may be affected by the
 720-8   excavation or damage and to other notification centers operating in
 720-9   this state; and
720-10                     (B)  receive notification of an extraordinary
720-11   circumstance and disseminate that information to member operators
720-12   and to other notification centers operating in this state; and
720-13               (3)  registers the following information with the
720-14   corporation:
720-15                     (A)  its name, address, and telephone number;
720-16                     (B)  the name of a contact person;
720-17                     (C)  a statement of compliance with Section
720-18   251.104; and
720-19                     (D)  a listing of the counties in which it
720-20   operates.
720-21         (b)  A notification center operating on September 1, 1997,
720-22   may continue to operate if the notification center complies with
720-23   this chapter.
720-24         Sec. 251.102.  GENERAL DUTIES OF NOTIFICATION CENTER.  A
720-25   notification center shall:
720-26               (1)  operate 24 hours a day every day of the year;
 721-1               (2)  have the capability to receive emergency
 721-2   information 24 hours a day from excavators and disseminate the
 721-3   information as soon as it is received to the appropriate operators
 721-4   and to all registered and affected notification centers operating
 721-5   in this state;
 721-6               (3)  have the capacity to receive extraordinary
 721-7   circumstance information 24 hours a day from operators and
 721-8   disseminate the information as soon as it is received to all
 721-9   registered and affected notification centers;
721-10               (4)  submit to the corporation, not later than May 15
721-11   of each year, a pro rata share of the expense, as established by
721-12   the corporation, of the statewide toll-free telephone number and
721-13   the call router;
721-14               (5)  provide, on request of an excavator, a contact
721-15   name and telephone number of a representative of the operator for
721-16   special circumstances; and
721-17               (6)  have personnel capable of assisting
721-18   Spanish-speaking customers.
721-19         Sec. 251.103.  RECORDS.  (a)  A notification center shall
721-20   maintain for not less than four years a record to document:
721-21               (1)  the receipt of a notice of:
721-22                     (A)  intent to excavate;
721-23                     (B)  damage to an underground facility;
721-24                     (C)  an emergency excavation; and
721-25                     (D)  an extraordinary circumstance;
721-26               (2)  the information the excavator is required to
 722-1   provide to the notification center under this chapter;
 722-2               (3)  contact with operators and other notification
 722-3   centers; and
 722-4               (4)  the information the notification center provided
 722-5   to the excavator.
 722-6         (b)  A notification center may not destroy records that
 722-7   relate to any matter that is involved in litigation if the
 722-8   notification center is placed on notice that the litigation has not
 722-9   been finally resolved.
722-10         Sec. 251.104.  INSURANCE.  A notification center shall, at
722-11   all times, maintain a minimum of $5 million professional liability
722-12   and errors and omissions insurance to cover duties prescribed by
722-13   this chapter.
722-14         Sec. 251.105.  FEES AND CHARGES.  (a)  A notification center
722-15   that notifies another notification center under Section 251.102(2)
722-16   or (3) or Section 251.153(b) shall recover an amount not exceeding
722-17   the actual cost of providing the notice from the notification
722-18   center receiving the notice.
722-19         (b)  The notification center shall charge a Class A
722-20   underground facility operator not more than $1.25 for a call made
722-21   to the system that affects the operator.  The board may increase or
722-22   decrease the maximum charge only on an affirmative vote of at least
722-23   two-thirds of the total number of votes entitled to be cast.  A
722-24   notification center may petition the corporation for an increase in
722-25   the maximum charge and is entitled to the increase on proof that
722-26   costs exceed the maximum charge.
 723-1         (c)  The notification center may not charge an operator any
 723-2   additional fee such as an initiation fee, a membership fee, or a
 723-3   set-up fee.
 723-4         Sec. 251.106.  PAYMENTS TO CORPORATION.  Each time a
 723-5   notification center receives a call from an excavator under Section
 723-6   251.151, the notification center shall pay the corporation one
 723-7   cent.  The corporation shall waive this charge for the remainder of
 723-8   any year in which the corporation receives $500,000 under this
 723-9   section.
723-10         Sec. 251.107.  DUTY TO PARTICIPATE IN NOTIFICATION CENTER.
723-11   (a)  Each operator of a Class A underground facility, including a
723-12   political subdivision of this state, shall participate in a
723-13   notification center as a condition of doing business in this state.
723-14         (b)  Each operator of a Class A underground facility shall
723-15   provide to the notification center:
723-16               (1)  maps or grid locations or other identifiers
723-17   determined by the operator indicating the location of the
723-18   operator's underground facilities;
723-19               (2)  the name and telephone number of a contact person
723-20   or persons; and
723-21               (3)  at least quarterly but, if possible, as those
723-22   changes occur, information relating to each change in the
723-23   operator's  maps or grid locations or other identifiers or in the
723-24   person or persons designated as the operator's contact person or
723-25   persons.
723-26         (c)  The notification center may not require an operator to
 724-1   conduct a survey of the operator's underground facilities or alter
 724-2   the operator's existing signage.
 724-3         (d)  A notification center may not disseminate, make
 724-4   available, or otherwise distribute maps or information provided by
 724-5   an operator unless that action is necessary to perform the
 724-6   notification center's specific obligations under this chapter.
 724-7            (Sections 251.108-251.150 reserved for expansion
 724-8           SUBCHAPTER D.  REQUIREMENTS RELATING TO EXCAVATION
 724-9         Sec. 251.151.  DUTY OF AN EXCAVATOR.  (a)  Except as provided
724-10   by Sections 251.155 and 251.156, a person who intends to excavate
724-11   shall notify a notification center not earlier than the 14th day
724-12   before the date the excavation is to begin or later than the 48th
724-13   hour before the time the excavation is to begin, excluding
724-14   Saturdays, Sundays, and legal holidays.
724-15         (b)  Notwithstanding Subsection (a), if an excavator makes a
724-16   Saturday notification, the excavator may begin the excavation the
724-17   following Tuesday at 11:59 a.m. unless the intervening Monday is a
724-18   holiday.  If the intervening Monday is a holiday, the excavator may
724-19   begin the excavation the following Wednesday at 11:59 a.m.
724-20         (c)  To have a representative present during the excavation,
724-21   the operator shall contact the excavator and advise the excavator
724-22   of the operator's intent to be present during excavation and
724-23   confirm the start time of the excavation.  If the excavator wants
724-24   to change the start time, the excavator shall notify the operator
724-25   to set a mutually agreed-to time to begin the excavation.
724-26         Sec. 251.152.  INFORMATION INCLUDED IN NOTICE.  The excavator
 725-1   shall include in the notice required under Section 251.151:
 725-2               (1)  the name of the person serving the notice;
 725-3               (2)  the location of the proposed area of excavation,
 725-4   including:
 725-5                     (A)  the street address, if available, and the
 725-6   location of the excavation at the street address; or
 725-7                     (B)  if there is no street address, an accurate
 725-8   description of the excavation area using any available designations
 725-9   such as the closest street, road, or intersection;
725-10               (3)  the name, address, and telephone number of the
725-11   excavator or the excavator's company;
725-12               (4)  the excavator's field telephone number, if one is
725-13   available;
725-14               (5)  the starting date and time and the anticipated
725-15   completion date of excavation; and
725-16               (6)  a statement as to whether explosives will be used.
725-17         Sec. 251.153.  DUTY OF NOTIFICATION CENTER.  (a)  At the time
725-18   an excavator provides a notification center with the excavator's
725-19   intent to excavate, the notification center shall advise the
725-20   excavator that water, slurry, and sewage underground facilities in
725-21   the area of the proposed excavation may not receive information
725-22   concerning the excavator's proposed excavation.
725-23         (b)  Not later than two hours after the time the notification
725-24   center receives a notice of intent to excavate from an excavator,
725-25   the notification center shall provide to every other affected
725-26   notification center operating in this state the information
 726-1   required by Section 251.152 and received from the excavator.  The
 726-2   notification center shall provide the information by the use of
 726-3   high speed data transmission.
 726-4         (c)  Not later than two hours after the time the notification
 726-5   center receives a notice of intent to excavate from an excavator or
 726-6   from a different notification center, the notification center shall
 726-7   notify each member operator that may have an underground facility
 726-8   in the vicinity of the proposed excavation operation.
 726-9         Sec. 251.154.  NOTIFICATION BY AN EXCAVATOR.  (a)  A person
726-10   required to provide notice under this chapter  is considered to
726-11   have provided the notice when the person delivers the required
726-12   information and a notification center receives that information
726-13   within the time limits prescribed by this chapter.
726-14         (b)  A person may deliver information required under this
726-15   chapter by any appropriate method, including the use of any
726-16   electronic means of data transfer.
726-17         Sec. 251.155.  EXCEPTION IN CASE OF EMERGENCY.  (a)  Section
726-18   251.151 does not apply to an emergency excavation that is necessary
726-19   to respond to a situation that endangers life, health, or property
726-20   or a situation in which the public need for uninterrupted service
726-21   and immediate reestablishment of service if service is interrupted
726-22   compels immediate action.
726-23         (b)  The excavator may begin emergency excavation under
726-24   Subsection (a) immediately and shall take reasonable precautions to
726-25   protect underground facilities.
726-26         (c)  When an emergency exists, the excavator shall notify a
 727-1   notification center as promptly as reasonably possible.
 727-2         Sec. 251.156.  OTHER EXCEPTIONS TO DUTY OF EXCAVATORS.
 727-3   (a)  Section 251.151 does not apply to:
 727-4               (1)  interment operations of a cemetery;
 727-5               (2)  operations at a secured facility if:
 727-6                     (A)  the excavator operates each underground
 727-7   facility at the secured facility, other than those within a
 727-8   third-party underground facility easement or right-of-way; and
 727-9                     (B)  the excavation activity is not within a
727-10   third-party underground facility or right-of-way;
727-11               (3)  routine railroad maintenance within 15 feet of
727-12   either side of the midline of the track if the maintenance will not
727-13   disturb the ground at a depth of more than 18 inches;
727-14               (4)  activities performed on private property in
727-15   connection with agricultural operations;
727-16               (5)  operations associated with the exploration or
727-17   production of oil or gas if the operations are not conducted within
727-18   an underground facility easement or right-of-way;
727-19               (6)  excavations by or for a person that:
727-20                     (A)  owns, leases, or owns a mineral leasehold
727-21   interest in the real property on which the excavation occurs; and
727-22                     (B)  operates all underground facilities located
727-23   at the excavation site; or
727-24               (7)  routine maintenance by a county employee on a
727-25   county road right-of-way to a depth of not more than 24 inches.
727-26         (b)  If a person excepted  under Subsection (a)(4) elects to
 728-1   comply with this chapter and the operator fails to comply with this
 728-2   chapter, the person is not liable to the underground facility owner
 728-3   for damages to the underground facility.
 728-4         (c)  In this section:
 728-5               (1)  "Agricultural operations" means activities
 728-6   performed on land and described by Section 23.51(2), Tax Code.
 728-7               (2)  "Routine maintenance" means operations, not to
 728-8   exceed 24 inches in depth, within a road or drainage ditch
 728-9   involving grading and removal or replacement of pavement and
728-10   structures.
728-11         Sec. 251.157.  DUTY OF OPERATOR TO PERSON EXCAVATING.
728-12   (a)  Each Class A underground facility operator contacted by the
728-13   notification system shall mark the approximate location of its
728-14   underground facilities at or near the site of the proposed
728-15   excavation if the operator believes that marking the location is
728-16   necessary. The operator shall mark the location not later than:
728-17               (1)  the 48th hour after the time the excavator gives
728-18   to the notification system notice of intent to excavate, excluding
728-19   Saturdays, Sundays, and legal holidays;
728-20               (2)  11:59 a.m. on the Tuesday following a Saturday
728-21   notification unless the intervening Monday is a holiday;
728-22               (3)  11:59 a.m. on the Wednesday following a Saturday
728-23   notification if the intervening Monday is a holiday; or
728-24               (4)  a time agreed to by the operator and the
728-25   excavator.
728-26         (b)  An operator shall refer to the American Public Works
 729-1   Association color coding standards when marking.
 729-2         (c)  An excavator who has fully complied with this chapter
 729-3   may not be liable for damage to an underground facility that was
 729-4   not marked in accordance with this chapter.
 729-5         Sec. 251.158.  DUTY OF OPERATOR IN EVENT OF AN EXTRAORDINARY
 729-6   CIRCUMSTANCE.  (a)  The deadline prescribed by Section 251.157(a)
 729-7   does not apply if the operator experiences an extraordinary
 729-8   circumstance due to an act of God, including a tornado, a
 729-9   hurricane, an ice storm, or  a severe flood, or  a war, riot, work
729-10   stoppage, or strike that limits personnel or resources needed to
729-11   fulfill the operator's obligations under this chapter.
729-12         (b)  The operator shall notify a notification center of the
729-13   extraordinary circumstance and shall include in the notification:
729-14               (1)  the nature and location of the extraordinary
729-15   circumstance;
729-16               (2)  the expected duration of the situation and the
729-17   approximate time at which the operator will be able to resume
729-18   location request activities; and
729-19               (3)  the name and telephone number of the individual
729-20   that the notification system can contact if there is an emergency
729-21   that requires the operator's immediate attention.
729-22         (c)  In addition to the notification required by Subsection
729-23   (b), the operator shall also notify each excavator that has a
729-24   pending location request in the location where an extraordinary
729-25   circumstance is being experienced and shall include in the
729-26   notification:
 730-1               (1)  the fact that the operator is experiencing an
 730-2   extraordinary circumstance; and
 730-3               (2)  the approximate time at which the operator will
 730-4   mark the requested location.
 730-5         (d)  A notification center shall inform each excavator
 730-6   notifying the system under Section 251.151 that the operator's
 730-7   location request activities are suspended until the extraordinary
 730-8   circumstance has discontinued or has been corrected within the
 730-9   affected location.
730-10         (e)  An excavator is relieved from all provisions of this
730-11   chapter until the operator notifies the notification center that
730-12   the operator has resumed location request activities within the
730-13   affected location.
730-14         Sec. 251.159.  EXCAVATION DAMAGE.  (a)  If an excavation
730-15   operation results in damage to an underground facility, the
730-16   excavator shall immediately contact the underground facility
730-17   operator to report the damage.
730-18         (b)  If the excavator is not certain of the operator's
730-19   identity, the excavator shall contact a notification center to
730-20   report the damage, and the notification center shall immediately
730-21   notify all other affected notification centers.  Immediately on
730-22   receiving notification, each notification center shall contact each
730-23   member operator that has underground facilities in or near the area
730-24   in which the damage occurred.
730-25         (c)  Only the operator or a person authorized by the operator
730-26   may perform repairs, and the repairs must be made in an expeditious
 731-1   manner.
 731-2         (d)  An excavator shall delay backfilling in the immediate
 731-3   area of the damage until the damage is reported to the operator and
 731-4   a repair schedule is mutually agreed to by the excavator and the
 731-5   operator.
 731-6         (e)  If damage endangers life, health, or property because of
 731-7   the presence of flammable material, the excavator shall keep
 731-8   sources of ignition away.
 731-9            (Sections 251.160-251.200 reserved for expansion
731-10                        SUBCHAPTER E.  PENALTIES
731-11         Sec. 251.201.  CIVIL PENALTY.  (a)  An excavator that
731-12   violates Section 251.151, 251.152, or 251.159 is liable for a civil
731-13   penalty of not less than $50 or more than $100.
731-14         (b)  If it is found at the trial on a civil penalty that the
731-15   excavator has violated this chapter and has been assessed a penalty
731-16   under this section one other time before the first anniversary of
731-17   the date of the most recent violation, the excavator is liable for
731-18   a civil penalty of not less than $100 or more than $200.
731-19         (c)  If it is found at the trial on a civil penalty that the
731-20   excavator has violated this chapter and has been assessed a penalty
731-21   under this section at least two other times before the first
731-22   anniversary of the date of the most recent violation, the excavator
731-23   is liable for a civil penalty of not less than $200 or more than
731-24   $500.
731-25         (d)  In assessing the penalty the court shall consider the
731-26   actual damage to the facility, the effect of the excavator's
 732-1   actions on the public health and safety, whether the violation was
 732-2   a wilful act, and any good faith of the excavator in attempting to
 732-3   achieve compliance.
 732-4         (e)  Venue for a proceeding under this section is in the
 732-5   county in which:
 732-6               (1)  all or part of the alleged violation occurred;
 732-7               (2)  the defendant has its principal place of business
 732-8   in this state; or
 732-9               (3)  the defendant resides, if in this state.
732-10         (f)  The appropriate county attorney or criminal district
732-11   attorney shall bring the action to recover the civil penalty.
732-12         (g)  This section does not apply to a residential property
732-13   owner excavating on the property owner's own residential lot.
732-14         Sec. 251.202.  ALLOCATION OF CIVIL PENALTY.  (a)  Fifty
732-15   percent of the civil penalty collected under Section 251.201 shall
732-16   be transferred to the county treasurer of the county prosecuting
732-17   the action and 50 percent of the civil penalty collected under
732-18   Section 251.201 shall be transferred to the corporation.
732-19         (b)  The county treasurer shall deposit all money received
732-20   under this section in the county road and bridge fund.
732-21         (c)  The corporation shall use the money received under this
732-22   section to develop public service announcements to educate the
732-23   public about the statewide one-call notification system and its
732-24   availability as prescribed by Section 251.060(7).
732-25         Sec. 251.203.  CRIMINAL PENALTY FOR REMOVAL, DAMAGE, OR
732-26   CONCEALMENT OF MARKER OR SIGN.  (a)  A person commits an offense
 733-1   if:
 733-2               (1)  the person without authorization from the owner or
 733-3   operator of the facility intentionally removes, damages, or
 733-4   conceals a marker or sign giving information about the location of
 733-5   a Class A underground facility; and
 733-6               (2)  the marker or sign gives notice of the penalty for
 733-7   intentional removal, damage, or concealment of the marker or sign.
 733-8         (b)  An offense under this section is a Class B misdemeanor.
 733-9         (b)  Chapter 1407, Acts of the 75th Legislature, Regular
733-10   Session, 1997 (Article 9033, Vernon's Texas Civil Statutes), is
733-11   repealed.
733-12         SECTION 18.18.  (a)  Section 67.006(a), Water Code, is
733-13   amended to conform to Section 1, Chapter 688, Acts of the 75th
733-14   Legislature, Regular Session, 1997, to read as follows:
733-15         (a)  The board shall elect a president, a vice president, and
733-16   a secretary-treasurer following the issuance of a charter and after
733-17   each annual meeting of the membership or shareholders.  At the
733-18   meeting, each member or stockholder may be allowed only one vote
733-19   regardless of the number of memberships or stock certificates held
733-20   by the person.
733-21         (b)  Section 1, Chapter 688, Acts of the 75th Legislature,
733-22   Regular Session, 1997, is repealed.
733-23         SECTION 18.19.  (a)  Chapter 67, Water Code, is amended to
733-24   conform to Section 1, Chapter 532, Acts of the 75th Legislature,
733-25   Regular Session, 1997, by adding Section 67.0105 to read as
733-26   follows:
 734-1         Sec. 67.0105.  CONTRACT FOR WATER FOR FIRE SUPPRESSION.
 734-2   (a)  A corporation may enter into a contract with a municipality or
 734-3   a volunteer fire department to supply water either to municipally
 734-4   owned fire hydrants or to corporation fire hydrants for use in fire
 734-5   suppression by the municipality's fire department or a volunteer
 734-6   fire department.  The contract must be under terms that are
 734-7   mutually beneficial to the contracting parties.
 734-8         (b)  The furnishing of a water supply and fire hydrant
 734-9   equipment by a municipality or a volunteer fire department directly
734-10   or through another entity by a lease, contract, or any other manner
734-11   is an essential governmental function and not a proprietary
734-12   function for all purposes, including the application of Chapter
734-13   101, Civil Practice and Remedies Code.
734-14         (c)  A corporation that contracts with a municipality or
734-15   volunteer fire department to provide a water supply or fire hydrant
734-16   equipment may be liable for damages only to the extent that the
734-17   municipality or volunteer fire department would be liable if the
734-18   municipality or volunteer fire department were performing the
734-19   governmental function directly.
734-20         (b)  Section 1, Chapter 532, Acts of the 75th Legislature,
734-21   Regular Session, 1997, is repealed.
734-22         SECTION 18.20.  Section 1(7), Article 18.21, Code of Criminal
734-23   Procedure, is amended to conform to Chapter 166, Acts of the 75th
734-24   Legislature, Regular Session, 1997, to read as follows:
734-25               (7)  "Trap and trace device" means a device that
734-26   records an incoming electronic or other impulse that identifies the
 735-1   originating number of an instrument or device from which a wire or
 735-2   electronic communication was transmitted.  The term does not
 735-3   include a device or telecommunications network used in providing:
 735-4                     (A)  a caller identification service authorized
 735-5   by the Public Utility Commission of Texas under Subchapter E,
 735-6   Chapter 55, Utilities Code [Section 3.302, Public Utility
 735-7   Regulatory Act of 1995 (Article 1446c-0, Vernon's Texas Civil
 735-8   Statutes)];
 735-9                     (B)  the services referenced in Section
735-10   55.102(b), Utilities Code [3.302(g), Public Utility Regulatory Act
735-11   of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes)]; or
735-12                     (C)  a caller identification service provided by
735-13   a commercial mobile radio service provider licensed by the Federal
735-14   Communications Commission.
735-15         SECTION 18.21.  Section 466.105(b), Government Code, is
735-16   amended to conform to Chapter 166, Acts of the 75th Legislature,
735-17   Regular Session, 1997, to read as follows:
735-18         (b)  Notwithstanding the provisions of Title 2, Utilities
735-19   Code [the Public Utility Regulatory Act (Article 1446c, Vernon's
735-20   Texas Civil Statutes)], the commission may negotiate rates and
735-21   execute contracts with telecommunications service providers for the
735-22   interexchange services necessary for the operation of the lottery.
735-23   The commission may acquire transmission facilities by lease,
735-24   purchase, or lease-purchase.  The acquisition of transmission
735-25   facilities must be done on a competitive bid basis if possible.
735-26         SECTION 18.22.  Subsection (e), Section 531.0216, Government
 736-1   Code, as added by Chapter 1244, Acts of the 75th Legislature,
 736-2   Regular Session, 1997, and renumbered by Section 19.01 of this Act
 736-3   from Section 531.0215, Government Code, as added by Chapter 1244,
 736-4   Acts of the 75th Legislature, Regular Session, 1997, is amended to
 736-5   conform to Chapter 166, Acts of the 75th Legislature, Regular
 736-6   Session, 1997, to read as follows:
 736-7         (e)  In this section, "telemedicine" has the meaning assigned
 736-8   by Section 57.042, Utilities Code [3.606, Public Utility Regulatory
 736-9   Act of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes)].
736-10         SECTION 18.23.  Section 551.001(3), Government Code, is
736-11   amended to conform to Chapter 166, Acts of the 75th Legislature,
736-12   Regular Session, 1997, to read as follows:
736-13               (3)  "Governmental body" means:
736-14                     (A)  a board, commission, department, committee,
736-15   or agency within the executive or legislative branch of state
736-16   government that is directed by one or more elected or appointed
736-17   members;
736-18                     (B)  a county commissioners court in the state;
736-19                     (C)  a municipal governing body in the state;
736-20                     (D)  a deliberative body that has rulemaking or
736-21   quasi-judicial power and that is classified as a department,
736-22   agency, or political subdivision of a county or municipality;
736-23                     (E)  a school district board of trustees;
736-24                     (F)  a county board of school trustees;
736-25                     (G)  a county board of education;
736-26                     (H)  the governing board of a special district
 737-1   created by law; and
 737-2                     (I)  a nonprofit corporation organized under
 737-3   Chapter 67, Water Code [76, Acts of the 43rd Legislature, 1st
 737-4   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
 737-5   Statutes)], that provides a water supply or wastewater service, or
 737-6   both, and is exempt from ad valorem taxation under Section 11.30,
 737-7   Tax Code.
 737-8         SECTION 18.24.  Section 552.003(1), Government Code, is
 737-9   amended to conform to Chapter 166, Acts of the 75th Legislature,
737-10   Regular Session, 1997, to read as follows:
737-11               (1)  "Governmental body":
737-12                     (A)  means:
737-13                           (i)  a board, commission, department,
737-14   committee, institution, agency, or office that is within or is
737-15   created by the executive or legislative branch of state government
737-16   and that is directed by one or more elected or appointed members;
737-17                           (ii)  a county commissioners court in the
737-18   state;
737-19                           (iii)  a municipal governing body in the
737-20   state;
737-21                           (iv)  a deliberative body that has
737-22   rulemaking or quasi-judicial power and that is classified as a
737-23   department, agency, or political subdivision of a county or
737-24   municipality;
737-25                           (v)  a school district board of trustees;
737-26                           (vi)  a county board of school trustees;
 738-1                           (vii)  a county board of education;
 738-2                           (viii)  the governing board of a special
 738-3   district;
 738-4                           (ix)  the governing body of a nonprofit
 738-5   corporation organized under Chapter 67, Water Code [76, Acts of the
 738-6   43rd Legislature, 1st Called Session, 1933 (Article 1434a, Vernon's
 738-7   Texas Civil Statutes)], that provides a water supply or wastewater
 738-8   service, or both, and is exempt from ad valorem taxation under
 738-9   Section 11.30, Tax Code; and
738-10                           (x)  the part, section, or portion of an
738-11   organization, corporation, commission, committee, institution, or
738-12   agency that spends or that is supported in whole or in part by
738-13   public funds; and
738-14                     (B)  does not include the judiciary.
738-15         SECTION 18.25.  Section 2157.001(1), Government Code, is
738-16   amended to conform to Chapter 166, Acts of the 75th Legislature,
738-17   Regular Session, 1997, to read as follows:
738-18               (1)  "Automated information system" includes:
738-19                     (A)  the computers on which the information
738-20   system is automated;
738-21                     (B)  a service related to the automation of the
738-22   system, including computer software, or the computers;
738-23                     (C)  a telecommunications apparatus or device
738-24   that serves as a component of a voice, data, or video
738-25   communications network for transmitting, switching, routing,
738-26   multiplexing, modulating, amplifying, or receiving signals on the
 739-1   network; and
 739-2                     (D)  for the General Services Commission, as
 739-3   telecommunications provider for the State, the term includes any
 739-4   service provided by a telecommunications provider, as that term is
 739-5   defined by Section 51.002, Utilities Code [in the Public Utility
 739-6   Regulatory Act of 1995 (Article 1446c-0, Vernon's Texas Civil
 739-7   Statutes)].
 739-8         SECTION 18.26.  Section 2166.301, Government Code, is amended
 739-9   to conform to Chapter 166, Acts of the 75th Legislature, Regular
739-10   Session, 1997, to read as follows:
739-11         Sec. 2166.301.  EXCEPTIONS.  Sections 2166.303 and 2166.304
739-12   do not apply to a contract made with a person subject to[:]
739-13               [(1)]  the safety standards and administrative penalty
739-14   provisions of Subchapter E, Chapter 121, Utilities Code [Article
739-15   6053-1, Revised Statutes; and]
739-16               [(2)  the administrative penalty provisions of Article
739-17   6053-2, Revised Statutes].
739-18         SECTION 18.27.  Section 2170.053(b), Government Code, is
739-19   amended to conform to Chapter 166, Acts of the 75th Legislature,
739-20   Regular Session, 1997, to read as follows:
739-21         (b)  Sharing or integrated use does not constitute the resale
739-22   or carriage of services and does not subject the system to
739-23   regulation or reporting under Title 2, Utilities Code [the Public
739-24   Utility Regulatory Act (Article 1446c, Vernon's Texas Civil
739-25   Statutes)].
739-26         SECTION 18.28.  Section 2303.511(b), Government Code, is
 740-1   amended to conform to Chapter 166, Acts of the 75th Legislature,
 740-2   Regular Session, 1997, to read as follows:
 740-3         (b)  A reduction in utility rates under Subsection (a)(9)(B)
 740-4   is subject to the agreement of the affected utility and the
 740-5   approval of the appropriate regulatory authority under Title 2,
 740-6   Utilities Code [Sections 16 and 17, Public Utility Regulatory Act
 740-7   (Article 1446c, Vernon's Texas Civil Statutes)].  The rates may not
 740-8   be reduced more than five percent below the lowest rate offered to
 740-9   any customer located in the enterprise zone, including economic
740-10   development rates and standby rates.  A qualified enterprise
740-11   project or the governing body of the enterprise zone may petition
740-12   the appropriate regulatory authority to receive a reduced rate
740-13   under this section, and the regulatory authority may order that
740-14   rates be reduced.  In making its determination under this section,
740-15   the regulatory authority shall consider revitalization goals for
740-16   the enterprise zone.  In setting the rates of the utility the
740-17   appropriate regulatory authority shall allow the utility to recover
740-18   the amount of the reduction.
740-19         SECTION 18.29.  Section 2310.409(b), Government Code, is
740-20   amended to conform to Chapter 166, Acts of the 75th Legislature,
740-21   Regular Session, 1997, to read as follows:
740-22         (b)  A reduction in utility rates under Subsection (a)(9)(B)
740-23   is subject to the agreement of the affected utility and the
740-24   approval of the appropriate regulatory authority under Title 2,
740-25   Utilities Code [the Public Utility Regulatory Act of 1995 (Article
740-26   1446c-0, Vernon's Texas Civil Statutes)].  The rates may be reduced
 741-1   up to but not more than five percent below the lowest rate
 741-2   allowable for that customer class.  In making its determination
 741-3   under this section, the regulatory authority shall consider
 741-4   revitalization goals for the readjustment zone.  In setting the
 741-5   rates of the utility the appropriate regulatory authority shall
 741-6   allow the utility to recover the amount of the reduction.
 741-7         SECTION 18.30.  Section 361.701(4), Health and Safety Code,
 741-8   is amended to conform to Chapter 166, Acts of the 75th Legislature,
 741-9   Regular Session, 1997, to read as follows:
741-10               (4)  "Lender" means:
741-11                     (A)  an insured depository institution, as that
741-12   term is defined by Section 3, Federal Deposit Insurance Act (12
741-13   U.S.C. Section 1813);
741-14                     (B)  an insured credit union, as that term is
741-15   defined by Section 101, Federal Credit Union Act (12 U.S.C. Section
741-16   1752);
741-17                     (C)  a bank or association chartered under the
741-18   Farm Credit Act of 1971 (12 U.S.C. Section 2001 et seq.);
741-19                     (D)  a leasing or trust company that is an
741-20   affiliate of an insured depository institution;
741-21                     (E)  any person, including a successor or
741-22   assignee of any such person, that makes a bona fide extension of
741-23   credit to or takes or acquires a security interest from a
741-24   nonaffiliated person;
741-25                     (F)  the Federal National Mortgage Association,
741-26   the Federal Home Loan Mortgage Corporation, the Federal
 742-1   Agricultural Mortgage Corporation, or any other entity that in a
 742-2   bona fide manner buys or sells loans or interests in loans;
 742-3                     (G)  a person that insures or guarantees against
 742-4   a default in the repayment of an extension of credit, or acts as a
 742-5   surety with respect to an extension of credit, to a nonaffiliated
 742-6   person;
 742-7                     (H)  a person that provides title insurance and
 742-8   that acquires a solid waste facility as a result of assignment or
 742-9   conveyance in the course of underwriting claims and claims
742-10   settlement; and
742-11                     (I)  an agency of this state that makes an
742-12   extension of credit to or acquires a security interest from:
742-13                           (i)  a federal or state agency;
742-14                           (ii)  a county, municipality, or other body
742-15   politic or corporate of this state, including:
742-16                                          (a)  a district or authority
742-17   created under Section 52, Article III, or Section 59, Article XVI,
742-18   Texas Constitution;
742-19                                          (b)  an interstate compact
742-20   commission to which this state is a party; or
742-21                                          (c)  a nonprofit water
742-22   supply corporation created and operating under Chapter 67, Water
742-23   Code [76, Acts of the 43rd Legislature, 1st Called Session, 1933
742-24   (Article 1434a, Vernon's Texas Civil Statutes)]; or
742-25                           (iii)  another person.
742-26         SECTION 18.31.  Section 756.022(d), Health and Safety Code,
 743-1   is amended to conform to Chapter 166, Acts of the 75th Legislature,
 743-2   Regular Session, 1997, to read as follows:
 743-3         (d)  This section does not apply to a contract:
 743-4               (1)  governed by Section 756.023;
 743-5               (2)  governed by Subtitle D, Title 10, Government Code;
 743-6   or
 743-7               (3)  entered into by a person subject to[:]
 743-8                     [(A)]  the safety standards adopted under and the
 743-9   administrative penalty provisions of Subchapter E, Chapter 121,
743-10   Utilities Code [Article 6053-1, Revised Statutes; and]
743-11                     [(B)  the administrative penalty provisions of
743-12   Article 6053-2, Revised Statutes].
743-13         SECTION 18.32.  Section 756.023(d), Health and Safety Code,
743-14   is amended to conform to Chapter 166, Acts of the 75th Legislature,
743-15   Regular Session, 1997, to read as follows:
743-16         (d)  This section does not apply to a person subject to[:]
743-17               [(1)]  the safety standards adopted under and the
743-18   administrative penalty provisions of Subchapter E, Chapter 121,
743-19   Utilities Code [Article 6053-1, Revised Statutes; and]
743-20               [(2)  the administrative penalty provisions of Article
743-21   6053-2, Revised Statutes].
743-22         SECTION 18.33.  Section 771.0725(d), Health and Safety Code,
743-23   is amended to conform to Chapter 166, Acts of the 75th Legislature,
743-24   Regular Session, 1997, to read as follows:
743-25         (d)  The Public Utility Commission of Texas may review and
743-26   make comments regarding a rate or allocation under this section in
 744-1   an informal proceeding.  A proceeding in which a rate or allocation
 744-2   is reviewed is not a contested case for purposes of Chapter 2001,
 744-3   Government Code.  A review of a rate or allocation is not a rate
 744-4   change for purposes of Chapter 36 or 53, Utilities Code [Subtitle
 744-5   E, Title II, or Subtitle E, Title III, Public Utility Regulatory
 744-6   Act of 1995 (Article 1446c-0, Vernon's Texas Civil Statutes)].
 744-7         SECTION 18.34.  Section 212.012(b), Local Government Code, is
 744-8   amended to conform to Chapter 166, Acts of the 75th Legislature,
 744-9   Regular Session, 1997, to read as follows:
744-10         (b)  The prohibition established by Subsection (a) applies
744-11   only to:
744-12               (1)  a municipality and officials of a municipality
744-13   that provides water, sewer, electricity, gas, or other utility
744-14   service;
744-15               (2)  a municipally owned or municipally operated
744-16   utility that provides any of those services;
744-17               (3)  a public utility that provides any of those
744-18   services;
744-19               (4)  a water supply or sewer service corporation
744-20   organized and operating under Chapter 67, Water Code [76, Acts of
744-21   the 43rd Legislature, 1st Called Session, 1933 (Article 1434a,
744-22   Vernon's Texas Civil Statutes)], that provides any of those
744-23   services;
744-24               (5)  a county that provides any of those services; and
744-25               (6)  a special district or authority created by or
744-26   under state law that provides any of those services.
 745-1         SECTION 18.35.  Section 232.021(15), Local Government Code,
 745-2   is amended to conform to Chapter 166, Acts of the 75th Legislature,
 745-3   Regular Session, 1997, to read as follows:
 745-4               (15)  "Utility" means a person, including a legal
 745-5   entity or political subdivision, that provides the services of:
 745-6                     (A)  an electric utility, as defined by Section
 745-7   31.002, Utilities Code [3(c)(1), Public Utility Regulatory Act
 745-8   (Article 1446c, Vernon's Texas Civil Statutes)];
 745-9                     (B)  a gas utility, as defined by Section
745-10   101.003, Utilities Code [1.03, Gas Utility Regulatory Act (Article
745-11   1446e, Vernon's  Texas Civil Statutes)]; and
745-12                     (C)  a water and sewer utility, as defined by
745-13   Section 13.002, Water Code.
745-14         SECTION 18.36.  Section 232.077(c), Local Government Code, is
745-15   amended to conform to Chapter 166, Acts of the 75th Legislature,
745-16   Regular Session, 1997, to read as follows:
745-17         (c)  The prohibition established by Subsection (b) applies
745-18   only to:
745-19               (1)  a municipality, and officials of the municipality,
745-20   that provides water, sewer, electricity, gas, or other utility
745-21   service;
745-22               (2)  a municipally owned or municipally operated
745-23   utility that provides any of those services;
745-24               (3)  a public utility that provides any of those
745-25   services;
745-26               (4)  a water supply or sewer service corporation
 746-1   organized and operating under Chapter 67, Water Code [76, Acts of
 746-2   the 43rd Legislature, 1st Called Session, 1933 (Article 1434a,
 746-3   Vernon's Texas Civil Statutes)], that provides any of those
 746-4   services;
 746-5               (5)  a county that provides any of those services; and
 746-6               (6)  a special district or authority created by or
 746-7   under state law that provides any of those services.
 746-8         SECTION 18.37.  Section 376.170, Local Government Code, as
 746-9   renumbered by Section 19.01 of this Act from Section 376.140, Local
746-10   Government Code, as added by Chapter 275, Acts of the 75th
746-11   Legislature, Regular Session, 1997, is amended to conform to
746-12   Chapter 166, Acts of the 75th Legislature, Regular Session, 1997,
746-13   to read as follows:
746-14         Sec. 376.170.  EXEMPTION OF PUBLIC UTILITY FROM FEE OR
746-15   ASSESSMENT.  The district may not impose an impact fee or
746-16   assessment on the property, equipment, or facilities of an electric
746-17   [a public] utility as defined by Section 31.002, Utilities Code
746-18   [2.0011, Public Utility Regulatory Act of 1995 (Article 1446c-0,
746-19   Vernon's Texas Civil Statutes)].
746-20         SECTION 18.38.  Section 376.230(b), Local Government Code, is
746-21   amended to conform to Chapter 166, Acts of the 75th Legislature,
746-22   Regular Session, 1997, to read as follows:
746-23         (b)  The district may not impose an impact fee or assessment
746-24   on any property, equipment, or facilities of an electric [a public]
746-25   utility as defined by Section 31.002, Utilities Code [2.0011(1),
746-26   Public Utility Regulatory Act of 1995 (Article 1446c-0, Vernon's
 747-1   Texas Civil Statutes)].
 747-2         SECTION 18.39.  Section 40.008, Natural Resources Code, is
 747-3   amended to conform to Chapter 166, Acts of the 75th Legislature,
 747-4   Regular Session, 1997, to read as follows:
 747-5         Sec. 40.008.  RAILROAD COMMISSION AUTHORITY.  The Railroad
 747-6   Commission of Texas shall continue to exercise its authority
 747-7   pursuant to Section 91.101 of this code and Section 26.131, Water
 747-8   Code, to issue and enforce rules, permits, and orders to prevent
 747-9   pollution of surface and subsurface waters in the state by
747-10   activities associated with the exploration, development, or
747-11   production of oil, gas, or geothermal resources, including the
747-12   transportation of oil or gas by pipeline.  Nothing in this chapter
747-13   preempts the jurisdiction of the Railroad Commission of Texas under
747-14   Subchapter E, Chapter 121, Utilities Code [Article 6053-1, Revised
747-15   Statutes], and Chapter 117, Natural Resources Code, over pipeline
747-16   transportation of gas and hazardous liquids and over gas and
747-17   hazardous liquid pipeline facilities.
747-18         SECTION 18.40.  Section 51.121(e), Natural Resources Code, is
747-19   amended to conform to Chapter 166, Acts of the 75th Legislature,
747-20   Regular Session, 1997, to read as follows:
747-21         (e)  Subject to the provisions of Title 2, Utilities Code
747-22   [the Public Utility Regulatory Act (Article 1446c, Vernon's Texas
747-23   Civil Statutes)], any district created by Article XVI, Section 59,
747-24   of the Texas Constitution that leases unsold public school or
747-25   asylum land for power generation through the use of renewable
747-26   energy sources, such as wind, solar, or geothermal energy and other
 748-1   sustainable sources, or a district participating in a power
 748-2   generation project using renewable energy sources which is located
 748-3   on unsold public school or asylum lands may distribute and sell
 748-4   electric energy generated on public school or asylum lands within
 748-5   or without the boundaries of the district and may issue bonds to
 748-6   accomplish such purposes pursuant to Chapter 656, Acts of the 68th
 748-7   Legislature, Regular Session, 1983 (Article 717q, Vernon's Texas
 748-8   Civil Statutes), or other applicable law.  For any such power
 748-9   generation project which is located on both public lands and
748-10   private lands, the district may sell outside its boundaries only
748-11   the pro rata portion of the total amount as is generated on the
748-12   public lands.  All electric energy generated pursuant to this
748-13   section shall be sold for resale only to utilities authorized to
748-14   make retail sales under Title 2, Utilities Code, [the Public
748-15   Utility Regulatory Act (Article 1446c, Vernon's Texas Civil
748-16   Statutes)] and shall be subject to the solicitation process and
748-17   integrated resource planning process authorized by that title
748-18   [Act].
748-19         SECTION 18.41.  Section 91.173(2), Natural Resources Code, is
748-20   amended to conform to Chapter 166, Acts of the 75th Legislature,
748-21   Regular Session, 1997, to read as follows:
748-22               (2)  "Gas utility" means a gas utility as defined in
748-23   Section 101.003, Utilities Code,  or  Subchapter A, Chapter 121,
748-24   Utilities Code [3, Public Utility Regulatory Act (Article 1446c,
748-25   Vernon's Texas Civil Statutes), or Article 6050, Revised Civil
748-26   Statutes of Texas, 1925, as amended].
 749-1         SECTION 18.42.  Section 116.002, Natural Resources Code, is
 749-2   amended to conform to Chapter 166, Acts of the 75th Legislature,
 749-3   Regular Session, 1997, to read as follows:
 749-4         Sec. 116.002.  EXCEPTIONS.  This chapter does not apply to:
 749-5               (1)  the production, transportation, storage, sale, or
 749-6   distribution of natural gas that is not included in the definition
 749-7   of compressed natural gas or liquefied natural gas;
 749-8               (2)  the production, transportation, storage, sale, or
 749-9   distribution of natural gas that is subject to commission
749-10   jurisdiction under Subtitle A or B, Title 3, Utilities Code [the
749-11   Gas Utility Regulatory Act (Article 1446e, Revised Statutes) or the
749-12   Cox law (Title 102, Revised Statutes)];
749-13               (3)  pipelines, fixtures, and other equipment used in
749-14   the natural gas industry that are not used or designed to be used
749-15   as part of a CNG or LNG system; or
749-16               (4)  pipelines, fixtures, equipment, or facilities to
749-17   the extent that they are subject to the safety regulations
749-18   promulgated and enforced by the commission pursuant to Chapter 117,
749-19   Natural Resources Code, or Subchapter E, Chapter 121, Utilities
749-20   Code [Article 6053-1, Revised Statutes].
749-21         SECTION 18.43.  Section 116.101, Natural Resources Code, is
749-22   amended to conform to Chapter 166, Acts of the 75th Legislature,
749-23   Regular Session, 1997, to read as follows:
749-24         Sec. 116.101.  MALODORANTS.  Compressed natural gas must be
749-25   odorized as provided by Subchapter F,  Chapter 121, Utilities Code
749-26   [Section 2, Article 6053, Revised Statutes, as amended].
 750-1         SECTION 18.44.  Section 33.01(13), Penal Code, is amended to
 750-2   conform to Chapter 166, Acts of the 75th Legislature, Regular
 750-3   Session, 1997, to read as follows:
 750-4               (13)  "Electric utility" has the meaning assigned by
 750-5   Section 31.002, Utilities Code [Subsection (c), Section 3, Public
 750-6   Utility Regulatory Act (Article 1446c, Vernon's Texas Civil
 750-7   Statutes)].
 750-8         SECTION 18.45.  Section 74.3013(h), Property Code, is amended
 750-9   to conform to Chapter 166, Acts of the 75th Legislature, Regular
750-10   Session, 1997, to read as follows:
750-11         (h)  In this section, a nonprofit cooperative corporation
750-12   means a cooperative corporation organized under Chapters 51 and 52,
750-13   Agriculture Code, the Texas Non-Profit Corporation Act (Article
750-14   1396-1.01 et seq., Vernon's Texas Civil Statutes), the Cooperative
750-15   Association Act (Article 1396-50.01, Vernon's Texas Civil
750-16   Statutes), and Chapter 161, Utilities Code [the Electric
750-17   Cooperative Corporation Act (Article 1528b, Vernon's Texas Civil
750-18   Statutes)].
750-19         SECTION 18.46.  Section 11.30, Tax Code, is amended to
750-20   conform to Chapter 166, Acts of the 75th Legislature, Regular
750-21   Session, 1997, to read as follows:
750-22         Sec. 11.30.  NONPROFIT WATER SUPPLY OR WASTEWATER SERVICE
750-23   CORPORATION.  A corporation organized under Chapter 67, Water Code
750-24   [76, Acts of the 43rd Legislature, 1st Called Session, 1933
750-25   (Article 1434a, Vernon's Texas Civil Statutes)], that provides in
750-26   the bylaws of the corporation that on dissolution of the
 751-1   corporation the assets of the corporation remaining after discharge
 751-2   of the corporation's indebtedness shall be transferred to an entity
 751-3   that provides a water supply or wastewater service, or both, that
 751-4   is exempt from ad valorem taxation is entitled to an exemption from
 751-5   taxation of property that the corporation owns and that is
 751-6   reasonably necessary for and used in the operation of the
 751-7   corporation:
 751-8               (1)  to acquire, treat, store, transport, sell, or
 751-9   distribute water; or
751-10               (2)  to provide wastewater service.
751-11         SECTION 18.47.  Section 171.065, Tax Code, is amended to
751-12   conform to Chapter 166, Acts of the 75th Legislature, Regular
751-13   Session, 1997, to read as follows:
751-14         Sec. 171.065.  EXEMPTION--NONPROFIT CORPORATION ORGANIZED TO
751-15   PROVIDE WATER SUPPLY OR SEWER SERVICES.  A nonprofit water supply
751-16   or sewer service corporation organized in behalf of a city or town
751-17   under Chapter 67, Water Code [76, Acts of the 43rd Legislature, 1st
751-18   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
751-19   Statutes)], is exempted from the franchise tax.
751-20         SECTION 18.48.  Section 171.079, Tax Code, is amended to
751-21   conform to Chapter 166, Acts of the 75th Legislature, Regular
751-22   Session, 1997, to read as follows:
751-23         Sec. 171.079.  EXEMPTION--ELECTRIC COOPERATIVE CORPORATION.
751-24   An electric cooperative corporation incorporated under Chapter 161,
751-25   Utilities Code, [the Electric Cooperative Corporation Act (Article
751-26   1528b, Vernon's Texas Civil Statutes)] that is not a participant in
 752-1   a joint powers agency is exempted from the franchise tax.
 752-2         SECTION 18.49.  Section 171.080, Tax Code, is amended to
 752-3   conform to Chapter 166, Acts of the 75th Legislature, Regular
 752-4   Session, 1997, to read as follows:
 752-5         Sec. 171.080.  EXEMPTION--TELEPHONE COOPERATIVE CORPORATIONS.
 752-6   A telephone cooperative corporation incorporated under Chapter 162,
 752-7   Utilities Code, [the Telephone Cooperative Act (Article 1528c,
 752-8   Vernon's Texas Civil Statutes)] is exempted from the franchise tax.
 752-9         SECTION 18.50.  Section 361.234(d), Transportation Code, is
752-10   amended to conform to Chapter 166, Acts of the 75th Legislature,
752-11   Regular Session, 1997, to read as follows:
752-12         (d)  Notwithstanding anything in this chapter to the
752-13   contrary, Subchapter C, Chapter 181, Utilities Code [Chapter 228,
752-14   Acts of the 51st Legislature, Regular Session, 1949 (Article 1436a,
752-15   Vernon's Texas Civil Statutes)], applies to the erection,
752-16   construction, maintenance, and operation of lines and poles owned
752-17   by an electric utility, as that term is defined [a corporation
752-18   described] by Section 181.041, Utilities Code, [1 of that Act]
752-19   over, under, across, on, and along a turnpike project constructed
752-20   by the authority.  The authority has the powers and duties
752-21   delegated to the commission by Subchapter C, Chapter 181, Utilities
752-22   Code [Chapter 228, Acts of the 51st Legislature, Regular Session,
752-23   1949 (Article 1436a, Vernon's Texas Civil Statutes)].
752-24         SECTION 18.51.  Sections 366.171(d) and (e), Transportation
752-25   Code, are amended to conform to Chapter 166, Acts of the 75th
752-26   Legislature, Regular Session, 1997, to read as follows:
 753-1         (d)  Subchapter C, Chapter 181, Utilities Code [Chapter 228,
 753-2   Acts of the 51st Legislature, Regular Session, 1949 (Article 1436a,
 753-3   Vernon's Texas Civil Statutes)], applies to the erection,
 753-4   construction, maintenance, and operation of lines and poles owned
 753-5   by an electric utility, as that term is defined [a corporation
 753-6   described] by Section 181.041, Utilities Code, [1 of that Act]
 753-7   over, under, across, on, and along a turnpike project or system
 753-8   constructed by an authority.  An authority has the powers and
 753-9   duties delegated to the commissioners court by that subchapter
753-10   [Act], and an authority has exclusive jurisdiction and control of
753-11   utilities located in its rights-of-way.
753-12         (e)  Subchapter B, Chapter 181, Utilities Code [Chapter 470,
753-13   Acts of the 52nd Legislature, 1951 (Article 1436b, Vernon's Texas
753-14   Civil Statutes)], applies to the laying and maintenance of
753-15   facilities used for conducting gas by a gas utility, as that term
753-16   is defined by Section 181.021, Utilities Code, [person, firm, or
753-17   corporation or municipality described in Section 1 of that Act]
753-18   through, under, along, across, and over a turnpike project or
753-19   system constructed by an authority except as otherwise provided by
753-20   this section.  An authority has the power and duties delegated to
753-21   the commissioners court by that subchapter [Act] and an authority
753-22   has exclusive jurisdiction and control of utilities located in its
753-23   right-of-way.
753-24         SECTION 18.52.  Section 13.002(24), Water Code, is amended to
753-25   conform to Chapter 166, Acts of the 75th Legislature, Regular
753-26   Session, 1997, to read as follows:
 754-1               (24)  "Water supply or sewer service corporation" means
 754-2   a nonprofit corporation organized and operating under Chapter 67
 754-3   [76, Acts of the 43rd Legislature, 1st Called Session, 1933
 754-4   (Article 1434a, Vernon's Texas Civil Statutes)] that provides
 754-5   potable water service or sewer service for compensation and that
 754-6   has adopted and is operating in accordance with by-laws or articles
 754-7   of incorporation which ensure that it is member-owned and
 754-8   member-controlled.  The term does not include a corporation that
 754-9   provides retail water or sewer service to a person who is not a
754-10   member, except that the corporation may provide retail water or
754-11   sewer service to a person who is not a member if the person only
754-12   builds on or develops property to sell to another and the service
754-13   is provided on an interim basis before the property is sold.
754-14         SECTION 18.53.  Section 13.043(b), Water Code, is amended to
754-15   conform to Chapter 166, Acts of the 75th Legislature, Regular
754-16   Session, 1997, to read as follows:
754-17         (b)  Ratepayers of the following entities may appeal the
754-18   decision of the governing body of the entity affecting their water,
754-19   drainage, or sewer rates to the commission:
754-20               (1)  a nonprofit water supply or sewer service
754-21   corporation created and operating under Chapter 67 [76, Acts of the
754-22   43rd Legislature, 1st Called Session, 1933 (Article 1434a, Vernon's
754-23   Texas Civil Statutes)];
754-24               (2)  a utility under the jurisdiction of a municipality
754-25   inside the corporate limits of the municipality;
754-26               (3)  a municipally owned utility, if the ratepayers
 755-1   reside outside the corporate limits of the municipality;
 755-2               (4)  a district or authority created under Article III,
 755-3   Section 52, or Article XVI, Section 59, of the Texas Constitution
 755-4   that provides water or sewer service to household users; and
 755-5               (5)  a utility owned by an affected county, if the
 755-6   ratepayer's rates are actually or may be adversely affected.  For
 755-7   the purposes of this section ratepayers who reside outside the
 755-8   boundaries of the district or authority shall be considered a
 755-9   separate class from ratepayers who reside inside those boundaries.
755-10         SECTION 18.54.  Section 15.001(5), Water Code, is amended to
755-11   conform to Chapter 166, Acts of the 75th Legislature, Regular
755-12   Session, 1997, to read as follows:
755-13               (5)  "Political subdivision" means a city, county,
755-14   district or authority created under Article III, Section 52, or
755-15   Article XVI, Section 59, of the Texas Constitution, any other
755-16   political subdivision of the state, any interstate compact
755-17   commission to which the state is a party, and any nonprofit water
755-18   supply corporation created and operating under Chapter 67 [76, Acts
755-19   of the 43rd Legislature, 1st Called Session, 1933 (Article 1434a,
755-20   Vernon's Texas Civil Statutes)].
755-21         SECTION 18.55.  Section 15.201(a)(5), Water Code, is amended
755-22   to conform to Chapter 166, Acts of the 75th Legislature, Regular
755-23   Session, 1997, to read as follows:
755-24               (5)  "Water supply corporation" means a nonprofit water
755-25   supply corporation created and operating under Chapter 67 [76, Acts
755-26   of the 43rd Legislature, 1st Called Session, 1933 (Article 1434a,
 756-1   Vernon's Texas Civil Statutes)].
 756-2         SECTION 18.56.  Section 15.602(8), Water Code, is amended to
 756-3   conform to Chapter 166, Acts of the 75th Legislature, Regular
 756-4   Session, 1997, to read as follows:
 756-5               (8)  "Political subdivision" means a municipality,
 756-6   intermunicipal, interstate, or state agency, any other public
 756-7   entity eligible for assistance under this subchapter, or a
 756-8   nonprofit water supply corporation created and operating under
 756-9   Chapter 67 [76, Acts of the 43rd Legislature, 1st Called Session,
756-10   1933 (Article 1434a, Vernon's Texas Civil Statutes)], if such
756-11   entity is eligible for financial assistance under federal law
756-12   establishing the state revolving fund or an additional state
756-13   revolving fund.
756-14         SECTION 18.57.  Section 15.731(4), Water Code, is amended to
756-15   conform to Chapter 166, Acts of the 75th Legislature, Regular
756-16   Session, 1997, to read as follows:
756-17               (4)  "Political subdivision" means a county, a
756-18   municipality, a nonprofit member-owned, member-controlled water
756-19   supply corporation organized and operating under Chapter 67 [76,
756-20   Acts of the 43rd Legislature, 1st Called Session, 1933 (Article
756-21   1434a, Vernon's Texas Civil Statutes)], or a district or authority
756-22   created and operating under Article III, Section 52, or Article
756-23   XVI, Section 59, of the Texas Constitution.
756-24         SECTION 18.58.  Section 16.001(7), Water Code, is amended to
756-25   conform to Chapter 166, Acts of the 75th Legislature, Regular
756-26   Session, 1997, to read as follows:
 757-1               (7)  "Political subdivision" means a county, city, or
 757-2   other body politic or corporate of the state, including any
 757-3   district or authority created under Article III, Section 52 or
 757-4   Article XVI, Section 59 of the Texas Constitution and including any
 757-5   interstate compact commission to which the state is a party and any
 757-6   nonprofit water supply corporation created and operating under
 757-7   Chapter 67 [76, Acts of the 43rd Legislature, 1st Called Session,
 757-8   1933 (Article 1434a, Vernon's Texas Civil Statutes)].
 757-9         SECTION 18.59.  Section 16.341(3), Water Code, is amended to
757-10   conform to Chapter 166, Acts of the 75th Legislature, Regular
757-11   Session, 1997, to read as follows:
757-12               (3)  "Political subdivision" means an affected county,
757-13   a municipality located in an affected county, a district or
757-14   authority created under Article III, Section 52, or Article XVI,
757-15   Section 59, of the Texas Constitution, located in an affected
757-16   county, or a nonprofit water supply corporation created and
757-17   operating under Chapter 67 [76, Acts of the 43rd Legislature, 1st
757-18   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
757-19   Statutes)], located in an affected county, that receives funds for
757-20   facility engineering under Section 15.407 [of this code] or
757-21   financial assistance under Subchapter K, Chapter 17, [of this code]
757-22   or an economically distressed area in an affected county for which
757-23   financial assistance is received under Subchapter C, Chapter 15[,
757-24   of this code].
757-25         SECTION 18.60.  Section 17.852(4), Water Code, is amended to
757-26   conform to Chapter 166, Acts of the 75th Legislature, Regular
 758-1   Session, 1997, to read as follows:
 758-2               (4)  "Participant" means a political subdivision or
 758-3   agency of the state or a nonprofit corporation organized pursuant
 758-4   to Chapter 67 [76, Acts of the 43rd Legislature, 1st Called
 758-5   Session, 1933 (Article 1434a, Vernon's Texas Civil Statutes)], that
 758-6   is authorized to finance projects.
 758-7         SECTION 18.61.  Section 17.853(c), Water Code, is amended to
 758-8   conform to Chapter 166, Acts of the 75th Legislature, Regular
 758-9   Session, 1997, to read as follows:
758-10         (c)  The board may use the fund only:
758-11               (1)  to provide state matching funds for federal funds
758-12   provided to the state water pollution control revolving fund or to
758-13   any additional state revolving fund created under Subchapter J,
758-14   [of] Chapter 15 [of this code];
758-15               (2)  to provide financial assistance from the proceeds
758-16   of taxable bond issues to water supply corporations organized under
758-17   Chapter 67 [76, Acts of the 43rd Legislature, 1st Called Session,
758-18   1933 (Article 1434a, Vernon's Texas Civil Statutes)], and other
758-19   participants;
758-20               (3)  to provide financial assistance to participants
758-21   for the construction of water supply projects and treatment works;
758-22               (4)  to provide financial assistance for an interim
758-23   construction period to participants for projects for which the
758-24   board will provide long-term financing through the water
758-25   development fund; and
758-26               (5)  to provide financial assistance for water supply
 759-1   and sewer service projects in economically distressed areas as
 759-2   provided by Subchapter K, [of] Chapter 17, [of this code] to the
 759-3   extent the board can make that assistance without adversely
 759-4   affecting the current or future integrity of the fund or of any
 759-5   other financial assistance program of the board.
 759-6         SECTION 18.62.  Section 17.921(3), Water Code, is amended to
 759-7   conform to Chapter 166, Acts of the 75th Legislature, Regular
 759-8   Session, 1997, to read as follows:
 759-9               (3)  "Political subdivision" means a county,
759-10   municipality, a nonprofit water supply corporation created and
759-11   operating under Chapter 67 [76, Acts of the 43rd Legislature, 1st
759-12   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
759-13   Statutes)], or district or authority created under Article III,
759-14   Section 52, or Article XVI, Section 59, of the Texas Constitution.
759-15         SECTION 18.63.  Section 20.002(7), Water Code, is amended to
759-16   conform to Chapter 166, Acts of the 75th Legislature, Regular
759-17   Session, 1997, to read as follows:
759-18               (7)  "Political subdivision" means a city, county, or
759-19   other body politic or corporate of the state, including any
759-20   district or authority created under Article III, Section 52, or
759-21   Article XVI, Section 59, of the Texas Constitution, a state agency,
759-22   an entity created by an interstate compact to which the state is a
759-23   party, and any nonprofit water supply corporation created and
759-24   operating under Chapter 67 [76, Acts of the 43rd Legislature, 1st
759-25   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
759-26   Statutes)].
 760-1         SECTION 18.64.  Section 26.344(d), Water Code, is amended to
 760-2   conform to Chapter 166, Acts of the 75th Legislature, Regular
 760-3   Session, 1997, to read as follows:
 760-4         (d)  An intrastate pipeline facility or an aboveground
 760-5   storage tank connected to such a facility is exempt from regulation
 760-6   under this subchapter if the pipeline facility is regulated under
 760-7   one of the following state laws:
 760-8               (1)  Chapter 111, Natural Resources Code;
 760-9               (2)  Chapter 117, Natural Resources Code; or
760-10               (3)  Subchapter E, Chapter 121, Utilities Code
760-11   [Articles 6053-1 and 6053-2, Revised Statutes].
760-12         SECTION 18.65.  Section 36.001(15), Water Code, is amended to
760-13   conform to Chapter 166, Acts of the 75th Legislature, Regular
760-14   Session, 1997, to read as follows:
760-15               (15)  "Political subdivision" means a county,
760-16   municipality, or other body politic or corporate of the state,
760-17   including a district or authority created under Section 52, Article
760-18   III, or Section 59, Article XVI, Texas Constitution, a state
760-19   agency, or a nonprofit water supply corporation created under
760-20   Chapter 67 [76, Acts of the 43rd Legislature, 1st Called Session,
760-21   1933 (Article 1434a, Vernon's Texas Civil Statutes)].
760-22         SECTION 18.66.  Section 49.001(a)(5), Water Code, is amended
760-23   to conform to Chapter 166, Acts of the 75th Legislature, Regular
760-24   Session, 1997, to read as follows:
760-25               (5)  "Water supply corporation" means a nonprofit water
760-26   supply or sewer service corporation created or operating under
 761-1   Chapter 67 [76, Acts of the 43rd Legislature, 1st Called Session,
 761-2   1933 (Article 1434a, Vernon's Texas Civil Statutes)].
 761-3         SECTION 18.67.  Section 65.001(10), Water Code, is amended to
 761-4   conform to Chapter 166, Acts of the 75th Legislature, Regular
 761-5   Session, 1997, to read as follows:
 761-6               (10)  "Water supply corporation" means any
 761-7   member-owned, consumer-owned water supply corporation created and
 761-8   operating under Chapter 67 [76, Acts of the 43rd Legislature, 1st
 761-9   Called Session, 1933 (Article 1434a, Vernon's Texas Civil
761-10   Statutes)], that:
761-11                     (A)  provides water supply services to
761-12   noncontiguous subdivisions in two or more counties, at least one of
761-13   which counties has a population greater than two million; or
761-14                     (B)  on or before January 1, 1985, was providing
761-15   the services of a water supply corporation under a certificate of
761-16   convenience and necessity issued by the Public Utility Commission
761-17   of Texas.
761-18         SECTION 18.68.  The following are repealed:
761-19               (1)  Chapter 1212, Acts of the 75th Legislature,
761-20   Regular Session, 1997; and
761-21               (2)  Sections 21.55, 21.56, and 21.57, Chapter 1423,
761-22   Acts of the 75th Legislature, Regular Session, 1997.
761-23                        ARTICLE 19.  RENUMBERING
761-24         SECTION 19.01.  The following provisions of enacted codes are
761-25   renumbered or relettered and appropriate cross-references are
761-26   changed to eliminate duplicate citations or to relocate misplaced
 762-1   provisions:
 762-2               (1)  Chapter 151, Agriculture Code, as added by Chapter
 762-3   780, Acts of the 75th Legislature, Regular Session, 1997, is
 762-4   renumbered as Chapter 152, Agriculture Code, and Sections 151.001
 762-5   and 151.002, Agriculture Code, as added by that Act, are renumbered
 762-6   as Sections 152.001 and 152.002, Agriculture Code, respectively.
 762-7               (2)  Section 161.053, Agriculture Code, as added by
 762-8   Chapter 31, Acts of the 74th Legislature, Regular Session, 1995, is
 762-9   renumbered as Section 161.057, Agriculture Code.
762-10               (3)  Chapter 11, Civil Practice and Remedies Code, as
762-11   added by Chapter 189, Acts of the 75th Legislature, Regular
762-12   Session, 1997, is renumbered as Chapter 12, Civil Practice and
762-13   Remedies Code, and Sections 11.001, 11.002, 11.003, 11.004, 11.005,
762-14   11.006, and 11.007, Civil Practice and Remedies Code, as added by
762-15   that Act, are renumbered as Sections 12.001, 12.002, 12.003,
762-16   12.004, 12.005, 12.006, and 12.007, Civil Practice and Remedies
762-17   Code, respectively.
762-18               (4)  Section 63.006, Civil Practice and Remedies Code,
762-19   as added by Chapter 1409, Acts of the 75th Legislature, Regular
762-20   Session, 1997, is renumbered as Section 63.007, Civil Practice and
762-21   Remedies Code.
762-22               (5)  Chapter 88, Civil Practice and Remedies Code, as
762-23   added by Chapter 662, Acts of the 75th Legislature, Regular
762-24   Session, 1997, is renumbered as Chapter 89, Civil Practice and
762-25   Remedies Code, and Sections 88.001, 88.002, and 88.003, Civil
762-26   Practice and Remedies Code, as added by that Act, are renumbered as
 763-1   Sections 89.001, 89.002, and 89.003, Civil Practice and Remedies
 763-2   Code, respectively.
 763-3               (6)  Article 13.26, Code of Criminal Procedure, as
 763-4   added by Chapter 189, Acts of the 75th Legislature, Regular
 763-5   Session, 1997, is renumbered as Article 13.27, Code of Criminal
 763-6   Procedure.
 763-7               (7)  Subsection (h), Section 3, Article 37.07, Code of
 763-8   Criminal Procedure, as added by Chapter 1086, Acts of the 75th
 763-9   Legislature, Regular Session, 1997, is relettered as Subsection
763-10   (i), Section 3, Article 37.07, Code of Criminal Procedure.
763-11               (8)(A)  Chapter 62, Code of Criminal Procedure, as
763-12   transferred by Chapter 1427, Acts of the 75th Legislature, Regular
763-13   Session, 1997, is renumbered as Chapter 63, Code of Criminal
763-14   Procedure, and Articles 62.001, 62.002, 62.003, 62.004, 62.005,
763-15   62.006, 62.007, 62.008, 62.009, 62.010, 62.011, 62.012, 62.013,
763-16   62.014, 62.015, 62.016, 62.017, and 62.018, Code of Criminal
763-17   Procedure, as transferred by that Act, are renumbered as Articles
763-18   63.001, 63.002, 63.003, 63.004, 63.005, 63.006, 63.007, 63.008,
763-19   63.009, 63.010, 63.011, 63.012, 63.013, 63.014, 63.015, 63.016,
763-20   63.017, and 63.018, Code of Criminal Procedure, respectively.
763-21                     (B)  Sections 79.017, 79.018, 79.019, and 79.020,
763-22   Human Resources Code, as added by Chapter 1084, Acts of the 75th
763-23   Legislature, Regular Session, 1997, are renumbered as Articles
763-24   63.019, 63.020, 63.021, and 63.022, Code of Criminal Procedure,
763-25   respectively.
763-26                     (C)  Sections 79.017 and 79.018, Human Resources
 764-1   Code, as added by Chapter 1376, Acts of the 75th Legislature,
 764-2   Regular Session, 1997, are renumbered as Articles 63.023 and
 764-3   63.024, Code of Criminal Procedure, respectively.
 764-4               (9)  Subchapter S, Chapter 51, Education Code, as added
 764-5   by Chapter 1179, Acts of the 75th Legislature, Regular Session,
 764-6   1997, is relettered as Subchapter T, Chapter 51, Education Code.
 764-7               (10)  Subchapter S, Chapter 51, Education Code, as
 764-8   added by Chapter 155, Acts of the 75th Legislature, Regular
 764-9   Session, 1997, is relettered as Subchapter U, Chapter 51, Education
764-10   Code.
764-11               (11)  Section 54.212, Education Code, as added by
764-12   Chapter 327, Acts of the 74th Legislature, Regular Session, 1995,
764-13   is renumbered as Section 54.217, Education Code.
764-14               (12)  Section 54.214, Education Code, as added by
764-15   Chapter  1073, Acts of the 75th Legislature, Regular Session, 1997,
764-16   is renumbered as Section 54.218, Education Code.
764-17               (13)  Section 58.009, Education Code, as added by
764-18   Chapter  787, Acts of the 75th Legislature, Regular Session, 1997,
764-19   is renumbered as Section 58.010, Education Code.
764-20               (14)  Subchapter G, Chapter 88, Education Code, as
764-21   added by Chapter 292, Acts of the 74th Legislature, Regular
764-22   Session, 1995, is relettered as Subchapter H, Chapter 88, Education
764-23   Code.
764-24               (15)  Subsection (c), Section 41.001, Election Code, as
764-25   added by Chapter 1219, Acts of the 75th Legislature, Regular
764-26   Session, 1997, is relettered as Subsection (d), Section 41.001,
 765-1   Election Code.
 765-2               (16)  Chapter 105, Election Code, as added by Chapter
 765-3   842, Acts of the 75th Legislature, Regular Session, 1997, is
 765-4   renumbered as Chapter 106, Election Code, and Sections 105.001 and
 765-5   105.002, Election Code, as added by that Act, are renumbered as
 765-6   Sections 106.001 and 106.002, Election Code, respectively.
 765-7               (17)  Subsection (g), Section 53.03, Family Code, as
 765-8   added by Chapter 593, Acts of the 75th Legislature, Regular
 765-9   Session, 1997, is relettered as Subsection (h), Section 53.03,
765-10   Family Code.
765-11               (18)  Subsection (f), Section 54.042, Family Code, as
765-12   added by Chapter 1013, Acts of the 75th Legislature, Regular
765-13   Session, 1997, is relettered as Subsection (h), Section 54.042,
765-14   Family Code.
765-15               (19)  Section 54.046, Family Code, as added by Chapter
765-16   1013, Acts of the 75th Legislature, Regular Session, 1997, is
765-17   renumbered as Section 54.047, Family Code.
765-18               (20)  Subsection (m), Section 58.003, Family Code, as
765-19   added by Chapter 1086, Acts of the 75th Legislature, Regular
765-20   Session, 1997, is relettered as Subsection (n), Section 58.003,
765-21   Family Code.
765-22               (21)  Subsection (f), Section 105.006, Family Code, as
765-23   added by Chapter 786, Acts of the 75th Legislature, Regular
765-24   Session, 1997, is relettered as Subsection (h), Section 105.006,
765-25   Family Code.
765-26               (22)  Subsection (c), Section 231.101, Family Code, as
 766-1   added by Chapter 702, Acts of the 75th Legislature, Regular
 766-2   Session, 1997, is relettered as Subsection (e), Section 231.101,
 766-3   Family Code.
 766-4               (23)  Section 231.115, Family Code, as added by Chapter
 766-5   165, Acts of the 75th Legislature, Regular Session, 1997, is
 766-6   renumbered as Section 231.117, Family Code.
 766-7               (24)  Chapter 233, Family Code, as added by Chapter
 766-8   420, Acts of the 75th Legislature, Regular Session, 1997, is
 766-9   renumbered as Chapter 235, Family Code, and Sections 233.001,
766-10   233.002, 233.003, and 233.004, Family Code, as added by that Act,
766-11   are renumbered as Sections 235.001, 235.002, 235.003, and 235.004,
766-12   Family Code, respectively.
766-13               (25)  Chapter 234, Family Code, as added by Chapter
766-14   420, Acts of the 75th Legislature, Regular Session, 1997, is
766-15   renumbered as Chapter 236, Family Code, and Sections 234.001,
766-16   234.002, and 234.003, Family Code, as added by that Act, are
766-17   renumbered as Sections 236.001, 236.002, and 236.003, Family Code,
766-18   respectively.
766-19               (26)  Subdivision (7), Section 261.001, Family Code, as
766-20   added by Chapter 575, Acts of the 75th Legislature, Regular
766-21   Session, 1997, is renumbered as Subdivision (8), Section 261.001,
766-22   Family Code.
766-23               (27)  Section 261.315, Family Code, as added by Chapter
766-24   575, Acts of the 75th Legislature, Regular Session, 1997, is
766-25   renumbered as Section 261.316, Family Code.
766-26               (28)  Subchapter J, Chapter 51, Government Code, as
 767-1   added by Chapter 699, Acts of the 75th Legislature, Regular
 767-2   Session, 1997, is relettered as Subchapter L, Chapter 51,
 767-3   Government Code, and Sections 51.901, 51.902, and 51.903,
 767-4   Government Code, as added by that Act, are renumbered as Sections
 767-5   51.941, 51.942, and 51.943, Government Code, respectively.
 767-6               (29)  Subsection (f), Section 76.006, Government Code,
 767-7   as added by Chapter 1240, Acts of the 75th Legislature, Regular
 767-8   Session, 1997, is relettered as Subsection (g), Section 76.006,
 767-9   Government Code.
767-10               (30)  Section 403.026, Government Code, as added by
767-11   Chapter 1252, Acts of the 75th Legislature, Regular Session, 1997,
767-12   is renumbered as Section 403.0221, Government Code.
767-13               (31)  Section 403.026, Government Code, as added by
767-14   Chapter 167, Acts of the 75th Legislature, Regular Session, 1997,
767-15   is renumbered as Section 403.0231, Government Code.
767-16               (32)  Section 403.026, Government Code, as added by
767-17   Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
767-18   is renumbered as Section 403.028, Government Code.
767-19               (33)  Section 411.132, Government Code, as added by
767-20   Chapter 18, Acts of the 75th Legislature, Regular Session, 1997, is
767-21   renumbered as Section 411.1105, Government Code.
767-22               (34)  Section 411.132, Government Code, as added by
767-23   Chapter 320, Acts of the 75th Legislature, Regular Session, 1997,
767-24   is renumbered as Section 411.1141, Government Code.
767-25               (35)  Section 411.132, Government Code, as added by
767-26   Chapter 923, Acts of the 75th Legislature, Regular Session, 1997,
 768-1   is renumbered as Section 411.1142, Government Code.
 768-2               (36)  Section 411.132, Government Code, as added by
 768-3   Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
 768-4   is renumbered as Section 411.1143, Government Code.
 768-5               (37)  Section 411.132, Government Code, as added by
 768-6   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
 768-7   is renumbered as Section 411.133, Government Code.
 768-8               (38)  Section 411.132, Government Code, as added by
 768-9   Chapter 1366, Acts of the 75th Legislature, Regular Session, 1997,
768-10   is renumbered as Section 411.134, Government Code.
768-11               (39)  Section 411.135, Government Code, as added by
768-12   Chapter 440, Acts of the 75th Legislature, Regular Session, 1997,
768-13   is renumbered as Section 411.1005, Government Code.
768-14               (40)  Subchapter L, Chapter 441, Government Code, as
768-15   added by Chapter 250, Acts of the 75th Legislature, Regular
768-16   Session, 1997, is relettered as Subchapter M, Chapter 441,
768-17   Government Code, and Sections 441.201, 441.202, 441.203, 441.204,
768-18   441.205, 441.206, 441.207, 441.208, 441.209, and 441.210,
768-19   Government Code, as added by that Act, are renumbered as Sections
768-20   441.221, 441.222, 441.223, 441.224, 441.225, 441.226, 441.227,
768-21   441.228, 441.229, and 441.230, Government Code, respectively.
768-22               (41)  Subchapter L, Chapter 441, Government Code, as
768-23   added by Chapter 872, Acts of the 75th Legislature, Regular
768-24   Session, 1997, is relettered as Subchapter N, Chapter 441,
768-25   Government Code, and Sections 441.201, 441.202, 441.203, 441.204,
768-26   441.205, and 441.206, Government Code, as added by that Act, are
 769-1   renumbered as Sections 441.241, 441.242, 441.243, 441.244, 441.245,
 769-2   and 441.246, Government Code, respectively.
 769-3               (42)  Section 443.015, Government Code, as added by
 769-4   Chapter 1141, Acts of the 75th Legislature, Regular Session, 1997,
 769-5   is renumbered as Section 443.024, Government Code.
 769-6               (43)  Section 493.0052, Government Code, as added by
 769-7   Chapter 1360, Acts of the 75th Legislature, Regular Session, 1997,
 769-8   is renumbered as Section 493.0053, Government Code.
 769-9               (44)  Section 493.0082, Government Code, as added by
769-10   Chapter 1360, Acts of the 75th Legislature, Regular Session, 1997,
769-11   is renumbered as Section 493.0083, Government Code.
769-12               (45)  Section 501.061, Government Code, as added by
769-13   Chapter 257, Acts of the 75th Legislature, Regular Session, 1997,
769-14   is renumbered as Section 501.063, Government Code.
769-15               (46)  Section 531.0215, Government Code, as added by
769-16   Chapter 1244, Acts of the 75th Legislature, Regular Session, 1997,
769-17   is renumbered as Section 531.0216, Government Code.
769-18               (47)  Section 531.047, Government Code, as added by
769-19   Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
769-20   is renumbered as Section 531.050, Government Code.
769-21               (48)  Section 531.047, Government Code, as added by
769-22   Chapter 1251, Acts of the 75th Legislature, Regular Session, 1997,
769-23   is renumbered as Section 531.0217, Government Code.
769-24               (49)  Section 532.112, Government Code, as added by
769-25   Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
769-26   is renumbered as Section 532.114, Government Code.
 770-1               (50)  Section 551.126, Government Code, as added by
 770-2   Chapter 1038, Acts of the 75th Legislature, Regular Session, 1997,
 770-3   is renumbered as Section 551.127, Government Code.
 770-4               (51)  Section 552.127, Government Code, as added by
 770-5   Chapter 1227, Acts of the 75th Legislature, Regular Session, 1997,
 770-6   is renumbered as Section 552.128, Government Code.
 770-7               (52)  Section 552.127, Government Code, as added by
 770-8   Chapter 1069, Acts of the 75th Legislature, Regular Session, 1997,
 770-9   is renumbered as Section 552.129, Government Code.
770-10               (53)  Section 612.004, Government Code, as added by
770-11   Chapter 760, Acts of the 75th Legislature, Regular Session, 1997,
770-12   is renumbered as Section 612.005, Government Code.
770-13               (54)  Section 824.1012, Government Code, as added by
770-14   Chapter 401, Acts of the 75th Legislature, Regular Session, 1997,
770-15   is renumbered as Section 824.1013, Government Code.
770-16               (55)  Chapter 2008, Government Code, as added by
770-17   Chapter 934, Acts of the 75th Legislature, Regular Session, 1997,
770-18   is renumbered as Chapter 2009, Government Code, and Sections
770-19   2008.001, 2008.002, 2008.003, 2008.004, 2008.005, 2008.051,
770-20   2008.052, 2008.053, 2008.054, and 2008.055, Government Code, as
770-21   added by that Act, are renumbered as Sections 2009.001, 2009.002,
770-22   2009.003, 2009.004, 2009.005, 2009.051, 2009.052, 2009.053,
770-23   2009.054, and 2009.055, Government Code, respectively.
770-24               (56)  Section 2054.060, Government Code, as added by
770-25   Chapter 538, Acts of the 75th Legislature, Regular Session, 1997,
770-26   is renumbered as Section 2054.057, Government Code.
 771-1               (57)  Section 2155.074, Government Code, as added by
 771-2   Chapter 508, Acts of the 75th Legislature, Regular Session, 1997,
 771-3   is renumbered as Section 2155.083, Government Code.
 771-4               (58)  Section 2155.144, Government Code, as added by
 771-5   Chapter 165, Acts of the 75th Legislature, Regular Session, 1997,
 771-6   is renumbered as Section 2155.1441, Government Code.
 771-7               (59)  Subchapter Y, Chapter 2306, Government Code, as
 771-8   added by Chapter 978, Acts of the 74th Legislature, Regular
 771-9   Session, 1995, is relettered as Subchapter AA, Chapter 2306,
771-10   Government Code.
771-11               (60)  Subchapter AA, Chapter 2306, Government Code, as
771-12   added by Chapter 980, Acts of the 75th Legislature, Regular
771-13   Session, 1997, is relettered as Subchapter CC, Chapter 2306,
771-14   Government Code.
771-15               (61)  Subchapter BB, Chapter 2306, Government Code, as
771-16   added by Chapter 980, Acts of the 75th Legislature, Regular
771-17   Session, 1997, is relettered as Subchapter DD, Chapter 2306,
771-18   Government Code.
771-19               (62)  Section 12.020, Health and Safety Code, as added
771-20   by Chapter 647, Acts of the 75th Legislature, Regular Session,
771-21   1997, is renumbered as Section 12.0122, Health and Safety Code.
771-22               (63)  Subchapter E, Chapter 106, Health and Safety
771-23   Code, as added by Chapter 644, Acts of the 75th Legislature,
771-24   Regular Session, 1997, is relettered as Subchapter F, Chapter 106,
771-25   Health and Safety Code, and Sections 106.101, 106.102, 106.103,
771-26   106.104, 106.105, and 106.106, Health and Safety Code, as added by
 772-1   that Act, are renumbered as Sections 106.151, 106.152, 106.153,
 772-2   106.154, 106.155, and 106.156, Health and Safety Code,
 772-3   respectively.
 772-4               (64)  Subchapter N, Chapter 161, Health and Safety
 772-5   Code, as added by Chapter 1216, Acts of the 75th Legislature,
 772-6   Regular Session, 1997, is relettered as Subchapter P, Chapter 161,
 772-7   Health and Safety Code, and Sections 161.251, 161.252, 161.253,
 772-8   161.254, and 161.255, Health and Safety Code, as added by that Act,
 772-9   are renumbered as Sections 161.351, 161.352, 161.353, 161.354, and
772-10   161.355, Health and Safety Code, respectively.
772-11               (65)  Section 245.017, Health and Safety Code, as added
772-12   by Chapter 1120, Acts of the 75th Legislature, Regular Session,
772-13   1997, is renumbered as Section 245.023, Health and Safety Code.
772-14               (66)  Section 247.029, Health and Safety Code, as added
772-15   by Chapter 1088, Acts of the 75th Legislature, Regular Session,
772-16   1997, is renumbered as Section 247.030, Health and Safety Code.
772-17               (67)  Section 361.116, Health and Safety Code, as added
772-18   by Chapter 276, Acts of the 75th Legislature, Regular Session,
772-19   1997, is renumbered as Section 361.117, Health and Safety Code.
772-20               (68)  Subsection (d), Section 461.012, Health and
772-21   Safety Code, as added by Chapter 825, Acts of the 75th Legislature,
772-22   Regular Session, 1997, is relettered as Subsection (f), Section
772-23   461.012, Health and Safety Code.
772-24               (69)  Section 22.0291, Human Resources Code, as added
772-25   by Chapter 1153, Acts of the 75th Legislature, Regular Session,
772-26   1997, is renumbered as Section 22.0292, Human Resources Code.
 773-1               (70)  Section 22.032, Human Resources Code, as added by
 773-2   Chapter 1094, Acts of the 75th Legislature, Regular Session, 1997,
 773-3   is renumbered as Section 22.0325, Human Resources Code.                   
 773-4               (71)  Section 31.0321, Human Resources Code, as added
 773-5   by Chapter 1442, Acts of the 75th Legislature, Regular Session,
 773-6   1997, is renumbered as Section 31.0322, Human Resources Code.
 773-7               (72)  Section 31.043, Human Resources Code, as added by
 773-8   Chapters 322 and 458, Acts of the 75th Legislature, Regular
 773-9   Session, 1997, is renumbered as Section 31.044, Human Resources
773-10   Code.
773-11               (73)  Section 32.0246, Human Resources Code, as added
773-12   by Chapter 555, Acts of the 75th Legislature, Regular Session,
773-13   1997, is renumbered as Section 32.0244, Human Resources Code.
773-14               (74)  Section 32.043, Human Resources Code, as added by
773-15   Chapter 618, Acts of the 75th Legislature, Regular Session, 1997,
773-16   is renumbered as Section 32.048, Human Resources Code.
773-17               (75)  Section 32.043, Human Resources Code, as added by
773-18   Chapter 692, Acts of the 75th Legislature, Regular Session, 1997,
773-19   is renumbered as Section 32.049, Human Resources Code.
773-20               (76)  Section 32.043, Human Resources Code, as added by
773-21   Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
773-22   is renumbered as Section 32.050, Human Resources Code. 
773-23               (77)  Section 32.044, Human Resources Code, as added by
773-24   Chapter 1153, Acts of the 75th Legislature, Regular Session, 1997,
773-25   is renumbered as Section 32.051, Human Resources Code.
773-26               (78)  Section 33.012, Human Resources Code, as added by
 774-1   Chapter 456, Acts of the 75th Legislature, Regular Session, 1997,
 774-2   is renumbered as Section 33.0125, Human Resources Code.
 774-3               (79)  Section 40.0563, Human Resources Code, as added
 774-4   by Chapter 1022, Acts of the 75th Legislature, Regular Session,
 774-5   1997, is renumbered as Section 40.0566, Human Resources Code.
 774-6               (80)  Section 61.051, Human Resources Code, as added by
 774-7   Chapter 1093, Acts of the 75th Legislature, Regular Session, 1997,
 774-8   is renumbered as Section 61.054, Human Resources Code.
 774-9               (81)  Section 301.067, Labor Code, as added by Chapter
774-10   228, Acts of the 75th Legislature, Regular Session, 1997, is
774-11   renumbered as Section 301.0671, Labor Code.
774-12               (82)  Section 301.067, Labor Code, as added by Chapter
774-13   456, Acts of the 75th Legislature, Regular Session, 1997, is
774-14   renumbered as Section 301.0672, Labor Code.
774-15               (83)  Section 302.003, Labor Code, as added by Chapter
774-16   684, Acts of the 75th Legislature, Regular Session, 1997, is
774-17   renumbered as Section 302.005, Labor Code.
774-18               (84)  Section 51.002, Local Government Code, is
774-19   renumbered as Section 215.005, Local Government Code.
774-20               (85)  Subsection (d), Section 262.030, Local Government
774-21   Code, as added by Chapter 746, Acts of the 74th Legislature,
774-22   Regular Session, 1995, is relettered as Subsection (e), Section
774-23   262.030, Local Government Code.
774-24               (86)  Subchapter D, Chapter 376, Local Government Code,
774-25   as added by Chapter 275, Acts of the 75th Legislature, Regular
774-26   Session, 1997, is relettered as Subchapter E, Chapter 376, Local
 775-1   Government Code, and Sections 376.121, 376.122, 376.123, 376.124,
 775-2   376.125, 376.126, 376.127, 376.128, 376.129, 376.130, 376.131,
 775-3   376.132, 376.133, 376.134, 376.135, 376.136, 376.137, 376.138,
 775-4   376.139, and 376.140, Local Government Code, as added by that Act,
 775-5   are renumbered as Sections 376.151, 376.152, 376.153, 376.154,
 775-6   376.155, 376.156, 376.157, 376.158, 376.159, 376.160, 376.161,
 775-7   376.162, 376.163, 376.164, 376.165, 376.166, 376.167, 376.168,
 775-8   376.169, and 376.170, Local Government Code, respectively.
 775-9               (87)  Section 402.906, Local Government Code, as added
775-10   by Chapter 171, Acts of the 75th Legislature, Regular Session,
775-11   1997, is renumbered as Section 402.907, Local Government Code.
775-12               (88)  Section 32.49, Penal Code, as added by Chapter
775-13   730, Acts of the 75th Legislature, Regular Session, 1997, is
775-14   renumbered as Section 32.50, Penal Code.
775-15               (89)  Section 5.010, Property Code, as added by Chapter
775-16   1239, Acts of the 75th Legislature, Regular Session, 1997, is
775-17   renumbered as Section 5.011, Property Code.
775-18               (90)  Subsection (f), Section 74.705, Property Code, as
775-19   added by Chapter 888, Acts of the 75th Legislature, Regular
775-20   Session, 1997, is relettered as Subsection (g), Section 74.705,
775-21   Property Code.
775-22               (91)  Section 25, Chapter 141, Property Code, as added
775-23   by Chapter 221, Acts of the 75th Legislature, Regular Session,
775-24   1997, is renumbered as Section 141.025, Property Code.
775-25               (92)  Subsection (r), Section 151.318, Tax Code, as
775-26   added by Chapter 1040, Acts of the 75th Legislature, Regular
 776-1   Session, 1997,  is relettered as Subsection (t), Section 151.318,
 776-2   Tax Code.
 776-3               (93)  Section 201.610, Transportation Code, as added by
 776-4   Chapter 165, Acts of the 75th Legislature, Regular Session, 1997,
 776-5   is renumbered as Section 201.612, Transportation Code.
 776-6               (94)  Section 201.905, Transportation Code, as added by
 776-7   Chapter 1171, Acts of the 75th Legislature, Regular Session, 1997,
 776-8   is renumbered as Section 201.906, Transportation Code.
 776-9               (95)  Section 225.034, Transportation Code, as added by
776-10   Chapter 44, Acts of the 75th Legislature, Regular Session, 1997, is
776-11   renumbered as Section 225.036, Transportation Code.
776-12               (96)  Section 225.034, Transportation Code, as added by
776-13   Chapter 57, Acts of the 75th Legislature, Regular Session, 1997, is
776-14   renumbered as Section 225.037, Transportation Code.
776-15               (97)  Section 225.034, Transportation Code, as added by
776-16   Chapter 190, Acts of the 75th Legislature, Regular Session, 1997,
776-17   is renumbered as Section 225.038, Transportation Code.
776-18               (98)  Section 225.034, Transportation Code, as added by
776-19   Chapter 519, Acts of the 75th Legislature, Regular Session, 1997,
776-20   is renumbered as Section 225.039, Transportation Code.
776-21               (99)  Section 225.034, Transportation Code, as added by
776-22   Chapter 595, Acts of the 75th Legislature, Regular Session, 1997,
776-23   is renumbered as Section 225.040, Transportation Code.
776-24               (100)  Section 502.009, Transportation Code, as added
776-25   by Chapter 625, Acts of the 75th Legislature, Regular Session,
776-26   1997, is renumbered as Section 502.0021, Transportation Code.
 777-1               (101)  Section 502.291, Transportation Code, as added
 777-2   by Chapter 165, Acts of the 75th Legislature, Regular Session,
 777-3   1997, is renumbered as Section 502.2704, Transportation Code.
 777-4               (102)  Section 502.292, Transportation Code, as added
 777-5   by Chapter 61, Acts of the 75th Legislature, Regular Session, 1997,
 777-6   is renumbered as Section 502.2921, Transportation Code.
 777-7               (103)  Section 502.292, Transportation Code, as added
 777-8   by Chapter 1312, Acts of the 75th Legislature, Regular Session,
 777-9   1997, is renumbered as Section 502.2661, Transportation Code.
777-10               (104)  Section 502.293, Transportation Code, as added
777-11   by Chapter 1222, Acts of the 75th Legislature, Regular Session,
777-12   1997, is renumbered as Section 502.2951, Transportation Code.
777-13               (105)  Section 502.293, Transportation Code, as added
777-14   by Chapter 1247, Acts of the 75th Legislature, Regular Session,
777-15   1997, and Section 502.294, Transportation Code, as added by Chapter
777-16   1222, Acts of the 75th Legislature, Regular Session, 1997, are
777-17   renumbered as Section 502.2721, Transportation Code.
777-18               (106)  Section 502.295, Transportation Code, as added
777-19   by Chapter 581, Acts of the 75th Legislature, Regular Session,
777-20   1997, is renumbered as Section 502.2732, Transportation Code.
777-21               (107)  Subsection (d), Section 623.093, Transportation
777-22   Code, as added by Chapter 165, Acts of the 75th Legislature,
777-23   Regular Session, 1997, is relettered as Subsection (f), Section
777-24   623.093, Transportation Code.
777-25               (108)  Section 5.123, Water Code, as added by Chapters
777-26   304 and 1082, Acts of the 75th Legislature, Regular Session, 1997,
 778-1   is renumbered as Section 5.124, Water Code.
 778-2               (109)  Section 5.238, Water Code, as added by Chapter
 778-3   302, Acts of the 75th Legislature, Regular Session, 1997, is
 778-4   renumbered as Section 5.222, Water Code.
 778-5               (110)  Section 13.143, Water Code, as added by Chapter
 778-6   1010, Acts of the 75th Legislature, Regular Session, 1997, is
 778-7   renumbered as Section 13.144, Water Code.
 778-8         SECTION 19.02.  The following cross-reference changes are
 778-9   made to conform the provisions amended to the renumbering changes
778-10   made by Section 19.01 of this Act.
778-11               (1)  Article 62.012, Code of Criminal Procedure, as
778-12   transferred by Chapter 1427, Acts of the 75th Legislature, Regular
778-13   Session, 1997, is renumbered as Article 63.012, Code of Criminal
778-14   Procedure, and amended to read as follows:
778-15         Art. 63.012 [62.012].  REPORT OF INQUIRY.  A law enforcement
778-16   agency to which a request has been made under Article 63.011
778-17   [62.011] of this code shall report to the parent on the results of
778-18   its inquiry within 14 days after the day that the written request
778-19   is filed with the law enforcement agency.
778-20               (2)  Subsection (c), Article 63.023, Code of Criminal
778-21   Procedure, as renumbered from Section 79.017, Human Resources Code,
778-22   by Section 19.01 of this Act, is amended to read as follows:
778-23         (c)  Notice of a proceeding shall be issued and served as
778-24   provided by Section 63.024 [79.018].
778-25               (3)  Subsection (a), Article 63.024, Code of Criminal
778-26   Procedure, as renumbered from Section 79.018, Human Resources Code,
 779-1   by Section 19.01 of this Act, is amended to read as follows:
 779-2         (a)  On the filing of an application under Section 63.023
 779-3   [79.017], the court clerk shall issue a citation that states that
 779-4   the application for receivership was filed and includes:
 779-5               (1)  the name of the missing person; and
 779-6               (2)  the name of the applicant.
 779-7               (4)  Subsection (a), Section 235.001, Family Code, as
 779-8   renumbered from Section 233.001, Family Code, by Section 19.01 of
 779-9   this Act, is amended to read as follows:
779-10         (a)  The state case registry shall provide information under
779-11   this chapter on the written request of a custodial parent whose
779-12   case:
779-13               (1)  is included in the state case registry established
779-14   under 42 U.S.C. Section 654a and for whom the Title IV-D agency is
779-15   not providing enforcement services; or
779-16               (2)  would otherwise not be required to be included in
779-17   the state case registry under 42 U.S.C. Section 654a but who has
779-18   applied for inclusion under Section 235.002 [233.002].
779-19               (5)  Section 233.003, Family Code, as added by Chapter
779-20   420, Acts of the 75th Legislature, Regular Session, 1997, is
779-21   renumbered as Section 235.003, Family Code, and amended to read as
779-22   follows:
779-23         Sec. 235.003 [233.003].  APPLICATION FOR SERVICES NOT
779-24   REQUIRED.  The Title IV-D agency may not require an application for
779-25   services as a condition for:
779-26               (1)  releasing information under Section 235.001
 780-1   [233.001] to a custodial parent or to the person designated by the
 780-2   parent; or
 780-3               (2)  including a case in the state case registry under
 780-4   Section 235.002 [233.002].
 780-5               (6)  Subsection (a), Section 235.004, Family Code, as
 780-6   renumbered from Section 233.004, Family Code, by Section 19.01 of
 780-7   this Act, is amended to read as follows:
 780-8         (a)  The state case registry may charge a fee for:
 780-9               (1)  including in the registry a child support case
780-10   entered in the registry under Section 235.002 [233.002]; and
780-11               (2)  providing information concerning a case as
780-12   authorized by Section 235.001 [233.001].
780-13               (7)  Section 413.022(a), Government Code, is amended to
780-14   read as follows:
780-15         (a)  The policy council shall develop methods for measuring
780-16   the success of each program or service determined by the Texas
780-17   Board of Criminal Justice under Section 493.0053 [493.0052] to be
780-18   designed for the primary purpose of rehabilitating inmates.  On
780-19   request of the policy council, the provider of a program or service
780-20   or a representative of Sam Houston State University, the Texas
780-21   Workforce Commission, or the Texas Department of Criminal Justice
780-22   shall assist the policy council in developing the methods required
780-23   by this section.  The Texas Department of Criminal Justice shall
780-24   assist the council by collecting data in accordance with those
780-25   methods.
780-26               (8)  Section 501.014(g), Government Code, is amended to
 781-1   read as follows:
 781-2         (g)  The department shall withdraw money from an inmate's
 781-3   trust fund under Subsection (e) before the department applies a
 781-4   deposit to that fund toward any unpaid balance owed to the
 781-5   department by the inmate under Section 501.063 [501.061].
 781-6               (9)  Section 2003.001(2), Government Code, is amended
 781-7   to read as follows:
 781-8               (2)  "Alternative dispute resolution procedure" has the
 781-9   meaning assigned by Section 2009.003 [2008.003].
781-10               (10)  Section 2003.042(a), Government Code, is amended
781-11   to read as follows:
781-12         (a)  An administrative law judge employed by the office or a
781-13   temporary administrative law judge may:
781-14               (1)  administer an oath;
781-15               (2)  take testimony;
781-16               (3)  rule on a question of evidence;
781-17               (4)  issue an order relating to discovery or another
781-18   hearing or prehearing matter, including an order imposing a
781-19   sanction;
781-20               (5)  issue an order that refers a case to an
781-21   alternative dispute resolution procedure, determines how the costs
781-22   of the procedure will be apportioned, and appoints an impartial
781-23   third party as described by Section 2009.053 [2008.053] to
781-24   facilitate that procedure;
781-25               (6)  issue a proposal for decision that includes
781-26   findings of fact and conclusions of law;
 782-1               (7) [(6)]  if expressly authorized by a state agency
 782-2   rule adopted under Section 2001.058(f), make the final decision in
 782-3   a contested case;[.]
 782-4               (8) [(7)]  serve as an impartial third party as
 782-5   described by Section 2009.053 [2008.053] for a dispute referred by
 782-6   an administrative law judge, unless one of the parties objects to
 782-7   the appointment; and
 782-8               (9) [(8)]  serve as an impartial third party as
 782-9   described by Section 2009.053 [2008.053] for a dispute referred by
782-10   a government agency under a contract.
782-11               (11)  Section 12.035(a), Health and Safety Code, is
782-12   amended to read as follows:
782-13         (a)  The department shall deposit all money collected for
782-14   fees and charges collected under Sections 12.0122(d) [12.020(d)]
782-15   and 12.032(a) in the state treasury to the credit of the Texas
782-16   Department of Health public health services fee fund.
782-17               (12)  Subsection (a), Section 161.352, Health and
782-18   Safety Code, as renumbered from Section 161.252, Health and Safety
782-19   Code, by Section 19.01 of this Act, is amended to read as follows:
782-20         (a)  Each manufacturer shall file with the department an
782-21   annual report for each cigarette or tobacco product distributed in
782-22   this state, stating:
782-23               (1)  the identity of each ingredient in the cigarette
782-24   or tobacco product, listed in descending order according to weight,
782-25   measure, or numerical count, other than:
782-26                     (A)  tobacco;
 783-1                     (B)  water; or
 783-2                     (C)  a reconstituted tobacco sheet made wholly
 783-3   from tobacco; and
 783-4               (2)  a nicotine yield rating for the cigarette or
 783-5   tobacco product established under Section 161.353 [161.253].
 783-6               (13)  Subsection (a), Section 161.355, Health and
 783-7   Safety Code, as renumbered from Section 161.255, Health and Safety
 783-8   Code, by Section 19.01 of this Act, is amended to read as follows:
 783-9         (a)  A district court, on petition of the department and on a
783-10   finding by the court that a manufacturer has failed to file the
783-11   report required by Section 161.352 [161.252], may by injunction:
783-12               (1)  prohibit the sale or distribution in this state of
783-13   a cigarette or tobacco product manufactured by the manufacturer; or
783-14               (2)  grant any other injunctive relief warranted by the
783-15   facts.
783-16               (14)  Section 245.011(d), Health and Safety Code, is
783-17   amended to read as follows:
783-18         (d)  Except as provided by Section 245.023 [245.017], all
783-19   information and records held by the department under this chapter
783-20   are confidential and are not open records for the purposes of
783-21   Chapter 552, Government Code.  That information may not be released
783-22   or made public on subpoena or otherwise, except that release may be
783-23   made:
783-24               (1)  for statistical purposes, but only if a person,
783-25   patient, or abortion facility is not identified;
783-26               (2)  with the consent of each person, patient, and
 784-1   abortion facility identified in the information released;
 784-2               (3)  to medical personnel, appropriate state agencies,
 784-3   or county and district courts to enforce this chapter; or
 784-4               (4)  to appropriate state licensing boards to enforce
 784-5   state licensing laws.
 784-6               (15)  Subsection (a), Section 376.167, Local Government
 784-7   Code, as renumbered from Section 376.137, Local Government Code, by
 784-8   Section 19.01 of this Act, is amended to read as follows:
 784-9         (a)  If authorized at an election held in accordance with
784-10   Section 376.166 [376.136], the district may impose and collect an
784-11   annual ad valorem tax on taxable property in the district for the
784-12   maintenance, restoration, replacement, or operation of the district
784-13   and the improvements constructed or acquired by the district or the
784-14   facilities, works, or services of the district.
784-15         SECTION 19.03.  If the number, letter, or designation
784-16   assigned by this article conflicts with a number, letter, or
784-17   designation assigned by another Act of the 76th Legislature, the
784-18   other Act controls, and the number, letter, or designation assigned
784-19   by this article has no effect.
784-20                 ARTICLE 20.  EFFECTIVE DATE; EMERGENCY
784-21         SECTION 20.01.  This Act takes effect September 1, 1999.
784-22         SECTION 20.02.  The importance of this legislation and the
784-23   crowded condition of the calendars in both houses create an
784-24   emergency and an imperative public necessity that the
784-25   constitutional rule requiring bills to be read on three several
784-26   days in each house be suspended, and this rule is hereby suspended.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 1368 passed the Senate on
         March 30, 1999, by the following vote:  Yeas 30, Nays 0.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 1368 passed the House on
         April 23, 1999, by a non-record vote.
                                             _______________________________
                                                 Chief Clerk of the House
         Approved:
         _______________________________
                     Date
         _______________________________
                   Governor