SRC-TBR C.S.S.B. 314 77(R)BILL ANALYSIS


Senate Research CenterC.S.S.B. 314
77R1068 DWS-DBy: Sibley
Business & Commerce
3/22/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

Periodically, state agencies undergo a review by the Sunset Advisory
Commission.  As proposed, C.S.S.B. 314 continues the Texas Department of
Banking for 12 years and makes statutory changes recommended by the Sunset
Advisory Commission following its review of that department. 

RULEMAKING AUTHORITY

Rulemaking authority is expressly gratned to the Finance Commission of
Texas is SECTIONS 6, and 13 (Sections 154.151, and 712.008, Finance Code)
of this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 12.107, Finance Code, as follows: (a)  Defines
"Texas trade association."  

(b)  Prohibits a person from being a Texas Department of Banking
(department)  employee employed in a "bona fide executive, administrative,
or professional capacity," as that phrase is used for purposes of
establishing an exemption to the overtime provisions of the federal Fair
Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), and its
subsequent amendments, the person or the person's spouse is an officer,
employee, or paid consultant in an industry regulated by the department. 

(c)  Prohibits a person from acting as the general counsel to the
department if the person is required to register as a lobbyist under
Chapter 305, Government Code, because of the person's activities for
compensation on behalf of a profession related to the operation of the
department.  Deletes language regarding officer or employee. 

SECTION 2.  Amends Section 12.108, Finance Code, as follows:

(b)  Requires the department to maintain a file on each written complaint
filed with the department.  Requires the file to include certain
information. 

(c)  Requires the department to provide to the person filing the complaint
and to each person who is a subject of the complaint a written summary of
the department's policies and procedures relating to complaint
investigation and resolution. 

SECTION 3.  Amends Section 12.109, Finance Code, to provide that the office
of banking commissioner is subject to Chapter 325 (Texas Sunset Act),
Government Code.  Provides that unless continued in existence as provided
by that chapter, the office is abolished September 1, 2013, rather than
2001. 

SECTION 4.  Chapter 12B, Finance Code, by adding Sections 12.111-12.113 as
follows: 

Sec. 12.111.  STANDARDS OF CONDUCT.  Requires the banking commissioner or
the  banking commissioner's designee to provide to agency employees, as
often as necessary, information regarding the requirements for office or
employment under this chapter, including information regarding a person's
responsibilities under applicable laws relating to standards of conduct for
state officers or employees. 

Sec. 12.112.  EQUAL EMPLOYMENT OPPORTUNITY POLICY.  (a)  Requires the
banking commissioner or the banking commissioner's designee to prepare and
maintain a written policy statement that implements a program of equal
employment opportunity to ensure that all personnel decisions are made
without regard to race, color, disability, sex, religion, age, or national
origin. 

  (b)  Requires the policy statement to include certain information.

(c)  Requires the policy statement to be updated annually, be reviewed by
the state Commission on Human Rights for compliance with Subsection (b)(1)
and be filed with the governor's office. 

Sec. 12.113.  EMPLOYEE INCENTIVE PROGRAM.  Requires the banking
commissioner or the banking commissioner's designee to provide to agency
employees information and training on the benefits and methods of
participation in the State Employee Incentive Program. 

SECTION 5.  Amends Section 154.109, Finance Code, by adding Subsection (d)
to authorize the commissioner to place on probation a permit holder whose
permit is suspended.  Authorizes the commissioner, if a permit suspension
is probated, to require the permit holder to report regularly to the
department on matters that are the basis of the probation, or to limit its
activities as prescribed by the commissioner. 

SECTION 6.  Amends Section 154.151, Finance Code, by adding Subsections (d)
and (e) as follows: 

(d)  Requires that a sales contract for prepaid funeral benefits, whether
in English or Spanish, be written in plain language designed to be easily
understood by the average consumer. Requires the contract to be printed in
an easily readable font and type size.  Requires the department to provide
model contracts complying with this subsection and to enforce this
subsection. 

(e)  Requires the Finance Commission of Texas by rule to establish a
standard disclosure that be included in each contract to inform purchasers
of the goods and services that will be provided or excluded under the
contract and the circumstances under which the contract may be modified
after death of the beneficiary. 

SECTION 7.  Amends Section 154.155(d), Finance Code, to provide that the
purchaser is entitled to receive the actual amount paid by the purchaser
and half of all earnings attributable to that money, less the amount
permitted to be retained as provided by Section 154.252, except as provided
by Subsection (e) and by Section 154.205.  Deletes language referencing
section 154.254. 

SECTION 8.  Amends Section 154.252, Finance Code, to authorize the seller
of a trust-funded prepaid funeral benefits contract to retain for the
seller's use and benefit an amount not to exceed one-half of all money
collected or paid until the seller has received an amount equal to the
lesser of the amount spent by the seller on selling expenses, service
costs, and general overhead, as determined and documented according to
rules adopted by the Finance Commission of Texas, or 10 percent of the
total amount the purchaser agreed to pay under the contract. 

SECTION 9.  Amends Section 154.406, Finance Code, as follows: 

(A)  Authorizes the commissioner, after notice and opportunity for hearing,
the to impose an  administrative penalty on a person who violates this
chapter or a final order of the commissioner or rule of the Finance
Commission of Texas and does not correct the violation before the 31st day
after the date the person receives written notice of the violation from the
department, or engages in a pattern of violations, as determined by the
commissioner, including violations corrected as provided by Subdivision
(1). 

(c)  Requires the commissioner, in determining the amount of the penalty,
to consider the seriousness of the violation, the person's history of
violations, including violations corrected as provided by Subsection
(a)(1), and the person's good faith in attempting to comply with this
chapter. 

(d)  Provides that the imposition of a penalty under this section is
subject to judicial review as a contested case under Chapter 2001
(Administrative Procedure), Government Code. 

SECTION 10.  Amends Section 345.003(b), Finance Code, to redefine
"services." 

SECTION 11.  Amends Chapter 712A, Health and Safety Code, by adding Section
712.008 as follows: 

Sec. 712.008.  RULES.  Authorizes the Finance Commission of Texas to adopt
rules to enforce and administer this chapter, including rules establishing
fees to defray the costs of enforcing and administering this chapter. 

SECTION 12.  Amends Section 712.042, to require a corporation, that on
filing a statement of funds under Section 712.041, to pay the commissioner
a reasonable and necessary fee set by rule adopted by the Finance
Commissioner of Texas under Section 712.008 to defray the cost of
administering this chapter.  Deletes language regarding the banking
department. 

SECTION 13.  Amends Section 712.044, Health and Safety Code, as follows:

Sec. 712.044.  New Heading: EXAMINATION OF [FUND] RECORDS; EXAMINATION FEES
AND EXPENSES.  (a) Authorizes the commissioner to examine the books and
records of a corporation relating to its fund and the operation of the
cemetery annually or more often as necessary to protect the interest of
plot owners.  Deletes language regarding the last examination of the
corporation's books. 

SECTION 14.  Amends Sections 712.0441(a)-(c), Health and Safety Code, as
follows: 

(a)  Authorizes the commissioner, after notice and opportunity for hearing,
to impose an administrative penalty on a person who violates this chapter
or a final order of the commissioner or rule of the Finance Commission of
Texas and does not correct the violation before the 31st day after the date
the person receives written notice of the violation from the banking
department, or engages in a pattern of violations, as determined by the
commissioner, including violations corrected as provided by this section. 

(b)  Prohibits the amount of the penalty for each violation from exceeding
$1,000 for each day the violation occurs. 

(c)  Requires the commissioner, in determining the amount of the penalty,
to consider the seriousness of the violation, the person's history of
violations, including violations corrected as provided by this section, and
the person's good faith in attempting to comply with this chapter. Provides
that the imposition of a penalty under this section is subject to judicial
review as a contested case under Chapter 2001, Government Code.  Authorizes
the commissioner to collect the penalty in the same manner that a money
judgment is enforced in district court.  Deletes language regarding civil
penalties. 

SECTION 15.  Effective date: September 1, 2001.

SUMMARY OF COMMITTEE CHANGES

SECTION 1.  Amends As Filed S.B. 314 by redefining "Texas trade
association." 

SECTION 2.  Amends As Filed S.B. 314 to require the complaint file to
contain an explanation of why the file was closed, and requiring the Texas
Department of Banking (department) to provide to the person filing the
complaint and to each person who is subject of the complaint a written
summary, rather than a copy, of the department's policies and procedures
relating to complaint investigation and resolution. 

SECTION 7.  Deletes proposed SECTION 7 of As Filed S.B. 314, relating to
finance charges, and renumbers sections accordingly. 

SECTION 10.  Deletes proposed SECTION 10 of As Filed S.B. 314, relating to
return of interest following a funeral, and renumbers sections accordingly. 

SECTION 11 former SECTION 13 in As Filed 314.  Amends As Filed S.B. 314,
relating to adoption of rules by the Finance Commission to include rules
establishing fees to defray the costs of enforcing and administering this
chapter. 

SECTION 12 former SECTION 14 in As Filed 314.  Amends As Filed S.B. 314, to
include a rule adopted by the Finance Commissioner of Texas
(commission)under Section 712.008 to defray the costs of administering this
chapter, and renumbers SECTIONS accordingly. 

SECTION 13 former SECTION 15 in As Filed 314.  Amends As Filed S.B. 314, to
retitle Section 712.044 as EXAMINATION OF [FUND] RECORD; EXAMINATION FEES
AND EXPENSES, and to authorize the commissioner to examine the books and
records of a corporation relating to its fund and the operation of the
cemetery annually or more often as necessary to protect the interest of
plot owners.   

SECTION 16.  Deletes SECTION 16 of this Act and renumbers sections
accordingly.