77R13202 DLF-F                           
         By Thompson, Brown of Brazos                          H.B. No. 3497
         Substitute the following for H.B. No. 3497:
         By Thompson                                       C.S.H.B. No. 3497
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain practices of title insurance companies in
 1-3     providing area and boundary coverage.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Chapter 9, Insurance Code, is amended by adding
 1-6     Article 9.07C to read as follows:
 1-7           Art. 9.07C.  AREA AND BOUNDARY COVERAGE. (a)  In this
 1-8     article, "area and boundary coverage" means title insurance
 1-9     coverage relating to discrepancies, conflicts, or shortages in area
1-10     or boundary lines, or any encroachments or protrusions, or any
1-11     overlapping of improvements.
1-12           (b)  The commissioner may adopt rules allowing a title
1-13     insurance company to accept an existing real property survey and
1-14     not require a new survey when providing area and boundary coverage
1-15     if the title insurance company is willing to accept evidence of an
1-16     existing real property survey, and an affidavit verifying the
1-17     existing survey, as prescribed by the commissioner, notwithstanding
1-18     the age of the survey or the identity of the person for whom the
1-19     survey was prepared.
1-20           (c)  A title insurance company may not discriminate in
1-21     providing area and boundary coverage in connection with residential
1-22     real property solely because:
1-23                 (1)  the real property is platted or unplatted; or
1-24                 (2)  a municipality did not accept a subdivision plat
 2-1     in relation to the real property before September 1, 1975.
 2-2           (d)  A title insurance company may not require an indemnity
 2-3     from a seller, buyer, borrower, or lender to provide area and
 2-4     boundary coverage.
 2-5           SECTION 2.  This Act takes effect immediately if it receives
 2-6     a vote of two-thirds of all the members elected to each house, as
 2-7     provided by Section 39, Article III, Texas Constitution.  If this
 2-8     Act does not receive the vote necessary for immediate effect, this
 2-9     Act takes effect September 1, 2001.