By: Sibley S.B. No. 314
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the continuation and functions of the Texas Department
1-3 of Banking and the regulation of certain financial institutions and
1-4 businesses; providing an administrative penalty.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Section 12.107, Finance Code, is amended to read
1-7 as follows:
1-8 Sec. 12.107. CONFLICT OF INTEREST. (a) In this section,
1-9 "Texas trade association" means a cooperative and voluntarily
1-10 joined association of business or professional competitors in this
1-11 state that:
1-12 (1) is primarily designed to assist its members and
1-13 its industry or profession in dealing with mutual business or
1-14 professional problems and in promoting their common interests; and
1-15 (2) includes business and professional competitors
1-16 located in this state among its members.
1-17 (b) A person may not be a department employee if:
1-18 (1) the person is an officer, employee, or paid
1-19 consultant of a Texas trade association in an industry regulated by
1-20 the department; or
1-21 (2) the person's spouse is an officer, manager, or
1-22 paid consultant of a Texas trade association in an industry
1-23 regulated by the department.
1-24 (c) A person may not act as the general counsel to the
1-25 department if the person is required to register as a lobbyist
2-1 under Chapter 305, Government Code, because of the person's
2-2 activities for compensation on behalf of a profession related to
2-3 the operation of the department [An officer or employee of the
2-4 department may not be:]
2-5 [(1) an officer, employee, or paid consultant of a
2-6 trade association in an industry regulated by the department; or]
2-7 [(2) related within the second degree by affinity or
2-8 consanguinity, as determined under Chapter 573, Government Code, to
2-9 a person who is an officer, employee, or paid consultant of a trade
2-10 association in an industry regulated by the department].
2-11 (d) [(b)] Before the 11th day after the date on which an
2-12 employee begins employment with the department, the employee shall
2-13 read the conflict-of-interest statutes applicable to employees of
2-14 the department and sign a notarized affidavit stating that the
2-15 employee has read those statutes.
2-16 SECTION 2. Section 12.108, Finance Code, is amended to read
2-17 as follows:
2-18 Sec. 12.108. CONSUMER INFORMATION AND COMPLAINTS. (a) The
2-19 banking commissioner shall:
2-20 (1) prepare information of consumer interest
2-21 describing:
2-22 (A) the regulatory functions of the department;
2-23 and
2-24 (B) the department's procedures by which
2-25 consumer complaints are filed with and resolved by the department;
2-26 and
3-1 (2) make the information available to the public and
3-2 appropriate state agencies.
3-3 (b) The department shall maintain a file on each written
3-4 complaint filed with the department. The file must include:
3-5 (1) the name of the person who filed the complaint;
3-6 (2) the date the complaint is received by the
3-7 department;
3-8 (3) the subject matter of the complaint;
3-9 (4) the name of each person contacted in relation to
3-10 the complaint;
3-11 (5) a summary of the results of the review or
3-12 investigation of the complaint; and
3-13 (6) an explanation of the reason the file was closed.
3-14 (c) The department shall provide to the person filing the
3-15 complaint and to each person who is a subject of the complaint a
3-16 written summary of the department's policies and procedures
3-17 relating to complaint investigation and resolution [banking
3-18 commissioner shall keep an information file about each complaint
3-19 filed with the commissioner relating to an entity regulated by the
3-20 department.]
3-21 [(c) At least quarterly until final disposition of any
3-22 written complaint filed with the banking commissioner relating to
3-23 an entity regulated by the department, the commissioner shall
3-24 notify the parties to the complaint of the status of the complaint
3-25 unless the notice would jeopardize an undercover investigation].
3-26 SECTION 3. Section 12.109, Finance Code, is amended to read
4-1 as follows:
4-2 Sec. 12.109. SUNSET PROVISION. The office of banking
4-3 commissioner is subject to Chapter 325, Government Code (Texas
4-4 Sunset Act). Unless continued in existence as provided by that
4-5 chapter, the office is abolished September 1, 2013 [2001].
4-6 SECTION 4. Subchapter B, Chapter 12, Finance Code, is
4-7 amended by adding Sections 12.111, 12.112, and 12.113 to read as
4-8 follows:
4-9 Sec. 12.111. STANDARDS OF CONDUCT. The banking commissioner
4-10 or the banking commissioner's designee shall provide to agency
4-11 employees, as often as necessary, information regarding the
4-12 requirements for office or employment under this chapter, including
4-13 information regarding a person's responsibilities under applicable
4-14 laws relating to standards of conduct for state officers or
4-15 employees.
4-16 Sec. 12.112. EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a) The
4-17 banking commissioner or the banking commissioner's designee shall
4-18 prepare and maintain a written policy statement that implements a
4-19 program of equal employment opportunity to ensure that all
4-20 personnel decisions are made without regard to race, color,
4-21 disability, sex, religion, age, or national origin.
4-22 (b) The policy statement must include:
4-23 (1) personnel policies, including policies relating to
4-24 recruitment, evaluation, selection, training, and promotion of
4-25 personnel, that show the intent of the department to avoid the
4-26 unlawful employment practices described by Chapter 21, Labor Code;
5-1 and
5-2 (2) an analysis of the extent to which the composition
5-3 of the department's personnel is in accordance with state and
5-4 federal law and a description of reasonable methods to achieve
5-5 compliance with state and federal law.
5-6 (c) The policy statement must:
5-7 (1) be updated annually;
5-8 (2) be reviewed by the state Commission on Human
5-9 Rights for compliance with Subsection (b)(1); and
5-10 (3) be filed with the governor's office.
5-11 Sec. 12.113. EMPLOYEE INCENTIVE PROGRAM. The banking
5-12 commissioner or the banking commissioner's designee shall provide
5-13 to agency employees information and training on the benefits and
5-14 methods of participation in the state employee incentive program.
5-15 SECTION 5. Section 154.109, Finance Code, is amended by
5-16 adding Subsection (d) to read as follows:
5-17 (d) The commissioner may place on probation a permit holder
5-18 whose permit is suspended. If a permit suspension is probated, the
5-19 commissioner may require the permit holder:
5-20 (1) to report regularly to the department on matters
5-21 that are the basis of the probation; or
5-22 (2) to limit its activities as prescribed by the
5-23 commissioner.
5-24 SECTION 6. Section 154.151, Finance Code, is amended by
5-25 adding Subsections (d) and (e) to read as follows:
5-26 (d) A sales contract for prepaid funeral benefits, whether
6-1 in English or Spanish, must be written in plain language designed
6-2 to be easily understood by the average consumer. The contract must
6-3 be printed in an easily readable font and type size. The
6-4 department shall provide model contracts complying with this
6-5 subsection and shall enforce this subsection.
6-6 (e) The Finance Commission of Texas by rule shall establish
6-7 a standard disclosure that must be included in each contract to
6-8 inform purchasers of the goods and services that will be provided
6-9 or excluded under the contract and the circumstances under which
6-10 the contract may be modified after death of the beneficiary.
6-11 SECTION 7. Subsection (d), Section 154.155, Finance Code, is
6-12 amended to read as follows:
6-13 (d) The purchaser is entitled to receive [only] the actual
6-14 amount paid by the purchaser and half of all earnings attributable
6-15 to that money, less the amount permitted to be retained as provided
6-16 by Section 154.252, except as provided by Subsection (e) and by
6-17 Section [Sections] 154.205 [and 154.254].
6-18 SECTION 8. Section 154.252, Finance Code, is amended to read
6-19 as follows:
6-20 Sec. 154.252. RETENTION OF MONEY FOR EXPENSES. The [To
6-21 cover its selling expenses, service costs, and general overhead,
6-22 the] seller of a trust-funded prepaid funeral benefits contract may
6-23 retain for the seller's use and benefit an amount not to exceed
6-24 one-half of all money collected or paid until the seller has
6-25 received an amount equal to the lesser of:
6-26 (1) the amount spent by the seller on selling
7-1 expenses, service costs, and general overhead, as determined and
7-2 documented according to rules adopted by the Finance Commission of
7-3 Texas; or
7-4 (2) 10 percent of the total amount the purchaser
7-5 agreed to pay under the contract.
7-6 SECTION 9. Section 154.406, Finance Code, is amended to read
7-7 as follows:
7-8 Sec. 154.406. ADMINISTRATIVE PENALTY. (a) After notice and
7-9 opportunity for hearing, the commissioner may impose an
7-10 administrative penalty on a person who:
7-11 (1) violates this chapter or a final order of the
7-12 commissioner or rule of the Finance Commission of Texas
7-13 [commissioner or department;] and
7-14 [(2)] does not correct the violation before the 31st
7-15 day after the date the person receives written notice of the
7-16 violation from the department; or
7-17 (2) engages in a pattern of violations, as determined
7-18 by the commissioner, including violations corrected as provided by
7-19 Subdivision (1).
7-20 (b) The amount of the penalty for each violation may not
7-21 exceed $1,000 for each day the violation occurs.
7-22 (c) In determining the amount of the penalty, the
7-23 commissioner shall consider the seriousness of the violation, the
7-24 person's history of violations, including violations corrected as
7-25 provided by Subsection (a)(1), and the person's good faith in
7-26 attempting to comply with this chapter.
8-1 (d) The imposition of a penalty under this section is
8-2 subject to judicial review as a contested case under Chapter 2001,
8-3 Government Code.
8-4 (e) The commissioner may collect the penalty in the same
8-5 manner that a money judgment is enforced in district court.
8-6 SECTION 10. Subsection (b), Section 345.003, Finance Code,
8-7 is amended to read as follows:
8-8 (b) "Services" includes work or labor described by
8-9 Subsection (a) and that is:
8-10 (1) a medical or dental service; or
8-11 (2) [a prepaid funeral benefit regulated under Chapter
8-12 154; and]
8-13 [(3)] a maintenance or service contract or warranty.
8-14 SECTION 11. Subchapter A, Chapter 712, Health and Safety
8-15 Code, is amended by adding Section 712.008 to read as follows:
8-16 Sec. 712.008. RULES. The Finance Commission of Texas may
8-17 adopt rules to enforce and administer this chapter, including rules
8-18 establishing fees to defray the costs of enforcing and
8-19 administering this chapter.
8-20 SECTION 12. Section 712.042, Health and Safety Code, is
8-21 amended to read as follows:
8-22 Sec. 712.042. FEES. On filing a statement of funds under
8-23 Section 712.041, a corporation shall pay the commissioner a
8-24 reasonable and necessary fee set by rule adopted by the Finance
8-25 Commission of Texas under Section 712.008 [annually by the
8-26 commissioner] to defray the cost of administering this chapter.
9-1 SECTION 13. Section 712.044, Health and Safety Code, is
9-2 amended by amending the section heading and Subsection (a) to read
9-3 as follows:
9-4 Sec. 712.044. EXAMINATION OF [FUND] RECORDS; EXAMINATION
9-5 FEES AND EXPENSES. (a) The commissioner may examine the books and
9-6 records of a corporation relating to its fund and the operation of
9-7 the cemetery [shall be examined] annually or more [as] often as
9-8 necessary to protect the interest of plot owners [by the
9-9 commissioner. The examination shall cover the period of time from
9-10 the date of the last examination of the corporation's books and
9-11 records relating to its fund].
9-12 SECTION 14. Subsections (a), (b), and (c), Section 712.0441,
9-13 Health and Safety Code, are amended to read as follows:
9-14 (a) After notice and opportunity for hearing, the
9-15 commissioner may impose an administrative penalty on a person who:
9-16 (1) violates this chapter or a final order of the
9-17 commissioner or rule of the Finance Commission of Texas and does
9-18 not correct the violation before the 31st day after the date the
9-19 person receives written notice of the violation from the banking
9-20 department; or
9-21 (2) engages in a pattern of violations, as determined
9-22 by the commissioner, including violations corrected as provided by
9-23 this section.
9-24 (b) The amount of the penalty for each violation may not
9-25 exceed $1,000 for each day the violation occurs.
9-26 (c) In determining the amount of the penalty, the
10-1 commissioner shall consider the seriousness of the violation, the
10-2 person's history of violations, including violations corrected as
10-3 provided by this section, and the person's good faith in attempting
10-4 to comply with this chapter. The imposition of a penalty under
10-5 this section is subject to judicial review as a contested case
10-6 under Chapter 2001, Government Code. The commissioner may collect
10-7 the penalty in the same manner that a money judgment is enforced in
10-8 district court. [A corporation shall be subject to a civil penalty
10-9 upon the occurrence of any of the following violations:]
10-10 [(1) the corporation does not make a deposit in its
10-11 fund as required by Section 712.028;]
10-12 [(2) the corporation does not file a statement of
10-13 funds as required by Section 712.041; or]
10-14 [(3) the corporation does not pay the filing fee as
10-15 required by Section 712.042.]
10-16 [(b) The trustee of a fund shall be subject to a civil
10-17 penalty upon the occurrence of either of the following violations:]
10-18 [(1) the trustee does not file a report required by
10-19 the commissioner under Section 712.043 within 30 days after the
10-20 date of the commissioner's request; or]
10-21 [(2) the fund does not comply with this chapter.]
10-22 [(c) The civil penalty that may be imposed under Subsection
10-23 (a) or (b) shall not exceed $250 per violation for each day that
10-24 the violation persists, provided, that the aggregate civil penalty
10-25 for all violations shall not exceed $500 per day. A corporation or
10-26 trustee shall have no civil penalty liability if within 30 days
11-1 after receiving written notice from the commissioner of the
11-2 violation the corporation or trustee corrects such violation by
11-3 performing the required duty or act. Any such civil penalty may be
11-4 imposed by the commissioner after notice and opportunity for
11-5 hearing in accordance with the procedures for a contested case
11-6 hearing under the Administrative Procedure and Texas Register Act.
11-7 In determining the amount of the penalty, the commissioner shall
11-8 consider the seriousness of the violation and the good faith of the
11-9 corporation or trustee in its attempts to achieve compliance. The
11-10 amount of such penalty may be collected by the commissioner in the
11-11 same manner that money judgments are enforced in the district
11-12 courts of this state.]
11-13 SECTION 15. This Act takes effect September 1, 2001.