1-1 By: Sibley S.B. No. 314
1-2 (In the Senate - Filed March 7, 2001; March 8, 2001, read
1-3 first time and referred to Committee on Business and Commerce;
1-4 March 26, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 7, Nays 0; March 26, 2001,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 314 By: Sibley
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the continuation and functions of the Texas Department
1-11 of Banking and the regulation of certain financial institutions and
1-12 businesses; providing an administrative penalty.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Section 12.107, Finance Code, is amended to read
1-15 as follows:
1-16 Sec. 12.107. CONFLICT OF INTEREST. (a) In this section,
1-17 "Texas trade association" means a cooperative and voluntarily
1-18 joined association of business or professional competitors in this
1-19 state that:
1-20 (1) is primarily designed to assist its members and
1-21 its industry or profession in dealing with mutual business or
1-22 professional problems and in promoting their common interests; and
1-23 (2) includes business and professional competitors
1-24 located in this state among its members.
1-25 (b) A person may not be a department employee if:
1-26 (1) the person is an officer, employee, or paid
1-27 consultant of a Texas trade association in an industry regulated by
1-28 the department; or
1-29 (2) the person's spouse is an officer, manager, or
1-30 paid consultant of a Texas trade association in an industry
1-31 regulated by the department.
1-32 (c) A person may not act as the general counsel to the
1-33 department if the person is required to register as a lobbyist
1-34 under Chapter 305, Government Code, because of the person's
1-35 activities for compensation on behalf of a profession related to
1-36 the operation of the department [An officer or employee of the
1-37 department may not be:]
1-38 [(1) an officer, employee, or paid consultant of a
1-39 trade association in an industry regulated by the department; or]
1-40 [(2) related within the second degree by affinity or
1-41 consanguinity, as determined under Chapter 573, Government Code, to
1-42 a person who is an officer, employee, or paid consultant of a trade
1-43 association in an industry regulated by the department].
1-44 (d) [(b)] Before the 11th day after the date on which an
1-45 employee begins employment with the department, the employee shall
1-46 read the conflict-of-interest statutes applicable to employees of
1-47 the department and sign a notarized affidavit stating that the
1-48 employee has read those statutes.
1-49 SECTION 2. Section 12.108, Finance Code, is amended to read
1-50 as follows:
1-51 Sec. 12.108. CONSUMER INFORMATION AND COMPLAINTS. (a) The
1-52 banking commissioner shall:
1-53 (1) prepare information of consumer interest
1-54 describing:
1-55 (A) the regulatory functions of the department;
1-56 and
1-57 (B) the department's procedures by which
1-58 consumer complaints are filed with and resolved by the department;
1-59 and
1-60 (2) make the information available to the public and
1-61 appropriate state agencies.
1-62 (b) The department shall maintain a file on each written
1-63 complaint filed with the department. The file must include:
1-64 (1) the name of the person who filed the complaint;
2-1 (2) the date the complaint is received by the
2-2 department;
2-3 (3) the subject matter of the complaint;
2-4 (4) the name of each person contacted in relation to
2-5 the complaint;
2-6 (5) a summary of the results of the review or
2-7 investigation of the complaint; and
2-8 (6) an explanation of the reason the file was closed.
2-9 (c) The department shall provide to the person filing the
2-10 complaint and to each person who is a subject of the complaint a
2-11 written summary of the department's policies and procedures
2-12 relating to complaint investigation and resolution [banking
2-13 commissioner shall keep an information file about each complaint
2-14 filed with the commissioner relating to an entity regulated by the
2-15 department.]
2-16 [(c) At least quarterly until final disposition of any
2-17 written complaint filed with the banking commissioner relating to
2-18 an entity regulated by the department, the commissioner shall
2-19 notify the parties to the complaint of the status of the complaint
2-20 unless the notice would jeopardize an undercover investigation].
2-21 SECTION 3. Section 12.109, Finance Code, is amended to read
2-22 as follows:
2-23 Sec. 12.109. SUNSET PROVISION. The office of banking
2-24 commissioner is subject to Chapter 325, Government Code (Texas
2-25 Sunset Act). Unless continued in existence as provided by that
2-26 chapter, the office is abolished September 1, 2013 [2001].
2-27 SECTION 4. Subchapter B, Chapter 12, Finance Code, is
2-28 amended by adding Sections 12.111, 12.112, and 12.113 to read as
2-29 follows:
2-30 Sec. 12.111. STANDARDS OF CONDUCT. The banking commissioner
2-31 or the banking commissioner's designee shall provide to agency
2-32 employees, as often as necessary, information regarding the
2-33 requirements for office or employment under this chapter, including
2-34 information regarding a person's responsibilities under applicable
2-35 laws relating to standards of conduct for state officers or
2-36 employees.
2-37 Sec. 12.112. EQUAL EMPLOYMENT OPPORTUNITY POLICY. (a) The
2-38 banking commissioner or the banking commissioner's designee shall
2-39 prepare and maintain a written policy statement that implements a
2-40 program of equal employment opportunity to ensure that all
2-41 personnel decisions are made without regard to race, color,
2-42 disability, sex, religion, age, or national origin.
2-43 (b) The policy statement must include:
2-44 (1) personnel policies, including policies relating to
2-45 recruitment, evaluation, selection, training, and promotion of
2-46 personnel, that show the intent of the department to avoid the
2-47 unlawful employment practices described by Chapter 21, Labor Code;
2-48 and
2-49 (2) an analysis of the extent to which the composition
2-50 of the department's personnel is in accordance with state and
2-51 federal law and a description of reasonable methods to achieve
2-52 compliance with state and federal law.
2-53 (c) The policy statement must:
2-54 (1) be updated annually;
2-55 (2) be reviewed by the state Commission on Human
2-56 Rights for compliance with Subsection (b)(1); and
2-57 (3) be filed with the governor's office.
2-58 Sec. 12.113. EMPLOYEE INCENTIVE PROGRAM. The banking
2-59 commissioner or the banking commissioner's designee shall provide
2-60 to agency employees information and training on the benefits and
2-61 methods of participation in the state employee incentive program.
2-62 SECTION 5. Section 154.109, Finance Code, is amended by
2-63 adding Subsection (d) to read as follows:
2-64 (d) The commissioner may place on probation a permit holder
2-65 whose permit is suspended. If a permit suspension is probated, the
2-66 commissioner may require the permit holder:
2-67 (1) to report regularly to the department on matters
2-68 that are the basis of the probation; or
2-69 (2) to limit its activities as prescribed by the
3-1 commissioner.
3-2 SECTION 6. Section 154.151, Finance Code, is amended by
3-3 adding Subsections (d) and (e) to read as follows:
3-4 (d) A sales contract for prepaid funeral benefits, whether
3-5 in English or Spanish, must be written in plain language designed
3-6 to be easily understood by the average consumer. The contract must
3-7 be printed in an easily readable font and type size. The
3-8 department shall provide model contracts complying with this
3-9 subsection and shall enforce this subsection.
3-10 (e) The Finance Commission of Texas by rule shall establish
3-11 a standard disclosure that must be included in each contract to
3-12 inform purchasers of the goods and services that will be provided
3-13 or excluded under the contract and the circumstances under which
3-14 the contract may be modified after death of the beneficiary.
3-15 SECTION 7. Subsection (d), Section 154.155, Finance Code, is
3-16 amended to read as follows:
3-17 (d) The purchaser is entitled to receive [only] the actual
3-18 amount paid by the purchaser and half of all earnings attributable
3-19 to that money, less the amount permitted to be retained as provided
3-20 by Section 154.252, except as provided by Subsection (e) and by
3-21 Section [Sections] 154.205 [and 154.254].
3-22 SECTION 8. Section 154.252, Finance Code, is amended to read
3-23 as follows:
3-24 Sec. 154.252. RETENTION OF MONEY FOR EXPENSES. The [To
3-25 cover its selling expenses, service costs, and general overhead,
3-26 the] seller of a trust-funded prepaid funeral benefits contract may
3-27 retain for the seller's use and benefit an amount not to exceed
3-28 one-half of all money collected or paid until the seller has
3-29 received an amount equal to the lesser of:
3-30 (1) the amount spent by the seller on selling
3-31 expenses, service costs, and general overhead, as determined and
3-32 documented according to rules adopted by the Finance Commission of
3-33 Texas; or
3-34 (2) 10 percent of the total amount the purchaser
3-35 agreed to pay under the contract.
3-36 SECTION 9. Section 154.406, Finance Code, is amended to read
3-37 as follows:
3-38 Sec. 154.406. ADMINISTRATIVE PENALTY. (a) After notice and
3-39 opportunity for hearing, the commissioner may impose an
3-40 administrative penalty on a person who:
3-41 (1) violates this chapter or a final order of the
3-42 commissioner or rule of the Finance Commission of Texas
3-43 [commissioner or department;] and
3-44 [(2)] does not correct the violation before the 31st
3-45 day after the date the person receives written notice of the
3-46 violation from the department; or
3-47 (2) engages in a pattern of violations, as determined
3-48 by the commissioner, including violations corrected as provided by
3-49 Subdivision (1).
3-50 (b) The amount of the penalty for each violation may not
3-51 exceed $1,000 for each day the violation occurs.
3-52 (c) In determining the amount of the penalty, the
3-53 commissioner shall consider the seriousness of the violation, the
3-54 person's history of violations, including violations corrected as
3-55 provided by Subsection (a)(1), and the person's good faith in
3-56 attempting to comply with this chapter.
3-57 (d) The imposition of a penalty under this section is
3-58 subject to judicial review as a contested case under Chapter 2001,
3-59 Government Code.
3-60 (e) The commissioner may collect the penalty in the same
3-61 manner that a money judgment is enforced in district court.
3-62 SECTION 10. Subsection (b), Section 345.003, Finance Code,
3-63 is amended to read as follows:
3-64 (b) "Services" includes work or labor described by
3-65 Subsection (a) and that is:
3-66 (1) a medical or dental service; or
3-67 (2) [a prepaid funeral benefit regulated under Chapter
3-68 154; and]
3-69 [(3)] a maintenance or service contract or warranty.
4-1 SECTION 11. Subchapter A, Chapter 712, Health and Safety
4-2 Code, is amended by adding Section 712.008 to read as follows:
4-3 Sec. 712.008. RULES. The Finance Commission of Texas may
4-4 adopt rules to enforce and administer this chapter, including rules
4-5 establishing fees to defray the costs of enforcing and
4-6 administering this chapter.
4-7 SECTION 12. Section 712.042, Health and Safety Code, is
4-8 amended to read as follows:
4-9 Sec. 712.042. FEES. On filing a statement of funds under
4-10 Section 712.041, a corporation shall pay the commissioner a
4-11 reasonable and necessary fee set by rule adopted by the Finance
4-12 Commission of Texas under Section 712.008 [annually by the
4-13 commissioner] to defray the cost of administering this chapter.
4-14 SECTION 13. Section 712.044, Health and Safety Code, is
4-15 amended by amending the section heading and Subsection (a) to read
4-16 as follows:
4-17 Sec. 712.044. EXAMINATION OF [FUND] RECORDS; EXAMINATION
4-18 FEES AND EXPENSES. (a) The commissioner may examine the books and
4-19 records of a corporation relating to its fund and the operation of
4-20 the cemetery [shall be examined] annually or more [as] often as
4-21 necessary to protect the interest of plot owners [by the
4-22 commissioner. The examination shall cover the period of time from
4-23 the date of the last examination of the corporation's books and
4-24 records relating to its fund].
4-25 SECTION 14. Subsections (a), (b), and (c), Section 712.0441,
4-26 Health and Safety Code, are amended to read as follows:
4-27 (a) After notice and opportunity for hearing, the
4-28 commissioner may impose an administrative penalty on a person who:
4-29 (1) violates this chapter or a final order of the
4-30 commissioner or rule of the Finance Commission of Texas and does
4-31 not correct the violation before the 31st day after the date the
4-32 person receives written notice of the violation from the banking
4-33 department; or
4-34 (2) engages in a pattern of violations, as determined
4-35 by the commissioner, including violations corrected as provided by
4-36 this section.
4-37 (b) The amount of the penalty for each violation may not
4-38 exceed $1,000 for each day the violation occurs.
4-39 (c) In determining the amount of the penalty, the
4-40 commissioner shall consider the seriousness of the violation, the
4-41 person's history of violations, including violations corrected as
4-42 provided by this section, and the person's good faith in attempting
4-43 to comply with this chapter. The imposition of a penalty under
4-44 this section is subject to judicial review as a contested case
4-45 under Chapter 2001, Government Code. The commissioner may collect
4-46 the penalty in the same manner that a money judgment is enforced in
4-47 district court. [A corporation shall be subject to a civil penalty
4-48 upon the occurrence of any of the following violations:]
4-49 [(1) the corporation does not make a deposit in its
4-50 fund as required by Section 712.028;]
4-51 [(2) the corporation does not file a statement of
4-52 funds as required by Section 712.041; or]
4-53 [(3) the corporation does not pay the filing fee as
4-54 required by Section 712.042.]
4-55 [(b) The trustee of a fund shall be subject to a civil
4-56 penalty upon the occurrence of either of the following violations:]
4-57 [(1) the trustee does not file a report required by
4-58 the commissioner under Section 712.043 within 30 days after the
4-59 date of the commissioner's request; or]
4-60 [(2) the fund does not comply with this chapter.]
4-61 [(c) The civil penalty that may be imposed under Subsection
4-62 (a) or (b) shall not exceed $250 per violation for each day that
4-63 the violation persists, provided, that the aggregate civil penalty
4-64 for all violations shall not exceed $500 per day. A corporation or
4-65 trustee shall have no civil penalty liability if within 30 days
4-66 after receiving written notice from the commissioner of the
4-67 violation the corporation or trustee corrects such violation by
4-68 performing the required duty or act. Any such civil penalty may be
4-69 imposed by the commissioner after notice and opportunity for
5-1 hearing in accordance with the procedures for a contested case
5-2 hearing under the Administrative Procedure and Texas Register Act.
5-3 In determining the amount of the penalty, the commissioner shall
5-4 consider the seriousness of the violation and the good faith of the
5-5 corporation or trustee in its attempts to achieve compliance. The
5-6 amount of such penalty may be collected by the commissioner in the
5-7 same manner that money judgments are enforced in the district
5-8 courts of this state.]
5-9 SECTION 15. This Act takes effect September 1, 2001.
5-10 * * * * *