By: Duncan S.B. No. 626
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to liens on certain property related to certain criminal
1-3 offenses and the effect of forfeiture of that property; providing
1-4 penalties.
1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-6 SECTION 1. Article 59.01, Code of Criminal Procedure, is
1-7 amended by adding Subdivisions (9), (10), and (11) to read as
1-8 follows:
1-9 (9) "Depository account" means the obligation of a
1-10 regulated financial institution to pay the account owner under a
1-11 written agreement, including a checking account, savings account,
1-12 money market account, time deposit, NOW account, or certificate of
1-13 deposit.
1-14 (10) "Primary state or federal financial institution
1-15 regulator" means the state or federal regulatory agency that
1-16 chartered and comprehensively regulates a regulated financial
1-17 institution.
1-18 (11) "Regulated financial institution" means a
1-19 depository institution chartered by a state or federal government,
1-20 the deposits of which are insured by the Federal Deposit Insurance
1-21 Corporation or the National Credit Union Administration.
1-22 SECTION 2. Subsections (c) through (g), Article 59.02, Code
1-23 of Criminal Procedure, are amended to read as follows:
1-24 (c) An owner or interest holder's interest in property may
1-25 not be forfeited under this chapter if the owner or interest holder
2-1 proves by a preponderance of the evidence that the owner or
2-2 interest holder[:]
2-3 [(1)] acquired and perfected the interest:
2-4 (1) before or during the act or omission giving rise
2-5 to forfeiture or, if the property is real property, he acquired an
2-6 ownership interest, security interest, or lien interest before a
2-7 lis pendens notice was filed under Article 59.04(g) of this code[;]
2-8 and
2-9 [(2)] did not know or should not reasonably have known
2-10 of the act or omission giving rise to the forfeiture or that it was
2-11 likely to occur at or before the time of acquiring and perfecting
2-12 the interest or, if the property is real property, at or before the
2-13 time of acquiring the ownership interest, security interest, or
2-14 lien interest; or
2-15 (2) after the act or omission giving rise to the
2-16 forfeiture, but before the seizure of the property, and only if the
2-17 owner or interest holder:
2-18 (A) was, at the time that the interest in the
2-19 property was acquired, an owner or interest holder for value; and
2-20 (B) was without reasonable cause to believe that
2-21 the property was contraband and did not purposefully avoid learning
2-22 that the property was contraband.
2-23 (d) Notwithstanding any other law, if property is seized
2-24 from the possession of an owner or interest holder who asserts an
2-25 ownership interest, security interest, or lien interest in the
2-26 property under applicable law, the owner or interest holder's
3-1 rights remain in effect during the pendency of proceedings under
3-2 this chapter as if possession of the property had remained with the
3-3 owner or interest holder.
3-4 (e) On motion by any party or on the motion of the court,
3-5 after notice in the manner provided by Article 59.04 of this code
3-6 to all known owners and interest holders of property subject to
3-7 forfeiture under this chapter, and after a hearing on the matter,
3-8 the court may make appropriate orders to preserve and maintain the
3-9 value of the property until a final disposition of the property is
3-10 made under this chapter, including the sale of the property if that
3-11 is the only method by which the value of the property may be
3-12 preserved until final disposition.
3-13 (f) [(e)] Any property that is contraband and has been
3-14 seized by the institutional division of the Texas Department of
3-15 Criminal Justice shall be forfeited to the institutional division
3-16 under the same rules and conditions as for other forfeitures.
3-17 (g) [(f)] An individual, firm, corporation, or other entity
3-18 insured under a policy of title insurance may not assert a claim or
3-19 cause of action on or because of the policy if the claim or cause
3-20 of action is based on forfeiture under this chapter and, at or
3-21 before the time of acquiring the ownership of real property,
3-22 security interest in real property, or lien interest against real
3-23 property, the insured knew or reasonably should have known of the
3-24 act or omission giving rise to the forfeiture or that the act or
3-25 omission was likely to occur.
3-26 (h) [(g)] The forfeiture provisions of this chapter apply to
4-1 contraband as defined by Article 59.01(2)(B)(iv) of this code only
4-2 in a municipality with a population of 250,000 or more.
4-3 SECTION 3. Article 59.03, Code of Criminal Procedure, is
4-4 amended by amending Subsection (a) and adding Subsection (d) to
4-5 read as follows:
4-6 (a) Property subject to forfeiture under this chapter, other
4-7 than property described by Article 59.12 of this code, may be
4-8 seized by any peace officer under authority of a search warrant.
4-9 (d) A peace officer who intentionally subjects another to
4-10 seizure that the peace officer knows is unlawful may be criminally
4-11 liable under Section 39.03, Penal Code, or any other law of this
4-12 state.
4-13 SECTION 4. Subsection (b), Article 59.04, Code of Criminal
4-14 Procedure, is amended to read as follows:
4-15 (b) A forfeiture proceeding commences under this chapter
4-16 when the attorney representing the state files a notice of the
4-17 seizure and intended forfeiture in the name of the state with the
4-18 clerk of the district court in the county in which the seizure is
4-19 made. The attorney representing the state must attach to the
4-20 notice the peace officer's sworn statement under Article 59.03 of
4-21 this code or, if the property has been seized under Article
4-22 59.12(b) of this code, the statement of the terms and amount of the
4-23 depository account or inventory of assets provided by the regulated
4-24 financial institution to the peace officer executing the warrant in
4-25 the manner described by Article 59.12(b) of this code. Except as
4-26 provided by Subsection (c) of this article, the attorney
5-1 representing the state shall cause certified copies of the notice
5-2 to be served on the following persons in the same manner as
5-3 provided for the service of process by citation in civil cases:
5-4 (1) the owner of the property; and
5-5 (2) any interest holder in the property.
5-6 SECTION 5. Chapter 59, Code of Criminal Procedure, is
5-7 amended by adding Articles 59.12, 59.13, and 59.14 to read as
5-8 follows:
5-9 Art. 59.12. SEIZURE OF ACCOUNTS AND ASSETS AT REGULATED
5-10 FINANCIAL INSTITUTION. (a) This article applies to property
5-11 consisting of a depository account or assets in a regulated
5-12 financial institution.
5-13 (b) A regulated financial institution, at the time a seizure
5-14 warrant issued under Chapter 18 is served on the institution, may
5-15 either:
5-16 (1) pay an account or tender assets held as security
5-17 for an obligation owed to the institution at the time of the
5-18 service of the seizure warrant; or
5-19 (2) transfer the depository account or assets to a
5-20 segregated interest-bearing account in the name of the attorney
5-21 representing the state as trustee, to remain in the account until
5-22 the time has expired for an appeal from a decision of the court
5-23 relating to the forfeiture of accounts or assets under Article
5-24 59.05.
5-25 (c) Immediately on service of the seizure warrant, the
5-26 regulated financial institution shall take action as necessary to
6-1 segregate the account or assets and shall provide evidence,
6-2 certified by an officer of the institution, of the terms and amount
6-3 of the account or a detailed inventory of the assets to the peace
6-4 officer serving the warrant. Except as otherwise provided by this
6-5 article, a transaction involving an account or assets, other than
6-6 the deposit or reinvestment of interest, dividends, or other
6-7 normally recurring payments on the account or assets that do not
6-8 involve distribution of proceeds to the owner, is not authorized
6-9 unless approved by the court that issued the seizure warrant or, if
6-10 a forfeiture action has been instituted, the court in which that
6-11 action is pending.
6-12 (d) Any accrual to the value of the account or assets during
6-13 the pendency of the forfeiture proceedings is subject to the
6-14 procedures for the disbursement of interest under Article 59.08.
6-15 (e) If the regulated financial institution fails to release
6-16 the depository account or assets to a peace officer pursuant to a
6-17 seizure warrant or transfer the account or assets as required by
6-18 Subsection (b), and as a result cannot comply with the court's
6-19 forfeiture order, the court:
6-20 (1) shall order the regulated financial institution
6-21 and its culpable officers, agents, or employees to pay actual
6-22 damages, attorney's fees, and court costs incurred as a result of
6-23 the institution's failure to comply; and
6-24 (2) may find the regulated financial institution and
6-25 its culpable officers, agents, or employees in contempt.
6-26 (f) A regulated financial institution that complies with
7-1 this article is not liable in damages because of the compliance.
7-2 (g) This article does not:
7-3 (1) impair the right of the state to obtain possession
7-4 of physical evidence or to seize a depository account or other
7-5 assets for purposes other than forfeiture under this chapter; or
7-6 (2) waive criminal or civil remedies available under
7-7 other law.
7-8 Art. 59.13. DISCLOSURE OF INFORMATION RELATING TO ACCOUNTS
7-9 AND ASSETS AT REGULATED FINANCIAL INSTITUTION. (a) The attorney
7-10 representing the state may disclose information to the primary
7-11 state or federal financial institution regulator, including grand
7-12 jury information or otherwise confidential information, relating to
7-13 any action contemplated or brought under this chapter that involves
7-14 property consisting of a depository account in a regulated
7-15 financial institution or assets held by a regulated financial
7-16 institution as security for an obligation owed to a regulated
7-17 financial institution. An attorney representing the state who
7-18 discloses information as permitted by this subsection is not
7-19 subject to contempt under Article 20.02 for that disclosure.
7-20 (b) A primary state or federal financial institution
7-21 regulator shall keep confidential any information provided by the
7-22 attorney representing the state under Subsection (a). The sharing
7-23 of information under Subsection (a) by a representative of the
7-24 state is not considered a waiver by the state of any privilege or
7-25 claim of confidentiality.
7-26 (c) A regulator described by Subsection (b) commits an
8-1 offense if the regulator knowingly discloses information in
8-2 violation of this article. An offense under this subsection is
8-3 punishable by confinement in jail for a period not to exceed 30
8-4 days, a fine not to exceed $500, or both such confinement and fine.
8-5 Art. 59.14. NOTICE TO PRIMARY STATE AND FEDERAL FINANCIAL
8-6 INSTITUTION REGULATORS. (a) Before taking any action under this
8-7 chapter that implicates a potentially culpable officer or director
8-8 of a regulated financial institution, the attorney representing the
8-9 state shall notify the banking commissioner, who shall notify the
8-10 appropriate state or federal financial institution regulator.
8-11 (b) A state or federal financial institution regulator shall
8-12 keep confidential any information provided by the attorney
8-13 representing the state under Subsection (a).
8-14 (c) A regulator described by Subsection (b) commits an
8-15 offense if the regulator knowingly discloses information in
8-16 violation of this article. An offense under this subsection is
8-17 punishable by confinement in jail for a period not to exceed 30
8-18 days, a fine not to exceed $500, or both such confinement and fine.
8-19 (d) The provision of notice under Subsection (a) is not
8-20 considered a waiver by the state of any privilege or claim of
8-21 confidentiality.
8-22 SECTION 6. The change in law made by this Act applies only
8-23 to a seizure that occurs on or after the effective date of this
8-24 Act. A seizure that occurs before the effective date of this Act
8-25 is covered by the law in effect when the seizure occurred, and the
8-26 former law is continued in effect for that purpose.
9-1 SECTION 7. This Act takes effect September 1, 2001.