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)(v) [(iv)] of this code
 4-2     only in a municipality with a population of 250,000 or more.
 4-3           SECTION 3.  Subsection (a), Article 59.03, Code of Criminal
 4-4     Procedure, is amended to read as follows:
 4-5           (a)  Property subject to forfeiture under this chapter, other
 4-6     than property described by Article 59.12, may be seized by any
 4-7     peace officer under authority of a search warrant.
 4-8           SECTION 4.  Subsection (b), Article 59.04, Code of Criminal
 4-9     Procedure, is amended to read as follows:
4-10           (b)  A forfeiture proceeding commences under this chapter
4-11     when the attorney representing the state files a notice of the
4-12     seizure and intended forfeiture in the name of the state with the
4-13     clerk of the district court in the county in which the seizure is
4-14     made.  The attorney representing the state must attach to the
4-15     notice the peace officer's sworn statement under Article 59.03 of
4-16     this code or, if the property has been seized under Article
4-17     59.12(b), the statement of the terms and amount of the depository
4-18     account or inventory of assets provided by the regulated financial
4-19     institution to the peace officer executing the warrant in the
4-20     manner described by Article 59.12(b).  Except as provided by
4-21     Subsection (c) of this article, the attorney representing the state
4-22     shall cause certified copies of the notice to be served on the
4-23     following persons in the same manner as provided for the service of
4-24     process by citation in civil cases:
4-25                 (1)  the owner of the property; and
4-26                 (2)  any interest holder in the property.
 5-1           SECTION 5.  Chapter 59, Code of Criminal Procedure, is
 5-2     amended by adding Articles 59.12, 59.13, and 59.14 to read as
 5-3     follows:
 5-4           Art. 59.12.  SEIZURE OF ACCOUNTS AND ASSETS AT REGULATED
 5-5     FINANCIAL INSTITUTION.  (a)  This article applies to property
 5-6     consisting of a depository account or assets in a regulated
 5-7     financial institution.
 5-8           (b)  A regulated financial institution, at the time a seizure
 5-9     warrant issued under Chapter 18 is served on the institution, may
5-10     either:
5-11                 (1)  pay an account or tender assets held as security
5-12     for an obligation owed to the institution at the time of the
5-13     service of the seizure warrant; or
5-14                 (2)  transfer the depository account or assets to a
5-15     segregated interest-bearing account in the name of the attorney
5-16     representing the state as trustee, to remain in the account until
5-17     the time has expired for an appeal from a decision of the court
5-18     relating to the forfeiture of accounts or assets under Article
5-19     59.05.
5-20           (c)  Immediately on service of the seizure warrant, the
5-21     regulated financial institution shall take action as necessary to
5-22     segregate the account or assets and shall provide evidence,
5-23     certified by an officer of the institution, of the terms and amount
5-24     of the account or a detailed inventory of the assets to the peace
5-25     officer serving the warrant.  Except as otherwise provided by this
5-26     article, a transaction involving an account or assets, other than
 6-1     the deposit or reinvestment of interest, dividends, or other
 6-2     normally recurring payments on the account or assets that do not
 6-3     involve distribution of proceeds to the owner, is not authorized
 6-4     unless approved by the court that issued the seizure warrant or, if
 6-5     a forfeiture action has been instituted, the court in which that
 6-6     action is pending.
 6-7           (d)  Any accrual to the value of the account or assets during
 6-8     the pendency of the forfeiture proceedings is subject to the
 6-9     procedures for the disbursement of interest under Article 59.08.
6-10           (e)  If the regulated financial institution fails to release
6-11     the depository account or assets to a peace officer pursuant to a
6-12     seizure warrant or transfer the account or assets as required by
6-13     Subsection (b), and as a result cannot comply with the court's
6-14     forfeiture order, the court:
6-15                 (1)  shall order the regulated financial institution
6-16     and its culpable officers, agents, or employees to pay actual
6-17     damages, attorney's fees, and court costs incurred as a result of
6-18     the institution's failure to comply; and
6-19                 (2)  may find the regulated financial institution and
6-20     its culpable officers, agents, or employees in contempt.
6-21           (f)  A regulated financial institution that complies with
6-22     this article is not liable in damages because of the compliance.
6-23           (g)  This article does not:
6-24                 (1)  impair the right of the state to obtain possession
6-25     of physical evidence or to seize a depository account or other
6-26     assets for purposes other than forfeiture under this chapter; or
 7-1                 (2)  waive criminal or civil remedies available under
 7-2     other law.
 7-3           Art. 59.13.  DISCLOSURE OF INFORMATION RELATING TO ACCOUNTS
 7-4     AND ASSETS AT REGULATED FINANCIAL INSTITUTION.  (a)  The attorney
 7-5     representing the state may disclose information to the primary
 7-6     state or federal financial institution regulator, including grand
 7-7     jury information or otherwise confidential information, relating to
 7-8     any action contemplated or brought under this chapter that involves
 7-9     property consisting of a depository account in a regulated
7-10     financial institution or assets held by a regulated financial
7-11     institution as security for an obligation owed to a regulated
7-12     financial institution.  An attorney representing the state who
7-13     discloses information as permitted by this subsection is not
7-14     subject to contempt under Article 20.02 for that disclosure.
7-15           (b)  A primary state or federal financial institution
7-16     regulator shall keep confidential any information provided by the
7-17     attorney representing the state under Subsection (a).  The sharing
7-18     of information under Subsection (a) by a representative of the
7-19     state is not considered a waiver by the state of any privilege or
7-20     claim of confidentiality.
7-21           (c)  A regulator described by Subsection (b) commits an
7-22     offense if the regulator knowingly discloses information in
7-23     violation of this article.  An offense under this subsection is
7-24     punishable by confinement in jail for a period not to exceed 30
7-25     days, a fine not to exceed $500, or both such confinement and fine.
7-26           Art. 59.14.  NOTICE TO PRIMARY STATE AND FEDERAL FINANCIAL
 8-1     INSTITUTION REGULATORS.  (a)  Before taking any action under this
 8-2     chapter that implicates a potentially culpable officer or director
 8-3     of a regulated financial institution, the attorney representing the
 8-4     state shall notify the banking commissioner, who shall notify the
 8-5     appropriate state or federal financial institution regulator.
 8-6           (b)  A state or federal financial institution regulator shall
 8-7     keep confidential any information provided by the attorney
 8-8     representing the state under Subsection (a).
 8-9           (c)  A regulator described by Subsection (b) commits an
8-10     offense if the regulator knowingly discloses information in
8-11     violation of this article.  An offense under this subsection is
8-12     punishable by confinement in jail for a period not to exceed 30
8-13     days, a fine not to exceed $500, or both such confinement and fine.
8-14           (d)  The provision of notice under Subsection (a) is not
8-15     considered a waiver by the state of any privilege or claim of
8-16     confidentiality.
8-17           SECTION 6.  The change in law made by this Act applies only
8-18     to a seizure that occurs on or after the effective date of this
8-19     Act.  A seizure that occurs before the effective date of this Act
8-20     is covered by the law in effect when the seizure occurred, and the
8-21     former law is continued in effect for that purpose.
8-22           SECTION 7.  This Act takes effect September 1, 2001.
         _______________________________     _______________________________
             President of the Senate              Speaker of the House
               I hereby certify that S.B. No. 626 passed the Senate on
         March 21, 2001, by a viva-voce vote; and that the Senate concurred
         in House amendment on May 15, 2001, by a viva-voce vote.
                                             _______________________________
                                                 Secretary of the Senate
               I hereby certify that S.B. No. 626 passed the House, with
         amendment, on May 10, 2001, by a non-record vote.
                                             _______________________________
                                                Chief Clerk of the House
         Approved:
         _______________________________
                      Date
         _______________________________
                    Governor