1-1 By: Duncan S.B. No. 626
1-2 (In the Senate - Filed February 9, 2001; February 12, 2001,
1-3 read first time and referred to Committee on Jurisprudence;
1-4 March 13, 2001, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 6, Nays 0; March 13, 2001,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 626 By: Duncan
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to liens on certain property related to certain criminal
1-11 offenses and the effect of forfeiture of that property; providing
1-12 penalties.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Article 59.01, Code of Criminal Procedure, is
1-15 amended by adding Subdivisions (9), (10), and (11) to read as
1-16 follows:
1-17 (9) "Depository account" means the obligation of a
1-18 regulated financial institution to pay the account owner under a
1-19 written agreement, including a checking account, savings account,
1-20 money market account, time deposit, NOW account, or certificate of
1-21 deposit.
1-22 (10) "Primary state or federal financial institution
1-23 regulator" means the state or federal regulatory agency that
1-24 chartered and comprehensively regulates a regulated financial
1-25 institution.
1-26 (11) "Regulated financial institution" means a
1-27 depository institution chartered by a state or federal government,
1-28 the deposits of which are insured by the Federal Deposit Insurance
1-29 Corporation or the National Credit Union Administration.
1-30 SECTION 2. Subsections (c) through (g), Article 59.02, Code
1-31 of Criminal Procedure, are amended to read as follows:
1-32 (c) An owner or interest holder's interest in property may
1-33 not be forfeited under this chapter if the owner or interest holder
1-34 proves by a preponderance of the evidence that the owner or
1-35 interest holder[:]
1-36 [(1)] acquired and perfected the interest:
1-37 (1) before or during the act or omission giving rise
1-38 to forfeiture or, if the property is real property, he acquired an
1-39 ownership interest, security interest, or lien interest before a
1-40 lis pendens notice was filed under Article 59.04(g) of this code[;]
1-41 and
1-42 [(2)] did not know or should not reasonably have known
1-43 of the act or omission giving rise to the forfeiture or that it was
1-44 likely to occur at or before the time of acquiring and perfecting
1-45 the interest or, if the property is real property, at or before the
1-46 time of acquiring the ownership interest, security interest, or
1-47 lien interest; or
1-48 (2) after the act or omission giving rise to the
1-49 forfeiture, but before the seizure of the property, and only if the
1-50 owner or interest holder:
1-51 (A) was, at the time that the interest in the
1-52 property was acquired, an owner or interest holder for value; and
1-53 (B) was without reasonable cause to believe that
1-54 the property was contraband and did not purposefully avoid learning
1-55 that the property was contraband.
1-56 (d) Notwithstanding any other law, if property is seized
1-57 from the possession of an owner or interest holder who asserts an
1-58 ownership interest, security interest, or lien interest in the
1-59 property under applicable law, the owner or interest holder's
1-60 rights remain in effect during the pendency of proceedings under
1-61 this chapter as if possession of the property had remained with the
1-62 owner or interest holder.
1-63 (e) On motion by any party or on the motion of the court,
1-64 after notice in the manner provided by Article 59.04 of this code
2-1 to all known owners and interest holders of property subject to
2-2 forfeiture under this chapter, and after a hearing on the matter,
2-3 the court may make appropriate orders to preserve and maintain the
2-4 value of the property until a final disposition of the property is
2-5 made under this chapter, including the sale of the property if that
2-6 is the only method by which the value of the property may be
2-7 preserved until final disposition.
2-8 (f) [(e)] Any property that is contraband and has been
2-9 seized by the institutional division of the Texas Department of
2-10 Criminal Justice shall be forfeited to the institutional division
2-11 under the same rules and conditions as for other forfeitures.
2-12 (g) [(f)] An individual, firm, corporation, or other entity
2-13 insured under a policy of title insurance may not assert a claim or
2-14 cause of action on or because of the policy if the claim or cause
2-15 of action is based on forfeiture under this chapter and, at or
2-16 before the time of acquiring the ownership of real property,
2-17 security interest in real property, or lien interest against real
2-18 property, the insured knew or reasonably should have known of the
2-19 act or omission giving rise to the forfeiture or that the act or
2-20 omission was likely to occur.
2-21 (h) [(g)] The forfeiture provisions of this chapter apply to
2-22 contraband as defined by Article 59.01(2)(B)(iv) of this code only
2-23 in a municipality with a population of 250,000 or more.
2-24 SECTION 3. Article 59.03, Code of Criminal Procedure, is
2-25 amended by amending Subsection (a) and adding Subsection (d) to
2-26 read as follows:
2-27 (a) Property subject to forfeiture under this chapter, other
2-28 than property described by Article 59.12 of this code, may be
2-29 seized by any peace officer under authority of a search warrant.
2-30 (d) A peace officer who intentionally subjects another to
2-31 seizure that the peace officer knows is unlawful may be criminally
2-32 liable under Section 39.03, Penal Code, or any other law of this
2-33 state.
2-34 SECTION 4. Subsection (b), Article 59.04, Code of Criminal
2-35 Procedure, is amended to read as follows:
2-36 (b) A forfeiture proceeding commences under this chapter
2-37 when the attorney representing the state files a notice of the
2-38 seizure and intended forfeiture in the name of the state with the
2-39 clerk of the district court in the county in which the seizure is
2-40 made. The attorney representing the state must attach to the
2-41 notice the peace officer's sworn statement under Article 59.03 of
2-42 this code or, if the property has been seized under Article
2-43 59.12(b) of this code, the statement of the terms and amount of the
2-44 depository account or inventory of assets provided by the regulated
2-45 financial institution to the peace officer executing the warrant in
2-46 the manner described by Article 59.12(b) of this code. Except as
2-47 provided by Subsection (c) of this article, the attorney
2-48 representing the state shall cause certified copies of the notice
2-49 to be served on the following persons in the same manner as
2-50 provided for the service of process by citation in civil cases:
2-51 (1) the owner of the property; and
2-52 (2) any interest holder in the property.
2-53 SECTION 5. Chapter 59, Code of Criminal Procedure, is
2-54 amended by adding Articles 59.12, 59.13, and 59.14 to read as
2-55 follows:
2-56 Art. 59.12. SEIZURE OF ACCOUNTS AND ASSETS AT REGULATED
2-57 FINANCIAL INSTITUTION. (a) This article applies to property
2-58 consisting of a depository account or assets in a regulated
2-59 financial institution.
2-60 (b) A regulated financial institution, at the time a seizure
2-61 warrant issued under Chapter 18 is served on the institution, may
2-62 either:
2-63 (1) pay an account or tender assets held as security
2-64 for an obligation owed to the institution at the time of the
2-65 service of the seizure warrant; or
2-66 (2) transfer the depository account or assets to a
2-67 segregated interest-bearing account in the name of the attorney
2-68 representing the state as trustee, to remain in the account until
2-69 the time has expired for an appeal from a decision of the court
3-1 relating to the forfeiture of accounts or assets under Article
3-2 59.05.
3-3 (c) Immediately on service of the seizure warrant, the
3-4 regulated financial institution shall take action as necessary to
3-5 segregate the account or assets and shall provide evidence,
3-6 certified by an officer of the institution, of the terms and amount
3-7 of the account or a detailed inventory of the assets to the peace
3-8 officer serving the warrant. Except as otherwise provided by this
3-9 article, a transaction involving an account or assets, other than
3-10 the deposit or reinvestment of interest, dividends, or other
3-11 normally recurring payments on the account or assets that do not
3-12 involve distribution of proceeds to the owner, is not authorized
3-13 unless approved by the court that issued the seizure warrant or, if
3-14 a forfeiture action has been instituted, the court in which that
3-15 action is pending.
3-16 (d) Any accrual to the value of the account or assets during
3-17 the pendency of the forfeiture proceedings is subject to the
3-18 procedures for the disbursement of interest under Article 59.08.
3-19 (e) If the regulated financial institution fails to release
3-20 the depository account or assets to a peace officer pursuant to a
3-21 seizure warrant or transfer the account or assets as required by
3-22 Subsection (b), and as a result cannot comply with the court's
3-23 forfeiture order, the court:
3-24 (1) shall order the regulated financial institution
3-25 and its culpable officers, agents, or employees to pay actual
3-26 damages, attorney's fees, and court costs incurred as a result of
3-27 the institution's failure to comply; and
3-28 (2) may find the regulated financial institution and
3-29 its culpable officers, agents, or employees in contempt.
3-30 (f) A regulated financial institution that complies with
3-31 this article is not liable in damages because of the compliance.
3-32 (g) This article does not:
3-33 (1) impair the right of the state to obtain possession
3-34 of physical evidence or to seize a depository account or other
3-35 assets for purposes other than forfeiture under this chapter; or
3-36 (2) waive criminal or civil remedies available under
3-37 other law.
3-38 Art. 59.13. DISCLOSURE OF INFORMATION RELATING TO ACCOUNTS
3-39 AND ASSETS AT REGULATED FINANCIAL INSTITUTION. (a) The attorney
3-40 representing the state may disclose information to the primary
3-41 state or federal financial institution regulator, including grand
3-42 jury information or otherwise confidential information, relating to
3-43 any action contemplated or brought under this chapter that involves
3-44 property consisting of a depository account in a regulated
3-45 financial institution or assets held by a regulated financial
3-46 institution as security for an obligation owed to a regulated
3-47 financial institution. An attorney representing the state who
3-48 discloses information as permitted by this subsection is not
3-49 subject to contempt under Article 20.02 for that disclosure.
3-50 (b) A primary state or federal financial institution
3-51 regulator shall keep confidential any information provided by the
3-52 attorney representing the state under Subsection (a). The sharing
3-53 of information under Subsection (a) by a representative of the
3-54 state is not considered a waiver by the state of any privilege or
3-55 claim of confidentiality.
3-56 (c) A regulator described by Subsection (b) commits an
3-57 offense if the regulator knowingly discloses information in
3-58 violation of this article. An offense under this subsection is
3-59 punishable by confinement in jail for a period not to exceed 30
3-60 days, a fine not to exceed $500, or both such confinement and fine.
3-61 Art. 59.14. NOTICE TO PRIMARY STATE AND FEDERAL FINANCIAL
3-62 INSTITUTION REGULATORS. (a) Before taking any action under this
3-63 chapter that implicates a potentially culpable officer or director
3-64 of a regulated financial institution, the attorney representing the
3-65 state shall notify the banking commissioner, who shall notify the
3-66 appropriate state or federal financial institution regulator.
3-67 (b) A state or federal financial institution regulator shall
3-68 keep confidential any information provided by the attorney
3-69 representing the state under Subsection (a).
4-1 (c) A regulator described by Subsection (b) commits an
4-2 offense if the regulator knowingly discloses information in
4-3 violation of this article. An offense under this subsection is
4-4 punishable by confinement in jail for a period not to exceed 30
4-5 days, a fine not to exceed $500, or both such confinement and fine.
4-6 (d) The provision of notice under Subsection (a) is not
4-7 considered a waiver by the state of any privilege or claim of
4-8 confidentiality.
4-9 SECTION 6. The change in law made by this Act applies only
4-10 to a seizure that occurs on or after the effective date of this
4-11 Act. A seizure that occurs before the effective date of this Act
4-12 is covered by the law in effect when the seizure occurred, and the
4-13 former law is continued in effect for that purpose.
4-14 SECTION 7. This Act takes effect September 1, 2001.
4-15 * * * * *