By:  Laubenberg                                                   H.B. No. 3532



A BILL TO BE ENTITLED

AN ACT

relating to title insurance.                                                  
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Art. 9.02.  Definitions                                            
	(a)  "Title Insurance" means insuring, guaranteeing or 
indemnifying owners of real property or others interested therein 
against loss or damage suffered by reason of liens, encumbrances 
upon, or defects in the title to said property, and the invalidity 
or impairment of liens thereon, or doing any business in substance 
equivalent to any of the foregoing in a manner designed to evade the 
provisions of this Act. Title insurance does not include mortgage 
insurance, mortgage pool guaranty insurance or lender's errors and 
omission insurance.
	(e)  "[Board] Department" means the [State Board of 
Insurance] Texas Department of Insurance  of the State of Texas.
		(1)  "Person" includes individuals, corporations, 
[associations,], limited liability companies, partnerships and 
trusts.
	(n)  "Closing the Transaction" means the investigation made 
on behalf of [a title insurance company, title insurance agent, or 
direct operation] a consumer or purchaser of a title insurance 
policy before the actual issuance of the title policy to determine 
proper execution, acknowledgement, and delivery of all 
conveyances, mortgage papers, and other title instruments which may 
be necessary to the consumation of the transaction and includes the 
determination that all delinquent taxes are paid, all current 
taxes, based on the latest available information, have been 
properly prorated between the purchaser and seller in the case of an 
owner policy, the consideration has been passed, all proceeds have 
been properly disbursed, a final search of the title has been made, 
and all necessary papers have been filed for record.
	(r)  "Producer" means a real estate broker or agent, lender, 
mortgage company, mortgage broker, loan officer, builder, 
developer, attorney, real estate firm or an affiliate of a 
producer.
	SECTION 2.  [Art. 9.09A. Prohibiting Unmarketablility of 
Title Insurance

An insurance company may not insure against loss or damage by reason 
of unmarketability of title.  The commissioner may not promulgate 
rules or forms providing for that coverage.]
	SECTION 3.  Art. 9.07C.  Area and Boundary Coverage                            
	(c)  A title insurance company may not discriminate in 
providing area and boundary coverage in connection with residential 
real property solely because:
		(1)  the real property is platted or unpolluted; or                           
		(2)  a municipality did not accept a subdivision plat 
in relation to the real property before September 1, 1975.
		(3)  the proposed insured or insured is not a lender                   
	SECTION 4.  Art. 9.30. Rebates and Discounts                                   
	(b)  This Article may not be construed as prohibiting:                         
		(7)  Notwithstanding any provision of this Article 
9.30, no person doing the business of title insurance shall, 
directly or indirectly, pay, give, provide, allow or permit 
anything of value to a real estate broker, real estate agent, 
builder, developer, attorney, lender, mortgage broker, loan 
officer, mortgage company, bank, savings association, credit 
union, architect, appraiser, real estate firm, real estate 
investment trust, or any other Producer.
	(f)  No person shall mark-up, add to, up charge, or 
overcharge for any service or product provided by a third party to a 
consumer or proposed insured or insured in a real estate 
transaction.  Any person marking-up, adding to, up charging or 
overcharging for any service or product in a real estate 
transaction, and in addition to any other penalty or damages, after 
notice and opportunity for a hearing, is subject to a monetary 
forfeiture not less than five times the value of the mark-up, 
addition-to, up charge or overcharge.
	(g)  Any action pursuant to this Article may brought in a 
state court or other court of competent jurisdiction without regard 
to the amount of damages.
	SECTION 5.  Art. 9.39B Interest form Escrow and Trust 
Accounts of a Title Insurance Company, Direct Operation or Title 
Insurance Agent
	All interest from escrow and trust fund accounts held by a 
title insurance company, direct operation or title insurance agent, 
unless directed otherwise by the owner of the funds, shall be paid 
to the Texas Department of Housing and Community Affairs for the 
purpose of assisting individuals or families of low, very low or 
extremely low incomes who are not assisted by private enterprise or 
other governmental programs to obtain affordable housing.
	SECTION 6.  This Act takes effect September 1, 2003.