79R8322 ATP-D


By:  Giddings                                                     H.B. No. 2223



A BILL TO BE ENTITLED

AN ACT

relating to the making of a notation on a forged check by a 
financial institution.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter D, Chapter 35, Business & Commerce 
Code, is amended by adding Section 35.591 to read as follows:
	Sec. 35.591.  NOTATION OF FORGED CHECK.  (a)  In this 
section, "victim of identify theft" means a person who has filed 
with an appropriate law enforcement agency a criminal complaint 
alleging commission of an offense under Section 32.51, Penal Code.
	(b)  If a victim of identity theft closes an account at a 
financial institution as a result of the identity theft and 
notifies the financial institution that the identity theft is the 
reason for closing the account, the financial institution shall:
		(1)  make a physical notation of "forgery" on the front 
and back of any document presented to the institution for payment 
that purports to be a check drawn on the closed account; or
		(2)  make an electronic notation of "forgery" on each 
electronic record pertaining to any document that is electronically 
presented to the financial institution for payment and that 
purports to be a check drawn on the closed account.
	(c)  If a financial institution does not possess the document 
presented for payment as described by Subsection (b), the financial 
institution shall instruct the person in possession of the document 
to make a physical notation of "forgery" on the front and back of 
the document.
	(d)  This section does not apply to a check if the financial 
institution takes reasonable measures to verify the check's 
authenticity with the victim of identity theft.
	(e)  If a financial institution does not physically note that 
a document is a forgery, make an electronic notation that a document 
is a forgery, or instruct a person in possession of a document to 
make a notation that a document is a forgery as required by this 
section, the financial institution assumes the obligation of the 
victim of identity theft with respect to the document.
	SECTION 2.  This Act takes effect September 1, 2005.                           


COMMITTEE AMENDMENT NO. 1
	Amend H.B. No. 2223 as follows:                                                
	(1)  On page 1, line 12, strike "and" and substitute ",".        
	(2)  On page 1, line 14, between "account," and "the 
financial" insert "provides the financial institution with a copy 
of the criminal complaint described by Subsection (a), and requests 
that the financial institution return checks with the notation 
"forgery",".
	(3)  On page 1, line 14, strike ":" and substitute the 
following:     

process as forgeries the checks received after the customer takes 
those actions, in accordance with the financial institution's 
customary procedures.
	(c)  A victim of identity theft who requests that a financial 
institution return checks with the notation "forgery" as provided 
by Subsection (b):
		(1)  may not assert that the financial institution is 
liable under Section 4.402 for wrongfully dishonoring a check 
returned after the victim makes the request; and
		(2)  shall hold the financial institution harmless for 
acting in accordance with the victim's request.
	(4)  Strike page 1, line 15, through page 2, line 11.                          

79R12810 ATP-F                                                        Solomons