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By:  Nixon                                                        H.B. No. 2987



A BILL TO BE ENTITLED

AN ACT

relating to funding advanced in connection with a lawsuit that is at 
a rate above the usurious interest prohibition.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 6, Civil Practice and Remedies Code, is 
amended by adding Chapter 151 to read as follows:

CHAPTER 151.  PROHIBITION ON LAWSUIT ADVANCE FUNDING

FOR USURIOUS INTEREST
	Sec. 151.001.  PROHIBITION ON LAWSUIT ADVANCE FUNDING FOR 
USURIOUS INTEREST.  (a)  All funding advanced to a person whose 
repayment is contingent upon the person's recovery in a lawsuit is a 
loan subject to the usurious interest prohibition in Section 
302.001, Finance Code, and the penalties prescribed by Chapter 305, 
Finance Code.  A contract to provide such funding that allows a rate 
of return in excess of the usurious interest prohibition in Section 
302.001, Finance Code, is against the public policy of this state.
	(b)  This section does not apply to contracts entered into 
between an attorney and a client for the purpose of compensating the 
attorney for providing legal services.
	SECTION 2.  This Act takes effect September 1, 2005.  This 
section applies to any case in which a final judgment is signed or 
subject to appeal on or after the effective date of this Act.