83R11013 SCL-F

By: Thompson of Harris H.B. No. 3241

A BILL TO BE ENTITLED

AN ACT

relating to the civil prosecution of racketeering related to trafficking of persons; providing penalties.

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 140 to read as follows:

CHAPTER 140. CIVIL RACKETEERING RELATED TO TRAFFICKING OF PERSONS

Sec. 140.001. DEFINITIONS. In this chapter:

(1) "Acquire" means an act to:

(A) possess property;

(B) prevent another person from using that person's property or dictate the terms of use of that property;

(C) bring about or receive the transfer of any interest in property, whether to oneself or to another person; or

(D) secure performance of a service.

(2) "Enterprise" means a legal entity, a group of individuals associated in fact, or a combination of entities and individuals.

(3) "Gain" means a benefit, an interest, or property, without reduction for expenses incurred in acquiring or maintaining the benefit, interest, or property or incurred for any other reason.

(4) "Proceeds" means an interest in property acquired or derived from, produced or realized through, or directly or indirectly caused by an act or omission, and the fruits of the interest, in any form.

(5) "Racketeering" means an act described by Section 140.002.

Sec. 140.002. CIVIL RACKETEERING. A person or enterprise commits racketeering if, for financial gain, the person or enterprise commits an offense under Chapter 20A, Penal Code (trafficking of persons), and the offense or an element of the offense:

(1) occurs in more than one county in this state; or

(2) is facilitated by the use of United States mail, e-mail, telephone, facsimile, or a wireless communication from one county in this state to another.

Sec. 140.003. SUIT TO ABATE RACKETEERING. (a) The attorney general may bring suit in the name of the state against a person or enterprise for racketeering and may seek civil penalties, costs, reasonable attorney's fees, and appropriate injunctive relief.

(b) This chapter does not authorize suit by a person or enterprise that sustains injury as a result of racketeering.

(c) A suit under this chapter must be brought in a district court in a county in which all or part of the alleged racketeering offense giving rise to the suit occurred.

Sec. 140.004. INJUNCTIVE RELIEF; OTHER REMEDIES. (a) A court in which a proceeding is brought under this chapter may prevent, restrain, and remedy racketeering by issuing appropriate orders. The orders may include a temporary restraining order, a temporary or permanent injunction, the creation of a receivership, and the enforcement of a constructive trust in connection with any property or other interest, prejudgment writs of attachment under Chapter 61 for the purposes of freezing, preserving, and disgorging assets, or another order for a remedy or restraint the court considers proper.

(b) Following a final determination of liability under this chapter, the court may issue an appropriate order, including an order that:

(1) requires a person to divest any direct or indirect interest in an enterprise;

(2) imposes reasonable restrictions on the future activities or investments of a person that affect the laws of this state, including prohibiting a person from engaging in the type of endeavor or enterprise that gave rise to the racketeering offense, to the extent permitted by the constitutions of this state and the United States;

(3) requires the dissolution or reorganization of an enterprise involved in the suit;

(4) orders the recovery of reasonable fees, expenses, and costs incurred in obtaining injunctive relief or civil remedies or in conducting investigations under this chapter, including court costs, attorney's fees, witness fees, and deposition fees;

(5) orders payment to the state of an amount equal to:

(A) the gain acquired or maintained through racketeering; or

(B) the amount for which a person is liable under this chapter;

(6) orders payment to the state of a civil penalty by a person or enterprise found liable for racketeering, in an amount not to exceed $250,000 for each separately alleged and proven act of racketeering;

(7) orders payment of damages to the state for racketeering shown to have materially damaged the state; or

(8) orders that property attached under Chapter 61 be used to satisfy an award of the court, including damages, penalties, costs, and fees.

(c) In determining the amount of a civil penalty ordered under Subsection (b)(6), the court shall consider:

(1) the seriousness of the racketeering offense and the consequent financial or personal harm to the state or to any identified victim; and

(2) the duration of the racketeering activity.

(d) If any property attached under Chapter 61 is not necessary to satisfy an award of the court after a finding of liability for racketeering of the person or enterprise having an interest in the property, the court may order that the property be disgorged to the state to the extent of the person's or enterprise's interest. To be disgorged, the property must be acquired or maintained by the person or enterprise through racketeering.

(e) In determining the amount of damages ordered under Subsection (b)(7), the court shall consider:

(1) loss of tax revenue to the state;

(2) unpaid state unemployment taxes;

(3) unpaid state licensing and regulatory fees;

(4) medical and counseling costs incurred by the state on behalf of any victim of the racketeering; and

(5) other material damage caused to the state by the racketeering.

(f) Except as otherwise provided by this chapter, remedies and awards ordered by a court under this chapter, including costs and reasonable attorney's fees, may be assessed against and paid from money or property awarded under this chapter.

(g) This chapter is not intended to provide the exclusive remedy for the activity addressed by this chapter. A proceeding under this chapter may be brought in addition to or in the alternative of any other civil or criminal action available under the laws of this state.

(h) Notwithstanding any other provision in this chapter, Articles 59.13 and 59.14, Code of Criminal Procedure, apply to a remedy under this section.

(i) A remedy under this section may not impair a security interest in property subject to a bona fide lien.

Sec. 140.005. CONSTRUCTIVE TRUST. (a) A person or enterprise that, through racketeering, acquires property or prevents another person from receiving property that by law is required to be transferred or paid to that person is an involuntary trustee. The involuntary trustee or any other person or enterprise, other than a bona fide purchaser for value as described by Subsection (b), holds the property and the proceeds of the property in constructive trust for the benefit of any person entitled to remedies under this chapter.

(b) A bona fide purchaser for value who was reasonably without notice of unlawful conduct and who did not knowingly take part in an illegal transaction is not an involuntary trustee under Subsection (a) and is not subject to a constructive trust imposed under this chapter.

Sec. 140.006. EVIDENCE. (a) In a proceeding under this chapter, the state bears the burden of proof by a preponderance of the evidence.

(b) A person convicted in a criminal proceeding is precluded, in a proceeding under this chapter, from subsequently denying the essential allegations of the criminal offense of which the person was convicted. For purposes of this subsection, a verdict or a plea, including a plea of nolo contendere, is considered a conviction.

(c) An individual may not be held liable under this chapter based on the conduct of another person unless the finder of fact finds by a preponderance of the evidence that the individual authorized, requested, commanded, participated in, ratified, or recklessly tolerated the unlawful conduct of the other person.

(d) An enterprise may not be held liable under this chapter based on the conduct of an agent unless the finder of fact finds by a preponderance of the evidence that a director or high managerial agent performed, authorized, requested, commanded, participated in, ratified, or recklessly tolerated the unlawful conduct of the agent.

(e) A bank or savings and loan association insured by the Federal Deposit Insurance Corporation, a credit union insured by the National Credit Union Administration, or the holder of a money transmission license as defined by Chapter 151, Finance Code, may not be held liable in damages or for other relief under this chapter, unless the finder of fact finds by a preponderance of the evidence that the person or agent acquiring or maintaining an interest in or transporting, transacting, transferring, or receiving the funds on behalf of another did so knowing that the funds were the proceeds of an offense and that a director or high managerial agent performed, authorized, requested, commanded, participated in, ratified, or recklessly tolerated the unlawful conduct of the person or agent.

Sec. 140.007. LIMITATIONS PERIOD. A proceeding may be commenced under this chapter only if the proceeding is filed on or before the seventh anniversary of the date on which the racketeering offense was actually discovered. This section supersedes any conflicting provision establishing a shorter period of limitations for the same conduct.

Sec. 140.008. SPECIAL DOCKETING PROCEDURES. The attorney general may file with the clerk of the district court in which a proceeding is brought under this chapter a certificate stating that the case is of special public importance. The clerk must immediately furnish a copy of the certificate to the administrative judge of the district court of the county in which the proceeding is pending. On receiving the copy of the certificate, the administrative judge shall immediately designate a judge to hear and determine the proceeding. The designated judge shall promptly assign the proceeding for hearing, participate in hearings, make determinations, and cause the action to be expedited.

Sec. 140.009. NOTICE TO LOCAL PROSECUTOR. (a) In a reasonable time before initiating suit or on initiating an investigation on racketeering, the attorney general shall provide notice to the district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction that appears to have primary jurisdiction over the criminal prosecution of any target of an investigation under this chapter at the time of the notice concerning the attorney general's intent to file suit under this chapter or investigate racketeering, as applicable.

(b) The notices described by Subsection (a) must describe or otherwise identify the defendant to the suit or the suspect, as applicable.

Sec. 140.010. COOPERATION WITH LOCAL PROSECUTOR. (a) A district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction that receives notice under Section 140.009 may notify the attorney general of a related pending criminal investigation or prosecution.

(b) On receipt of notice described by Subsection (a), the attorney general shall coordinate and cooperate with the district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction to ensure that the filing of a suit under this chapter does not interfere with an ongoing criminal investigation or prosecution. The attorney general shall update the district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction on matters affecting the suit or the investigation.

Sec. 140.011. ABATEMENT OF SUIT. (a) If the district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction determines that a suit brought under this chapter would interfere with an ongoing criminal investigation or prosecution after notifying the attorney general of the investigation or prosecution under Section 140.010, the district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction may request, in writing, that the attorney general abate the suit. On receipt of this request, the attorney general shall abate the suit.

(b) If the attorney general determines that it is necessary for the suit to proceed, the attorney general may request for permission to proceed from a district court described by Section 140.003. The attorney general shall provide notice of the request to proceed to the district attorney, criminal district attorney, or county attorney with felony criminal jurisdiction described by Subsection (a).

(c) The court may hold a hearing to determine whether to grant a request from the attorney general under Subsection (b). The attorney general must provide proof by a preponderance of the evidence that abatement of a suit brought under this chapter would unduly burden the suit. On the request of a party, a hearing under this subsection may be conducted in camera to protect the ongoing investigation or prosecution, or the identity of the person or enterprise under investigation or prosecution.

Sec. 140.012. DISPOSITION OF ASSETS. (a) An award issued in an action brought under this chapter must be paid in accordance with this section.

(b) After a deduction of any costs of suit, including reasonable attorney's fees and court costs, 80 percent of the amount of the award remaining must be paid to the state, and the remaining 20 percent must be paid, on a pro rata basis, to each law enforcement agency found by the court to have assisted in the suit.

(c) The first $10 million, after any costs of suit described by Subsection (b), that is paid to the state under this chapter in a fiscal year shall be dedicated to the compensation to victims of crime fund described by Article 56.54, Code of Criminal Procedure.

Sec. 140.013. PREVIOUSLY SEIZED ASSETS. Notwithstanding another provision of this chapter, no remedies provided by this chapter may be assessed against proceeds, contraband, or other property over which a law enforcement agency has previously asserted jurisdiction under Chapter 59, Code of Criminal Procedure, at the time a suit under this chapter was filed.

SECTION 2. Chapter 140, Civil Practice and Remedies Code, as added by this Act, applies only to a civil action based on an offense under Chapter 20A, Penal Code, committed on or after the effective date of this Act. A civil action based on an offense committed before the effective date of this Act is governed by the law in effect when the offense was committed, and that law continues in effect for that purpose. For the purposes of this section, an offense was committed before the effective date of this Act if any element of the offense occurred before that date.

SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2013.