| |
| |
| |
|
|
AN ACT
|
|
|
relating to regulation of property tax lenders; providing a |
|
|
penalty. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Subtitle B, Title 4, Finance Code, is amended by |
|
|
adding Chapter 351 to read as follows: |
|
|
CHAPTER 351. PROPERTY TAX LENDERS |
|
|
SUBCHAPTER A. GENERAL PROVISIONS |
|
|
Sec. 351.001. SHORT TITLE. This chapter may be cited as the |
|
|
Property Tax Lender License Act. |
|
|
Sec. 351.002. DEFINITIONS. In this chapter: |
|
|
(1) "Property tax lender" means a person that engages |
|
|
in activity requiring a license under Section 351.051. The term |
|
|
does not include: |
|
|
(A) a person who is sponsored by a licensed |
|
|
property tax lender to assist with or perform the acts of a property |
|
|
tax lender; or |
|
|
(B) a person who performs only clerical functions |
|
|
such as delivering a loan application to a property tax lender, |
|
|
gathering or requesting information related to a property tax loan |
|
|
application on behalf of the prospective borrower or property tax |
|
|
lender, word processing, sending correspondence, or assembling |
|
|
files. |
|
|
(2) "Property tax loan" means an advance of money: |
|
|
(A) in connection with a transfer of lien under |
|
|
Section 32.06, Tax Code, or a contract under Section 32.065, Tax |
|
|
Code; |
|
|
(B) in connection with which the person making |
|
|
the transfer arranges for the payment, with a property owner's |
|
|
written consent, of property taxes and related closing costs on |
|
|
behalf of the property owner in accordance with Section 32.06, Tax |
|
|
Code; and |
|
|
(C) that is secured by a special lien against |
|
|
property transferred from a taxing unit to the property tax lender |
|
|
and which may be further secured by the lien or security interest |
|
|
created by a deed of trust, security deed, or other security |
|
|
instrument. |
|
|
Sec. 351.003. SECONDARY MARKET TRANSACTIONS. This chapter |
|
|
does not prohibit a property tax lender from receiving compensation |
|
|
from a party other than the property tax loan applicant for the |
|
|
sale, transfer, assignment, or release of rights on the closing of a |
|
|
property tax loan transaction. |
|
|
Sec. 351.004. AFFILIATED BUSINESS ARRANGEMENTS. This |
|
|
chapter may not be construed to prevent affiliated or controlled |
|
|
business arrangements or loan origination services by or between a |
|
|
property tax lender and other professionals. |
|
|
Sec. 351.005. APPLICATION OF TAX CODE. This chapter does |
|
|
not affect the application of Section 32.06 or 32.065, Tax Code. |
|
|
Sec. 351.006. ENFORCEMENT. In addition to any other |
|
|
applicable enforcement provisions, Subchapters E, F, and G, Chapter |
|
|
14, apply to a violation of this chapter or Section 32.06 or 32.065, |
|
|
Tax Code, in connection with property tax loans. |
|
|
Sec. 351.007. RULES. The finance commission may adopt |
|
|
rules to ensure compliance with this chapter and Sections 32.06 and |
|
|
32.065, Tax Code. |
|
|
[Sections 351.008-351.050 reserved for expansion] |
|
|
SUBCHAPTER B. AUTHORIZED ACTIVITIES; LICENSE |
|
|
Sec. 351.051. LICENSE REQUIRED. (a) A person must hold a |
|
|
license issued under this chapter to: |
|
|
(1) engage in the business of making, transacting, or |
|
|
negotiating property tax loans; or |
|
|
(2) contract for, charge, or receive, directly or |
|
|
indirectly, in connection with a property tax loan subject to this |
|
|
chapter, a charge, including interest, compensation, |
|
|
consideration, or another expense, authorized under this chapter |
|
|
that in the aggregate exceeds the charges authorized under other |
|
|
law. |
|
|
(b) A person may not use any device, subterfuge, or pretense |
|
|
to evade the application of this section. |
|
|
(c) This chapter does not apply to: |
|
|
(1) any of the following entities or an employee of any |
|
|
of the following entities, if the employee is acting for the benefit |
|
|
of the employer: |
|
|
(A) a bank, savings bank, or savings and loan |
|
|
association, or a subsidiary or an affiliate of a bank, savings |
|
|
bank, or savings and loan association; or |
|
|
(B) a state or federal credit union, or a |
|
|
subsidiary, affiliate, or credit union service organization of a |
|
|
state or federal credit union; or |
|
|
(2) an individual who: |
|
|
(A) makes a property tax loan from the |
|
|
individual's own funds to a spouse, former spouse, or persons in the |
|
|
lineal line of consanguinity of the individual lending the money; |
|
|
or |
|
|
(B) makes five or fewer property tax loans in any |
|
|
consecutive 12-month period from the individual's own funds. |
|
|
(d) A property tax lender licensed under this chapter is not |
|
|
required to be licensed under Chapter 156 or any other provision of |
|
|
this code. |
|
|
Sec. 351.052. ISSUANCE OF MORE THAN ONE LICENSE FOR |
|
|
PROPERTY TAX LENDER. (a) The commissioner may issue more than one |
|
|
license to a property tax lender on compliance with this chapter for |
|
|
each license. |
|
|
(b) A person who is required to hold a license under this |
|
|
chapter must hold a separate license for each office at which |
|
|
property tax loans are made, negotiated, serviced, held, or |
|
|
collected under this chapter. |
|
|
(c) A license is not required under this chapter for a place |
|
|
of business: |
|
|
(1) devoted to accounting or other recordkeeping; and |
|
|
(2) at which property tax loans are not made, |
|
|
negotiated, serviced, held, or collected under this chapter. |
|
|
Sec. 351.053. AREA OF BUSINESS; PROPERTY TAX LOANS BY MAIL. |
|
|
(a) A property tax lender is not limited to making property tax |
|
|
loans to residents of the community in which the office for which |
|
|
the license or other authority is granted is located. |
|
|
(b) A property tax lender may make, negotiate, arrange, and |
|
|
collect property tax loans by mail from a licensed office. |
|
|
Sec. 351.054. NOTICE TO TAXING UNIT. (a) A transferee of a |
|
|
tax lien must include with the sworn document filed with the |
|
|
collector of a taxing unit under Section 32.06(a-1), Tax Code, the |
|
|
information required by this section. |
|
|
(b) If the transferee is licensed under this chapter, the |
|
|
transferee shall include with the filing the licensee's license |
|
|
number assigned by the commissioner. |
|
|
(c) If the transferee is exempt from this chapter under |
|
|
Section 351.051(c)(1), the transferee shall include with the filing |
|
|
an affidavit stating the entity's type of organization that |
|
|
qualifies it for the exemption, any charter number assigned by the |
|
|
governmental authority that issued the entity's charter, and the |
|
|
address of the entity's main office. |
|
|
(d) If the transferee is exempt from this chapter under |
|
|
Section 351.051(c)(2), the transferee shall include a certificate |
|
|
issued by the commissioner indicating the entity's exemption. The |
|
|
commissioner shall establish procedures for issuance of a |
|
|
certificate under this subsection, application requirements, and |
|
|
requirements regarding information that must be submitted with an |
|
|
application. |
|
|
[Sections 351.055-351.100 reserved for expansion] |
|
|
SUBCHAPTER C. APPLICATION FOR AND ISSUANCE OF LICENSE |
|
|
Sec. 351.101. APPLICATION REQUIREMENTS. (a) The |
|
|
application for a license under this chapter must: |
|
|
(1) be under oath; |
|
|
(2) give the approximate location from which business |
|
|
is to be conducted; |
|
|
(3) identify the business's principal parties in |
|
|
interest; and |
|
|
(4) contain other relevant information that the |
|
|
commissioner requires for the findings required under Section |
|
|
351.104. |
|
|
(b) On the filing of one or more license applications, the |
|
|
applicant shall pay to the commissioner an investigation fee not to |
|
|
exceed $200. |
|
|
(c) On the filing of each license application, the applicant |
|
|
shall pay to the commissioner for the license's year of issuance a |
|
|
license fee in an amount determined as provided by Section 14.107. |
|
|
Sec. 351.102. BOND. (a) If the commissioner requires, an |
|
|
applicant for a license under this chapter shall file with the |
|
|
application a bond that is: |
|
|
(1) in an amount not to exceed the total of: |
|
|
(A) $50,000 for the first license; and |
|
|
(B) $10,000 for each additional license; |
|
|
(2) satisfactory to the commissioner; and |
|
|
(3) issued by a surety company qualified to do |
|
|
business as a surety in this state. |
|
|
(b) The bond must be in favor of this state for the use of |
|
|
this state and the use of a person who has a cause of action under |
|
|
this chapter against the license holder. |
|
|
(c) The bond must be conditioned on: |
|
|
(1) the license holder's faithful performance under |
|
|
this chapter and rules adopted under this chapter; and |
|
|
(2) the payment of all amounts that become due to the |
|
|
state or another person under this chapter during the calendar year |
|
|
for which the bond is given. |
|
|
(d) The aggregate liability of a surety to all persons |
|
|
damaged by the license holder's violation of this chapter may not |
|
|
exceed the amount of the bond. |
|
|
Sec. 351.103. INVESTIGATION OF APPLICATION. On the filing |
|
|
of an application and, if required, a bond, and on payment of the |
|
|
required fees, the commissioner shall conduct an investigation to |
|
|
determine whether to issue the license. |
|
|
Sec. 351.104. APPROVAL OR DENIAL OF APPLICATION. (a) The |
|
|
commissioner shall approve the application and issue to the |
|
|
applicant a license to make property tax loans under this chapter if |
|
|
the commissioner finds that: |
|
|
(1) the financial responsibility, experience, |
|
|
character, and general fitness of the applicant are sufficient to: |
|
|
(A) command the confidence of the public; and |
|
|
(B) warrant the belief that the business will be |
|
|
operated lawfully and fairly, within the purposes of this chapter; |
|
|
and |
|
|
(2) the applicant has net assets of at least $25,000 |
|
|
available for the operation of the business. |
|
|
(b) If the commissioner does not find that the eligibility |
|
|
requirements of Subsection (a) are met, the commissioner shall |
|
|
notify the applicant. |
|
|
(c) If an applicant requests a hearing on the application |
|
|
not later than the 30th day after the date of notification under |
|
|
Subsection (b), the applicant is entitled to a hearing not later |
|
|
than the 60th day after the date of the request. |
|
|
(d) The commissioner shall approve or deny the application |
|
|
not later than the 60th day after the date of the filing of a |
|
|
completed application with payment of the required fees, or if a |
|
|
hearing is held, after the date of the completion of the hearing on |
|
|
the application. The commissioner and the applicant may agree to a |
|
|
later date in writing. |
|
|
Sec. 351.105. DISPOSITION OF FEES ON DENIAL OF APPLICATION. |
|
|
If the commissioner denies the application, the commissioner shall |
|
|
retain the investigation fee and shall return to the applicant the |
|
|
license fee submitted with the application. |
|
|
[Sections 351.106-351.150 reserved for expansion] |
|
|
SUBCHAPTER D. LICENSE |
|
|
Sec. 351.151. NAME AND PLACE ON LICENSE. (a) A license must |
|
|
state: |
|
|
(1) the name of the license holder; and |
|
|
(2) the address of the office from which the business |
|
|
is to be conducted. |
|
|
(b) A license holder may not conduct business under this |
|
|
chapter under a name or at a place of business in this state other |
|
|
than the name or office stated on the license. |
|
|
Sec. 351.152. LICENSE DISPLAY. A license holder shall |
|
|
display a license at the place of business provided on the license. |
|
|
Sec. 351.153. MINIMUM ASSETS FOR LICENSE. A license holder |
|
|
shall maintain for each office for which a license is held net |
|
|
assets of at least $25,000 that are used or readily available for |
|
|
use in conducting the business of that office. |
|
|
Sec. 351.154. ANNUAL LICENSE FEE. Not later than December |
|
|
1, a license holder shall pay to the commissioner for each license |
|
|
held an annual fee for the year beginning the next January 1, in an |
|
|
amount determined as provided by Section 14.107. |
|
|
Sec. 351.155. EXPIRATION OF LICENSE ON FAILURE TO PAY |
|
|
ANNUAL FEE. If the annual fee for a license is not paid before the |
|
|
16th day after the date on which the written notice of delinquency |
|
|
of payment has been given to the license holder, the license expires |
|
|
on the later of: |
|
|
(1) that day; or |
|
|
(2) December 31 of the last year for which an annual |
|
|
fee was paid. |
|
|
Sec. 351.156. LICENSE SUSPENSION OR REVOCATION. After |
|
|
notice and a hearing the commissioner may suspend or revoke a |
|
|
license if the commissioner finds that: |
|
|
(1) the license holder failed to pay the annual |
|
|
license fee, an examination fee, an investigation fee, or another |
|
|
charge imposed by the commissioner under this chapter; |
|
|
(2) the license holder, knowingly or without the |
|
|
exercise of due care, violated this chapter or Section 32.06 or |
|
|
32.065, Tax Code, or a rule adopted or an order issued under this |
|
|
chapter or Section 32.06 or 32.065, Tax Code; or |
|
|
(3) a fact or condition exists that, if it had existed |
|
|
or had been known to exist at the time of the original application |
|
|
for the license, clearly would have justified the commissioner's |
|
|
denial of the application. |
|
|
Sec. 351.157. CORPORATE CHARTER FORFEITURE. (a) A license |
|
|
holder who violates this chapter is subject to revocation of the |
|
|
holder's license and, if the license holder is a corporation, |
|
|
forfeiture of its charter. |
|
|
(b) When the attorney general is notified of a violation of |
|
|
this chapter and revocation of a license, the attorney general |
|
|
shall file suit in a district court in Travis County, if the license |
|
|
holder is a corporation, for forfeiture of the license holder's |
|
|
charter. |
|
|
Sec. 351.158. LICENSE SUSPENSION OR REVOCATION FILED WITH |
|
|
PUBLIC RECORDS. The decision of the commissioner on the suspension |
|
|
or revocation of a license and the evidence considered by the |
|
|
commissioner in making the decision shall be filed in the public |
|
|
records of the commissioner. |
|
|
Sec. 351.159. REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE |
|
|
OF NEW LICENSE AFTER REVOCATION. The commissioner may reinstate a |
|
|
suspended license or issue a new license on application to a person |
|
|
whose license has been revoked if at the time of the reinstatement |
|
|
or issuance no fact or condition exists that clearly would have |
|
|
justified the commissioner's denial of an original application for |
|
|
the license. |
|
|
Sec. 351.160. SURRENDER OF LICENSE. A license holder may |
|
|
surrender a license issued under this chapter by delivering to the |
|
|
commissioner: |
|
|
(1) the license; and |
|
|
(2) a written notice of the license's surrender. |
|
|
Sec. 351.161. EFFECT OF LICENSE SUSPENSION, REVOCATION, OR |
|
|
SURRENDER. (a) The suspension, revocation, or surrender of a |
|
|
license issued under this chapter does not affect the obligation of |
|
|
a contract between the license holder and a debtor entered into |
|
|
before the revocation, suspension, or surrender. |
|
|
(b) Surrender of a license does not affect the license |
|
|
holder's civil or criminal liability for an act committed before |
|
|
surrender. |
|
|
Sec. 351.162. MOVING AN OFFICE. (a) A license holder shall |
|
|
give written notice to the commissioner before the 30th day |
|
|
preceding the date the license holder moves an office from the |
|
|
location provided on the license. |
|
|
(b) The commissioner shall amend a license holder's license |
|
|
accordingly. |
|
|
Sec. 351.163. TRANSFER OR ASSIGNMENT OF LICENSE. A license |
|
|
may be transferred or assigned only with the approval of the |
|
|
commissioner. |
|
|
Sec. 351.164. REPORTING REQUIREMENT. (a) Each year, a |
|
|
license holder shall file with the commissioner a report that |
|
|
contains relevant information concerning its transactions |
|
|
conducted under this chapter. |
|
|
(b) A report under this section must be: |
|
|
(1) under oath; and |
|
|
(2) in the form prescribed by the commissioner. |
|
|
(c) A report under this section is confidential. |
|
|
(d) Annually the commissioner shall prepare and publish a |
|
|
consolidated analysis and recapitulation of reports filed under |
|
|
this section. |
|
|
SECTION 2. Sections 349.502(a) and (c), Finance Code, are |
|
|
amended to read as follows: |
|
|
(a) A person commits an offense if the person engages in a |
|
|
business that is subject to Chapter 342, [or] 346, or 351 without |
|
|
holding the license or other authorization required under that |
|
|
chapter. |
|
|
(c) Each loan made without the authority required by Chapter |
|
|
342, [or] 346, or 351 is a separate offense. |
|
|
SECTION 3. Section 32.06(a-1), Tax Code, is amended to read |
|
|
as follows: |
|
|
(a-1) A person may authorize another person to pay the |
|
|
delinquent taxes imposed by a taxing unit on the person's real |
|
|
property by filing with the collector for the unit: |
|
|
(1) a sworn document stating: |
|
|
(A) [(1)] the authorization; |
|
|
(B) [(2)] the name and street address of the |
|
|
transferee authorized to pay the taxes of the property owner; and |
|
|
(C) [(3)] a description of the property by street |
|
|
address, if applicable, and legal description; and |
|
|
(2) the information required by Section 351.054, |
|
|
Finance Code. |
|
|
SECTION 4. Section 32.065(d), Tax Code, is amended to read |
|
|
as follows: |
|
|
(d) Chapters 342 and 346, Finance Code, and the provisions |
|
|
of Chapter 343, Finance Code, other than Sections 343.203 and |
|
|
343.205, do not apply to a transaction covered by this section. |
|
|
[The transferee of a tax lien under this section is not required to
|
|
|
obtain a license under Title 4, Finance Code.] |
|
|
SECTION 5. A person is not required to be licensed under or |
|
|
comply with Chapter 351, Finance Code, as added by this Act, before |
|
|
March 1, 2008. |
|
|
SECTION 6. This Act takes effect September 1, 2007. |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
| |
|
|
I certify that H.B. No. 2138 was passed by the House on April |
|
|
26, 2007, by the following vote: Yeas 128, Nays 0, 1 present, not |
|
|
voting; and that the House concurred in Senate amendments to H.B. |
|
|
No. 2138 on May 24, 2007, by the following vote: Yeas 146, Nays 0, |
|
|
1 present, not voting. |
|
|
|
|
|
______________________________ |
|
|
Chief Clerk of the House |
| |
|
|
I certify that H.B. No. 2138 was passed by the Senate, with |
|
|
amendments, on May 22, 2007, by the following vote: Yeas 31, Nays |
|
|
0. |
|
|
|
|
|
______________________________ |
|
|
Secretary of the Senate |
|
|
APPROVED: __________________ |
|
|
Date |
|
|
|
|
|
__________________ |
|
|
Governor |