Texas Legislature Winding Down Session

Texas Legislature Winding Down Session

by Hirsch Westheimer

As is the normal practice, the Texas Legislature will approve many new laws and amendments of existing laws in the last days of the 80th Legislative Session.  Then Governor Perry will have additional time to decide to sign or veto the legislation.  In fact, some of the most important and far-reaching bills are sent to the Governor at the end of the session.  For instance, House Bill 3928 will, if it makes it through the legislative process, make “technical amendments” to the margin tax approved in 2006.  We will prepare a report to you in the next newsletter on HB 3928 and some of the other bills.

Nevertheless, a week before the end of the session, some bills have made it through the legislative process and will be effective immediately or, more typically, on September 1, 2007.  A few of the bills that may be of interest are the following:

  • House Bill 2007, relating to the “modernization” of the regulation of banking in the state of Texas.  This bill is applicable only to state chartered banks.  It requires the Texas Department of Banking to seek to improve the “financial literacy” of Texas citizens and to encourage access to mainstream financial products and services by persons who have not previously participated in the conventional financing system.  The bill will also give the Department of Banking more flexibility in scheduling regular audits of bank operations.  The bill also simplified the calculation of legal limits on loans and investments, while authorizing state-chartered banks to own nominally valued, nonworking mineral and royalty interests. There is also a provision to allow the Department of Banking to expedite procedures to restore the banking system after a natural disaster or other emergency.
  • House Bill 823, relating to the liability of certain professionals for damages resulting from services provided during an emergency.  Similar in effect to the “good samaritan law,” this bill allows licensed professionals providing architectural or engineering services during certain declared federal, state or local emergencies to avoid personal liability due to act, error or omission in the performance of the services.  However, there are a few catches.  First, the architect or engineer would be liable for acts, errors of omissions that constitute gross negligence or wanton, willful or intentional misconduct.  Second, the safe harbor provision does not apply if the professional is at the scene to solicit business or to perform a service for compensation.  Both of those exceptions could end up to be fact questions, so it is uncertain how much protection the bill will actually provide.
  • Senate Bill 904, relating to the reauthorization of the Texas Alcoholic Beverage Commission after its recent sunset review.  The TABC would have expired on September 1, 2007 if the legislature did not continue its existence this session.  Instead, the TABC has renewed life through September 1, 2019.  In the new authorization, the legislature required that the TABC develop a risk-based approach to conducting its enforcement activities that focuses on detecting serious violations that impact public safety, monitoring entities that have a history of complaints and violations of the code and “other factors the commission considers important.”  As a related item, the TABC is required to develop a schedule of sanctions based on severity of the violation and assign priorities to complaint investigations based on risk. The bill also requires the TABC to develop a formal process for making policy decisions regarding violations of marketing regulations, and then communicate those to the regulated businesses.

In addition, other bills have reached the Governor’s desk, but have not been signed as of the date this article is being written.  For instance, the Governor must consider whether to sign a bill relating to the application of the Business Organizations Code to certain financial institutions, the right to apply a municipal setting designation under the Health and Safety Code in or near municipalities of less than 20,000 people, the storage of certain imported alcoholic beverages and the requirements for recording documents with the county clerk.

If you would like to follow the status of these or other bills, you can obtain comprehensive information through the Texas Legislature Online website at http://www.capitol.state.tx.us/.  Of course, if you have a specific question about the activities of the legislature, you may contact Lee Herman, a shareholder of Hirsch & Westheimer, P.C., at lherman@hirschwest.com.