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�	H.B.�No.�2774

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�	AN ACT
�	relating to self-directed and semi-independent status of state
�	financial regulatory agencies and the licensing and regulation of
�	certain persons involved in residential mortgage lending; making an
�	appropriation; providing a penalty.
�	�������BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
�	�������SECTION�1.��Section 156.101, Finance Code, is amended by
�	adding Subsection (d) to read as follows:
�	�������(d)��The commissioner shall participate in the Nationwide
�	Mortgage Licensing System and Registry as provided by Chapter 180.
�	�������SECTION�2.��Section 156.102, Finance Code, is amended by
�	adding Subsections (a-1) and (b-1) to read as follows:
�	�������(a-1)��The finance commission may adopt rules under this
�	chapter as required to carry out the intentions of the federal
�	Secure and Fair Enforcement for Mortgage Licensing Act of 2008
�	(Pub. L. No. 110-289).
�	�������(b-1)��The finance commission on the commissioner's
�	recommendation may adopt rules to promote a fair and orderly
�	administration of the fund consistent with the purposes of
�	Subchapter F.
�	�������SECTION�3.��The heading to Section 156.104, Finance Code, is
�	amended to read as follows:
�	�������Sec.�156.104.��MORTGAGE INDUSTRY [BROKER] ADVISORY
�	COMMITTEE.
�	�������SECTION�4.��Sections 156.104(a), (b), and (h), Finance Code,
�	are amended to read as follows:
�	�������(a)��The mortgage industry [broker] advisory committee is
�	created to advise and assist the commissioner.
�	�������(b)��The advisory committee is composed of six members [to
�	be] appointed by [as follows:
�	�������������[(1)]��the commissioner. �Each of the members must be
�	[shall appoint four members, each of whom]:
�	�������������(1)��under the regulatory authority of the department
�	[(A) �must hold a mortgage broker license];
�	�������������(2)��[(B) is] actively engaged in the business of
�	originating, brokering, or funding residential �mortgage loans at
�	the time of appointment; and
�	�������������(3)��[(C) has been] primarily engaged in the business
�	of originating, brokering, or funding residential mortgage loans
�	for at least two years before the member's appointment[; and
�	�������������[(2) � � the Texas Real Estate Commission shall appoint
�	two members, each of whom must hold a real estate broker or
�	salesperson license].
�	�������(h)��In addition to other powers and duties delegated to it
�	by the commissioner, the advisory committee shall advise the
�	commissioner with respect to:
�	�������������(1)��the proposal and adoption of rules relating to:
�	�������������������(A)��the licensing of mortgage brokers and loan
�	officers;
�	�������������������(B)��the education and experience requirements
�	for licensing mortgage brokers and loan officers; and
�	�������������������(C)��conduct and ethics of mortgage brokers and
�	loan officers;
�	�������������������[(D) � � continuing education for licensed mortgage
�	brokers and loan officers and the types of courses acceptable as
�	continuing education courses under this chapter; and
�	�������������������[(E) � � the granting or denying of an application or
�	request for renewal for a mortgage broker license or loan officer
�	license;]
�	�������������(2)��the form of or format for any applications or other
�	documents under this chapter; and
�	�������������(3)��the interpretation, implementation, and
�	enforcement of this chapter.
�	�������SECTION�5.��Effective April 1, 2010, Section 156.104,
�	Finance Code, is amended by adding Subsection (b-1) to read as
�	follows:
�	�������(b-1)��The members of the committee must include:
�	�������������(1)��three individuals licensed as residential
�	mortgage loan originators under this chapter, one of whom must hold
�	an active real estate broker or salesperson license issued under
�	Chapter 1101, Occupations Code; and
�	�������������(2)��three individuals licensed as residential
�	mortgage loan originators under Chapter 157, one of whom must hold
�	an active real estate broker or salesperson license issued under
�	Chapter 1101, Occupations Code.
�	�������SECTION�6.��Section 156.202, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.202.��EXEMPTIONS.��(a)��The following persons are
�	exempt from this chapter:
�	�������������(1)��any of the following entities or an employee of any
�	of the following entities provided 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;
�	�������������������(B)��a state or federal credit union, or a
�	subsidiary, affiliate, or credit union service organization of a
�	state or federal credit union;
�	�������������������(C)��an insurance company licensed or authorized
�	to do business in this state under the Insurance Code;
�	�������������������(D)��a mortgage banker registered under Chapter
�	157;
�	�������������������(E)��an organization that qualifies for an
�	exemption from state franchise and sales tax as a 501(c)(3)
�	organization;
�	�������������������(F)��a Farm Credit System institution; or
�	�������������������(G)��a political subdivision of this state
�	involved in affordable home ownership programs;
�	�������������(2)��an individual who makes a mortgage 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;
�	�������������(3)��an owner of real property who in any
�	12-consecutive-month period makes no more than five mortgage loans
�	to purchasers of the property for all or part of the purchase price
�	of the real estate against which the mortgage is secured;
�	�������������(4)��an individual who:
�	�������������������(A)��makes a mortgage loan from the individual's
�	own funds;
�	�������������������(B)��is not an authorized lender under Chapter
�	342, Finance Code; and
�	�������������������(C)��does not regularly engage in the business of
�	making or brokering mortgage loans; or
�	�������������(5)��an individual who is an exclusive agent of a
�	registered financial services company under a written agreement
�	prohibiting the individual from soliciting, processing,
�	negotiating, or placing a mortgage loan with a person other than the
�	registered financial services company or an affiliate of that
�	company.
�	�������(b)��An exclusive agent described by Subsection (a)(5) is
�	considered an employee of the registered financial services company
�	for purposes of this chapter.
�	�������SECTION�7.��Section 156.203, Finance Code, is amended by
�	adding Subsection (e) to read as follows:
�	�������(e)��In addition to the disciplinary action by the
�	commissioner authorized under Section 156.303(a)(7), the
�	commissioner may collect a fee in an amount not to exceed $50 for
�	any returned check or credit card charge back.
�	�������SECTION�8.��Section 156.204, Finance Code, is amended by
�	amending Subsections (a) and (c) and adding Subsection (f) to read
�	as follows:
�	�������(a)��To be eligible to be licensed as a mortgage broker as an
�	individual, the individual must:
�	�������������(1)��be at least 18 years of age;
�	�������������(2)��be a citizen of the United States or a lawfully
�	admitted alien;
�	�������������(3)��maintain a physical office in this state and
�	designate that office in the application;
�	�������������(4)��provide the commissioner with satisfactory
�	evidence that the applicant satisfies one of the following:
�	�������������������(A)��the individual�[person] has received a
�	bachelor's degree in an area relating to finance, banking, or
�	business administration from an accredited college or university
�	and has 18 months of experience in the mortgage or lending field as
�	evidenced by documentary proof of full-time employment as a
�	mortgage broker or licensed loan officer with a mortgage broker or
�	an individual�[a person] exempt under Section 156.202;
�	�������������������(B)��the individual�[person] is licensed in this
�	state as:
�	�������������������������(i)��an active real estate broker under
�	Chapter 1101, Occupations Code;
�	�������������������������(ii)��an active attorney; or
�	�������������������������(iii)��an active general lines [a local
�	recording agent or] insurance [solicitor or] agent or a limited
�	lines [for a legal reserve life] insurance agent [company under
�	Chapter 21, Insurance Code], or holds an equivalent insurance�
�	license under the [Chapter 21,] Insurance Code; or
�	�������������������(C)��the individual�[person] has three years of
�	experience in the mortgage lending field as evidenced by
�	documentary proof of full-time employment as a licensed loan
�	officer with a mortgage broker or an individual�[a person] exempt
�	under Section 156.202;
�	�������������(5)��provide the commissioner with satisfactory
�	evidence of:
�	�������������������(A)��having passed an examination, offered by a
�	testing service or company approved by the finance commission, that
�	demonstrates knowledge of:
�	�������������������������(i)��the mortgage industry; and
�	�������������������������(ii)��the role and responsibilities of a
�	mortgage broker; and
�	�������������������(B)��compliance with the financial requirements
�	of this chapter;
�	�������������(6)��not have been convicted of a criminal offense that
�	the commissioner determines directly relates to the occupation of a
�	mortgage broker as provided by Chapter 53, Occupations Code;
�	�������������(7)��satisfy the commissioner as to the individual's
�	good moral character, including the individual's honesty,
�	trustworthiness, and integrity;
�	�������������(8)��not be in violation of this chapter, a rule adopted
�	under this chapter, or any order previously issued to the
�	individual by the commissioner; and
�	�������������(9)��provide the commissioner with satisfactory
�	evidence that:
�	�������������������(A)��if the individual [person] has not been
�	previously licensed as a mortgage broker or a loan officer under
�	this subchapter, the individual [person] has completed 90
�	[classroom] hours of education courses approved by the commissioner
�	under this section; or
�	�������������������(B)��if the individual [person] has not been
�	previously licensed as a mortgage broker under this subchapter but
�	has been licensed as a loan officer under this subchapter, the
�	individual [person] has successfully completed an additional 30
�	[classroom] hours of education courses approved by the commissioner
�	under this section.
�	�������(c)��To be eligible to be licensed as a loan officer a person
�	must:
�	�������������(1)��be an individual who is at least 18 years of age;
�	�������������(2)��be a citizen of the United States or a lawfully
�	admitted alien;
�	�������������(3)��designate in the application the name of the
�	mortgage broker sponsoring the loan officer;
�	�������������(4)��provide the commissioner with satisfactory
�	evidence that the applicant satisfies one of the following:
�	�������������������(A)��the person [meets one of the requirements
�	described by Subsection (a)(4) and] has successfully completed at
�	least 60�[classroom] hours of education courses approved by the
�	commissioner;�[under this section;]
�	�������������������(B)��the person [has 18 months of experience as a
�	loan officer as evidenced by documentary proof of full-time
�	employment as a loan officer with a person exempt under Section
�	156.202 and] has successfully completed 30 [classroom] hours of
�	education courses approved by the commissioner under this section
�	if the applicant:
�	�������������������������(i)��has 18 months or more of experience as a
�	mortgage loan officer as evidenced by documentary proof of
�	full-time employment as a mortgage loan officer with a person
�	exempt under Section 156.202; or
�	�������������������������(ii)��is a person who meets the
�	qualifications under Subsection (a)(4)(B); or
�	�������������������(C)��the person holds an active mortgage broker
�	license issued under this chapter�[for applications received prior
�	to January 1, 2000, the mortgage broker that will sponsor the
�	applicant provides a certification under oath that the applicant
�	has been provided necessary and appropriate education and training
�	regarding all applicable state and federal law and regulations
�	relating to mortgage loans];
�	�������������(5)��not have been convicted of a criminal offense that
�	the commissioner determines directly relates to the occupation of a
�	loan officer as provided by Chapter 53, Occupations Code;
�	�������������(6)��satisfy the commissioner as to the individual's
�	good moral character, including the individual's honesty,
�	trustworthiness, and integrity;
�	�������������(7)��provide the commissioner with satisfactory
�	evidence of having passed an examination, offered by a testing
�	service or company approved by the finance commission, that
�	demonstrates knowledge of:
�	�������������������(A)��the mortgage industry; and
�	�������������������(B)��the role and responsibilities of a loan
�	officer; and
�	�������������(8)��not be in violation of this chapter, a rule adopted
�	under this chapter, or any order previously issued to the
�	individual by the commissioner.
�	�������(f)��Subsection (c) and this subsection expire January 1,
�	2011.
�	�������SECTION�9.��Effective January 1, 2011, Section 156.204,
�	Finance Code, is amended by adding Subsection (c-1) to read as
�	follows:
�	�������(c-1)��To be eligible to be licensed as a loan officer a
�	person must:
�	�������������(1)��be an individual who is at least 18 years of age;
�	�������������(2)��be a citizen of the United States or a lawfully
�	admitted alien;
�	�������������(3)��designate in the application the name of the
�	mortgage broker sponsoring the loan officer;
�	�������������(4)��provide the commissioner with satisfactory
�	evidence that the applicant satisfies one of the following:
�	�������������������(A)��the person has successfully completed at
�	least 60 hours of education courses approved by the commissioner;
�	�������������������(B)��the person has successfully completed 30
�	hours of education courses approved by the commissioner under this
�	section if the applicant has 18 months or more of experience as a
�	residential mortgage loan originator as evidenced by documentary
�	proof of full-time employment; or
�	�������������������(C)��the person holds an active license as a
�	residential mortgage loan originator under Chapter 157 and has held
�	that license for a minimum of one year;
�	�������������(5)��not have been convicted of a criminal offense that
�	the commissioner determines directly relates to the occupation of a
�	loan officer as provided by Chapter 53, Occupations Code;
�	�������������(6)��satisfy the commissioner as to the individual's
�	good moral character, including the individual's honesty,
�	trustworthiness, and integrity;
�	�������������(7)��provide the commissioner with satisfactory
�	evidence of having passed an examination, offered by a testing
�	service or company approved by the finance commission, that
�	demonstrates knowledge of:
�	�������������������(A)��the mortgage industry; and
�	�������������������(B)��the role and responsibilities of a loan
�	officer; and
�	�������������(8)��not be in violation of this chapter, a rule adopted
�	under this chapter, or any order previously issued to the
�	individual by the commissioner.
�	�������SECTION�10.��Section 156.205, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.205.��FINANCIAL REQUIREMENTS [FOR A MORTGAGE
�	BROKER]. Financial requirements for holding a mortgage broker or
�	loan officer license shall be met through participation in the
�	fund. [(a) � � In this section, "net assets" means the difference
�	between total assets and total liabilities, as determined by
�	generally acceptable accounting principles, and does not include
�	any assets that are exempt under state or federal law. � All assets
�	and liabilities are subject to verification by the commissioner.
�	�������[(b) � � A mortgage broker must maintain net assets of at least
�	$25,000 or a surety bond in the amount of at least $50,000. � The term
�	of the surety bond must coincide with the term of the license. � The
�	finance commission may adopt rules establishing the terms and
�	conditions of the surety bond and the qualifications of the surety.
�	�������[(c) � � The commissioner shall require proof of compliance
�	with this section at the time the mortgage broker applies for or
�	renews a license.]
�	�������SECTION�11.��Section 156.208, Finance Code, is amended by
�	amending Subsections (a), (b), and (j) and adding Subsections (k)
�	and (l) to read as follows:
�	�������(a)��A mortgage broker license issued under this chapter is
�	valid for a term of not more than two years and may be renewed on or
�	before its expiration date if the mortgage broker:
�	�������������(1)��pays to the commissioner a renewal fee in an amount
�	determined by the commissioner not to exceed $375 and a recovery
�	fund fee provided by Section 156.502;
�	�������������(2)��has not been convicted of a criminal offense the
�	commissioner determines is directly related to the occupation of a
�	mortgage broker as provided by Chapter 53, Occupations Code; and
�	�������������(3)��provides the commissioner with satisfactory
�	evidence that the mortgage broker:
�	�������������������(A)��has attended, during the term of the current
�	license, 15 hours of continuing education courses that the
�	commissioner, in accordance with the rules adopted by the finance
�	commission under this section, has approved as continuing education
�	courses; or
�	�������������������(B)��maintains an active license in this state as:
�	�������������������������(i)��a real estate broker;
�	�������������������������(ii)��a real estate salesperson;
�	�������������������������(iii)��an attorney; or
�	�������������������������(iv)��an active general lines insurance [a
�	local recording] agent or a limited lines [or] insurance [solicitor
�	or] agent [for a legal reserve life insurance company under Chapter
�	21, Insurance Code], or holds an equivalent insurance license under
�	the [Chapter 21,] Insurance Code.
�	�������(b)��A loan officer license issued under this chapter is
�	valid for a term of not more than two years and may be renewed on or
�	before its expiration date if the loan officer:
�	�������������(1)��pays to the commissioner a renewal fee in an amount
�	determined by the commissioner not to exceed $275 [$175] and a
�	recovery fund fee provided by Section 156.502;
�	�������������(2)��has not been convicted of a criminal offense the
�	commissioner determines is directly related to the occupation of a
�	loan officer as provided by Chapter 53, Occupations Code; and
�	�������������(3)��provides the commissioner with satisfactory
�	evidence that the loan officer:
�	�������������������(A)��has attended, during the term of the current
�	license, 15 hours of continuing education courses that the
�	commissioner, in accordance with the rules adopted by the finance
�	commission under this section, has approved as continuing education
�	courses, including courses provided by or through the licensed
�	mortgage broker with whom the loan officer is associated after
�	submission to and approval by the commission; or
�	�������������������(B)��maintains an active license in this state as:
�	�������������������������(i)��a real estate broker;
�	�������������������������(ii)��a real estate salesperson;
�	�������������������������(iii)��an attorney; or
�	�������������������������(iv)��an active general lines insurance [a
�	local recording] agent or a limited lines [or] insurance [solicitor
�	or] agent [for a legal reserve life insurance company under Chapter
�	21, Insurance Code], or holds an equivalent insurance license under
�	the [Chapter 21,] Insurance Code.
�	�������(j)��The commissioner may deny the renewal of a mortgage
�	broker license or a loan officer license if:
�	�������������(1)��the mortgage broker or loan officer is in
�	violation of this chapter, a rule adopted under this chapter, or any
�	order previously issued to the individual by the commissioner;
�	�������������(2)��the mortgage broker or loan officer is in default
�	in the payment of any administrative penalty, fee, charge, or other
�	indebtedness owed under this title; [or]
�	�������������(3)��during the current term of the license, the
�	commissioner becomes aware of any fact that would have been grounds
�	for denial of an original license if the fact had been known by the
�	commissioner on the date the license was granted; or
�	�������������(4)��the mortgage broker or loan officer is in default
�	on a student loan administered by the Texas Guaranteed Student Loan
�	Corporation, pursuant to Section 57.491, Education Code.
�	�������(k)��In addition to the disciplinary action by the
�	commissioner authorized under Section 156.303(a)(7), the
�	commissioner may collect a fee in an amount not to exceed $50 for
�	any returned check or credit card charge back.
�	�������(l)��Subsections (a) and (b) and this subsection expire
�	January 1, 2011.
�	�������SECTION�12.��Effective January 1, 2011, Section 156.208,
�	Finance Code, is amended by adding Subsections (a-1) and (b-1) to
�	read as follows:
�	�������(a-1)��A mortgage broker license issued under this chapter is
�	valid for a term of not more than two years and may be renewed on or
�	before its expiration date if the mortgage broker:
�	�������������(1)��pays to the commissioner a renewal fee in an amount
�	determined by the commissioner not to exceed $375 and a recovery
�	fund fee provided by Section 156.502;
�	�������������(2)��has not been convicted of a criminal offense the
�	commissioner determines is directly related to the occupation of a
�	mortgage broker as provided by Chapter 53, Occupations Code; and
�	�������������(3)��provides the commissioner with satisfactory
�	evidence that the mortgage broker has attended, during the term of
�	the current license, continuing education courses in accordance
�	with the applicable requirements of Chapter 180.
�	�������(b-1)��A loan officer license issued under this chapter is
�	valid for a term of not more than two years and may be renewed on or
�	before its expiration date if the loan officer:
�	�������������(1)��pays to the commissioner a renewal fee in an amount
�	determined by the commissioner not to exceed $275 and a recovery
�	fund fee provided by Section 156.502;
�	�������������(2)��has not been convicted of a criminal offense the
�	commissioner determines is directly related to the occupation of a
�	loan officer as provided by Chapter 53, Occupations Code; and
�	�������������(3)��provides the commissioner with satisfactory
�	evidence that the loan officer has attended, during the term of the
�	current license, continuing education courses in accordance with
�	the applicable requirements of Chapter 180.
�	�������SECTION�13.��The heading to Section 156.212, Finance Code,
�	is amended to read as follows:
�	�������Sec.�156.212.��MAINTENANCE AND LOCATION OF OFFICES[; DISPLAY
�	OF LICENSE CERTIFICATES].
�	�������SECTION�14.��Section 156.214(b), Finance Code, as added by
�	Chapter 228 (H.B. 1716), Acts of the 80th Legislature, Regular
�	Session, 2007, is amended to read as follows:
�	�������(b)��To be eligible to register as a registered financial
�	services company, a person must:
�	�������������(1)��be a depository institution exempt from this
�	chapter under Section 156.202(1)(A) or (B) and chartered and
�	regulated by the Office of Thrift Supervision or the Office of the
�	Comptroller of the Currency, or be a subsidiary or affiliate of the
�	institution;
�	�������������(2)��provide the commissioner with satisfactory
�	evidence of an undertaking of accountability in a form acceptable
�	to the commissioner, supported by a surety bond equal to $1 million
�	to cover the person's responsibility for mortgage broker activities
�	of each exclusive agent;
�	�������������(3)��provide a business plan satisfactory to the
�	commissioner that sets forth the person's plan to provide education
�	to its exclusive agents, handle consumer complaints relating to its
�	exclusive agents, and supervise the mortgage broker activities of
�	its exclusive agents;
�	�������������(4)��pay an annual registration fee in an amount
�	determined as follows [of the lesser of]:
�	�������������������(A)��if the registered financial services company
�	has 2,000 or fewer exclusive agents acting in this state, an amount
�	equal to the lesser of:
�	�������������������������(i)��one-half of the license fee for a loan
�	officer under Section 156.203(c)(1), multiplied by the number of
�	exclusive agents under contract to act for the person in this state;
�	or
�	�������������������������(ii) [(B)]��$200,000;
�	�������������������(B)��if the registered financial services company
�	has at least 2,001 but not more than 2,500 exclusive agents acting
�	in this state, $225,000;
�	�������������������(C)��if the registered financial services company
�	has at least 2,501 but not more than 3,000 exclusive agents acting
�	in this state, $250,000;
�	�������������������(D)��if the registered financial services company
�	has at least 3,001 but not more than 5,000 exclusive agents acting
�	in this state, $300,000; or
�	�������������������(E)��if the registered financial services company
�	has at least 5,001 exclusive agents acting in this state, $350,000;
�	and
�	�������������(5)��designate an officer of the person to be
�	responsible for the activities of the exclusive agents.
�	�������SECTION�15.��Section 156.301, Finance Code, is amended by
�	adding Subsection (h) to read as follows:
�	�������(h)��The commissioner may require reimbursement in an amount
�	not to exceed $325 for each examiner a day for on-site examination
�	or investigation of a mortgage broker if records are located out of
�	state or if the review is considered necessary beyond the routine
�	examination process.
�	�������SECTION�16.��Section 156.302(a), Finance Code, is amended to
�	read as follows:
�	�������(a)��The commissioner, after notice and opportunity for
�	hearing, may impose an administrative penalty on a person licensed
�	under this chapter who violates this chapter or a rule or order
�	adopted under this chapter.
�	�������SECTION�17.��Section 156.303, Finance Code, is amended by
�	amending Subsections (a), (e), (g), (h), and (j) and adding
�	Subsection (a-1) to read as follows:
�	�������(a)��The commissioner may order disciplinary action against
�	a licensed mortgage broker or a licensed loan officer when the
�	commissioner, after notice and opportunity for [a] hearing, has
�	determined that the person:
�	�������������(1)��obtained a license, including a renewal of a
�	license, under this chapter through a false or fraudulent
�	representation or made a material misrepresentation in an
�	application for a license or for the renewal of a license under this
�	chapter;
�	�������������(2)��published or caused to be published an
�	advertisement related to the business of a mortgage broker or loan
�	officer that:
�	�������������������(A)��is misleading;
�	�������������������(B)��is likely to deceive the public;
�	�������������������(C)��in any manner tends to create a misleading
�	impression;
�	�������������������(D)��fails to identify as a mortgage broker or
�	loan officer the person causing the advertisement to be published;
�	or
�	�������������������(E)��violates federal or state law;
�	�������������(3)��while performing an act for which a license under
�	this chapter is required, engaged in conduct that constitutes
�	improper, fraudulent, or dishonest dealings;
�	�������������(4)��entered a plea of guilty or nolo contendere to, or
�	is convicted of, a criminal offense that is a felony or that
�	involves fraud or moral turpitude in a court of this or another
�	state or in a federal court;
�	�������������(5)��failed to use a fee collected in advance of closing
�	of a mortgage loan for a purpose for which the fee was paid;
�	�������������(6)��charged or received, directly or indirectly, a fee
�	for assisting a mortgage applicant in obtaining a mortgage loan
�	before all of the services that the person agreed to perform for the
�	mortgage applicant are completed, and the proceeds of the mortgage
�	loan have been disbursed to or on behalf of the mortgage applicant,
�	except as provided by Section 156.304;
�	�������������(7)��failed within a reasonable time to honor a check
�	issued to the commissioner after the commissioner has mailed a
�	request for payment by certified mail to the person's last known
�	business address as reflected by the commissioner's records;
�	�������������(8)��paid compensation to a person who is not licensed
�	or exempt under this chapter for acts for which a license under this
�	chapter is required;
�	�������������(9)��induced or attempted to induce a party to a
�	contract to breach the contract so the person may make a mortgage
�	loan;
�	�������������(10)��published or circulated an unjustified or
�	unwarranted threat of legal proceedings in matters related to the
�	person's actions or services as a mortgage broker or loan officer,
�	as applicable;
�	�������������(11)��established an association, by employment or
�	otherwise, with a person not licensed or exempt under this chapter
�	who was expected or required to act as a mortgage broker or loan
�	officer;
�	�������������(12)��aided, abetted, or conspired with a person to
�	circumvent the requirements of this chapter;
�	�������������(13)��acted in the dual capacity of a mortgage broker or
�	loan officer and real estate broker, salesperson, or attorney in a
�	transaction without the knowledge and written consent of the
�	mortgage applicant or in violation of applicable requirements under
�	federal law;
�	�������������(14)��discriminated against a prospective borrower on
�	the basis of race, color, religion, sex, national origin, ancestry,
�	familial status, or a disability;
�	�������������(15)��failed or refused on demand to:
�	�������������������(A)��produce a document, book, or record
�	concerning a mortgage loan transaction conducted by the mortgage
�	broker or loan officer for inspection by the commissioner or the
�	commissioner's authorized personnel or representative;
�	�������������������(B)��give the commissioner or the commissioner's
�	authorized personnel or representative free access to the books or
�	records relating to the person's business kept by an officer,
�	agent, or employee of the person or any business entity through
�	which the person conducts mortgage brokerage activities, including
�	a subsidiary or holding company affiliate; or
�	�������������������(C)��provide information requested by the
�	commissioner as a result of a formal or informal complaint made to
�	the commissioner;
�	�������������(16)��failed without just cause to surrender, on
�	demand, a copy of a document or other instrument coming into the
�	person's possession that was provided to the person by another
�	person making the demand or that the person making the demand is
�	under law entitled to receive;
�	�������������(17)��disregarded or violated this chapter, a rule
�	adopted by the finance commission under this chapter, or an order
�	issued by the commissioner under this chapter; or
�	�������������(18)��provided false information to the commissioner
�	during the course of an investigation or inspection.
�	�������(a-1)��The commissioner may also order disciplinary action
�	after notice and opportunity for hearing against a licensed
�	mortgage broker or a licensed loan officer if the commissioner
�	becomes aware during the term of the license of any fact that would
�	have been grounds for denial of an original license if the fact had
�	been known by the commissioner on the date the license was issued.
�	�������(e)��The commissioner, after giving notice and an
�	opportunity for hearing, may impose against a person who violates a
�	cease and desist order an administrative penalty in an amount not to
�	exceed $1,000 for each day of the violation. In addition to any
�	other remedy provided by law, the commissioner may institute in
�	district court a suit for injunctive relief and to collect the
�	administrative penalty. A bond is not required of the commissioner
�	with respect to injunctive relief granted under this subsection.
�	[A penalty collected under this subsection shall be deposited in
�	the fund.]
�	�������(g)��If a person fails to pay an administrative penalty that
�	has become final or fails to comply with an order of the
�	commissioner that has become final, in addition to any other remedy
�	provided under law the commissioner, on not less than 10 days'
�	notice to the person, may without a prior hearing suspend the
�	person's mortgage broker license or loan officer license. �The
�	suspension shall continue until the person has complied with the
�	[cease and desist] order or paid the administrative penalty. �
�	During the period of suspension, the person may not originate a
�	mortgage loan and all compensation received by the person during
�	the period of suspension is subject to forfeiture as provided by
�	Section 156.406(b).
�	�������(h)��An order of suspension under Subsection (g) may be
�	appealed. �An appeal is a contested case governed by Chapter 2001,
�	Government Code. �A hearing of an appeal of an order of suspension
�	issued under Subsection (g) shall be held not later than the 30th
�	[15th] day after the date of receipt of the notice of appeal. �The
�	appellant shall be provided at least three days' notice of the time
�	and place of the hearing.
�	�������(j)��The [On notice and opportunity for hearing, the]
�	commissioner may, on not less than 10 days' notice to the person,
�	suspend a person's license without a prior hearing under this
�	chapter if an indictment or information is filed or returned
�	alleging that the person committed a criminal offense involving
�	fraud, theft, or dishonesty. �The suspension continues until the
�	criminal case is dismissed or the person is acquitted. A person may
�	appeal the suspension in accordance with Subsection (h).
�	�������SECTION�18.��Section 156.401(a), Finance Code, is amended to
�	read as follows:
�	�������(a)��The commissioner may employ an enforcement staff to
�	investigate and prosecute complaints made against persons licensed
�	under this chapter. The commissioner may employ a hearings officer
�	to conduct hearings under this section. The commissioner may
�	collect and deposit any court costs collected pursuant to a final
�	order.
�	�������SECTION�19.��Section 156.501, Finance Code, is amended by
�	amending Subsections (a) and (b) and adding Subsections (d), (e),
�	and (f) to read as follows:
�	�������(a)��The commissioner shall establish, administer, and
�	maintain a mortgage broker recovery fund as provided by this
�	subchapter. The amounts received by the commissioner for deposit
�	in the fund shall be held by the commissioner in trust for carrying
�	out the purposes of the fund.
�	�������(b)��Subject to this subsection, the�[The] fund shall be used
�	to reimburse residential mortgage loan applicants for actual
�	damages incurred because of [aggrieved persons to whom a court
�	awards actual damages because of certain] acts committed by a
�	mortgage broker or loan officer who was licensed under this chapter
�	when the act was committed. �The use of the fund is limited to
�	reimbursement for out-of-pocket losses caused by an act by a
�	mortgage broker or loan officer that constitutes a violation of
�	Section 156.303(a)(2), (3), (5), (6), (8), (9), (10), (11), (12),
�	(13), or (16) or 156.304. �Payments from the fund may not be made to
�	a lender who makes a mortgage loan originated by the mortgage broker
�	or loan officer or who acquires a mortgage loan originated by the
�	mortgage broker or loan officer.
�	�������(d)��The fund may be used at the discretion of the
�	commissioner to reimburse expenses incurred to secure and destroy
�	residential mortgage loan documents that have been abandoned by a
�	current or former individual or entity under the regulatory
�	authority of the department.
�	�������(e)��Payments from the fund shall be reduced by the amount of
�	any recovery from the mortgage broker or loan officer or from any
�	surety, insurer, or other person or entity making restitution to
�	the applicant on behalf of the mortgage broker or loan officer.
�	�������(f)��The commissioner, as manager of the fund, is entitled to
�	reimbursement for reasonable and necessary costs and expenses
�	incurred in the management of the fund, including costs and
�	expenses incurred with regard to applications filed under Section
�	156.504.
�	�������SECTION�20.��Section 156.502(a), Finance Code, is amended to
�	read as follows:
�	�������(a)��On an application for an original license or for renewal
�	of a license issued under this chapter, the applicant, in addition
�	to paying the original application fee or renewal fee, shall pay a
�	fee in an amount determined by the commissioner, not to exceed $20
�	[fee]. The fee shall be deposited in the fund.
�	�������SECTION�21.��Section 156.502(b), Finance Code, is amended to
�	read as follows:
�	�������(b)��If the balance remaining in the fund at the end of a
�	calendar year [after 2010] is more [less] than $3.5 million, the
�	amount of money in excess of that amount shall be available to the
�	commissioner to offset the expenses of participating in and sharing
�	information with the Nationwide Mortgage Licensing System and
�	Registry in accordance with Chapter 180 [$500,000, each mortgage
�	broker and loan officer licensed under this chapter, on the next
�	renewal of the license, shall pay, in addition to any other required
�	fees, the lesser of a $10 fee or a pro rata share of the amount
�	necessary to bring the fund to $1 million. The fee shall be
�	deposited in the fund].
�	�������SECTION�22.��Section 156.503, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.503.��STATUTE OF LIMITATIONS. (a)��An application
�	for the recovery of actual damages [action for a judgment that
�	subsequently results in an order for collection] from the fund
�	under Section 156.504�may not be filed�[instituted] after the
�	second anniversary of the date of the alleged act or omission
�	causing the actual damages or the date the act or omission should
�	reasonably have been discovered.
�	�������(b)��This section does not apply to a subrogation claim
�	brought by the commissioner for recovery of money paid out of the
�	fund�[on which the cause of action accrues].
�	�������SECTION�23.��Section 156.504, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.504.��PROCEDURE FOR RECOVERY. (a) �To recover from
�	the fund, a residential mortgage loan applicant must file a written
�	sworn application with the commissioner in the form prescribed by
�	[An aggrieved person who recovers against a mortgage broker or loan
�	officer licensed under this chapter a valid court judgment for
�	conduct described by Section 156.501 that occurred on or after
�	January 1, 2000, after final judgment has been entered, execution
�	returned nulla bona, and a judgment lien perfected, may file a
�	verified claim in the court in which the judgment was entered and,
�	on 20 days' written notice to] the commissioner [and to the judgment
�	debtor, may apply to the court for an order directing payment from
�	the fund of any unpaid judgment amount], subject to Section
�	156.503. A person who knowingly makes a false statement in
�	connection with applying for money out of the fund may be subject to
�	criminal prosecution under Section 37.10, Penal Code.
�	�������(b)��The residential mortgage loan applicant [On the hearing
�	on the application, the aggrieved person] is required to show:
�	�������������(1)��that the applicant's claim [judgment] is based on
�	facts allowing recovery under Section 156.501; and
�	�������������(2)��that the applicant:�����
�	�������������������(A)��[person] is not a spouse of the licensed
�	mortgage broker or loan officer;
�	�������������������(B)��is not a child, parent, grandchild,
�	grandparent, or sibling, including relationships by adoption, of
�	the licensed mortgage broker or loan officer;
�	�������������������(C)��is not a person sharing living quarters with
�	the licensed mortgage broker or loan officer or a current or former
�	employer, employee, or associate of the licensed mortgage broker or
�	loan officer;
�	�������������������(D)��is not a person who has aided, abetted, or
�	participated other than as a victim with the�[of the debtor, or the
�	personal representative of the spouse, and that the person is not]
�	licensed [as a] mortgage broker or loan officer in any activity that
�	is illegal under Section 156.303(a)(2), (3), (5), (6), (8), (9),
�	(10), (11), (12), (13), or (16) or Section 156.304 or is not the
�	personal representative of a licensed mortgage broker or loan
�	officer; and
�	�������������������(E)��is not licensed as a mortgage broker or loan
�	officer under�this chapter who is seeking to recover any
�	compensation in the transaction or transactions for which the
�	application for payment is made[;
�	�������������[(3) � � that based on the best available information, the
�	judgment debtor lacks sufficient attachable assets in this state or
�	any other state to satisfy the judgment and the surety bond required
�	by Section 156.205 is not sufficient to satisfy the judgment; and
�	�������������[(4) � � the amount that may be realized from the sale of
�	property or other assets liable to be sold or applied in
�	satisfaction of the judgment and the balance remaining due on the
�	judgment after application of the amount that may be realized].
�	�������(c)��On receipt of the verified application, the
�	commissioner's staff shall:
�	�������������(1)��notify each appropriate license holder and the
�	issuer of any surety bond issued in connection with their licenses;
�	and
�	�������������(2)��investigate the application and issue a
�	preliminary determination, giving the applicant, the license
�	holder, and any surety an opportunity to resolve the matter by
�	agreement or to dispute the preliminary determination.
�	�������(d)��If the preliminary determination under Subsection
�	(c)(2) is not otherwise resolved by agreement and is not disputed by
�	written notice to the commissioner before the 31st day after the
�	notification date, the preliminary determination automatically
�	becomes final and the commissioner shall make payment from the
�	fund, subject to [A recovery on the judgment against a single
�	defendant made before payment from the fund shall be applied first
�	by the creditor to actual damages.
�	�������[(d) � � The court shall make an order directed to the
�	commissioner requiring payment from the fund of the amount the
�	court finds to be payable on the claim, pursuant to and in
�	accordance with the limitations contained in this subchapter, if
�	the court is satisfied, on the hearing, of the truth of all matters
�	required to be shown by the aggrieved person under Subsection (b)
�	and that the aggrieved person has satisfied all of the requirements
�	of this section.
�	�������[(e) � � When the commissioner receives notice of entry of a
�	final judgment and a hearing is scheduled under this section, the
�	commissioner may notify the attorney general of the commissioner's
�	desire to enter an appearance, file a response, appear at the court
�	hearing, defend the action, or to take any other appropriate
�	action. In taking any action described by this subsection, the
�	commissioner and the attorney general shall act only to protect the
�	fund from spurious or unjust claims or to ensure compliance with the
�	requirements for recovery under this subchapter.
�	�������[(f) � � The commissioner may relitigate any issue material and
�	relevant in the hearing on the application that was determined in
�	the underlying action on which the judgment in favor of the
�	applicant was based.
�	�������[(g) � � If the court finds that the aggregate amount of claims
�	against a licensed mortgage broker or loan officer exceeds] the
�	limits of�[contained in] Section 156.505.
�	�������(e)��If the preliminary determination under Subsection
�	(c)(2) is disputed by the applicant, the license holder, or any
�	surety by written notice to the commissioner before the 31st day
�	after the notification date, the matter shall be set for a hearing
�	governed by Chapter 2001, Government Code, and the hearing rules of
�	the finance commission [, the court shall reduce proportionately
�	the amount the court finds payable on the claim].
�	�������SECTION�24.��Section 156.505, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.505.��RECOVERY LIMITS. (a) �A person entitled to
�	receive payment out of the fund is entitled to receive
�	reimbursement of actual, out-of-pocket damages[, reasonable
�	attorney's fees, and court costs as determined by the court] as
�	provided by this section.
�	�������(b)��A payment from the fund may be made [only pursuant to a
�	court order] as provided by Section 156.504 and this section. A
�	payment for claims:
�	�������������(1)��arising out of the same transaction, including
�	[attorney's fees,] interest, [and court costs,] is limited in the
�	aggregate to $25,000, regardless of the number of claimants; and
�	�������������(2)��[based on judgments] against a single person
�	licensed as a mortgage broker or loan officer under this chapter
�	arising out of separate transactions, including interest, is
�	limited in the aggregate to $50,000 until the fund has been
�	reimbursed for all amounts paid.
�	�������(c)��In the event there are concurrent claims under
�	Subsections (b)(1) and (2) that exceed the amounts available under
�	the fund, the commissioner shall prorate recovery based on the
�	amount of damage suffered by each claimant.
�	�������SECTION�25.��Section 156.506, Finance Code, is amended by
�	amending Subsections (a) and (c) and adding Subsection (a-1) to
�	read as follows:
�	�������(a)��The commissioner may revoke a license issued under this
�	chapter on proof that the commissioner has made a payment from the
�	fund of any amount toward satisfaction of a claim [judgment]
�	against a [person licensed as a] mortgage broker or loan officer
�	under this chapter.
�	�������(a-1)��The commissioner may seek to collect from a mortgage
�	broker or loan officer the amount paid from the fund on behalf of
�	the mortgage broker or loan officer and any costs associated with
�	investigating and processing the claim against the fund or with
�	collection of reimbursement for payments from the fund, plus
�	interest at the current legal rate until the amount has been repaid
�	in full. Any amount, including interest, recovered by the
�	commissioner shall be deposited to the credit of the fund.
�	�������(c)��A person on whose behalf payment was made from the fund
�	is not eligible to receive a new license under this chapter until
�	the person has repaid in full, plus interest at the current legal
�	rate, the amount paid from the fund on the person's behalf and any
�	costs associated with investigating and processing the claim
�	against the fund or with collection of reimbursement for payments
�	from the fund.
�	�������SECTION�26.��Section 156.507, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.507.��SUBROGATION. When the commissioner has paid
�	an applicant [a judgment creditor] an amount from the fund under
�	Section 156.504 [as directed by the court], the commissioner is
�	subrogated to all of the rights of the applicant [judgment
�	creditor] to the extent of the amount paid. The applicant [judgment
�	creditor] shall assign all of the applicant's [creditor's] right,
�	title, and interest in [the judgment up to the amount paid by the
�	commissioner, and that amount has priority for repayment in the
�	event of] any subsequent [recovery on the] judgment against the
�	license holder, up to the[. Any] amount paid[, including interest,
�	recovered] by the commissioner. Any amount, including interest,
�	recovered by the commissioner on the assignment [judgment] shall be
�	deposited to the credit of the fund.
�	�������SECTION�27.��Section 156.508, Finance Code, is amended to
�	read as follows:
�	�������Sec.�156.508.��FAILURE TO COMPLY WITH SUBCHAPTER OR RULE
�	ADOPTED BY THE FINANCE COMMISSION. The failure of an applicant
�	under Section 156.504 [aggrieved person] to comply with a provision
�	of this subchapter relating to the fund or with a rule adopted by
�	the finance commission relating to the fund constitutes a waiver of
�	any rights under this subchapter.
�	�������SECTION�28.��(a)��Title 2, Finance Code, is amended by
�	adding Chapter 16 to read as follows:
�	CHAPTER 16. �FINANCIAL REGULATORY AGENCIES: SELF-DIRECTED AND
�	SEMI-INDEPENDENT
�	�������Sec.�16.001.��DEFINITIONS. In this chapter:
�	�������������(1)��"Financial regulatory agency" means:
�	�������������������(A)��the Texas Department of Banking;
�	�������������������(B)��the Department of Savings and Mortgage
�	Lending;
�	�������������������(C)��the Office of Consumer Credit Commissioner;
�	and
�	�������������������(D)��the Credit Union Department.
�	�������������(2)��"Policy-making body" means:
�	�������������������(A)��the Finance Commission of Texas for:
�	�������������������������(i)��the Texas Department of Banking;
�	�������������������������(ii)��the Department of Savings and Mortgage
�	Lending; and
�	�������������������������(iii)��the Office of Consumer Credit
�	Commissioner; and
�	�������������������(B)��the Credit Union Commission for the Credit
�	Union Department.
�	�������Sec.�16.002.��SELF-DIRECTED AND SEMI-INDEPENDENT STATUS OF
�	FINANCIAL REGULATORY AGENCIES. Notwithstanding any other
�	provision of law, a financial regulatory agency is self-directed
�	and semi-independent as specified by this chapter. Any Act of the
�	81st Legislature that relates to a financial regulatory agency and
�	that is inconsistent with the agency being self-directed and
�	semi-independent may be implemented by the financial regulatory
�	agency only on authorization by the policy-making body of the
�	financial regulatory agency.
�	�������Sec.�16.003.��BUDGET, REVENUES, AND EXPENSES. (a) �A
�	financial regulatory agency shall submit to the policy-making body
�	of the financial regulatory agency a budget annually using
�	generally accepted accounting principles. Notwithstanding any
�	other provision of law, including the General Appropriations Act,
�	the budget shall be adopted and approved only by the policy-making
�	body of the financial regulatory agency.
�	�������(b)��A financial regulatory agency shall be responsible for
�	all direct and indirect costs of the agency's existence and
�	operation. The financial regulatory agency may not directly or
�	indirectly cause the general revenue fund to incur any cost.
�	�������(c)��Subject to any limitations in a financial regulatory
�	agency's enabling legislation, a financial regulatory agency may
�	set the amounts of fees, penalties, charges, and revenues required
�	or permitted by statute or rule as necessary for the purpose of
�	carrying out the functions of the financial regulatory agency and
�	funding the budget adopted and approved under Subsection (a).
�	�������(d)��All fees and funds collected by a financial regulatory
�	agency and any funds appropriated to the financial regulatory
�	agency shall be deposited in interest-bearing deposit accounts in
�	the Texas Treasury Safekeeping Trust Company. The comptroller
�	shall contract with the financial regulatory agency for the
�	maintenance of the deposit accounts under terms comparable to a
�	contract between a commercial banking institution and the
�	institution's customers.
�	�������(e)��Periodically, each financial regulatory agency shall
�	submit to the agency's policy-making body, as directed by the
�	policy-making body, a report of the receipts and expenditures of
�	the financial regulatory agency.
�	�������(f)��The fiscal year for a financial regulatory agency begins
�	on September 1 and ends on August 31.
�	�������Sec.�16.004.��AUDITS. This chapter does not affect the duty
�	of the state auditor to audit a financial regulatory agency. The
�	state auditor shall enter into a contract and schedule with each
�	financial regulatory agency to conduct audits, including financial
�	reports and performance audits. The financial regulatory agency
�	shall reimburse the state auditor for all costs incurred in
�	performing the audits and shall provide to the governor a copy of
�	any audit performed.
�	�������Sec.�16.005.��RECORDS; REPORTING REQUIREMENTS. (a) A
�	financial regulatory agency shall keep financial and statistical
�	information as necessary to disclose completely and accurately the
�	financial condition and results of operations of the agency.
�	�������(b)��Before the beginning of each regular session of the
�	legislature, each financial regulatory agency shall submit to the
�	legislature and the governor a report describing all of the
�	agency's activities in the previous biennium. The report must
�	include:
�	�������������(1)��an audit as required by Section 16.004;
�	�������������(2)��a financial report of the previous fiscal year,
�	including reports on financial condition and results of operations;
�	�������������(3)��a description of all changes in fees imposed on
�	regulated industries;
�	�������������(4)��a report on changes in the regulatory jurisdiction
�	of the agency, including the number of chartered financial
�	institutions, license holders, and registrants subject to the
�	agency's jurisdiction and any changes in those figures; and
�	�������������(5)��a list of all new rules adopted or repealed.
�	�������(c)��In addition to the reporting requirements of Subsection
�	(b), not later than November 1 of each year, each financial
�	regulatory agency shall submit to the governor, the committee of
�	each house of the legislature that has jurisdiction over
�	appropriations, and the Legislative Budget Board a report that
�	contains:
�	�������������(1)��the salary for all financial regulatory agency
�	personnel and the total amount of per diem expenses and travel
�	expenses paid for all agency employees;
�	�������������(2)��the total amount of per diem expenses and travel
�	expenses paid for each member of the agency's policy-making body,
�	provided that only one report must be submitted regarding the
�	Finance Commission of Texas;
�	�������������(3)��the agency's operating plan and annual budget; and
�	�������������(4)��a detailed report of all revenue received and all
�	expenses incurred by the financial regulatory agency in the
�	previous 12 months.
�	�������Sec.�16.006.��ABILITY TO CONTRACT. (a) �To carry out and
�	promote the objectives of this chapter, a financial regulatory
�	agency may enter into contracts and do all other acts incidental to
�	those contracts that are necessary for the administration of the
�	agency's affairs and for the attainment of the agency's purposes,
�	except as limited by Subsection (b).
�	�������(b)��Any indebtedness, liability, or obligation of the
�	financial regulatory agency incurred under this section may not:
�	�������������(1)��create a debt or other liability of this state or
�	another entity other than the financial regulatory agency; or
�	�������������(2)��create any personal liability on the part of the
�	members of the policy-making body or the body's or agency's
�	employees.
�	�������Sec.�16.007.��PROPERTY. A financial regulatory agency may:
�	�������������(1)��acquire by purchase, lease, gift, or any other
�	manner provided by law and maintain, use, and operate any real,
�	personal, or mixed property, or any interest in property, necessary
�	or convenient to the exercise of the powers, rights, privileges, or
�	functions of the financial regulatory agency;
�	�������������(2)��sell or otherwise dispose of any real, personal,
�	or mixed property, or any interest in property, that the financial
�	regulatory agency determines is not necessary or convenient to the
�	exercise of the agency's powers, rights, privileges, or functions;
�	�������������(3)��construct, extend, improve, maintain, and
�	reconstruct, or cause to construct, extend, improve, maintain, and
�	reconstruct, and use and operate all facilities necessary or
�	convenient to the exercise of the powers, rights, privileges, or
�	functions of the financial regulatory agency; and
�	�������������(4)��borrow money, as may be authorized from time to
�	time by an affirmative vote of a two-thirds majority of the
�	policy-making body of the financial regulatory agency, for a period
�	not to exceed five years if necessary or convenient to the exercise
�	of the financial regulatory agency's powers, rights, privileges, or
�	functions.
�	�������Sec.�16.008.��SUITS. The office of the attorney general
�	shall represent a financial regulatory agency in any litigation.
�	The attorney general may assess and collect from the financial
�	regulatory agency reasonable attorney's fees associated with any
�	litigation under this section.
�	�������Sec.�16.009.��POST-PARTICIPATION LIABILITY. (a) If a
�	financial regulatory agency no longer has status under this chapter
�	as a self-directed semi-independent financial regulatory agency
�	for any reason, the agency shall be liable for any expenses or debts
�	incurred by the agency during the time the agency was a
�	self-directed semi-independent financial regulatory agency. The
�	agency's liability under this section includes liability for any
�	lease entered into by the agency. This state is not liable for any
�	expense or debt covered by this subsection, and money from the
�	general revenue fund may not be used to repay the expense or debt.
�	�������(b)��If a financial regulatory agency no longer has status
�	under this chapter as a self-directed semi-independent financial
�	regulatory agency for any reason, ownership of any property or
�	other asset acquired by the agency during the time the agency was a
�	self-directed semi-independent financial regulatory agency,
�	including unexpended fees in a deposit account in the Texas
�	Treasury Safekeeping Trust Company, shall be transferred to this
�	state.
�	�������Sec.�16.010.��DUE PROCESS; OPEN GOVERNMENT. A financial
�	regulatory agency is:
�	�������������(1)��a governmental body for purposes of Chapters 551
�	and 552, Government Code; and
�	�������������(2)��a state agency for purposes of Chapters 2001 and
�	2005, Government Code.
�	�������Sec.�16.011.��MEMBERSHIP IN EMPLOYEES RETIREMENT SYSTEM.
�	Employees of the financial regulatory agencies are members of the
�	Employees Retirement System of Texas under Chapter 812, Government
�	Code, and the agencies'�transition to independent status as
�	provided by this chapter has no effect on their membership or any
�	benefits under that system.
�	�������Sec.�16.012.��GIFTS. (a) �Notwithstanding any other law, a
�	financial regulatory agency may not accept a gift, grant, or
�	donation:
�	�������������(1)��from a party to an enforcement action; or
�	�������������(2)��to pursue a specific investigation or enforcement
�	action.
�	�������(b)��A financial regulatory agency must:
�	�������������(1)��report each gift, grant, or donation that the
�	agency receives as a separate item in the agency's report required
�	under Section 16.005(b); and
�	�������������(2)��include with the report a statement indicating the
�	purpose for which each gift, grant, or donation was donated and
�	used.
�	�������(b)��Section 11.104, Finance Code, is amended to read as
�	follows:
�	�������Sec.�11.104.��EXPENSES AND COMPENSATION OF MEMBERS.��A
�	member of the finance commission is entitled to:
�	�������������(1)��the reimbursement for reasonable and necessary
�	expenses incidental to travel incurred in connection with the
�	performance of official duties; and
�	�������������(2)��a per diem [as set by legislative appropriation]
�	for each day that the member engages in the business of the finance
�	commission.
�	�������(c)��Section 11.110(c), Finance Code, is amended to read as
�	follows:
�	�������(c)��A person appointed to the finance commission is entitled
�	to reimbursement under Section 11.104, as if the person were a
�	member of the finance commission, [as provided by the General
�	Appropriations Act,] for the travel expenses incurred in attending
�	the training program regardless of whether the attendance at the
�	program occurs before or after the person qualifies for office.
�	�������(d)��Section 11.204, Finance Code, is amended by adding
�	Subsection (c) to read as follows:
�	�������(c)��The finance commission shall have charge and control of
�	the property known as the Finance Commission Building and use of
�	staff, equipment, and facilities of the finance agencies. The
�	Finance Commission Building refers to the property located in the
�	city of Austin and titled in the name of the Banking Section of the
�	Finance Commission of Texas, as described by deed recorded in
�	Volume 5080, Page 1099, of the Deed Records of Travis County, Texas.
�	�������(e)��Section 15.2041(c), Finance Code, is amended to read as
�	follows:
�	�������(c)��A person appointed to the commission is entitled to
�	reimbursement under Section 15.207, as if the person were a member
�	of the commission, for travel expenses incurred in attending the
�	training program, regardless of whether the attendance at the
�	program occurs before or after the person qualifies for office[, as
�	provided by the General Appropriations Act and as if the person were
�	a member of the commission].
�	�������(f)��Subchapter E, Chapter 15, Finance Code, is amended by
�	adding Section 15.4011 to read as follows:
�	�������Sec.�15.4011.��CREDIT UNION DEPARTMENT BUILDING. The
�	commission shall have charge and control of the property known as
�	the Credit Union Department Building and use of staff, equipment,
�	and facilities of the department. The Credit Union Department
�	Building refers to the property located in the city of Austin and
�	titled in the name of the State of Texas for the use and benefit of
�	the Credit Union Department, as described by deed recorded in
�	Volume 6126, Page 27, of the Deed Records of Travis County, Texas.
�	�������(g)��Section 156.101(a), Finance Code, is amended to read as
�	follows:
�	�������(a)��The commissioner shall administer and enforce this
�	chapter.
�	�������(h)��Section 2165.007(b), Government Code, is amended to
�	read as follows:
�	�������(b)��Notwithstanding any other law, the commission shall
�	provide facilities management services in relation to all state
�	agency facilities in Travis County or a county adjacent to Travis
�	County.��The commission's duty does not apply to:
�	�������������(1)��a facility owned or operated by an institution of
�	higher education;
�	�������������(2)��military facilities;
�	�������������(3)��facilities owned or operated by the Texas
�	Department of Criminal Justice;
�	�������������(4)��facilities owned or operated by the Texas Youth
�	Commission;
�	�������������(5)��facilities owned or operated by the Texas
�	Department of Transportation;
�	�������������(6)��the Capitol, including the Capitol Extension, the
�	General Land Office building, the Bob Bullock Texas State History
�	Museum, any museum located on the Capitol grounds, the Governor's
�	Mansion, and any property maintained by the Texas Historical
�	Commission under Sections 442.0072 and 442.0073;
�	�������������(7)��a facility determined by the commission to be
�	completely residential;
�	�������������(8)��a regional or field office of a state agency; [or]
�	�������������(9)��a facility located within or on state park
�	property;
�	�������������(10)��the property known as the Finance Commission
�	Building described by deed recorded in Volume 5080, Page 1099, of
�	the Deed Records of Travis County, Texas; or
�	�������������(11)��the property known as the Credit Union Department
�	Building described by deed recorded in Volume 6126, Page 27, of the
�	Deed Records of Travis County, Texas.
�	�������(i)��Sections 12.103, 13.005, 13.008, 14.053, 14.060,
�	15.104, 15.207(c), 15.308, 15.408, and 156.101(b) and (c), Finance
�	Code, are repealed.
�	�������(j)(1)��To provide a reasonable period for each financial
�	regulatory agency, as defined by Section 16.001, Finance Code, as
�	added by this section, to establish itself as a self-directed and
�	semi-independent agency, the following amounts are appropriated
�	from the general revenue fund to each of those financial regulatory
�	agencies:
�	�������������������(A)��for the state fiscal year ending August 31,
�	2010, an amount equal to 50 percent of the amount of general revenue
�	appropriated to the agency for the state fiscal year ending August
�	31, 2009; and
�	�������������������(B)��for the state fiscal year ending August 31,
�	2011, an amount equal to 50 percent of the amount of general revenue
�	appropriated to the agency for the state fiscal year ending August
�	31, 2009.
�	�������������(2)��Subject to Section 16.003, Finance Code, as added
�	by this section, the appropriations made by Subdivision (1) of this
�	subsection may be spent by the financial regulatory agency to which
�	they are made as the financial regulatory agency directs. The
�	financial regulatory agency shall repay to the general revenue fund
�	the appropriation made to the agency for the state fiscal year
�	ending August 31, 2010, not later than that date and as funds become
�	available. The financial regulatory agency shall repay to the
�	general revenue fund the appropriation made to the agency for the
�	state fiscal year ending August 31, 2011, not later than that date
�	and as funds become available.
�	�������(k)��The transfer of a financial regulatory agency, as
�	defined by Section 16.001, Finance Code, as added by this section,
�	to self-directed and semi-independent status under Chapter 16,
�	Finance Code, as added by this section, and the expiration of
�	self-directed and semi-independent status may not act to cancel,
�	suspend, or prevent:
�	�������������(1)��any debt owed to or by the financial regulatory
�	agency;
�	�������������(2)��any fine, tax, penalty, or obligation of any
�	party;
�	�������������(3)��any contract or other obligation of any party; or
�	�������������(4)��any action taken by the financial regulatory
�	agency in the administration or enforcement of the agency's duties.
�	�������(l)��Each financial regulatory agency, as defined by Section
�	16.001, Finance Code, as added by this section, shall continue to
�	have and exercise the powers and duties allocated to the agency in
�	the agency's enabling legislation, except as specifically amended
�	by this section.
�	�������(m)��Title to all supplies, materials, records, equipment,
�	books, papers, and facilities used by each financial regulatory
�	agency, as defined by Section 16.001, Finance Code, as added by this
�	section, is transferred to each respective financial regulatory
�	agency in fee simple. Nothing in this section shall have an effect
�	on property owned by a financial regulatory agency on or before the
�	effective date of this section.
�	�������(n)��If a conflict exists between this section and another
�	Act of the 81st Legislature, Regular Session, 2009, that relates to
�	the self-directed and semi-independent status of a state financial
�	regulatory agency, this section controls without regard to the
�	relative dates of the enactment.
�	�������SECTION�29.��Sections 156.212(c) and (d) and 156.502(c),
�	Finance Code, are repealed.
�	�������SECTION�30.��The provisions of this Act or the applications
�	of those provisions are severable as provided by Section
�	311.032(c), Government Code. �If the Secretary of Housing and Urban
�	Development determines that any provision of Sections 1-27 and 29
�	of this Act fails to meet the requirements of the federal Secure and
�	Fair Enforcement for Mortgage Licensing Act of 2008 (Pub. L. No.
�	110-289), that provision of this Act shall be held invalid;
�	however, the remainder of this Act or the application of the
�	provision to other persons or circumstances is not affected.
�	�������SECTION�31.��To the extent of any conflict, this Act prevails
�	over another Act of the 81st Legislature, Regular Session, 2009,
�	relating to nonsubstantive additions to and corrections in enacted
�	codes.
�	�������SECTION�32.��(a)��Subject to Subsection (b) of this section,
�	this Act takes effect September 1, 2009.
�	�������(b)��Sections 1, 2, and 18 of this Act take effect only if
�	House Bill 10 or another similar bill of the Regular Session of the
�	81st Legislature relating to the licensing of residential mortgage
�	loan originators is enacted and becomes law. If House Bill 10 or
�	another similar bill of the Regular Session of the 81st Legislature
�	relating to the licensing of residential mortgage loan originators
�	does not become law, Sections 1, 2, and 18 of this Act do not take
�	effect.
�
�
�	______________________________	______________________________
�	���President of the Senate	Speaker of the House�����
�
�
�	�������I certify that H.B. No. 2774 was passed by the House on April
�	28, 2009, by the following vote:��Yeas 147, Nays 0, 1 present, not
�	voting; that the House refused to concur in Senate amendments to
�	H.B. No. 2774 on May 29, 2009, and requested the appointment of a
�	conference committee to consider the differences between the two
�	houses; and that the House adopted the conference committee report
�	on H.B. No. 2774 on May 31, 2009, by the following vote:��Yeas 144,
�	Nays 0, 1 present, not voting.
�
�	______________________________
�	Chief Clerk of the House���
�
�	�������I certify that H.B. No. 2774 was passed by the Senate, with
�	amendments, on May 26, 2009, by the following vote:��Yeas 31, Nays
�	0; at the request of the House, the Senate appointed a conference
�	committee to consider the differences between the two houses; and
�	that the Senate adopted the conference committee report on H.B. No.
�	2774 on June 1, 2009, by the following vote:��Yeas 31, Nays 0.
�
�	______________________________
�	Secretary of the Senate���
�	APPROVED: __________________
�	����������������Date�������
�	�
�	�������� __________________
�	��������������Governor�������