Texas 2009 - 81st Regular

Texas Senate Bill SB1065 Compare Versions

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1	1	By: Williams, Van de Putte S.B. No. 1065
2	2	(In the Senate - Filed February 23, 2009; March 13, 2009, read
3	3	first time and referred to Committee on State Affairs; May 1, 2009,
4	4	reported adversely, with favorable Committee Substitute by the
5	5	following vote: Yeas 6, Nays 2; May 1, 2009, sent to printer.)
6	6	COMMITTEE SUBSTITUTE FOR S.B. No. 1065 By: Van de Putte
7	7
8	8
9	9	A BILL TO BE ENTITLED
10	10	AN ACT
11	11	relating to civil racketeering; providing civil penalties.
12	12	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
13	13	SECTION 1. Title 6, Civil Practice and Remedies Code, is
14	14	amended by adding Chapter 140 to read as follows:
15	15	CHAPTER 140. CIVIL RACKETEERING
16	16	Sec. 140.001. LEGISLATIVE PURPOSE AND INTENT. (a) The
17	17	legislature finds that law enforcement authorities at the local
18	18	level, including district attorneys and county attorneys with
19	19	felony criminal jurisdiction, are experienced and capable in the
20	20	investigation, prosecution, and eradication of crime.
21	21	(b) The legislature further finds that certain crimes are
22	22	increasingly committed by organized enterprises that have the
23	23	capability of operating throughout the state, the United States,
24	24	and, in some instances, internationally.
25	25	(c) The legislature further finds that the
26	26	transjurisdictional nature and scope of these organized
27	27	enterprises can present challenges to the investigation,
28	28	prosecution, and eradication of some of their activities.
29	29	(d) The legislature further finds that the
30	30	transjurisdictional nature and scope of these organized
31	31	enterprises requires that the State of Texas, at a statewide level,
32	32	become more involved in addressing the ability of these enterprises
33	33	to operate in and throughout this state.
34	34	(e) It is the intent of the legislature that the efforts of
35	35	the State of Texas under this chapter will assist local law
36	36	enforcement agencies in the shared mission of disabling the
37	37	organized activity referenced in this chapter and protecting the
38	38	health, safety, and welfare of the people of Texas.
39	39	Sec. 140.002. DEFINITIONS. In this chapter:
40	40	(1) "Acquire" means an act:
41	41	(A) to possess property;
42	42	(B) to prevent another person from using that
43	43	person's property or to dictate the terms of use of the property;
44	44	(C) to bring about or receive the transfer of any
45	45	interest in property, whether to oneself or to another person; or
46	46	(D) to secure performance of a service.
47	47	(2) "Enterprise" means any legal entity, or any group
48	48	of persons associated in fact although not a legal entity, or any
49	49	combination of such groups or entities.
50	50	(3) "Gain" means a benefit, an interest, or property
51	51	of any kind, without reduction for expenses incurred in acquiring
52	52	or maintaining the benefit, interest, or property or incurred for
53	53	any other reason.
54	54	(4) "Proceeds" means an interest in property of any
55	55	kind acquired or derived from, produced or realized through, or
56	56	caused by, directly or indirectly, an act or omission, and any
57	57	fruits of the interest, in whatever form.
58	58	(5) "Racketeering" means an act described by Section
59	59	140.003.
60	60	Sec. 140.003. CIVIL RACKETEERING. (a) A person commits
61	61	racketeering if:
62	62	(1) for financial gain, the person knowingly engages
63	63	in an enterprise that commits, facilitates, or promotes:
64	64	(A) any gambling offense punishable at least as a
65	65	Class A misdemeanor;
66	66	(B) the promotion of prostitution, as described
67	67	by Section 43.03, Penal Code;
68	68	(C) compelling prostitution, as described by
69	69	Section 43.05, Penal Code;
70	70	(D) unlawful manufacture, transportation,
71	71	repair, or sale of firearms or prohibited weapons;
72	72	(E) unlawful manufacture, delivery,
73	73	dispensation, or distribution of a controlled substance or
74	74	dangerous drug, or unlawful possession of a controlled substance or
75	75	dangerous drug through forgery, fraud, misrepresentation, or
76	76	deception;
77	77	(F) any offense under Subchapter B, Chapter 43,
78	78	Penal Code, depicting or involving conduct by or directed toward a
79	79	child younger than 18 years of age;
80	80	(G) trafficking of persons, as described by
81	81	Chapter 20A, Penal Code;
82	82	(H) bigamy, as described by Section 25.01, Penal
83	83	Code; or
84	84	(I) fraudulent use or possession of identifying
85	85	information, as described by Chapter 32, Penal Code; and
86	86	(2) the event, omission, transaction, or occurrence,
87	87	or the series of events, omissions, transactions, or occurrences,
88	88	relating to the act that meets the requirements of Subdivision (1):
89	89	(A) takes place or occurs in more than one county
90	90	in Texas; or
91	91	(B) is perpetuated by use of the United States
92	92	mail, electronic mail, telephone, facsimile, or a wireless
93	93	communication from one county to another.
94	94	Sec. 140.004. SUIT TO ABATE RACKETEERING. (a) The
95	95	attorney general may bring suit under this chapter in the name of
96	96	the state against any person or enterprise who engages in a pattern
97	97	or practice of racketeering and may seek to recover civil
98	98	penalties, costs of suit, including reasonable attorney's fees, and
99	99	any appropriate injunctive relief. The reasonable attorney's fees
100	100	that the attorney general recovers in a suit brought under this
101	101	chapter shall be determined and awarded pursuant to Section
102	102	2107.006, Government Code.
103	103	(b) This chapter does not authorize suit by a person or
104	104	enterprise that sustains injury as a result of racketeering.
105	105	(c) A suit under this chapter must be brought in a district
106	106	court in a county in which all or part of the alleged racketeering
107	107	activity giving rise to the suit occurred.
108	108	Sec. 140.005. INJUNCTIVE RELIEF; OTHER REMEDIES. (a) A
109	109	court in which a proceeding is brought under this chapter may
110	110	prevent, restrain, and remedy racketeering by issuing appropriate
111	111	orders. The orders may include, but are not limited to, a temporary
112	112	restraining order, a temporary or permanent injunction, the
113	113	creation of a receivership, the enforcement of a constructive trust
114	114	in connection with any property or other interest, prejudgment
115	115	writs of attachment under Chapter 61 for the purpose of the
116	116	freezing, preserving, and disgorging of assets, orders to
117	117	repatriate property beyond the jurisdiction of the court, or other
118	118	remedies or restraints the court considers proper.
119	119	(b) Following a final determination of liability under this
120	120	chapter, the court may issue an order that includes, but is not
121	121	limited to:
122	122	(1) requiring any person to divest any interest,
123	123	direct or indirect, in any enterprise;
124	124	(2) imposing reasonable restrictions on the future
125	125	activities or investments of any person that affect the laws of this
126	126	state, including prohibiting any person from engaging in the type
127	127	of endeavor or enterprise that gave rise to the racketeering
128	128	activity, to the extent the constitutions of the United States and
129	129	this state permit;
130	130	(3) requiring the dissolution or reorganization of any
131	131	enterprise involved in the suit;
132	132	(4) ordering the recovery of reasonable fees,
133	133	expenses, and costs incurred in obtaining injunctive relief or
134	134	civil remedies or in conducting investigations under this chapter,
135	135	including court costs, attorney's fees, witness fees, and
136	136	deposition fees;
137	137	(5) ordering payment of an amount equal to:
138	138	(A) the gain acquired or maintained through
139	139	racketeering; or
140	140	(B) the amount for which any person is liable
141	141	under this chapter;
142	142	(6) ordering payment of a civil penalty by a person or
143	143	enterprise found liable for racketeering, in an amount not to
144	144	exceed $250,000 for each separately alleged and proven act of
145	145	racketeering;
146	146	(7) ordering payment of damages for racketeering shown
147	147	to have materially damaged the state; and
148	148	(8) ordering that property attached under Chapter 61
149	149	be used to satisfy any award of the court, including awards for
150	150	damages, penalties, costs, or fees.
151	151	(c) If any property attached under Chapter 61 is not
152	152	necessary to satisfy an award of the court, and after a finding of
153	153	liability for racketeering of the person or enterprise having an
154	154	interest in such property, the court may order that the property be
155	155	disgorged to the state to the extent of the person's or enterprise's
156	156	interest, if it is proven that the property is one or more of the
157	157	following:
158	158	(1) property or an interest in property acquired or
159	159	maintained by the person or enterprise through racketeering;
160	160	(2) any interest, security, claim, or any other form
161	161	of property, office, title, license, or contractual right that
162	162	affords a source of influence over any enterprise that conducted or
163	163	participated in racketeering; or
164	164	(3) proceeds traceable to racketeering activity and
165	165	all money, negotiable instruments, securities, and other property
166	166	used or intended to be used in any manner, or in any part, to
167	167	facilitate the commission of the racketeering.
168	168	(d) In determining the amount of a civil penalty ordered
169	169	under Subsection (b)(6), the court shall consider:
170	170	(1) the seriousness of the racketeering activity and
171	171	the consequent harm, financial or personal, to the state and to any
172	172	identified victim or victims; and
173	173	(2) the duration of the racketeering activity.
174	174	(e) In determining the amount of damages ordered under
175	175	Subsection (b)(7), the court shall consider:
176	176	(1) loss of tax revenue to the state;
177	177	(2) unpaid state unemployment taxes;
178	178	(3) unpaid state licensing and regulatory fees;
179	179	(4) medical and counseling costs incurred by the state
180	180	on behalf of any victim of the racketeering; and
181	181	(5) any other damages suffered by the state due to the
182	182	racketeering.
183	183	(f) Unless otherwise provided by this chapter, remedies and
184	184	awards ordered by a court under this chapter, including costs and
185	185	reasonable attorney's fees, may be assessed against and paid from
186	186	money or property awarded under this chapter.
187	187	(g) This chapter is not intended to provide the exclusive
188	188	remedy for unlawful activity addressed by this chapter. A
189	189	proceeding under this chapter may be in addition to or in the
190	190	alternative of any other action, civil or criminal, available under
191	191	the laws of this state.
192	192	(h) Notwithstanding any other provision of this chapter,
193	193	the court shall order that any awards issued under this chapter
194	194	shall, after taking into account any costs of suit, including
195	195	reasonable attorney's fees and court costs, be paid in accordance
196	196	with Section 140.012.
197	197	(i) Notwithstanding any other provision of this chapter,
198	198	the provisions of Articles 59.13 and 59.14, Code of Criminal
199	199	Procedure, shall apply to any remedy under this section, and in no
200	200	event shall the remedies herein result in the impairment of a
201	201	security interest in property subject to a bona fide lien.
202	202	Sec. 140.006. CONSTRUCTIVE TRUST. (a) A person or
203	203	enterprise that, through racketeering, acquires any property or
204	204	prevents another person from receiving property that by law is
205	205	required to be transferred or paid to that person is an involuntary
206	206	trustee. An involuntary trustee or any other person or enterprise,
207	207	except a bona fide purchaser or lien holder for value as described
208	208	under Subsection (b), holds the property and its proceeds in
209	209	constructive trust for the benefit of persons entitled to remedies
210	210	under this chapter.
211	211	(b) A bona fide purchaser for value who was reasonably
212	212	without notice of unlawful conduct and who did not knowingly take
213	213	part in an illegal transaction is not an involuntary trustee under
214	214	Subsection (a) and is not subject to a constructive trust imposed
215	215	under this chapter.
216	216	Sec. 140.007. EVIDENCE. (a) In a proceeding under this
217	217	chapter, the state bears the burden of proof by a preponderance of
218	218	the evidence.
219	219	(b) A person convicted in a criminal proceeding is
220	220	precluded, in a proceeding under this chapter, from subsequently
221	221	denying the essential allegations of the criminal offense of which
222	222	the person was convicted. For purposes of this subsection, a
223	223	verdict or a plea, including a no contest plea, is considered a
224	224	conviction.
225	225	(c) An individual may not be held liable in damages or for
226	226	other relief under this chapter based on the conduct of another
227	227	unless the finder of fact, by a preponderance of the evidence, finds
228	228	that the individual authorized, requested, commanded, participated
229	229	in, ratified, or recklessly tolerated the unlawful conduct of the
230	230	other.
231	231	(d) An enterprise may not be held liable in damages or for
232	232	other relief under this chapter based on the conduct of an agent
233	233	unless the finder of fact, by a preponderance of the evidence, finds
234	234	that a director or high managerial agent of the enterprise
235	235	performed, authorized, requested, commanded, participated in,
236	236	ratified, or recklessly tolerated the unlawful conduct of the
237	237	agent.
238	238	(e) A bank or savings and loan association insured by the
239	239	Federal Deposit Insurance Corporation, a credit union insured by
240	240	the National Credit Union Administration, or a holder of a money
241	241	transmission license under Chapter 151, Finance Code, may not be
242	242	held liable in damages or for other relief under this chapter unless
243	243	the finder of fact, by a preponderance of the evidence, finds that
244	244	the board of directors performed, authorized, requested,
245	245	commanded, participated in, ratified, or recklessly tolerated the
246	246	unlawful conduct.
247	247	Sec. 140.008. LIMITATIONS PERIOD. No proceeding may be
248	248	commenced under this chapter unless the proceeding is filed not
249	249	later than seven years after the date of the alleged act of
250	250	racketeering. This provision supersedes any conflicting
251	251	limitations provision creating a shorter period.
252	252	Sec. 140.009. SPECIAL DOCKETING PROCEDURES. The attorney
253	253	general may file with the clerk of the district court in which a
254	254	proceeding is brought under this chapter a certificate stating that
255	255	the case is of special public importance. The clerk shall
256	256	immediately furnish a copy of the certificate to the administrative
257	257	judge of the district court of the county in which the proceeding is
258	258	pending. On receiving the copy of the certificate, the
259	259	administrative judge shall immediately designate a judge to hear
260	260	and determine the proceeding. The designated judge shall promptly
261	261	assign the proceeding for hearing, participate in hearings, make
262	262	determinations, and cause the action to be expedited.
263	263	Sec. 140.010. NOTIFICATION TO LOCAL PROSECUTOR. (a) If
264	264	the attorney general investigates racketeering activity under this
265	265	chapter, then the attorney general shall use reasonable efforts to
266	266	provide notice to the district attorney or county attorney with
267	267	felony criminal jurisdiction in each county where the attorney
268	268	general determines the racketeering activity occurs or occurred.
269	269	If the attorney general intends to file suit under this chapter, the
270	270	attorney general shall provide notice of this intention to the
271	271	district attorney or county attorney with felony criminal
272	272	jurisdiction in the county where the attorney general intends to
273	273	file suit.
274	274	(b) The notices described in this section must describe or
275	275	otherwise identify the defendant or defendants of the suit or
276	276	investigation.
277	277	Sec. 140.011. COOPERATION WITH LOCAL AUTHORITIES. (a) A
278	278	district attorney or county attorney with felony criminal
279	279	jurisdiction that receives notice under Section 140.010 may notify
280	280	the attorney general of any pending criminal investigation or
281	281	prosecution relating to the subject matter of the racketeering
282	282	action.
283	283	(b) Upon receipt of a notice from a district attorney or
284	284	county attorney with felony criminal jurisdiction under Subsection
285	285	(a), the attorney general shall coordinate and cooperate with the
286	286	district attorney or county attorney with felony criminal
287	287	jurisdiction to ensure that the filing or prosecution of a suit
288	288	under this chapter does not interfere with any ongoing criminal
289	289	investigation or prosecution. The attorney general shall update
290	290	each such district attorney or county attorney with felony criminal
291	291	jurisdiction on matters affecting the suit or the investigation.
292	292	(c) If the district attorney or county attorney with felony
293	293	criminal jurisdiction in the county determines that a suit brought
294	294	under this chapter will interfere with an ongoing criminal
295	295	investigation or prosecution, the district attorney or county
296	296	attorney with felony criminal jurisdiction in the county may ask
297	297	the attorney general, in writing, to abate the suit. If the
298	298	attorney general determines that it is necessary for the suit to
299	299	continue, then the attorney general may ask the court for
300	300	permission to proceed, and shall provide notice of the request to
301	301	the district attorney or county attorney with felony criminal
302	302	jurisdiction who made the request to the attorney general. The
303	303	court may hold a hearing to determine this issue, with the burden of
304	304	persuasion being upon the attorney general. A hearing held under
305	305	this subsection may, at the request of either party, be conducted in
306	306	camera to protect the integrity of the ongoing investigation or
307	307	prosecution, as well as the identity of any person or enterprise
308	308	then under investigation or prosecution.
309	309	Sec. 140.012. DISPOSITION AND SHARING OF ASSETS. (a) Any
310	310	awards issued in an action brought under this chapter shall, by
311	311	court order, be paid in accordance with this section.
312	312	(b) The court shall order that 80 percent of any award
313	313	issued under this chapter be paid to the State of Texas. The
314	314	remaining 20 percent of the award shall be shared, on a pro rata
315	315	basis, by and among any law enforcement agencies determined by the
316	316	court to have assisted in the investigation and furtherance of the
317	317	suit.
318	318	(c) The first $10 million that is paid to the state under
319	319	this chapter in any given fiscal year, after taking into account any
320	320	costs of suit, including reasonable attorney's fees and court
321	321	costs, shall be dedicated to the compensation to victims of crime
322	322	fund established under Subchapter B, Chapter 56, Code of Criminal
323	323	Procedure.
324	324	Sec. 140.013. PREVIOUSLY SEIZED ASSETS. Notwithstanding
325	325	any other provision of this chapter, no remedies provided by this
326	326	chapter may be assessed against, and the attorney general may not
327	327	claim or pursue in a suit brought under this chapter, any proceeds,
328	328	contraband, or other property of any kind over which a law
329	329	enforcement authority has previously asserted jurisdiction under
330	330	Chapter 59, Code of Criminal Procedure, at the time a suit under
331	331	this chapter was filed.
332	332	SECTION 2. (a) The changes in law made by Chapter 140,
333	333	Civil Practice and Remedies Code, as added by this Act, apply only
334	334	to an offense committed on or after the effective date of this Act.
335	335	For purposes of this section, an offense was committed before the
336	336	effective date of this Act if any element of the offense occurred
337	337	before that date.
338	338	(b) An offense committed before the effective date of this
339	339	Act is covered by the law in effect when the offense was committed,
340	340	and the former law is continued in effect for that purpose.
341	341	SECTION 3. This Act takes effect immediately if it receives
342	342	a vote of two-thirds of all the members elected to each house, as
343	343	provided by Section 39, Article III, Texas Constitution. If this
344	344	Act does not receive the vote necessary for immediate effect, this
345	345	Act takes effect September 1, 2009.
346	346	* * * * *