| 1 | 1 | | 84R9937 SCL-D |
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| 2 | 2 | | By: Davis of Dallas H.B. No. 3250 |
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| 3 | 3 | | |
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| 4 | 4 | | |
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| 5 | 5 | | A BILL TO BE ENTITLED |
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| 6 | 6 | | AN ACT |
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| 7 | 7 | | relating to disclosures and transfer expenses for transfers of |
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| 8 | 8 | | structured settlement payments. |
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| 9 | 9 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 10 | 10 | | SECTION 1. Section 141.003, Civil Practice and Remedies |
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| 11 | 11 | | Code, is amended to read as follows: |
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| 12 | 12 | | Sec. 141.003. REQUIRED DISCLOSURES TO PAYEE. At least 10 |
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| 13 | 13 | | [three] days before the date on which the payee signs a transfer |
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| 14 | 14 | | agreement, the transferee shall provide to the payee a separate |
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| 15 | 15 | | disclosure statement, in bold type at least 14 points in size, that |
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| 16 | 16 | | states in plain language: |
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| 17 | 17 | | (1) the amounts and due dates of the structured |
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| 18 | 18 | | settlement payments to be transferred; |
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| 19 | 19 | | (2) the aggregate amount of the payments; |
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| 20 | 20 | | (3) the discounted present value of the payments to be |
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| 21 | 21 | | transferred, which shall be identified as the "calculation of |
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| 22 | 22 | | current value of the transferred structured settlement payments |
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| 23 | 23 | | under federal standards for valuing annuities," and the amount of |
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| 24 | 24 | | the Applicable Federal Rate used in calculating the discounted |
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| 25 | 25 | | present value; |
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| 26 | 26 | | (4) the gross advance amount; |
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| 27 | 27 | | (5) an itemized listing of all applicable transfer |
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| 28 | 28 | | expenses, other than attorney's fees and related disbursements |
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| 29 | 29 | | payable in connection with the transferee's application for |
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| 30 | 30 | | approval of the transfer, and the transferee's best estimate of the |
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| 31 | 31 | | amount of those expenses; |
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| 32 | 32 | | (6) the net advance amount; |
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| 33 | 33 | | (7) the amount of any penalties or liquidated damages |
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| 34 | 34 | | payable by the payee in the event of any breach of the transfer |
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| 35 | 35 | | agreement by the payee; [and] |
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| 36 | 36 | | (8) [a statement] that the payee has the right to |
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| 37 | 37 | | cancel the transfer agreement, without penalty or further |
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| 38 | 38 | | obligation, not later than the third business day after the date the |
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| 39 | 39 | | agreement is signed by the payee; and |
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| 40 | 40 | | (9) that the payee is advised to seek independent |
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| 41 | 41 | | legal and financial advice before entering into the transaction and |
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| 42 | 42 | | that the transferee will reimburse the payee up to $1,500 for the |
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| 43 | 43 | | costs incurred in obtaining that advice. |
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| 44 | 44 | | SECTION 2. Chapter 141, Civil Practice and Remedies Code, |
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| 45 | 45 | | is amended by adding Section 141.0035 to read as follows: |
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| 46 | 46 | | Sec. 141.0035. MAXIMUM TRANSFER EXPENSES; REIMBURSEMENT OF |
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| 47 | 47 | | CERTAIN PAYEE COSTS. (a) A transferee may not charge a payee |
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| 48 | 48 | | transfer expenses in excess of six percent of the aggregate amount |
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| 49 | 49 | | of the structured settlement payments due to the payee. The |
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| 50 | 50 | | limitation described by this subsection excludes reasonable |
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| 51 | 51 | | attorney's fees, taxes incurred by the transferee as a result of the |
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| 52 | 52 | | transfer, and any other liabilities or costs arising from obtaining |
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| 53 | 53 | | approval of the transfer under this chapter. |
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| 54 | 54 | | (b) The transferee shall reimburse the payee up to $1,500 of |
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| 55 | 55 | | the payee's costs to obtain independent legal and financial advice |
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| 56 | 56 | | with respect to the transfer agreement before the agreement is |
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| 57 | 57 | | entered into. The transferee may not refer the payee to an attorney |
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| 58 | 58 | | or financial advisor. |
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| 59 | 59 | | SECTION 3. This Act takes effect September 1, 2015. |
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