Texas 2015 - 84th Regular

Texas Senate Bill SB1008 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Eltife S.B. No. 1008
2		-	(Frullo)
	1	+	S.B. No. 1008
3	2
4	3
5		-	A BILL TO BE ENTITLED
6	4		AN ACT
7	5		relating to the authority of certain domestic life, health, and
8	6		accident insurance companies to make investments in mezzanine real
9	7		estate loans.
10	8		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	9		SECTION 1. Subchapter C, Chapter 425, Insurance Code, is
12	10		amended by adding Section 425.1185 to read as follows:
13	11		Sec. 425.1185. AUTHORIZED INVESTMENTS: MEZZANINE REAL
14	12		ESTATE LOANS. (a) In this section, "mezzanine real estate loan"
15	13		means a loan that is secured by a pledge of direct or indirect
16	14		equity interests in an entity that owns real estate.
17	15		(b) Subject to Subsections (c) and (d), an insurance company
18	16		with more than $10 billion in admitted assets may invest in a
19	17		mezzanine real estate loan if the loan documents:
20	18		(1) require that each pledgor abstain from granting an
21	19		additional security interest in the equity interest pledged;
22	20		(2) employ techniques to minimize the likelihood or
23	21		impact of a bankruptcy filing by the real estate owner or the
24	22		mezzanine real estate loan borrower; and
25	23		(3) require the real estate owner or the mezzanine
26	24		real estate loan borrower to:
27	25		(A) hold no assets other than, in the case of the
28	26		owner, the real estate, and in the case of the borrower, the equity
29	27		interests in the entity;
30	28		(B) not engage in any business other than, in the
31	29		case of the owner, the ownership and operation of the real estate,
32	30		and in the case of the borrower, holding an ownership interest in
33	31		the owner; and
34	32		(C) not incur additional debt, other than limited
35	33		trade payables, a first mortgage loan, or the mezzanine real estate
36	34		loan.
37	35		(c) Before making an initial investment in a mezzanine real
38	36		estate loan, an insurance company shall corroborate that the sum of
39	37		the first mortgage on the real estate and the mezzanine real estate
40	38		loan does not exceed 100 percent of the value of the current
41	39		appraised value of the real estate.
42	40		(d) An insurance company's cumulative investment under this
43	41		section may not exceed three percent of the insurance company's
44	42		admitted assets.
45	43		SECTION 2. Section 425.1185, Insurance Code, as added by
46	44		this Act, applies only to an investment made on or after the
47	45		effective date of this Act. An investment made before the effective
48	46		date of this Act is governed by the law as it existed immediately
49	47		before that date, and that law is continued in effect for that
50	48		purpose.
51	49		SECTION 3. This Act takes effect September 1, 2015.
	50	+	______________________________ ______________________________
	51	+	President of the Senate Speaker of the House
	52	+	I hereby certify that S.B. No. 1008 passed the Senate on
	53	+	April 30, 2015, by the following vote: Yeas 31, Nays 0.
	54	+	______________________________
	55	+	Secretary of the Senate
	56	+	I hereby certify that S.B. No. 1008 passed the House on
	57	+	May 19, 2015, by the following vote: Yeas 146, Nays 0, two
	58	+	present not voting.
	59	+	______________________________
	60	+	Chief Clerk of the House
	61	+	Approved:
	62	+	______________________________
	63	+	Date
	64	+	______________________________
	65	+	Governor