| 3 | 5 | | |
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| 4 | 6 | | |
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| 5 | 7 | | A BILL TO BE ENTITLED |
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| 6 | 8 | | AN ACT |
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| 7 | 9 | | relating to the settlement of certain claims on behalf of a minor. |
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| 8 | 10 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 9 | 11 | | SECTION 1. Title 6, Civil Practice and Remedies Code, is |
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| 10 | 12 | | amended by adding Chapter 150D to read as follows: |
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| 11 | 13 | | CHAPTER 150D. SETTLEMENT OF CLAIMS INVOLVING MINORS |
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| 12 | 14 | | Sec. 150D.001. AUTHORITY TO SETTLE CLAIM; SETTLEMENT |
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| 13 | 15 | | REQUIREMENTS. (a) A person having legal custody of a minor may |
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| 14 | 16 | | enter into a settlement agreement with a person against whom the |
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| 15 | 17 | | minor has a claim if: |
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| 16 | 18 | | (1) a guardian or guardian ad litem has not been |
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| 17 | 19 | | appointed for the minor; |
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| 18 | 20 | | (2) the total amount of the settlement is $25,000 or |
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| 19 | 21 | | less; |
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| 20 | 22 | | (3) the money to be paid under the settlement |
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| 21 | 23 | | agreement is to be paid as provided by this chapter; and |
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| 22 | 24 | | (4) the person entering into the settlement agreement |
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| 23 | 25 | | on behalf of the minor completes an affidavit or verified statement |
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| 24 | 26 | | that attests that the person has made a reasonable inquiry and that: |
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| 25 | 27 | | (A) to the best of the person's knowledge, the |
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| 26 | 28 | | minor will be fully compensated by the settlement; or |
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| 27 | 29 | | (B) there is no practical way to obtain |
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| 28 | 30 | | additional amounts from the party entering into the settlement |
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| 29 | 31 | | agreement with the minor. |
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| 30 | 32 | | (b) The attorney representing the person entering into the |
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| 31 | 33 | | settlement agreement on behalf of the minor, if any, shall maintain |
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| 32 | 34 | | the affidavit or verified statement completed under Subsection |
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| 33 | 35 | | (a)(4) in the attorney's file until the second anniversary of the |
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| 34 | 36 | | date the minor attains the age of 21 years. |
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| 35 | 37 | | Sec. 150D.002. DEPOSIT INTO COURT REGISTRY. (a) Money |
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| 36 | 38 | | payable to a minor under a settlement agreement entered into under |
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| 37 | 39 | | this chapter shall be deposited into the registry of: |
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| 38 | 40 | | (1) the court in which a civil action asserting the |
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| 39 | 41 | | settled claim was filed; or |
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| 40 | 42 | | (2) if no civil action asserting the claim was filed, a |
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| 41 | 43 | | court in which the claim could have been filed. |
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| 42 | 44 | | (b) A court order is not required to make a deposit under |
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| 43 | 45 | | this section. |
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| 44 | 46 | | Sec. 150D.003. PAYMENT BY ANNUITY PURCHASE. If the money |
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| 45 | 47 | | payable under the settlement agreement is to be paid by the payment |
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| 46 | 48 | | of premium to purchase an annuity, the payment must be made by |
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| 47 | 49 | | direct payment to the provider of the annuity with the minor |
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| 48 | 50 | | designated as the sole beneficiary of the annuity. |
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| 49 | 51 | | Sec. 150D.004. WITHDRAWAL OF MONEY. Money deposited into a |
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| 50 | 52 | | court registry under this chapter may not be withdrawn, removed, |
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| 51 | 53 | | paid out, or transferred to any person, including the minor, |
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| 52 | 54 | | except: |
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| 53 | 55 | | (1) pursuant to a court order; |
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| 54 | 56 | | (2) on the minor's attainment of 18 years of age; or |
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| 55 | 57 | | (3) on the minor's death. |
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| 56 | 58 | | Sec. 150D.005. BINDING EFFECT OF SETTLEMENT. If a |
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| 57 | 59 | | settlement agreement is entered into in compliance with Section |
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| 58 | 60 | | 150D.001, the signature of the person entering into the settlement |
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| 59 | 61 | | agreement on behalf of the minor is binding on the minor without the |
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| 60 | 62 | | need for further court approval or review and has the same force and |
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| 61 | 63 | | effect as if the minor were a competent adult entering into the |
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| 62 | 64 | | settlement agreement. |
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| 63 | 65 | | Sec. 150D.006. LIABILITY FOR SETTLEMENT. (a) A person |
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| 64 | 66 | | acting in good faith on behalf of a minor under this chapter is not |
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| 65 | 67 | | liable to the minor for the money paid in settlement or for any |
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| 66 | 68 | | other claim arising out of the settlement. |
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| 67 | 69 | | (b) A person against whom a minor has a claim that settles |
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| 68 | 70 | | the claim with the minor in good faith under this chapter is not |
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| 69 | 71 | | liable to the minor for any claim arising from the settlement of the |
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| 70 | 72 | | claim. |
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| 71 | 73 | | SECTION 2. Section 141.008, Property Code, is amended by |
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| 72 | 74 | | amending Subsection (a) and adding Subsection (d) to read as |
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| 73 | 75 | | follows: |
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| 74 | 76 | | (a) Subject to Subsections (b), [and] (c), and (d), a person |
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| 75 | 77 | | who is not subject to Section 141.006 or 141.007 and who holds |
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| 76 | 78 | | property, including a benefit plan of a minor who does not have a |
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| 77 | 79 | | guardian, or who owes a liquidated debt to a minor who does not have |
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| 78 | 80 | | a guardian may make an irrevocable transfer to a custodian for the |
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| 79 | 81 | | benefit of the minor under Section 141.010. |
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| 80 | 82 | | (d) This section does not apply to a debt incurred under a |
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| 81 | 83 | | settlement agreement governed by Chapter 150D, Civil Practice and |
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| 82 | 84 | | Remedies Code. |
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| 83 | 85 | | SECTION 3. The change in law made by this Act applies only |
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| 84 | 86 | | to a settlement agreement entered into on or after the effective |
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| 85 | 87 | | date of this Act. |
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| 86 | 88 | | SECTION 4. This Act takes effect September 1, 2021. |
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