H.B. No. 4635
AN ACT
relating to organized crime, racketeering activities, and
collection of unlawful debts; providing a civil penalty; creating
criminal offenses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. This Act shall be known as the Texas Racketeering
Act.
SECTION 2. Title 6, Civil Practice and Remedies Code, is
amended by adding Chapter 140B to read as follows:
CHAPTER 140B. CIVIL REMEDIES AND ENFORCEMENT RELATED TO
RACKETEERING AND UNLAWFUL DEBT COLLECTION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 140B.001. DEFINITIONS. In this chapter:
(1) "Beneficial interest":
(A) means the interest of a person:
(i) as a beneficiary under a trust
established under the Texas Trust Code (Subtitle B, Title 9,
Property Code) in which the trustee for the trust holds legal or
record title to real property;
(ii) as a beneficiary under any other trust
arrangement under which a trustee holds legal or record title to
real property for the benefit of the person; or
(iii) under any other form of express
fiduciary arrangement under which any other person holds legal or
record title to real property for the benefit of the person; and
(B) does not include the interest of a
shareholder in a corporation or the interest of a partner in either
a general partnership or a limited partnership.
(2) "Cash or cash proceeds" includes:
(A) damages, penalties, or any other monetary
payment;
(B) monetary proceeds from property forfeited to
the state under Subchapter C; or
(C) any payment made by a defendant by reason of a
decree or settlement in an action filed under Subchapter C.
(3) "Enterprise" means a legal entity, group of
individuals associated in fact, or a combination of those entities
and individuals.
(4) "Investigative agency" means the Department of
Public Safety, the attorney general, or a local prosecutor.
(5) "Local prosecutor" means a district attorney,
criminal district attorney, or county attorney with felony criminal
jurisdiction.
(6) "Money" means funds as defined by Section 34.01,
Penal Code.
(7) "Real property" means any real property or any
interest in real property, including any lease of or mortgage on
real property.
Sec. 140B.002. SPECIAL DOCKETING PROCEDURES. The attorney
general or local prosecutor may file with the clerk of the district
court in which an action is brought under this chapter a certificate
stating that the case is of special public importance. The clerk
must immediately furnish a copy of the certificate to the
administrative judge of the district court of the county in which
the action is pending. On receiving the copy of the certificate,
the administrative judge shall immediately designate a judge to
hear and determine the action. The designated judge shall promptly
assign the action for hearing, participate in hearings, make
determinations, and cause the action to be expedited.
Sec. 140B.003. PREVIOUSLY SEIZED ASSETS. Notwithstanding
any other provision of this chapter, a remedy provided by this
chapter may not be assessed against, and the attorney general may
not claim or pursue in an action brought under this chapter, any
proceeds, contraband, or other property of any kind over which a law
enforcement authority has previously asserted jurisdiction under
Chapter 59, Code of Criminal Procedure, at the time an action under
this chapter was filed.
SUBCHAPTER B. CIVIL INVESTIGATIVE AUTHORITY
Sec. 140B.051. DEFINITIONS. In this subchapter:
(1) "Civil investigative demand" means any demand
issued by the attorney general or a local prosecutor under this
subchapter.
(2) "Documentary material" means the original or a
copy of any paper, contract, agreement, book, booklet, brochure,
pamphlet, catalog, magazine, notice, announcement, circular,
bulletin, instruction, minutes, agenda, study, analysis, report,
graph, map, chart, table, schedule, note, letter, telegram,
telephone recordings, or data compilations stored in or accessible
through computer or other information retrieval systems, together
with instructions and all other materials necessary to use or
interpret the data compilations, and any product of discovery.
(3) "Product of discovery" means:
(A) the original or a copy of a deposition,
interrogatory, document, thing, result of inspection of land or
other property, examination, or admission that is obtained by any
method of discovery in a judicial or administrative proceeding of
an adversarial nature;
(B) a digest, analysis, selection, compilation,
or derivation of any item listed in Paragraph (A); and
(C) an index, instruction, or other aid or means
of access to any item listed in Paragraph (A).
(4) "Racketeering investigation" means any inquiry
conducted by the attorney general or a local prosecutor for the
purpose of ascertaining whether any person is or has been engaged in
or is actively preparing to engage in activities that may
constitute a racketeering violation.
(5) "Racketeering violation" means conduct
constituting an offense under Section 72.02, 72.03, or 72.04, Penal
Code.
Sec. 140B.052. CIVIL INVESTIGATIVE DEMAND. If the attorney
general or a local prosecutor has reason to believe that a person
may be in possession, custody, or control of any documentary
material or other evidence or may have any information relevant to a
civil racketeering investigation, the attorney general or local
prosecutor may, before beginning a civil proceeding under this
chapter, issue in writing and serve on the person a civil
investigative demand requiring the person to:
(1) produce any of the documentary material for
inspection and copying;
(2) answer in writing any written interrogatories;
(3) give oral testimony; or
(4) provide any combination of civil investigative
demands under Subdivisions (1)-(3).
Sec. 140B.053. CONTENTS OF DEMAND. (a) A civil
investigative demand issued under Section 140B.052 must:
(1) describe the nature of the activities that are the
subject of the investigation;
(2) state each statute the activity violates; and
(3) advise the person on whom the demand is served that
the person has the right to object to the demand as provided for in
this subchapter.
(b) A demand for production of documentary material must:
(1) describe the class of material to be produced with
reasonable specificity so that the material demanded is fairly
identified;
(2) prescribe a return date that provides a reasonable
period of time within which the material is to be produced; and
(3) identify the individual to whom the material is to
be made available for inspection and copying.
(c) A demand for answers to written interrogatories must:
(1) propound the interrogatories with definiteness
and certainty;
(2) prescribe a date by which answers to the
interrogatories must be submitted; and
(3) identify the individual to whom the answers should
be submitted.
(d) Each demand for the giving of oral testimony must:
(1) prescribe a reasonable date, time, and place at
which the testimony will begin; and
(2) identify the individual who will conduct the
examination.
Sec. 140B.054. SERVICE; PROOF OF SERVICE. (a) Service of
any civil investigative demand or petition filed under Section
140B.055 or 140B.060 may be made on any natural person by delivering
a duly executed copy of the demand or petition to the person to be
served or by mailing a copy by registered or certified mail, return
receipt requested, to the person at the person's residence or
principal office or place of business.
(b) Service of any demand or petition filed under Section
140B.055 or 140B.060 may be made on any person other than a natural
person by delivering a duly executed copy of the demand or petition
to a person to whom delivery would be appropriate under state law if
the demand or petition were process in a civil suit.
(c) A verified return by the individual serving any demand
or petition filed under Section 140B.055 or 140B.060 setting forth
the manner of service is proof of service. In the case of service by
registered or certified mail, the return must be accompanied by the
return post office receipt of delivery of the demand or petition.
Sec. 140B.055. PETITION FOR ORDER MODIFYING OR SETTING
ASIDE DEMAND. (a) At any time before the return date specified in a
civil investigative demand or not later than the 30th day after the
date the demand was served, whichever period is shorter, the person
who has been served, and in the case of a demand for a product of
discovery the person from whom the discovery was obtained, may file
a petition for an order modifying or setting aside the demand in the
district court in the county of the person's residence or principal
office or place of business or a district court of Travis County.
The petition must specify each ground upon which the petitioner
relies in seeking the relief sought. The petition may be based on
any failure of a demand to comply with the provisions of this
subchapter or on any constitutional or other legal right or
privilege of the petitioner.
(b) The petitioner shall serve a copy of the petition on the
attorney general or local prosecutor, as applicable, in accordance
with Section 140B.054. The attorney general or local prosecutor
may submit an answer to the petition.
(c) In ruling on the petition under this section, the court
shall presume absent evidence to the contrary that the attorney
general or local prosecutor issued the demand in good faith and
within the scope of the attorney general's or local prosecutor's
authority.
Sec. 140B.056. COMPLIANCE WITH DEMAND. (a) A person on
whom a civil investigative demand is served under this subchapter
shall comply with the terms of the demand unless otherwise provided
by court order.
(b) The time for compliance with the demand wholly or partly
does not run during the pendency of any petition filed under Section
140B.055, provided that the petitioner shall comply with any
portions of the demand not sought to be modified or set aside.
Sec. 140B.057. DOCUMENTARY MATERIAL. (a) Any person on
whom any civil investigative demand for the production of
documentary material has been duly served under this subchapter
shall make the material available to the attorney general or local
prosecutor, as applicable, for inspection and copying during normal
business hours on the return date specified in the demand at the
person's principal office or place of business or as otherwise may
be agreed on by the person and the attorney general or local
prosecutor. The attorney general or local prosecutor shall bear
the expense of any copying. The person may substitute copies for
originals of all or part of the requested documents if the originals
are made available for inspection. The attorney general or local
prosecutor may elect to obtain or review information in an
electronic format. The person shall indicate in writing which, if
any, of the documents produced contain trade secrets or
confidential information.
(b) The production of documentary material in response to
any demand must be made under a sworn certificate in the form the
demand designates by a natural person having knowledge of the facts
and circumstances relating to the production to the effect that all
of the requested material in the possession, custody, or control of
the person to whom the demand is directed has been produced.
Sec. 140B.058. INTERROGATORIES. (a) Each interrogatory in
any civil investigative demand duly served must be answered
separately and fully in writing, unless it is objected to, in which
case the basis for the objection shall be set forth in lieu of an
answer. The person shall indicate in writing which, if any, of the
answers contain trade secrets or confidential information.
(b) Answers to interrogatories must be submitted under a
sworn certificate in the form the related demand designates by a
natural person having knowledge of the facts and circumstances
relating to the preparation of the answers to the effect that all of
the requested information in the possession, custody, control, or
knowledge of the person to whom the demand is directed has been set
forth fully and accurately.
Sec. 140B.059. ORAL EXAMINATION. (a) The examination of
any person pursuant to a civil investigative demand for oral
testimony duly served must be taken before any person authorized to
administer oaths and affirmations under the laws of this state or
the United States. The person before whom the testimony is to be
taken shall put the witness on oath or affirmation and shall
personally or by someone acting under the person's direction and in
the person's presence record the witness's testimony. At the
expense of the attorney general or local prosecutor, and except as
provided by this subsection, the testimony must be taken
stenographically and may be transcribed. The attorney general or
local prosecutor may take audio and video recordings of the
testimony by providing notice to the person to be examined not later
than the seventh day before the day the person is to be examined.
(b) The oral testimony of any person taken pursuant to a
demand served must be taken within 100 miles of the county where the
person resides, is found, or transacts business or in any other
place agreed on by the person and the attorney general or local
prosecutor.
(c) Any person compelled to appear under a demand for oral
testimony may be accompanied, represented, and advised by counsel.
Counsel may advise the person in confidence, either on the request
of the person or on the counsel's own initiative, with respect to
any question arising in connection with the examination.
(d) The individual conducting the examination on behalf of
the attorney general or local prosecutor shall exclude from the
place of examination all other persons except the person being
examined, the person's counsel, the counsel of the person to whom
the demand has been issued, the person before whom the testimony is
to be taken, any stenographer taking the testimony, audiographer,
videographer, and any person assisting the individual conducting
the examination.
(e) During the examination, the person being examined or the
person's counsel may object on the record to any question in
accordance with Rule 199.5(e), Texas Rules of Civil Procedure. An
objection may properly be made, received, and entered on the record
when it is claimed that the person is entitled to refuse to answer
the question on grounds of any constitutional or other privilege,
including the privilege against self-incrimination. Neither that
person nor the person's counsel may otherwise object to or refuse to
answer any question or interrupt the oral examination. If the
person refuses to answer any question, the attorney general or
local prosecutor may petition the district court in the county
where the examination is being conducted for an order compelling
the person to answer the question.
(f) After the testimony has been fully transcribed, the
person before whom the testimony was taken shall promptly transmit
the transcript of the testimony to the witness and a copy of the
transcript to the attorney general or local prosecutor. The
witness must have a reasonable opportunity to examine the
transcript and make any changes in form or substance accompanied by
a statement of the reasons for the changes. The witness shall then
sign and return the transcript. If the witness does not return the
transcript to the person before whom the testimony was taken not
later than the 20th day after the date the transcript was provided
to the witness, the witness may be deemed to have waived the right
to make changes. The officer shall then certify on the transcript
that the witness was duly sworn and that the transcript is a true
record of the testimony given by the witness and promptly transmit a
copy of the certified transcript to the attorney general or local
prosecutor.
(g) On request, the attorney general or local prosecutor
shall furnish a copy of the certified transcript to the witness.
(h) The attorney general or local prosecutor may provide the
witness the same fees and mileage reimbursement that are paid to
witnesses in the district courts of this state.
Sec. 140B.060. FAILURE TO COMPLY WITH DEMAND PETITION FOR
ENFORCEMENT. If a person fails to comply with a civil investigative
demand duly served on the person, the attorney general or local
prosecutor may file in the district court in the county in which the
person resides, is found, or transacts business or in a district
court of Travis County and may serve on the person a petition for an
order of the court for enforcement. If the person transacts
business in more than one county and the attorney general or local
prosecutor elects not to file the petition in Travis County, the
petition must be filed in the county of the person's principal
office or place of business in the state or in any other county as
may be agreed on by the person and the attorney general or local
prosecutor.
Sec. 140B.061. CRIMINAL OFFENSE: DELIBERATE NONCOMPLIANCE.
(a) A person commits an offense if the person, with intent to
avoid, evade, or prevent compliance with a civil investigative
demand issued under this subchapter, knowingly removes from any
place, conceals, withholds, destroys, mutilates, alters, or by any
other means falsifies any documentary material or otherwise
provides inaccurate information.
(b) An offense under this section is a Class A misdemeanor.
Sec. 140B.062. DISCLOSURE AND USE OF MATERIAL AND
INFORMATION. (a) The civil investigative demand issued by the
attorney general or local prosecutor, any information obtained,
maintained, or created in response to the demand, or any
documentary material, product of discovery, or other record derived
or created during an investigation from the information, is not
subject to disclosure under Chapter 552, Government Code, and is
not subject to disclosure, discovery, subpoena, or other means of
legal compulsion for the release, except as described in
Subsections (b) and (c).
(b) The attorney general or local prosecutor may not release
or disclose information that is obtained in response to a demand or
any documentary material, product of discovery, or other record
derived from the information except:
(1) by court order for good cause shown;
(2) with the consent of the person who provided the
information to the attorney general or local prosecutor;
(3) to an employee or other person under the direction
of the attorney general or local prosecutor;
(4) to an agency of this state, the United States, or
another state or foreign country;
(5) to a political subdivision of this state; or
(6) to a person authorized by the attorney general or
local prosecutor to receive the information.
(c) The attorney general or local prosecutor may use
information obtained in response to a demand, or any documentary
material, product of discovery, or other record derived or created
from the information as the attorney general or local prosecutor
determines necessary in the enforcement of this chapter, including
presentation before court.
Sec. 140B.063. JURISDICTION. If a petition is filed in the
district court in any county, the court has jurisdiction to hear and
determine the matter presented and to enter any order required to
implement this chapter. Any final order is subject to appeal.
Failure to comply with any final order entered by a court under this
chapter is punishable by the court as contempt of the order.
Sec. 140B.064. NONEXCLUSIVE PROCEDURES. Nothing in this
chapter precludes the attorney general or local prosecutor from
using any procedure not specified in this chapter in conducting a
racketeering investigation.
SUBCHAPTER C. CIVIL REMEDIES
Sec. 140B.101. CIVIL REMEDIES. A district court may, after
making due provision for the rights of innocent persons, enjoin
conduct constituting an offense under Section 72.02, 72.03, or
72.04, Penal Code, by issuing appropriate orders and judgments,
including:
(1) ordering a defendant to divest of any interest in
any enterprise, including real property;
(2) imposing reasonable restrictions on the future
activities or investments of a defendant, including prohibiting a
defendant from engaging in the same type of endeavor as the
enterprise in which the defendant was engaged in conduct
constituting an offense under Section 72.02, 72.03, or 72.04, Penal
Code;
(3) ordering the dissolution or reorganization of an
enterprise;
(4) ordering the suspension or revocation of a
license, permit, or approval previously granted to an enterprise by
any state agency; or
(5) ordering the forfeiture of the charter of a
corporation organized under the laws of this state, or the
revocation of a certificate allowing a foreign corporation to
conduct business within this state, on finding that:
(A) the board of directors or a managerial agent
acting on behalf of the corporation, in conducting the affairs of
the corporation, has authorized or engaged in conduct constituting
an offense under Section 72.02, 72.03, or 72.04, Penal Code; and
(B) for the prevention of future criminal
activity, the public interest requires the charter of the
corporation forfeited and the corporation dissolved or the
certificate revoked.
Sec. 140B.102. CIVIL FORFEITURE OF PROPERTY. (a) All
property, real or personal, including money, used in the course of,
intended for use in the course of, derived from, or realized through
conduct constituting an offense under Section 72.02, 72.03, or
72.04, Penal Code, is subject to civil forfeiture to the state under
this chapter.
(b) An investigative agency, on behalf of this state, may
bring a civil action for forfeiture:
(1) in the district court for the judicial district in
which real or personal tangible property described by Subsection
(a) is located;
(2) in a district court in this state regarding
intangible property described by Subsection (a); and
(3) in the county in which real or personal tangible
property described by Subsection (a) was seized.
(c) On entry of a final judgment of forfeiture in favor of
the state, the title of the state to the forfeited property shall
relate back:
(1) in the case of real property or a beneficial
interest:
(A) to the date of filing of a lien notice under
Chapter 68, Property Code, in the official records of the county
where the real property or beneficial trust is located;
(B) if no lien notice is filed, to the date of the
filing of any notice of lis pendens under Section 68.056(a),
Property Code, in the official records of the county where the real
property or beneficial interest is located; or
(C) if no lien notice or notice of lis pendens is
filed, to the date of recording of the final judgment of forfeiture
in the official records of the county where the real property or
beneficial interest is located; or
(2) in the case of personal property, to the date the
personal property was seized by the investigative agency.
(d) For purposes of this section, a beneficial interest is
considered to be located where real property owned by the trustee is
located.
Sec. 140B.103. CONVEYANCE OF PROPERTY SUBJECT TO
FORFEITURE. (a) If property subject to forfeiture is conveyed,
alienated, disposed of, diminished in value, or otherwise rendered
unavailable for forfeiture, the investigative agency may, on behalf
of the state, bring an action in any district court against the
person named in the lien notice under Chapter 68, Property Code, or
the defendant in the relevant civil action or criminal proceeding.
If a civil action is pending, the action shall be filed only in the
court where the civil action is pending.
(b) The court in an action brought under Subsection (a)
shall:
(1) enter final judgment against the person named in
the lien notice or the defendant in the relevant civil action or
criminal proceeding in an amount equal to:
(A) the fair market value of the property; and
(B) the investigative costs and attorney fees
incurred by the investigative agency in the action; or
(2) order the forfeiture of any other property of the
defendant up to the value of the property subject to forfeiture.
Sec. 140B.104. DISPOSITION OF FORFEITED PROPERTY. (a) The
state shall dispose of all forfeited property as soon as
commercially feasible. If property is not exercisable or
transferable for value by the state, the state may destroy or
otherwise dispose of the property.
(b) All forfeitures or dispositions under this subchapter
shall be made with due provision for the rights of innocent persons.
(c) The state shall promptly distribute the proceeds
realized from the forfeiture and disposition of property under this
section in accordance with Subchapter D.
Sec. 140B.105. SEIZURE OF PROPERTY. (a) Property subject
to forfeiture under this subchapter may be seized by a law
enforcement officer on court process. Seizure without process may
be made if:
(1) the seizure is incident to a lawful arrest or
search conducted under a warrant issued under Chapter 18, Code of
Criminal Procedure; or
(2) the property subject to seizure has been the
subject of a previous judgment in favor of the state in a forfeiture
action brought under this subchapter.
(b) For a seizure conducted under this section, an
investigative agency shall promptly commence a forfeiture action
under Section 140B.102.
Sec. 140B.106. STORAGE OF SEIZED PROPERTY PENDING
FORFEITURE ACTION. Property taken or detained under this
subchapter is not subject to replevin but is considered to be in the
custody of the law enforcement officer making the seizure, subject
only to the order of the court. When property is seized under this
subchapter, pending forfeiture and final disposition, the law
enforcement officer may:
(1) place the property under seal;
(2) remove the property to a place designated by a
court; or
(3) require another agency authorized by law to take
custody of the property and remove it to an appropriate location.
Sec. 140B.107. CIVIL ACTION BROUGHT BY ATTORNEY GENERAL,
LOCAL PROSECUTOR, OR STATE AGENCY. (a) The office of the attorney
general, a local prosecutor, or a state agency having jurisdiction
over conduct constituting an offense under Section 72.02, 72.03, or
72.04, Penal Code, may institute civil actions under this
subchapter. The attorney general or a state agency may institute an
action under Section 140B.101 or 140B.102 only if the attorney
general or agency receives the consent of the applicable local
prosecutor to bring the action.
(b) In an action brought under this subchapter, the district
court shall proceed as soon as practicable to the hearing and
determination. Pending final determination, the district court may
at any time enter injunctions, prohibitions, or restraining orders,
or take actions, including the acceptance of satisfactory
performance bonds, the court considers proper.
Sec. 140B.108. EFFECT OF FINAL JUDGMENT OR DECREE. A final
judgment or decree rendered in favor of this state in a criminal
proceeding under state law prevents the defendant from asserting in
any subsequent civil action brought under this chapter any matter
as to which that judgment or decree would be an estoppel as between
the parties.
Sec. 140B.109. OTHER RELIEF AVAILABLE TO ATTORNEY GENERAL.
(a) The attorney general may bring an action against a person who
engages in conduct constituting an offense under Section 72.02,
72.03, or 72.04, Penal Code, to obtain:
(1) injunctive relief;
(2) a civil penalty as provided by this section; and
(3) reasonable attorney's fees and reasonably incurred
costs of investigation or litigation.
(b) A defendant in an action brought under this section is
subject to a civil penalty not to exceed:
(1) $100,000 if the defendant is an individual; or
(2) $1 million if the defendant is not an individual.
(c) The attorney general shall deposit a civil penalty
collected under this section to the credit of the general revenue
fund. The attorney general shall deposit attorney's fees and costs
collected under this section into the attorney general law
enforcement account, which may be used to investigate and enforce
this chapter.
(d) Any party to an action brought under this section may
petition the court for entry of a consent decree or for approval of
a settlement agreement. The proposed decree or settlement must
specify the alleged violations, the future obligations of the
parties, the relief agreed on, and the reasons for entering into the
consent decree or settlement agreement.
Sec. 140B.110. NOTICE TO LOCAL PROSECUTOR. (a) In a
reasonable time before bringing an action or on initiating an
investigation on racketeering, the attorney general shall provide
notice to the local prosecutor who appears to have primary
jurisdiction over the criminal prosecution of any target of an
investigation under this chapter at the time of the notice
concerning the attorney general's intent to bring an action under
this chapter or investigate racketeering, as applicable.
(b) The notices described by Subsection (a) must describe or
otherwise identify the defendant to the action or the suspect, as
applicable.
Sec. 140B.111. COOPERATION WITH LOCAL PROSECUTOR. (a) A
local prosecutor who receives notice under Section 140B.110 may
notify the attorney general of a related pending criminal
investigation or prosecution.
(b) Notification to the attorney general under Subsection
(a) must be in writing and describe or otherwise identify the
defendant or suspect in the criminal investigation or proceeding.
(c) On receipt of notice described by Subsection (a), the
attorney general shall coordinate and cooperate with the local
prosecutor to ensure that the filing of an action under this chapter
does not interfere with an ongoing criminal investigation or
prosecution. The attorney general shall update the local
prosecutor on matters affecting the action or the investigation.
Sec. 140B.112. ABATEMENT OF ACTION. If the local
prosecutor determines that an action brought under this chapter
would interfere with an ongoing criminal investigation or
prosecution after notifying the attorney general of the
investigation or prosecution under Section 140B.111, the local
prosecutor may request, in writing, that the attorney general abate
the action. On receipt of this request, the attorney general shall
abate the action.
Sec. 140B.113. LIMITATIONS; TOLLING. (a) Notwithstanding
any other law, the attorney general or a local prosecutor must bring
an action under this chapter not later than the fifth anniversary of
the later of:
(1) the date the conduct that is the basis for the
action terminates; or
(2) the date the cause of action accrues.
(b) If an indictment for an offense under Section 72.02,
72.03, or 72.04, Penal Code, is presented or a civil action is
brought, or intervened in, to punish, prevent, or restrain conduct
constituting an offense under Section 72.02, 72.03, or 72.04, Penal
Code, the running of the period of limitations prescribed by this
section with respect to any cause of action arising under Section
140B.109 that is wholly or partly based on a matter complained of in
the indictment or the pleadings in the action, as applicable, is
suspended during the pendency of the prosecution or litigation of
the action, as applicable, and extended for two years following its
termination.
Sec. 140B.114. MULTIPLE REMEDIES ALLOWED. The application
of one civil remedy under a provision of this chapter does not
preclude the application of any other remedy, civil or criminal,
under this chapter or any other law. Civil remedies under this
chapter are supplemental and not mutually exclusive.
SUBCHAPTER D. DISPOSITION OF FUNDS OBTAINED THROUGH FORFEITURE
ACTIONS
Sec. 140B.151. INITIAL DISTRIBUTION. (a) A court entering
a judgment of forfeiture in an action brought under Subchapter C
retains jurisdiction to direct the distribution of any cash or cash
proceeds realized from the forfeiture and disposition of the
property. The court shall direct the distribution of the funds in
the following order of priority:
(1) statutory fees to which the clerk of the court may
be entitled;
(2) claims against the property by persons who have
previously been judicially determined to be innocent persons and
whose interests are preserved from forfeiture by the court and not
otherwise satisfied; and
(3) subject to Subsection (c), claims for restitution
by victims of the racketeering activity.
(b) A claim under Subsection (a)(2) may include a claim by a
person appointed by the court as receiver pending litigation.
(c) If the attorney general brought the forfeiture action,
restitution shall be distributed though the compensation to victims
of crime fund. If the attorney general did not bring the forfeiture
action, restitution shall be distributed by the clerk of the court.
Sec. 140B.152. DISTRIBUTION OF REMAINING MONEY. (a)
Following satisfaction of all valid claims under Section 140B.151,
the remaining money obtained in the forfeiture proceeding shall be
deposited as follows:
(1) 25 percent into the appropriate trust fund of the
attorney general or local prosecutor's office that filed the civil
forfeiture action as provided by Subsection (c);
(2) 25 percent into the applicable law enforcement
trust fund of the investigative agency that conducted the
investigation that resulted in or significantly contributed to the
forfeiture of the property as provided by Subsection (d); and
(3) 50 percent into the general revenue fund.
(b) If a forfeiture action is filed by the attorney general
or a local prosecutor, the court entering the judgment of
forfeiture shall, taking into account the overall effort and
contribution to the investigation and forfeiture action by the
agencies that filed the action, make a pro rata apportionment among
those agencies of the money available for distribution to those
agencies as provided by this subchapter. If multiple investigative
agencies have contributed to the forfeiture of the property, the
court that entered the judgment of forfeiture shall, taking into
account the overall effort and contribution of the agencies to the
investigation and forfeiture action, make a pro rata apportionment
among those investigative agencies of the money available for
distribution to the investigative agencies as provided by this
subchapter.
(c) If a forfeiture action is filed by the attorney general,
any money obtained by the attorney general under this section shall
be deposited in the same manner described by Article 59.06(k)(3),
Code of Criminal Procedure, and may be expended for the purposes and
in the manner authorized by that section.
(d) If a forfeiture action is filed by a district or county
attorney, any money obtained by the district or county attorney's
office under this section may be used to pay the costs of
investigations under Subchapter B and the resulting criminal
prosecutions and civil actions. Such costs may include:
(1) all taxable costs;
(2) costs of protecting, maintaining, and forfeiting
the property;
(3) employees' base salaries and compensation for
overtime; and
(4) other costs that are directly attributable to the
investigation, prosecution, or civil action.
(e) Any money distributed to an investigative agency under
Subsection (a) shall be deposited in the applicable law enforcement
fund or account established for that agency and expended for the
purposes and in the manner authorized for that fund or account. In
addition, any money distributed to an investigative agency under
this section may be used to pay the costs of investigations under
Subchapter B and the resulting criminal prosecutions and civil
actions. Such costs may include:
(1) all taxable costs;
(2) costs of protecting, maintaining, and forfeiting
the property;
(3) employees' base salaries and compensation for
overtime; and
(4) other costs directly attributable to the
investigation, prosecution, or civil action.
Sec. 140B.153. EFFECT ON SETTLEMENTS. (a) This subchapter
may not be construed to limit the authority of an entity that files
a forfeiture action under Subchapter C to settle a claim for
forfeiture.
(b) Any proceeds arising from a settlement or from the sale
of property obtained in a settlement shall be distributed in the
manner described by Sections 140B.151 and 140B.152.
Sec. 140B.154. TEMPORARY DEPOSIT IN COURT REGISTRY.
Pending the final distribution of the cash or cash proceeds under
this subchapter, the court may authorize the cash or cash proceeds
to be deposited in the court registry or in a qualified public
depository.
SECTION 3. Article 12.01, Code of Criminal Procedure, is
amended to read as follows:
Art. 12.01. FELONIES. Except as provided in Articles
12.015 and [Article] 12.03, felony indictments may be presented
within these limits, and not afterward:
(1) no limitation:
(A) murder and manslaughter;
(B) sexual assault under Section 22.011(a)(2),
Penal Code, or aggravated sexual assault under Section
22.021(a)(1)(B), Penal Code;
(C) sexual assault, if:
(i) during the investigation of the offense
biological matter is collected and the matter:
(a) has not yet been subjected to
forensic DNA testing; or
(b) has been subjected to forensic DNA
testing and the testing results show that the matter does not match
the victim or any other person whose identity is readily
ascertained; or
(ii) probable cause exists to believe that
the defendant has committed the same or a similar sex offense
against five or more victims;
(D) continuous sexual abuse of young child or
disabled individual under Section 21.02, Penal Code;
(E) indecency with a child under Section 21.11,
Penal Code;
(F) an offense involving leaving the scene of an
accident under Section 550.021, Transportation Code, if the
accident resulted in the death of a person;
(G) trafficking of persons under Section
20A.02(a)(7) or (8), Penal Code;
(H) continuous trafficking of persons under
Section 20A.03, Penal Code; or
(I) compelling prostitution under Section
43.05(a)(2), Penal Code;
(2) ten years from the date of the commission of the
offense:
(A) theft of any estate, real, personal or mixed,
by an executor, administrator, guardian or trustee, with intent to
defraud any creditor, heir, legatee, ward, distributee,
beneficiary or settlor of a trust interested in such estate;
(B) theft by a public servant of government
property over which the public servant exercises control in the
public servant's official capacity;
(C) forgery or the uttering, using, or passing of
forged instruments;
(D) injury to an elderly or disabled individual
punishable as a felony of the first degree under Section 22.04,
Penal Code;
(E) sexual assault, except as provided by
Subdivision (1) or (7);
(F) arson;
(G) trafficking of persons under Section
20A.02(a)(1), (2), (3), or (4), Penal Code; or
(H) compelling prostitution under Section
43.05(a)(1), Penal Code;
(3) seven years from the date of the commission of the
offense:
(A) misapplication of fiduciary property or
property of a financial institution;
(B) fraudulent securing of document execution;
(C) a felony violation under Chapter 162, Tax
Code;
(D) false statement to obtain property or credit
under Section 32.32, Penal Code;
(E) money laundering;
(F) credit card or debit card abuse under Section
32.31, Penal Code;
(G) fraudulent use or possession of identifying
information under Section 32.51, Penal Code;
(H) exploitation of a child, elderly individual,
or disabled individual under Section 32.53, Penal Code;
(I) health care fraud under Section 35A.02, Penal
Code; or
(J) bigamy under Section 25.01, Penal Code,
except as provided by Subdivision (6);
(4) five years from the date of the commission of the
offense:
(A) theft or robbery;
(B) except as provided by Subdivision (5),
kidnapping or burglary;
(C) injury to an elderly or disabled individual
that is not punishable as a felony of the first degree under Section
22.04, Penal Code;
(D) abandoning or endangering a child; or
(E) insurance fraud;
(5) if the investigation of the offense shows that the
victim is younger than 17 years of age at the time the offense is
committed, 20 years from the 18th birthday of the victim of one of
the following offenses:
(A) sexual performance by a child under Section
43.25, Penal Code;
(B) aggravated kidnapping under Section
20.04(a)(4), Penal Code, if the defendant committed the offense
with the intent to violate or abuse the victim sexually; or
(C) burglary under Section 30.02, Penal Code, if
the offense is punishable under Subsection (d) of that section and
the defendant committed the offense with the intent to commit an
offense described by Subdivision (1)(B) or (D) of this article or
Paragraph (B) of this subdivision;
(6) ten years from the 18th birthday of the victim of
the offense:
(A) trafficking of persons under Section
20A.02(a)(5) or (6), Penal Code;
(B) injury to a child under Section 22.04, Penal
Code; or
(C) bigamy under Section 25.01, Penal Code, if
the investigation of the offense shows that the person, other than
the legal spouse of the defendant, whom the defendant marries or
purports to marry or with whom the defendant lives under the
appearance of being married is younger than 18 years of age at the
time the offense is committed;
(7) two years from the date the offense was
discovered: sexual assault punishable as a state jail felony under
Section 22.011(f)(2), Penal Code; or
(8) three years from the date of the commission of the
offense: all other felonies.
SECTION 4. Chapter 12, Code of Criminal Procedure, is
amended by adding Article 12.015 to read as follows:
Art. 12.015. RACKETEERING AND UNLAWFUL DEBT COLLECTION.
(a) Except as provided by Subsection (b), a felony indictment for
an offense under Section 72.02, 72.03, or 72.04, Penal Code, must be
presented not later than five years from the date of the commission
of the offense.
(b) If the attorney general or a local prosecutor, as
defined by Section 140B.001, Civil Practice and Remedies Code,
brings an action in the name of the state under Chapter 140B, Civil
Practice and Remedies Code, during the limitations period described
by Subsection (a), that limitations period is suspended while the
attorney general's or local prosecutor's action is pending. If a
limitations period is suspended under this subsection, the
limitations period is extended for two years.
SECTION 5. Section 71.02(a), Penal Code, is amended to read
as follows:
(a) A person commits an offense if, with the intent to
establish, maintain, or participate in a combination or in the
profits of a combination or as a member of a criminal street gang,
the person commits or conspires to commit one or more of the
following:
(1) murder, capital murder, arson, aggravated
robbery, robbery, burglary, theft, aggravated kidnapping,
kidnapping, aggravated assault, aggravated sexual assault, sexual
assault, continuous sexual abuse of young child or disabled
individual, solicitation of a minor, forgery, deadly conduct,
assault punishable as a Class A misdemeanor, burglary of a motor
vehicle, or unauthorized use of a motor vehicle;
(2) any gambling offense punishable as a Class A
misdemeanor;
(3) promotion of prostitution, aggravated promotion
of prostitution, or compelling prostitution;
(4) unlawful manufacture, transportation, repair, or
sale of firearms or prohibited weapons;
(5) unlawful manufacture, delivery, dispensation, or
distribution of a controlled substance or dangerous drug, or
unlawful possession of a controlled substance or dangerous drug
through forgery, fraud, misrepresentation, or deception;
(5-a) causing the unlawful delivery, dispensation, or
distribution of a controlled substance or dangerous drug in
violation of Subtitle B, Title 3, Occupations Code;
(5-b) any unlawful possession with intent to deliver a
controlled substance or dangerous drug;
(6) any unlawful wholesale promotion or possession of
any obscene material or obscene device with the intent to wholesale
promote the same;
(7) any offense under Subchapter B, Chapter 43,
depicting or involving conduct by or directed toward a child
younger than 18 years of age;
(8) any felony offense under Chapter 32;
(9) any offense under Chapter 36;
(10) any offense under Chapter 34, 35, or 35A;
(11) any offense under Section 37.11(a);
(12) any offense under Chapter 20A;
(13) any offense under Section 37.10;
(14) any offense under Section 38.06, 38.07, 38.09, or
38.11;
(15) any offense under Section 42.10;
(16) any offense under Section 46.06(a)(1) or 46.14;
(17) any offense under Section 20.05 or 20.06;
(18) any offense under Section 16.02; or
(19) any offense classified as a felony under the Tax
Code.
SECTION 6. Title 11, Penal Code, is amended by adding
Chapter 72 to read as follows:
CHAPTER 72. RACKETEERING AND UNLAWFUL DEBT COLLECTION
Sec. 72.01. DEFINITIONS. In this chapter:
(1) "Enterprise" has the meaning assigned by Section
140B.001, Civil Practice and Remedies Code.
(2) "Money" means funds as defined by Section 34.01.
(3) "Pattern of racketeering" means engaging in at
least two incidents of racketeering conduct that have the same or
similar intents, results, accomplices, victims, or methods of
commission or that otherwise are interrelated by distinguishing
characteristics and are not isolated incidents, the last of which
occurred not later than the fifth anniversary of the date of a
previous incident of racketeering conduct.
(4) "Pecuniary value" means:
(A) anything of value in the form of money, a
negotiable instrument, or a commercial interest or anything else
the primary significance of which is economic advantage; or
(B) any other property or service that has a
value in excess of $100.
(5) "Racketeering" means to commit, to attempt to
commit, to conspire to commit, or to solicit, coerce, or intimidate
another person to commit:
(A) a felony offense under The Securities Act
(Title 12, Government Code);
(B) an offense under Section 20.03 (kidnapping);
(C) an offense under Section 20.04 (aggravated
kidnapping);
(D) an offense under Section 20.07 (operation of
stash house);
(E) a felony offense under Chapter 37 (perjury
and other falsification);
(F) a felony offense under Section 38.03
(resisting arrest, search, or transportation);
(G) a felony offense under Section 38.05
(hindering apprehension or prosecution);
(H) a felony offense under Chapter 43 (public
indecency); or
(I) an offense under Section 71.02 (engaging in
organized criminal activity).
(6) "Real property" has the meaning assigned by
Section 140B.001, Civil Practice and Remedies Code.
(7) "Unlawful debt" means any money or other thing of
value constituting principal or interest of a debt that is wholly or
partly legally unenforceable in this state because the debt was
incurred or contracted:
(A) in violation of:
(i) the Texas Racing Act (Subtitle A-1,
Title 13, Occupations Code, and Article 179e, Revised Civil
Statutes);
(ii) Subtitle A, Title 4, Finance Code, or
Section 11, Article XVI, Texas Constitution, relating to interest
and usury, if the usurious rate is at least twice the enforceable
rate; or
(iii) Chapter 47, relating to gambling; or
(B) in gambling activity in violation of federal
law or in the business of lending money at a rate usurious under
state law if the usurious rate is at least twice the enforceable
rate.
Sec. 72.02. USE OF PROCEEDS DERIVED FROM RACKETEERING OR
UNLAWFUL DEBT COLLECTION. (a) A person commits an offense if the
person intentionally uses or invests, whether directly or
indirectly, any part of any proceeds knowingly derived, directly or
indirectly, from a pattern of racketeering or through the
collection of an unlawful debt, or the proceeds derived from the
investment or use of those proceeds, in acquiring title to, or any
right, interest, or equity in, real property or in the
establishment or operation of any enterprise.
(b) An offense under this section is a felony of the second
degree.
(c) If conduct that constitutes an offense under this
section also constitutes an offense under any other law, the actor
may be prosecuted under this section, the other law, or both.
Sec. 72.03. ACQUISITION OF INTEREST IN PROPERTY OR CONTROL
OF ENTERPRISE THROUGH RACKETEERING OR UNLAWFUL DEBT COLLECTION.
(a) A person commits an offense if the person, knowingly through a
pattern of racketeering or through the collection of an unlawful
debt, acquires or maintains, directly or indirectly, any interest
in or control of any enterprise or real property.
(b) An offense under this section is a felony of the second
degree.
(c) If conduct that constitutes an offense under this
section also constitutes an offense under any other law, the actor
may be prosecuted under this section, the other law, or both.
Sec. 72.04. PARTICIPATION IN ENTERPRISE THROUGH
RACKETEERING OR UNLAWFUL DEBT COLLECTION. (a) A person commits an
offense if the person is employed by or associated with an
enterprise and knowingly conducts or participates, directly or
indirectly, in that enterprise through a pattern of racketeering or
the collection of an unlawful debt.
(b) An offense under this section is a felony of the second
degree.
(c) If conduct that constitutes an offense under this
section also constitutes an offense under any other law, the actor
may be prosecuted under this section, the other law, or both.
Sec. 72.05. ALTERNATIVE FINE. Notwithstanding any other
law, a court, after a hearing, may impose a fine, instead of an
otherwise applicable fine, on a person convicted of an offense
under Section 72.02, 72.03, or 72.04, through which the person
derived pecuniary value or by which the person caused personal
injury, property damage, or other loss, that does not exceed:
(1) the greater of:
(A) three times the gross value gained as a
result of the offense; or
(B) three times the gross loss caused as a result
of the offense; and
(2) the amount of the court costs and the reasonably
incurred costs of investigation and prosecution.
SECTION 7. Subtitle B, Title 5, Property Code, is amended by
adding Chapter 68 to read as follows:
CHAPTER 68. RICO LIENS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 68.001. DEFINITIONS. In this chapter:
(1) "Beneficial interest," "investigative agency,"
"local prosecutor," and "real property" have the meanings assigned
by Section 140B.001, Civil Practice and Remedies Code.
(2) "RICO lien notice" means a lien notice filed under
Section 68.051 or 68.052.
(3) "Trustee":
(A) means:
(i) a person acting as trustee under a trust
established under the Texas Trust Code (Subtitle B, Title 9,
Property Code) in which the trustee holds legal or record title to
real property;
(ii) a person who holds legal or record
title to real property in which another person has a beneficial
interest; or
(iii) a successor trustee to a person
described by Subparagraph (i) or (ii); and
(B) does not include a person appointed or acting
as a personal representative as defined by Section 22.031, Estates
Code, or appointed or acting as a trustee of a testamentary trust or
as a trustee of an indenture of trust under which any bonds have
been or are to be issued.
SUBCHAPTER B. RICO LIEN NOTICE
Sec. 68.051. GENERAL RICO LIEN NOTICE. (a) On the
institution by an investigative agency of a civil action brought
under Chapter 140B, Civil Practice and Remedies Code, the
investigative agency, then or at any time during the pendency of the
action, may file a RICO lien notice in the official records of any
one or more counties. The attorney general must receive the consent
of the applicable local prosecutor before filing a RICO lien.
(b) A filing fee or other charge may not be required as a
condition for filing the RICO lien notice, and the clerk of the
district court, on the presentation of a RICO lien notice, shall
immediately record it in the official records.
Sec. 68.052. ATTORNEY GENERAL OR LOCAL PROSECUTOR RICO LIEN
NOTICE. (a) In addition to the authority to file a RICO lien notice
under Section 68.051, the attorney general or a local prosecutor
may apply ex parte to a district court and, on petition supported by
sworn affidavit, obtain an order authorizing the filing of a RICO
lien notice against real property on a showing of probable cause to
believe that the property was used in the course of, intended for
use in the course of, derived from, or realized through conduct
constituting an offense under Section 72.02, 72.03, or 72.04, Penal
Code.
(b) If the RICO lien notice authorization is granted, the
attorney general or local prosecutor shall, after filing the
notice, immediately provide notice to the owner of the property by:
(1) serving the notice in the manner provided by law
for the service of process;
(2) mailing the notice, postage prepaid, by certified
mail to the owner at the owner's last known address and obtaining
evidence of the delivery; or
(3) if service by a method described by Subdivision
(1) or (2) cannot be accomplished, posting the notice on the
premises.
(c) The owner of the property may move the court to
discharge the lien, and that motion shall be set for hearing at the
earliest possible time.
(d) The court shall discharge the lien if the court finds
that:
(1) there is no probable cause to believe that the
property was used in the course of, intended for use in the course
of, derived from, or realized through conduct constituting an
offense under Section 72.02, 72.03, or 72.04, Penal Code; or
(2) the owner of the property neither knew nor
reasonably should have known that the property was used in the
course of, intended for use in the course of, derived from, or
realized through conduct constituting an offense under Section
72.02, 72.03, or 72.04, Penal Code.
(e) Testimony presented by the property owner at the
hearing:
(1) is not admissible against the property owner in
any criminal proceeding except in a criminal prosecution for
perjury or false statement; and
(2) does not constitute a waiver of the property
owner's constitutional right against self-incrimination.
(f) Except as provided by Subsection (g), a RICO lien notice
secured under this section is valid for a period of 90 days from the
date the court granted authorization and may be extended for an
additional 90 days by the court for good cause shown.
(g) If a civil action is instituted under Chapter 140B,
Civil Practice and Remedies Code, and a RICO lien notice is filed
under this subchapter, the term of the lien notice is governed by
this subchapter.
(h) The filing of a RICO lien notice, regardless of whether
subsequently discharged or otherwise lifted, constitutes notice to
the owner and knowledge by the owner that the property was used in
the course of, intended for use in the course of, derived from, or
realized through conduct constituting an offense under Section
72.02, 72.03, or 72.04, Penal Code, such that lack of such notice
and knowledge is not a defense in any subsequent civil action under
Chapter 140B, Civil Practice and Remedies Code, or a subsequent
criminal proceeding under Chapter 72, Penal Code.
Sec. 68.053. FORMAT OF NOTICE. (a) A RICO lien notice must
be signed by the attorney general or the attorney general's
designee or by a local prosecutor or the local prosecutor's
designee.
(b) A RICO lien notice must be in the form prescribed by the
attorney general and must include:
(1) the name of the person against whom a civil action
has been brought under Chapter 140B, Civil Practice and Remedies
Code, and at the discretion of the investigative agency may also
include any other aliases, names, or fictitious names under which
the person may be known and any corporation, partnership, or other
entity that is either controlled or entirely owned by the person;
(2) if known to the investigative agency, the current
residence and business addresses of the person named in the notice
and of the other names included in the notice;
(3) a reference to an applicable civil action,
stating:
(A) that an action under Chapter 140B, Civil
Practice and Remedies Code, has been brought against the person
named in the notice;
(B) the name of each county in which the action
has been brought; and
(C) if known to the investigative agency at the
time of filing the notice, the cause number of the action;
(4) a statement that the notice is being filed under
this chapter; and
(5) the name and address of the investigative agency
filing the notice and the name of the individual signing the notice.
(c) A RICO lien notice must apply only to one person and, to
the extent applicable, any other aliases, names, or fictitious
names of that person, including the names of corporations,
partnerships, or other entities, to the extent permitted by
Subsection (b)(1). A separate notice must be filed for each person
against whom the investigative agency desires to file a RICO lien
notice under this subchapter.
Sec. 68.054. SERVICE OF NOTICE. (a) An investigative
agency shall, as soon as practicable after the filing of each RICO
lien notice, provide to the person named in the notice:
(1) a copy of the recorded notice; or
(2) a copy of the notice that states each county in
which the notice has been recorded.
(b) The failure of the investigative agency to provide a
copy of a RICO lien notice under this section does not invalidate or
otherwise affect the notice.
Sec. 68.055. CREATION AND PRIORITY OF RICO LIEN. (a)
Filing a RICO lien notice creates, from the time of its filing, a
lien in favor of the state on the following property of the person
named in the notice and against any other names set forth in the
notice:
(1) any real property situated in the county where the
notice is filed then or thereafter owned by the person or under any
of the names; and
(2) any beneficial interest situated in the county
where the notice is filed then or thereafter owned by the person or
under any of the names.
(b) The lien shall commence and attach as of the time of
filing of a RICO lien notice and shall continue thereafter until
expiration, termination, or release of the notice under this
subchapter. The lien created in favor of the state is superior to
the interest of any other person in the real property or beneficial
interest if the interest is acquired subsequent to the filing of the
notice.
(c) For purposes of this section, a beneficial interest is
considered to be located where real property owned by the trustee is
located.
Sec. 68.056. LIS PENDENS; INTERESTS OF PERSONS ACQUIRING
INTEREST IN PROPERTY. (a) In conjunction with a civil action
brought under Chapter 140B, Civil Practice and Remedies Code, an
investigative agency may file without prior court order in any
county a notice of lis pendens under Section 12.007. In such case,
a person acquiring an interest in the subject real property or
beneficial interest, if the real property or beneficial interest is
acquired subsequent to the filing of the notice of lis pendens,
shall take the interest subject to the civil action and any
subsequent judgment of forfeiture.
(b) In conjunction with a civil action brought under Chapter
140B, Civil Practice and Remedies Code, if a RICO lien notice has
been filed, an investigative agency may name as a defendant, in
addition to the person named in the notice, any person acquiring an
interest in the real property or beneficial interest subsequent to
the filing of the notice. If a judgment of forfeiture is entered in
the action in favor of the state, the interest of any person in the
property that was acquired subsequent to the filing of the notice
shall be subject to the notice and judgment of forfeiture.
Sec. 68.057. DUTIES OF TRUSTEE; CRIMINAL OFFENSE. (a) A
trustee who acquires actual knowledge that a RICO lien notice or a
civil action brought under Chapter 140B, Civil Practice and
Remedies Code, or criminal proceeding brought under Chapter 72,
Penal Code, has been filed against a person for whom the trustee
holds legal or record title to real property shall immediately
furnish to the appropriate investigative agency:
(1) the name and address of the person, as known to the
trustee;
(2) the name and address, as known to the trustee, of
each other person for whose benefit the trustee holds title to the
real property; and
(3) if requested by the investigative agency, a copy
of the trust agreement or other instrument under which the trustee
holds legal or record title to the real property.
(b) A trustee who violates this section commits an offense.
An offense under this subsection is a Class B misdemeanor.
Sec. 68.058. LIABILITY OF TRUSTEE FOR CONVEYANCE OF TITLE.
(a) A trustee who conveys title to real property for which, at the
time of the conveyance, a RICO lien notice naming a person who, to
the actual knowledge of the trustee, holds a beneficial interest in
the trust has been filed in the county where the real property is
situated is liable to the state for the greatest of:
(1) the amount of proceeds received directly by the
person named in the notice as a result of the conveyance;
(2) the amount of proceeds received by the trustee as a
result of the conveyance and distributed to the person named in the
notice; or
(3) the fair market value of the interest of the person
named in the notice in the real property conveyed.
(b) Notwithstanding Subsection (a)(3), if a trustee conveys
the real property and holds the proceeds that would otherwise be
paid or distributed to the beneficiary or at the direction of the
beneficiary or the beneficiary's designee, the trustee's liability
does not exceed the amount of the proceeds held for so long as the
proceeds are held by the trustee.
(c) An investigative agency may bring a civil action in any
district court against a trustee to recover from the trustee the
amount described by Subsection (a) and is entitled to recover
investigative costs and attorney's fees incurred by the
investigative agency.
Sec. 68.059. EFFECT ON TRUST OF RICO LIEN NOTICE. (a) The
filing of a RICO lien notice does not constitute a lien on the
record title to real property as owned by a trustee except to the
extent that the trustee is named in the notice.
(b) The filing of a RICO lien notice does not affect the use
to which real property or a beneficial interest owned by the person
named in the notice may be put or the right of the person to receive
any avails, rents, or other proceeds resulting from the use and
ownership, but not the sale, of the property until a judgment of
forfeiture is entered.
Sec. 68.060. TRUST EXCEPTIONS. (a) This chapter does not
apply to a conveyance by a trustee under a court order, unless that
court order is entered in an action between the trustee and the
beneficiary.
(b) Unless the trustee has actual knowledge that a person
owning a beneficial interest in the trust is named in a RICO lien
notice or is otherwise a defendant in a civil action brought under
Chapter 140B, Civil Practice and Remedies Code, this subchapter
does not apply to a conveyance by the trustee:
(1) required under the terms of the trust agreement
that is a matter of public record before the filing of the lien
notice; or
(2) to all of the persons who own beneficial interests
in the trust.
Sec. 68.061. RIGHTS OF INNOCENT PERSONS. All forfeitures
or dispositions under this chapter must be made with due provision
for the rights of innocent persons.
Sec. 68.062. EXPIRATION, RENEWAL, AND RELEASE OF RICO LIEN
NOTICE. (a) Unless renewed by the investigative agency, a RICO
lien notice expires on the sixth anniversary of the date it was
filed. If the investigative agency renews the notice, the notice
expires on the sixth anniversary of the date it was renewed. The
investigative agency may renew the notice only once.
(b) The investigative agency filing a RICO lien notice may
wholly or partly release the notice or may release any specific real
property or beneficial interest from the notice on the
investigative agency's own terms. A release of the notice may be
filed in the official records of any county. A charge or fee may not
be imposed for the filing of the release.
Sec. 68.063. EFFECT OF CRIMINAL CASE ON RICO LIEN NOTICE.
If a civil action has not been brought by an investigative agency
seeking a forfeiture of any property owned by the person named in
the RICO lien notice, the acquittal in a criminal proceeding
brought under Chapter 72, Penal Code, of the person named in the
notice or the dismissal of the criminal proceeding terminates the
notice and, in such case, the filing of the notice is void. If the
criminal proceeding has been dismissed or the person named in the
notice has been acquitted in the criminal proceeding, the notice
continues for the duration of a civil action brought under Chapter
140B, Civil Practice and Remedies Code.
Sec. 68.064. TERMINATION OR RELEASE OF RICO LIEN NOTICE BY
COURT. (a) If a civil action brought under Chapter 140B, Civil
Practice and Remedies Code, is not pending against a person named in
a RICO lien notice, the person may bring an action in the county
where the notice has been filed against the investigative agency
that filed the notice seeking a release or extinguishment of the
notice.
(b) In an action brought under this section, the court
shall, on the motion of the person named in the RICO lien notice,
immediately enter an order setting a date for hearing that is not
earlier than the fifth day and not later than the 10th day after the
date the action is filed, and the order and a copy of the complaint
shall be served on the investigative agency not later than the third
day after the date the action is filed.
(c) At the hearing set under Subsection (b), the court shall
take evidence on the issue of whether any real property or
beneficial interest owned by the person named in the RICO lien
notice is covered by the notice or is otherwise subject to
forfeiture under Chapter 140B, Civil Practice and Remedies Code.
(d) If, at the hearing under Subsection (b), the person
named in the RICO lien notice shows by a preponderance of the
evidence that the notice is not applicable to the person or that any
real property or beneficial interest owned by the person is not
subject to forfeiture under Chapter 140B, Civil Practice and
Remedies Code, the court shall enter a judgment terminating the
notice or releasing the real property or beneficial interest from
the notice.
(e) A court shall immediately enter its order releasing from
a RICO lien notice any specific real property or beneficial
interest if a sale of that real property or beneficial interest is
pending and the filing of the notice prevents the sale of the
property or interest. Proceeds resulting from the sale of that real
property or beneficial interest shall be deposited into the
registry of the court, subject to the further order of the court.
(f) At the hearing under Subsection (b), the court may
release any real property or beneficial interest from the RICO lien
notice, on the posting by the person named in the notice of security
that is equal to the value of the real property or beneficial
interest owned by the person.
(g) If a civil action brought under Chapter 140B, Civil
Practice and Remedies Code, is pending against a person named in a
RICO lien notice, the court on motion by the person may grant the
relief described by this section.
SECTION 8. (a) Chapter 140B, Civil Practice and Remedies
Code, as added by this Act, applies only to a cause of action that
accrues on or after the effective date of this Act.
(b) Section 71.02, Penal Code, as amended by this Act,
applies only to an offense committed on or after the effective date
of this Act. An offense committed before the effective date of this
Act is governed by the law in effect when the offense was committed,
and the former law is continued in effect for that purpose. For
purposes of this section, an offense was committed before the
effective date of this Act if any element of the offense occurred
before that date.
SECTION 9. To the extent of any conflict, this Act prevails
over another Act of the 88th Legislature, Regular Session, 2023,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 10. This Act takes effect September 1, 2023.
______________________________ ______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 4635 was passed by the House on May 5,
2023, by the following vote: Yeas 112, Nays 24, 1 present, not
voting; that the House refused to concur in Senate amendments to
H.B. No. 4635 on May 25, 2023, 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. 4635 on May 28, 2023, by the following vote: Yeas 105,
Nays 35, 2 present, not voting.
______________________________
Chief Clerk of the House
I certify that H.B. No. 4635 was passed by the Senate, with
amendments, on May 23, 2023, by the following vote: Yeas 30, Nays
1; 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.
4635 on May 28, 2023, by the following vote: Yeas 30, Nays 1.
______________________________
Secretary of the Senate
APPROVED: __________________
Date
__________________
Governor