2011 Texas Legislative Update
by
Doug Hollowell, President, RESPRO Texas Chapter

The 82^ndSession of the Texas Legislature (2011), saw a reduction in the number of bill filings from previous sessions.  Bill fillings each session had been on the rise since 2005.  

The bills passed, accounted for the lowest number in 16 years.  Sentiments from many were that this was not a session to get bills passed due to issues surrounding a historic budget shortfall, immigration bills and redistricting. 

Ultimately, the issues which took center stage were the budget, voter ID, sanctuary cities as well as Sunset Bills (which included the Texas Department of Insurance), causing Governor Rick Perry to call a Special Session, which began just after the regular session ended on May 30, 2011. 

Additionally, more layers of complexity were added to the mix when in November 2010, the election sent more than two dozen new members to the Legislature resulting in a supermajority of Republicans in the House. 

Here is an overview of the bill count for the 82^ndSession and some Session Quickfacts: 

Although there were not any bills presented, that I am aware of, which targeted “Affiliated” businesses directly, there were a number of bills which affected the title industry (and hence, some of our membership).

Through the efforts of the Texas Land Title Association, the title industry took an “affirmative” position in attempting to pass 9 bills.  This was unusual, as most industries were taking a “defensive” stance, in an attempt to fend off bills that might adversely affect them. 

Although TLTA had it’s share of “adverse” bills and was successful in playing defense, they were even more successful in their affirmative agenda of getting 8 of their 9 bills passed and signed into law by the Governor.

Here is a list of those bills and a brief description:

HB 2408-TDI Omnibus Bill-Provides solutions for several issues regarding the regulation of title insurance including streamlining the rate setting process, adding due process protections to the enforcement and licensing process and eliminating the 2% minerals credit while maintaining the ability to take a general exception.  Additionally, the bill clarifies existing law relating to the educational and promotional activities of title agents and underwriters.

Effective-9/1/2011-except the minerals section which is effective 1/1/2012. Note-Several elements of this bill require rules before taking full effect.

HB 2604-TDI Agent Minimum Capitalization Deposit Plan-Establishes a more practical way for title agents to reach minimum capitalization requirements by depositing funds on a per policy basis in a bank of their choosing. The law says that 1% of the 85% agent-retained premium may be set aside, on a per policy basis, in a bank account of the agent's choosing, in order to satisfy mandatory minimum capitalization requirements. It also removes the previously unworkable requirement that a CPA certify unencumbered assets.

Effective-Immediately. Note-This bill requires rules promulgated by TDI by 1/1/2012 before taking full effect.

SB 1320-Acknowledgments of Foreign Persons-Notaries will now be allowed to accept a current foreign passport issued to serve as proof of identity.

Effective-9/1/2011.

HB 558-Payoff Satements-Banks will now be responsible for mistakes as to the final payoff amount in their payoff statements, not title companies.

Effective-9/1/2011. Note-This bill requires a promulgated payoff request form for use by all parties from the Texas Dept. of Savings and Mortgage Lending (TDSML).

HB 1187-Indexing Lis Pendens-Notice of a lis pendens will now take place when indexed so title agents can be aware of such claims at closing. (Previous language stated the notice was effective from date of “filing”).

Effective-9/1/2011.

SB 1496-Correction Deeds-The status and use of correction deeds are no longer in jeopardy and are now established as a valid mechanism. The bill sets forth specific procedures and qualifications for correcting transfer documents.

Effective-9/1/2011.

HB 1821-HOA Resale Certificates-Buyers can now purchase HOA resale certificates directly from the HOA. A buyer and seller may still negotiate who pays for the resale certificate, but in the absence of an agreement, the new law requires the buyer to pay the fee.

Effective-1/1/2012. Note-This bills allows that The Texas Real Estate Commission (TREC) may adopt changes to the TREC form contract to reflect the new ability of the buyer to purchase resale certificates.

HB 8-Private Transfer Fees-Private transfer fees on real property are now prohibited and notice must be regularly maintained by existing beneficiaries.

Effective-Immediately.

For more specific information about these and other bills of interest, please use the online resources below:

Texas Legislature Online: http://www.legis.state.tx.us/

Texas Land Title Association: http://www.tlta.com

The RESPRO Texas Chapter will continue to monitor legislation and activities affecting our membership and promote their value.

As Chapter President, RESPRO welcomes questions and input from our membership and those interested in our mission. To find out more information about our organization, please visit us at www.RESPRO.org.  Be sure to stop by our Texas Chapter page for upcoming events and an online membership application.

Sincerely,

Doug Hollowell
RESPRO Texas Chapter, President