Sec. 961.203. CLAIM FUND; EXPENSE FUND. (a) A nonprofit legal services corporation shall maintain a claim fund and an expense fund.
(b) The claim fund is composed of:
(1) application fees; and
(2) at least 70 percent of the regular payments by participants, except the department may adjust this percentage on a showing that the adjustment:
(A) is in the best interest of the persons receiving legal services under the contract at the time of the adjustment; or
(B) is necessary for the corporation's development during its first year of existence.
(c) Money in the claim fund must be maintained as cash or in demand deposits or invested in:
(1) certificates of deposit, share accounts, and time deposits in a public bank or savings and loan association the deposits of which are insured by a federal government agency; or
(2) obligations of a state or the federal government.
(d) Money in the expense fund may be invested only in legal investments for the capital, surplus, and contingency funds of a stock life insurance company.
(e) Net income from an investment of money in a fund accrues to that fund.
(f) Money in the claim fund may be disbursed only to pay:
(1) a valid claim;
(2) the cost of settling a contested claim;
(3) tax on the fund's income;
(4) a refund of a fee deposited in the fund;
(5) an expense directly incurred on or for preservation of an investment of the fund, including the cost of transferring a security; or
(6) an amount as provided by a contract under Section 961.207.
Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.
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