HBA-NLM C.S.H.B. 1511 76(R)BILL ANALYSIS
Office of House Bill AnalysisC.S.H.B. 1511
By: Marchant
Financial Institutions
3/25/1999
Committee Report (Substituted)
BACKGROUND AND PURPOSE
The 75th Legislature passed H.B. 10, which provided for nonsubstantive
revisions to Texas statutes relating to finance, including the Texas
Banking Act, Texas Savings and Loan Act, Texas Savings Bank Act, Texas
Credit Union Act, and various other statutes relating to financial
institutions, businesses, and credit transactions. H.B. 10 included
conforming amendments, repeals, and penalties for the purpose of making the
statutes more accessible without altering the sense, meaning, or effect of
the law. The Texas Pawnshop Act was also among the provisions addressed by
H.B. 10.
C.S.H.B. 1511 further clarifies language included in the Texas Pawnshop Act
and updates existing sections of the Act. This bill grants exclusive
authority regarding the operation of pawnshops to the legislature, rather
than to the consumer credit commissioner (commissioner). However, this
bill authorizes the commissioner to regulate a business practice that
requires a pawnshop license.
RULEMAKING AUTHORITY
It is the opinion of the Office of House Bill Analysis that this bill
modifies rulemaking authority previously granted to the consumer credit
commissioner in SECTION 7 (Section 371.155, Finance Code) and SECTION 16
(Sections 371.184 and Section 371.185, Finance Code) of this bill.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 371.005, Finance Code, to grant the legislature
the exclusive authority regarding the operation of pawnshops, except for a
matter delegated by this chapter to the consumer credit commissioner
(commissioner). Provides that the commissioner has the authority to
regulate only a business practice that requires a pawnshop license.
SECTION 2. Amends Section 371.006(c), Finance Code, to provide that the
rule may not take effect before the 21st day after the earliest date on
which all of the copies have been mailed.
SECTION 3. Amends Section 371.066(a), Finance Code, to include that a
temporary pawnshop license may be issued on receipt of an application to
owners that are substantially identical to those of a pawnshop in operation
at the time of receipt of the application.
SECTION 4. Amends Section 371.072, Finance Code, to define "net assets" as
the term was defined at the time the license was issued and to make a
conforming change.
SECTION 5. Amends Section 371.153(a), Finance Code, to delete the
requirement for a pawnbroker to notify the commissioner before the
pawnbroker conducts certain business.
SECTION 6. Amends Section 371.154 (b), Finance Code, to require a
pawnbroker to secure a bond, rather than maintain a bond.
SECTION 7. Amends Section 371.155, Finance Code, to delete the provision
that a required safe must be a type approved by the pawnbroker's insurance
underwriter. Deletes the authority of the commissioner to adopt rules
related to the keeping of firearms used solely for the security of the
pawnshop by the pawnbroker.
SECTION 8. Amends Section 371.162, Finance Code, to provide an exception
to this section under Section 371.163(a) (Lost or Destroyed Ticket),
Finance Code, which states that if a pawn ticket is lost, destroyed, or
stolen, the pledgor may notify the pawnbroker of that fact in writing, and
that receipt of this notice invalidates the pawn ticket if the pledged
goods have not been redeemed. Makes a nonsubstantive change.
SECTION 9. Amends Section 371.163(c), Finance Code, to delete the
requirement for a pawnbroker to record on a written statement the
identifying information required by Section 371.157(2) (Pawn Tickets).
Redesignates existing Subdivision (3) to (2).
SECTION 10. Amends Section 371.175(a), Finance Code, to increase from
more than $10 to more than $25 the retail or sale value of an item of goods
to be identified by a tag or similar means.
SECTION 11. Amends Section 371.176, Finance Code, to prohibit a pawnbroker
from accepting a pledge from, rather than entering a pawn transaction with,
a person under 18 years of age.
SECTION 12. Amends Section 371.182, Finance Code, to authorize, rather
than require, the commissioner to designate a reasonable hold period.
Limits the hold period to no more than 10 days.
SECTION 13. Amends Section 371.258(b), Finance Code, to provide that the
commissioner may reinstate a suspended pawnshop license or issue a new
license if no condition exists that would have justified refusal to
originally issue the license.
SECTION 14. Amends Section 371.306(a), Finance Code, to delete the
requirement for a pawnbroker to be liable for a pawn service charge imposed
by the pawnbroker that is greater than the amount authorized by this
chapter and for a pawnbroker to return the goods pledged in connection with
the pawn transaction on request of the pledgor and payment of the balance
due.
SECTION 15. Repealer: Sections 371.184 (Displays and Signs) and 371.185
(Maintenance of Premises), Finance Code.
SECTION 16. (a) Effective date: September 1, 1999.
(b) Provides that any rules adopted by the
commissioner relating to the use of an outdoor
display or sign at a pawnshop or to the maintenance of pawnshop or to the
maintenance of pawnshop premises under Section 371.184 or 371.185, Finance
Code, repealed by this Act, are void.
SECTION 17. Emergency clause.
COMPARISON OF ORIGINAL TO SUBSTITUTE
C.S.H.B. 1511 modifies the original in SECTION 1 by deleting the reference
to any other provision of this chapter.
C.S.H.B. 1511 modifies the original by adding a new SECTION 2 to amend
Section 371.006(c), Finance Code, to provide that the rule may not take
effect before the 21st day after the earliest date on which all of the
copies have been mailed. This bill redesignates proposed SECTIONS 2-3 to
SECTIONS 3-4 in the substitute.
C.S.H.B. 1511 modifies the original by adding a new SECTION 5 to amend
Section 371.153(a), Finance Code, to delete the requirement for a
pawnbroker to notify the commissioner before the pawnbroker conducts
certain business. This bill redesignates proposed SECTION 4 to SECTION 6
in the substitute.
C.S.H.B. 1511 modifies the original by adding a new SECTION 7 to amend
Section 371.155, Finance Code, to delete the provision that a required safe
must be a type approved by the pawnbroker's insurance underwriter. Deletes
the authority of the commissioner to adopt rules related to the keeping of
firearms used solely for the security of the pawnshop by the pawnbroker.
This bill redesignates proposed SECTION 5 to SECTION 8 in the
substitute.
C.S.H.B. 1511 modifies the original by deleting proposed SECTION 8 to
amend Section 371.306(a), Finance Code, relating to the requirement that a
pawnbroker be liable for a pawn service charge imposed by the pawnbroker
that is greater than the amount authorized by this chapter.
C.S.H.B. 1511 modifies the original by adding a new SECTION 9 to amend
Section 371.163(c), Finance Code, to delete the requirement for a
pawnbroker to record on a written statement the identifying information
required by Section 371.157(2). Redesignates existing Subdivision (3) to
(2).
C.S.H.B. 1511 modifies the original by adding a new SECTION 10 to amend
Section 371.175(a), Finance Code, to increase the retail or sale value
identified by a tag or similar means from more than $10 to more than $25.
This bill redesignates proposed SECTION 6 to SECTION 11 in the substitute.
C.S.H.B. 1511 modifies the original by adding a new SECTION 12 to amend
Section 371.182, Finance Code, to authorize, rather than require the
commissioner to designate a reasonable hold period not to exceed 10 days.
This bill redesignates proposed SECTION 7 to SECTION 13 in the substitute.
C.S.H.B. 1511 modifies the original SECTION 13 to make a nonsubstantive
change.
C.S.H.B. 1511 modifies the original by adding a new SECTION 14 to repeal
Sections 371.184 (Displays and Signs) and 371.185 (Maintenance of
Premises), Finance Code.
C.S.H.B. 1511 redesignates proposed SECTIONS 9-10 to SECTIONS 15-16 in the
substitute. This bill modifies SECTION 15 (redesignated from SECTION 9 of
the original) to provides that any rules adopted by the commissioner
relating to the use of an outdoor display or sign at a pawnshop or to the
maintenance of pawnshop or to the maintenance of pawnshop premises under
Section 371.184 or 371.185, Finance Code, repealed by this Act, are void.