HBA-ATS, TYH H.B. 2223 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 2223
By: Solomons
Financial Institutions
6/4/1999
Enrolled



BACKGROUND AND PURPOSE 

The legislature adopted the Sale of Checks Act (Act) in 1963.  The
regulatory scheme encompassed the payment of $50 to obtain a license.
After a large money order company filed for bankruptcy and Texas citizens
lost money, the legislature adopted amendments establishing minimum net
worth and bonding requirements and giving the Texas Department of Banking
(department) examination and enforcement authority.  Legislative amendments
during the 1990s expanded the definition of "check" to include electronic
transmittals, increased bond amounts, imposed reporting requirements, and
provided rulemaking and additional enforcement authority to the department.

Prior to the 76th Legislature, some large license holders were not able to
provide audited financial statements after the end of the fiscal year
because the law did not provide flexibility to permit an extension of time
for filing comprehensive financial reports.  H.B. 2223 requires a license
holder, before April 15 of each year, or a later date the banking
commissioner of Texas (commissioner) approves in writing for good cause
shown, to file an annual audited unconsolidated financial statement dated
as of the last day of the license holder's fiscal year that ended in the
immediately preceding calendar year.  H.B. 2223 also requires a license
holder, unless waived by the commissioner, to file within 45 days of the
last day of each quarter of the license holder's fiscal year with the
commissioner a certification of net worth and a report, rather than an
unconsolidated financial statement and required reports, regarding
maintaining permissible investments. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 152.305, Finance Code, as follows:

Sec. 152.305.  FINANCIAL STATEMENTS AND REPORTS.  (a) Requires a license
holder, unless waived by the banking commissioner of Texas (commissioner),
to file within 45 days of the last day of each quarter of the license
holder's fiscal year with the commissioner a certification of net worth and
a report regarding maintaining permissible investments under Section
152.301(Minimum Security and Net Worth of License Holder) and 152.3015
(Phase-in of Minimum Security Requirement for Certain License Holders) for
the preceding quarter submitted on forms furnished by the commissioner.
Deletes text specifying an unconsolidated financial statement as part of
the report.  Makes conforming changes. 

(b) Requires a license holder, before April 15 of each year, or a later
date the commissioner approves in writing for good cause shown, to file an
annual audited unconsolidated financial statement dated as of the last day
of the license holder's fiscal year that ended in the immediately preceding
calendar year.  Deletes text specifying the time period to be within 120
days after the last day of the license holder's fiscal year. 

SECTION 2.   Repealer: Section 152.303, Finance Code (Report of Business
Locations).    This section relates to the reporting of business locations
for a license holder that does not have on file a bond or maintain deposits
in the undiminished principal amount of at least $500,000. 

 SECTION 3.  Effective date: September 1, 1999.

SECTION 4.  Emergency clause.