HBA-TYH H.B. 2223 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2223 By: Solomons Financial Institutions 3/24/1999 Introduced BACKGROUND AND PURPOSE The legislature adopted the Sale of Checks Act (Act) in 1963. The regulatory scheme was to pay $50 and 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. Some large license holders are not able to obtain audited financial statements within 45 days after the end of the fiscal year. Currently, the law does not provide flexibility to permit an extension of time for filing comprehensive financial reports. H.B. 2223 gives the banking commissioner of Texas the authority to extend the time period for good cause shown. H.B. 2223 also permits the department to consider whether to allow some license holders to provide fiscal reports to examiners during an examination, rather than filing them with the department as is currently required. 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 within120 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.