BILL ANALYSIS



H.B. 1074
By: West
April 12, 1995
Committee Report (Unamended)


BACKGROUND

Retailers who accept personal checks as payment for merchandise may
encounter problems because of the unavoidable delay between the
time the check is accepted and the time it is presented for
payment.  Individuals may write checks to business owners for
merchandise and cancel or stop payment on the check before the
seller has the opportunity to cash or deposit the check.  In some
instances, the merchandise is never returned.  This can result in
marked financial loss for the business establishment.

Current law (Penal Code, Section 31.06), establishes a criminal
intent to deprive the owner of property or services if the buyer
pays for the product/service with a check drawn on an account with
insufficient funds or a non-existent account.  Such an intent,
according to Note of Decision #5 of the same section, is not
established if an individual stops payment on a check.  No
distinction is drawn here between those stop-payment orders
followed by a return of the merchandise and those fraudulent orders
made without a return of merchandise.  Given the absence of a clear
establishment of criminal wrongdoing, law enforcement officers and
prosecutors have been reticent to pursue such violations.

PURPOSE

If enacted, H.B 1074 would more fully distinguish between
fraudulent stop-payment orders and legitimate stop-payment orders. 
The former essentially constitutes theft by virtue of the
individual's refusing to return the merchandise after requesting
the stop-payment.  H.B. 1074 would also provide a mechanism in the
law whereby officials could properly define, pursue, and prosecute
fraudulent stop-payment orders.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency, or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 31.06, Penal Code, by amending
Subsection (b) and adding Subsection (f) as follows:

     (b) adds Subsection (f)(3) as a condition in which notice of
     presumption for theft by check may be actual notice or in
     writing.

     (f) includes an actor's presumption of intent (and, therefore,
     grounds for    prosecution) to deprive the owner of property
     if all of a number of preconditions are met:
           (1) the actor stopped payment on a check;
           (2) the bank/drawee refused payment to check holder
           within 30 days of issue;
           (3) the owner gave the actor notice of this refusal and
           demanded repayment or return of property; and
           (4) the actor failed to:
               (A) pay holder within 10 days following demand for
               payment; or
               (B) return property to owner within 10 days
               following the demand for return of property.

SECTION 2.  Change in law made by this Act applies only to those
offenses committed on or after the effective date.

SECTION 3.  Effective date:  September 1, 1995.

SECTION 4.  Emergency clause.

SUMMARY OF COMMITTEE ACTION

HB 1074 was considered by the full committee in a public hearing on
March 13, 1995.  The following person testified in favor or the
bill:

     Harold Moore, representing himself.

HB 1074 was left pending in committee.  HB 1074 was considered by
the full committee in a formal meeting on April 12, 1995.  HB 1074
was reported favorably without amendment, with the recommendation
that it do pass and be printed by a record vote of 6 ayes, 0 nays,
0 pnv, and 3 absent.