BILL ANALYSIS
S.B. 871
By: Madla (Carona)
May 18, 1995
Committee Report (Unamended)
BACKGROUND
The consumer credit commissioner has authority to assess civil
money penalties under the Texas Pawnshop Act (Article 5069-51.01,
et seq., V.T.C.S.) but has no authority to do so under Subtitle II,
Title 79, V.T.C.S. The consumer credit commissioner licenses and
regulates various lenders and creditors under the purview of
Subtitle II. Currently, the only administrative remedy available
to the commissioner is suspension and revocation of licenses.
Often a civil money penalty is more appropriate, and some lenders
have requested the opportunity to pay a civil money penalty in lieu
of suspension, but that alternative is not available under current
law.
PURPOSE
As proposed, S.B. 871 authorizes the consumer credit commissioner
to assess civil money penalties under Subtitle II, Title 79,
V.T.C.S.
RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 7, Article 5069-2.03, V.T.C.S., to
require an appeal to an order of the consumer credit commissioner
(commissioner), requiring a person to refrain or desist from
violation, to be made in accordance with Chapter 2001, Government
Code.
SECTION 2. Amends Article 5069-1.01, et seq., V.T.C.S., by adding
Article 2.03A, as follows:
Art. 2.03A. ADMINISTRATIVE PENALTY; RESTITUTION ORDER. (a)
Authorizes the commissioner to assess an administrative
penalty against a person who knowingly and wilfully violates
this subtitle, Chapter 9 or 15 of this title, or a rule
adopted under this subtitle or Chapter 9 or 15 of this title,
and to make a violator make restitution to a person injured by
the violation.
(b) Prohibits the amount of an administrative penalty from
exceeding $1,000 for each day and each act of violation, and
the aggregate amount during one year may not exceed $5,000
for each business location at which an element of a
violation occurred, with a limit of $50,000 for violations
at 11 or more locations.
(c) Sets forth the considerations of the commissioner
required to determine the amount of an administrative
penalty.
(d) Authorizes the commissioner, if the commissioner
determines that a violation occurred, to issue a report
stating the facts on which the determination is based and a
recommendation on imposition and the amount of a penalty.
(e) Requires the commissioner to give written notice of the
report, by certified mail, to the violator within 14 days
after the report is issued. Requires the notice to include
a brief summary of the alleged violation and a statement of
the amount of the recommended penalty, and to inform the
person that the person has a right to a hearing on the
occurrence of the violation, the amount of the penalty, or
both.
(f) Authorizes the person, within 20 days after the person
receives notice, to either accept the determination and
recommended penalty in writing or make a written request for
a hearing.
(g) Requires the commissioner, if the person accepts the
determination and recommended penalty, to approve the
determination by order and impose the recommended penalty.
(h) Requires the commissioner, if the person requests a
hearing or fails to respond timely to the notice, to set a
hearing and give notice, by certified mail, of the hearing
to the person. Requires the hearing to be held by an
administrative law judge of the State Office of
Administrative Hearings. Requires the judge to make
findings of fact and conclusions of law and promptly issue
a proposal for a decision about the occurrence of the
violation and the proposed penalty. Authorizes the
commissioner, based on the findings of fact, conclusions of
law, and proposal for a decision, to find by order that a
violation has occurred and impose a penalty, or to find that
no violation has occurred.
(i) Requires the notice of the commissioner's order to
include a statement of the right of the person to judicial
review of the order.
(j) Provides that judicial review of the order is instituted
by filing a petition under Chapter 2001G, Government Code,
and is under the substantial evidence rule.
(k) Authorizes the court, if it sustains the occurrence of
the violation, to uphold or reduce the amount of the
penalty, and order the person to pay the penalty. Requires
the court, if it does not sustain the occurrence of the
violation, to order that no penalty is owed.
(l) Requires the court to proceed under this subsection when
the judgment of the court becomes final and to order the
amount of the penalty plus accrued interest to be remitted
to the person, if the person paid the penalty and if the
penalty was reduced or not upheld by the court. Requires
the rate of interest, which is set at the rate authorized by
Article 1.05, to be paid for the period the court held the
penalty.
(m) Authorizes the court to authorize the commissioner to
recover from a person who pays an administrative penalty or
restitution amount, or both, reasonable expenses incurred in
obtaining the ordered amount.
(n) Requires a penalty collected under this section to be
deposited in the general revenue fund.
(o) Subjects all proceedings under this article to Chapter
2001, Government Code.
(p) Provides that an administrative penalty or restitution
order under this article is in addition to any other
enforcement authority provided by law.
SECTION 3. Amends Article 5069-8.03, V.T.C.S., to make a person
guilty of a misdemeanor who, without first securing a license,
engages in business under the scope of Chapter 3, 4, 5, or 15 of
this Title.
SECTION 4. Makes application of this Act prospective.
SECTION 5. Effective date: September 1, 1995.
SECTION 6. Emergency clause.
SUMMARY OF COMMITTEE ACTION
The Committee considered SB 871 in a formal meeting on May 18,
1995.
The bill was reported favorably without amendments, with the
recommendation that it do pass and be printed and be sent to the
Committee on Local and Consent Calendars, by a record vote of: 5
Ayes, 0 Nays, 0 PNV, 4 Absent.