1-1 By: Carona (Senate Sponsor - Rosson) H.B. No. 1259
1-2 (In the Senate - Received from the House May 4, 1995;
1-3 May 5, 1995, read first time and referred to Committee on Economic
1-4 Development; May 23, 1995, reported favorably by the following
1-5 vote: Yeas 10, Nays 0; May 23, 1995, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to security obligations of a licensed seller of checks.
1-9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10 SECTION 1. Section 9, The Sale of Checks Act (Article 489d,
1-11 Vernon's Texas Civil Statutes), is amended to read as follows:
1-12 Sec. 9. Obligations of Licensee. Each person holding a
1-13 license under this Act shall at all times when the license is in
1-14 effect:
1-15 (a) Maintain the bond or securities in the amount
1-16 prescribed by Section 7 and if<;>
1-17 <(b) If> the licensee does not have on file or deposit
1-18 a bond or securities, as aforesaid, in the undiminished principal
1-19 sum of at least Five Hundred Thousand Dollars ($500,000), file
1-20 quarterly reports with the Commissioner setting forth the locations
1-21 at which he sells checks in this state not later than the 45th day
1-22 after the date of the last day of each quarter of the licensee's
1-23 fiscal year <as of January 1, April 1, July 1, and October 1 in
1-24 each year, the report for each such date being due on or before the
1-25 15th day thereafter>;
1-26 (1) Within ten (10) days following the filing of
1-27 such a report, the principal sum of the bond or securities shall be
1-28 increased to reflect any increase in the number of locations, and
1-29 may be decreased to reflect any decrease in the number of
1-30 locations;
1-31 (2) If the Commissioner shall at any time
1-32 reasonably determine that the bond or securities aforesaid are
1-33 insecure, deficient in amount, or exhausted in whole or part, the
1-34 Commissioner <he> may by written order require the filing of a new
1-35 or supplemental bond or the deposit of new or additional securities
1-36 in order to secure compliance with this Act, such order to be
1-37 complied with within thirty (30) days following service thereof
1-38 upon the licensee;
1-39 (b) <(c)> Maintain a net worth equal to or greater
1-40 than the amount then currently prescribed by Section 5 for license
1-41 applicants; <and>
1-42 (c) If the licensee has a net worth of less than Five
1-43 Million Dollars ($5 million), as shown by audited financial
1-44 statements reasonably satisfactory to the Commissioner, maintain a
1-45 surety bond or letter of credit, or have <(d) Have> on hand
1-46 permissible investments, in an amount equal to the aggregate face
1-47 amount of all outstanding checks sold in the United States<, except
1-48 traveler's checks,> for which the licensee is liable for payment,
1-49 less the amount of the surety bond or deposit maintained under
1-50 Section 7(c) of this Act; and
1-51 (d) If the licensee has a net worth of Five Million
1-52 Dollars ($5 million) or more, as shown by audited financial
1-53 statements reasonably satisfactory to the Commissioner, maintain a
1-54 surety bond or letter of credit, or have on hand permissible
1-55 investments, in an amount equal to at least 50 percent of the
1-56 aggregate face amount of all outstanding checks sold in the United
1-57 States for which the licensee is liable for payment, less the
1-58 amount of the surety bond or deposit maintained under Section 7(c)
1-59 of this Act.
1-60 (e) If the licensee maintains a surety bond or letter
1-61 of credit under Subsection (c) or (d) of this section, the surety
1-62 bond or letter of credit must be:
1-63 (1) in addition to any other bond or security
1-64 required by this Act;
1-65 (2) issued by a bonding company or insurance
1-66 company authorized to do business in this state and acceptable to
1-67 the Commissioner, in the case of a surety bond;
1-68 (3) issued by a state or national bank, savings
2-1 bank, or savings and loan association acceptable to the
2-2 Commissioner, in the case of a letter of credit; and
2-3 (4) payable to the Commissioner on behalf of any
2-4 claimants against the licensee to secure the faithful performance
2-5 of the obligations of the licensee in the receipt, handling, and
2-6 payment of money in connection with the sale of checks. <however,
2-7 this subsection does not apply to any licensee with a net worth of
2-8 not less than Five Million Dollars ($5 million) as shown by audited
2-9 financial statements reasonably satisfactory to the Commissioner;
2-10 statements filed under Section 9B of this Act may be used to
2-11 satisfy this requirement.>
2-12 SECTION 2. Notwithstanding Subsection (d), Section 9, The
2-13 Sale of Checks Act (Article 489d, Vernon's Texas Civil Statutes),
2-14 as added by this Act, a person who is subject to that subsection
2-15 and who held a license under that Act on January 1, 1995, is
2-16 required to maintain for the license permissible investments or a
2-17 bond under that section in the following amounts:
2-18 (1) during the 12-month period beginning September 1,
2-19 1995, an amount equal to not less than 10 percent of the aggregate
2-20 face amount of all outstanding checks sold in the United States for
2-21 which the licensee is liable for payment, less the amount of the
2-22 surety bond or deposit maintained under Section 7(c), The Sale of
2-23 Checks Act (Article 489d, Vernon's Texas Civil Statutes);
2-24 (2) during the 12-month period beginning September 1,
2-25 1996, an amount equal to not less than 20 percent of the aggregate
2-26 face amount of all outstanding checks sold in the United States for
2-27 which the licensee is liable for payment, less the amount of the
2-28 surety bond or deposit maintained under Section 7(c), The Sale of
2-29 Checks Act (Article 489d, Vernon's Texas Civil Statutes);
2-30 (3) during the 12-month period beginning September 1,
2-31 1997, an amount equal to not less than 30 percent of the aggregate
2-32 face amount of all outstanding checks sold in the United States for
2-33 which the licensee is liable for payment, less the amount of the
2-34 surety bond or deposit maintained under Section 7(c), The Sale of
2-35 Checks Act (Article 489d, Vernon's Texas Civil Statutes);
2-36 (4) during the 12-month period beginning September 1,
2-37 1998, an amount equal to not less than 40 percent of the aggregate
2-38 face amount of all outstanding checks sold in the United States for
2-39 which the licensee is liable for payment, less the amount of the
2-40 surety bond or deposit maintained under Section 7(c), The Sale of
2-41 Checks Act (Article 489d, Vernon's Texas Civil Statutes); and
2-42 (5) on and after September 1, 1999, the amount
2-43 required by Subsection (d), Section 9, The Sale of Checks Act
2-44 (Article 489d, Vernon's Texas Civil Statutes), as added by this
2-45 Act.
2-46 SECTION 3. This Act takes effect September 1, 1995.
2-47 SECTION 4. The importance of this legislation and the
2-48 crowded condition of the calendars in both houses create an
2-49 emergency and an imperative public necessity that the
2-50 constitutional rule requiring bills to be read on three several
2-51 days in each house be suspended, and this rule is hereby suspended.
2-52 * * * * *