By: Patterson S.B. No. 752
A BILL TO BE ENTITLED
AN ACT
1-1 relating to regulation of businesses conducting currency exchange,
1-2 transportation, or transmission; creating offenses and providing
1-3 penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Section 1, Article 350, Revised Statutes, is
1-6 amended by amending Subdivisions (5) and (6) and by adding
1-7 Subdivision (11) to read as follows:
1-8 (5) "Currency exchange, transportation, or
1-9 transmission business" means a person who is engaging in currency
1-10 exchange, currency transportation, or currency transmission as a
1-11 service or for profit.
1-12 (6) "Currency transmission" means engaging in the
1-13 business of receiving currency for the purpose of transmitting the
1-14 currency or its equivalent by wire, computer modem, facsimile, or
1-15 other electronic means, or through the use of a financial
1-16 institution, financial intermediary, the federal reserve system, or
1-17 other <a similar electronic or> funds transfer network.
1-18 (11) "Currency transportation" means engaging in the
1-19 business of physically transporting currency from one location to
1-20 another.
1-21 SECTION 2. Section 2, Article 350, Revised Statutes, is
1-22 amended to read as follows:
1-23 Sec. 2. LICENSE REQUIRED. Except as provided by Section 3
1-24 of this article, a person may not engage in the business of
2-1 currency exchange, transportation, or transmission in this state
2-2 without a license issued under this article.
2-3 SECTION 3. Section 3, Article 350, Revised Statutes, is
2-4 amended by amending Subsection (c) and adding Subsection (f) to
2-5 read as follows:
2-6 (c) A retailer, wholesaler, or service provider who, in the
2-7 ordinary course of business, accepts currency of a country or
2-8 government other than the United States in payment for goods sold
2-9 or services provided is eligible for an exemption from licensing
2-10 under this article. A person requesting an exemption under this
2-11 subsection must notify <annually file an application with> the
2-12 commissioner in writing that the person qualifies for and intends
2-13 to assert the exemption and must certify that the person will
2-14 conduct the person's currency exchange activities in a manner that
2-15 maintains the person's eligibility for the exemption<, accompanied
2-16 by a nonrefundable license exemption application fee in an amount
2-17 to be set by the commissioner to recover the cost of administering
2-18 this subsection. The commissioner shall grant an exemption to a
2-19 person under this subsection if the commissioner determines that
2-20 the person making the request is eligible under this subsection>.
2-21 The commissioner in accordance with the examination provisions of
2-22 this article may examine a person to verify the exempt status. The
2-23 retailer, wholesaler, or service provider is not eligible for an
2-24 exemption <may not be exempted under this subsection or an
2-25 exemption may be suspended or revoked> if:
2-26 (1) the value of the goods or services purchased in a
2-27 single transaction exceeds $10,000;
3-1 (2) the change given or made as a result of the
3-2 transaction exceeds $100;
3-3 (3) an attempt is made to structure transactions in a
3-4 way to evade the licensing requirements of this article or to avoid
3-5 using a licensed currency exchange business;
3-6 (4) the retailer, wholesaler, or service provider is
3-7 engaged in the business of cashing checks, drafts, or other
3-8 monetary instruments for a fee or other consideration and is not
3-9 otherwise exempted from licensing under this article; or
3-10 (5) the retailer, wholesaler, or service provider
3-11 would not be eligible for a license under Section 8 of this
3-12 article.
3-13 (f) A person engaged in the business of currency
3-14 transportation who holds a permit issued under Section 6-dd,
3-15 Chapter 314, Acts of the 41st Legislature, Regular Session, 1929
3-16 (Article 911b, Vernon's Texas Civil Statutes), is not required to
3-17 be licensed under this article, provided that such a permit does
3-18 not authorize the person to engage in the business of currency
3-19 exchange or transmission without a license issued under this
3-20 article.
3-21 SECTION 4. Section 8, Article 350, Revised Statutes, is
3-22 amended by adding Subsection (e) to read as follows:
3-23 (e) A person is not eligible for a license, and a person who
3-24 holds a license shall surrender the license to the commissioner, if
3-25 the person or a principal of the person has at any time been
3-26 convicted of:
3-27 (1) a felony under Chapter 34, Penal Code, or a
4-1 similar provision of the laws of another state or the United States
4-2 involving the laundering of money that is the product of or
4-3 proceeds from criminal activity; or
4-4 (2) a felony violation of 31 U.S.C. Section 5313 or
4-5 5324 or a rule adopted under those sections.
4-6 SECTION 5. Section 10, Article 350, Revised Statutes, is
4-7 amended by amending Subsection (a) and by adding Subsections (c)
4-8 and (d) to read as follows:
4-9 (a) A person who is licensed under this article shall post a
4-10 bond with a qualified surety company doing business in this state
4-11 that is acceptable to the commissioner or an irrevocable letter of
4-12 credit issued by a qualified financial institution that is
4-13 acceptable to the commissioner. The bond or letter of credit shall
4-14 be in an amount determined by the commissioner. The commissioner
4-15 shall determine the amount of the bond or letter of credit based on
4-16 the dollar volume of the licensee's currency exchange or
4-17 transmission business and the number of locations from which the
4-18 person operates, but the bond or letter of credit must be at least
4-19 $25,000 for a person conducting a currency exchange business and at
4-20 least $300,000 for a person conducting a currency transmission or
4-21 currency transportation business.
4-22 (c) Instead of the bond or letter of credit required under
4-23 Subsection (a) of this section, a licensee, with the prior written
4-24 permission of the commission, may deposit with the commissioner
4-25 United States currency or cash equivalent instruments or securities
4-26 acceptable to the commissioner. The amount of currency or the fair
4-27 market value of the instruments or securities must be an amount
5-1 equal to or exceeding the amount required for the bond or letter of
5-2 credit under Subsection (a) of this section. The commissioner may
5-3 adopt rules to implement this subsection.
5-4 (d) A fee under Section 5 of this article, expenses under
5-5 Section 11 of this article, or a civil penalty under Section 15 of
5-6 this article may be paid out of and collected from the proceeds of
5-7 a bond, letter of credit, or deposit under this section.
5-8 SECTION 6. Article 350, Revised Statutes, is amended by
5-9 adding Section 13A to read as follows:
5-10 Sec. 13A. FRAUDULENTLY STRUCTURED TRANSACTION. (a) A
5-11 person, for the purpose of evading a reporting or record-keeping
5-12 requirement of 31 U.S.C. Section 5313, 31 C.F.R. Part 103, Article
5-13 351, Revised Statutes, this article, or a rule adopted under this
5-14 article, may not with respect to a transaction with a licensee:
5-15 (1) cause or attempt to cause the licensee to:
5-16 (A) not maintain a record or file a report
5-17 required by a law listed by this subsection; or
5-18 (B) maintain a record or file a report required
5-19 by a law listed by this subsection that contains a material
5-20 omission or misstatement of fact; or
5-21 (2) fraudulently structure the transaction.
5-22 (b) For the purposes of this article, a person fraudulently
5-23 structures a transaction if the person conducts or attempts to
5-24 conduct a transaction in any amount of currency with a licensee in
5-25 a manner having the purpose of evading a record-keeping or
5-26 reporting requirement of a law listed by Subsection (a) of this
5-27 section, including the division of a single amount of currency into
6-1 smaller amounts or the conduct of a transaction or series of
6-2 transactions in amounts equal to or less than the reporting or
6-3 record-keeping threshold of a law listed by Subsection (a) of this
6-4 section.
6-5 (c) A transaction is not required to exceed a record-keeping
6-6 or reporting threshold of a single licensee on a single day to be a
6-7 fraudulently structured transaction.
6-8 SECTION 7. Subsection (a), Section 14, Article 350, Revised
6-9 Statutes, is amended to read as follows:
6-10 (a) A person commits an offense if the person knowingly:
6-11 (1) violates a requirement of this article;
6-12 (2) makes a false, fictitious, or fraudulent
6-13 statement, representation, or entry in a record or report required
6-14 under 31 U.S.C. Section 5313, 31 C.F.R. Part 103, Article 351,
6-15 Revised Statutes, this article, or a rule adopted under this
6-16 article; or
6-17 (3) fraudulently structures or attempts to
6-18 fraudulently structure a transaction in violation of Section 13A of
6-19 this article.
6-20 SECTION 8. Section 21, Article 350, Revised Statutes, is
6-21 amended to read as follows:
6-22 Sec. 21. HEARINGS. (a) A license may not be denied,
6-23 revoked, or suspended except after notice and opportunity for <a>
6-24 hearing on that action. The notice must:
6-25 (1) be in the form specified by Section 2001.052,
6-26 Government Code;
6-27 (2) be given by registered or certified mail addressed
7-1 to the applicant or licensee at the address stated on the
7-2 application or license; and
7-3 (3) fix a date, not less than 10 days after the date
7-4 it is mailed, by which the applicant or licensee must request a
7-5 hearing.
7-6 (b) If a hearing is not requested by the date specified in
7-7 the notice, the proposed action becomes final. If a hearing is
7-8 requested, it shall be conducted in accordance with Chapter 2001,
7-9 Government Code (Administrative Procedure Act). <The commissioner
7-10 shall give the applicant or licensee at least 20 days' written
7-11 notice of the time and place of the hearing by registered or
7-12 certified mail addressed to the principal place of business of the
7-13 applicant or licensee.>
7-14 (c) An order of the commissioner denying or revoking a
7-15 license must state the grounds on which the denial or revocation is
7-16 based and is not effective until the 21st day after the date
7-17 written notice has been sent by registered or certified mail to the
7-18 applicant or licensee at the address stated on the application or
7-19 license <principal place of business>. If the commissioner finds
7-20 that an imminent peril to public health, safety, or welfare is
7-21 threatened, the commissioner may make the order effective
7-22 immediately. An applicant or <A> licensee may appeal a finding or
7-23 order of the commissioner under the substantial evidence rule as
7-24 provided by Chapter 2001, Government Code (<the> Administrative
7-25 Procedure <and Texas Register> Act) <(Article 6252-13a, Vernon's
7-26 Texas Civil Statutes). Notice under this section is effective on
7-27 the date the notice is placed in the mail>.
8-1 SECTION 9. This Act takes effect September 1, 1995.
8-2 SECTION 10. The importance of this legislation and the
8-3 crowded condition of the calendars in both houses create an
8-4 emergency and an imperative public necessity that the
8-5 constitutional rule requiring bills to be read on three several
8-6 days in each house be suspended, and this rule is hereby suspended.