1-1 By: Patterson S.B. No. 752
1-2 (In the Senate - Filed February 24, 1995; February 27, 1995,
1-3 read first time and referred to Committee on Economic Development;
1-4 April 12, 1995, reported adversely, with favorable Committee
1-5 Substitute by the following vote: Yeas 9, Nays 0; April 12, 1995,
1-6 sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 752 By: Patterson
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to regulation of businesses conducting currency exchange,
1-11 transportation, or transmission; creating offenses and providing
1-12 penalties.
1-13 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-14 SECTION 1. Section 1, Article 350, Revised Statutes, is
1-15 amended by amending Subdivisions (5) and (6) and by adding
1-16 Subdivision (11) to read as follows:
1-17 (5) "Currency exchange, transportation, or
1-18 transmission business" means a person who is engaging in currency
1-19 exchange, currency transportation, or currency transmission as a
1-20 service or for profit.
1-21 (6) "Currency transmission" means engaging in the
1-22 business of receiving currency for the purpose of transmitting the
1-23 currency or its equivalent by wire, computer modem, facsimile, or
1-24 other electronic means, or through the use of a financial
1-25 institution, financial intermediary, the federal reserve system, or
1-26 other <a similar electronic or> funds transfer network.
1-27 (11) "Currency transportation" means engaging in the
1-28 business of physically transporting currency from one location to
1-29 another.
1-30 SECTION 2. Section 2, Article 350, Revised Statutes, is
1-31 amended to read as follows:
1-32 Sec. 2. LICENSE REQUIRED. Except as provided by Section 3
1-33 of this article, a person may not engage in the business of
1-34 currency exchange, transportation, or transmission in this state
1-35 without a license issued under this article.
1-36 SECTION 3. Section 3, Article 350, Revised Statutes, is
1-37 amended by amending Subsection (c) and adding Subsection (f) to
1-38 read as follows:
1-39 (c) A retailer, wholesaler, or service provider who, in the
1-40 ordinary course of business, accepts currency of a country or
1-41 government other than the United States in payment for goods sold
1-42 or services provided is eligible for an exemption from licensing
1-43 under this article. A person requesting an exemption under this
1-44 subsection must notify <annually file an application with> the
1-45 commissioner in writing that the person qualifies for and intends
1-46 to assert the exemption and must certify that the person will
1-47 conduct the person's currency exchange activities in a manner that
1-48 maintains the person's eligibility for the exemption<, accompanied
1-49 by a nonrefundable license exemption application fee in an amount
1-50 to be set by the commissioner to recover the cost of administering
1-51 this subsection. The commissioner shall grant an exemption to a
1-52 person under this subsection if the commissioner determines that
1-53 the person making the request is eligible under this subsection>.
1-54 The commissioner in accordance with the examination provisions of
1-55 this article may examine a person to verify the exempt status. The
1-56 retailer, wholesaler, or service provider is not eligible for an
1-57 exemption <may not be exempted under this subsection or an
1-58 exemption may be suspended or revoked> if:
1-59 (1) the value of the goods or services purchased in a
1-60 single transaction exceeds $10,000;
1-61 (2) the change given or made as a result of the
1-62 transaction exceeds $100;
1-63 (3) an attempt is made to structure transactions in a
1-64 way to evade the licensing requirements of this article or to avoid
1-65 using a licensed currency exchange business;
1-66 (4) the retailer, wholesaler, or service provider is
1-67 engaged in the business of cashing checks, drafts, or other
1-68 monetary instruments for a fee or other consideration and is not
2-1 otherwise exempted from licensing under this article; or
2-2 (5) the retailer, wholesaler, or service provider
2-3 would not be eligible for a license under Section 8 of this
2-4 article.
2-5 (f) A person engaged in the business of currency
2-6 transportation who holds a permit issued under Section 6-dd,
2-7 Chapter 314, Acts of the 41st Legislature, Regular Session, 1929
2-8 (Article 911b, Vernon's Texas Civil Statutes), is not required to
2-9 be licensed under this article, provided that such a permit does
2-10 not authorize the person to engage in the business of currency
2-11 exchange or transmission without a license issued under this
2-12 article.
2-13 SECTION 4. Section 8, Article 350, Revised Statutes, is
2-14 amended by adding Subsection (e) to read as follows:
2-15 (e) A person is not eligible for a license, and a person who
2-16 holds a license shall surrender the license to the commissioner, if
2-17 the person or a principal of the person has at any time been
2-18 convicted of:
2-19 (1) a felony under Chapter 34, Penal Code, or a
2-20 similar provision of the laws of another state or the United States
2-21 involving the laundering of money that is the product of or
2-22 proceeds from criminal activity; or
2-23 (2) a felony violation of 31 U.S.C. Section 5313 or
2-24 5324 or a rule adopted under those sections.
2-25 SECTION 5. Section 10, Article 350, Revised Statutes, is
2-26 amended by amending Subsection (a) and by adding Subsections (c)
2-27 and (d) to read as follows:
2-28 (a) A person who is licensed under this article shall post a
2-29 bond with a qualified surety company doing business in this state
2-30 that is acceptable to the commissioner or an irrevocable letter of
2-31 credit issued by a qualified financial institution that is
2-32 acceptable to the commissioner. The bond or letter of credit shall
2-33 be in an amount determined by the commissioner. The commissioner
2-34 shall determine the amount of the bond or letter of credit based on
2-35 the dollar volume of the licensee's currency exchange or
2-36 transmission business and the number of locations from which the
2-37 person operates, but the bond or letter of credit must be at least
2-38 $25,000 for a person conducting a currency exchange business and at
2-39 least $300,000 for a person conducting a currency transmission or
2-40 currency transportation business.
2-41 (c) Instead of the bond or letter of credit required under
2-42 Subsection (a) of this section, a licensee, with the prior written
2-43 permission of the commission, may deposit with the commissioner
2-44 United States currency or cash equivalent instruments or securities
2-45 acceptable to the commissioner. The amount of currency or the fair
2-46 market value of the instruments or securities must be an amount
2-47 equal to or exceeding the amount required for the bond or letter of
2-48 credit under Subsection (a) of this section. The commissioner may
2-49 adopt rules to implement this subsection.
2-50 (d) A fee under Section 5 of this article, expenses under
2-51 Section 11 of this article, or a civil penalty under Section 15 of
2-52 this article may be paid out of and collected from the proceeds of
2-53 a bond, letter of credit, or deposit under this section.
2-54 SECTION 6. Article 350, Revised Statutes, is amended by
2-55 adding Section 13A to read as follows:
2-56 Sec. 13A. FRAUDULENTLY STRUCTURED TRANSACTION. (a) A
2-57 person, for the purpose of evading a reporting or record-keeping
2-58 requirement of 31 U.S.C. Section 5313, 31 C.F.R. Part 103, Article
2-59 351, Revised Statutes, this article, or a rule adopted under this
2-60 article, may not with respect to a transaction with a licensee:
2-61 (1) cause or attempt to cause the licensee to:
2-62 (A) not maintain a record or file a report
2-63 required by a law listed by this subsection; or
2-64 (B) maintain a record or file a report required
2-65 by a law listed by this subsection that contains a material
2-66 omission or misstatement of fact; or
2-67 (2) fraudulently structure the transaction.
2-68 (b) For the purposes of this article, a person fraudulently
2-69 structures a transaction if the person conducts or attempts to
2-70 conduct a transaction in any amount of currency with a licensee in
3-1 a manner having the purpose of evading a record-keeping or
3-2 reporting requirement of a law listed by Subsection (a) of this
3-3 section, including the division of a single amount of currency into
3-4 smaller amounts or the conduct of a transaction or series of
3-5 transactions in amounts equal to or less than the reporting or
3-6 record-keeping threshold of a law listed by Subsection (a) of this
3-7 section.
3-8 (c) A transaction is not required to exceed a record-keeping
3-9 or reporting threshold of a single licensee on a single day to be a
3-10 fraudulently structured transaction.
3-11 SECTION 7. Subsection (a), Section 14, Article 350, Revised
3-12 Statutes, is amended to read as follows:
3-13 (a) A person commits an offense if the person knowingly:
3-14 (1) violates a requirement of this article;
3-15 (2) makes a false, fictitious, or fraudulent
3-16 statement, representation, or entry in a record or report required
3-17 under 31 U.S.C. Section 5313, 31 C.F.R. Part 103, Article 351,
3-18 Revised Statutes, this article, or a rule adopted under this
3-19 article; or
3-20 (3) fraudulently structures or attempts to
3-21 fraudulently structure a transaction in violation of Section 13A of
3-22 this article.
3-23 SECTION 8. Section 21, Article 350, Revised Statutes, is
3-24 amended to read as follows:
3-25 Sec. 21. HEARINGS. (a) A license may not be denied,
3-26 revoked, or suspended except after notice and opportunity for <a>
3-27 hearing on that action. The notice must:
3-28 (1) be in the form specified by Section 2001.052,
3-29 Government Code;
3-30 (2) be given by registered or certified mail addressed
3-31 to the applicant or licensee at the address stated on the
3-32 application or license; and
3-33 (3) fix a date, not less than 10 days after the date
3-34 it is mailed, by which the applicant or licensee must request a
3-35 hearing.
3-36 (b) If a hearing is not requested by the date specified in
3-37 the notice, the proposed action becomes final. If a hearing is
3-38 requested, it shall be conducted in accordance with Chapter 2001,
3-39 Government Code (Administrative Procedure Act). <The commissioner
3-40 shall give the applicant or licensee at least 20 days' written
3-41 notice of the time and place of the hearing by registered or
3-42 certified mail addressed to the principal place of business of the
3-43 applicant or licensee.>
3-44 (c) An order of the commissioner denying or revoking a
3-45 license must state the grounds on which the denial or revocation is
3-46 based and is not effective until the 21st day after the date
3-47 written notice has been sent by registered or certified mail to the
3-48 applicant or licensee at the address stated on the application or
3-49 license <principal place of business>. If the commissioner finds
3-50 that an imminent peril to public health, safety, or welfare is
3-51 threatened, the commissioner may make the order effective
3-52 immediately. An applicant or <A> licensee may appeal a finding or
3-53 order of the commissioner under the substantial evidence rule as
3-54 provided by Chapter 2001, Government Code ( <the> Administrative
3-55 Procedure <and Texas Register> Act) <(Article 6252-13a, Vernon's
3-56 Texas Civil Statutes). Notice under this section is effective on
3-57 the date the notice is placed in the mail>.
3-58 SECTION 9. This Act takes effect September 1, 1995.
3-59 SECTION 10. The importance of this legislation and the
3-60 crowded condition of the calendars in both houses create an
3-61 emergency and an imperative public necessity that the
3-62 constitutional rule requiring bills to be read on three several
3-63 days in each house be suspended, and this rule is hereby suspended.
3-64 * * * * *