By:  Madla                                             S.B. No. 871
                                 A BILL TO BE ENTITLED
                                        AN ACT
    1-1  relating to the appeal of orders of and civil penalties assessed by
    1-2  the Consumer Credit Commissioner.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section (7), Article 2.03, Title 79, Revised
    1-5  Statutes (Article 5069-2.03, Vernon's Texas Civil Statutes), is
    1-6  amended to read as follows:
    1-7        (7)  Whenever the Consumer Credit Commissioner has reasonable
    1-8  cause to believe that any person is violating any provisions of the
    1-9  statutes to which this Article applies he may in addition to all
   1-10  actions provided for, and without prejudice thereto, enter an order
   1-11  requiring such person to desist or to refrain from such violation.
   1-12  A person may appeal such an order to the Finance Commission.  The
   1-13  appeal must be made in accordance with Chapter 2001,  Government
   1-14  Code (Administrative Procedure Act) <rules adopted by the Finance
   1-15  Commission for that purpose>.  In addition to the order, the
   1-16  Commissioner may bring an action in any district court of this
   1-17  State having jurisdiction and venue, on the relation of the
   1-18  Attorney General at the request of the Commissioner, to enjoin such
   1-19  person from engaging in or continuing such violation or from doing
   1-20  any act or acts in furtherance thereof.  In any such action, an
   1-21  order or judgment may be entered awarding such preliminary or final
   1-22  injunction as may be deemed proper.  In addition to all other means
   1-23  provided by law for the enforcement of a restraining order or
   1-24  injunction, the court in which such action is brought shall have
    2-1  power and jurisdiction to impound, and to appoint a receiver for,
    2-2  the property and business of the defendant, including books,
    2-3  papers, documents, and records pertaining thereto or so much
    2-4  thereof as the court may deem reasonably necessary to prevent
    2-5  violations through or by means of the use of said property and
    2-6  business.  Such receiver, when appointed and qualified, shall have
    2-7  such powers and duties as he would have under Chapter 64, Civil
    2-8  Practice and Remedies Code.
    2-9        SECTION 2.  Title 79, Revised Statutes (Article 5069-1.01 et
   2-10  seq., Vernon's Texas Civil  Statutes), is amended by adding Article
   2-11  2.03A to read as follows:
   2-12        Art. 2.03A.  ADMINISTRATIVE PENALTY; RESTITUTION ORDER.
   2-13  (a)  The Consumer Credit Commissioner may assess an administrative
   2-14  penalty against a person who knowingly and wilfully violates or
   2-15  causes a violation of this subtitle, Chapter 9 or 15 of this title,
   2-16  or a rule adopted under this subtitle or Chapter 9 or 15 of this
   2-17  title.  The Commissioner may order a person who violates or causes
   2-18  a violation of this subtitle, Chapter 9 or 15 of this title, or a
   2-19  rule adopted under this subtitle or Chapter 9 or 15 of this title
   2-20  to make restitution to an identifiable person injured by the
   2-21  violation.
   2-22        (b)  The amount of an administrative penalty may not exceed
   2-23  $1,000 for each day of violation and for each act of violation.
   2-24  The aggregate amount of penalties that may be assessed against a
   2-25  person during one calendar year under this article may not exceed
   2-26  $5,000 for each business location at which an element of a
   2-27  violation occurred and may not exceed $50,000 if the person
    3-1  committed violations at 11 or more business locations.
    3-2        (c)  In determining the amount of an administrative penalty,
    3-3  the Commissioner shall consider:
    3-4              (1)  the seriousness of the violation, including the
    3-5  nature, circumstances, extent, and gravity of the prohibited act;
    3-6              (2)  the extent of actual or potential harm to a third
    3-7  party;
    3-8              (3)  the history of violations;
    3-9              (4)  the amount necessary to deter future violations;
   3-10              (5)  efforts to correct the violation; and
   3-11              (6)  any other matter that justice may require.
   3-12        (d)  If the Commissioner determines that a violation
   3-13  occurred, the Commissioner may issue a report that states the facts
   3-14  on which the determination is based and the Commissioner's
   3-15  recommendation on imposition of a penalty, including a
   3-16  recommendation on the amount of the penalty.
   3-17        (e)  Not later than the 14th day after the date on which a
   3-18  report is issued, the Commissioner shall give written notice of the
   3-19  report to the person charged with committing or causing the
   3-20  violation.  The notice shall be given by certified mail.  The
   3-21  notice must include a brief summary of the alleged violation and a
   3-22  statement of the amount of the recommended penalty and must inform
   3-23  the person that the person has a right to a hearing on the
   3-24  occurrence of the violation, the amount of the penalty, or both the
   3-25  occurrence of the violation and the amount of the penalty.
   3-26        (f)  Not later than the 20th day after the date on which a
   3-27  person receives notice under Subsection (e), the person may:
    4-1              (1)  in writing accept the determination and
    4-2  recommended penalty of the Commissioner; or
    4-3              (2)  make a written request for a hearing on the
    4-4  occurrence of the violation, the amount of the penalty, or both the
    4-5  occurrence of the violation and the amount of the penalty.
    4-6        (g)  If the person accepts the determination and recommended
    4-7  penalty of the Commissioner, the Commissioner by order shall
    4-8  approve the determination and impose the recommended penalty.
    4-9        (h)  If the person requests a hearing or fails to respond
   4-10  timely to the notice, the Commissioner shall set a hearing and give
   4-11  notice of the hearing to the person.  The notice shall be given by
   4-12  certified mail.  The hearing shall be held by an administrative law
   4-13  judge of the State Office of Administrative Hearings.  The
   4-14  administrative law judge shall make findings of fact and
   4-15  conclusions of law and promptly issue a proposal for a decision
   4-16  about the occurrence of the violation and the amount of a proposed
   4-17  penalty.  Based on the findings of fact, conclusions of law, and
   4-18  proposal for a decision, the Commissioner by order may find that a
   4-19  violation has occurred and impose a penalty or may find that no
   4-20  violation occurred.
   4-21        (i)  The notice of the Commissioner's order given to the
   4-22  person under Chapter 2001, Government Code (Administrative
   4-23  Procedure Act), must include a statement of the right of the person
   4-24  to judicial review of the order.
   4-25        (j)  Judicial review of the order of the Commissioner:
   4-26              (1)  is instituted by filing a petition as provided by
   4-27  Subchapter G, Chapter 2001, Government Code; and
    5-1              (2)  is under the substantial evidence rule.
    5-2        (k)  If the court sustains the occurrence of the violation,
    5-3  the court may uphold or reduce the amount of the penalty and order
    5-4  the person to pay the full or reduced amount of the penalty.  If
    5-5  the court does not sustain the occurrence of the violation, the
    5-6  court shall order that no penalty is owed.
    5-7        (l)  When the judgment of the court becomes final, the court
    5-8  shall proceed under this subsection.  If the person paid the amount
    5-9  of the penalty and if that amount is reduced or is not upheld by
   5-10  the court, the court shall order that the appropriate amount plus
   5-11  accrued interest be remitted to the person.  The rate of the
   5-12  interest is the rate authorized by Article 1.05 of this title, and
   5-13  the interest shall be paid for the period beginning on the date the
   5-14  penalty was paid and ending on the date the penalty is remitted.
   5-15        (m)  In addition to the administrative penalty or restitution
   5-16  amount, the court may authorize the Commissioner to recover from a
   5-17  person who pays an administrative penalty or restitution amount, or
   5-18  both, under this article reasonable expenses incurred in obtaining
   5-19  the ordered amount, including investigation costs, witness fees,
   5-20  and deposition expenses.
   5-21        (n)  A penalty collected under this article shall be
   5-22  deposited to the credit of the general revenue fund.
   5-23        (o)  All proceedings under this section are subject to
   5-24  Chapter 2001, Government Code (Administrative Procedure Act).
   5-25        (p)  An administrative penalty or restitution order
   5-26  authorized by this article is in addition to any other enforcement
   5-27  authority provided by law.
    6-1        SECTION 3.  Article 8.03, Title 79, Revised Statutes (Article
    6-2  5069-8.03, Vernon's Texas Civil Statutes), is amended to read as
    6-3  follows:
    6-4        Art. 8.03.  ENGAGING IN LENDING BUSINESS WITHOUT LICENSE.  In
    6-5  addition to the foregoing penalties, if applicable, any person
    6-6  engaging in any business under the scope of Chapter <Chapters> 3,
    6-7  4, <or> 5, or 15 of this Title <Subtitle> without first securing a
    6-8  license provided, or without the authorization prescribed, in such
    6-9  Chapter shall be guilty of a misdemeanor and upon conviction
   6-10  thereof shall be punishable by a fine of not more than One Thousand
   6-11  Dollars, and each such loan made without the authority granted by
   6-12  such license shall constitute a separate offense punishable
   6-13  hereunder; and in addition such person shall forfeit all principal
   6-14  and charges contracted for or collected on each such loan, and
   6-15  shall pay reasonable attorneys' fees incurred by the obligor.
   6-16        SECTION 4.  This Act applies only to acts done and
   6-17  transactions entered into on or after the effective date of this
   6-18  Act.  Acts done and transactions entered into before the effective
   6-19  date of this Act are governed by the law in effect immediately
   6-20  before this Act takes effect and that law continues in effect for
   6-21  that purpose.
   6-22        SECTION 5.  This Act takes effect September 1, 1995.
   6-23        SECTION 6.  The importance of this legislation and the
   6-24  crowded condition of the calendars in both houses create an
   6-25  emergency and an imperative public necessity that the
   6-26  constitutional rule requiring bills to be read on three several
   6-27  days in each house be suspended, and this rule is hereby suspended.