1-1 By: Madla S.B. No. 871
1-2 (In the Senate - Filed March 2, 1995; March 6, 1995, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 6, 1995, reported favorably, as amended, by the following
1-5 vote: Yeas 9, Nays 0; April 6, 1995, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Madla
1-7 Amend S.B. No. 871 as follows:
1-8 (1) In SECTION 2 of the bill, proposed Article 2.03A (e),
1-9 Title 79, Revised Statutes (introduced version page 3, line 20;
1-10 committee printing page , line ), strike "The notice may be
1-11 given by certified mail." and substitute "The notice shall be given
1-12 by certified mail.".
1-13 (2) In SECTION 2 of the bill, proposed Article 2.03A (h),
1-14 Title 79, Revised Statutes (introduced version page 4, line 11;
1-15 committee printing page , line ), insert between the first and
1-16 second sentences "The notice shall be given by certified mail."
1-17 A BILL TO BE ENTITLED
1-18 AN ACT
1-19 relating to the appeal of orders of and civil penalties assessed by
1-20 the Consumer Credit Commissioner.
1-21 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-22 SECTION 1. Section (7), Article 2.03, Title 79, Revised
1-23 Statutes (Article 5069-2.03, Vernon's Texas Civil Statutes), is
1-24 amended to read as follows:
1-25 (7) Whenever the Consumer Credit Commissioner has reasonable
1-26 cause to believe that any person is violating any provisions of the
1-27 statutes to which this Article applies he may in addition to all
1-28 actions provided for, and without prejudice thereto, enter an order
1-29 requiring such person to desist or to refrain from such violation.
1-30 A person may appeal such an order to the Finance Commission. The
1-31 appeal must be made in accordance with Chapter 2001, Government
1-32 Code (Administrative Procedure Act) <rules adopted by the Finance
1-33 Commission for that purpose>. In addition to the order, the
1-34 Commissioner may bring an action in any district court of this
1-35 State having jurisdiction and venue, on the relation of the
1-36 Attorney General at the request of the Commissioner, to enjoin such
1-37 person from engaging in or continuing such violation or from doing
1-38 any act or acts in furtherance thereof. In any such action, an
1-39 order or judgment may be entered awarding such preliminary or final
1-40 injunction as may be deemed proper. In addition to all other means
1-41 provided by law for the enforcement of a restraining order or
1-42 injunction, the court in which such action is brought shall have
1-43 power and jurisdiction to impound, and to appoint a receiver for,
1-44 the property and business of the defendant, including books,
1-45 papers, documents, and records pertaining thereto or so much
1-46 thereof as the court may deem reasonably necessary to prevent
1-47 violations through or by means of the use of said property and
1-48 business. Such receiver, when appointed and qualified, shall have
1-49 such powers and duties as he would have under Chapter 64, Civil
1-50 Practice and Remedies Code.
1-51 SECTION 2. Title 79, Revised Statutes (Article 5069-1.01 et
1-52 seq., Vernon's Texas Civil Statutes), is amended by adding Article
1-53 2.03A to read as follows:
1-54 Art. 2.03A. ADMINISTRATIVE PENALTY; RESTITUTION ORDER.
1-55 (a) The Consumer Credit Commissioner may assess an administrative
1-56 penalty against a person who knowingly and wilfully violates or
1-57 causes a violation of this subtitle, Chapter 9 or 15 of this title,
1-58 or a rule adopted under this subtitle or Chapter 9 or 15 of this
1-59 title. The Commissioner may order a person who violates or causes
1-60 a violation of this subtitle, Chapter 9 or 15 of this title, or a
1-61 rule adopted under this subtitle or Chapter 9 or 15 of this title
1-62 to make restitution to an identifiable person injured by the
1-63 violation.
1-64 (b) The amount of an administrative penalty may not exceed
1-65 $1,000 for each day of violation and for each act of violation.
1-66 The aggregate amount of penalties that may be assessed against a
1-67 person during one calendar year under this article may not exceed
1-68 $5,000 for each business location at which an element of a
2-1 violation occurred and may not exceed $50,000 if the person
2-2 committed violations at 11 or more business locations.
2-3 (c) In determining the amount of an administrative penalty,
2-4 the Commissioner shall consider:
2-5 (1) the seriousness of the violation, including the
2-6 nature, circumstances, extent, and gravity of the prohibited act;
2-7 (2) the extent of actual or potential harm to a third
2-8 party;
2-9 (3) the history of violations;
2-10 (4) the amount necessary to deter future violations;
2-11 (5) efforts to correct the violation; and
2-12 (6) any other matter that justice may require.
2-13 (d) If the Commissioner determines that a violation
2-14 occurred, the Commissioner may issue a report that states the facts
2-15 on which the determination is based and the Commissioner's
2-16 recommendation on imposition of a penalty, including a
2-17 recommendation on the amount of the penalty.
2-18 (e) Not later than the 14th day after the date on which a
2-19 report is issued, the Commissioner shall give written notice of the
2-20 report to the person charged with committing or causing the
2-21 violation. The notice may be given by certified mail. The notice
2-22 must include a brief summary of the alleged violation and a
2-23 statement of the amount of the recommended penalty and must inform
2-24 the person that the person has a right to a hearing on the
2-25 occurrence of the violation, the amount of the penalty, or both the
2-26 occurrence of the violation and the amount of the penalty.
2-27 (f) Not later than the 20th day after the date on which a
2-28 person receives notice under Subsection (e), the person may:
2-29 (1) in writing accept the determination and
2-30 recommended penalty of the Commissioner; or
2-31 (2) make a written request for a hearing on the
2-32 occurrence of the violation, the amount of the penalty, or both the
2-33 occurrence of the violation and the amount of the penalty.
2-34 (g) If the person accepts the determination and recommended
2-35 penalty of the Commissioner, the Commissioner by order shall
2-36 approve the determination and impose the recommended penalty.
2-37 (h) If the person requests a hearing or fails to respond
2-38 timely to the notice, the Commissioner shall set a hearing and give
2-39 notice of the hearing to the person. The hearing shall be held by
2-40 an administrative law judge of the State Office of Administrative
2-41 Hearings. The administrative law judge shall make findings of fact
2-42 and conclusions of law and promptly issue a proposal for a decision
2-43 about the occurrence of the violation and the amount of a proposed
2-44 penalty. Based on the findings of fact, conclusions of law, and
2-45 proposal for a decision, the Commissioner by order may find that a
2-46 violation has occurred and impose a penalty or may find that no
2-47 violation occurred.
2-48 (i) The notice of the Commissioner's order given to the
2-49 person under Chapter 2001, Government Code (Administrative
2-50 Procedure Act), must include a statement of the right of the person
2-51 to judicial review of the order.
2-52 (j) Judicial review of the order of the Commissioner:
2-53 (1) is instituted by filing a petition as provided by
2-54 Subchapter G, Chapter 2001, Government Code; and
2-55 (2) is under the substantial evidence rule.
2-56 (k) If the court sustains the occurrence of the violation,
2-57 the court may uphold or reduce the amount of the penalty and order
2-58 the person to pay the full or reduced amount of the penalty. If
2-59 the court does not sustain the occurrence of the violation, the
2-60 court shall order that no penalty is owed.
2-61 (l) When the judgment of the court becomes final, the court
2-62 shall proceed under this subsection. If the person paid the amount
2-63 of the penalty and if that amount is reduced or is not upheld by
2-64 the court, the court shall order that the appropriate amount plus
2-65 accrued interest be remitted to the person. The rate of the
2-66 interest is the rate authorized by Article 1.05 of this title, and
2-67 the interest shall be paid for the period beginning on the date the
2-68 penalty was paid and ending on the date the penalty is remitted.
2-69 (m) In addition to the administrative penalty or restitution
2-70 amount, the court may authorize the Commissioner to recover from a
3-1 person who pays an administrative penalty or restitution amount, or
3-2 both, under this article reasonable expenses incurred in obtaining
3-3 the ordered amount, including investigation costs, witness fees,
3-4 and deposition expenses.
3-5 (n) A penalty collected under this article shall be
3-6 deposited to the credit of the general revenue fund.
3-7 (o) All proceedings under this section are subject to
3-8 Chapter 2001, Government Code (Administrative Procedure Act).
3-9 (p) An administrative penalty or restitution order
3-10 authorized by this article is in addition to any other enforcement
3-11 authority provided by law.
3-12 SECTION 3. Article 8.03, Title 79, Revised Statutes (Article
3-13 5069-8.03, Vernon's Texas Civil Statutes), is amended to read as
3-14 follows:
3-15 Art. 8.03. ENGAGING IN LENDING BUSINESS WITHOUT LICENSE. In
3-16 addition to the foregoing penalties, if applicable, any person
3-17 engaging in any business under the scope of Chapter <Chapters> 3,
3-18 4, <or> 5, or 15 of this Title <Subtitle> without first securing a
3-19 license provided, or without the authorization prescribed, in such
3-20 Chapter shall be guilty of a misdemeanor and upon conviction
3-21 thereof shall be punishable by a fine of not more than One Thousand
3-22 Dollars, and each such loan made without the authority granted by
3-23 such license shall constitute a separate offense punishable
3-24 hereunder; and in addition such person shall forfeit all principal
3-25 and charges contracted for or collected on each such loan, and
3-26 shall pay reasonable attorneys' fees incurred by the obligor.
3-27 SECTION 4. This Act applies only to acts done and
3-28 transactions entered into on or after the effective date of this
3-29 Act. Acts done and transactions entered into before the effective
3-30 date of this Act are governed by the law in effect immediately
3-31 before this Act takes effect and that law continues in effect for
3-32 that purpose.
3-33 SECTION 5. This Act takes effect September 1, 1995.
3-34 SECTION 6. The importance of this legislation and the
3-35 crowded condition of the calendars in both houses create an
3-36 emergency and an imperative public necessity that the
3-37 constitutional rule requiring bills to be read on three several
3-38 days in each house be suspended, and this rule is hereby suspended.
3-39 * * * * *