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                               * * * * *