By Sims S.B. No. 1077
74R7731 LJR-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of pawnshops.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 1A, Texas Pawnshop Act (Article
1-5 5069-51.01A, Vernon's Texas Civil Statutes), is amended to read as
1-6 follows:
1-7 Sec. 1A. Purpose. The making of pawn loans and the
1-8 acquisition and disposition of tangible personal property by and
1-9 through pawn transactions <pawnshops> vitally affects the general
1-10 economy of this state and the public interest and welfare of its
1-11 citizens. To prevent frauds, unfair practices, discriminations,
1-12 impositions, and abuses of the citizens of the state, it is the
1-13 policy of this state and the purpose of the Texas Pawnshop Act to:
1-14 (1) exercise the state's police power to ensure a
1-15 sound system of making pawn loans and acquiring and disposing of
1-16 tangible personal property by and through pawn transactions
1-17 <pawnshops> and to prevent unlawful property transactions,
1-18 particularly in stolen property, through licensing and regulating
1-19 pawnbrokers and certain persons employed by or in pawnshops;
1-20 (2) provide for licensing fees, investigation fees,
1-21 and minimum capital requirements of licensees;
1-22 (3) ensure financial responsibility to the state and
1-23 the public;
1-24 (4) ensure compliance with federal, state, and local
2-1 laws, rules, regulations, and ordinances; <and>
2-2 (5) assist local governments in the exercise of their
2-3 police power; and
2-4 (6) impose applicable law with the least possible cost
2-5 and disruption to pawnbrokers.
2-6 SECTION 2. Section 4(b), Texas Pawnshop Act (Article
2-7 5069-51.04, Vernon's Texas Civil Statutes), is amended to read as
2-8 follows:
2-9 (b) The application must be accompanied by:
2-10 (1) an investigation fee of $500 if the applicant is
2-11 unlicensed at the time of applying for the pawnshop license or $250
2-12 if the application involves a second or additional license to an
2-13 applicant previously licensed for a separate location or involves
2-14 substantially identical principals and owners of a licensed
2-15 pawnshop at a separate location;
2-16 (2) proof of general liability and fire insurance
2-17 coverage <in a reasonable amount and form required by the
2-18 Commissioner>; and
2-19 (3) an annual fee of $100.
2-20 SECTION 3. Sections 6(f) and (g), Texas Pawnshop Act
2-21 (Article 5069-51.06, Vernon's Texas Civil Statutes), are amended to
2-22 read as follows:
2-23 (f) Subject to Subsection (g) of this section, if a change
2-24 in ownership <or a move from a municipality> occurs, the net assets
2-25 requirement for a licensee is an amount equal to the sum, rounded
2-26 to the next higher multiple of $5,000, of:
2-27 (1) the licensee's outstanding loans on the date of
3-1 the change of ownership <or move>;
3-2 (2) the value of the licensee's inventory on that
3-3 date; and
3-4 (3) the amount equal to five percent of the sum of the
3-5 amounts described by Subdivisions (1) and (2) of this subsection.
3-6 (g) The net assets requirement of Subsection (f) of this
3-7 section may not be less than the amount of net assets required
3-8 immediately before the date of the change of ownership <or move>,
3-9 or more than $150,000.
3-10 SECTION 4. Section 8, Texas Pawnshop Act (Article
3-11 5069-51.08, Vernon's Texas Civil Statutes), is amended to read as
3-12 follows:
3-13 Sec. 8. Examinations. (a) At such times as the
3-14 Commissioner may deem necessary, the Commissioner, or his duly
3-15 authorized representative, may make an examination of the place of
3-16 business of each licensee, may inquire into and examine the
3-17 transactions, books, accounts, papers, correspondence and records
3-18 of such licensee insofar as they pertain to the business regulated
3-19 by this Act, and may examine or inspect pledged goods <and
3-20 purchased goods required to be identified under Section 16(9) of
3-21 this Act>. Such books, accounts, papers, correspondence and records
3-22 shall also be open for inspection at any reasonable time by any
3-23 peace officer, without need of judicial writ or other process. In
3-24 the course of an examination, the Commissioner or his duly
3-25 authorized representative shall have free access to the <office,>
3-26 place of business, loan files, safes, and vaults of such licensee,
3-27 and shall have the right to make copies of any books, accounts,
4-1 papers, correspondence and records pertaining to pawn transactions.
4-2 The Commissioner or his duly authorized representative may, during
4-3 the course of such examination, administer oaths and examine any
4-4 licensee <person> under oath upon any subject pertinent to pawn
4-5 transactions <any matter about> which the Commissioner is
4-6 authorized or required by this Act to consider, investigate, or
4-7 secure information. Any licensee who fails or refuses to let the
4-8 Commissioner or his duly authorized representative <or any peace
4-9 officer> examine or make copies of such books, or other relevant
4-10 documents pertaining to pawn transactions, or who fails or refuses
4-11 to allow an examination or inspection of pledged goods <and
4-12 purchased goods required to be identified under Section 16(9) of
4-13 this Act> by the Commissioner or his duly authorized
4-14 representative, shall thereby be deemed in violation of this Act
4-15 and such failure or refusal shall constitute grounds for the
4-16 suspension or revocation of such license. The information obtained
4-17 in the course of any examination or inspection shall be
4-18 confidential and privileged, except for lawful use by the
4-19 Commissioner, or in a criminal investigation or prosecution. Each
4-20 licensee shall pay to the Commissioner an amount assessed by the
4-21 Commissioner to cover the direct and indirect cost of such
4-22 examinations and a proportionate share of general administrative
4-23 expense.
4-24 (b) If the Commissioner has reason to doubt that a licensee
4-25 satisfies <questions> the net assets requirement of a licensed
4-26 pawnshop, the Commissioner may require certification by an
4-27 independent certified public accountant that the accountant has
5-1 reviewed a licensee's books, records, and transactions during the
5-2 reporting year, that the books and records are maintained using
5-3 generally accepted accounting principles, and that the licensee
5-4 fulfills the net assets requirement of this Act.
5-5 SECTION 5. Section 9, Texas Pawnshop Act (Article
5-6 5069-51.09, Vernon's Texas Civil Statutes), is amended to read as
5-7 follows:
5-8 Sec. 9. Form of books and records; regulations. (a) Each
5-9 licensee shall keep, consistent with accepted accounting practices,
5-10 adequate books and records relating to the licensee's pawn
5-11 transactions <and any other business regulated by this Act>, which
5-12 books and records shall be preserved for a period of at least two
5-13 years from the date of the last transaction recorded therein. <The
5-14 licensee shall notify the Commissioner of any type of business
5-15 conducted on the premises of the licensee's pawnshop other than the
5-16 making and collecting of pawn loans and the buying and selling of
5-17 tangible personal goods.>
5-18 (b) The Commissioner may make regulations necessary for the
5-19 enforcement of this Act and consistent with all its provisions.
5-20 Before making a regulation the Commissioner shall give each
5-21 licensee at least thirty days' written notice of a public hearing,
5-22 stating the time and place thereof and the terms or substance of
5-23 the proposed regulation. At the hearing, any licensee or other
5-24 person may be heard and may introduce evidence, data, or arguments
5-25 or place the same on file. The Commissioner, after consideration
5-26 of all relevant matters presented, shall adopt and promulgate every
5-27 regulation in written form, stating the date of adoption and date
6-1 of promulgation. Each regulation shall be entered in a permanent
6-2 record book which shall be a public record and be kept in the
6-3 Commissioner's office. A copy of every regulation shall be mailed
6-4 to each licensee, and no regulation shall become effective until
6-5 the expiration of at least twenty days after such mailing. On the
6-6 application of any person and payment of the cost thereof, the
6-7 Commissioner shall furnish such person a certified copy of any such
6-8 regulation.
6-9 (c) Notwithstanding other provisions of this Act, the
6-10 Commissioner has the authority to adopt rules relating only to
6-11 those business practices that require a pawnshop license, or for
6-12 the issuance, denial, or suspension of licenses pursuant to this
6-13 Act.
6-14 SECTION 6. Section 15A, Texas Pawnshop Act (Article
6-15 5069-51.15A, Vernon's Texas Civil Statutes), is amended to read as
6-16 follows:
6-17 Sec. 15A. Exemption from <criminal> liability. A pawnbroker
6-18 may not be held criminally liable for damages or loss due to an act
6-19 of God or circumstances beyond the pawnbroker's control and may not
6-20 be held civilly liable for damages or loss due to an act of God.
6-21 SECTION 7. Section 16(a), Texas Pawnshop Act (Article
6-22 5069-51.16, Vernon's Texas Civil Statutes), is amended to read as
6-23 follows:
6-24 (a) A pawnbroker shall not:
6-25 (1) Accept a pledge of personal <or purchase> property
6-26 from a person under the age of eighteen years.
6-27 (2) Make any agreement requiring the personal
7-1 liability of a pledgor in connection with a pawn transaction.
7-2 (3) Accept any waiver, in writing or otherwise, of any
7-3 right or protection accorded a pledgor under this Act.
7-4 (4) Fail to exercise reasonable care to protect
7-5 pledged goods from loss or damage.
7-6 (5) Subject to Section 15A of this Act, fail <Fail> to
7-7 return pledged goods to a pledgor upon payment of the full amount
7-8 due the pawnbroker on the pawn transaction. In the event such
7-9 pledged goods are lost or damaged while in the possession of the
7-10 pawnbroker it shall be the responsibility of the pawnbroker to
7-11 replace the lost or damaged goods with like kind(s) of merchandise.
7-12 All such replacements are subject to the approval or rejection of
7-13 the Commissioner. For the purposes of this subdivision, "lost"
7-14 includes destroyed or having disappeared because of any cause,
7-15 whether known or unknown, excluding acts of God, that results in
7-16 the pledged goods being unavailable for return to the pledgor.
7-17 (6) Make any charge for insurance in connection with a
7-18 pawn transaction, except for the actual cost to insure pledged
7-19 goods being shipped to a pledgor who redeemed the goods by mail.
7-20 (7) Enter any pawn transaction which has a maturity
7-21 date more than one month after the date of the transaction.
7-22 (8) Display for sale in storefront windows or sidewalk
7-23 display case so that same may be viewed from the street, any
7-24 pistol, dirk, dagger, blackjack, hand chain, sword cane, knuckles
7-25 made of any metal or any hard substance, switchblade knife,
7-26 springblade knife, or throwblade knife, or depict same on any sign
7-27 or advertisement which may be viewed from the street.
8-1 (9) <Purchase used or secondhand personal property
8-2 from a person other than a pawnbroker unless a record is
8-3 established that contains:>
8-4 <(A) the name, address, physical description,
8-5 and the driver's license number, military identification number,
8-6 identification certificate number, or other official number capable
8-7 of identifying the seller;>
8-8 <(B) a complete description of the property,
8-9 including the serial number, if reasonably available, or other
8-10 identifying characteristics; and>
8-11 <(C) a signed document from the seller providing
8-12 that the seller has the right to sell the property.>
8-13 <(10)> Accept as pledged goods in a pawn transaction
8-14 building construction materials, including copper pipes, tubing,
8-15 and wiring, aluminum wire, plumbing supplies, electrical supplies,
8-16 window glass, lumber, and other similar materials, unless a record
8-17 is established that contains the information required under Section
8-18 10 of this Act <Subsection (9) of this section for the purchase of
8-19 used or secondhand personal property>.
8-20 SECTION 8. Section 17B, Texas Pawnshop Act (Article
8-21 5069-51.17B, Vernon's Texas Civil Statutes), is amended to read as
8-22 follows:
8-23 Sec. 17B. Operation of pawnshops; authority of commissioner.
8-24 (a) A pawnshop must maintain normal minimum business hours of at
8-25 least four hours on each of five days each week. A pawnshop may
8-26 not begin doing business before 7 a.m. or continue doing business
8-27 after 9 p.m.
9-1 (b) A pawnbroker shall require acceptable identification of
9-2 the pledgor <if a transaction is a pawn transaction and of the
9-3 seller if a transaction is a purchase by the pawnbroker of goods or
9-4 tangible personal property>. Acceptable identification is a
9-5 document that contains a photograph of the pledgor <or seller> and
9-6 is one of the following documents:
9-7 (1) a state-issued driver's license;
9-8 (2) a federal or state-issued identification card;
9-9 (3) a passport;
9-10 (4) a valid military identification;
9-11 (5) a nonresident alien border crossing card;
9-12 (6) a resident alien border crossing card; or
9-13 (7) a United States Immigration and Naturalization
9-14 Service identification.
9-15 (c) A pawnbroker must use the pawnbroker's best effort to
9-16 determine that the identification used is apparently genuine and
9-17 unaltered and that the identification properly identifies the
9-18 pledgor <or seller>.
9-19 (d) A pawnbroker shall notify the commissioner of all
9-20 locations at which the pawnbroker or an applicant for a pawnshop
9-21 license operates a buy shop, secondhand merchandise store, retail
9-22 outlet, or similar business <or any business> to which the
9-23 pawnbroker regularly transfers goods acquired through pawn
9-24 transactions <from the pawnshop>.
9-25 (e) A pawnshop shall have an alarm system or systems
9-26 sufficient to detect and signal unauthorized entry or the presence
9-27 of unauthorized persons to provide for the security of pledged
10-1 goods.
10-2 (f) A pawnshop shall have a safe, vault, or similar security
10-3 device <of a type approved by the pawnbroker's insurance
10-4 underwriter> to provide for the security of pledged jewelry.
10-5 (g) A pawnbroker <conducting or> allowing others to conduct
10-6 business <other than the making and collecting of pawn loans and
10-7 the buying and selling of tangible goods> on the pawnshop premises
10-8 shall notify the commissioner before beginning the other business.
10-9 The commissioner may refuse to permit a person other than the
10-10 pawnbroker from operating the other business on the pawnshop
10-11 premises if the commissioner finds that the operation is
10-12 inconsistent with the purposes of this Act.
10-13 (h) A pawnshop shall identify by a tag or similar
10-14 identification all tangible personal property acquired through pawn
10-15 transactions and located in the pawnshop that has a retail or sale
10-16 value of more than $10 and that is capable of being tagged or
10-17 similarly identified, other than the personal effects of a person
10-18 in the pawnshop and furniture, fixtures, and equipment of the
10-19 pawnshop.
10-20 (i) A pawnshop shall permit the redemption by mail of
10-21 pledged property by a pledgor.
10-22 (j) A pawnbroker shall monitor goods <purchased,> accepted
10-23 in pawn<, or otherwise acquired by a pawnbroker> in order to
10-24 identify and prohibit transactions involving stolen goods. A
10-25 pawnbroker may not transact business with a person believed to be
10-26 under the influence of alcohol or drugs.
10-27 (k) A pawnbroker shall maintain general liability and fire
11-1 insurance <in a reasonable amount and form required by the
11-2 commissioner sufficient to protect pledged goods and jewelry at the
11-3 pawnshop>.
11-4 (l) A pawnbroker shall secure a bond in an amount and form
11-5 required by the commissioner, in an amount not to exceed $5,000,
11-6 conditioned on compliance with this Act and the rules adopted by
11-7 the commissioner under this Act.
11-8 (m) <The commissioner shall designate a reasonable hold
11-9 period before a sale or other disposition of an item of tangible
11-10 personal property purchased or otherwise acquired by a pawnbroker
11-11 and offered for sale or other disposition by the pawnbroker.>
11-12 <(n)> The commissioner may adopt rules requiring a pawnshop
11-13 to provide a display area in the pawnshop, accessible to customers
11-14 and consumers, for materials provided by the commissioner that are
11-15 designed to educate and inform customers of the duties, rights, and
11-16 responsibilities of parties to transactions regulated by the
11-17 commissioner and to provide information <and assistance> to
11-18 robbery, burglary, and theft victims.
11-19 (n) <(o) The commissioner may adopt rules related to the
11-20 keeping of firearms used solely for the security of the pawnshop by
11-21 the pawnbroker.>
11-22 <(p) The commissioner may adopt rules related to the use of
11-23 outdoor displays and signs at pawnshops and the maintenance of the
11-24 premises at pawnshops.>
11-25 <(q) The commissioner shall adopt rules that permit a
11-26 consumer who has filed an offense report with the local law
11-27 enforcement agency to request a pawnbroker to search the records of
12-1 the pawnshop and permit the pawnbroker to assist the consumer and
12-2 the local law enforcement agency in locating and recovering stolen
12-3 property.>
12-4 <(r)> The legislature has exclusive authority regarding the
12-5 operation of pawnshops, except for those matters delegated in this
12-6 Act to the commissioner. <Notwithstanding the provisions of this
12-7 Act, the commissioner has the authority to regulate only those
12-8 business practices which require a pawnshop license.>
12-9 SECTION 9. This Act takes effect September 1, 1995.
12-10 SECTION 10. The importance of this legislation and the
12-11 crowded condition of the calendars in both houses create an
12-12 emergency and an imperative public necessity that the
12-13 constitutional rule requiring bills to be read on three several
12-14 days in each house be suspended, and this rule is hereby suspended.