By Marchant H.B. No. 2796
75R6067 JMM-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of pawnshops and pawnbrokers.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 3, Texas Pawnshop Act (Article
1-5 5069-51.03, Vernon's Texas Civil Statutes), is amended by amending
1-6 Subsection (b) and adding Subsection (e) to read as follows:
1-7 (b) A pawnbroker may not employ an individual for the
1-8 purpose of writing pawn transactions, buying and/or selling
1-9 merchandise, or the supervising of employees writing pawn
1-10 transactions or buying and/or selling merchandise after the 60-day
1-11 [30-day] grace period for filing an application for a pawnshop
1-12 employee license unless the person:
1-13 (1) has timely filed an application for a pawnshop
1-14 employee license and is awaiting the commissioner's decision on the
1-15 application; or
1-16 (2) possesses a valid pawnshop employee license.
1-17 (e) A transaction is not a change in ownership for the
1-18 purposes of this section if only the number of owners change or the
1-19 proportionate share of ownership by an individual changes and an
1-20 individual who was an owner of not more than a five percent equity
1-21 interest in the business before the date of the transaction retains
1-22 not more than a five percent equity interest after the date of the
1-23 transaction.
1-24 SECTION 2. Section 5(f), Texas Pawnshop Act (Article
2-1 5069-51.05, Vernon's Texas Civil Statutes), is amended to read as
2-2 follows:
2-3 (f) Any license issued to a pawnshop [before October 1,
2-4 1981,] remains valid as long as the licensee complies with this Act
2-5 and with the net asset requirement in effect on the date the
2-6 license was issued.
2-7 SECTION 3. Section 10, Texas Pawnshop Act (Article
2-8 5069-51.10, Vernon's Texas Civil Statutes), is amended to read as
2-9 follows:
2-10 Sec. 10. PAWN TICKET. The pawnbroker, at the time the pawn
2-11 transaction is entered, shall deliver to the pledgor a memorandum
2-12 or ticket on which shall be clearly set forth the following:
2-13 (a) The name and address of the pawnshop;
2-14 (b) The name and address of the pledgor, the pledgor's
2-15 description, and the driver's license number, military
2-16 identification number, identification certificate number, or other
2-17 official number capable of identifying the pledgor;
2-18 (c) The date of the transaction;
2-19 (d) An identification and description of the pledged
2-20 goods, including serial numbers if reasonably available;
2-21 (e) The amount of cash advanced or credit extended to
2-22 the pledgor, designated as the "Amount Financed";
2-23 (f) The amount of the pawn service charge, designated
2-24 as the "Finance Charge";
2-25 (g) The total amount (the Amount Financed plus the
2-26 Finance Charge) which must be paid to redeem the pledged goods on
2-27 the maturity date, designated as the "Total of Payments";
3-1 (h) The "Annual Percentage Rate", computed in
3-2 accordance with the regulations issued by the Federal Reserve Board
3-3 of the United States pursuant to the Truth-in-Lending Act, Title I,
3-4 Act of May 29, 1968, Public Law 90-321, 82 Stat. 146, as amended;
3-5 (i) The maturity date of the pawn transaction;
3-6 (j) A statement to the effect that the pledgor is not
3-7 obligated to redeem the pledged goods, and that the pledged goods
3-8 may be forfeited to the pawnbroker sixty days after the specified
3-9 maturity date; and
3-10 (k) A statement by the pledgor that the pledged goods
3-11 are not stolen and are not subject to a lien or encumbrance and
3-12 that the pledgor has the right to enter into the pawn transaction
3-13 with regard to the pledged goods.
3-14 SECTION 4. Section 11, Texas Pawnshop Act (Article
3-15 5069-51.11, Vernon's Texas Civil Statutes), is amended to read as
3-16 follows:
3-17 Sec. 11. PLEDGOR'S LIABILITY PROHIBITED. A pledgor shall
3-18 have no obligation to redeem pledged goods or make any payment on a
3-19 pawn transaction, except for a false statement made under Section
3-20 10(k) of this Act or as otherwise ordered by a court.
3-21 SECTION 5. Section 16(a), Texas Pawnshop Act (Article
3-22 5069-51.16, Vernon's Texas Civil Statutes), is amended to read as
3-23 follows:
3-24 (a) A pawnbroker shall not:
3-25 (1) Accept a pledge or purchase property from a person
3-26 under the age of eighteen years.
3-27 (2) Make any agreement requiring the personal
4-1 liability of a pledgor in connection with a pawn transaction,
4-2 except for the statement required by the pledgor under Section
4-3 10(k) of this Act.
4-4 (3) Accept any waiver, in writing or otherwise, of any
4-5 right or protection accorded a pledgor under this Act.
4-6 (4) Fail to exercise reasonable care to protect
4-7 pledged goods from loss or damage.
4-8 (5) Fail to return pledged goods to a pledgor upon
4-9 payment of the full amount due the pawnbroker on the pawn
4-10 transaction. In the event such pledged goods are lost or damaged
4-11 while in the possession of the pawnbroker it shall be the
4-12 responsibility of the pawnbroker to replace the lost or damaged
4-13 goods with like kind(s) of merchandise. All such replacements are
4-14 subject to the approval or rejection of the Commissioner. For the
4-15 purposes of this subdivision, "lost" includes destroyed or having
4-16 disappeared because of any cause, whether known or unknown, that
4-17 results in the pledged goods being unavailable for return to the
4-18 pledgor.
4-19 (6) Make any charge for insurance in connection with a
4-20 pawn transaction, except for the actual cost to insure pledged
4-21 goods being shipped to a pledgor who redeemed the goods by mail.
4-22 (7) Enter any pawn transaction which has a maturity
4-23 date more than one month after the date of the transaction.
4-24 (8) Display for sale in storefront windows or sidewalk
4-25 display case so that same may be viewed from the street, any
4-26 pistol, dirk, dagger, blackjack, hand chain, sword cane, knuckles
4-27 made of any metal or any hard substance, switchblade knife,
5-1 springblade knife, or throwblade knife, or depict same on any sign
5-2 or advertisement which may be viewed from the street.
5-3 (9) Purchase used or secondhand personal property from
5-4 a person other than a pawnbroker unless a record is established
5-5 that contains:
5-6 (A) the name, address, physical description, and
5-7 the driver's license number, military identification number,
5-8 identification certificate number, or other official number capable
5-9 of identifying the seller;
5-10 (B) a complete description of the property,
5-11 including the serial number, if reasonably available, or other
5-12 identifying characteristics; and
5-13 (C) a signed document from the seller in which
5-14 the seller states that the property is not stolen or subject to a
5-15 lien or encumbrance and [providing] that the seller has the right
5-16 to sell the property.
5-17 (10) Accept as pledged goods in a pawn transaction
5-18 building construction materials, including copper pipes, tubing,
5-19 and wiring, aluminum wire, plumbing supplies, electrical supplies,
5-20 window glass, lumber, and other similar materials, unless a record
5-21 is established that contains the information required under
5-22 Subsection (9) of this section for the purchase of used or
5-23 secondhand personal property.
5-24 SECTION 6. The Texas Pawnshop Act (Article 5069-51.01 et
5-25 seq., Vernon's Texas Civil Statutes) is amended by adding Section
5-26 17A to read as follows:
5-27 Sec. 17A. PROVIDING DATA TO LAW ENFORCEMENT OFFICIAL.
6-1 (a) In this section:
6-2 (1) "Eligible pawnbroker" means a pawnbroker who:
6-3 (A) at the time of receipt of notice from an
6-4 appropriate law enforcement official has adequate computer hardware
6-5 and software to comply with the requirements of this section to
6-6 provide reportable data; and
6-7 (B) during any six-month period conducted not
6-8 fewer than 1,800 pawn transactions.
6-9 (2) "Reportable data" means the information required
6-10 to be recorded by a pawnbroker:
6-11 (A) for a pawn transaction under Sections 10(a),
6-12 (b), (c), (d), and (i) of this Act; and
6-13 (B) for a purchase transaction under Section
6-14 16(a)(9) of this Act.
6-15 (b) A law enforcement official may adopt a policy requiring
6-16 eligible pawnbrokers operating in the official's jurisdiction to
6-17 provide reportable data to the official under this section. Each
6-18 appropriate law enforcement official who adopts policies under this
6-19 section shall take appropriate steps to receive reportable data
6-20 required to be provided by an eligible pawnbroker under this
6-21 section.
6-22 (c) Not later than the 60th day after the date an eligible
6-23 pawnbroker receives notice from an appropriate law enforcement
6-24 official, the pawnbroker shall notify the official in writing as to
6-25 whether the pawnbroker has adequate computer hardware and software
6-26 to provide reportable data under this section. A pawnbroker who
6-27 does not have adequate computer hardware or software is not an
7-1 eligible pawnbroker.
7-2 (d) Before the expiration of the 60th day after the date an
7-3 eligible pawnbroker receives notice under Subsection (c) of this
7-4 section, the reporting pawnbroker shall make available all
7-5 reportable data to the appropriate law enforcement official in
7-6 ASCII text in a form normally generated by the eligible
7-7 pawnbroker's computer system on reusable media furnished by the
7-8 appropriate law enforcement official, including diskettes or other
7-9 media acceptable to both the eligible pawnbroker and the law
7-10 enforcement official. An eligible pawnbroker is not responsible
7-11 for any delay in making available reportable data because of a law
7-12 enforcement official's delay in facilitating receipt of the data.
7-13 (e) The media by which an eligible pawnbroker provides data
7-14 to an appropriate law enforcement official shall contain the
7-15 reportable data for all transactions during a particular business
7-16 period of not less than one business day and shall be available to
7-17 be picked up by the appropriate law enforcement official by the end
7-18 of the second business day after the business period to which the
7-19 data relates.
7-20 (f) During a test period beginning on the date an eligible
7-21 pawnbroker begins to provide reportable data as provided by
7-22 Subsections (d) and (e) of this section, the pawnbroker shall also
7-23 make available copies of each of the underlying pawn or purchase
7-24 transaction documents contained in the data to enable the law
7-25 enforcement official to ensure the proper operation of the system.
7-26 The test period shall be a time agreed upon by the law enforcement
7-27 official and the pawnbroker but may not exceed 90 days.
8-1 (g) An appropriate law enforcement official by written
8-2 notice may require eligible pawnbrokers in the jurisdiction of the
8-3 official to provide reportable data under this section to not more
8-4 than one other law enforcement agency in lieu of transmitting
8-5 reportable data to the law enforcement official.
8-6 (h) If an eligible pawnbroker or an appropriate law
8-7 enforcement official discovers an error in reportable data from the
8-8 pawnbroker, the pawnbroker shall be permitted not less than 30 days
8-9 from the date of receipt of notice from the law enforcement
8-10 official to correct the error. If a pawnbroker experiences a
8-11 computer malfunction, the pawnbroker shall be permitted not less
8-12 than 30 days to correct the malfunction. A pawnbroker making a
8-13 bona fide effort to make the repairs during a period referred to in
8-14 this subsection is not in violation of the requirements of this
8-15 section during the period.
8-16 (i) Notwithstanding any other provision of this section, a
8-17 pawnbroker is not obligated to:
8-18 (1) purchase computer hardware or software in order to
8-19 provide reportable data;
8-20 (2) modify software the pawnbroker owns in order to
8-21 submit reportable data;
8-22 (3) provide reportable data in a form other than that
8-23 normally produced by a software program already owned by the
8-24 pawnbroker;
8-25 (4) take action to deliver the reportable data other
8-26 than making the data available at the pawnbroker's place of
8-27 business; or
9-1 (5) make available paper copies of the transaction
9-2 documents underlying the reportable data except as provided in
9-3 Subsection (f) of this section.
9-4 (j) Reportable data transmitted to an appropriate law
9-5 enforcement official under this section is confidential and may be
9-6 used by the appropriate law enforcement official only to
9-7 investigate and prosecute crimes specifically relating to pledged
9-8 or purchased goods described in the reportable data.
9-9 SECTION 7. Sections 17B(d), (o), (p), (q), and (r), Texas
9-10 Pawnshop Act (Article 5069-51.17B, Vernon's Texas Civil Statutes),
9-11 are amended to read as follows:
9-12 (d) A pawnbroker shall notify the commissioner of all
9-13 locations at which the pawnbroker or an applicant for a pawnshop
9-14 license operates a buy shop, secondhand merchandise store, retail
9-15 outlet, or similar business or any business to which the pawnbroker
9-16 regularly transfers goods acquired through a pawn or purchase
9-17 transaction [from the pawnshop].
9-18 (o) [The commissioner may adopt rules related to the keeping
9-19 of firearms used solely for the security of the pawnshop by the
9-20 pawnbroker.]
9-21 [(p)] The commissioner may adopt rules related to the use of
9-22 outdoor displays and signs at pawnshops and the maintenance of the
9-23 premises at pawnshops.
9-24 (p) [(q)] The commissioner shall adopt rules that permit a
9-25 consumer who has filed an offense report with the local law
9-26 enforcement agency to request a pawnbroker to search the records of
9-27 the pawnshop and permit the pawnbroker to assist the consumer and
10-1 the local law enforcement agency in locating and recovering stolen
10-2 property.
10-3 (q) [(r)] The legislature has exclusive authority regarding
10-4 the operation of pawnshops, except for those matters delegated in
10-5 this Act to the commissioner. Notwithstanding the provisions of
10-6 this Act, the commissioner has the authority to regulate only those
10-7 business practices which require a pawnshop license.
10-8 SECTION 8. This Act takes effect September 1, 1997.
10-9 SECTION 9. The importance of this legislation and the
10-10 crowded condition of the calendars in both houses create an
10-11 emergency and an imperative public necessity that the
10-12 constitutional rule requiring bills to be read on three several
10-13 days in each house be suspended, and this rule is hereby suspended.