By: Armbrister S.B. No. 1274
97S0763/1
A BILL TO BE ENTITLED
AN ACT
1-1 relating to the regulation of pawnshops and pawnbrokers.
1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-3 SECTION 1. Section 3, Texas Pawnshop Act (Article
1-4 5069-51.03, Vernon's Texas Civil Statutes), is amended by amending
1-5 Subsection (b) and adding Subsection (e) to read as follows:
1-6 (b) A pawnbroker may not employ an individual for the
1-7 purpose of writing pawn transactions, buying and/or selling
1-8 merchandise, or the supervising of employees writing pawn
1-9 transactions or buying and/or selling merchandise after the 60-day
1-10 [30-day] grace period for filing an application for a pawnshop
1-11 employee license unless the person:
1-12 (1) has timely filed an application for a pawnshop
1-13 employee license and is awaiting the commissioner's decision on the
1-14 application; or
1-15 (2) possesses a valid pawnshop employee license.
1-16 (e) A transaction is not a change in ownership for the
1-17 purposes of this section if only the number of owners changes or
1-18 the proportionate share of ownership by an individual changes and
1-19 an individual who was an owner of not more than a five percent
1-20 equity interest in the business before the date of the transaction
1-21 retains not more than a five percent equity interest after the date
1-22 of the transaction.
1-23 SECTION 2. Subsection (f), Section 5, Texas Pawnshop Act
2-1 (Article 5069-51.05, Vernon's Texas Civil Statutes), is amended to
2-2 read as 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
3-1 Finance Charge) which must be paid to redeem the pledged goods on
3-2 the maturity date, designated as the "Total of Payments";
3-3 (h) The "Annual Percentage Rate", computed in
3-4 accordance with the regulations issued by the Federal Reserve Board
3-5 of the United States pursuant to the Truth-in-Lending Act, Title I,
3-6 Act of May 29, 1968, Public Law 90-321, 82 Stat. 146, as amended;
3-7 (i) The maturity date of the pawn transaction;
3-8 (j) A statement to the effect that the pledgor is not
3-9 obligated to redeem the pledged goods, and that the pledged goods
3-10 may be forfeited to the pawnbroker sixty days after the specified
3-11 maturity date; and
3-12 (k) A statement by the pledgor that the pledged goods
3-13 are not stolen and are not subject to a lien or encumbrance and
3-14 that the pledgor has the right to enter into the pawn transaction
3-15 with regard to the pledged goods.
3-16 SECTION 4. Section 11, Texas Pawnshop Act (Article
3-17 5069-51.11, Vernon's Texas Civil Statutes), is amended to read as
3-18 follows:
3-19 Sec. 11. PLEDGOR'S LIABILITY PROHIBITED. A pledgor shall
3-20 have no obligation to redeem pledged goods or make any payment on a
3-21 pawn transaction, except for a false statement made under Section
3-22 10(k) of this Act or as otherwise ordered by a court.
3-23 SECTION 5. Subsection (a), Section 16, Texas Pawnshop Act
3-24 (Article 5069-51.16, Vernon's Texas Civil Statutes), is amended to
3-25 read as follows:
4-1 (a) A pawnbroker shall not:
4-2 (1) Accept a pledge or purchase property from a person
4-3 under the age of eighteen years.
4-4 (2) Make any agreement requiring the personal
4-5 liability of a pledgor in connection with a pawn transaction,
4-6 except for the statement required by the pledgor under Section
4-7 10(k) of this Act.
4-8 (3) Accept any waiver, in writing or otherwise, of any
4-9 right or protection accorded a pledgor under this Act.
4-10 (4) Fail to exercise reasonable care to protect
4-11 pledged goods from loss or damage.
4-12 (5) Fail to return pledged goods to a pledgor upon
4-13 payment of the full amount due the pawnbroker on the pawn
4-14 transaction. In the event such pledged goods are lost or damaged
4-15 while in the possession of the pawnbroker it shall be the
4-16 responsibility of the pawnbroker to replace the lost or damaged
4-17 goods with like kind(s) of merchandise. All such replacements are
4-18 subject to the approval or rejection of the Commissioner. For the
4-19 purposes of this subdivision, "lost" includes destroyed or having
4-20 disappeared because of any cause, whether known or unknown, that
4-21 results in the pledged goods being unavailable for return to the
4-22 pledgor.
4-23 (6) Make any charge for insurance in connection with a
4-24 pawn transaction, except for the actual cost to insure pledged
4-25 goods being shipped to a pledgor who redeemed the goods by mail.
5-1 (7) Enter any pawn transaction which has a maturity
5-2 date more than one month after the date of the transaction.
5-3 (8) Display for sale in storefront windows or sidewalk
5-4 display case so that same may be viewed from the street, any
5-5 pistol, dirk, dagger, blackjack, hand chain, sword cane, knuckles
5-6 made of any metal or any hard substance, switchblade knife,
5-7 springblade knife, or throwblade knife, or depict same on any sign
5-8 or advertisement which may be viewed from the street.
5-9 (9) Purchase used or secondhand personal property from
5-10 a person other than a pawnbroker unless a record is established
5-11 that contains:
5-12 (A) the name, address, physical description, and
5-13 the driver's license number, military identification number,
5-14 identification certificate number, or other official number capable
5-15 of identifying the seller;
5-16 (B) a complete description of the property,
5-17 including the serial number, if reasonably available, or other
5-18 identifying characteristics; and
5-19 (C) a signed document from the seller in which
5-20 the seller states that the property is not stolen or subject to a
5-21 lien or encumbrance and [providing] that the seller has the right
5-22 to sell the property.
5-23 (10) Accept as pledged goods in a pawn transaction
5-24 building construction materials, including copper pipes, tubing,
5-25 and wiring, aluminum wire, plumbing supplies, electrical supplies,
6-1 window glass, lumber, and other similar materials, unless a record
6-2 is established that contains the information required under
6-3 Subsection (9) of this section for the purchase of used or
6-4 secondhand personal property.
6-5 SECTION 6. The Texas Pawnshop Act (Article 5069-51.01 et
6-6 seq., Vernon's Texas Civil Statutes) is amended by adding Section
6-7 17A to read as follows:
6-8 Sec. 17A. PROVIDING DATA TO LAW ENFORCEMENT OFFICIAL.
6-9 (a) In this section:
6-10 (1) "Eligible pawnbroker" means a pawnbroker who:
6-11 (A) at the time of receipt of notice from an
6-12 appropriate law enforcement official has adequate computer hardware
6-13 and software to comply with the requirements of this section to
6-14 provide reportable data; and
6-15 (B) during any six-month period conducted not
6-16 fewer than 1,800 pawn transactions.
6-17 (2) "Reportable data" means the information required
6-18 to be recorded by a pawnbroker:
6-19 (A) for a pawn transaction under Sections 10(a),
6-20 (b), (c), (d), and (i) of this Act; and
6-21 (B) for a purchase transaction under Section
6-22 16(a)(9) of this Act.
6-23 (b) A law enforcement official may adopt a policy requiring
6-24 eligible pawnbrokers operating in the official's jurisdiction to
6-25 provide reportable data to the official under this section. Each
7-1 appropriate law enforcement official who adopts policies under this
7-2 section shall take appropriate steps to receive reportable data
7-3 required to be provided by an eligible pawnbroker under this
7-4 section.
7-5 (c) Not later than the 60th day after the date an eligible
7-6 pawnbroker receives notice from an appropriate law enforcement
7-7 official, the pawnbroker shall notify the official in writing as to
7-8 whether the pawnbroker has adequate computer hardware and software
7-9 to provide reportable data under this section. A pawnbroker who
7-10 does not have adequate computer hardware or software is not an
7-11 eligible pawnbroker.
7-12 (d) Before the expiration of the 60th day after the date an
7-13 eligible pawnbroker receives notice under Subsection (c) of this
7-14 section, the reporting pawnbroker shall make available all
7-15 reportable data to the appropriate law enforcement official in
7-16 ASCII text in a form normally generated by the eligible
7-17 pawnbroker's computer system on reusable media furnished by the
7-18 appropriate law enforcement official, including diskettes or other
7-19 media acceptable to both the eligible pawnbroker and the law
7-20 enforcement official. An eligible pawnbroker is not responsible
7-21 for any delay in making available reportable data because of a law
7-22 enforcement official's delay in facilitating receipt of the data.
7-23 (e) The media by which an eligible pawnbroker provides data
7-24 to an appropriate law enforcement official shall contain the
7-25 reportable data for all transactions during a particular business
8-1 period of not less than one business day and shall be available to
8-2 be picked up by the appropriate law enforcement official by the end
8-3 of the second business day after the business period to which the
8-4 data relates.
8-5 (f) During a test period beginning on the date an eligible
8-6 pawnbroker begins to provide reportable data as provided by
8-7 Subsections (d) and (e) of this section, the pawnbroker shall also
8-8 make available copies of each of the underlying pawn or purchase
8-9 transaction documents contained in the data to enable the law
8-10 enforcement official to ensure the proper operation of the system.
8-11 The test period shall be a time agreed upon by the law enforcement
8-12 official and the pawnbroker but may not exceed 90 days.
8-13 (g) An appropriate law enforcement official by written
8-14 notice may require eligible pawnbrokers in the jurisdiction of the
8-15 official to provide reportable data under this section to not more
8-16 than one other law enforcement agency in lieu of transmitting
8-17 reportable data to the law enforcement official.
8-18 (h) If an eligible pawnbroker or an appropriate law
8-19 enforcement official discovers an error in reportable data from the
8-20 pawnbroker, the pawnbroker shall be permitted not less than 30 days
8-21 from the date of receipt of notice from the law enforcement
8-22 official to correct the error. If a pawnbroker experiences a
8-23 computer malfunction, the pawnbroker shall be permitted not less
8-24 than 30 days to correct the malfunction. A pawnbroker making a
8-25 bona fide effort to make the repairs during a period referred to in
9-1 this subsection is not in violation of the requirements of this
9-2 section during the period.
9-3 (i) Notwithstanding any other provision of this section, a
9-4 pawnbroker is not obligated to:
9-5 (1) purchase computer hardware or software in order to
9-6 provide reportable data;
9-7 (2) modify software the pawnbroker owns in order to
9-8 submit reportable data;
9-9 (3) provide reportable data in a form other than that
9-10 normally produced by a software program already owned by the
9-11 pawnbroker;
9-12 (4) take action to deliver the reportable data other
9-13 than making the data available at the pawnbroker's place of
9-14 business; or
9-15 (5) make available paper copies of the transaction
9-16 documents underlying the reportable data except as provided in
9-17 Subsection (f) of this section.
9-18 (j) Reportable data transmitted to an appropriate law
9-19 enforcement official under this section is confidential and may be
9-20 used by the appropriate law enforcement official only to
9-21 investigate and prosecute crimes specifically relating to pledged
9-22 or purchased goods described in the reportable data.
9-23 SECTION 7. Subsections (d), (o), (p), (q), and (r), Section
9-24 17B, Texas Pawnshop Act (Article 5069-51.17B, Vernon's Texas Civil
9-25 Statutes), are amended to read as follows:
10-1 (d) A pawnbroker shall notify the commissioner of all
10-2 locations at which the pawnbroker or an applicant for a pawnshop
10-3 license operates a buy shop, secondhand merchandise store, retail
10-4 outlet, or similar business or any business to which the pawnbroker
10-5 regularly transfers goods acquired through a pawn or purchase
10-6 transaction [from the pawnshop].
10-7 (o) [The commissioner may adopt rules related to the keeping
10-8 of firearms used solely for the security of the pawnshop by the
10-9 pawnbroker.]
10-10 [(p)] The commissioner may adopt rules related to the use of
10-11 outdoor displays and signs at pawnshops and the maintenance of the
10-12 premises at pawnshops.
10-13 (p) [(q)] The commissioner shall adopt rules that permit a
10-14 consumer who has filed an offense report with the local law
10-15 enforcement agency to request a pawnbroker to search the records of
10-16 the pawnshop and permit the pawnbroker to assist the consumer and
10-17 the local law enforcement agency in locating and recovering stolen
10-18 property.
10-19 (q) [(r)] The legislature has exclusive authority regarding
10-20 the operation of pawnshops, except for those matters delegated in
10-21 this Act to the commissioner. Notwithstanding the provisions of
10-22 this Act, the commissioner has the authority to regulate only those
10-23 business practices which require a pawnshop license.
10-24 SECTION 8. This Act takes effect September 1, 1997.
10-25 SECTION 9. The importance of this legislation and the
11-1 crowded condition of the calendars in both houses create an
11-2 emergency and an imperative public necessity that the
11-3 constitutional rule requiring bills to be read on three several
11-4 days in each house be suspended, and this rule is hereby suspended.