SRC-JXG H.B. 1878 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 1878
By: Averitt (Harris)
Economic Development
5/8/1999
Engrossed


DIGEST 

Currently, the license reinstatement period for a pawnshop and the license
filing period for a pawnshop employee create delays for the pawnshop
industry and its regulators. The licensing requirement for new pawnshops
entails an investigational process by which the commissioner of consumer
credit (commissioner) determines eligibility for a pawnshop license.
Additionally, disputes regarding lost or damaged goods have crowded court
dockets. H.B. 1878 would set forth provisions regarding applications for
new pawnshops; relocation of pawnshops; license reinstatement period for
pawnshops; and license requirements for pawnshop employees; and would
clarify the requirements for net assets. 

PURPOSE

As proposed, H.B. 1878 sets forth provisions regarding the regulation of
pawnshops and pawnshop employees. 
 
RULEMAKING AUTHORITY

This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 371.059, Finance Code, to require the
commissioner of consumer credit (commissioner) to approve the application
and issue a license, subject to Subsection (b). Prohibits the commissioner
from approving certain pawnshops, in a county with a population of 250,000
or more.  Authorizes the commissioner to approve an application for the
relocation of a licensed pawnshop that needs to relocate marginally further
than one mile from its existing location, or that at the time the
application is made has not been in operation in its current location for
at least three years if the necessity for relocation was caused by
circumstances beyond the applicant's control, notwithstanding Subsection
(b)(3).  Provides that a determination of distance for purposes of this
Section is based on a measurement taken from the front door of a facility
to the front door of the other facility.  Requires the location of the
front door of the proposed facility to be indicated on architectural
drawings or comparable professionally prepared drawings depicting the
facility and the entire boundary of the lot or parcel of land to which the
facility is to be attached, for a facility not in existence at the time the
application is filed.  Deletes text regarding the relocation of a pawnshop
in a county with a population of at least 250,000.  Makes conforming and
nonsubstantive changes. 

SECTION 2. Amends Section 371.064(a), Finance Code, to require a
pawnbroker,  no later than December 1, to pay to the commissioner for each
license held an annual fee of $125, rather than $100, for the year
beginning the next January 1. 

SECTION 3. Amends Section 371.071, Finance Code, as follows:

Sec. 371.071. New heading:  APPLICATION FOR RELOCATION.  Requires a
pawnbroker who wishes to move a pawnshop from the location provided on the
license to make application to the commissioner. Deletes text regarding
submitting an application to the commissioner to relocate a pawnshop. Makes
a nonsubstantive change. 

SECTION 4. Amends Section 371.072, Finance Code, to require a pawnbroker to
maintain net assets  of at least $150,000 that are used or readily
available for use in the business of each pawnshop, except as provided by
Subsection (b). Requires a pawnbroker who held a license under this chapter
before September 1, 1999, to maintain net assets that are used or readily
available for use in the business for that existing license of at least the
amount required on August 31, 1999. Provides that the net assets
requirement of this Subsection remains in effect without regard to a change
in ownership or relocation of the license. Provides that Subsection (b)
applies to a change in ownership under certain conditions.  Deletes text
regarding net assets.  Makes conforming changes. 
  
SECTION 5. Amends Section 371.101(a), Finance Code, to require an
individual who begins employment at a pawnshop to apply to the commissioner
for a pawnshop employee license no later than the 75th day, rather than
30th, after the date employment begins. 

SECTION 6. Amends Section 371.106(a), Finance Code, to require a pawnshop
employee license holder, no later than December 1, to pay the commissioner
an annual fee of $15, rather than $10, for the year beginning the next
January 1.  

SECTION 7. Amends Section 371.258, Finance Code, by adding Subsection (c),
to require the commissioner to reinstate an expired pawnbroker license if,
no later than the 180th day after the date on which the license expired,
the pawnbroker pays the commissioner the delinquent $125 annual fee plus a
reinstatement fee of $1,000. Requires the commissioner to promptly send
notice of reinstatement rights to the delinquent pawnbroker by certified
mail, after a pawnbroker's licensed has expired.  

SECTION 8. Effective date: September 1, 1999.
           Makes application of this Act prospective.

SECTION 9. Emergency clause.