HBA-ATS, TYH H.B. 2223 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2223 By: Solomons Financial Institutions 6/4/1999 Enrolled BACKGROUND AND PURPOSE The legislature adopted the Sale of Checks Act (Act) in 1963. The regulatory scheme encompassed the payment of $50 to obtain a license. After a large money order company filed for bankruptcy and Texas citizens lost money, the legislature adopted amendments establishing minimum net worth and bonding requirements and giving the Texas Department of Banking (department) examination and enforcement authority. Legislative amendments during the 1990s expanded the definition of "check" to include electronic transmittals, increased bond amounts, imposed reporting requirements, and provided rulemaking and additional enforcement authority to the department. Prior to the 76th Legislature, some large license holders were not able to provide audited financial statements after the end of the fiscal year because the law did not provide flexibility to permit an extension of time for filing comprehensive financial reports. H.B. 2223 requires a license holder, before April 15 of each year, or a later date the banking commissioner of Texas (commissioner) approves in writing for good cause shown, to file an annual audited unconsolidated financial statement dated as of the last day of the license holder's fiscal year that ended in the immediately preceding calendar year. H.B. 2223 also requires a license holder, unless waived by the commissioner, to file within 45 days of the last day of each quarter of the license holder's fiscal year with the commissioner a certification of net worth and a report, rather than an unconsolidated financial statement and required reports, regarding maintaining permissible investments. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 152.305, Finance Code, as follows: Sec. 152.305. FINANCIAL STATEMENTS AND REPORTS. (a) Requires a license holder, unless waived by the banking commissioner of Texas (commissioner), to file within 45 days of the last day of each quarter of the license holder's fiscal year with the commissioner a certification of net worth and a report regarding maintaining permissible investments under Section 152.301(Minimum Security and Net Worth of License Holder) and 152.3015 (Phase-in of Minimum Security Requirement for Certain License Holders) for the preceding quarter submitted on forms furnished by the commissioner. Deletes text specifying an unconsolidated financial statement as part of the report. Makes conforming changes. (b) Requires a license holder, before April 15 of each year, or a later date the commissioner approves in writing for good cause shown, to file an annual audited unconsolidated financial statement dated as of the last day of the license holder's fiscal year that ended in the immediately preceding calendar year. Deletes text specifying the time period to be within 120 days after the last day of the license holder's fiscal year. SECTION 2. Repealer: Section 152.303, Finance Code (Report of Business Locations). This section relates to the reporting of business locations for a license holder that does not have on file a bond or maintain deposits in the undiminished principal amount of at least $500,000. SECTION 3. Effective date: September 1, 1999. SECTION 4. Emergency clause.