By Averitt H.B. No. 1878
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of pawnbrokers and pawnshop employees.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 371.059, Finance Code, is amended to read
1-5 as follows:
1-6 Sec. 371.059. APPROVAL; ISSUANCE OF LICENSE. (a) Subject
1-7 to Subsection (b), the [The] commissioner shall approve the
1-8 application and issue a license if the commissioner finds that[:]
1-9 [(1)] the applicant is eligible for the license.
1-10 (b) In a county with a population of 250,000 or more, the
1-11 commissioner may not approve[; and]
1-12 [(2) for] an application for:
1-13 (1) an original license to operate a pawnshop at a
1-14 facility that is not an existing licensed pawnshop at the time the
1-15 application is filed if the proposed facility is located within two
1-16 miles of a licensed pawnshop;
1-17 (2) the relocation of a licensed pawnshop to a
1-18 facility that is not an existing licensed pawnshop at the time the
1-19 application is filed and that is located within one mile of a
1-20 licensed pawnshop; and
1-21 (3) the relocation of a licensed pawnshop if at the
1-22 time the application is filed the pawnshop has not been in
1-23 operation at its current location for at least three years, and the
1-24 facility where the pawnshop is to be relocated is further than one
2-1 mile from its existing location and closer than one mile to an
2-2 existing licensed operating pawnshop.
2-3 (c) Notwithstanding Subsection (b)(3), the commissioner may
2-4 approve an application for the relocation of a licensed pawnshop
2-5 that needs to relocate marginally further than one mile from its
2-6 existing location or that at the time the application is made has
2-7 not been in operation in its current location for at least three
2-8 years if the necessity for relocation was caused by circumstances
2-9 beyond the applicant's control.
2-10 (d) A determination of distance for purposes of this section
2-11 is based on a measurement taken from the front door of a facility
2-12 to the front door of the other facility. For a facility not in
2-13 existence at the time the application is filed, the location of the
2-14 front door of the proposed facility must be indicated on
2-15 architectural drawings or comparable professionally prepared
2-16 drawings depicting the facility and the entire boundary of the lot
2-17 or parcel of land to which the facility is to be attached [in or
2-18 the relocation of a pawnshop to a county with a population of at
2-19 least 250,000:]
2-20 [(A) there is a public need for the proposed
2-21 pawnshop; and]
2-22 [(B) the volume of business in the community in
2-23 which the pawnshop will conduct its business indicates a profitable
2-24 operation is probable].
2-25 SECTION 2. Section 371.064(a), Finance Code, is amended to
2-26 read as follows:
2-27 (a) Not later than December 1, a pawnbroker shall pay to the
3-1 commissioner for each license held an annual fee of $125 [$100] for
3-2 the year beginning the next January 1.
3-3 SECTION 3. Section 371.071, Finance Code, is amended to read
3-4 as follows:
3-5 Sec. 371.071. APPLICATION FOR [NOTICE OF] RELOCATION. [(a)]
3-6 A pawnbroker who wishes to move a pawnshop from the location
3-7 provided on the license must make application to the commissioner[:]
3-8 [(1) give notice to the commissioner] before the 30th
3-9 day preceding the date the pawnbroker moves [if the new location is
3-10 not subject to Section 371.059(2); or]
3-11 [(2) make application to the commissioner before the
3-12 60th day preceding the date the pawnbroker moves if the new
3-13 location is subject to Section 371.059(2).]
3-14 [(b) When the commissioner receives a notice under
3-15 Subsection (a)(1), the commissioner shall amend the license
3-16 accordingly].
3-17 SECTION 4. Section 371.072, Finance Code, is amended to read
3-18 as follows:
3-19 Sec. 371.072. NET ASSETS REQUIREMENT. (a) Except as
3-20 provided by Subsection (b) [this section], a pawnbroker shall
3-21 maintain net assets of at least $150,000 that are used or readily
3-22 available for use in the business of each pawnshop.
3-23 (b) A pawnbroker who held a license under this chapter
3-24 before September 1, 1999, shall maintain net assets that are used
3-25 or readily available for use in the business for that existing
3-26 license of at least the amount required on August 31, 1999. The
3-27 net assets requirement of this subsection remains in effect without
4-1 regard to a change in ownership or relocation of the license [If a
4-2 change in ownership or a relocation from a municipality occurs, the
4-3 net assets requirement for a pawnbroker is an amount equal to the
4-4 sum, rounded to the next higher multiple of $5,000, of:]
4-5 [(1) the pawnbroker's outstanding loans on the date of
4-6 the change of ownership or relocation;]
4-7 [(2) the value of the pawnbroker's inventory on that
4-8 date; and]
4-9 [(3) an amount equal to five percent of the sum of the
4-10 amounts described by Subdivisions (1) and (2).]
4-11 [(c) The net assets requirement of Subsection (b) may not
4-12 be:]
4-13 [(1) less than the amount of net assets required
4-14 immediately before the date of the change of ownership or
4-15 relocation; or]
4-16 [(2) more than $150,000.]
4-17 [(d) Subject to Subsection (b), a pawnbroker shall maintain
4-18 for each pawnshop net assets that are used or readily available for
4-19 use in the business of the pawnshop of at least the amount required
4-20 on:]
4-21 [(1) August 31, 1981, if the pawnbroker held a license
4-22 on that date; or]
4-23 [(2) June 20, 1987, if the pawnbroker held a license
4-24 on that date but did not hold a license on August 31, 1981].
4-25 (c) [(e)] Net assets must be represented by a capital
4-26 investment unencumbered by a lien or other encumbrance and subject
4-27 to a claim by a general creditor.
5-1 (d) [(f)] In this section, "capital investment" means:
5-2 (1) common or preferred shares and capital or earned
5-3 surplus as those terms are defined by the Texas Business
5-4 Corporation Act if the pawnbroker is a corporation; or
5-5 (2) a substantial equivalent of items described by
5-6 Subdivision (1), as determined by generally accepted accounting
5-7 principles, if the pawnbroker is not a corporation.
5-8 (e) Subsection (b) applies [(g) This section does not
5-9 apply] to a change in ownership that is:
5-10 (1) a transaction involving a different owner who had
5-11 a significant family or business relationship with a prior owner
5-12 before the transaction;
5-13 (2) a transaction in which:
5-14 (A) only the number or proportionate ownership
5-15 of owners of a business changes; and
5-16 (B) an individual who was not an owner before
5-17 the transaction is not an owner after the transaction; or
5-18 (3) a change in ownership that occurs by testate or
5-19 intestate disposition.
5-20 SECTION 5. Section 371.101(a), Finance Code, is amended to
5-21 read as follows:
5-22 (a) An individual who begins employment at a pawnshop must
5-23 apply to the commissioner for a pawnshop employee license not later
5-24 than the 75th [30th] day after the date employment begins.
5-25 SECTION 6. Section 371.106(a), Finance Code, is amended to
5-26 read as follows:
5-27 (a) Not later than December 1, a pawnshop employee license
6-1 holder shall pay to the commissioner an annual fee of $15 [$10] for
6-2 the year beginning the next January 1.
6-3 SECTION 7. Section 371.258, Finance Code, is amended by
6-4 adding Subsection (c) to read as follows:
6-5 (c) The commissioner shall reinstate an expired pawnbroker
6-6 license if, not later than the 180th day after the date on which
6-7 the license expired, the pawnbroker pays the commissioner the
6-8 delinquent $125 annual fee plus a reinstatement fee of $1,000.
6-9 After a pawnbroker's license has expired, the commissioner shall
6-10 promptly send notice of reinstatement rights to the delinquent
6-11 pawnbroker by certified mail.
6-12 SECTION 8. (a) This Act takes effect September 1, 1999.
6-13 The changes in law made by this Act to Sections 371.059 and
6-14 371.071, Finance Code, apply only to applications filed on or after
6-15 the effective date of this Act.
6-16 (b) An application filed before the effective date of this
6-17 Act is covered by the law in effect when the application was
6-18 submitted, and the former law is continued in effect for that
6-19 purpose.
6-20 SECTION 9. The importance of this legislation and the
6-21 crowded condition of the calendars in both houses create an
6-22 emergency and an imperative public necessity that the
6-23 constitutional rule requiring bills to be read on three several
6-24 days in each house be suspended, and this rule is hereby suspended.