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 shall 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 not located within
1-16 two 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 if the facility where the pawnshop is to be
1-20 relocated is not located within one mile of a licensed pawnshop;
1-21 and
1-22 (3) the relocation of a licensed pawnshop if at the
1-23 time the application is filed the pawnshop has been in operation at
1-24 its current location for at least three years, and the facility
2-1 where the pawnshop is to be relocated is either within one mile of
2-2 its existing location or, if in excess of one mile from its
2-3 existing location, not within one mile of another existing
2-4 operating pawnshop.
2-5 (c) Notwithstanding Subsection (b)(3), the commissioner may
2-6 approve an application for the relocation of a licensed pawnshop
2-7 that needs to relocate marginally further than one mile from its
2-8 existing location or that at the time the application is made has
2-9 not been in operation in its current location for at least three
2-10 years if the necessity for relocation was caused by circumstances
2-11 beyond the applicant's control.
2-12 (d) A determination of distance for purposes of this section
2-13 is based on a measurement taken from the front door of a facility
2-14 to the front door of the other facility. For a facility not in
2-15 existence at the time the application is filed, the location of the
2-16 front door of the proposed facility must be indicated on
2-17 architectural drawings or comparable professionally prepared
2-18 drawings depicting the facility and the entire boundary of the lot
2-19 or parcel of land to which the facility is to be attached [in or
2-20 the relocation of a pawnshop to a county with a population of at
2-21 least 250,000:]
2-22 [(A) there is a public need for the proposed
2-23 pawnshop; and]
2-24 [(B) the volume of business in the community in
2-25 which the pawnshop will conduct its business indicates a profitable
2-26 operation is probable].
2-27 SECTION 2. Section 371.064(a), Finance Code, is amended to
3-1 read as follows:
3-2 (a) Not later than December 1, a pawnbroker shall pay to the
3-3 commissioner for each license held an annual fee of $125 [$100] for
3-4 the year beginning the next January 1.
3-5 SECTION 3. Section 371.071, Finance Code, is amended to read
3-6 as follows:
3-7 Sec. 371.071. APPLICATION FOR [NOTICE OF] RELOCATION. [(a)]
3-8 A pawnbroker who wishes to move a pawnshop from the location
3-9 provided on the license must make application to the commissioner[:]
3-10 [(1) give notice to the commissioner] before the 30th
3-11 day preceding the date the pawnbroker moves [if the new location is
3-12 not subject to Section 371.059(2); or]
3-13 [(2) make application to the commissioner before the
3-14 60th day preceding the date the pawnbroker moves if the new
3-15 location is subject to Section 371.059(2).]
3-16 [(b) When the commissioner receives a notice under
3-17 Subsection (a)(1), the commissioner shall amend the license
3-18 accordingly].
3-19 SECTION 4. Section 371.072, Finance Code, is amended to read
3-20 as follows:
3-21 Sec. 371.072. NET ASSETS REQUIREMENT. (a) Except as
3-22 provided by Subsection (b) [this section], a pawnbroker shall
3-23 maintain net assets of at least $150,000 that are used or readily
3-24 available for use in the business of each pawnshop.
3-25 (b) A pawnbroker who held a license under this chapter
3-26 before September 1, 1999, shall maintain net assets that are used
3-27 or readily available for use in the business for that existing
4-1 license of at least the amount required on August 31, 1999. The
4-2 net assets requirement of this subsection remains in effect without
4-3 regard to a change in ownership or relocation of the license [If a
4-4 change in ownership or a relocation from a municipality occurs, the
4-5 net assets requirement for a pawnbroker is an amount equal to the
4-6 sum, rounded to the next higher multiple of $5,000, of:]
4-7 [(1) the pawnbroker's outstanding loans on the date of
4-8 the change of ownership or relocation;]
4-9 [(2) the value of the pawnbroker's inventory on that
4-10 date; and]
4-11 [(3) an amount equal to five percent of the sum of the
4-12 amounts described by Subdivisions (1) and (2).]
4-13 [(c) The net assets requirement of Subsection (b) may not
4-14 be:]
4-15 [(1) less than the amount of net assets required
4-16 immediately before the date of the change of ownership or
4-17 relocation; or]
4-18 [(2) more than $150,000.]
4-19 [(d) Subject to Subsection (b), a pawnbroker shall maintain
4-20 for each pawnshop net assets that are used or readily available for
4-21 use in the business of the pawnshop of at least the amount required
4-22 on:]
4-23 [(1) August 31, 1981, if the pawnbroker held a license
4-24 on that date; or]
4-25 [(2) June 20, 1987, if the pawnbroker held a license
4-26 on that date but did not hold a license on August 31, 1981].
4-27 (c) [(e)] Net assets must be represented by a capital
5-1 investment unencumbered by a lien or other encumbrance and subject
5-2 to a claim by a general creditor.
5-3 (d) [(f)] In this section, "capital investment" means:
5-4 (1) common or preferred shares and capital or earned
5-5 surplus as those terms are defined by the Texas Business
5-6 Corporation Act if the pawnbroker is a corporation; or
5-7 (2) a substantial equivalent of items described by
5-8 Subdivision (1), as determined by generally accepted accounting
5-9 principles, if the pawnbroker is not a corporation.
5-10 (e) Subsection (b) applies [(g) This section does not
5-11 apply] to a change in ownership that is:
5-12 (1) a transaction involving a different owner who had
5-13 a significant family or business relationship with a prior owner
5-14 before the transaction;
5-15 (2) a transaction in which:
5-16 (A) only the number or proportionate ownership
5-17 of owners of a business changes; and
5-18 (B) an individual who was not an owner before
5-19 the transaction is not an owner after the transaction; or
5-20 (3) a change in ownership that occurs by testate or
5-21 intestate disposition.
5-22 SECTION 5. Section 371.101(a), Finance Code, is amended to
5-23 read as follows:
5-24 (a) An individual who begins employment at a pawnshop must
5-25 apply to the commissioner for a pawnshop employee license not later
5-26 than the 75th [30th] day after the date employment begins.
5-27 SECTION 6. Section 371.106(a), Finance Code, is amended to
6-1 read as follows:
6-2 (a) Not later than December 1, a pawnshop employee license
6-3 holder shall pay to the commissioner an annual fee of $15 [$10] for
6-4 the year beginning the next January 1.
6-5 SECTION 7. Section 371.167(a), Finance Code, is amended to
6-6 read as follows:
6-7 (a) A pawnbroker shall replace pledged goods that are lost
6-8 or damaged while in the pawnbroker's possession with like kind
6-9 merchandise. The replacement is subject to approval by the
6-10 commissioner and the pledgor must exhaust this administrative
6-11 remedy with respect to the lost or damaged pledged goods before
6-12 seeking a remedy in court. If the commissioner does not approve a
6-13 replacement before the 91st day after the date on which the
6-14 commissioner receives a complaint from the pledgor concerning the
6-15 lost or damaged goods, or if the pledgor does not accept the
6-16 commissioner's determination, the pledgor may seek a remedy in
6-17 court.
6-18 SECTION 8. Section 371.258, Finance Code, is amended by
6-19 adding Subsection (c) to read as follows:
6-20 (c) The commissioner shall reinstate an expired pawnbroker
6-21 license if, not later than the 180th day after the date on which
6-22 the license expired, the pawnbroker pays the commissioner the
6-23 delinquent $125 annual fee plus a reinstatement fee of $1,000.
6-24 After a pawnbroker's license has expired, the commissioner shall
6-25 promptly send notice of reinstatement rights to the delinquent
6-26 pawnbroker by certified mail.
6-27 SECTION 9. (a) This Act takes effect September 1, 1999.
7-1 The changes in law made by this Act to Sections 371.059 and
7-2 371.071, Finance Code, apply only to applications filed on or after
7-3 the effective date of this Act.
7-4 (b) An application filed before the effective date of this
7-5 Act is covered by the law in effect when the application was
7-6 submitted, and the former law is continued in effect for that
7-7 purpose.
7-8 (c) The net assets requirement under Section 371.072,
7-9 Finance Code, as amended by this Act, for an existing license on
7-10 the effective date of this Act remains in effect as the net assets
7-11 requirement that existed immediately before the effective date of
7-12 this Act.
7-13 SECTION 10. The importance of this legislation and the
7-14 crowded condition of the calendars in both houses create an
7-15 emergency and an imperative public necessity that the
7-16 constitutional rule requiring bills to be read on three several
7-17 days in each house be suspended, and this rule is hereby suspended.
_______________________________ _______________________________
President of the Senate Speaker of the House
I certify that H.B. No. 1878 was passed by the House on April
22, 1999, by a non-record vote; and that the House concurred in
Senate amendments to H.B. No. 1878 on May 27, 1999, by a non-record
vote.
_______________________________
Chief Clerk of the House
I certify that H.B. No. 1878 was passed by the Senate, with
amendments, on May 24, 1999, by the following vote: Yeas 30, Nays
0.
_______________________________
Secretary of the Senate
APPROVED: _____________________
Date
_____________________
Governor