78R5334 ATP-F
By: Armbrister S.B. No. 783
A BILL TO BE ENTITLED
AN ACT
relating to property in the custody of a pawnbroker; providing
criminal penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subchapter D, Chapter 371, Finance Code, is
amended by adding Section 371.1821 to read as follows:
Sec. 371.1821. LAW ENFORCEMENT HOLD PROCEDURE; PLEDGE OR
SALE OF MISAPPROPRIATED PROPERTY. (a) In this section:
(1) "Chief law enforcement officer" means:
(A) the sheriff of the county in which the
pawnshop is located or the officer of the sheriff's department
designated by the sheriff, if the pawnshop is not located in a
municipality that maintains a police department; or
(B) the police chief of the municipality in which
the pawnshop is located or the police officer designated by the
police chief, if the pawnshop is located in a municipality that
maintains a police department.
(2) "Misappropriated" means stolen, embezzled,
converted, or otherwise wrongfully appropriated, or pledged
against the will of the owner of the goods or a person holding a
perfected security interest in the goods.
(b) If a chief law enforcement officer has probable cause to
believe that goods in the possession of a pawnbroker are
misappropriated, the officer may place a hold order on the goods.
(c) Goods subject to a hold order must be physically
retained by the pawnbroker in a secure area and may not be released,
sold, redeemed, or disposed of unless:
(1) the chief law enforcement officer placing the hold
order delivers a written release to the pawnbroker;
(2) the hold order expires; or
(3) a court order, including a search warrant,
requires the release, sale, or disposal of the property.
(d) A hold order is effective only if it contains:
(1) the name of the pawnbroker;
(2) the name and mailing address of the pawnshop where
the goods are located;
(3) the name, title, badge number, case number, and
phone number of the chief law enforcement officer placing the hold
order;
(4) a complete description of the goods to be held,
including any model number and serial number, and the related pawn
or purchase ticket number;
(5) the expiration date of the hold order; and
(6) the name of the law enforcement agency that
prepared the investigative report and the associated number of the
report.
(e) The hold order and any extension of the hold order must
be signed and dated by the chief law enforcement officer and the
pawnbroker or the pawnbroker's designee, as evidence of the hold
order's issuance by the chief law enforcement officer, the
pawnbroker's receipt of the hold order, and the beginning of the
holding period. The chief law enforcement officer shall provide at
no cost to the pawnbroker an executed copy of the hold order for the
pawnbroker's records.
(f) The initial holding period of the hold order may not
exceed 60 days. A hold order may be extended for up to two
successive 30-day periods on written notification to the pawnbroker
before the expiration of the immediately preceding holding period
or extension. A hold order may be released before the expiration of
the holding period or extension by written release from the chief
law enforcement officer who placed the initial hold order. A hold
order is considered expired on the expiration date stated on the
hold order if the holding period is not extended under this
subsection.
(g) Goods subject to a hold order may be released to the
custody of the chief law enforcement officer for use in a criminal
investigation if the officer furnishes a written receipt for the
goods. The release of the goods to the custody of the chief law
enforcement officer is not considered a waiver or release of the
pawnbroker's rights or interest in the goods. The chief law
enforcement officer shall return the goods to the pawnbroker on the
completion of the criminal investigation or on the expiration of
the hold order and any extensions.
(h) A person commits an offense if the person pledges with
or sells to a pawnbroker misappropriated property. An offense
under this subsection is a Class B misdemeanor.
SECTION 2. Chapter 371, Finance Code, is amended by adding
Subchapter H to read as follows:
SUBCHAPTER H. PROVIDING DATA TO LAW ENFORCEMENT AGENCIES BY
ELECTRONIC MEANS
Sec. 371.351. DEFINITIONS. In this subchapter:
(1) "Database" means an Internet repository of
reportable data.
(2) "Provider" means a commercial enterprise
primarily engaged in the business of establishing and maintaining
one or more Internet databases.
(3) "Reportable data" means the information recorded
by a pawnbroker under Sections 371.157(1)-(4) and 371.177.
Sec. 371.352. ELECTRONIC REPORTING. (a) A pawnbroker who
generates computerized pawn and purchase tickets and has access to
Internet service on September 1, 2003, shall provide reportable
data to a law enforcement agency by transmitting the reportable
data electronically, in the format used by the pawnbroker's
computer software, to a database as provided by this subchapter. A
pawnbroker who is licensed after September 1, 2003, who generates
computerized pawn and purchase tickets and has access to Internet
service shall provide reportable data to a law enforcement agency
by transmitting the reportable data electronically, in the format
used by the pawnbroker's computer software, to a database as
provided by this subchapter.
(b) A pawnbroker who electronically reports information
under this subchapter shall transmit reportable data to a law
enforcement agency before the seventh day after the date of the
transaction to which the data relates, or within a shorter period as
agreed on by the pawnbroker and the sheriff or chief of the law
enforcement agency. The transmission must be completed before the
end of the next business day after the date the reporting period
under this subsection ends.
Sec. 371.353. DATABASE OF REPORTABLE DATA. (a) A provider
may establish a database for the purposes of providing law
enforcement agencies with useful information to facilitate the
investigation of alleged property crimes and protecting the privacy
rights of pawn customers and pawnbrokers.
(b) The provider shall collect and maintain the reportable
data and shall update the database at least daily. The database
shall contain the security features necessary to ensure that the
reportable data maintained in the database can be accessed only by
law enforcement personnel in accordance with this subchapter.
Sec. 371.354. CHARGES FOR USE OF DATABASE. (a) A provider
may charge a law enforcement agency directly for access to the
database. The charge for the use of the database may be based on the
number of users within a particular law enforcement jurisdiction
and must be reasonable in relation to the provider's costs in
establishing and maintaining the database.
(b) A person may not charge a pawnbroker or customer of a
pawnbroker a fee for the compilation or transmission of reportable
data or for the creation, maintenance, or use of the database.
Sec. 371.355. DATA ESCROW SERVICE. A provider must use a
data escrow service to store a copy of the most recently updated
version of the database and the source code for the database system.
Sec. 371.356. INSURANCE. A provider shall maintain a
general liability insurance policy of at least $1 million.
Sec. 371.357. DATABASE REQUIREMENTS. (a) A database must:
(1) enable reporting pawnbrokers to transmit to the
database reportable data for each pawn and purchase transaction
over the Internet in the format used by the pawnbroker's computer
software;
(2) enable appropriate law enforcement personnel who
provide a secure identification or access code to access the
information contained in the database and prevent others from
accessing the information;
(3) require law enforcement personnel seeking access
to the identity of the customer in a pawn or purchase transaction to
provide a valid case number of a criminal proceeding for which the
customer's identity is needed and to represent that the information
is sought in connection with the investigation of a crime involving
the goods delivered by the customer in that transaction;
(4) record, for each search, the identity of the law
enforcement personnel searching the database, the pawn or purchase
transaction involved in the search, and the identity of any
customer whose information was accessed through the search; and
(5) use a minimum of 128-bit encryption for all
transmissions to and from the database.
(b) A database server must be housed in a nationally
recognized data storage facility with security measures that are
adequate to protect the data.
Sec. 371.358. COMMISSIONER OVERSIGHT. (a) The
commissioner may take appropriate measures to ensure that a
provider and its database meet the requirements of Sections
371.355, 371.356, and 371.357.
(b) On or before January 31 of each year, a provider shall
report to the commissioner the total number of transactions
reported by each reporting pawnbroker in the preceding calendar
year. The provider shall provide the report at no cost to the
commissioner. The report must be in a format prescribed by the
commissioner if the provider can use the prescribed format.
Sec. 371.359. CONFIDENTIALITY. (a) The information in the
database is confidential and may be released or disclosed only for a
law enforcement investigation of a property crime or to the
commissioner for administrative purposes.
(b) A person who releases or discloses data in violation of
this section commits an offense. An offense under this section is a
Class A misdemeanor.
Sec. 371.360. FRAUDULENT ACCESS OF DATABASE. (a) A person
who gains access to the information in the database through fraud or
false pretenses commits an offense.
(b) An offense under this section is a Class A misdemeanor.
Sec. 371.361. COMPUTER-RELATED MALFUNCTIONS AND ERRORS.
(a) A pawnbroker who electronically reports information under this
subchapter may not be held responsible for a delay in making
available reportable data that results from a malfunction in the
database or Internet service.
(b) A provider shall correct an error in reportable data
before the seventh day after the earlier of:
(1) the date the provider discovered the error; or
(2) the date the provider received notice from the
reporting pawnbroker or the law enforcement officer who discovered
the error.
(c) If a pawnbroker who electronically reports information
under this subchapter experiences a computer malfunction, the
pawnbroker shall repair the malfunction before the 30th day after
the date the malfunction began. If a pawnbroker's computer
experiences a software malfunction, the pawnbroker may not be
considered to be in violation of a reporting requirement if the
pawnbroker is making a bona fide effort to repair the malfunction.
(d) If there is an error in reportable data or a malfunction
in a database, Internet service, or pawnbroker's computer, the
pawnbroker and the appropriate law enforcement agency shall arrange
a mutually acceptable alternative method by which the pawnbroker
provides the reportable data to the appropriate law enforcement
agency.
Sec. 371.362. PAPER COPIES. (a) A pawnbroker who
electronically reports information under this subchapter shall
make available for on-site inspection, to any appropriate law
enforcement officer on request, paper copies of pawn or purchase
transaction documents.
(b) After the 90th day after the date a pawnbroker transmits
reportable data to the database under this subchapter, the
pawnbroker is not required to make available to any law enforcement
personnel paper copies of the pawnbroker's information related to
the pawnbroker's pawn or purchase transactions, except for
evidentiary purposes for which a law enforcement officer makes a
specific request related to a specific transaction.
Sec. 371.363. COSTS. A pawnbroker who electronically
reports information under this subchapter is not required to incur
any cost, other than Internet service costs, in preparing,
converting, or delivering its reportable data to the database.
SECTION 3. This Act takes effect September 1, 2003.