82R21338 JE-F

By: Raymond H.B. No. 3502

Substitute the following for H.B. No. 3502:

By: Menendez C.S.H.B. No. 3502

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of crafted precious metal dealers and dealerships; providing a criminal penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. The heading to Subchapter B, Chapter 1956, Occupations Code, is amended to read as follows:

SUBCHAPTER B. [SALE OF] CRAFTED PRECIOUS METAL [TO] DEALERS AND

DEALERSHIPS

SECTION 2. Section 1956.051, Occupations Code, is amended to read as follows:

Sec. 1956.051. DEFINITIONS. In this subchapter:

(1) "Commission" means the Texas Commission of Licensing and Regulation.

(2) "Crafted precious metal" means jewelry, silverware, an art object, or another object, made wholly or partly from precious metal, other than a coin, a bar, a [or] commemorative medallion, or scrap or a broken item selling at not more than five percent more than the scrap value of the item [made in whole or in part from precious metal].

(3) [(2)] "Dealer" means a person who engages in the business of purchasing and selling crafted precious metal, including purchases or sales made through the mail.

(4) "Dealership" means a location at which or premises in which a dealer conducts business.

(5) [(3)] "Department" means the Texas Department of Licensing and Regulation [Public Safety].

(6) "Personal identification document" means a document that contains a photograph of the seller or transferor and is:

(A) a state driver's license;

(B) a state identification card;

(C) a passport;

(D) a military identification;

(E) a certificate of identification from the Mexican Consulate, certificado de matricula consular; or

(F) identification issued by the agency of the United States responsible for citizenship and immigration.

(7) [(4)] "Precious metal" means gold, silver, platinum, palladium, iridium, rhodium, osmium, ruthenium, or an alloy of those metals.

SECTION 3. Section 1956.060, Occupations Code, is amended to read as follows:

Sec. 1956.060. EXCEPTION: CRAFTED PRECIOUS METAL ACQUIRED BY PERSON LICENSED UNDER TEXAS PAWNSHOP ACT. This subchapter does not apply to crafted precious metal acquired by a person or an employee of a person licensed under Chapter 371, Finance Code.

SECTION 4. Subchapter B, Chapter 1956, Occupations Code, is amended by adding Sections 1956.0611, 1956.0612, 1956.0613, 1956.0614, 1956.0615, 1956.0616, 1956.0617, 1956.0618, 1956.0619, and 1956.06191 to read as follows:

Sec. 1956.0611. RULEMAKING. The commission may adopt rules necessary to implement and enforce this subchapter.

Sec. 1956.0612. DEALERSHIP LICENSE REQUIRED. A person may not engage in business as a crafted precious metal dealer unless the person holds a dealership license.

Sec. 1956.0613. MULTIPLE PLACES OF BUSINESS. (a) A separate dealership license is required for each place of business operated under this subchapter.

(b) The department may issue more than one dealership license to a person if the person complies with this subchapter for each license.

Sec. 1956.0614. APPLICATION REQUIREMENTS. (a) An application for a dealership license must be made to the department and must:

(1) be under oath;

(2) state:

(A) the full name and address of the applicant;

(B) the type of business entity formed by the applicant, if the applicant is not an individual;

(C) the full name and address of each general partner and the type of partnership, if the applicant is a partnership;

(D) the full name and address of each officer and owner, if the applicant is an unincorporated association;

(E) except as provided by Subsection (b), the full name of each officer and shareholder, if the applicant is a corporation;

(F) the full name and address of each manager and operator of the dealership;

(G) the location where the dealership's business is to be conducted and:

(i) a copy of the certificate of occupancy for the location; and

(ii) proof of the applicant's ownership of the property or a copy of a lease agreement for the lease of the property;

(H) the intended hours of operation of the dealership; and

(I) other relevant information required by the department; and

(3) state that the applicant and, if applicable, any business partner or officer of the corporation has not had a license revoked under this subchapter or Chapter 371, Finance Code.

(b) The full name of each shareholder is not required if the applicant is a corporation with five or more shareholders.

(c) If an applicant is leasing the property where the business is to be conducted, the term of the lease agreement may not expire before the first anniversary of the date the application is filed.

Sec. 1956.0615. FEES. (a) Except as provided by Subsection (b), an applicant must submit with the application:

(1) an application fee of:

(A) $500, if the applicant does not hold a license under this subchapter; or

(B) $200, if the application is for an additional dealership license for a separate location; and

(2) an annual license fee in an amount determined by the commission by rule.

(b) An applicant that is exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986, is exempt from the fees required under Subsection (a).

Sec. 1956.0616. LICENSE TERM; RENEWAL. A license expires on the first anniversary of the date of issuance and may be renewed annually on payment of the required annual license fee.

Sec. 1956.0617. INVESTIGATION; NOTICE OF APPLICATION. (a) On receipt of an application and the required fees, the department shall:

(1) conduct an investigation to determine whether to issue the license; and

(2) give notice of the application to:

(A) the Department of Public Safety; and

(B) each local law enforcement agency in the county in which the dealership is to conduct business.

(b) The notice under Subsection (a) must state the name and address of each person required by Section 1956.0614 to be listed on the license application.

(c) The department shall give the Department of Public Safety and local law enforcement agencies a reasonable period to respond to the notice with information concerning the listed persons or any other relevant information.

Sec. 1956.0618. NOTICE OF DENIAL; HEARING. (a) If the department determines not to issue a license, the department shall deliver to the applicant at the address provided in the application a written notice by personal delivery or certified mail, return receipt requested. The notice must include the department's reason for denying the license.

(b) Not later than the 30th day after the date of receipt of a notice under Subsection (a), an applicant may request a hearing on the application denial. The department shall set the hearing not later than the 60th day after the date of the request. A hearing under this section is subject to Section 51.354.

(c) If the department denies the application, the department shall retain the application fee and shall return to the applicant the annual license fee submitted with the application.

Sec. 1956.0619. CONTENTS AND DISPLAY OF LICENSE. (a) A license must state:

(1) the name of the dealer;

(2) the address at which the dealership conducts business; and

(3) that the dealership is authorized to deal in crafted precious metals.

(b) A dealer shall display a license in a conspicuous location at the place of business provided on the license.

Sec. 1956.06191. APPLICATION FOR RELOCATION. A dealer who wishes to move a dealership from the location authorized by a license must file a relocation application with the department not later than the 30th day before the date the dealer moves and pay an application fee of $20.

SECTION 5. The heading to Section 1956.062, Occupations Code, is amended to read as follows:

Sec. 1956.062. REPORT OF PURCHASE OR EXCHANGE REQUIRED.

SECTION 6. Section 1956.062, Occupations Code, is amended by amending Subsections (b), (c), and (d) and adding Subsections (c-1) and (c-2) to read as follows:

(b) Before [crafted precious metal is offered for sale or exchange,] a dealer [must notify each person intending to sell or exchange the metal that, before the dealer] may purchase or exchange crafted precious metal [accept any of the person's property], the dealer [person] must compile [file with the dealer] a list describing all of the [person's] crafted precious metal to be accepted by the dealer. The list must contain:

(1) the proposed seller's or transferor's name, sex, height, date of birth, eye color, and address;

(2) the date and time of the purchase or exchange;

(3) a complete and accurate description of the crafted precious metal, including:

(A) a serial number and year produced or manufactured, if available; and

(B) the size, weight, material, length, number of items, capacity, or other identifying characteristics; and

(4) [(3)] the proposed seller's or transferor's signed certification that the information is true and complete.

(c) The dealer shall:

(1) require the proposed seller or transferor to physically present [record] the proposed seller's or transferor's personal identification document; and

(2) record:

(A) the type of personal identification document presented; and

(B) the identification [driver's license] number of the [or department] personal identification document [certificate number on physical presentation of the license or personal identification certificate by the seller].

(c-1) The record described by Subsection (c) must accompany the list required by Subsection (b).

(c-2) All lists and records required by this section must be legible.

(d) The dealer shall:

(1) provide to a peace officer or the department, on demand, the list required by Subsection (b); and

(2) mail or deliver a complete copy of the list to the chief of police or the sheriff as provided by Section 1956.063 not later than 48 hours after the list is filed with the dealer.

SECTION 7. Subchapter B, Chapter 1956, Occupations Code, is amended by adding Section 1956.0635 to read as follows:

Sec. 1956.0635. RECEIPT REQUIRED. (a) A dealer, at the time of the sale or exchange of crafted precious metal, shall deliver a receipt to the seller or transferor. Each receipt delivered by the dealer must:

(1) be numbered sequentially;

(2) contain the date and time of the transaction or acquisition; and

(3) itemize the crafted precious metal purchased or exchanged, the price paid for the item, and the value of each item, if melted.

(b) An accurate copy or record of the receipt shall be:

(1) maintained until the third anniversary of the date of the sale or exchange; and

(2) available on request for inspection during business hours by a peace officer or the department.

SECTION 8. Section 1956.064, Occupations Code, is amended to read as follows:

Sec. 1956.064. REQUIRED RETENTION OF CRAFTED PRECIOUS METAL. (a) A dealer may not melt, deface, alter, or dispose of crafted precious metal that is the subject of a report required by this subchapter before the 21st [11th] day after the date the report is filed unless[:

[(1) the peace officer to whom the report is submitted, for good cause, authorizes disposition of the metal;

[(2) the dealer obtains the name, address, and description of the buyer and retains a record of that information; or

[(3)] the dealer is a pawnbroker and the disposition is the redemption of pledged property by the pledgor.

(b) During the hold period required by Subsection (a), the crafted precious metal shall be stored or displayed:

(1) in the exact form received;

(2) in a manner as to be identifiable from the description provided under Section 1956.062;

(3) in a manner as to not impede or prevent the crafted precious metal's examination by a peace officer or the department; and

(4) at the dealership where the crafted precious metal was purchased or exchanged. [A dealer who retains information under Subsection (a)(2) shall make that information available for inspection by any peace officer.]

SECTION 9. Subchapter B, Chapter 1956, Occupations Code, is amended by adding Section 1956.0645 to read as follows:

Sec. 1956.0645. STOLEN CRAFTED PRECIOUS METAL. (a) A dealer or an agent or employee of a dealership shall:

(1) monitor the purchase of crafted precious metal to identify or prevent transactions involving stolen crafted precious metal;

(2) make reasonable efforts to avoid accepting or purchasing stolen crafted precious metal; and

(3) immediately report to a local law enforcement agency:

(A) an offer to sell to the dealership crafted precious metal actually known or reasonably suspected to be stolen;

(B) the identity, if known, and the description of the person offering to sell the metal described by Paragraph (A); and

(C) the purchase of crafted precious metal subsequently determined or reasonably suspected to be stolen.

(b) A dealer shall cooperate with a local law enforcement agency regarding any matter relating to stolen crafted precious metal and assist in the prompt resolution of an official investigation.

SECTION 10. The heading to Section 1956.065, Occupations Code, is amended to read as follows:

Sec. 1956.065. INSPECTION OF CRAFTED PRECIOUS METAL [BY PEACE OFFICER].

SECTION 11. Section 1956.065(a), Occupations Code, is amended to read as follows:

(a) A dealer shall make crafted precious metal purchased or exchanged by the dealer available for inspection by a peace officer or the department during regular business hours while in the dealer's possession.

SECTION 12. Section 1956.066, Occupations Code, is amended to read as follows:

Sec. 1956.066. PURCHASE FROM MINOR PROHIBITED. [(a)] A dealer may not purchase crafted precious metal from a person younger than 18 years of age [unless the seller delivers to the dealer before the purchase a written statement from the seller's parent or legal guardian consenting to the transaction].

[(b) The dealer shall retain the statement with the records required to be kept under this subchapter. The dealer may destroy the statement after the later of:

[(1) the date the item is sold; or

[(2) the first anniversary of the date the dealer purchased the item.]

SECTION 13. Subchapter B, Chapter 1956, Occupations Code, is amended by adding Sections 1956.0685 and 1956.0686 to read as follows:

Sec. 1956.0685. GROUNDS FOR DENIAL, REVOCATION, OR SUSPENSION OF LICENSE. The department may deny, revoke, or suspend a dealership license if the dealer:

(1) violates this subchapter or a rule adopted or an order issued under this subchapter;

(2) falsifies information on a license application; or

(3) is convicted of an offense under Section 31.03, 37.09, or 37.10, Penal Code.

Sec. 1956.0686. NOTICE OF HEARING. (a) The department shall send written notice to the dealer of a dealership license revocation or suspension hearing that includes the cause or allegations of the revocation or suspension hearing.

(b) A hearing under this section is subject to Subchapter G, Chapter 51.

SECTION 14. Section 1956.069(a), Occupations Code, is amended to read as follows:

(a) A person commits an offense if the person violates this subchapter [dealer commits an offense if the dealer:

[(1) fails to make or permit inspection of a report as required by Section 1956.062 or 1956.063;

[(2) disposes of crafted precious metal or fails to make a record available for inspection by a peace officer as required by Section 1956.064;

[(3) fails to obtain or retain a statement as required by Section 1956.066;

[(4) fails to file a registration statement as required by Section 1956.067; or

[(5) purchases an object in violation of Section 1956.068].

SECTION 15. Section 215.031, Local Government Code, is amended to read as follows:

Sec. 215.031. HAWKERS; PEDDLERS; PAWNBROKERS; CRAFTED PRECIOUS METAL DEALERS. The governing body of the municipality may license, tax, suppress, prevent, or otherwise regulate:

(1) hawkers;

(2) peddlers; [and]

(3) pawnbrokers; and

(4) crafted precious metal dealers.

SECTION 16. (a) As soon as practicable after the effective date of this Act, the Texas Commission of Licensing and Regulation shall adopt the rules and procedures necessary to implement Subchapter B, Chapter 1956, Occupations Code, as amended by this Act.

(b) A crafted precious metal dealer is not required to hold a license under Subchapter B, Chapter 1956, Occupations Code, as amended by this Act, before March 1, 2012.

(c) Section 1956.069, Occupations Code, as amended by this Act, applies only to an offense committed on or after the effective date of this Act. An offense committed before the effective date of this Act is governed by the law in effect on the date the offense was committed, and the former law is continued in effect for that purpose. For purposes of this subsection, an offense was committed before the effective date of this Act if any element of the offense occurred before that date.

SECTION 17. This Act takes effect September 1, 2011.