HBA-TYH, NLM H.B. 1511 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 1511 By: Marchant Financial Institutions 7/21/1999 Enrolled BACKGROUND AND PURPOSE The 75th Legislature passed H.B. 10, which provided for nonsubstantive revisions to Texas statutes relating to finance, including the Texas Banking Act, Texas Savings and Loan Act, Texas Savings Bank Act, Texas Credit Union Act, and various other statutes relating to financial institutions, businesses, and credit transactions. H.B. 10 included conforming amendments, repeals, and penalties for the purpose of making the statutes more accessible without altering the sense, meaning, or effect of the law. The Texas Pawnshop Act was also among the provisions addressed by H.B. 10. H.B. 1511 further clarifies language included in the Texas Pawnshop Act and updates existing sections of the Act. This bill grants exclusive authority regarding the operation of pawnshops to the legislature, rather than to the consumer credit commissioner (commissioner). However, this bill authorizes the commissioner to regulate a business practice that requires a pawnshop license. 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 371.005, Finance Code, to grant the legislature the exclusive authority regarding the operation of pawnshops, except for a matter delegated by this chapter to the consumer credit commissioner (commissioner). Provides that the commissioner has the authority to regulate only a business practice that requires a pawnshop license. SECTION 2. Amends Section 371.006(c), Finance Code, to provide that the rule may not take effect before the 21st day after the earliest date on which all of the copies have been mailed. SECTION 3. Amends Section 371.066(a), Finance Code, to include that a temporary pawnshop license may be issued on receipt of an application to principals and owners that are substantially identical to those of a pawnshop in operation at the time of receipt of the application. SECTION 4. Amends Sections 371.072(d) and (e), Finance Code, to define "net assets" as the term was defined at the time the license was issued and to make a conforming change. SECTION 5. Amends Section 371.153(a), Finance Code, to delete the requirement for a pawnbroker to notify the commissioner before the pawnbroker conducts certain business. SECTION 6. Amends Section 371.154(b), Finance Code, to require a pawnbroker to secure a bond, rather than maintain a bond. SECTION 7. Amends Section 371.155, Finance Code, to delete the provision that a required safe must be a type approved by the pawnbroker's insurance underwriter. Deletes the authority of the commissioner to adopt rules related to the keeping of firearms used solely for the security of the pawnshop by the pawnbroker. SECTION 8. Amends Section 371.162, Finance Code, to provide an exception to this section under Section 371.163(a) (Lost or Destroyed Ticket), Finance Code, which states that if a pawn ticket is lost, destroyed, or stolen, the pledgor may notify the pawnbroker of that fact in writing, and that receipt of this notice invalidates the pawn ticket if the pledged goods have not been redeemed. Makes a nonsubstantive change. SECTION 9. Amends Section 371.163(c), Finance Code, to delete the requirement for a pawnbroker to record on a written statement the identifying information required by Section 371.157(2) (Pawn Tickets). Redesignates existing Subdivision (3) to (2). SECTION 10. Amends Section 371.175(a), Finance Code, to increase from more than $10 to more than $25 the retail or sale value of an item of goods to be identified by a tag or similar means. SECTION 11. Amends Section 371.176, Finance Code, to prohibit a pawnbroker from accepting a pledge from, rather than entering a pawn transaction with, a person under 18 years of age. SECTION 12. Amends Section 371.182, Finance Code, to authorize, rather than require, the commissioner to designate a reasonable hold period. SECTION 13. Amends Section 371.258(b), Finance Code, to provide that the commissioner may reinstate a suspended pawnshop license or issue a new license if no condition exists that would have justified refusal to originally issue the license. SECTION 14. Repealer: Sections 371.184 (Displays and Signs) and 371.185 (Maintenance of Premises), Finance Code. SECTION 15. (a) Effective date: September 1, 1999. (b) Provides that any rules adopted by the commissioner relating to the use of an outdoor display or sign at a pawnshop or to the maintenance of pawnshop or to the maintenance of pawnshop premises under Section 371.184 or 371.185, Finance Code, repealed by this Act, are void. SECTION 16. Emergency clause.