Office of House Bill AnalysisH.B. 2676
By: Keel
Financial Institutions


Currently, Texas law provides for pawnshops to provide law enforcement
agencies with copies of pawn and purchase transaction receipts.  Law
enforcement agencies gather the paper slips and enter the data into their
computer systems for stolen checks and information purposes relating to
criminal intelligence.  Most pawnshops already operate with computer
systems that generate their transaction information.  Some shops are
already transmitting the transaction  information to law enforcement
agencies by electronic reporting on a voluntary basis.   

Current operating procedures for placing a hold on property in a pawnshop
are not specific and need to be structured.  The ability of police to place
holds on items is allowed but there is not a uniform set of standards.
There are also no rules for pawnshops to abide by relating to police holds
and other procedures.   

Current law states that when a case has been filed, property seized as
stolen from a pawnshop will be placed before the county or district court
having disposition responsibility for that case.  In some cases, the
property may sit for a year or more pending the trial or plea arrangement
while the complainant does not have access to the property.  All parties
involved would like to receive a speedy hearing to return the property to
the rightful owner.   

H.B. 2676 sets forth specific guidelines for the transmittal of
electronically gathered pawn and purchase transaction data from licensed
pawnshops.  This bill provides for electronic transmission of reportable
data when a county or municipality passes an ordinance to require it.  This
bill does not require any pawnshop to purchase computer systems if they do
not already use them.  It establishes standardized rules for the placing of
police holds on property in the possession of pawnshops, and adds the
requirement for phone numbers and fingerprints to be placed on pawn and
purchase tickets. This bill also allows a magistrate or judge to hold a
property hearing in all cases for property that has been seized. 


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 1.  Amends Section 371.003, Finance Code, by adding definitions for
"chief law enforcement official," "designated law enforcement official,"
"misappropriated," and "pledgor." Makes conforming changes. 

SECTION 2.  Amends Chapter 371, Finance Code, by adding Section 371.186, as

MEANS.  (a) Defines, for this section, "reportable data." 

(b)  Authorizes a chief law enforcement official  to require reporting
pawnbrokers within the jurisdiction of such official to provide all
reportable data to a designated law enforcement official by electronic
means, in lieu of the paper documents. 
(c)  Provides that this section applies only to a pawnbroker who possesses
and uses the computer equipment capable of complying with the requirements
for providing reportable data under this section and conducted at least a
total of 1,200 pawn and purchase transactions.  Provides that a pawnbroker
who becomes eligible for application of this section remains eligible
regardless of the number of pawn and purchase transactions conducted in
subsequent periods.  
(d)  Provides that if the pawnbroker possesses and uses adequate computer
equipment, the pawnbroker is required to make available, within six months
of the receipt of the notice from the chief law enforcement official, all
reportable data to the designated law enforcement official.  Sets forth the
procedure for the eligible pawnbroker to follow in submitting the data.
Requires a pawnbroker who does not possess and use adequate computer
hardware and software to comply with the requirements of this section
within 180 days from the date the pawnbroker obtains capable computer
hardware and software. Provides that a pawnbroker is not responsible for
any delay that results from the law enforcement official's delay in
facilitating the receipt of the data.  
(e)  Provides that the medium in which a pawnbroker provides data to the
designated law enforcement official must contain the reportable data for
all transactions during a particular business period of not less than one
business day and must be made available to be picked up by or transmitted
to the designated law enforcement official by the end of the second
business day after the business period to which the data relates.  
(f)  Requires the pawnbroker, during a test period beginning on the date a
pawnbroker begins to provide reportable data under this section, to
continue to make available copies of each of the underlying pawn or
purchase transaction documents.  Requires the test period to continue until
the system is properly operating and transmitting data to the satisfaction
of the designated law enforcement official.  

(g)  Provides that a pawnbroker is responsible for training the
pawnbroker's employees in correct data reporting and requires a pawnbroker
to provide complete and accurate data to the designated law enforcement
official.  Requires the pawnbroker to be allowed a period of 30 days after
the date of receipt of notice to correct an error.  Requires the pawnbroker
to be allowed a period of 30 days in which to correct a computer
malfunction. Provides that a pawnbroker who makes a bona fide effort to
make the appropriate system repairs during the periods prescribed by this
subsection is not in violation of this section during those periods.
Requires the pawnbroker, during those periods of error or malfunction, to
provide paper copies of the transaction tickets to the designated law
enforcement official. Requires any reduced hold period for purchased goods
to revert to the standard hold period for property as set out in Section
371.182 (Hold Period) of this Act.  
(h)  Provides that all reportable data transmitted or furnished to any law
enforcement official under this Act is confidential and are authorized to
be used by that official only for official law enforcement related
investigations.  Prohibits a pawnbroker from being held liable for
furnishing the information required by this Act to a law enforcement
(i)  Requires a Texas uniform reporting format to be established.  Requires
a committee to be formed under the direction of the Consumer Credit
Commissioner (commissioner) consisting of representatives of the pawnbroker
industry, law enforcement and computer software industry.  Requires the
committee to review and recommend to the commissioner, no later than
November 1, 1999, a format to be designated by the commissioner as the
Texas uniform reporting format.  

SECTION 3.  Amends Chapter 371, Finance Code, by adding Section 371.187, as

chief law enforcement official to require pawnbrokers within the
jurisdiction of such official to provide all reportable data to an
alternative law enforcement agency (but not more than one such alternative
recipient) in lieu of transmitting reportable data to that Chief law
enforcement official.  Requires that alternative recipient to be known as
the designated law enforcement official for that jurisdiction for reporting
purposes only.  

SECTION 4.  Amends Chapter 371, Finance Code, by adding Section 371.188, as

Sec. 371.188.  POLICE HOLDS.  (a)  Authorizes the official, if any law
enforcement official has reasonable suspicion to believe that property in
the possession of a pawnbroker has been misappropriated, to place a hold
order on the property as provided by this section.  
(b)  Authorizes any law enforcement official to place a hold order
verbally, but if the pawnbroker does not receive a written order within 10
days after the date of the verbal order, the verbal hold order
automatically expires.  Prohibits the term of a written hold order from
exceeding 60 days from the earlier of the date of the verbal hold order or
the date of receipt by the pawnbroker of the written hold order.
Authorizes the law enforcement official, if there is an unexpected delay in
the investigation to extend the term of the hold order for up to an
additional 30 days by notifying the pawnbroker in writing.  Requires the
hold order to automatically expire upon expiration of the hold period or
(c)  Provides that a hold order must specify the enumerated information.
(d)  Authorizes a written hold order to be transmitted to the pawnbroker by
facsimile machine, mail, or personal delivery.  

(e)  Prohibits the pawnbroker from releasing or disposing of property
subject to a hold order except under a search warrant, court order, release
authorization from the official placing the item on hold, seizure by a law
enforcement official, or the expiration of the hold period.  Requires a
pawnbroker to release property to the custody of a law enforcement official
on the official's request for use in a criminal investigation if the
official has furnished the pawnbroker with a written receipt for the
property.  Provides that the release of the property to the custody of the
official is not considered to be a waiver or release of the pawnbroker's
rights or interest in the property.  Requires the property, on the earlier
of the completion of the criminal investigation or the expiration of the
hold period, to be returned to the pawnbroker who released it unless a
court order provides for other disposition.  Authorizes the court, if other
disposition is ordered, to order the pledgor or seller to pay restitution
to the pawnbroker in the amount received by the pledgor or seller for the
property, plus accrued pawn service charges to the date of seizure, in the
case of pawn transactions, and reasonable attorney's fees and costs.  

SECTION 5.  Amends Section 371.182, Finance Code, as follows:

Sec. 371.182.  HOLD PERIOD.  Requires a pawnbroker to hold for not less
than 20 calendar days an item of tangible personal property purchased or
otherwise acquired from the general public before the property may be
modified, changed, sold, or disposed of in any manner.  Authorizes the
commissioner to provide for a hold period of 10 days upon written
application by a pawnbroker.  Authorizes a reduction in the hold period to
be granted only if the pawnbroker and the chief law enforcement officer
have implemented a procedure for transmitting reportable electronic data
under Sections 371.186 or 371.187 of this Act.  An application for a
shorter hold period must be approved by the chief law enforcement official
before the application is submitted to the commissioner by the pawnbroker.
Deletes text requiring the consumer credit commissioner (commissioner) to
designate a reasonable hold period. 

SECTION 6.  Amends Section 371.157, Finance Code,  to include, among other
items,  the pledgor's telephone number, the number of the unexpired
identification of the pledgor as required in Section 371.174 (Property
Identification Tags Required), and a complete description of pledged goods
in a  pawn ticket or other memorandum delivered to the pledgor.  Requires
the pawnbroker to record a legible thumbprint of the pledgor on the forth
part of the pawn ticket or that part numerically filed and retained by the

SECTION 7.  Amends Section 371.177, Finance Code, to make conforming

SECTION 8.  Amends Article 47.01a, Code of Criminal Procedure, as follows:

Art. 47.01a.  New title: Restoring Property to Owner.  Deletes text
referring to a pending criminal action relating to stolen property. 

SECTION 9.  Effective date: September 1, 1999.

SECTION 10.  Emergency clause.