By: Solomons (Senate Sponsor - Carona) H.B. No. 2490
(In the Senate - Received from the House May 4, 2011;
May 5, 2011, read first time and referred to Committee on Business
and Commerce; May 19, 2011, reported adversely, with favorable
Committee Substitute by the following vote: Yeas 6, Nays 3;
May 19, 2011, sent to printer.)
COMMITTEE SUBSTITUTE FOR H.B. No. 2490 By: Carona
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of crafted precious metal dealers;
providing criminal penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 1956.051, Occupations Code, is amended
to read as follows:
Sec. 1956.051. DEFINITIONS. In this subchapter:
(1) "Commission" means the Finance Commission of
Texas.
(2) "Commissioner" means the consumer credit
commissioner.
(3) "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 five percent or more
than the scrap value of the item [made in whole or in part from
precious metal].
(4) [(2)] "Dealer" means a person licensed to engage
[who engages] in the business of purchasing and selling crafted
precious metal, including purchases or sales made through the mail.
(5) [(3)] "Department" means the Texas Department of
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 2. Subchapter B, Chapter 1956, Occupations Code, is
amended by adding Section 1956.0511 to read as follows:
Sec. 1956.0511. ADMINISTRATION BY COMMISSION. (a)
Notwithstanding any other provision of this chapter, the commission
shall administer and enforce this subchapter, unless the context
clearly requires another state agency to perform a specific duty.
(b) To the extent of any conflict between this subchapter
and other provisions of this chapter, this subchapter prevails.
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:
(1) a person licensed under Chapter 371, Finance Code;
or
(2) an entity affiliated with a person licensed under
Chapter 371, Finance Code, if the entity's recordkeeping practices
satisfy the requirements of that chapter.
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, and 1956.0618 to read
as follows:
Sec. 1956.0611. RULEMAKING. The commission may adopt rules
necessary to implement and enforce this subchapter.
Sec. 1956.0612. LICENSE REQUIRED. A person may not engage
in the business of purchasing and selling crafted precious metal
unless the person holds a license issued under this subchapter.
Sec. 1956.0613. ELIGIBILITY. (a) To be eligible for a
license, an applicant must:
(1) be of good moral character; and
(2) show that:
(A) the applicant will operate lawfully and
fairly under this subchapter; and
(B) the applicant or the applicant's owners and
managers have the financial responsibility, experience, character,
and general fitness to command the confidence of the public in the
applicant's operations.
(b) Subsection (a)(1) applies to each:
(1) operator and legal or beneficial owner, if the
applicant is a business entity; and
(2) officer, owner of at least five percent of the
shares outstanding, and director, if the applicant is a
corporation.
(c) The commission by rule may establish other
qualifications for a license.
Sec. 1956.0614. LICENSE APPLICATION; FEES. (a) An
applicant for a license shall submit a license application on a form
prescribed by the commissioner. The commission shall establish a
nonrefundable application fee in an amount not to exceed $500.
(b) The commission shall establish fees under this
subchapter, including an annual fee to be paid by a license holder,
in amounts reasonable and necessary to cover the costs of
administering the commission's programs and activities under this
subchapter.
Sec. 1956.0615. 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. 1956.0616. INVESTIGATION; NOTICE OF APPLICATION. (a)
On receipt of an application and the required fees, the
commissioner shall:
(1) conduct an investigation to determine whether to
issue the license; and
(2) give notice of the application to:
(A) the department; and
(B) each local law enforcement agency in the
county in which the dealer is to conduct business.
(b) The notice under Subsection (a) must state the name and
address of each person described by Section 1956.0613(b).
(c) The commissioner shall give the department and local law
enforcement agencies a reasonable period to respond to the notice
with information concerning each listed person or any other
relevant information.
Sec. 1956.0617. NOTICE OF DENIAL; HEARING. (a) If the
commissioner determines not to issue a license, the commissioner
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
reasons 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 commissioner shall set the hearing not
later than the 60th day after the date of the request. A hearing
under this section is a contested case under Chapter 2001,
Government Code.
Sec. 1956.0618. CONTENTS AND DISPLAY OF LICENSE. (a) A
license must state:
(1) the name of the dealer;
(2) the address of the dealer's principal place of
business; and
(3) that the dealer is authorized to deal in crafted
precious metals.
(b) A dealer shall display the license in a conspicuous
location at the dealer's principal place of business.
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), (c-2), and (e) 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 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 that includes:
(A) the serial number of each item and the year
each item was produced or manufactured, if available;
(B) the approximate value of each item; and
(C) the size, weight, material, length, number of
items, capacity, or other identifying characteristics; and
(4) [(3)] the proposed seller's signed certification
that the information is true and complete.
(c) The dealer shall:
(1) record the identification [proposed seller's
driver's license] number [or department personal identification
certificate number on physical presentation] of the seller's
personal identification document;
(2) visually verify the accuracy of the seller's
personal identification document and make a copy of the document;
and
(3) obtain a digital or video photograph that
accurately depicts each item of crafted precious metal purchased
[license or personal identification certificate by the seller].
(c-1) The copy of the document and photograph described by
Subsection (c) [record] must accompany the list.
(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 commissioner, 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.
(e) In this section, "seller" includes a transferor who
exchanges, or offers to exchange, crafted precious metal with a
dealer.
SECTION 7. Section 1956.063(c), Occupations Code, is
amended to read as follows:
(c) For each transaction regulated by this subchapter, the
[The] dealer shall submit a [the] report on a preprinted and
prenumbered form prescribed by the commissioner [district attorney
or person performing the duties of district attorney of the county
in which the transaction occurs]. The form must include the
following:
(1) the date of the transaction;
(2) a description of the crafted precious metal
purchased by the dealer;
(3) the name and physical address of the dealer;
(4) the name, physical description, and physical
address of the seller or transferor; and
(5) a copy of the document described by Section
1956.062(c).
SECTION 8. Subchapter B, Chapter 1956, Occupations Code, is
amended by adding Section 1956.0631 to read as follows:
Sec. 1956.0631. PAYMENT FOR CRAFTED PRECIOUS METAL
PURCHASED. A dealer may pay for a purchase of crafted precious
metal only by check or prepaid debit card. If payment is by check,
the names of the dealer and seller or transferor must be printed on
the check. If payment is by prepaid debit card, the seller or
transferor may not be liable for any fees charged by the issuer of
the card.
SECTION 9. 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; or
(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 or an employee of a
pawnbroker and the disposition is the redemption of pledged
property by the pledgor.
(b) A peace officer who has reasonable suspicion to believe
that an item of crafted precious metal in the possession of a dealer
is stolen may place the item on hold for a period not to exceed 60
days by issuing to the dealer a written notice that:
(1) specifically identifies the item alleged to be
stolen and subject to the hold; and
(2) informs the dealer of the requirements of
Subsection (c).
(c) On receiving the notice, the dealer may not melt,
deface, alter, or dispose of the identified crafted precious metal
until the hold is released in writing by a peace officer of this
state or a court order. [A dealer who retains information under
Subsection (a)(2) shall make that information available for
inspection by any peace officer.]
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 commissioner 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. Section 1956.067(a), Occupations Code, is
amended to read as follows:
(a) A dealer who conducts business at a temporary location
for a period of less than one year [90 days] may not engage in the
business of buying precious metal or used items made of precious
metal unless, within a 12-month period at least 30 days before the
date on which each purchase is made, the dealer [person] has filed:
(1) a registration statement with the department;
[and]
(2) a copy of the registration statement and a copy of
the dealer's license issued under this subchapter with the local
law enforcement agency of:
(A) the municipality in which the temporary
location is located; or
(B) if the temporary location is not located in a
municipality, the county in which the temporary location is
located; and
(3) a copy of the dealer's license issued under this
subchapter with the county and, if applicable, the municipality in
which the temporary location is located.
SECTION 14. 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 commissioner may deny, revoke, or
suspend a license issued under this subchapter if the person:
(1) violates this subchapter or a rule adopted or an
order issued under this subchapter;
(2) provides false 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 commissioner
shall send written notice to the dealer of a license revocation or
suspension hearing that includes the cause or allegations of the
revocation or suspension hearing.
(b) A hearing under this section is a contested case under
Chapter 2001, Government Code.
SECTION 15. Section 1956.069(a), Occupations Code, is
amended to read as follows:
(a) A person [dealer] commits an offense if the person
[dealer]:
(1) fails to make or permit inspection of a report as
required by Section 1956.062 or 1956.063;
(2) violates [disposes of crafted precious metal or
fails to make a record available for inspection by a peace officer
as required by] Section 1956.0612, 1956.0631, or 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 16. The change in law made 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 section, an offense was committed before the
effective date of this Act if any element of the offense occurred
before that date.
SECTION 17. Not later than December 1, 2011, the Finance
Commission of Texas shall adopt rules to implement Subchapter B,
Chapter 1956, Occupations Code, as amended by this Act.
SECTION 18. (a) Except as provided by Subsection (b) of
this section, this Act takes effect September 1, 2011.
(b) Section 1956.0612, Occupations Code, as added by this
Act, and Sections 1956.067(a) and 1956.069(a), Occupations Code, as
amended by this Act, take effect January 1, 2012.
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