Bill Text: TX HB483 | 2015-2016 | 84th Legislature | Engrossed

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Relating to the establishment and administration of a state bullion depository; authorizing fees.

Spectrum: Moderate Partisan Bill (Republican 31-4)

Status: (Passed) 2015-06-19 - Effective immediately [HB483 Detail]

Download: Texas-2015-HB483-Engrossed.html

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By: Capriglione, Fletcher, Flynn, Longoria, H.B. No. 483
Parker, et al.

A BILL TO BE ENTITLED
AN ACT
rel
ating to the establishment and administration of a state bullion
depository; authorizing fees.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 10, Government Code, is
amended by adding Chapter 2116 to read as follows:
CHAPTER 2116. TEXAS BULLION DEPOSITORY
SUBCHAPTER A. ESTABLISHMENT AND ADMINISTRATION OF TEXAS
BULLION DEPOSITORY
Sec. 2116.001. DEFINITIONS. In this chapter:
(1) "Administrator" means the bullion depository
administrator appointed under Section 2116.003.
(2) "Bullion" means precious metals that are formed
into uniform shapes and quantities such as ingots, bars, or plates,
with uniform content and purity, as are suitable for or customarily
used in the purchase, sale, storage, transfer, and delivery of bulk
or wholesale transactions in precious metals.
(3) "Business day" means a day other than a Saturday,
Sunday, or banking holiday for a bank chartered under the laws of
this state.
(4) "Deposit" means the establishment of an executory
obligation of the depository to deliver to the order of the person
establishing with the depository the obligation, on demand, a
quantity of a specified precious metal, in bullion, specie, or a
combination of bullion and specie, equal to the quantity of the same
precious metal delivered by or on behalf of the depositor into the
custody of:
(A) the depository; or
(B) a depository agent.
(5) "Depositor" means a person who makes a deposit.
(6) "Depository" means the Texas Bullion Depository
created by this chapter.
(7) "Depository account" means the rights, interests,
and entitlements established in favor of a depositor with respect
to a deposit in accordance with this chapter and rules adopted under
this chapter.
(8) "Depository account holder," regarding a
depository account, means the original depositor or a successor or
assignee of the depositor respecting the depository account.
(9) "Depository agent" means a person licensed in
accordance with this chapter to serve as an intermediary between
the depository and a retail customer in making a transaction in
precious metals bullion or specie.
(10) "Precious metal" means a metal, including gold,
silver, platinum, palladium, and rhodium, that:
(A) bears a high value-to-weight ratio relative
to common industrial metals; and
(B) customarily is formed into bullion or specie.
(11) "Specie" means a precious metal stamped into
coins of uniform shape, size, design, content, and purity, suitable
for or customarily used as currency, as a medium of exchange, or as
the medium for purchase, sale, storage, transfer, or delivery of
precious metals in retail or wholesale transactions.
Sec. 2116.002. TEXAS BULLION DEPOSITORY. (a) The Texas
Bullion Depository is established as an agency of this state in the
office of the comptroller.
(b) The depository is established to serve as the custodian,
guardian, and administrator of certain bullion and specie that may
be transferred to or otherwise acquired by this state or an agency,
a political subdivision, or another instrumentality of this state.
Sec. 2116.003. DEPOSITORY ADMINISTRATION; ADMINISTRATOR.
(a) The depository is administered as a division of the office of
the comptroller and under the direction and supervision of a
bullion depository administrator appointed by the comptroller with
the advice and consent of the governor, lieutenant governor, and
senate.
(b) The administrator shall:
(1) administer, supervise, and direct the operations
and affairs of the depository and depository agents; and
(2) liaise with the comptroller and other divisions of
the office of the comptroller to ensure that each transaction with
the depository that involves state money, that involves an agency,
a political subdivision, or another instrumentality of this state,
or that involves a private person is planned, administered, and
executed in a manner to achieve the purposes of this chapter.
(c) The administrator may appoint, subject to the approval
of the comptroller, a deputy administrator or other subordinate
officer as necessary and appropriate to the efficient
administration of the depository.
Sec. 2116.004. DEPOSITS AND RELATED ASSETS NOT SUBJECT TO
LEGISLATIVE APPROPRIATION; STATUS OF DEPOSITS AND ALLOCATION OF
REVENUES. (a) The following are not available for legislative
appropriation:
(1) a deposit to the depository;
(2) bullion or specie held by or on behalf of the
depository or a depository agent;
(3) bullion or specie in transit to or from the
depository or a depository agent; and
(4) a receivable or other amount owed to the
depository in settlement of a transaction in bullion or specie.
(b) Bullion, specie, and other assets described by
Subsection (a) are subject to redemption, liquidation, or transfer
exclusively to discharge an obligation of the depository to
depository account holders, depository agents, bullion banks,
financial institutions, or other intermediaries in accordance with
this chapter and rules adopted under this chapter.
(c) Revenue the depository realizes from fees, charges, or
other payments received in the course of depository operations
shall be deposited to the credit of the general revenue fund.
Sec. 2116.005. DEPOSITS AND DEPOSITORY ACCOUNTS;
STANDARDS. (a) The depository may receive a deposit of bullion or
specie from or on behalf of a person acting in the person's own
right, as trustee, or in another fiduciary capacity, in accordance
with rules adopted by the comptroller as appropriate to:
(1) ensure compliance with law; and
(2) protect the interests of:
(A) the depository;
(B) depository account holders;
(C) this state and the agencies, political
subdivisions, and instrumentalities of this state; and
(D) the public at large.
(b) The depository shall record the amount of precious
metals a person deposits, regardless of form, in units of troy
ounces pure, and the records must also specify the type and quantity
of each precious metal deposited.
(c) The comptroller by rule shall adopt standards by which
the quantities of precious metals deposited are credited to a
depositor's depository account by reference to the particular form
in which the metals were deposited, classified by mint,
denomination, weight, assay mark, or other indicator, as
applicable. The standards must conform to applicable national and
international standards of weights and measures.
(d) The comptroller by rule may, if the comptroller
determines that to do so is in the public interest, restrict the
forms in which deposits of precious metals may be made to those
forms that conveniently lend themselves to measurement and
accounting in units of troy ounces and standardized fractions of
troy ounces.
(e) The depository shall adjust each depository account
balance to reflect additions to or withdrawals or deliveries from
the account.
Sec. 2116.006. DEMAND, PRESENTMENT, WITHDRAWAL, DELIVERY,
AND SETTLEMENT. (a) The depository shall deliver any precious
metal held by or on behalf of the depository in bullion, specie, or
a combination of bullion and specie, on the order of a depository
account holder in a quantity of that precious metal as is available
in the depository account holder's depository account.
(b) The depository shall make a delivery described by
Subsection (a) on demand by the presentment of a suitable check,
draft, or digital electronic instruction to the depository or a
depository agent. The comptroller by rule shall adopt the forms,
standards, and processes through which an order for delivery on
demand may be made, presented, and honored.
(c) The depository shall make a delivery at the depository's
settlement facility designated by the comptroller, shipping to an
address specified by the account holder or, at the depository's
discretion, at a facility of a depository agent at which
presentment is made, not later than five business days after the
date of presentment.
Sec. 2116.007. TRANSFER OF DEPOSITORY ACCOUNT BALANCE. (a)
In accordance with rules adopted under this chapter, a depository
account holder may transfer any portion of the balance of the
holder's depository account by check, draft, or digital electronic
instruction to another depository account holder or to a person who
at the time the transfer is initiated is not a depository account
holder.
(b) The depository shall adjust the depository account
balances of the depository accounts to reflect a transfer
transaction between depository account holders on presentment of
the check, draft, or other instruction by reducing the payor's
depository account balance and increasing the depository account
balance of the payee accordingly.
(c) If a depository account holder transfers to a payee who
is not a depository account holder any portion of the balance of the
holder's depository account, the depository shall allow the payee
to establish a depository account by presentment of the payor's
check, draft, or instruction to the depository or to a depository
agent. The depository shall credit a newly established account on
behalf of the payee and shall debit the payor's account
accordingly.
Sec. 2116.008. DEPOSITORY ACCOUNT CONTRACTS. (a) To
establish a depository account, a depositor must contract with the
depository for a depository account. The contract must specify:
(1) the terms applicable to the account, including any
special terms; and
(2) the conditions on which withdrawals or deliveries
with respect to the account may be made.
(b) The execution of a contract for a depository account
described by this section may be made, as prescribed by rules
adopted under this chapter, by electronic or digital transmission.
(c) The depository or a depository agent shall hold the
contract for a depository account in the records pertaining to the
account.
(d) A contract for a depository account executed by a
depositor and the depository is considered a contract in writing
for all purposes, and may be evidenced by one or more agreements,
deposit receipts, signature cards, amendment notices, or other
documentation as provided by law.
(e) The depository and the depository account holder may
amend a contract for a depository account by agreement, or the
depository may amend the deposit contract by mailing a written
notice of the amendment to the account holder, separately or as an
enclosure with or part of the account holder's statement of account
or passbook. In the case of amendment by notice from the
depository, the notice must include the text and effective date of
the amendment. The effective date may not be earlier than the 30th
day after the date the notice is mailed, unless otherwise provided
by rules adopted under this chapter.
Sec. 2116.009. CAUSE OF ACTION FOR DENIAL OF DEPOSIT
LIABILITY. (a) A cause of action for denial of deposit liability
on a depository account contract without a maturity date does not
accrue until the depository has denied liability and given notice
of the denial to the depository account holder.
(b) The depository's act of furnishing an account statement
or passbook, whether in physical, digital, or electronic form,
constitutes a denial of liability and the giving of such notice as
to any amount not shown on the statement or passbook.
(c) The depository's sovereign immunity from suit is waived
for an action brought by a depositor for the denial of deposit
liability.
(d) The depository's liability for a denial of deposit
liability is limited to the amount on deposit for which liability
was denied. A depositor may not recover consequential damages,
exemplary damages, pre- or post-judgment interest, costs, or
attorney's fees.
(e) A suit authorized by this section must be brought in a
district court of Travis County.
(f) A suit authorized by this section must be brought before
the expiration of one year after the date the cause of action
accrues or the suit is barred.
Sec. 2116.010. FEES; SERVICE CHARGES; PENALTIES. The
comptroller by rule may establish fees, service charges, and
penalties to be charged a depository account holder for a service or
activity regarding a depository account, including a fee for an
overdraft, an insufficient fund check or draft, or a stop payment
order.
Sec. 2116.011. DEPOSITORY ACCOUNT OWNERSHIP BY OWNER OF
RECORD. Unless the depository acknowledges in writing a pledge of a
depository account, the depository may treat the holder of record
of the account as the owner of the account for all purposes and
without regard to a notice to the contrary.
Sec. 2116.012. TRANSFER OF DEPOSITORY ACCOUNT. (a) A
depository account may be transferred on the books of the
depository only on presentation to the depository of:
(1) evidence of transfer satisfactory to the
depository; and
(2) an application for the transfer submitted by the
person to whom the depository account is to be transferred.
(b) A person to whom a depository account is to be
transferred must accept the transferred account subject to the
terms of the deposit contract, this chapter, and rules adopted
under this chapter.
Sec. 2116.013. DEPOSITORY ACCOUNTS NOT INTEREST-BEARING.
The depository may not pay on a depository account:
(1) interest;
(2) an amount in the nature of interest; or
(3) a fee or other payment for the use or forbearance
of use of money, bullion, specie, or precious metals deposited to a
depository account.
Sec. 2116.014. LIEN ON DEPOSITORY ACCOUNT. (a) Without the
need of any further agreement or pledge, the depository has a lien
on each depository account owned by a depository account holder to
secure any fees, charges, or other obligations owed or that may
become owed to the depository in connection with any of the
depository account holder's depository accounts as provided by the
terms of the depository account holder's applicable depository
account contract.
(b) On default in the payment or in the satisfaction of a
depository account holder's obligation, the depository, without
notice to or consent of the depository account holder, may transfer
on the depository's books all or part of the balance of a depository
account holder's depository account to the extent necessary to pay
or satisfy the obligation, as determined by reference to the
exchange rates applicable at the time of the transfer.
(c) The depository by written instrument may waive wholly or
partly the depository's lien on a depository account.
(d) Subject to a lien created as provided by this section,
the depository shall recognize the lawful pledge to a third party by
a depository account holder of the depository account holder's
rights, interests, and entitlements in and to a depository account
as an intangible asset. On the satisfaction of other requirements
of law in respect of the perfection and enforcement of a pledge of
that type, the depository shall take all steps reasonably necessary
and appropriate to effectuate on the depository's books any
transfer of a depository account or of all or part of a depository
account balance to the account of the secured party on the
successful enforcement of the pledge.
Sec. 2116.015. DEPOSITORY ACCOUNT AS LEGAL INVESTMENT. (a)
The following persons may invest the person's money in a depository
account by purchasing precious metals and depositing the precious
metals with the depository or a depository agent:
(1) a fiduciary, including an administrator,
executor, custodian, guardian, or trustee;
(2) a political subdivision of this state or an
instrumentality of this state;
(3) a business or nonprofit corporation;
(4) a charitable or educational corporation or
association; or
(5) a financial institution, including a bank, savings
and loan association, or credit union.
(b) An investment by an insurance company in a depository
account is eligible to be applied as a credit against taxes payable
under Chapters 221 and 222, Insurance Code, in accordance with
rules adopted by the comptroller after consultation with the
commissioner of insurance.
(c) An investment by a school district in a depository
account may be made instead of an investment as provided by Section
45.102, Education Code, and the depository may be used by a district
instead of a depository bank for the purposes of Subchapter G,
Chapter 45, Education Code.
Sec. 2116.016. APPLICABILITY OF ESTATES CODE. The
applicable provisions of Chapters 111, 112, and 113, Estates Code,
govern a depository account.
Sec. 2116.017. PLEDGE OF JOINTLY HELD DEPOSITORY ACCOUNT.
(a) Unless a term of the depository account provides otherwise, a
person on whose signature precious metals may be withdrawn from a
depository account that is jointly held in the names of two or more
persons may, by a signed pledge, pledge and transfer to the
depository or to a third party all or part of the account.
(b) A pledge made as described by Subsection (a) does not
sever or terminate the joint and survivorship ownership of the
account, to the extent applicable to the account before the pledge.
Sec. 2116.018. DEPOSITORY ACCOUNT HELD BY FIDUCIARY. (a)
The depository or a depository agent may accept a depository
account in the name of a fiduciary, including an administrator,
executor, custodian, guardian, or trustee, for a named beneficiary.
(b) A fiduciary may open, add to, or withdraw precious
metals from an account described by Subsection (a).
(c) Except as otherwise provided by law, a payment or
delivery to a fiduciary or an acquittance signed by the fiduciary to
whom a payment or delivery is made is a discharge of the depository
for the payment or delivery.
(d) After a person who holds a depository account in a
fiduciary capacity dies, the depository may pay or deliver to the
beneficiary of the account the quantity of precious metals
represented by the balance in the depository account, plus other
rights relating to the depository account, wholly or partly, if the
depository has no written notice or order of the probate court of:
(1) a revocation or termination of the fiduciary
relationship; or
(2) any other disposition of the beneficial estate.
(e) The depository has no further liability for a payment
made or right delivered under Subsection (d).
Sec. 2116.019. DEPOSITORY ACCOUNT HELD IN TRUST;
UNDISCLOSED TRUST INSTRUMENT. (a) If the depository opens a
depository account for a person claiming to be the trustee for
another person and the depository has no other notice of the
existence or terms of the trust other than a written claim against
the account:
(1) the person claiming to be the trustee, on the
person's signature, may withdraw precious metals from the account;
and
(2) if the person claiming to be the trustee dies, the
depository may pay or deliver the quantity of precious metals
represented by the balance in the account to the person for whom the
account was opened.
(b) The depository has no further liability for a payment or
delivery made as provided by Subsection (a).
Sec. 2116.020. POWER OF ATTORNEY; REVOCATION ON DEATH OR
INCOMPETENCY. (a) The depository shall recognize the authority of
an attorney-in-fact authorized in writing by a depository account
holder to manage or withdraw precious metals from the depository
account holder's depository account until the depository receives
written or actual notice of the revocation of that authority.
(b) For purposes of this section, written notice of the
death or adjudication of incompetency of a depository account
holder is considered to be written notice of revocation of the
authority of the account holder's attorney-in-fact.
Sec. 2116.021. TRANSACTIONS AND RELATIONSHIPS. The
depository shall enter into transactions and relationships with
bullion banks, depositories, dealers, central banks, sovereign
wealth funds, financial institutions, international
nongovernmental organizations, and other persons, located inside
or outside of this state or inside or outside of the United States,
as the comptroller determines to be prudent and suitable to
facilitate the operations of the depository and to further the
purposes of this chapter.
Sec. 2116.022. CERTAIN ACTIONS PROHIBITED. The depository
may not take any of the following actions, and any attempt by the
depository to take any of the following actions is void ab initio
and of no force or effect:
(1) entering into a precious metals leasing,
sale-leaseback, forward transaction, swap transaction, future
transaction, index transaction, or option on or other derivative of
any of those, whether in the nature of a cap transaction, floor
transaction, collar transaction, repurchase transaction, reverse
repurchase transaction, buy-and-sell-back transaction, securities
lending transaction, or other financial instrument or interest
intended to or having the effect of hedging or leveraging the
depository's holdings of precious metals, including any option
with respect to any of these transactions, or any combination of
these transactions, except that the limitation provided by this
subdivision does not apply to a transaction entered into to limit
the depository's exposure to post-signature price risks associated
with executory agreements to purchase or sell precious metals in
the ordinary course of depository operations and does not apply to
policies of insurance purchased to insure against ordinary casualty
risks such as theft, damage or destruction, loss during shipment,
or similar risks;
(2) crediting the depository account balances of a
depository account holder, or disposing of any precious metals, if
to do so would cause the aggregate depository account balances with
respect to any precious metal represented by all depository
accounts to exceed the aggregate quantities of such precious metal
held by or for the benefit of the depository and the depository's
depository agents;
(3) entering into or maintaining a deposit, trust, or
similar relationship for the custody of precious metals by a third
party outside this state, directly or indirectly, for the account
or benefit of the depository if the comptroller by rule establishes
that:
(A) the custody or intermediary arrangements in
question do not meet the comptroller's standards of safety,
security, and liquidity; or
(B) except in those cases where such relationship
may be incidental to the performance of or preparation for purchase
and sale transactions with counterparties located outside of this
state, suitable alternate arrangements for physical custody of the
precious metals inside this state have been established and are
available;
(4) extending credit to a person, including credit
secured by a depository account or other assets, except an
extension of credit incidental to the performance of the functions
and responsibilities otherwise provided by this chapter; or
(5) engaging in a business or activity that, if
conducted by a private person, would be subject to regulation in
this state as a banking or savings and loan function.
Sec. 2116.023. CONFISCATIONS, REQUISITIONS, SEIZURES, AND
OTHER ACTIONS VOID. (a) A purported confiscation, requisition,
seizure, or other attempt to control the ownership, disposition, or
proceeds of a withdrawal, transfer, liquidation, or settlement of a
depository account, including the precious metals represented by
the balance of a depository account, if effected by a governmental
or quasi-governmental authority other than an authority of this
state or by a financial institution or other person acting on behalf
of or pursuant to a directive or authorization issued by a
governmental or quasi-governmental authority other than an
authority of this state, in the course of a generalized declaration
of illegality or emergency relating to the ownership, possession,
or disposition of one or more precious metals, contracts, or other
rights to the precious metals or contracts or derivatives of the
ownership, possession, disposition, contracts, or other rights, is
void ab initio and of no force or effect.
(b) The depository in the case of receiving notice of a
purported confiscation, requisition, seizure, or other attempt to
control the ownership, disposition, or proceeds of a withdrawal,
transfer, liquidation, or settlement of a depository account,
including the precious metals represented by the balance of a
depository account, effected by a governmental or
quasi-governmental authority other than an authority of this state
or by a financial institution or other person acting on behalf of or
pursuant to a directive or authorization issued by a governmental
or quasi-governmental authority other than an authority of this
state, in the course of a generalized declaration of illegality or
emergency relating to the ownership, possession, or disposition of
one or more precious metals, contracts, or other rights to the
precious metals or contracts or derivatives of the ownership,
possession, disposition, contracts, or other rights, may not
recognize the governmental or quasi-governmental authority,
financial institution, or other person acting as the lawful
successor of the registered holder of a depository account in
question.
(c) On receipt of notice of any transaction described by
Subsection (a), with respect to all or any portion of the balance of
a depository account, the depository shall suspend withdrawal
privileges associated with the balances of the depository account
until suitable substitute arrangements may be effected in
accordance with rules of the comptroller to enable the registered
account holder to take delivery of the precious metals represented
by the account balances in question. A voluntary transfer of a
depository account balance or of a depository account among
depository account holders may continue to take place unaffected by
the suspension, and the depository shall recognize to the full
extent authorized by this chapter and rules adopted under this
chapter.
Sec. 2116.024. OFFICIAL EXCHANGE RATES. The comptroller by
rule shall establish the references by which the official exchange
rate for pricing precious metals transactions in terms of United
States dollars or other currency must be established at the time of
a depository transaction. The comptroller shall establish
procedures and facilities through which the rates are made
discoverable at all reasonable times by system participants, both
on a real-time basis and retrospectively.
Sec. 2116.025. FACILITATION OF ACCOUNTING AND REPORTING OF
TAXABLE GAINS. The comptroller by rule shall establish procedures
and requirements for the depository and depository agents designed
to minimize the burden to system participants of accounting for and
reporting taxable gains and losses arising out of depository
transactions as denominated in United States dollars or another
currency.
Sec. 2116.026. ANNUAL REPORT. The comptroller shall submit
to the governor and the legislature a report on the status,
condition, operations, and prospects for the depository and
depository participation each year not later than September 30.
SUBCHAPTER B. DEPOSITORY AGENTS
Sec. 2116.051. USE OF DEPOSITORY AGENTS. The depository
shall use private, independently managed firms and institutions
licensed as depository agents as intermediaries to conduct retail
transactions in bullion and specie on behalf of the depository with
current and prospective depository account holders. A depository
agent used by the depository under this section must have a minimum
five years of depository operational experience or ownership,
including three years of direct retail transaction experience with
public and private entities or individuals.
Sec. 2116.052. ELECTRONIC INFORMATION SHARING SYSTEMS AND
PROCESSES. The comptroller by rule shall require a depository
agent to maintain suitable systems and processes for electronic
information sharing and communication with the comptroller and the
depository to ensure that all transactions effected on behalf of
the depository are reported to and integrated into the depository's
records not later than 11:59:59 p.m. on the date of each
transaction.
Sec. 2116.053. PERIODIC REPORTS. A depository agent shall
submit monthly, quarterly, and annual reports of all depository
transactions not later than the 15th day of the month following the
expiration of the period with respect to which such report is
submitted. The report must contain information and be in a form and
format as rules of the comptroller require.
SECTION 2. Section 151.002(a), Finance Code, is amended to
read as follows:
(a) This section defines general terms that apply to an
applicant for or holder of a money services license issued under
this chapter, regardless of whether the license is a money
transmission license, [or] a currency exchange license, or a
depository agent license. Additional terms that apply specifically
to money transmission are defined in Section 151.301. Additional
terms that apply specifically to currency exchange are defined in
Section 151.501. Additional terms that apply specifically to
depository agents are defined in Section 151.851.
SECTION 3. Section 151.002(b), Finance Code, is amended by
adding Subdivisions (9-a), (9-b), and (9-c) and amending
Subdivisions (11) and (14) to read as follows:
(9-a) "Depository agent" has the meaning assigned by
Section 151.851.
(9-b) "Depository agent license" means a license
issued under Subchapter J.
(9-c) "Depository agent services" means services
rendered to the general public for or on behalf of the Texas Bullion
Depository in the nature of purchasing, selling, transferring,
accepting, transporting, delivering, or otherwise dealing in
precious metals bullion or specie in connection with the creation,
transfer, clearing, settlement, or liquidation of the rights and
interests of a depository account holder and a direct or indirect
transferee of a depository account holder, as those terms are
defined by Subchapter J. The term "depository agent services" does
not include:
(A) participation as a party or counterparty to a
transaction, including an agreement with respect to a transaction,
in or in connection with a contract for the purchase or sale of a
person's rights and interests as a depository account holder, as a
cash contract for present delivery, a cash contract for deferred
shipment or delivery, or a contract for future delivery, where the
underlying deliverable consists of the depository account holder's
interest in the depository account, rather than the underlying
precious metal represented by the depository account balance;
(B) the opening, transfer, settlement, or
liquidation of any derivative of a contract described by Paragraph
(A), including a forward transaction, swap transaction, currency
transaction, future transaction, index transaction, or option on or
other derivative of a transaction of any of those types, in the
nature of a cap transaction, floor transaction, collar transaction,
repurchase transaction, reverse repurchase transaction,
buy-and-sell-back transaction, securities lending transaction, or
other financial instrument or interest, including an option with
respect to a transaction, or any combination of these transactions;
or
(C) the rendition of services exclusively in
support of the opening, transfer, settlement, or liquidation of
transaction derivatives described by Paragraph (B) through a
central counterparty, such as those customarily rendered by a
clearinghouse, clearing association, or clearing corporation, or
through an interbank payment system, physical or electronic trading
facility, broker or brokerage firm, or similar entity, facility,
system, or organization.
(11) "License holder" means a person that holds a
money transmission license, [or] a currency exchange license, or a
depository agent license.
(14) "Money services" means money transmission, [or]
currency exchange, or depository agent services.
SECTION 4. Section 151.003, Finance Code, is amended to
read as follows:
Sec. 151.003. EXCLUSIONS. Subject to Subchapter J, the
[The] following persons are not required to be licensed under this
chapter:
(1) the United States or an instrumentality of the
United States, including the United States Post Office or a
contractor acting on behalf of the United States Post Office;
(2) a state or an agency, political subdivision, or
other instrumentality of a state;
(3) a federally insured financial institution, as that
term is defined by Section 201.101, that is organized under the laws
of this state, another state, or the United States;
(4) a foreign bank branch or agency in the United
States established under the federal International Banking Act of
1978 (12 U.S.C. Section 3101 et seq.);
(5) a person acting as an agent for an entity excluded
under Subdivision (3) or (4), to the extent of the person's actions
in that capacity, provided that:
(A) the entity is liable for satisfying the money
services obligation owed to the purchaser on the person's receipt
of the purchaser's money; and
(B) the entity and person enter into a written
contract that appoints the person as the entity's agent and the
person acts only within the scope of authority conferred by the
contract;
(6) a person that, on behalf of the United States or a
department, agency, or instrumentality of the United States, or a
state or county, city, or any other governmental agency or
political subdivision of a state, provides electronic funds
transfer services of governmental benefits for a federal, state,
county, or local governmental agency;
(7) a person that acts as an intermediary on behalf of
and at the direction of a license holder in the process by which the
license holder, after receiving money or monetary value from a
purchaser, either directly or through an authorized delegate,
transmits the money or monetary value to the purchaser's designated
recipient, provided that the license holder is liable for
satisfying the obligation owed to the purchaser;
(8) an attorney or title company that in connection
with a real property transaction receives and disburses domestic
currency or issues an escrow or trust fund check only on behalf of a
party to the transaction;
(9) a person engaged in the business of currency
transportation who is both a registered motor carrier under Chapter
643, Transportation Code, and a licensed armored car company or
courier company under Chapter 1702, Occupations Code, provided that
the person does not engage in the money transmission or currency
exchange business or depository agent services business without a
license issued under this chapter; and
(10) any other person, transaction, or class of
persons or transactions exempted by commission rule or any other
person or transaction exempted by the commissioner's order on a
finding that the licensing of the person is not necessary to achieve
the purposes of this chapter.
SECTION 5. Section 151.201, Finance Code, is amended to
read as follows:
Sec. 151.201. SCOPE. This subchapter sets out the general
qualifications and provisions that apply to a money services
license, regardless of whether the license is a money transmission
license, [or] a currency exchange license, or a depository agent
license. Subchapters D and E set forth the additional
qualifications and provisions that apply specifically to a money
transmission license. Subchapter F sets forth the additional
qualifications and provisions that apply specifically to a currency
exchange license. Subchapter J sets forth the additional
qualifications and provisions that apply specifically to a
depository agent license.
SECTION 6. Sections 151.207(a), (b), and (d), Finance Code,
are amended to read as follows:
(a) If a license holder does not continue to meet the
qualifications or satisfy the requirements that apply to an
applicant for a new money transmission license, [or] currency
exchange license, or depository agent license, as applicable, the
commissioner may suspend or revoke the license holder's license.
(b) In addition to complying with Subsection (a), a license
holder must annually:
(1) pay a license fee in an amount established by
commission rule; and
(2) submit a report that is under oath, is in the form
and medium required by the commissioner, and contains:
(A) if the license is a money transmission
license or depository agent license, an audited unconsolidated
financial statement dated as of the last day of the license holder's
fiscal year that ended in the immediately preceding calendar year;
(B) if the license is a currency exchange
license, a financial statement, audited or unaudited, dated as of
the last day of the license holder's fiscal year that ended in the
immediately preceding calendar year; and
(C) documentation and certification, or any
other information the commissioner reasonably requires to
determine the security, net worth, permissible investments, and
other requirements the license holder must satisfy and whether the
license holder continues to meet the qualifications and
requirements for licensure.
(d) If the license holder fails to submit the completed
annual report and pay the annual license fee and any late fee due
within the time prescribed by Subsection (c)(1), the license
expires, and the license holder must cease and desist from engaging
in the business of money transmission, [or] currency exchange, or
depository agent services, as applicable, as of that date. The
expiration of a license is not subject to appeal.
SECTION 7. Section 151.302(a), Finance Code, is amended to
read as follows:
(a) A person may not engage in the business of money
transmission or advertise, solicit, or hold itself out as a person
that engages in the business of money transmission unless the
person:
(1) is licensed under this subchapter;
(2) is an authorized delegate of a person licensed
under this subchapter, appointed by the license holder in
accordance with Section 151.402;
(3) is excluded from licensure under Section 151.003;
[or]
(4) is licensed as a depository agent under Subchapter
J and only engages in the business of money transmission in
connection with, and to the extent necessary for, the performance
of depository agent activities; or
(5) has been granted an exemption under Subsection
(c).
SECTION 8. Section 151.502(a), Finance Code, is amended to
read as follows:
Sec. 151.502. LICENSE REQUIRED. (a) A person may not engage
in the business of currency exchange or advertise, solicit, or hold
itself out as providing currency exchange unless the person:
(1) is licensed under this subchapter;
(2) is licensed for money transmission under
Subchapter D;
(3) is an authorized delegate of a person licensed for
money transmission under Subchapter D;
(4) is excluded under Section 151.003; [or]
(5) is licensed as a depository agent under Subchapter
J and only engages in the business of currency exchange in
connection with, and to the extent necessary for, the performance
of depository agent activities; or
(6) has been granted an exemption under Subsection
(d).
SECTION 9. Section 151.602(a), Finance Code, is amended to
read as follows:
(a) A license holder must prepare, maintain, and preserve
the following books, accounts, and other records for at least five
years or another period as may be prescribed by rule of the
commission:
(1) a record of each money transmission transaction,
[or] currency exchange transaction, or depository agent services
transaction, as applicable;
(2) a general ledger posted in accordance with
generally accepted accounting principles containing all asset,
liability, capital, income, and expense accounts, unless directed
otherwise by the commissioner;
(3) bank statements and bank reconciliation records;
(4) all records and reports required by applicable
state and federal law, including the reporting and recordkeeping
requirements imposed by the Bank Secrecy Act, the USA PATRIOT ACT,
and Chapter 271, and other federal and state laws pertaining to
money laundering, drug trafficking, or terrorist funding; and
(5) any other records required by commission rule or
reasonably requested by the commissioner to determine compliance
with this chapter.
SECTION 10. Section 151.603, Finance Code, is amended by
adding Subsection (c-1) to read as follows:
(c-1) A depository agent license holder shall prepare
written reports and statements as follows:
(1) the renewal report required by Section
151.207(b)(2), including an audited unconsolidated financial
statement that is dated as of the last day of the license holder's
fiscal year that ended in the immediately preceding calendar year;
(2) a quarterly interim financial statement and report
regarding the permissible investments required to be maintained
under applicable rules that reflect the license holder's financial
condition and permissible investments as of the last day of the
calendar quarter to which the statement and report relate and that
are prepared not later than the 45th day after the last day of the
calendar quarter; and
(3) any other report required by commission rule or
reasonably requested by the commissioner to determine compliance
with this chapter.
SECTION 11. Section 151.604(b), Finance Code, is amended to
read as follows:
(b) A license holder must file a written report with the
commissioner not later than 24 hours after the license holder knows
or has reason to know of:
(1) the filing of a petition by or against the license
holder for bankruptcy or reorganization;
(2) the filing of a petition by or against the license
holder for receivership, the commencement of any other judicial or
administrative proceeding for its dissolution or reorganization,
or the making of a general assignment for the benefit of the license
holder's creditors;
(3) the institution of a proceeding to revoke or
suspend the license holder's license, or to enjoin or otherwise
require the license holder to cease and desist from engaging in an
activity related to a business activity that, if conducted in this
state, would be subject to this chapter [money transmission], by a
state or country in which the license holder engages in business or
is licensed;
(4) the felony indictment or conviction of the license
holder or a principal of, person in control of, responsible
individual of, or authorized delegate of the license holder for an
offense identified in Section 151.202(e);
(5) the cancellation or other impairment of the
license holder's security; or
(6) the inability to meet the license holder's
transmission obligations under this chapter for a period of 24
hours or longer.
SECTION 12. Chapter 151, Finance Code, is amended by adding
Subchapter J to read as follows:
SUBCHAPTER J. DEPOSITORY AGENT LICENSE
Sec. 151.851. DEFINITIONS. In this subchapter, "bullion,"
"deposit," "depository," "depository account," "depository account
holder," "depository agent," "precious metal," and "specie" have
the meanings assigned by Section 2116.001, Government Code.
Sec. 151.852. APPLICABILITY TO DEPOSITORY AGENT SERVICES.
(a) Notwithstanding any other provision of this chapter, a money
service that constitutes both a depository agent service and a
money transmission service, or both a depository agent service and
a currency exchange service, for purposes of this chapter
constitutes a depository agent service only.
(b) A depository agent service described by Subsection (a)
is not subject to a provision of this chapter applicable uniquely to
money transmission services or currency exchange services.
(c) A person who renders a service that constitutes a
depository agent service, including a depository agent service
described by Subsection (a), and renders another service that
constitutes money transmission or currency exchange service only,
is subject to the requirements of this chapter applicable to each
type of service rendered.
Sec. 151.853. LICENSE REQUIRED. (a) A person may not
engage in the business of rendering depository agent services or
advertise, solicit, or hold itself out as a person that engages in
the business of depository agent services unless the person:
(1) is licensed under this subchapter and has received
the requisite certifications from the comptroller of its
facilities, systems, processes, and procedures as required by
Chapter 2116, Government Code, or rules adopted under that chapter;
or
(2) is excluded from licensing requirements under
Section 151.003.
(b) Notwithstanding any other provision of this chapter, a
person described by Section 151.003(1), (6), (7), (8), or (9) is not
eligible for a license under this subchapter and may not engage in
depository agent activities.
(c) For purposes of this chapter:
(1) a person engages in the business of depository
agent services if the person renders a depository agent service,
regardless of whether:
(A) compensation is sought or received for the
service, directly or indirectly; and
(B) the service is incidental to any other
business in which the person is primarily engaged; and
(2) a person solicits, advertises, or holds the person
out as a person that engages in the business of depository agent
services if the person represents that the person will conduct
depository agent services.
(d) Notwithstanding Subsection (c), a person does not
engage in the business of depository agent services by engaging in a
transaction for the person's own depository account or for the
account of another person acting as a fiduciary that would
constitute depository agent services if conducted for another
person.
(e) A depository agent license holder may engage in
depository agent services business at one or more locations in this
state owned directly or indirectly by the license holder under a
single license.
Sec. 151.854. ADDITIONAL QUALIFICATIONS. In addition to
the general qualifications for licensure set forth in Section
151.202, an applicant for a depository agent license must
demonstrate to the satisfaction of the commissioner that:
(1) the applicant has and will maintain the
capitalization, minimum net worth, and other applicable financial
requirements established by rules of the commission;
(2) the applicant's financial condition will enable
the applicant to safely and soundly engage in the business of
depository agent services; and
(3) the applicant does not engage in any activity or
practice that adversely affects the applicant's safety and
soundness.
Sec. 151.855. APPLICATION AND ACCOMPANYING FEE,
STATEMENTS, AND SECURITY. (a) An applicant for a depository agent
license must submit an application in accordance with Section
151.203.
(b) At the time an application for a depository agent
license is submitted, an applicant must file with the department:
(1) an application fee in the amount established by
commission rule;
(2) audited financial statements that are
satisfactory to the commissioner for purposes of determining
whether the applicant has the minimum net worth required under
applicable rules and is likely to maintain the required minimum net
worth if a license is issued; and
(3) security in the amount of $500,000 that meets the
requirements of applicable rules and an undertaking or agreement
that the applicant will increase or supplement the security to
equal the aggregate security required by the commissioner before
the issuance of the license and the start of operations.
Sec. 151.856. INVESTIGATION AND ACTION ON APPLICATION. The
commissioner shall investigate the applicant and act on the
application in accordance with Sections 151.204 and 151.205.
Sec. 151.857. TEMPORARY LICENSE. (a) The commissioner may
issue a temporary depository agent license to a person that is
engaging in depository agent services, but has not obtained a
license under this subchapter, if the person:
(1) certifies in writing that the person qualifies for
the license and will submit a completed license application not
later than the 60th day after the date the temporary license is
issued;
(2) submits a recent financial statement acceptable to
the commissioner that reflects the minimum net worth required under
applicable regulations;
(3) provides security that meets the requirements
specified by the commissioner, but not less than $500,000;
(4) agrees in writing that, until a permanent license
is issued, the person will engage only in activities being
conducted at existing locations; and
(5) pays the application fee and a nonrefundable
temporary license fee in the amount established by commission rule.
(b) The effective period for a temporary depository agent
license may not exceed 90 days after the date the license is issued.
The commissioner may extend the effective period for not more than
30 days if necessary to complete the processing of a timely filed
application for which approval is likely.
Sec. 151.858. LIABILITY OF LICENSE HOLDER. A depository
agent license holder is liable for the delivery to or for the
account of the depository or each depositor, as applicable, of all
bullion, specie, and money payable or deliverable in connection
with the transactions in which the license holder engages on behalf
of the depository.
Sec. 151.859. TRUST IMPOSED. (a) A depository agent
license holder shall hold in trust all cash, bullion, specie, and
other assets received in the ordinary course of its business until
the time the delivery obligation is discharged. A trust resulting
from the depository agent license holder's actions is in favor of
the persons to whom such delivery obligations are owed.
(b) If a depository agent license holder commingles any
money or other property received for delivery with money or other
property owned or controlled by the depository agent license
holder, all commingled money and other property are impressed with
a trust as provided by this section in an amount equal to the amount
of money or property received for delivery, less the amount of fees
paid for the delivery.
(c) If the commissioner revokes a depository agent license,
all money and other property held in trust by the depository agent
license holder is assigned to the commissioner for the benefit of
the persons to whom the related delivery obligations are owed.
(d) Money or other property of a depository agent license
holder impressed with a trust under this section may not be
considered an asset or property of the license holder in the event
of bankruptcy, receivership, or a claim against the license holder
unrelated to the license holder's obligations under this chapter.
Sec. 151.860. DISCLOSURE REQUIREMENTS. (a) A depository
agent license holder's name and mailing address or telephone number
must be provided to the purchaser in connection with each
depository agent services transaction conducted by the depository
agent license holder.
(b) A depository agent license holder receiving currency or
an instrument payable in currency for transmission must comply with
Chapter 278.
SECTION 13. This Act takes effect immediately if it
receives a vote of two-thirds of all the members elected to each
house, as provided by Section 39, Article III, Texas Constitution.
If this Act does not receive the vote necessary for immediate
effect, this Act takes effect September 1, 2015.