Ban Plate Readers - Minnesota

A bill for an act 1.2 relating to relating to data practices; classifying data related to automated license 1.3 plate readers and requiring a governing policy; requiring a log of use; requiring 1.4 data to be destroyed in certain circumstances; requiring a report; amending 1.5 Minnesota Statutes 2014, section 13.82, subdivision 2, by adding a subdivision; 1.6 proposing coding for new law in Minnesota Statutes, chapters 13; 626. 1.7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 1.8 Section 1. Minnesota Statutes 2014, section 13.82, subdivision 2, is amended to read: 1.9 Subd. 2. Arrest data. The following data created or collected by law enforcement 1.10 agencies which document any actions taken by them to cite, arrest, incarcerate or 1.11 otherwise substantially deprive an adult individual of liberty shall be public at all times 1.12 in the originating agency: 1.13 (a) time, date and place of the action; 1.14 (b) any resistance encountered by the agency; 1.15 (c) any pursuit engaged in by the agency; 1.16 (d) whether any weapons were used by the agency or other individual; 1.17 (e) the charge, arrest or search warrants, or other legal basis for the action; 1.18 (f) the identities of the agencies, units within the agencies and individual persons 1.19 taking the action; 1.20 (g) whether and where the individual is being held in custody or is being incarcerated 1.21 by the agency; 1.22 (h) the date, time and legal basis for any transfer of custody and the identity of the 1.23 agency or person who received custody; 1.24 (i) the date, time and legal basis for any release from custody or incarceration; Section 1. 1 SENATE STATE OF MINNESOTA EIGHTY-NINTH SESSION S.F. No. 86 (SENATE AUTHORS: LATZ, Kent and Hall) DATE D-PG OFFICIAL STATUS 01/12/2015 54 Introduction and first reading Referred to Judiciary 01/29/2015 139a Comm report: To pass as amended Rule 21, referred to Rules and Administration 02/19/2015 340 Comm report: Amend previous comm report Re-referred to Transportation and Public Safety 03/04/2015 517a Comm report: To pass as amended and re-refer to Finance 05/06/2015 3306 Comm report: To pass 3392 Second reading 05/07/2015 3420a Special Order: Amended 3424 Motion did not prevail to lay bill on the table 3428 Third reading Passed 05/15/2015 3569 Returned from House with amendment 3569 Senate not concur, conference committee of 3 requested 3575 Senate conferees Latz; Kent; Hall 05/16/2015 3592 House conferees Cornish; Scott; Schoen 05/17/2015 3810c Conference committee report, delete everything Senate adopted CC report and repassed bill 3815 Third reading 4254 House adopted SCC report and repassed bill Presentment date 05/20/15 Governor's action Approval 05/23/15 Secretary of State Chapter 67 05/23/15 SF86 REVISOR KLL S0086-4 4th Engrossment 2.1 (j) the name, age, sex and last known address of an adult person or the age and sex 2.2 of any juvenile person cited, arrested, incarcerated or otherwise substantially deprived 2.3 of liberty; 2.4 (k) whether the agency employed an automated license plate reader, wiretaps or 2.5 other eavesdropping techniques, unless the release of this specific data would jeopardize 2.6 an ongoing investigation; 2.7 (l) the manner in which the agencies received the information that led to the arrest 2.8 and the names of individuals who supplied the information unless the identities of those 2.9 individuals qualify for protection under subdivision 17; and 2.10 (m) response or incident report number. 2.11 Sec. 2. Minnesota Statutes 2014, section 13.82, is amended by adding a subdivision to 2.12 read: 2.13 Subd. 31. Use of surveillance technology. Notwithstanding subdivision 25 2.14 and section 13.37, subdivision 2, the existence of all technology maintained by a 2.15 law enforcement agency that may be used to electronically capture an audio, video, 2.16 photographic, or other record of the activities of the general public, or of an individual 2.17 or group of individuals, for purposes of conducting an investigation, responding to an 2.18 incident or request for service, monitoring or maintaining public order and safety, or 2.19 engaging in any other law enforcement function authorized by law is public data. 2.20 Sec. 3. [13.824] AUTOMATED LICENSE PLATE READERS. 2.21 Subdivision 1. Definition. As used in this section, "automated license plate reader" 2.22 means an electronic device mounted on a law enforcement vehicle or positioned in a 2.23 stationary location that is capable of recording data on, or taking a photograph of, a 2.24 vehicle or its license plate and comparing the collected data and photographs to existing 2.25 law enforcement databases for investigative purposes. Automated license plate reader 2.26 includes a device that is owned or operated by a person who is not a government entity to 2.27 the extent that data collected by the reader are shared with a law enforcement agency. 2.28 Subd. 2. Data collection; classification; use restrictions. (a) Data collected by an 2.29 automated license plate reader must be limited to the following: 2.30 (1) license plate numbers; 2.31 (2) date, time, and location data on vehicles; and 2.32 (3) pictures of license plates, vehicles, and areas surrounding the vehicles. 2.33 Collection of any data not authorized by this paragraph is prohibited. Sec. 3. 2 SF86 REVISOR KLL S0086-4 4th Engrossment 3.1 (b) All data collected by an automated license plate reader are private data on 3.2 individuals or nonpublic data unless the data are public under section 13.82, subdivision 2, 3.3 3, or 6, or are active criminal investigative data under section 13.82, subdivision 7. 3.4 (c) Data collected by an automated license plate reader may only be matched with 3.5 data in the Minnesota license plate data file, provided that a law enforcement agency 3.6 may use additional sources of data for matching if the additional data relate to an active 3.7 criminal investigation. A central state repository of automated license plate reader data is 3.8 prohibited unless explicitly authorized by law. 3.9 (d) Automated license plate readers must not be used to monitor or track an individual 3.10 who is the subject of an active criminal investigation unless authorized by a warrant, issued 3.11 upon probable cause, or exigent circumstances justify the use without obtaining a warrant. 3.12 Subd. 3. Destruction of data required. (a) Notwithstanding section 138.17, and 3.13 except as otherwise provided in this subdivision, data collected by an automated license 3.14 plate reader that are not related to an active criminal investigation must be destroyed no 3.15 later than 60 days from the date of collection. 3.16 (b) Upon written request from an individual who is the subject of a pending criminal 3.17 charge or complaint, along with the case or complaint number and a statement that the 3.18 data may be used as exculpatory evidence, data otherwise subject to destruction under 3.19 paragraph (a) must be preserved by the law enforcement agency until the criminal charge 3.20 or complaint is resolved or dismissed. 3.21 (c) Upon written request from a program participant under chapter 5B, automated 3.22 license plate reader data related to the program participant must be destroyed at the 3.23 time of collection or upon receipt of the request, whichever occurs later, unless the data 3.24 are active criminal investigative data. The existence of a request submitted under this 3.25 paragraph is private data on individuals. 3.26 (d) Data that are inactive criminal investigative data are subject to destruction 3.27 according to the retention schedule for the data established under section 138.17. 3.28 Subd. 4. Sharing among law enforcement agencies. (a) Automated license plate 3.29 reader data that are not related to an active criminal investigation may only be shared 3.30 with, or disseminated to, another law enforcement agency upon meeting the standards 3.31 for requesting access to data as provided in subdivision 7. 3.32 (b) If data collected by an automated license plate reader are shared with another law 3.33 enforcement agency under this subdivision, the agency that receives the data must comply 3.34 with all data classification, destruction, and security requirements of this section. Sec. 3. 3 SF86 REVISOR KLL S0086-4 4th Engrossment 4.1 (c) Automated license plate reader data that are not related to an active criminal 4.2 investigation may not be shared with, disseminated to, sold to, or traded with any other 4.3 individual or entity unless explicitly authorized by this subdivision or other law. 4.4 Subd. 5. Log of use required. (a) A law enforcement agency that installs or 4.5 uses an automated license plate reader must maintain a public log of its use, including 4.6 but not limited to: 4.7 (1) specific times of day that the reader actively collected data; 4.8 (2) the aggregate number of vehicles or license plates on which data are collected for 4.9 each period of active use and a list of all state and federal databases with which the data 4.10 were compared, unless the existence of the database itself is not public; 4.11 (3) for each period of active use, the number of vehicles or license plates in each of 4.12 the following categories where the data identify a vehicle or license plate that has been 4.13 stolen, a warrant for the arrest of the owner of the vehicle or an owner with a suspended or 4.14 revoked driver's license or similar category, or are active investigative data; and 4.15 (4) for a reader at a stationary or fixed location, the location at which the reader 4.16 actively collected data and is installed and used. 4.17 (b) The law enforcement agency must maintain a list of the current and previous 4.18 locations, including dates at those locations, of any fixed stationary automated license 4.19 plate readers or other surveillance devices with automated license plate reader capability 4.20 used by the agency. The agency's list must be accessible to the public, unless the agency 4.21 determines that the data are security information as provided in section 13.37, subdivision 4.22 2. A determination that these data are security information is subject to in-camera judicial 4.23 review as provided in section 13.08, subdivision 4. 4.24 Subd. 6. Biennial audit. (a) In addition to the log required under subdivision 5, 4.25 the law enforcement agency must maintain records showing the date and time automated 4.26 license plate reader data were collected and the applicable classification of the data. The 4.27 law enforcement agency shall arrange for an independent, biennial audit of the records 4.28 to determine whether data currently in the records are classified, how the data are used, 4.29 whether they are destroyed as required under this section, and to verify compliance with 4.30 subdivision 7. If the commissioner of administration believes that a law enforcement 4.31 agency is not complying with this section or other applicable law, the commissioner may 4.32 order a law enforcement agency to arrange for additional independent audits. Data in the 4.33 records required under this paragraph are classified as provided in subdivision 2. 4.34 (b) The results of the audit are public. The commissioner of administration shall 4.35 review the results of the audit. If the commissioner determines that there is a pattern of 4.36 substantial noncompliance with this section by the law enforcement agency, the agency Sec. 3. 4 SF86 REVISOR KLL S0086-4 4th Engrossment 5.1 must immediately suspend operation of all automated license plate reader devices until the 5.2 commissioner has authorized the agency to reinstate their use. An order of suspension 5.3 under this paragraph may be issued by the commissioner, upon review of the results of the 5.4 audit, review of the applicable provisions of this chapter, and after providing the agency a 5.5 reasonable opportunity to respond to the audit's findings. 5.6 (c) A report summarizing the results of each audit must be provided to the 5.7 commissioner of administration, to the chair and ranking minority members of the 5.8 committees of the house of representatives and the senate with jurisdiction over data 5.9 practices and public safety issues, and to the Legislative Commission on Data Practices 5.10 and Personal Data Privacy no later than 30 days following completion of the audit. 5.11 Subd. 7. Authorization to access data. (a) A law enforcement agency must comply 5.12 with sections 13.05, subdivision 5, and 13.055 in the operation of automated license plate 5.13 readers, and in maintaining automated license plate reader data. 5.14 (b) The responsible authority for a law enforcement agency must establish written 5.15 procedures to ensure that law enforcement personnel have access to the data only if 5.16 authorized in writing by the chief of police, sheriff, or head of the law enforcement agency, 5.17 or their designee, to obtain access to data collected by an automated license plate reader 5.18 for a legitimate, specified, and documented law enforcement purpose. Consistent with the 5.19 requirements of paragraph (c), each access must be based on a reasonable suspicion that 5.20 the data are pertinent to an active criminal investigation and must include a record of the 5.21 factual basis for the access and any associated case number, complaint, or incident that is 5.22 the basis for the access. 5.23 (c) The ability of authorized individuals to enter, update, or access automated license 5.24 plate reader data must be limited through the use of role-based access that corresponds 5.25 to the official duties or training level of the individual and the statutory authorization 5.26 that grants access for that purpose. All queries and responses, and all actions in which 5.27 data are entered, updated, accessed, shared, or disseminated, must be recorded in a data 5.28 audit trail. Data contained in the audit trail are public, to the extent that the data are 5.29 not otherwise classified by law. 5.30 Subd. 8. Notification to Bureau of Criminal Apprehension. (a) Within ten days 5.31 of the installation or current use of an automated license plate reader or the integration 5.32 of automated license plate reader technology into another surveillance device, a law 5.33 enforcement agency must notify the Bureau of Criminal Apprehension of that installation 5.34 or use and of any fixed location of a stationary automated license plate reader. 5.35 (b) The Bureau of Criminal Apprehension must maintain a list of law enforcement 5.36 agencies using automated license plate readers or other surveillance devices with Sec. 3. 5 SF86 REVISOR KLL S0086-4 4th Engrossment 6.1 automated license plate reader capability, including locations of any fixed stationary 6.2 automated license plate readers or other devices. Except to the extent that the law 6.3 enforcement agency determines that the location of a specific reader or other device is 6.4 security information, as defined in section 13.37, this list is accessible to the public and 6.5 must be available on the bureau's Web site. A determination that the location of a reader 6.6 or other device is security information is subject to in-camera judicial review, as provided 6.7 in section 13.08, subdivision 4. 6.8 EFFECTIVE DATE. This section is effective August 1, 2015. Data collected 6.9 before the effective date of this section must be destroyed, if required by this section, no 6.10 later than 15 days after the date this section becomes effective. 6.11 Sec. 4. [626.8472] AUTOMATED LICENSE PLATE READER POLICY. 6.12 The chief law enforcement officer of every state and local law enforcement agency 6.13 that maintains an automated license plate reader shall establish and enforce a written 6.14 policy governing use of the reader. Use of an automated license plate reader without 6.15 adoption of a written policy under this section is prohibited. At a minimum, the policies 6.16 and procedures must incorporate the requirements of section 13.824, and the employee 6.17 discipline standards for unauthorized access to data contained in section 13.09. 6.18 EFFECTIVE DATE. This section is effective August 1, 2015, provided that chief 6.19 law enforcement officers shall adopt the policy required under this section no later than 6.20 January 15, 2016.

Ban Stingray Spying

AN ACT Relating to prohibiting the use of a cell site simulator 2 device without a warrant; amending RCW 9.73.260; adding a new section to chapter 9.73 RCW; and declaring an emergency.3 4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON: 5 NEW SECTION. Sec. 1. A new section is added to chapter 9.73 RCW to read as follows:6 7 The state and its political subdivisions shall not, by means of a 8 cell site simulator device, collect or use a person's electronic data 9 or metadata without (1) that person's informed consent, (2) a 10 warrant, based upon probable cause, that describes with particularity 11 the person, place, or thing to be searched or seized, or (3) acting 12 in accordance with a legally recognized exception to the warrant requirements.13 14 Sec. 2. RCW 9.73.260 and 1998 c 217 s 1 are each amended to read as follows:15 (1) As used in this section:16 17 (a) "Wire communication" means any aural transfer made in whole 18 or in part through the use of facilities for the transmission of 19 communications by the aid of wire, cable, or other like connection 20 between the point of origin and the point of reception, including the ENGROSSED SUBSTITUTE HOUSE BILL 1440 AS AMENDED BY THE SENATE Passed Legislature - 2015 Regular Session State of Washington 64th Legislature 2015 Regular Session By House Public Safety (originally sponsored by Representatives Taylor, Goodman, Pollet, Scott, Condotta, Shea, G. Hunt, Young, Moscoso, Smith, Ryu, Jinkins, Magendanz, Farrell, and McCaslin) READ FIRST TIME 02/17/15. p. 1 ESHB 1440.PL 1 use of such connection in a switching station, furnished or operated 2 by any person engaged in providing or operating such facilities for 3 the transmission of intrastate, interstate, or foreign 4 communications, and such term includes any electronic storage of such communication.5 6 (b) "Electronic communication" means any transfer of signs, 7 signals, writing, images, sounds, data, or intelligence of any nature 8 transmitted in whole or in part by a wire, radio, electromagnetic, 9 photoelectronic, or photo-optical system, but does not include: (i) Any wire or oral communication;10 11 (ii) Any communication made through a tone-only paging device; or 12 (iii) Any communication from a tracking device, but solely to the 13 extent the tracking device is owned by the applicable law enforcement agency.14 15 (c) "Electronic communication service" means any service that 16 provides to users thereof the ability to send or receive wire or electronic communications.17 18 (d) "Pen register" means a device that records or decodes 19 electronic or other impulses that identify the numbers dialed or 20 otherwise transmitted on the telephone line to which such device is 21 attached, but such term does not include any device used by a 22 provider or customer of a wire or electronic communication service 23 for billing, or recording as an incident to billing, for 24 communications services provided by such provider or any device used 25 by a provider or customer of a wire communication service for cost 26 accounting or other like purposes in the ordinary course of its business.27 28 (e) "Trap and trace device" means a device that captures the 29 incoming electronic or other impulses that identify the originating 30 number of an instrument or device from which a wire or electronic communication was transmitted.31 32 (f) "Cell site simulator device" means a device that transmits or 33 receives radio waves for the purpose of conducting one or more of the 34 following operations: (i) Identifying, locating, or tracking the 35 movements of a communications device; (ii) intercepting, obtaining, 36 accessing, or forwarding the communications, stored data, or metadata 37 of a communications device; (iii) affecting the hardware or software 38 operations or functions of a communications device; (iv) forcing 39 transmissions from or connections to a communications device; (v) 40 denying a communications device access to other communications p. 2 ESHB 1440.PL 1 devices, communications protocols, or services; or (vi) spoofing or 2 simulating a communications device, cell tower, cell site, or 3 service, including, but not limited to, an international mobile 4 subscriber identity catcher or other invasive cell phone or telephone 5 surveillance or eavesdropping device that mimics a cell phone tower 6 and sends out signals to cause cell phones in the area to transmit 7 their locations, identifying information, and communications content, 8 or a passive interception device or digital analyzer that does not 9 send signals to a communications device under surveillance. A cell 10 site simulator device does not include any device used or installed 11 by an electric utility, as defined in RCW 19.280.020, solely to the 12 extent such device is used by that utility to measure electrical 13 usage, to provide services to customers, or to operate the electric grid.14 15 (2) No person may install or use a pen register ((or)), trap and 16 trace device, or cell site simulator device without a prior court 17 order issued under this section except as provided under subsection (6) of this section or RCW 9.73.070.18 19 (3) A law enforcement officer may apply for and the superior 20 court may issue orders and extensions of orders authorizing the 21 installation and use of pen registers ((and)), trap and trace 22 devices, and cell site simulator devices as provided in this section. 23 The application shall be under oath and shall include the identity of 24 the officer making the application and the identity of the law 25 enforcement agency conducting the investigation. The applicant must 26 certify that the information likely to be obtained is relevant to an 27 ongoing criminal investigation being conducted by that agency. 28 (4) If the court finds that the information likely to be obtained 29 by such installation and use is relevant to an ongoing criminal 30 investigation and finds that there is probable cause to believe that 31 the pen register ((or)), trap and trace device, or cell site 32 simulator device will lead to obtaining evidence of a crime, 33 contraband, fruits of crime, things criminally possessed, weapons, or 34 other things by means of which a crime has been committed or 35 reasonably appears about to be committed, or will lead to learning 36 the location of a person who is unlawfully restrained or reasonably 37 believed to be a witness in a criminal investigation or for whose 38 arrest there is probable cause, the court shall enter an ex parte 39 order authorizing the installation and use of a pen register ((or p. 3 ESHB 1440.PL 1 a)), trap and trace device, or cell site simulator device. The order shall specify:2 3 (a)(i) In the case of a pen register or trap and trace device, 4 the identity, if known, of the person to whom is leased or in whose 5 name is listed the telephone line to which the pen register or trap 6 and trace device is to be attached; or 7 (ii) In the case of a cell site simulator device, the identity, 8 if known, of (A) the person to whom is subscribed or in whose name is 9 subscribed the electronic communications service utilized by the 10 device to which the cell site simulator device is to be used and (B) 11 the person who possesses the device to which the cell site simulator device is to be used;12 13 (b) The identity, if known, of the person who is the subject of the criminal investigation;14 15 (c)(i) In the case of a pen register or trap and trace device, 16 the number and, if known, physical location of the telephone line to 17 which the pen register or trap and trace device is to be attached 18 and, in the case of a trap and trace device, the geographic limits of 19 the trap and trace order; or 20 (ii) In the case of a cell site simulator device: (A) The 21 telephone number or other unique subscriber account number 22 identifying the wire or electronic communications service account 23 used by the device to which the cell site simulator device is to be 24 attached or used; (B) if known, the physical location of the device 25 to which the cell site simulator device is to be attached or used; 26 (C) the type of device, and the communications protocols being used 27 by the device, to which the cell site simulator device is to be 28 attached or used; (D) the geographic area that will be covered by the 29 cell site simulator device; (E) all categories of metadata, data, or 30 information to be collected by the cell site simulator device from 31 the targeted device including, but not limited to, call records and 32 geolocation information; (F) whether or not the cell site simulator 33 device will incidentally collect metadata, data, or information from 34 any parties or devices not specified in the court order, and if so, 35 what categories of information or metadata will be collected; and (G) 36 any disruptions to access or use of a communications or internet 37 access network that may be created by use of the device; and 38 (d) A statement of the offense to which the information likely to 39 be obtained by the pen register ((or)), trap and trace device, or cell site simulator device relates.40 p. 4 ESHB 1440.PL 1 The order shall direct, if the applicant has requested, the 2 furnishing of information, facilities, and technical assistance 3 necessary to accomplish the installation of the pen register ((or)), 4 trap and trace device, or cell site simulator device. An order issued 5 under this section shall authorize the installation and use of a: (i) 6 Pen register or a trap and trace device for a period not to exceed 7 sixty days; and (ii) a cell site simulator device for sixty days. An 8 extension of the original order may only be granted upon: A new 9 application for an order under subsection (3) of this section; and a 10 showing that there is a probability that the information or items 11 sought under this subsection are more likely to be obtained under the 12 extension than under the original order. No extension beyond the 13 first extension shall be granted unless: There is a showing that 14 there is a high probability that the information or items sought 15 under this subsection are much more likely to be obtained under the 16 second or subsequent extension than under the original order; and 17 there are extraordinary circumstances such as a direct and immediate 18 danger of death or serious bodily injury to a law enforcement 19 officer. The period of extension shall be for a period not to exceed sixty days.20 21 An order authorizing or approving the installation and use of a 22 pen register ((or a)), trap and trace device, or cell site simulator 23 device shall direct that the order be sealed until otherwise ordered 24 by the court and that the person owning or leasing the line to which 25 the pen register ((or)), trap and trace device, and cell site 26 simulator devices is attached or used, or who has been ordered by the 27 court to provide assistance to the applicant, not disclose the 28 existence of the pen register ((or)), trap and trace device, or cell 29 site simulator device or the existence of the investigation to the 30 listed subscriber or to any other person, unless or until otherwise ordered by the court.31 32 (5) Upon the presentation of an order, entered under subsection 33 (4) of this section, by an officer of a law enforcement agency 34 authorized to install and use a pen register under this chapter, a 35 provider of wire or electronic communication service, landlord, 36 custodian, or other person shall furnish such law enforcement officer 37 forthwith all information, facilities, and technical assistance 38 necessary to accomplish the installation of the pen register 39 unobtrusively and with a minimum of interference with the services 40 that the person so ordered by the court accords the party with p. 5 ESHB 1440.PL 1 respect to whom the installation and use is to take place, if such 2 assistance is directed by a court order as provided in subsection (4) of this section.3 4 Upon the request of an officer of a law enforcement agency 5 authorized to receive the results of a trap and trace device under 6 this chapter, a provider of a wire or electronic communication 7 service, landlord, custodian, or other person shall install such 8 device forthwith on the appropriate line and shall furnish such law 9 enforcement officer all additional information, facilities, and 10 technical assistance including installation and operation of the 11 device unobtrusively and with a minimum of interference with the 12 services that the person so ordered by the court accords the party 13 with respect to whom the installation and use is to take place, if 14 such installation and assistance is directed by a court order as 15 provided in subsection (4) of this section. Unless otherwise ordered 16 by the court, the results of the trap and trace device shall be 17 furnished to the officer of a law enforcement agency, designated in 18 the court order, at reasonable intervals during regular business hours for the duration of the order.19 20 A provider of a wire or electronic communication service, 21 landlord, custodian, or other person who furnishes facilities or 22 technical assistance pursuant to this subsection shall be reasonably 23 compensated by the law enforcement agency that requests the 24 facilities or assistance for such reasonable expenses incurred in providing such facilities and assistance.25 26 No cause of action shall lie in any court against any provider of 27 a wire or electronic communication service, its officers, employees, 28 agents, or other specified persons for providing information, 29 facilities, or assistance in accordance with the terms of a court 30 order under this section. A good faith reliance on a court order 31 under this section, a request pursuant to this section, a legislative 32 authorization, or a statutory authorization is a complete defense 33 against any civil or criminal action brought under this chapter or any other law.34 35 (6)(a) Notwithstanding any other provision of this chapter, a law 36 enforcement officer and a prosecuting attorney or deputy prosecuting 37 attorney who jointly and reasonably determine that there is probable 38 cause to believe that an emergency situation exists that involves 39 immediate danger of death or serious bodily injury to any person that 40 requires the installation and use of a pen register ((or a)), trap p. 6 ESHB 1440.PL 1 and trace device, or cell site simulator device before an order 2 authorizing such installation and use can, with due diligence, be 3 obtained, and there are grounds upon which an order could be entered 4 under this chapter to authorize such installation and use, may have 5 installed and use a pen register ((or)), trap and trace device, or 6 cell site simulator device if, within forty-eight hours after the 7 installation has occurred, or begins to occur, an order approving the 8 installation or use is issued in accordance with subsection (4) of 9 this section. In the absence of an authorizing order, such use shall 10 immediately terminate when the information sought is obtained, when 11 the application for the order is denied or when forty-eight hours 12 have lapsed since the installation of the pen register ((or)), trap 13 and trace device, or cell site simulator device, whichever is 14 earlier. If an order approving the installation or use is not 15 obtained within forty-eight hours, any information obtained is not 16 admissible as evidence in any legal proceeding. The knowing 17 installation or use by any law enforcement officer of a pen register 18 ((or)), trap and trace device, or cell site simulator device pursuant 19 to this subsection without application for the authorizing order 20 within forty-eight hours of the installation shall constitute a 21 violation of this chapter and be punishable as a gross misdemeanor. A 22 provider of a wire or electronic service, landlord, custodian, or 23 other person who furnished facilities or technical assistance 24 pursuant to this subsection shall be reasonably compensated by the 25 law enforcement agency that requests the facilities or assistance for 26 such reasonable expenses incurred in providing such facilities and assistance.27 28 (b) A law enforcement agency that authorizes the installation of 29 a pen register ((or)), trap and trace device, or cell site simulator 30 device under this subsection (6) shall file a monthly report with the 31 administrator for the courts. The report shall indicate the number of 32 authorizations made, the date and time of each authorization, whether 33 a court authorization was sought within forty-eight hours, and 34 whether a subsequent court authorization was granted. 35 (c) A law enforcement agency authorized to use a cell site 36 simulator device in accordance with this section must: (i) Take all 37 steps necessary to limit the collection of any information or 38 metadata to the target specified in the applicable court order; (ii) 39 take all steps necessary to permanently delete any information or 40 metadata collected from any party not specified in the applicable p. 7 ESHB 1440.PL 1 court order immediately following such collection and must not 2 transmit, use, or retain such information or metadata for any purpose 3 whatsoever; and (iii) must delete any information or metadata 4 collected from the target specified in the court order within thirty 5 days if there is no longer probable cause to support the belief that 6 such information or metadata is evidence of a crime. 7 NEW SECTION. Sec. 3. If any provision of this act or its 8 application to any person or circumstance is held invalid, the 9 remainder of the act or the application of the provision to other 10 persons or circumstances is not affected. 11 NEW SECTION. Sec. 4. This act is necessary for the immediate 12 preservation of the public peace, health, or safety, or support of 13 the state government and its existing public institutions, and takes 14 effect immediately.

Gold and Silver Depository

https://s3.amazonaws.com/TAClegislation/Gold-depository-texas-hb483.pdf

 http://tenthamendmentcenter.com/legislation/depository/

By:AACapriglione H.B.ANo.A483 A BILL TO BE ENTITLED AN ACT relating to the establishment and administration of a state bullion depository; authorizing fees. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: SECTIONA1.AASubtitle 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.A2116.001.AADEFINITIONS. In this chapter: (1)AA"Administrator" means the bullion depository administrator appointed under Section 2116.003. (2)AA"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)AA"Business day" means a day other than a Saturday, Sunday, or banking holiday for a bank chartered under the laws of this state. (4)AA"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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 84R1880 MK-F 1 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)AAthe depository; or (B)AAa depository agent. (5)AA"Depositor" means a person who makes a deposit. (6)AA"Depository" means the Texas Bullion Depository created by this chapter. (7)AA"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)AA"Depository account holder," regarding a depository account, means the original depositor or a successor or assignee of the depositor respecting the depository account. (9)AA"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)AA"Precious metal" means a metal, including gold, silver, platinum, palladium, and rhodium, that: (A)AAbears a high value-to-weight ratio relative to common industrial metals; and (B)AAcustomarily is formed into bullion or specie. (11)AA"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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 2 the medium for purchase, sale, storage, transfer, or delivery of precious metals in retail or wholesale transactions. Sec.A2116.002.AATEXAS BULLION DEPOSITORY. (a) The Texas Bullion Depository is established as an agency of this state in the office of the comptroller. (b)AAThe 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.A2116.003.AADEPOSITORY 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)AAThe administrator shall: (1)AAadminister, supervise, and direct the operations and affairs of the depository and depository agents; and (2)AAliaise 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)AAThe administrator may appoint, subject to the approval of the comptroller, a deputy administrator or other subordinate officer as necessary and appropriate to the efficient 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 3 administration of the depository. Sec.A2116.004.AADEPOSITS 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)AAa deposit to the depository; (2)AAbullion or specie held by or on behalf of the depository or a depository agent; (3)AAbullion or specie in transit to or from the depository or a depository agent; and (4)AAa receivable or other amount owed to the depository in settlement of a transaction in bullion or specie. (b)AABullion, 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)AARevenue 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.A2116.005.AADEPOSITS 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)AAensure compliance with law; and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 4 (2)AAprotect the interests of: (A)AAthe depository; (B)AAdepository account holders; (C)AAthis state and the agencies, political subdivisions, and instrumentalities of this state; and (D)AAthe public at large. (b)AAThe 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)AAThe 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)AAThe 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)AAThe depository shall adjust each depository account balance to reflect additions to or withdrawals or deliveries from the account. Sec.A2116.006.AADEMAND, PRESENTMENT, WITHDRAWAL, DELIVERY, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 5 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)AAThe 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)AAThe 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.A2116.007.AATRANSFER 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)AAThe depository shall adjust the depository account balances of the depository accounts to reflect a transfer transaction between depository account holders on presentment of 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 6 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)AAIf 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.A2116.008.AADEPOSITORY ACCOUNT CONTRACTS. (a) To establish a depository account, a depositor must contract with the depository for a depository account. The contract must specify: (1)AAthe terms applicable to the account, including any special terms; and (2)AAthe conditions on which withdrawals or deliveries with respect to the account may be made. (b)AAThe 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)AAThe depository or a depository agent shall hold the contract for a depository account in the records pertaining to the account. (d)AAA 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, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 7 deposit receipts, signature cards, amendment notices, or other documentation as provided by law. (e)AAThe 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.A2116.009.AACAUSE 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)AAThe 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. Sec.A2116.010.AAFEES; 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. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 8 Sec.A2116.011.AADEPOSITORY 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.A2116.012.AATRANSFER OF DEPOSITORY ACCOUNT. (a) A depository account may be transferred on the books of the depository only on presentation to the depository of: (1)AAevidence of transfer satisfactory to the depository; and (2)AAan application for the transfer submitted by the person to whom the depository account is to be transferred. (b)AAA 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.A2116.013.AADEPOSITORY ACCOUNTS NOT INTEREST-BEARING. The depository may not pay on a depository account: (1)AAinterest; (2)AAan amount in the nature of interest; or (3)AAa fee or other payment for the use or forbearance of use of money, bullion, specie, or precious metals deposited to a depository account. Sec.A2116.014.AALIEN 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 9 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)AAOn 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)AAThe depository by written instrument may waive wholly or partly the depository ’s lien on a depository account. (d)AASubject 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.A2116.015.AADEPOSITORY 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 10 metals with the depository or a depository agent: (1)AAa fiduciary, including an administrator, executor, custodian, guardian, or trustee; (2)AAa political subdivision of this state or an instrumentality of this state; (3)AAa business or nonprofit corporation; (4)AAa charitable or educational corporation or association; or (5)AAa financial institution, including a bank, savings and loan association, or credit union. (b)AAAn 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)AAAn 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.A2116.016.AAAPPLICABILITY OF ESTATES CODE. The applicable provisions of Chapters 111, 112, and 113, Estates Code, govern a depository account. Sec.A2116.017.AAPLEDGE 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 11 persons may, by a signed pledge, pledge and transfer to the depository or to a third party all or part of the account. (b)AAA 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.A2116.018.AADEPOSITORY 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)AAA fiduciary may open, add to, or withdraw precious metals from an account described by Subsection (a). (c)AAExcept 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)AAAfter 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)AAa revocation or termination of the fiduciary relationship; or (2)AAany other disposition of the beneficial estate. (e)AAThe depository has no further liability for a payment made or right delivered under Subsection (d). Sec.A2116.019.AADEPOSITORY ACCOUNT HELD IN TRUST; 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 12 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)AAthe person claiming to be the trustee, on the person ’s signature, may withdraw precious metals from the account; and (2)AAif 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)AAThe depository has no further liability for a payment or delivery made as provided by Subsection (a). Sec.A2116.020.AAPOWER 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)AAFor 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.A2116.021.AATRANSACTIONS AND RELATIONSHIPS. The depository shall enter into transactions and relationships with bullion banks, depositories, dealers, central banks, sovereign 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 13 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.A2116.022.AACERTAIN 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)AAentering 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, 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 14 or similar risks; (2)AAcrediting 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)AAentering 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)AAthe custody or intermediary arrangements in question do not meet the comptroller ’s standards of safety, security, and liquidity; or (B)AAexcept 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)AAextending 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)AAengaging in a business or activity that, if 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 15 conducted by a private person, would be subject to regulation in this state as a banking or savings and loan function. Sec.A2116.023.AACONFISCATIONS, 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)AAThe 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 16 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)AAOn 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.A2116.024.AAOFFICIAL 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 17 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.A2116.025.AAFACILITATION 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.A2116.026.AAANNUAL 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.A2116.051.AAUSE 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. In addition to licensing requirements for a depository agent provided by Chapter 151, Finance Code, and rules adopted under that chapter, the 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 18 comptroller by rule may impose additional requirements as to capitalization, net worth, liquidity, or other financial prerequisites to qualify a depository agent to conduct transactions or take other action on behalf of the depository. Sec.A2116.052.AAELECTRONIC 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.A2116.053.AAPERIODIC 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. SECTIONA2.AASection 151.002(a), Finance Code, is amended to read as follows: (a)AAThis 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 19 Section 151.501. Additional terms that apply specifically to depository agents are defined in Section 151.851. SECTIONA3.AASection 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)AA"Depository agent" has the meaning assigned by Section 151.851. (9-b)AA"Depository agent license" means a license issued under Subchapter J. (9-c)AA"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)AAparticipation 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 20 precious metal represented by the depository account balance; (B)AAthe 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)AAthe 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)AA"License holder" means a person that holds a money transmission license, [or] a currency exchange license, or a depository agent license. (14)AA"Money services" means money transmission, [or] currency exchange, or depository agent services. SECTIONA4.AASection 151.003, Finance Code, is amended to read as follows: 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 21 Sec.A151.003.AAEXCLUSIONS. Subject to Subchapter J, the [The] following persons are not required to be licensed under this chapter: (1)AAthe 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)AAa state or an agency, political subdivision, or other instrumentality of a state; (3)AAa 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)AAa 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)AAa 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)AAthe 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)AAthe 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)AAa 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 22 political subdivision of a state, provides electronic funds transfer services of governmental benefits for a federal, state, county, or local governmental agency; (7)AAa 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)AAan 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)AAa 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)AAany 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. SECTIONA5.AASection 151.201, Finance Code, is amended to 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 23 read as follows: Sec.A151.201.AASCOPE. 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. SECTIONA6.AASections 151.207(a), (b), and (d), Finance Code, are amended to read as follows: (a)AAIf 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)AAIn addition to complying with Subsection (a), a license holder must annually: (1)AApay a license fee in an amount established by commission rule; and (2)AAsubmit a report that is under oath, is in the form and medium required by the commissioner, and contains: (A)AAif the license is a money transmission license or depository agent license, an audited unconsolidated 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 24 financial statement dated as of the last day of the license holder ’s fiscal year that ended in the immediately preceding calendar year; (B)AAif 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)AAdocumentation 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)AAIf 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. SECTIONA7.AASection 151.602(a), Finance Code, is amended to read as follows: (a)AAA 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)AAa record of each money transmission transaction, [or] currency exchange transaction, or depository agent services 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 25 transaction, as applicable; (2)AAa 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)AAbank statements and bank reconciliation records; (4)AAall 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)AAany other records required by commission rule or reasonably requested by the commissioner to determine compliance with this chapter. SECTIONA8.AASection 151.603, Finance Code, is amended by adding Subsection (c-1) to read as follows: (c-1)AAA depository agent license holder shall prepare written reports and statements as follows: (1)AAthe 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)AAa 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 26 are prepared not later than the 45th day after the last day of the calendar quarter; and (3)AAany other report required by commission rule or reasonably requested by the commissioner to determine compliance with this chapter. SECTIONA9.AASection 151.604(b), Finance Code, is amended to read as follows: (b)AAA 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)AAthe filing of a petition by or against the license holder for bankruptcy or reorganization; (2)AAthe 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)AAthe 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)AAthe felony indictment or conviction of the license holder or a principal of, person in control of,AAresponsible individual of, or authorized delegate of the license holder for an 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 27 offense identified in Section 151.202(e); (5)AAthe cancellation or other impairment of the license holder ’s security; or (6)AAthe inability to meet the license holder ’s transmission obligations under this chapter for a period of 24 hours or longer. SECTIONA10.AAChapter 151, Finance Code, is amended by adding Subchapter J to read as follows: SUBCHAPTER J. DEPOSITORY AGENT LICENSE Sec.A151.851.AADEFINITIONS. 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.A151.852.AAAPPLICABILITY 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)AAA 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)AAA 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 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 28 type of service rendered. Sec.A151.853.AALICENSE 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)AAis 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)AAis exempted from licensing requirements under Section 151.003(2). (b)AANotwithstanding 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. (c)AAFor purposes of this chapter: (1)AAa person engages in the business of depository agent services if the person renders a depository agent service, regardless of whether: (A)AAcompensation is sought or received for the service, directly or indirectly; and (B)AAthe service is incidental to any other business in which the person is primarily engaged; and (2)AAa 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. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 29 (d)AANotwithstanding 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)AAA 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.A151.854.AAADDITIONAL 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)AAthe applicant has and will maintain the capitalization, minimum net worth, and other applicable financial requirements established by rules of the comptroller; (2)AAthe applicant ’s financial condition will enable the applicant to safely and soundly engage in the business of depository agent services; and (3)AAthe applicant does not engage in any activity or practice that adversely affects the applicant ’s safety and soundness. Sec.A151.855.AAAPPLICATION AND ACCOMPANYING FEE, STATEMENTS, AND SECURITY. (a) An applicant for a depository agent license must submit an application in accordance with Section 151.203. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 30 (b)AAAt the time an application for a depository agent license is submitted, an applicant must file with the department: (1)AAan application fee in the amount established by commission rule; (2)AAaudited 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)AAsecurity 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.A151.856.AAINVESTIGATION 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.A151.857.AATEMPORARY 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)AAcertifies 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)AAsubmits a recent financial statement acceptable to the commissioner that reflects the minimum net worth required under 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 31 applicable regulations; (3)AAprovides security that meets the requirements specified by the commissioner, but not less than $500,000; (4)AAagrees in writing that, until a permanent license is issued, the person will engage only in activities being conducted at existing locations; and (5)AApays the application fee and a nonrefundable temporary license fee in the amount established by commission rule. (b)AAThe 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.A151.858.AALIABILITY 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.A151.859.AATRUST 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)AAIf a depository agent license holder commingles any money or other property received for delivery with money or other 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 H.B.ANo.A483 32 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)AAIf 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)AAMoney 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.A151.860.AADISCLOSURE 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)AAA depository agent license holder receiving currency or an instrument payable in currency for transmission must comply with Chapter 278. SECTIONA11.AAThis 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.