By Clemons H.B. No. 364
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of telephone solicitation; providing
1-3 civil and criminal penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Subtitle 3, Title 79, Revised Statutes (Article
1-6 5069-9.01 et seq., Vernon's Texas Civil Statutes), is amended by
1-7 adding Chapter 18 to read as follows:
1-8 CHAPTER EIGHTEEN
1-9 SUBCHAPTER A. GENERAL PROVISIONS
1-10 Art. 1. DEFINITIONS. In this chapter:
1-11 (1) "Item" means property or a good or service and
1-12 includes:
1-13 (A) a coupon book that is to be used with a
1-14 business or company; and
1-15 (B) an interest in real property.
1-16 (2) "Owner" means a person who owns, controls, or
1-17 otherwise has claim to 10 percent or more of the net income of a
1-18 seller.
1-19 (3) "Person" includes an individual, sole
1-20 proprietorship, firm, association, corporation, partnership, joint
1-21 venture, or any other business entity.
1-22 (4) "Principal" means an owner, an executive officer
1-23 of a corporation, a general partner of a partnership, a sole
1-24 proprietor, a trustee of a trust, or another individual with
2-1 similar supervisory functions with respect to any person.
2-2 (5) "Purchaser" means a person who is:
2-3 (A) solicited to become or becomes obligated for
2-4 the purchase or rental of an item; or
2-5 (B) offered the opportunity to claim or receive
2-6 an item.
2-7 (6) "Registration statement" means a registration
2-8 statement required under this chapter.
2-9 (7) "Salesperson" means a person employed or
2-10 authorized by a seller to cause, or to attempt to cause, a
2-11 telephone solicitation.
2-12 (8) "Seller" means a person who, on the person's own
2-13 behalf, causes or attempts to cause a telephone solicitation.
2-14 (9) "Supervised financial institution" means a bank,
2-15 trust company, savings and loan association, credit union,
2-16 industrial loan company, personal property broker, consumer finance
2-17 lender, commercial finance lender, insurer, or other financial
2-18 institution that is subject to supervision by an official or agency
2-19 of this state or the United States.
2-20 (10) "Telephone solicitation" means a telephone call
2-21 to or from a person, initiated by a seller, salesperson, automatic
2-22 dialing machine, or recorded message device for the purpose of
2-23 inducing the person to purchase, rent, claim, or receive an item
2-24 and includes a call made by a purchaser in response to a
2-25 solicitation sent by mail or made by any other means.
2-26 Art. 2. EXEMPTIONS. (a) This chapter does not apply to:
2-27 (1) a person offering or selling a security that has
3-1 been qualified for sale under Section 7, The Securities Act
3-2 (Article 581-7, Vernon's Texas Civil Statutes), and its subsequent
3-3 amendments, or that is subject to an exemption under Section 5 or 6
3-4 of that Act;
3-5 (2) a publicly traded corporation registered with the
3-6 Securities and Exchange Commission or the State Securities Board,
3-7 or a subsidiary or agent of the corporation;
3-8 (3) a person licensed under the Insurance Code, if the
3-9 solicited transaction is governed by the Insurance Code;
3-10 (4) a person soliciting the sale of a subscription to:
3-11 (A) a daily or weekly newspaper of general
3-12 circulation;
3-13 (B) a magazine or other periodical of general
3-14 circulation; or
3-15 (C) a cable television service;
3-16 (5) a supervised financial institution or parent,
3-17 subsidiary, or affiliate of a supervised financial institution;
3-18 (6) a person or affiliate of a person whose business
3-19 is regulated by the Public Utility Commission of Texas;
3-20 (7) an educational institution or organization or a
3-21 nonprofit organization exempt from taxation under Section 501(c)(3)
3-22 of the Internal Revenue Code of 1986;
3-23 (8) a sale in which the purchaser is a business that
3-24 intends to:
3-25 (A) resell the item purchased; or
3-26 (B) use the item purchased in a recycling,
3-27 reuse, remanufacturing, or manufacturing process;
4-1 (9) a person soliciting the sale of food;
4-2 (10) a person who periodically issues and delivers
4-3 catalogs to potential purchasers if the catalog:
4-4 (A) includes a written description or
4-5 illustration and the sales price of each item offered for sale;
4-6 (B) includes at least 24 full pages of written
4-7 material or illustrations;
4-8 (C) is distributed in more than one state; and
4-9 (D) has an annual circulation of not less than
4-10 250,000 customers;
4-11 (11) the solicitation of contracts for the maintenance
4-12 or repair of items previously purchased from the person making the
4-13 solicitation or on whose behalf the solicitation is made;
4-14 (12) a person soliciting:
4-15 (A) without intent to complete or obtain
4-16 provisional acceptance of a sale during the telephone solicitation;
4-17 (B) who does not make the major sales
4-18 presentation during the telephone solicitation but arranges for the
4-19 major sales presentation to be made at a later face-to-face meeting
4-20 between the salesperson and the purchaser; and
4-21 (C) who does not cause an individual to go to
4-22 the prospective purchaser to collect payment for the purchase or to
4-23 deliver any item purchased directly following the telephone
4-24 solicitation;
4-25 (13) a person subject to the control or licensing
4-26 regulations of the Federal Communications Commission;
4-27 (14) a person selling:
5-1 (A) a contractual plan regulated by the Federal
5-2 Trade Commission trade regulation on use of negative option plans
5-3 by sellers in commerce under Title 16, Code of Federal Regulations,
5-4 Part 425; or
5-5 (B) merchandise under an arrangement in which
5-6 the seller periodically ships the merchandise to a consumer who has
5-7 consented in advance to receive the merchandise on a periodic
5-8 basis;
5-9 (15) a person:
5-10 (A) who provides telephone solicitation services
5-11 under contract to sellers;
5-12 (B) who has been operating continuously for at
5-13 least three years under the same business name; and
5-14 (C) for whom at least 75 percent of the person's
5-15 contracts are performed on behalf of other persons exempt under
5-16 this section;
5-17 (16) a person soliciting business from a former or
5-18 current customer if the person has operated under the exact same
5-19 business name for at least two years;
5-20 (17) a person engaging in a commercial telephone
5-21 solicitation that is an isolated transaction and not done in the
5-22 course of a pattern of repeated transactions of a like nature;
5-23 (18) a person who for at least two years has been
5-24 operating under the same name as that used in connection with its
5-25 telemarketing operations a retail establishment where consumer
5-26 goods are displayed and offered for sale on a continuing basis if a
5-27 majority of the person's business involves the buyers obtaining
6-1 services or products at the person's retail establishment;
6-2 (19) a person subject to the filing requirements of
6-3 Chapter 1054, Acts of the 70th Legislature, Regular Session, 1987
6-4 (Article 9023a, Vernon's Texas Civil Statutes), or any successor to
6-5 this statute; or
6-6 (20) a person soliciting a transaction regulated by
6-7 the Commodity Futures Trading Commission if the person is
6-8 registered or temporarily licensed for that activity with the
6-9 Commodity Futures Trading Commission under the Commodity Exchange
6-10 Act (7 U.S.C. Section 1 et seq.) and the registration or license
6-11 has not expired or been suspended or revoked.
6-12 (b) In a civil proceeding alleging a violation of this
6-13 chapter, the burden of proving an exemption is on the person
6-14 claiming the exemption, and in a criminal proceeding alleging a
6-15 violation of this chapter, the burden of producing evidence to
6-16 support a defense based on an exemption is on the person claiming
6-17 the exemption.
6-18 (c) The exemptions provided in this section apply only to a
6-19 seller engaging in a telephone solicitation on its own behalf,
6-20 except that the exemption provided in Subsection (a)(15) applies to
6-21 a person providing telephone solicitation services to sellers.
6-22 Art. 3. CONSTRUCTION AND APPLICATION. This chapter shall be
6-23 liberally construed and applied to promote its underlying purpose
6-24 to protect persons against false, misleading, or deceptive
6-25 practices in the telephone solicitation business.
6-26 SUBCHAPTER B. REGISTRATION OF TELEPHONE SELLERS
6-27 Art. 4. REGISTRATION REQUIRED. (a) A seller may not engage
7-1 in telephone solicitation from a location in this state or to a
7-2 purchaser located in this state without a certificate of
7-3 registration for the business location from which the solicitation
7-4 is made.
7-5 (b) A separate certificate is required for each business
7-6 location from which a solicitation is made.
7-7 Art. 5. CONTENTS OF REGISTRATION STATEMENT; VERIFICATION;
7-8 PUBLIC INFORMATION. (a) To obtain a certificate of registration,
7-9 a seller must file a registration statement with the secretary of
7-10 state.
7-11 (b) A registration statement must be in the form prescribed
7-12 by the secretary of state and contain the information required by
7-13 Subchapter C of this chapter.
7-14 (c) A registration statement must be verified by each
7-15 principal of the seller and must specify the date and location of
7-16 verification.
7-17 (d) All information included in or attached to a
7-18 registration statement is public information.
7-19 Art. 6. FILING FEE. The filing fee for a registration
7-20 statement is $200.
7-21 Art. 7. ISSUANCE OF CERTIFICATE OF REGISTRATION. (a) On
7-22 receipt of a completed registration statement, the filing fee
7-23 required by Article 6 of this chapter, the security required by
7-24 Article 10 of this chapter, and the consent regarding service of
7-25 process required by Article 11 of this chapter, the secretary of
7-26 state shall issue a certificate of registration and mail the
7-27 certificate to the seller.
8-1 (b) If the seller uses one registration statement to
8-2 register more than one business location, the secretary of state
8-3 shall issue a certificate for each business location and mail all
8-4 the certificates to the principal business location shown on the
8-5 registration statement.
8-6 Art. 8. EFFECTIVE DATE; RENEWAL. The effective date of a
8-7 registration statement is the date on which the secretary of state
8-8 issues the certificate. A registration statement is effective for
8-9 one year after its effective date and may be renewed annually by
8-10 filing a renewal registration statement with the information
8-11 required by Subchapter C of this chapter and paying the filing fee.
8-12 Art. 9. UPDATE ADDENDUM REQUIRED. (a) A seller shall file
8-13 with the secretary of state an update addendum at quarterly
8-14 intervals, computed from the effective date of registration,
8-15 providing all required registration information for all
8-16 salespersons who are currently soliciting or have solicited on
8-17 behalf of the seller at any time during the period between the
8-18 filing of the registration statement or the last addendum and the
8-19 current addendum. For the purposes of compliance with this
8-20 section, the seller may provide a copy of the "Employer's Quarterly
8-21 Report" for employee wages it files with the Texas Employment
8-22 Commission.
8-23 (b) In addition to the quarterly updates, if a material
8-24 change in information submitted in a registration statement, other
8-25 than the information described by Subsection (a) of this article,
8-26 occurs before the date for renewal, a seller shall submit that
8-27 information to the secretary of state by filing an update addendum.
9-1 Art. 10. SECURITY. (a) A registration statement filed
9-2 under this chapter must be accompanied by:
9-3 (1) a bond executed by a corporate surety approved by
9-4 the secretary of state and licensed to do business in this state;
9-5 (2) an irrevocable letter of credit issued for the
9-6 benefit of the registrant by a supervised financial institution
9-7 whose deposits are insured by an agency of the federal government;
9-8 or
9-9 (3) a certificate of deposit in a supervised financial
9-10 institution whose deposits are insured by an agency of the federal
9-11 government, the principal of which may be withdrawn only on the
9-12 order of the secretary of state.
9-13 (b) The amount of the bond, letter of credit, or certificate
9-14 of deposit must be $10,000, and the bond, letter of credit, or
9-15 certificate of deposit must be conditioned on compliance by the
9-16 seller with this chapter.
9-17 Art. 11. SECRETARY OF STATE AS SELLER'S AGENT TO RECEIVE
9-18 SERVICE. (a) A seller shall file with the secretary of state, in
9-19 the form prescribed by the secretary of state, an irrevocable
9-20 consent appointing the secretary of state to act as the seller's
9-21 agent to receive service of any lawful process in any noncriminal
9-22 suit, action, or proceeding against the seller or the seller's
9-23 successor, executor, or administrator that may arise under this
9-24 chapter, when:
9-25 (1) an agent has not been designated under Subdivision
9-26 15, Article 12, of this chapter;
9-27 (2) the agent has resigned or died and a replacement
10-1 has not been designated under Article 9 of this chapter; or
10-2 (3) the agent cannot with reasonable diligence be
10-3 found at the designated address.
10-4 (b) Service on the secretary of state under this article has
10-5 the same force and validity as service on the seller. Service on
10-6 the secretary of state may be made by:
10-7 (1) leaving a copy of the process in the office of the
10-8 secretary of state;
10-9 (2) promptly sending by first-class mail a notice of
10-10 the service and a copy of the process to the seller's principal
10-11 business location at the last address on file with the secretary of
10-12 state; and
10-13 (3) filing the plaintiff's affidavit of compliance
10-14 with this article in the case on or before the return date of the
10-15 process, if any, or within an additional period that the court
10-16 allows.
10-17 SUBCHAPTER C. CONTENTS OF REGISTRATION STATEMENT
10-18 Art. 12. DISCLOSURE OF CERTAIN NAMES, ADDRESSES, AND
10-19 ORGANIZATIONAL INFORMATION. A registration statement must contain
10-20 the following information:
10-21 (1) the seller's name and the name under which the
10-22 seller is doing or intends to do business, if different from the
10-23 seller's name;
10-24 (2) the name of each parent and affiliated
10-25 organization of the seller that:
10-26 (A) will engage in business transactions with
10-27 purchasers relating to sales solicited by the seller; or
11-1 (B) accepts responsibility for statements made
11-2 by, or acts of, the seller relating to sales solicited by the
11-3 seller;
11-4 (3) the seller's business form and place of
11-5 organization;
11-6 (4) if the seller is a corporation, a copy of its
11-7 articles of incorporation and bylaws;
11-8 (5) if the seller is a partnership, a copy of the
11-9 partnership agreement;
11-10 (6) if the seller is operating under an assumed
11-11 business name, the location where the assumed name has been
11-12 registered;
11-13 (7) for any parent or affiliated organization
11-14 disclosed under Subdivision (2) of this article, the applicable
11-15 information that is required of a seller under Subdivisions (3)-(6)
11-16 of this article;
11-17 (8) the complete street address of each location of
11-18 the seller, designating the principal location from which the
11-19 seller will be conducting business;
11-20 (9) if the principal business location of the seller
11-21 is not in this state, a designation of its main location in the
11-22 state;
11-23 (10) a listing of each telephone number to be used by
11-24 the seller and the address where each telephone using the number is
11-25 located;
11-26 (11) the name and title of each of the seller's
11-27 officers, directors, trustees, general and limited partners, sole
12-1 proprietor, and owners, as applicable, and the name of each of
12-2 those persons who have management responsibilities in connection
12-3 with the seller's business activities;
12-4 (12) the complete address of the principal residence,
12-5 the date of birth, and the number and state of issuance of the
12-6 driver's license of each person whose name is disclosed under
12-7 Subdivision (11) of this article;
12-8 (13) the name and principal residence address of each
12-9 person the seller leaves in charge at each location from which the
12-10 seller does business in this state, and the business location at
12-11 which each of these persons is or will be in charge;
12-12 (14) the name and principal residence address of each
12-13 salesperson who solicits on behalf of the seller or a copy of the
12-14 "Employer's Quarterly Report" for employee wages the seller files
12-15 with the Texas Employment Commission and the name the salesperson
12-16 uses while soliciting;
12-17 (15) the name and address of the seller's agent in
12-18 this state, other than the secretary of state, authorized to
12-19 receive service of process; and
12-20 (16) the name and address of each financial
12-21 institution with which banking or similar monetary transactions are
12-22 made by the seller and the identification number of each of the
12-23 seller's accounts in each institution.
12-24 Art. 13. DISCLOSURE OF CERTAIN CONVICTIONS, JUDGMENTS,
12-25 ORDERS, AND BANKRUPTCIES. (a) With respect to the seller and each
12-26 person identified under Subdivision (11) or (13), Article 12, of
12-27 this chapter, a registration statement must state the identity of
13-1 each person:
13-2 (1) who has been convicted of or pleaded nolo
13-3 contendere to a felony or misdemeanor involving an alleged
13-4 violation of this chapter, or fraud, theft, embezzlement,
13-5 fraudulent conversion, or misappropriation of property;
13-6 (2) against whom has been entered a final judgment or
13-7 order in a civil or administrative action, including a stipulated
13-8 judgment or order, in which the complaint or petition alleged acts
13-9 constituting a violation of this chapter, fraud, theft,
13-10 embezzlement, fraudulent conversion, or misappropriation of
13-11 property, the use of untrue or misleading representations in an
13-12 attempt to sell or dispose of real or personal property, or the use
13-13 of unfair, unlawful, or deceptive business practices;
13-14 (3) who is subject to an injunction or restrictive
13-15 court order relating to business activity as the result of an
13-16 action brought by a federal, state, or local public agency,
13-17 including an action affecting any vocational license; or
13-18 (4) who has, during the previous seven tax years,
13-19 filed in bankruptcy, been adjudged a bankrupt, been reorganized due
13-20 to insolvency, or has been a principal, director, officer, trustee,
13-21 general or limited partner, or had management responsibilities of a
13-22 corporation, partnership, joint venture, or other business entity
13-23 that has filed in bankruptcy, been adjudged a bankrupt, or been
13-24 reorganized due to insolvency while the person held that position
13-25 or within one year after the date on which the person last held
13-26 that position.
13-27 (b) Under Subsections (a)(1), (2), and (3) of this article,
14-1 the statement must identify the court or administrative agency
14-2 rendering the conviction, judgment, or order, the docket number of
14-3 the matter, the date of conviction, judgment, or order, and the
14-4 name of the governmental agency, if any, that brought the action
14-5 resulting in the conviction, judgment, or order. Under Subsection
14-6 (a)(4) of this article, the statement must include the name and
14-7 location of the person filing in bankruptcy, adjudged a bankrupt,
14-8 or reorganized due to insolvency, and must include the date of the
14-9 filing, judgment, or reorganization order, the court having
14-10 jurisdiction, and the docket number of the matter.
14-11 Art. 14. DISCLOSURE OF CERTAIN SALES INFORMATION. The
14-12 registration statement must be accompanied by the following
14-13 information:
14-14 (1) a description of the items the seller is offering
14-15 for sale;
14-16 (2) a copy of all sales information and literature,
14-17 including scripts, outlines, instructions, and information
14-18 regarding the conduct of telephone solicitations, sample
14-19 introductions, sample closings, product information, and contest or
14-20 premium-award information, provided by the seller to salespersons
14-21 or about which the seller informs salespersons, and a copy of all
14-22 written material the seller sends to any purchaser;
14-23 (3) if the seller represents or implies, or directs
14-24 salespersons to represent or imply, to purchasers that the
14-25 purchaser will receive a specific item, including a certificate
14-26 that the purchaser must redeem to obtain the item described in the
14-27 certificate, or one or more items from among designated items,
15-1 whether the items are denominated as gifts, premiums, bonuses,
15-2 prizes, or otherwise:
15-3 (A) a list of the items described;
15-4 (B) the value of each item and the basis for the
15-5 valuation;
15-6 (C) the price paid by the seller to its supplier
15-7 for each item and the name, address, and telephone number of each
15-8 item's supplier;
15-9 (D) if the purchaser is to receive fewer than
15-10 all of the items described by the seller:
15-11 (i) the manner in which the seller
15-12 decides which item a particular purchaser is to receive;
15-13 (ii) for each item, the odds of a single
15-14 purchaser's receiving the item; and
15-15 (iii) the name and address of each
15-16 recipient who has received, during the preceding 12 months, or if
15-17 the seller has not been in business that long, during the period
15-18 the seller has been in business, the item having the greatest value
15-19 and the item with the smallest odds of being received; and
15-20 (E) all rules, regulations, terms, and
15-21 conditions a purchaser must meet in order to receive the item;
15-22 (4) if the seller is offering an item that the seller
15-23 neither manufactures nor supplies:
15-24 (A) the name, address, and telephone number of
15-25 each of the seller's suppliers and a description of each item
15-26 provided by the supplier;
15-27 (B) if the possession of the item is to be
16-1 retained by the seller or will not be transferred to the purchaser
16-2 until the purchaser has paid in full:
16-3 (i) the address of each location where the
16-4 item will be kept;
16-5 (ii) if not kept on premises owned by the
16-6 seller or at an address registered under Subdivision (8) or (9),
16-7 Article 12, of this chapter, the name of the owner of the business
16-8 at which the item will be kept; and
16-9 (iii) a copy of any contract or other
16-10 document that evidences the seller's right to store the item at the
16-11 address designated under Subparagraph (ii) of this paragraph;
16-12 (C) if the seller is not selling the item from
16-13 its own inventory but purchases the item to fill an order already
16-14 taken from a purchaser, copies of all contracts or other documents
16-15 evidencing the seller's ability to call on suppliers to fill the
16-16 seller's orders;
16-17 (D) if the seller represents to purchasers that
16-18 the seller has insurance or a surety bond of any type relating to a
16-19 purchaser's purchase of any item, a complete copy of each insurance
16-20 policy and bond; and
16-21 (E) if the seller makes any representation as to
16-22 the post-purchase earning or profit potential of an item, data to
16-23 substantiate the claims made, and if the representation relates to
16-24 previous sales made by the seller or a related entity,
16-25 substantiating data based on the experiences of at least 50 percent
16-26 of the persons who purchased that particular type of item from the
16-27 seller or related entity during the preceding six months, or if the
17-1 seller or related entity has not been in business that long, during
17-2 the period the seller or related entity has been in business,
17-3 including:
17-4 (i) the length of time the seller or
17-5 related entity has been selling the particular type of item being
17-6 offered;
17-7 (ii) the number of purchasers of the item
17-8 from the seller or related entity known to the seller or related
17-9 entity to have made at least the same earnings or profit as those
17-10 represented; and
17-11 (iii) the percentage that the number
17-12 disclosed under Subparagraph (ii) of this paragraph represents of
17-13 the total number of purchasers from the seller or related entity of
17-14 the particular type of item offered; and
17-15 (5) if the seller is offering to sell an interest in
17-16 oil, gas, or a mineral field, well, or exploration site:
17-17 (A) the seller's ownership interest, if any, in
17-18 each field, well, or site being offered for sale;
17-19 (B) the total number of interests to be sold in
17-20 each field, well, or site being offered for sale; and
17-21 (C) if, in selling an interest in any particular
17-22 field, well, or site, reference is made to an investigation of the
17-23 field, well, or site by the seller or anyone else:
17-24 (i) the name, business address, telephone
17-25 number, and professional credentials of the person who made the
17-26 investigation; and
17-27 (ii) a copy of the report and other
18-1 documents relating to the investigation prepared by the person.
18-2 SUBCHAPTER D. ADDITIONAL INFORMATION FROM SELLER
18-3 Art. 15. INFORMATION POSTED OR AVAILABLE AT SELLER'S
18-4 BUSINESS LOCATION. (a) A seller shall post the certificate of
18-5 registration in a conspicuous place at the location for which it is
18-6 issued.
18-7 (b) A seller shall make available at each of the seller's
18-8 business locations a copy of the entire registration statement and
18-9 update addenda, if any, for inspection by any purchaser or
18-10 representative of any governmental agency.
18-11 (c) A seller shall post in close proximity to the
18-12 certificate of registration the name of each individual in charge
18-13 of the location.
18-14 Art. 16. DISCLOSURES TO PROSPECTIVE PURCHASERS. A seller
18-15 shall, when the solicitation is made and before consummation of any
18-16 sales transaction, provide to each purchaser:
18-17 (1) the complete street address of the location from
18-18 which the salesperson is calling the purchaser and, if different,
18-19 the complete street address of the seller's principal location;
18-20 (2) if the seller represents or implies that a
18-21 purchaser will receive without charge a specified item or one item
18-22 from among designated items, whether the items are denominated as
18-23 gifts, premiums, bonuses, prizes, or otherwise:
18-24 (A) the information required to be filed by
18-25 Subdivisions (3)(D)(i) and (ii) and (3)(E), Article 14, of this
18-26 chapter, as appropriate; and
18-27 (B) the total number of individuals who have
19-1 actually received from the seller during the preceding 12 months,
19-2 or if the seller has not been in the business that long, during the
19-3 period the seller has been in business, the item having the
19-4 greatest value and the item with the smallest odds of being
19-5 received;
19-6 (3) if the seller is offering to sell an interest in
19-7 oil, gas, or mineral field, well, or exploration site, the
19-8 information required by Subdivision (5), Article 14, of this
19-9 chapter; and
19-10 (4) if the seller represents that an item is being
19-11 offered at a price below that usually charged for the item, the
19-12 name of the manufacturer of the item.
19-13 Art. 17. NO REFERENCE TO COMPLIANCE WITH STATUTE. A seller
19-14 may not make or authorize the making of a reference to its
19-15 compliance with this chapter to a purchaser.
19-16 SUBCHAPTER E. OFFENSES
19-17 Art. 18. VIOLATION OF CHAPTER. (a) A person commits an
19-18 offense if the person knowingly or intentionally violates Article
19-19 4, 9, 15, 16, or 17 of this chapter. Each violation constitutes a
19-20 separate offense.
19-21 (b) An offense under this article is a Class A misdemeanor.
19-22 Art. 19. SALESPERSON FOR UNREGISTERED SELLER. (a) A person
19-23 commits an offense if the person knowingly or intentionally acts as
19-24 a salesperson on behalf of a seller who violates the registration
19-25 requirements of this chapter. Each violation constitutes a
19-26 separate offense.
19-27 (b) An offense under this article is a Class A misdemeanor.
20-1 Art. 19A. CHARGE TO A CREDIT CARD ACCOUNT OR DEBIT OF A
20-2 CHECKING ACCOUNT AFTER OFFER OF FREE ITEM. (a) A seller commits
20-3 an offense if the seller knowingly:
20-4 (1) represents or implies that a purchaser will
20-5 receive without charge an item or service, regardless of whether
20-6 denominated as a gift, premium, bonus, prize, or otherwise; and
20-7 (2) requests a credit card account number or checking
20-8 account number from the purchaser for the purpose of charging to
20-9 the credit card account or debiting from the checking account an
20-10 amount as a condition precedent to the purchaser's receipt of an
20-11 item.
20-12 (b) An offense under this article is a Class A misdemeanor.
20-13 SUBCHAPTER F. ENFORCEMENT
20-14 Art. 20. INJUNCTION. The attorney general may sue in a
20-15 court of competent jurisdiction to enjoin a person from violating
20-16 this chapter. The attorney general shall notify the defendant of
20-17 the alleged prohibited conduct not later than the seventh day
20-18 before the date the suit is filed, unless the attorney general
20-19 intends to request that the court issue a temporary restraining
20-20 order, in which event notice is not required. The party bringing
20-21 the suit shall recover all reasonable costs of prosecuting these
20-22 cases including, but not limited to, costs of investigation,
20-23 depositions, witness fees, attorney's fees, and other costs of
20-24 court.
20-25 Art. 21. CIVIL PENALTIES. A person is subject to a civil
20-26 penalty of not more than $5,000 for a single violation. A person
20-27 who violates an injunction issued under Article 20 of this chapter
21-1 is liable to the state for a civil penalty of not more than $25,000
21-2 for a single violation and not more than $50,000 for all violations
21-3 of the injunction. The attorney general may bring suit to recover
21-4 the civil penalty in the court that issued the original injunction.
21-5 The party bringing the suit shall also recover all reasonable costs
21-6 of prosecuting these cases including, but not limited to, costs of
21-7 investigation, depositions, witness fees, attorney's fees, and
21-8 other costs of court.
21-9 Art. 22. DECEPTIVE TRADE PRACTICES. A violation of this
21-10 chapter is a false, misleading, or deceptive act or practice under
21-11 Subchapter E, Chapter 17, Business & Commerce Code, and its
21-12 subsequent amendments, and any public or private right or remedy
21-13 prescribed by that subchapter may be used to enforce this chapter.
21-14 Art. 23. ACTION TO RECOVER AGAINST SECURITY. (a) A person
21-15 who is injured by the bankruptcy of a seller or the seller's breach
21-16 of an agreement entered into during a telephone solicitation may
21-17 bring and maintain an action to recover against the bond, letter of
21-18 credit, or certificate of deposit required under Article 10 of this
21-19 chapter.
21-20 (b) The liability of the surety on a bond provided pursuant
21-21 to Article 10 of this chapter does not exceed the amount of the
21-22 bond, regardless of the number of claims filed or the aggregate
21-23 amount claimed. If the amount claimed exceeds the amount of the
21-24 bond, the surety shall deposit the amount of the bond with the
21-25 secretary of state for distribution to claimants entitled to
21-26 recovery, and the surety is then relieved of all liability under
21-27 the bond.
22-1 Art. 24. NO WAIVER. An attempted waiver of a provision of
22-2 this chapter is void.
22-3 Art. 25. CUMULATIVE REMEDIES. The remedies provided by this
22-4 chapter are in addition to any other procedures or remedies
22-5 provided for by other law.
22-6 SECTION 2. (a) This Act takes effect September 1, 1993.
22-7 (b) The change in law made by this Act applies only to an
22-8 offense committed on or after the effective date of this Act. For
22-9 purposes of this section, an offense is committed before the
22-10 effective date of this Act if any element of the offense occurs
22-11 before that date.
22-12 SECTION 3. The importance of this legislation and the
22-13 crowded condition of the calendars in both houses create an
22-14 emergency and an imperative public necessity that the
22-15 constitutional rule requiring bills to be read on three several
22-16 days in each house be suspended, and this rule is hereby suspended.