1-1 By: Clemons (Senate Sponsor - Lucio) H.B. No. 364
1-2 (In the Senate - Received from the House April 26, 1993;
1-3 April 27, 1993, read first time and referred to Committee on
1-4 Economic Development; May 24, 1993, reported favorably by the
1-5 following vote: Yeas 8, Nays 0; May 24, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Parker x
1-9 Lucio x
1-10 Ellis x
1-11 Haley x
1-12 Harris of Dallas x
1-13 Harris of Tarrant x
1-14 Leedom x
1-15 Madla x
1-16 Rosson x
1-17 Shapiro x
1-18 Wentworth x
1-19 A BILL TO BE ENTITLED
1-20 AN ACT
1-21 relating to the regulation of telephone solicitation; providing
1-22 civil and criminal penalties.
1-23 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-24 SECTION 1. Subtitle 3, Title 79, Revised Statutes (Article
1-25 5069-9.01 et seq., Vernon's Texas Civil Statutes), is amended by
1-26 adding Chapter 18 to read as follows:
1-27 CHAPTER EIGHTEEN
1-28 SUBCHAPTER A. GENERAL PROVISIONS
1-29 Art. 1. DEFINITIONS. In this chapter:
1-30 (1) "Item" means property or a good or service and
1-31 includes:
1-32 (A) a coupon book that is to be used with a
1-33 business or company; and
1-34 (B) an interest in real property.
1-35 (2) "Owner" means a person who owns, controls, or
1-36 otherwise has claim to 10 percent or more of the net income of a
1-37 seller.
1-38 (3) "Person" includes an individual, sole
1-39 proprietorship, firm, association, corporation, partnership, joint
1-40 venture, or any other business entity.
1-41 (4) "Principal" means an owner, an executive officer
1-42 of a corporation, a general partner of a partnership, a sole
1-43 proprietor, a trustee of a trust, or another individual with
1-44 similar supervisory functions with respect to any person.
1-45 (5) "Purchaser" means a person who is:
1-46 (A) solicited to become or becomes obligated for
1-47 the purchase or rental of an item; or
1-48 (B) offered the opportunity to claim or receive
1-49 an item.
1-50 (6) "Registration statement" means a registration
1-51 statement required under this chapter.
1-52 (7) "Salesperson" means a person employed or
1-53 authorized by a seller to cause, or to attempt to cause, a
1-54 telephone solicitation.
1-55 (8) "Seller" means a person who, on the person's own
1-56 behalf, causes or attempts to cause a telephone solicitation.
1-57 (9) "Supervised financial institution" means a bank,
1-58 trust company, savings and loan association, credit union,
1-59 industrial loan company, personal property broker, consumer finance
1-60 lender, commercial finance lender, insurer, or other financial
1-61 institution that is subject to supervision by an official or agency
1-62 of this state or the United States.
1-63 (10) "Telephone solicitation" means a telephone call
1-64 to or from a person, initiated by a seller, salesperson, automatic
1-65 dialing machine, or recorded message device for the purpose of
1-66 inducing the person to purchase, rent, claim, or receive an item
1-67 and includes a call made by a purchaser in response to a
1-68 solicitation sent by mail or made by any other means.
2-1 Art. 2. EXEMPTIONS. (a) This chapter does not apply to:
2-2 (1) a person offering or selling a security that has
2-3 been qualified for sale under Section 7, The Securities Act
2-4 (Article 581-7, Vernon's Texas Civil Statutes), and its subsequent
2-5 amendments, or that is subject to an exemption under Section 5 or 6
2-6 of that Act;
2-7 (2) a publicly traded corporation registered with the
2-8 Securities and Exchange Commission or the State Securities Board,
2-9 or a subsidiary or agent of the corporation;
2-10 (3) a person licensed under the Insurance Code, if the
2-11 solicited transaction is governed by the Insurance Code;
2-12 (4) a person soliciting the sale of a subscription to:
2-13 (A) a daily or weekly newspaper of general
2-14 circulation;
2-15 (B) a magazine or other periodical of general
2-16 circulation; or
2-17 (C) a cable television service;
2-18 (5) a supervised financial institution or parent,
2-19 subsidiary, or affiliate of a supervised financial institution;
2-20 (6) a person or affiliate of a person whose business
2-21 is regulated by the Public Utility Commission of Texas;
2-22 (7) an educational institution or organization or a
2-23 nonprofit organization exempt from taxation under Section 501(c)(3)
2-24 of the Internal Revenue Code of 1986;
2-25 (8) a sale in which the purchaser is a business that
2-26 intends to:
2-27 (A) resell the item purchased; or
2-28 (B) use the item purchased in a recycling,
2-29 reuse, remanufacturing, or manufacturing process;
2-30 (9) a person soliciting the sale of food;
2-31 (10) a person who periodically issues and delivers
2-32 catalogs to potential purchasers if the catalog:
2-33 (A) includes a written description or
2-34 illustration and the sales price of each item offered for sale;
2-35 (B) includes at least 24 full pages of written
2-36 material or illustrations;
2-37 (C) is distributed in more than one state; and
2-38 (D) has an annual circulation of not less than
2-39 250,000 customers;
2-40 (11) the solicitation of contracts for the maintenance
2-41 or repair of items previously purchased from the person making the
2-42 solicitation or on whose behalf the solicitation is made;
2-43 (12) a person soliciting:
2-44 (A) without intent to complete or obtain
2-45 provisional acceptance of a sale during the telephone solicitation;
2-46 (B) who does not make the major sales
2-47 presentation during the telephone solicitation but arranges for the
2-48 major sales presentation to be made at a later face-to-face meeting
2-49 between the salesperson and the purchaser; and
2-50 (C) who does not cause an individual to go to
2-51 the prospective purchaser to collect payment for the purchase or to
2-52 deliver any item purchased directly following the telephone
2-53 solicitation;
2-54 (13) a person subject to the control or licensing
2-55 regulations of the Federal Communications Commission;
2-56 (14) a person selling:
2-57 (A) a contractual plan regulated by the Federal
2-58 Trade Commission trade regulation on use of negative option plans
2-59 by sellers in commerce under Title 16, Code of Federal Regulations,
2-60 Part 425; or
2-61 (B) merchandise under an arrangement in which
2-62 the seller periodically ships the merchandise to a consumer who has
2-63 consented in advance to receive the merchandise on a periodic
2-64 basis;
2-65 (15) a person:
2-66 (A) who provides telephone solicitation services
2-67 under contract to sellers;
2-68 (B) who has been operating continuously for at
2-69 least three years under the same business name; and
2-70 (C) for whom at least 75 percent of the person's
3-1 contracts are performed on behalf of other persons exempt under
3-2 this section;
3-3 (16) a person soliciting business from a former or
3-4 current customer if the person has operated under the exact same
3-5 business name for at least two years;
3-6 (17) a person engaging in a commercial telephone
3-7 solicitation that is an isolated transaction and not done in the
3-8 course of a pattern of repeated transactions of a like nature;
3-9 (18) a person who for at least two years has been
3-10 operating under the same name as that used in connection with its
3-11 telemarketing operations a retail establishment where consumer
3-12 goods are displayed and offered for sale on a continuing basis if a
3-13 majority of the person's business involves the buyers obtaining
3-14 services or products at the person's retail establishment;
3-15 (19) a person subject to the filing requirements of
3-16 Chapter 1054, Acts of the 70th Legislature, Regular Session, 1987
3-17 (Article 9023a, Vernon's Texas Civil Statutes), or any successor to
3-18 this statute; or
3-19 (20) a person soliciting a transaction regulated by
3-20 the Commodity Futures Trading Commission if the person is
3-21 registered or temporarily licensed for that activity with the
3-22 Commodity Futures Trading Commission under the Commodity Exchange
3-23 Act (7 U.S.C. Section 1 et seq.) and the registration or license
3-24 has not expired or been suspended or revoked.
3-25 (b) In a civil proceeding alleging a violation of this
3-26 chapter, the burden of proving an exemption is on the person
3-27 claiming the exemption, and in a criminal proceeding alleging a
3-28 violation of this chapter, the burden of producing evidence to
3-29 support a defense based on an exemption is on the person claiming
3-30 the exemption.
3-31 (c) The exemptions provided in this section apply only to a
3-32 seller engaging in a telephone solicitation on its own behalf,
3-33 except that the exemption provided in Subsection (a)(15) applies to
3-34 a person providing telephone solicitation services to sellers.
3-35 Art. 3. CONSTRUCTION AND APPLICATION. This chapter shall be
3-36 liberally construed and applied to promote its underlying purpose
3-37 to protect persons against false, misleading, or deceptive
3-38 practices in the telephone solicitation business.
3-39 SUBCHAPTER B. REGISTRATION OF TELEPHONE SELLERS
3-40 Art. 4. REGISTRATION REQUIRED. (a) A seller may not engage
3-41 in telephone solicitation from a location in this state or to a
3-42 purchaser located in this state without a certificate of
3-43 registration for the business location from which the solicitation
3-44 is made.
3-45 (b) A separate certificate is required for each business
3-46 location from which a solicitation is made.
3-47 Art. 5. CONTENTS OF REGISTRATION STATEMENT; VERIFICATION;
3-48 PUBLIC INFORMATION. (a) To obtain a certificate of registration,
3-49 a seller must file a registration statement with the secretary of
3-50 state.
3-51 (b) A registration statement must be in the form prescribed
3-52 by the secretary of state and contain the information required by
3-53 Subchapter C of this chapter.
3-54 (c) A registration statement must be verified by each
3-55 principal of the seller and must specify the date and location of
3-56 verification.
3-57 (d) All information included in or attached to a
3-58 registration statement is public information.
3-59 Art. 6. FILING FEE. The filing fee for a registration
3-60 statement is $200.
3-61 Art. 7. ISSUANCE OF CERTIFICATE OF REGISTRATION. (a) On
3-62 receipt of a completed registration statement, the filing fee
3-63 required by Article 6 of this chapter, the security required by
3-64 Article 10 of this chapter, and the consent regarding service of
3-65 process required by Article 11 of this chapter, the secretary of
3-66 state shall issue a certificate of registration and mail the
3-67 certificate to the seller.
3-68 (b) If the seller uses one registration statement to
3-69 register more than one business location, the secretary of state
3-70 shall issue a certificate for each business location and mail all
4-1 the certificates to the principal business location shown on the
4-2 registration statement.
4-3 Art. 8. EFFECTIVE DATE; RENEWAL. The effective date of a
4-4 registration statement is the date on which the secretary of state
4-5 issues the certificate. A registration statement is effective for
4-6 one year after its effective date and may be renewed annually by
4-7 filing a renewal registration statement with the information
4-8 required by Subchapter C of this chapter and paying the filing fee.
4-9 Art. 9. UPDATE ADDENDUM REQUIRED. (a) A seller shall file
4-10 with the secretary of state an update addendum at quarterly
4-11 intervals, computed from the effective date of registration,
4-12 providing all required registration information for all
4-13 salespersons who are currently soliciting or have solicited on
4-14 behalf of the seller at any time during the period between the
4-15 filing of the registration statement or the last addendum and the
4-16 current addendum. For the purposes of compliance with this
4-17 section, the seller may provide a copy of the "Employer's Quarterly
4-18 Report" for employee wages it files with the Texas Employment
4-19 Commission.
4-20 (b) In addition to the quarterly updates, if a material
4-21 change in information submitted in a registration statement, other
4-22 than the information described by Subsection (a) of this article,
4-23 occurs before the date for renewal, a seller shall submit that
4-24 information to the secretary of state by filing an update addendum.
4-25 Art. 10. SECURITY. (a) A registration statement filed
4-26 under this chapter must be accompanied by:
4-27 (1) a bond executed by a corporate surety approved by
4-28 the secretary of state and licensed to do business in this state;
4-29 (2) an irrevocable letter of credit issued for the
4-30 benefit of the registrant by a supervised financial institution
4-31 whose deposits are insured by an agency of the federal government;
4-32 or
4-33 (3) a certificate of deposit in a supervised financial
4-34 institution whose deposits are insured by an agency of the federal
4-35 government, the principal of which may be withdrawn only on the
4-36 order of the secretary of state.
4-37 (b) The amount of the bond, letter of credit, or certificate
4-38 of deposit must be $10,000, and the bond, letter of credit, or
4-39 certificate of deposit must be conditioned on compliance by the
4-40 seller with this chapter.
4-41 Art. 11. SECRETARY OF STATE AS SELLER'S AGENT TO RECEIVE
4-42 SERVICE. (a) A seller shall file with the secretary of state, in
4-43 the form prescribed by the secretary of state, an irrevocable
4-44 consent appointing the secretary of state to act as the seller's
4-45 agent to receive service of any lawful process in any noncriminal
4-46 suit, action, or proceeding against the seller or the seller's
4-47 successor, executor, or administrator that may arise under this
4-48 chapter, when:
4-49 (1) an agent has not been designated under Subdivision
4-50 15, Article 12, of this chapter;
4-51 (2) the agent has resigned or died and a replacement
4-52 has not been designated under Article 9 of this chapter; or
4-53 (3) the agent cannot with reasonable diligence be
4-54 found at the designated address.
4-55 (b) Service on the secretary of state under this article has
4-56 the same force and validity as service on the seller. Service on
4-57 the secretary of state may be made by:
4-58 (1) leaving a copy of the process in the office of the
4-59 secretary of state;
4-60 (2) promptly sending by first-class mail a notice of
4-61 the service and a copy of the process to the seller's principal
4-62 business location at the last address on file with the secretary of
4-63 state; and
4-64 (3) filing the plaintiff's affidavit of compliance
4-65 with this article in the case on or before the return date of the
4-66 process, if any, or within an additional period that the court
4-67 allows.
4-68 SUBCHAPTER C. CONTENTS OF REGISTRATION STATEMENT
4-69 Art. 12. DISCLOSURE OF CERTAIN NAMES, ADDRESSES, AND
4-70 ORGANIZATIONAL INFORMATION. A registration statement must contain
5-1 the following information:
5-2 (1) the seller's name and the name under which the
5-3 seller is doing or intends to do business, if different from the
5-4 seller's name;
5-5 (2) the name of each parent and affiliated
5-6 organization of the seller that:
5-7 (A) will engage in business transactions with
5-8 purchasers relating to sales solicited by the seller; or
5-9 (B) accepts responsibility for statements made
5-10 by, or acts of, the seller relating to sales solicited by the
5-11 seller;
5-12 (3) the seller's business form and place of
5-13 organization;
5-14 (4) if the seller is a corporation, a copy of its
5-15 articles of incorporation and bylaws;
5-16 (5) if the seller is a partnership, a copy of the
5-17 partnership agreement;
5-18 (6) if the seller is operating under an assumed
5-19 business name, the location where the assumed name has been
5-20 registered;
5-21 (7) for any parent or affiliated organization
5-22 disclosed under Subdivision (2) of this article, the applicable
5-23 information that is required of a seller under Subdivisions (3)-(6)
5-24 of this article;
5-25 (8) the complete street address of each location of
5-26 the seller, designating the principal location from which the
5-27 seller will be conducting business;
5-28 (9) if the principal business location of the seller
5-29 is not in this state, a designation of its main location in the
5-30 state;
5-31 (10) a listing of each telephone number to be used by
5-32 the seller and the address where each telephone using the number is
5-33 located;
5-34 (11) the name and title of each of the seller's
5-35 officers, directors, trustees, general and limited partners, sole
5-36 proprietor, and owners, as applicable, and the name of each of
5-37 those persons who have management responsibilities in connection
5-38 with the seller's business activities;
5-39 (12) the complete address of the principal residence,
5-40 the date of birth, and the number and state of issuance of the
5-41 driver's license of each person whose name is disclosed under
5-42 Subdivision (11) of this article;
5-43 (13) the name and principal residence address of each
5-44 person the seller leaves in charge at each location from which the
5-45 seller does business in this state, and the business location at
5-46 which each of these persons is or will be in charge;
5-47 (14) the name and principal residence address of each
5-48 salesperson who solicits on behalf of the seller or a copy of the
5-49 "Employer's Quarterly Report" for employee wages the seller files
5-50 with the Texas Employment Commission and the name the salesperson
5-51 uses while soliciting;
5-52 (15) the name and address of the seller's agent in
5-53 this state, other than the secretary of state, authorized to
5-54 receive service of process; and
5-55 (16) the name and address of each financial
5-56 institution with which banking or similar monetary transactions are
5-57 made by the seller and the identification number of each of the
5-58 seller's accounts in each institution.
5-59 Art. 13. DISCLOSURE OF CERTAIN CONVICTIONS, JUDGMENTS,
5-60 ORDERS, AND BANKRUPTCIES. (a) With respect to the seller and each
5-61 person identified under Subdivision (11) or (13), Article 12, of
5-62 this chapter, a registration statement must state the identity of
5-63 each person:
5-64 (1) who has been convicted of or pleaded nolo
5-65 contendere to a felony or misdemeanor involving an alleged
5-66 violation of this chapter, or fraud, theft, embezzlement,
5-67 fraudulent conversion, or misappropriation of property;
5-68 (2) against whom has been entered a final judgment or
5-69 order in a civil or administrative action, including a stipulated
5-70 judgment or order, in which the complaint or petition alleged acts
6-1 constituting a violation of this chapter, fraud, theft,
6-2 embezzlement, fraudulent conversion, or misappropriation of
6-3 property, the use of untrue or misleading representations in an
6-4 attempt to sell or dispose of real or personal property, or the use
6-5 of unfair, unlawful, or deceptive business practices;
6-6 (3) who is subject to an injunction or restrictive
6-7 court order relating to business activity as the result of an
6-8 action brought by a federal, state, or local public agency,
6-9 including an action affecting any vocational license; or
6-10 (4) who has, during the previous seven tax years,
6-11 filed in bankruptcy, been adjudged a bankrupt, been reorganized due
6-12 to insolvency, or has been a principal, director, officer, trustee,
6-13 general or limited partner, or had management responsibilities of a
6-14 corporation, partnership, joint venture, or other business entity
6-15 that has filed in bankruptcy, been adjudged a bankrupt, or been
6-16 reorganized due to insolvency while the person held that position
6-17 or within one year after the date on which the person last held
6-18 that position.
6-19 (b) Under Subsections (a)(1), (2), and (3) of this article,
6-20 the statement must identify the court or administrative agency
6-21 rendering the conviction, judgment, or order, the docket number of
6-22 the matter, the date of conviction, judgment, or order, and the
6-23 name of the governmental agency, if any, that brought the action
6-24 resulting in the conviction, judgment, or order. Under Subsection
6-25 (a)(4) of this article, the statement must include the name and
6-26 location of the person filing in bankruptcy, adjudged a bankrupt,
6-27 or reorganized due to insolvency, and must include the date of the
6-28 filing, judgment, or reorganization order, the court having
6-29 jurisdiction, and the docket number of the matter.
6-30 Art. 14. DISCLOSURE OF CERTAIN SALES INFORMATION. The
6-31 registration statement must be accompanied by the following
6-32 information:
6-33 (1) a description of the items the seller is offering
6-34 for sale;
6-35 (2) a copy of all sales information and literature,
6-36 including scripts, outlines, instructions, and information
6-37 regarding the conduct of telephone solicitations, sample
6-38 introductions, sample closings, product information, and contest or
6-39 premium-award information, provided by the seller to salespersons
6-40 or about which the seller informs salespersons, and a copy of all
6-41 written material the seller sends to any purchaser;
6-42 (3) if the seller represents or implies, or directs
6-43 salespersons to represent or imply, to purchasers that the
6-44 purchaser will receive a specific item, including a certificate
6-45 that the purchaser must redeem to obtain the item described in the
6-46 certificate, or one or more items from among designated items,
6-47 whether the items are denominated as gifts, premiums, bonuses,
6-48 prizes, or otherwise:
6-49 (A) a list of the items described;
6-50 (B) the value of each item and the basis for the
6-51 valuation;
6-52 (C) the price paid by the seller to its supplier
6-53 for each item and the name, address, and telephone number of each
6-54 item's supplier;
6-55 (D) if the purchaser is to receive fewer than
6-56 all of the items described by the seller:
6-57 (i) the manner in which the seller
6-58 decides which item a particular purchaser is to receive;
6-59 (ii) for each item, the odds of a single
6-60 purchaser's receiving the item; and
6-61 (iii) the name and address of each
6-62 recipient who has received, during the preceding 12 months, or if
6-63 the seller has not been in business that long, during the period
6-64 the seller has been in business, the item having the greatest value
6-65 and the item with the smallest odds of being received; and
6-66 (E) all rules, regulations, terms, and
6-67 conditions a purchaser must meet in order to receive the item;
6-68 (4) if the seller is offering an item that the seller
6-69 neither manufactures nor supplies:
6-70 (A) the name, address, and telephone number of
7-1 each of the seller's suppliers and a description of each item
7-2 provided by the supplier;
7-3 (B) if the possession of the item is to be
7-4 retained by the seller or will not be transferred to the purchaser
7-5 until the purchaser has paid in full:
7-6 (i) the address of each location where the
7-7 item will be kept;
7-8 (ii) if not kept on premises owned by the
7-9 seller or at an address registered under Subdivision (8) or (9),
7-10 Article 12, of this chapter, the name of the owner of the business
7-11 at which the item will be kept; and
7-12 (iii) a copy of any contract or other
7-13 document that evidences the seller's right to store the item at the
7-14 address designated under Subparagraph (ii) of this paragraph;
7-15 (C) if the seller is not selling the item from
7-16 its own inventory but purchases the item to fill an order already
7-17 taken from a purchaser, copies of all contracts or other documents
7-18 evidencing the seller's ability to call on suppliers to fill the
7-19 seller's orders;
7-20 (D) if the seller represents to purchasers that
7-21 the seller has insurance or a surety bond of any type relating to a
7-22 purchaser's purchase of any item, a complete copy of each insurance
7-23 policy and bond; and
7-24 (E) if the seller makes any representation as to
7-25 the post-purchase earning or profit potential of an item, data to
7-26 substantiate the claims made, and if the representation relates to
7-27 previous sales made by the seller or a related entity,
7-28 substantiating data based on the experiences of at least 50 percent
7-29 of the persons who purchased that particular type of item from the
7-30 seller or related entity during the preceding six months, or if the
7-31 seller or related entity has not been in business that long, during
7-32 the period the seller or related entity has been in business,
7-33 including:
7-34 (i) the length of time the seller or
7-35 related entity has been selling the particular type of item being
7-36 offered;
7-37 (ii) the number of purchasers of the item
7-38 from the seller or related entity known to the seller or related
7-39 entity to have made at least the same earnings or profit as those
7-40 represented; and
7-41 (iii) the percentage that the number
7-42 disclosed under Subparagraph (ii) of this paragraph represents of
7-43 the total number of purchasers from the seller or related entity of
7-44 the particular type of item offered; and
7-45 (5) if the seller is offering to sell an interest in
7-46 oil, gas, or a mineral field, well, or exploration site:
7-47 (A) the seller's ownership interest, if any, in
7-48 each field, well, or site being offered for sale;
7-49 (B) the total number of interests to be sold in
7-50 each field, well, or site being offered for sale; and
7-51 (C) if, in selling an interest in any particular
7-52 field, well, or site, reference is made to an investigation of the
7-53 field, well, or site by the seller or anyone else:
7-54 (i) the name, business address, telephone
7-55 number, and professional credentials of the person who made the
7-56 investigation; and
7-57 (ii) a copy of the report and other
7-58 documents relating to the investigation prepared by the person.
7-59 SUBCHAPTER D. ADDITIONAL INFORMATION FROM SELLER
7-60 Art. 15. INFORMATION POSTED OR AVAILABLE AT SELLER'S
7-61 BUSINESS LOCATION. (a) A seller shall post the certificate of
7-62 registration in a conspicuous place at the location for which it is
7-63 issued.
7-64 (b) A seller shall make available at each of the seller's
7-65 business locations a copy of the entire registration statement and
7-66 update addenda, if any, for inspection by any purchaser or
7-67 representative of any governmental agency.
7-68 (c) A seller shall post in close proximity to the
7-69 certificate of registration the name of each individual in charge
7-70 of the location.
8-1 Art. 16. DISCLOSURES TO PROSPECTIVE PURCHASERS. A seller
8-2 shall, when the solicitation is made and before consummation of any
8-3 sales transaction, provide to each purchaser:
8-4 (1) the complete street address of the location from
8-5 which the salesperson is calling the purchaser and, if different,
8-6 the complete street address of the seller's principal location;
8-7 (2) if the seller represents or implies that a
8-8 purchaser will receive without charge a specified item or one item
8-9 from among designated items, whether the items are denominated as
8-10 gifts, premiums, bonuses, prizes, or otherwise:
8-11 (A) the information required to be filed by
8-12 Subdivisions (3)(D)(i) and (ii) and (3)(E), Article 14, of this
8-13 chapter, as appropriate; and
8-14 (B) the total number of individuals who have
8-15 actually received from the seller during the preceding 12 months,
8-16 or if the seller has not been in the business that long, during the
8-17 period the seller has been in business, the item having the
8-18 greatest value and the item with the smallest odds of being
8-19 received;
8-20 (3) if the seller is offering to sell an interest in
8-21 oil, gas, or mineral field, well, or exploration site, the
8-22 information required by Subdivision (5), Article 14, of this
8-23 chapter; and
8-24 (4) if the seller represents that an item is being
8-25 offered at a price below that usually charged for the item, the
8-26 name of the manufacturer of the item.
8-27 Art. 17. NO REFERENCE TO COMPLIANCE WITH STATUTE. A seller
8-28 may not make or authorize the making of a reference to its
8-29 compliance with this chapter to a purchaser.
8-30 SUBCHAPTER E. OFFENSES
8-31 Art. 18. VIOLATION OF CHAPTER. (a) A person commits an
8-32 offense if the person knowingly or intentionally violates Article
8-33 4, 9, 15, 16, or 17 of this chapter. Each violation constitutes a
8-34 separate offense.
8-35 (b) An offense under this article is a Class A misdemeanor.
8-36 Art. 19. SALESPERSON FOR UNREGISTERED SELLER. (a) A person
8-37 commits an offense if the person knowingly or intentionally acts as
8-38 a salesperson on behalf of a seller who violates the registration
8-39 requirements of this chapter. Each violation constitutes a
8-40 separate offense.
8-41 (b) An offense under this article is a Class A misdemeanor.
8-42 Art. 19A. CHARGE TO A CREDIT CARD ACCOUNT OR DEBIT OF A
8-43 CHECKING ACCOUNT AFTER OFFER OF FREE ITEM. (a) A seller commits
8-44 an offense if the seller knowingly:
8-45 (1) represents or implies that a purchaser will
8-46 receive without charge an item or service, regardless of whether
8-47 denominated as a gift, premium, bonus, prize, or otherwise; and
8-48 (2) requests a credit card account number or checking
8-49 account number from the purchaser for the purpose of charging to
8-50 the credit card account or debiting from the checking account an
8-51 amount as a condition precedent to the purchaser's receipt of an
8-52 item.
8-53 (b) An offense under this article is a Class A misdemeanor.
8-54 SUBCHAPTER F. ENFORCEMENT
8-55 Art. 20. INJUNCTION. The attorney general may sue in a
8-56 court of competent jurisdiction to enjoin a person from violating
8-57 this chapter. The attorney general shall notify the defendant of
8-58 the alleged prohibited conduct not later than the seventh day
8-59 before the date the suit is filed, unless the attorney general
8-60 intends to request that the court issue a temporary restraining
8-61 order, in which event notice is not required. The party bringing
8-62 the suit shall recover all reasonable costs of prosecuting these
8-63 cases including, but not limited to, costs of investigation,
8-64 depositions, witness fees, attorney's fees, and other costs of
8-65 court.
8-66 Art. 21. CIVIL PENALTIES. A person is subject to a civil
8-67 penalty of not more than $5,000 for a single violation. A person
8-68 who violates an injunction issued under Article 20 of this chapter
8-69 is liable to the state for a civil penalty of not more than $25,000
8-70 for a single violation and not more than $50,000 for all violations
9-1 of the injunction. The attorney general may bring suit to recover
9-2 the civil penalty in the court that issued the original injunction.
9-3 The party bringing the suit shall also recover all reasonable costs
9-4 of prosecuting these cases including, but not limited to, costs of
9-5 investigation, depositions, witness fees, attorney's fees, and
9-6 other costs of court.
9-7 Art. 22. DECEPTIVE TRADE PRACTICES. A violation of this
9-8 chapter is a false, misleading, or deceptive act or practice under
9-9 Subchapter E, Chapter 17, Business & Commerce Code, and its
9-10 subsequent amendments, and any public or private right or remedy
9-11 prescribed by that subchapter may be used to enforce this chapter.
9-12 Art. 23. ACTION TO RECOVER AGAINST SECURITY. (a) A person
9-13 who is injured by the bankruptcy of a seller or the seller's breach
9-14 of an agreement entered into during a telephone solicitation may
9-15 bring and maintain an action to recover against the bond, letter of
9-16 credit, or certificate of deposit required under Article 10 of this
9-17 chapter.
9-18 (b) The liability of the surety on a bond provided pursuant
9-19 to Article 10 of this chapter does not exceed the amount of the
9-20 bond, regardless of the number of claims filed or the aggregate
9-21 amount claimed. If the amount claimed exceeds the amount of the
9-22 bond, the surety shall deposit the amount of the bond with the
9-23 secretary of state for distribution to claimants entitled to
9-24 recovery, and the surety is then relieved of all liability under
9-25 the bond.
9-26 Art. 24. NO WAIVER. An attempted waiver of a provision of
9-27 this chapter is void.
9-28 Art. 25. CUMULATIVE REMEDIES. The remedies provided by this
9-29 chapter are in addition to any other procedures or remedies
9-30 provided for by other law.
9-31 SECTION 2. (a) This Act takes effect September 1, 1993.
9-32 (b) The change in law made by this Act applies only to an
9-33 offense committed on or after the effective date of this Act. For
9-34 purposes of this section, an offense is committed before the
9-35 effective date of this Act if any element of the offense occurs
9-36 before that date.
9-37 SECTION 3. The importance of this legislation and the
9-38 crowded condition of the calendars in both houses create an
9-39 emergency and an imperative public necessity that the
9-40 constitutional rule requiring bills to be read on three several
9-41 days in each house be suspended, and this rule is hereby suspended.
9-42 * * * * *
9-43 Austin,
9-44 Texas
9-45 May 24, 1993
9-46 Hon. Bob Bullock
9-47 President of the Senate
9-48 Sir:
9-49 We, your Committee on Economic Development to which was referred
9-50 H.B. No. 364, have had the same under consideration, and I am
9-51 instructed to report it back to the Senate with the recommendation
9-52 that it do pass and be printed.
9-53 Parker,
9-54 Chairman
9-55 * * * * *
9-56 WITNESSES
9-57 FOR AGAINST ON
9-58 ___________________________________________________________________
9-59 Name: Teri Flack x
9-60 Representing: Office of the Attorney General
9-61 City: Austin
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