By Willis H.B. No. 1899
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to solicitations for veterans organizations; providing
1-3 penalties.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Title 132, Revised Statutes, is amended by adding
1-6 Article 9023b to read as follows:
1-7 Art. 9023b. SOLICITATION IN NAME OF VETERANS ORGANIZATION
1-8 Sec. 1. DEFINITIONS. In this article:
1-9 (1) "Person" means an individual, corporation,
1-10 organization, business trust, partnership, association, or other
1-11 private legal entity.
1-12 (2) "Solicitor" means a person who receives monetary
1-13 compensation for the person's solicitation services on behalf of a
1-14 veterans organization and who:
1-15 (A) solicits a contribution of financial support
1-16 or a purchase of goods or services on behalf of a veterans
1-17 organization in person, by telephone, or by mail; or
1-18 (B) solicits membership in a veterans
1-19 organization from individuals who are not veterans.
1-20 (3) "Veteran" means a person who has served on active
1-21 duty in the armed forces of the United States or in the state
1-22 military forces as defined by Section 431.001, Government Code.
1-23 (4) "Veterans organization" means a nongovernmental
1-24 entity that:
2-1 (A) is formed formally or informally and
2-2 purports to include or represent veterans; or
2-3 (B) includes in its name a term that would lead
2-4 a reasonable person to assume that the organization is associated
2-5 with veterans or concerned with veterans' issues.
2-6 Sec. 2. REGISTRATION REQUIRED. (a) A veterans organization
2-7 may not use a solicitor unless:
2-8 (1) the veterans organization has:
2-9 (A) filed a registration statement as required
2-10 by Section 4 of this article; and
2-11 (B) filed and maintains a bond as required by
2-12 Section 5 of this article; and
2-13 (2) the solicitor has:
2-14 (A) filed a registration statement as required
2-15 by Section 6 of this article; and
2-16 (B) filed and maintains a bond as required by
2-17 Section 7 of this article.
2-18 (b) A person may not act as a solicitor for a veterans
2-19 organization unless the person has:
2-20 (1) filed a registration statement as required by
2-21 Section 6 of this article; and
2-22 (2) filed and maintains a bond as required by Section
2-23 7 of this article.
2-24 Sec. 3. ELIGIBILITY. (a) A veterans organization is
2-25 eligible to register under Section 4 of this article and use a
2-26 solicitor if the organization:
2-27 (1) consists of members:
3-1 (A) who are individuals;
3-2 (B) of whom at least 90 percent or 500,
3-3 whichever is less, are veterans; and
3-4 (C) who have signed written membership
3-5 agreements with the organization.
3-6 (b) A veterans organization is not eligible to use a
3-7 solicitor if the organization has forfeited on three or more
3-8 occasions a bond filed under this article.
3-9 (c) A solicitor is not eligible to solicit on behalf of a
3-10 veterans organization if the solicitor has forfeited on three or
3-11 more occasions a bond under this article.
3-12 Sec. 4. VETERANS ORGANIZATIONS REGISTRATION STATEMENT. (a)
3-13 Before beginning solicitations, a veterans organization must have
3-14 on file with the secretary of state for public disclosure a
3-15 registration statement containing:
3-16 (1) the name, street address, and telephone number of
3-17 each solicitor that solicits on behalf of the veterans
3-18 organization;
3-19 (2) the name, street address, and telephone number of
3-20 each veterans organization or fund on behalf of which all or part
3-21 of the contributions will be used, or, if there is no organization
3-22 or fund, a statement describing the manner in which the
3-23 contributions will be used;
3-24 (3) a statement of whether the veterans organization
3-25 or fund for which the contributions are solicited has a charitable
3-26 tax exemption under both federal and state law;
3-27 (4) the name of each veteran who serves on the board
4-1 of directors or governing body of the veterans organization or fund
4-2 for which the contributions are solicited, if any;
4-3 (5) the number of members who are veterans and the
4-4 percentage of members of the veterans organization who are
4-5 veterans, as determined on December 31 preceding the year in which
4-6 the statement is filed;
4-7 (6) the name of each local, chapter, lodge,
4-8 association, or group of veterans that is a member of the veterans
4-9 organization for which contributions are solicited, if any;
4-10 (7) a copy of the Internal Revenue Service Form 990,
4-11 or its successors, the veterans organizations most recently filed
4-12 with the Internal Revenue Service, if any; and
4-13 (8) the name, address, and telephone number of the
4-14 surety bond required by Section 5 of this article.
4-15 (b) The registration statement required by Subsection (a) of
4-16 this section must be accompanied by a registration fee in the
4-17 amount of $150 and the original copy of the bond required by
4-18 Section 5 of this article.
4-19 (c) A veterans organization that has filed a registration
4-20 statement under Subsection (a) of this section and that continues
4-21 to make solicitations through a solicitor shall file an updated
4-22 statement with the secretary of state on or before January 15 of
4-23 each year during which solicitations will occur.
4-24 Sec. 5. VETERANS ORGANIZATION BOND. (a) A veterans
4-25 organization that uses a solicitor shall post a surety bond with
4-26 the secretary of state in the amount of:
4-27 (1) $1,000 if the organization is a veterans
5-1 organization chartered by the United States Congress; or
5-2 (2) if the organization is not chartered by the United
5-3 States Congress:
5-4 (A) $5,000 if the organization solicits in not
5-5 more than one county;
5-6 (B) $10,000 if the organization solicits in more
5-7 than one county but fewer than six counties; or
5-8 (C) $25,000 if the organization solicits in six
5-9 or more counties.
5-10 (b) The bond must be payable to the state and conditioned on
5-11 compliance with this article.
5-12 Sec. 6. SOLICITOR REGISTRATION STATEMENT; FEE. (a) Before
5-13 beginning solicitations for a veterans organization, a solicitor
5-14 must have on file with the secretary of state for public disclosure
5-15 a registration statement containing:
5-16 (1) the name, address, and telephone number of the
5-17 solicitor;
5-18 (2) the name, address, and telephone number of each
5-19 veterans organization on whose behalf the solicitor solicits or
5-20 will solicit; and
5-21 (3) the name of each other state in which the
5-22 solicitor is registered as a solicitor and the status of that
5-23 registration.
5-24 (b) The registration statement required by Subsection (a) of
5-25 this section must be accompanied by a registration fee in the
5-26 amount of $500 and a bond as required by Section 7 of this article.
5-27 (c) A solicitor that has filed a registration statement
6-1 under Subsection (a) of this section shall file an updated
6-2 statement with the secretary of state on or before January 15 of
6-3 each year during which the solicitor will solicit on behalf of a
6-4 veterans organization.
6-5 Sec. 7. SOLICITOR BOND. (a) A solicitor shall post a
6-6 surety bond with the secretary of state in the amount of:
6-7 (1) $5,000 if the solicitor solicits in not more than
6-8 one county;
6-9 (2) $10,000 if the solicitor solicits in more than one
6-10 county but fewer than six counties; or
6-11 (3) $25,000 if the solicitor solicits in six or more
6-12 counties.
6-13 (b) The bond must be payable to the state and conditioned on
6-14 compliance with this article.
6-15 Sec. 8. DISCLOSURE AT TIME OF SOLICITATION. A solicitor
6-16 shall disclose at the time each solicitation is made, orally if the
6-17 solicitation is in person or by telephone and by printed notice in
6-18 any printed matter distributed by the solicitor, the following
6-19 information: "The secretary of state has on file important
6-20 information about persons that seek contributions in the name of
6-21 veterans, and the number to call about that information is the
6-22 Solicitation Information Hotline (the number maintained by the
6-23 secretary of state)."
6-24 Sec. 9. SOLICITATION INFORMATION HOTLINE. The secretary of
6-25 state shall establish and operate a toll-free telephone line known
6-26 as the Solicitation Information Hotline. A member of the public
6-27 may telephone the hotline number to:
7-1 (1) obtain information concerning a veterans
7-2 organization or solicitor that has filed a statement with the
7-3 secretary of state under this article; or
7-4 (2) report an alleged violation of this article by a
7-5 solicitor or a veterans organization.
7-6 Sec. 10. SOLICITOR REPORTS. (a) At the end of each
7-7 calendar quarter, a solicitor who raises more than $5,000 for a
7-8 veterans organization during that calendar quarter shall file with
7-9 the secretary of state a report that includes:
7-10 (1) the name, address, and telephone number of the
7-11 solicitor;
7-12 (2) the gross amount raised by the solicitor for the
7-13 veterans organization;
7-14 (3) the amount paid to the veterans organization; and
7-15 (4) the name and address of the person representing
7-16 the veterans organization to which the amount was paid.
7-17 (b) A filing fee of $50 must accompany each report filed
7-18 under this section.
7-19 Sec. 11. VETERANS ORGANIZATION REPORTS. (a) Before January
7-20 15 of each year, each veterans organization that received more than
7-21 $500 in solicited funds during the preceding calendar year shall
7-22 file with the secretary of state a report that includes:
7-23 (1) the name and address of the veterans organization
7-24 and each officer who is authorized to spend funds of the
7-25 organization; and
7-26 (2) the total amounts from all sources spent by the
7-27 organization for each of the following:
8-1 (A) administrative expenses;
8-2 (B) travel expenses of officers of the
8-3 organization;
8-4 (C) travel expenses of each member of the
8-5 organization;
8-6 (D) gifts to veterans or other veterans
8-7 organizations;
8-8 (E) gifts to nonveterans;
8-9 (F) payments for the purchase, rental, or lease
8-10 of and repairs to facilities used by the organization; and
8-11 (G) any other expenditures.
8-12 (b) A filing fee of $50 must accompany each report filed
8-13 under this section.
8-14 (c) A veterans organization that is chartered by the United
8-15 States Congress and that has subsidiary organizations may:
8-16 (1) collect the reports of the subsidiary
8-17 organizations; and
8-18 (2) file its report and the reports of its subsidiary
8-19 organizations at one time and pay a single filing fee.
8-20 (d) If funds of a veterans organization are given to an
8-21 individual for the individual's personal use, the organization
8-22 shall require the individual to sign a receipt for the funds before
8-23 the funds are delivered. The organization shall keep receipts for
8-24 all expenditures on file for a period of seven years.
8-25 (e) The reports and receipts to which this section applies
8-26 are public records and the veterans organization shall make them
8-27 available to any person who requests them in writing.
9-1 Sec. 12. PROHIBITED PRACTICES. (a) A solicitor may not
9-2 solicit on behalf of a veterans organization in counties other than
9-3 counties that the veterans organization serves unless the solicitor
9-4 discloses the county or counties actually served by the
9-5 organization.
9-6 (b) A contribution or membership fee solicited at a person's
9-7 residence in person or by telephone may not be collected except
9-8 through the United States mail or parcel post courier.
9-9 (c) A solicitor may not make a materially false or
9-10 misleading statement of fact during a solicitation that would lead
9-11 a responsible person to believe that proceeds of the solicitation
9-12 are being used or will be used for a purpose other than the purpose
9-13 for which the proceeds are actually used.
9-14 (d) A solicitor or a veterans organization may not make a
9-15 material misrepresentation in a registration statement filed under
9-16 this article.
9-17 (e) For purposes of Subsection (d) of this section,
9-18 overreporting the number of veterans who are members of the
9-19 veterans organization by more than three percent of the
9-20 organization's total membership is a material misrepresentation.
9-21 Sec. 13. OFFENSES; PENALTIES. (a) A person commits an
9-22 offense if the person knowingly violates this article.
9-23 (b) An offense under this section is a Class B misdemeanor,
9-24 except that if it is shown on trial of the offense that the
9-25 defendant has been convicted previously under this section, the
9-26 offense is a Class A misdemeanor.
9-27 (c) A corporation or association may be held criminally
10-1 responsible for the conduct of a person acting on its behalf if the
10-2 person's conduct constitutes an offense under this section.
10-3 (d) It is a defense to prosecution under this section that:
10-4 (1) the defendant is a veterans organization;
10-5 (2) the person whose conduct constitutes the offense
10-6 was acting on behalf of a corporation or association with which the
10-7 veterans organization had contracted for services; and
10-8 (3) the person committed the conduct without the
10-9 knowledge of the veterans organization.
10-10 Sec. 14. AUDIT POWERS OF THE ATTORNEY GENERAL. (a) The
10-11 attorney general may request reasonable and necessary information
10-12 from a veterans organization or a solicitor for the purpose of
10-13 auditing or verifying the representations contained in a
10-14 registration statement required by this article.
10-15 (b) The attorney general may audit representations made by a
10-16 solicitor during a solicitation to determine whether the
10-17 solicitation complies with this article.
10-18 Sec. 15. INJUNCTION. The attorney general may sue in a
10-19 district court of Travis County to enjoin a person from violating
10-20 this article. The attorney general shall notify the defendant of
10-21 the alleged prohibited conduct not later than the seventh day
10-22 before the date the suit is filed, unless the attorney general
10-23 intends to request that the court issue a temporary restraining
10-24 order, in which event notice is not required.
10-25 Sec. 16. CIVIL PENALTIES. A person who violates any
10-26 provision of this article is liable to the state for a civil
10-27 penalty of not more than $10,000 per violation. A person who
11-1 violates an injunction issued under this article is liable to the
11-2 state for a civil penalty of not less than $100,000. The attorney
11-3 general shall bring suit to recover the civil penalty. If the
11-4 violator has filed a bond under this article, the suit may be
11-5 brought against the bond.
11-6 Sec. 17. SUIT ON BOND BY INJURED PARTY. (a) A person who
11-7 is injured by a violation of this article may bring and maintain a
11-8 suit or join in a suit brought by the state to recover against a
11-9 bond filed under this article. In a suit brought under this
11-10 article, the court may assess costs of litigation and reasonable
11-11 attorney's fees incurred by a plaintiff other than the state or by
11-12 a defendant who substantially prevails.
11-13 (b) In a suit brought by a private plaintiff and the state
11-14 under this article, if the amount claimed exceeds the amount of the
11-15 bond, a bond forfeiture first pays the private plaintiff's damages
11-16 and attorney's fees and any remaining amount is forfeited to the
11-17 state.
11-18 (c) Nothing in this article prevents the state or an injured
11-19 party from suing to recover a contribution obtained by
11-20 misrepresentation or limits other causes of action available to a
11-21 plaintiff by statute or common law.
11-22 Sec. 18. LOCAL ORDINANCES. This article does not preempt or
11-23 supersede any municipal ordinance applicable to a veterans
11-24 organization or a solicitor.
11-25 SECTION 2. This Act takes effect September 1, 1993.
11-26 SECTION 3. The importance of this legislation and the
11-27 crowded condition of the calendars in both houses create an
12-1 emergency and an imperative public necessity that the
12-2 constitutional rule requiring bills to be read on three several
12-3 days in each house be suspended, and this rule is hereby suspended.