1-1 By: Willis (Senate Sponsor - Rosson) H.B. No. 1899
1-2 (In the Senate - Received from the House May 12, 1993;
1-3 May 13, 1993, read first time and referred to Committee on State
1-4 Affairs; May 20, 1993, reported favorably by the following vote:
1-5 Yeas 9, Nays 0; May 20, 1993, sent to printer.)
1-6 COMMITTEE VOTE
1-7 Yea Nay PNV Absent
1-8 Harris of Dallas x
1-9 Rosson x
1-10 Carriker x
1-11 Henderson x
1-12 Leedom x
1-13 Lucio x
1-14 Luna x
1-15 Nelson x
1-16 Patterson x
1-17 Shelley x
1-18 Sibley x
1-19 West x
1-20 Whitmire x
1-21 A BILL TO BE ENTITLED
1-22 AN ACT
1-23 relating to solicitations for veterans organizations; providing
1-24 penalties.
1-25 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-26 SECTION 1. Title 132, Revised Statutes, is amended by adding
1-27 Article 9023b to read as follows:
1-28 Art. 9023b. SOLICITATION IN NAME OF VETERANS ORGANIZATION
1-29 Sec. 1. DEFINITIONS. In this article:
1-30 (1) "Person" means an individual, corporation,
1-31 organization, business trust, partnership, association, or other
1-32 private legal entity.
1-33 (2) "Solicitor" means a person who receives monetary
1-34 compensation for the person's solicitation services on behalf of a
1-35 veterans organization and who:
1-36 (A) solicits a contribution of financial support
1-37 or a purchase of goods or services on behalf of a veterans
1-38 organization in person, by telephone, or by mail; or
1-39 (B) solicits membership in a veterans
1-40 organization from individuals who are not veterans.
1-41 (3) "Veteran" means a person who has served on active
1-42 duty in the armed forces of the United States or in the state
1-43 military forces as defined by Section 431.001, Government Code.
1-44 (4) "Veterans organization" means a nongovernmental
1-45 entity that:
1-46 (A) is formed formally or informally and
1-47 purports to include or represent veterans; or
1-48 (B) includes in its name a term that would lead
1-49 a reasonable person to assume that the organization is associated
1-50 with veterans or concerned with veterans' issues.
1-51 Sec. 2. REGISTRATION REQUIRED. (a) A veterans organization
1-52 may not use a solicitor unless:
1-53 (1) the veterans organization has:
1-54 (A) filed a registration statement as required
1-55 by Section 4 of this article; and
1-56 (B) filed and maintains a bond as required by
1-57 Section 5 of this article; and
1-58 (2) the solicitor has:
1-59 (A) filed a registration statement as required
1-60 by Section 6 of this article; and
1-61 (B) filed and maintains a bond as required by
1-62 Section 7 of this article.
1-63 (b) A person may not act as a solicitor for a veterans
1-64 organization unless the person has:
1-65 (1) filed a registration statement as required by
1-66 Section 6 of this article; and
1-67 (2) filed and maintains a bond as required by Section
1-68 7 of this article.
2-1 Sec. 3. ELIGIBILITY. (a) A veterans organization is
2-2 eligible to register under Section 4 of this article and use a
2-3 solicitor if the organization:
2-4 (1) consists of members:
2-5 (A) who are individuals;
2-6 (B) of whom at least 90 percent or 500,
2-7 whichever is less, are veterans; and
2-8 (C) who have signed written membership
2-9 agreements with the organization.
2-10 (b) A veterans organization is not eligible to use a
2-11 solicitor if the organization has forfeited on three or more
2-12 occasions a bond filed under this article.
2-13 (c) A solicitor is not eligible to solicit on behalf of a
2-14 veterans organization if the solicitor has forfeited on three or
2-15 more occasions a bond under this article.
2-16 Sec. 4. VETERANS ORGANIZATIONS REGISTRATION STATEMENT.
2-17 (a) Before beginning solicitations, a veterans organization must
2-18 have on file with the secretary of state for public disclosure a
2-19 registration statement containing:
2-20 (1) the name, street address, and telephone number of
2-21 each solicitor that solicits on behalf of the veterans
2-22 organization;
2-23 (2) the name, street address, and telephone number of
2-24 each veterans organization or fund on behalf of which all or part
2-25 of the contributions will be used, or, if there is no organization
2-26 or fund, a statement describing the manner in which the
2-27 contributions will be used;
2-28 (3) a statement of whether the veterans organization
2-29 or fund for which the contributions are solicited has a charitable
2-30 tax exemption under both federal and state law;
2-31 (4) the name of each veteran who serves on the board
2-32 of directors or governing body of the veterans organization or fund
2-33 for which the contributions are solicited, if any;
2-34 (5) the number of members who are veterans and the
2-35 percentage of members of the veterans organization who are
2-36 veterans, as determined on December 31 preceding the year in which
2-37 the statement is filed;
2-38 (6) the name of each local, chapter, lodge,
2-39 association, or group of veterans that is a member of the veterans
2-40 organization for which contributions are solicited, if any;
2-41 (7) a copy of the Internal Revenue Service Form 990,
2-42 or its successors, the veterans organizations most recently filed
2-43 with the Internal Revenue Service, if any; and
2-44 (8) the name, address, and telephone number of the
2-45 surety bond required by Section 5 of this article.
2-46 (b) The registration statement required by Subsection (a) of
2-47 this section must be accompanied by a registration fee in the
2-48 amount of $150 and the original copy of the bond required by
2-49 Section 5 of this article.
2-50 (c) A veterans organization that has filed a registration
2-51 statement under Subsection (a) of this section and that continues
2-52 to make solicitations through a solicitor shall file an updated
2-53 statement with the secretary of state on or before January 15 of
2-54 each year during which solicitations will occur.
2-55 Sec. 5. VETERANS ORGANIZATION BOND. (a) A veterans
2-56 organization that uses a solicitor shall post a surety bond with
2-57 the secretary of state in the amount of:
2-58 (1) $1,000 if the organization is a veterans
2-59 organization chartered by the United States Congress; or
2-60 (2) if the organization is not chartered by the United
2-61 States Congress:
2-62 (A) $5,000 if the organization solicits in not
2-63 more than one county;
2-64 (B) $10,000 if the organization solicits in more
2-65 than one county but fewer than six counties; or
2-66 (C) $25,000 if the organization solicits in six
2-67 or more counties.
2-68 (b) The bond must be payable to the state and conditioned on
2-69 compliance with this article.
2-70 Sec. 6. SOLICITOR REGISTRATION STATEMENT; FEE. (a) Before
3-1 beginning solicitations for a veterans organization, a solicitor
3-2 must have on file with the secretary of state for public disclosure
3-3 a registration statement containing:
3-4 (1) the name, address, and telephone number of the
3-5 solicitor;
3-6 (2) the name, address, and telephone number of each
3-7 veterans organization on whose behalf the solicitor solicits or
3-8 will solicit; and
3-9 (3) the name of each other state in which the
3-10 solicitor is registered as a solicitor and the status of that
3-11 registration.
3-12 (b) The registration statement required by Subsection (a) of
3-13 this section must be accompanied by a registration fee in the
3-14 amount of $500 and a bond as required by Section 7 of this article.
3-15 (c) A solicitor that has filed a registration statement
3-16 under Subsection (a) of this section shall file an updated
3-17 statement with the secretary of state on or before January 15 of
3-18 each year during which the solicitor will solicit on behalf of a
3-19 veterans organization.
3-20 Sec. 7. SOLICITOR BOND. (a) A solicitor shall post a
3-21 surety bond with the secretary of state in the amount of:
3-22 (1) $5,000 if the solicitor solicits in not more than
3-23 one county;
3-24 (2) $10,000 if the solicitor solicits in more than one
3-25 county but fewer than six counties; or
3-26 (3) $25,000 if the solicitor solicits in six or more
3-27 counties.
3-28 (b) The bond must be payable to the state and conditioned on
3-29 compliance with this article.
3-30 Sec. 8. DISCLOSURE AT TIME OF SOLICITATION. A solicitor
3-31 shall disclose at the time each solicitation is made, orally if the
3-32 solicitation is in person or by telephone and by printed notice in
3-33 any printed matter distributed by the solicitor, the following
3-34 information: "The secretary of state has on file important
3-35 information about persons that seek contributions in the name of
3-36 veterans, and the number to call about that information is the
3-37 Solicitation Information Hotline (the number maintained by the
3-38 secretary of state)."
3-39 Sec. 9. SOLICITATION INFORMATION HOTLINE. The secretary of
3-40 state shall establish and operate a toll-free telephone line known
3-41 as the Solicitation Information Hotline. A member of the public
3-42 may telephone the hotline number to:
3-43 (1) obtain information concerning a veterans
3-44 organization or solicitor that has filed a statement with the
3-45 secretary of state under this article; or
3-46 (2) report an alleged violation of this article by a
3-47 solicitor or a veterans organization.
3-48 Sec. 10. SOLICITOR REPORTS. (a) At the end of each
3-49 calendar quarter, a solicitor who raises more than $5,000 for a
3-50 veterans organization during that calendar quarter shall file with
3-51 the secretary of state a report that includes:
3-52 (1) the name, address, and telephone number of the
3-53 solicitor;
3-54 (2) the gross amount raised by the solicitor for the
3-55 veterans organization;
3-56 (3) the amount paid to the veterans organization; and
3-57 (4) the name and address of the person representing
3-58 the veterans organization to which the amount was paid.
3-59 (b) A filing fee of $50 must accompany each report filed
3-60 under this section.
3-61 Sec. 11. VETERANS ORGANIZATION REPORTS. (a) Before January
3-62 15 of each year, each veterans organization that received more than
3-63 $500 in solicited funds during the preceding calendar year shall
3-64 file with the secretary of state a report that includes:
3-65 (1) the name and address of the veterans organization
3-66 and each officer who is authorized to spend funds of the
3-67 organization; and
3-68 (2) the total amounts from all sources spent by the
3-69 organization for each of the following:
3-70 (A) administrative expenses;
4-1 (B) travel expenses of officers of the
4-2 organization;
4-3 (C) travel expenses of each member of the
4-4 organization;
4-5 (D) gifts to veterans or other veterans
4-6 organizations;
4-7 (E) gifts to nonveterans;
4-8 (F) payments for the purchase, rental, or lease
4-9 of and repairs to facilities used by the organization; and
4-10 (G) any other expenditures.
4-11 (b) A filing fee of $50 must accompany each report filed
4-12 under this section.
4-13 (c) A veterans organization that is chartered by the United
4-14 States Congress and that has subsidiary organizations may:
4-15 (1) collect the reports of the subsidiary
4-16 organizations; and
4-17 (2) file its report and the reports of its subsidiary
4-18 organizations at one time and pay a single filing fee.
4-19 (d) If funds of a veterans organization are given to an
4-20 individual for the individual's personal use, the organization
4-21 shall require the individual to sign a receipt for the funds before
4-22 the funds are delivered. The organization shall keep receipts for
4-23 all expenditures on file for a period of seven years.
4-24 (e) The reports and receipts to which this section applies
4-25 are public records and the veterans organization shall make them
4-26 available to any person who requests them in writing.
4-27 Sec. 12. PROHIBITED PRACTICES. (a) A solicitor may not
4-28 solicit on behalf of a veterans organization in counties other than
4-29 counties that the veterans organization serves unless the solicitor
4-30 discloses the county or counties actually served by the
4-31 organization.
4-32 (b) A contribution or membership fee solicited at a person's
4-33 residence in person or by telephone may not be collected except
4-34 through the United States mail or parcel post courier.
4-35 (c) A solicitor may not make a materially false or
4-36 misleading statement of fact during a solicitation that would lead
4-37 a responsible person to believe that proceeds of the solicitation
4-38 are being used or will be used for a purpose other than the purpose
4-39 for which the proceeds are actually used.
4-40 (d) A solicitor or a veterans organization may not make a
4-41 material misrepresentation in a registration statement filed under
4-42 this article.
4-43 (e) For purposes of Subsection (d) of this section,
4-44 overreporting the number of veterans who are members of the
4-45 veterans organization by more than three percent of the
4-46 organization's total membership is a material misrepresentation.
4-47 Sec. 13. OFFENSES; PENALTIES. (a) A person commits an
4-48 offense if the person knowingly violates this article.
4-49 (b) An offense under this section is a Class B misdemeanor,
4-50 except that if it is shown on trial of the offense that the
4-51 defendant has been convicted previously under this section, the
4-52 offense is a Class A misdemeanor.
4-53 (c) A corporation or association may be held criminally
4-54 responsible for the conduct of a person acting on its behalf if the
4-55 person's conduct constitutes an offense under this section.
4-56 (d) It is a defense to prosecution under this section that:
4-57 (1) the defendant is a veterans organization;
4-58 (2) the person whose conduct constitutes the offense
4-59 was acting on behalf of a corporation or association with which the
4-60 veterans organization had contracted for services; and
4-61 (3) the person committed the conduct without the
4-62 knowledge of the veterans organization.
4-63 Sec. 14. AUDIT POWERS OF THE ATTORNEY GENERAL. (a) The
4-64 attorney general may request reasonable and necessary information
4-65 from a veterans organization or a solicitor for the purpose of
4-66 auditing or verifying the representations contained in a
4-67 registration statement required by this article.
4-68 (b) The attorney general may audit representations made by a
4-69 solicitor during a solicitation to determine whether the
4-70 solicitation complies with this article.
5-1 Sec. 15. INJUNCTION. The attorney general may sue in a
5-2 district court of Travis County to enjoin a person from violating
5-3 this article. The attorney general shall notify the defendant of
5-4 the alleged prohibited conduct not later than the seventh day
5-5 before the date the suit is filed, unless the attorney general
5-6 intends to request that the court issue a temporary restraining
5-7 order, in which event notice is not required.
5-8 Sec. 16. CIVIL PENALTIES. A person who violates any
5-9 provision of this article is liable to the state for a civil
5-10 penalty of not more than $10,000 per violation. A person who
5-11 violates an injunction issued under this article is liable to the
5-12 state for a civil penalty of not less than $100,000. The attorney
5-13 general shall bring suit to recover the civil penalty. If the
5-14 violator has filed a bond under this article, the suit may be
5-15 brought against the bond.
5-16 Sec. 17. SUIT ON BOND BY INJURED PARTY. (a) A person who
5-17 is injured by a violation of this article may bring and maintain a
5-18 suit or join in a suit brought by the state to recover against a
5-19 bond filed under this article. In a suit brought under this
5-20 article, the court may assess costs of litigation and reasonable
5-21 attorney's fees incurred by a plaintiff other than the state or by
5-22 a defendant who substantially prevails.
5-23 (b) In a suit brought by a private plaintiff and the state
5-24 under this article, if the amount claimed exceeds the amount of the
5-25 bond, a bond forfeiture first pays the private plaintiff's damages
5-26 and attorney's fees and any remaining amount is forfeited to the
5-27 state.
5-28 (c) Nothing in this article prevents the state or an injured
5-29 party from suing to recover a contribution obtained by
5-30 misrepresentation or limits other causes of action available to a
5-31 plaintiff by statute or common law.
5-32 Sec. 18. LOCAL ORDINANCES. This article does not preempt or
5-33 supersede any municipal ordinance applicable to a veterans
5-34 organization or a solicitor.
5-35 SECTION 2. This Act takes effect September 1, 1993.
5-36 SECTION 3. The importance of this legislation and the
5-37 crowded condition of the calendars in both houses create an
5-38 emergency and an imperative public necessity that the
5-39 constitutional rule requiring bills to be read on three several
5-40 days in each house be suspended, and this rule is hereby suspended.
5-41 * * * * *
5-42 Austin,
5-43 Texas
5-44 May 20, 1993
5-45 Hon. Bob Bullock
5-46 President of the Senate
5-47 Sir:
5-48 We, your Committee on State Affairs to which was referred H.B.
5-49 No. 1899, have had the same under consideration, and I am
5-50 instructed to report it back to the Senate with the recommendation
5-51 that it do pass and be printed.
5-52 Harris of
5-53 Dallas, Chairman
5-54 * * * * *
5-55 WITNESSES
5-56 FOR AGAINST ON
5-57 ___________________________________________________________________
5-58 Name: Samuel Bier x
5-59 Representing: VFW
5-60 City: Austin
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