BILL ANALYSIS



C.S.H.B. 1766
By: King
4-11-95
Committee Report (Substituted)


BACKGROUND

     The purpose of the Telephone Solicitation Act (Article 5069-18.01 et seq., Revised Statutes) is to protect the public against
unscrupulous telemarketers by regulating those who engage in
telephone solicitations.

     When the legislature enacted the Telephone Solicitation Act,
this Act exempted "a person or affiliate of a person whose business
is regulated by the Public Utility Commission" from the application
of the Act.  This provision was designed to exempt local telephone
companies from the application of the Act because they are already
extensively regulated by the Public Utility Commission.  However,
this provision was not intended to exempt automatic dialing
announcing devices (ADADs).  In fact, the legislature recognized
that telephone solicitations are often initiated by automatic
dialing machines and recorded message devices.

     Automatic dialing announcing devices, which include automatic
dialing machines and recorded message devices, are capable of
computer-generating thousands of telephone solicitations each day. 
Because they must be registered with the Public Utility Commission,
ADADs can be said to be "regulated" by the Public Utility
Commission.  However, only the most minimal filing is required for
registration, and there are few regulatory or statutory
restrictions of ADADs.  Consequently, the exemption for local
telephone companies has the unintended effect of exempting a
substantial segment of persons whose main business is conducting
telephone solicitations.  Moreover, persons who use ADADs in
telemarketing have utilized the regulation exemption to exempt from
the Telephone Solicitation Act not only all of their recorded
calls, but also all of their live telephone solicitations.

PURPOSE

     To prevent wholesale abuse of the Public Utility regulation
exemption by telephone solicitors.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not expressly
grant any additional rulemaking authority to a state officer,
department, agency or institution.

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Subdivision (6), Article 2(a), Chapter 18, Title
79, Revised Statutes (Article 5069-18.02, Vernon's Texas Civil
Statutes, to exclude automatic dialing announcing devices from
being exempt from the application of the Telephone Solicitation
Act.

SECTION 2.  This Act applies only to violations that take place on
or after the effective date of this Act.

SECTION 3.  The effective date of this Act is September 1, 1995.

SECTION 4.  Emergency clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE


SUMMARY OF COMMITTEE ACTION

The Business and Industry Committee considered H.B. 1766 in a
public hearing on March 21, 1995.  The committee considered a
complete substitute for the bill.  The substituted was withdrawn
without objection.  The following person testified on H.B. 1766: 
Richard Tomlinson, representing the Office of the Attorney General. 
H.B. 1766 was referred to the following subcommittee: 
Representatives Crabb-chair, Corte, Janek.  The subcommittee
considered H.B. 1766 in a formal meeting on April 6, 1995.  The
committee considered a complete substitute for the bill.  The
substituted was adopted without objection.  H.B. 1766, as
substituted, was reported favorably to the full committee by a
record vote of 3 (three) ayes, 0 (zero) nays, 0 (zero) present-not-voting, 0 (zero) absent.  H.B. 1766, was considered on subcommittee
report by the full committee in a public hearing on April 11, 1995. 
The full committee adopted the committee substitute without
objection.  H.B. 1766, as substituted, was reported favorably with
the recommendation that it do pass and be printed and be sent to
the Committee on Local and Consent Calendars, by a record vote of
9 (nine) ayes, 0 (zero) nays, 0 (zero) present-not-voting, 0 (zero)
absent.