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.