S.B. No. 1029 AN ACT 1-1 relating to persons subject to regulation as telephone solicitors. 1-2 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-3 SECTION 1. Subsection (a), Article 2, Chapter 18, Title 79, 1-4 Revised Statutes (Article 5069-18.02, Vernon's Texas Civil 1-5 Statutes), is amended to read as follows: 1-6 (a) This chapter does not apply to: 1-7 (1) a person offering or selling a security that has 1-8 been qualified for sale under Section 7, The Securities Act 1-9 (Article 581-7, Vernon's Texas Civil Statutes), and its subsequent 1-10 amendments, or that is subject to an exemption under Section 5 or 6 1-11 of that Act; 1-12 (2) a publicly traded corporation registered with the 1-13 Securities and Exchange Commission or the State Securities Board, 1-14 or a subsidiary or agent of the corporation; 1-15 (3) a person licensed under the Insurance Code, if the 1-16 solicited transaction is governed by the Insurance Code; 1-17 (4) a person soliciting the sale of a subscription to: 1-18 (A) a daily or weekly newspaper of general 1-19 circulation; 1-20 (B) a magazine or other periodical of general 1-21 circulation; or 1-22 (C) a cable television service; 1-23 (5) a supervised financial institution or parent, 2-1 subsidiary, or affiliate of a supervised financial institution; 2-2 (6) a person or affiliate of a person whose business 2-3 is regulated by the Public Utility Commission of Texas, except that 2-4 this chapter applies to a person or affiliate of a person who is 2-5 regulated by the Public Utility Commission of Texas only with 2-6 respect to one or more automated dial announcing devices; 2-7 (7) an educational institution or organization or a 2-8 nonprofit organization exempt from taxation under Section 501(c)(3) 2-9 of the Internal Revenue Code of 1986; 2-10 (8) a sale in which the purchaser is a business that 2-11 intends to: 2-12 (A) resell the item purchased; or 2-13 (B) use the item purchased in a recycling, 2-14 reuse, remanufacturing, or manufacturing process; 2-15 (9) a person soliciting the sale of food; 2-16 (10) a person who periodically issues and delivers 2-17 catalogs to potential purchasers if the catalog: 2-18 (A) includes a written description or 2-19 illustration and the sales price of each item offered for sale; 2-20 (B) includes at least 24 full pages of written 2-21 material or illustrations; 2-22 (C) is distributed in more than one state; and 2-23 (D) has an annual circulation of not less than 2-24 250,000 customers; 2-25 (11) the solicitation of contracts for the maintenance 3-1 or repair of items previously purchased from the person making the 3-2 solicitation or on whose behalf the solicitation is made; 3-3 (12) a person soliciting: 3-4 (A) without intent to complete or obtain 3-5 provisional acceptance of a sale during the telephone solicitation; 3-6 (B) who does not make the major sales 3-7 presentation during the telephone solicitation but arranges for the 3-8 major sales presentation to be made at a later face-to-face meeting 3-9 between the salesperson and the purchaser; and 3-10 (C) who does not cause an individual to go to 3-11 the prospective purchaser to collect payment for the purchase or to 3-12 deliver any item purchased directly following the telephone 3-13 solicitation; 3-14 (13) a person subject to the control or licensing 3-15 regulations of the Federal Communications Commission; 3-16 (14) a person selling: 3-17 (A) a contractual plan regulated by the Federal 3-18 Trade Commission trade regulation on use of negative option plans 3-19 by sellers in commerce under Title 16, Code of Federal Regulations, 3-20 Part 425; or 3-21 (B) merchandise under an arrangement in which 3-22 the seller periodically ships the merchandise to a consumer who has 3-23 consented in advance to receive the merchandise on a periodic 3-24 basis; 3-25 (15) a person: 4-1 (A) who provides telephone solicitation services 4-2 under contract to sellers; 4-3 (B) who has been operating continuously for at 4-4 least three years under the same business name; and 4-5 (C) for whom at least 75 percent of the person's 4-6 contracts are performed on behalf of other persons exempt under 4-7 this section; 4-8 (16) a person soliciting business from a former or 4-9 current customer if the person has operated under the exact same 4-10 business name for at least two years; 4-11 (17) a person engaging in a commercial telephone 4-12 solicitation that is an isolated transaction and not done in the 4-13 course of a pattern of repeated transactions of a like nature; 4-14 (18) a person who for at least two years has been 4-15 operating under the same name as that used in connection with its 4-16 telemarketing operations a retail establishment where consumer 4-17 goods are displayed and offered for sale on a continuing basis if a 4-18 majority of the person's business involves the buyers obtaining 4-19 services or products at the person's retail establishment; 4-20 (19) a person subject to the filing requirements of 4-21 Chapter 1054, Acts of the 70th Legislature, Regular Session, 1987 4-22 (Article 9023a, Vernon's Texas Civil Statutes), or any successor to 4-23 this statute; or 4-24 (20) a person soliciting a transaction regulated by 4-25 the Commodity Futures Trading Commission if the person is 5-1 registered or temporarily licensed for that activity with the 5-2 Commodity Futures Trading Commission under the Commodity Exchange 5-3 Act (7 U.S.C. Section 1 et seq.) and the registration or license 5-4 has not expired or been suspended or revoked. 5-5 SECTION 2. (a) The change in law made by this Act applies 5-6 only to an offense committed on or after the effective date of this 5-7 Act. For purposes of this section, an offense is committed before 5-8 the effective date of this Act if any element of the offense occurs 5-9 before that date. 5-10 (b) An offense committed before the effective date of this 5-11 Act is covered by the law in effect when the offense was committed, 5-12 and the former law is continued in effect for that purpose. 5-13 SECTION 3. This Act takes effect September 1, 1995. 5-14 SECTION 4. The importance of this legislation and the 5-15 crowded condition of the calendars in both houses create an 5-16 emergency and an imperative public necessity that the 5-17 constitutional rule requiring bills to be read on three several 5-18 days in each house be suspended, and this rule is hereby suspended.