1-1 By: Haywood S.B. No. 1029 1-2 (In the Senate - Filed March 8, 1995; March 9, 1995, read 1-3 first time and referred to Committee on Economic Development; 1-4 April 26, 1995, reported adversely, with favorable Committee 1-5 Substitute by the following vote: Yeas 9, Nays 0; April 26, 1995, 1-6 sent to printer.) 1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 1029 By: Haywood 1-8 A BILL TO BE ENTITLED 1-9 AN ACT 1-10 relating to persons subject to regulation as telephone solicitors. 1-11 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-12 SECTION 1. Subsection (a), Article 2, Chapter 18, Title 79, 1-13 Revised Statutes (Article 5069-18.02, Vernon's Texas Civil 1-14 Statutes), is amended to read as follows: 1-15 (a) This chapter does not apply to: 1-16 (1) a person offering or selling a security that has 1-17 been qualified for sale under Section 7, The Securities Act 1-18 (Article 581-7, Vernon's Texas Civil Statutes), and its subsequent 1-19 amendments, or that is subject to an exemption under Section 5 or 6 1-20 of that Act; 1-21 (2) a publicly traded corporation registered with the 1-22 Securities and Exchange Commission or the State Securities Board, 1-23 or a subsidiary or agent of the corporation; 1-24 (3) a person licensed under the Insurance Code, if the 1-25 solicited transaction is governed by the Insurance Code; 1-26 (4) a person soliciting the sale of a subscription to: 1-27 (A) a daily or weekly newspaper of general 1-28 circulation; 1-29 (B) a magazine or other periodical of general 1-30 circulation; or 1-31 (C) a cable television service; 1-32 (5) a supervised financial institution or parent, 1-33 subsidiary, or affiliate of a supervised financial institution; 1-34 (6) a person or affiliate of a person whose business 1-35 is regulated by the Public Utility Commission of Texas, except that 1-36 this chapter applies to a person or affiliate of a person who is 1-37 regulated by the Public Utility Commission of Texas only with 1-38 respect to one or more automated dial announcing devices; 1-39 (7) an educational institution or organization or a 1-40 nonprofit organization exempt from taxation under Section 501(c)(3) 1-41 of the Internal Revenue Code of 1986; 1-42 (8) a sale in which the purchaser is a business that 1-43 intends to: 1-44 (A) resell the item purchased; or 1-45 (B) use the item purchased in a recycling, 1-46 reuse, remanufacturing, or manufacturing process; 1-47 (9) a person soliciting the sale of food; 1-48 (10) a person who periodically issues and delivers 1-49 catalogs to potential purchasers if the catalog: 1-50 (A) includes a written description or 1-51 illustration and the sales price of each item offered for sale; 1-52 (B) includes at least 24 full pages of written 1-53 material or illustrations; 1-54 (C) is distributed in more than one state; and 1-55 (D) has an annual circulation of not less than 1-56 250,000 customers; 1-57 (11) the solicitation of contracts for the maintenance 1-58 or repair of items previously purchased from the person making the 1-59 solicitation or on whose behalf the solicitation is made; 1-60 (12) a person soliciting: 1-61 (A) without intent to complete or obtain 1-62 provisional acceptance of a sale during the telephone solicitation; 1-63 (B) who does not make the major sales 1-64 presentation during the telephone solicitation but arranges for the 1-65 major sales presentation to be made at a later face-to-face meeting 1-66 between the salesperson and the purchaser; and 1-67 (C) who does not cause an individual to go to 1-68 the prospective purchaser to collect payment for the purchase or to 2-1 deliver any item purchased directly following the telephone 2-2 solicitation; 2-3 (13) a person subject to the control or licensing 2-4 regulations of the Federal Communications Commission; 2-5 (14) a person selling: 2-6 (A) a contractual plan regulated by the Federal 2-7 Trade Commission trade regulation on use of negative option plans 2-8 by sellers in commerce under Title 16, Code of Federal Regulations, 2-9 Part 425; or 2-10 (B) merchandise under an arrangement in which 2-11 the seller periodically ships the merchandise to a consumer who has 2-12 consented in advance to receive the merchandise on a periodic 2-13 basis; 2-14 (15) a person: 2-15 (A) who provides telephone solicitation services 2-16 under contract to sellers; 2-17 (B) who has been operating continuously for at 2-18 least three years under the same business name; and 2-19 (C) for whom at least 75 percent of the person's 2-20 contracts are performed on behalf of other persons exempt under 2-21 this section; 2-22 (16) a person soliciting business from a former or 2-23 current customer if the person has operated under the exact same 2-24 business name for at least two years; 2-25 (17) a person engaging in a commercial telephone 2-26 solicitation that is an isolated transaction and not done in the 2-27 course of a pattern of repeated transactions of a like nature; 2-28 (18) a person who for at least two years has been 2-29 operating under the same name as that used in connection with its 2-30 telemarketing operations a retail establishment where consumer 2-31 goods are displayed and offered for sale on a continuing basis if a 2-32 majority of the person's business involves the buyers obtaining 2-33 services or products at the person's retail establishment; 2-34 (19) a person subject to the filing requirements of 2-35 Chapter 1054, Acts of the 70th Legislature, Regular Session, 1987 2-36 (Article 9023a, Vernon's Texas Civil Statutes), or any successor to 2-37 this statute; or 2-38 (20) a person soliciting a transaction regulated by 2-39 the Commodity Futures Trading Commission if the person is 2-40 registered or temporarily licensed for that activity with the 2-41 Commodity Futures Trading Commission under the Commodity Exchange 2-42 Act (7 U.S.C. Section 1 et seq.) and the registration or license 2-43 has not expired or been suspended or revoked. 2-44 SECTION 2. (a) The change in law made by this Act applies 2-45 only to an offense committed on or after the effective date of this 2-46 Act. For purposes of this section, an offense is committed before 2-47 the effective date of this Act if any element of the offense occurs 2-48 before that date. 2-49 (b) An offense committed before the effective date of this 2-50 Act is covered by the law in effect when the offense was committed, 2-51 and the former law is continued in effect for that purpose. 2-52 SECTION 3. This Act takes effect September 1, 1995. 2-53 SECTION 4. The importance of this legislation and the 2-54 crowded condition of the calendars in both houses create an 2-55 emergency and an imperative public necessity that the 2-56 constitutional rule requiring bills to be read on three several 2-57 days in each house be suspended, and this rule is hereby suspended. 2-58 * * * * *