76R13230 DWS-F
By Danburg, et al. H.B. No. 537
Substitute the following for H.B. No. 537:
By Woolley C.S.H.B. No. 537
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to telephone solicitation; providing penalties.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapters 37 and 38, Business & Commerce Code, are
1-5 amended to read as follows:
1-6 CHAPTER 37. TELEPHONE SOLICITATION
1-7 Sec. 37.01. DEFINITIONS. In this chapter:
1-8 (1) "Automated dialing announcing device" means
1-9 automated equipment used for telephone solicitation or collection
1-10 that is capable:
1-11 (A) of storing telephone numbers to be called or
1-12 has a random or sequential number generator capable of producing
1-13 numbers to be called; and
1-14 (B) alone or in conjunction with other
1-15 equipment, of conveying a prerecorded or synthesized voice message
1-16 to the number called without the use of a live operator.
1-17 (2) ["Consumer" means a person who is solicited to
1-18 purchase, lease, or receive a consumer good or service.]
1-19 [(3)] "Consumer good or service" means:
1-20 (A) real property or tangible or intangible
1-21 personal property that is normally used for personal, family, or
1-22 household purposes, including personal property intended to be
1-23 attached to or installed in any real property;
1-24 (B) a cemetery lot;
2-1 (C) a time-share estate; [and]
2-2 (D) a service related to real or personal
2-3 property; and
2-4 (E) a coupon book to be used with a business or
2-5 company.
2-6 (3) "Telephone solicitation" [(4) "Consumer telephone
2-7 call"] means an unsolicited call, including a call by an automated
2-8 dialing announcing device or recorded message device, made to a
2-9 residential telephone number by a telephone solicitor to:
2-10 (A) solicit a sale of a consumer good or
2-11 service;
2-12 (B) solicit an extension of credit for a
2-13 consumer good or service; [or]
2-14 (C) obtain information that will or may be used
2-15 to directly solicit a sale of a consumer good or service or to
2-16 extend credit for the sale; or
2-17 (D) solicit a contribution of money or other
2-18 property.
2-19 (4) [(5)] "Telephone solicitor" means a person who
2-20 makes or causes to be made a telephone solicitation [consumer
2-21 telephone call, including a call made by an automated dialing
2-22 device].
2-23 Sec. 37.02. SOLICITOR IDENTITY; PERMISSIBLE HOURS;
2-24 DISCONNECT. [(a)] A telephone solicitor may not make a telephone
2-25 solicitation [consumer telephone call to a consumer] unless:
2-26 (1) the telephone solicitor identifies himself or
2-27 herself by name and identifies the entity [business] on whose
3-1 behalf the telephone solicitor is calling and the purpose of the
3-2 call immediately after making contact with the person [consumer] to
3-3 whom the call is made;
3-4 (2) the telephone solicitor makes the call after 12
3-5 noon or before 9 p.m. on a Sunday or after 9 a.m. and before 9 p.m.
3-6 on a weekday or a Saturday; and
3-7 (3) for those calls in which an automated dialing
3-8 [dial] announcing device is used, where technically possible, the
3-9 device must disconnect the called person's [consumer's] telephone
3-10 line within 30 seconds after termination of the call by either the
3-11 telephone solicitor or the called person [consumer].
3-12 [(b) A consumer telephone call is not subject to the
3-13 provisions of Subsection (a) of this section if the call is made:]
3-14 [(1) in response to the express request of the
3-15 consumer;]
3-16 [(2) primarily in connection with an existing debt or
3-17 contract for which payment or performance has not been completed at
3-18 the time of the call; or]
3-19 [(3) to a consumer with whom the telephone solicitor
3-20 has a prior or existing business relationship.]
3-21 Sec. 37.03. CHARGES TO CONSUMER CREDIT ACCOUNT. A person
3-22 who sells consumer goods and services through the use of a
3-23 telephone solicitor may not make or submit a charge to a consumer's
3-24 credit card account unless:
3-25 (1) the seller provides that the consumer may receive
3-26 a full refund for the return of undamaged and unused goods or a
3-27 cancellation of services by providing notice to the seller not
4-1 later than the seventh day after the date the consumer receives the
4-2 goods or services and in which the seller will process:
4-3 (A) a refund not later than the 30th day after
4-4 the date the seller receives the returned merchandise from the
4-5 consumer;
4-6 (B) a full refund not later than the 30th day
4-7 after the purchaser of services cancels an order for the purchase
4-8 of services not performed or a pro rata refund for any services not
4-9 yet performed for the consumer;
4-10 (2) the seller provides to the consumer a written
4-11 contract fully describing the goods or services being offered, the
4-12 total price to be charged, the name, address, and business phone of
4-13 the seller, and any terms or conditions affecting the sale and
4-14 receives from the consumer a signed copy of such contract; or
4-15 (3) the seller is an organization that qualifies for
4-16 and has obtained an exemption from federal income tax from the
4-17 Internal Revenue Service under Section 501(c)(3), Internal Revenue
4-18 Code of 1986 (26 U.S.C. Section 501(c)(3)).
4-19 Sec. 37.031. NO-CALL LIST. (a) In this section,
4-20 "commission" means the Public Utility Commission of Texas.
4-21 (b) The commission shall maintain a telephone solicitation
4-22 no-call list of the telephone numbers of residential customers in
4-23 this state who have requested to be on the list. The commission
4-24 shall update the list quarterly. An entry on the list expires on
4-25 the fifth anniversary of the date the entry is first included on
4-26 the list. An entry may be renewed for successive five-year periods.
4-27 The commission may not charge a person for a request to place a
5-1 number on the list or to renew an entry on the list. The
5-2 commission shall develop and disseminate a form to be used by
5-3 residential customers to request to be on the list and shall
5-4 provide a toll-free telephone number that customers may call to
5-5 obtain a copy of the form. The form must include a notice in at
5-6 least 12-point bold-faced type stating:
5-7 "You may continue to receive telephone solicitation calls
5-8 from religious and charitable organizations, veterans
5-9 organizations, public or private universities and their alumni
5-10 organizations (if you are an alumnus), and organizations calling on
5-11 behalf of political candidates and officeholders or in support or
5-12 opposition to ballot issues. You may continue to receive calls
5-13 from companies with which you already do business. This does not
5-14 apply to telephone solicitation calls to your business telephone."
5-15 (c) A telephone solicitor may not make a telephone
5-16 solicitation to a telephone number on the no-call list under
5-17 Subsection (b) after the 30th day after the day the list containing
5-18 the number is first available to the telephone solicitor.
5-19 (d) A violation of Subsection (c) is subject to enforcement
5-20 and penalties under Subchapter B, Chapter 15, Utilities Code, as if
5-21 the violation were a violation of Title 2, Utilities Code, by a
5-22 person regulated under that title. A violation of Subsection (c)
5-23 is also subject to other enforcement and penalties provided by this
5-24 chapter. An administrative penalty collected for a violation of
5-25 Subsection (c) may be used only for administering this section.
5-26 (e) The commission shall receive and investigate complaints
5-27 concerning violations of Subsection (c). On determination that a
6-1 violation has occurred, the commission shall take appropriate
6-2 action for enforcement and penalties.
6-3 (f) The commission may adopt rules to administer this
6-4 section. The commission shall adopt rules:
6-5 (1) requiring each local exchange telephone company to
6-6 inform its customers of the requirements of this section by annual
6-7 inserts in billing statements mailed to customers or conspicuous
6-8 publication of the notice in the consumer information pages of
6-9 local telephone directories; and
6-10 (2) providing that a telephone solicitation made to a
6-11 telephone number on the no-call list is not a violation of this
6-12 section if the call is an isolated occurrence made by a telephone
6-13 solicitor who has in place adequate procedures to comply with this
6-14 section.
6-15 (g) In addition to requiring the notice required by
6-16 Subsection (f)(1), the commission shall conduct an educational
6-17 program designed to inform the public of their rights under this
6-18 section. The educational program shall be directed to all
6-19 residential telephone subscribers and shall be conducted at least
6-20 annually if funds are available.
6-21 (h) The commission shall provide for dissemination of the
6-22 no-call list in formats, including electronic formats, commonly
6-23 used by telephone solicitors. A telephone solicitor registered
6-24 under Chapter 38 shall be provided a copy of the list and each
6-25 update of the list without charge. The commission shall set and
6-26 collect a fee for a copy of the list or an update of the list
6-27 provided to a person not registered under Chapter 38 in an amount,
7-1 not more than $200, necessary to cover the cost of administering
7-2 this section, considering amounts available for that purpose under
7-3 Subsection (d).
7-4 Sec. 37.032. REQUEST OF CREDIT CARD NUMBER OR FINANCIAL
7-5 INSTITUTION ACCOUNT NUMBER AFTER OFFER OF FREE CONSUMER GOOD OR
7-6 SERVICE. (a) A telephone solicitor commits an offense if the
7-7 telephone solicitor, in connection with a telephone solicitation
7-8 made in violation of another provision of this chapter or Chapter
7-9 38, knowingly:
7-10 (1) represents or implies that a called person will
7-11 receive without charge a consumer good or service, regardless of
7-12 whether designated as a gift, premium, bonus, prize, or otherwise;
7-13 and
7-14 (2) requests a credit card account number, debit card
7-15 account number, or financial institution account number from the
7-16 called person for the purpose of charging to the credit card
7-17 account or debiting from the financial institution account an
7-18 amount as a condition precedent to the called person's receipt of a
7-19 consumer good or service.
7-20 (b) An offense under this section is a Class A misdemeanor.
7-21 Sec. 37.04. ENFORCEMENT. (a) The attorney general's office
7-22 shall investigate a complaint relating to a violation of this
7-23 chapter and may petition a district court for a temporary
7-24 restraining order to restrain a continuing violation of this
7-25 chapter and for the assessment of a civil penalty as provided by
7-26 Section 37.05 of this code.
7-27 (b) A district court, on petition of the attorney general's
8-1 office and on a finding by the court that a person is violating
8-2 this chapter may, by injunction, prohibit a person from continuing
8-3 a violation of this chapter or grant any other injunctive relief
8-4 warranted by the facts.
8-5 (c) Venue for a suit brought under this chapter is in:
8-6 (1) the county in which the telephone solicitation
8-7 [consumer telephone call] originated;
8-8 (2) the county in which the telephone solicitation
8-9 [consumer telephone call] was received; or
8-10 (3) Travis County.
8-11 Sec. 37.05. CIVIL PENALTY. (a) A person who knowingly
8-12 violates this chapter is liable for a civil penalty of not more
8-13 than $10,000 for each violation.
8-14 (b) In addition to bringing an action for injunctive relief,
8-15 the attorney general may also seek restitution, attorney fees,
8-16 investigative costs, and civil penalties as provided herein.
8-17 (c) A called person [consumer] injured by a violation of
8-18 this chapter may bring any action for recovery of damages. The
8-19 damages awarded may not be less than the amount paid by the called
8-20 person to the person making the sale or receiving the contribution
8-21 as a result of the telephone solicitation [buyer to the telephone
8-22 solicitor], plus reasonable attorney fees and court costs.
8-23 Sec. 37.06. DECEPTIVE TRADE PRACTICES. A violation of this
8-24 chapter is a false, misleading, or deceptive act or practice under
8-25 Subchapter E, Chapter 17, and any public or private right or remedy
8-26 prescribed by that subchapter may be used to enforce this chapter.
8-27 Sec. 37.07. EXEMPTION. This chapter does not apply to:
9-1 (1) an institution of higher education or a private or
9-2 independent institution of higher education, as those terms are
9-3 defined by Section 61.003, Education Code;
9-4 (2) an entity exempt from taxation under Section
9-5 501(c)(3) or (19), Internal Revenue Code of 1986, as amended;
9-6 (3) an organization calling on behalf of a political
9-7 candidate or officeholder or in support of or opposition to a
9-8 ballot issue;
9-9 (4) a person offering or selling a security that has
9-10 been qualified for sale under Section 7, The Securities Act
9-11 (Article 581-7, Vernon's Texas Civil Statutes), or that is subject
9-12 to an exemption under Section 5 or 6 of that Act;
9-13 (5) a person licensed under the Insurance Code if the
9-14 solicited transaction is governed by the Insurance Code; or
9-15 (6) a telephone solicitation made:
9-16 (A) in response to the express request of the
9-17 called person;
9-18 (B) primarily in connection with an existing
9-19 debt or contract for which payment or performance has not been
9-20 completed at the time of the call;
9-21 (C) to a person with whom the telephone
9-22 solicitor has an established business relationship, as defined by
9-23 47 C.F.R. Section 64.1200, as amended, except that this exemption
9-24 does not apply to a telephone solicitation by a provider of local
9-25 exchange or interexchange telecommunication service; or
9-26 (D) by a person who:
9-27 (i) does not intend to complete or obtain
10-1 provisional acceptance of a sale or obtain provisional commitment
10-2 to make a contribution during the telephone solicitation;
10-3 (ii) does not make a major sales
10-4 presentation or presentation soliciting a contribution during the
10-5 telephone solicitation; and
10-6 (iii) either:
10-7 (a) arranges for a major
10-8 sales presentation to be made at a later face-to-face meeting
10-9 between a salesperson and the called person; or
10-10 (b) invites the called
10-11 person to attend a later meeting at which a contribution may be
10-12 solicited.
10-13 CHAPTER 38. REGISTRATION [REGULATION] OF TELEPHONE SOLICITORS
10-14 [SOLICITATION]
10-15 SUBCHAPTER A. GENERAL PROVISIONS
10-16 Sec. 38.001. DEFINITIONS. In this chapter:
10-17 (1) "Consumer good or service" has the meaning
10-18 assigned by Section 37.01. ["Item" means property or service and
10-19 includes a coupon book that is to be used with a business or
10-20 company.]
10-21 (2) "Owner" means a person who has control of or is
10-22 entitled to, by ownership or other claim, at least 10 percent of
10-23 the net income of a telephone solicitor [seller].
10-24 (3) "Principal" means an owner, an executive officer
10-25 of a corporation, a general partner of a partnership, a sole
10-26 proprietor, a trustee of a trust, or another individual with
10-27 similar supervisory functions with respect to any person.
11-1 (4) "Purchaser" means a person who is:
11-2 (A) solicited to become or becomes obligated for
11-3 the purchase or rental of a consumer good or service [an item]; or
11-4 (B) offered the opportunity to claim or receive
11-5 a consumer good or service [an item.]
11-6 [(4) "Salesperson" means a person employed or
11-7 authorized by a seller to make a telephone solicitation.]
11-8 [(5) "Seller" means a person who makes a telephone
11-9 solicitation on the person's own behalf].
11-10 (5) [(6)] "Supervised financial institution" means a
11-11 bank, trust company, savings and loan association, credit union,
11-12 industrial loan company, personal property broker, consumer finance
11-13 lender, commercial finance lender, insurer, or other financial
11-14 institution that is subject to supervision by an official or agency
11-15 of this state or the United States.
11-16 (6) [(7)] "Telephone solicitation" means an
11-17 unsolicited call, including a call by an automated dialing
11-18 announcing device or recorded message device, made to a residential
11-19 telephone number by a telephone solicitor to:
11-20 (A) solicit a sale of a consumer good or
11-21 service;
11-22 (B) solicit an extension of credit for a
11-23 consumer good or service;
11-24 (C) obtain information that will or may be used
11-25 to directly solicit a sale of a consumer good or service or to
11-26 extend credit for the sale; or
11-27 (D) solicit a contribution of money or other
12-1 property.
12-2 (7) "Telephone solicitor" means a person who makes or
12-3 causes to be made a telephone solicitation [a telephone call
12-4 initiated by a seller or salesperson to or from a person for the
12-5 purpose of inducing the person to purchase, rent, claim, or receive
12-6 an item. The term includes a call made by a purchaser in response
12-7 to a solicitation sent by mail or made by any other means].
12-8 Sec. 38.002. MAKING TELEPHONE SOLICITATION. In this
12-9 chapter, a person makes a telephone solicitation if the person
12-10 effects or attempts to effect a telephone solicitation[, including
12-11 a solicitation initiated by an automatic dialing machine or a
12-12 recorded message device].
12-13 Sec. 38.003. CONSTRUCTION AND APPLICATION. This chapter
12-14 shall be liberally construed and applied to promote its underlying
12-15 purpose to protect persons against false, misleading, or deceptive
12-16 practices in the telephone solicitation business.
12-17 SUBCHAPTER B. EXEMPTIONS
12-18 Sec. 38.051. CLAIM OF EXEMPTION. (a) In a civil proceeding
12-19 alleging a violation of this chapter, the burden of proving an
12-20 exemption is on the person claiming the exemption.
12-21 (b) In a criminal proceeding alleging a violation of this
12-22 chapter, the burden of producing evidence to support a defense of
12-23 an exemption is on the person claiming the exemption.
12-24 Sec. 38.052. EXEMPTIONS APPLY TO TELEPHONE SOLICITOR
12-25 [SELLER]. The exemptions provided by this chapter apply only to a
12-26 telephone solicitor [seller] engaging in a telephone solicitation
12-27 on the telephone solicitor's [seller's] own behalf.
13-1 Sec. 38.053. PERSONS [OR ITEMS] REGULATED BY OTHER LAW.
13-2 This chapter does not apply to:
13-3 (1) a person who is required to register and post a
13-4 bond, and who registers and posts that bond, under Article 9023b,
13-5 Revised Statutes;
13-6 (2) a person who is required to register and post a
13-7 bond, and who registers and posts that bond, under Chapter 920,
13-8 Acts of the 73rd Legislature, Regular Session, 1993 (Article 9023c,
13-9 Vernon's Texas Civil Statutes);
13-10 (3) a person who is required to post a bond, and who
13-11 posts that bond, under Chapter 1202, Acts of the 75th Legislature,
13-12 Regular Session, 1997 (Article 9023e, Vernon's Texas Civil
13-13 Statutes);
13-14 (4) a person offering or selling a security that has
13-15 been qualified for sale under Section 7, The Securities Act
13-16 (Article 581-7, Vernon's Texas Civil Statutes), or that is subject
13-17 to an exemption under Section 5 or 6 of that Act; or
13-18 [(2) a publicly traded corporation registered with the
13-19 Securities and Exchange Commission or the State Securities Board,
13-20 or a subsidiary or agent of the corporation;]
13-21 (5) [(3)] a person licensed under the Insurance Code
13-22 if the solicited transaction is governed by the Insurance Code[;]
13-23 [(4) a supervised financial institution or parent,
13-24 subsidiary, or affiliate of a supervised financial institution;]
13-25 [(5) a person or affiliate of a person whose business
13-26 is regulated by the Public Utility Commission of Texas, except that
13-27 this chapter applies to a person or affiliate of a person who is
14-1 regulated by the Public Utility Commission of Texas only with
14-2 respect to one or more automated dial announcing devices;]
14-3 [(6) a person subject to the control or licensing
14-4 regulations of the Federal Communications Commission;]
14-5 [(7) a person selling a contractual plan regulated by
14-6 the Federal Trade Commission trade regulation on use of negative
14-7 option plans by sellers in commerce under 16 C.F.R. Part 425;]
14-8 [(8) a person subject to the filing requirements of
14-9 Chapter 920, Acts of the 73rd Legislature, Regular Session, 1993
14-10 (Article 9023c, Vernon's Texas Civil Statutes); or]
14-11 [(9) a person soliciting a transaction regulated by
14-12 the Commodity Futures Trading Commission if the person is
14-13 registered or temporarily licensed for that activity with the
14-14 Commodity Futures Trading Commission under the Commodity Exchange
14-15 Act (7 U.S.C. Section 1 et seq.) and the registration or license
14-16 has not expired or been suspended or revoked.]
14-17 [Sec. 38.054. MEDIA AND SUBSCRIPTION SERVICES AND CERTAIN
14-18 CATALOGS. This chapter does not apply to:]
14-19 [(1) a person soliciting the sale of a subscription
14-20 to:]
14-21 [(A) a daily or weekly newspaper of general
14-22 circulation;]
14-23 [(B) a magazine or other periodical of general
14-24 circulation; or]
14-25 [(C) a cable television service;]
14-26 [(2) a person selling merchandise under an arrangement
14-27 in which the seller periodically ships the merchandise to a
15-1 consumer who has consented in advance to receive the merchandise
15-2 periodically; or]
15-3 [(3) a person who periodically issues and delivers
15-4 catalogs to potential purchasers if the catalog:]
15-5 [(A) includes a written description or
15-6 illustration and the sales price of each item offered for sale;]
15-7 [(B) includes at least 24 full pages of written
15-8 material or illustrations;]
15-9 [(C) is distributed in more than one state; and]
15-10 [(D) has an annual circulation of at least
15-11 250,000 customers].
15-12 Sec. 38.054 [38.055]. CERTAIN NONPROFIT, [AND] EDUCATIONAL,
15-13 AND POLITICAL ORGANIZATIONS. (a) This chapter does not apply to
15-14 an entity [educational institution or organization or a nonprofit
15-15 organization] exempt from taxation under Section 501(c)(3),
15-16 Internal Revenue Code of 1986, as amended, if the entity is:
15-17 (1) a nonprofit organization; or
15-18 (2) an entity organized and operated exclusively for
15-19 educational purposes.
15-20 (b) This chapter does not apply to an organization calling
15-21 on behalf of a political candidate or officeholder or in support of
15-22 or opposition to a ballot issue.
15-23 [Sec. 38.056. CERTAIN COMMERCIAL SALES. This chapter does
15-24 not apply to a sale in which the purchaser is a business that
15-25 intends to:]
15-26 [(1) resell the item purchased; or]
15-27 [(2) use the item purchased in a recycling, reuse,
16-1 remanufacturing, or manufacturing process.]
16-2 [Sec. 38.057. FOOD. This chapter does not apply to a person
16-3 soliciting the sale of food.]
16-4 Sec. 38.055 [38.058]. SOLICITATION OF CURRENT OR FORMER
16-5 CUSTOMERS OR CONTRIBUTORS. This chapter does not apply to a call
16-6 made to a person with whom the telephone solicitor has an
16-7 established business relationship, as defined by 47 C.F.R. Section
16-8 64.1200, as amended, except that this exemption does not apply to a
16-9 telephone solicitation by a provider of local exchange or
16-10 interexchange telecommunication service[:]
16-11 [(1) the solicitation of contracts for the maintenance
16-12 or repair of items previously purchased from the person making the
16-13 solicitation or on whose behalf the solicitation is made; or]
16-14 [(2) a person soliciting business from a former or
16-15 current customer if the person has operated under the exact same
16-16 business name for at least two years].
16-17 Sec. 38.056 [38.059]. ARRANGEMENT FOR LATER PRESENTATION
16-18 [PROMOTIONS AT ESTABLISHED RETAIL SALES LOCATIONS OR AT CONSUMER'S
16-19 RESIDENCE]. This chapter does not apply to[:]
16-20 [(1)] a person soliciting[:]
16-21 [(A)] without intent to complete or obtain
16-22 provisional acceptance of a sale during the telephone
16-23 solicitation[;]
16-24 [(B)] who does not make the major sales
16-25 presentation during the telephone solicitation but arranges for the
16-26 major sales presentation to be made at a later face-to-face meeting
16-27 between the salesperson and the purchaser[; and]
17-1 [(C) who does not cause an individual to go to
17-2 the prospective purchaser to collect payment for the purchase or to
17-3 deliver an item purchased directly following the telephone
17-4 solicitation; or]
17-5 [(2) a person who for at least two years has been
17-6 operating under the same name as that used in connection with its
17-7 telemarketing operations a retail establishment where consumer
17-8 goods are displayed and offered for sale continuously if a majority
17-9 of the person's business involves the buyers obtaining services or
17-10 products at the person's retail establishment.]
17-11 [Sec. 38.060. CERTAIN SOLICITATION SERVICES HAVING
17-12 PREDOMINATELY EXEMPT CUSTOMERS. (a) This chapter does not apply
17-13 to a person:]
17-14 [(1) who provides telephone solicitation services
17-15 under contract to sellers;]
17-16 [(2) who has been operating continuously for at least
17-17 three years under the same business name; and]
17-18 [(3) for whom at least 75 percent of the person's
17-19 contracts are performed on behalf of other persons exempt under
17-20 this section.]
17-21 [(b) Notwithstanding Section 38.052, the exemption provided
17-22 by this section applies to a person providing telephone
17-23 solicitation services to sellers].
17-24 Sec. 38.057 [38.061]. CERTAIN ISOLATED SOLICITATIONS. This
17-25 chapter does not apply to a person engaging in a [commercial]
17-26 telephone solicitation that is an isolated transaction and not done
17-27 in the course of a pattern of repeated transactions of a similar
18-1 nature.
18-2 SUBCHAPTER C. REGISTRATION
18-3 Sec. 38.101. REGISTRATION REQUIRED. (a) A telephone
18-4 solicitor [seller] may not engage in telephone solicitation from a
18-5 location in this state or to a person [purchaser] located in this
18-6 state without a registration certificate for the business location
18-7 from which the solicitation is made.
18-8 (b) A separate registration certificate is required for each
18-9 business location from which a solicitation is made.
18-10 Sec. 38.102. CONTENTS OF REGISTRATION STATEMENT;
18-11 VERIFICATION; PUBLIC INFORMATION. (a) A telephone solicitor
18-12 [seller] must file a registration statement with the secretary of
18-13 state to obtain a registration certificate.
18-14 (b) A registration statement must be in the form prescribed
18-15 by the secretary of state and contain the information required by
18-16 Subchapter D.
18-17 (c) A registration statement must be verified by each
18-18 principal of the telephone solicitor [seller] and must specify the
18-19 date and location of verification.
18-20 (d) The information included in or attached to a
18-21 registration statement is public information.
18-22 [(e) In this section, "principal" means an owner, an
18-23 executive officer of a corporation, a general partner of a
18-24 partnership, a sole proprietor, a trustee of a trust, or another
18-25 individual with similar supervisory functions with respect to any
18-26 person.]
18-27 Sec. 38.103. FILING FEE. (a) The filing fee for a
19-1 registration statement is $75 [$200].
19-2 (b) The fee collected under this section may be used only to
19-3 defray the costs of the secretary of state and the Public Utility
19-4 Commission of Texas in administering this chapter and Section
19-5 37.031.
19-6 Sec. 38.104. ISSUANCE OF CERTIFICATE OF REGISTRATION.
19-7 (a) The secretary of state shall issue a registration certificate
19-8 and mail the certificate to the telephone solicitor [seller] on
19-9 receipt of:
19-10 (1) a completed registration statement;
19-11 (2) the registration statement filing fee;
19-12 (3) the security required by Section 38.107; and
19-13 (4) the consent regarding service of process required
19-14 by Section 38.108.
19-15 (b) If the telephone solicitor [seller] uses one
19-16 registration statement to register more than one business location,
19-17 the secretary of state shall issue a registration certificate for
19-18 each business location and mail all the certificates to the
19-19 principal business location shown on the registration statement.
19-20 Sec. 38.105. EFFECTIVE DATE; RENEWAL. (a) A registration
19-21 statement becomes effective on the date that the secretary of state
19-22 issues the registration certificate.
19-23 (b) A registration statement is effective for one year and
19-24 may be renewed annually by:
19-25 (1) filing a renewal registration statement with the
19-26 information required by Subchapter D; and
19-27 (2) paying the registration statement filing fee.
20-1 Sec. 38.106. CHANGE IN INFORMATION. If [UPDATE ADDENDUM
20-2 REQUIRED. (a) A seller shall file with the secretary of state an
20-3 addendum for each quarter after the effective date of the
20-4 registration providing the required registration information for
20-5 each salesperson who is soliciting or has solicited on behalf of
20-6 the seller during the preceding quarter.]
20-7 [(b) A seller may comply with Subsection (a) by providing a
20-8 copy of the "Employer's Quarterly Report" for employee wages the
20-9 seller files with the Texas Workforce Commission.]
20-10 [(c) In addition to the quarterly addendum, if] a material
20-11 change in information submitted in a registration statement,
20-12 including a change of a telephone solicitation agent of the
20-13 telephone solicitor, [other than the information described by
20-14 Subsection (a),] occurs before the date for renewal, a telephone
20-15 solicitor [seller] shall submit that information to the secretary
20-16 of state by filing an addendum.
20-17 Sec. 38.107. SECURITY. (a) Except as provided by
20-18 Subsections (c) and (d), a [A] registration statement filed under
20-19 this chapter must be accompanied by:
20-20 (1) a bond executed by a corporate surety approved by
20-21 the secretary of state and licensed to do business in this state;
20-22 (2) an irrevocable letter of credit issued for the
20-23 benefit of the registrant by a supervised financial institution
20-24 whose deposits are insured by an agency of the federal government;
20-25 or
20-26 (3) a certificate of deposit in a supervised financial
20-27 institution whose deposits are insured by an agency of the federal
21-1 government, the principal of which may be withdrawn only on the
21-2 order of the secretary of state.
21-3 (b) The bond, letter of credit, or certificate of deposit
21-4 must be:
21-5 (1) maintained in the amount of $25,000 [$10,000]; and
21-6 (2) conditioned on the telephone solicitor's
21-7 [seller's] compliance with this chapter.
21-8 (c) A telephone solicitor that ceases all activities subject
21-9 to this chapter may apply to the secretary of state for release of
21-10 the security required by this section. The application must be
21-11 verified by each principal of the telephone solicitor. The
21-12 secretary of state shall promptly notify the attorney general of
21-13 receipt of an application under this subsection. Unless the
21-14 attorney general files notice of objection with the secretary of
21-15 state, the secretary of state shall release the security not
21-16 earlier than the later of:
21-17 (1) the 180th day after the date the telephone
21-18 solicitor conducted its final activity subject to this chapter; or
21-19 (2) the 60th day after the date the attorney general
21-20 is notified under this subsection.
21-21 (d) The secretary of state may accept the self-insurance or
21-22 bond of the registrant itself, without separate surety, if the
21-23 registrant demonstrates to the satisfaction of the secretary of
21-24 state the existence of a suitable agent to receive service of
21-25 process and a history of financial solvency and continuous
21-26 operation sufficient to justify the self-insurance or bond of the
21-27 registrant.
22-1 Sec. 38.108. SECRETARY OF STATE AS TELEPHONE SOLICITOR'S
22-2 [SELLER'S] AGENT TO RECEIVE SERVICE. (a) A telephone solicitor
22-3 [seller] shall file with the secretary of state, in the form
22-4 prescribed by the secretary of state, an irrevocable consent
22-5 appointing the secretary of state to act as the telephone
22-6 solicitor's [seller's] agent to receive service of process in a
22-7 noncriminal suit, action, or proceeding against the telephone
22-8 solicitor [seller] or the telephone solicitor's [seller's]
22-9 successor, executor, or administrator that may arise under this
22-10 chapter if:
22-11 (1) an agent has not been designated under Section
22-12 38.151(6) [38.151(15)];
22-13 (2) the agent has resigned or died and a replacement
22-14 has not been designated under Section 38.106; or
22-15 (3) the agent cannot with reasonable diligence be
22-16 found at the designated address.
22-17 (b) Service on the secretary of state under this section has
22-18 the same effect as service on the telephone solicitor [seller].
22-19 Service on the secretary of state may be made by:
22-20 (1) leaving a copy of the process in the office of the
22-21 secretary of state;
22-22 (2) promptly sending by first-class mail a notice of
22-23 the service and a copy of the process to the telephone solicitor's
22-24 [seller's] principal business location at the last address on file
22-25 with the secretary of state; and
22-26 (3) filing the plaintiff's affidavit of compliance
22-27 with this section in the case on or before the return date of the
23-1 process, if any, or within an additional period that the court
23-2 allows.
23-3 SUBCHAPTER D. DISCLOSURES REQUIRED IN REGISTRATION STATEMENT
23-4 Sec. 38.151. DISCLOSURE OF CERTAIN NAMES, ADDRESSES, AND
23-5 ORGANIZATIONAL INFORMATION. A registration statement must contain:
23-6 (1) the telephone solicitor's [seller's] name and the
23-7 name under which the telephone solicitor [seller] is doing or
23-8 intends to do business, if different from the telephone
23-9 solicitor's [seller's] name;
23-10 (2) the name of each parent and affiliated
23-11 organization of the telephone solicitor [seller] that:
23-12 (A) will engage in business transactions with
23-13 purchasers relating to sales solicited by the telephone solicitor
23-14 or will receive contributions solicited by the telephone solicitor
23-15 [seller]; or
23-16 (B) accepts responsibility for statements made
23-17 by, or acts of, the telephone solicitor [seller] relating to sales
23-18 or contributions solicited by the telephone solicitor [seller];
23-19 (3) the telephone solicitor's [seller's] business form
23-20 and place of organization;
23-21 (4) [if the seller is a corporation, a copy of its
23-22 articles of incorporation and bylaws;]
23-23 [(5) if the seller is a partnership, a copy of the
23-24 partnership agreement;]
23-25 [(6) if the seller is operating under an assumed
23-26 business name, the location where the assumed name has been
23-27 registered;]
24-1 [(7) for any parent or affiliated organization
24-2 disclosed under Subdivision (2), the applicable information that is
24-3 required of a seller under Subdivisions (3)-(6);]
24-4 [(8)] the complete street address of the physical
24-5 location of the principal place of business of the telephone
24-6 solicitor and the telephone solicitor's telephone number at that
24-7 location [each location of the seller, designating the principal
24-8 location from which the seller will be conducting business];
24-9 (5) [(9) if the principal business location of the
24-10 seller is not in this state, a designation of its main location in
24-11 the state;]
24-12 [(10) a listing of each telephone number to be used by
24-13 the seller and the address where each telephone using the number is
24-14 located;]
24-15 [(11)] the name of an officer, a general or limited
24-16 partner, or the sole proprietor, as applicable, of the telephone
24-17 solicitor [and title of each of the seller's officers, directors,
24-18 trustees, general and limited partners, sole proprietor, and
24-19 owners, as applicable, and the name of each of those persons who
24-20 has management responsibilities in connection with the seller's
24-21 business activities;]
24-22 [(12) the complete address of the principal residence,
24-23 the date of birth, and the number and state of issuance of the
24-24 driver's license of each person whose name is disclosed under
24-25 Subdivision (11);]
24-26 [(13) the name and principal residence address of each
24-27 person the seller leaves in charge at each location from which the
25-1 seller does business in this state and the business location at
25-2 which each of these persons is or will be in charge;]
25-3 [(14) the name and principal residence address of each
25-4 salesperson who solicits on behalf of the seller or a copy of the
25-5 "Employer's Quarterly Report" for employee wages the seller files
25-6 with the Texas Workforce Commission and the name the salesperson
25-7 uses while soliciting]; and
25-8 (6) [(15)] the name and address of the telephone
25-9 solicitor's [seller's] agent in this state, other than the
25-10 secretary of state, authorized to receive service of process[; and]
25-11 [(16) the name and address of each financial
25-12 institution with which banking or similar monetary transactions are
25-13 made by the seller and the identification number of each of the
25-14 seller's accounts in each institution].
25-15 [Sec. 38.152. DISCLOSURE OF CERTAIN CONVICTIONS, JUDGMENTS,
25-16 ORDERS, AND BANKRUPTCIES. (a) With respect to the seller and each
25-17 person identified under Section 38.151(11) or (13), a registration
25-18 statement must state the identity of each person:]
25-19 [(1) who has been convicted of or pleaded nolo
25-20 contendere to:]
25-21 [(A) a felony or misdemeanor involving an
25-22 alleged violation of this chapter; or]
25-23 [(B) fraud, theft, embezzlement, fraudulent
25-24 conversion, or misappropriation of property;]
25-25 [(2) against whom a final judgment or order has been
25-26 entered in a civil or administrative action, including a stipulated
25-27 judgment or order, in which the complaint or petition alleged:]
26-1 [(A) acts constituting a violation of this
26-2 chapter, fraud, theft, embezzlement, fraudulent conversion, or
26-3 misappropriation of property;]
26-4 [(B) the use of untrue or misleading
26-5 representations in an attempt to sell or dispose of property; or]
26-6 [(C) the use of unfair, unlawful, or deceptive
26-7 business practices;]
26-8 [(3) who is subject to an injunction or restrictive
26-9 court order relating to business activity as the result of an
26-10 action brought by a federal, state, or local public agency,
26-11 including an action affecting a vocational license; or]
26-12 [(4) who has, during the previous seven tax years:]
26-13 [(A) filed in bankruptcy;]
26-14 [(B) been adjudged a bankrupt;]
26-15 [(C) been reorganized due to insolvency; or]
26-16 [(D) been a principal, director, officer,
26-17 trustee, general or limited partner of, or had management
26-18 responsibilities for, a corporation, partnership, joint venture, or
26-19 other business entity that has filed in bankruptcy, been adjudged a
26-20 bankrupt, or been reorganized due to insolvency while the person
26-21 held that position or within one year after the date on which the
26-22 person last held that position.]
26-23 [(b) Under Subsections (a)(1), (2), and (3), the statement
26-24 must identify the:]
26-25 [(1) court or administrative agency rendering the
26-26 conviction, judgment, or order;]
26-27 [(2) docket number of the matter;]
27-1 [(3) date of conviction, judgment, or order; and]
27-2 [(4) name of the governmental agency, if any, that
27-3 brought the action resulting in the conviction, judgment, or order.]
27-4 [(c) Under Subsection (a)(4), the statement must include
27-5 the:]
27-6 [(1) name and location of the person filing in
27-7 bankruptcy, adjudged a bankrupt, or reorganized due to insolvency;]
27-8 [(2) date of the filing, judgment, or reorganization
27-9 order;]
27-10 [(3) court having jurisdiction; and]
27-11 [(4) docket number of the matter.]
27-12 [Sec. 38.153. DISCLOSURE OF CERTAIN SALES INFORMATION. The
27-13 registration statement must be accompanied by:]
27-14 [(1) a description of the items the seller is offering
27-15 for sale;]
27-16 [(2) a copy of all sales information and literature,
27-17 including scripts, outlines, instructions, and information
27-18 regarding the conduct of telephone solicitations, sample
27-19 introductions, sample closings, product information, and contest or
27-20 premium-award information, provided by the seller to salespersons
27-21 or about which the seller informs salespersons;]
27-22 [(3) a copy of all written material the seller sends
27-23 to any purchaser;]
27-24 [(4) if the seller represents or implies, or directs
27-25 salespersons to represent or imply, to purchasers that the
27-26 purchaser will receive a specific item, including a certificate
27-27 that the purchaser must redeem to obtain the item described in the
28-1 certificate, or one or more items from among designated items,
28-2 whether the items are designated as gifts, premiums, bonuses,
28-3 prizes, or otherwise:]
28-4 [(A) a list of the items described;]
28-5 [(B) the value of each item and the basis for
28-6 the valuation;]
28-7 [(C) the price paid by the seller to its
28-8 supplier for each item and the name, address, and telephone number
28-9 of each item's supplier;]
28-10 [(D) if the purchaser is to receive fewer than
28-11 all of the items described by the seller:]
28-12 [(i) the manner in which the seller
28-13 decides which item a particular purchaser is to receive;]
28-14 [(ii) for each item, the odds of a single
28-15 purchaser's receiving the item; and]
28-16 [(iii) the name and address of each
28-17 recipient who has received, during the preceding 12 months or, if
28-18 the seller has not been in business that long, during the period
28-19 the seller has been in business, the item having the greatest value
28-20 and the item with the smallest odds of being received; and]
28-21 [(E) all rules, regulations, and terms a
28-22 purchaser must meet to receive the item;]
28-23 [(5) if the seller is offering an item that the seller
28-24 does not manufacture or supply:]
28-25 [(A) the name, address, and telephone number of
28-26 each of the seller's suppliers and a description of each item
28-27 provided by the supplier;]
29-1 [(B) if the possession of the item is to be
29-2 retained by the seller or will not be transferred to the purchaser
29-3 until the purchaser has paid in full:]
29-4 [(i) the address of each location where
29-5 the item will be kept;]
29-6 [(ii) if not kept on premises owned by the
29-7 seller or at an address registered under Section 38.151(8) or (9),
29-8 the name of the owner of the business at which the item will be
29-9 kept; and]
29-10 [(iii) a copy of any contract or other
29-11 document that evidences the seller's right to store the item at the
29-12 address designated under Subparagraph (ii);]
29-13 [(C) if the seller is not selling the item from
29-14 its own inventory but purchases the item to fill an order already
29-15 taken from a purchaser, copies of all contracts or other documents
29-16 evidencing the seller's ability to call on suppliers to fill the
29-17 seller's orders;]
29-18 [(D) if the seller represents to purchasers that
29-19 the seller has insurance or a surety bond relating to a purchaser's
29-20 purchase of an item, a copy of each insurance policy and bond; and]
29-21 [(E) if the seller makes a representation as to
29-22 the post-purchase earning or profit potential of an item, data to
29-23 substantiate the claims made and, if the representation relates to
29-24 previous sales made by the seller or a related entity,
29-25 substantiating data based on the experiences of at least 50 percent
29-26 of the persons who purchased that particular type of item from the
29-27 seller or related entity during the preceding six months or, if the
30-1 seller or related entity has not been in business that long, during
30-2 the period the seller or related entity has been in business,
30-3 including:]
30-4 [(i) the period the seller or related
30-5 entity has been selling the particular type of item being offered;]
30-6 [(ii) the number of purchasers of the item
30-7 from the seller or related entity known to the seller or related
30-8 entity to have made at least the same earnings or profit as those
30-9 represented; and]
30-10 [(iii) the percentage that the number
30-11 disclosed under Subparagraph (ii) represents of the total number of
30-12 purchasers from the seller or related entity of the particular type
30-13 of item offered; and]
30-14 [(6) if the seller is offering to sell an interest in
30-15 an oil, gas, or mineral field, well, or exploration site:]
30-16 [(A) the seller's ownership interest, if any, in
30-17 each field, well, or site being offered for sale;]
30-18 [(B) the total number of interests to be sold in
30-19 each field, well, or site being offered for sale; and]
30-20 [(C) if, in selling an interest in any
30-21 particular field, well, or site, reference is made to an
30-22 investigation of the field, well, or site by the seller or anyone
30-23 else:]
30-24 [(i) the name, business address, telephone
30-25 number, and professional credentials of the person who made the
30-26 investigation; and]
30-27 [(ii) a copy of the report and other
31-1 documents relating to the investigation prepared by the person.]
31-2 SUBCHAPTER E. ADDITIONAL INFORMATION FROM
31-3 TELEPHONE SOLICITOR [SELLER]
31-4 Sec. 38.201. INFORMATION POSTED OR AVAILABLE AT TELEPHONE
31-5 SOLICITOR'S [SELLER'S BUSINESS] LOCATION. (a) A telephone
31-6 solicitor [seller] shall post the registration certificate in a
31-7 conspicuous place at the location for which it is issued.
31-8 (b) A telephone solicitor [seller] shall make available at
31-9 each of the telephone solicitor's [seller's] business locations
31-10 from which telephone solicitations are made a copy of the entire
31-11 registration statement and addenda, if any, for inspection by a
31-12 purchaser or representative of a governmental agency.
31-13 (c) A telephone solicitor [seller] shall post in close
31-14 proximity to the registration certificate the name of each
31-15 individual in charge of the location.
31-16 Sec. 38.202. DISCLOSURES TO SOLICITED PERSONS [PROSPECTIVE
31-17 PURCHASERS]. A telephone solicitor [seller] shall, when the
31-18 solicitation is made and before consummation of any sales
31-19 transaction or receipt of any contribution, provide to each
31-20 purchaser or contributor:
31-21 (1) the complete street address or telephone number of
31-22 the location from which the telephone solicitation is being made
31-23 [salesperson is calling the purchaser] and, if different, the
31-24 complete street address of the telephone solicitor's [seller's]
31-25 principal location;
31-26 (2) if the telephone solicitor [seller] represents or
31-27 implies that a purchaser or contributor will receive without charge
32-1 a specified consumer good or service [item] or one consumer good or
32-2 service [item] from among designated consumer goods or services
32-3 [items], whether the consumer goods or services [items] are
32-4 designated as gifts, premiums, bonuses, prizes, or otherwise:
32-5 (A) the manner in which the telephone solicitor
32-6 decides which consumer good or service a particular purchaser or
32-7 contributor is to receive;
32-8 (B) for each consumer good or service, the odds
32-9 of a single purchaser or contributor receiving the consumer good or
32-10 service; and
32-11 (C) all rules and terms a purchaser or
32-12 contributor must meet to receive the consumer good or service
32-13 [information required to be filed by Sections 38.153(4)(D)(i),
32-14 (D)(ii), and (E), as appropriate; and]
32-15 [(B) the total number of individuals who have
32-16 actually received from the seller during the preceding 12 months
32-17 or, if the seller has not been in the business that long, during
32-18 the period the seller has been in business the item having the
32-19 greatest value and the item with the smallest odds of being
32-20 received];
32-21 (3) if the telephone solicitor [seller] is offering to
32-22 sell an interest in an oil, gas, or mineral field, well, or
32-23 exploration site:
32-24 (A) the telephone solicitor's ownership
32-25 interest, if any, in each field, well, or site being offered for
32-26 sale;
32-27 (B) the total number of interests to be sold in
33-1 each field, well, or site being offered for sale; and
33-2 (C) if, in selling an interest in any particular
33-3 field, well, or site, reference is made to an investigation of the
33-4 field, well, or site by the telephone solicitor or anyone else:
33-5 (i) the name, business address, telephone
33-6 number, and professional credentials of the person who made the
33-7 investigation; and
33-8 (ii) a copy of the report and other
33-9 documents relating to the investigation prepared by the person[,
33-10 the information required by Section 38.153(6)]; and
33-11 (4) if the telephone solicitor [seller] represents
33-12 that a consumer good or service [an item] is being offered at a
33-13 price below that usually charged for the consumer good or service
33-14 [item], the name of the manufacturer of the consumer good or
33-15 provider of the service [item].
33-16 Sec. 38.203. REFERENCE TO COMPLIANCE WITH STATUTE
33-17 PROHIBITED. A telephone solicitor [seller] may not make or
33-18 authorize the making of a reference to its compliance with this
33-19 chapter to a solicited person [purchaser].
33-20 SUBCHAPTER F. OFFENSES
33-21 Sec. 38.251. VIOLATION OF CHAPTER. (a) A person commits an
33-22 offense if the person knowingly violates Section 38.101, 38.106,
33-23 38.201, 38.202, or 38.203. Each violation constitutes a separate
33-24 offense.
33-25 (b) An offense under this section is a Class A misdemeanor.
33-26 Sec. 38.252. TELEPHONE SOLICITATION [SALESPERSON] FOR
33-27 UNREGISTERED TELEPHONE SOLICITOR [SELLER]. (a) A person commits
34-1 an offense if the person knowingly makes a telephone solicitation
34-2 [acts as a salesperson] on behalf of a telephone solicitor [seller]
34-3 who violates the registration requirements of this chapter. Each
34-4 violation constitutes a separate offense.
34-5 (b) An offense under this section is a Class A misdemeanor.
34-6 [Sec. 38.253. REQUEST OF CREDIT CARD ACCOUNT NUMBER OR
34-7 CHECKING ACCOUNT NUMBER AFTER OFFER OF FREE ITEM. (a) A seller
34-8 commits an offense if the seller knowingly:]
34-9 [(1) represents or implies that a purchaser will
34-10 receive without charge an item or service, regardless of whether
34-11 designated as a gift, premium, bonus, prize, or otherwise; and]
34-12 [(2) requests a credit card account number or checking
34-13 account number from the purchaser for the purpose of charging to
34-14 the credit card account or debiting from the checking account an
34-15 amount as a condition precedent to the purchaser's receipt of an
34-16 item.]
34-17 [(b) An offense under this section is a Class A
34-18 misdemeanor.]
34-19 SUBCHAPTER G. ENFORCEMENT
34-20 Sec. 38.301. INJUNCTION. (a) The attorney general may
34-21 bring suit to enjoin a person from violating this chapter.
34-22 (b) The attorney general shall notify the defendant of the
34-23 alleged prohibited conduct not later than the seventh day before
34-24 the date the suit is filed except that if the attorney general
34-25 intends to request that the court issue a temporary restraining
34-26 order notice is not required.
34-27 (c) The attorney general is entitled to recover all
35-1 reasonable costs of prosecuting the case, including court costs and
35-2 costs of investigation, depositions, witness fees, and attorney's
35-3 fees.
35-4 Sec. 38.302. CIVIL PENALTIES. (a) A person who violates
35-5 this chapter is subject to a civil penalty of not more than $5,000
35-6 for each violation.
35-7 (b) A person who violates an injunction issued under Section
35-8 38.301 is liable to this state for a civil penalty of not more than
35-9 $25,000 for each violation [and not more than $50,000 for all
35-10 violations of the injunction].
35-11 (c) The attorney general may bring suit to recover a civil
35-12 penalty under Subsection (b) in the court that issued the original
35-13 injunction.
35-14 (d) The party bringing the suit also is entitled to recover
35-15 all reasonable costs of prosecuting the case, including court costs
35-16 and costs of investigation, depositions, witness fees, and
35-17 attorney's fees.
35-18 Sec. 38.303. DECEPTIVE TRADE PRACTICES. A violation of this
35-19 chapter is a false, misleading, or deceptive act or practice under
35-20 Subchapter E, Chapter 17, and any public or private right or remedy
35-21 prescribed by that subchapter may be used to enforce this chapter.
35-22 Sec. 38.304. ACTION TO RECOVER AGAINST SECURITY. (a) A
35-23 person who is injured by the bankruptcy of a telephone solicitor
35-24 [seller] or the telephone solicitor's [seller's] breach of an
35-25 agreement entered into during a telephone solicitation may bring an
35-26 action to recover against the bond, letter of credit, or
35-27 certificate of deposit required under Section 38.107.
36-1 (b) The liability of the surety on a bond provided under
36-2 Section 38.107 does not exceed the amount of the bond, regardless
36-3 of the number of claims filed or the aggregate amount claimed. If
36-4 the amount claimed exceeds the amount of the bond, the surety shall
36-5 deposit the amount of the bond with the secretary of state for
36-6 distribution to claimants entitled to recovery, and the surety is
36-7 then relieved of all liability under the bond.
36-8 (c) The attorney general may bring an action in the name of
36-9 the state to recover against the bond, letter of credit, or
36-10 certificate of deposit required under Section 38.107.
36-11 Sec. 38.305. WAIVER PROHIBITED. An attempted waiver of a
36-12 provision of this chapter is void.
36-13 SECTION 2. Subchapter G, Chapter 55, Utilities Code, is
36-14 repealed.
36-15 SECTION 3. The change in law made by this Act applies only
36-16 to a telephone solicitation made on or after the effective date of
36-17 this Act. A telephone solicitation made before the effective date
36-18 of this Act is governed by the law in effect when the telephone
36-19 solicitation was made, and the former law is continued in effect
36-20 for that purpose.
36-21 SECTION 4. This Act takes effect September 1, 1999, except
36-22 that the requirements of Section 37.031, Business & Commerce Code,
36-23 as added by this Act, apply only on and after January 1, 2000.
36-24 SECTION 5. The importance of this legislation and the
36-25 crowded condition of the calendars in both houses create an
36-26 emergency and an imperative public necessity that the
36-27 constitutional rule requiring bills to be read on three several
37-1 days in each house be suspended, and this rule is hereby suspended.