By:  Carona, Shapleigh                                 S.B. No. 513
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to a restriction on the use of goods by a purchaser of the
 1-2     goods.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 15.05, Business & Commerce Code, is
 1-5     amended to read as follows:
 1-6           Sec. 15.05.  Unlawful Practices.  (a)  Every contract,
 1-7     combination, or conspiracy in restraint of trade or commerce is
 1-8     unlawful.
 1-9           (b)  It is unlawful for any person to monopolize, attempt to
1-10     monopolize, or conspire to monopolize any part of trade or
1-11     commerce.
1-12           (c)  It is unlawful for any person to sell, lease, or
1-13     contract for the sale or lease of any goods, whether patented or
1-14     unpatented, for use, consumption, or resale or to fix a price for
1-15     such use, consumption, or resale or to discount from or rebate upon
1-16     such price, on the condition, agreement, or understanding that the
1-17     purchaser or lessee shall not use or deal in the goods of a
1-18     competitor or competitors of the seller or lessor, where the effect
1-19     of the condition, agreement, or understanding may be to lessen
1-20     competition substantially in any line of trade or commerce.
1-21           (d)  It is unlawful for any person to sell or contract for
1-22     the sale of any goods, whether patented or unpatented, for use,
1-23     consumption, or resale or to fix a price for such use, consumption,
1-24     or resale or to discount from or rebate upon such price, on the
 2-1     condition, agreement, or understanding that the purchaser must,
 2-2     after use, discard the goods or return the goods to the seller,
 2-3     where such condition, agreement, or understanding is unreasonable
 2-4     and where the effect of the condition, agreement, or understanding
 2-5     may be to lessen competition substantially in any line of trade or
 2-6     commerce.  An action under this subsection may be initiated only by
 2-7     the state.
 2-8           (e)  It is unlawful for any person to acquire, directly or
 2-9     indirectly, the whole or any part of the stock or other share
2-10     capital or the assets of any other person or persons, where the
2-11     effect of such acquisition may be to lessen competition
2-12     substantially in any line of trade or commerce.  This subsection
2-13     shall not be construed:
2-14                 (1)  to prohibit the purchase of stock or other share
2-15     capital of another person where the purchase is made solely for
2-16     investment and does not confer control of that person in a manner
2-17     that could substantially lessen competition;
2-18                 (2)  to prevent a corporation from forming subsidiary
2-19     or parent corporations for the purpose of conducting its
2-20     immediately lawful business, or any natural and legitimate branch
2-21     extensions of such business, or from owning and holding all or a
2-22     part of the stock or other share capital of a subsidiary, or
2-23     transferring all or part of its stock or other share capital to be
2-24     owned and held by a parent, where the effect of such a transaction
2-25     is not to lessen competition substantially;
2-26                 (3)  to affect or impair any right previously legally
 3-1     acquired; or
 3-2                 (4)  to apply to transactions duly consummated pursuant
 3-3     to authority given by any statute of this state or of the United
 3-4     States or pursuant to authority or approval given by any regulatory
 3-5     agency of this state or of the United States under any
 3-6     constitutional or statutory provisions vesting the agency with such
 3-7     power.
 3-8           (f) [(e)]  It is unlawful for an employer and a labor union
 3-9     or other organization to agree or combine so that:
3-10                 (1)  a person is denied the right to work for an
3-11     employer because of membership or nonmembership in the labor union
3-12     or other organization; or
3-13                 (2)  membership or nonmembership in the labor union or
3-14     other organization is made a condition of obtaining or keeping a
3-15     job with the employer.
3-16           (g) [(f)]  It is not unlawful for:
3-17                 (1)  employees to agree to quit their employment or to
3-18     refuse to deal with tangible personal property of their immediate
3-19     employer, unless their refusal to deal with tangible personal
3-20     property of their immediate employer is intended to induce or has
3-21     the effect of inducing that employer to refrain from buying or
3-22     otherwise acquiring tangible personal property from a person; or
3-23                 (2)  persons to agree to refer for employment a
3-24     migratory worker who works on seasonal crops if the referral is
3-25     made irrespective of whether or not the worker belongs to a labor
3-26     union or organization.
 4-1           (h) [(g)]  Nothing in this section shall be construed to
 4-2     prohibit activities that are exempt from the operation of the
 4-3     federal antitrust laws, 15 U.S.C. Section 1 et seq., except that an
 4-4     exemption otherwise available under the McCarran-Ferguson Act (15
 4-5     U.S.C. Sections 1011-1015) does not serve to exempt activities
 4-6     under this Act.  Nothing in this section shall apply to actions
 4-7     required or affirmatively approved by any statute of this state or
 4-8     of the United States or by a regulatory agency of this state or of
 4-9     the United States duly acting under any constitutional or statutory
4-10     authority vesting the agency with such power.
4-11           (i) [(h)]  In any lawsuit alleging a contract, combination,
4-12     or conspiracy to fix prices, evidence of uniform prices alone shall
4-13     not be sufficient to establish a violation of Subsection (a) of
4-14     Section 15.05.
4-15           (j) [(i)]  In determining whether a restraint related to the
4-16     sale or delivery of professional services is reasonable, except in
4-17     cases involving price fixing, or other per se violations, the court
4-18     may consider, but shall not reach its decision solely on the basis
4-19     of, criteria which include:
4-20                 (1)  whether the activities involved maintain or
4-21     improve the quality of such services to benefit the public
4-22     interest; and
4-23                 (2)  whether the activities involved limit or reduce
4-24     the cost of such services to benefit the public interest.
4-25           (k)  For purposes of Subsection (j) of this section
4-26     [subsection], the term "professional services" means services
 5-1     performed by any licensed accountant, physician, or professional
 5-2     engineer in connection with his or her professional employment or
 5-3     practice.
 5-4           SECTION 2.  Section 15.20, Business & Commerce Code, is
 5-5     amended to read as follows:
 5-6           Sec. 15.20.  CIVIL SUITS BY THE STATE.  (a)  Suit to Collect
 5-7     Civil Fine.  The attorney general may file suit in district court
 5-8     in Travis County or in any county in the State of Texas in which
 5-9     any of the named defendants resides, does business, or maintains
5-10     its principal office on behalf of the State of Texas to collect a
5-11     civil fine from any person, other than a municipal corporation,
5-12     whom the attorney general believes has violated any of the
5-13     prohibitions in Subsection (a), (b), or (c) of Section 15.05 of
5-14     this Act.  Every person adjudged to have violated any of these
5-15     prohibitions shall pay a fine to the state not to exceed $1 million
5-16     if a corporation, or, if any other person, $100,000.
5-17           (b)  Suit for Injunctive Relief.  The attorney general may
5-18     file suit against any person, other than a municipal corporation,
5-19     in district court in Travis County, or in any county in the State
5-20     of Texas in which any of the named defendants resides, does
5-21     business, or maintains its principal office on behalf of the State
5-22     of Texas to enjoin temporarily or permanently any activity or
5-23     contemplated activity that violates or threatens to violate any of
5-24     the prohibitions in Section 15.05 of this Act.  In any such suit,
5-25     the court shall apply the same principles as those generally
5-26     applied by courts of equity in suits for injunctive relief against
 6-1     threatened conduct that would cause injury to business or property.
 6-2     In any such suit in which the state substantially prevails on the
 6-3     merits, the state shall be entitled to recover the cost of suit.
 6-4     Upon finding a violation of the prohibition against acquiring the
 6-5     stock, share capital, or assets of a person in Subsection (e) [(d)]
 6-6     of Section 15.05 of this Act, the court shall, upon further finding
 6-7     that no other remedy will eliminate the lessening of competition,
 6-8     order the divestiture or other disposition of the stock, share
 6-9     capital, or assets and shall prescribe a reasonable time, manner,
6-10     and degree of the divestiture or other disposition.
6-11           (c)  Suit to Collect Actual Damages.  In order to recover
6-12     actual damages under Subsection (d) of Section 15.05 of this Act,
6-13     the attorney general may file suit, in district court in Travis
6-14     County or in any county in the State of Texas in which any of the
6-15     named defendants resides, does business, or maintains its principal
6-16     office, on behalf of the State of Texas to recover actual damages
6-17     sustained, interest on actual damages for the period beginning on
6-18     the date of service of the pleading by the State of Texas setting
6-19     forth a claim under the antitrust laws and ending on the date of
6-20     judgment, and the cost of suit, including reasonable attorney's
6-21     fees.  The rate of interest under this subsection shall be
6-22     determined in accordance with Texas law regarding postjudgment
6-23     interest rates and the amount of interest shall be adjusted by the
6-24     court if it finds that the award of all or part of such interest is
6-25     unjust under the circumstances.  If the trier of fact finds that
6-26     the unlawful conduct was wilful or flagrant, it shall increase the
 7-1     recovery to threefold the damages sustained and the cost of suit,
 7-2     including reasonable attorney's fees; provided, however, that
 7-3     interest on actual damages as specified in this subsection may not
 7-4     be recovered when recovered damages are increased threefold.
 7-5           (d)  No suit filed under Subsection (a), [or] (b), or (c) of
 7-6     this section may be transferred to another county except on order
 7-7     of the court.
 7-8           (e) [(d)]  Nothing in this section shall be construed to
 7-9     limit the constitutional or common law authority of the attorney
7-10     general to bring actions under state and federal law.
7-11           SECTION 3.  The change in law made by this Act applies only
7-12     to a sale or contract for the sale of goods entered into on or
7-13     after the effective date of this Act.
7-14           SECTION 4.  This Act takes effect September 1, 1999.
7-15           SECTION 5.  The importance of this legislation and the
7-16     crowded condition of the calendars in both houses create an
7-17     emergency and an imperative public necessity that the
7-18     constitutional rule requiring bills to be read on three several
7-19     days in each house be suspended, and this rule is hereby suspended.