Amend HB 2530 by striking all below the enacting clause and
substituting the following:
SECTION 1. Title 4, Business & Commerce Code, is amended by
adding Chapter 43 to read as follows:
CHAPTER 43. SWEEPSTAKES
Sec. 43.001. DEFINITIONS. In this chapter:
(1) "Catalogues" means promotional booklets listing
merchandise for sale that are at least 24 pages long, have a
circulation of at least 250,000, and either:
(A) require customers to go to a physical
location to purchase the advertised items; or
(B) are published by a company that derives more
than 50 percent of its total gross revenue from sales occurring at
physical locations.
(2) "Conducting" a sweepstakes means distributing any
material that promotes a sweepstakes, describes the prize or
prizes, states one or more of the sweepstakes rules, includes any
current or future opportunity to enter the sweepstakes, or provides
any method for the recipient of the material to obtain additional
information about the sweepstakes.
(3) "Credit card" means:
(A) a card that, if covered by Texas law, would
be a lender credit card, as defined by Section 301.002, Finance
Code; or
(B) a card that, if covered by Texas law, would
be a lender credit card under Section 301.002, Finance Code, except
that the obligations under the card are payable in full each month,
not deferred, and no finance charge is assessed when the
obligations are paid.
(4) "Debit card" means a card offered by an
institution whose deposits are insured by the Federal Deposit
Insurance Corporation or by another agency, corporation, or
instrumentality chartered by the United States government.
(5) "Direct marketing" means using a facsimile or the
United States mail.
(6) "Imply" means all methods and means by which an
implication can be conveyed, including a statement, a question, a
request, conduct, a graphic, a symbol, lettering, coloring, font
size, font style, or formatting.
(7) "Magazines" and "newspapers" mean publications:
(A) that sell advertising space to companies
other than the publisher, its affiliates, and the vendors for any
of them; and
(B) for which more than 50 percent of the total
number of copies distributed of each issue go to customers who paid
for the copy.
(8) "Sweepstakes" means a contest that awards one or
more prizes based on chance or the random selection of entries.
Sec. 43.002. OFFENSES. A person conducting a sweepstakes
through direct marketing may not:
(1) require an individual to order or purchase a good
or service, or promise to purchase a good or service in the future,
to enter a sweepstakes;
(2) automatically enter an individual in a sweepstakes
because the individual ordered or purchased a good or service or
because the individual promised to order or purchase a good or
service;
(3) solicit business using an order form or purchasing
mechanism that has any role in the operation of a sweepstakes;
(4) use a mechanism for entering a sweepstakes that:
(A) has any connection to ordering or purchasing
a good or service;
(B) is not identical for all individuals
entering the sweepstakes; and
(C) does not have printed on the entry form in a
font size at least as large as the largest font size used on the
entry form the following language: "Buying Will Not Help You Win.
Your chances of winning without making a purchase are the same as
the chances of someone who purchases something. It is illegal to
give any advantage to buyers in a sweepstakes.";
(5) solicit an individual to enter a sweepstakes by
invitation or other opportunity and allow the individual to choose
or indicate the preferred characteristics of a prize to be awarded
in the sweepstakes, unless those choices:
(A) are made on the sweepstakes entry form; and
(B) do not appear on and are not connected in
any way to an order form or other purchasing mechanism;
(6) offer through direct marketing any nonsweepstakes
prize, gift, premium, giveaway, or skill contest during the 30-day
period immediately following the last date on which the person
conducted a sweepstakes through direct marketing;
(7) offer through direct marketing any opportunity to
enter a sweepstakes during the 30-day period immediately following
the last date on which the person conducted a sweepstakes through
direct marketing;
(8) ask an individual for any information or any
action by that individual that would be consistent with the
individual winning a sweepstakes prize, unless the individual has
won a sweepstakes prize;
(9) provide an individual who has not yet won the
sweepstakes with any document or other item that simulates any
event, circumstance, or condition connected with being the winner
of the sweepstakes;
(10) send material accompanying or relating to a
sweepstakes or an offer to enter a sweepstakes that states or
implies that an individual must comply with a restriction or
condition to enter the sweepstakes, unless all individuals entering
the sweepstakes are required to comply with the identical
restriction or condition;
(11) use a scratch-off device or any other game piece
that suggests an element of chance or luck to convey information
about a sweepstakes or an offer to enter a sweepstakes;
(12) send material accompanying or relating to a
sweepstakes or an offer to enter a sweepstakes that:
(A) states or implies that an individual's
chances of winning a prize in the sweepstakes are raised, lowered,
or different in any way because of a factor or circumstance that
has no relation to the manner in which a winner of the sweepstakes
is selected;
(B) states or implies that a winner of a
sweepstakes prize will be selected at a time or place or in a
manner that is different from the actual time or place at which or
manner in which a winner is selected;
(C) states or implies falsely that the
individual receiving the advertisement has received any special
treatment or personal attention from the offeror of the sweepstakes
or any officer, employee, or agent of the offeror of the
sweepstakes;
(D) states or implies that an individual who
orders or purchases a good or service will receive a benefit in the
sweepstakes or be treated differently in the sweepstakes compared
with an individual who did not order or purchase a good or service;
(E) states or implies that an individual who
does not order or purchase a good or service will suffer a
disadvantage in the sweepstakes or be treated differently in the
sweepstakes compared with an individual who ordered or purchased a
good or service; or
(F) states that the recipient of the material:
(i) is a winner if the recipient is not a
winner;
(ii) may be a winner;
(iii) will be a winner if certain
conditions are met or if certain events occur in the future;
(iv) may be or will be among the group from
which a winner will be selected; or
(v) has in any way a better chance than
another individual of being chosen as a winner;
(13) publish or cause to be published different
advertisements for the same sweepstakes that contain inconsistent
descriptions of the grand prize awarded through the sweepstakes;
(14) award multiple prizes in a sweepstakes unless all
prizes are awarded on the same date and through the same selection
process;
(15) publish or cause to be published official rules
of a sweepstakes that do not uniquely identify the prizes to be
awarded and the date they will be awarded; or
(16) provide for entry by mail in a sweepstakes and
use:
(A) more than one address to accept entries in
the sweepstakes; or
(B) the address for entry in the sweepstakes for
any purpose other than entry in the sweepstakes.
Sec. 43.003. APPLICATION OF CHAPTER; ACTS NOT PROHIBITED.
(a) This chapter does not apply to any sweepstakes that is
conducted through advertisements or inserts in magazines,
newspapers, or catalogues sent through the mail.
(b) This chapter does not apply to any charitable raffle
regulated by Chapter 2002, Occupations Code.
(c) This chapter does not apply to any sweepstakes regulated
by the Alcoholic Beverage Code.
(d) This chapter does not apply to any company that is an
air carrier subject to Title 49 of the United States Code.
(e) This chapter does not apply to a drawing for the
opportunity to participate in a hunting, fishing, or other
recreational event conducted by the Parks and Wildlife Department.
(f) If the only use of mail or facsimile is for consumers to
return their entry forms to the sponsor of the contest, then this
chapter does not apply to that sweepstakes.
(g) This chapter does not prohibit a sweepstakes sponsor
from making a statement in the official rules of the sweepstakes
describing the method to be used in choosing a winner, and this
chapter does not prohibit a sweepstakes sponsor from notifying the
winner after the winner has been selected.
(h) This chapter does not prohibit a sweepstakes sponsor,
after determining the winner, from obtaining an affidavit from the
person selected to verify that the person is eligible to win the
prize and has complied with the rules of the sweepstakes.
(i) This chapter does not apply to a sweepstakes conducted
by direct marketing if the most valuable prize to be awarded is
less than $20,000. The value of a prize is measured by the highest
number among its face value, its fair market value, and its
financial present value.
(j) Sections 43.002(3) and (4)(A) do not apply to a single
sheet of paper that contains both a contest entry form and an order
form if the order form is perforated or detachable and if the entry
form must be separated from the order form and returned to an
address different from the return address for the order form.
(k) Sections 43.002(2), (3), and (4) do not apply to a
contest that is offered to promote a credit card or a debit card if
the official rules of the contest provide that consumers are
entered in the contest based on the number of purchases made or the
amount of money spent. A person who did not qualify as an issuer as
of January 1, 2001, is not eligible for the exceptions under this
subsection.
(l) Sections 43.002(2), (3), and (4) do not apply to a
company that is offering a sweepstakes in which the consumer must
go to a physical location to obtain or use the goods or services
that are being sold by the company offering the sweepstakes.
(m) Sections 43.002(4), (5), (6), (7), (10), (11), and
(12)(F)(iii) do not apply to a sweepstakes conducted by direct
marketing if none of the materials accompanying the sweepstakes
information contain:
(1) an offer to sell any goods or services; or
(2) a method or mechanism to purchase, order, or
promise to purchase any goods or services.
Sec. 43.004. CIVIL PENALTY. (a) The attorney general may
initiate an action under this chapter by filing suit in a district
court in Travis County or in any county in which a violation
occurred.
(b) For each violation found, the court shall award the
attorney general a civil penalty of not less than $5,000 or more
than $50,000.
(c) If the material accompanying or relating to a
sweepstakes or an offer to enter a sweepstakes contains multiple
statements, implications, representations, or offers that are
prohibited by this chapter, each statement, implication,
representation, or offer is a separate violation and shall result
in a separate civil penalty. Each individual who receives the
material constitutes an additional and separate group of violations
of this chapter.
(d) Any person who provides names, addresses, or facsimile
numbers of residents of this state that are used in conducting a
sweepstakes that the person knows to be in violation of this
chapter is liable for the cumulative civil penalties that result
from the person's conduct. The liability of a person who provides
names, addresses, or facsimile numbers does not reduce the
liability of the person who conducted the sweepstakes.
(e) If the attorney general substantially prevails, the
court shall award the attorney general reasonable expenses incurred
in recovering a civil penalty under this section, including court
costs, reasonable attorney's fees, reasonable investigative costs,
witness fees, and deposition expenses.
(f) A civil penalty recovered under this section shall be
deposited in the state treasury.
(g) A court may also award injunctive relief or other
equitable or ancillary relief that is reasonably necessary to
prevent future violations of this chapter.
(h) This chapter does not create any private right of action
for any person.
SECTION 2. This act takes effect November 1, 2001.