By Elkins H.B. No. 1305
77R457 DWS-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to certain plans or operations involving gifts.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 17.461, Business & Commerce Code, is
1-5 amended by adding Subsection (e) to read as follows:
1-6 (e) A plan or operation is not a pyramid promotional scheme
1-7 if each participant in the plan or operation has signed a document
1-8 stating that all money the participant contributes into the plan or
1-9 operation is a gift and that the participant has not been promised
1-10 any compensation in return for the contribution.
1-11 SECTION 2. Section 41.004(b), Business & Commerce Code, is
1-12 amended to read as follows:
1-13 (b) In this chapter, "business opportunity" does not
1-14 include:
1-15 (1) the sale or lease of an established and ongoing
1-16 business or enterprise that has actively conducted business before
1-17 the sale or lease, whether composed of one or more than one
1-18 component business or enterprise, if the sale or lease represents
1-19 an isolated transaction or series of transactions involving a bona
1-20 fide change of ownership or control of the business or enterprise
1-21 or liquidation of the business or enterprise;
1-22 (2) a contract or agreement in which a retailer of
1-23 goods or services sells the inventory of one or more ongoing leased
1-24 departments to a purchaser who is granted the right to sell the
2-1 goods or services within or adjoining the retail business
2-2 establishment as a department or division of the retail business
2-3 establishment;
2-4 (3) a transaction regulated by the Motor Vehicle Board
2-5 of the Texas Department of Transportation, Texas Department of
2-6 Licensing and Regulation, Texas Department of Insurance, or Texas
2-7 Real Estate Commission if engaged in by a person licensed by one of
2-8 those agencies;
2-9 (4) a real estate syndication;
2-10 (5) a sale or lease to a business enterprise that also
2-11 sells or leases equipment, products, and supplies or performs
2-12 services:
2-13 (A) that are not supplied by the seller; and
2-14 (B) that the purchaser does not use with the
2-15 equipment, products, supplies, or services of the seller;
2-16 (6) the offer or sale of a franchise as described by
2-17 the Petroleum Marketing Practices Act (15 U.S.C. Section 2801 et
2-18 seq.) and its subsequent amendments;
2-19 (7) the offer or sale of a business opportunity if the
2-20 seller:
2-21 (A) has a net worth of at least $25 million
2-22 according to the seller's audited balance sheet as of a date not
2-23 earlier than the 13th month before the date of the transaction; or
2-24 (B) is at least 80-percent owned by another
2-25 person who:
2-26 (i) in writing unconditionally guarantees
2-27 performance by the person offering the plan; and
3-1 (ii) has a net worth of more than $25
3-2 million according to the person's most recent audited balance sheet
3-3 as of a date not earlier than the 13th month before the date of the
3-4 transaction; [or]
3-5 (8) an arrangement defined as a franchise by 16 C.F.R.
3-6 Section 436.2(a) and its subsequent amendments if:
3-7 (A) the franchisor complies in all material
3-8 respects in this state with 16 C.F.R. Part 436 and each order or
3-9 other action of the Federal Trade Commission; and
3-10 (B) before offering for sale or selling a
3-11 franchise in this state, a person files with the secretary of state
3-12 a notice containing:
3-13 (i) the name of the franchisor;
3-14 (ii) the name under which the franchisor
3-15 intends to do business; and
3-16 (iii) the franchisor's principal business
3-17 address; or
3-18 (9) a plan or operation described by Section
3-19 17.461(e).
3-20 SECTION 3. Subsection A, Section 4, The Securities Act
3-21 (Article 581-4, Vernon's Texas Civil Statutes), is amended to read
3-22 as follows:
3-23 A. The term "security" or "securities" shall include any
3-24 limited partner interest in a limited partnership, share, stock,
3-25 treasury stock, stock certificate under a voting trust agreement,
3-26 collateral trust certificate, equipment trust certificate,
3-27 preorganization certificate or receipt, subscription or
4-1 reorganization certificate, note, bond, debenture, mortgage
4-2 certificate or other evidence of indebtedness, any form of
4-3 commercial paper, certificate in or under a profit sharing or
4-4 participation agreement, certificate or any instrument representing
4-5 any interest in or under an oil, gas or mining lease, fee or title,
4-6 or any certificate or instrument representing or secured by an
4-7 interest in any or all of the capital, property, assets, profits or
4-8 earnings of any company, investment contract, or any other
4-9 instrument commonly known as a security, whether similar to those
4-10 herein referred to or not. Provided, however, that this definition
4-11 shall not apply to any insurance policy, endowment policy, annuity
4-12 contract, optional annuity contract, or any contract or agreement
4-13 in relation to and in consequence of any such policy or contract,
4-14 issued by an insurance company subject to the supervision or
4-15 control of the Texas Department of Insurance when the form of such
4-16 policy or contract has been duly filed with the Department as now
4-17 or hereafter required by law. The term does not include an
4-18 interest, or a document representing an interest, in a plan or
4-19 operation described by Section 17.461(e), Business & Commerce Code.
4-20 SECTION 4. This Act takes effect immediately.