By Burnam                                             H.B. No. 1673
         77R1943 DLF-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the salvage of certain distressed merchandise.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1. Chapter 432, Health and Safety Code, is amended by
 1-5     adding Sections 432.0035 and 432.0115 to read as follows:
 1-6           Sec. 432.0035.  DISTRESSED MERCHANDISE DEFINED. (a)  A food,
 1-7     drug, or cosmetic is distressed merchandise for purposes of this
 1-8     chapter only if the food, drug, or cosmetic:
 1-9                 (1)  has lost its label or is otherwise unidentified;
1-10                 (2)  has been subjected to prolonged or improper
1-11     storage;
1-12                 (3)  has been subjected for any reason to abnormal
1-13     environmental conditions, including temperature extremes, humidity,
1-14     smoke, water, fumes, pressure, or radiation; or
1-15                 (4)  may have been rendered unsafe or unsuitable for
1-16     human consumption or use for any reason other than those specified
1-17     by this subsection.
1-18           (b)  A device is distressed merchandise for purposes of this
1-19     chapter only if the device:
1-20                 (1)  subject to Subsection (c), is misbranded or
1-21     mislabeled  for purposes of:
1-22                       (A)  the Federal Food, Drug, and Cosmetic Act (21
1-23     U.S.C. Section 301 et seq.), as amended, and federal regulations
1-24     adopted under that Act; or
 2-1                       (B)  the fair packaging and labeling program
 2-2     established under 15 U.S.C. Section 1451 et seq., as amended, and
 2-3     federal regulations adopted under that law; or
 2-4                 (2)  has been subjected to conditions that render the
 2-5     device unsuitable for use according to the original manufacturer's
 2-6     published recommendations or specifications.
 2-7           (c)  A device is not distressed merchandise under Subsection
 2-8     (b)(1) unless the device is offered for sale or distribution to a
 2-9     person who does not hold a license under this chapter.
2-10           Sec. 432.0115.  TREATMENT OF DEVICE AS DISTRESSED
2-11     MERCHANDISE.  Before the department may treat a device in the
2-12     possession of a person licensed under this chapter as distressed
2-13     merchandise under this chapter, the department must provide to the
2-14     person a statement of proof that establishes that the device is
2-15     distressed merchandise.
2-16           SECTION 2. Section 432.003(6), Health and Safety Code, is
2-17     repealed.
2-18           SECTION 3. This Act takes effect September 1, 2001, and
2-19     applies only to the operations of a salvage broker, salvage
2-20     establishment, salvage operator, or salvage warehouse on or after
2-21     that date. The operations of a salvage broker, salvage
2-22     establishment, salvage operator, or salvage warehouse before
2-23     September 1, 2001, are governed by the law as it existed before the
2-24     effective date of this Act, and that law is continued in effect for
2-25     that purpose.