By Junell                                             H.B. No. 2530
         77R8072 JMG-D                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain prohibitions applicable to a person offering a
 1-3     sweepstakes; providing a civil penalty.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1. Title 4, Business & Commerce Code, is amended by
 1-6     adding Chapter 43 to read as follows:
 1-7                           CHAPTER 43. SWEEPSTAKES
 1-8           Sec. 43.001.  DEFINITION.  In this chapter, "sweepstakes"
 1-9     means a contest that awards one or more prizes based on the random
1-10     selection of entries.
1-11           Sec. 43.002.  OFFENSES.  A person offering a sweepstakes may
1-12     not:
1-13                 (1)  require an individual to order or buy a good or
1-14     service, or promise to buy a good or service in the future, to
1-15     enter a sweepstakes;
1-16                 (2)  solicit business using an order form or purchasing
1-17     mechanism that has any connection to a sweepstakes;
1-18                 (3)  use a mechanism for entering a sweepstakes that:
1-19                       (A)  has any connection to ordering or purchasing
1-20     a good or service; or
1-21                       (B)  is not the same for all individuals entering
1-22     the sweepstakes;
1-23                 (4)  solicit an individual to enter a sweepstakes by
1-24     invitation or other opportunity and allow the individual to choose
 2-1     or indicate the preferred characteristics of a prize to be awarded
 2-2     in the sweepstakes, unless those choices:
 2-3                       (A)  are made on the sweepstakes entering
 2-4     mechanism; and
 2-5                       (B)  do not appear on and are not connected in
 2-6     any way to an order form or other purchasing mechanism;
 2-7                 (5)  publish or cause to be published an advertisement
 2-8     that includes an invitation or opportunity to enter a sweepstakes
 2-9     if the advertisement offers any gift, premium, prize, giveaway,
2-10     coupon, rebate, or other economic incentive of any kind, except for
2-11     a competitive price on the goods or services advertised;
2-12                 (6)  send an advertisement by mail, facsimile,
2-13     electronic mail, or other similar mass distribution to a customer
2-14     or potential customer that includes an invitation or opportunity to
2-15     enter a sweepstakes and send the same customer or potential
2-16     customer any offer for any other gift, premium, prize, giveaway,
2-17     coupon, or rebate, or other economic incentive of any kind, except
2-18     for a competitive price on the goods or services originally
2-19     advertised, before 45 days after the date the original
2-20     advertisement was sent to the customer or potential customer;
2-21                 (7)  ask an individual for any information or any
2-22     action by that individual that would be consistent with the
2-23     individual winning a sweepstakes prize, unless the individual has
2-24     won a sweepstakes prize;
2-25                 (8)  send material accompanying or relating to a
2-26     sweepstakes or an offer to enter a sweepstakes that states or
2-27     implies that an individual must comply with a restriction or
 3-1     condition to enter the sweepstakes, unless all individuals entering
 3-2     the sweepstakes are required to comply with the same restrictions
 3-3     or conditions;
 3-4                 (9)  send material accompanying or relating to a
 3-5     sweepstakes or an offer to enter a sweepstakes that:
 3-6                       (A)  states or implies that an individual's
 3-7     chances of winning a prize in the sweepstakes are raised, lowered,
 3-8     or different in any way because of a factor or circumstance that
 3-9     has no relation to the manner in which a winner of the sweepstakes
3-10     is selected;
3-11                       (B)  states or implies that a winner of a
3-12     sweepstakes prize will be selected at a time or place or in a
3-13     manner that is different from the actual time or place at which or
3-14     manner in which a winner is selected; or
3-15                       (C)  states or implies falsely that the
3-16     individual receiving the advertisement has received any special
3-17     treatment or personal attention from the offeror of the sweepstakes
3-18     or any officer, employee, or agent of the offeror of the
3-19     sweepstakes;
3-20                 (10)  publish or cause to be published advertisements
3-21     for the same sweepstakes that contain different descriptions of
3-22     prizes awarded through the sweepstakes;
3-23                 (11)  offer more than one sweepstakes at the same time;
3-24                 (12)  award multiple prizes in a sweepstakes unless all
3-25     prizes are awarded on the same date and through the same selection
3-26     process;
3-27                 (13)  publish or cause to be published official rules
 4-1     of a sweepstakes that do not uniquely identify the prizes to be
 4-2     awarded and the date they will be awarded; or
 4-3                 (14)  provide for entry in a sweepstakes by mail and
 4-4     use:
 4-5                       (A)  more than one address to accept entries in
 4-6     the sweepstakes; or
 4-7                       (B)  the address for entry in the sweepstakes to
 4-8     process or deal in any way with an order to buy a good or service.
 4-9           Sec. 43.003.  CIVIL PENALTY.  (a)  A person who violates this
4-10     chapter is liable to the state for a civil penalty in an amount not
4-11     to exceed $50,000 for each violation. If an offer to enter a
4-12     sweepstakes is made by mail, facsimile, electronic mail, or other
4-13     similar mass distribution in violation of this chapter, each
4-14     recipient of the offer constitutes a separate violation.
4-15           (b)  The attorney general may initiate an action under this
4-16     section by filing suit in a district court in Travis County or in
4-17     the county in which the violation occurred.
4-18           (c)  The attorney general may recover reasonable expenses
4-19     incurred in recovering a civil penalty under this section,
4-20     including court costs, reasonable attorney's fees, reasonable
4-21     investigative costs, witness fees, and deposition expenses.
4-22           (d)  A civil penalty recovered under this section shall be
4-23     deposited in the state treasury.
4-24           SECTION 2. This Act takes effect September 1, 2001.