79R9389 MXM-F
By: Zedler H.B. No. 3004
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of owners, operators, employees, and
independent contractors of sexually oriented businesses; providing
penalties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle D, Title 13, Occupations Code, is
amended by adding Chapter 2158 to read as follows:
CHAPTER 2158. SEXUALLY ORIENTED BUSINESSES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 2158.001. DEFINITIONS. In this chapter:
(1) "Department" means the Department of State Health
Services.
(2) "Executive commissioner" means the executive
commissioner of the Health and Human Services Commission.
(3) "License holder" means a person who holds a
license issued under this chapter.
Sec. 2158.002. SEXUALLY ORIENTED BUSINESSES DEFINED. (a)
In this chapter, a "sexually oriented business" means:
(1) a sex parlor, sexually oriented arcade, sexually
oriented bookstore, sexually oriented video store, sexually
oriented cabaret, sexually oriented motel, sexually oriented
novelty store, sexually oriented theater, sexually oriented motion
picture theater, sexually oriented service establishment, nude
model business, or sexual encounter center; or
(2) any other commercial enterprise:
(A) that devotes a significant or substantial
portion of its business to the offering of a service or to the
selling, renting, or exhibiting of a device or any other item
intended to provide sexual stimulation or sexual gratification to
its customers;
(B) that is distinguished by or characterized by
an emphasis on matter depicting, describing, or relating to
specified sexual activities or specified anatomical areas; or
(C) whose employees or customers appear in a
state of nudity.
(b) As used in Subsection (a), "significant or substantial
portion" refers to all relevant factors, including:
(1) whether the business uses advertising or a sign
identifying the business as having sexually explicit merchandise or
services for sale, rental, or viewing, including the use of terms
such as "adult," "sex," or "XXX";
(2) the percentage of the business's overall sales or
revenues attributable to sexually explicit content; and
(3) the percentage of sales or revenues attributable
to sexually explicit content within each category of merchandise,
including books, magazines, movies for rent, movies for sale,
movies for on-site viewing, performances, sexual paraphernalia,
and other similar products or services.
(c) As used in Subsection (a), "state of nudity" means:
(1) the appearance of a human bare buttock, a vulva, an
anus, an anal cleft with less than a full opaque covering, male
genitals, female genitals, or a female breast; or
(2) a state of dress that fails to completely and
opaquely cover a human buttock, a vulva, an anus, male genitals, or
female genitals or a part of the female breast that is situated
below a point immediately above the top of the areola of the female
breast.
Sec. 2158.003. ADMINISTRATION BY DEPARTMENT OF STATE HEALTH
SERVICES. The department shall administer this chapter.
Sec. 2158.004. CONFLICT OF LAWS. This chapter controls
over any conflicting municipal or county regulation.
Sec. 2158.005. EXEMPTIONS. (a) This chapter does not apply
to:
(1) a business operated by or employing a licensed
psychologist, licensed physical therapist, licensed masseuse,
licensed vocational nurse, registered nurse, licensed athletic
trainer, licensed cosmetologist, or licensed barber engaged in
performing the normal and customary functions authorized under the
license;
(2) a business operated by or employing a licensed
physician or licensed chiropractor engaged in practicing the
healing arts;
(3) a retail establishment whose principal business is
the offering of wearing apparel for sale to customers and that does
not exhibit merchandise on live models; or
(4) an activity conducted or sponsored:
(A) by a proprietary school licensed by this
state or a state-supported junior college or institution of higher
education; or
(B) a private institution of higher education
that maintains or operates educational programs in which credits
are transferable to a state-supported junior college or institution
of higher education.
(b) An activity conducted or sponsored by an entity
identified in Subsection (a)(4):
(1) must be in a structure that does not have a sign or
other advertising visible from the exterior of the structure
indicating that a nude person is available for viewing;
(2) must require that, in order to participate in the
activity or conduct of a class, a student must enroll in the class
at least three days in advance of the class; and
(3) may not have more than one nude model on the
premises at any time.
[Sections 2158.006-2158.050 reserved for expansion]
SUBCHAPTER B. POWERS AND DUTIES
Sec. 2158.051. FEES. The department shall set fees in an
amount sufficient to cover the cost of administering this chapter.
Sec. 2158.052. RULES. The executive commissioner shall
adopt rules necessary to administer and enforce this chapter.
Sec. 2158.053. RULES RESTRICTING ADVERTISING OR
COMPETITIVE BIDDING. (a) The executive commissioner may not adopt
rules restricting advertising or competitive bidding by a license
holder except to prohibit false, misleading, or deceptive
practices.
(b) In the executive commissioner's rules to prohibit
false, misleading, or deceptive practices, the executive
commissioner may not include a rule that:
(1) restricts the use of any medium for advertising;
(2) restricts the use of a license holder's personal
appearance or voice in an advertisement;
(3) relates to the size or duration of an
advertisement by the license holder; or
(4) restricts the license holder's advertisement under
a trade name.
[Sections 2158.054-2158.100 reserved for expansion]
SUBCHAPTER C. LICENSE REQUIREMENTS
Sec. 2158.101. LICENSE REQUIRED. (a) A person may not own,
operate, or work at a sexually oriented business unless the person
holds a license under this chapter.
(b) A person may not employ or hire a person to work at, or
contract with an independent contractor to work at, a sexually
oriented business unless the person employed or the independent
contractor entering into the contract holds a license under this
chapter.
Sec. 2158.102. ISSUANCE OF LICENSE. The department shall
issue a sexually oriented business license to an applicant that
meets the requirements of this chapter.
Sec. 2158.103. LICENSE APPLICATION. (a) A license
applicant must apply to the department on a form and in the manner
the department prescribes.
(b) The application must be accompanied by a nonrefundable
application fee and any other appropriate fees.
Sec. 2158.104. ELIGIBILITY FOR LICENSE; INELIGIBILITY FOR
CERTAIN OFFENSES. (a) To be eligible for a license under this
chapter, an applicant must be at least 21 years of age and meet any
other requirements approved by the department.
(b) A person is ineligible to be issued a license under this
chapter if the person has been convicted of:
(1) prostitution;
(2) promotion of prostitution;
(3) aggravated promotion of prostitution;
(4) compelling prostitution;
(5) obscenity;
(6) sale, distribution, or display of harmful material
to a minor;
(7) an offense under Section 43.25, Penal Code (sexual
performance by a child);
(8) possession of child pornography;
(9) public lewdness;
(10) indecent exposure;
(11) indecency with a child;
(12) sexual assault or aggravated sexual assault;
(13) incest, including prohibited sexual conduct
under Chapter 25, Penal Code; or
(14) harboring a runaway child.
Sec. 2158.105. LICENSE EXPIRATION AND RENEWAL. (a) A
license expires on the second anniversary of the date it was issued.
(b) A person who is otherwise eligible to renew a license
may renew an unexpired license by paying the required renewal fee to
the department before the expiration date of the license. A person
whose license has expired may not engage in activities that require
a license until the license is renewed.
(c) A person whose license has been expired for 90 days or
less may renew the license by paying to the department a renewal fee
that is equal to 1-1/2 times the normally required renewal fee.
(d) A person whose license has been expired for more than 90
days but less than one year may renew the license by paying to the
department a renewal fee that is equal to two times the normally
required renewal fee.
(e) A person whose license has been expired for one year or
more may not renew the license. The person may obtain a new license
by complying with the requirements and procedures for obtaining an
original license.
Sec. 2158.106. NOTICE OF RENEWAL. Not later than the 30th
day before the date a person's license is scheduled to expire, the
department shall send written notice of the impending expiration to
the person at the person's last known address according to the
records of the department.
[Sections 2158.107-2158.150 reserved for expansion]
SUBCHAPTER D. PRACTICE BY LICENSE HOLDER
Sec. 2158.151. CONTINUING EDUCATION. (a) The department
may recognize, prepare, or administer continuing education
programs for its license holders under this chapter. A license
holder may not renew the person's license unless the person meets
any continuing education requirements.
(b) The department shall:
(1) provide to a license applicant, with the
application form on which the person is to apply for a license,
information describing the continuing education requirements; and
(2) notify each license holder of any change in the
continuing education requirements at least one year before the date
the change takes effect.
[Sections 2158.152-2158.200 reserved for expansion]
SUBCHAPTER E. LICENSE DENIAL AND DISCIPLINARY PROCEDURES
Sec. 2158.201. ADMINISTRATIVE SANCTIONS. (a) The
department shall revoke, suspend, or refuse to issue or renew a
license or shall reprimand a license holder for a violation of this
chapter or a rule adopted under this chapter.
(b) The department may place on probation a person whose
license is suspended. If a license suspension is probated, the
department may require the person:
(1) to report regularly to the department on matters
that are the basis of the probation;
(2) to limit business activities to the areas
prescribed by the department; or
(3) to continue or review professional education until
the person attains a degree of skill satisfactory to the department
in those areas that are the basis of the probation.
Sec. 2158.202. COMPLAINTS. Any person may file a complaint
with the department alleging a violation of this chapter or a rule
adopted under this chapter.
Sec. 2158.203. PROHIBITED ACTIONS. A license holder may
not:
(1) obtain a license by means of fraud,
misrepresentation, or concealment of a material fact;
(2) sell, barter, or offer to sell or barter a license;
or
(3) engage in unprofessional conduct that endangers or
is likely to endanger the health, welfare, or safety of the public
as defined by an executive commissioner rule.
Sec. 2158.204. MONITORING OF LICENSE HOLDER; RULES. (a)
The executive commissioner by rule may develop a system for
monitoring a license holder's compliance with this chapter.
(b) Rules adopted under this section may include procedures
to:
(1) monitor for compliance a license holder who is
ordered by the department to perform certain acts; and
(2) identify and monitor license holders who represent
a risk to the public.
Sec. 2158.205. LICENSE DENIAL, REVOCATION, OR SUSPENSION
FOR CRIMINAL CONVICTION. (a) The department may deny a license
application or request for renewal, or may suspend or revoke a
license, if the applicant or license holder has been convicted of:
(1) a felony; or
(2) a misdemeanor involving:
(A) prostitution;
(B) promotion of prostitution;
(C) obscenity;
(D) sale, distribution, or display of harmful
material to a minor;
(E) public lewdness;
(F) indecent exposure; or
(G) harboring a runaway child.
(b) The department may take action authorized by this
section:
(1) after the time for appeal of the person's
conviction has elapsed;
(2) after the judgment or conviction has been affirmed
on appeal; or
(3) on issuance of an order granting probation
suspending the imposition of the person's sentence, without regard
to whether a subsequent order:
(A) allows withdrawal of a plea of guilty;
(B) sets aside a verdict of guilty; or
(C) dismisses an information or indictment.
(c) A plea or verdict of guilty or a conviction following a
plea of nolo contendere is a conviction for purposes of this
section.
Sec. 2158.206. SCHEDULE OF SANCTIONS; RULES. The
department shall use the schedule of sanctions adopted by executive
commissioner rule for any sanction imposed as the result of a
hearing conducted by the department.
Sec. 2158.207. REINSTATEMENT. (a) A person may apply for
reinstatement of a revoked license on or after the first
anniversary of the date of revocation.
(b) The department may accept or reject the application.
Sec. 2158.208. REPRIMAND; CONTINUING EDUCATION. (a) In
addition to other disciplinary action authorized by this
subchapter, the department may:
(1) issue a written reprimand to a license holder who
violates this chapter; or
(2) require that a license holder who violates this
chapter attend continuing education programs.
(b) The department may specify the number of hours of
continuing education that must be completed by a license holder to
fulfill the requirement of Subsection (a)(2).
Sec. 2158.209. EMERGENCY SUSPENSION. (a) The department
or a three-member committee of members designated by the department
shall temporarily suspend the license of a license holder if the
department or committee determines from the evidence or information
presented to it that continued practice by the license holder would
constitute a continuing and imminent threat to the public health or
welfare.
(b) A license may be suspended under this section without
notice or hearing on the complaint if:
(1) action is taken to initiate proceedings for a
hearing before the State Office of Administrative Hearings
simultaneously with the temporary suspension; and
(2) a hearing is held as soon as practicable under this
chapter and Chapter 2001, Government Code.
(c) The State Office of Administrative Hearings shall hold a
preliminary hearing not later than the 14th day after the date of
the temporary suspension to determine if there is probable cause to
believe that a continuing and imminent threat to the public health
or welfare still exists. A final hearing on the matter shall be
held not later than the 61st day after the date of the temporary
suspension.
[Sections 2158.210-2158.250 reserved for expansion]
SUBCHAPTER F. PENALTIES AND OTHER ENFORCEMENT PROCEDURES
Sec. 2158.251. DECEPTIVE TRADE PRACTICE. A violation of
Section 2158.101 is a deceptive trade practice.
Sec. 2158.252. INJUNCTION. The department may apply to a
district court in any county for an injunction or another order to
restrain the violation of this chapter by a person other than a
license holder under this chapter.
Sec. 2158.253. CRIMINAL OFFENSE. (a) A person commits an
offense if the person violates Section 2158.101.
(b) An offense under this section is a Class A misdemeanor.
Sec. 2158.254. CIVIL PENALTY. (a) A person who violates
Section 2158.101 is liable to the state for a civil penalty in an
amount not to exceed $1,000 for each violation. Each day a
violation occurs is a separate violation.
(b) The department or the attorney general may institute an
action in a district court in Travis County or in the county in
which the person who is alleged to have violated Section 2158.101
resides.
[Sections 2158.255-2158.300 reserved for expansion]
SUBCHAPTER G. ADMINISTRATIVE PENALTY
Sec. 2158.301. IMPOSITION OF ADMINISTRATIVE PENALTY. The
department may impose an administrative penalty on a person
licensed under this chapter who violates this chapter or a rule or
order adopted under this chapter.
Sec. 2158.302. AMOUNT OF ADMINISTRATIVE PENALTY. (a) The
amount of the administrative penalty may not be less than $50 or
more than $5,000 for each violation. Each day a violation continues
or occurs is a separate violation for the purpose of imposing a
penalty.
(b) The amount shall be based on:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the violation;
(2) the economic harm caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter a future violation;
(5) efforts to correct the violation; and
(6) any other matter that justice may require.
Sec. 2158.303. REPORT AND NOTICE OF VIOLATION AND PENALTY.
(a) If the department determines that a violation occurred, the
department may issue a report stating:
(1) the facts on which the determination is based; and
(2) the department's recommendation on the imposition
of an administrative penalty, including a recommendation on the
amount of the penalty.
(b) Within 14 days after the date the report is issued, the
department shall give written notice of the report to the person.
The notice must:
(1) include a brief summary of the alleged violation;
(2) state the amount of the recommended administrative
penalty; and
(3) inform the person of the person's right to a
hearing on the occurrence of the violation, the amount of the
penalty, or both.
Sec. 2158.304. PENALTY TO BE PAID OR HEARING REQUESTED. (a)
Within 10 days after the date the person receives the notice, the
person in writing may:
(1) accept the determination and recommended
administrative penalty of the department; or
(2) make a request for a hearing on the occurrence of
the violation, the amount of the penalty, or both.
(b) If the person accepts the determination and recommended
penalty of the department, the department by order shall approve
the determination and impose the recommended penalty.
Sec. 2158.305. HEARING. (a) If the person requests a
hearing or fails to respond in a timely manner to the notice, the
department shall set a hearing and give written notice of the
hearing to the person.
(b) An administrative law judge of the State Office of
Administrative Hearings shall hold the hearing.
(c) The administrative law judge shall make findings of fact
and conclusions of law and promptly issue to the department a
proposal for a decision about the occurrence of the violation and
the amount of a proposed administrative penalty.
Sec. 2158.306. DECISION BY DEPARTMENT. (a) Based on the
findings of fact, conclusions of law, and proposal for decision,
the department by order may determine that:
(1) a violation occurred and impose an administrative
penalty; or
(2) a violation did not occur.
(b) The notice of the department's order given to the person
must include a statement of the right of the person to judicial
review of the order.
Sec. 2158.307. OPTIONS FOLLOWING DECISION: PAY OR APPEAL.
(a) Within 30 days after the date the department's order becomes
final, the person shall:
(1) pay the administrative penalty; or
(2) file a petition for judicial review contesting the
occurrence of the violation, the amount of the penalty, or both.
(b) Within the 30-day period prescribed by Subsection (a), a
person who files a petition for judicial review may:
(1) stay enforcement of the penalty by:
(A) paying the penalty to the court for placement
in an escrow account; or
(B) giving the court a supersedeas bond approved
by the court that:
(i) is for the amount of the penalty; and
(ii) is effective until all judicial review
of the department's order is final; or
(2) request the court to stay enforcement of the
penalty by:
(A) filing with the court a sworn affidavit
stating that the person is financially unable to pay the penalty and
is financially unable to give the supersedeas bond; and
(B) giving a copy of the affidavit to the
department by certified mail.
(c) If the department receives a copy of an affidavit under
Subsection (b)(2), the department may file with the court, within
five days after the date the copy is received, a contest to the
affidavit.
(d) The court shall hold a hearing on the facts alleged in
the affidavit as soon as practicable and shall stay the enforcement
of the penalty on finding that the alleged facts are true. The
person who files an affidavit has the burden of proving that the
person is financially unable to pay the penalty and to give a
supersedeas bond.
Sec. 2158.308. COLLECTION OF PENALTY. (a) If the person
does not pay the administrative penalty and the enforcement of the
penalty is not stayed, the penalty may be collected.
(b) The attorney general may sue to collect the penalty.
Sec. 2158.309. DETERMINATION BY COURT. (a) If the court
sustains the determination that a violation occurred, the court may
uphold or reduce the amount of the administrative penalty and order
the person to pay the full or reduced amount of the penalty.
(b) If the court does not sustain the finding that a
violation occurred, the court shall order that a penalty is not
owed.
Sec. 2158.310. REMITTANCE OF PENALTY AND INTEREST. (a) If
the person paid the administrative penalty and if the amount of the
penalty is reduced or the penalty is not upheld by the court, the
court shall order, when the court's judgment becomes final, that
the appropriate amount plus accrued interest be remitted to the
person.
(b) The interest accrues at the rate charged on loans to
depository institutions by the New York Federal Reserve Bank.
(c) The interest shall be paid for the period beginning on
the date the penalty is paid and ending on the date the penalty is
remitted.
(d) If the person gave a supersedeas bond and the penalty is
not upheld by the court, the court shall order, when the court's
judgment becomes final, the release of the bond.
(e) If the person gave a supersedeas bond and the amount of
the penalty is reduced, the court shall order the release of the
bond after the person pays the reduced amount.
SECTION 2. (a) Except as required by Subsection (b) of this
section, this Act takes effect September 1, 2005.
(b) Section 2158.101 and Subchapters E, F, and G, Chapter
2158, Occupations Code, as added by this Act, take effect September
1, 2006.