H.B. No. 2278

AN ACT

relating to a nonsubstantive revision of statutes relating to business and commerce; including conforming amendments.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

ARTICLE 1. GENERAL MATTERS

SECTION 1.01. PURPOSE OF ACT. (a) This Act is enacted as a part of the state's continuing statutory revision program under Section 323.007, Government Code. The program contemplates a topic-by-topic revision of the state's general and permanent statute law without substantive change.

(b) Consistent with the objectives of the statutory revision program, the purpose of this Act is to make the law encompassed by this Act more accessible and understandable by:

(1) rearranging the statutes into a more logical order;

(2) employing a format and numbering system designed to facilitate citation of the law and to accommodate future expansion of the law;

(3) eliminating repealed, duplicative, unconstitutional, expired, executed, and other ineffective provisions; and

(4) restating the law in modern American English to the greatest extent possible.

ARTICLE 2. MISCELLANEOUS COMMERCIAL PROVISIONS

SECTION 2.01. TITLES 4 THROUGH 15 AND 99. The Business & Commerce Code is amended by revising Title 4 and adding Titles 5 through 15 and 99 to read as follows:

TITLE 4. BUSINESS OPPORTUNITIES AND AGREEMENTS

CHAPTER 51. BUSINESS OPPORTUNITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 51.001. SHORT TITLE Sec. 51.002. GENERAL DEFINITIONS Sec. 51.003. DEFINITION OF BUSINESS OPPORTUNITY Sec. 51.004. LIBERAL CONSTRUCTION AND APPLICATION Sec. 51.005. BURDEN OF PROOF Sec. 51.006. WAIVER Sec. 51.007. MAINTENANCE OF RECORDS Sec. 51.008. FILING FEE Sec. 51.009. RULES

[Sections 51.010-51.050 reserved for expansion]

SUBCHAPTER B. REGISTRATION OF BUSINESS OPPORTUNITY

Sec. 51.051. FILING OF DISCLOSURE STATEMENTS AND LIST

OF SELLERS Sec. 51.052. UPDATING OF INFORMATION ON FILE Sec. 51.053. FILING OF DISCLOSURE DOCUMENT FROM OTHER

REGULATORY AGENCY Sec. 51.054. FILING OF COPY OF BOND OR NOTIFICATION OF

ACCOUNT

[Sections 51.055-51.100 reserved for expansion]

SUBCHAPTER C. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT

Sec. 51.101. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT

REQUIRED Sec. 51.102. ACTION AGAINST BOND, TRUST ACCOUNT, OR

LETTER OF CREDIT

[Sections 51.103-51.150 reserved for expansion]

SUBCHAPTER D. DISCLOSURE STATEMENT

Sec. 51.151. DISCLOSURE TO PURCHASER OF BUSINESS

OPPORTUNITY Sec. 51.152. COVER SHEET OF DISCLOSURE STATEMENT Sec. 51.153. CONTENTS: NAMES AND ADDRESSES Sec. 51.154. CONTENTS: SALES PERIODS Sec. 51.155. CONTENTS: SERVICES DESCRIPTION Sec. 51.156. CONTENTS: UPDATED FINANCIAL STATEMENT Sec. 51.157. CONTENTS: TRAINING DESCRIPTION Sec. 51.158. CONTENTS: SECURITY DESCRIPTION Sec. 51.159. CONTENTS: DELIVERY DATE; CANCELLATION OF

CONTRACT Sec. 51.160. CONTENTS: SALES OR EARNINGS

REPRESENTATION Sec. 51.161. CONTENTS: LEGAL ACTION HISTORY Sec. 51.162. CONTENTS: BANKRUPTCY OR REORGANIZATION Sec. 51.163. CONTENTS: CONTRACT COPY Sec. 51.164. USE OF DISCLOSURE DOCUMENT FROM OTHER

REGULATORY AGENCY

[Sections 51.165-51.200 reserved for expansion]

SUBCHAPTER E. BUSINESS OPPORTUNITY CONTRACT

Sec. 51.201. FORM OF BUSINESS OPPORTUNITY CONTRACT Sec. 51.202. DELIVERY OF COPIES OF DOCUMENTS TO

PURCHASER Sec. 51.203. EFFECT OF ASSIGNMENT OF BUSINESS

OPPORTUNITY CONTRACT

[Sections 51.204-51.250 reserved for expansion]

SUBCHAPTER F. TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION

Sec. 51.251. VOLUNTARY TERMINATION OF BUSINESS

OPPORTUNITY REGISTRATION Sec. 51.252. INVOLUNTARY TERMINATION OF BUSINESS

OPPORTUNITY REGISTRATION

[Sections 51.253-51.300 reserved for expansion]

SUBCHAPTER G. ENFORCEMENT

Sec. 51.301. PROHIBITED ACTS Sec. 51.302. DECEPTIVE TRADE PRACTICE; REMEDIES Sec. 51.303. REVIEW AND SUIT BY ATTORNEY GENERAL

CHAPTER 51. BUSINESS OPPORTUNITIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 51.001. SHORT TITLE. This chapter may be cited as the Business Opportunity Act. (Bus. & Com. Code, Sec. 41.001.)

Sec. 51.002. GENERAL DEFINITIONS. In this chapter:

(1) "Business opportunity contract" means an agreement that obligates or is intended to obligate a purchaser to a seller.

(2) "Buy-back" or "secured investment" means a representation that implies a purchaser's payment is protected from loss.

(3) "Equipment" includes electrical devices, video and audio devices, molds, display units, including display racks, and machines, including coin-operated game machines and vending and other machines that dispense products.

(4) "Initial consideration" means the total amount a purchaser is obligated to pay under a business opportunity contract before or at the time products, equipment, supplies, or services are delivered or within six months after the date the purchaser begins operation of the business opportunity plan. The term means the total sale price if the contract states a specific total sale price for purchase of the business opportunity plan and the total sale price is to be paid as a down payment and one or more additional payments. The term does not include the not-for-profit sale of sales demonstration materials, samples, or equipment for not more than $500.

(5) "Marketing program" means advice or training that a seller or a person recommended by a seller gives to a purchaser regarding the sale of products, equipment, supplies, or services. The term includes the preparation or provision of:

(A) a brochure, pamphlet, or advertising material, including promotional literature;

(B) training regarding the promotion, operation, or management of a business opportunity; or

(C) operational, managerial, technical, or financial guidelines or assistance.

(6) "Product" includes tangible personal property.

(7) "Purchaser" means a person who becomes or is solicited to become obligated under a business opportunity contract.

(8) "Seller" means a principal or agent who sells or leases or offers to sell or lease a business opportunity.

(9) "Services" includes any assistance, guidance, direction, work, labor, or other services provided by a seller to initiate or maintain a business opportunity.

(10) "Supplies" includes materials used to make, produce, grow, or breed a product or item. (Bus. & Com. Code, Secs. 41.003(1), (2), (4), (5), (6), (7), (8), (9), (10), (11), (12).)

Sec. 51.003. DEFINITION OF BUSINESS OPPORTUNITY. (a) In this chapter, "business opportunity" means a sale or lease for an initial consideration of more than $500 of products, equipment, supplies, or services that will be used by or for the purchaser to begin a business in which the seller represents that:

(1) the purchaser will earn or is likely to earn a profit in excess of the amount of the initial consideration the purchaser paid; and

(2) the seller will:

(A) provide a location or assist the purchaser in finding a location for the use or operation of the products, equipment, supplies, or services on premises that are not owned or leased by the purchaser or seller;

(B) provide a sales, production, or marketing program; or

(C) buy back or is likely to buy back products, equipment, or supplies purchased or products made, produced, grown, or bred by the purchaser using wholly or partly the products, equipment, supplies, or services that the seller initially sold or leased or offered for sale or lease to the purchaser.

(b) In this chapter, "business opportunity" does not include:

(1) the sale or lease of an established and ongoing business or enterprise that has actively conducted business before the sale or lease, whether composed of one or more than one component business or enterprise, if the sale or lease represents an isolated transaction or series of transactions involving a bona fide change of ownership or control of the business or enterprise or liquidation of the business or enterprise;

(2) a sale by a retailer of goods or services under a contract or other agreement to sell the inventory of one or more ongoing leased departments to a purchaser who is granted the right to sell the goods or services within or adjoining a retail business establishment as a department or division of the retail business establishment;

(3) a transaction that is:

(A) regulated by the Texas Department of Licensing and Regulation, the Texas Department of Insurance, the Texas Real Estate Commission, or the director of the Motor Vehicle Division of the Texas Department of Transportation; and

(B) engaged in by a person licensed by one of those agencies;

(4) a real estate syndication;

(5) a sale or lease to a business enterprise that also sells or leases products, equipment, or supplies or performs services:

(A) that are not supplied by the seller; and

(B) that the purchaser does not use with the seller's products, equipment, supplies, or services;

(6) the offer or sale of a franchise as described by the Petroleum Marketing Practices Act (15 U.S.C. Section 2801 et seq.) and its subsequent amendments;

(7) the offer or sale of a business opportunity if the seller:

(A) has a net worth of $25 million or more according to the seller's audited balance sheet as of a date not earlier than the 13th month before the date of the transaction; or

(B) is at least 80 percent owned by another person who:

(i) in writing unconditionally guarantees performance by the person offering the business opportunity plan; and

(ii) has a net worth of more than $25 million according to the person's most recent audited balance sheet as of a date not earlier than the 13th month before the date of the transaction; or

(8) an arrangement defined as a franchise by 16 C.F.R. Section 436.2(a) and its subsequent amendments if:

(A) the franchisor complies in all material respects in this state with 16 C.F.R. Part 436 and each order or other action of the Federal Trade Commission; and

(B) before offering for sale or selling a franchise in this state, a person files with the secretary of state a notice containing:

(i) the name of the franchisor;

(ii) the name under which the franchisor intends to transact business; and

(iii) the franchisor's principal business address.

(c) The secretary of state shall prescribe the form of the notice described by Subsection (b)(8)(B). (Bus. & Com. Code, Sec. 41.004.)

Sec. 51.004. LIBERAL CONSTRUCTION AND APPLICATION. (a) This chapter shall be liberally construed and applied to:

(1) protect persons against false, misleading, or deceptive practices in the advertising, offering for sale or lease, or sale or lease of business opportunities; and

(2) provide efficient and economical procedures to secure that protection.

(b) In construing this chapter, a court to the extent possible shall follow the interpretations given by the Federal Trade Commission and the federal courts to Section 5(a)(1), Federal Trade Commission Act (15 U.S.C. Section 45(a)(1)), and 16 C.F.R. Part 436 and their subsequent amendments. (Bus. & Com. Code, Sec. 41.002.)

Sec. 51.005. BURDEN OF PROOF. A person who claims to be exempt from this chapter has the burden of proving the exemption. (Bus. & Com. Code, Sec. 41.005.)

Sec. 51.006. WAIVER. A waiver of this chapter is contrary to public policy and void. (Bus. & Com. Code, Sec. 41.009.)

Sec. 51.007. MAINTENANCE OF RECORDS. (a) A seller shall maintain a complete set of books, records, and accounts of business opportunity sales made by the seller.

(b) A document relating to a business opportunity sold or leased shall be maintained until the fourth anniversary of the date of the business opportunity contract. (Bus. & Com. Code, Sec. 41.008.)

Sec. 51.008. FILING FEE. The secretary of state may charge a reasonable fee to cover the costs incurred as a result of a filing required by Subchapter B or Section 51.003 or 51.251. (Bus. & Com. Code, Sec. 41.007.)

Sec. 51.009. RULES. The secretary of state may adopt rules to administer and enforce this chapter. (Bus. & Com. Code, Sec. 41.006.)

[Sections 51.010-51.050 reserved for expansion]

SUBCHAPTER B. REGISTRATION OF BUSINESS OPPORTUNITY

Sec. 51.051. FILING OF DISCLOSURE STATEMENTS AND LIST OF SELLERS. Before a sale or offer for sale, including advertising, of a business opportunity, the principal seller must register the business opportunity with the secretary of state by filing:

(1) a copy of the disclosure statement required by Subchapter D, except as provided by Section 51.053; and

(2) a list of the name and resident address of any individual who sells or will sell the business opportunity for the principal seller. (Bus. & Com. Code, Sec. 41.051.)

Sec. 51.052. UPDATING OF INFORMATION ON FILE. (a) A copy of a disclosure statement filed under Section 51.051 must be updated through a new filing:

(1) annually; and

(2) when a material change occurs.

(b) The list filed under Section 51.051(2) must be updated through a new filing every six months. (Bus. & Com. Code, Sec. 41.052.)

Sec. 51.053. FILING OF DISCLOSURE DOCUMENT FROM OTHER REGULATORY AGENCY. Instead of filing with the secretary of state a copy of a disclosure statement, a seller may file a copy of a similar document required by the State Securities Board, Securities and Exchange Commission, or Federal Trade Commission that contains all the information required to be disclosed by this chapter. (Bus. & Com. Code, Sec. 41.054 (part).)

Sec. 51.054. FILING OF COPY OF BOND OR NOTIFICATION OF ACCOUNT. A principal seller who is required to obtain a bond or establish a trust account under Subchapter C shall contemporaneously file with the secretary of state a copy of:

(1) the bond; or

(2) the formal notification by the depository that the trust account is established. (Bus. & Com. Code, Sec. 41.053.)

[Sections 51.055-51.100 reserved for expansion]

SUBCHAPTER C. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT

Sec. 51.101. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT REQUIRED. (a) Before a seller makes a representation described by Section 51.003(a)(1) or otherwise represents that the purchaser is assured of making a profit from a business opportunity, the principal seller must:

(1) obtain a surety bond from a surety company authorized to transact business in this state;

(2) establish a trust account; or

(3) obtain an irrevocable letter of credit.

(b) The bond, trust account, or irrevocable letter of credit must be:

(1) in an amount of $25,000 or more; and

(2) in favor of this state. (Bus. & Com. Code, Sec. 41.101.)

Sec. 51.102. ACTION AGAINST BOND, TRUST ACCOUNT, OR LETTER OF CREDIT. (a) A person may bring an action against the bond, trust account, or irrevocable letter of credit obtained or established under Section 51.101 to recover actual damages for:

(1) a violation of this chapter; or

(2) the seller's breach of:

(A) the business opportunity contract; or

(B) an obligation arising from a business opportunity sale.

(b) The aggregate liability of the surety, trustee, or issuer in an action under Subsection (a) may not exceed the amount of the bond, trust account, or irrevocable letter of credit. (Bus. & Com. Code, Sec. 41.102.)

[Sections 51.103-51.150 reserved for expansion]

SUBCHAPTER D. DISCLOSURE STATEMENT

Sec. 51.151. DISCLOSURE TO PURCHASER OF BUSINESS OPPORTUNITY. (a) Except as provided by Section 51.164, a seller must provide a purchaser with a written disclosure statement that meets the requirements of this subchapter.

(b) The seller must provide the disclosure statement at least 10 business days before the earlier of the date:

(1) the purchaser signs a business opportunity contract; or

(2) the seller receives any consideration. (Bus. & Com. Code, Sec. 41.151.)

Sec. 51.152. COVER SHEET OF DISCLOSURE STATEMENT. (a) A disclosure statement must have a cover sheet titled, in at least 12-point boldface capital letters, "DISCLOSURES REQUIRED BY TEXAS LAW." The following statement must appear below the title in at least 10-point boldface type: "The State of Texas has not reviewed and does not endorse, approve, recommend, or sponsor any business opportunity. The information contained in this disclosure has not been verified by the state. If you have any questions about this investment, see an attorney before you sign a contract or agreement."

(b) Only the title and required statement may appear on the cover sheet. (Bus. & Com. Code, Sec. 41.152.)

Sec. 51.153. CONTENTS: NAMES AND ADDRESSES. A disclosure statement must contain:

(1) the name of the seller;

(2) each name under which the seller has transacted, is transacting, or intends to transact business;

(3) the name of any parent or affiliated company that will engage in a business transaction with the purchaser or that takes responsibility for statements made by the seller; and

(4) the names, addresses, and titles of:

(A) the seller's officers, directors, trustees, general partners, general managers, and principal executives;

(B) shareholders owning more than 20 percent of the shares of the seller; and

(C) any other persons responsible for the seller's business activities relating to the sale of business opportunities. (Bus. & Com. Code, Sec. 41.153.)

Sec. 51.154. CONTENTS: SALES PERIODS. A disclosure statement must:

(1) specify the period during which the seller has sold business opportunities; and

(2) specify the period during which the seller has sold business opportunities involving the products, equipment, supplies, or services the seller is offering to the purchaser. (Bus. & Com. Code, Sec. 41.154.)

Sec. 51.155. CONTENTS: SERVICES DESCRIPTION. A disclosure statement must contain:

(1) a detailed description of the actual services the seller undertakes to perform for the purchaser; and

(2) if the seller promises to perform services in connection with the placement of products, equipment, or supplies at a location:

(A) the full nature of those services; and

(B) the nature of any agreements to be made with the owners or managers of that location. (Bus. & Com. Code, Sec. 41.155.)

Sec. 51.156. CONTENTS: UPDATED FINANCIAL STATEMENT. A disclosure statement must contain a copy of a financial statement of the seller that:

(1) was prepared according to generally accepted accounting principles within the previous 13 months; and

(2) has been updated to reflect any material change in the seller's financial condition. (Bus. & Com. Code, Sec. 41.156.)

Sec. 51.157. CONTENTS: TRAINING DESCRIPTION. If the seller promises training, the disclosure statement must contain a complete description of the training, including:

(1) the length of the training; and

(2) any costs of the training that the purchaser will be required to incur, including travel and lodging expenses. (Bus. & Com. Code, Sec. 41.157.)

Sec. 51.158. CONTENTS: SECURITY DESCRIPTION. If the seller is required to obtain a bond or establish a trust account, the disclosure statement must contain one of the following statements, as applicable:

(1) "As required by Texas law, the seller has secured a bond issued by ______, a surety company authorized to do business in this state. Before signing a contract to purchase this business opportunity, you should confirm the bond's status with the surety company."; or

(2) "As required by Texas law, the seller has established a trust account with ______. Before signing a contract to purchase this business opportunity, you should confirm with the bank or savings institution the current status of the trust account." (Bus. & Com. Code, Sec. 41.158.)

Sec. 51.159. CONTENTS: DELIVERY DATE; CANCELLATION OF CONTRACT. If the seller is required to deliver to the purchaser the product, equipment, or supplies necessary to begin substantial operation of the business and states a definite or approximate delivery date for the product, equipment, or supplies, the disclosure statement must contain the following statement: "If the seller fails to deliver the product, equipment, or supplies necessary to begin substantial operation of the business within 45 days of the delivery date stated in your contract, you may notify the seller in writing and cancel your contract." (Bus. & Com. Code, Sec. 41.159.)

Sec. 51.160. CONTENTS: SALES OR EARNINGS REPRESENTATION. If the seller makes a statement concerning sales or earnings that may be made through the business opportunity, the disclosure statement must contain a statement disclosing:

(1) the total number of purchasers of business opportunities involving the product, equipment, supplies, or services being offered who to the seller's knowledge have, not earlier than the third year before the date of the disclosure statement, actually achieved sales of or received earnings in the amount or range specified; and

(2) the total number of purchasers who, not earlier than the third year before the date of the disclosure statement, purchased business opportunities involving the product, equipment, supplies, or services being offered. (Bus. & Com. Code, Sec. 41.160.)

Sec. 51.161. CONTENTS: LEGAL ACTION HISTORY. (a) A disclosure statement must contain a statement disclosing any person described by Section 51.153 who:

(1) has, during the previous seven fiscal years:

(A) been convicted of a felony, or pleaded nolo contendere to a felony charge, involving fraud, embezzlement, fraudulent conversion, or misappropriation of property; or

(B) been held liable in a civil action resulting in a final judgment, or has settled out of court a civil action, involving:

(i) allegations of fraud, embezzlement, fraudulent conversion, or misappropriation of property;

(ii) the use of untrue or misleading representations in an attempt to sell or dispose of property; or

(iii) the use of unfair, unlawful, or deceptive business practices;

(2) is a party to a civil action involving:

(A) allegations of fraud, embezzlement, fraudulent conversion, or misappropriation of property;

(B) the use of untrue or misleading representations in an attempt to sell or dispose of property; or

(C) the use of unfair, unlawful, or deceptive business practices; or

(3) is subject to an injunction or restrictive order relating to business activity as a result of an action brought by a public agency or department.

(b) A statement required by Subsection (a) must include:

(1) the identity and location of any court or agency;

(2) the date of any entry of a plea of nolo contendere, conviction, judgment, or decision;

(3) any penalty imposed;

(4) any damages assessed;

(5) the terms of any settlement or order; and

(6) the date, nature, and issuer of any order or ruling. (Bus. & Com. Code, Sec. 41.161.)

Sec. 51.162. CONTENTS: BANKRUPTCY OR REORGANIZATION. (a) A disclosure statement must contain a statement disclosing any person described by Section 51.153 who has, during the previous seven fiscal years:

(1) filed in bankruptcy;

(2) been adjudged bankrupt;

(3) been reorganized because of insolvency; or

(4) been a principal, director, executive officer, or partner of any other person that, during or not later than the first anniversary of the end of the period the person held the position in relation to the other person, filed in bankruptcy, was adjudged bankrupt, or was reorganized because of insolvency.

(b) A statement required by Subsection (a)(4) must include:

(1) the name and location of the person who filed in bankruptcy, was adjudged bankrupt, or was reorganized;

(2) the date of the filing, adjudication, or reorganization; and

(3) any other material fact relating to the filing, adjudication, or reorganization. (Bus. & Com. Code, Sec. 41.162.)

Sec. 51.163. CONTENTS: CONTRACT COPY. A disclosure statement must contain a copy of the business opportunity contract that the seller uses as a matter of course and that will be presented to the purchaser at closing. (Bus. & Com. Code, Sec. 41.163.)

Sec. 51.164. USE OF DISCLOSURE DOCUMENT FROM OTHER REGULATORY AGENCY. Instead of providing a disclosure statement to a purchaser under this subchapter, a seller may provide a copy of a similar document required by the State Securities Board, Securities and Exchange Commission, or Federal Trade Commission that contains all the information required to be disclosed by this chapter. (Bus. & Com. Code, Sec. 41.054 (part).)

[Sections 51.165-51.200 reserved for expansion]

SUBCHAPTER E. BUSINESS OPPORTUNITY CONTRACT

Sec. 51.201. FORM OF BUSINESS OPPORTUNITY CONTRACT. A business opportunity contract must be in writing and include, in 10-point type or in handwriting of an equivalent size, the following:

(1) the terms of payment, including the initial consideration, down payment, and additional payments required;

(2) a detailed description of the acts or services the seller undertakes to perform for the purchaser;

(3) the seller's principal business address;

(4) the name and address of the seller's agent in this state authorized to receive service of process;

(5) the delivery date or, if the contract provides for staggered delivery times to the purchaser, the approximate delivery date of the products, equipment, or supplies the seller is to:

(A) deliver to the purchaser's home or business address; or

(B) place at a location owned or managed by a person other than the purchaser; and

(6) a complete description of the nature of the buy-back or security arrangement if the seller has represented orally or in writing when selling, leasing, soliciting, or offering a business opportunity that there is a buy-back or that the initial consideration is secured. (Bus. & Com. Code, Sec. 41.201.)

Sec. 51.202. DELIVERY OF COPIES OF DOCUMENTS TO PURCHASER. A copy of the completed business opportunity contract and any other document the seller requires the purchaser to sign shall be given to the purchaser at the time the purchaser signs the contract. (Bus. & Com. Code, Sec. 41.202.)

Sec. 51.203. EFFECT OF ASSIGNMENT OF BUSINESS OPPORTUNITY CONTRACT. An assignee of a business opportunity contract or of the seller's rights under the contract is subject to all equities, rights, and defenses of the purchaser against the seller. (Bus. & Com. Code, Sec. 41.203.)

[Sections 51.204-51.250 reserved for expansion]

SUBCHAPTER F. TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION

Sec. 51.251. VOLUNTARY TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION. The principal seller of a registered business opportunity may voluntarily terminate the business opportunity's registration with the secretary of state if:

(1) the registered business opportunity will no longer be offered in this state;

(2) the registered business opportunity has changed to the extent that it no longer meets the definition of a business opportunity under Section 51.003(a);

(3) the registered business opportunity has become exempt under Section 51.003(b); or

(4) the principal seller offering the registered business opportunity ceases to exist as a legal entity. (Bus. & Com. Code, Sec. 41.251.)

Sec. 51.252. INVOLUNTARY TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION. (a) The secretary of state may terminate the registration of a business opportunity registered under Section 51.051 if the seller does not comply with Section 51.052.

(b) The secretary of state must give the business opportunity registrant notice of the delinquency not later than the 31st day before the date of termination of the business opportunity registration under Subsection (a).

(c) The notice of delinquency must be given by certified mail addressed to the registered agent or the principal place of business of the business opportunity registrant noted in the latest filing made under this chapter.

(d) The secretary of state may adopt rules governing:

(1) the termination of a delinquent registration;

(2) the effective date of the termination; and

(3) the grace period, if any. (Bus. & Com. Code, Sec. 41.252.)

[Sections 51.253-51.300 reserved for expansion]

SUBCHAPTER G. ENFORCEMENT

Sec. 51.301. PROHIBITED ACTS. A seller may not:

(1) employ a representation, device, scheme, or artifice to deceive a purchaser;

(2) make an untrue statement of a material fact or omit to state a material fact in connection with the documents and information required to be provided to the secretary of state or purchaser;

(3) represent that the business opportunity provides or will provide income or earning potential unless the seller:

(A) has documented data to substantiate the representation of income or earning potential; and

(B) discloses the data to the purchaser when the representation is made; or

(4) make a claim or representation that is inconsistent with the information required to be disclosed by this chapter in:

(A) advertising or other promotional material; or

(B) an oral sales presentation, solicitation, or discussion between the seller and the purchaser. (Bus. & Com. Code, Sec. 41.301.)

Sec. 51.302. DECEPTIVE TRADE PRACTICE; REMEDIES. (a) A violation of this chapter is a false, misleading, or deceptive act or practice under Section 17.46.

(b) A public or private right or remedy prescribed by Chapter 17 may be used to enforce this chapter. (Bus. & Com. Code, Sec. 41.302.)

Sec. 51.303. REVIEW AND SUIT BY ATTORNEY GENERAL. (a) The attorney general may review the copy of a disclosure statement filed with the secretary of state under Subchapter B.

(b) If the disclosure statement fails to comply with this chapter, the attorney general may:

(1) notify the secretary of state and the seller in writing of the deficiency; and

(2) file suit to enjoin the seller from transacting business until the failure to comply has been corrected.

(c) If the attorney general notifies the secretary of state under Subsection (b), the secretary of state shall:

(1) attach a copy of the notice to the front of the disclosure statement; and

(2) on inquiry of the status of the disclosure statement, disclose that a statement has been filed but that the attorney general has questioned the correctness of the statement. (Bus. & Com. Code, Sec. 41.303.)

CHAPTER 52. INVENTION DEVELOPMENT SERVICES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 52.001. SHORT TITLE Sec. 52.002. DEFINITIONS Sec. 52.003. APPLICABILITY OF CHAPTER TO CONTRACT FOR

INVENTION DEVELOPMENT SERVICES Sec. 52.004. WAIVER BY CUSTOMER PROHIBITED

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SUBCHAPTER B. FINANCIAL REQUIREMENTS OF INVENTION DEVELOPERS

Sec. 52.051. BOND REQUIRED Sec. 52.052. BENEFICIARY OF BOND; CLAIM AGAINST BOND Sec. 52.053. CASH DEPOSIT INSTEAD OF BOND

[Sections 52.054-52.100 reserved for expansion]

SUBCHAPTER C. INVENTION DEVELOPMENT SERVICES CONTRACT

Sec. 52.101. WRITTEN CONTRACT REQUIRED; CUSTOMER COPY Sec. 52.102. MANDATORY CONTRACT TERMS Sec. 52.103. MULTIPLE CONTRACTS Sec. 52.104. PAYMENT FOR SERVICES; OPTION TO TERMINATE

CONTRACT Sec. 52.105. COVER NOTICE REQUIRED Sec. 52.106. QUARTERLY REPORTS TO CUSTOMER REQUIRED

[Sections 52.107-52.150 reserved for expansion]

SUBCHAPTER D. ENFORCEMENT

Sec. 52.151. CONTRACT VOIDABLE Sec. 52.152. PRIVATE CAUSE OF ACTION Sec. 52.153. DECEPTIVE TRADE PRACTICE Sec. 52.154. MUTUALLY EXCLUSIVE REMEDIES Sec. 52.155. PRESUMPTION OF INJURY Sec. 52.156. ENFORCEMENT BY ATTORNEY GENERAL Sec. 52.157. APPLICATION OF OTHER LAWS

CHAPTER 52. INVENTION DEVELOPMENT SERVICES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 52.001. SHORT TITLE. This chapter may be cited as the Regulation of Invention Development Services Act. (V.A.C.S. Art. 9020, Sec. 1.)

Sec. 52.002. DEFINITIONS. In this chapter:

(1) "Customer" means:

(A) an individual who enters into a contract with an invention developer for invention development services; or

(B) a firm, partnership, corporation, or other entity that enters into a contract with an invention developer for invention development services and is not purchasing those services as an adjunct to the traditional commercial enterprises in which the entity engages as a business.

(2) "Invention" means a discovery, process, machine, design, formulation, product, concept, idea, or any combination of these, regardless of whether patentable.

(3) "Invention developer" means an individual, firm, partnership, or corporation, or an agent, employee, officer, partner, or independent contractor of one of those entities, who:

(A) performs or offers to perform invention development services for a customer; and

(B) is not:

(i) a federal, state, or local government department or agency;

(ii) a nonprofit, charitable, scientific, or educational organization organized under the Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil Statutes) or formed under Title 1 and Chapter 22, Business Organizations Code, or described by Section 170(b)(1)(A), Internal Revenue Code of 1986, as amended;

(iii) an attorney acting within the scope of the attorney's professional license;

(iv) a person registered to practice before the United States Patent and Trademark Office and acting within the scope of that person's professional license; or

(v) a person, firm, corporation, association, or other entity that does not charge a fee, including reimbursement for expenditures made or costs incurred by the entity, for invention development services other than payment made from a portion of the income a customer received by virtue of an act performed by the entity.

(4) "Invention development services" means an act done by or for an invention developer for the invention developer's procurement or attempted procurement of a licensee or buyer of an intellectual property right in an invention, including:

(A) evaluating, perfecting, marketing, or brokering an invention;

(B) performing a patent search; and

(C) preparing or prosecuting a patent application by a person not registered to practice before the United States Patent and Trademark Office. (V.A.C.S. Art. 9020, Secs. 2, 3, 4.)

Sec. 52.003. APPLICABILITY OF CHAPTER TO CONTRACT FOR INVENTION DEVELOPMENT SERVICES. This chapter applies to each contract under which an invention developer agrees to perform invention development services for a customer. (V.A.C.S. Art. 9020, Sec. 5(a) (part).)

Sec. 52.004. WAIVER BY CUSTOMER PROHIBITED. A waiver by a customer of a provision of this chapter is void. (V.A.C.S. Art. 9020, Sec. 9(a) (part).)

[Sections 52.005-52.050 reserved for expansion]

SUBCHAPTER B. FINANCIAL REQUIREMENTS OF INVENTION DEVELOPERS

Sec. 52.051. BOND REQUIRED. (a) Except as provided by Section 52.053, an invention developer performing or offering to perform invention development services in this state shall maintain a bond issued by a surety company authorized to transact business in this state.

(b) The principal amount of the bond must equal at least the greater of:

(1) five percent of the invention developer's gross income from the invention development business in this state during the invention developer's last fiscal year; or

(2) $25,000.

(c) The invention developer must file a copy of the bond with the secretary of state before the date the invention developer begins business in this state.

(d) Before the 91st day after the last day of the invention developer's fiscal year, the invention developer shall change the amount of the bond if necessary to conform with this section and Section 52.052. (V.A.C.S. Art. 9020, Sec. 11(a).)

Sec. 52.052. BENEFICIARY OF BOND; CLAIM AGAINST BOND. (a) The bond required by Section 52.051 must be:

(1) in favor of this state; and

(2) for the benefit of any person who, after entering into a contract for invention development services with the invention developer, is damaged by fraud, dishonesty, or failure to provide the invention developer's services in performance of the contract.

(b) A person making a claim against the bond may bring an action against the invention developer and the surety. The aggregate liability of the surety to all persons for all breaches of conditions of the bond required by this section is limited to the amount of the bond. (V.A.C.S. Art. 9020, Sec. 11(b).)

Sec. 52.053. CASH DEPOSIT INSTEAD OF BOND. Instead of furnishing the bond required by Section 52.051, the invention developer may provide for, in an amount equal to the amount of the bond required:

(1) cash deposited with the secretary of state;

(2) a certificate of deposit payable to the secretary of state and issued by a bank that is:

(A) transacting business in this state; and

(B) insured by the Federal Deposit Insurance Corporation;

(3) an investment certificate of a share account assigned to the secretary of state and issued by a savings and loan association that is:

(A) transacting business in this state; and

(B) insured by the Federal Deposit Insurance Corporation; or

(4) a bearer bond issued by the United States government or this state. (V.A.C.S. Art. 9020, Sec. 11(c).)

[Sections 52.054-52.100 reserved for expansion]

SUBCHAPTER C. INVENTION DEVELOPMENT SERVICES CONTRACT

Sec. 52.101. WRITTEN CONTRACT REQUIRED; CUSTOMER COPY. (a) A contract for invention development services must be in writing.

(b) The invention developer shall give a copy of the contract to the customer at the time the customer signs the contract. (V.A.C.S. Art. 9020, Sec. 5(a) (part).)

Sec. 52.102. MANDATORY CONTRACT TERMS. (a) A contract for invention development services must contain in boldfaced type of not less than 10-point size:

(1) the payment terms;

(2) the contract termination rights required by Section 52.104;

(3) a full, clear, and concise description of the specific acts or services that the invention developer agrees to perform for the customer;

(4) a statement of whether the invention developer agrees to construct, sell, or distribute one or more prototypes, models, or devices embodying the customer's invention;

(5) the full name and principal place of business of the invention developer;

(6) the name and principal place of business of any parent, subsidiary, or affiliated company that may engage in performing any of the invention development services;

(7) if the invention developer makes an oral or written representation of estimated or projected customer earnings, a statement of estimated or projected customer earnings and a description of the data on which the estimation or projection is based;

(8) the name and address of the custodian of all records and correspondence pertaining to the invention development services described by the contract;

(9) a statement that the invention developer:

(A) is required to maintain all records and correspondence relating to performance of the invention development services for the customer until the second anniversary of the date the contract expires; and

(B) on seven days' written notice will make the invention development services records and correspondence available to the customer or the customer's representative for review and copying at the customer's reasonable expense on the invention developer's premises during normal business hours; and

(10) a time schedule for performance of the invention development services, including an estimated date by which performance is expected to be completed.

(b) An invention developer is a fiduciary to the extent that the description of specific acts or services required by Subsection (a)(3) gives the invention developer discretion in determining which acts or services will be performed. (V.A.C.S. Art. 9020, Sec. 8.)

Sec. 52.103. MULTIPLE CONTRACTS. If it is the invention developer's normal practice to seek more than one contract in connection with an invention or if the invention developer normally seeks to perform services in connection with an invention in more than one phase with the performance of each phase covered in one or more subsequent contracts, the invention developer shall give to the customer at the time the customer signs the first contract:

(1) a written statement describing that practice; and

(2) a written summary of the developer's normal terms, if any, for subsequent contracts, including the approximate amount of the developer's normal fees or other consideration that the developer may require from the customer. (V.A.C.S. Art. 9020, Sec. 5(b).)

Sec. 52.104. PAYMENT FOR SERVICES; OPTION TO TERMINATE CONTRACT. (a) For purposes of this section, delivery of a promissory note, bill of exchange, or negotiable instrument of any kind to the invention developer or to a third party for the benefit of the invention developer is payment, regardless of the date or dates appearing on the instrument.

(b) Notwithstanding any contractual provision to the contrary, payment for invention development services may not be required, made, or received before the fourth working day after the date the customer receives a copy of the contract for invention development services signed by the invention developer and the customer.

(c) Until the payment for invention development services is made, the parties to the contract have the option to terminate the contract. The customer may exercise the option to terminate by refraining from making payment to the invention developer. The invention developer may exercise the option to terminate by giving to the customer a written notice of the invention developer's exercise of the option. The written notice becomes effective when the customer receives the notice. (V.A.C.S. Art. 9020, Secs. 5(c), (d), (e).)

Sec. 52.105. COVER NOTICE REQUIRED. (a) A contract for invention development services must have attached a conspicuous and legible cover sheet that contains:

(1) the name, home address, office address, and local office address of the invention developer; and

(2) the following notice in boldfaced type of not less than 10-point size:

THIS CONTRACT BETWEEN YOU AND AN INVENTION DEVELOPER IS REGULATED BY THE STATE OF TEXAS' REGULATION OF INVENTION DEVELOPMENT SERVICES ACT. YOU ARE NOT PERMITTED OR REQUIRED TO MAKE ANY PAYMENTS UNDER THIS CONTRACT UNTIL FOUR (4) WORKING DAYS AFTER YOU SIGN THIS CONTRACT AND RECEIVE A COMPLETED COPY OF IT.

IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO THE INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE THE RIGHT TO SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR CONSENT AND MAY NOT HAVE TO SHARE THE PROFITS WITH YOU.

THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH THE INVENTION DEVELOPER SINCE (year) IS (number). THE TOTAL NUMBER OF CUSTOMERS KNOWN BY THIS INVENTION DEVELOPER TO HAVE RECEIVED, BY VIRTUE OF THIS INVENTION DEVELOPER'S PERFORMANCE, AN AMOUNT OF MONEY IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION DEVELOPER IS (number).

YOU ARE ENCOURAGED TO CONSULT WITH A QUALIFIED ATTORNEY BEFORE SIGNING THIS CONTRACT. BY PROCEEDING WITHOUT THE ADVICE OF A QUALIFIED ATTORNEY, YOU COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN YOUR IDEA OR INVENTION.

(b) The invention developer shall complete the cover sheet by providing the proper information in the blanks of the cover sheet. In the first blank the invention developer shall enter the later of the year that the invention developer began to transact business or May 7, 1981. The invention developer may round the numbers the invention developer enters in the last two blanks to the nearest 100 and, in computing the numbers, may exclude persons who have contracted with the invention developer during the three calendar months preceding the date of the contract. If the number to be inserted in the third blank is zero, the invention developer shall enter a zero in the blank.

(c) The cover sheet may not contain anything other than the information required by Subsection (a). (V.A.C.S. Art. 9020, Sec. 6.)

Sec. 52.106. QUARTERLY REPORTS TO CUSTOMER REQUIRED. At least once each calendar quarter during the term of a contract for invention development services, the invention developer shall deliver to the customer at the address specified in the contract a written report that identifies the contract and contains:

(1) a full, clear, and concise description of the services performed up to the date of the report and of the services to be performed; and

(2) the name and address of each person to whom the subject matter of the contract has been disclosed, the reason for each disclosure, the nature of the disclosure, and copies of all responses received as a result of those disclosures. (V.A.C.S. Art. 9020, Sec. 7.)

[Sections 52.107-52.150 reserved for expansion]

SUBCHAPTER D. ENFORCEMENT

Sec. 52.151. CONTRACT VOIDABLE. A contract for invention development services is voidable at the option of the customer if the contract:

(1) does not substantially comply with this chapter; or

(2) was entered into in reliance on any false, fraudulent, or misleading information, representation, notice, or advertisement of the invention developer. (V.A.C.S. Art. 9020, Sec. 9(a) (part).)

Sec. 52.152. PRIVATE CAUSE OF ACTION. (a) This section applies only to a customer who is injured by an invention developer's:

(1) violation of this chapter;

(2) false or fraudulent statement, representation, or omission of material fact; or

(3) failure to make all disclosures required by this chapter.

(b) A customer to whom this section applies may recover in a civil action against the invention developer:

(1) the greater of:

(A) the amount of any actual damages sustained by the customer; or

(B) $1,000;

(2) court costs; and

(3) attorney's fees. (V.A.C.S. Art. 9020, Sec. 9(b).)

Sec. 52.153. DECEPTIVE TRADE PRACTICE. The following acts, omissions, or failures by an invention developer constitute a deceptive trade practice under Chapter 17:

(1) a violation of this chapter;

(2) an omission of material fact; or

(3) a failure to make a disclosure required by this chapter. (V.A.C.S. Art. 9020, Sec. 9(c) (part).)

Sec. 52.154. MUTUALLY EXCLUSIVE REMEDIES. Remedies available under Sections 52.152 and 52.153 are mutually exclusive. (V.A.C.S. Art. 9020, Sec. 9(c) (part).)

Sec. 52.155. PRESUMPTION OF INJURY. For purposes of Sections 52.152 and 52.153, a rebuttable presumption of injury is established by:

(1) a substantial violation of this chapter by an invention developer; or

(2) a customer's execution of a contract for invention development services in reliance on a false or fraudulent statement, representation, or an omission of material fact. (V.A.C.S. Art. 9020, Sec. 9(d).)

Sec. 52.156. ENFORCEMENT BY ATTORNEY GENERAL. (a) The attorney general shall enforce this chapter.

(b) The attorney general may:

(1) recover a civil penalty not to exceed $2,000 for each violation of this chapter; and

(2) seek equitable relief to restrain a violation of this chapter. (V.A.C.S. Art. 9020, Sec. 10.)

Sec. 52.157. APPLICATION OF OTHER LAWS. This chapter does not nullify or limit any obligation, right, or remedy that is applicable or available under the law of this state. (V.A.C.S. Art. 9020, Sec. 12.)

CHAPTER 53. STORE LEASES

Sec. 53.001. STORE LEASE CONTRACT

CHAPTER 53. STORE LEASES

Sec. 53.001. STORE LEASE CONTRACT. (a) A provision of a lease contract that requires a store to be open when another store located in the same shopping center is open does not apply on Sunday unless the provision specifically states that it applies on Sunday.

(b) This section applies to a contract executed before or after September 1, 1985. (Bus. & Com. Code, Sec. 35.44.)

CHAPTER 54. COMPENSATION AGREEMENTS FOR SALES REPRESENTATIVES

Sec. 54.001. DEFINITIONS Sec. 54.002. CONTRACT Sec. 54.003. PAYMENT ON TERMINATION OF CERTAIN

COMPENSATION AGREEMENTS Sec. 54.004. DAMAGES Sec. 54.005. PERSONAL JURISDICTION Sec. 54.006. WAIVER

CHAPTER 54. COMPENSATION AGREEMENTS FOR SALES REPRESENTATIVES

Sec. 54.001. DEFINITIONS. In this chapter:

(1) "Commission" means compensation paid a sales representative by a principal in an amount based on a percentage of the dollar amount of certain orders for or sales of the principal's product.

(2) "Principal" means a person who:

(A) manufactures, produces, imports, or distributes a product for sale;

(B) uses a sales representative to solicit orders for the product; and

(C) compensates the sales representative wholly or partly by commission.

(3) "Sales representative" means an independent contractor who solicits, on behalf of a principal, orders for the purchase at wholesale of the principal's product. (Bus. & Com. Code, Sec. 35.81.)

Sec. 54.002. CONTRACT. (a) A contract between a principal and a sales representative under which the sales representative is to solicit wholesale orders within this state must:

(1) be in writing or in a computer-based medium; and

(2) state the method by which the sales representative's commission is to be computed and paid.

(b) The principal shall provide the sales representative with a copy of the contract.

(c) A provision in the contract establishing venue for an action arising under the contract in a state other than this state is void. (Bus. & Com. Code, Sec. 35.82.)

Sec. 54.003. PAYMENT ON TERMINATION OF CERTAIN COMPENSATION AGREEMENTS. If a compensation agreement between a sales representative and a principal that does not comply with Section 54.002 is terminated, the principal shall pay all commissions due the sales representative not later than the 30th working day after the date of the termination. (Bus. & Com. Code, Sec. 35.83.)

Sec. 54.004. DAMAGES. A principal who fails to comply with a provision of a contract under Section 54.002 relating to payment of a commission or who fails to pay a commission as required by Section 54.003 is liable to the sales representative in a civil action for:

(1) three times the unpaid commission due the sales representative; and

(2) reasonable attorney's fees and costs. (Bus. & Com. Code, Sec. 35.84.)

Sec. 54.005. PERSONAL JURISDICTION. A principal who is not a resident of this state and who enters into a contract subject to this chapter is considered to be transacting business in this state for purposes of the exercise of personal jurisdiction over the principal. (Bus. & Com. Code, Sec. 35.85.)

Sec. 54.006. WAIVER. A provision of this chapter may not be waived, whether by an express waiver or by an attempt to make a contract or agreement subject to the laws of another state. A waiver of a provision of this chapter is void. (Bus. & Com. Code, Sec. 35.86.)

CHAPTER 55. FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION, FORESTRY

HARVESTING, AND OUTDOOR POWER EQUIPMENT DEALER AGREEMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 55.001. DEFINITIONS Sec. 55.002. SECURITY INTEREST Sec. 55.003. WAIVER OF CHAPTER

[Sections 55.004-55.050 reserved for expansion]

SUBCHAPTER B. PROVISIONS REGARDING DEALER AGREEMENT OR DEALERSHIP

Sec. 55.051. SUPPLEMENTARY AGREEMENT Sec. 55.052. CHANGE IN COMPETITIVE CIRCUMSTANCES Sec. 55.053. INTEREST IN DEALERSHIP BY SALE OR

TRANSFER Sec. 55.054. TRANSFER OF CONTROLLING INTEREST IN

DEALERSHIP BY SUCCESSION Sec. 55.055. CONTINUATION OF AGREEMENT Sec. 55.056. CAUSE REQUIRED FOR TERMINATION Sec. 55.057. RENOVATION OR ADDITIONAL SPACE

[Sections 55.058-55.100 reserved for expansion]

SUBCHAPTER C. WARRANTIES

Sec. 55.101. APPLICABILITY OF SUBCHAPTER Sec. 55.102. ACCEPTANCE OR REJECTION OF WARRANTY CLAIM Sec. 55.103. SUPPLIER'S RECOVERY OF WARRANTY CLAIM Sec. 55.104. PURCHASER'S WARRANTY AGREEMENT

[Sections 55.105-55.150 reserved for expansion]

SUBCHAPTER D. DELIVERY, SALE, AND RETURN OF EQUIPMENT

Sec. 55.151. COERCED ORDERS, DELIVERIES, OR REFUSALS

TO PURCHASE PROHIBITED Sec. 55.152. DISCRIMINATION AMONG DEALERS Sec. 55.153. LATE DELIVERY OF BACK-ORDERED SEASONAL

DEMAND ITEM Sec. 55.154. SALES TO AFFILIATED DEALER Sec. 55.155. RETURN OF INVENTORY; RESPONSIBILITY FOR

COSTS Sec. 55.156. RETURN OF DATA PROCESSING OR PERIPHERAL

EQUIPMENT, SOFTWARE, OR CERTAIN TOOLS;

RESPONSIBILITY FOR COSTS Sec. 55.157. SUPPLIER'S LIABILITY FOR LATE PAYMENT Sec. 55.158. EXCEPTIONS TO SUPPLIER'S REPURCHASE,

PURCHASE, OR ASSUMPTION RESPONSIBILITY

[Sections 55.159-55.200 reserved for expansion]

SUBCHAPTER E. ENFORCEMENT

Sec. 55.201. ACTION FOR VIOLATION OF CHAPTER

CHAPTER 55. FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION, FORESTRY

HARVESTING, AND OUTDOOR POWER EQUIPMENT DEALER AGREEMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 55.001. DEFINITIONS. In this chapter:

(1) "Controlling interest" means 50 percent or more ownership of or a managing interest in a dealership.

(2) "Current price" means an amount equal to the price listed in the supplier's printed price list in effect when a dealer agreement is terminated, less applicable trade and cash discounts.

(3) "Dealer" means a person in the business of the retail sale of equipment. The term does not include an individual, partnership, or corporation who:

(A) is primarily engaged in the retail sale and service of off-road construction and earth-moving equipment;

(B) has purchased 75 percent or more of the dealer's total new product inventory from a single supplier under all agreements with that supplier; and

(C) has a total annual average sales volume in excess of $100 million for the preceding three years with that single supplier for the territory for which the dealer is responsible in this state.

(4) "Dealer agreement" means an oral or written contract, of definite or indefinite duration, between a supplier and a dealer, that states the rights and obligations of the parties with respect to the purchase or sale of equipment.

(5) "Dealer cost" means an amount equal to the sum of the original invoice price that the dealer paid for inventory and the cost to the dealer of the inventory's delivery from the supplier to the dealer, less applicable discounts.

(6) "Dealership" means the retail sale business engaged in by a dealer under a dealer agreement.

(7) "Equipment" means farm tractors, farm implements, utility tractors, industrial tractors, forklifts, material-handling equipment, forestry harvesting equipment, off-road construction equipment, and outdoor power equipment and any attachments to or repair parts for those items.

(8) "Inventory" means new or unused equipment that is provided by a supplier to a dealer under a dealer agreement and that was:

(A) purchased within the 30-month period preceding the date of the termination of the dealership; or

(B) listed in the supplier's current sales manual on the date of termination.

(9) "Outdoor power equipment" means machinery operated by an engine or electric power and used in the landscaping or cultivation of land for nonagricultural purposes. The term includes lawn and garden implements.

(10) "Supplier" means:

(A) a person engaged in the manufacture, assembly, or wholesale distribution of equipment; or

(B) the person's successor in interest, including a purchaser of assets or stock and a surviving corporation resulting from a merger, liquidation, or reorganization. (Bus. & Com. Code, Secs. 19.01(2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (12).)

Sec. 55.002. SECURITY INTEREST. This chapter does not affect a supplier's security interest in inventory. (Bus. & Com. Code, Sec. 19.03.)

Sec. 55.003. WAIVER OF CHAPTER. An attempted waiver of a provision of this chapter is void. (Bus. & Com. Code, Sec. 19.05.)

[Sections 55.004-55.050 reserved for expansion]

SUBCHAPTER B. PROVISIONS REGARDING DEALER AGREEMENT OR DEALERSHIP

Sec. 55.051. SUPPLEMENTARY AGREEMENT. A supplier may not coerce or compel a dealer to enter into a written or oral agreement supplementing a dealer agreement with the supplier unless the supplementary agreement is imposed on all other similarly situated dealers in this state. (Bus. & Com. Code, Sec. 19.21.)

Sec. 55.052. CHANGE IN COMPETITIVE CIRCUMSTANCES. A supplier may not substantially change the competitive circumstances of a dealer agreement without cause. (Bus. & Com. Code, Sec. 19.27.)

Sec. 55.053. INTEREST IN DEALERSHIP BY SALE OR TRANSFER. (a) A supplier may not prevent, by contract or otherwise, a dealer or an officer, member, partner, or shareholder of a dealer from selling or transferring a noncontrolling interest in the dealership to another person.

(b) A supplier may prevent a person from selling or transferring a controlling interest in a dealership without the supplier's written consent. A supplier may not unreasonably withhold the supplier's consent to a sale or transfer of a controlling interest. (Bus. & Com. Code, Secs. 19.26(a), (b).)

Sec. 55.054. TRANSFER OF CONTROLLING INTEREST IN DEALERSHIP BY SUCCESSION. (a) In this section, "family member" means an individual related within the second degree by consanguinity or affinity to an individual owning a controlling interest.

(b) A supplier and a dealer may provide by written agreement for succession rights to a controlling interest in a dealership on the death of an individual owning the controlling interest.

(c) If not otherwise determined by a written agreement between the dealer and supplier, on the death of an individual owning a controlling interest in a dealership, the family member to whom the interest passes by will or intestate succession may request that the supplier consent to a transfer of the ownership interest to the family member.

(d) The supplier shall consent to a transfer described by Subsection (c) if the family member meets the reasonable financial, business experience, and character standards of the supplier. Before the 91st day after the date the supplier receives the family member's request, the supplier shall send a written response to the family member that:

(1) grants the supplier's consent; or

(2) states the supplier's refusal to consent and the specific reasons for the refusal. (Bus. & Com. Code, Secs. 19.26(c), (d).)

Sec. 55.055. CONTINUATION OF AGREEMENT. Section 55.053 or 55.054 does not require a supplier to continue a dealer agreement if the supplier determines that the dealer's area of responsibility or trade area lacks sufficient sales potential to reasonably support continuation of the agreement. (Bus. & Com. Code, Sec. 19.26(e).)

Sec. 55.056. CAUSE REQUIRED FOR TERMINATION. A supplier may not terminate, cancel, or fail to renew a dealer agreement without cause. (Bus. & Com. Code, Sec. 19.41.)

Sec. 55.057. RENOVATION OR ADDITIONAL SPACE. A supplier may not require as a condition of renewal or extension of a dealer agreement that the dealer complete substantial renovation of the dealer's place of business or acquire new or additional space to serve as the dealer's place of business, unless the supplier gives the dealer:

(1) one year's written notice of the requirement that states all grounds for the requirement; and

(2) reasonable time to complete the renovation or acquisition. (Bus. & Com. Code, Sec. 19.42.)

[Sections 55.058-55.100 reserved for expansion]

SUBCHAPTER C. WARRANTIES

Sec. 55.101. APPLICABILITY OF SUBCHAPTER. This subchapter applies only to a warranty claim submitted by a dealer:

(1) while the dealer agreement is in effect; or

(2) after the termination of the dealer agreement, if the claim is for work performed before the effective date of the termination. (Bus. & Com. Code, Sec. 19.28(a).)

Sec. 55.102. ACCEPTANCE OR REJECTION OF WARRANTY CLAIM. (a) Not later than the 30th day after the date a supplier receives a warranty claim from a dealer, the supplier shall accept or reject the claim. A claim not rejected before that date is considered accepted.

(b) Not later than the 30th day after the date a warranty claim is accepted or rejected, the supplier shall:

(1) pay the accepted claim; or

(2) send the dealer written notice of the grounds for rejecting the claim.

(c) A supplier, including a supplier of an electric engine or motor, who pays a claim may not pay less than the hourly labor rate and other expenses involved in the work that the dealer regularly charges to a retail customer who does not assert a warranty and the dealer's net price plus 15 percent for parts. The number of hours of labor claimed may not exceed 1-1/2 times the supplier's recommended hours for the work. (Bus. & Com. Code, Secs. 19.28(b), (c), (d).)

Sec. 55.103. SUPPLIER'S RECOVERY OF WARRANTY CLAIM. After paying a warranty claim, a supplier may not charge back, set off, or otherwise attempt to recover all or part of the amount of the claim unless:

(1) the claim was fraudulent;

(2) the work for which the claim was made was not properly performed or was unnecessary to comply with the warranty; or

(3) the dealer did not substantiate the claim according to the supplier's written requirements in effect when the claim arose. (Bus. & Com. Code, Sec. 19.28(e).)

Sec. 55.104. PURCHASER'S WARRANTY AGREEMENT. A dealer or supplier authorized to sell new farm, industrial, or outdoor power equipment shall give the purchaser a written warranty agreement including replacement or cash refund. If the dealer determines the equipment cannot be made usable, the manufacturer is liable to the purchaser for the replacement or cash refund. (Bus. & Com. Code, Sec. 19.28(f).)

[Sections 55.105-55.150 reserved for expansion]

SUBCHAPTER D. DELIVERY, SALE, AND RETURN OF EQUIPMENT

Sec. 55.151. COERCED ORDERS, DELIVERIES, OR REFUSALS TO PURCHASE PROHIBITED. A supplier may not coerce or compel a dealer to:

(1) order or accept delivery of equipment with a special feature or accessory not included in the base list price of the equipment as publicly advertised by the supplier unless the special feature or accessory is a safety feature or accessory required by the supplier or by applicable law; or

(2) refuse to purchase equipment manufactured by another manufacturer. (Bus. & Com. Code, Sec. 19.22.)

Sec. 55.152. DISCRIMINATION AMONG DEALERS. (a) A supplier may not discriminate among dealers in the supplier's delivery, in reasonable quantities and within a reasonable time after receipt of a dealer's order, of equipment covered by the dealer agreement and specifically represented by the supplier as available for immediate delivery.

(b) Subsection (a) does not apply if the discrimination is because of:

(1) the supplier's restrictions on extending credit to the dealer;

(2) the dealer's default under a dealership agreement; or

(3) an act of God, work stoppage or delay because of a strike or labor difficulty, bona fide shortage of materials, freight embargo, or other cause over which the supplier has no control. (Bus. & Com. Code, Sec. 19.23.)

Sec. 55.153. LATE DELIVERY OF BACK-ORDERED SEASONAL DEMAND ITEM. (a) Unless the supplier notifies a dealer of the status of a back-ordered item before shipment of the item to the dealer, a dealer may reject the delivery of an item of equipment other than a repair part or attachment from a supplier if:

(1) the item has special value in a particular time of year because of predictable seasonal demand and is less marketable and less valuable after the seasonal demand period ends;

(2) the item was back-ordered and delivery is made after the seasonal demand period ends; and

(3) the dealer sends written notice of the rejection to the supplier before the 11th day after the delivery of the item.

(b) The supplier shall pay the costs of the return of an item the delivery of which is rejected under Subsection (a).

(c) A supplier may not coerce or compel a dealer to accept late delivery of back-ordered seasonal demand equipment other than repair parts or attachments. (Bus. & Com. Code, Sec. 19.24.)

Sec. 55.154. SALES TO AFFILIATED DEALER. (a) In this section, "affiliated dealer" means a dealer in which a supplier has an ownership interest.

(b) Except as provided by Subsection (c), a supplier may not:

(1) sell or offer to sell new or unused equipment to an affiliated dealer at a price lower than the price for a sale of the same equipment, identically equipped, to a nonaffiliated dealer; or

(2) use a sales promotion plan or other program or device that results in a sale or offer of sale of new or unused equipment to an affiliated dealer at an actual price that is:

(A) lower than the price for a nonaffiliated dealer; or

(B) fixed and predetermined solely by the supplier.

(c) This section does not apply to sales made to a dealer for resale to:

(1) a unit, agency, or political subdivision of the United States or this state;

(2) a major fleet account; or

(3) an organization for testing or demonstrating the equipment. (Bus. & Com. Code, Secs. 19.01(1), 19.25.)

Sec. 55.155. RETURN OF INVENTORY; RESPONSIBILITY FOR COSTS. (a) If on termination of a dealer agreement the dealer delivers to the supplier or a person designated by the supplier inventory purchased from the supplier and held by the dealer on the date of the termination, the supplier shall pay to the dealer:

(1) the dealer cost of new, unsold, undamaged, and complete equipment, other than repair parts, returned by the dealer; and

(2) an amount equal to:

(A) 85 percent of the current price of new, undamaged repair parts returned by the dealer, if the supplier handles, packs, and loads the parts; or

(B) 90 percent of the current price of new, undamaged repair parts returned by the dealer, if the supplier does not handle, pack, or load the parts.

(b) Before returning inventory under this section and not later than the 120th day after the effective date of termination, the dealer shall submit to the supplier a list of the inventory the dealer intends to return, including, to the extent possible, each item's trade name, description, and serial number. Not later than the 60th day after the date the supplier receives the list, the supplier shall notify the dealer in writing of:

(1) each item that the supplier claims is not subject to reimbursement under this section; and

(2) the destination for each item the dealer is to deliver to a person designated by the supplier.

(c) The supplier may subtract from the amount owed under Subsection (a) the amount of debt owed by the dealer to the supplier.

(d) The supplier and dealer are each responsible for one-half of the cost of delivering the inventory to the supplier or a person designated by the supplier, except that if the dealer delivers an item to a person designated by the supplier the dealer is not responsible for the amount that exceeds the amount for which the dealer would have been responsible if the item had been delivered to the supplier.

(e) The supplier shall pay the amount owed under this section:

(1) before the 91st day after the date the supplier or person designated by the supplier receives inventory from the dealer; and

(2) after the dealer has furnished proof that the inventory was purchased from the supplier.

(f) On payment of the amount owed under this section, title to the inventory is transferred to the supplier or person designated by the supplier.

(g) A supplier and dealer may by agreement alter the time limits provided by this section. (Bus. & Com. Code, Sec. 19.43.)

Sec. 55.156. RETURN OF DATA PROCESSING OR PERIPHERAL EQUIPMENT, SOFTWARE, OR CERTAIN TOOLS; RESPONSIBILITY FOR COSTS. (a) If on termination of a dealer agreement the dealer delivers to the supplier data processing or peripheral equipment, software, or specialized repair tools that the supplier required the dealer to purchase or lease, the supplier shall:

(1) assume any responsibilities of the dealer under the lease for that equipment or software; and

(2) pay the dealer:

(A) an amount equal to the fair market value of the data processing or peripheral equipment or software purchased by the dealer and delivered to the supplier; and

(B) an amount equal to 75 percent of the cost to the dealer of the specialized repair tools purchased by the dealer and delivered to the supplier.

(b) The supplier and dealer are each responsible for one-half of the cost of delivering the data processing or peripheral equipment, software, or specialized repair tools to the supplier.

(c) The supplier shall assume the responsibilities under the lease and pay the amount required by this section before the 61st day after the date the supplier receives the data processing or peripheral equipment, software, or specialized repair tools.

(d) On payment of the amount required by this section, title or the right of possession to the data processing or peripheral equipment or specialized repair tools purchased or leased by the dealer is transferred to the supplier. (Bus. & Com. Code, Sec. 19.44.)

Sec. 55.157. SUPPLIER'S LIABILITY FOR LATE PAYMENT. A supplier who does not make a payment required by Section 55.155 or 55.156 before the 61st day after the date the supplier receives the final shipment of the inventory, data processing or peripheral equipment, software, or specialized repair tools from the dealer is liable to the dealer for:

(1) the greater of the dealer cost or current price of any inventory;

(2) any cost to the dealer of the data processing or peripheral equipment, software, or specialized repair tools;

(3) any expense incurred by the dealer in returning the inventory, data processing or peripheral equipment, software, or specialized repair tools to the supplier;

(4) interest on any amounts owed under Subdivision (1), (2), or (3), at the rate applicable to a judgment of a court of this state, beginning on the 61st day after the date the supplier received the inventory, data processing or peripheral equipment, software, or specialized repair tools;

(5) reasonable attorney's fees; and

(6) court costs. (Bus. & Com. Code, Sec. 19.47.)

Sec. 55.158. EXCEPTIONS TO SUPPLIER'S REPURCHASE, PURCHASE, OR ASSUMPTION RESPONSIBILITY. (a) A supplier is not required to repurchase:

(1) inventory:

(A) that the dealer orders after the dealer receives notice of the termination of the dealer agreement from the supplier; or

(B) for which the dealer cannot furnish evidence of clear title that is satisfactory to the supplier; or

(2) a repair part that:

(A) has a limited storage life and was purchased from the supplier more than two years before the date of termination of the dealer agreement;

(B) is in a broken or damaged package;

(C) is usually sold as part of a set, if the part is separated from the set; or

(D) cannot be sold without reconditioning or repackaging.

(b) A supplier is not required to purchase or assume the responsibilities under the lease for:

(1) data processing or peripheral equipment or software that the dealer purchased that was not specifically required by the supplier; or

(2) a specialized repair tool that:

(A) is not unique to the supplier's product line;

(B) is not in complete and salable condition; or

(C) was not purchased by the dealer within the three-year period preceding the date of termination of the dealer agreement. (Bus. & Com. Code, Sec. 19.45.)

[Sections 55.159-55.200 reserved for expansion]

SUBCHAPTER E. ENFORCEMENT

Sec. 55.201. ACTION FOR VIOLATION OF CHAPTER. A person injured by a violation of this chapter may bring an action for:

(1) an injunction to prevent further violation;

(2) damages;

(3) reasonable attorney's fees; and

(4) costs. (Bus. & Com. Code, Sec. 19.02.)

TITLE 5. REGULATION OF BUSINESSES AND SERVICES

SUBTITLE A. GENERAL PRACTICES

CHAPTER 71. ASSUMED BUSINESS OR PROFESSIONAL NAME

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 71.001. SHORT TITLE Sec. 71.002. DEFINITIONS Sec. 71.003. APPLICABILITY OF CHAPTER

[Sections 71.004-71.050 reserved for expansion]

SUBCHAPTER B. REQUIREMENTS APPLICABLE TO CERTAIN UNINCORPORATED

PERSONS

Sec. 71.051. CERTIFICATE FOR CERTAIN UNINCORPORATED

PERSONS Sec. 71.052. CONTENTS OF CERTIFICATE Sec. 71.053. EXECUTION OF CERTIFICATE Sec. 71.054. PLACE OF FILING

[Sections 71.055-71.100 reserved for expansion]

SUBCHAPTER C. REQUIREMENTS APPLICABLE TO INCORPORATED BUSINESS OR

PROFESSION AND CERTAIN OTHER ENTITIES

Sec. 71.101. CERTIFICATE FOR INCORPORATED BUSINESS OR

PROFESSION, LIMITED PARTNERSHIP,

REGISTERED LIMITED LIABILITY

PARTNERSHIP, OR LIMITED LIABILITY

COMPANY Sec. 71.102. CONTENTS OF CERTIFICATE Sec. 71.103. PLACE OF FILING Sec. 71.104. EXECUTION OF CERTIFICATE

[Sections 71.105-71.150 reserved for expansion]

SUBCHAPTER D. GENERAL PROVISIONS REGARDING ASSUMED NAME

CERTIFICATE

Sec. 71.151. DURATION AND RENEWAL OF CERTIFICATE Sec. 71.152. MATERIAL CHANGE IN INFORMATION; NEW

CERTIFICATE Sec. 71.153. ABANDONMENT OF USE OF BUSINESS OR

PROFESSIONAL NAME Sec. 71.154. INDEX OF CERTIFICATES Sec. 71.155. FILING FEES Sec. 71.156. PRESCRIBED FORMS Sec. 71.157. EFFECT OF FILING Sec. 71.158. FILING OF REPRODUCTION

[Sections 71.159-71.200 reserved for expansion]

SUBCHAPTER E. PENALTIES

Sec. 71.201. CIVIL ACTION; SANCTION Sec. 71.202. CRIMINAL PENALTY: GENERAL VIOLATION Sec. 71.203. CRIMINAL PENALTY: FRAUDULENT FILING

CHAPTER 71. ASSUMED BUSINESS OR PROFESSIONAL NAME

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 71.001. SHORT TITLE. This chapter may be cited as the Assumed Business or Professional Name Act. (Bus. & Com. Code, Sec. 36.01.)

Sec. 71.002. DEFINITIONS. In this chapter:

(1) "Address" means:

(A) a post office address; and

(B) a street address, if the street address is not the same as the post office address.

(2) "Assumed name" means:

(A) for an individual, a name that does not include the surname of the individual;

(B) for a partnership, a name that does not include the surname or other legal name of each joint venturer or general partner;

(C) for an individual or a partnership, a name, including a surname, that suggests the existence of additional owners by including words such as "Company," "& Company," "& Son," "& Sons," "& Associates," "Brothers," and similar words, but not words that merely describe the business being conducted or the professional service being rendered;

(D) for a limited partnership, a name other than the name stated in its certificate of formation;

(E) for a company, a name used by the company;

(F) for a corporation, a name other than the name stated in its certificate of formation or a comparable document;

(G) for a registered limited liability partnership, a name other than the name stated in its application filed with the office of the secretary of state or a comparable document; and

(H) for a limited liability company, a name other than the name stated in its certificate of formation or a comparable document.

(3) "Certificate" means an assumed name certificate.

(4) "Company" means a real estate investment trust, a joint-stock company, or any other business, professional, or other association or legal entity that is not incorporated, other than a partnership, limited partnership, limited liability company, or registered limited liability partnership.

(5) "Corporation" means:

(A) a domestic or foreign corporation, professional corporation, professional association, or other corporation; or

(B) any other business, professional, or other association or legal entity that is incorporated.

(6) "Estate" means a person's property that is administered by a representative.

(7) "Office" means:

(A) for a person that is not an individual or that is a corporation that is not required to or does not maintain a registered office in this state, the person's:

(i) principal office; and

(ii) principal place of business if not the same as the person's principal office; and

(B) for a corporation, limited partnership, registered limited liability partnership, or limited liability company that is required to maintain a registered office in this state, the entity's:

(i) registered office; and

(ii) principal office if not the same as the entity's registered office.

(8) "Partnership" means a joint venture or general partnership other than a limited partnership or a registered limited liability partnership.

(9) "Person" includes an individual, partnership, limited partnership, limited liability company, registered limited liability partnership, company, or corporation.

(10) "Registrant" means a person who has filed, or on whose behalf there has been filed, a certificate under this chapter or other law.

(11) "Representative" means a trustee, administrator, executor, independent executor, guardian, conservator, trustee in bankruptcy, receiver, or other person appointed by a court or by trust or will to have custody of, take possession of, have title to, or otherwise be empowered to control the person or property of any person. (Bus. & Com. Code, Sec. 36.02; New.)

Sec. 71.003. APPLICABILITY OF CHAPTER. (a) This chapter does not apply to an insurer authorized to engage in business in this state and described in Subchapter A, Chapter 805, Insurance Code, except as specifically provided by the Insurance Code.

(b) This chapter does not require a corporation, limited partnership, registered limited liability partnership, or limited liability company or its shareholders, associates, partners, or members to file a certificate to conduct business or render a professional service in this state under the name of the entity as stated in the certificate of formation, application filed with the office of the secretary of state, or other comparable document of the entity. (Bus. & Com. Code, Secs. 36.03, 36.11(c).)

[Sections 71.004-71.050 reserved for expansion]

SUBCHAPTER B. REQUIREMENTS APPLICABLE TO CERTAIN UNINCORPORATED

PERSONS

Sec. 71.051. CERTIFICATE FOR CERTAIN UNINCORPORATED PERSONS. A person must file a certificate under this subchapter if the person regularly conducts business or renders a professional service in this state under an assumed name other than as a corporation, limited partnership, registered limited liability partnership, or limited liability company. (Bus. & Com. Code, Sec. 36.10(a) (part).)

Sec. 71.052. CONTENTS OF CERTIFICATE. The certificate must state:

(1) the assumed name under which the business is or is to be conducted or the professional service is or is to be rendered;

(2) if the registrant is:

(A) an individual, the individual's full name and residence address;

(B) a partnership:

(i) the venture or partnership name;

(ii) the venture or partnership office address;

(iii) the full name of each joint venturer or general partner; and

(iv) each joint venturer's or general partner's residence address if the venturer or partner is an individual or the joint venturer's or general partner's office address if the venturer or partner is not an individual;

(C) an estate:

(i) the name of the estate;

(ii) the estate's office address, if any;

(iii) the full name of each representative of the estate; and

(iv) each representative's residence address if the representative is an individual or the representative's office address if the representative is not an individual;

(D) a real estate investment trust:

(i) the name of the trust;

(ii) the address of the trust;

(iii) the full name of each trustee manager; and

(iv) each trustee manager's residence address if the trustee manager is an individual or the trustee manager's office address if the trustee manager is not an individual; or

(E) a company, other than a real estate investment trust, or a corporation:

(i) the name of the company or corporation;

(ii) the state, country, or other jurisdiction under the laws of which the company or corporation was organized or incorporated; and

(iii) the company's or corporation's office address;

(3) the period, not to exceed 10 years, during which the registrant will use the assumed name; and

(4) a statement specifying that the business that is or will be conducted or the professional service that is or will be rendered in the county under the assumed name is being or will be conducted or rendered as a proprietorship, sole practitioner, partnership, real estate investment trust, joint-stock company, or other form of unincorporated business or professional association or entity other than a limited partnership, limited liability company, or registered limited liability partnership. (Bus. & Com. Code, Sec. 36.10(a) (part).)

Sec. 71.053. EXECUTION OF CERTIFICATE. (a) The certificate must be executed and acknowledged:

(1) by each individual whose name is required to be stated in the certificate or the individual's representative or attorney-in-fact; and

(2) under oath on behalf of each person whose name is required to be stated in the certificate and who is not an individual, by:

(A) the person's representative or attorney-in-fact; or

(B) a joint venturer, general partner, trustee manager, officer, or other person having authority regarding the person comparable to the person's representative or attorney-in-fact.

(b) A certificate executed and acknowledged by an attorney-in-fact must include a statement that the attorney has been authorized in writing by the attorney's principal to execute and acknowledge the certificate. (Bus. & Com. Code, Sec. 36.10(b).)

Sec. 71.054. PLACE OF FILING. A person shall file the certificate in the office of the county clerk in each county in which the person:

(1) has or will maintain business or professional premises; or

(2) conducts business or renders a professional service, if the person does not or will not maintain business or professional premises in any county. (Bus. & Com. Code, Sec. 36.10(a) (part).)

[Sections 71.055-71.100 reserved for expansion]

SUBCHAPTER C. REQUIREMENTS APPLICABLE TO INCORPORATED BUSINESS OR

PROFESSION AND CERTAIN OTHER ENTITIES

Sec. 71.101. CERTIFICATE FOR INCORPORATED BUSINESS OR PROFESSION, LIMITED PARTNERSHIP, REGISTERED LIMITED LIABILITY PARTNERSHIP, OR LIMITED LIABILITY COMPANY. A corporation, limited partnership, registered limited liability partnership, or limited liability company must file a certificate under this subchapter if the entity:

(1) regularly conducts business or renders professional services in this state under an assumed name; or

(2) is required by law to use an assumed name in this state to conduct business or render professional services. (Bus. & Com. Code, Sec. 36.11(a) (part).)

Sec. 71.102. CONTENTS OF CERTIFICATE. The certificate must state:

(1) the assumed name under which the business is or is to be conducted or the professional service is or is to be rendered;

(2) the registrant's name as stated in the registrant's certificate of formation or application filed with the office of the secretary of state or other comparable document;

(3) the state, country, or other jurisdiction under the laws of which the registrant was incorporated or organized and the registrant's registered or similar office address in that state, country, or jurisdiction;

(4) the period, not to exceed 10 years, during which the registrant will use the assumed name;

(5) a statement specifying that the registrant is:

(A) a business corporation, nonprofit corporation, professional corporation, professional association, or other type of corporation;

(B) a limited partnership, registered limited liability partnership, or limited liability company; or

(C) another type of incorporated business, professional or other association, or legal entity;

(6) the address of:

(A) the registrant's:

(i) registered office in this state and the name of its registered agent at that address; and

(ii) principal office, if the principal office address is not the same as the registrant's registered office address in this state; or

(B) if the registrant is not required to or does not maintain a registered office in this state:

(i) the registrant's office in this state; and

(ii) the registrant's place of business in this state and any office of the registrant outside this state, if the registrant is not incorporated or organized under the laws of this state; and

(7) the county or counties in this state where the registrant is or will be conducting business or rendering professional services under the assumed name. (Bus. & Com. Code, Sec. 36.11(a) (part).)

Sec. 71.103. PLACE OF FILING. (a) The corporation, limited partnership, registered limited liability partnership, or limited liability company shall file the certificate in the office of the secretary of state and in the office or offices of each county clerk as specified by Subsection (b) or (c).

(b) Except as provided by Subsection (c), the entity shall file the certificate in the offices of the county clerk of the county in which the entity's:

(1) registered office is located; and

(2) principal office is located if the principal office is in this state and not in the same county where the registered office is located.

(c) If the entity is not required to or does not maintain a registered office in this state, the entity shall file the certificate:

(1) in the office of the county clerk of the county in which the entity's office in this state is located; or

(2) in the office of the county clerk of the county in which the entity's principal place of business in this state is located, if:

(A) the entity is not incorporated or organized under the laws of this state; and

(B) the county in which the entity's principal place of business in this state is located is not the same county where the entity's office is located. (Bus. & Com. Code, Sec. 36.11(a) (part).)

Sec. 71.104. EXECUTION OF CERTIFICATE. (a) A certificate filed in the secretary of state's office must be executed by an officer, general partner, member, manager, or representative of or attorney-in-fact for the registrant.

(b) A certificate filed in a county clerk's office must be executed and acknowledged in the manner provided by Section 71.053 for a certificate filed under that section.

(c) A certificate executed by an attorney-in-fact must include a statement that the attorney has been authorized in writing by the attorney's principal to execute the certificate. (Bus. & Com. Code, Sec. 36.11(b).)

[Sections 71.105-71.150 reserved for expansion]

SUBCHAPTER D. GENERAL PROVISIONS REGARDING ASSUMED NAME

CERTIFICATE

Sec. 71.151. DURATION AND RENEWAL OF CERTIFICATE. (a) A certificate is effective for a term not to exceed 10 years from the date the certificate is filed.

(b) A certificate is void at the end of the certificate's stated term, unless within six months preceding the certificate's expiration date the registrant files in the office of a county clerk and the secretary of state, if applicable, a renewal certificate complying with the requirements of this chapter for an original certificate.

(c) A registrant may renew a certificate under this section for any number of successive terms, but each term may not exceed 10 years. (Bus. & Com. Code, Sec. 36.13.)

Sec. 71.152. MATERIAL CHANGE IN INFORMATION; NEW CERTIFICATE. (a) Not later than the 60th day after an event occurs that causes the information in a certificate to become materially misleading, a registrant must file a new certificate complying with this chapter in the office in which the original or renewal certificate was filed.

(b) An event that causes the information in a certificate to become materially misleading includes:

(1) a change in the name, identity, entity, form of business or professional organization, or location of a registrant;

(2) for a proprietorship or sole practitioner, a change in ownership;

(3) for a partnership:

(A) the admission of a new partner or joint venturer; or

(B) the end of a general partner's or joint venturer's association with the partnership; or

(4) for a registrant required by law to maintain a registered office or similar office and a registered agent or similar agent at that office, a change in the address of the office or in the identity of the agent.

(c) A new certificate filed under this section is effective for a term not to exceed 10 years from the date the certificate is filed. (Bus. & Com. Code, Sec. 36.12.)

Sec. 71.153. ABANDONMENT OF USE OF BUSINESS OR PROFESSIONAL NAME. (a) A registrant who has filed a certificate under this chapter and who ceases to conduct business or render professional services in this state under the assumed name stated in the certificate may file a statement of abandonment of use of the assumed name in the office in which the registrant's certificate was filed.

(b) The statement of abandonment of use of an assumed name must state:

(1) the assumed name being abandoned;

(2) the date on which the certificate was filed in the office in which the statement of abandonment is being filed and in any other office in which the certificate was filed; and

(3) the registrant's name and residence or office address as required for a certificate filed under this chapter.

(c) A statement of abandonment must be executed and acknowledged in the same manner as if the registrant were filing a certificate under this chapter. (Bus. & Com. Code, Sec. 36.14.)

Sec. 71.154. INDEX OF CERTIFICATES. (a) The secretary of state and each county clerk shall keep an alphabetical index of:

(1) all assumed names that have been filed in the office of the respective officer; and

(2) the persons filing the certificates.

(b) A copy of a certificate or statement is presumptive evidence in any court in this state of the facts contained in the copy if the copy is certified to by:

(1) the county clerk in whose office the certificate or statement was filed; or

(2) the secretary of state. (Bus. & Com. Code, Sec. 36.15 (part).)

Sec. 71.155. FILING FEES. (a) The county clerk shall collect a fee of:

(1) $2 for filing each certificate or statement required or permitted to be filed under this chapter; and

(2) 50 cents for each name to be indexed.

(b) The secretary of state shall collect for the use of this state a fee of:

(1) $25 for indexing and filing each certificate or statement required or permitted to be filed under this chapter; and

(2) $10 for filing each statement of abandonment of use of an assumed name. (Bus. & Com. Code, Sec. 36.15 (part).)

Sec. 71.156. PRESCRIBED FORMS. (a) The secretary of state may prescribe a form to be used for filing a certificate or statement that complies with this chapter in the secretary's office or in the office of any county clerk in this state.

(b) Unless otherwise specifically provided by law, the use of a form prescribed under this section is not mandatory. (Bus. & Com. Code, Sec. 36.16.)

Sec. 71.157. EFFECT OF FILING. (a) This chapter does not give a registrant a right to use the assumed name in violation of the common or statutory law of unfair competition or unfair trade practices, common law copyright, or similar law.

(b) The filing of a certificate under this chapter does not in itself constitute actual use of the assumed name stated in the certificate for purposes of determining priority of rights. (Bus. & Com. Code, Sec. 36.17.)

Sec. 71.158. FILING OF REPRODUCTION. (a) The secretary of state may accept for filing a photographic, photostatic, or similar reproduction of a signed original document required or authorized to be filed in the secretary's office under this chapter.

(b) A signature on a document required or authorized to be filed in the secretary of state's office under this chapter may be a facsimile. (Bus. & Com. Code, Sec. 36.18.)

[Sections 71.159-71.200 reserved for expansion]

SUBCHAPTER E. PENALTIES

Sec. 71.201. CIVIL ACTION; SANCTION. (a) A person's failure to comply with this chapter does not impair the validity of any contract or act by the person or prevent the person from defending any action or proceeding in any court of this state, but the person may not maintain in a court of this state an action or proceeding arising out of a contract or act in which an assumed name was used until an original, new, or renewed certificate has been filed as required by this chapter.

(b) In an action or proceeding brought against a person who has not complied with this chapter, the court may award the plaintiff or other party bringing the action or proceeding expenses incurred, including attorney's fees, in locating and effecting service of process on the defendant. (Bus. & Com. Code, Sec. 36.25.)

Sec. 71.202. CRIMINAL PENALTY: GENERAL VIOLATION. (a) A person commits an offense if the person:

(1) conducts business or renders a professional service in this state under an assumed name; and

(2) intentionally violates this chapter.

(b) An offense under this section is a Class A misdemeanor. (Bus. & Com. Code, Sec. 36.26.)

Sec. 71.203. CRIMINAL PENALTY: FRAUDULENT FILING. (a) A person may not knowingly or intentionally sign and present for filing or cause to be presented for filing a document authorized or required to be filed under this chapter that:

(1) indicates that the person signing the document has the authority to act on behalf of the entity for which the document is presented and the person does not have that authority;

(2) contains a material false statement; or

(3) is forged.

(b) A person commits an offense if the person violates Subsection (a). An offense under this subsection is punishable as if it were an offense under Section 37.10, Penal Code. (Bus. & Com. Code, Sec. 36.27.)

CHAPTER 72. BUSINESS RECORDS

SUBCHAPTER A. DISPOSAL OF CERTAIN BUSINESS RECORDS

Sec. 72.001. DEFINITIONS Sec. 72.002. DESTRUCTION OF CERTAIN BUSINESS RECORDS Sec. 72.003. RETENTION OF REPRODUCTION OF BUSINESS

RECORDS Sec. 72.004. DISPOSAL OF BUSINESS RECORDS CONTAINING

PERSONAL IDENTIFYING INFORMATION

[Sections 72.005-72.050 reserved for expansion]

SUBCHAPTER B. DELETION OF CERTAIN RECORDS OR INFORMATION RELATING

TO CUSTOMERS' CHECKS

Sec. 72.051. REQUIRED DELETION OF CERTAIN ELECTRONIC

RECORDS

CHAPTER 72. BUSINESS RECORDS

SUBCHAPTER A. DISPOSAL OF CERTAIN BUSINESS RECORDS

Sec. 72.001. DEFINITIONS. In this subchapter:

(1) "Business record" means letters, words, sounds, or numbers, or the equivalent of letters, words, sounds, or numbers, recorded in the operation of a business by:

(A) handwriting;

(B) typewriting;

(C) printing;

(D) photostat;

(E) photograph;

(F) magnetic impulse;

(G) mechanical or electronic recording;

(H) digitized optical image; or

(I) another form of data compilation.

(2) "Personal identifying information" means an individual's first name or initial and last name in combination with one or more of the following:

(A) date of birth;

(B) social security number or other government-issued identification number;

(C) mother's maiden name;

(D) unique biometric data, including the individual's fingerprint, voice data, or retina or iris image;

(E) unique electronic identification number, address, or routing code;

(F) telecommunication access device as defined by Section 32.51, Penal Code, including debit or credit card information; or

(G) financial institution account number or any other financial information.

(3) "Reproduction" means a counterpart of an original business record produced by:

(A) production from the same impression or the same matrix as the original;

(B) photography, including an enlargement or miniature;

(C) mechanical or electronic rerecording;

(D) chemical reproduction;

(E) digitized optical imaging; or

(F) another technique that accurately reproduces the original. (Bus. & Com. Code, Sec. 35.48(a).)

Sec. 72.002. DESTRUCTION OF CERTAIN BUSINESS RECORDS. (a) A business record required to be retained by a law of this state may be destroyed at any time after the third anniversary of the date the business record was created.

(b) Subsection (a) does not apply if a law or rule applicable to the business record prescribes a different retention period or procedure for disposal. (Bus. & Com. Code, Sec. 35.48(b).)

Sec. 72.003. RETENTION OF REPRODUCTION OF BUSINESS RECORDS. A law of this state that requires retention of a business record is satisfied by retention of a reproduction of the original record. (Bus. & Com. Code, Sec. 35.48(c).)

Sec. 72.004. DISPOSAL OF BUSINESS RECORDS CONTAINING PERSONAL IDENTIFYING INFORMATION. (a) This section does not apply to:

(1) a financial institution as defined by 15 U.S.C. Section 6809; or

(2) a covered entity as defined by Section 601.001 or 602.001, Insurance Code.

(b) When a business disposes of a business record that contains personal identifying information of a customer of the business, the business shall modify, by shredding, erasing, or other means, the personal identifying information so as to make the information unreadable or undecipherable.

(c) A business is considered to comply with Subsection (b) if the business contracts with a person engaged in the business of disposing of records for the modification of personal identifying information on behalf of the business in accordance with that subsection.

(d) A business that disposes of a business record without complying with Subsection (b) is liable for a civil penalty in an amount not to exceed $500 for each business record. The attorney general may bring an action against the business to:

(1) recover the civil penalty;

(2) obtain any other remedy, including injunctive relief; and

(3) recover costs and reasonable attorney's fees incurred in bringing the action.

(e) A business that in good faith modifies a business record as required by Subsection (b) is not liable for a civil penalty under Subsection (d) if the business record is reconstructed, wholly or partly, through extraordinary means.

(f) Subsection (b) does not require a business to modify a business record if:

(1) the business is required to retain the business record under another law; or

(2) the business record is historically significant and:

(A) there is no potential for identity theft or fraud while the business retains custody of the business record; or

(B) the business record is transferred to a professionally managed historical repository. (Bus. & Com. Code, Secs. 35.48(d), (e), (f), (g), (h), (i).)

[Sections 72.005-72.050 reserved for expansion]

SUBCHAPTER B. DELETION OF CERTAIN RECORDS OR INFORMATION RELATING

TO CUSTOMERS' CHECKS

Sec. 72.051. REQUIRED DELETION OF CERTAIN ELECTRONIC RECORDS. (a) In this section, "law enforcement agency" has the meaning assigned by Article 59.01, Code of Criminal Procedure.

(b) This section applies only to a business that accepts checks from customers in the ordinary course of business. This section does not apply to a financial institution as defined by 31 U.S.C. Section 5312(a)(2), as amended.

(c) A business shall delete any electronic record indicating that a customer has issued a dishonored check or any other information except for a checking account number or bank routing transit number on which the business bases a refusal to accept a check from a customer. The record must be deleted not later than the 30th day after the date:

(1) the customer and the business agree that the information contained in the electronic record is incorrect; or

(2) the customer presents to the business:

(A) a copy of a report filed by the customer with a law enforcement agency stating that the dishonored check was unauthorized; and

(B) a written statement of the customer indicating that the dishonored check was unauthorized.

(d) A business that violates Subsection (c) is liable to this state for a civil penalty in an amount not to exceed $1,000. The attorney general may:

(1) bring an action to recover the civil penalty; and

(2) recover reasonable expenses incurred in recovering the penalty, including court costs, reasonable attorney's fees, investigative costs, witness fees, and deposition expenses. (Bus. & Com. Code, Sec. 35.62.)

[Chapters 73-90 reserved for expansion]

SUBTITLE B. RENTAL PRACTICES

CHAPTER 91. PRIVATE PASSENGER VEHICLE RENTAL COMPANIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 91.001. DEFINITIONS

[Sections 91.002-91.050 reserved for expansion]

SUBCHAPTER B. DAMAGE WAIVERS AND MANDATORY CHARGES

Sec. 91.051. WRITTEN AGREEMENT REQUIRED FOR DAMAGE

WAIVER Sec. 91.052. NOTICE TO RENTER Sec. 91.053. POSTED NOTICE Sec. 91.054. PROHIBITED REPRESENTATIONS AND COERCION Sec. 91.055. MANDATORY CHARGE Sec. 91.056. VOIDING OF DAMAGE WAIVER

[Sections 91.057-91.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT PROVISIONS

Sec. 91.101. CIVIL PENALTY Sec. 91.102. INJUNCTION Sec. 91.103. SUIT FOR CIVIL PENALTY OR INJUNCTIVE

RELIEF

CHAPTER 91. PRIVATE PASSENGER VEHICLE RENTAL COMPANIES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 91.001. DEFINITIONS. In this chapter:

(1) "Authorized driver" means:

(A) the renter;

(B) a person whom the rental company expressly designates on the rental agreement as an authorized driver;

(C) the renter's spouse if the spouse:

(i) holds a driver's license; and

(ii) satisfies any minimum age requirement established by the rental company;

(D) an employer, employee, or coworker of the renter if the person:

(i) holds a driver's license;

(ii) satisfies any minimum age requirement established by the rental company; and

(iii) is engaged in a business activity with the renter at the time of the rental; or

(E) a person who:

(i) holds a driver's license; and

(ii) is driving directly to a medical or police facility under circumstances reasonably believed to constitute an emergency.

(2) "Damage" means damage to or loss of a rented vehicle, regardless of fault involved in the damage or loss. The term includes:

(A) theft and loss of use; and

(B) any cost incident to the damage or loss, including storage, impound, towing, and administrative charges.

(3) "Damage waiver" means a rental company's agreement not to hold an authorized driver liable for all or part of any damage to a rented vehicle.

(4) "Mandatory charge" means a charge for an item or service provided in connection with a rental transaction, other than a charge imposed by law:

(A) that is in addition to the base rental rate; and

(B) that the renter may not avoid or decline.

(5) "Private passenger vehicle" means a motor vehicle of the private passenger type, including a passenger van, primarily intended for private use.

(6) "Rental agreement" means an agreement for 30 days or less that states the terms governing the use of a private passenger vehicle rented by a rental company.

(7) "Rental company" means a person in the business of renting private passenger vehicles to the public for 30 days or less. The term does not include a person who holds a license under Chapter 2301, Occupations Code, and whose primary business activity is not renting private passenger vehicles.

(8) "Renter" means a person who obtains use of a private passenger vehicle from a rental company under a rental agreement. (V.A.C.S. Art. 9026c, Secs. 1, 4(a).)

[Sections 91.002-91.050 reserved for expansion]

SUBCHAPTER B. DAMAGE WAIVERS AND MANDATORY CHARGES

Sec. 91.051. WRITTEN AGREEMENT REQUIRED FOR DAMAGE WAIVER. A rental company may not sell a damage waiver unless the renter agrees to the damage waiver in writing at or before the time the rental agreement is executed. (V.A.C.S. Art. 9026c, Sec. 2(a).)

Sec. 91.052. NOTICE TO RENTER. (a) A rental company shall provide each renter who purchases a damage waiver, the charge for which is not included in the base rental rate, the following notice:

NOTICE: Your rental agreement offers, for an additional charge, an optional waiver to cover all or a part of your responsibility for damage to or loss of the vehicle. Before deciding whether to purchase the waiver, you may wish to determine whether your own automobile insurance or credit card agreement provides you coverage for rental vehicle damage or loss and determine the amount of the deductible under your own insurance coverage. The purchase of the waiver is not mandatory. The waiver is not insurance.

(b) The notice under Subsection (a) must be in at least 10-point type. (V.A.C.S. Art. 9026c, Sec. 3(a).)

Sec. 91.053. POSTED NOTICE. In addition to providing the notice required by Section 91.052, a rental company shall post in a conspicuous location where the damage waiver is offered the following notice:

Notice to Texas Residents Regarding Damage Waivers

Your personal automobile insurance policy may or may not provide coverage for your responsibility for the loss of or damage to a rented vehicle during the rental term. Before deciding whether to purchase a damage waiver, you may wish to determine whether your automobile insurance policy provides you coverage for rental vehicle damage or loss. If you file a claim under your personal automobile insurance policy, your insurance company may choose to nonrenew your policy at your renewal date, but may do so only if you are at fault for the claim. (V.A.C.S. Art. 9026c, Sec. 3(b).)

Sec. 91.054. PROHIBITED REPRESENTATIONS AND COERCION. (a) An employee or agent of a rental company may not:

(1) make an oral or written representation that contradicts this chapter; or

(2) use coercive language or a coercive act in an attempt to persuade a renter to purchase a damage waiver.

(b) For purposes of this section, if the renter has declined the damage waiver, a further statement or question by the employee or agent that refers to the damage waiver, other than a statement made in conjunction with review of the rental agreement that the waiver has been declined, is considered coercive. (V.A.C.S. Art. 9026c, Sec. 5.)

Sec. 91.055. MANDATORY CHARGE. (a) A rental company that includes a mandatory charge in a rental agreement shall prominently display and fully disclose the charge:

(1) separately on the face of the agreement; and

(2) in all of the rental company's price advertising, price quotes, price offers, and price displays, including displays in computerized reservation systems.

(b) A rental company may not impose or require the purchase of a damage waiver as a mandatory charge. (V.A.C.S. Art. 9026c, Secs. 4(b), (c).)

Sec. 91.056. VOIDING OF DAMAGE WAIVER. A rental company may not void a damage waiver unless:

(1) an authorized driver causes the damage intentionally or by wilful and wanton misconduct;

(2) the damage arises out of use of the vehicle:

(A) by a person:

(i) who is not an authorized driver;

(ii) while under the influence of an intoxicant that impairs driving ability, including alcohol, an illegal drug, or a controlled substance; or

(iii) while engaged in commission of a crime other than a traffic infraction;

(B) to carry persons or property for hire;

(C) to push or tow anything;

(D) for driver's training;

(E) to engage in a speed contest; or

(F) outside the continental United States, unless the rental agreement specifically authorizes the use; or

(3) the rental company entered into the rental transaction based on fraudulent information supplied by the renter. (V.A.C.S. Art. 9026c, Sec. 2(b).)

[Sections 91.057-91.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT PROVISIONS

Sec. 91.101. CIVIL PENALTY. A rental company that violates this chapter is liable for a civil penalty in an amount of not less than $500 or more than $1,000 for each act of violation. (V.A.C.S. Art. 9026c, Sec. 6(a).)

Sec. 91.102. INJUNCTION. A person injured or threatened with injury by a violation of this chapter may seek injunctive relief against the person committing or threatening to commit the violation. (V.A.C.S. Art. 9026c, Sec. 6(c).)

Sec. 91.103. SUIT FOR CIVIL PENALTY OR INJUNCTIVE RELIEF. The attorney general or a county or district attorney may bring an action in the name of the state for a civil penalty under Section 91.101, injunctive relief under Section 91.102, or both. (V.A.C.S. Art. 9026c, Sec. 6(b).)

CHAPTER 92. RENTAL-PURCHASE AGREEMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 92.001. DEFINITIONS Sec. 92.002. ADVERTISEMENT REQUIREMENTS

[Sections 92.003-92.050 reserved for expansion]

SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS

Sec. 92.051. FORM OF AGREEMENT Sec. 92.052. REQUIRED DISCLOSURES Sec. 92.053. OTHER REQUIRED PROVISIONS Sec. 92.054. PROHIBITED PROVISIONS Sec. 92.055. RESTRICTIONS ON LATE CHARGES AND

REINSTATEMENT FEES

[Sections 92.056-92.100 reserved for expansion]

SUBCHAPTER C. REPOSSESSION AND REINSTATEMENT

Sec. 92.101. MERCHANT'S REPOSSESSION RIGHT Sec. 92.102. EFFECT OF REPOSSESSION DURING

REINSTATEMENT PERIOD Sec. 92.103. EFFECT ON REINSTATEMENT PERIOD OF

MERCHANDISE RETURN Sec. 92.104. MERCHANT'S DUTIES ON REINSTATEMENT

[Sections 92.105-92.150 reserved for expansion]

SUBCHAPTER D. LOSS DAMAGE WAIVERS

Sec. 92.151. CONTRACT FOR WAIVER Sec. 92.152. CHARGE FOR WAIVER Sec. 92.153. RESTRICTIONS ON MERCHANT CONCERNING

WAIVER Sec. 92.154. REQUIRED NOTICE IN WAIVER Sec. 92.155. STATEMENT OF TOTAL CHARGE Sec. 92.156. AUTHORIZED EXCLUSIONS Sec. 92.157. RELATIONSHIP TO INSURANCE Sec. 92.158. RULES FOR REVIEW OF CERTAIN CONTRACTS Sec. 92.159. FEES Sec. 92.160. ADMINISTRATIVE ENFORCEMENT OF SUBCHAPTER

[Sections 92.161-92.200 reserved for expansion]

SUBCHAPTER E. CIVIL ENFORCEMENT

Sec. 92.201. ACTION FOR VIOLATION OF CHAPTER Sec. 92.202. DECEPTIVE TRADE PRACTICE

CHAPTER 92. RENTAL-PURCHASE AGREEMENTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 92.001. DEFINITIONS. In this chapter:

(1) "Advertisement" means a commercial message in any medium that directly or indirectly promotes or assists a rental-purchase agreement.

(2) "Commission" means the Texas Commission of Licensing and Regulation.

(3) "Consumer" means an individual who leases personal property under a rental-purchase agreement.

(4) "Department" means the Texas Department of Licensing and Regulation.

(5) "Loss damage waiver" means a merchant's agreement to not hold a consumer liable for loss from all or part of any damage to merchandise.

(6) "Merchandise" means the personal property that is the subject of a rental-purchase agreement.

(7) "Merchant" means a person who, in the ordinary course of business, regularly leases, offers to lease, or arranges for the leasing of merchandise under a rental-purchase agreement. The term includes a person who is assigned an interest in a rental-purchase agreement.

(8) "Rental-purchase agreement" means an agreement under which a consumer may use merchandise for personal, family, or household purposes for an initial period of four months or less, and that:

(A) is automatically renewable with each payment after the initial period; and

(B) permits the consumer to become the owner of the merchandise. (Bus. & Com. Code, Secs. 35.71(1), (3), (3-a), (4), (5), (6), 35.722(a).)

Sec. 92.002. ADVERTISEMENT REQUIREMENTS. An advertisement for a rental-purchase agreement that refers to or states the amount of a payment or the right to acquire ownership of any one particular item under the agreement must clearly and conspicuously state:

(1) that the transaction advertised is a rental-purchase agreement;

(2) the total amount and number of payments necessary to acquire ownership; and

(3) that the consumer does not acquire ownership rights unless the merchandise is rented for a specified number of payment periods. (Bus. & Com. Code, Sec. 35.73.)

[Sections 92.003-92.050 reserved for expansion]

SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS

Sec. 92.051. FORM OF AGREEMENT. (a) A rental-purchase agreement must be written in:

(1) plain English; and

(2) any other language used by the merchant in an advertisement related to the agreement.

(b) A numerical amount included in a rental-purchase agreement must be stated in figures.

(c) A disclosure required by this chapter must be printed or typed in each rental-purchase agreement in a size equal to at least 10-point boldfaced type.

(d) The attorney general shall provide a form agreement that may be used to satisfy the requirements of a rental-purchase agreement under this chapter. (Bus. & Com. Code, Secs. 35.72(a), (b).)

Sec. 92.052. REQUIRED DISCLOSURES. (a) A rental-purchase agreement must disclose:

(1) whether the merchandise is new or used;

(2) the price for which the merchant would have sold the merchandise to the consumer for cash on the date of the agreement;

(3) the amount and timing of payments;

(4) the total number of payments necessary and the total amount to be paid to acquire ownership of the merchandise;

(5) that the consumer does not acquire ownership rights unless the consumer complies with the ownership terms of the agreement;

(6) the amount and purpose of any payment, charge, or fee in addition to the regular periodic payments; and

(7) whether the consumer is liable for loss or damage to the merchandise and, if so, the maximum amount for which the consumer may be liable.

(b) Notice of the right to reinstate the agreement must be disclosed in the agreement. (Bus. & Com. Code, Secs. 35.71(2), 35.72(f) (part), (g).)

Sec. 92.053. OTHER REQUIRED PROVISIONS. A rental-purchase agreement must provide that:

(1) any charge in addition to periodic payments must be reasonably related to the service performed; and

(2) a consumer who fails to make a timely payment may reinstate an agreement, without losing any right or option previously acquired, by taking the required action before the later of:

(A) one week after the due date of the payment; or

(B) the number of days after the due date of the payment that is equal to half the number of days in a regular payment period. (Bus. & Com. Code, Sec. 35.72(e).)

Sec. 92.054. PROHIBITED PROVISIONS. (a) A rental-purchase agreement may not:

(1) require a consumer to:

(A) pay a late charge or reinstatement fee except as provided by Section 92.055(b);

(B) make a payment at the end of the scheduled rental-purchase term in excess of or in addition to a regular periodic payment to acquire ownership of the merchandise; or

(C) purchase insurance or a loss damage waiver from the merchant to cover the merchandise;

(2) require a confession of judgment;

(3) authorize a merchant or an agent of the merchant to commit a breach of the peace in repossessing merchandise; or

(4) waive a defense, counterclaim, or right the consumer may have against the merchant or an agent of the merchant.

(b) A consumer may not in any event be required to pay a sum greater than the total amount to be paid to acquire ownership of the merchandise as disclosed under Section 92.052(a)(4). (Bus. & Com. Code, Sec. 35.72(c) (part).)

Sec. 92.055. RESTRICTIONS ON LATE CHARGES AND REINSTATEMENT FEES. (a) Only one late charge or reinstatement fee may be collected on a payment regardless of the period during which the payment remains in default.

(b) A rental-purchase agreement may require the consumer to pay a late charge or reinstatement fee only if:

(1) a periodic payment is delinquent for more than:

(A) seven days, if the payment is due monthly; or

(B) three days, if the payment is due more frequently than monthly; and

(2) the charge or fee is in an amount not less than $5 and not more than the lesser of:

(A) $10; or

(B) 10 percent of the delinquent payment. (Bus. & Com. Code, Secs. 35.72(c) (part), (d).)

[Sections 92.056-92.100 reserved for expansion]

SUBCHAPTER C. REPOSSESSION AND REINSTATEMENT

Sec. 92.101. MERCHANT'S REPOSSESSION RIGHT. This chapter does not prevent a merchant from attempting repossession of merchandise during the reinstatement period. (Bus. & Com. Code, Sec. 35.72(f) (part).)

Sec. 92.102. EFFECT OF REPOSSESSION DURING REINSTATEMENT PERIOD. A consumer's right to reinstate a rental-purchase agreement is not affected by the merchant's repossession of the merchandise during the reinstatement period. (Bus. & Com. Code, Sec. 35.72(f) (part).)

Sec. 92.103. EFFECT ON REINSTATEMENT PERIOD OF MERCHANDISE RETURN. If merchandise is returned during the applicable reinstatement period, other than through judicial process, the right to reinstate the rental-purchase agreement is extended for a period of not less than 30 days after the date of return. (Bus. & Com. Code, Sec. 35.72(f) (part).)

Sec. 92.104. MERCHANT'S DUTIES ON REINSTATEMENT. (a) On reinstatement, the merchant shall provide the consumer with:

(1) the same merchandise; or

(2) substitute merchandise of comparable quality and condition.

(b) A merchant who provides the consumer with substitute merchandise shall also provide the consumer with the disclosures required by Section 92.052(a). (Bus. & Com. Code, Sec. 35.72(f) (part).)

[Sections 92.105-92.150 reserved for expansion]

SUBCHAPTER D. LOSS DAMAGE WAIVERS

Sec. 92.151. CONTRACT FOR WAIVER. In addition to other charges permitted by this chapter, a consumer may contract for a loss damage waiver. (Bus. & Com. Code, Sec. 35.721(a) (part).)

Sec. 92.152. CHARGE FOR WAIVER. A merchant may charge a periodic fee for a loss damage waiver in an amount not to exceed 10 percent of the periodic rental payment. (Bus. & Com. Code, Sec. 35.721(e).)

Sec. 92.153. RESTRICTIONS ON MERCHANT CONCERNING WAIVER. A merchant may not:

(1) sell a loss damage waiver unless:

(A) the department has approved the form of the contract containing the waiver; and

(B) the consumer agrees to the waiver in writing; or

(2) impose or require the purchase of a loss damage waiver as a mandatory charge. (Bus. & Com. Code, Secs. 35.721(b), (g).)

Sec. 92.154. REQUIRED NOTICE IN WAIVER. A contract that offers a loss damage waiver must include the following notice:

"This contract offers an optional loss damage waiver for an additional charge to cover your responsibility for loss of or damage to the merchandise. You do not have to purchase this coverage. Before deciding whether or not to purchase this loss damage waiver, you may consider whether your homeowners' or casualty insurance policy affords you coverage for loss of or damage to rental merchandise and the amount of the deductible you would pay under your policy." (Bus. & Com. Code, Sec. 35.721(f).)

Sec. 92.155. STATEMENT OF TOTAL CHARGE. A loss damage waiver agreement must include a statement of the total charge for the loss damage waiver. (Bus. & Com. Code, Sec. 35.721(d).)

Sec. 92.156. AUTHORIZED EXCLUSIONS. A loss damage waiver may exclude:

(1) loss or damage to the merchandise that is caused by an unexplained disappearance or abandonment of the merchandise;

(2) damage that is intentionally caused by the consumer; or

(3) damage that results from the consumer's wilful or wanton misconduct. (Bus. & Com. Code, Sec. 35.721(c).)

Sec. 92.157. RELATIONSHIP TO INSURANCE. A loss damage waiver is not insurance. (Bus. & Com. Code, Sec. 35.721(a) (part).)

Sec. 92.158. RULES FOR REVIEW OF CERTAIN CONTRACTS. The commission by rule shall provide the method for annually submitting to the department for review any contract, including any amendment to a contract, that contains a loss damage waiver. (Bus. & Com. Code, Sec. 35.721(h) (part).)

Sec. 92.159. FEES. The commission by rule shall set a reasonable fee to be paid by a merchant for:

(1) the review of a contract form under Section 92.158; and

(2) the administration of this chapter by the department. (Bus. & Com. Code, Sec. 35.721(h) (part).)

Sec. 92.160. ADMINISTRATIVE ENFORCEMENT OF SUBCHAPTER. (a) The department shall enforce this subchapter and, as necessary, may investigate a merchant who has one or more contracts that include a loss damage waiver.

(b) A person may file a complaint with the department alleging a violation of this subchapter. The department shall investigate the alleged violation on receipt of the complaint and may inspect any record relevant to the complaint.

(c) If, as a result of an investigation, the department determines that a violation may have occurred, the commission shall provide an opportunity for a hearing in the manner provided for a contested case under Chapter 2001, Government Code.

(d) If, after opportunity for hearing, the commission determines that the merchant has violated this subchapter, the commission may:

(1) impose an administrative penalty under Chapter 51, Occupations Code; or

(2) award the complainant damages in an amount not to exceed the amount of the contract price for the merchandise. (Bus. & Com. Code, Secs. 35.722(b), (c), (d), (e).)

[Sections 92.161-92.200 reserved for expansion]

SUBCHAPTER E. CIVIL ENFORCEMENT

Sec. 92.201. ACTION FOR VIOLATION OF CHAPTER. (a) A consumer damaged by a merchant's violation of this chapter is entitled to recover from the merchant:

(1) actual damages;

(2) an amount equal to 25 percent of the total amount of payments required to obtain ownership of the merchandise, except that the amount recovered under this subdivision may not be less than $250 or more than $1,000; and

(3) reasonable attorney's fees and court costs.

(b) A merchant is not liable under this section for a violation of this chapter caused by the merchant's error if, subject to Subsection (c), the merchant:

(1) provides the consumer written notice of the error; and

(2) makes adjustments in the consumer's account as necessary to ensure:

(A) the consumer will not be required to pay an amount in excess of the amount disclosed; and

(B) the agreement otherwise complies with this chapter.

(c) A merchant must take action under Subsection (b) before:

(1) the 31st day after the date the merchant discovers the error; and

(2) the merchant receives written notice of the error from the consumer or an action under this section is filed. (Bus. & Com. Code, Secs. 35.74(a), (b).)

Sec. 92.202. DECEPTIVE TRADE PRACTICE. A violation of this chapter is a deceptive trade practice under Subchapter E, Chapter 17. (Bus. & Com. Code, Sec. 35.74(c).)

[Chapters 93-100 reserved for expansion]

SUBTITLE C. BUSINESS OPERATIONS

CHAPTER 101. INTERNATIONAL MATCHMAKING ORGANIZATIONS

Sec. 101.001. DEFINITIONS Sec. 101.002. PROVIDING CRIMINAL HISTORY, MARITAL

HISTORY, AND BASIC RIGHTS INFORMATION Sec. 101.003. PROVIDING ADDITIONAL CRIMINAL HISTORY,

MARITAL HISTORY, AND BASIC RIGHTS

INFORMATION Sec. 101.004. OBTAINING CRIMINAL HISTORY RECORD

INFORMATION AND MARITAL HISTORY

INFORMATION Sec. 101.005. CIVIL PENALTY

CHAPTER 101. INTERNATIONAL MATCHMAKING ORGANIZATIONS

Sec. 101.001. DEFINITIONS. In this chapter:

(1) "Basic rights information" means information applicable to a noncitizen, including information about human rights, immigration, and emergency assistance and resources.

(2) "Client" means a person who is a resident of the United States and who contracts with an international matchmaking organization to meet recruits.

(3) "Criminal history record information" means criminal history record information obtained from the Department of Public Safety under Subchapter F, Chapter 411, Government Code, and from the Federal Bureau of Investigation under Section 411.087, Government Code.

(4) "International matchmaking organization" means a corporation, partnership, sole proprietorship, or other legal entity that does business in the United States and offers to residents of this state dating, matrimonial, or social referral services involving recruits by:

(A) exchanging names, telephone numbers, addresses, or statistics;

(B) selecting photographs; or

(C) providing a social environment for introducing clients to recruits in a country other than the United States.

(5) "Marital history information" means a declaration of a person's current marital status, the number of times the person has been married, and whether any marriage occurred as a result of receiving services from an international matchmaking organization.

(6) "Recruit" means a person who:

(A) is not a citizen or resident of the United States; and

(B) is recruited by an international matchmaking organization for the purpose of providing dating, matrimonial, or social referral services. (Bus. & Com. Code, Sec. 35.121.)

Sec. 101.002. PROVIDING CRIMINAL HISTORY, MARITAL HISTORY, AND BASIC RIGHTS INFORMATION. (a) An international matchmaking organization shall provide each recruit with the criminal history record information and marital history information of the organization's clients and with basic rights information.

(b) The information under Subsection (a) must:

(1) be in the recruit's native language; and

(2) be displayed in a manner that:

(A) separates the criminal history record information, the marital history information, and the basic rights information from any other information; and

(B) is highly noticeable. (Bus. & Com. Code, Sec. 35.122.)

Sec. 101.003. PROVIDING ADDITIONAL CRIMINAL HISTORY, MARITAL HISTORY, AND BASIC RIGHTS INFORMATION. (a) An international matchmaking organization shall disseminate to a recruit the criminal history record information and marital history information of a client and the basic rights information not later than the 30th day after the date the organization receives the criminal history record information and the marital history information from the client.

(b) The international matchmaking organization shall provide the information to the recruit in the recruit's native language. The organization shall pay the costs incurred to translate the information. (Bus. & Com. Code, Sec. 35.123.)

Sec. 101.004. OBTAINING CRIMINAL HISTORY RECORD INFORMATION AND MARITAL HISTORY INFORMATION. (a) A client shall:

(1) obtain a copy of the client's own criminal history record information;

(2) provide the criminal history record information to the international matchmaking organization; and

(3) provide the client's own marital history information to the international matchmaking organization.

(b) The international matchmaking organization shall require the client to affirm that the marital history information is complete and accurate and includes information regarding marriages, annulments, and dissolutions that occurred in another state or a foreign country.

(c) The international matchmaking organization may not provide any further services to the client or the recruit until the organization has:

(1) obtained the requested criminal history record information and marital history information; and

(2) provided the information to the recruit. (Bus. & Com. Code, Sec. 35.124.)

Sec. 101.005. CIVIL PENALTY. (a) An international matchmaking organization that violates this chapter is subject to a civil penalty not to exceed $20,000 for each violation.

(b) In determining the amount of the civil penalty, the court shall consider:

(1) any previous violations of this chapter by the international matchmaking organization;

(2) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;

(3) the demonstrated good faith of the international matchmaking organization; and

(4) the amount necessary to deter future violations.

(c) The attorney general or the appropriate district or county attorney may bring an action under this section in the name of the state in a district court in:

(1) Travis County; or

(2) a county in which any part of the violation occurs.

(d) A penalty collected under this section by the attorney general or a district or county attorney shall be deposited in the state treasury to the credit of the compensation to victims of crime fund under Article 56.54, Code of Criminal Procedure. (Bus. & Com. Code, Sec. 35.125.)

CHAPTER 102. SEXUALLY ORIENTED BUSINESSES

Sec. 102.001. DEFINITIONS Sec. 102.002. PROHIBITION ON CERTAIN ACTIVITIES BY SEX

OFFENDER IN RELATION TO BUSINESS Sec. 102.003. PROHIBITION ON CERTAIN ACTIVITIES BY

BUSINESS IN RELATION TO SEX OFFENDER Sec. 102.004. INJUNCTION OR OTHER RELIEF Sec. 102.005. CRIMINAL PENALTIES

CHAPTER 102. SEXUALLY ORIENTED BUSINESSES

Sec. 102.001. DEFINITIONS. In this chapter:

(1) "Sex offender" means a person who has been convicted of or placed on deferred adjudication for an offense for which a person is subject to registration under Chapter 62, Code of Criminal Procedure.

(2) "Sexually oriented business" has the meaning assigned by Section 243.002, Local Government Code. (Bus. & Com. Code, Sec. 47.001.)

Sec. 102.002. PROHIBITION ON CERTAIN ACTIVITIES BY SEX OFFENDER IN RELATION TO BUSINESS. A sex offender may not:

(1) wholly or partly own a sexually oriented business; or

(2) serve as a director, officer, operator, manager, or employee of a sexually oriented business. (Bus. & Com. Code, Sec. 47.002(a).)

Sec. 102.003. PROHIBITION ON CERTAIN ACTIVITIES BY BUSINESS IN RELATION TO SEX OFFENDER. If a sexually oriented business knows that a person is a sex offender, the business may not:

(1) contract with that person to operate or manage the business as an independent contractor; or

(2) employ that person as an officer, operator, manager, or other employee. (Bus. & Com. Code, Sec. 47.002(b).)

Sec. 102.004. INJUNCTION OR OTHER RELIEF. (a) The attorney general or appropriate district or county attorney, in the name of the state, may bring an action for an injunction or other process against a person who violates or threatens to violate Section 102.002 or 102.003.

(b) The action may be brought in a district court in:

(1) Travis County; or

(2) a county in which any part of the violation or threatened violation occurs.

(c) The court may grant any prohibitory or mandatory relief warranted by the facts, including a temporary restraining order, temporary injunction, or permanent injunction. (Bus. & Com. Code, Sec. 47.003.)

Sec. 102.005. CRIMINAL PENALTIES. (a) A sex offender commits an offense if the sex offender violates Section 102.002.

(b) A sexually oriented business commits an offense if the business violates Section 102.003.

(c) An offense under this section is a Class A misdemeanor. (Bus. & Com. Code, Sec. 47.004.)

CHAPTER 103. APPRAISALS IMPROPERLY INDUCED BY MORTGAGE LENDERS

Sec. 103.001. DEFINITIONS Sec. 103.002. CRIMINAL PENALTY

CHAPTER 103. APPRAISALS IMPROPERLY INDUCED BY MORTGAGE LENDERS

Sec. 103.001. DEFINITIONS. In this chapter:

(1) "Lender" means a person who lends money for or invests money in mortgage loans.

(2) "Mortgage loan" means a loan secured by a deed of trust, security deed, or other lien on real property. (Bus. & Com. Code, Sec. 35.56(a).)

Sec. 103.002. CRIMINAL PENALTY. (a) A lender commits an offense if in connection with a mortgage loan transaction the lender pays or offers to pay a person, including an individual licensed or certified by the Texas Appraiser Licensing and Certification Board or the Texas Real Estate Commission, a fee or other consideration for appraisal services and the payment:

(1) is contingent on a minimum, maximum, or pre-agreed estimate of value of property securing the loan; and

(2) interferes with the person's ability or obligation to provide an independent and impartial opinion of the property's value.

(b) An offense under this section is a Class A misdemeanor.

(c) An instruction a lender gives to a real estate appraiser regarding a legal or other regulatory requirement for the appraisal of property, or any other communication between a lender or real estate appraiser necessary or appropriate under a law, regulation, or underwriting standard applicable to a real estate appraisal, does not constitute interference by a lender for purposes of Subsection (a)(2). (Bus. & Com. Code, Secs. 35.56(b), (c), (d).)

CHAPTER 104. RESTRICTIONS ON CHARGES BY MOTOR FUEL FRANCHISORS

Sec. 104.001. DEFINITIONS Sec. 104.002. PROHIBITED FEES, CHARGES, AND DISCOUNTS Sec. 104.003. CIVIL ACTION

CHAPTER 104. RESTRICTIONS ON CHARGES BY MOTOR FUEL FRANCHISORS

Sec. 104.001. DEFINITIONS. In this chapter:

(1) "Franchise":

(A) includes:

(i) a contract under which a distributor or retailer is authorized to occupy marketing premises in connection with the sale, consignment, or distribution of motor fuel under a trademark owned or controlled by a franchisor-refiner or by a refiner who supplies motor fuel to a distributor who authorizes the occupancy;

(ii) a contract relating to the supply of motor fuel to be sold, consigned, or distributed under a trademark owned or controlled by a refiner; and

(iii) the unexpired portion of any franchise transferred or assigned under the franchise provisions or any applicable provision of state or federal law authorizing the transfer or assignment regardless of the franchise provisions; and

(B) does not include a contract:

(i) that is made in the distribution of motor fuels through a card-lock or key-operated pumping system; and

(ii) to which a refiner or producer of the motor fuel is not a party.

(2) "Franchisee" means a distributor or retailer who is authorized under a franchise to use a trademark in connection with the sale, consignment, or distribution of motor fuel.

(3) "Franchisor" means a refiner or distributor who authorizes under a franchise the use of a trademark in connection with the sale, consignment, or distribution of motor fuel.

(4) "Motor fuel" includes diesel fuel and gasoline:

(A) delivered to a service station by a franchisor; and

(B) usable as a propellant of a motor vehicle. (V.A.C.S. Art. 8612, Secs. 1(1), (2), (3), (5).)

Sec. 104.002. PROHIBITED FEES, CHARGES, AND DISCOUNTS. (a) For purposes of this section, wholesale price is computed by adding to the invoice price or purchase price per gallon charged to a franchisee who buys motor fuel any excise tax paid by the buyer and any reasonable freight charges paid by the buyer, and subtracting that portion of any refund, rebate, or subsidy not designed to offset the fee, charge, or discount described by this section.

(b) Except as provided by Subsection (c), a franchisor may not require a franchisee to pay to the franchisor a fee, charge, or discount for:

(1) honoring a credit card issued by the franchisor; or

(2) submitting to the franchisor, for payment or credit to the franchisee's account, documents or other evidence of indebtedness of the holder of a credit card issued by the franchisor.

(c) A franchisor may require a franchisee to pay the fee, charge, or discount if the franchisor, in consideration of competitive prices in the relevant market, has adjusted the wholesale prices charged or rebates credited to franchisees for motor fuel by amounts that on average for franchisees in this state substantially offset the fee, charge, or discount. (V.A.C.S. Art. 8612, Secs. 1(4), 2.)

Sec. 104.003. CIVIL ACTION. (a) A franchisee may bring a civil action against a franchisor who violates Section 104.002, without regard to the amount in controversy, in the district court in any county in which the franchisor or franchisee transacts business. An action under this section must be commenced and prosecuted not later than the second anniversary of the date the cause of action accrues against the franchisor.

(b) The court shall award to a franchisee who prevails in an action under this section:

(1) the amount of actual damages;

(2) equitable relief as determined by the court to be necessary to remedy the effects of the franchisor's violation of Section 104.002, including a declaratory judgment, permanent injunctive relief, and temporary injunctive relief; and

(3) court costs and attorney's fees that are reasonable in relation to the amount of work expended.

(c) In addition to the remedies provided under Subsection (b), on finding that the defendant wilfully and knowingly committed the violation, the trier of fact shall award not more than three times the amount of actual damages.

(d) In an action under this section, the franchisor has the burden of establishing the offset described by Section 104.002 as an affirmative defense. (V.A.C.S. Art. 8612, Sec. 3.)

CHAPTER 105. REFUELING SERVICES FOR PERSONS WITH DISABILITIES

Sec. 105.001. DEFINITIONS Sec. 105.002. APPLICABILITY OF CHAPTER Sec. 105.003. REFUELING SERVICES Sec. 105.004. NOTICE Sec. 105.005. OFFENSE; PENALTY Sec. 105.006. ENFORCEMENT

CHAPTER 105. REFUELING SERVICES FOR PERSONS WITH DISABILITIES

Sec. 105.001. DEFINITIONS. (a) In this chapter:

(1) "Refueling service" means the service of pumping motor vehicle fuel into the fuel tank of a motor vehicle.

(2) "Service station" means a gasoline service station or other facility that offers gasoline or other motor vehicle fuel for sale to the public from the facility.

(b) In this chapter, with respect to the operation of a service station, "person" means an individual, firm, partnership, association, trustee, or corporation. (V.A.C.S. Art. 8613, Sec. 1; New.)

Sec. 105.002. APPLICABILITY OF CHAPTER. (a) This chapter applies to a service station that ordinarily provides pump island service, except that such a service station is not required to provide refueling service under this chapter during any regularly scheduled hours during which, for security reasons, the service station does not provide pump island service.

(b) This chapter does not apply to:

(1) a service station or other facility that:

(A) never provides pump island service; and

(B) has only remotely controlled pumps; or

(2) a refueling service used to provide liquefied gas, as defined by Section 162.001, Tax Code. (V.A.C.S. Art. 8613, Sec. 3.)

Sec. 105.003. REFUELING SERVICES. (a) A person who operates a service station shall provide, on request, refueling service to a person with a disability who is the driver of a vehicle and displays:

(1) a license plate issued under Section 504.201 or 504.203, Transportation Code; or

(2) a disabled parking placard issued under Section 681.004, Transportation Code.

(b) The price charged for motor vehicle fuel provided under Subsection (a) may not exceed the price the service station would otherwise generally charge the public for the purchase of motor vehicle fuel without refueling service. (V.A.C.S. Art. 8613, Sec. 2.)

Sec. 105.004. NOTICE. (a) The Department of Agriculture shall provide a notice that states the provisions of this chapter to each person who operates a service station.

(b) The Texas Department of Transportation shall provide a notice that states the provisions of this chapter to each person with a disability who is issued:

(1) license plates under Section 504.201, Transportation Code; or

(2) a disabled parking placard under Section 681.004, Transportation Code. (V.A.C.S. Art. 8613, Sec. 4.)

Sec. 105.005. OFFENSE; PENALTY. (a) A person commits an offense if the person violates Section 105.003 and the person is:

(1) a manager responsible for setting the service policy of a service station subject to this chapter; or

(2) an employee acting independently against the established service policy of the service station.

(b) An offense under this section is a Class C misdemeanor. (V.A.C.S. Art. 8613, Sec. 5.)

Sec. 105.006. ENFORCEMENT. In addition to enforcement by the prosecuting attorney who represents the state, this chapter may be enforced by the attorney general. (V.A.C.S. Art. 8613, Sec. 6.)

TITLE 6. SALE OR TRANSFER OF GOODS

CHAPTER 201. SALE OF ITEMS AT FLEA MARKETS

Sec. 201.001. DEFINITION Sec. 201.002. INAPPLICABILITY OF CHAPTER TO CERTAIN

ITEMS Sec. 201.003. SALE OF CERTAIN ITEMS PROHIBITED Sec. 201.004. FRAUDULENT AUTHORIZATION FOR SALE OF

CERTAIN ITEMS AT RETAIL Sec. 201.005. PROVISION OF BOOTH OR SIMILAR SPACE NOT

AN OFFENSE Sec. 201.006. INVESTIGATION RECORDS REQUIRED

CHAPTER 201. SALE OF ITEMS AT FLEA MARKETS

Sec. 201.001. DEFINITION. In this chapter, "flea market" means a location at which booths or similar spaces are rented or otherwise made temporarily available to two or more persons and at which the persons offer tangible personal property for sale. (Bus. & Com. Code, Sec. 35.55(a).)

Sec. 201.002. INAPPLICABILITY OF CHAPTER TO CERTAIN ITEMS. This chapter does not apply to the sale or offer for sale of a nutritional supplement or vitamin. (Bus. & Com. Code, Sec. 35.55(h).)

Sec. 201.003. SALE OF CERTAIN ITEMS PROHIBITED. (a) A person commits an offense if the person sells or offers for sale at a flea market:

(1) infant formula or baby food of a type usually consumed by children younger than two years of age;

(2) a drug, as defined by Section 431.002, Health and Safety Code; or

(3) contact lenses, including disposable contact lenses.

(b) It is a defense to prosecution under this section that the person selling the item:

(1) is authorized in writing to sell the item at retail by the manufacturer of the item or the manufacturer's authorized distributor and the authorization states the person's name; and

(2) provides the authorization for examination by any person at the flea market who requests to see the authorization.

(c) It is a defense to prosecution under this section that only a sample of the item or a catalog or brochure displaying the item was available at the flea market and the item sold was not delivered to the buyer at the flea market.

(d) An offense under this section is a misdemeanor punishable by a fine not to exceed $100.

(e) The penalty provided by this section is in addition to any other sanction provided by law. (Bus. & Com. Code, Secs. 35.55(b), (d), (f).)

Sec. 201.004. FRAUDULENT AUTHORIZATION FOR SALE OF CERTAIN ITEMS AT RETAIL. (a) A person commits an offense if the person provides to another person an authorization under Section 201.003(b) and:

(1) the authorization is forged or contains a false statement; or

(2) the person displaying the authorization obtained the authorization by fraud.

(b) An offense under this section is a misdemeanor punishable by a fine not to exceed $100. (Bus. & Com. Code, Secs. 35.55(e), (f).)

Sec. 201.005. PROVISION OF BOOTH OR SIMILAR SPACE NOT AN OFFENSE. A person does not commit an offense under this chapter solely because the person provides booths or similar spaces at a flea market. (Bus. & Com. Code, Sec. 35.55(c).)

Sec. 201.006. INVESTIGATION RECORDS REQUIRED. A law enforcement agency investigating a violation of this chapter shall maintain a record of the investigation. The record is public information. (Bus. & Com. Code, Sec. 35.55(g).)

CHAPTER 202. SALES OF MOTOR VEHICLES WITH STOPLAMP COVERINGS

Sec. 202.001. SALE OF MOTOR VEHICLE WITH CERTAIN

STOPLAMP COVERING PROHIBITED

CHAPTER 202. SALES OF MOTOR VEHICLES WITH STOPLAMP COVERINGS

Sec. 202.001. SALE OF MOTOR VEHICLE WITH CERTAIN STOPLAMP COVERING PROHIBITED. (a) In this section, "motor vehicle" has the meaning assigned by Section 541.201, Transportation Code.

(b) A person in the business of selling motor vehicles may not sell a motor vehicle with a transparent or semitransparent covering:

(1) placed over a stoplamp that is mounted on the rear center line of the vehicle either in or on the rear window or within six inches from the rear window of the vehicle for the purpose of emitting light when the vehicle's brakes are applied; and

(2) on which is impressed or imprinted a name, trade name, logotype, or other message that a person behind the vehicle can read when the stoplamp is illuminated.

(c) A person who violates this section commits an offense. An offense under this section is a Class C misdemeanor. (Bus. & Com. Code, Sec. 35.46.)

CHAPTER 203. EXPORTING ARTICLES WITHOUT INSPECTION

Sec. 203.001. CRIMINAL PENALTY FOR EXPORTING ARTICLES

WITHOUT REQUIRED INSPECTION

CHAPTER 203. EXPORTING ARTICLES WITHOUT INSPECTION

Sec. 203.001. CRIMINAL PENALTY FOR EXPORTING ARTICLES WITHOUT REQUIRED INSPECTION. (a) A person commits an offense if the person:

(1) exports from this state, or ships for the purpose of exportation to a state other than this state or to a foreign port, an article of commerce that by law of this state is required to be inspected by a public inspector; and

(2) does not have the article inspected as required by law.

(b) An offense under this section is a misdemeanor punishable by a fine not to exceed $100. (Bus. & Com. Code, Sec. 35.57.)

TITLE 7. RECEIPTS, DOCUMENTS OF TITLE, AND OTHER INSTRUMENTS

CHAPTER 251. WAREHOUSE RECEIPTS

Sec. 251.001. DEFINITIONS Sec. 251.002. WAREHOUSEMAN ISSUING FRAUDULENT WAREHOUSE

RECEIPT Sec. 251.003. WAREHOUSEMAN FAILING TO STATE

WAREHOUSEMAN'S OWNERSHIP OF GOODS ON

RECEIPT Sec. 251.004. WAREHOUSEMAN ISSUING WAREHOUSE RECEIPT

WITHOUT CONTROL OF GOODS Sec. 251.005. WAREHOUSEMAN ISSUING DUPLICATE OR

ADDITIONAL WAREHOUSE RECEIPT Sec. 251.006. WAREHOUSEMAN WRONGFULLY DELIVERING GOODS Sec. 251.007. FAILURE TO DISCLOSE LACK OF OWNERSHIP OF

GOODS Sec. 251.008. FAILURE TO DISCLOSE EXISTENCE OF LIEN ON

GOODS

CHAPTER 251. WAREHOUSE RECEIPTS

Sec. 251.001. DEFINITIONS. In this chapter:

(1) "Goods" means all things treated as movable for purposes of a contract of storage or transportation.

(2) "Issue" includes aiding in the issuance of a warehouse receipt.

(3) "Warehouse receipt" means a receipt issued by a warehouseman.

(4) "Warehouseman" means a person engaged in the business of storing goods for hire. The term includes an officer, agent, or employee of a warehouseman. (Bus. & Com. Code, Sec. 35.27; New.)

Sec. 251.002. WAREHOUSEMAN ISSUING FRAUDULENT WAREHOUSE RECEIPT. (a) A warehouseman may not, with intent to defraud, issue a warehouse receipt that contains a false statement.

(b) A warehouseman who violates this section commits an offense. An offense under this section is a misdemeanor punishable by:

(1) confinement in the county jail for a term of not more than one year;

(2) a fine not to exceed $1,000; or

(3) both the fine and confinement. (Bus. & Com. Code, Sec. 35.28.)

Sec. 251.003. WAREHOUSEMAN FAILING TO STATE WAREHOUSEMAN'S OWNERSHIP OF GOODS ON RECEIPT. (a) A warehouseman may not knowingly issue a negotiable warehouse receipt describing goods the warehouseman owns, whether solely, jointly, or in common, and is storing, unless the warehouseman states the warehouseman's ownership of the goods on the receipt.

(b) A warehouseman who violates this section commits an offense. An offense under this section is a misdemeanor punishable by:

(1) confinement in the county jail for a term of not more than one year; or

(2) a fine not to exceed $1,000. (Bus. & Com. Code, Sec. 35.29.)

Sec. 251.004. WAREHOUSEMAN ISSUING WAREHOUSE RECEIPT WITHOUT CONTROL OF GOODS. (a) A warehouseman may not issue a warehouse receipt for goods if the warehouseman knows at the time of issuance that the goods described in the receipt are not under the warehouseman's control.

(b) A warehouseman who violates this section commits an offense. An offense under this section is a felony punishable by:

(1) imprisonment in the Texas Department of Criminal Justice for a term of not more than five years;

(2) a fine not to exceed $5,000; or

(3) both the fine and imprisonment. (Bus. & Com. Code, Sec. 35.30.)

Sec. 251.005. WAREHOUSEMAN ISSUING DUPLICATE OR ADDITIONAL WAREHOUSE RECEIPT. (a) A warehouseman may not issue a duplicate or additional negotiable warehouse receipt for goods if the warehouseman knows at the time of issuance that a previously issued negotiable warehouse receipt describing the goods is outstanding and uncanceled.

(b) This section does not apply if:

(1) the word "duplicate" is plainly placed on the duplicate or additional negotiable warehouse receipt; or

(2) goods described in the outstanding and uncanceled negotiable warehouse receipt were delivered under a court order on proof that the receipt was lost or destroyed.

(c) A warehouseman who violates this section commits an offense. An offense under this section is a felony punishable by:

(1) imprisonment in the Texas Department of Criminal Justice for a term of not more than five years;

(2) a fine not to exceed $5,000; or

(3) both the fine and imprisonment. (Bus. & Com. Code, Sec. 35.31.)

Sec. 251.006. WAREHOUSEMAN WRONGFULLY DELIVERING GOODS. (a) A warehouseman may not knowingly deliver goods that are described in a negotiable warehouse receipt and stored with the warehouseman, unless the receipt is surrendered to the warehouseman at or before the time the warehouseman delivers the goods.

(b) This section does not apply if the goods are:

(1) delivered under a court order on proof that the negotiable warehouse receipt describing the goods was lost or destroyed;

(2) lawfully sold to satisfy a warehouseman's lien; or

(3) disposed of because of the perishable or hazardous nature of the goods.

(c) A warehouseman who violates this section commits an offense. An offense under this section is a misdemeanor punishable by:

(1) confinement in the county jail for a term of not more than one year;

(2) a fine not to exceed $1,000; or

(3) both the fine and confinement. (Bus. & Com. Code, Sec. 35.32.)

Sec. 251.007. FAILURE TO DISCLOSE LACK OF OWNERSHIP OF GOODS. (a) A person who obtains a negotiable warehouse receipt describing goods the person does not own may not, with intent to defraud, negotiate the receipt for value without disclosing the person's lack of ownership.

(b) A person who violates this section commits an offense. An offense under this section is a misdemeanor punishable by:

(1) confinement in the county jail for a term of not more than one year;

(2) a fine not to exceed $1,000; or

(3) both the fine and confinement. (Bus. & Com. Code, Sec. 35.33 (part).)

Sec. 251.008. FAILURE TO DISCLOSE EXISTENCE OF LIEN ON GOODS. (a) A person who obtains a negotiable warehouse receipt describing goods subject to a lien may not, with intent to defraud, negotiate the receipt for value without disclosing the lien's existence.

(b) A person who violates this section commits an offense. An offense under this section is a misdemeanor punishable by:

(1) confinement in the county jail for a term of not more than one year;

(2) a fine not to exceed $1,000; or

(3) both the fine and confinement. (Bus. & Com. Code, Sec. 35.33 (part).)

CHAPTER 252. BILLS OF LADING

Sec. 252.001. DEFINITIONS Sec. 252.002. DUTIES OF RAILROAD COMMISSION Sec. 252.003. AGENT WRONGFULLY FAILING OR REFUSING TO

ISSUE BILL OF LADING Sec. 252.004. AGENT ISSUING FRAUDULENT BILL OF LADING Sec. 252.005. AGENT ISSUING ORDER BILL OF LADING IN

DUPLICATE OR SET OF PARTS Sec. 252.006. FRAUDULENTLY INDUCING ISSUANCE OF BILL

OF LADING Sec. 252.007. FRAUDULENTLY NEGOTIATING OR TRANSFERRING

BILL OF LADING

CHAPTER 252. BILLS OF LADING

Sec. 252.001. DEFINITIONS. In this chapter:

(1) "Agent" includes an officer, employee, or receiver.

(2) "Bill of lading" means a document evidencing the receipt of goods for shipment issued by a person engaged in the business of transporting or forwarding goods. The term includes an air consignment note, air waybill, or other document for air transportation comparable to a bill of lading for marine or rail transportation.

(3) "Goods" means all things treated as movable for purposes of a contract of storage or transportation. (Bus. & Com. Code, Sec. 35.14 (part).)

Sec. 252.002. DUTIES OF RAILROAD COMMISSION. (a) In this section, "common carrier" does not include a pipeline company or express company.

(b) The Railroad Commission of Texas shall:

(1) prescribe forms, terms, and conditions for authenticating, certifying, or validating bills of lading issued by a common carrier;

(2) regulate the manner by which a common carrier issues bills of lading; and

(3) take other action necessary to carry out the purposes of Chapter 7.

(c) After giving reasonable notice to interested common carriers and to the public, the railroad commission may amend a rule adopted under Subsection (b). (Bus. & Com. Code, Secs. 35.14 (part), 35.15.)

Sec. 252.003. AGENT WRONGFULLY FAILING OR REFUSING TO ISSUE BILL OF LADING. (a) In this section, "common carrier" does not include a pipeline company or express company.

(b) An agent of a common carrier may not after lawful demand fail or refuse to issue a bill of lading in accordance with Chapter 7 or a rule of the railroad commission.

(c) An agent who violates this section commits an offense. An offense under this section is a misdemeanor punishable by:

(1) confinement in the county jail for a term of not more than six months;

(2) a fine not to exceed $200; or

(3) both the fine and confinement. (Bus. & Com. Code, Secs. 35.14 (part), 35.16.)

Sec. 252.004. AGENT ISSUING FRAUDULENT BILL OF LADING. (a) In this section, "common carrier" does not include a pipeline company or express company.

(b) An agent of a common carrier may not with intent to defraud a person:

(1) issue a bill of lading;

(2) incorrectly describe goods or the quantity of goods in a bill of lading; or

(3) issue a bill of lading without authority.

(c) An agent who violates this section commits an offense. An offense under this section is a felony punishable by imprisonment in the Texas Department of Criminal Justice for a term of not more than 10 years or less than two years. (Bus. & Com. Code, Secs. 35.14 (part), 35.17.)

Sec. 252.005. AGENT ISSUING ORDER BILL OF LADING IN DUPLICATE OR SET OF PARTS. (a) Except where customary in overseas transportation, an agent of a common carrier may not knowingly issue or aid in issuing an order bill of lading in duplicate or in a set of parts.

(b) An agent who violates this section commits an offense. An offense under this section is a felony punishable by:

(1) imprisonment in the Texas Department of Criminal Justice for a term of not more than five years; and

(2) a fine not to exceed $5,000. (Bus. & Com. Code, Sec. 35.18.)

Sec. 252.006. FRAUDULENTLY INDUCING ISSUANCE OF BILL OF LADING. (a) A person may not, with intent to defraud, induce an agent of a common carrier to:

(1) issue to the person a bill of lading; or

(2) materially misrepresent in a bill of lading issued on behalf of the common carrier the quantity of goods described in the bill of lading.

(b) A person who violates this section commits an offense. An offense under this section is a felony punishable by imprisonment in the Texas Department of Criminal Justice for a term of not more than five years or less than two years. (Bus. & Com. Code, Sec. 35.20.)

Sec. 252.007. FRAUDULENTLY NEGOTIATING OR TRANSFERRING BILL OF LADING. (a) A person may not, with intent to defraud, negotiate or transfer a bill of lading that:

(1) is issued in violation of Chapter 7; or

(2) contains a false, material statement of fact.

(b) A person who violates this section commits an offense. An offense under this section is a felony punishable by imprisonment in the Texas Department of Criminal Justice for a term of not more than 10 years. (Bus. & Com. Code, Sec. 35.21.)

CHAPTER 253. PROTESTED OUT-OF-STATE DRAFTS

Sec. 253.001. DAMAGES ON PROTESTED OUT-OF-STATE DRAFTS

CHAPTER 253. PROTESTED OUT-OF-STATE DRAFTS

Sec. 253.001. DAMAGES ON PROTESTED OUT-OF-STATE DRAFTS. The holder of a protested draft is entitled to damages in an amount equal to 10 percent of the amount of the draft, plus interest and the costs of suit, if:

(1) the draft was drawn by a merchant in this state on the merchant's agent or factor outside this state; and

(2) the drawer's or indorser's liability on the draft has been fixed. (Bus. & Com. Code, Sec. 35.39.)

CHAPTER 254. NOTE OR LIEN IDENTIFYING A PATENT RIGHT

Sec. 254.001. IDENTIFICATION OF PATENT RIGHT Sec. 254.002. FAILURE TO IDENTIFY PATENT RIGHT;

CRIMINAL PENALTY

CHAPTER 254. NOTE OR LIEN IDENTIFYING A PATENT RIGHT

Sec. 254.001. IDENTIFICATION OF PATENT RIGHT. (a) A note or lien evidencing or securing the purchase price for a patent right or patent right territory must contain on the face of the note or lien a statement that the note or lien was given for a patent right or patent right territory.

(b) The statement required by Subsection (a):

(1) is notice to a subsequent purchaser of the note or lien of all equities between the original parties to the note or lien; and

(2) subjects a subsequent holder of the note or lien to all defenses available against the original parties to the note or lien. (Bus. & Com. Code, Secs. 35.40(a), (b).)

Sec. 254.002. FAILURE TO IDENTIFY PATENT RIGHT; CRIMINAL PENALTY. (a) A person selling a patent right or patent right territory may not take a note or lien evidencing or securing the purchase price for the patent right or patent right territory without placing on the face of the note or lien the statement required by Section 254.001(a).

(b) A person who violates this section commits an offense. An offense under this section is a misdemeanor punishable by a fine of not less than $25 or more than $200. (Bus. & Com. Code, Secs. 35.40(c), (d).)

TITLE 8. SECURITY INSTRUMENTS

CHAPTER 261. UTILITY SECURITY INSTRUMENTS

Sec. 261.001. DEFINITIONS Sec. 261.002. ACT CONSTITUTING FILING Sec. 261.003. APPLICABILITY OF CHAPTER Sec. 261.004. FILING UTILITY SECURITY INSTRUMENT WITH

SECRETARY OF STATE: PERFECTION AND

NOTICE Sec. 261.005. DURATION OF PERFECTION AND NOTICE Sec. 261.006. PRIORITIES AND REMEDIES APPLICABLE TO

CERTAIN PERFECTED SECURITY INTERESTS Sec. 261.007. NOTICE OF NAME CHANGE, MERGER, OR

CONSOLIDATION Sec. 261.008. ENDORSEMENT AND FILING BY SECRETARY OF

STATE; FEES Sec. 261.009. CERTIFICATE OF FILING; FEE Sec. 261.010. COPY OF FILED UTILITY SECURITY

INSTRUMENT; FEE Sec. 261.011. NOTICE OF UTILITY SECURITY INSTRUMENT

AFFECTING REAL PROPERTY

CHAPTER 261. UTILITY SECURITY INSTRUMENTS

Sec. 261.001. DEFINITIONS. (a) In this chapter:

(1) "Utility" means a person engaged in this state in:

(A) generating, transmitting, or distributing and selling electric power;

(B) transporting, distributing, and selling, through a local distribution system, natural or other gas for domestic, commercial, industrial, or other use;

(C) owning or operating a pipeline to transmit or sell natural or other gas, natural gas liquids, crude oil, or petroleum products to another pipeline company or to a refinery, local distribution system, municipality, or industrial consumer;

(D) providing telephone or telegraph service to others;

(E) producing, transmitting, or distributing and selling steam or water;

(F) operating a railroad; or

(G) providing sewer service to others.

(2) "Utility security instrument" means:

(A) a mortgage, deed of trust, security agreement, or other instrument executed to secure payment of a bond, note, or other obligation of a utility; or

(B) an instrument that supplements or amends an instrument described by Paragraph (A), including a signed copy of the instrument.

(b) The definitions in Chapters 1 and 9 apply to this chapter. (Bus. & Com. Code, Sec. 35.01.)

Sec. 261.002. ACT CONSTITUTING FILING. For purposes of this chapter, a utility security instrument is filed when it is deposited for filing with the secretary of state. (New.)

Sec. 261.003. APPLICABILITY OF CHAPTER. A utility is subject to the requirements and entitled to the benefits of this chapter:

(1) only if the utility files with the secretary of state a utility security instrument that states conspicuously on its title page: "This Instrument Grants A Security Interest By A Utility"; and

(2) only with respect to collateral covered by a utility security instrument filed by the utility in accordance with Subdivision (1). (Bus. & Com. Code, Secs. 35.015(1), (2).)

Sec. 261.004. FILING UTILITY SECURITY INSTRUMENT WITH SECRETARY OF STATE: PERFECTION AND NOTICE. (a) Subject to Subsection (b), the filing with the secretary of state of a utility security instrument executed by a utility and described by Section 261.003(1) and payment of the filing fee prescribed by Section 261.008:

(1) constitute perfection of a security interest created by the instrument in any personal property:

(A) in which a security interest may be perfected by filing under Chapter 9, including any goods that are or will become a fixture;

(B) that is located in this state; and

(C) that was owned by the utility when the instrument was executed or is to be acquired by the utility after the instrument is executed; and

(2) if the instrument is proven, acknowledged, or certified as otherwise required by law for the recording of real property mortgages, serve as notice to all persons of the existence of the instrument and the security interest granted by the instrument in any real property, or in any fixture on or to be placed on the property, that:

(A) is located in this state; and

(B) was owned by the utility when the instrument was executed or is to be acquired by the utility after the instrument is executed.

(b) For perfection or notice under Subsection (a) to be effective as to a particular item of property, the filed utility security instrument must:

(1) identify the property by type, character, or description if the property is presently owned personal property, including a fixture, and for that purpose any description of personal property or real property is sufficient, regardless of whether specific, if it reasonably identifies what is described;

(2) provide a description of the property if the property is presently owned real property; or

(3) if the property is to be acquired after the instrument is executed, state conspicuously on its title page: "This Instrument Contains After-Acquired Property Provisions."

(c) A filing under this section satisfies any requirement of:

(1) a filing of the utility security instrument or a financing statement in the office of a county clerk if that filing would otherwise be necessary to perfect a security interest; and

(2) a recording of the utility security instrument in the office of a county clerk if that recording would otherwise make the instrument effective as to all creditors and subsequent purchasers for valuable consideration without notice. (Bus. & Com. Code, Secs. 35.02(a), (b), (c).)

Sec. 261.005. DURATION OF PERFECTION AND NOTICE. The perfection and notice provided by the filing of a utility security instrument under Section 261.004 take effect on the date of filing and remain in effect without any renewal, refiling, or continuation statement until the interest granted as security is released by the filing of a termination statement, or a release of all or a part of the property, signed by the secured party. (Bus. & Com. Code, Sec. 35.03.)

Sec. 261.006. PRIORITIES AND REMEDIES APPLICABLE TO CERTAIN PERFECTED SECURITY INTERESTS. The provisions of Chapter 9 relating to priorities and remedies apply to security interests in personal property, including fixtures, perfected under Section 261.004. (Bus. & Com. Code, Sec. 35.02(d).)

Sec. 261.007. NOTICE OF NAME CHANGE, MERGER, OR CONSOLIDATION. (a) A utility that changes its name or merges or consolidates after filing a utility security instrument under Section 261.004 shall promptly file with the secretary of state a written statement of the name change, merger, or consolidation. The written statement must:

(1) be signed by the secured party and the utility;

(2) identify the appropriate utility security instrument by file number; and

(3) state the name of the utility after the name change, merger, or consolidation.

(b) Unless a written statement is filed under Subsection (a) not later than four months after the effective date of the name change, merger, or consolidations, the filing of a utility security instrument before the name change, merger, or consolidation does not constitute perfection or serve as notice under Section 261.004 of a security interest in property acquired by the utility more than four months after the name change, merger, or consolidation. (Bus. & Com. Code, Sec. 35.04.)

Sec. 261.008. ENDORSEMENT AND FILING BY SECRETARY OF STATE; FEES. (a) The secretary of state shall endorse on a utility security instrument and any statement of name change, merger, or consolidation filed with the secretary of state:

(1) the day and hour of receipt; and

(2) the assigned file number.

(b) In the absence of other evidence, an endorsement under Subsection (a) is conclusive proof of the time and fact of filing.

(c) The secretary of state shall file in adequate filing devices and retain in the secretary of state's office all utility security instruments and statements of name change, merger, or consolidation filed with the secretary of state.

(d) The secretary of state shall charge a $25 fee to:

(1) file and index:

(A) a utility security instrument;

(B) an instrument that supplements or amends a utility security instrument; or

(C) a statement of name change, merger, or consolidation; and

(2) stamp a copy of a document described by Subdivision (1), provided by the secured party or the utility, to indicate the date and place of filing. (Bus. & Com. Code, Sec. 35.05.)

Sec. 261.009. CERTIFICATE OF FILING; FEE. (a) On request of any person, the secretary of state shall issue a certificate that:

(1) indicates whether on the date and hour stated in the request, there is on file any presently effective utility security instrument naming a particular utility; and

(2) if there is, states:

(A) the date and hour the utility security instrument was filed; and

(B) the names and addresses of each secured party.

(b) The fee for a certificate under this section is:

(1) $10, if the request for the certificate is in the standard form prescribed by the secretary of state; or

(2) $25, if the request is not in the standard form. (Bus. & Com. Code, Sec. 35.06 (part).)

Sec. 261.010. COPY OF FILED UTILITY SECURITY INSTRUMENT; FEE. (a) On request and payment of the fee prescribed by Subsection (b), the secretary of state shall provide a person with a copy of any filed utility security instrument.

(b) The fee for a copy under this section is $1.50 per page, but may not be less than $5 or more than $100 for each request concerning a particular utility. (Bus. & Com. Code, Sec. 35.06 (part).)

Sec. 261.011. NOTICE OF UTILITY SECURITY INSTRUMENT AFFECTING REAL PROPERTY. (a) If a utility security instrument filed with the secretary of state under Section 261.004 grants a security interest in real property owned by the utility, a notice of utility security instrument affecting real property must be recorded in the office of the county clerk in the county in which the real property is located. The notice must state:

(1) the name of the utility that executed the utility security instrument;

(2) that a utility security instrument affecting real property in the county has been executed by the utility; and

(3) that the utility security instrument was filed, and other security instruments may be on file, with the secretary of state.

(b) A notice recorded under Subsection (a) is sufficient to provide notice of any other security instrument filed with the secretary of state that:

(1) was executed by the utility; and

(2) grants a security interest in any real property located in the county in which the notice was recorded or in any fixture on the property.

(c) The county clerk shall record and index a notice described by Subsection (a) in the same records and indices as the clerk records and indexes mortgages on real property.

(d) The county clerk shall maintain a separate index of utility security instruments and continuation statements recorded under prior law. (Bus. & Com. Code, Secs. 35.07(a), (b) (part), (c), (d).)

TITLE 9. APPLICABILITY OF LAW TO COMMERCIAL TRANSACTIONS

CHAPTER 271. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE

TO CERTAIN TRANSACTIONS

Sec. 271.001. DEFINITION Sec. 271.002. SUBSTANTIALLY SIMILAR OR RELATED

TRANSACTIONS Sec. 271.003. CONFLICT-OF-LAWS RULES Sec. 271.004. DETERMINATION OF REASONABLE RELATION OF

TRANSACTION TO PARTICULAR JURISDICTION Sec. 271.005. LAW GOVERNING ISSUE RELATING TO

QUALIFIED TRANSACTION Sec. 271.006. LAW GOVERNING INTERPRETATION OR

CONSTRUCTION OF AGREEMENT RELATING TO

QUALIFIED TRANSACTION Sec. 271.007. LAW GOVERNING VALIDITY OR ENFORCEABILITY

OF TERM OF AGREEMENT RELATING TO

QUALIFIED TRANSACTION Sec. 271.008. APPLICABILITY TO CERTAIN REAL PROPERTY

TRANSACTIONS; EXCEPTIONS Sec. 271.009. EXCEPTION: MARRIAGE OR ADOPTION Sec. 271.010. EXCEPTION: DECEDENT'S ESTATE Sec. 271.011. EXCEPTION: OTHER STATUTE SPECIFYING

GOVERNING LAW

CHAPTER 271. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE

TO CERTAIN TRANSACTIONS

Sec. 271.001. DEFINITION. In this chapter, "qualified transaction" means a transaction under which a party:

(1) pays or receives, or is obligated to pay or is entitled to receive, consideration with an aggregate value of at least $1 million; or

(2) lends, advances, borrows, or receives, or is obligated to lend or advance or is entitled to borrow or receive, money or credit with an aggregate value of at least $1 million. (Bus. & Com. Code, Sec. 35.51(a)(2).)

Sec. 271.002. SUBSTANTIALLY SIMILAR OR RELATED TRANSACTIONS. For purposes of this chapter, two or more substantially similar or related transactions are considered a single transaction if the transactions:

(1) are entered into contemporaneously; and

(2) have at least one common party. (Bus. & Com. Code, Sec. 35.51(a)(1).)

Sec. 271.003. CONFLICT-OF-LAWS RULES. For purposes of this chapter, a reference to the law of a particular jurisdiction does not include that jurisdiction's conflict-of-laws rules. (Bus. & Com. Code, Secs. 35.51(b) (part), (c) (part), (e) (part).)

Sec. 271.004. DETERMINATION OF REASONABLE RELATION OF TRANSACTION TO PARTICULAR JURISDICTION. (a) For purposes of this chapter, a transaction bears a reasonable relation to a particular jurisdiction if the transaction, the subject matter of the transaction, or a party to the transaction is reasonably related to that jurisdiction.

(b) A transaction bears a reasonable relation to a particular jurisdiction if:

(1) a party to the transaction is a resident of that jurisdiction;

(2) a party to the transaction has the party's place of business or, if that party has more than one place of business, the party's chief executive office or an office from which the party conducts a substantial part of the negotiations relating to the transaction, in that jurisdiction;

(3) all or part of the subject matter of the transaction is located in that jurisdiction;

(4) a party to the transaction is required to perform in that jurisdiction a substantial part of the party's obligations relating to the transaction, such as delivering payments; or

(5) a substantial part of the negotiations relating to the transaction occurred in that jurisdiction and an agreement relating to the transaction was signed in that jurisdiction by a party to the transaction. (Bus. & Com. Code, Sec. 35.51(d).)

Sec. 271.005. LAW GOVERNING ISSUE RELATING TO QUALIFIED TRANSACTION. (a) Except as provided by Section 271.007, 271.008(b), 271.009, 271.010, or 271.011 or by Chapter 272, the law of a particular jurisdiction governs an issue relating to a qualified transaction if:

(1) the parties to the transaction agree in writing that the law of that jurisdiction governs the issue, including the validity or enforceability of an agreement relating to the transaction or a provision of the agreement; and

(2) the transaction bears a reasonable relation to that jurisdiction.

(b) The law of a particular jurisdiction governs an issue described by this section regardless of whether the application of that law is contrary to a fundamental or public policy of this state or of any other jurisdiction. (Bus. & Com. Code, Sec. 35.51(b) (part).)

Sec. 271.006. LAW GOVERNING INTERPRETATION OR CONSTRUCTION OF AGREEMENT RELATING TO QUALIFIED TRANSACTION. Except as provided by Section 271.008(b), 271.009, 271.010, or 271.011 and by Chapter 272, if the parties to a qualified transaction agree in writing that the law of a particular jurisdiction governs the interpretation or construction of an agreement relating to the transaction or a provision of the agreement, the law of that jurisdiction governs that issue regardless of whether the transaction bears a reasonable relation to that jurisdiction. (Bus. & Com. Code, Sec. 35.51(c) (part).)

Sec. 271.007. LAW GOVERNING VALIDITY OR ENFORCEABILITY OF TERM OF AGREEMENT RELATING TO QUALIFIED TRANSACTION. (a) Except as provided by Section 271.008(b), 271.009, 271.010, or 271.011 or by Chapter 272, this section applies if:

(1) the parties to a qualified transaction agree in writing that the law of a particular jurisdiction governs the validity or enforceability of an agreement relating to the transaction or a provision of the agreement;

(2) the transaction bears a reasonable relation to that jurisdiction; and

(3) a term of the agreement or of that provision is invalid or unenforceable under the law of that jurisdiction but is valid or enforceable under the law of the jurisdiction that has the most significant relation to the transaction, the subject matter of the transaction, and the parties.

(b) If this section applies:

(1) the law of the jurisdiction that has the most significant relation to the transaction, the subject matter of the transaction, and the parties governs the validity or enforceability of a term described by Subsection (a)(3); and

(2) the law of the jurisdiction that the parties agree would govern the validity or enforceability of the agreement or provision governs the validity or enforceability of the other terms of the agreement or provision. (Bus. & Com. Code, Sec. 35.51(e) (part).)

Sec. 271.008. APPLICABILITY TO CERTAIN REAL PROPERTY TRANSACTIONS; EXCEPTIONS. (a) Sections 271.004-271.007 apply to the determination of the law that governs an issue relating to a transaction involving real property other than a matter described by Subsection (b), including the validity or enforceability of an indebtedness incurred in consideration for the transfer of, or the payment of which is secured by a lien on, real property.

(b) Sections 271.004-271.007 do not apply to the determination of the law that governs:

(1) whether a transaction transfers or creates an interest in real property for security purposes or otherwise;

(2) the nature of an interest in real property that is transferred or created by a transaction;

(3) the method for foreclosure of a lien on real property;

(4) the nature of an interest in real property that results from foreclosure; or

(5) the manner and effect of recording or failing to record evidence of a transaction that transfers or creates an interest in real property. (Bus. & Com. Code, Secs. 35.51(f) (part), (g).)

Sec. 271.009. EXCEPTION: MARRIAGE OR ADOPTION. Sections 271.004-271.007 do not apply to the determination of the law that governs:

(1) the validity of a marriage or an adoption;

(2) whether a marriage has been terminated; or

(3) the effect of a marriage on property owned by a spouse at the time of the marriage or acquired by either spouse during the marriage. (Bus. & Com. Code, Sec. 35.51(f) (part).)

Sec. 271.010. EXCEPTION: DECEDENT'S ESTATE. Sections 271.004-271.007 do not apply to the determination of the law that governs:

(1) whether an instrument is a will;

(2) the rights of persons under a will; or

(3) the rights of persons in the absence of a will. (Bus. & Com. Code, Sec. 35.51(f) (part).)

Sec. 271.011. EXCEPTION: OTHER STATUTE SPECIFYING GOVERNING LAW. Sections 271.004-271.007 do not apply to the determination of the law that governs an issue that another statute of this state or a statute of the United States provides is governed by the law of a particular jurisdiction. (Bus. & Com. Code, Sec. 35.51(f) (part).)

CHAPTER 272. LAW APPLICABLE TO CERTAIN CONTRACTS FOR CONSTRUCTION

OR REPAIR OF REAL PROPERTY IMPROVEMENTS

Sec. 272.001. VOIDABLE CONTRACT PROVISION Sec. 272.002. CONTRACT PRINCIPALLY FOR CONSTRUCTION OR

REPAIR OF REAL PROPERTY IMPROVEMENTS

CHAPTER 272. LAW APPLICABLE TO CERTAIN CONTRACTS FOR CONSTRUCTION

OR REPAIR OF REAL PROPERTY IMPROVEMENTS

Sec. 272.001. VOIDABLE CONTRACT PROVISION. (a) This section applies only to a contract that is principally for the construction or repair of an improvement to real property located in this state.

(b) If a contract contains a provision making the contract or any conflict arising under the contract subject to another state's law, litigation in the courts of another state, or arbitration in another state, that provision is voidable by the party obligated by the contract to perform the construction or repair. (Bus. & Com. Code, Sec. 35.52(a).)

Sec. 272.002. CONTRACT PRINCIPALLY FOR CONSTRUCTION OR REPAIR OF REAL PROPERTY IMPROVEMENTS. (a) For purposes of this chapter, a contract is principally for the construction or repair of an improvement to real property located in this state if the contract obligates a party, as the party's principal obligation under the contract, to provide labor or labor and materials as a general contractor or subcontractor for the construction or repair of an improvement to real property located in this state.

(b) For purposes of this chapter, a contract is not principally for the construction or repair of an improvement to real property located in this state if the contract:

(1) is a partnership agreement or other agreement governing an entity or trust;

(2) provides for a loan or other extension of credit and the party promising to construct or repair the improvement is doing so as part of the party's agreements with the lender or other person who extends credit; or

(3) is for the management of real property or improvements and the obligation to construct or repair the improvement is part of that management.

(c) Subsections (a) and (b) do not provide an exclusive list of the situations in which a contract is or is not principally for the construction or repair of an improvement to real property located in this state. (Bus. & Com. Code, Secs. 35.52(b), (c), (d).)

CHAPTER 273. LAW OR FORUM APPLICABLE TO CERTAIN CONTRACTS FOR

DISPOSITION OF GOODS

Sec. 273.001. CONTRACTS SUBJECT TO CHAPTER Sec. 273.002. NOTICE OF APPLICABLE LAW OR FORUM Sec. 273.003. FAILURE TO PROVIDE NOTICE

CHAPTER 273. LAW OR FORUM APPLICABLE TO CERTAIN CONTRACTS FOR

DISPOSITION OF GOODS

Sec. 273.001. CONTRACTS SUBJECT TO CHAPTER. This chapter applies to a contract only if:

(1) the contract is for the sale, lease, exchange, or other disposition for value of goods for the price, rental, or other consideration of $50,000 or less;

(2) any element of the contract's execution occurred in this state;

(3) a party to the contract is:

(A) an individual resident of this state; or

(B) an association or corporation that is created under the laws of this state or has its principal place of business in this state; and

(4) Section 1.301 does not apply to the contract. (Bus. & Com. Code, Sec. 35.53(a).)

Sec. 273.002. NOTICE OF APPLICABLE LAW OR FORUM. If a contract contains a provision making the contract or any conflict arising under the contract subject to another state's laws, litigation in the courts of another state, or arbitration in another state, that provision must be set out conspicuously in print, type, or other form of writing that is boldfaced, capitalized, underlined, or otherwise set out in such a manner that a reasonable person against whom the provision may operate would notice the provision. (Bus. & Com. Code, Sec. 35.53(b) (part).)

Sec. 273.003. FAILURE TO PROVIDE NOTICE. A contract provision that does not comply with Section 273.002 is voidable by a party against whom the provision is sought to be enforced. (Bus. & Com. Code, Sec. 35.53(b) (part).)

CHAPTER 274. LAW APPLICABLE TO CONTRACT MADE OVER INTERNET

Sec. 274.001. DEFINITION Sec. 274.002. APPLICABILITY OF CHAPTER; EXCEPTION Sec. 274.003. STATE LAW GOVERNING CONTRACT; BURDEN OF

PROOF Sec. 274.004. APPLICABILITY OF OTHER LAW TO CONTRACT

CHAPTER 274. LAW APPLICABLE TO CONTRACT MADE OVER INTERNET

Sec. 274.001. DEFINITION. In this chapter, "Internet" means the largest nonproprietary nonprofit cooperative public computer network, popularly known as the Internet. (Bus. & Com. Code, Sec. 35.531(a).)

Sec. 274.002. APPLICABILITY OF CHAPTER; EXCEPTION. (a) Except as provided by Subsection (b), this chapter applies only to a contract made solely over the Internet between a person located in this state and a person located outside this state who does not maintain an office or agent in this state for transacting business in this state.

(b) This chapter does not apply to a contract to which Chapter 271 applies. (Bus. & Com. Code, Secs. 35.531(b), (e) (part).)

Sec. 274.003. STATE LAW GOVERNING CONTRACT; BURDEN OF PROOF. (a) A contract is governed by the law of this state unless each party to the contract who is located in this state:

(1) is given notice that the law of the state in which another party to the contract is located applies to the contract; and

(2) agrees to the application of that state's law.

(b) A person asserting that the law of another state governs a contract has the burden of proving that notice was given and agreement was obtained as specified by Subsection (a). (Bus. & Com. Code, Secs. 35.531(c), (d).)

Sec. 274.004. APPLICABILITY OF OTHER LAW TO CONTRACT. Section 1.031 and Chapter 273 do not apply to a contract to which this chapter applies. (Bus. & Com. Code, Sec. 35.531(e) (part).)

TITLE 10. USE OF TELECOMMUNICATIONS

SUBTITLE A. TELEPHONES

CHAPTER 301. TELEPHONE SOLICITATION PRACTICES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 301.001. DEFINITIONS

[Sections 301.002-301.050 reserved for expansion]

SUBCHAPTER B. PERMITTED AND PROHIBITED PRACTICES

Sec. 301.051. TELEPHONE SOLICITATION REQUIREMENTS Sec. 301.052. CHARGES TO CONSUMER'S CREDIT CARD

ACCOUNT

[Sections 301.053-301.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT

Sec. 301.101. INVESTIGATION BY ATTORNEY GENERAL'S

OFFICE Sec. 301.102. INJUNCTIVE RELIEF Sec. 301.103. CIVIL PENALTY; RESTITUTION Sec. 301.104. CIVIL ACTION Sec. 301.105. VENUE

CHAPTER 301. TELEPHONE SOLICITATION PRACTICES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 301.001. DEFINITIONS. In this chapter:

(1) "Automated dial announcing device" means automated equipment used for telephone solicitation or collection that can:

(A) store telephone numbers to be called or produce numbers to be called through use of a random or sequential number generator; and

(B) convey, alone or in conjunction with other equipment, a prerecorded or synthesized voice message to the number called without the use of a live operator.

(2) "Consumer" means a person who is solicited to purchase, lease, or receive a consumer good or service.

(3) "Consumer good or service" means:

(A) real property or tangible or intangible personal property that is normally used for personal, family, or household purposes, including:

(i) personal property intended to be attached to or installed in any real property;

(ii) a cemetery lot; and

(iii) a time-share estate; or

(B) a service related to real or personal property.

(4) "Consumer telephone call" means an unsolicited call made to a residential telephone number by a telephone solicitor to:

(A) solicit a sale of a consumer good or service;

(B) solicit an extension of credit for a consumer good or service; or

(C) obtain information that will or may be used to directly solicit a sale of a consumer good or service or to extend credit for the sale.

(5) "Telephone solicitor" means a person who makes or causes to be made a consumer telephone call, including a call made by an automated dial announcing device. (Bus. & Com. Code, Sec. 37.01.)

[Sections 301.002-301.050 reserved for expansion]

SUBCHAPTER B. PERMITTED AND PROHIBITED PRACTICES

Sec. 301.051. TELEPHONE SOLICITATION REQUIREMENTS. (a) This section does not apply to a consumer telephone call made:

(1) in response to the express request of the consumer;

(2) primarily in connection with an existing debt or contract for which payment or performance has not been completed at the time of the call; or

(3) to a consumer with whom the telephone solicitor has a prior or existing business relationship.

(b) A telephone solicitor may not make a consumer telephone call to a consumer unless:

(1) the telephone solicitor, immediately after making contact with the consumer to whom the call is made, identifies:

(A) himself or herself by name;

(B) the business on whose behalf the telephone solicitor is calling; and

(C) the purpose of the call;

(2) the telephone solicitor makes the call after 12 noon and before 9 p.m. on a Sunday or after 9 a.m. and before 9 p.m. on a weekday or a Saturday; and

(3) for those calls in which an automated dial announcing device is used, the device disconnects the consumer's telephone line within the period specified by Section 55.126, Utilities Code, after either the telephone solicitor or the consumer terminates the call. (Bus. & Com. Code, Sec. 37.02.)

Sec. 301.052. CHARGES TO CONSUMER'S CREDIT CARD ACCOUNT. A person who sells consumer goods or services through the use of a telephone solicitor may not make or submit a charge to a consumer's credit card account unless the seller:

(1) provides that:

(A) the consumer may receive a full refund for returning undamaged and unused goods or canceling services by providing notice to the seller not later than the seventh day after the date the consumer receives the goods or services; and

(B) the seller will process:

(i) a refund not later than the 30th day after the date the seller receives the returned goods from the consumer; or

(ii) a full refund not later than the 30th day after the date the consumer cancels an order for the purchase of services not performed or a pro rata refund for any services not yet performed for the consumer;

(2) provides to the consumer a written contract fully describing the goods or services being offered, the total price to be charged, the name, address, and business telephone number of the seller, and any terms affecting the sale and receives from the consumer a signed copy of the contract; or

(3) is an organization that qualifies for an exemption from federal income taxation under Section 501(c)(3), Internal Revenue Code of 1986, and has obtained that exemption from the Internal Revenue Service. (Bus. & Com. Code, Sec. 37.03.)

[Sections 301.053-301.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT

Sec. 301.101. INVESTIGATION BY ATTORNEY GENERAL'S OFFICE. The attorney general's office shall investigate a complaint relating to a violation of this chapter. (Bus. & Com. Code, Sec. 37.04(a) (part).)

Sec. 301.102. INJUNCTIVE RELIEF. (a) The attorney general's office may petition a district court for a temporary restraining order to restrain a continuing violation of this chapter.

(b) A district court, on petition of the attorney general's office and on finding that a person is violating this chapter, may:

(1) issue an injunction prohibiting the person from continuing the violation; or

(2) grant any other injunctive relief warranted by the facts. (Bus. & Com. Code, Secs. 37.04(a) (part), (b).)

Sec. 301.103. CIVIL PENALTY; RESTITUTION. (a) A person who knowingly violates this chapter is liable for a civil penalty of not more than $10,000 for each violation.

(b) In addition to bringing an action for injunctive relief under Section 301.102, the attorney general's office may seek restitution and petition a district court for the assessment of a civil penalty as provided by this chapter. (Bus. & Com. Code, Secs. 37.04(a) (part), 37.05(a), (b).)

Sec. 301.104. CIVIL ACTION. A consumer injured by a violation of this chapter may bring an action for recovery of damages. The damages awarded may not be less than the amount the consumer paid the person who sold the consumer goods or services through the use of the telephone solicitor, plus reasonable attorney's fees and court costs. (Bus. & Com. Code, Sec. 37.05(c).)

Sec. 301.105. VENUE. Venue for an action brought under this chapter is in:

(1) the county in which the consumer telephone call originated;

(2) the county in which the consumer telephone call was received; or

(3) Travis County. (Bus. & Com. Code, Sec. 37.04(c).)

CHAPTER 302. REGULATION OF TELEPHONE SOLICITATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 302.001. DEFINITIONS Sec. 302.002. MAKING TELEPHONE SOLICITATION Sec. 302.003. LIBERAL CONSTRUCTION AND APPLICATION Sec. 302.004. ATTEMPTED WAIVER VOID

[Sections 302.005-302.050 reserved for expansion]

SUBCHAPTER B. EXEMPTIONS

Sec. 302.051. BURDEN OF PROOF Sec. 302.052. EXEMPTIONS APPLY ONLY TO SELLERS;

EXCEPTION Sec. 302.053. EXEMPTION: PERSONS REGULATED BY OTHER

LAW Sec. 302.054. EXEMPTION: PERSONS SELLING MEDIA

SUBSCRIPTIONS, CERTAIN MERCHANDISE, OR

ITEMS FROM CERTAIN CATALOGS Sec. 302.055. EXEMPTION: EDUCATIONAL AND NONPROFIT

ORGANIZATIONS Sec. 302.056. EXEMPTION: CERTAIN COMMERCIAL SALES Sec. 302.057. EXEMPTION: PERSON SOLICITING FOOD SALES Sec. 302.058. EXEMPTION: SOLICITATION OF FORMER OR

CURRENT CUSTOMERS Sec. 302.059. EXEMPTION: PERSONS WHO MAKE CERTAIN

SALES PRESENTATIONS OR MAKE SALES AT

ESTABLISHED RETAIL LOCATIONS Sec. 302.060. EXEMPTION: CERTAIN PERSONS PROVIDING

TELEPHONE SOLICITATION SERVICES

PREDOMINANTLY FOR EXEMPT PERSONS Sec. 302.061. EXEMPTION: PERSONS CONDUCTING CERTAIN

ISOLATED TELEPHONE SOLICITATIONS

[Sections 302.062-302.100 reserved for expansion]

SUBCHAPTER C. REGISTRATION

Sec. 302.101. REGISTRATION CERTIFICATE REQUIRED Sec. 302.102. FILING OF REGISTRATION STATEMENT; PUBLIC

INFORMATION Sec. 302.103. ISSUANCE OF REGISTRATION CERTIFICATE Sec. 302.104. EFFECTIVE DATE OF REGISTRATION

STATEMENT; RENEWAL Sec. 302.105. ADDENDA REQUIREMENTS Sec. 302.106. FILING FEE Sec. 302.107. SECURITY REQUIREMENTS Sec. 302.108. APPOINTMENT OF SECRETARY OF STATE AS

AGENT FOR SERVICE

[Sections 302.109-302.150 reserved for expansion]

SUBCHAPTER D. DISCLOSURES REQUIRED IN REGISTRATION STATEMENT

Sec. 302.151. DISCLOSURE OF CERTAIN NAMES, ADDRESSES,

TELEPHONE NUMBERS, AND ORGANIZATIONAL

INFORMATION Sec. 302.152. DISCLOSURE OF CERTAIN CONVICTIONS,

PLEAS, JUDGMENTS, ORDERS,

BANKRUPTCIES, AND REORGANIZATIONS Sec. 302.153. DISCLOSURE OF CERTAIN SALES INFORMATION

[Sections 302.154-302.200 reserved for expansion]

SUBCHAPTER E. ADDITIONAL INFORMATION FROM SELLER

Sec. 302.201. INFORMATION REQUIRED TO BE POSTED OR

AVAILABLE AT SELLER'S BUSINESS

LOCATION Sec. 302.202. DISCLOSURES REQUIRED BEFORE PURCHASE Sec. 302.203. REFERENCE TO COMPLIANCE WITH STATUTE

PROHIBITED

[Sections 302.204-302.250 reserved for expansion]

SUBCHAPTER F. OFFENSES

Sec. 302.251. VIOLATION OF CERTAIN PROVISIONS Sec. 302.252. ACTING AS SALESPERSON FOR UNREGISTERED

SELLER Sec. 302.253. REQUEST FOR CREDIT CARD ACCOUNT NUMBER

OR CHECKING ACCOUNT NUMBER AFTER OFFER

OF FREE ITEM

[Sections 302.254-302.300 reserved for expansion]

SUBCHAPTER G. ENFORCEMENT

Sec. 302.301. INJUNCTION Sec. 302.302. CIVIL PENALTIES Sec. 302.303. DECEPTIVE TRADE PRACTICES Sec. 302.304. ACTION TO RECOVER AGAINST SECURITY

CHAPTER 302. REGULATION OF TELEPHONE SOLICITATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 302.001. DEFINITIONS. In this chapter:

(1) "Item" means property or a service. The term includes a coupon book to be used with a business.

(2) "Owner" means a person who has control of or is entitled to, by ownership or other claim, at least 10 percent of a seller's net income.

(3) "Purchaser" means a person who:

(A) is solicited to become or becomes obligated for the purchase or rental of an item; or

(B) is offered an opportunity to claim or receive an item.

(4) "Salesperson" means a person who is employed or authorized by a seller to make a telephone solicitation.

(5) "Seller" means a person who makes a telephone solicitation on the person's own behalf.

(6) "Supervised financial institution" means a bank, trust company, savings and loan association, credit union, industrial loan company, personal property broker, consumer finance lender, commercial finance lender, insurer, or other financial institution that is subject to supervision by an official or agency of this state or the United States.

(7) "Telephone solicitation" means a telephone call a seller or salesperson initiates to induce a person to purchase, rent, claim, or receive an item. The term includes a telephone call a purchaser makes in response to a solicitation sent by mail or made by any other means. (Bus. & Com. Code, Sec. 38.001.)

Sec. 302.002. MAKING TELEPHONE SOLICITATION. For purposes of this chapter, a person makes a telephone solicitation if the person effects or attempts to effect a telephone solicitation, including a solicitation initiated by an automatic dialing machine or a recorded message device. (Bus. & Com. Code, Sec. 38.002.)

Sec. 302.003. LIBERAL CONSTRUCTION AND APPLICATION. This chapter shall be liberally construed and applied to promote its underlying purpose to protect persons against false, misleading, or deceptive practices in the telephone solicitation business. (Bus. & Com. Code, Sec. 38.003.)

Sec. 302.004. ATTEMPTED WAIVER VOID. An attempted waiver of a provision of this chapter is void. (Bus. & Com. Code, Sec. 38.305.)

[Sections 302.005-302.050 reserved for expansion]

SUBCHAPTER B. EXEMPTIONS

Sec. 302.051. BURDEN OF PROOF. (a) In a civil proceeding in which a violation of this chapter is alleged, a person who claims an exemption from the application of this chapter has the burden of proving the exemption.

(b) In a criminal proceeding in which a violation of this chapter is alleged, a person who claims an exemption from the application of this chapter as a defense to prosecution has the burden of producing evidence to support the defense. (Bus. & Com. Code, Sec. 38.051.)

Sec. 302.052. EXEMPTIONS APPLY ONLY TO SELLERS; EXCEPTION. Except as provided by Section 302.060, an exemption from the application of this chapter applies only to a seller. (Bus. & Com. Code, Sec. 38.052.)

Sec. 302.053. EXEMPTION: PERSONS REGULATED BY OTHER LAW. This chapter does not apply to:

(1) a person offering or selling a security that has been qualified for sale under Section 7, The Securities Act (Article 581-7, Vernon's Texas Civil Statutes), or that is subject to an exemption under Section 5 or 6 of that Act;

(2) a publicly traded corporation registered with the Securities and Exchange Commission or the State Securities Board, or a subsidiary or agent of the corporation;

(3) a person who holds a license issued under the Insurance Code if the solicited transaction is governed by that code;

(4) a supervised financial institution or a parent, a subsidiary, or an affiliate of a supervised financial institution;

(5) a person whose business is regulated by the Public Utility Commission of Texas or an affiliate of that person, except that this chapter applies to such a person or affiliate only with respect to one or more automated dial announcing devices;

(6) a person subject to the control or licensing regulations of the Federal Communications Commission;

(7) a person selling a contractual plan regulated by the Federal Trade Commission trade regulation on use of negative option plans by sellers in commerce under 16 C.F.R. Part 425;

(8) a person subject to filing requirements under Chapter 1803, Occupations Code; or

(9) a person who:

(A) is soliciting a transaction regulated by the Commodity Futures Trading Commission; and

(B) is registered or holds a temporary license for the activity described by Paragraph (A) with the Commodity Futures Trading Commission under the Commodity Exchange Act (7 U.S.C. Section 1 et seq.), if the registration or license has not expired or been suspended or revoked. (Bus. & Com. Code, Sec. 38.053.)

Sec. 302.054. EXEMPTION: PERSONS SELLING MEDIA SUBSCRIPTIONS, CERTAIN MERCHANDISE, OR ITEMS FROM CERTAIN CATALOGS. This chapter does not apply to:

(1) a person soliciting the sale of a subscription to:

(A) a daily or weekly newspaper of general circulation;

(B) a magazine or other periodical of general circulation; or

(C) a cable television service;

(2) a person selling merchandise under an arrangement in which the seller periodically ships the merchandise to a consumer who has consented in advance to receive the merchandise periodically; or

(3) a person periodically issuing and delivering to purchasers catalogs that each:

(A) include a written description or illustration and the sales price of each item offered for sale;

(B) include at least 24 full pages of written material or illustrations;

(C) are distributed in more than one state; and

(D) have an annual circulation of at least 250,000 customers. (Bus. & Com. Code, Sec. 38.054.)

Sec. 302.055. EXEMPTION: EDUCATIONAL AND NONPROFIT ORGANIZATIONS. This chapter does not apply to an educational institution or organization or a nonprofit organization exempt from taxation under Section 501(c)(3), Internal Revenue Code of 1986. (Bus. & Com. Code, Sec. 38.055.)

Sec. 302.056. EXEMPTION: CERTAIN COMMERCIAL SALES. This chapter does not apply to a sale in which the purchaser is a business that intends to:

(1) resell the item purchased; or

(2) use the item purchased in a recycling, reuse, remanufacturing, or manufacturing process. (Bus. & Com. Code, Sec. 38.056.)

Sec. 302.057. EXEMPTION: PERSON SOLICITING FOOD SALES. This chapter does not apply to a person soliciting the sale of food. (Bus. & Com. Code, Sec. 38.057.)

Sec. 302.058. EXEMPTION: SOLICITATION OF FORMER OR CURRENT CUSTOMERS. This chapter does not apply to:

(1) the solicitation of a contract for the maintenance or repair of an item previously purchased from the person making the solicitation or on whose behalf the solicitation is made; or

(2) a person who:

(A) is soliciting business from a former or current customer; and

(B) has operated under the same business name for at least two years. (Bus. & Com. Code, Sec. 38.058.)

Sec. 302.059. EXEMPTION: PERSONS WHO MAKE CERTAIN SALES PRESENTATIONS OR MAKE SALES AT ESTABLISHED RETAIL LOCATIONS. This chapter does not apply to:

(1) a person conducting a telephone solicitation who:

(A) does not intend to complete or obtain provisional acceptance of a sale during the telephone solicitation;

(B) does not make a major sales presentation during the telephone solicitation but arranges for a major sales presentation to be made face-to-face at a later meeting between the salesperson and the purchaser; and

(C) does not cause an individual to go to the purchaser to collect payment for the purchase or to deliver an item purchased directly following the telephone solicitation; or

(2) a person who for at least two years, under the same name as that used in connection with the person's telemarketing operations, has operated a retail establishment where consumer goods are displayed and offered for sale continuously, if a majority of the person's business involves buyers obtaining services or products at the retail establishment. (Bus. & Com. Code, Sec. 38.059.)

Sec. 302.060. EXEMPTION: CERTAIN PERSONS PROVIDING TELEPHONE SOLICITATION SERVICES PREDOMINANTLY FOR EXEMPT PERSONS. This chapter does not apply to a person:

(1) who provides telephone solicitation services under contract to a seller;

(2) who has been operating continuously for at least three years under the same business name; and

(3) for whom at least 75 percent of the person's contracts are performed on behalf of other persons exempt from the application of this chapter under this section. (Bus. & Com. Code, Sec. 38.060(a).)

Sec. 302.061. EXEMPTION: PERSONS CONDUCTING CERTAIN ISOLATED TELEPHONE SOLICITATIONS. This chapter does not apply to a person engaging in a telephone solicitation that:

(1) is an isolated transaction; and

(2) is not done in the course of a pattern of repeated transactions of a similar nature. (Bus. & Com. Code, Sec. 38.061.)

[Sections 302.062-302.100 reserved for expansion]

SUBCHAPTER C. REGISTRATION

Sec. 302.101. REGISTRATION CERTIFICATE REQUIRED. (a) A seller may not make a telephone solicitation from a location in this state or to a purchaser located in this state unless the seller holds a registration certificate for the business location from which the telephone solicitation is made.

(b) A separate registration certificate is required for each business location from which a telephone solicitation is made. (Bus. & Com. Code, Sec. 38.101.)

Sec. 302.102. FILING OF REGISTRATION STATEMENT; PUBLIC INFORMATION. (a) To obtain a registration certificate, a seller must file with the secretary of state a registration statement that:

(1) is in the form prescribed by the secretary of state;

(2) contains the information required by Subchapter D;

(3) is verified by each principal of the seller; and

(4) specifies the date and location of verification.

(b) Information included in or attached to a registration statement is public information.

(c) In this section, "principal" means an owner, an executive officer of a corporation, a general partner of a partnership, a sole proprietor, a trustee of a trust, or another individual with similar supervisory functions with respect to any person. (Bus. & Com. Code, Sec. 38.302.)

Sec. 302.103. ISSUANCE OF REGISTRATION CERTIFICATE. (a) The secretary of state shall issue a registration certificate and mail the certificate to the seller when the secretary of state receives:

(1) a completed registration statement required by Section 302.102;

(2) the filing fee prescribed by Section 302.106;

(3) the security required by Section 302.107; and

(4) the consent regarding service of process required by Section 302.108.

(b) If the seller uses a single registration statement to register more than one business location, the secretary of state shall:

(1) issue a registration certificate for each business location; and

(2) mail all the certificates to the principal business location shown on the registration statement. (Bus. & Com. Code, Sec. 38.104.)

Sec. 302.104. EFFECTIVE DATE OF REGISTRATION STATEMENT; RENEWAL. (a) A registration statement takes effect on the date the secretary of state issues the registration certificate and is effective for one year.

(b) A registration statement may be renewed annually by:

(1) filing a renewal registration statement containing the information required by Subchapter D; and

(2) paying the filing fee prescribed by Section 302.106. (Bus. & Com. Code, Sec. 38.105.)

Sec. 302.105. ADDENDA REQUIREMENTS. (a) For each quarter after the effective date of a registration statement, the seller shall file with the secretary of state an addendum providing the required registration information for each salesperson who is soliciting or has solicited on behalf of the seller during the preceding quarter.

(b) A seller may comply with Subsection (a) by filing with the secretary of state a copy of the "Employer's Quarterly Report" for employee wages that the seller files with the Texas Workforce Commission.

(c) In addition to filing the quarterly addendum, if a material change in information submitted in a registration statement, other than the information described by Subsection (a), occurs before the date for renewal, a seller shall submit that information to the secretary of state by filing an addendum. (Bus. & Com. Code, Sec. 38.106.)

Sec. 302.106. FILING FEE. The filing fee for a registration statement is $200. (Bus. & Com. Code, Sec. 38.103.)

Sec. 302.107. SECURITY REQUIREMENTS. A registration statement must be accompanied by security that:

(1) is in the amount of $10,000;

(2) is in the form of:

(A) a bond executed by a corporate security that:

(i) is approved by the secretary of state; and

(ii) holds a license to transact business in this state;

(B) an irrevocable letter of credit issued for the benefit of the registrant by a supervised financial institution whose deposits are insured by an agency of the federal government; or

(C) a certificate of deposit in a supervised financial institution whose deposits are insured by an agency of the federal government, the principal of which may be withdrawn only on the order of the secretary of state; and

(3) is conditioned on the seller's compliance with this chapter. (Bus. & Com. Code, Sec. 38.107.)

Sec. 302.108. APPOINTMENT OF SECRETARY OF STATE AS AGENT FOR SERVICE. (a) A seller shall file with the secretary of state, in the form prescribed by the secretary of state, an irrevocable consent appointing the secretary of state to act as the seller's agent to receive service of process in a noncriminal action or proceeding that may arise under this chapter against the seller or the seller's successor, executor, or administrator if:

(1) an agent has not been named under Section 302.151(15);

(2) the agent named under Section 302.151(15) has resigned or died and the name of a successor agent has not been submitted under Section 302.105; or

(3) the agent named under Section 302.151(15) cannot with reasonable diligence be found at the disclosed address.

(b) Service on the secretary of state under this section has the same effect as service on the seller. Service on the secretary of state may be made by:

(1) leaving a copy of the process in the office of the secretary of state;

(2) promptly sending by first class mail a notice of the service and a copy of the process to the seller's principal business location at the last address on file with the secretary of state; and

(3) filing the plaintiff's affidavit of compliance with this section in the action or proceeding on or before the return date of any process or within an additional period that the court allows. (Bus. & Com. Code, Sec. 38.108.)

[Sections 302.109-302.150 reserved for expansion]

SUBCHAPTER D. DISCLOSURES REQUIRED IN REGISTRATION STATEMENT

Sec. 302.151. DISCLOSURE OF CERTAIN NAMES, ADDRESSES, TELEPHONE NUMBERS, AND ORGANIZATIONAL INFORMATION. A registration statement must contain:

(1) the seller's name and, if different from the seller's name, the name under which the seller is transacting or intends to transact business;

(2) the name of each parent and affiliated organization of the seller that:

(A) will transact business with a purchaser relating to sales solicited by the seller; or

(B) accepts responsibility for statements made by, or acts of, the seller relating to sales solicited by the seller;

(3) the seller's:

(A) form of business; and

(B) place of organization;

(4) for a seller who is a corporation, a copy of the seller's certificate of formation and bylaws;

(5) for a seller who is a partnership, a copy of the partnership agreement;

(6) for a seller who is operating under an assumed business name, the location where the assumed name has been registered;

(7) for any parent or affiliated organization disclosed under Subdivision (2), the applicable information that is required of a seller under Subdivisions (3) through (6);

(8) the complete street address of each location of the seller, designating the principal location from which the seller will be transacting business;

(9) if the principal business location of the seller is not in this state, a designation of the seller's main location in this state;

(10) a listing of each telephone number to be used by the seller and the address where each telephone using the number is located;

(11) the name and title of each of the seller's officers, directors, trustees, general and limited partners, and owners, as applicable, and the name of each of those persons who has management responsibilities in connection with the seller's business activities;

(12) for each person whose name is disclosed under Subdivision (11) and for each seller who is a sole proprietor:

(A) the complete address of the person's principal residence;

(B) the person's date of birth; and

(C) the number of and state that issued the person's driver's license;

(13) the name and principal residence address of each person the seller leaves in charge at each location from which the seller transacts business in this state and the business location at which each of those persons is or will be in charge;

(14) the name and principal residence address of each salesperson who solicits on the seller's behalf or a copy of the "Employer's Quarterly Report" for employee wages the seller files with the Texas Workforce Commission and the name the salesperson uses while soliciting;

(15) the name and address of the seller's agent in this state, other than the secretary of state, who is authorized to receive service of process; and

(16) the name and address of each financial institution with which the seller makes banking or similar monetary transactions and the identification number of each of the seller's accounts in each institution. (Bus. & Com. Code, Sec. 38.151.)

Sec. 302.152. DISCLOSURE OF CERTAIN CONVICTIONS, PLEAS, JUDGMENTS, ORDERS, BANKRUPTCIES, AND REORGANIZATIONS. (a) With respect to the seller and each person identified under Section 302.151(11) or (13), a registration statement must identify each person:

(1) who has been convicted of or pleaded nolo contendere to:

(A) an offense involving an alleged violation of this chapter; or

(B) fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property;

(2) against whom a final judgment or order has been entered in a civil or administrative action, including a stipulated judgment or order, in which the complaint or petition alleged:

(A) acts constituting:

(i) a violation of this chapter; or

(ii) fraud, theft, embezzlement, fraudulent conversion, or misappropriation of property;

(B) the use of false or misleading representations in an attempt to sell or otherwise dispose of property; or

(C) the use of unfair, unlawful, or deceptive business practices;

(3) who is subject to an injunction or restrictive court order relating to business activity as the result of an action brought by a federal, state, or local public agency, including an action affecting a vocational license; or

(4) who, during the previous seven tax years:

(A) has filed in bankruptcy;

(B) has been adjudged a bankrupt;

(C) has been reorganized because of insolvency; or

(D) has been a principal, director, officer, trustee, or general or limited partner of, or had management responsibilities for, a corporation, partnership, joint venture, or other business entity that has filed in bankruptcy, been adjudged a bankrupt, or been reorganized because of insolvency while the person held that position or on or before the first anniversary of the date on which the person last held that position.

(b) For each person identified under Subsection (a)(1), (2), or (3), the statement must disclose:

(1) the court that received the plea of nolo contendere or the court or administrative agency that rendered the conviction, judgment, or order;

(2) the docket number of the matter;

(3) the date the plea of nolo contendere was received or the date of the conviction, judgment, or order; and

(4) the name of any government agency that brought the action resulting in the plea or the conviction, judgment, or order.

(c) For each person identified under Subsection (a)(4), the statement must disclose:

(1) the name and location of the person filing in bankruptcy, adjudged a bankrupt, or reorganized because of insolvency;

(2) the date of the filing, judgment, or reorganization order;

(3) the court having jurisdiction; and

(4) the docket number of the matter. (Bus. & Com. Code, Sec. 38.152.)

Sec. 302.153. DISCLOSURE OF CERTAIN SALES INFORMATION. (a) A registration statement must be accompanied by:

(1) a description of the items the seller is offering for sale;

(2) a copy of all sales information and literature, including scripts, outlines, instructions, and information regarding the conduct of telephone solicitations, sample introductions, sample closings, product information, and contest or premium-award information, that the seller provides to salespersons or about which the seller informs salespersons;

(3) a copy of all written material the seller sends to any purchaser; and

(4) as applicable, the information and documents specified by Subsections (b) through (h).

(b) If the seller represents or implies, or directs a salesperson to represent or imply, to a purchaser that the purchaser will receive a specific item, including a certificate that the purchaser must redeem to obtain the item described in the certificate, or one or more items from among designated items, regardless of whether the items are designated as gifts, premiums, bonuses, or prizes or otherwise, the registration statement must be accompanied by:

(1) a list of the items described;

(2) the value of each item and the basis for the valuation;

(3) the price the seller paid for each item to the seller's supplier and the name, address, and telephone number of each item's supplier;

(4) all rules and terms a purchaser must meet to receive the item; and

(5) if the purchaser will not receive all of the items described by the seller:

(A) the manner in which the seller decides which item a particular purchaser is to receive;

(B) for each item, the odds of a single purchaser receiving the item; and

(C) the name and address of each purchaser who has received, during the preceding 12 months, the item with the greatest value and the item with the lowest odds of being received.

(c) If the seller is offering an item that the seller does not manufacture or supply, the registration statement must be accompanied by:

(1) the name, address, and telephone number of each of the seller's suppliers;

(2) a description of each item provided by each supplier named in Subdivision (1); and

(3) as applicable, the information and documents specified by Subsections (d) through (g).

(d) If the seller is offering an item that the seller does not manufacture or supply and the possession of the item is to be retained by the seller or will not be transferred to the purchaser until the purchaser has paid in full, the registration statement must be accompanied by:

(1) the address of each location where the item will be kept;

(2) if the item is not kept on premises owned by the seller or at an address registered under Section 302.151(8) or (9), the name of the owner of the business at which the item will be kept; and

(3) a copy of any contract or other document that evidences the seller's right to store the item at the address designated under Subdivision (2).

(e) If the seller is offering an item that the seller does not manufacture or supply and the seller is not selling the item from the seller's own inventory but purchases the item to fill an order previously taken from a purchaser, the registration statement must be accompanied by a copy of each contract or other document that evidences the seller's ability to call on suppliers to fill the seller's orders.

(f) If the seller is offering an item that the seller does not manufacture or supply and the seller represents to purchasers that the seller has insurance or a surety bond relating to a purchaser's purchase of an item, the registration statement must be accompanied by a copy of each insurance policy or bond.

(g) If the seller is offering an item that the seller does not manufacture or supply and the seller makes a representation regarding the post-purchase earning or profit potential of an item, the registration statement must be accompanied by:

(1) data to substantiate the claims made; and

(2) if the representation relates to previous sales made by the seller or a related entity, substantiating data based on the experiences of at least 50 percent of purchasers of that particular type of item from the seller or related entity during the preceding six months, including:

(A) the period the seller or related entity has been selling the particular type of item being offered;

(B) the number of purchasers of the item known to the seller or related entity to have made at least the same earnings or profit as those represented; and

(C) the percentage that the number disclosed under Paragraph (B) represents of the total number of purchasers from the seller or related entity of the particular type of item offered.

(h) If the seller is offering to sell an interest in an oil, gas, or mineral field, well, or exploration site, the registration statement must be accompanied by:

(1) any ownership interest of the seller in each field, well, or site being offered for sale;

(2) the total number of interests to be sold in each field, well, or site being offered for sale; and

(3) if, in selling an interest in any particular field, well, or site, reference is made to an investigation of the field, well, or site by the seller or anyone else:

(A) the name, business address, telephone number, and professional credentials of the person who conducted the investigation; and

(B) a copy of the report and other documents relating to the investigation prepared by the person who conducted the investigation. (Bus. & Com. Code, Sec. 38.153.)

[Sections 302.154-302.200 reserved for expansion]

SUBCHAPTER E. ADDITIONAL INFORMATION FROM SELLER

Sec. 302.201. INFORMATION REQUIRED TO BE POSTED OR AVAILABLE AT SELLER'S BUSINESS LOCATION. (a) A seller shall post the registration certificate in a conspicuous place at the location for which the certificate is issued.

(b) A seller shall post in close proximity to the registration certificate the name of each individual in charge of the location.

(c) A seller shall make available at each of the seller's business locations a copy of the entire registration statement and any addenda for inspection by a purchaser or by a representative of a government agency. (Bus. & Com. Code, Sec. 38.201.)

Sec. 302.202. DISCLOSURES REQUIRED BEFORE PURCHASE. When a telephone solicitation is made and before consummation of any sales transaction, a seller shall provide to each purchaser:

(1) the complete street address of the location from which the salesperson is calling the purchaser and, if different, the complete street address of the seller's principal location;

(2) if the seller represents or implies that a purchaser will receive without charge a specified item or one item from among designated items, regardless of whether the items are designated as gifts, premiums, bonuses, prizes, or otherwise:

(A) the information required to be filed by Sections 302.153(b)(4) and (5)(A) and (B), as appropriate; and

(B) the total number of individuals who have actually received from the seller during the preceding 12 months the item having the greatest value and the item with the smallest odds of being received;

(3) if the seller is offering to sell an interest in an oil, gas, or mineral field, well, or exploration site, the information required by Section 302.153(h); and

(4) if the seller represents that an item is being offered at a price below that usually charged for the item, the name of the item's manufacturer. (Bus. & Com. Code, Sec. 38.202.)

Sec. 302.203. REFERENCE TO COMPLIANCE WITH STATUTE PROHIBITED. A seller may not make or authorize the making of a reference to the seller's compliance with this chapter to a purchaser. (Bus. & Com. Code, Sec. 38.203.)

[Sections 302.204-302.250 reserved for expansion]

SUBCHAPTER F. OFFENSES

Sec. 302.251. VIOLATION OF CERTAIN PROVISIONS. (a) A person commits an offense if the person knowingly violates Section 302.101, 302.105, 302.201, 302.202, or 302.203. Each violation constitutes a separate offense.

(b) An offense under this section is a Class A misdemeanor. (Bus. & Com. Code, Sec. 38.251.)

Sec. 302.252. ACTING AS SALESPERSON FOR UNREGISTERED SELLER. (a) A person commits an offense if the person knowingly acts as a salesperson on behalf of a seller who violates the registration requirements of this chapter. Each violation constitutes a separate offense.

(b) An offense under this section is a Class A misdemeanor. (Bus. & Com. Code, Sec. 38.252.)

Sec. 302.253. REQUEST FOR CREDIT CARD ACCOUNT NUMBER OR CHECKING ACCOUNT NUMBER AFTER OFFER OF FREE ITEM. (a) A seller commits an offense if the seller knowingly:

(1) represents or implies that a purchaser will receive an item without charge, regardless of whether the item is designated as a gift, premium, bonus, or prize or otherwise; and

(2) requests a credit card account number or checking account number from the purchaser to charge to the credit card account or debit from the checking account an amount as a condition precedent to the purchaser's receipt of the item.

(b) An offense under this section is a Class A misdemeanor. (Bus. & Com. Code, Sec. 38.253.)

[Sections 302.254-302.300 reserved for expansion]

SUBCHAPTER G. ENFORCEMENT

Sec. 302.301. INJUNCTION. (a) The attorney general may bring an action to enjoin a person from violating this chapter.

(b) The attorney general shall notify the defendant of the alleged prohibited conduct not later than the seventh day before the date the action is filed, except that notice is not required if the attorney general intends to request that the court issue a temporary restraining order.

(c) The attorney general is entitled to recover all reasonable costs of prosecuting the action, including court costs and investigation costs, deposition expenses, witness fees, and attorney's fees. (Bus. & Com. Code, Sec. 38.301.)

Sec. 302.302. CIVIL PENALTIES. (a) A person who violates this chapter is subject to a civil penalty of not more than $5,000 for each violation.

(b) A person who violates an injunction issued under Section 302.301 is liable to this state for a civil penalty of not more than:

(1) $25,000 for each violation of the injunction; and

(2) $50,000 for all violations of the injunction.

(c) The attorney general may bring an action to recover a civil penalty under Subsection (b) in the court that issued the original injunction.

(d) The party bringing the action also is entitled to recover all reasonable costs of prosecuting the action, including court costs and investigation costs, deposition expenses, witness fees, and attorney's fees. (Bus. & Com. Code, Sec. 38.302.)

Sec. 302.303. DECEPTIVE TRADE PRACTICES. (a) A violation of this chapter is a false, misleading, or deceptive act or practice under Subchapter E, Chapter 17.

(b) A public or private right or remedy prescribed by Subchapter E, Chapter 17, may be used to enforce this chapter. (Bus. & Com. Code, Sec. 38.303.)

Sec. 302.304. ACTION TO RECOVER AGAINST SECURITY. (a) A person injured by a seller's bankruptcy or by a seller's breach of an agreement entered into during a telephone solicitation may bring an action to recover against the security required under Section 302.107.

(b) The liability of the surety on a bond provided under Section 302.107 may not exceed the amount of the bond, regardless of the number of claims filed or the aggregate amount claimed. If the amount claimed exceeds the amount of the bond, the surety shall deposit the amount of the bond with the secretary of state for distribution to claimants entitled to recovery, and the surety is then relieved of all liability under the bond. (Bus. & Com. Code, Sec. 38.304.)

CHAPTER 303. TELEPHONE SOLICITATION FOR CERTAIN LAW

ENFORCEMENT-RELATED CHARITABLE ORGANIZATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 303.001. DEFINITIONS Sec. 303.002. SOLICITATION GOVERNED BY CHAPTER Sec. 303.003. PUBLIC ACCESS TO CERTAIN DOCUMENTS AND

INFORMATION Sec. 303.004. RULES; PROCEDURES; FORMS

[Sections 303.005-303.050 reserved for expansion]

SUBCHAPTER B. REGISTRATION AND BOND REQUIREMENTS

Sec. 303.051. RECORD OF ORGANIZATIONS Sec. 303.052. FORM AND CONTENT OF REGISTRATION

STATEMENT Sec. 303.053. INITIAL REGISTRATION STATEMENT Sec. 303.054. EXPIRATION OF REGISTRATION; RENEWAL Sec. 303.055. FILING FEE Sec. 303.056. EXEMPTION: VOLUNTEER Sec. 303.057. REGISTRATION DOES NOT IMPLY ENDORSEMENT Sec. 303.058. BOOKS AND RECORDS Sec. 303.059. BOND

[Sections 303.060-303.100 reserved for expansion]

SUBCHAPTER C. SOLICITATION PRACTICES

Sec. 303.101. DECEPTIVE ACT OR PRACTICE Sec. 303.102. REPRESENTATION OF BENEFIT TO SURVIVORS Sec. 303.103. NOTICE OF DISPOSITION OF MONEY Sec. 303.104. HOURS OF SOLICITATION

[Sections 303.105-303.150 reserved for expansion]

SUBCHAPTER D. VIOLATION; REMEDIES

Sec. 303.151. NOTIFICATION OF NONCOMPLIANCE Sec. 303.152. VIOLATIONS RELATING TO FILING OF

DOCUMENTS Sec. 303.153. REMEDIES Sec. 303.154. VENUE

CHAPTER 303. TELEPHONE SOLICITATION FOR CERTAIN LAW

ENFORCEMENT-RELATED CHARITABLE ORGANIZATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 303.001. DEFINITIONS. In this chapter:

(1) "Commercial telephone solicitor" means a person whom a law enforcement-related charitable organization retains to make a telephone solicitation, directly or through another person under the direction of the person retained. The term does not include a bona fide officer, director, or employee of, or volunteer for, a law enforcement-related charitable organization.

(2) "Contribution" means a promise to give or a gift of money or other property, credit, financial assistance, or another thing of any kind or value. The term does not include:

(A) volunteer services; or

(B) bona fide fees, dues, or assessments a member pays if membership is not conferred solely as consideration for making a contribution in response to a telephone solicitation.

(3) "Law enforcement-related charitable organization" means a person who solicits a contribution and is or purports to be established or operating for a charitable purpose relating to law enforcement. The term includes a nongovernmental law enforcement organization or publication and survivors of law enforcement officers killed in the line of duty. The term does not include a governmental law enforcement agency or organization.

(4) "Telephone solicitation" means the use of a telephone to solicit another person to make a charitable contribution to a law enforcement-related charitable organization. (V.A.C.S. Art. 9023e, Secs. 2(1), (2), (3), (6).)

Sec. 303.002. SOLICITATION GOVERNED BY CHAPTER. The telephone solicitation of a contribution from a person in this state is considered to be engaging in telephone solicitation in this state regardless of where the solicitation originates. (V.A.C.S. Art. 9023e, Sec. 1.)

Sec. 303.003. PUBLIC ACCESS TO CERTAIN DOCUMENTS AND INFORMATION. (a) Except as provided by Subsection (b), a document required to be filed with the attorney general under this chapter is public information available to members of the public under Chapter 552, Government Code.

(b) A document that identifies the donors to a law enforcement-related charitable organization is confidential and not subject to disclosure. (V.A.C.S. Art. 9023e, Sec. 3(b).)

Sec. 303.004. RULES; PROCEDURES; FORMS. The attorney general may adopt rules, procedures, and forms necessary to administer and enforce this chapter. (V.A.C.S. Art. 9023e, Sec. 14.)

[Sections 303.005-303.050 reserved for expansion]

SUBCHAPTER B. REGISTRATION AND BOND REQUIREMENTS

Sec. 303.051. RECORD OF ORGANIZATIONS. The attorney general shall maintain:

(1) a register of law enforcement-related charitable organizations subject to this chapter; and

(2) a registry of law enforcement-related charitable organizations that submit to the attorney general a completed registration statement containing the information required by Section 303.052. (V.A.C.S. Art. 9023e, Secs. 3(a), 4(a) (part).)

Sec. 303.052. FORM AND CONTENT OF REGISTRATION STATEMENT. A registration statement under Section 303.051(2) must be submitted on a form the attorney general prescribes or approves and must contain:

(1) for each of the organization's offices, chapters, local units, branches, and affiliates:

(A) the legal name and each assumed name;

(B) the mailing address and street address; and

(C) each telephone number and facsimile number;

(2) the organization's employer identification number;

(3) the name, title, address, and telephone number of:

(A) the organization's executive director or other chief operating officer; and

(B) each of the organization's officers and directors;

(4) the name of each officer, director, or employee:

(A) whom the organization compensates or who has custody and control of the organization's money; and

(B) who has been convicted of or pleaded nolo contendere to:

(i) a felony; or

(ii) a misdemeanor involving fraud or the theft, misappropriation, misapplication, or misuse of another's property;

(5) for each person listed under Subdivision (4), a statement of:

(A) the offense; and

(B) the state, court, and date of each conviction or plea of nolo contendere;

(6) if the organization is a corporation, the date and state of incorporation;

(7) if the organization is not a corporation, the type of organization and date established;

(8) the date the organization began transacting business in this state;

(9) the name and address of the organization's registered agent in this state;

(10) a statement of the organization's charitable purposes;

(11) a list of the programs for which funds are solicited;

(12) the day and month on which the organization's fiscal year ends;

(13) a statement of whether the organization:

(A) is eligible to receive tax-deductible contributions under Section 170, Internal Revenue Code of 1986; and

(B) has applied for or been granted tax-exempt status by the Internal Revenue Service and, if so:

(i) the Internal Revenue Code of 1986 section on which the application was based;

(ii) the application date;

(iii) the date the exemption was granted or denied; and

(iv) a statement of whether or when the tax exemption has ever been denied, revoked, or modified;

(14) a statement that includes:

(A) the method of accounting used and the name, address, and telephone number of each of the organization's accountants and auditors;

(B) for the preceding 12 months:

(i) the total contributions received;

(ii) the total fund-raising costs, computed according to generally accepted accounting principles;

(iii) if the organization retained a commercial telephone solicitor:

(a) the name and address of each commercial telephone solicitor; and

(b) a written confirmation from each commercial telephone solicitor that it has complied with all state and local registration laws; and

(iv) the amount paid to commercial telephone solicitors; and

(C) a statement that:

(i) the organization has attempted in good faith to comply with each ordinance of a municipality or each order of a county in this state regarding telephone solicitation that has been filed with the attorney general; or

(ii) no ordinance or order described by Subparagraph (i) applies;

(15) if the organization files a federal tax return, a copy of:

(A) the organization's most recently filed Internal Revenue Service Form 990 and other federal tax returns;

(B) each supplement, amendment, and attachment to those returns; and

(C) each request for an extension to file any of those returns;

(16) if the organization does not file a federal tax return:

(A) a statement of the reason a return is not filed; and

(B) the organization's most recent financial statements, including audited financial statements, if any have been prepared; and

(17) a sworn statement verifying that the information contained in the registration statement and each attachment to the registration statement is true, correct, and complete to the best of the affiant's knowledge. (V.A.C.S. Art. 9023e, Secs. 4(a) (part), (e).)

Sec. 303.053. INITIAL REGISTRATION STATEMENT. A law enforcement-related charitable organization shall file the organization's initial registration statement before the 10th working day before the date the organization begins telephone solicitation in this state. (V.A.C.S. Art. 9023e, Sec. 4(b).)

Sec. 303.054. EXPIRATION OF REGISTRATION; RENEWAL. (a) A law enforcement-related charitable organization's registration expires on the 15th day of the fifth month after the last day of the organization's fiscal year.

(b) The organization shall file a renewal registration statement on the form required under Section 303.052. The renewal registration statement must include the organization's name and employer identification number and any changes to information previously submitted to the attorney general. For an item on which there is no change from the previous year's registration statement, "no change" may be indicated. (V.A.C.S. Art. 9023e, Sec. 4(c).)

Sec. 303.055. FILING FEE. (a) An initial registration statement must be accompanied by a filing fee not to exceed $50.

(b) A renewal registration statement must be accompanied by a filing fee of $50. (V.A.C.S. Art. 9023e, Sec. 4(d).)

Sec. 303.056. EXEMPTION: VOLUNTEER. A volunteer authorized to solicit on behalf of a law enforcement-related charitable organization is not required to register under this chapter. (V.A.C.S. Art. 9023e, Sec. 4(f).)

Sec. 303.057. REGISTRATION DOES NOT IMPLY ENDORSEMENT. (a) Registration under this chapter does not imply endorsement by this state or the attorney general.

(b) A law enforcement-related charitable organization may not state or imply that registration under this chapter is endorsement by this state or the attorney general. (V.A.C.S. Art. 9023e, Sec. 8.)

Sec. 303.058. BOOKS AND RECORDS. (a) A law enforcement-related charitable organization required to file a registration statement shall maintain books and records of the organization's activities in this state. The books and records must be maintained:

(1) in a form that enables the organization to accurately provide the information required by this chapter; and

(2) until at least the third anniversary of the end of the period to which the registration statement relates.

(b) On written request of authorized personnel of the attorney general, the organization shall make the books and records available for inspection and copying by authorized personnel:

(1) at the organization's principal place of business not later than the 10th working day after the date of the request; or

(2) at another agreed place and time.

(c) The authority provided by this section is in addition to the attorney general's other statutory or common law audit or investigative authority. (V.A.C.S. Art. 9023e, Sec. 7.)

Sec. 303.059. BOND. A commercial telephone solicitor shall post with the secretary of state a surety bond that:

(1) is in the amount of $50,000; and

(2) is issued by a surety company authorized to transact business in this state. (V.A.C.S. Art. 9023e, Sec. 5.)

[Sections 303.060-303.100 reserved for expansion]

SUBCHAPTER C. SOLICITATION PRACTICES

Sec. 303.101. DECEPTIVE ACT OR PRACTICE. A person may not commit an unfair or deceptive act or practice in making a telephone solicitation for a law enforcement-related charitable organization. (V.A.C.S. Art. 9023e, Sec. 13(a).)

Sec. 303.102. REPRESENTATION OF BENEFIT TO SURVIVORS. A person may not represent to a person solicited that a contribution is to be used to benefit the survivors of a law enforcement officer killed in the line of duty unless:

(1) all of the contributions collected are used to benefit those survivors; or

(2) the person solicited is informed in writing of the percentage of the contribution that will directly benefit those survivors. (V.A.C.S. Art. 9023e, Sec. 13(b).)

Sec. 303.103. NOTICE OF DISPOSITION OF MONEY. (a) If less than 90 percent of the contributions collected by a law enforcement-related charitable organization or commercial telephone solicitor are paid to a law enforcement-related charitable organization, the commercial telephone solicitor shall notify each person solicited by telephone, before accepting a contribution from the person, of:

(1) the percentage of the contributions that will be paid to the organization for which the contributions are being solicited; and

(2) the percentage of the contributions that the solicitor will retain.

(b) Information required to be disclosed under Subsection (a) shall also be included on any written statement mailed to the contributor. (V.A.C.S. Art. 9023e, Sec. 12(a).)

Sec. 303.104. HOURS OF SOLICITATION. A law enforcement-related charitable organization or commercial telephone solicitor may not make a telephone solicitation call unless the call is made after 9 a.m. and before 7 p.m., Monday through Friday. (V.A.C.S. Art. 9023e, Sec. 12(b).)

[Sections 303.105-303.150 reserved for expansion]

SUBCHAPTER D. VIOLATION; REMEDIES

Sec. 303.151. NOTIFICATION OF NONCOMPLIANCE. If a law enforcement-related charitable organization does not file a document required by this chapter, files an incomplete or inaccurate document, or otherwise does not comply with this chapter, the attorney general shall notify the organization of the organization's noncompliance by first class mail sent to the organization's last reported address. (V.A.C.S. Art. 9023e, Sec. 6(a).)

Sec. 303.152. VIOLATIONS RELATING TO FILING OF DOCUMENTS. (a) A law enforcement-related charitable organization violates this chapter if the organization:

(1) does not file complete documents before the 31st day after the date a notice under Section 303.151 is mailed; or

(2) with actual awareness files materially inaccurate documents.

(b) For purposes of Subsection (a)(2), actual awareness may be inferred from an objective manifestation that indicates that a person acted with actual awareness. (V.A.C.S. Art. 9023e, Secs. 2(4), 6(b).)

Sec. 303.153. REMEDIES. (a) The attorney general may bring an action against a person who violates this chapter to:

(1) cancel or suspend the person's registration;

(2) obtain an injunction to restrain the person from continuing the violation;

(3) restrain the person from transacting business in this state while violating this chapter;

(4) impose a civil penalty of not more than $25,000 for each violation; or

(5) both obtain an injunction and impose a civil penalty.

(b) A person who violates an injunction issued under this section is liable to this state for a civil penalty of not less than $100,000.

(c) In an action that the attorney general successfully prosecutes under this chapter, the court may allow the attorney general to recover civil penalties and the reasonable costs, attorney's fees, and expenses, including investigative costs, witness fees, and deposition expenses, incurred in bringing the action.

(d) A remedy authorized by this chapter is in addition to any other procedure or remedy provided by another statutory law or common law. (V.A.C.S. Art. 9023e, Secs. 9, 10 (part).)

Sec. 303.154. VENUE. An action under this chapter must be brought in:

(1) Travis County;

(2) the county in which the law enforcement-related charitable organization has its principal place of business or a fixed and established place of business at the time the action is brought; or

(3) the county in which solicitation occurred. (V.A.C.S. Art. 9023e, Sec. 11.)

CHAPTER 304. TELEMARKETING

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 304.001. SHORT TITLE Sec. 304.002. DEFINITIONS Sec. 304.003. MAKING TELEMARKETING CALL Sec. 304.004. INAPPLICABILITY OF CHAPTER TO CERTAIN

CALLS Sec. 304.005. LIBERAL CONSTRUCTION AND APPLICATION Sec. 304.006. ATTEMPTED WAIVER VOID

[Sections 304.007-304.050 reserved for expansion]

SUBCHAPTER B. TEXAS NO-CALL LIST

Sec. 304.051. MAINTENANCE OF TEXAS NO-CALL LIST Sec. 304.052. TELEMARKETING CALL TO TELEPHONE NUMBER

ON LIST PROHIBITED Sec. 304.053. EXPIRATION, RENEWAL, AND DELETION OF

ENTRY Sec. 304.054. FEE Sec. 304.055. PUBLICATION IN TELEPHONE DIRECTORY Sec. 304.056. PLACEMENT OF ENTRIES ON NATIONAL

DO-NOT-CALL REGISTRY Sec. 304.057. GENERAL RULEMAKING AUTHORITY Sec. 304.058. RULES REGARDING ISOLATED CALLS Sec. 304.059. RULES REGARDING PUBLIC NOTICE Sec. 304.060. RULES REGARDING DISSEMINATION OF LIST Sec. 304.061. EDUCATIONAL PROGRAMS Sec. 304.062. ASSISTANCE OF DEPARTMENT OF INFORMATION

RESOURCES

[Sections 304.063-304.100 reserved for expansion]

SUBCHAPTER C. FACSIMILE TRANSMISSIONS

Sec. 304.101. NOTICE IN FACSIMILE SOLICITATION Sec. 304.102. ACKNOWLEDGMENT REQUIRED; TRANSMISSION

PROHIBITED

[Sections 304.103-304.150 reserved for expansion]

SUBCHAPTER D. CALLER IDENTIFICATION

Sec. 304.151. INTERFERENCE WITH CALLER IDENTIFICATION

SERVICE OR DEVICE PROHIBITED Sec. 304.152. EXCEPTION: USE OF CERTAIN SERVICE OR

EQUIPMENT

[Sections 304.153-304.200 reserved for expansion]

SUBCHAPTER E. REGULATORY REPORTS

Sec. 304.201. REPORT BY COMMISSION Sec. 304.202. REPORT BY ATTORNEY GENERAL

[Sections 304.203-304.250 reserved for expansion]

SUBCHAPTER F. ENFORCEMENT

Sec. 304.251. ENFORCEMENT BY COMMISSION Sec. 304.252. ENFORCEMENT BY ATTORNEY GENERAL Sec. 304.253. ENFORCEMENT BY LICENSING AGENCY Sec. 304.254. DETERMINATION OF AMOUNT OF

ADMINISTRATIVE PENALTY Sec. 304.255. STAY OF ADMINISTRATIVE PENALTY Sec. 304.256. CONTESTED CASE Sec. 304.257. PRIVATE ACTION: TELEMARKETING CALLS Sec. 304.258. PRIVATE ACTION: FACSIMILE TRANSMISSION Sec. 304.259. VENUE

CHAPTER 304. TELEMARKETING

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 304.001. SHORT TITLE. This chapter may be cited as the Texas Telemarketing Disclosure and Privacy Act. (Bus. & Com. Code, Sec. 44.001.)

Sec. 304.002. DEFINITIONS. In this chapter:

(1) "Caller identification service or device" means a service or device designed to provide the user of the service or device with the telephone number of an incoming telephone call.

(2) "Commission" means the Public Utility Commission of Texas.

(3) "Consumer good or service" means property of any kind that is normally used for personal, family, or household purposes. The term does not include a security, as defined by Section 4, The Securities Act (Article 581-4, Vernon's Texas Civil Statutes).

(4) "Established business relationship" means a relationship that:

(A) is formed by a voluntary two-way communication between a person and a consumer, regardless of whether consideration is exchanged;

(B) pertains to a consumer good or service offered by the person; and

(C) has not been terminated by either party.

(5) "Facsimile recording device" means a device capable of receiving a facsimile transmission.

(6) "Facsimile solicitation" means a telemarketing call made by a transmission to a facsimile recording device.

(7) "State licensee" means a person licensed by a state agency under a law of this state that requires the person to obtain a license as a condition of engaging in a profession or business.

(8) "Telemarketer" means a person who makes or causes to be made a telemarketing call.

(9) "Telemarketing call" means an unsolicited telephone call made to:

(A) solicit a sale of a consumer good or service;

(B) solicit an extension of credit for a consumer good or service; or

(C) obtain information that may be used to solicit a sale of a consumer good or service or to extend credit for the sale.

(10) "Telephone call" means a call or other transmission made to or received at a telephone number, including:

(A) a call made by an automated telephone dialing system;

(B) a transmission to a facsimile recording device; and

(C) a call to a mobile telephone number serviced by a provider of commercial mobile service, as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), as amended, Federal Communications Commission rules, or the Omnibus Budget Reconciliation Act of 1993 (Pub. L. No. 103-66), as amended. (Bus. & Com. Code, Secs. 44.002, 44.003(a).)

Sec. 304.003. MAKING TELEMARKETING CALL. For purposes of this chapter, a person makes a telemarketing call if the person effects a telemarketing call on the person's own behalf or on behalf of another entity. A person makes a telemarketing call on behalf of another entity if, as a result of the telemarketing call, the other entity can:

(1) become entitled to receive money or other property of any kind from a sale solicited during the call; or

(2) receive information obtained during the call to:

(A) extend or offer to extend to the person solicited credit for a consumer good or service; or

(B) directly solicit a sale of a consumer good or service or extend credit for the sale. (Bus. & Com. Code, Sec. 44.004.)

Sec. 304.004. INAPPLICABILITY OF CHAPTER TO CERTAIN CALLS. This chapter does not apply to a call made:

(1) by a consumer:

(A) as the result of a solicitation by a seller or telemarketer; or

(B) in response to general media advertising by a direct mail solicitation that clearly, conspicuously, and truthfully makes all disclosures required by federal or state law;

(2) in connection with:

(A) an established business relationship; or

(B) a business relationship that has been terminated, if the call is made before the later of:

(i) the publication date of the first Texas no-call list in which the consumer's telephone number appears; or

(ii) the first anniversary of the date of termination;

(3) between a telemarketer and a business, other than by a facsimile solicitation, unless the business has informed the telemarketer that the business does not wish to receive a telemarketing call from the telemarketer;

(4) to collect a debt; or

(5) by a state licensee if:

(A) the call is not made by an automated telephone dialing system;

(B) the solicited transaction is not completed until a face-to-face sales presentation by the seller occurs and the consumer is not required to pay or authorize payment until after the presentation; and

(C) the consumer has not informed the telemarketer that the consumer does not wish to receive a telemarketing call from the telemarketer. (Bus. & Com. Code, Sec. 44.003(b).)

Sec. 304.005. LIBERAL CONSTRUCTION AND APPLICATION. This chapter shall be liberally construed and applied to promote its underlying purpose to protect the public against false, misleading, abusive, or deceptive practices in the telemarketing business. (Bus. & Com. Code, Sec. 44.005.)

Sec. 304.006. ATTEMPTED WAIVER VOID. An attempted waiver of a provision of this chapter is void. (Bus. & Com. Code, Sec. 44.006.)

[Sections 304.007-304.050 reserved for expansion]

SUBCHAPTER B. TEXAS NO-CALL LIST

Sec. 304.051. MAINTENANCE OF TEXAS NO-CALL LIST. (a) The commission shall provide for the operation of a database to compile a list of names, zip codes, and telephone numbers of consumers in this state who object to receiving telemarketing calls or other unsolicited telephone calls.

(b) The Texas no-call list is a combined list consisting of the name and telephone numbers of:

(1) each consumer in this state who has requested to be on that list; and

(2) each person in the portion of the national do-not-call registry maintained by the United States government that relates to this state.

(c) The commission shall:

(1) make available an Internet website at which a person may request that a telephone number be placed on the Texas no-call list; and

(2) provide a toll-free telephone number and mailing address that a person may call or write to obtain a copy of a form to request placement of a telephone number on the Texas no-call list.

(d) The Texas no-call list shall be updated and published on January 1, April 1, July 1, and October 1 of each year.

(e) The commission may contract with a private vendor to maintain the Texas no-call list if the vendor has maintained a no-call list database containing the names and telephone numbers of consumers who have previously requested to be added to a no-call list. A contract under this subsection must require the vendor to publish the Texas portion of the national no-call list in an electronic format for any telemarketer who agrees to use the Texas no-call list only to update the telemarketer's no-call list to include those persons with whom the telemarketer does not have an established business relationship. (Bus. & Com. Code, Secs. 44.101(a), (b), (c) (part).)

Sec. 304.052. TELEMARKETING CALL TO TELEPHONE NUMBER ON LIST PROHIBITED. A telemarketer may not make a telemarketing call to a telephone number published on the Texas no-call list more than 60 days after the date the telephone number appears on the current list. (Bus. & Com. Code, Sec. 44.102(a).)

Sec. 304.053. EXPIRATION, RENEWAL, AND DELETION OF ENTRY. (a) An entry on the Texas no-call list expires on the third anniversary of the date the entry is first published on the list. An entry may be renewed for successive three-year periods.

(b) The telephone number of a consumer on the Texas no-call list may be deleted from the list if:

(1) the consumer makes a written request; or

(2) the telephone number of the consumer is changed. (Bus. & Com. Code, Sec. 44.101(c) (part).)

Sec. 304.054. FEE. (a) Except as provided by Subsection (b), the commission may charge a person a reasonable amount not to exceed $3 for a request to place a telephone number on the Texas no-call list or to renew an entry on the list.

(b) The commission shall provide a method for placement or renewal of an entry by use of the Internet at no charge. (Bus. & Com. Code, Sec. 44.101(c) (part).)

Sec. 304.055. PUBLICATION IN TELEPHONE DIRECTORY. A private for-profit publisher of a residential telephone directory that is distributed to the public at minimal or no cost shall include in the directory a prominently displayed Internet website address, toll-free number, and mailing address established by the commission through which a person may request placement of a telephone number on the Texas no-call list or order a copy of the form to make that request. (Bus. & Com. Code, Sec. 44.101(c) (part).)

Sec. 304.056. PLACEMENT OF ENTRIES ON NATIONAL DO-NOT-CALL REGISTRY. The commission or a person the commission designates may:

(1) provide information on the Texas no-call list to the administrator of the national do-not-call registry; and

(2) allow the names and telephone numbers on the Texas no-call list to be placed on the national do-not-call registry. (Bus.& Com. Code, Sec. 44.101(d).)

Sec. 304.057. GENERAL RULEMAKING AUTHORITY. The commission may adopt rules to administer this subchapter and Subchapter F, other than Sections 304.254, 304.255, 304.256, and 304.258, as that subchapter relates to the Texas no-call list. (Bus. & Com. Code, Sec. 44.103(a) (part).)

Sec. 304.058. RULES REGARDING ISOLATED CALLS. The commission shall adopt rules providing that a telemarketing call made to a telephone number on the Texas no-call list is not a violation of Section 304.052 if the telemarketing call:

(1) is an isolated occurrence; and

(2) is made by a person who has in place adequate procedures to comply with this subchapter. (Bus. & Com. Code, Sec. 44.103(a) (part).)

Sec. 304.059. RULES REGARDING PUBLIC NOTICE. The commission shall adopt rules requiring each local exchange telephone company and each provider of commercial mobile service, as described by Section 304.002(10)(C), that provides commercial mobile service in this state to inform its customers of the requirements of this subchapter and Sections 304.251, 304.252, 304.253, 304.257, and 304.259, as those sections relate to the Texas no-call list, through:

(1) annual inserts in billing statements mailed to customers;

(2) notification:

(A) included in a customer's electronic bill;

(B) printed on a customer's paper bill;

(C) sent free of charge by messaging service to a customer's mobile telephone number; or

(D) conspicuously published in the consumer information pages of local telephone directories; or

(3) other appropriate means of notice. (Bus. & Com. Code, Sec. 44.103(a) (part).)

Sec. 304.060. RULES REGARDING DISSEMINATION OF LIST. The commission shall adopt rules providing for:

(1) the distribution of the Texas no-call list in formats, including electronic formats, commonly used by persons making telemarketing calls; and

(2) a fee for each distribution, not to exceed $75. (Bus. & Com. Code, Sec. 44.103(a) (part).)

Sec. 304.061. EDUCATIONAL PROGRAMS. In addition to requiring the notice under Section 304.059, the commission may conduct educational programs designed to inform members of the public of their rights and telemarketers of their obligations under this subchapter and Sections 304.251, 304.252, 304.253, 304.257, and 304.259, as those sections relate to the Texas no-call list. (Bus. & Com. Code, Sec. 44.103(b).)

Sec. 304.062. ASSISTANCE OF DEPARTMENT OF INFORMATION RESOURCES. On request of the commission, the Department of Information Resources shall assist the commission in administering this subchapter. (Bus. & Com. Code, Sec. 44.104.)

[Sections 304.063-304.100 reserved for expansion]

SUBCHAPTER C. FACSIMILE TRANSMISSIONS

Sec. 304.101. NOTICE IN FACSIMILE SOLICITATION. In addition to complying with the technical and procedural standards established by federal statutes or regulations regarding telephone facsimile machines and transmissions, a person in this state who makes or causes to be made a facsimile solicitation shall include in the transmitted document or on a cover page to the document a statement, in at least 12-point type, containing:

(1) the complete name of the person making the facsimile solicitation and street address of the person's place of business; and

(2) a toll-free or local exchange accessible telephone number of the person that:

(A) is answered in the order in which calls are received by an individual capable of responding to inquiries from recipients of facsimile solicitations at all times after 9 a.m. and before 5 p.m. on each day except Saturday and Sunday; or

(B) automatically and immediately deletes the specified telephone number of the recipient. (Bus. & Com. Code, Sec. 44.151.)

Sec. 304.102. ACKNOWLEDGMENT REQUIRED; TRANSMISSION PROHIBITED. On receiving oral or written notice from the recipient of a facsimile solicitation not to send any further facsimile transmissions to one or more specified telephone numbers, the person making the solicitation:

(1) shall within 24 hours after receiving the notice send the recipient of the solicitation written acknowledgment of the receipt; and

(2) other than a single transmission to comply with Subdivision (1), may not make or cause to be made a transmission to a telephone number specified by the recipient. (Bus. & Com. Code, Sec. 44.152.)

[Sections 304.103-304.150 reserved for expansion]

SUBCHAPTER D. CALLER IDENTIFICATION

Sec. 304.151. INTERFERENCE WITH CALLER IDENTIFICATION SERVICE OR DEVICE PROHIBITED. (a) In making a telemarketing call, a telemarketer may not block the identity of the telephone number from which the call is made to evade a device designed to identify a telephone caller.

(b) A telemarketer may not:

(1) interfere with or circumvent the capability of a caller identification service or device to access or provide to the recipient of the telemarketing call any information regarding the call that the service or device is capable of providing; or

(2) fail to provide caller identification information in a manner that is accessible by a caller identification service or device, if the telemarketer is capable of providing the information in that manner. (Bus. & Com. Code, Secs. 44.051(a), (b).)

Sec. 304.152. EXCEPTION: USE OF CERTAIN SERVICE OR EQUIPMENT. For purposes of Section 304.151, use of a telecommunications service or telecommunications equipment that is incapable of transmitting caller identification information does not of itself constitute interference with or circumvention of the capability of a caller identification service or device to access or provide the information. (Bus. & Com. Code, Sec. 44.051(c).)

[Sections 304.153-304.200 reserved for expansion]

SUBCHAPTER E. REGULATORY REPORTS

Sec. 304.201. REPORT BY COMMISSION. (a) Before December 31 of each even-numbered year, the commission shall submit a report to the lieutenant governor and the speaker of the house of representatives.

(b) The report must contain for the two-year period ending August 31 of the year of the report:

(1) a statement of:

(A) the number of telephone numbers included on the Texas no-call list;

(B) the number of no-call lists distributed; and

(C) the amount collected for requests to place telephone numbers and renew entries on the list and for distribution of the list;

(2) a list of complaints the commission received concerning activities regulated by this chapter, itemized by type;

(3) a summary of any enforcement efforts made by the commission; and

(4) the commission's recommendations for any changes to this chapter. (Bus. & Com. Code, Sec. 44.201.)

Sec. 304.202. REPORT BY ATTORNEY GENERAL. (a) Before December 31 of each even-numbered year, the attorney general shall submit a report to the lieutenant governor and the speaker of the house of representatives.

(b) The report must contain for the two-year period ending August 31 of the year of the report:

(1) a list of complaints the attorney general received concerning activities regulated by this chapter, itemized by type;

(2) a summary of any enforcement efforts made by the attorney general; and

(3) the attorney general's recommendations for any changes to this chapter. (Bus. & Com. Code, Sec. 44.202.)

[Sections 304.203-304.250 reserved for expansion]

SUBCHAPTER F. ENFORCEMENT

Sec. 304.251. ENFORCEMENT BY COMMISSION. (a) Except as provided by Section 304.253, the commission shall receive and investigate complaints concerning violations of Subchapters B, C, and D and may impose an administrative penalty not to exceed $1,000 for each violation.

(b) Notwithstanding Section 304.252, if a complaint alleges that the person violating Subchapter B, C, or D is a telecommunications provider, as defined by Section 51.002, Utilities Code, the commission has exclusive jurisdiction over the violation alleged in the complaint. (Bus. & Com. Code, Secs. 44.052(a), 44.102(b) (part), 44.153(a) (part).)

Sec. 304.252. ENFORCEMENT BY ATTORNEY GENERAL. (a) Except as provided by Section 304.253, the attorney general may investigate violations of Subchapters B, C, and D and file civil enforcement actions seeking:

(1) a civil penalty in an amount not to exceed $1,000 for each violation, except as provided by Subsection (b);

(2) injunctive relief; and

(3) attorney's fees.

(b) If the court finds the defendant wilfully or knowingly violated Subchapter B, C, or D, the court may increase the amount of the civil penalty to an amount not to exceed $3,000 for each violation.

(c) A violation of Subchapter B, C, or D is subject to enforcement action by the attorney general's consumer protection division under Sections 17.47, 17.58, 17.60, and 17.61. (Bus. & Com. Code, Secs. 44.052(b), 44.102(c), 44.153(b).)

Sec. 304.253. ENFORCEMENT BY LICENSING AGENCY. (a) A state agency that issues a license to a state licensee shall:

(1) receive and investigate complaints concerning violations of Subchapters B and C by the state licensee; and

(2) may receive and investigate complaints concerning violations of Subchapter D by the state licensee.

(b) The state agency may:

(1) impose an administrative penalty not to exceed $1,000 for each violation;

(2) order restitution for any monetary damages of the complainant in the case of a violation of Subchapter B or D; and

(3) suspend or revoke the state licensee's license, if the agency finds that the licensee wilfully or knowingly violated Subchapter B, C, or D. (Bus. & Com. Code, Secs. 44.052(c), 44.102(d), 44.153(c).)

Sec. 304.254. DETERMINATION OF AMOUNT OF ADMINISTRATIVE PENALTY. The amount of an administrative penalty imposed under this subchapter must be based on:

(1) the seriousness of the violation, including the nature, circumstances, extent, and gravity of the violation;

(2) any history of previous violations;

(3) the amount necessary to deter a future violation;

(4) any effort to correct the violation; and

(5) any other matter that justice may require. (Bus. & Com. Code, Sec. 44.251.)

Sec. 304.255. STAY OF ADMINISTRATIVE PENALTY. (a) The enforcement of an administrative penalty imposed under this subchapter may be stayed during the time the order is under judicial review if the person on whom the penalty is imposed pays the penalty to the clerk of the court or files a supersedeas bond with the court in the amount of the penalty.

(b) A person who cannot afford to pay the penalty or file the bond may stay the enforcement by filing an affidavit in the manner required by the Texas Rules of Civil Procedure for a party who cannot afford to file security for costs, subject to the right to contest the affidavit as provided by those rules. (Bus. & Com. Code, Sec. 44.252.)

Sec. 304.256. CONTESTED CASE. A proceeding to impose an administrative penalty under this subchapter is a contested case under Chapter 2001, Government Code. (Bus. & Com. Code, Sec. 44.253.)

Sec. 304.257. PRIVATE ACTION: TELEMARKETING CALLS. (a) A consumer on the Texas no-call list is presumed to be adversely affected by a telemarketer who calls the consumer more than once. The consumer may bring a civil action based on the second or a subsequent violation of Subchapter B if:

(1) the consumer has notified the telemarketer of the alleged violation;

(2) not later than the 30th day after the date of the call, the consumer files with the commission, the attorney general, or a state agency that licenses the person making the call a verified complaint stating the relevant facts surrounding the violation; and

(3) the commission, attorney general, or state agency receiving the complaint does not initiate an administrative action or a civil enforcement action, as appropriate, against the telemarketer named in the complaint before the 121st day after the date the complaint is filed.

(b) If the consumer brings an action based on a violation of Section 304.052 and the court finds that the defendant wilfully or knowingly violated that section, the court may award damages in an amount not to exceed $500 for each violation.

(c) Section 304.251(b) does not affect the right of a consumer to bring an action under Subsection (a). (Bus. & Com. Code, Secs. 44.102(b) (part), (f), (g).)

Sec. 304.258. PRIVATE ACTION: FACSIMILE TRANSMISSION. (a) A person may bring a civil action based on a violation of Subchapter C:

(1) for damages in an amount equal to the greater of:

(A) the person's actual monetary loss from the violation; or

(B) $500 for each violation;

(2) to enjoin the violation; or

(3) for both damages and an injunction.

(b) If the court finds that the defendant wilfully or knowingly violated Subchapter C, the court may increase the amount of the damages awarded to an amount equal to not more than three times the amount available under Subsection (a)(1).

(c) Section 304.251(b) does not affect the right of a consumer to bring an action under Subsection (a). (Bus. & Com. Code, Secs. 44.153(a) (part), (e), (f).)

Sec. 304.259. VENUE. (a) Venue for an action based on a violation of Subchapter B or C is in:

(1) the county in which the telemarketing call was made or received; or

(2) Travis County, if the action is brought by the commission, the attorney general, or a state agency.

(b) Venue for an action under Subchapter D is in Travis County. (Bus. & Com. Code, Secs. 44.052(d), 44.102(e), 44.153(d).)

CHAPTER 305. TELEPHONIC COMMUNICATIONS MADE FOR

PURPOSE OF SOLICITATION

SUBCHAPTER A. PROHIBITED COMMUNICATIONS MADE FOR

PURPOSE OF SOLICITATION

Sec. 305.001. PROHIBITED TELEPHONE CALLS Sec. 305.002. PROHIBITED FACSIMILE TRANSMISSIONS:

CHARGE TO RECIPIENT Sec. 305.003. PROHIBITED FACSIMILE TRANSMISSIONS:

HOURS OF TRANSMISSION

[Sections 305.004-305.050 reserved for expansion]

SUBCHAPTER B. ENFORCEMENT

Sec. 305.051. INVESTIGATION Sec. 305.052. CRIMINAL PENALTY Sec. 305.053. CIVIL ACTION

CHAPTER 305. TELEPHONIC COMMUNICATIONS MADE FOR

PURPOSE OF SOLICITATION

SUBCHAPTER A. PROHIBITED COMMUNICATIONS MADE FOR

PURPOSE OF SOLICITATION

Sec. 305.001. PROHIBITED TELEPHONE CALLS. A person may not make a telephone call or use an automatic dial announcing device to make a telephone call for the purpose of making a sale if:

(1) the person making the call or using the device knows or should have known that the called number is a mobile telephone for which the called person will be charged for that specific call; and

(2) the called person has not consented to the making of such a call to the person calling or using the device or to the business enterprise for which the person is calling or using the device. (Bus. & Com. Code, Sec. 35.47(a).)

Sec. 305.002. PROHIBITED FACSIMILE TRANSMISSIONS: CHARGE TO RECIPIENT. A person may not make or cause to be made a transmission for the purpose of a solicitation or sale to a facsimile recording device or other telecopier for which the person receiving the transmission will be charged for the transmission, unless the person receiving the transmission has, before the transmission, consented to the making of the transmission. (Bus. & Com. Code, Sec. 35.47(b).)

Sec. 305.003. PROHIBITED FACSIMILE TRANSMISSIONS: HOURS OF TRANSMISSION. A person may not make or cause to be made a transmission for the purpose of a solicitation or sale to a facsimile recording device after 11 p.m. and before 7 a.m. (Bus. & Com. Code, Sec. 35.47(c).)

[Sections 305.004-305.050 reserved for expansion]

SUBCHAPTER B. ENFORCEMENT

Sec. 305.051. INVESTIGATION. (a) On complaint of a called person that a person has violated Section 305.001, 305.002, or 305.003, the county or district attorney of the county in which the called person resides shall investigate the complaint and file charges if appropriate.

(b) A telephone company serving the caller or called person is not responsible for investigating a complaint or keeping records relating to this chapter. (Bus. & Com. Code, Sec. 35.47(d).)

Sec. 305.052. CRIMINAL PENALTY. (a) A person who violates Section 305.001, 305.002, or 305.003 commits an offense.

(b) An offense under this section is a Class C misdemeanor. (Bus. & Com. Code, Sec. 35.47(e).)

Sec. 305.053. CIVIL ACTION. (a) A person who receives a communication that violates 47 U.S.C. Section 227, a regulation adopted under that provision, or Subchapter A may bring an action in this state against the person who originates the communication for:

(1) an injunction;

(2) damages in the amount provided by this section; or

(3) both an injunction and damages.

(b) A plaintiff who prevails in an action for damages under this section is entitled to the greater of:

(1) $500 for each violation; or

(2) the plaintiff's actual damages.

(c) If the court finds that the defendant committed the violation knowingly or intentionally, the court may increase the amount of the award of damages under Subsection (b) to not more than the greater of:

(1) $1,500 for each violation; or

(2) three times the plaintiff's actual damages. (Bus. & Com. Code, Sec. 35.47(f).)

[Chapters 306-320 reserved for expansion]

SUBTITLE B. ELECTRONIC COMMUNICATIONS