80(R) HB 2278 - Enrolled version

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	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(3) eliminating repealed, duplicative,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

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

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.

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

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

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).

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;

(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.

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

[Sections 52.005-52.050 reserved for expansion]

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

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.

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.

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.

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;

(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

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.

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

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.

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.

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;

(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;

(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).

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.

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.

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.

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;

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

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;

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;

(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

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.

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.

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.

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.

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.

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;

(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;

(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;

(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.

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.

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;

(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;

(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.

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

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;

(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.

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.

(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

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.

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.

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;

(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.

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.

(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.

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;

(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.

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.

(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.

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.

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.

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.

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.

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.

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.

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;

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

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."

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.

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

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.

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.

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

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

(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

(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;

(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

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.

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

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.

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;

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

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

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;

(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.

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

has received, during the preceding 12 months, the item with the

greatest value and the item with the lowest odds of being received.

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

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.

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.

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.

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

(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

(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

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;

(2) at another agreed place and time.

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.

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

(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

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

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

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.

(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;

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

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.

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.

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

(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).

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.

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

CHAPTER 321. REGULATION OF CERTAIN ELECTRONIC MAIL

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 321.001. DEFINITIONS

[Sections 321.002-321.050 reserved for expansion]

SUBCHAPTER B. PROHIBITED AND REQUIRED CONDUCT

Sec. 321.051. TRANSMISSION OF CERTAIN COMMERCIAL

ELECTRONIC MAIL MESSAGES PROHIBITED

Sec. 321.052. REQUIREMENT FOR TRANSMISSION OF

UNSOLICITED COMMERCIAL ELECTRONIC MAIL

MESSAGES

Sec. 321.053. SELLING OR PROVIDING CERTAIN ELECTRONIC

MAIL ADDRESSES PROHIBITED

[Sections 321.054-321.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT

Sec. 321.101. TRANSMISSION OF MESSAGE CONTAINING

OBSCENE MATERIAL OR MATERIAL DEPICTING

SEXUAL CONDUCT; CRIMINAL PENALTY

Sec. 321.102. VIOLATION OF CHAPTER: GENERAL CIVIL

PENALTY AND INJUNCTIVE RELIEF

Sec. 321.103. VIOLATION OF CHAPTER: DECEPTIVE TRADE

PRACTICE

Sec. 321.104. VIOLATION OF CHAPTER: CIVIL ACTION FOR

DAMAGES

Sec. 321.105. ALTERNATIVE RECOVERY FOR PERSONS OTHER

THAN ELECTRONIC MAIL SERVICE PROVIDERS

Sec. 321.106. ALTERNATIVE RECOVERY FOR ELECTRONIC MAIL

SERVICE PROVIDERS

Sec. 321.107. REQUIRED NOTICE OF CIVIL ACTION TO

ATTORNEY GENERAL; CIVIL PENALTY

Sec. 321.108. INTERVENTION IN CIVIL ACTION BY ATTORNEY

GENERAL

Sec. 321.109. CERTIFICATION AS CLASS ACTION PROHIBITED

Sec. 321.110. PROTECTION OF SECRECY OR SECURITY

Sec. 321.111. IMMUNITY FROM LIABILITY: COMMERCIAL

ELECTRONIC MAIL MESSAGE TRANSMITTED BY

ERROR OR ACCIDENT

Sec. 321.112. IMMUNITY FROM LIABILITY:

TELECOMMUNICATIONS UTILITIES AND

ELECTRONIC MAIL SERVICE PROVIDERS

Sec. 321.113. QUALIFIED IMMUNITY FROM LIABILITY OF

SENDERS

Sec. 321.114. AUTHORITY TO BLOCK CERTAIN COMMERCIAL

ELECTRONIC MAIL MESSAGES; QUALIFIED

IMMUNITY

CHAPTER 321. REGULATION OF CERTAIN ELECTRONIC MAIL

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 321.001. DEFINITIONS. In this chapter:

(1) "Commercial electronic mail message" means an

electronic mail message that advertises, offers for sale or lease,

or promotes any goods, services, business opportunity, property, or

other article, commodity, or thing of value.

(2) "Electronic mail" means a message, file, or other

information that is transmitted through a local, regional, or

global computer network, regardless of whether the message, file,

or information is viewed, stored for retrieval at a later time,

printed, or filtered by a computer program that is designed or

intended to filter or screen the message, file, or information.

(3) "Electronic mail service provider" means a person

who:

(A) is authorized to transact business in this

state;

(B) is an intermediary in transmitting or

receiving electronic mail; and

service the ability to transmit or receive electronic mail.

(4) "Established business relationship" means a

relationship that:

(A) is formed by a voluntary two-way

communication between a person and another person, regardless of

whether consideration is exchanged;

(B) pertains to a product or service offered by

one of the persons; and

(5) "Obscene" has the meaning assigned by Section

43.21, Penal Code.

(6) "Sender" means a person who initiates an

electronic mail message.

(7) "Sexual conduct" has the meaning assigned by

Section 43.25, Penal Code.

(8) "Unsolicited commercial electronic mail message"

means a commercial electronic mail message transmitted without the

consent of the recipient by a person with whom the recipient does

not have an established business relationship. The term does not

include electronic mail transmitted by an organization using

electronic mail to communicate exclusively with members,

employees, or contractors of the organization. (Bus. & Com. Code,

Secs. 46.001(1), (2), (3), (4), (6), (7), (8), (9).)

[Sections 321.002-321.050 reserved for expansion]

SUBCHAPTER B. PROHIBITED AND REQUIRED CONDUCT

Sec. 321.051. TRANSMISSION OF CERTAIN COMMERCIAL

ELECTRONIC MAIL MESSAGES PROHIBITED. (a) In this section,

"Internet domain name" means a globally unique, hierarchical

reference to an Internet host or service that is:

(1) assigned through a centralized Internet naming

authority; and

(2) composed of a series of character strings

separated by periods, with the right-most string specifying the top

of the hierarchy.

(b) A person may not intentionally transmit a commercial

electronic mail message that:

(1) is an unsolicited commercial electronic mail

message and falsifies the electronic mail transmission or routing

information;

(2) contains false, deceptive, or misleading

information in the subject line; or

(3) uses another person's Internet domain name without

the other person's consent. (Bus. & Com. Code, Secs. 46.001(5),

46.002.)

Sec. 321.052. REQUIREMENT FOR TRANSMISSION OF UNSOLICITED

COMMERCIAL ELECTRONIC MAIL MESSAGES. (a) A person may not

intentionally take an action to transmit an unsolicited commercial

electronic mail message unless:

(1) "ADV:" appears first in the subject line of the

message or, if the message contains obscene material or material

depicting sexual conduct, "ADV: ADULT ADVERTISEMENT" appears first

in the subject line; and

(2) the sender or a person acting on behalf of the

sender provides a functioning return electronic mail address to

which a recipient of the message may, at no cost to the recipient,

send a reply requesting the removal of the recipient's electronic

mail address from the sender's electronic mail list.

(b) A sender shall remove a person's electronic mail address

from the sender's electronic mail list not later than the third day

after the date the sender receives a request for removal of that

address under Subsection (a)(2). (Bus. & Com. Code, Sec. 46.003.)

Sec. 321.053. SELLING OR PROVIDING CERTAIN ELECTRONIC MAIL

ADDRESSES PROHIBITED. A sender or a person acting on behalf of a

sender may not sell or otherwise provide to another the electronic

mail address of a person who requests the removal of that address

from the sender's electronic mail list as provided by Section

321.052(a)(2), except as required by other law. (Bus. & Com. Code,

Sec. 46.004.)

[Sections 321.054-321.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT

Sec. 321.101. TRANSMISSION OF MESSAGE CONTAINING OBSCENE

MATERIAL OR MATERIAL DEPICTING SEXUAL CONDUCT; CRIMINAL PENALTY.

(a) A person commits an offense if the person intentionally takes

an action to transmit a message that contains obscene material or

material depicting sexual conduct in violation of Section

321.052(a)(1).

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

(Bus. & Com. Code, Sec. 46.005.)

Sec. 321.102. VIOLATION OF CHAPTER: GENERAL CIVIL PENALTY

AND INJUNCTIVE RELIEF. (a) A person who violates this chapter is

liable to this state for a civil penalty in an amount not to exceed

the lesser of:

(1) $10 for each unlawful message or unlawful action;

(2) $25,000 for each day an unlawful message is

received or each day an unlawful action is taken.

(b) The attorney general or a prosecuting attorney in the

county in which the violation occurs may:

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

(2) obtain an injunction to prevent or restrain a

violation of this chapter.

recover reasonable expenses incurred in recovering the civil

penalty, including court costs, reasonable attorney's fees,

investigative costs, witness fees, and deposition expenses.

(d) Subsection (a) does not apply to a violation of Section

321.107(a). (Bus. & Com. Code, Sec. 46.006.)

Sec. 321.103. VIOLATION OF CHAPTER: DECEPTIVE TRADE

PRACTICE. A violation of this chapter is a false, misleading, or

deceptive act or practice under Subchapter E, Chapter 17, and any

public or private right or remedy prescribed by that subchapter may

be used to enforce this chapter, except as provided by Section

321.109. (Bus. & Com. Code, Sec. 46.007.)

Sec. 321.104. VIOLATION OF CHAPTER: CIVIL ACTION FOR

DAMAGES. (a) A person injured by a violation of this chapter may

bring an action to recover:

(1) actual damages, including lost profits; or

(2) an amount described by Section 321.105 or 321.106,

as applicable.

(b) A person who prevails in the action is entitled to

recover reasonable attorney's fees and court costs. (Bus. & Com.

Code, Sec. 46.008(a).)

Sec. 321.105. ALTERNATIVE RECOVERY FOR PERSONS OTHER THAN

ELECTRONIC MAIL SERVICE PROVIDERS. (a) In lieu of actual damages,

a person injured by a violation of this chapter arising from the

transmission of an unsolicited or commercial electronic mail

message may recover an amount equal to the lesser of:

(1) $10 for each unlawful message; or

(2) $25,000 for each day the unlawful message is

received.

(b) Subsection (a) does not apply to a person who is an

electronic mail service provider. (Bus. & Com. Code, Sec.

46.008(b).)

Sec. 321.106. ALTERNATIVE RECOVERY FOR ELECTRONIC MAIL

SERVICE PROVIDERS. In lieu of actual damages, an electronic mail

service provider injured by a violation of this chapter arising

from the transmission of an unsolicited or commercial electronic

mail message may recover an amount equal to the greater of:

(1) $10 for each unlawful message; or

(2) $25,000 for each day the unlawful message is

received. (Bus. & Com. Code, Sec. 46.008(c).)

Sec. 321.107. REQUIRED NOTICE OF CIVIL ACTION TO ATTORNEY

GENERAL; CIVIL PENALTY. (a) A person who brings an action under

Section 321.104 shall notify the attorney general of the action by

mailing a copy of the petition by registered or certified mail not

later than the 30th day after the date the petition is filed and at

least 10 days before the date set for a hearing on the action.

(b) A person who violates Subsection (a) is liable to this

state for a civil penalty in an amount not to exceed $200 for each

violation. The attorney general may bring an action to recover the

civil penalty in the court in which the action under Section 321.104

was brought. (Bus. & Com. Code, Secs. 46.009(a), (c).)

Sec. 321.108. INTERVENTION IN CIVIL ACTION BY ATTORNEY

GENERAL. The attorney general may intervene in an action brought

under Section 321.104 by:

(1) filing a notice of intervention with the court in

which the action is pending; and

(2) serving each party to the action with a copy of the

notice of intervention. (Bus. & Com. Code, Sec. 46.009(b).)

Sec. 321.109. CERTIFICATION AS CLASS ACTION PROHIBITED. A

court may not certify an action brought under this chapter as a

class action. (Bus. & Com. Code, Sec. 46.008(d).)

Sec. 321.110. PROTECTION OF SECRECY OR SECURITY. At the

request of a party to an action brought under this chapter, the

court, in the court's discretion, may conduct a legal proceeding in

a manner that protects:

(1) the secrecy and security of the computer, computer

network, computer data, computer program, and computer software

involved so as to prevent a possible recurrence of the same or a

similar act by another person; or

(2) any trade secret of a party to the action. (Bus. &

Com. Code, Sec. 46.008(e).)

Sec. 321.111. IMMUNITY FROM LIABILITY: COMMERCIAL

ELECTRONIC MAIL MESSAGE TRANSMITTED BY ERROR OR ACCIDENT. A person

may not be held liable under this chapter for a commercial

electronic mail message that is transmitted as a result of an error

or accident. (Bus. & Com. Code, Sec. 46.011(e).)

Sec. 321.112. IMMUNITY FROM LIABILITY: TELECOMMUNICATIONS

UTILITIES AND ELECTRONIC MAIL SERVICE PROVIDERS. (a) In this

section, "telecommunications utility" has the meaning assigned by

Section 51.002, Utilities Code.

(b) A telecommunications utility or an electronic mail

service provider may not be held liable under Section 321.051 or

321.052 and is not subject to a penalty provided by this chapter.

have a cause of action against a telecommunications utility or an

electronic mail service provider under this chapter solely because

the utility or service provider:

(1) is an intermediary between the sender, or a person

acting on behalf of the sender, and the recipient in the

transmission of electronic mail that violates this chapter;

(2) provides transmission, routing, relaying,

handling, or storing, through an automatic technical process, of an

unsolicited commercial electronic mail message through the

utility's or service provider's computer network or facilities; or

(3) provides telecommunications services, information

services, or other services used in the transmission of an

electronic mail message that violates this chapter. (Bus. & Com.

Code, Secs. 46.011(a), (b), (c).)

Sec. 321.113. QUALIFIED IMMUNITY FROM LIABILITY OF SENDERS.

A sender may not be held liable for the transmission of an

electronic mail message that violates this chapter if the sender:

(1) contracts in good faith with an electronic mail

service provider to transmit electronic mail messages for the

sender; and

(2) has no reason to believe the electronic mail

service provider will transmit any of the sender's electronic mail

messages in violation of this chapter. (Bus. & Com. Code, Sec.

46.011(f).)

Sec. 321.114. AUTHORITY TO BLOCK CERTAIN COMMERCIAL

ELECTRONIC MAIL MESSAGES; QUALIFIED IMMUNITY. (a) An electronic

mail service provider may on its own initiative block the receipt or

transmission through its service of any commercial electronic mail

message that the service provider reasonably believes is or will be

transmitted in violation of this chapter, if the service provider:

(1) provides a process for the prompt, good faith

resolution of a dispute related to the blocking with the sender of

the commercial electronic mail message; and

(2) makes contact information for the resolution of

the dispute accessible to the public on the service provider's

Internet website.

(b) An electronic mail service provider who complies with

Subsection (a) may not be held liable for blocking the receipt or

transmission through its service of any commercial electronic mail

message that the service provider reasonably believes is or will be

transmitted in violation of this chapter. (Bus. & Com. Code, Secs.

46.010, 46.011(d).)

CHAPTER 322. UNIFORM ELECTRONIC TRANSACTIONS ACT

Sec. 322.001. SHORT TITLE

Sec. 322.002. DEFINITIONS

Sec. 322.003. SCOPE

Sec. 322.004. PROSPECTIVE APPLICATION

Sec. 322.005. USE OF ELECTRONIC RECORDS AND ELECTRONIC

SIGNATURES; VARIATION BY AGREEMENT

Sec. 322.006. CONSTRUCTION AND APPLICATION

Sec. 322.007. LEGAL RECOGNITION OF ELECTRONIC RECORDS,

ELECTRONIC SIGNATURES, AND ELECTRONIC

CONTRACTS

Sec. 322.008. PROVISION OF INFORMATION IN WRITING;

PRESENTATION OF RECORDS

Sec. 322.009. ATTRIBUTION AND EFFECT OF ELECTRONIC

RECORD AND ELECTRONIC SIGNATURE

Sec. 322.010. EFFECT OF CHANGE OR ERROR

Sec. 322.011. NOTARIZATION AND ACKNOWLEDGMENT

Sec. 322.012. RETENTION OF ELECTRONIC RECORDS;

ORIGINALS

Sec. 322.013. ADMISSIBILITY IN EVIDENCE

Sec. 322.014. AUTOMATED TRANSACTION

Sec. 322.015. TIME AND PLACE OF SENDING AND RECEIPT

Sec. 322.016. TRANSFERABLE RECORDS

Sec. 322.017. ACCEPTANCE AND DISTRIBUTION OF

ELECTRONIC RECORDS BY GOVERNMENTAL

AGENCIES

Sec. 322.018. INTEROPERABILITY

Sec. 322.019. EXEMPTION TO PREEMPTION BY FEDERAL

ELECTRONIC SIGNATURES ACT

Sec. 322.020. APPLICABILITY OF PENAL CODE

Sec. 322.021. CERTAIN REQUIREMENTS CONSIDERED TO BE

RECOMMENDATIONS

CHAPTER 322. UNIFORM ELECTRONIC TRANSACTIONS ACT

Sec. 322.001. SHORT TITLE. This chapter may be cited as

the Uniform Electronic Transactions Act. (Bus. & Com. Code, Sec.

43.001.)

Sec. 322.002. DEFINITIONS. In this chapter:

(1) "Agreement" means the bargain of the parties in

fact, as found in their language or inferred from other

circumstances and from rules, regulations, and procedures given the

effect of agreements under laws otherwise applicable to a

particular transaction.

(2) "Automated transaction" means a transaction

conducted or performed, in whole or in part, by electronic means or

electronic records, in which the acts or records of one or both

parties are not reviewed by an individual in the ordinary course in

forming a contract, performing under an existing contract, or

fulfilling an obligation required by the transaction.

(3) "Computer program" means a set of statements or

instructions to be used directly or indirectly in an information

processing system in order to bring about a certain result.

(4) "Contract" means the total legal obligation

resulting from the parties' agreement as affected by this chapter

and other applicable law.

(5) "Electronic" means relating to technology having

electrical, digital, magnetic, wireless, optical, electromagnetic,

or similar capabilities.

(6) "Electronic agent" means a computer program or an

electronic or other automated means used independently to initiate

an action or respond to electronic records or performances in whole

or in part, without review or action by an individual.

(7) "Electronic record" means a record created,

generated, sent, communicated, received, or stored by electronic

means.

(8) "Electronic signature" means an electronic sound,

symbol, or process attached to or logically associated with a

record and executed or adopted by a person with the intent to sign

the record.

(9) "Governmental agency" means an executive,

legislative, or judicial agency, department, board, commission,

authority, institution, or instrumentality of the federal

government or of a state or of a county, municipality, or other

political subdivision of a state.

(10) "Information" means data, text, images, sounds,

codes, computer programs, software, databases, or the like.

(11) "Information processing system" means an

electronic system for creating, generating, sending, receiving,

storing, displaying, or processing information.

(12) "Record" means information that is inscribed on a

tangible medium or that is stored in an electronic or other medium

and is retrievable in perceivable form.

(13) "Security procedure" means a procedure employed

for the purpose of verifying that an electronic signature, record,

or performance is that of a specific person or for detecting changes

or errors in the information in an electronic record. The term

includes a procedure that requires the use of algorithms or other

codes, identifying words or numbers, encryption, or callback or

other acknowledgment procedures.

(14) "State" means a state of the United States, the

District of Columbia, Puerto Rico, the United States Virgin

Islands, or any territory or insular possession subject to the

jurisdiction of the United States. The term includes an Indian

tribe or band, or Alaskan native village, which is recognized by

federal law or formally acknowledged by a state.

(15) "Transaction" means an action or set of actions

occurring between two or more persons relating to the conduct of

business, commercial, or governmental affairs. (Bus. & Com. Code,

Sec. 43.002.)

Sec. 322.003. SCOPE. (a) Except as otherwise provided in

Subsection (b), this chapter applies to electronic records and

electronic signatures relating to a transaction.

(b) This chapter does not apply to a transaction to the

extent it is governed by:

(1) a law governing the creation and execution of

wills, codicils, or testamentary trusts; or

(2) the Uniform Commercial Code, other than Sections

1.107 and 1.206 and Chapters 2 and 2A.

electronic signature otherwise excluded from the application of

this chapter under Subsection (b) when used for a transaction

subject to a law other than those specified in Subsection (b).

(d) A transaction subject to this chapter is also subject to

other applicable substantive law. (Bus. & Com. Code, Sec. 43.003.)

Sec. 322.004. PROSPECTIVE APPLICATION. This chapter

applies to any electronic record or electronic signature created,

generated, sent, communicated, received, or stored on or after

January 1, 2002. (Bus. & Com. Code, Sec. 43.004.)

Sec. 322.005. USE OF ELECTRONIC RECORDS AND ELECTRONIC

SIGNATURES; VARIATION BY AGREEMENT. (a) This chapter does not

require a record or signature to be created, generated, sent,

communicated, received, stored, or otherwise processed or used by

electronic means or in electronic form.

(b) This chapter applies only to transactions between

parties each of which has agreed to conduct transactions by

electronic means. Whether the parties agree to conduct a

transaction by electronic means is determined from the context and

surrounding circumstances, including the parties' conduct.

electronic means may refuse to conduct other transactions by

electronic means. The right granted by this subsection may not be

waived by agreement.

(d) Except as otherwise provided in this chapter, the effect

of any of its provisions may be varied by agreement. The presence

in certain provisions of this chapter of the words "unless

otherwise agreed," or words of similar import, does not imply that

the effect of other provisions may not be varied by agreement.

(e) Whether an electronic record or electronic signature

has legal consequences is determined by this chapter and other

applicable law. (Bus. & Com. Code, Sec. 43.005.)

Sec. 322.006. CONSTRUCTION AND APPLICATION. This chapter

must be construed and applied:

(1) to facilitate electronic transactions consistent

with other applicable law;

(2) to be consistent with reasonable practices

concerning electronic transactions and with the continued

expansion of those practices; and

(3) to effectuate its general purpose to make uniform

the law with respect to the subject of this chapter among states

enacting it. (Bus. & Com. Code, Sec. 43.006.)

Sec. 322.007. LEGAL RECOGNITION OF ELECTRONIC RECORDS,

ELECTRONIC SIGNATURES, AND ELECTRONIC CONTRACTS. (a) A record or

signature may not be denied legal effect or enforceability solely

because it is in electronic form.

(b) A contract may not be denied legal effect or

enforceability solely because an electronic record was used in its

formation.

electronic record satisfies the law.

(d) If a law requires a signature, an electronic signature

satisfies the law. (Bus. & Com. Code, Sec. 43.007.)

Sec. 322.008. PROVISION OF INFORMATION IN WRITING;

PRESENTATION OF RECORDS. (a) If parties have agreed to conduct a

transaction by electronic means and a law requires a person to

provide, send, or deliver information in writing to another person,

the requirement is satisfied if the information is provided, sent,

or delivered, as the case may be, in an electronic record capable of

retention by the recipient at the time of receipt. An electronic

record is not capable of retention by the recipient if the sender or

its information processing system inhibits the ability of the

recipient to print or store the electronic record.

(b) If a law other than this chapter requires a record (i) to

be posted or displayed in a certain manner, (ii) to be sent,

communicated, or transmitted by a specified method, or (iii) to

contain information that is formatted in a certain manner, the

following rules apply:

(1) the record must be posted or displayed in the

manner specified in the other law;

(2) except as otherwise provided in Subsection (d)(2),

the record must be sent, communicated, or transmitted by the method

specified in the other law; and

(3) the record must contain the information formatted

in the manner specified in the other law.

or print an electronic record, the electronic record is not

enforceable against the recipient.

(d) The requirements of this section may not be varied by

agreement, but:

(1) to the extent a law other than this chapter

requires information to be provided, sent, or delivered in writing

but permits that requirement to be varied by agreement, the

requirement under Subsection (a) that the information be in the

form of an electronic record capable of retention may also be varied

by agreement; and

(2) a requirement under a law other than this chapter

to send, communicate, or transmit a record by first class mail may

be varied by agreement to the extent permitted by the other law.

(Bus. & Com. Code, Sec. 43.008.)

Sec. 322.009. ATTRIBUTION AND EFFECT OF ELECTRONIC RECORD

AND ELECTRONIC SIGNATURE. (a) An electronic record or electronic

signature is attributable to a person if it was the act of the

person. The act of the person may be shown in any manner, including

a showing of the efficacy of any security procedure applied to

determine the person to which the electronic record or electronic

signature was attributable.

(b) The effect of an electronic record or electronic

signature attributed to a person under Subsection (a) is determined

from the context and surrounding circumstances at the time of its

creation, execution, or adoption, including the parties'

agreement, if any, and otherwise as provided by law. (Bus. & Com.

Code, Sec. 43.009.)

Sec. 322.010. EFFECT OF CHANGE OR ERROR. (a) If a change

or error in an electronic record occurs in a transmission between

parties to a transaction, the rules provided by this section apply.

(b) If the parties have agreed to use a security procedure

to detect changes or errors and one party has conformed to the

procedure, but the other party has not, and the nonconforming party

would have detected the change or error had that party also

conformed, the conforming party may avoid the effect of the changed

or erroneous electronic record.

the individual may avoid the effect of an electronic record that

resulted from an error made by the individual in dealing with the

electronic agent of another person if the electronic agent did not

provide an opportunity for the prevention or correction of the

error and, at the time the individual learns of the error, the

individual:

(1) promptly notifies the other person of the error

and that the individual did not intend to be bound by the electronic

record received by the other person;

(2) takes reasonable steps, including steps that

conform to the other person's reasonable instructions, to return to

the other person or, if instructed by the other person, to destroy

the consideration received, if any, as a result of the erroneous

electronic record; and

(3) has not used or received any benefit or value from

the consideration, if any, received from the other person.

(d) If neither Subsection (b) nor Subsection (c) applies,

the change or error has the effect provided by other law, including

the law of mistake, and the parties' contract, if any.

(e) Subsections (c) and (d) may not be varied by agreement.

(Bus. & Com. Code, Sec. 43.010.)

Sec. 322.011. NOTARIZATION AND ACKNOWLEDGMENT. If a law

requires a signature or record to be notarized, acknowledged,

verified, or made under oath, the requirement is satisfied if the

electronic signature of the person authorized to perform those

acts, together with all other information required to be included

by other applicable law, is attached to or logically associated

with the signature or record. (Bus. & Com. Code, Sec. 43.011.)

Sec. 322.012. RETENTION OF ELECTRONIC RECORDS; ORIGINALS.

(a) If a law requires that a record be retained, the requirement is

satisfied by retaining an electronic record of the information in

the record which:

(1) accurately reflects the information set forth in

the record after it was first generated in its final form as an

electronic record or otherwise; and

(2) remains accessible for later reference.

(b) A requirement to retain a record in accordance with

Subsection (a) does not apply to any information the sole purpose of

which is to enable the record to be sent, communicated, or received.

services of another person if the requirements of that subsection

are satisfied.

(d) If a law requires a record to be presented or retained in

its original form, or provides consequences if the record is not

presented or retained in its original form, that law is satisfied by

an electronic record retained in accordance with Subsection (a).

(e) If a law requires retention of a check, that requirement

is satisfied by retention of an electronic record of the

information on the front and back of the check in accordance with

Subsection (a).

(f) A record retained as an electronic record in accordance

with Subsection (a) satisfies a law requiring a person to retain a

record for evidentiary, audit, or like purposes, unless a law

enacted after January 1, 2002, specifically prohibits the use of an

electronic record for the specified purpose.

(g) This section does not preclude a governmental agency of

this state from specifying additional requirements for the

retention of a record subject to the agency's jurisdiction. (Bus. &

Com. Code, Sec. 43.012.)

Sec. 322.013. ADMISSIBILITY IN EVIDENCE. In a proceeding,

evidence of a record or signature may not be excluded solely because

it is in electronic form. (Bus. & Com. Code, Sec. 43.013.)

Sec. 322.014. AUTOMATED TRANSACTION. (a) In an automated

transaction, the rules provided by this section apply.

(b) A contract may be formed by the interaction of

electronic agents of the parties, even if no individual was aware of

or reviewed the electronic agents' actions or the resulting terms

and agreements.

electronic agent and an individual, acting on the individual's own

behalf or for another person, including by an interaction in which

the individual performs actions that the individual is free to

refuse to perform and which the individual knows or has reason to

know will cause the electronic agent to complete the transaction or

performance.

(d) The terms of the contract are determined by the

substantive law applicable to it. (Bus. & Com. Code, Sec. 43.014.)

Sec. 322.015. TIME AND PLACE OF SENDING AND RECEIPT. (a)

Unless otherwise agreed between the sender and the recipient, an

electronic record is sent when it:

(1) is addressed properly or otherwise directed

properly to an information processing system that the recipient has

designated or uses for the purpose of receiving electronic records

or information of the type sent and from which the recipient is able

to retrieve the electronic record;

(2) is in a form capable of being processed by that

system; and

(3) enters an information processing system outside

the control of the sender or of a person that sent the electronic

record on behalf of the sender or enters a region of the information

processing system designated or used by the recipient which is

under the control of the recipient.

(b) Unless otherwise agreed between the sender and the

recipient, an electronic record is received when:

(1) it enters an information processing system that

the recipient has designated or uses for the purpose of receiving

electronic records or information of the type sent and from which

the recipient is able to retrieve the electronic record; and

(2) it is in a form capable of being processed by that

system.

processing system is located is different from the place the

electronic record is deemed to be received under Subsection (d).

(d) Unless otherwise expressly provided in the electronic

record or agreed between the sender and the recipient, an

electronic record is deemed to be sent from the sender's place of

business and to be received at the recipient's place of business.

For purposes of this subsection, the following rules apply:

(1) if the sender or the recipient has more than one

place of business, the place of business of that person is the place

having the closest relationship to the underlying transaction; and

(2) if the sender or the recipient does not have a

place of business, the place of business is the sender's or the

recipient's residence, as the case may be.

(e) An electronic record is received under Subsection (b)

even if no individual is aware of its receipt.

(f) Receipt of an electronic acknowledgment from an

information processing system described in Subsection (b)

establishes that a record was received but, by itself, does not

establish that the content sent corresponds to the content

received.

(g) If a person is aware that an electronic record

purportedly sent under Subsection (a), or purportedly received

under Subsection (b), was not actually sent or received, the legal

effect of the sending or receipt is determined by other applicable

law. Except to the extent permitted by the other law, the

requirements of this subsection may not be varied by agreement.

(Bus. & Com. Code, Sec. 43.015.)

Sec. 322.016. TRANSFERABLE RECORDS. (a) In this section,

"transferable record" means an electronic record that:

(1) would be a note under Chapter 3, or a document

under Chapter 7, if the electronic record were in writing; and

(2) the issuer of the electronic record expressly has

agreed is a transferable record.

(b) A person has control of a transferable record if a

system employed for evidencing the transfer of interests in the

transferable record reliably establishes that person as the person

to which the transferable record was issued or transferred.

deemed to have control of a transferable record, if the

transferable record is created, stored, and assigned in such a

manner that:

(1) a single authoritative copy of the transferable

record exists which is unique, identifiable, and, except as

otherwise provided in Subdivisions (4), (5), and (6), unalterable;

(2) the authoritative copy identifies the person

asserting control as:

(A) the person to which the transferable record

was issued; or

(B) if the authoritative copy indicates that the

transferable record has been transferred, the person to which the

transferable record was most recently transferred;

(3) the authoritative copy is communicated to and

maintained by the person asserting control or its designated

custodian;

(4) copies or revisions that add or change an

identified assignee of the authoritative copy can be made only with

the consent of the person asserting control;

(5) each copy of the authoritative copy and any copy of

a copy is readily identifiable as a copy that is not the

authoritative copy; and

(6) any revision of the authoritative copy is readily

identifiable as authorized or unauthorized.

(d) Except as otherwise agreed, a person having control of a

transferable record is the holder, as defined in Section 1.201, of

the transferable record and has the same rights and defenses as a

holder of an equivalent record or writing under the Uniform

Commercial Code, including, if the applicable statutory

requirements under Section 3.302(a), 7.501, or 9.330 are satisfied,

the rights and defenses of a holder in due course, a holder to which

a negotiable document of title has been duly negotiated, or a

purchaser, respectively. Delivery, possession, and indorsement

are not required to obtain or exercise any of the rights under this

subsection.

(e) Except as otherwise agreed, an obligor under a

transferable record has the same rights and defenses as an

equivalent obligor under equivalent records or writings under the

Uniform Commercial Code.

(f) If requested by a person against which enforcement is

sought, the person seeking to enforce the transferable record shall

provide reasonable proof that the person is in control of the

transferable record. Proof may include access to the authoritative

copy of the transferable record and related business records

sufficient to review the terms of the transferable record and to

establish the identity of the person having control of the

transferable record. (Bus. & Com. Code, Sec. 43.016.)

Sec. 322.017. ACCEPTANCE AND DISTRIBUTION OF ELECTRONIC

RECORDS BY GOVERNMENTAL AGENCIES. (a) Except as otherwise

provided by Section 322.012(f), each state agency shall determine

whether, and the extent to which, the agency will send and accept

electronic records and electronic signatures to and from other

persons and otherwise create, generate, communicate, store,

process, use, and rely upon electronic records and electronic

signatures.

(b) To the extent that a state agency uses electronic

records and electronic signatures under Subsection (a), the

Department of Information Resources and Texas State Library and

Archives Commission, pursuant to their rulemaking authority under

other law and giving due consideration to security, may specify:

(1) the manner and format in which the electronic

records must be created, generated, sent, communicated, received,

and stored and the systems established for those purposes;

(2) if electronic records must be signed by electronic

means, the type of electronic signature required, the manner and

format in which the electronic signature must be affixed to the

electronic record, and the identity of, or criteria that must be met

by, any third party used by a person filing a document to facilitate

the process;

(3) control processes and procedures as appropriate to

ensure adequate preservation, disposition, integrity, security,

confidentiality, and auditability of electronic records; and

(4) any other required attributes for electronic

records which are specified for corresponding nonelectronic

records or reasonably necessary under the circumstances.

this chapter does not require a governmental agency of this state to

use or permit the use of electronic records or electronic

signatures. (Bus. & Com. Code, Sec. 43.017.)

Sec. 322.018. INTEROPERABILITY. The Department of

Information Resources may encourage and promote consistency and

interoperability with similar requirements adopted by other

governmental agencies of this and other states and the federal

government and nongovernmental persons interacting with

governmental agencies of this state. If appropriate, those

standards may specify differing levels of standards from which

governmental agencies of this state may choose in implementing the

most appropriate standard for a particular application. (Bus. &

Com. Code, Sec. 43.018.)

Sec. 322.019. EXEMPTION TO PREEMPTION BY FEDERAL ELECTRONIC

SIGNATURES ACT. This chapter modifies, limits, or supersedes the

provisions of the Electronic Signatures in Global and National

Commerce Act (15 U.S.C. Section 7001 et seq.) as authorized by

Section 102 of that Act (15 U.S.C. Section 7002). (Bus. & Com.

Code, Sec. 43.019.)

Sec. 322.020. APPLICABILITY OF PENAL CODE. This chapter

does not authorize any activity that is prohibited by the Penal

Code. (Bus. & Com. Code, Sec. 43.020.)

Sec. 322.021. CERTAIN REQUIREMENTS CONSIDERED TO BE

RECOMMENDATIONS. Any requirement of the Department of Information

Resources or the Texas State Library and Archives Commission under

this chapter that generally applies to one or more state agencies

using electronic records or electronic signatures is considered to

be a recommendation to the comptroller concerning the electronic

records or electronic signatures used by the comptroller. The

comptroller may adopt or decline to adopt the recommendation.

(Bus. & Com. Code, Sec. 43.021.)

CHAPTER 323. PROVISION OF SOFTWARE OR SERVICES TO BLOCK OR SCREEN

INTERNET MATERIAL

Sec. 323.001. DEFINITIONS

Sec. 323.002. SOFTWARE OR SERVICES THAT RESTRICT

ACCESS TO CERTAIN INTERNET MATERIAL

Sec. 323.003. CIVIL PENALTY

CHAPTER 323. PROVISION OF SOFTWARE OR SERVICES TO BLOCK OR SCREEN

INTERNET MATERIAL

Sec. 323.001. DEFINITIONS. In this chapter:

(1) "Freeware" means software distributed to a person

free of charge, regardless of whether use of the software is subject

to certain restrictions.

(2) "Institution of higher education" has the meaning

assigned by Section 61.003, Education Code.

(3) "Interactive computer service" means any

information service or system that provides or enables computer

access to the Internet by multiple users.

(4) "Internet" means the largest nonproprietary

nonprofit cooperative public computer network, popularly known as

the Internet.

(5) "Shareware" means copyrighted software for which

the copyright owner sets certain conditions for the software's

distribution and use, including requiring payment to the copyright

owner after a person who has secured a copy of the software decides

to use the software, regardless of whether the payment is for

additional support or functionality of the software. (Bus. & Com.

Code, Secs. 35.101, 35.102(c) (part).)

Sec. 323.002. SOFTWARE OR SERVICES THAT RESTRICT ACCESS TO

CERTAIN INTERNET MATERIAL. (a) This section does not apply to:

(1) the Department of Information Resources, in the

department's capacity as the telecommunications provider for this

state; or

(2) an institution of higher education that provides

interactive computer service.

(b) A person who charges a fee to provide an interactive

computer service shall provide free of charge to each subscriber of

the service in this state a link leading to fully functional

shareware, freeware, or a demonstration version of software or to a

service that, for at least one operating system, enables the

subscriber to automatically block or screen material on the

Internet.

computer service is in compliance with this section if the person

places, on the person's first page of world wide web text

information accessible to a subscriber, a link leading to the

software or service described by Subsection (b). The identity of

the link or other on-screen depiction of the link must appear set

out from surrounding written or graphical material so as to be

conspicuous.

(d) A person who provides a link that complies with this

section is not liable to a subscriber for any temporary

inoperability of the link or for the effectiveness of the software

or service to which the person links. (Bus. & Com. Code, Secs.

35.102(a), (b), (c) (part), (d).)

Sec. 323.003. CIVIL PENALTY. (a) A person is liable to this

state for a civil penalty of $2,000 for each day the person violates

Section 323.002. The aggregate civil penalty may not exceed

$60,000.

(b) The attorney general may bring an action against a

person who violates Section 323.002 to recover the civil penalty.

Before bringing the action, the attorney general shall give the

person notice of the person's noncompliance and liability for a

civil penalty. If the person complies with Section 323.002 not

later than the 30th day after the date of the notice, the violation

is cured and the person is not liable for the civil penalty. (Bus. &

Com. Code, Sec. 35.103.)

CHAPTER 324. CONSUMER PROTECTION AGAINST COMPUTER SPYWARE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 324.001. SHORT TITLE

Sec. 324.002. DEFINITIONS

Sec. 324.003. EXCEPTIONS TO APPLICABILITY OF CHAPTER

Sec. 324.004. CAUSING COMPUTER SOFTWARE TO BE COPIED

Sec. 324.005. KNOWING VIOLATION

Sec. 324.006. INTENTIONALLY DECEPTIVE MEANS

[Sections 324.007-324.050 reserved for expansion]

SUBCHAPTER B. PROHIBITED CONDUCT OR ACTIVITIES

Sec. 324.051. UNAUTHORIZED COLLECTION OR CULLING OF

PERSONALLY IDENTIFIABLE INFORMATION

Sec. 324.052. UNAUTHORIZED ACCESS TO OR MODIFICATIONS

OF COMPUTER SETTINGS; COMPUTER DAMAGE

Sec. 324.053. UNAUTHORIZED INTERFERENCE WITH

INSTALLATION OR DISABLING OF COMPUTER

SOFTWARE

Sec. 324.054. OTHER PROHIBITED CONDUCT

[Sections 324.055-324.100 reserved for expansion]

SUBCHAPTER C. CIVIL REMEDIES

Sec. 324.101. PRIVATE ACTION

Sec. 324.102. CIVIL PENALTY; INJUNCTIVE RELIEF

CHAPTER 324. CONSUMER PROTECTION AGAINST COMPUTER SPYWARE

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 324.001. SHORT TITLE. This chapter may be cited as the

Consumer Protection Against Computer Spyware Act. (Bus. & Com.

Code, Sec. 48.001, as added Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.002. DEFINITIONS. In this chapter:

(1) "Advertisement" means a communication that

includes the promotion of a commercial product or service,

including communication on an Internet website operated for a

commercial purpose.

(2) "Computer software" means a sequence of

instructions written in a programming language that is executed on

a computer. The term does not include:

(A) a web page; or

(B) a data component of a web page that cannot be

executed independently of that page.

(3) "Damage," with respect to a computer, means

significant impairment to the integrity or availability of data,

computer software, a system, or information.

(4) "Execute," with respect to computer software,

means to perform a function or carry out instructions.

(5) "Keystroke-logging function" means a function of a

computer software program that:

(A) records all keystrokes made by a person using

a computer; and

(B) transfers that information from the computer

to another person.

(6) "Owner or operator of a computer" means the owner

or lessee of a computer or an individual using a computer with the

authorization of the owner or lessee of the computer. The phrase

"owner of a computer," with respect to a computer sold at retail,

does not include a person who owned the computer before the date on

which the computer was sold.

(7) "Person" means an individual, partnership,

corporation, limited liability company, or other organization, or a

combination of those organizations.

(8) "Personally identifiable information," with

respect to an individual who is the owner or operator of a computer,

means:

(A) a first name or first initial in combination

with a last name;

(B) a home or other physical address, including

street name;

(D) a credit or debit card number;

(E) a bank account number;

(F) a password or access code associated with a

credit or debit card or bank account;

(G) a social security number, tax identification

number, driver's license number, passport number, or other

government-issued identification number; or

(H) any of the following information if the

information alone or in combination with other information

personally identifies the individual:

(i) account balances;

(ii) overdraft history; or

(iii) payment history. (Bus. & Com. Code,

Secs. 48.002(1), (3), (4), (5), (6), (7), (8), (9), as added Acts

79th Leg., R.S., Ch. 298.)

Sec. 324.003. EXCEPTIONS TO APPLICABILITY OF CHAPTER. (a)

Section 324.052, other than Subdivision (1) of that section, and

Sections 324.053(4) and 324.054 do not apply to a

telecommunications carrier, cable operator, computer hardware or

software provider, or provider of information service or

interactive computer service that monitors or has interaction with

a subscriber's Internet or other network connection or service or a

protected computer for:

(1) a network or computer security purpose;

(2) diagnostics, technical support, or a repair

purpose;

(3) an authorized update of computer software or

system firmware;

(4) authorized remote system management; or

(5) detection or prevention of unauthorized use of or

fraudulent or other illegal activity in connection with a network,

service, or computer software, including scanning for and removing

software proscribed under this chapter.

(b) This chapter does not apply to:

(1) the use of a navigation device, any interaction

with a navigation device, or the installation or use of computer

software on a navigation device by a multichannel video programming

distributor, as defined by 47 U.S.C. Section 522(13), or video

programmer in connection with the provision of multichannel video

programming or other services offered over a multichannel video

programming system if the provision of the programming or other

service is subject to 47 U.S.C. Section 338(i) or 551; or

(2) the collection or disclosure of subscriber

information by a multichannel video programming distributor, as

defined by 47 U.S.C. Section 522(13), or video programmer in

connection with the provision of multichannel video programming or

other services offered over a multichannel video programming system

if the collection or disclosure of the information is subject to 47

U.S.C. Section 338(i) or 551. (Bus. & Com. Code, Sec. 48.003, as

added Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.004. CAUSING COMPUTER SOFTWARE TO BE COPIED. For

purposes of this chapter, a person causes computer software to be

copied if the person distributes or transfers computer software or

a component of computer software. Causing computer software to be

copied does not include:

(1) transmitting or routing computer software or a

component of the software;

(2) providing intermediate temporary storage or

caching of software;

(3) providing a storage medium such as a compact disk;

(4) a website;

(5) the distribution of computer software by a third

party through a computer server; or

(6) providing an information location tool, such as a

directory, index, reference, pointer, or hypertext link, through

which the user of a computer is able to locate computer software.

(Bus. & Com. Code, Sec. 48.002(2), as added Acts 79th Leg., R.S.,

Ch. 298.)

Sec. 324.005. KNOWING VIOLATION. A person knowingly

violates Section 324.051, 324.052, or 324.053 if the person:

(1) acts with actual knowledge of the facts that

constitute the violation; or

(2) consciously avoids information that would

establish actual knowledge of those facts. (Bus. & Com. Code, Sec.

48.054, as added Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.006. INTENTIONALLY DECEPTIVE MEANS. For purposes

of this chapter, a person is considered to have acted through

intentionally deceptive means if the person, with the intent to

deceive the owner or operator of a computer:

(1) intentionally makes a materially false or

fraudulent statement;

(2) intentionally makes a statement or uses a

description that omits or misrepresents material information; or

(3) intentionally and materially fails to provide to

the owner or operator any notice regarding the installation or

execution of computer software. (Bus. & Com. Code, Sec. 48.056, as

added Acts 79th Leg., R.S., Ch. 298.)

[Sections 324.007-324.050 reserved for expansion]

SUBCHAPTER B. PROHIBITED CONDUCT OR ACTIVITIES

Sec. 324.051. UNAUTHORIZED COLLECTION OR CULLING OF

PERSONALLY IDENTIFIABLE INFORMATION. A person other than the owner

or operator of the computer may not knowingly cause computer

software to be copied to a computer in this state and use the

software to:

(1) collect personally identifiable information

through intentionally deceptive means:

(A) by using a keystroke-logging function; or

(B) in a manner that correlates that information

with information regarding all or substantially all of the websites

visited by the owner or operator of the computer, other than

websites operated by the person collecting the information; or

(2) cull, through intentionally deceptive means, the

following kinds of personally identifiable information from the

consumer's computer hard drive for a purpose wholly unrelated to

any of the purposes of the software or service described to an owner

or operator of the computer:

(A) a credit or debit card number;

(B) a bank account number;

credit or debit card number or a bank account;

(D) a social security number;

(E) account balances; or

(F) overdraft history. (Bus. & Com. Code, Sec.

48.051, as added Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.052. UNAUTHORIZED ACCESS TO OR MODIFICATIONS OF

COMPUTER SETTINGS; COMPUTER DAMAGE. A person other than the owner

or operator of the computer may not knowingly cause computer

software to be copied to a computer in this state and use the

software to:

(1) modify, through intentionally deceptive means, a

setting that controls:

(A) the page that appears when an Internet

browser or a similar software program is launched to access and

navigate the Internet;

(B) the default provider or web proxy used to

access or search the Internet; or

(2) take control of the computer by:

(A) accessing or using the computer's modem or

Internet service to:

(i) cause damage to the computer;

(ii) cause the owner or operator of the

computer to incur financial charges for a service the owner or

operator did not previously authorize; or

(iii) cause a third party affected by the

conduct to incur financial charges for a service the third party did

not previously authorize; or

(B) opening, without the consent of the owner or

operator of the computer, an advertisement that:

(i) is in the owner's or operator's Internet

browser in a multiple, sequential, or stand-alone form; and

(ii) cannot be closed by an ordinarily

reasonable person using the computer without closing the browser or

shutting down the computer;

(3) modify settings on the computer that relate to

access to or use of the Internet and protection of information for

purposes of stealing personally identifiable information of the

owner or operator of the computer; or

(4) modify security settings on the computer relating

to access to or use of the Internet for purposes of causing damage

to one or more computers. (Bus. & Com. Code, Sec. 48.052, as added

Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.053. UNAUTHORIZED INTERFERENCE WITH INSTALLATION

OR DISABLING OF COMPUTER SOFTWARE. A person other than the owner or

operator of the computer may not knowingly cause computer software

to be copied to a computer in this state and use the software to:

(1) prevent, through intentionally deceptive means,

reasonable efforts of the owner or operator of the computer to block

the installation or execution of or to disable computer software by

causing computer software that the owner or operator has properly

removed or disabled to automatically reinstall or reactivate on the

computer;

(2) intentionally misrepresent to another that

computer software will be uninstalled or disabled by the actions of

the owner or operator of the computer;

(3) remove, disable, or render inoperative, through

intentionally deceptive means, security, antispyware, or antivirus

computer software installed on the computer;

(4) prevent reasonable efforts of the owner or

operator to block the installation of or to disable computer

software by:

(A) presenting the owner or operator with an

option to decline the installation of software knowing that, when

the option is selected, the installation process will continue to

proceed; or

(B) misrepresenting that software has been

disabled;

(5) change the name, location, or other designation of

computer software to prevent the owner from locating and removing

the software; or

(6) create randomized or intentionally deceptive file

names or random or intentionally deceptive directory folders,

formats, or registry entries to avoid detection and prevent the

owner from removing computer software. (Bus. & Com. Code, Sec.

48.053, as added Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.054. OTHER PROHIBITED CONDUCT. A person other

than the owner or operator of the computer may not:

(1) induce the owner or operator of a computer in this

state to install a computer software component to the computer by

intentionally misrepresenting the extent to which the installation

is necessary:

(A) for security or privacy reasons;

(B) to open or view text; or

content; or

(2) copy and execute or cause the copying and

execution of a computer software component to a computer in this

state in a deceptive manner with the intent to cause the owner or

operator of the computer to use the component in a manner that

violates this chapter. (Bus. & Com. Code, Sec. 48.055, as added

Acts 79th Leg., R.S., Ch. 298.)

[Sections 324.055-324.100 reserved for expansion]

SUBCHAPTER C. CIVIL REMEDIES

Sec. 324.101. PRIVATE ACTION. (a) Any of the following

persons, if adversely affected by the violation, may bring a civil

action against a person who violates this chapter:

(1) a provider of computer software;

(2) an owner of a web page or trademark;

(3) a telecommunications carrier;

(4) a cable operator; or

(5) an Internet service provider.

(b) Each separate violation of this chapter is an actionable

violation.

except as provided by Subsection (g), a person who brings an action

under this section may obtain:

(1) injunctive relief that restrains the violator from

continuing the violation;

(2) subject to Subsection (d), damages in an amount

equal to the greater of:

(A) actual damages arising from the violation;

(B) $100,000 for each violation of the same

nature; or

(3) both injunctive relief and damages.

(d) The court may increase the amount of an award of actual

damages in an action brought under Subsection (c) to an amount not

to exceed three times the amount of actual damages sustained if the

court finds that the violation has reoccurred with sufficient

frequency to constitute a pattern or practice.

(e) A plaintiff who prevails in an action brought under

Subsection (c) is entitled to recover reasonable attorney's fees

and court costs.

(f) For purposes of Subsection (c), violations are of the

same nature if the violations consist of the same course of conduct

or action, regardless of the number of times the conduct or act

occurred.

(g) If a violation of Section 324.052 causes a

telecommunications carrier or cable operator to incur costs for the

origination, transport, or termination of a call triggered using

the modem of a customer of the telecommunications carrier or cable

operator as a result of the violation, the telecommunications

carrier or cable operator may in addition to any other remedy

provided by law:

(1) apply to a court for an order to enjoin the

violation;

(2) recover the charges the telecommunications

carrier or cable operator is obligated to pay to a

telecommunications carrier, a cable operator, another provider of

transmission capability, or an information service provider as a

result of the violation, including charges for the origination,

transport, or termination of the call;

(3) recover the costs of handling customer inquiries

or complaints with respect to amounts billed for calls as a result

of the violation;

(4) recover other costs, including court costs, and

reasonable attorney's fees; or

(5) both apply for injunctive relief and recover

charges and other costs as provided by this subsection. (Bus. & Com.

Code, Sec. 48.101, as added Acts 79th Leg., R.S., Ch. 298.)

Sec. 324.102. CIVIL PENALTY; INJUNCTIVE RELIEF. (a) A

person who violates this chapter is liable to this state for a civil

penalty in an amount not to exceed $100,000 for each violation. The

attorney general may bring an action to recover the civil penalty

imposed by this subsection.

(b) If it appears to the attorney general that a person is

engaging in, has engaged in, or is about to engage in conduct that

violates this chapter, the attorney general may bring an action in

the name of the state against the person to restrain the violation

by a temporary restraining order or by a permanent or temporary

injunction.

expenses incurred in obtaining civil penalties or injunctive

relief, or both, under this section, including reasonable

attorney's fees and court costs. (Bus. & Com. Code, Sec. 48.102, as

added Acts 79th Leg., R.S., Ch. 298.)

CHAPTER 325. INTERNET FRAUD

Sec. 325.001. SHORT TITLE

Sec. 325.002. DEFINITIONS

Sec. 325.003. INAPPLICABILITY OF CHAPTER

Sec. 325.004. CREATION AND USE OF WEB PAGE OR DOMAIN

NAME FOR FRAUDULENT PURPOSE PROHIBITED

Sec. 325.005. TRANSMISSION OF FRAUDULENT ELECTRONIC

MAIL PROHIBITED

Sec. 325.006. CIVIL ACTION FOR INJUNCTIVE RELIEF OR

DAMAGES

CHAPTER 325. INTERNET FRAUD

Sec. 325.001. SHORT TITLE. This chapter may be cited as the

Anti-Phishing Act. (Bus. & Com. Code, Sec. 48.001, as added Acts

79th Leg., R.S., Ch. 544.)

Sec. 325.002. DEFINITIONS. In this chapter:

(1) "Electronic mail" means a message, file, or other

information that is transmitted through a local, regional, or

global computer network, regardless of whether the message, file,

or information is viewed, stored for retrieval at a later time,

printed, or filtered by a computer program that is designed or

intended to filter or screen the message, file, or information.

(2) "Electronic mail address" means a destination,

commonly expressed as a string of characters, to which electronic

mail may be sent or delivered.

(3) "Identifying information" has the meaning

assigned by Section 32.51, Penal Code.

(4) "Internet domain name" refers to a globally

unique, hierarchical reference to an Internet host or service that

is:

(A) assigned through a centralized Internet

naming authority; and

(B) composed of a series of character strings

separated by periods with the right-most string specifying the top

of the hierarchy.

(5) "Web page" means:

(A) a location that has a single uniform resource

locator with respect to the world wide web; or

(B) another location that can be accessed on the

Internet. (Bus. & Com. Code, Sec. 48.002, as added Acts 79th Leg.,

R.S., Ch. 544.)

Sec. 325.003. INAPPLICABILITY OF CHAPTER. This chapter

does not apply to a telecommunications provider's or Internet

service provider's good faith transmission or routing of, or

intermediate temporary storing or caching of, identifying

information. (Bus. & Com. Code, Sec. 48.006, as added Acts 79th

Leg., R.S., Ch. 544.)

Sec. 325.004. CREATION AND USE OF WEB PAGE OR DOMAIN NAME

FOR FRAUDULENT PURPOSE PROHIBITED. A person may not, with the

intent to engage in conduct involving the fraudulent use or

possession of identifying information of another person:

(1) create a web page or Internet domain name that is

represented as a legitimate online business without the

authorization of the registered owner of that business; and

(2) use that web page or a link to that web page, that

domain name, or another site on the Internet to induce, request, or

solicit another person to provide identifying information for a

purpose that the other person believes is legitimate. (Bus. & Com.

Code, Sec. 48.003, as added Acts 79th Leg., R.S., Ch. 544.)

Sec. 325.005. TRANSMISSION OF FRAUDULENT ELECTRONIC MAIL

PROHIBITED. A person may not, with the intent to engage in conduct

involving the fraudulent use or possession of identifying

information, send or cause to be sent to an electronic mail address

held by a resident of this state an electronic mail message that:

(1) is falsely represented as being sent by a

legitimate online business;

(2) refers or links the recipient to a web page that is

represented as being associated with the legitimate online

business; and

(3) directly or indirectly induces, requests, or

solicits the recipient to provide identifying information for a

purpose that the recipient believes is legitimate. (Bus. & Com.

Code, Sec. 48.004, as added Acts 79th Leg., R.S., Ch. 544.)

Sec. 325.006. CIVIL ACTION FOR INJUNCTIVE RELIEF OR

DAMAGES. (a) Any of the following persons may bring a civil action

against a person who violates this chapter:

(1) a person who is engaged in the business of

providing Internet access service to the public and is adversely

affected by the violation;

(2) an owner of a web page or trademark who is

adversely affected by the violation; or

(3) the attorney general.

(b) A person who brings an action under this section may

obtain:

(1) injunctive relief that restrains the violator from

continuing the violation;

(2) subject to Subsection (c), damages in an amount

equal to the greater of:

(A) actual damages arising from the violation; or

(B) $100,000 for each violation of the same

nature; or

(3) both injunctive relief and damages.

damages in an action brought under this section to an amount not to

exceed three times the actual damages sustained if the court finds

that the violation has reoccurred with sufficient frequency to

constitute a pattern or practice.

(d) A plaintiff who prevails in an action brought under this

section is entitled to recover reasonable attorney's fees and court

costs.

(e) For purposes of this section, violations are of the same

nature if the violations consist of the same course of conduct or

action, regardless of the number of times the conduct or act

occurred. (Bus. & Com. Code, Sec. 48.005, as added Acts 79th Leg.,

R.S., Ch. 544.)

TITLE 11. PERSONAL IDENTITY INFORMATION

SUBTITLE A. IDENTIFYING INFORMATION

CHAPTER 501. PROTECTION OF DRIVER'S LICENSE AND SOCIAL SECURITY

NUMBERS

SUBCHAPTER A. CONFIDENTIALITY OF SOCIAL SECURITY NUMBERS

Sec. 501.001. CERTAIN USES OF SOCIAL SECURITY NUMBER

PROHIBITED

Sec. 501.002. CERTAIN USES OF SOCIAL SECURITY NUMBER

PROHIBITED; REMEDIES

[Sections 501.003-501.050 reserved for expansion]

SUBCHAPTER B. PRIVACY POLICY TO PROTECT SOCIAL SECURITY NUMBERS

Sec. 501.051. INAPPLICABILITY OF SUBCHAPTER

Sec. 501.052. PRIVACY POLICY NECESSARY TO REQUIRE

DISCLOSURE OF SOCIAL SECURITY NUMBER

Sec. 501.053. CIVIL PENALTY; INJUNCTION

[Sections 501.054-501.100 reserved for expansion]

SUBCHAPTER C. OTHER RESTRICTIONS TO PROTECT DRIVER'S LICENSE AND

SOCIAL SECURITY NUMBERS

Sec. 501.101. USE OF CONSUMER DRIVER'S LICENSE OR

SOCIAL SECURITY NUMBER BY MERCHANT OR

CERTAIN THIRD PARTY

Sec. 501.102. CIVIL PENALTY; INJUNCTION

CHAPTER 501. PROTECTION OF DRIVER'S LICENSE AND SOCIAL SECURITY

NUMBERS

SUBCHAPTER A. CONFIDENTIALITY OF SOCIAL SECURITY NUMBERS

Sec. 501.001. CERTAIN USES OF SOCIAL SECURITY NUMBER

PROHIBITED. (a) A person, other than a government or a

governmental subdivision or agency, may not:

(1) intentionally communicate or otherwise make

available to the public an individual's social security number;

(2) display an individual's social security number on

a card or other device required to access a product or service

provided by the person;

(3) require an individual to transmit the individual's

social security number over the Internet unless:

(1) the Internet connection is secure; or

(2) the social security number is encrypted;

(4) require an individual's social security number for

access to an Internet website unless a password or unique personal

identification number or other authentication device is also

required for access; or

(5) except as provided by Subsection (f), print an

individual's social security number on any material sent by mail,

unless state or federal law requires that social security number to

be included in the material.

(b) A person using an individual's social security number

before January 1, 2005, in a manner prohibited by Subsection (a) may

continue that use if:

(1) the use is continuous; and

(2) beginning January 1, 2006, the person provides to

the individual an annual disclosure stating that, on written

request from the individual, the person will stop using the

individual's social security number in a manner prohibited by

Subsection (a).

subdivision or agency, may not deny a service to an individual

because the individual makes a written request under Subsection

(b)(2).

(d) If a person receives a written request from an

individual directing the person to stop using the individual's

social security number in a manner prohibited by Subsection (a),

the person shall comply with the request not later than the 30th day

after the date the request is received. The person may not impose a

fee for complying with the request.

(e) This section does not apply to:

(1) the collection, use, or release of a social

security number required by state or federal law, including Chapter

552, Government Code;

(2) the use of a social security number for internal

verification or administrative purposes;

(3) a document that is recorded or required to be open

to the public under Chapter 552, Government Code;

(4) a court record; or

(5) an institution of higher education if the use of a

social security number by the institution is regulated by Chapter

51, Education Code, or another provision of the Education Code.

(f) Subsection (a)(5) does not apply to an application or

form sent by mail, including a document sent:

(1) as part of an application or enrollment process;

(2) to establish, amend, or terminate an account,

contract, or policy; or

(3) to confirm the accuracy of a social security

number. (Bus. & Com. Code, Sec. 35.58, as added Acts 78th Leg.,

R.S., Ch. 1326.)

Sec. 501.002. CERTAIN USES OF SOCIAL SECURITY NUMBER

PROHIBITED; REMEDIES. (a) A person may not print an individual's

social security number on a card or other device required to access

a product or service provided by the person unless the individual

has requested in writing that printing. The person may not require

a request for that printing as a condition of receipt of or access

to a product or service provided by the person.

(b) A person who violates this section is liable to this

state for a civil penalty in an amount not to exceed $500 for each

violation. The attorney general or the prosecuting attorney in the

county in which the violation occurs may bring an action to recover

the civil penalty imposed under this section.

the state to restrain or enjoin a person from violating this

section.

(d) This section does not apply to:

(1) the collection, use, or release of a social

security number required by state or federal law, including Chapter

552, Government Code; or

(2) the use of a social security number for internal

verification or administrative purposes.

(e) This section applies to a card or other device issued in

connection with an insurance policy only if the policy is

delivered, issued for delivery, or renewed on or after March 1,

2005. (Acts 78th Leg., R.S., Ch. 341, Sec. 2(b) (part); Bus. & Com.

Code, Sec. 35.58, as added Acts 78th Leg., R.S., Ch. 341.)

[Sections 501.003-501.050 reserved for expansion]

SUBCHAPTER B. PRIVACY POLICY TO PROTECT SOCIAL SECURITY NUMBERS

Sec. 501.051. INAPPLICABILITY OF SUBCHAPTER. This

subchapter does not apply to:

(1) a person who is required to maintain and

disseminate a privacy policy under:

(A) the Gramm-Leach-Bliley Act (15 U.S.C.

Sections 6801 to 6809);

(B) the Family Educational Rights and Privacy Act

of 1974 (20 U.S.C. Section 1232g); or

Accountability Act of 1996 (42 U.S.C. Section 1320d et seq.);

(2) a covered entity under rules adopted by the

commissioner of insurance relating to insurance consumer health

information privacy or insurance consumer financial information

privacy;

(3) a governmental body, as defined by Section

552.003, Government Code, other than a municipally owned utility;

(4) a person with respect to a loan transaction, if the

person is not engaged in the business of making loans. (Bus. & Com.

Code, Sec. 35.581(c), as added Acts 79th Leg., R.S., Ch. 198.)

Sec. 501.052. PRIVACY POLICY NECESSARY TO REQUIRE

DISCLOSURE OF SOCIAL SECURITY NUMBER. (a) A person may not require

an individual to disclose the individual's social security number

to obtain goods or services from or enter into a business

transaction with the person unless the person:

(1) adopts a privacy policy as provided by Subsection

(b);

(2) makes the privacy policy available to the

individual; and

(3) maintains under the privacy policy the

confidentiality and security of the social security number

disclosed to the person.

(b) A privacy policy adopted under this section must

include:

(1) how personal information is collected;

(2) how and when the personal information is used;

(3) how the personal information is protected;

(4) who has access to the personal information; and

(5) the method of disposal of the personal

information. (Bus. & Com. Code, Secs. 35.581(a), (b), as added Acts

79th Leg., R.S., Ch. 198.)

Sec. 501.053. CIVIL PENALTY; INJUNCTION. (a) A person who

violates Section 501.052(a) is liable to this state for a civil

penalty in an amount not to exceed $500 for each calendar month

during which a violation occurs. The civil penalty may not be

imposed for more than one violation that occurs in a month. The

attorney general or the prosecuting attorney in the county in which

the violation occurs may bring an action to recover the civil

penalty imposed under this section.

(b) The attorney general may bring an action in the name of

the state to restrain or enjoin a person from violating Section

501.052(a). (Bus. & Com. Code, Secs. 35.581(d), (e), as added Acts

79th Leg., R.S., Ch. 198.)

[Sections 501.054-501.100 reserved for expansion]

SUBCHAPTER C. OTHER RESTRICTIONS TO PROTECT DRIVER'S LICENSE AND

SOCIAL SECURITY NUMBERS

Sec. 501.101. USE OF CONSUMER DRIVER'S LICENSE OR SOCIAL

SECURITY NUMBER BY MERCHANT OR CERTAIN THIRD PARTY. (a) A merchant

or a third party under contract with a merchant who requires a

consumer returning merchandise to provide the consumer's driver's

license or social security number may use the number or numbers

provided by the consumer solely for identification purposes if the

consumer does not have a valid receipt for the item being returned

and is seeking a cash, credit, or store credit refund.

(b) A merchant or a third party under contract with a

merchant may not disclose a consumer's driver's license or social

security number to any other third party, including a merchant, not

involved in the initial transaction.

merchant may use a consumer's driver's license or social security

number only to monitor, investigate, or prosecute fraudulent return

of merchandise.

(d) A merchant or a third party under contract with a

merchant shall destroy or arrange for the destruction of records

containing the consumer's driver's license or social security

number at the expiration of six months from the date of the last

transaction. (Bus. & Com. Code, Secs. 35.581(a), (b), (c), (d), as

added Acts 79th Leg., R.S., Ch. 946.)

Sec. 501.102. CIVIL PENALTY; INJUNCTION. (a) A person who

violates this subchapter is liable to this state for a civil penalty

in an amount not to exceed $500 for each violation. The attorney

general or the prosecuting attorney in the county in which the

violation occurs may bring an action to recover the civil penalty

imposed under this section.

(b) The attorney general may bring an action in the name of

the state to restrain or enjoin a person from violating this

subchapter. (Bus. & Com. Code, Secs. 35.581(e), (f), as added Acts

79th Leg., R.S., Ch. 946.)

CHAPTER 502. PROTECTION OF IDENTIFYING FINANCIAL INFORMATION

Sec. 502.001. WARNING SIGN ABOUT IDENTITY THEFT FOR

RESTAURANT OR BAR EMPLOYEES

Sec. 502.002. BUSINESS RECEIPT CONTAINING CREDIT CARD

OR DEBIT CARD INFORMATION

Sec. 502.003. DELIVERY OF CHECK FORM

CHAPTER 502. PROTECTION OF IDENTIFYING FINANCIAL INFORMATION

Sec. 502.001. WARNING SIGN ABOUT IDENTITY THEFT FOR

RESTAURANT OR BAR EMPLOYEES. (a) In this section:

(1) "Credit card" means an identification card, plate,

coupon, book, or number or any other device authorizing a

designated person or bearer to obtain property or service on

credit.

(2) "Debit card" means an identification card, plate,

coupon, book, or number or any other device authorizing a

designated person or bearer to communicate a request to an unmanned

teller machine or a customer convenience terminal or to obtain

property or services by debit to an account at a financial

institution.

(b) This section applies only to a restaurant or bar that

accepts credit cards or debit cards from customers in the ordinary

course of business.

place on the premises of the restaurant or bar a sign stating in

letters at least one-half inch high: "UNDER SECTION 32.51, PENAL

CODE, IT IS A STATE JAIL FELONY (PUNISHABLE BY CONFINEMENT IN A

STATE JAIL FOR NOT MORE THAN TWO YEARS) TO OBTAIN, POSSESS,

TRANSFER, OR USE A CUSTOMER'S DEBIT CARD OR CREDIT CARD NUMBER

WITHOUT THE CUSTOMER'S CONSENT."

(d) The restaurant or bar owner shall display the sign in

English and in another language spoken by a substantial portion of

the employees of the restaurant or bar as their familiar language.

(e) A restaurant or bar owner who fails to comply with this

section commits an offense. An offense under this subsection is a

misdemeanor punishable by a fine not to exceed $25.

(f) It is a defense to prosecution under Subsection (e) that

the restaurant or bar owner charged with the offense produces to the

court satisfactory evidence that the person displayed the sign

required by Subsection (c) not later than 48 hours after the person

received a citation for an offense under Subsection (e). If the

court is satisfied with the evidence produced by the person, the

court shall dismiss the charge. (Bus. & Com. Code, Sec. 35.60.)

Sec. 502.002. BUSINESS RECEIPT CONTAINING CREDIT CARD OR

DEBIT CARD INFORMATION. (a) A person who accepts a credit card or

debit card for the transaction of business may not print on a

receipt or other document that evidences the transaction and is

provided to a cardholder more than the last four digits of the

credit card or debit card account number or the month and year that

the credit card or debit card expires.

(b) This section does not apply to a transaction in which

the sole means of recording a person's credit card or debit card

account number on a receipt or other document evidencing the

transaction is by handwriting or an imprint or copy of the credit

card or debit card.

or other machine used to print a receipt or other document

evidencing a credit card or debit card transaction shall provide

notice of the requirements of this section to the recipient,

lessee, or buyer, as applicable, of the machine.

(d) A person who violates Subsection (a) is liable to this

state for a civil penalty in an amount not to exceed $500 for each

calendar month in which a violation occurs. The civil penalty may

not be imposed for more than one violation that occurs in a month.

The attorney general or the prosecuting attorney in the county in

which the violation occurs may bring an action to recover the civil

penalty imposed under this section.

(e) The attorney general may bring an action in the name of

the state to restrain or enjoin a person from violating Subsection

(a).

(f) A court may not certify an action brought under this

section as a class action. (Bus. & Com. Code, Sec. 35.61.)

Sec. 502.003. DELIVERY OF CHECK FORM. (a) In this section:

(1) "Addressee" means a person to whom a check form is

sent.

(2) "Check form" means a device for the transmission

or payment of money that:

(A) is not a negotiable instrument under Section

3.104;

(B) if completed would be a check as defined by

Section 3.104; and

financial institution on which the completed check may be drawn.

(3) "Check form provider" means a business that

provides check forms to a customer for a personal or business

account.

(4) "Courier" means an entity that delivers parcels

for a fee.

(b) If an addressee requests that a check form provider

employ courier delivery of a check form with signature required,

and that service is available in the delivery area of the addressee,

the entity arranging for courier delivery in compliance with the

addressee's request must provide the addressee with the option to

require that the signature of the addressee, or the representative

of the addressee, be obtained on delivery.

of the addressee or representative may be provided:

(1) on a printed check form order form;

(2) on an electronic check form order form where check

form orders are offered on the Internet;

(3) by electronic mail to an address established for

that purpose by the entity making the offer; or

(4) by another method reasonably designed to

effectively communicate the addressee's intent.

(d) An entity that arranges for the courier delivery of a

check form to an addressee as requested under Subsection (b) shall

notify the courier of the check form that the signature of the

addressee or a representative of the addressee is required for

delivery under that subsection.

(e) If the addressee suffers a pecuniary loss because of the

use of a check form stolen at the time of delivery to the addressee,

a civil penalty of not more than $1,000 for each delivery may be

imposed on:

(1) an entity that violates Subsection (b), (c), or

(d); or

(2) a courier that:

(A) is properly notified under Subsection (d)

that a signature is required for delivery; and

(B) delivers the check form without obtaining the

signature of the addressee or a representative of the addressee.

(f) The attorney general may bring an action to recover a

civil penalty imposed under Subsection (e). The attorney general

may recover reasonable expenses incurred in obtaining the civil

penalty, including court costs, reasonable attorney's fees,

investigative costs, witness fees, and deposition expenses. (Bus. &

Com. Code, Sec. 35.395.)

CHAPTER 503. BIOMETRIC IDENTIFIERS

Sec. 503.001. CAPTURE OR USE OF BIOMETRIC IDENTIFIER

CHAPTER 503. BIOMETRIC IDENTIFIERS

Sec. 503.001. CAPTURE OR USE OF BIOMETRIC IDENTIFIER. (a)

In this section, "biometric identifier" means a retina or iris

scan, fingerprint, voiceprint, or record of hand or face geometry.

(b) A person may not capture a biometric identifier of an

individual for a commercial purpose unless the person:

(1) informs the individual before capturing the

biometric identifier; and

(2) receives the individual's consent to capture the

biometric identifier.

individual:

(1) may not sell, lease, or otherwise disclose the

biometric identifier to another person unless:

(A) the individual consents to the disclosure;

(B) the disclosure completes a financial

transaction that the individual requested or authorized;

federal statute or by a state statute other than Chapter 552,

Government Code; or

(D) the disclosure is made by or to a law

enforcement agency for a law enforcement purpose; and

(2) shall store, transmit, and protect from disclosure

the biometric identifier using reasonable care and in a manner that

is the same as or more protective than the manner in which the

person stores, transmits, and protects any other confidential

information the person possesses.

(d) A person who violates this section is subject to a civil

penalty of not more than $25,000 for each violation. The attorney

general may bring an action to recover the civil penalty. (Bus. &

Com. Code, Sec. 35.50.)

CHAPTER 504. PROHIBITED USE OF CRIME VICTIM OR MOTOR VEHICLE

ACCIDENT INFORMATION

Sec. 504.001. DEFINITIONS

Sec. 504.002. PROHIBITION ON USE FOR SOLICITATION OR

SALE OF INFORMATION

CHAPTER 504. PROHIBITED USE OF CRIME VICTIM OR MOTOR VEHICLE

ACCIDENT INFORMATION

Sec. 504.001. DEFINITIONS. In this chapter:

(1) "Crime victim information" means information

that:

(A) is collected or prepared by a law enforcement

agency; and

(B) identifies or serves to identify a person

who, according to a record of the agency, may have been the victim

of a crime in which:

(i) physical injury to the person occurred

or was attempted; or

(ii) the offender entered or attempted to

enter the dwelling of the person.

(2) "Motor vehicle accident information" means

information that:

(A) is collected or prepared by a law enforcement

agency; and

(B) identifies or serves to identify a person

who, according to a record of the agency, may have been involved in

a motor vehicle accident. (Bus. & Com. Code, Sec. 35.54(a).)

Sec. 504.002. PROHIBITION ON USE FOR SOLICITATION OR SALE

OF INFORMATION. (a) A person who possesses crime victim or motor

vehicle accident information that the person obtained or knows was

obtained from a law enforcement agency may not:

(1) use the information to contact directly any of the

following persons for the purpose of soliciting business from the

person:

(A) a crime victim;

(B) a person who was involved in a motor vehicle

accident; or

by Paragraph (A) or (B); or

(2) sell the information to another person for

financial gain.

(b) The attorney general may bring an action against a

person who violates Subsection (a) pursuant to Section 17.47.

Subsection (a). An offense under this subsection is a Class C

misdemeanor unless the defendant has been previously convicted

under this section three or more times, in which event the offense

is a felony of the third degree. (Bus. & Com. Code, Secs. 35.54(b),

(c), (d).)

[Chapters 505-520 reserved for expansion]

SUBTITLE B. IDENTITY THEFT

CHAPTER 521. UNAUTHORIZED USE OF IDENTIFYING INFORMATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 521.001. SHORT TITLE

Sec. 521.002. DEFINITIONS

[Sections 521.003-521.050 reserved for expansion]

SUBCHAPTER B. IDENTITY THEFT

Sec. 521.051. UNAUTHORIZED USE OR POSSESSION OF

PERSONAL IDENTIFYING INFORMATION

Sec. 521.052. BUSINESS DUTY TO PROTECT SENSITIVE

PERSONAL INFORMATION

Sec. 521.053. NOTIFICATION REQUIRED FOLLOWING BREACH

OF SECURITY OF COMPUTERIZED DATA

[Sections 521.054-521.100 reserved for expansion]

SUBCHAPTER C. COURT ORDER DECLARING INDIVIDUAL

A VICTIM OF IDENTITY THEFT

Sec. 521.101. APPLICATION FOR COURT ORDER TO DECLARE

INDIVIDUAL A VICTIM OF IDENTITY THEFT

Sec. 521.102. PRESUMPTION OF APPLICANT'S STATUS AS

VICTIM

Sec. 521.103. ISSUANCE OF ORDER; CONTENTS

Sec. 521.104. CONFIDENTIALITY OF ORDER

Sec. 521.105. GROUNDS FOR VACATING ORDER

[Sections 521.106-521.150 reserved for expansion]

SUBCHAPTER D. REMEDIES

Sec. 521.151. CIVIL PENALTY; INJUNCTION

Sec. 521.152. DECEPTIVE TRADE PRACTICE

CHAPTER 521. UNAUTHORIZED USE OF IDENTIFYING INFORMATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 521.001. SHORT TITLE. This chapter may be cited as the

Identity Theft Enforcement and Protection Act. (Bus. & Com. Code,

Sec. 48.001, as added Acts 79th Leg., R.S., Ch. 294.)

Sec. 521.002. DEFINITIONS. (a) In this chapter:

(1) "Personal identifying information" means

information that alone or in conjunction with other information

identifies an individual, including an individual's:

(A) name, social security number, date of birth,

or government-issued identification number;

(B) mother's maiden name;

individual's fingerprint, voice print, and retina or iris image;

(D) unique electronic identification number,

address, or routing code; and

(E) telecommunication access device as defined

by Section 32.51, Penal Code.

(2) "Sensitive personal information" means, subject

to Subsection (b), an individual's first name or first initial and

last name in combination with any one or more of the following

items, if the name and the items are not encrypted:

(A) social security number;

(B) driver's license number or government-issued

identification number; or

in combination with any required security code, access code, or

password that would permit access to an individual's financial

account.

(3) "Victim" means a person whose identifying

information is used by an unauthorized person.

(b) For purposes of this chapter, the term "sensitive

personal information" does not include publicly available

information that is lawfully made available to the public from the

federal government or a state or local government. (Bus. & Com.

Code, Sec. 48.002, as added Acts 79th Leg., R.S., Ch. 294.)

[Sections 521.003-521.050 reserved for expansion]

SUBCHAPTER B. IDENTITY THEFT

Sec. 521.051. UNAUTHORIZED USE OR POSSESSION OF PERSONAL

IDENTIFYING INFORMATION. (a) A person may not obtain, possess,

transfer, or use personal identifying information of another person

without the other person's consent and with intent to obtain a good,

a service, insurance, an extension of credit, or any other thing of

value in the other person's name.

(b) It is a defense to an action brought under this section

that an act by a person:

(1) is covered by the Fair Credit Reporting Act (15

U.S.C. Section 1681 et seq.); and

(2) is in compliance with that Act and regulations

adopted under that Act.

(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. (Bus. & Com. Code, Sec. 48.101, as added

Acts 79th Leg., R.S., Ch. 294.)

Sec. 521.052. BUSINESS DUTY TO PROTECT SENSITIVE PERSONAL

INFORMATION. (a) A business shall implement and maintain

reasonable procedures, including taking any appropriate corrective

action, to protect from unlawful use or disclosure any sensitive

personal information collected or maintained by the business in the

regular course of business.

(b) A business shall destroy or arrange for the destruction

of customer records containing sensitive personal information

within the business's custody or control that are not to be retained

by the business by:

(1) shredding;

(2) erasing; or

(3) otherwise modifying the sensitive personal

information in the records to make the information unreadable or

indecipherable through any means.

as defined by 15 U.S.C. Section 6809. (Bus. & Com. Code, Sec.

48.102, as added Acts 79th Leg., R.S., Ch. 294.)

Sec. 521.053. NOTIFICATION REQUIRED FOLLOWING BREACH OF

SECURITY OF COMPUTERIZED DATA. (a) In this section, "breach of

system security" means unauthorized acquisition of computerized

data that compromises the security, confidentiality, or integrity

of sensitive personal information maintained by a person. Good

faith acquisition of sensitive personal information by an employee

or agent of the person for the purposes of the person is not a breach

of system security unless the person uses or discloses the

sensitive personal information in an unauthorized manner.

(b) A person who conducts business in this state and owns or

licenses computerized data that includes sensitive personal

information shall disclose any breach of system security, after

discovering or receiving notification of the breach, to any

resident of this state whose sensitive personal information was, or

is reasonably believed to have been, acquired by an unauthorized

person. The disclosure shall be made as quickly as possible, except

as provided by Subsection (d) or as necessary to determine the scope

of the breach and restore the reasonable integrity of the data

system.

includes sensitive personal information not owned by the person

shall notify the owner or license holder of the information of any

breach of system security immediately after discovering the breach,

if the sensitive personal information was, or is reasonably

believed to have been, acquired by an unauthorized person.

(d) A person may delay providing notice as required by

Subsection (b) or (c) at the request of a law enforcement agency

that determines that the notification will impede a criminal

investigation. The notification shall be made as soon as the law

enforcement agency determines that the notification will not

compromise the investigation.

(e) A person may give notice as required by Subsection (b)

or (c) by providing:

(1) written notice;

(2) electronic notice, if the notice is provided in

accordance with 15 U.S.C. Section 7001; or

(3) notice as provided by Subsection (f).

(f) If the person required to give notice under Subsection

(b) or (c) demonstrates that the cost of providing notice would

exceed $250,000, the number of affected persons exceeds 500,000, or

the person does not have sufficient contact information, the notice

may be given by:

(1) electronic mail, if the person has electronic mail

addresses for the affected persons;

(2) conspicuous posting of the notice on the person's

website; or

(3) notice published in or broadcast on major

statewide media.

(g) Notwithstanding Subsection (e), a person who maintains

the person's own notification procedures as part of an information

security policy for the treatment of sensitive personal information

that complies with the timing requirements for notice under this

section complies with this section if the person notifies affected

persons in accordance with that policy.

(h) If a person is required by this section to notify at one

time more than 10,000 persons of a breach of system security, the

person shall also notify each consumer reporting agency, as defined

by 15 U.S.C. Section 1681a, that maintains files on consumers on a

nationwide basis, of the timing, distribution, and content of the

notices. The person shall provide the notice required by this

subsection without unreasonable delay. (Bus. & Com. Code, Sec.

48.103, as added Acts 79th Leg., R.S., Ch. 294.)

[Sections 521.054-521.100 reserved for expansion]

SUBCHAPTER C. COURT ORDER DECLARING INDIVIDUAL

A VICTIM OF IDENTITY THEFT

Sec. 521.101. APPLICATION FOR COURT ORDER TO DECLARE

INDIVIDUAL A VICTIM OF IDENTITY THEFT. (a) A person who is injured

by a violation of Section 521.051 or who has filed a criminal

complaint alleging commission of an offense under Section 32.51,

Penal Code, may file an application with a district court for the

issuance of an order declaring that the person is a victim of

identity theft.

(b) A person may file an application under this section

regardless of whether the person is able to identify each person who

allegedly transferred or used the person's identifying information

in an unlawful manner. (Bus. & Com. Code, Sec. 48.202(a), as added

Acts 79th Leg., R.S., Ch. 294.)

Sec. 521.102. PRESUMPTION OF APPLICANT'S STATUS AS VICTIM.

An applicant under Section 521.101 is presumed to be a victim of

identity theft under this subchapter if the person charged with an

offense under Section 32.51, Penal Code, is convicted of the

offense. (Bus. & Com. Code, Sec. 48.202(b), as added Acts 79th

Leg., R.S., Ch. 294.)

Sec. 521.103. ISSUANCE OF ORDER; CONTENTS. (a) After

notice and hearing, if the court is satisfied by a preponderance of

the evidence that an applicant under Section 521.101 has been

injured by a violation of Section 521.051 or is the victim of an

offense under Section 32.51, Penal Code, the court shall enter an

order declaring that the applicant is a victim of identity theft

resulting from a violation of Section 521.051 or an offense under

Section 32.51, Penal Code, as appropriate.

(b) An order under this section must contain:

(1) any known information identifying the violator or

person charged with the offense;

(2) the specific personal identifying information and

any related document used to commit the alleged violation or

offense; and

(3) information identifying any financial account or

transaction affected by the alleged violation or offense,

including:

(A) the name of the financial institution in

which the account is established or of the merchant involved in the

transaction, as appropriate;

(B) any relevant account numbers;

transaction affected by the alleged violation or offense; and

(D) the date of the alleged violation or offense.

(Bus. & Com. Code, Sec. 48.202(c), as added Acts 79th Leg., R.S.,

Ch. 294.)

Sec. 521.104. CONFIDENTIALITY OF ORDER. (a) An order

issued under Section 521.103 must be sealed because of the

confidential nature of the information required to be included in

the order. The order may be opened and the order or a copy of the

order may be released only:

(1) to the proper officials in a civil proceeding

brought by or against the victim arising or resulting from a

violation of this chapter, including a proceeding to set aside a

judgment obtained against the victim;

(2) to the victim for the purpose of submitting the

copy of the order to a governmental entity or private business to:

(A) prove that a financial transaction or account

of the victim was directly affected by a violation of this chapter

or the commission of an offense under Section 32.51, Penal Code; or

(B) correct any record of the entity or business

that contains inaccurate or false information as a result of the

violation or offense;

(3) on order of the judge; or

(4) as otherwise required or provided by law.

(b) A copy of an order provided to a person under Subsection

(a)(1) must remain sealed throughout and after the civil

proceeding.

a governmental entity or business under Subsection (a)(2) is

confidential and may not be released to another person except as

otherwise required or provided by law. (Bus. & Com. Code, Secs.

48.202(d), (f), as added Acts 79th Leg., R.S., Ch. 294.)

Sec. 521.105. GROUNDS FOR VACATING ORDER. A court at any

time may vacate an order issued under Section 521.103 if the court

finds that the application filed under Section 521.101 or any

information submitted to the court by the applicant contains a

fraudulent misrepresentation or a material misrepresentation of

fact. (Bus. & Com. Code, Sec. 48.202(e), as added Acts 79th Leg.,

R.S., Ch. 294.)

[Sections 521.106-521.150 reserved for expansion]

SUBCHAPTER D. REMEDIES

Sec. 521.151. CIVIL PENALTY; INJUNCTION. (a) A person who

violates this chapter is liable to this state for a civil penalty of

at least $2,000 but not more than $50,000 for each violation. The

attorney general may bring an action to recover the civil penalty

imposed under this subsection.

(b) If it appears to the attorney general that a person is

engaging in, has engaged in, or is about to engage in conduct that

violates this chapter, the attorney general may bring an action in

the name of the state against the person to restrain the violation

by a temporary restraining order or by a permanent or temporary

injunction.

a district court in Travis County or:

(1) in any county in which the violation occurred; or

(2) in the county in which the victim resides,

regardless of whether the alleged violator has resided, worked, or

transacted business in the county in which the victim resides.

(d) The attorney general is not required to give a bond in an

action under this section.

(e) In an action under this section, the court may grant any

other equitable relief that the court considers appropriate to:

(1) prevent any additional harm to a victim of

identity theft or a further violation of this chapter; or

(2) satisfy any judgment entered against the

defendant, including issuing an order to appoint a receiver,

sequester assets, correct a public or private record, or prevent

the dissipation of a victim's assets.

(f) The attorney general is entitled to recover reasonable

expenses, including reasonable attorney's fees, court costs, and

investigatory costs, incurred in obtaining injunctive relief or

civil penalties, or both, under this section. Amounts collected by

the attorney general under this section shall be deposited in the

general revenue fund and may be appropriated only for the

investigation and prosecution of other cases under this chapter.

(g) The fees associated with an action under this section

are the same as in a civil case, but the fees may be assessed only

against the defendant. (Bus. & Com. Code, Sec. 48.201, as added

Acts 79th Leg., R.S., Ch. 294.)

Sec. 521.152. DECEPTIVE TRADE PRACTICE. A violation of

Section 521.051 is a deceptive trade practice actionable under

Subchapter E, Chapter 17. (Bus. & Com. Code, Sec. 48.203, as added

Acts 79th Leg., R.S., Ch. 294.)

CHAPTER 522. IDENTITY THEFT BY ELECTRONIC DEVICE

Sec. 522.001. DEFINITIONS

Sec. 522.002. OFFENSE; PENALTY

CHAPTER 522. IDENTITY THEFT BY ELECTRONIC DEVICE

Sec. 522.001. DEFINITIONS. In this chapter:

(1) "Payment card" means a credit card, debit card,

check card, or other card that is issued to an authorized user to

purchase or obtain goods, services, money, or any other thing of

value.

(2) "Re-encoder" means an electronic device that can

be used to transfer encoded information from a magnetic strip on a

payment card onto the magnetic strip of a different payment card.

(3) "Scanning device" means an electronic device used

to access, read, scan, or store information encoded on the magnetic

strip of a payment card. (Bus. & Com. Code, Sec. 35.58, Subsec.

(a), as added by Acts 78th Leg., R.S., Ch. 649.)

Sec. 522.002. OFFENSE; PENALTY. (a) A person commits an

offense if the person uses a scanning device or re-encoder to

access, read, scan, store, or transfer information encoded on the

magnetic strip of a payment card without the consent of an

authorized user of the payment card and with intent to harm or

defraud another.

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

section also constitutes an offense under any other law, the actor

may be prosecuted under this section or the other law. (Bus. & Com.

Code, Sec. 35.58, Subsecs. (b), (c), (d), as added by Acts 78th

Leg., R.S., Ch. 649.)

CHAPTER 523. PROVISIONS RELATING TO VICTIMS OF IDENTITY THEFT

Sec. 523.001. EXTENSION OF CREDIT TO VICTIM OF

IDENTITY THEFT

Sec. 523.002. VERIFICATION OF CONSUMER IDENTITY

Sec. 523.003. NOTATION OF FORGED CHECK

CHAPTER 523. PROVISIONS RELATING TO VICTIMS OF IDENTITY THEFT

Sec. 523.001. EXTENSION OF CREDIT TO VICTIM OF IDENTITY

THEFT. (a) In this section, "victim of identity theft" means an

individual who has filed a criminal complaint alleging the

commission of an offense under Section 32.51, Penal Code, other

than a person who is convicted of an offense under Section 37.08,

Penal Code, with respect to that complaint.

(b) A person who has been notified that an individual has

been the victim of identity theft may not deny the individual an

extension of credit, including a loan, in the individual's name or

restrict or limit the credit extended solely because the individual

has been a victim of identity theft. This subsection does not

prohibit a person from denying an individual an extension of credit

for a reason other than the individual's having been a victim of

identity theft, including by reason of the individual's lack of

capacity to contract.

Code, that is held by a person who violates this section is subject

to revocation or suspension under that subtitle. (Bus. & Com. Code,

Sec. 35.585.)

Sec. 523.002. VERIFICATION OF CONSUMER IDENTITY. (a) In

this section:

(1) "Consumer report" has the meaning assigned by

Section 20.01.

(2) "Extension of credit" does not include:

(A) an increase in the dollar limit of an

existing open-end credit plan as defined by federal Regulation Z

(12 C.F.R. Section 226.2), as amended; or

(B) any change to, or review of, an existing

credit account.

(3) "Security alert" has the meaning assigned by

Section 20.01.

(b) A person who receives notification of a security alert

under Section 20.032 in connection with a request for a consumer

report for the approval of a credit-based application, including an

application for an extension of credit, a purchase, lease, or

rental agreement for goods, or for an application for a

noncredit-related service, may not lend money, extend credit, or

authorize an application without taking reasonable steps to verify

the consumer's identity.

specified telephone number to be used for identity verification

purposes, a person who receives that number with a security alert

must take reasonable steps to contact the consumer using that

number before lending money, extending credit, or completing any

purchase, lease, or rental of goods, or approving any

noncredit-related services.

(d) If a person uses a consumer report to facilitate the

extension of credit or for any other transaction on behalf of a

subsidiary, affiliate, agent, assignee, or prospective assignee,

that person, rather than the subsidiary, affiliate, agent,

assignee, or prospective assignee, may verify the consumer's

identity. (Bus. & Com. Code, Sec. 35.59.)

Sec. 523.003. NOTATION OF FORGED CHECK. (a) In this

section, "victim of identity theft" means a person who has filed

with an appropriate law enforcement agency a criminal complaint

alleging commission of an offense under Section 32.51, Penal Code.

(b) A financial institution, in accordance with its

customary procedures, shall process as forgeries checks received on

the account of a victim of identity theft if the victim:

(1) closes the account at the financial institution as

a result of the identity theft;

(2) notifies the financial institution that the

identity theft is the reason for closing the account;

(3) provides the financial institution with a copy of

the criminal complaint described by Subsection (a); and

(4) requests that the financial institution return

checks with the notation "forgery."

institution return checks with the notation "forgery" as provided

by Subsection (b):

(1) may not assert that the financial institution is

liable under Section 4.402 for wrongfully dishonoring a check

returned after the victim makes the request; and

(2) shall hold the financial institution harmless for

acting in accordance with the victim's request. (Bus. & Com. Code,

Sec. 35.591.)

TITLE 12. RIGHTS AND DUTIES OF CONSUMERS AND MERCHANTS

CHAPTER 601. CANCELLATION OF CERTAIN CONSUMER TRANSACTIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 601.001. DEFINITIONS

Sec. 601.002. APPLICABILITY OF CHAPTER; EXCEPTION

[Sections 601.003-601.050 reserved for expansion]

SUBCHAPTER B. CONSUMER'S RIGHT TO CANCEL TRANSACTION

Sec. 601.051. CONSUMER'S RIGHT TO CANCEL

Sec. 601.052. NOTICE OF CONSUMER'S RIGHT TO CANCEL

REQUIRED

Sec. 601.053. COMPLETED CANCELLATION FORM REQUIRED

Sec. 601.054. USE OF FORMS AND NOTICES PRESCRIBED BY

THE FEDERAL TRADE COMMISSION

AUTHORIZED

Sec. 601.055. ALTERNATIVE NOTICE AUTHORIZED FOR

CERTAIN CONSUMER TRANSACTIONS

[Sections 601.056-601.100 reserved for expansion]

SUBCHAPTER C. RIGHTS AND DUTIES OF CONSUMER AND MERCHANT

Sec. 601.101. MERCHANT'S COMPENSATION

Sec. 601.102. CONSUMER'S RETENTION OF GOODS OR TITLE

TO REAL PROPERTY AUTHORIZED

Sec. 601.103. CONSUMER'S DUTIES WITH RESPECT TO

DELIVERED GOODS OR REAL PROPERTY

[Sections 601.104-601.150 reserved for expansion]

SUBCHAPTER D. PROHIBITED ACTS AND CONDUCT BY MERCHANT

Sec. 601.151. CONFESSION OF JUDGMENT OR WAIVER OF

RIGHTS

Sec. 601.152. FAILURE TO INFORM OR MISREPRESENTATION

OF RIGHT TO CANCEL

Sec. 601.153. TRANSFER OF INDEBTEDNESS DURING CERTAIN

PERIOD

Sec. 601.154. FAILURE TO TAKE CERTAIN ACTIONS

FOLLOWING RECEIPT OF NOTICE OF

CANCELLATION

[Sections 601.155-601.200 reserved for expansion]

SUBCHAPTER E. ENFORCEMENT

Sec. 601.201. CERTAIN SALES OR CONTRACTS VOID

Sec. 601.202. LIABILITY FOR DAMAGES

Sec. 601.203. ALTERNATIVE RECOVERY UNDER CERTAIN

CIRCUMSTANCES

Sec. 601.204. DECEPTIVE TRADE PRACTICE

Sec. 601.205. INJUNCTION

CHAPTER 601. CANCELLATION OF CERTAIN CONSUMER TRANSACTIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 601.001. DEFINITIONS. In this chapter:

(1) "Consumer" means an individual who seeks or

acquires real property, money or other personal property, services,

or credit for personal, family, or household purposes.

(2) "Consumer transaction" means a transaction

between a merchant and one or more consumers.

(3) "Merchant" means a party to a consumer transaction

other than a consumer.

(4) "Merchant's place of business" means a merchant's

main or permanent branch office or local address. For a state or

national bank or savings and loan association, the term includes an

approved branch office and a registered loan production office.

(Bus. & Com. Code, Sec. 39.001.)

Sec. 601.002. APPLICABILITY OF CHAPTER; EXCEPTION. (a)

This chapter applies only to a consumer transaction in which:

(1) the merchant or the merchant's agent engages in a

personal solicitation of a sale to the consumer at a place other

than the merchant's place of business;

(2) the consumer's agreement or offer to purchase is

given to the merchant or the merchant's agent at a place other than

the merchant's place of business; and

(3) the agreement or offer is for:

(A) the purchase of goods or services for

consideration that exceeds $25, payable in installments or in cash;

(B) the purchase of real property for

consideration that exceeds $100, payable in installments or in

cash.

(b) Notwithstanding Subsection (a), this chapter does not

apply to:

(1) a purchase of farm equipment;

(2) an insurance sale regulated by the Texas

Department of Insurance;

(3) a sale of goods or services made:

(A) under a preexisting revolving charge account

or retail charge agreement; or

(B) after negotiations between the parties at a

business establishment in a fixed location where goods or services

are offered or exhibited for sale; or

(4) a sale of real property if:

(A) the purchaser is represented by a licensed

attorney;

(B) the transaction is negotiated by a licensed

real estate broker; or

other than the consumer's residence by the person who owns the

property. (Bus. & Com. Code, Sec. 39.002.)

[Sections 601.003-601.050 reserved for expansion]

SUBCHAPTER B. CONSUMER'S RIGHT TO CANCEL TRANSACTION

Sec. 601.051. CONSUMER'S RIGHT TO CANCEL. In addition to

any other rights or remedies available, a consumer may cancel a

consumer transaction not later than midnight of the third business

day after the date the consumer signs an agreement or offer to

purchase. (Bus. & Com. Code, Sec. 39.003.)

Sec. 601.052. NOTICE OF CONSUMER'S RIGHT TO CANCEL

REQUIRED. (a) A merchant must provide a consumer with a complete

receipt or copy of a contract pertaining to the consumer

transaction at the time of its execution.

(b) The document provided under Subsection (a) must:

(1) be in the same language as that principally used in

the oral sales presentation;

(2) contain the date of the transaction;

(3) contain the name and address of the merchant; and

(4) contain a statement:

(A) in immediate proximity to the space reserved

in the contract for the signature of the consumer or on the front

page of the receipt if a contract is not used; and

(B) in boldfaced type of a minimum size of 10

points in substantially the following form:

"YOU, THE BUYER, MAY CANCEL THIS TRANSACTION AT ANY TIME

PRIOR TO MIDNIGHT OF THE THIRD BUSINESS DAY AFTER THE DATE OF THIS

TRANSACTION. SEE THE ATTACHED NOTICE OF CANCELLATION FORM FOR AN

EXPLANATION OF THIS RIGHT." (Bus. & Com. Code, Secs. 39.004(a),

(b).)

Sec. 601.053. COMPLETED CANCELLATION FORM REQUIRED. (a) A

merchant that provides a document under Section 601.052 must attach

to the document a completed notice of cancellation form in

duplicate. The form must:

(1) be easily detachable;

(2) be in the same language as the document provided

under Section 601.052; and

(3) contain the following information and statements

in 10-point boldfaced type:

"NOTICE OF CANCELLATION

(enter date of transaction)

"YOU MAY CANCEL THIS TRANSACTION, WITHOUT ANY PENALTY OR

OBLIGATION, WITHIN THREE BUSINESS DAYS FROM THE ABOVE DATE.

"IF YOU CANCEL, ANY PROPERTY TRADED IN, ANY PAYMENTS MADE BY

YOU UNDER THE CONTRACT OR SALE, AND ANY NEGOTIABLE INSTRUMENT

EXECUTED BY YOU WILL BE RETURNED WITHIN 10 BUSINESS DAYS FOLLOWING

RECEIPT BY THE MERCHANT OF YOUR CANCELLATION NOTICE, AND ANY

SECURITY INTEREST ARISING OUT OF THE TRANSACTION WILL BE CANCELLED.

"IF YOU CANCEL, YOU MUST MAKE AVAILABLE TO THE MERCHANT AT

YOUR RESIDENCE, IN SUBSTANTIALLY AS GOOD CONDITION AS WHEN

RECEIVED, ANY GOODS DELIVERED TO YOU UNDER THIS CONTRACT OR SALE;

OR YOU MAY IF YOU WISH, COMPLY WITH THE INSTRUCTIONS OF THE MERCHANT

REGARDING THE RETURN SHIPMENT OF THE GOODS AT THE MERCHANT'S

EXPENSE AND RISK.

"IF YOU DO NOT AGREE TO RETURN THE GOODS TO THE MERCHANT OR IF

THE MERCHANT DOES NOT PICK THEM UP WITHIN 20 DAYS OF THE DATE OF YOUR

NOTICE OF CANCELLATION, YOU MAY RETAIN OR DISPOSE OF THE GOODS

WITHOUT ANY FURTHER OBLIGATION.

"TO CANCEL THIS TRANSACTION, MAIL OR DELIVER A SIGNED AND

DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE,

OR SEND A TELEGRAM, TO (name of merchant), AT (address of merchant's

place of business) NOT LATER THAN MIDNIGHT OF (date).

I HEREBY CANCEL THIS TRANSACTION.

(date)

(buyer's signature)"

(b) A merchant may not fail to include on both copies of the

form described by Subsection (a):

(1) the name of the merchant;

(2) the address of the merchant's place of business;

(3) the date of the transaction; and

(4) a date not earlier than the third business day

after the date of the transaction by which the consumer must give

notice of cancellation. (Bus. & Com. Code, Secs. 39.004(c),

39.008(a) (part).)

Sec. 601.054. USE OF FORMS AND NOTICES PRESCRIBED BY THE

FEDERAL TRADE COMMISSION AUTHORIZED. The use of the forms and

notices of the right to cancel prescribed by the Federal Trade

Commission's trade-regulation rule providing a cooling-off period

for door-to-door sales constitutes compliance with Sections

601.052 and 601.053. (Bus. & Com. Code, Sec. 39.004(d).)

Sec. 601.055. ALTERNATIVE NOTICE AUTHORIZED FOR CERTAIN

CONSUMER TRANSACTIONS. A consumer transaction in which the

contract price does not exceed $200 complies with the notice

requirements of Sections 601.052 and 601.053 if:

(1) the consumer may at any time cancel the order,

refuse to accept delivery of the goods without incurring any

obligation to pay for the goods, or return the goods to the merchant

and receive a full refund of the amount the consumer has paid; and

(2) the consumer's right to cancel the order, refuse

delivery, or return the goods without obligation or charge at any

time is clearly and conspicuously stated on the face or reverse side

of the sales ticket. (Bus. & Com. Code, Sec. 39.004(e).)

[Sections 601.056-601.100 reserved for expansion]

SUBCHAPTER C. RIGHTS AND DUTIES OF CONSUMER AND MERCHANT

Sec. 601.101. MERCHANT'S COMPENSATION. A merchant is not

entitled to compensation for services performed under a consumer

transaction canceled under this chapter. (Bus. & Com. Code, Sec.

39.005.)

Sec. 601.102. CONSUMER'S RETENTION OF GOODS OR TITLE TO

REAL PROPERTY AUTHORIZED. Until a merchant has complied with this

chapter, a consumer with possession of goods or the right or title

to real property delivered by the merchant:

(1) may retain possession of the goods or the right or

title to the real property; and

(2) has a lien on the goods or real property to the

extent of any recovery to which the consumer is entitled. (Bus. &

Com. Code, Sec. 39.006.)

Sec. 601.103. CONSUMER'S DUTIES WITH RESPECT TO DELIVERED

GOODS OR REAL PROPERTY. (a) Within a reasonable time after a

cancellation under this chapter, the consumer must, on demand,

tender to the merchant any goods or any right or title to real

property delivered by the merchant under the consumer transaction.

(b) The consumer is not obligated to tender goods at a place

other than the consumer's residence.

or the right or title to real property within a reasonable time

after cancellation, the goods or real property become the property

of the consumer without obligation to pay.

(d) Goods or real property in possession of the consumer are

at the risk of the merchant, except that the consumer shall take

reasonable care of the goods or the real property both before and

for a reasonable time after cancellation.

(e) For purposes of this section, 20 days is presumed to be a

reasonable time. (Bus. & Com. Code, Sec. 39.007.)

[Sections 601.104-601.150 reserved for expansion]

SUBCHAPTER D. PROHIBITED ACTS AND CONDUCT BY MERCHANT

Sec. 601.151. CONFESSION OF JUDGMENT OR WAIVER OF RIGHTS. A

merchant may not include in a contract or receipt pertaining to a

consumer transaction a confession of judgment or a waiver of any of

the rights to which the consumer is entitled under this chapter.

(Bus. & Com. Code, Sec. 39.008(a) (part).)

Sec. 601.152. FAILURE TO INFORM OR MISREPRESENTATION OF

RIGHT TO CANCEL. A merchant may not:

(1) at the time the consumer signs the contract

pertaining to a consumer transaction or purchases the goods,

services, or real property, fail to inform the consumer orally of

the right to cancel the transaction; or

(2) misrepresent in any manner the consumer's right to

cancel. (Bus. & Com. Code, Sec. 39.008(a) (part).)

Sec. 601.153. TRANSFER OF INDEBTEDNESS DURING CERTAIN

PERIOD. A merchant may not negotiate, transfer, sell, or assign a

note or other evidence of indebtedness to a finance company or other

third party before midnight of the fifth business day after the date

the contract pertaining to a consumer transaction was signed or the

goods or services were purchased. (Bus. & Com. Code, Sec. 39.008(a)

(part).)

Sec. 601.154. FAILURE TO TAKE CERTAIN ACTIONS FOLLOWING

RECEIPT OF NOTICE OF CANCELLATION. A merchant may not:

(1) fail to notify the consumer before the end of the

10th business day after the date the merchant receives the notice of

cancellation whether the merchant intends to repossess or abandon

any shipped or delivered goods;

(2) fail or refuse to honor a valid cancellation under

this chapter by a consumer; or

(3) fail before the end of the 10th business day after

the date the merchant receives a valid notice of cancellation to:

(A) refund all payments made under the contract

or sale;

(B) return any goods or property traded in to the

merchant in substantially the same condition as when received by

the merchant;

executed by the consumer in connection with the contract of sale;

(D) take any action appropriate to terminate

promptly any security interest created in the transaction; or

(E) restore improvements on real property to the

same condition as when the merchant took title to or possession of

the real property unless the consumer requests otherwise. (Bus. &

Com. Code, Sec. 39.008(a) (part).)

[Sections 601.155-601.200 reserved for expansion]

SUBCHAPTER E. ENFORCEMENT

Sec. 601.201. CERTAIN SALES OR CONTRACTS VOID. A sale or

contract entered into under a consumer transaction in violation of

Section 601.053(b) or Subchapter D is void. (Bus. & Com. Code, Sec.

39.008(b).)

Sec. 601.202. LIABILITY FOR DAMAGES. A merchant who

violates this chapter is liable to the consumer for:

(1) actual damages suffered by the consumer as a

result of the violation;

(2) reasonable attorney's fees; and

(3) court costs. (Bus. & Com. Code, Sec. 39.008(c).)

Sec. 601.203. ALTERNATIVE RECOVERY UNDER CERTAIN

CIRCUMSTANCES. If the merchant fails to tender goods or property

traded to the merchant in substantially the same condition as when

received by the merchant, the consumer may elect to recover an

amount equal to the trade-in allowance stated in the agreement.

(Bus. & Com. Code, Sec. 39.008(d).)

Sec. 601.204. DECEPTIVE TRADE PRACTICE. A violation of

this chapter is a false, misleading, or deceptive act or practice as

defined by Section 17.46(b). In addition to any remedy under this

chapter, a remedy under Subchapter E, Chapter 17, is also available

for a violation of this chapter. (Bus. & Com. Code, Sec.

39.008(e).)

Sec. 601.205. INJUNCTION. If the attorney general believes

that a person is violating or about to violate this chapter, the

attorney general may bring an action in the name of the state to

restrain or enjoin the person from violating this chapter. (Bus. &

Com. Code, Sec. 39.009.)

CHAPTER 602. DELIVERY OF UNSOLICITED GOODS

Sec. 602.001. INAPPLICABILITY OF CHAPTER TO

SUBSTITUTED GOODS

Sec. 602.002. ACTIONS AUTHORIZED ON DELIVERY OF

UNSOLICITED GOODS

Sec. 602.003. CERTAIN UNSOLICITED GOODS CONSIDERED

GIFT

Sec. 602.004. MISTAKEN DELIVERY

CHAPTER 602. DELIVERY OF UNSOLICITED GOODS

Sec. 602.001. INAPPLICABILITY OF CHAPTER TO SUBSTITUTED

GOODS. This chapter does not apply to goods substituted for goods

ordered or solicited by the recipient of the goods. (Bus. & Com.

Code, Sec. 35.45(d).)

Sec. 602.002. ACTIONS AUTHORIZED ON DELIVERY OF UNSOLICITED

GOODS. Unless otherwise agreed, a person to whom unsolicited goods

are delivered:

(1) is entitled to refuse to accept delivery of the

goods; and

(2) is not required to return the goods to the sender.

(Bus. & Com. Code, Sec. 35.45(a).)

Sec. 602.003. CERTAIN UNSOLICITED GOODS CONSIDERED GIFT.

(a) Unsolicited goods that are addressed to or intended for the

recipient are considered a gift to the recipient.

(b) The recipient may use or dispose of goods described by

Subsection (a) in any manner without obligation to the sender.

(Bus. & Com. Code, Sec. 35.45(b).)

Sec. 602.004. MISTAKEN DELIVERY. A person who receives

unsolicited goods as the result of a bona fide mistake shall return

the goods. The sender has the burden of proof as to the mistake.

(Bus. & Com. Code, Sec. 35.45(c).)

CHAPTER 603. REGULATION OF CONSUMER CONTRACTS CREATED BY

ACCEPTANCE OF CHECK OR OTHER DRAFT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 603.001. DEFINITIONS

Sec. 603.002. APPLICABILITY OF CHAPTER

[Sections 603.003-603.050 reserved for expansion]

SUBCHAPTER B. REQUIRED DISCLOSURES AND NOTICES

Sec. 603.051. REQUIRED DISCLOSURE ON CHECK OR OTHER

DRAFT

Sec. 603.052. REQUIRED NOTICE OF RIGHT TO TERMINATE

ACCEPTANCE OF OFFER

Sec. 603.053. EFFECT OF NONCOMPLIANCE

[Sections 603.054-603.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT

Sec. 603.101. DECEPTIVE TRADE PRACTICE

CHAPTER 603. REGULATION OF CONSUMER CONTRACTS CREATED BY

ACCEPTANCE OF CHECK OR OTHER DRAFT

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 603.001. DEFINITIONS. Unless the context requires a

different definition, the definitions provided by Chapter 3 apply

to this chapter. (Bus. & Com. Code, Sec. 35.455(a).)

Sec. 603.002. APPLICABILITY OF CHAPTER. (a) Except as

provided by Subsection (b), this chapter applies only to a person

who solicits business in this state by mailing an individual a check

or other draft payable to that individual.

(b) This chapter does not apply to a financial institution

as defined by Section 201.101, Finance Code, or an authorized

lender as defined by Section 341.001 of that code, that sends a

check or other draft to an existing or prospective account holder

authorizing that person to access an extension of credit. (Bus. &

Com. Code, Sec. 35.455(b).)

[Sections 603.003-603.050 reserved for expansion]

SUBCHAPTER B. REQUIRED DISCLOSURES AND NOTICES

Sec. 603.051. REQUIRED DISCLOSURE ON CHECK OR OTHER DRAFT.

(a) A person who makes an offer that the recipient may accept by

endorsing and negotiating a check or other draft shall disclose on

the check or other draft that by signing and negotiating the

instrument, the depositor agrees to pay for future goods or

services as a result of the contract.

(b) The disclosure required by Subsection (a) must be clear,

conspicuous, and located on the check or other draft next to the

place for endorsement. (Bus. & Com. Code, Sec. 35.455(c).)

Sec. 603.052. REQUIRED NOTICE OF RIGHT TO TERMINATE

ACCEPTANCE OF OFFER. (a) If an offer described by Section 603.051

includes a free membership period, trial period, or other incentive

with a time limit, and if the offer results in a contract unless the

recipient terminates the acceptance of the offer not later than the

end of the time period, the offeror shall send notice to the

recipient, at least two weeks before debiting any account, of the

recipient's obligation to terminate the recipient's acceptance of

the offer.

(b) The notice required by Subsection (a) must be clear and

conspicuous. If the offeror bills the recipient by mailing an

invoice, the notice may be included with the invoice. (Bus. & Com.

Code, Sec. 35.455(d).)

Sec. 603.053. EFFECT OF NONCOMPLIANCE. (a) An offer

described by Section 603.051 is void if the offeror:

(1) does not make the disclosure required by that

section;

(2) does not send notice as required by Section

603.052, if applicable; or

(3) provides an incentive with a time limit, including

a free membership period or trial period, that is less than two

weeks in length.

(b) A delivery of goods or services to the recipient does

not operate to form a contract between the offeror and the recipient

if:

(1) the offer does not contain the disclosure required

by Section 603.051;

(2) the offer is not followed by a notice required by

Section 603.052, if applicable; or

(3) the offeror fails to honor the recipient's

cancellation or termination of the acceptance of the offer made

under the terms of the offer or as required by Section 603.052.

(Bus. & Com. Code, Secs. 35.455(e), (f).)

[Sections 603.054-603.100 reserved for expansion]

SUBCHAPTER C. ENFORCEMENT

Sec. 603.101. DECEPTIVE TRADE PRACTICE. A violation of

this chapter is a deceptive trade practice in addition to the

practices described by Subchapter E, Chapter 17, and is actionable

under that subchapter. (Bus. & Com. Code, Sec. 35.455(g).)

CHAPTER 604. SALE OR ISSUANCE OF STORED VALUE CARD

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 604.001. DEFINITION OF STORED VALUE CARD

Sec. 604.002. INAPPLICABILITY OF CHAPTER

Sec. 604.003. CAUSE OF ACTION NOT CREATED

[Sections 604.004-604.050 reserved for expansion]

SUBCHAPTER B. PERMISSIBLE FEES

Sec. 604.051. FEES AND CHARGES RELATED TO ISSUANCE AND

HANDLING OF CARD

Sec. 604.052. FEES OR CHARGES THAT DECREASE UNREDEEMED

BALANCE OF CARD

[Sections 604.053-604.100 reserved for expansion]

SUBCHAPTER C. REQUIRED DISCLOSURES

Sec. 604.101. REQUIRED DISCLOSURE OF CERTAIN MATTERS

APPLICABLE TO CARD

Sec. 604.102. REQUIRED PRINTING OF CERTAIN DISCLOSURES

Sec. 604.103. VALIDITY OF CARD SOLD WITHOUT REQUIRED

DISCLOSURES

CHAPTER 604. SALE OR ISSUANCE OF STORED VALUE CARD

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 604.001. DEFINITION OF STORED VALUE CARD. In this

chapter, "stored value card":

(1) means a record, as defined by Section 322.002,

including a record that contains a microprocessor chip, magnetic

strip, or other means of storing information:

(A) that evidences a promise made for monetary

consideration by the seller or issuer of the record that goods or

services will be provided to the owner of the record in the value

shown in the record;

(B) that is prefunded; and

and

(2) includes a gift card or gift certificate. (Bus. &

Com. Code, Secs. 35.42(a)(1), (2).)

Sec. 604.002. INAPPLICABILITY OF CHAPTER. This chapter

does not apply to a stored value card that:

(1) is issued by:

(A) a financial institution acting as a financial

agent of the United States or this state;

(B) a federally insured financial institution,

as defined by Section 201.101, Finance Code, if the financial

institution is primarily liable for the card as the issuing

principal; or

public convenience and necessity under Title 49, United States

Code;

(2) is issued as a prepaid calling card by a prepaid

calling card company regulated under Section 55.253, Utilities

Code;

(3) is distributed by the issuer to a person under an

awards, rewards, loyalty, incentive, rebate, or promotional

program and is not issued or reloaded in exchange for money tendered

by the cardholder;

(4) is sold below face value or donated to:

(A) an employee of the seller or issuer;

(B) a nonprofit or charitable organization; or

purposes; or

(5) does not expire and for which the seller does not

charge a fee other than a fee described in Section 604.051. (Bus. &

Com. Code, Secs. 35.42(b), (c).)

Sec. 604.003. CAUSE OF ACTION NOT CREATED. This chapter

does not create a cause of action against a person who issues or

sells a stored value card. (Bus. & Com. Code, Sec. 35.42(g).)

[Sections 604.004-604.050 reserved for expansion]

SUBCHAPTER B. PERMISSIBLE FEES

Sec. 604.051. FEES AND CHARGES RELATED TO ISSUANCE AND

HANDLING OF CARD. If disclosed as required by Subchapter C, the

issuer of a stored value card may impose and collect a reasonable:

(1) handling fee in connection with the issuance of or

adding of value to the card;

(2) access fee for a card transaction conducted at an

unmanned teller machine, as defined by Section 59.301, Finance

Code; and

(3) reissue or replacement charge if an expired or

lost card is reissued or replaced. (Bus. & Com. Code, Sec.

35.42(d).)

Sec. 604.052. FEES OR CHARGES THAT DECREASE UNREDEEMED

BALANCE OF CARD. The issuer of a stored value card may impose or

collect a periodic fee or other charge that causes the unredeemed

balance of the card to decrease over time only if the fee:

(1) is reasonable;

(2) is not assessed until after the first anniversary

of the date the card is sold or issued; and

(3) is disclosed as required by Subchapter C. (Bus. &

Com. Code, Sec. 35.42(e).)

[Sections 604.053-604.100 reserved for expansion]

SUBCHAPTER C. REQUIRED DISCLOSURES

Sec. 604.101. REQUIRED DISCLOSURE OF CERTAIN MATTERS

APPLICABLE TO CARD. An expiration date or policy, fee, or other

material restriction or contract term applicable to a stored value

card must be clearly and conspicuously disclosed at the time the

card is sold or issued to a person to enable the person to make an

informed decision before purchasing the card. (Bus. & Com. Code,

Sec. 35.42(f) (part).)

Sec. 604.102. REQUIRED PRINTING OF CERTAIN DISCLOSURES. In

addition to the disclosure required under Section 604.101, a

disclosure regarding the expiration of a stored value card or a

periodic fee that reduces the unredeemed value of a stored value

card must be legibly printed on the card. (Bus. & Com. Code, Sec.

35.42(f) (part).)

Sec. 604.103. VALIDITY OF CARD SOLD WITHOUT REQUIRED

DISCLOSURES. A stored value card sold without the disclosure

required by this subchapter of an expiration date or policy, fee, or

other material restriction or contract term applicable to the card

is valid until redeemed or replaced. (Bus. & Com. Code, Sec.

35.42(f) (part).)

TITLE 13. CONTESTS AND OTHER PROMOTIONS

CHAPTER 621. CONTESTS AND GIFT GIVEAWAYS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 621.001. SHORT TITLE

Sec. 621.002. CONSTRUCTION OF CHAPTER

Sec. 621.003. DEFINITIONS

Sec. 621.004. INAPPLICABILITY OF CHAPTER TO CERTAIN

SALES PRESENTATIONS

Sec. 621.005. DETERMINATION OF RETAIL VALUE OF PRIZE

OR GIFT

Sec. 621.006. DEPOSIT REQUIREMENTS

[Sections 621.007-621.050 reserved for expansion]

SUBCHAPTER B. GIFT OFFERS

Sec. 621.051. APPLICABILITY OF SUBCHAPTER

Sec. 621.052. REQUIRED DISCLOSURES RELATING TO GIFTS

Sec. 621.053. PROHIBITED ACTS RELATING TO GIFTS

Sec. 621.054. LIMITATIONS ON CONDITIONING GIFT ON

PAYMENT OF CONSIDERATION, CHARGE, OR

EXPENSE

Sec. 621.055. LIMITATIONS ON CONDITIONING GIFT ON

PURCHASE

[Sections 621.056-621.100 reserved for expansion]

SUBCHAPTER C. MATCHED CONTESTS AND DRAWINGS

Sec. 621.101. APPLICABILITY OF SUBCHAPTER

Sec. 621.102. REQUIRED DISCLOSURES RELATING TO PRIZES

GENERALLY

Sec. 621.103. REQUIREMENTS FOR MATCHED CONTEST

Sec. 621.104. REQUIRED DISCLOSURES RELATING TO MATCHED

CONTEST

Sec. 621.105. PROHIBITED ACTS RELATING TO MATCHED

CONTEST

Sec. 621.106. REQUIRED DISCLOSURES RELATING TO

DRAWINGS

Sec. 621.107. PROHIBITED ACTS RELATING TO DRAWINGS

Sec. 621.108. CONDITIONING PRIZE ON PAYMENT OF

CONSIDERATION, CHARGE, OR EXPENSE

PROHIBITED; EXCEPTIONS

Sec. 621.109. CONDITIONING PRIZE ON PURCHASE

PROHIBITED

[Sections 621.110-621.150 reserved for expansion]

SUBCHAPTER D. FULFILLMENT OF GIFT AND PRIZE OFFERS

Sec. 621.151. AVAILABILITY AND AWARDING OF GIFT OR

PRIZE

Sec. 621.152. RAINCHECK REQUIREMENTS

Sec. 621.153. ISSUANCE OF CHECK OR MONEY ORDER IN LIEU

OF GIFT OR MINOR PRIZE

Sec. 621.154. CERTIFICATE PERMITTED FOR LODGING,

AIRFARE, TRIP, OR RECREATIONAL

ACTIVITY

[Sections 621.155-621.200 reserved for expansion]

SUBCHAPTER E. CONTEST RECORDS

Sec. 621.201. APPLICABILITY OF SUBCHAPTER

Sec. 621.202. REQUIRED RECORDS FOR CONTESTS OTHER THAN

DRAWINGS

Sec. 621.203. REQUIRED RECORDS FOR DRAWINGS

Sec. 621.204. DISCLOSURE OF MAJOR PRIZES AND WINNERS

ON REQUEST

Sec. 621.205. RECORDS AVAILABLE TO ATTORNEY GENERAL

[Sections 621.206-621.250 reserved for expansion]

SUBCHAPTER F. ENFORCEMENT

Sec. 621.251. CRIMINAL PENALTY

Sec. 621.252. DECEPTIVE TRADE PRACTICE

CHAPTER 621. CONTESTS AND GIFT GIVEAWAYS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 621.001. SHORT TITLE. This chapter may be cited as the

Contest and Gift Giveaway Act. (Bus. & Com. Code, Sec. 40.001.)

Sec. 621.002. CONSTRUCTION OF CHAPTER. This chapter shall

be interpreted to provide the maximum disclosure to, and fair

treatment of, a person who enters a contest or gift giveaway through

which the person is solicited to attend a sales presentation. (Bus. &

Com. Code, Sec. 40.002.)

Sec. 621.003. DEFINITIONS. (a) In this chapter:

(1) "Contest" means a promotional device in which:

(A) a person is offered, as an inducement to

attend a sales presentation, a chance to win or receive a prize by

complying with specified entry requirements;

(B) the winner or recipient of a prize is

determined by random selection; and

(2) "Contest period" means the duration of a contest

from the beginning date to the ending date.

(3) "Drawing" means a contest in which the recipient

of a prize is determined from all of the entries received.

(4) "Entry form" means a card, letter, entry blank,

token, or similar device that identifies a contestant by:

(A) name;

(B) number, letter, or symbol; or

(5) "Gift" means an item of value that is offered,

transferred, or given to a person as an inducement to attend a sales

presentation but that is not offered, transferred, or awarded

through a contest. The term does not include a manufacturer's

rebate or discount available to the public.

(6) "Major prize" means a prize that has an actual unit

cost to the offeror of at least $250.

(7) "Matched contest" means a contest in which:

(A) the winning numbers are preselected, printed

on an entry form, and distributed to the public; and

(B) the numbers printed on the entry forms are

subsequently matched with the list of winning numbers at a sales

location to determine prize eligibility.

(8) "Minor prize" means a prize that:

(A) has an actual unit cost to the offeror of less

than $250; and

(B) is transferred to a person who:

(i) attends a sales presentation; and

(ii) is not the winner of a major prize.

(9) "Odds of winning" means a ratio in which:

(A) the numerator equals the actual number of

units of an identified prize to be given away during a contest

period; and

(B) the denominator equals the number of entry

forms distributed or reasonably anticipated to be distributed

during the contest period.

(10) "Offeror" means a person who solicits another

person to attend a sales presentation.

(11) "Person" includes an individual, a corporation, a

firm, and an association.

(12) "Prize" means an item of value that is offered,

awarded, or given to a person through a contest. The term does not

include a manufacturer's rebate or discount available to the

public.

(13) "Sales presentation" means a transaction or

occurrence in which a consumer is solicited to execute a contract

that obligates the consumer to purchase goods or services as

defined by Subchapter E, Chapter 17, including:

(A) a timeshare interest as defined by Section

221.002, Property Code; and

(B) a membership interest as defined by Section

222.003, Property Code.

(14) "Winning number" includes a letter or other

identifying symbol.

(b) For purposes of Subsection (a)(1)(B), a determination

made by random selection does not include the method used by an

offeror to identify a person who will be notified of an offer to win

a prize. (Bus. & Com. Code, Secs. 40.003, 40.035(b).)

Sec. 621.004. INAPPLICABILITY OF CHAPTER TO CERTAIN SALES

PRESENTATIONS. This chapter does not apply to a sales presentation

that is conducted in conjunction with a business seminar, trade

show, convention, or other gathering if only representatives of

business entities who attend the seminar, trade show, convention,

or gathering are solicited to attend. (Bus. & Com. Code, Sec.

40.004.)

Sec. 621.005. DETERMINATION OF RETAIL VALUE OF PRIZE OR

GIFT. (a) The retail value of an item offered as a prize or gift is

the price at which at least two principal retail outlets in this

state have made a substantial number of sales of an identical item

to members of the public during the six months preceding the

offering of the prize or gift. The item sold by the principal

retail outlets must be from the same manufacturer, and be of the

same brand, model, and type, as the item offered as a prize or gift.

(b) If a substantial number of sales of a particular item

offered as a prize or gift have not been made in this state during

the six months preceding the offering of the item described in the

solicitation or if the offeror elects, the retail value of the item

is the actual cost of the item to the offeror, net of any rebates,

plus 200 percent.

a recreational activity, the retail value is the retail sales price

of that lodging, airfare, trip, or recreational activity to a

member of the public who is not involved in a promotional or other

discount transaction. (Bus. & Com. Code, Sec. 40.005.)

Sec. 621.006. DEPOSIT REQUIREMENTS. (a) In this section,

"refundable deposit" means a deposit that is required to be

returned in its entirety to a consumer if:

(1) it is paid by the consumer for a reservation used

by the consumer; or

(2) the consumer provides at least five possible

reservation dates, none of which can be confirmed.

(b) An offeror may require a refundable deposit for a gift

or prize involving lodging, airfare, a trip, or a recreational

activity if the deposit requirement is fully, clearly, and

conspicuously disclosed.

must be clearly and conspicuously disclosed in at least 10-point

type on the solicitation. (Bus. & Com. Code, Secs. 40.006(g)

(part), 40.007.)

[Sections 621.007-621.050 reserved for expansion]

SUBCHAPTER B. GIFT OFFERS

Sec. 621.051. APPLICABILITY OF SUBCHAPTER. This subchapter

applies to a person who uses a gift as part of an advertising plan or

program. (Bus. & Com. Code, Sec. 40.031.)

Sec. 621.052. REQUIRED DISCLOSURES RELATING TO GIFTS. (a)

An offeror who notifies a person that the person will receive a gift

shall, at the time of the notification, clearly and conspicuously

disclose:

(1) that attendance at a sales presentation is

required;

(2) the approximate duration of the sales

presentation; and

(3) a description of the product or service being

sold.

(b) A person shall disclose:

(1) the retail value of a gift; and

(2) clearly and conspicuously in at least 10-point

type that airfare, lodging, or both are not included as part of a

gift that is a trip or recreational activity to the extent that

either or both are not included. (Bus. & Com. Code, Secs.

40.035(a), 40.036 (part).)

Sec. 621.053. PROHIBITED ACTS RELATING TO GIFTS. A person

may not:

(1) use the term "gift" or a similar term in a false,

misleading, or deceptive manner;

(2) directly represent or imply that a gift promotion

is a contest;

(3) in a gift promotion, use the term:

(A) "finalist," "major award winner," "grand

prize recipient," "winner," "won," "will win," or "will be awarded"

or use words or phrases of similar meaning that imply that a person

is being solicited to enter or participate in a contest; or

(B) "sweepstakes" or "contest" or use words or

phrases of similar meaning that imply that a person is being

solicited to enter or has won a contest;

(4) represent that a gift has a sponsor, approval,

characteristic, ingredient, use, benefit, quantity, status,

affiliation, connection, or identity that the gift does not have;

(5) represent that a gift is of a particular standard,

quality, grade, style, or model if the gift is of another; or

(6) use a word or phrase that:

(A) simulates or causes confusion with a document

issued by an officer of a court or with the seal or name of a real or

fictitious governmental entity; or

(B) implies that the offeror is sending a court

document or legal document or that the offeror is a governmental

entity. (Bus. & Com. Code, Sec. 40.036 (part).)

Sec. 621.054. LIMITATIONS ON CONDITIONING GIFT ON PAYMENT

OF CONSIDERATION, CHARGE, OR EXPENSE. (a) In this section,

"redemption or shipping fee" means any kind of consideration paid

to the offeror. The term does not include a refundable deposit.

(b) Except as provided by Subsection (c), an offeror may

notify a person that the person will receive a gift, the receipt of

which is conditioned on the person paying consideration of any

kind, paying a charge, or incurring an expense, only if the offeror

fully, clearly, and conspicuously discloses the consideration,

charge, or expense.

for a gift regardless of whether full disclosure of the fee is made.

(d) A gift is not prohibited in a legitimate trade promotion

if the advertising regarding the promotion fully discloses any

contractual obligation to be assumed to qualify for the gift. (Bus. &

Com. Code, Secs. 40.032 (part), 40.033.)

Sec. 621.055. LIMITATIONS ON CONDITIONING GIFT ON PURCHASE.

(a) An offeror may notify a person that the person will receive a

gift, the receipt of which is conditioned on the person purchasing a

good or service, only if at the time of notification the offeror

clearly and conspicuously discloses that purchase of a good or

service is required.

(b) A gift is not prohibited in a legitimate trade promotion

if the advertising regarding the promotion fully discloses any

requirement of a purchase to be made to qualify for the gift. (Bus. &

Com. Code, Secs. 40.032 (part), 40.034.)

[Sections 621.056-621.100 reserved for expansion]

SUBCHAPTER C. MATCHED CONTESTS AND DRAWINGS

Sec. 621.101. APPLICABILITY OF SUBCHAPTER. This subchapter

applies to a person who uses a contest as part of an advertising

plan or program. (Bus. & Com. Code, Sec. 40.061.)

Sec. 621.102. REQUIRED DISCLOSURES RELATING TO PRIZES

GENERALLY. An offeror who notifies a person that the person has won

a prize, will receive a prize, or has a chance to win or receive a

prize shall, at the time of the notification, clearly and

conspicuously disclose:

(1) that attendance at a sales presentation is

required;

(2) the approximate duration of the sales

presentation; and

(3) a description of the product or service being

sold. (Bus. & Com. Code, Sec. 40.064.)

Sec. 621.103. REQUIREMENTS FOR MATCHED CONTEST. (a) The

identity and number of the major prizes to be awarded in a matched

contest must be:

(1) determined before the contest begins; and

(2) disclosed on each entry form distributed.

(b) Each major prize identified on an entry form for a

matched contest shall be awarded.

12 calendar months.

(d) If, during the contest period for a matched contest, a

winning number is not presented or matched for a major prize, the

offeror shall conduct a drawing from the names of those individuals

who attended a sales presentation during the contest period. The

offeror shall conduct the drawing not later than the 60th day after

the date the contest period ends. Each major prize identified on

the entry forms distributed during the contest period that was not

previously awarded shall be awarded at the time of the drawing.

(Bus. & Com. Code, Sec. 40.065.)

Sec. 621.104. REQUIRED DISCLOSURES RELATING TO MATCHED

CONTEST. (a) A person who uses a matched contest shall clearly and

conspicuously disclose in writing in the offer:

(1) that attendance at a sales presentation is

required;

(2) the name and street address of the person who is

soliciting attendance at a sales presentation;

(3) a description of the product or service being

sold;

(4) each requirement, restriction, qualification, and

other condition that must be satisfied for a person to enter the

contest, including:

(A) any deadline by which the person must visit

the location or attend the sales presentation to qualify to receive

a prize; and

(B) the approximate duration of the sales

presentation;

(5) a statement of the odds of winning each prize

offered, expressed as a ratio in Arabic numerals;

(6) the geographical area or states in which the

contest will be conducted;

(7) the beginning and ending dates of the contest

period;

(8) the identity and address of each person

responsible for awarding prizes;

(9) that all unclaimed prizes will be awarded by a

drawing and the date of the drawing; and

(10) all other rules and terms of the contest.

(b) A person engaged in the preparation, promotion, sale,

distribution, or use of a matched contest shall disclose:

(1) the retail value of a prize; and

(2) clearly and conspicuously in at least 10-point

type that airfare, lodging, or both are not included as part of a

prize that is a trip or recreational activity to the extent that

either or both are not included. (Bus. & Com. Code, Secs. 40.066(a)

(part), (b).)

Sec. 621.105. PROHIBITED ACTS RELATING TO MATCHED CONTEST.

A person engaged in the preparation, promotion, sale, distribution,

or use of a matched contest may not:

(1) use the term "prize" or a similar term in a false,

misleading, or deceptive manner;

(2) represent in soliciting a person to enter or

participate in the contest that the person is a "finalist," "major

award winner," "grand prize recipient," or "winner" or that a

person has "won," "will win," or "will be awarded" or use words or

phrases of similar meaning unless the representation is true;

(3) represent that a prize has a sponsor, approval,

characteristic, ingredient, use, benefit, quantity, status,

affiliation, connection, or identity that the prize does not have;

(4) represent that a prize is of a particular

standard, quality, grade, style, or model if the prize is of

another;

(5) misrepresent the odds of winning a prize;

(6) misrepresent the rules or terms of participation

in the contest;

(7) represent that:

(A) a number, ticket, coupon, symbol, or entry

form confers or will confer an advantage on a person that another

person does not have or has a value that other entries do not have;

(B) a person is more likely to win a prize than

another person;

(8) fail to obtain a person's express written consent

before using that person's name for a promotional purpose;

(9) use or distribute simulated checks or currency or

other simulated items of value unless the words

"SPECIMEN--NON-NEGOTIABLE" are clearly and conspicuously printed

on those items in at least 18-point type; or

(10) use a word or phrase that:

(A) simulates or causes confusion with a document

issued by an officer of a court or with the seal or name of a real or

fictitious governmental entity; or

(B) implies that the offeror is sending a court

document or legal document or that the offeror is a governmental

entity. (Bus. & Com. Code, Sec. 40.066(a) (part).)

Sec. 621.106. REQUIRED DISCLOSURES RELATING TO DRAWINGS.

(a) A person may not use a drawing unless the offeror clearly and

conspicuously discloses in writing in the offer:

(1) a statement of the odds of winning each prize

offered, expressed as a ratio in Arabic numerals, except as

provided by Subsection (c);

(2) the exact prizes to be awarded in the drawing;

(3) the beginning and ending dates of the contest

period;

(4) the date the drawing will occur; and

(5) the location at which the drawing will occur.

(b) A person engaged in the preparation, promotion, sale,

distribution, or use of a drawing shall disclose:

(1) the retail value of a prize; and

(2) clearly and conspicuously in at least 10-point

type that airfare, lodging, or both are not included in a prize that

is a trip or recreational activity to the extent that either or both

are not included.

because the total number of entries is not known, the offeror shall

make a statement to the effect that the odds of winning depend on

the total number of entries received. (Bus. & Com. Code, Secs.

40.067(a), (b) (part), (c).)

Sec. 621.107. PROHIBITED ACTS RELATING TO DRAWINGS. A

person engaged in the preparation, promotion, sale, distribution,

or use of a drawing may not:

(1) use the term "prize" or a similar term in a false,

misleading, or deceptive manner;

(2) fail to provide the prize as represented at the

conclusion of the drawing;

(3) represent that a prize has a sponsor, approval,

characteristic, ingredient, use, benefit, quantity, status,

affiliation, connection, or identity that the prize does not have;

(4) represent that a prize is of a particular

standard, quality, grade, style, or model if the prize is of

another;

(5) misrepresent the odds of winning a prize; or

(6) misrepresent the rules or terms of participation

in the drawing. (Bus. & Com. Code, Sec. 40.067(b) (part).)

Sec. 621.108. CONDITIONING PRIZE ON PAYMENT OF

CONSIDERATION, CHARGE, OR EXPENSE PROHIBITED; EXCEPTIONS. (a)

Except as provided by Subsection (b), an offeror may not notify a

person that the person has won a prize, will receive a prize, or has

a chance to win or receive a prize if the receipt of the prize is

conditioned on the person paying consideration of any kind, paying

a charge, or incurring an expense.

(b) An offeror may notify a person that the person has won a

prize, will receive a prize, or has a chance to receive a prize that

is conditioned on the person paying:

(1) expenses incurred for travel to and from the sales

location; or

(2) a refundable deposit authorized under Section

621.006. (Bus. & Com. Code, Sec. 40.062.)

Sec. 621.109. CONDITIONING PRIZE ON PURCHASE PROHIBITED.

An offeror may not notify a person that the person has won a prize,

will receive a prize, or has a chance to win or receive a prize if

the receipt of the prize is conditioned on the person purchasing a

good or service unrelated to the prize. (Bus. & Com. Code, Sec.

40.063.)

[Sections 621.110-621.150 reserved for expansion]

SUBCHAPTER D. FULFILLMENT OF GIFT AND PRIZE OFFERS

Sec. 621.151. AVAILABILITY AND AWARDING OF GIFT OR PRIZE.

(a) Subject to Sections 621.152-621.154, an offeror shall:

(1) in a gift offer, provide each gift as represented

to each person who attends a sales presentation; or

(2) in a matched contest, award each prize as

represented on the entry form to each person who presents a winning

entry.

(b) An offeror shall have available at the sales location a

sufficient quantity of:

(1) each gift to meet the reasonable anticipated

response to the offer; or

(2) each prize to meet the reasonable anticipated

number of prize winners.

offeror may not provide a coupon book, a discount book, or a

certificate or voucher that entitles the holder to redeem the

certificate or voucher for a gift or prize required to be available

under this section. (Bus. & Com. Code, Secs. 40.006(a), (b), (c).)

Sec. 621.152. RAINCHECK REQUIREMENTS. Subject to Section

621.153(a), if the response to an offer exceeds the number of gifts

or major or minor prizes, as applicable, available at the sales

location, the offeror, at the time of the visit or, if a sales

presentation is required, at the conclusion of the sales

presentation, shall tender to the recipient of the offer a

raincheck for the gift or prize represented in the offer. Except as

provided by Section 621.153(b), the offeror shall send that exact

gift or prize to the recipient, without cost to the recipient, not

later than the 14th day after the date the recipient visits the

sales location or attends the sales presentation. The offeror

shall obtain a return receipt from the shipper verifying that the

gift or prize was delivered to the recipient. (Bus. & Com. Code,

Sec. 40.006(d).)

Sec. 621.153. ISSUANCE OF CHECK OR MONEY ORDER IN LIEU OF

GIFT OR MINOR PRIZE. (a) An offeror who knows at the time a

recipient of an offer visits a sales location or attends a sales

presentation that the gift or minor prize will not be available

within 14 days of the date of the visit or attendance shall at the

time of the visit or at the conclusion of the sales presentation

tender to the recipient, by cash or check, the amount of $100.

(b) If, after the expiration of the 14th day after the date

the offeror issued a raincheck under Section 621.152 for a gift or

minor prize, the offeror has not sent the gift or prize, the offeror

shall send by mail to the recipient of the raincheck a check or

money order in the amount of $100 payable to the recipient. The

offeror shall:

(1) send the check or money order not later than the

15th day after the date the offeror issued the raincheck; and

(2) obtain a return receipt from the United States

Postal Service that verifies that the check or money order was

delivered to the recipient. (Bus. & Com. Code, Secs. 40.006(e),

(f).)

Sec. 621.154. CERTIFICATE PERMITTED FOR LODGING, AIRFARE,

TRIP, OR RECREATIONAL ACTIVITY. An offeror may give the recipient

of a gift or prize involving lodging, airfare, a trip, or a

recreational activity a certificate that evidences the recipient's

right to the gift or prize. (Bus. & Com. Code, Sec. 40.006(g)

(part).)

[Sections 621.155-621.200 reserved for expansion]

SUBCHAPTER E. CONTEST RECORDS

Sec. 621.201. APPLICABILITY OF SUBCHAPTER. This subchapter

applies to a person who uses a contest as part of an advertising

plan or program. (Bus. & Com. Code, Sec. 40.091.)

Sec. 621.202. REQUIRED RECORDS FOR CONTESTS OTHER THAN

DRAWINGS. (a) For each contest other than a drawing, the offeror

shall maintain until the second anniversary of the date the last

prize was awarded:

(1) records of the identity and address of each person

who is responsible for developing, creating, sponsoring, or

implementing any part of the advertising plan or program;

(2) records that show that the winning numbers have

been deposited in the mail or otherwise made available to

recipients in accordance with the odds statement provided under

Section 621.104(a);

(3) a copy of each contest solicitation;

(4) records adequate to determine:

(A) the name and address of each contestant;

(B) the approximate date each contestant was sent

the solicitation used in the contest;

(D) the date each major prize was awarded;

(E) the name, brand, type, model number, and

manufacturer of each prize offered;

(F) the method of computing the retail value of

each prize;

(G) the method of selecting major prize winners;

(H) the name and address of each major prize

winner; and

(I) the facts on which each representation or

disclosure made in connection with the contest was based and from

which the validity of the representation or disclosure can be

determined.

(b) Postal receipt records, affidavits of mailing, and a

list of winners or recipients of the major prizes satisfy the

requirements of Subsection (a)(2). (Bus. & Com. Code, Sec.

40.092.)

Sec. 621.203. REQUIRED RECORDS FOR DRAWINGS. (a) For each

drawing, the offeror shall maintain until the second anniversary of

the date the last major prize was awarded:

(1) records of the identity and address of each person

who is responsible for developing, creating, sponsoring, or

implementing any part of the advertising plan or program;

(2) records that show that the winning entry for each

major prize was selected entirely at random from all of the entries

received;

(3) a copy of each contest solicitation; and

(4) records adequate to determine:

(A) the total number of entries;

(B) the number of major prizes awarded;

(D) the name, brand, type, model number, and

manufacturer of each prize offered;

(E) the method of computing the retail value of

each prize;

(F) the method of selecting winners; and

(G) the names and addresses of the winners.

(b) An affidavit from the person who conducted the drawing

and a list of winners or recipients of the major prizes satisfies

the requirements of Subsection (a)(2). (Bus. & Com. Code, Sec.

40.093.)

Sec. 621.204. DISCLOSURE OF MAJOR PRIZES AND WINNERS ON

REQUEST. A person who conducts a contest shall, at the end of the

contest period, provide to any person who requests the information:

(1) the names of all major prize winners; and

(2) the prizes won by each winner. (Bus. & Com. Code,

Sec. 40.094.)

Sec. 621.205. RECORDS AVAILABLE TO ATTORNEY GENERAL. A

person who receives a written request from the attorney general for

the records required under this subchapter shall make the records

available to the attorney general not later than the 30th day after

the date the person received the request. (Bus. & Com. Code, Sec.

40.095.)

[Sections 621.206-621.250 reserved for expansion]

SUBCHAPTER F. ENFORCEMENT

Sec. 621.251. CRIMINAL PENALTY. (a) A person commits an

offense if the person knowingly violates this chapter.

(b) Except as provided by Subsection (c), an offense under

this section is a Class B misdemeanor.

(1) a Class A misdemeanor if it is shown at the trial

of the defendant that:

(A) the defendant has previously been convicted

of an offense under this section; and

(B) the offense for which the defendant is on

trial was committed not later than the fifth anniversary of the date

of the previous conviction; or

(2) a third degree felony if it is shown at the trial

of the defendant that:

(A) the defendant has previously been twice

convicted of an offense under this section; and

(B) the offense for which the defendant is on

trial was:

(i) intentional; and

(ii) committed not later than the fifth

anniversary of the earlier of the dates of two previous

convictions.

(d) Subsection (c)(2) does not apply to a violation of

Subchapter D.

(e) A person may not be prosecuted for more than one offense

involving the same promotion regardless of whether that promotion

is mailed or distributed to more than one person or is used at more

than one location. (Bus. & Com. Code, Sec. 40.121.)

Sec. 621.252. DECEPTIVE TRADE PRACTICE. A violation of

this chapter is a deceptive trade practice in addition to the

practices described by Subchapter E, Chapter 17, and is actionable

under that subchapter. (Bus. & Com. Code, Sec. 40.122.)

CHAPTER 622. SWEEPSTAKES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 622.001. DEFINITIONS

Sec. 622.002. ACTS CONSTITUTING CONDUCTING SWEEPSTAKES

[Sections 622.003-622.050 reserved for expansion]

SUBCHAPTER B. APPLICABILITY OF CHAPTER

Sec. 622.051. CHAPTER LIMITED TO SWEEPSTAKES CONDUCTED

THROUGH MAIL; EXCEPTION

Sec. 622.052. PRIZE VALUE LESS THAN $50,000

Sec. 622.053. ADVERTISEMENT OR INSERT IN MAGAZINE,

NEWSPAPER, OR CATALOG

Sec. 622.054. CHARITABLE RAFFLE

Sec. 622.055. SWEEPSTAKES REGULATED BY ALCOHOLIC

BEVERAGE CODE

Sec. 622.056. COMPANY REGULATED UNDER PUBLIC UTILITY

REGULATORY ACT

Sec. 622.057. AIR CARRIER; AIRMAN ASSOCIATION

Sec. 622.058. CERTAIN RECREATIONAL EVENTS

Sec. 622.059. CERTAIN FOOD PRODUCTS

Sec. 622.060. AUDIOVISUAL ENTERTAINMENT WORK, PRODUCT,

OR SOUND RECORDING

Sec. 622.061. CABLE SYSTEM

[Sections 622.062-622.100 reserved for expansion]

SUBCHAPTER C. PROHIBITED ACTS OR CONDUCT

Sec. 622.101. CONNECTING SWEEPSTAKES ENTRY OR

OPERATION TO ORDER OR PURCHASE

Sec. 622.102. USING MULTIPLE SWEEPSTAKES ENTRY

ADDRESSES OR MULTIPLE PURPOSES FOR

ADDRESS

Sec. 622.103. ALLOWING CHOICE OF PRIZE OR INDICATION

OF PREFERRED PRIZE CHARACTERISTICS

Sec. 622.104. SENDING SWEEPSTAKES MATERIAL THAT

INCLUDES CERTAIN STATEMENTS OR

IMPLICATIONS

Sec. 622.105. USING GAME PIECE TO CONVEY INFORMATION

OR OFFER TO ENTER

Sec. 622.106. PUBLISHING ADVERTISEMENTS OR RULES WITH

INCONSISTENT OR INCOMPLETE PRIZE

DESCRIPTIONS

Sec. 622.107. ENGAGING IN CONDUCT THAT FALSELY

INDICATES AN INDIVIDUAL HAS WON

Sec. 622.108. AWARDING MULTIPLE PRIZES

Sec. 622.109. MAILING CERTAIN OFFERS DURING PERIOD

FOLLOWING SWEEPSTAKES

Sec. 622.110. PROVIDING NAMES OR ADDRESSES USED IN

PROHIBITED SWEEPSTAKES

[Sections 622.111-622.150 reserved for expansion]

SUBCHAPTER D. ACTS OR CONDUCT NOT PROHIBITED

Sec. 622.151. DESCRIPTION OF METHOD OF CHOOSING WINNER

Sec. 622.152. NOTIFICATION OF AND AFFIDAVIT FROM

WINNER

[Sections 622.153-622.200 reserved for expansion]

SUBCHAPTER E. ENFORCEMENT

Sec. 622.201. ACTION BY ATTORNEY GENERAL; VENUE

Sec. 622.202. CIVIL PENALTY

Sec. 622.203. LIABILITY FOR PROVIDING NAMES OR

ADDRESSES USED IN PROHIBITED

SWEEPSTAKES

Sec. 622.204. INJUNCTIVE AND OTHER RELIEF

Sec. 622.205. NO PRIVATE RIGHT OF ACTION

Sec. 622.206. RECOVERY OF EXPENSES BY ATTORNEY GENERAL

CHAPTER 622. SWEEPSTAKES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 622.001. DEFINITIONS. In this chapter:

(1) "Credit card" means a card that, if covered by the

law of this state, would be subject to a lender credit card

agreement, as defined by Section 301.002, Finance Code, except that

the term does not exclude a card that is subject to an agreement

under which:

(A) the obligations are payable in full each

month and not deferred; and

(B) no finance charge is assessed when the

obligations are paid.

(2) "Debit card" means a card offered by an

institution the deposits of which are insured by the Federal

Deposit Insurance Corporation or another agency, corporation, or

instrumentality chartered by the United States government.

(3) "Imply" means to use any means by which an

implication can be conveyed, including:

(A) a statement, question, or request;

(B) conduct;

(D) lettering, coloring, font size, font style,

or formatting.

(4) "Sweepstakes" means a contest that awards one or

more prizes based on chance or the random selection of entries.

(Bus. & Com. Code, Secs. 45.001(3), (4), (5), (7).)

Sec. 622.002. ACTS CONSTITUTING CONDUCTING SWEEPSTAKES.

For purposes of this chapter, a person conducts a sweepstakes if the

person distributes material that:

(1) promotes a sweepstakes;

(2) describes one or more sweepstakes prizes;

(3) states one or more sweepstakes rules;

(4) includes a current or future opportunity to enter

a sweepstakes; or

(5) provides a method for the recipient of the

material to obtain additional information about a sweepstakes.

(Bus. & Com. Code, Sec. 45.001(2).)

[Sections 622.003-622.050 reserved for expansion]

SUBCHAPTER B. APPLICABILITY OF CHAPTER

Sec. 622.051. CHAPTER LIMITED TO SWEEPSTAKES CONDUCTED

THROUGH MAIL; EXCEPTION. (a) This chapter applies only to a

sweepstakes conducted through the mail.

(b) This chapter does not apply to a sweepstakes for which

the only use of the mail is for a consumer to return an entry form to

the sweepstakes sponsor. (Bus. & Com. Code, Secs. 45.002 (part),

45.003(g).)

Sec. 622.052. PRIZE VALUE LESS THAN $50,000. (a) This

chapter does not apply to a sweepstakes in which the value of the

most valuable prize is less than $50,000.

(b) For purposes of this section, the value of a prize is the

greatest of the prize's:

(1) face value;

(2) fair market value; or

(3) present financial value. (Bus. & Com. Code, Sec.

45.003(j).)

Sec. 622.053. ADVERTISEMENT OR INSERT IN MAGAZINE,

NEWSPAPER, OR CATALOG. This chapter does not apply to a sweepstakes

conducted through an advertisement or insert in:

(1) a magazine or newspaper:

(A) that is a publication in which more than 40

percent of the total column inches in each issue consist of

advertising space purchased by companies other than:

(i) the publisher;

(ii) an affiliate of the publisher; or

(iii) a vendor for the publisher or an

affiliate; and

(B) that is a publication for which more than 50

percent of the total number of copies distributed of each issue are

provided to customers who paid for the copy; or

(2) a catalog that is a promotional booklet listing

merchandise for sale and that:

(A) is at least 24 pages long;

(B) has a circulation of at least 250,000; and

(i) requires customers to go to a physical

location to purchase the advertised items; or

(ii) is published by a company that derives

more than 50 percent of the company's total gross revenue from sales

occurring at physical locations. (Bus. & Com. Code, Secs.

45.001(1), (6), 45.003(a).)

Sec. 622.054. CHARITABLE RAFFLE. This chapter does not

apply to a charitable raffle regulated by Chapter 2002, Occupations

Code. (Bus. & Com. Code, Sec. 45.003(b).)

Sec. 622.055. SWEEPSTAKES REGULATED BY ALCOHOLIC BEVERAGE

CODE. This chapter does not apply to a sweepstakes regulated by the

Alcoholic Beverage Code. (Bus. & Com. Code, Sec. 45.003(c).)

Sec. 622.056. COMPANY REGULATED UNDER PUBLIC UTILITY

REGULATORY ACT. This chapter does not apply to a company regulated

under Title 2, Utilities Code. (Bus. & Com. Code, Sec. 45.003(d).)

Sec. 622.057. AIR CARRIER; AIRMAN ASSOCIATION. This

chapter does not apply to:

(1) a company that is an air carrier subject to Title

49, United States Code; or

(2) a nonprofit association of airmen who are subject

to that title. (Bus. & Com. Code, Sec. 45.003(e).)

Sec. 622.058. CERTAIN RECREATIONAL EVENTS. This chapter

does not apply to a drawing for the opportunity to participate in a

hunting, fishing, or other recreational event conducted by the

Parks and Wildlife Department. (Bus. & Com. Code, Sec. 45.003(f).)

Sec. 622.059. CERTAIN FOOD PRODUCTS. This chapter does not

apply to a sweepstakes promoting one or more food products

regulated by the United States Food and Drug Administration or the

United States Department of Agriculture. (Bus. & Com. Code, Sec.

45.003(n).)

Sec. 622.060. AUDIOVISUAL ENTERTAINMENT WORK, PRODUCT, OR

SOUND RECORDING. This chapter does not apply to a company if 75

percent or more of the company's business is:

(1) the systematic development, planning, and

execution of creating audiovisual entertainment works, products,

or sound recordings; and

(2) the distribution, sale, and marketing of those

works, products, or recordings. (Bus. & Com. Code, Sec. 45.003(o)

(part).)

Sec. 622.061. CABLE SYSTEM. This chapter does not apply to

a company that owns or operates a cable system, as defined by 47

U.S.C. Section 522, as amended. (Bus. & Com. Code, Sec. 45.003(o)

(part).)

[Sections 622.062-622.100 reserved for expansion]

SUBCHAPTER C. PROHIBITED ACTS OR CONDUCT

Sec. 622.101. CONNECTING SWEEPSTAKES ENTRY OR OPERATION TO

ORDER OR PURCHASE. (a) A person conducting a sweepstakes may not

use a mechanism for entering the sweepstakes that:

(1) has any connection to ordering or purchasing a

good or service;

(2) is not identical for all individuals entering the

sweepstakes; and

(3) does not have printed on the entry form, in a font

size at least as large as the largest font size used on the entry

form, the following language: "Buying Will Not Help You Win. Your

chances of winning without making a purchase are the same as the

chances of someone who purchases something. It is illegal to give

any advantage to buyers in a sweepstakes."

(b) A person conducting a sweepstakes may not:

(1) require an individual to order, purchase, or

promise to purchase a good or service to enter the sweepstakes;

(2) automatically enter an individual in the

sweepstakes because the individual ordered, purchased, or promised

to order or purchase a good or service; or

(3) solicit business using an order form or purchasing

mechanism that has any role in the operation of the sweepstakes.

sheet of paper that contains both a sweepstakes entry form and an

order form if:

(1) the order form is perforated or detachable; and

(2) the entry form must be separated from the order

form and returned to a different address than the order form.

(d) Subsections (a) and (b)(2) and (3) do not apply to a

sweepstakes offered to promote a credit card or debit card if the

official rules of the sweepstakes provide that consumers are

entered in the sweepstakes based on the number of purchases made or

the amount of money spent. The exception provided by this

subsection applies only to a person offering a sweepstakes who

qualified as an issuer as of January 1, 2001.

(e) Subsections (a) and (b)(2) and (3) do not apply to a

company offering a sweepstakes in which the consumer must go to a

physical location to obtain or use the goods or services being sold

by the company. (Bus. & Com. Code, Secs. 45.002 (part), 45.003(k),

(l), (m).)

Sec. 622.102. USING MULTIPLE SWEEPSTAKES ENTRY ADDRESSES OR

MULTIPLE PURPOSES FOR ADDRESS. A person conducting a sweepstakes

who provides for entering the sweepstakes by mail may not:

(1) accept entries at more than one address; or

(2) use the address for entry in the sweepstakes for

any other purpose. (Bus. & Com. Code, Sec. 45.002 (part).)

Sec. 622.103. ALLOWING CHOICE OF PRIZE OR INDICATION OF

PREFERRED PRIZE CHARACTERISTICS. A person conducting a sweepstakes

may not:

(1) solicit an individual to enter the sweepstakes by

invitation or other opportunity; and

(2) allow the individual to choose, or indicate the

preferred characteristics of, a prize to be awarded in the

sweepstakes unless the choice or indication:

(A) is made on the sweepstakes entry form; and

(B) does not appear on, and is not in any way

connected to, an order form or other purchasing mechanism. (Bus. &

Com. Code, Sec. 45.002 (part).)

Sec. 622.104. SENDING SWEEPSTAKES MATERIAL THAT INCLUDES

CERTAIN STATEMENTS OR IMPLICATIONS. A person conducting a

sweepstakes may not send material accompanying or relating to the

sweepstakes or an offer to enter the sweepstakes that:

(1) states or implies that:

(A) an individual must comply with a restriction

or condition to enter the sweepstakes, unless all individuals

entering the sweepstakes are required to comply with the identical

restriction or condition;

(B) an individual's chances of winning a prize in

the sweepstakes are higher, lower, or different in any way because

of a factor or circumstance that does not relate to the manner in

which a winner is selected;

or in a manner that is different from the actual time or place at

which or manner in which a winner is selected;

(D) an individual who orders or purchases a good

or service will receive a benefit or be treated differently in the

sweepstakes in comparison to an individual who does not order or

purchase a good or service; or

(E) an individual who does not order or purchase

a good or service will be disadvantaged or treated differently in

the sweepstakes in comparison to an individual who orders or

purchases a good or service;

(2) states or implies falsely that the individual

receiving the material has received special treatment or personal

attention from the offeror of the sweepstakes or any officer,

employee, or agent of the offeror; or

(3) states that the recipient of the material:

(A) is a winner, if the recipient is not a winner;

(B) may be a winner;

met or certain events occur;

(D) may be or will be among the group from which a

winner will be selected; or

(E) has in any way a better chance than another

individual of being chosen as a winner. (Bus. & Com. Code, Sec.

45.002 (part).)

Sec. 622.105. USING GAME PIECE TO CONVEY INFORMATION OR

OFFER TO ENTER. A person conducting a sweepstakes may not convey

information about the sweepstakes or an offer to enter the

sweepstakes by using a scratch-off device or any other game piece

that suggests an element of chance or luck. (Bus. & Com. Code, Sec.

45.002 (part).)

Sec. 622.106. PUBLISHING ADVERTISEMENTS OR RULES WITH

INCONSISTENT OR INCOMPLETE PRIZE DESCRIPTIONS. A person conducting

a sweepstakes may not publish or cause to be published:

(1) different advertisements for the same sweepstakes

that contain inconsistent descriptions of the grand prize to be

awarded through the sweepstakes; or

(2) official rules of the sweepstakes that do not

uniquely identify the prizes to be awarded and the date the prizes

will be awarded. (Bus. & Com. Code, Sec. 45.002 (part).)

Sec. 622.107. ENGAGING IN CONDUCT THAT FALSELY INDICATES AN

INDIVIDUAL HAS WON. A person conducting a sweepstakes may not:

(1) ask an individual to provide any information or

take any action consistent with the individual winning a

sweepstakes prize, unless the individual has won a sweepstakes

prize; or

(2) provide an individual who has not yet won a

sweepstakes prize with a document or other item that simulates an

event, circumstance, or condition connected with being a

sweepstakes winner. (Bus. & Com. Code, Sec. 45.002 (part).)

Sec. 622.108. AWARDING MULTIPLE PRIZES. A person

conducting a sweepstakes may not award multiple prizes in the

sweepstakes unless all prizes are awarded on the same date and

through the same selection process. (Bus. & Com. Code, Sec. 45.002

(part).)

Sec. 622.109. MAILING CERTAIN OFFERS DURING PERIOD

FOLLOWING SWEEPSTAKES. A person conducting a sweepstakes may not,

during the 30-day period immediately following the last date on

which the person conducted the sweepstakes through the mail, offer

through the mail:

(1) an opportunity to enter a sweepstakes; or

(2) a nonsweepstakes prize, gift, premium, giveaway,

or skill contest. (Bus. & Com. Code, Sec. 45.002 (part).)

Sec. 622.110. PROVIDING NAMES OR ADDRESSES USED IN

PROHIBITED SWEEPSTAKES. A person may not provide names or

addresses of residents of this state that are used in conducting a

sweepstakes that the person knows violates this chapter. (Bus. &

Com. Code, Sec. 45.004(d) (part).)

[Sections 622.111-622.150 reserved for expansion]

SUBCHAPTER D. ACTS OR CONDUCT NOT PROHIBITED

Sec. 622.151. DESCRIPTION OF METHOD OF CHOOSING WINNER.

This chapter does not prohibit a sweepstakes sponsor from

describing in the official sweepstakes rules the method to be used

in choosing a winner. (Bus. & Com. Code, Sec. 45.003(h) (part).)

Sec. 622.152. NOTIFICATION OF AND AFFIDAVIT FROM WINNER.

This chapter does not prohibit a sweepstakes sponsor, after a

winner has been chosen, from:

(1) notifying an individual chosen as a winner; or

(2) obtaining from an individual chosen as a winner an

affidavit to verify that the individual:

(A) is eligible to win the prize; and

(B) has complied with the sweepstakes rules.

(Bus. & Com. Code, Secs. 45.003(h) (part), (i).)

[Sections 622.153-622.200 reserved for expansion]

SUBCHAPTER E. ENFORCEMENT

Sec. 622.201. ACTION BY ATTORNEY GENERAL; VENUE. The

attorney general may bring an action under this chapter by filing

suit in a district court in Travis County or in any county in which a

violation occurred. (Bus. & Com. Code, Sec. 45.004(a).)

Sec. 622.202. CIVIL PENALTY. (a) The court shall award the

attorney general a civil penalty of not less than $5,000 or more

than $50,000 for each violation found.

(b) If the material accompanying or relating to a

sweepstakes or an offer to enter a sweepstakes contains multiple

statements, implications, representations, or offers that are

prohibited by this chapter, each statement, implication,

representation, or offer is a separate violation and results in a

separate civil penalty. Each individual who receives the material

constitutes an additional and separate group of violations of this

chapter. (Bus. & Com. Code, Secs. 45.004(b), (c).)

Sec. 622.203. LIABILITY FOR PROVIDING NAMES OR ADDRESSES

USED IN PROHIBITED SWEEPSTAKES. (a) A person who violates Section

622.110 is liable for the cumulative civil penalties that result

from the person's conduct.

(b) Liability of a person under Subsection (a) does not

reduce the liability of the person who conducted the sweepstakes.

(Bus. & Com. Code, Sec. 45.004(d) (part).)

Sec. 622.204. INJUNCTIVE AND OTHER RELIEF. The court may

also award injunctive relief or other equitable or ancillary relief

that is reasonably necessary to prevent violations of this chapter.

(Bus. & Com. Code, Sec. 45.004(g).)

Sec. 622.205. NO PRIVATE RIGHT OF ACTION. This chapter does

not create a private right of action. (Bus. & Com. Code, Sec.

45.004(h).)

Sec. 622.206. RECOVERY OF EXPENSES BY ATTORNEY GENERAL. If

the attorney general substantially prevails, the court shall award

the attorney general reasonable expenses incurred in recovering a

civil penalty under this subchapter, including court costs,

reasonable attorney's fees, reasonable investigative costs,

witness fees, and deposition expenses. (Bus. & Com. Code, Sec.

45.004(e).)

TITLE 14. RECORDINGS

CHAPTER 641. UNAUTHORIZED RECORDINGS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 641.001. DEFINITIONS

[Sections 641.002-641.050 reserved for expansion]

SUBCHAPTER B. PROHIBITED PRACTICES; PENALTIES

Sec. 641.051. UNAUTHORIZED DUPLICATION OF CERTAIN

RECORDINGS

Sec. 641.052. UNAUTHORIZED RECORDING OF LIVE

PERFORMANCE

Sec. 641.053. UNAUTHORIZED OPERATION OF RECORDING

DEVICE IN MOTION PICTURE THEATER

Sec. 641.054. LABELING

Sec. 641.055. FORFEITURE

Sec. 641.056. PRIVATE RIGHTS AND REMEDIES NOT AFFECTED

Sec. 641.057. PENALTIES CUMULATIVE

CHAPTER 641. UNAUTHORIZED RECORDINGS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 641.001. DEFINITIONS. In this chapter:

(1) "Fix" means to embody in a recording or other

tangible medium of expression, by or under the authority of the

author, so that the matter embodied is sufficiently permanent or

stable to permit it to be perceived, reproduced, or otherwise

communicated for a period of more than transitory duration.

(2) "Live performance" means a recitation, rendering,

or playing of a series, in an audible sequence, of:

(A) images;

(B) musical, spoken, or other sounds; or

(3) "Owner" means a person who owns the sounds fixed in

a master phonograph record, master disc, master tape, master film,

or other recording:

(A) on which sound is recorded; and

(B) from which the transferred recorded sounds

are directly or indirectly derived.

(4) "Recording" means a tangible medium on which

sounds, images, or both are recorded or otherwise stored,

including:

(A) an original phonograph record, disc, tape,

audio or video cassette, wire, film, or other medium now existing or

later developed; or

(B) a copy or reproduction that wholly or partly

duplicates the original. (Bus. & Com. Code, Sec. 35.91.)

[Sections 641.002-641.050 reserved for expansion]

SUBCHAPTER B. PROHIBITED PRACTICES; PENALTIES

Sec. 641.051. UNAUTHORIZED DUPLICATION OF CERTAIN

RECORDINGS. (a) This section applies only to a recording that was

initially fixed before February 15, 1972.

(b) A person commits an offense if the person:

(1) knowingly reproduces for sale or causes to be

transferred any recording with intent to sell the recording or

cause the recording to be sold or use a recording or cause the

recording to be used for commercial advantage or private financial

gain through public performance without the consent of the owner;

(2) with the knowledge that the sounds on a recording

have been reproduced or transferred without the consent of the

owner, transports the recording within this state for commercial

advantage or private financial gain; or

(3) with the knowledge that a recording has been

reproduced or transferred without the consent of the owner:

(A) advertises, offers for sale, sells, or rents

the recording;

(B) causes the sale, resale, or rental of the

recording; or

described by Paragraph (A) or (B).

(1) imprisonment for a term of not more than five

years, a fine not to exceed $250,000, or both, if:

(A) the offense involves at least 1,000

unauthorized recordings during a 180-day period; or

(B) the defendant has been previously convicted

under this section;

(2) imprisonment for a term of not more than two years,

a fine not to exceed $250,000, or both, if the offense involves more

than 100 but fewer than 1,000 unauthorized recordings during a

180-day period; or

(3) confinement in the county jail for a term of not

more than one year, a fine not to exceed $25,000, or both, if the

offense is not otherwise punishable under Subdivision (1) or (2).

(d) This section does not apply to any fees due to the

American Society of Composers, Authors and Publishers. (Bus. &

Com. Code, Secs. 35.92(a), (b), (d).)

Sec. 641.052. UNAUTHORIZED RECORDING OF LIVE PERFORMANCE.

(a) A person commits an offense if the person, with the knowledge

that a live performance has been recorded or fixed without the

consent of the owner:

(1) for commercial advantage or private financial

gain, advertises, offers for sale, sells, rents, or transports,

causes the sale, resale, rental, or transportation of, or possesses

for one or more of these purposes a recording containing sounds of

the live performance; or

(2) with the intent to sell for commercial advantage

or private financial gain, records or fixes the live performance,

or causes the live performance to be recorded or fixed on a

recording.

(b) An offense under this section is punishable by:

(1) imprisonment for a term of not more than five

years, a fine not to exceed $250,000, or both, if:

(A) the offense involves at least 1,000

unauthorized recordings embodying sound or at least 65 unauthorized

audiovisual recordings during a 180-day period; or

(B) the defendant has been previously convicted

under this section;

(2) imprisonment for a term of not more than two years,

a fine not to exceed $250,000, or both, if the offense involves more

than 100 but fewer than 1,000 unauthorized recordings embodying

sound or more than seven but fewer than 65 unauthorized audiovisual

recordings during a 180-day period; or

(3) confinement in the county jail for a term of not

more than one year, a fine not to exceed $25,000, or both, if the

offense is not otherwise punishable under Subdivision (1) or (2).

contrary, the performer or performers of a live performance are

presumed to own the rights to record or fix those sounds.

(d) For purposes of this section, a person authorized to

maintain custody and control over business records that reflect

whether the owner of a live performance consented to having the live

performance recorded or fixed is a proper witness in a proceeding

regarding the issue of consent. A witness called under this

subsection is subject to the rules of evidence relating to the

competency of a witness to testify and the relevance and

admissibility of the testimony offered. (Bus. & Com. Code, Secs.

35.93(a), (b), (c), (d).)

Sec. 641.053. UNAUTHORIZED OPERATION OF RECORDING DEVICE IN

MOTION PICTURE THEATER. (a) In this section:

(1) "Audiovisual recording function" means the

capability of a device to record or transmit a motion picture or any

part of a motion picture by means of any technology now known or

later developed.

(2) "Motion picture theater" means a movie theater,

screening room, or other place primarily used to exhibit a motion

picture.

(b) A person commits an offense if, without the consent of

the owner of the theater, the person, with the intent to record a

motion picture, knowingly operates the audiovisual recording

function of any device in a motion picture theater while the motion

picture is being exhibited.

except that the offense is:

(1) a state jail felony if the person has been

previously convicted one time of an offense under this section; or

(2) a felony of the third degree if the person has been

previously convicted two or more times of an offense under this

section.

(d) It is a defense to prosecution under this section that

the audiovisual recording function of the device was operated

solely for official law enforcement purposes.

(e) If conduct constituting an offense under this section

also constitutes an offense under another law, the actor may be

prosecuted under this section, the other law, or both.

(f) A person who reasonably believes that another has

knowingly operated the audiovisual recording function of a device

in a motion picture theater in violation of this section is

privileged to detain that other person in a reasonable manner and

for a reasonable time to allow for the arrival of law enforcement

authorities. (Bus. & Com. Code, Sec. 35.935.)

Sec. 641.054. LABELING. (a) A person commits an offense

if:

(1) for commercial advantage or private financial

gain, the person knowingly:

(A) advertises, offers for sale, sells, rents, or

transports a recording;

(B) causes the sale, resale, rental, or

transportation of a recording; or

by Paragraph (A) or (B); and

(2) the outside cover, box, or jacket of the recording

does not clearly and conspicuously disclose:

(A) the actual name and address of the

manufacturer; and

(B) the name of the performer or group.

(b) An offense under this section is punishable by:

(1) imprisonment for a term of not more than five

years, a fine not to exceed $250,000, or both, if:

(A) the offense involves at least 65 unauthorized

recordings during a 180-day period; or

(B) the defendant has been previously convicted

under this section;

(2) imprisonment for a term of not more than two years,

a fine not to exceed $250,000, or both, if the offense involves more

than seven but fewer than 65 unauthorized recordings during a

180-day period; or

(3) confinement in the county jail for a term of not

more than one year, a fine not to exceed $25,000, or both, if the

offense is not otherwise punishable under Subdivision (1) or (2).

(Bus. & Com. Code, Secs. 35.94(a), (b).)

Sec. 641.055. FORFEITURE. If a person is convicted of a

violation of this chapter, the court in its judgment of conviction

shall order the forfeiture and destruction or other disposition of:

(1) all recordings on which the conviction is based;

and

(2) all devices and equipment used or intended to be

used in the manufacture of the recordings on which the conviction is

based. (Bus. & Com. Code, Sec. 35.95.)

Sec. 641.056. PRIVATE RIGHTS AND REMEDIES NOT AFFECTED.

Sections 641.051, 641.052, and 641.054 do not affect the rights and

remedies of a party in private litigation. (Bus. & Com. Code, Secs.

35.92(c), 35.93(e), 35.94(c).)

Sec. 641.057. PENALTIES CUMULATIVE. A penalty provided by

this chapter is in addition to any other penalty provided under

other law. (Bus. & Com. Code, Sec. 35.96.)

TITLE 15. CURRENCY AND TRADE

SUBTITLE A. CURRENCY

CHAPTER 661. EUROPEAN UNION CURRENCY CONVERSION

Sec. 661.001. DEFINITIONS

Sec. 661.002. APPLICABILITY OF CHAPTER

Sec. 661.003. CONFLICTS OF LAW

Sec. 661.004. NO NEGATIVE INFERENCE OR PRESUMPTION

CREATED

Sec. 661.005. CONTINUITY OF CONTRACT

Sec. 661.006. EFFECT ON CERTAIN AGREEMENTS

CHAPTER 661. EUROPEAN UNION CURRENCY CONVERSION

Sec. 661.001. DEFINITIONS. In this chapter:

(1) "Euro" means the currency of the member states of

the European Community, as amended by the Treaty on European Union.

The term is abbreviated as EUR.

(2) "European currency unit" means the currency basket

periodically used as the unit of account of the European Community,

as defined by Regulation No. 3320/94 of the Council of the European

Union and as referred to in Article 109g of the treaty establishing

the European Community, as amended by the Treaty on European Union.

The term is abbreviated as ECU.

(3) "Introduction of the euro" means the periodic

implementation of economic and monetary union in member states of

the European Union in accordance with the Treaty on European Union.

(4) "Treaty on European Union" means the Treaty on

European Union of February 7, 1992. (Bus. & Com. Code, Sec.

42.001.)

Sec. 661.002. APPLICABILITY OF CHAPTER. This chapter

applies to each contract, security, and instrument, including a

commercial contract, governed by the laws of this state. (Bus. &

Com. Code, Sec. 42.002(a).)

Sec. 661.003. CONFLICTS OF LAW. This chapter prevails to

the extent of any conflict between this chapter and any other law of

this state. (Bus. & Com. Code, Sec. 42.003.)

Sec. 661.004. NO NEGATIVE INFERENCE OR PRESUMPTION CREATED.

With respect to currency alteration other than the introduction of

the euro, this chapter does not create any negative inference or

negative presumption regarding the validity or enforceability of a

contract, security, or instrument denominated wholly or partly in a

currency affected by the alteration. (Bus. & Com. Code, Sec.

42.002(b).)

Sec. 661.005. CONTINUITY OF CONTRACT. (a) If a subject or

medium of payment of a contract, security, or instrument is the

European currency unit or a currency that has been substituted or

replaced by the euro, the euro is a commercially reasonable

substitute and substantial equivalent that may be:

(1) used in determining the value of the European

currency unit or currency, as appropriate; or

(2) tendered, in each case, at the conversion rate

specified in, and otherwise computed in accordance with, the

regulations adopted by the Council of the European Union.

(b) A person may perform any obligation described by

Subsection (a) in euros or in the currency or currencies originally

designated in the contract, security, or instrument if that

currency or those currencies remain legal tender, but the person

may not perform the obligation in any other currency, regardless of

whether that other currency:

(1) has been substituted or replaced by the euro; or

(2) is considered a denomination of the euro and has a

fixed conversion rate with respect to the euro.

discharge of, do not excuse performance under, and do not give a

party the right to unilaterally alter or terminate a contract,

security, or instrument:

(1) the introduction of the euro;

(2) the tender of euros in connection with any

obligation described by Subsection (a);

(3) the determination of the value of any obligation

described by Subsection (a); or

(4) the computation or determination of the subject or

medium of payment of a contract, security, or instrument with

reference to an interest rate or any other basis that has been

substituted or replaced because of the introduction of the euro and

that is a commercially reasonable substitute and substantial

equivalent. (Bus. & Com. Code, Sec. 42.004.)

Sec. 661.006. EFFECT ON CERTAIN AGREEMENTS. This chapter

does not alter or impair an agreement between parties that

specifically relates to the introduction of the euro. (Bus. & Com.

Code, Sec. 42.005.)

[Chapters 662-670 reserved for expansion]

SUBTITLE B. PORT OF ENTRY AUTHORITIES

CHAPTER 671. CITY OF LAREDO PORT OF ENTRY AUTHORITY

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 671.001. DEFINITIONS

Sec. 671.002. CREATION OF AUTHORITY

Sec. 671.003. AUTHORITY JURISDICTION

[Sections 671.004-671.050 reserved for expansion]

SUBCHAPTER B. GOVERNING BOARD

Sec. 671.051. COMPOSITION OF BOARD

Sec. 671.052. BOARD TERMS; VACANCY

Sec. 671.053. OFFICERS

Sec. 671.054. REMOVAL

Sec. 671.055. COMPENSATION; REIMBURSEMENT

[Sections 671.056-671.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 671.101. FEES

Sec. 671.102. USE OF MONEY

Sec. 671.103. EFFECT OF AUTHORITY ACTION; CITY

APPROVAL

Sec. 671.104. AD VALOREM TAXES AND BONDS PROHIBITED

Sec. 671.105. DEPOSITORY; ORDER TO DISBURSE

Sec. 671.106. AUDIT

CHAPTER 671. CITY OF LAREDO PORT OF ENTRY AUTHORITY

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 671.001. DEFINITIONS. In this chapter:

(1) "Authority" means the City of Laredo Port of Entry

Authority created under this chapter.

(2) "Board" means the governing board of the

authority.

(3) "City" means the city of Laredo.

(4) "Governing body" means the governing body of the

city. (V.A.C.S. Art. 1015g-6, Sec. 1.)

Sec. 671.002. CREATION OF AUTHORITY. The city by ordinance

may create the City of Laredo Port of Entry Authority for the

purposes provided by this chapter. (V.A.C.S. Art. 1015g-6, Sec.

2(a).)

Sec. 671.003. AUTHORITY JURISDICTION. The authority's

jurisdiction is coextensive with the area within the boundaries and

extraterritorial jurisdiction of the city. (V.A.C.S. Art. 1015g-6,

Sec. 2(b).)

[Sections 671.004-671.050 reserved for expansion]

SUBCHAPTER B. GOVERNING BOARD

Sec. 671.051. COMPOSITION OF BOARD. (a) The authority is

governed by a board of 11 members appointed by the governing body.

(b) Nine members are voting members who must reside in the

authority and two members are nonvoting members who must reside in

Mexico.

(1) one representative of United States customs

brokers;

(2) one representative of freight forwarders;

(3) one representative of the transportation

industry;

(4) one international banker; and

(5) one representative of a maquiladora project.

(V.A.C.S. Art. 1015g-6, Secs. 3(a), (b).)

Sec. 671.052. BOARD TERMS; VACANCY. (a) Board members

serve staggered two-year terms, with the terms of five members

expiring February 1 of each odd-numbered year and the terms of six

members expiring February 1 of each even-numbered year.

(b) A vacancy that occurs more than 60 days before the

expiration date of a term shall be promptly filled for the unexpired

term by the appointment of a member who has the same qualifications

as the member creating the vacancy. (V.A.C.S. Art. 1015g-6, Secs.

3(c), (e).)

Sec. 671.053. OFFICERS. The board shall select from among

the board's voting members a presiding officer, an assistant

presiding officer, a treasurer, and any other officers that the

board considers appropriate. (V.A.C.S. Art. 1015g-6, Sec. 3(d).)

Sec. 671.054. REMOVAL. After a hearing, a board member may

be removed for cause by a two-thirds vote of the membership of the

governing body. (V.A.C.S. Art. 1015g-6, Sec. 3(f).)

Sec. 671.055. COMPENSATION; REIMBURSEMENT. A board member

serves without compensation but is entitled to reimbursement for

necessary expenses incurred in the performance of duties as a

member. (V.A.C.S. Art. 1015g-6, Sec. 4.)

[Sections 671.056-671.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 671.101. FEES. The authority shall establish and

collect rentals, tolls, and other appropriate fees:

(1) from an operator of a commercial vehicle entering

the authority by an international bridge; and

(2) for the use of any other facility designated by the

city. (V.A.C.S. Art. 1015g-6, Sec. 5(a) (part).)

Sec. 671.102. USE OF MONEY. The authority may use the money

collected under this chapter as the board determines appropriate

only for the development and promotion of international trade. The

authority must obtain the approval of the governing body before any

expenditure of money. (V.A.C.S. Art. 1015g-6, Sec. 5(b).)

Sec. 671.103. EFFECT OF AUTHORITY ACTION; CITY APPROVAL.

(a) Not later than the 15th day after the date on which the

authority or the board acts, the city may approve or disapprove the

action.

(b) If the city disapproves an action under Subsection (a),

the action has no effect. If the city does not disapprove the

action, the action becomes effective on the earlier of:

(1) the date on which the city approves the action; or

(2) the 15th day after the date on which the authority

or board acted. (V.A.C.S. Art. 1015g-6, Sec. 5(c).)

Sec. 671.104. AD VALOREM TAXES AND BONDS PROHIBITED. The

authority may not:

(1) impose an ad valorem tax; or

(2) issue bonds. (V.A.C.S. Art. 1015g-6, Sec. 5(a)

(part).)

Sec. 671.105. DEPOSITORY; ORDER TO DISBURSE. (a) The

treasurer of the authority shall deposit money collected by the

authority in a separate account in a bank or trust company.

(b) Money of the authority may be paid out on the warrant or

other order of the presiding officer of the board or another person

designated by the authority. (V.A.C.S. Art. 1015g-6, Sec. 6.)

Sec. 671.106. AUDIT. (a) At least once a year, the

authority shall have a certified public accountant conduct an audit

of the authority's books, accounts, and other records. A copy of

the audit shall be delivered to the city.

(b) If the authority does not have the required audit

conducted, an auditor or accountant designated by the city may

examine, at the expense of the authority, the accounts and books of

the authority, including receipts, disbursements, contracts,

leases, investments, and other matters relating to the authority's

finances, operation, and affairs. (V.A.C.S. Art. 1015g-6, Sec. 7.)

[Chapters 672-680 reserved for expansion]

SUBTITLE C. TRADE ZONES

CHAPTER 681. FOREIGN TRADE ZONES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 681.001. DEFINITION

Sec. 681.002. AUTHORIZATION SUBJECT TO FEDERAL LAW AND

REGULATIONS

[Sections 681.003-681.050 reserved for expansion]

SUBCHAPTER B. GENERAL AUTHORITY FOR ESTABLISHMENT OF FOREIGN TRADE

ZONES BY CERTAIN ENTITIES

Sec. 681.051. DEFINITIONS

Sec. 681.052. GENERAL AUTHORITY FOR ELIGIBLE

CORPORATION OR GOVERNMENTAL ENTITY

[Sections 681.053-681.100 reserved for expansion]

SUBCHAPTER C. GENERAL AUTHORITY FOR ESTABLISHMENT OF FOREIGN TRADE

ZONES BY CERTAIN JOINT BOARDS

Sec. 681.101. DEFINITION

Sec. 681.102. GENERAL AUTHORITY FOR JOINT BOARD

[Sections 681.103-681.150 reserved for expansion]

SUBCHAPTER D. SPECIFIC AUTHORITY FOR CERTAIN FOREIGN TRADE ZONES

Sec. 681.151. AMARILLO TRADE ZONE CORPORATION

Sec. 681.152. CITY OF AUSTIN OR DESIGNEE

Sec. 681.153. CITY OF BEAUMONT; JEFFERSON COUNTY; PORT

OF BEAUMONT NAVIGATION DISTRICT; OR

CERTAIN OTHER CORPORATIONS OR ENTITIES

Sec. 681.154. BRAZOS RIVER HARBOR NAVIGATION DISTRICT

OR DESIGNEE

Sec. 681.155. BROWNSVILLE NAVIGATION DISTRICT

Sec. 681.156. CALHOUN-VICTORIA FOREIGN TRADE ZONE

CORPORATION

Sec. 681.157. CITY OF CORPUS CHRISTI, PORT OF CORPUS

CHRISTI AUTHORITY, OR DESIGNEE

Sec. 681.158. CITY OF DEL RIO OR DESIGNEE

Sec. 681.159. CITY OF EAGLE PASS OR DESIGNEE

Sec. 681.160. CITY OF EL PASO OR EL PASO TRADE ZONE

CORPORATION

Sec. 681.161. CITY OF GALVESTON OR BOARD OF TRUSTEES

OF GALVESTON WHARVES

Sec. 681.162. HARLINGEN TRADE ZONE CORPORATION

Sec. 681.163. CITY OF HOUSTON, HARRIS COUNTY, OR

CERTAIN OTHER CORPORATIONS OR ENTITIES

Sec. 681.164. CITY OF HOUSTON, PORT OF HOUSTON

AUTHORITY, OR HOUSTON FOREIGN-TRADE

ZONE CORPORATION

Sec. 681.165. JEFFERSON COUNTY AIRPORT GOVERNING BODY

Sec. 681.166. CITY OF LAREDO

Sec. 681.167. CITY OF LUBBOCK OR DESIGNEE

Sec. 681.168. MCALLEN TRADE ZONE CORPORATION

Sec. 681.169. CITY OF MIDLAND OR DESIGNEE

Sec. 681.170. MIDLOTHIAN TRADE ZONE CORPORATION

Sec. 681.171. ORANGE COUNTY NAVIGATION AND PORT

DISTRICT

Sec. 681.172. PORT OF PORT ARTHUR NAVIGATION DISTRICT

Sec. 681.173. SAN ANGELO TRADE ZONE CORPORATION

Sec. 681.174. CITY OF SAN ANTONIO OR DESIGNEE

Sec. 681.175. SATURN TRADE ZONE CORPORATION

Sec. 681.176. STARR COUNTY INDUSTRIAL FOUNDATION

Sec. 681.177. CITY OF WESLACO OR WESLACO DEVELOPMENT

CORPORATION

Sec. 681.178. WESTPORT ECONOMIC DEVELOPMENT

CORPORATION

CHAPTER 681. FOREIGN TRADE ZONES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 681.001. DEFINITION. In this chapter, "foreign trade

zone" has the meaning assigned to the term "zone" by the Foreign

Trade Zones Act (19 U.S.C. Section 81a et seq.). (New.)

Sec. 681.002. AUTHORIZATION SUBJECT TO FEDERAL LAW AND

REGULATIONS. An authorization under this chapter is subject to the

requirements of federal law and the regulations of the board

established to carry out the provisions of the Foreign Trade Zones

Act (19 U.S.C. Section 81a et seq.). (V.A.C.S. Arts. 1446.01, Sec.

2 (part); 1446.1 (part); 1446.2 (part); 1446.3 (part); 1446.4, Sec.

2 (part); 1446.5 (part); 1446.6 (part); 1446.7 (part); 1446.8, Sec.

2 (part); 1446.9 (part); 1446.10, Sec. 1 (part); 1446.11 (part);

1446.12 (part); 1446.13 (part); 1446.14 (part); 1446.15, Secs. 1

(part), 2 (part), 3 (part), 4 (part); 1446.16 (part); 1446.17

(part); 1446.18 (part); 1446.19 (part); 1446.20 (part); 1446.21

(part); 1446.22 (part); 1446.23 (part); 1446.24 (part); 1446.25

(part); 1446.26, Sec. 1 (part).)

[Sections 681.003-681.050 reserved for expansion]

SUBCHAPTER B. GENERAL AUTHORITY FOR ESTABLISHMENT OF FOREIGN TRADE

ZONES BY CERTAIN ENTITIES

Sec. 681.051. DEFINITIONS. In this subchapter:

(1) "Eligible corporation" means a corporation

organized to establish, operate, and maintain a foreign trade zone.

(2) "Governmental entity" means:

(A) this state;

(B) a state agency;

(D) a combination of entities listed in

Paragraphs (A)-(C). (V.A.C.S. Art. 1446.01, Sec. 1.)

Sec. 681.052. GENERAL AUTHORITY FOR ELIGIBLE CORPORATION OR

GOVERNMENTAL ENTITY. (a) An eligible corporation or a

governmental entity may:

(1) apply for and accept a grant of authority to

establish, operate, and maintain a foreign trade zone and subzones;

and

(2) take other actions necessary to establish,

operate, and maintain the foreign trade zone and subzones.

(b) An applicant under Subsection (a) may select and

describe the location of the foreign trade zone and subzones.

(V.A.C.S. Art. 1446.01, Secs. 2 (part), 3.)

[Sections 681.053-681.100 reserved for expansion]

SUBCHAPTER C. GENERAL AUTHORITY FOR ESTABLISHMENT OF FOREIGN TRADE

ZONES BY CERTAIN JOINT BOARDS

Sec. 681.101. DEFINITION. In this subchapter, "joint board"

means a joint board created by two or more municipalities with a

combined population of more than one million under:

(1) Chapter 114, Acts of the 50th Legislature, Regular

Session, 1947; or

(2) Section 22.074, Transportation Code. (V.A.C.S.

Art. 1446.8, Sec. 1.)

Sec. 681.102. GENERAL AUTHORITY FOR JOINT BOARD. (a) A

joint board may apply for and accept a permit, license, or other

grant of authority to establish, operate, and maintain:

(1) one or more foreign trade zones, as Texas ports of

entry under federal law, in any county in which the board's airport

is located; and

(2) other subzones or other additions to an existing

zone inside or outside that county.

(b) In operating and maintaining a foreign trade zone or

subzone under this subchapter, a joint board may exercise any power

or authority necessary to establish, operate, and maintain the

foreign trade zone or subzone in accordance with federal law,

rules, and regulations. (V.A.C.S. Art. 1446.8, Secs. 2 (part), 3.)

[Sections 681.103-681.150 reserved for expansion]

SUBCHAPTER D. SPECIFIC AUTHORITY FOR CERTAIN FOREIGN TRADE ZONES

Sec. 681.151. AMARILLO TRADE ZONE CORPORATION. The Amarillo

Trade Zone, Inc., organized under the laws of this state, with

offices at or near Amarillo, Potter, and Randall Counties, may

apply for and accept a grant of authority to establish, operate, and

maintain:

(1) a foreign trade zone in Amarillo, Potter, and

Randall Counties; and

(2) other subzones. (V.A.C.S. Art. 1446.5 (part).)

Sec. 681.152. CITY OF AUSTIN OR DESIGNEE. The City of

Austin, or a nonprofit corporation organized under the laws of this

state and designated by the City of Austin, may apply for and accept

a grant of authority to establish, operate, and maintain:

(1) a foreign trade zone in Travis County; and

(2) other subzones. (V.A.C.S. Art. 1446.25 (part).)

Sec. 681.153. CITY OF BEAUMONT; JEFFERSON COUNTY; PORT OF

BEAUMONT NAVIGATION DISTRICT; OR CERTAIN OTHER CORPORATIONS OR

ENTITIES. (a) This section applies to:

(1) the City of Beaumont;

(2) the Beaumont Chamber of Commerce;

(3) Jefferson County;

(4) the Port of Beaumont Navigation District of

Jefferson County;

(5) the Beaumont Economic Development Foundation, a

nonprofit corporation organized under the Texas Non-Profit

Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil

Statutes), with offices at Beaumont, Jefferson County; or

(6) any other corporation organized under the laws of

this state and designated by the Port of Beaumont Navigation

District of Jefferson County.

(b) A corporation or entity listed in or described by

Subsection (a) may apply for and accept a grant of authority to

establish, operate, and maintain a foreign trade zone and subzones

in Beaumont, Jefferson County, or another location in the portion

of the Port Arthur Customs District located in this state.

(V.A.C.S. Art. 1446.15, Sec. 1 (part).)

Sec. 681.154. BRAZOS RIVER HARBOR NAVIGATION DISTRICT OR

DESIGNEE. The Brazos River Harbor Navigation District of Brazoria

County, or a corporation organized under the laws of this state and

designated by the Brazos River Harbor Navigation District of

Brazoria County, may apply for and accept a grant of authority to

establish, operate, and maintain:

(1) a foreign trade zone adjacent to a port of entry in

the Brazos River Harbor Navigation District of Brazoria County; and

(2) other subzones. (V.A.C.S. Art. 1446.18 (part).)

Sec. 681.155. BROWNSVILLE NAVIGATION DISTRICT. The

Brownsville Navigation District may:

(1) apply for and accept a grant of authority to

establish, operate, and maintain:

(A) a foreign trade zone at the Brownsville port

of entry; and

(B) subzones of that zone; and

(2) on issuance of the grant of authority, take any

action necessary or appropriate to establish, operate, or maintain

the foreign trade zone and subzones. (V.A.C.S. Art. 1446.11

(part).)

Sec. 681.156. CALHOUN-VICTORIA FOREIGN TRADE ZONE

CORPORATION. The Calhoun-Victoria Foreign Trade Zone, Inc., a

corporation organized under the laws of this state, may apply for

and accept a grant of authority to establish, operate, and

maintain:

(1) a foreign trade zone in Calhoun County, Victoria

County, or both; and

(2) other subzones. (V.A.C.S. Art. 1446.21 (part).)

Sec. 681.157. CITY OF CORPUS CHRISTI, PORT OF CORPUS

CHRISTI AUTHORITY, OR DESIGNEE. The City of Corpus Christi, the

Port of Corpus Christi Authority of Nueces County, or any other

approved public agency designated by the City of Corpus Christi or

the Port of Corpus Christi Authority of Nueces County may apply for

and accept a grant of authority to establish, operate, and maintain

a foreign trade zone and subzones. (V.A.C.S. Art. 1446.17 (part).)

Sec. 681.158. CITY OF DEL RIO OR DESIGNEE. The City of Del

Rio, or a nonprofit corporation organized under the laws of this

state and designated by the City of Del Rio, may apply for and

accept a grant of authority to establish, operate, and maintain:

(1) a foreign trade zone in Del Rio, Val Verde County;

and

(2) other subzones. (V.A.C.S. Art. 1446.13 (part).)

Sec. 681.159. CITY OF EAGLE PASS OR DESIGNEE. The City of

Eagle Pass, or a nonprofit corporation organized under the laws of

this state and designated by the City of Eagle Pass, may apply for

and accept a grant of authority to establish, operate, and

maintain:

(1) a foreign trade zone in Eagle Pass, Maverick

County; and

(2) other subzones. (V.A.C.S. Art. 1446.14 (part).)

Sec. 681.160. CITY OF EL PASO OR EL PASO TRADE ZONE

CORPORATION. The City of El Paso or the El Paso Trade Zone, Inc.,

organized under the laws of this state, with offices at or near El

Paso, El Paso County, may apply for and accept a grant of authority

to establish, operate, and maintain:

(1) a foreign trade zone adjacent to any port of entry

in El Paso County; and

(2) other subzones. (V.A.C.S. Art. 1446.9 (part).)

Sec. 681.161. CITY OF GALVESTON OR BOARD OF TRUSTEES OF

GALVESTON WHARVES. The City of Galveston or the Board of Trustees

of the Galveston Wharves may:

(1) apply for and accept a grant of authority to

establish, operate, and maintain:

(A) a foreign trade zone at the Galveston port of

entry; and

(B) any subzones of that zone; and

(2) on issuance of the grant of authority, take any

action necessary or appropriate to establish, operate, and maintain

the foreign trade zone and subzones. (V.A.C.S. Art. 1446.6

(part).)

Sec. 681.162. HARLINGEN TRADE ZONE CORPORATION. The

Harlingen Trade Zone, Inc., organized under the laws of this state,

with offices at or near Harlingen, Cameron County, may apply for and

accept a grant of authority to establish, operate, and maintain:

(1) a foreign trade zone adjacent to any port of entry

in Cameron County; and

(2) other subzones. (V.A.C.S. Art. 1446.3 (part).)

Sec. 681.163. CITY OF HOUSTON, HARRIS COUNTY, OR CERTAIN

OTHER CORPORATIONS OR ENTITIES. (a) This section applies to:

(1) the City of Houston;

(2) Harris County;

(3) a corporation organized under the laws of this

state and designated by the City of Houston or Harris County; or

(4) any municipality or county located within five

miles of a major space and aeronautics center.

(b) To establish, operate, and maintain a space facility to

be named "Star Port," a corporation or entity listed in or described

by Subsection (a) may apply for and accept a grant of authority to

establish, operate, and maintain:

(1) a foreign trade zone adjacent to or near a facility

of the National Aeronautics and Space Administration in Harris

County; and

(2) other subzones.

appropriate inducements for the establishment and operation of the

foreign trade zone, including any appropriate or applicable tax

abatement or tax exemption. (V.A.C.S. Art. 1446.26, Secs. 1

(part), 2.)

Sec. 681.164. CITY OF HOUSTON, PORT OF HOUSTON AUTHORITY,

OR HOUSTON FOREIGN-TRADE ZONE CORPORATION. The City of Houston,

the Port of Houston Authority, and the Houston Foreign-Trade Zone,

Incorporated, a private corporation organized under the laws of

this state, may each:

(1) apply for and accept a grant of authority to

establish, operate, and maintain:

(A) a foreign trade zone at the Houston port of

entry; and

(B) any subzones of that zone; and

(2) if the grant of authority is approved, take any

action necessary to establish, operate, and maintain the foreign

trade zone. (V.A.C.S. Art. 1446.7 (part).)

Sec. 681.165. JEFFERSON COUNTY AIRPORT GOVERNING BODY. The

governing body of the Jefferson County Airport may apply for and

accept a grant of authority to establish, operate, and maintain:

(1) a foreign trade zone in Jefferson County, which

may include:

(A) land inside the boundaries of the airport;

and

(B) private industrial land, not to exceed 1,000

acres, adjacent to the airport; and

(2) other subzones. (V.A.C.S. Art. 1446.15, Sec. 4

(part).)

Sec. 681.166. CITY OF LAREDO. The City of Laredo or an

instrumentality of the City of Laredo may apply for and accept a

grant of authority to establish, operate, and maintain:

(1) a foreign trade zone at the Laredo port of entry;

and

(2) other subzones. (V.A.C.S. Art. 1446.1 (part).)

Sec. 681.167. CITY OF LUBBOCK OR DESIGNEE. The City of

Lubbock, or a corporation organized under the laws of this state and

designated by the City of Lubbock, may apply for and accept a grant

of authority to establish, operate, and maintain:

(1) a foreign trade zone adjacent to the United States

Customs port of entry at Lubbock; and

(2) other subzones. (V.A.C.S. Art. 1446.22 (part).)

Sec. 681.168. MCALLEN TRADE ZONE CORPORATION. The McAllen

Trade Zone, Inc., organized under the laws of this state, with

offices at McAllen, Hidalgo County, may apply for and accept a grant

of authority to establish, operate, and maintain:

(1) a foreign trade zone at the McAllen port of entry;

and

(2) other subzones, one of which may be located in

Starr County. (V.A.C.S. Art. 1446.2 (part).)

Sec. 681.169. CITY OF MIDLAND OR DESIGNEE. The City of

Midland, or a corporation organized under the laws of this state and

designated by the City of Midland, may apply for and accept a grant

of authority to establish, operate, and maintain:

(1) a foreign trade zone adjacent to the Midland

Regional Airport; and

(2) other subzones. (V.A.C.S. Art. 1446.23 (part).)

Sec. 681.170. MIDLOTHIAN TRADE ZONE CORPORATION. The

Midlothian Trade Zone Corporation, organized under the laws of this

state, may apply for and accept a grant of authority to establish,

operate, and maintain:

(1) a foreign trade zone in Midlothian, Ellis County,

adjacent to the port limits of the Dallas-Fort Worth port of entry;

and

(2) other subzones in Ellis County. (V.A.C.S. Art.

1446.16 (part).)

Sec. 681.171. ORANGE COUNTY NAVIGATION AND PORT DISTRICT.

The Orange County Navigation and Port District may apply for and

accept a grant of authority to establish, operate, and maintain:

(1) a foreign trade zone in Orange County; and

(2) other subzones. (V.A.C.S. Art. 1446.15, Sec. 2

(part).)

Sec. 681.172. PORT OF PORT ARTHUR NAVIGATION DISTRICT. The

Port of Port Arthur Navigation District of Jefferson County may

apply for and accept a grant of authority to establish, operate, and

maintain:

(1) a foreign trade zone in Jefferson County; and

(2) other subzones. (V.A.C.S. Art. 1446.15, Sec. 3

(part).)

Sec. 681.173. SAN ANGELO TRADE ZONE CORPORATION. The San

Angelo Trade Zone, Inc., organized under the laws of this state,

with offices at San Angelo, Tom Green County, may apply for and

accept a grant of authority to establish, operate, and maintain:

(1) a foreign trade zone in San Angelo, Tom Green

County;

(2) a foreign trade zone at the San Angelo port of

entry; and

(3) other subzones. (V.A.C.S. Art. 1446.4, Secs. 1, 2

(part).)

Sec. 681.174. CITY OF SAN ANTONIO OR DESIGNEE. (a) The

City of San Antonio, or a nonprofit corporation organized under the

laws of this state and designated by the City of San Antonio, may

apply for and accept a grant of authority to establish, operate, and

maintain:

(1) a foreign trade zone at or adjacent to any port of

entry in Bexar County; and

(2) other subzones.

(b) After a nonprofit corporation has accepted a grant of

authority to establish, operate, and maintain a foreign trade zone

under this section, the City of San Antonio may not exercise any

further control or supervision over the corporation with regard to:

(1) the naming of directors and officers of the

corporation; or

(2) the corporation's internal management or

organization. (V.A.C.S. Art. 1446.10, Secs. 1 (part), 2.)

Sec. 681.175. SATURN TRADE ZONE CORPORATION. The Saturn

Trade Zone Corporation, a corporation organized under the laws of

this state, may apply for and accept a grant of authority to

establish, operate, and maintain:

(1) a foreign trade zone at the location designated by

General Motors Corporation in this state for the Saturn automobile

production facility; and

(2) other subzones. (V.A.C.S. Art. 1446.19 (part).)

Sec. 681.176. STARR COUNTY INDUSTRIAL FOUNDATION. The

Starr County Industrial Foundation, a nonprofit corporation

organized under the Texas Non-Profit Corporation Act (Article

1396-1.01 et seq., Vernon's Texas Civil Statutes), to promote the

economic development of Starr County, with offices at Rio Grande

City, Starr County, may apply for and accept a grant of authority to

establish, operate, and maintain:

(1) a foreign trade zone in Rio Grande City, Starr

County; and

(2) other subzones. (V.A.C.S. Art. 1446.12 (part).)

Sec. 681.177. CITY OF WESLACO OR WESLACO DEVELOPMENT

CORPORATION. The City of Weslaco or the Weslaco Development

Corporation, Incorporated, a corporation organized under the laws

of this state, may apply for and accept a grant of authority to

establish, operate, and maintain:

(1) a foreign trade zone in Weslaco, Hidalgo County;

and

(2) other subzones. (V.A.C.S. Art. 1446.20 (part).)

Sec. 681.178. WESTPORT ECONOMIC DEVELOPMENT CORPORATION.

The Westport Economic Development Corporation, organized as a

nonprofit corporation under the laws of this state, with offices at

El Paso, El Paso County, may apply for and accept a grant of

authority to establish, operate, and maintain:

(1) a foreign trade zone in or adjacent to the United

States Customs port of entry at El Paso, El Paso County; and

(2) other subzones. (V.A.C.S. Art. 1446.24 (part).)

TITLE 99. MISCELLANEOUS COMMERCIAL PROVISIONS

CHAPTER 2001. DESTRUCTION OF DIE, MOLD, OR FORM

Sec. 2001.001. DEFINITIONS

Sec. 2001.002. NOTICE OF INTENT TO DESTROY DIE, MOLD,

OR FORM NOT OWNED BY MOLDER

Sec. 2001.003. DESTRUCTION OF DIE, MOLD, OR FORM NOT

OWNED BY MOLDER

Sec. 2001.004. TITLE EXTINGUISHED ON DESTRUCTION OF

DIE, MOLD, OR FORM

Sec. 2001.005. LIMITATION ON LIABILITY OF MOLDER

Sec. 2001.006. DESTRUCTION OF DIE, MOLD, OR FORM OWNED

BY MOLDER

CHAPTER 2001. DESTRUCTION OF DIE, MOLD, OR FORM

Sec. 2001.001. DEFINITIONS. In this chapter:

(1) "Molder" means an individual, firm, or corporation

that:

(A) makes a die, mold, or form; or

(B) uses a die, mold, or form to make another

product.

(2) "Owner" means an individual, firm, or corporation

that holds title to a die, mold, or form. (Bus. & Com. Code, Sec.

35.41(a).)

Sec. 2001.002. NOTICE OF INTENT TO DESTROY DIE, MOLD, OR

FORM NOT OWNED BY MOLDER. (a) After the third anniversary of the

date a die, mold, or form was last used or, if the die, mold, or form

was never used, after the third anniversary of the date the die,

mold, or form was made, a molder that is in possession of the die,

mold, or form may send notice to the owner that the molder intends

to destroy the die, mold, or form.

(b) The notice must be sent by registered mail, return

receipt requested, to the last known address of the owner. (Bus. &

Com. Code, Sec. 35.41(b).)

Sec. 2001.003. DESTRUCTION OF DIE, MOLD, OR FORM NOT OWNED

BY MOLDER. A molder that sends a notice in accordance with Section

2001.002 may destroy the die, mold, or form if, before the 121st day

after the date the owner receives the notice, the owner does not:

(1) take possession of the die, mold, or form; or

(2) make arrangements with the molder for the removal

or continued storage of the die, mold, or form. (Bus. & Com. Code,

Sec. 35.41(c).)

Sec. 2001.004. TITLE EXTINGUISHED ON DESTRUCTION OF DIE,

MOLD, OR FORM. Title to a die, mold, or form destroyed in

accordance with this chapter is extinguished at the time of the

destruction. (Bus. & Com. Code, Sec. 35.41(d).)

Sec. 2001.005. LIMITATION ON LIABILITY OF MOLDER. A molder

may not be held criminally or civilly liable for destroying a die,

mold, or form if the molder complies with Sections 2001.002 and

2001.003. (Bus. & Com. Code, Sec. 35.41(e).)

Sec. 2001.006. DESTRUCTION OF DIE, MOLD, OR FORM OWNED BY

MOLDER. This chapter does not prohibit a molder that is the owner

of a die, mold, or form from destroying the die, mold, or form at any

time. (Bus. & Com. Code, Sec. 35.41(f).)

CHAPTER 2002. LIQUEFIED PETROLEUM GAS CONTAINERS

Sec. 2002.001. DEFINITIONS

Sec. 2002.002. NOTICE TO PROSPECTIVE PURCHASERS AND USERS

Sec. 2002.003. SUPPLY CONTRACT REQUIREMENT

Sec. 2002.004. FILLING OR REFILLING OF CONTAINER BY NONOWNER

Sec. 2002.005. CRIMINAL PENALTIES

CHAPTER 2002. LIQUEFIED PETROLEUM GAS CONTAINERS

Sec. 2002.001. DEFINITIONS. In this chapter:

(1) "Liquefied petroleum gas" means the hydrocarbon

product extracted from natural gas or crude oil and commonly known

as butane or propane.

(2) "Person" means an individual, association, or

corporation. (V.A.C.S. Art. 8610a, Sec. (a).)

Sec. 2002.002. NOTICE TO PROSPECTIVE PURCHASERS AND USERS.

A person in the business of leasing or selling liquefied petroleum

gas containers shall give to each prospective purchaser or user of a

container a written notice of the purchase or use options provided

by that business, including, as applicable, options to purchase,

lease, or lease-purchase. The notice must include a written

statement that other persons in the business of leasing or selling

liquefied petroleum gas containers may provide purchase or use

options that include purchase, lease, and lease-purchase.

(V.A.C.S. Art. 8610a, Sec. (b).)

Sec. 2002.003. SUPPLY CONTRACT REQUIREMENT. If a person in

the business of leasing or selling liquefied petroleum gas

containers signs a supply contract with another person, a separate

agreement on the face of the supply contract must state that the

supplier gave to the user, before the user signed the supply

contract, the notice required by Section 2002.002. (V.A.C.S. Art.

8610a, Sec. (c).)

Sec. 2002.004. FILLING OR REFILLING OF CONTAINER BY

NONOWNER. A person who is not the owner of a liquefied petroleum

gas container may fill or refill the container if the person who

occupies the premises where the container is located:

(1) requests the service; and

(2) signs a written request stating that:

(A) an emergency exists; and

(B) the owner is unavailable to fill or refill

the container, as applicable. (V.A.C.S. Art. 8610a, Sec. (e).)

Sec. 2002.005. CRIMINAL PENALTIES. (a) A person commits an

offense if the person knowingly violates this chapter.

(b) A person who is not the owner of a liquefied petroleum

gas container commits an offense if the person:

(1) except as provided by Section 2002.004, without

written authorization of the owner of the container sells, fills,

refills, delivers or permits to be delivered, or uses the container

for any purpose;

(2) obtains a written request under Section 2002.004

through misrepresentation; or

(3) defaces, removes, or conceals a name, mark,

initial, or device on the container without the written consent of

the owner of the container.

punishable by a fine of not less than $25 and not more than $200.

(V.A.C.S. Art. 8610a, Secs. (d), (f), (g); Art. 8611 (part).)

SECTION 2.02. CONFORMING AMENDMENT. Section 1.301(c),

Business & Commerce Code, is amended to read as follows:

"qualified transaction," as defined in Section 271.001 [~~35.51 of~~

~~this code~~], then except as provided in Subsection (b) of this

section, Chapter 271 [~~Section 35.51~~] governs the effect of an

agreement by the parties that the law of a particular jurisdiction

governs an issue relating to the transaction or 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.

SECTION 2.03. CONFORMING AMENDMENT. Section 2A.104(a),

Business & Commerce Code, is amended to read as follows:

(a) A lease, although subject to this chapter, is also

subject to any applicable:

(1) certificate of title statute of this state,

including Chapter 501, Transportation Code, Chapter 31, Parks and

Wildlife Code, and Subchapter E, Chapter 1201, Occupations Code;

(2) certificate of title statute of another

jurisdiction (Section 2A.105); or

(3) consumer law of this state, both decisional and

statutory, including, to the extent that they apply to a lease

transaction:

(A) Titles 6, 7, 8, 9, and 14;

(B) Subtitle A, Title 11;

323, 522, 523, 602, 603, 604, and 2001;

(D) Section 65.017, Civil Practice and Remedies

Code;

(E) Chapter 1201, Occupations Code; and

(F) Chapter 25, Transportation Code[~~, Chapters~~

~~17 and 35 of this code and Chapter 1201, Occupations Code~~].

SECTION 2.04. CONFORMING AMENDMENT. Section 7.103(d),

Business & Commerce Code, is amended to read as follows:

(d) To the extent there is a conflict between Chapter 322

[43] and this chapter, this chapter governs.

SECTION 2.05. CONFORMING AMENDMENT. Section 9.311(a),

Business & Commerce Code, is amended to read as follows:

(a) Except as otherwise provided in Subsection (d), the

filing of a financing statement is not necessary or effective to

perfect a security interest in property subject to:

(1) a statute, regulation, or treaty of the United

States whose requirements for a security interest's obtaining

priority over the rights of a lien creditor with respect to the

property preempt Section 9.310(a);

(2) the following statutes of this state: Chapter

501, Transportation Code, relating to the certificates of title

for motor vehicles; Subchapter B-1, Chapter 31, Parks and Wildlife

Code, relating to the certificates of title for vessels and

outboard motors; Chapter 1201, Occupations Code, relating to the

documents of title for manufactured homes; or Chapter 261

[~~Subchapter A, Chapter 35~~], relating to utility security

instruments; or

(3) a certificate of title statute of another

jurisdiction that provides for a security interest to be indicated

on the certificate as a condition or result of the security

interest's obtaining priority over the rights of a lien creditor

with respect to the property.

SECTION 2.06. CONFORMING AMENDMENT. Title 2, Agriculture

Code, is amended by adding Chapter 17 to read as follows:

CHAPTER 17. SALE AND REGULATION OF CERTAIN FUEL MIXTURES

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 17.001. DEFINITIONS. In this chapter:

(1) "Automotive fuel rating" has the meaning assigned

by 15 U.S.C. Section 2821.

(2) "Dealer" means a person who:

(A) is the operator of a service station or other

retail outlet; and

(B) delivers motor fuel into the fuel tanks of

motor vehicles or motor boats.

(3) "Distributor" has the meaning assigned by Section

162.001, Tax Code.

(4) "Jobber" means a person who purchases tax-paid

gasoline for resale or distribution at wholesale.

(5) "Motor fuel" has the meaning assigned by Section

162.001, Tax Code.

(6) "Supplier" has the meaning assigned by Section

162.001, Tax Code.

(7) "Wholesaler" means a person who purchases tax-paid

gasoline for resale or distribution at wholesale. (V.A.C.S. Art.

8614, Secs. 1, 3B (part), 4(a) (part).)

[Sections 17.002-17.050 reserved for expansion]

SUBCHAPTER B. SALE OR DELIVERY OF MOTOR FUEL

Sec. 17.051. NOTICE OF SALE OF ALCOHOL AND FUEL MIXTURE.

(a) A dealer may not sell or offer for sale motor fuel from a motor

fuel pump supplied by a storage tank into which motor fuel, in a

mixture in which at least one percent of the mixture measured by

volume is ethanol or methanol, has been delivered within the 60-day

period preceding the date of sale or offer of sale unless the dealer

prominently displays on the pump from which the mixture is sold a

sign that complies with Subsection (b).

(b) A sign required by Subsection (a) must:

(1) be displayed on each face of the motor fuel pump on

which the price of the motor fuel mixture sold from the pump is

displayed;

(2) state "Contains Ethanol" or "Contains Methanol,"

as applicable;

(3) appear in contrasting colors with block letters at

least one-half inch high and one-fourth inch wide; and

(4) be displayed in a clear, conspicuous, and

prominent manner, visible to customers using either side of the

pump.

which motor fuel containing at least 10 percent ethanol by volume or

at least five percent methanol by volume is delivered in the 60-day

period preceding the date of the sale or offer of sale, the sign

required by Subsection (a) must also state the percentage of

ethanol or methanol by volume, to the nearest whole percent, of the

motor fuel having the highest percentage of ethanol or methanol

delivered into that storage tank during that period.

(d) On request by a motor fuel user, a dealer shall reveal:

(1) the percentage of ethanol contained in motor fuel

being sold;

(2) the percentage of methanol contained in motor fuel

being sold; and

(3) if the motor fuel contains methanol, the types and

percentages of associated cosolvents contained in the motor fuel

being sold.

(e) This section does not prohibit the posting of any other

alcohol or additive information. Other alcohol or additive

information and any relevant posting are subject to regulation by

the commissioner. (V.A.C.S. Art. 8614, Secs. 3, 4(b).)

Sec. 17.052. DOCUMENTATION OF MOTOR FUEL MIXTURE SALES.

(a) Except as provided by Subsection (b), a distributor, supplier,

wholesaler, or jobber of motor fuel may not deliver to an outlet in

this state a motor fuel mixture that contains ethanol or methanol

exceeding one percent by volume of the mixture unless, at the time

of the delivery of the mixture, the person also delivers to the

outlet receiving the delivery:

(1) signs required by Section 17.051 in a number

sufficient for the dealer receiving the mixture to comply with that

section; and

(2) a manifest, bill of sale, bill of lading, or other

document evidencing delivery of the mixture, that:

(A) includes a statement containing:

(i) the percentage of ethanol or methanol

contained in the mixture; and

(ii) the types and percentages of any

associated cosolvents contained in the mixture; and

(B) evidences delivery of the signs required

under Subdivision (1).

(b) Subsection (a) does not apply to a delivery made into

the fuel supply tanks of a motor vehicle.

statement required by Subsection (a). (V.A.C.S. Art. 8614, Secs.

4(a) (part), (c).)

Sec. 17.053. RECORD OF DELIVERY DOCUMENTS; INSPECTION

AUTHORIZED. (a) Each dealer shall keep a copy of each document

required to be delivered to the dealer by Section 17.052 until the

first anniversary of the delivery date. During the first 60 days

following delivery of a fuel mixture subject to this chapter, the

dealer shall keep a copy at the station or retail outlet where the

motor fuel was delivered.

(b) Each distributor, supplier, wholesaler, and jobber of

motor fuel shall keep at the person's principal place of business a

copy of each document required to be delivered to the dealer by

Section 17.052 until the first anniversary of the delivery date.

commissioner may inspect documents described by this section.

(d) The commissioner by rule may prescribe:

(1) the manner of filing documents required to be kept

under this section; and

(2) the time, place, and manner of inspection of the

documents. (V.A.C.S. Art. 8614, Sec. 5.)

Sec. 17.054. DOCUMENTS RELATING TO POSTING OR CERTIFICATION

OF AUTOMOTIVE FUEL RATINGS. (a) Each dealer shall keep for at

least one year a copy of:

(1) each delivery ticket or letter of certification on

which the dealer based a posting of the automotive fuel rating of

motor fuel contained in a motor fuel pump;

(2) each delivery ticket or letter of certification

that is required to be delivered to the dealer under 16 C.F.R. Part

306; and

(3) records of any automotive fuel rating

determination made by the dealer under 16 C.F.R. Part 306.

(b) Each distributor or supplier shall keep for at least one

year at the distributor's or supplier's principal place of business

a copy of each delivery ticket or letter of certification required

to be delivered by the distributor or supplier to a dealer in this

state under 16 C.F.R. Part 306.

commissioner may inspect a document required to be kept under this

section. (V.A.C.S. Art. 8614, Sec. 5A.)

Sec. 17.055. SALE OF MOTOR FUEL WITH INACCURATE AUTOMOTIVE

FUEL RATING. (a) A dealer may not sell or offer for sale from a

motor fuel pump motor fuel that has an automotive fuel rating lower

than the rating for that motor fuel posted on the pump.

(b) A distributor or supplier of motor fuel may not deliver

or transfer to a dealer in this state motor fuel that has an

automotive fuel rating lower than the certification of the rating

the distributor or supplier is required to make to the dealer under

federal law. (V.A.C.S. Art. 8614, Secs. 3A, 3B.)

[Sections 17.056-17.100 reserved for expansion]

SUBCHAPTER C. ADMINISTRATIVE PROVISIONS

Sec. 17.101. COPIES OF DOCUMENTS; DELIVERY TO FEDERAL

GOVERNMENT. (a) The commissioner, an authorized representative of

the commissioner, or the attorney general may copy any manifest,

bill of sale, bill of lading, delivery ticket, letter of

certification, or other document that the commissioner or attorney

general is entitled to inspect under this chapter.

(b) The commissioner, an authorized representative of the

commissioner, or the attorney general may deliver a copy of a

document described by Subsection (a) to the federal government for

the purpose of prosecuting a person for a violation of federal law

relating to the sale or transfer of motor fuel. (V.A.C.S. Art.

8614, Sec. 11.)

Sec. 17.102. TESTING; RULES RELATING TO TESTING FREQUENCY.

To determine compliance with the standards and enforce rules

adopted under Sections 17.051, 17.052, 17.053, 17.055, and 17.103,

the commissioner or an authorized representative of the

commissioner may test any motor fuel sold in this state, regardless

of the existence of a complaint about the fuel. This section does

not prohibit the commissioner from adopting rules relating to the

frequency of testing motor fuels. In adopting the rules, the

commissioner shall consider:

(1) the nature of the violation;

(2) the history of past violations; and

(3) available funds under Section 17.104(d).

(V.A.C.S. Art. 8614, Sec. 2.)

Sec. 17.103. AUTHORITY OF COMMISSIONER TO LIMIT

APPLICABILITY OF LAW. If the commissioner determines that certain

types of motor fuel, such as diesel or liquefied petroleum gas, are

not sold in this state as mixtures with alcohol in sufficient

quantities to warrant regulation of deliveries of those types of

motor fuel under this chapter, the commissioner may limit the

application of Sections 17.051 and 17.052 to motor fuels sold in

sufficient quantity to warrant regulation. (V.A.C.S. Art. 8614,

Sec. 4(d).)

Sec. 17.104. RULES; FEES. (a) The commissioner may adopt

rules consistent with this chapter for the regulation of the sale of

motor fuels containing ethanol and methanol.

(b) The commissioner by rule may impose a fee for testing,

inspection, or the performance of other services provided as

determined necessary by the commissioner in the administration of

this chapter. A fee imposed under this subsection shall be

collected from each dealer on a periodic basis determined by the

commissioner without regard to whether the motor fuel is subject to

regulation under this chapter.

reporting and remitting the fees imposed under this section.

(d) Fees collected under this section may be used only to

administer and enforce this chapter. (V.A.C.S. Art. 8614, Secs.

9(a), (b), (e).)

[Sections 17.105-17.150 reserved for expansion]

SUBCHAPTER D. ENFORCEMENT

Sec. 17.151. CONTRACT FOR ENFORCEMENT. The commissioner

may contract for the enforcement of this chapter after due notice.

(V.A.C.S. Art. 8614, Sec. 10.)

Sec. 17.152. CIVIL ACTION. (a) If a dealer or a

distributor, supplier, wholesaler, or jobber of motor fuel violates

Section 17.051, 17.052, 17.053, 17.054, or 17.055, a motor fuel

user who purchased the motor fuel and sustained damages or who has a

complaint about the product may bring an action against the dealer,

distributor, supplier, wholesaler, or jobber.

(b) The action may be brought, without regard to the

specific amount of damages, in the district court in any county in

which:

(1) the dealer, distributor, supplier, wholesaler, or

jobber transacts business; or

(2) the dealer resides.

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 violation, 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.

(d) In addition to the remedies provided under Subsection

(c), on finding that the defendant wilfully or knowingly violated

Section 17.051, 17.052, or 17.053, the trier of fact shall award not

more than three times the amount of actual damages.

(e) A violation of Section 17.051, 17.052, 17.053, 17.054,

or 17.055 also constitutes a deceptive trade practice under

Subchapter E, Chapter 17, Business & Commerce Code.

(f) An action alleging a violation of Section 17.051,

17.052, 17.053, 17.054, or 17.055 must be commenced and prosecuted

not later than the second anniversary of the date on which the cause

of action accrues. (V.A.C.S. Art. 8614, Sec. 6.)

Sec. 17.153. CIVIL PENALTY. A dealer, distributor,

supplier, wholesaler, or jobber who violates Section 17.051,

17.052, 17.053, 17.054, or 17.055 is liable to this state for a

civil penalty of not less than $200 and not more than $10,000.

(V.A.C.S. Art. 8614, Sec. 7.)

Sec. 17.154. CRIMINAL OFFENSES. (a) A person commits an

offense if the person knowingly violates Section 17.051, 17.052,

17.053, 17.054, or 17.055 or a rule adopted by the commissioner to

enforce or implement those sections.

(b) A person commits an offense if the person knowingly:

(1) refuses to permit a person authorized by Section

17.102 to test any motor fuel sold or held for sale in this state;

(2) refuses to permit inspection of any document

required to be kept or delivered by this chapter on request of a

person authorized to inspect the documents under Section 17.053 or

17.054; or

(3) mutilates, destroys, secretes, forges, or

falsifies any document, record, report, or sign required to be

delivered, kept, filed, or posted by this chapter or any rule

adopted by the commissioner to enforce this chapter.

misdemeanor.

(d) An offense under Subsection (b) is a Class B

misdemeanor.

(e) The commissioner or the authorized representative of

the commissioner may request the appropriate prosecuting attorney

to prosecute a violation of this chapter. (V.A.C.S. Art. 8614, Sec.

8.)

Sec. 17.155. ADMINISTRATIVE PENALTY. (a) The commissioner

may impose an administrative penalty against a person regulated

under this chapter who violates this chapter or a rule or order

adopted under this chapter. Except as otherwise provided by this

section, an administrative penalty is imposed and collected in the

manner provided by Section 12.020.

(b) The penalty for a violation of this chapter or a rule or

order adopted under this chapter may not exceed $500 a day for each

violation. Each day a violation continues or occurs may be

considered a separate violation for purposes of imposing a penalty.

(1) the seriousness of the violation, including the

nature, circumstances, extent, and gravity of any prohibited acts,

and the hazard or potential hazard created to the health, safety, or

economic welfare of the public;

(2) the economic harm to property or the environment

caused by the violation;

(3) the history of previous violations;

(4) the amount necessary to deter future violations;

(5) efforts to correct the violation; and

(6) any other matter that justice may require.

(d) An employee of the department designated by the

commissioner to act under this section who determines that a

violation has occurred may issue to the commissioner a report

stating the facts on which the determination is based and the

designated employee's recommendation on the imposition of a

penalty, including a recommendation on the amount of the penalty.

(e) Not later than the 14th day after the date the report is

issued, the designated employee shall give written notice of the

report to the person charged with the violation. The notice may be

given by certified mail. The notice must:

(1) include a brief summary of the alleged violation;

(2) include a statement of the amount of the

recommended penalty; and

(3) inform the person charged that the person has a

right to a hearing on the occurrence of the violation, the amount of

the penalty, or both the occurrence of the violation and the amount

of the penalty.

(f) Not later than the 20th day after the date the person

charged receives the notice, the person:

(1) in writing may accept the determination and

recommended penalty of the designated employee; or

(2) may make a written request for a hearing on the

occurrence of the violation, the amount of the penalty, or both the

occurrence of the violation and the amount of the penalty.

(g) If the person charged with the violation accepts the

determination and recommended penalty of the designated employee,

the commissioner by order shall approve the determination and

impose the recommended penalty.

(h) If the person charged requests a hearing or fails to

respond timely to the notice, the designated employee shall set a

hearing and give notice of the hearing to the person. The hearing

shall be held by an administrative law judge of the State Office of

Administrative Hearings. The administrative law judge shall make

findings of fact and conclusions of law and promptly issue to the

commissioner a proposal for a decision as to the occurrence of the

violation and the amount of a proposed penalty. Based on the

findings of fact, conclusions of law, and proposal for a decision,

the commissioner by order may find a violation has occurred and

impose a penalty or may find that no violation has occurred.

(i) The notice of the commissioner's order under Chapter

2001, Government Code, given to the person charged with the

violation must include a statement of the right of the person to

judicial review of the order. (V.A.C.S. Art. 8614, Secs. 7A(a),

(b), (c), (d), (e), (f), (g), (h), (i).)

SECTION 2.07. CONFORMING AMENDMENT. Section 1.002(4),

Business Organizations Code, is amended to read as follows:

(4) "Assumed name" means a name adopted for use by a

person. The term includes an assumed name filed under Chapter 71

[36], Business & Commerce Code.

SECTION 2.08. CONFORMING AMENDMENT. Section 5.001(a),

Business Organizations Code, is amended to read as follows:

(a) The filing of a certificate of formation by a filing

entity under this code, an application for registration by a

foreign filing entity under this code, or an application for

reservation or registration of a name under this chapter does not

authorize the use of a name in this state in violation of a right of

another under:

(1) the Trademark Act of 1946, as amended (15 U.S.C.

Section 1051 et seq.);

(2) Chapter 16 or 71 [36], Business & Commerce Code; or

(3) common law.

SECTION 2.09. CONFORMING AMENDMENT. Section 5.051,

Business Organizations Code, is amended to read as follows:

Sec. 5.051. ASSUMED NAME. A domestic entity or a foreign

entity having authority to transact business in this state may

transact business under an assumed name by filing an assumed name

certificate in accordance with Chapter 71 [36], Business & Commerce

Code. The requirements of this subchapter do not apply to an

assumed name set forth in an assumed name certificate filed under

that chapter.

SECTION 2.10. CONFORMING AMENDMENT. Section 15.020(d),

Civil Practice and Remedies Code, is amended to read as follows:

(d) This section does not apply to an action if:

(1) the agreement described by this section was

unconscionable at the time that it was made;

(2) the agreement regarding venue is voidable under

Chapter 272 [~~Section 35.52~~], Business & Commerce Code; or

(3) venue is established under a statute of this state

other than this title.

SECTION 2.11. CONFORMING AMENDMENT. Subtitle C, Title 2,

Civil Practice and Remedies Code, is amended by adding Chapter 43 to

read as follows:

CHAPTER 43. PRINCIPAL AND SURETY

Sec. 43.001. DEFINITION. In this chapter, "surety"

includes:

(1) an endorser, a guarantor, and a drawer of a draft

that has been accepted; and

(2) every other form of suretyship, whether created by

express contract or by operation of law. (Bus. & Com. Code, Sec.

34.01.)

Sec. 43.002. SUIT ON ACCRUED RIGHT OF ACTION. (a) When a

right of action accrues on a contract for the payment of money or

performance of an act, a surety on the contract may, by written

notice, require the obligee to without delay bring a suit on the

contract.

(b) A surety who provides notice to an obligee under

Subsection (a) is discharged from all liability on the contract if

the obligee:

(1) is not under a legal disability; and

(2) does not:

(A) bring a suit on the contract during:

(i) the first term of court after receipt of

the notice; or

(ii) the second term of court if good cause

is shown for the delay; or

(B) prosecute the suit to judgment and execution.

(Bus. & Com. Code, Sec. 34.02.)

Sec. 43.003. PRIORITY OF EXECUTION. (a) If a judgment

granted against two or more defendants finds a suretyship

relationship between or among the defendants, the court shall order

the sheriff to levy the execution in the following order:

(1) against the principal's property located in the

county where the judgment was granted;

(2) if the sheriff cannot find enough of the

principal's property in that county to satisfy the execution,

against as much of the principal's property as the sheriff finds;

and

(3) against as much of the surety's property as is

necessary to make up the balance of the amount shown in the writ of

execution.

(b) The clerk shall note the order to the sheriff on the writ

of execution. (Bus. & Com. Code, Sec. 34.03.)

Sec. 43.004. SUBROGATION RIGHTS OF SURETY. (a) A judgment

is not discharged by a surety's payment of the judgment in whole or

part if the payment:

(1) is compelled; or

(2) if made voluntarily, is applied to the judgment

because of the suretyship relationship.

(b) A surety who pays on a judgment as described by

Subsection (a) is subrogated to all of the judgment creditor's

rights under the judgment. A subrogated surety is entitled to

execution on the judgment against:

(1) the principal's property for the amount of the

surety's payment, plus interest and costs; and

(2) if there is more than one surety, both the

principal's property and the property of the cosurety or cosureties

for the amount by which the surety's payment exceeds the surety's

proportionate share of the judgment, plus interest and costs.

under Subsection (b) shall apply for execution to the clerk or

court. The execution shall be levied, collected, and returned as in

other cases. (Bus. & Com. Code, Sec. 34.04.)

Sec. 43.005. OFFICER TREATED AS SURETY. (a) An officer has

the rights of a surety provided by Section 43.004 if the officer is

compelled to pay a judgment in whole or part because of the

officer's default.

(b) An officer does not have the rights of a surety provided

by Section 43.004 if the officer:

(1) does not pay over money collected; or

(2) wastes property that is levied on by the officer or

is in the officer's possession. (Bus. & Com. Code, Sec. 34.05.)

SECTION 2.12. CONFORMING AMENDMENT. Subchapter B, Chapter

65, Civil Practice and Remedies Code, is amended by adding Section

65.017 to read as follows:

Sec. 65.017. CIGARETTE SELLER, DISTRIBUTOR, OR

MANUFACTURER. In addition to any other remedy provided by law, a

person may bring an action in good faith for appropriate injunctive

relief if the person sells, distributes, or manufactures cigarettes

and sustains a direct economic or commercial injury as a result of a

violation of:

(1) Section 48.015, Penal Code; or

(2) Section 154.0415, Tax Code. (Bus. & Com. Code,

Sec. 35.49.)

SECTION 2.13. CONFORMING AMENDMENT. Article 18.18(g), Code

of Criminal Procedure, is amended to read as follows:

(g) For purposes of this article:

(1) "criminal instrument" has the meaning defined in

the Penal Code;

(2) "gambling device or equipment, altered gambling

equipment or gambling paraphernalia" has the meaning defined in the

Penal Code;

(3) "prohibited weapon" has the meaning defined in the

Penal Code;

(4) "dog-fighting equipment" means:

(A) equipment used for training or handling a

fighting dog, including a harness, treadmill, cage, decoy, pen,

house for keeping a fighting dog, feeding apparatus, or training

pen;

(B) equipment used for transporting a fighting

dog, including any automobile, or other vehicle, and its

appurtenances which are intended to be used as a vehicle for

transporting a fighting dog;

exhibition of dog fighting, including a printing press or similar

equipment, paper, ink, or photography equipment; or

(D) a dog trained, being trained, or intended to

be used to fight with another dog;

(5) "obscene device" and "obscene" have the meanings

assigned by Section 43.21, Penal Code;

(6) "re-encoder" has the meaning assigned by Section

522.001 [~~35.60~~], Business & Commerce Code;

(7) "scanning device" has the meaning assigned by

Section 522.001 [~~35.60~~], Business & Commerce Code; and

(8) "obscene material" and "child pornography"

include digital images and the media and equipment on which those

images are stored.

SECTION 2.14. CONFORMING AMENDMENT. Article 59.01(2), Code

of Criminal Procedure, is amended to read as follows:

(2) "Contraband" means property of any nature,

including real, personal, tangible, or intangible, that is:

(A) used in the commission of:

(i) any first or second degree felony under

the Penal Code;

(ii) any felony under Section 15.031(b),

20.05, 21.11, 38.04, Subchapter B of Chapter 43, or Chapter 29, 30,

31, 32, 33, 33A, or 35, Penal Code;

(iii) any felony under The Securities Act

(Article 581-1 et seq., Vernon's Texas Civil Statutes); or

(iv) any offense under Chapter 49, Penal

Code, that is punishable as a felony of the third degree or state

jail felony, if the defendant has been previously convicted three

times of an offense under that chapter;

(B) used or intended to be used in the commission

of:

(i) any felony under Chapter 481, Health

and Safety Code (Texas Controlled Substances Act);

(ii) any felony under Chapter 483, Health

and Safety Code;

(iii) a felony under Chapter 153, Finance

Code;

(iv) any felony under Chapter 34, Penal

Code;

(v) a Class A misdemeanor under Subchapter

B, Chapter 365, Health and Safety Code, if the defendant has been

previously convicted twice of an offense under that subchapter;

(vi) any felony under Chapter 152, Finance

Code;

(vii) any felony under Chapter 31, 32, or

37, Penal Code, that involves the state Medicaid program, or any

felony under Chapter 36, Human Resources Code; or

(viii) a Class B misdemeanor under Chapter

522 [~~Section 35.60~~], Business & Commerce Code;

felony listed in Paragraph (A) or (B) of this subdivision, a

misdemeanor listed in Paragraph (B)(viii) of this subdivision, or a

crime of violence;

(D) acquired with proceeds gained from the

commission of a felony listed in Paragraph (A) or (B) of this

subdivision, a misdemeanor listed in Paragraph (B)(viii) of this

subdivision, or a crime of violence; or

(E) used to facilitate or intended to be used to

facilitate the commission of a felony under Section 15.031 or

43.25, Penal Code.

SECTION 2.15. CONFORMING AMENDMENT. Section 14.107(a),

Finance Code, is amended to read as follows:

(a) The finance commission shall establish reasonable and

necessary fees for carrying out the commissioner's powers and

duties under this chapter, Title 4, and Chapters 371, 392, and 394

and under Chapters 51, 302, 601, and 621 [~~38-41~~], Business &

Commerce Code.

SECTION 2.16. CONFORMING AMENDMENT. Section 303.301,

Finance Code, is amended to read as follows:

Sec. 303.301. AGREEMENT TO WHICH CHAPTER DOES NOT APPLY.

The rate ceilings provided by this chapter do not apply to an

agreement:

(1) under which credit is extended by the seller, or an

owner, subsidiary, or corporate affiliate of the seller, for a

transaction governed by Chapter 601 [39], Business & Commerce Code;

and

(2) that is secured by a lien on the obligor's

homestead.

SECTION 2.17. CONFORMING AMENDMENT. Section 345.001(6),

Finance Code, is amended to read as follows:

(6) "Retail installment contract" means one or more

instruments entered into in this state that evidence a secured or

unsecured retail installment transaction. The term includes a

chattel mortgage, security agreement, and conditional sale

contract and a document that evidences a bailment or lease

described by Section 345.068, but does not include:

(A) an instrument that is a retail charge

agreement;

(B) an instrument reflecting a sale under a

retail charge agreement; or

with Chapter 92 [~~Subchapter F, Chapter 35~~], Business & Commerce

Code.

SECTION 2.18. CONFORMING AMENDMENT. Section 345.158,

Finance Code, is amended to read as follows:

Sec. 345.158. RETAIL CHARGE AGREEMENT TO WHICH SUBCHAPTER

DOES NOT APPLY. This subchapter does not apply to a retail charge

agreement that:

(1) is a home solicitation transaction that is subject

to Chapter 601 [39], Business & Commerce Code;

(2) is secured by a lien on the obligor's homestead;

and

(3) provides for credit that is extended by the retail

seller or the seller's owner, subsidiary, or corporate affiliate.

SECTION 2.19. CONFORMING AMENDMENT. Section 371.301,

Finance Code, is amended to read as follows:

Sec. 371.301. COMMISSIONER'S ENFORCEMENT POWERS. For

purposes of enforcing this chapter, the commissioner:

(1) has the powers granted to the commissioner under

Chapter 14;

(2) may exercise those powers in the same manner as

those powers may be exercised under:

(A) Chapters 14, 392, and 394;

(B) Subtitle B, Title 4; and

Business & Commerce Code; and

(3) has any authority granted the commissioner by

other law.

SECTION 2.20. CONFORMING AMENDMENT. Section 552.141,

Government Code, as added by Chapter 401, Acts of the 78th

Legislature, Regular Session, 2003, is amended to read as follows:

Sec. 552.141. EXCEPTION: TEXAS NO-CALL LIST. The Texas

no-call list created under Subchapter B [C], Chapter 304 [44],

Business & Commerce Code, and any information provided to or

received from the administrator of the national do-not-call

registry maintained by the United States government, as provided by

Sections 304.051 and 304.056 [~~Section 44.101~~], Business & Commerce

Code, are [is] excepted from the requirements of Section 552.021.

SECTION 2.21. CONFORMING AMENDMENT. Section 982.304,

Insurance Code, is amended to read as follows:

Sec. 982.304. SAME OR DECEPTIVELY SIMILAR NAME. A foreign

or alien insurance company may not be denied permission to engage in

the business of insurance in this state because the name of the

company is the same as or deceptively similar to the name of a

domestic corporation existing under the laws of this state or of

another foreign or alien insurance company authorized to engage in

the business of insurance in this state if the company desiring to

engage in the business of insurance in this state:

(1) files with the department and with any county

clerk as provided by Subchapter B or C, Chapter 71 [~~Section 36.10 or~~

~~36.11~~], Business & Commerce Code, an assumed name certificate

stating a name permitted under the laws of this state; and

(2) does not engage in any business in this state

except under the assumed name.

SECTION 2.22. CONFORMING AMENDMENT. Section 2701.002,

Insurance Code, is amended to read as follows:

Sec. 2701.002. CONSTRUCTION OF CHAPTER 601 [39], BUSINESS &

COMMERCE CODE. Chapter 601 [39], Business & Commerce Code, is a

consumer protection law when construed in connection with a title

insurance policy issued in this state.

SECTION 2.23. CONFORMING AMENDMENT. Section 191.009(c),

Local Government Code, is amended to read as follows:

(1) an instrument is an electronic record, as defined

by Section 322.002 [~~43.002~~], Business & Commerce Code; and

(2) "electronic document" has the meaning assigned by

Section 15.002, Property Code.

SECTION 2.24. CONFORMING AMENDMENT. Section 195.002(e),

Local Government Code, is amended to read as follows:

(e) Notwithstanding Sections 322.017 and 322.018 [~~43.017~~

~~and 43.018~~], Business & Commerce Code, a county clerk may accept any

filed electronic record, as defined by Section 322.002 [~~43.002~~],

Business & Commerce Code, or electronic document and may

electronically record that electronic document or record if the

filing and recording of that electronic document or record complies

with rules adopted by the commission under this section.

SECTION 2.25. CONFORMING AMENDMENT. Section 212.158, Local

Government Code, is amended to read as follows:

Sec. 212.158. EFFECT ON OTHER LAW. This subchapter does not

prohibit the exhibition, play, or necessary incidental action

thereto of a sweepstakes not prohibited by Chapter 622 [43],

Business & Commerce Code[~~, as added by Chapter 1119, Acts of the~~

~~77th Legislature, Regular Session, 2001~~].

SECTION 2.26. CONFORMING AMENDMENT. Article 8611, Revised

Statutes, is amended to read as follows:

Art. 8611. PUNISHMENT. Any person who shall knowingly

violate any of the provisions of Articles 8601 through and

inclusive of Article 8610 [~~8610a~~], Revised Statutes, shall be

guilty of a misdemeanor, and upon conviction shall be fined in a sum

not less than Twenty-five Dollars ($25) nor more than Two Hundred

Dollars ($200).

SECTION 2.27. CONFORMING AMENDMENT. Section 1101.0055,

Occupations Code, is amended to read as follows:

Sec. 1101.0055. NONAPPLICABILITY OF LAW GOVERNING

CANCELLATION OF CERTAIN TRANSACTIONS. A service contract that a

license holder enters into for services governed by this chapter is

not a good or service governed by Chapter 601 [39], Business &

Commerce Code.

SECTION 2.28. CONFORMING AMENDMENT. Section 1303.0035,

Occupations Code, is amended to read as follows:

Sec. 1303.0035. NONAPPLICABILITY OF LAW GOVERNING

CANCELLATION OF CERTAIN TRANSACTIONS. The sale of a residential

service contract governed by this chapter is not a good or service

governed by Chapter 601 [39], Business & Commerce Code.

SECTION 2.29. CONFORMING AMENDMENT. Section 1951.254(f),

Occupations Code, is amended to read as follows:

(f) The information sheet must include:

(1) the names and telephone numbers of the board, the

Department of Agriculture, and the [~~Texas~~] Department of State

Health Services;

(2) the telephone number of any pesticide hotline

established by a state or federal agency or by a state university;

(3) a statement of a consumer's rights under Chapter

601 [39], Business & Commerce Code, to cancel a home solicitation

transaction; and

(4) information concerning the availability of any

pretreatment inspection service that may be provided by the board

under Section 1951.210.

SECTION 2.30. CONFORMING AMENDMENT. Section 2102.002,

Occupations Code, is amended to read as follows:

Sec. 2102.002. APPLICATION OF CHAPTER. This chapter does

not apply to:

(1) a contract:

(A) between a performing rights society and a

broadcaster licensed by the Federal Communications Commission; or

(B) with a cable operator, programmer, or other

transmission service;

(2) conduct engaged in for the enforcement of Section

641.054 and, to the extent applicable, Section 641.056 [~~35.94~~],

Business & Commerce Code; or

(3) the owner of a copyright of a motion picture or an

audiovisual work.

SECTION 2.31. CONFORMING AMENDMENT. Chapter 2301,

Occupations Code, is amended by adding Subchapter R to read as

follows:

SUBCHAPTER R. REGULATION OF CERTAIN COMMERCIAL USES OF MOTOR

VEHICLES

Sec. 2301.851. CERTAIN CHARGES INCLUDED IN CUSTOMER

AGREEMENT. (a) A person required to register under Section

152.065, Tax Code, may include in a customer agreement subject to

Subsection (b) a separate charge for the proportionate amount of

title fees, registration fees, and property taxes paid in the

preceding calendar year on the person's vehicle fleet.

(b) A person who includes the charge must do so:

(1) on a nondiscriminatory basis; and

(2) in each agreement other than an agreement that is

exempt from the tax imposed under Section 152.026, Tax Code.

(V.A.C.S. Art. 9026a, Secs. (a), (b).)

Sec. 2301.852. USE OR RETENTION OF SALVAGE MOTOR VEHICLE.

(a) Notwithstanding Section 2301.002, in this section,

"certificate of title," "motor vehicle," and "owner" have the

meanings assigned by Section 501.002, Transportation Code.

(b) An owner required to register under Section 152.065, Tax

Code, may not use or retain for use for a usual commercial purpose

of the owner a motor vehicle that has been issued a certificate of

title under Section 501.100, Transportation Code. (V.A.C.S. Art.

9026b, Secs. (a), (c).)

Sec. 2301.853. CRIMINAL PENALTY. (a) A person commits an

offense if the person violates this subchapter.

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

(V.A.C.S. Art. 9026a, Sec. (c); Art. 9026b, Sec. (b).)

SECTION 2.32. CONFORMING AMENDMENT. Section 11.001(a),

Property Code, is amended to read as follows:

(a) To be effectively recorded, an instrument relating to

real property must be eligible for recording and must be recorded in

the county in which a part of the property is located. However, if

such an instrument grants a security interest by a utility as

defined in Section 261.001 [~~35.01~~], Business & Commerce Code, the

instrument may be recorded as required by Sections 261.004 and

261.006 [~~Section 35.02~~] of that code, and if such instrument is so

recorded, the lien and the secured interest created by such

instrument shall be deemed perfected for all purposes.

SECTION 2.33. CONFORMING AMENDMENT. Sections 72.1016(a)

and (d), Property Code, are amended to read as follows:

(a) This section applies to a stored value card, as defined

by Section 604.001 [~~35.42(a)~~], Business & Commerce Code, other than

a card:

(1) to which Chapter 604 [~~Section 35.42~~], Business &

Commerce Code, does not apply by operation of Sections

604.002(1)(A) and (C) and 604.002(2)-(5) of that code [~~Subsection~~

~~(b) of that section~~]; or

(2) that is linked to and draws its value solely from a

deposit account subject to Chapter 73.

(d) A person may charge a fee against a stored value card as

provided by Chapter 604 [~~Section 35.42~~], Business & Commerce Code.

A fee may not be charged against a stored value card after the card

is presumed abandoned under this section.

SECTION 2.34. CONFORMING AMENDMENT. Section 221.024(a),

Property Code, is amended to read as follows:

(a) The commission may prescribe and publish forms and adopt

rules necessary to carry out the provisions of this chapter and may

suspend or revoke the registration of any developer, place on

probation the registration of a developer that has been suspended

or revoked, reprimand a developer, impose an administrative penalty

of not more than $10,000, or take any other disciplinary action

authorized by this chapter if, after notice and hearing, the

commission determines that a developer has materially violated this

chapter, the Deceptive Trade Practices-Consumer Protection Act

(Subchapter E, Chapter 17, Business & Commerce Code), or the

Contest and Gift Giveaway Act (Chapter 621 [40], Business &

Commerce Code).

SECTION 2.35. CONFORMING AMENDMENT. Sections 221.031(a)

through (d), Property Code, are amended to read as follows:

(a) At any time, the commission may request a developer to

file for review by the commission any advertisement used in this

state by the developer in connection with offering a timeshare

interest. The developer shall provide the advertisement not later

than the 15th day after the date the commission makes the request.

If the commission determines that the advertisement violates this

chapter or Chapter 621 [40], Business & Commerce Code, the

commission shall notify the developer in writing, stating the

specific grounds for the commission's determination not later than

the 15th day after the date the commission makes its determination.

The commission may grant the developer provisional approval for the

advertisement if the developer agrees to correct the deficiencies

identified by the commission. A developer, on its own initiative,

may submit any proposed advertisement to the commission for review

and approval by the commission.

(b) Any advertisement that contains a promotion in

connection with the offering of a timeshare interest must comply

with Chapter 621 [40], Business & Commerce Code.

that contains a promotion in connection with the offering of a

timeshare interest must include, in addition to any disclosures

required under Chapter 621 [40], Business & Commerce Code, the

following:

(1) a statement to the effect that the promotion is

intended to solicit purchasers of timeshare interests;

(2) if applicable, a statement to the effect that any

person whose name is obtained during the promotion may be solicited

to purchase a timeshare interest;

(3) the full name of the developer of the timeshare

property; and

(4) if applicable, the full name and address of any

marketing company involved in the promotion of the timeshare

property, excluding the developer or an affiliate or subsidiary of

the developer.

(d) An advertisement containing the disclosures required by

Chapter 621 [40], Business & Commerce Code, and Subsection (c) must

be provided in writing or electronically:

(1) at least once before a scheduled sales

presentation; and

(2) in a reasonable period before the scheduled sales

presentation to ensure that the recipient receives the disclosures

before leaving to attend the sales presentation.

SECTION 2.36. CONFORMING AMENDMENT. Section 25.07(b), Tax

Code, is amended to read as follows:

(b) Except as provided by Subsections (b) and (c) of Section

11.11 of this code, a leasehold or other possessory interest in

exempt property may not be listed if:

(1) the property is permanent university fund land;

(2) the property is county public school fund

agricultural land;

(3) the property is a part of a public transportation

facility owned by an incorporated city or town and:

(A) is an airport passenger terminal building or

a building used primarily for maintenance of aircraft or other

aircraft services, for aircraft equipment storage, or for air

cargo;

(B) is an airport fueling system facility;

(i) that has been granted to a joint airport

board under Subchapter C, Chapter 681, Business & Commerce Code

[~~Chapter 129, Acts of the 65th Legislature, Regular Session, 1977~~

~~(Article 1446.8, Vernon's Texas Civil Statutes)~~];

(ii) the area of which in the portion of the

zone located in the airport operated by the joint airport board does

not exceed 2,500 acres; and

(iii) that is established and operating

pursuant to federal law; or

(D)(i) is in a foreign trade zone established

pursuant to federal law after June 1, 1991, which operates pursuant

to federal law;

(ii) is contiguous to or has access via a

taxiway to an airport located in two counties, one of which has a

population of 500,000 or more according to the federal decennial

census most recently preceding the establishment of the foreign

trade zone; and

(iii) is owned, directly or through a

corporation organized under the Development Corporation Act of 1979

(Article 5190.6, Vernon's Texas Civil Statutes), by the same

incorporated city or town which owns the airport;

(4) the interest is in a part of:

(A) a park, market, fairground, or similar public

facility that is owned by an incorporated city or town; or

(B) a convention center, visitor center, sports

facility with permanent seating, concert hall, arena, or stadium

that is owned by an incorporated city or town as such leasehold or

possessory interest serves a governmental, municipal, or public

purpose or function when the facility is open to the public,

regardless of whether a fee is charged for admission;

(5) the interest involves only the right to use the

property for grazing or other agricultural purposes;

(6) the property is owned by the Texas National

Research Laboratory Commission or by a corporation formed by the

Texas National Research Laboratory Commission under Section

465.008(g), Government Code, and is used or is useful in connection

with an eligible undertaking as defined by Section 465.021,

Government Code; or

(7) the property is:

(A) owned by a municipality, a public port, or a

navigation district created or operating under Section 59, Article

XVI, Texas Constitution, or under a statute enacted under Section

59, Article XVI, Texas Constitution; and

(B) used as an aid or facility incidental to or

useful in the operation or development of a port or waterway or in

aid of navigation-related commerce.

SECTION 2.37. CONFORMING AMENDMENT. Title 3,

Transportation Code, is amended by adding Chapter 25 to read as

follows:

CHAPTER 25. NOTICE OF CONSTRUCTION OF WIRELESS COMMUNICATION

FACILITY

Sec. 25.001. DEFINITION. In this chapter, "wireless

communication facility" means an equipment enclosure, antenna,

antenna support structure, and any associated facility used for

receiving or sending a radio frequency, microwave, or other signal

for a commercial communications purpose. (Bus. & Com. Code, Sec.

35.111.)

Sec. 25.002. NOTICE OF CONSTRUCTION. (a) A person

proposing to construct a wireless communication facility that is

taller than 100 feet shall, not later than the 30th day before the

date the construction begins, mail a letter to:

(1) any airport located within three miles of the

proposed facility location; and

(2) the Texas Agricultural Aviation Association.

(b) The letter must state:

(1) the legal description of the proposed site of

construction, including a graphic depiction showing:

(A) the location, height, longitude, latitude,

pad size, roadway access, and proposed use of the wireless

communication facility; and

(B) the location of any guy wires;

(2) at a minimum, the name, phone number, electronic

mail address, if any, and mailing address of the person proposing

construction of the wireless communication facility; and

(3) a phone number that is operational 24 hours a day,

seven days a week, for emergency purposes. (Bus. & Com. Code, Sec.

35.112.)

Sec. 25.003. INAPPLICABILITY OF CHAPTER. This chapter does

not apply to:

(1) a structure the main purpose of which is to provide

electric service;

(2) a wireless communication facility:

(A) used by an entity only for internal

communications;

(B) constructed by a municipality;

(D) installed for colocation purposes;

(3) a radio or television reception antenna;

(4) a satellite or microwave parabolic antenna not

used by a wireless communication service provider;

(5) a receive-only antenna;

(6) an antenna owned and operated by a federally

licensed amateur radio station operator;

(7) a cable television company facility;

(8) a radio or television broadcasting facility; or

(9) a colocation antenna. (Bus. & Com. Code, Sec.

35.113.)

Sec. 25.004. EFFECT ON LOCAL ORDINANCES. This chapter does

not preempt a local ordinance regulating a wireless communication

facility. (Bus. & Com. Code, Sec. 35.114.)

SECTION 2.38. CONFORMING AMENDMENT. Section 21.070(a)(2),

Transportation Code, is amended to read as follows:

(2) "Wireless communication facility" has the meaning

assigned by Section 25.001 [~~35.111, Business & Commerce Code~~].

SECTION 2.39. CONFORMING AMENDMENT. Section 51.004(d),

Utilities Code, is amended to read as follows:

(d) An offer made under Subsection (c) must be made in

compliance with Chapter 304 [43], Business & Commerce Code[~~, as~~

~~added by Chapter 1429, Acts of the 77th Legislature, Regular~~

~~Session, 2001~~].

SECTION 2.40. CONFORMING AMENDMENT. Section 26.027(b),

Water Code, as effective on delegation of NPDES permit authority,

is amended to read as follows:

(b) A person desiring to obtain a permit or to amend a permit

shall submit an application to the commission containing all

information reasonably required by the commission. The commission

shall, at minimum, require an applicant who is an individual to

provide:

(1) the individual's full legal name and date of birth;

(2) the street address of the individual's place of

residence;

(3) the identifying number from the individual's

driver's license or personal identification certificate issued by

the state or country in which the individual resides;

(4) the individual's sex; and

(5) any assumed business or professional name of the

individual filed under Chapter 71 [36], Business & Commerce Code.

SECTION 2.41. CONFORMING AMENDMENT. Section C, Article

2.03, Texas Limited Liability Company Act (Article 1528n, Vernon's

Texas Civil Statutes), is amended to read as follows:

C. The filing of articles of organization under Part Three

of this Act or an application to reserve a specified company name

under Article 2.04 of this Act, does not authorize the use of

limited liability company name in this State in violation of the

rights of another under the Federal Trademark Act of 1946 (15

U.S.C., Section 1051 et seq.), the Texas trademark law (Chapter 16,

Business & Commerce Code), the Assumed Business or Professional

Name Act (Chapter 71 [36], Business & Commerce Code), or the common

law.

SECTION 2.42. CONFORMING AMENDMENT. Section 9.03(b), Texas

Revised Limited Partnership Act (Article 6132a-1, Vernon's Texas

Civil Statutes), is amended to read as follows:

(b) Unless the partnership conducts business under another

name, filing the application with the secretary of state makes it

unnecessary to file any other documents under the Assumed Business

or Professional Name Act (Chapter 71 [36], Business & Commerce

Code).

SECTION 2.43. CONFORMING AMENDMENT. Section C, Article

2.05, Texas Business Corporation Act, is amended to read as

follows:

C. The filing of articles of incorporation under Part Three

of this Act, an application to reserve a specified Corporate name

under Article 2.06 of this Act, or an application to register a

Corporate name by a foreign corporation under Article 2.07 of this

Act does not authorize the use of a Corporate name in this State in

violation of the rights of another under the federal Trademark Act

of 1946 (15 U.S.C., Section 1051 et seq.), the Texas trademark law

(Chapter 16, Business & Commerce Code), the Assumed Business or

Professional Name Act (Chapter 71 [36], Business & Commerce Code),

or the common law. The Secretary of State shall deliver to each

newly organized corporation, applicant for reservation of a

Corporate name, and newly registered foreign corporation a notice

containing the substance of this section.

SECTION 2.44. CONFORMING AMENDMENT. Section A, Article

8.03, Texas Business Corporation Act, is amended to read as

follows:

A. No certificate of authority shall be issued to a foreign

corporation unless the corporate name of such corporation:

(1) Shall contain the word "corporation," "company,"

"incorporated," or "limited," or shall contain an abbreviation of

one (1) of such words, or such corporation shall, for use in this

state, add at the end of its name one (1) of such words or an

abbreviation thereof.

(2) Shall not be the same as, or deceptively similar

to, the name of any domestic corporation, limited partnership, or

limited liability company existing under the laws of this state or

of any foreign corporation, limited partnership, or limited

liability company authorized to transact business in this state, or

a name the exclusive right to which is, at the time, reserved or

registered in the manner provided in this Act or any other statute

providing for the reservation or registration of names by a limited

partnership or limited liability company; provided that a name may

be similar if written consent is obtained from the existing

corporation, limited partnership, or limited liability company

having the name deemed to be similar or the person for whom the name

deemed to be similar is reserved or registered in the office of the

Secretary of State. A certificate of authority shall be issued as

provided in this Act to any foreign corporation having a name the

same as, deceptively similar to, or, if no consent is given, similar

to the name of any domestic corporation, limited partnership, or

limited liability company existing under the laws of this state or

of any foreign corporation, limited partnership, or limited

liability company authorized to transact business in this state, or

a name the exclusive right to which is, at the time, reserved or

registered in accordance with this Act or any other applicable law,

provided such foreign corporation qualifies and does business under

a name that meets the requirements of this article. The foreign

corporation shall set forth in the application for a certificate of

authority the name under which it is qualifying and shall file an

assumed name certificate in accordance with Chapter 71 [36],

Business & Commerce Code[~~, as amended~~].

SECTION 2.45. CONFORMING AMENDMENT. Section A, Article

8.03, Texas Non-Profit Corporation Act (Article 1396-8.03,

Vernon's Texas Civil Statutes), is amended to read as follows:

A. No certificate of authority shall be issued to a foreign

corporation if the corporate name of such corporation:

(1) Contains any word or phrase which indicates or

implies that it is organized for any purpose other than one or more

of the purposes contained in its articles of incorporation.

(2) Is the same as, or deceptively similar to, the name

of any corporation, whether for profit or not for profit, existing

under any Act of this State, or any foreign corporation, whether for

profit or not for profit, authorized to transact business or

conduct affairs in this State, or a corporate name reserved or

registered as permitted by the laws of this State; provided that a

name may be similar if written consent is obtained from the existing

corporation having the name deemed to be similar or the person, or

corporation for whom the name deemed to be similar is reserved or

registered in the office of the Secretary of State. A certificate

of authority shall be issued as provided by this Act to any foreign

corporation having a name the same as, deceptively similar to, or,

if no consent is given, similar to the name of any domestic

corporation existing under the laws of this State or of any foreign

corporation authorized to transact business or conduct affairs in

this State, or a name the exclusive right to which is, at the time,

reserved or registered in accordance with this Act, provided the

foreign corporation qualifies and does business under a name that

meets the requirements of this article. The foreign corporation

shall set forth in the application for a certificate of authority

the name under which it is qualifying and shall file an assumed name

certificate in accordance with Chapter 71 [36], Business & Commerce

Code[~~, as amended~~].

SECTION 2.46. REPEAL OF ARTICLE 6166.Z8. Chapter 251, Acts

of the 40th Legislature, Regular Session, 1927 (Article 6166z8,

Vernon's Texas Civil Statutes), is repealed.

SECTION 2.47. GENERAL REPEALER. (a) The following

provisions of the Business & Commerce Code are repealed:

(1) Chapters 19, 34, 35, 36, 37, 38, 39, 40, 41, 42,

43, 44, 45, 46, and 47;

(2) Chapter 48, as added by Chapter 294, Acts of the

79th Legislature, Regular Session, 2005;

(3) Chapter 48, as added by Chapter 298, Acts of the

79th Legislature, Regular Session, 2005; and

(4) Chapter 48, as added by Chapter 544, Acts of the

79th Legislature, Regular Session, 2005.

(b) The following Acts and articles as compiled in Vernon's

Texas Civil Statutes are repealed:

(1) 1015g-6;

(2) 1446.01, 1446.1, 1446.2, 1446.3, 1446.4, 1446.5,

1446.6, 1446.7, 1446.8, 1446.9, 1446.10, 1446.11, 1446.12,

1446.13, 1446.14, 1446.15, 1446.16, 1446.17, 1446.18, 1446.19,

1446.20, 1446.21, 1446.22, 1446.23, 1446.24, 1446.25, and 1446.26;

(3) 8610a, 8612, 8613, and 8614; and

(4) 9020, 9023e, 9026a, 9026b, and 9026c.

ARTICLE 3. DEVELOPMENT CORPORATIONS

SECTION 3.01. CODIFICATION OF DEVELOPMENT CORPORATION ACT

OF 1979. Title 12, Local Government Code, is amended by adding

Subtitle C1 to read as follows:

SUBTITLE C1. ADDITIONAL PLANNING AND DEVELOPMENT PROVISIONS

APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT

CHAPTER 501. PROVISIONS GOVERNING DEVELOPMENT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 501.001. SHORT TITLE

Sec. 501.002. DEFINITIONS

Sec. 501.003. WHO MAY BE USER

Sec. 501.004. LEGISLATIVE FINDINGS; CONSTRUCTION OF

SUBTITLE

Sec. 501.005. ADOPTION OF ALTERNATE PROCEDURE

Sec. 501.006. USE OF CORPORATION TO FINANCE PROJECT

Sec. 501.007. LENDING CREDIT OR GRANTING PUBLIC MONEY

Sec. 501.008. LIMITATION ON FINANCIAL OBLIGATION

Sec. 501.009. POLICE POWERS NOT AFFECTED

Sec. 501.010. DELEGATION OF UNIT'S SOVEREIGN POWERS

PROHIBITED

Sec. 501.011. REFERENCE TO ARTICLES OF INCORPORATION

OR CERTIFICATE OF FORMATION

[Sections 501.012-501.050 reserved for expansion]

SUBCHAPTER B. CREATION AND OPERATION OF CORPORATION

Sec. 501.051. AUTHORITY TO CREATE

Sec. 501.052. NONMEMBER, NONSTOCK FORM OF CORPORATION

Sec. 501.053. CORPORATION NONPROFIT; NET EARNINGS

Sec. 501.054. GENERAL POWERS, PRIVILEGES, AND

FUNCTIONS

Sec. 501.055. CONSTITUTED AUTHORITY OR INSTRUMENTALITY

Sec. 501.056. CONTENTS OF CERTIFICATE OF FORMATION

Sec. 501.057. FILING OF CERTIFICATE OF FORMATION AND

DELIVERY OF CERTIFICATE

EVIDENCING FILING

Sec. 501.058. EFFECT OF ISSUANCE OF CERTIFICATE

EVIDENCING FILING

Sec. 501.059. CORPORATE SEAL

Sec. 501.060. MAY SUE AND BE SUED

Sec. 501.061. CORPORATION'S ORGANIZATION NOT

RESTRICTED

Sec. 501.062. BOARD OF DIRECTORS

Sec. 501.063. ORGANIZATIONAL MEETING

Sec. 501.064. BYLAWS

Sec. 501.065. OFFICERS

Sec. 501.066. INDEMNIFICATION

Sec. 501.067. INSURANCE AND BENEFITS

Sec. 501.068. BOARD MEETINGS; NOTICE OF MEETING

Sec. 501.069. WAIVER OF NOTICE

Sec. 501.070. ACTION OF BOARD; QUORUM

Sec. 501.071. ACTION WITHOUT MEETING

Sec. 501.072. OPEN MEETINGS AND PUBLIC INFORMATION

Sec. 501.073. SUPERVISION BY AUTHORIZING UNIT

Sec. 501.074. PURCHASING

Sec. 501.075. EXEMPTION FROM TAXATION

[Sections 501.076-501.100 reserved for expansion]

SUBCHAPTER C. AUTHORIZED PROJECTS

Sec. 501.101. PROJECTS RELATED TO CREATION OR

RETENTION OF PRIMARY JOBS

Sec. 501.102. PROJECTS RELATED TO CERTAIN JOB TRAINING

Sec. 501.103. CERTAIN INFRASTRUCTURE IMPROVEMENT

PROJECTS

Sec. 501.104. PROJECTS RELATED TO CERTAIN MILITARY

BASES OR MISSIONS

Sec. 501.105. CAREER CENTER PROJECTS OUTSIDE OF JUNIOR

COLLEGE DISTRICT

Sec. 501.106. AIRPORT FACILITIES OR OTHER PROJECTS BY

CORPORATIONS AUTHORIZED BY CERTAIN

BORDER MUNICIPALITIES

Sec. 501.107. INFRASTRUCTURE PROJECTS BY CORPORATIONS

AUTHORIZED BY MUNICIPALITIES IN

CERTAIN BORDER COUNTIES

[Sections 501.108-501.150 reserved for expansion]

SUBCHAPTER D. CORPORATE POWERS AND LIMITATIONS RELATING TO

PROJECTS

Sec. 501.151. AUTHORITY TO FINANCE PROJECT

Sec. 501.152. DEFINITION OF COST WITH RESPECT TO

PROJECT

Sec. 501.153. LEASE OR SALE OF PROJECT

Sec. 501.154. CONVEYANCE OF PROPERTY TO INSTITUTION OF

HIGHER EDUCATION

Sec. 501.155. LOAN TO FINANCE PROJECT

Sec. 501.156. AGREEMENT MUST BENEFIT CORPORATION

Sec. 501.157. DEFAULT ON AGREEMENT; ENFORCEMENT

Sec. 501.158. PERFORMANCE AGREEMENTS

Sec. 501.159. POWERS CONCERNING

PROJECTS; JURISDICTION

Sec. 501.160. OWNING OR OPERATING PROJECT AS BUSINESS

Sec. 501.161. CERTAIN ECONOMIC INCENTIVES PROHIBITED

Sec. 501.162. USE OF TAX REVENUE FOR JOB TRAINING

[Sections 501.163-501.200 reserved for expansion]

SUBCHAPTER E. CORPORATE POWERS AND LIMITATIONS RELATING TO BONDS

Sec. 501.201. AUTHORITY TO ISSUE BONDS

Sec. 501.202. TERMS

Sec. 501.203. SECURITIES COMMISSIONER PERMIT TO SELL

SECURITIES REQUIRED

Sec. 501.204. AUTHORIZING UNIT'S APPROVAL OF BONDS

Sec. 501.205. BOND COUNSEL AND FINANCIAL ADVISORS

Sec. 501.206. MONEY USED TO PAY BONDS

Sec. 501.207. BONDS NOT DEBT OF STATE OR AUTHORIZING

UNIT

Sec. 501.208. BOND SECURITY; DEFAULT

Sec. 501.209. TRUST AGREEMENT

Sec. 501.210. FINANCIAL ASSURANCE OR RESPONSIBILITY

REQUIREMENTS FOR CERTAIN PROJECTS

Sec. 501.211. USE OF BOND PROCEEDS

Sec. 501.212. INTERIM BONDS

Sec. 501.213. REFUNDING BONDS

Sec. 501.214. SALE OR EXCHANGE OF BONDS

[Sections 501.215-501.250 reserved for expansion]

SUBCHAPTER F. ADMINISTRATION BY ECONOMIC DEVELOPMENT OFFICE

Sec. 501.251. STATE STANDARDS FOR PROJECT ELIGIBILITY

Sec. 501.252. STATE STANDARDS AND GUIDELINES FOR

LEASE, SALE, OR LOAN AGREEMENTS

Sec. 501.253. RULES FOR SMALL BUSINESS PROGRAMS

Sec. 501.254. FILING OF RULES AND GUIDELINES WITH

SECRETARY OF STATE

Sec. 501.255. APPROVAL OF LEASE, SALE, OR LOAN

AGREEMENT

Sec. 501.256. APPROVAL OF BONDS BY ECONOMIC

DEVELOPMENT OFFICE

Sec. 501.257. FILING OF FEE SCHEDULE AND

BOND PROCEDURES

Sec. 501.258. DELEGATION OF AUTHORITY

[Sections 501.259-501.300 reserved for expansion]

SUBCHAPTER G. AMENDMENT OR RESTATEMENT OF

CERTIFICATE OF FORMATION

Sec. 501.301. AMENDMENT BY BOARD OF DIRECTORS

Sec. 501.302. AMENDMENT BY UNIT

Sec. 501.303. AMENDMENT TO COUNTY ALLIANCE

CORPORATION'S CERTIFICATE OF FORMATION

Sec. 501.304. CONTENTS OF CERTIFICATE OF AMENDMENT

Sec. 501.305. EXECUTION AND VERIFICATION OF

CERTIFICATE OF AMENDMENT

Sec. 501.306. DELIVERY AND FILING OF CERTIFICATE OF

AMENDMENT

Sec. 501.307. SUITS OR RIGHTS NOT AFFECTED

Sec. 501.308. RESTATED CERTIFICATE OF FORMATION

Sec. 501.309. RESTATEMENT WITHOUT ADDITIONAL AMENDMENT

Sec. 501.310. RESTATEMENT WITH ADDITIONAL AMENDMENT

Sec. 501.311. CHANGE IN CERTAIN INFORMATION NOT

AMENDMENT

Sec. 501.312. EXECUTION AND VERIFICATION OF RESTATED

CERTIFICATE OF FORMATION

Sec. 501.313. DELIVERY AND FILING OF RESTATED

CERTIFICATE OF FORMATION

Sec. 501.314. EFFECT OF ISSUANCE OF CERTIFICATE

EVIDENCING FILING OF RESTATED

CERTIFICATE OF FORMATION

[Sections 501.315-501.350 reserved for expansion]

SUBCHAPTER H. REGISTERED OFFICE AND AGENT; SERVICE OF PROCESS

Sec. 501.351. REGISTERED OFFICE AND AGENT

Sec. 501.352. CHANGE OF REGISTERED OFFICE OR AGENT

Sec. 501.353. RESIGNATION OF REGISTERED AGENT

Sec. 501.354. AGENTS FOR SERVICE

[Sections 501.355-501.400 reserved for expansion]

SUBCHAPTER I. ALTERATION OR TERMINATION OF CORPORATION

Sec. 501.401. ALTERATION OR TERMINATION BY AUTHORIZING

UNIT

Sec. 501.402. TERMINATION OF CORPORATION ON COMPLETION

OF PURPOSE

Sec. 501.403. EXECUTION OF CERTIFICATE OF TERMINATION

Sec. 501.404. DELIVERY AND FILING OF CERTIFICATE OF

TERMINATION

Sec. 501.405. EFFECT OF ISSUANCE OF CERTIFICATE EVIDENCING

FILING OF CERTIFICATE OF TERMINATION

Sec. 501.406. ASSETS ON TERMINATION

Sec. 501.407. TERMINATION WITH TRANSFER OF ASSETS TO

TYPE A CORPORATION

SUBTITLE C1. ADDITIONAL PLANNING AND DEVELOPMENT PROVISIONS

APPLYING TO MORE THAN ONE TYPE OF LOCAL GOVERNMENT

CHAPTER 501. PROVISIONS GOVERNING DEVELOPMENT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 501.001. SHORT TITLE. This subtitle may be cited as

the Development Corporation Act. (V.A.C.S. Art. 5190.6, Sec. 1.)

Sec. 501.002. DEFINITIONS. In this subtitle:

(1) "Authorizing unit" means the unit that authorizes

the creation of a corporation under this subtitle.

(2) "Board of directors" means the board of directors

of a corporation.

(3) "Bonds" includes evidences of indebtedness,

including bonds and notes.

(4) "Corporate headquarters facilities" means

buildings proposed for construction or occupancy as the principal

office for a business enterprise's administrative and management

services.

(5) "Corporation" means a corporation organized under

this subtitle.

(6) "Cost," with respect to a project, has the meaning

assigned by Section 501.152.

(7) "County alliance" means two or more counties that

jointly authorize the creation of a corporation under this

subtitle.

(8) "District" means a conservation and reclamation

district established under Section 59, Article XVI, Texas

Constitution.

(9) "Economic development office" means the Texas

Economic Development and Tourism Office within the office of the

governor.

(10) "Governing body" means the commissioners court of

a county or the governing body of a municipality or district.

(11) "Institution of higher education" has the meaning

assigned by Section 61.003, Education Code.

(12) "Primary job" means:

(A) a job that is:

(i) available at a company for which a

majority of the products or services of that company are ultimately

exported to regional, statewide, national, or international

markets infusing new dollars into the local economy; and

(ii) included in one of the following

sectors of the North American Industry Classification System

(NAICS):

NAICS Sector #

Description

111

Crop Production

112

Animal Production

113

Forestry and Logging

11411

Commercial Fishing

115

Support Activities for Agriculture and Forestry

211-213

Mining

221

Utilities

311-339

Manufacturing

Wholesale Trade

48-49

Transportation and Warehousing

51 (excluding 512131 and 512132)

Information (excluding motion picture theaters and drive-in motion picture theaters)

523-525

Securities, Commodity Contracts, and Other Financial Investments and Related Activities; Insurance Carriers and Related Activities; Funds, Trusts, and Other Financial Vehicles

5413, 5415, 5416, 5417, and 5419

Architectural, Engineering, and Related Services; Computer System Design and Related Services; Management, Scientific, and Technical Consulting Services; Scientific Research and Development Services; Other Professional, Scientific, and Technical Services

551

Management of Companies and Enterprises

56142

Telephone Call Centers

922140

Correctional Institutions; or

(B) a job that is included in North American

Industry Classification System (NAICS) sector number 928110,

National Security, for the corresponding index entries for Armed

Forces, Army, Navy, Air Force, Marine Corps, and Military Bases.

(13) "Project" means a project specified as such under

Subchapter C.

(14) "Resolution" means a resolution, order,

ordinance, or other official action by the governing body of a unit.

(15) "Type A corporation" means a corporation governed

by Chapter 504.

(16) "Type B corporation" means a corporation governed

by Chapter 505.

(17) "Unit" means a municipality, county, or district

that may create and use a corporation under this subtitle.

(V.A.C.S. Art. 5190.6, Secs. 2(1), (2), (3), (7), (8), (9), (10)

(part), (11) (part), as amended Acts 79th Leg., R.S., Chs. 1, 1048,

1148, (12), (13), (14), (15), as added Acts 76th Leg., R.S., Ch.

296, (17), (18); New.)

Sec. 501.003. WHO MAY BE USER. The following may be a user

under this subtitle:

(1) an individual, a partnership, a corporation, or

any other private entity organized for profit or not for profit; or

(2) a municipality, county, district, other political

subdivision, public entity, or agency of this state or the federal

government. (V.A.C.S. Art. 5190.6, Sec. 2(15), as added Acts 76th

Leg., R.S., Ch. 973.)

Sec. 501.004. LEGISLATIVE FINDINGS; CONSTRUCTION OF

SUBTITLE. (a) The legislature finds that:

(1) the present and prospective right to gainful

employment and the general welfare of the people of this state

require as a public purpose the promotion and development of new and

expanded business enterprises and of job training;

(2) the existence, development, and expansion of

business, commerce, industry, higher education, and job training

are essential to the economic growth of this state and to the full

employment, welfare, and prosperity of residents of this state;

(3) the assistance provided by corporations in

promoting higher education opportunities encourages and fosters

the development and diversification of the economy of this state

and the elimination of unemployment and underemployment in this

state;

(4) the means authorized by this subtitle and the

assistance provided by this subtitle, especially with respect to

financing, are in the public interest and serve a public purpose of

this state in promoting the welfare of the residents of this state

economically by securing and retaining business enterprises and as

a result maintaining a higher level of employment, economic

activity, and stability;

(5) community industrial development corporations in

this state have invested substantial money in successful industrial

development projects and have experienced difficulty in

undertaking additional industrial development projects because of

the partial inadequacy of the community industrial development

corporations' money or money potentially available from local

subscription sources and the limitations of local financial

institutions in providing additional and sufficiently large first

mortgage loans; and

(6) communities in this state have been at a critical

disadvantage in competing with communities in other states for the

location or expansion of business enterprises because of the

availability and prevalent use in all other states of financing and

other special incentives, and, for that reason, the issuance of

revenue bonds under this subtitle by a corporation on behalf of

political subdivisions of this state for the promotion and

development of new and expanded business enterprises to provide and

encourage employment and the public welfare is in the public

interest and is a public purpose.

(b) This subtitle shall be construed in conformity with the

intention of the legislature expressed in this section. (V.A.C.S.

Art. 5190.6, Sec. 3.)

Sec. 501.005. ADOPTION OF ALTERNATE PROCEDURE. If a court

holds that a procedure under this subtitle violates the federal or

state constitution, a corporation by resolution may provide an

alternate procedure that conforms to the constitution. (V.A.C.S.

Art. 5190.6, Sec. 37 (part).)

Sec. 501.006. USE OF CORPORATION TO FINANCE PROJECT. A unit

may use a corporation to issue bonds on the unit's behalf to finance

the cost of a project, including a project in a federally designated

empowerment zone or enterprise community or in an enterprise zone

designated under Chapter 2303, Government Code, to promote and

develop new and expanded business enterprises for the promotion and

encouragement of employment and the public welfare. (V.A.C.S. Art.

5190.6, Sec. 21 (part).)

Sec. 501.007. LENDING CREDIT OR GRANTING PUBLIC MONEY. (a)

Except as provided by Subsection (b), a unit may not lend its credit

or grant public money or another thing of value in aid of a

corporation.

(b) A municipality may grant public money to a corporation

under a contract authorized by Section 380.002. (V.A.C.S. Art.

5190.6, Sec. 21 (part).)

Sec. 501.008. LIMITATION ON FINANCIAL OBLIGATION. A

corporation may not incur a financial obligation that cannot be

paid from:

(1) bond proceeds;

(2) revenue realized from the lease or sale of a

project;

(3) revenue realized from a loan made by the

corporation to wholly or partly finance or refinance a project; or

(4) money granted under a contract with a municipality

under Section 380.002. (V.A.C.S. Art. 5190.6, Sec. 22 (part).)

Sec. 501.009. POLICE POWERS NOT AFFECTED. This subtitle

does not deprive this state or a governmental subdivision of this

state of its police powers over a corporation's property and does

not impair any police power over the property that is otherwise

provided by law to any official or agency of this state or its

governmental subdivisions. (V.A.C.S. Art. 5190.6, Sec. 37 (part).)

Sec. 501.010. DELEGATION OF UNIT'S SOVEREIGN POWERS

PROHIBITED. A unit may not delegate to a corporation any of the

unit's attributes of sovereignty, including the power to tax, the

power of eminent domain, and the police power. (V.A.C.S. Art.

5190.6, Sec. 22 (part).)

Sec. 501.011. REFERENCE TO ARTICLES OF INCORPORATION OR

CERTIFICATE OF FORMATION. (a) With respect to a corporation

created under the Development Corporation Act of 1979 (Article

5190.6, Vernon's Texas Civil Statutes) before January 1, 2006, a

reference in any law of this state or in the corporation's governing

documents to "articles of incorporation" means, for purposes of

this subtitle, the corporation's certificate of formation.

(b) With respect to a corporation that is created under the

Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas

Civil Statutes) before January 1, 2006, and continues to operate

under articles of incorporation, a reference in this subtitle or

any other law of this state or in the corporation's governing

documents to "certificate of formation" means the corporation's

articles of incorporation. (New.)

[Sections 501.012-501.050 reserved for expansion]

SUBCHAPTER B. CREATION AND OPERATION OF CORPORATION

Sec. 501.051. AUTHORITY TO CREATE. (a) Three or more

individuals who are qualified voters of a unit may file with the

unit's governing body a written application requesting the unit to

authorize creation of a corporation to act on behalf of the unit.

The governing body may not charge a filing fee for the application.

(b) A corporation may be created only if the governing body

of the unit by resolution:

(1) determines that the creation of the corporation is

advisable; and

(2) approves the certificate of formation proposed to

be used in organizing the corporation.

corporations if the resolution authorizing the creation of each

corporation specifies the public purpose of the unit to be

furthered by the corporation. The specified public purpose must be

limited to the promotion and development under this subtitle of

enterprises to promote and encourage employment and the public

welfare. (V.A.C.S. Art. 5190.6, Sec. 4(a) (part).)

Sec. 501.052. NONMEMBER, NONSTOCK FORM OF CORPORATION. A

corporation is a nonmember, nonstock corporation. (V.A.C.S. Art.

5190.6, Sec. 5.)

Sec. 501.053. CORPORATION NONPROFIT; NET EARNINGS. (a) A

corporation is nonprofit, and the corporation's net earnings

remaining after payment of its expenses may not benefit an

individual, firm, or corporation, except as provided by Subsection

(b).

(b) If the board of directors determines that sufficient

provision has been made for the full payment of the corporation's

expenses, bonds, and other obligations, any net earnings of the

corporation subsequently accruing shall be paid to the

corporation's authorizing unit. (V.A.C.S. Art. 5190.6, Sec. 33.)

Sec. 501.054. GENERAL POWERS, PRIVILEGES, AND FUNCTIONS.

(a) A corporation has the powers, privileges, and functions of a

nonprofit corporation incorporated under the Texas Non-Profit

Corporation Act (Article 1396-1.01 et seq., Vernon's Texas Civil

Statutes) or formed under the Texas Nonprofit Corporation Law, as

described by Section 1.008, Business Organizations Code. To the

extent that the provisions governing powers, privileges, and

functions of a nonprofit corporation under those laws are in

conflict with or inconsistent with provisions of this subtitle

governing powers, privileges, and functions of a nonprofit

corporation, the provisions of this subtitle prevail.

(b) A corporation:

(1) has all powers incidental to or necessary for the

performance of the powers provided by Sections 501.059, 501.060,

501.064, 501.153-501.155, 501.159, 501.201(a), 501.208, 501.209,

501.214, and 501.402; and

(2) with respect to a project, may exercise all powers

necessary or appropriate to effect a purpose for which the

corporation is organized, subject to the control of the governing

body of the corporation's authorizing unit. (V.A.C.S. Art. 5190.6,

Sec. 23(a) (part).)

Sec. 501.055. CONSTITUTED AUTHORITY OR INSTRUMENTALITY.

(a) A corporation is a constituted authority and an

instrumentality, within the meaning of the United States Department

of the Treasury regulations and the Internal Revenue Service

rulings adopted under Section 103, Internal Revenue Code of 1986,

as amended, including regulations and rulings adopted under Section

103, Internal Revenue Code of 1954, and may act on behalf of the

corporation's authorizing unit for the specific public purpose

authorized by the unit.

(b) A corporation is not a political subdivision or a

political corporation for purposes of the laws of this state,

including Section 52, Article III, Texas Constitution. (V.A.C.S.

Art. 5190.6, Sec. 22 (part).)

Sec. 501.056. CONTENTS OF CERTIFICATE OF FORMATION. The

certificate of formation of a corporation must state:

(1) the name of the corporation;

(2) that the corporation is a nonprofit corporation;

(3) the duration of the corporation, which may be

perpetual;

(4) the specific purpose for which the corporation is

organized and may issue bonds on behalf of the unit;

(5) that the corporation has no members and is a

nonstock corporation;

(6) any provision consistent with law for the

regulation of the corporation's internal affairs, including any

provision required or permitted by this subtitle to be stated in the

bylaws;

(7) the street address of the corporation's initial

registered office and the name of the corporation's initial

registered agent at that address;

(8) the number of directors of the initial board of

directors and the name and address of each initial director;

(9) the name and street address of each organizer; and

(10) that the unit has:

(A) by resolution specifically authorized the

corporation to act on the unit's behalf to further the public

purpose stated in the resolution and the certificate of formation;

and

(B) approved the certificate of formation.

(V.A.C.S. Art. 5190.6, Sec. 6.)

Sec. 501.057. FILING OF CERTIFICATE OF FORMATION AND

DELIVERY OF CERTIFICATE EVIDENCING FILING. (a) If the unit's

governing body adopts a resolution under Section 501.051, the

certificate of formation may be filed as provided by this section.

(b) Three originals of the certificate of formation shall be

delivered to the secretary of state. If the secretary of state

determines that the certificate of formation conforms to this

subchapter, the secretary of state shall:

(1) endorse the word "Filed" and the date of the filing

on each original certificate of formation;

(2) file one of the original certificates of formation

in the secretary of state's office;

(3) issue two certificates evidencing the filing of

the certificate of formation;

(4) attach to each certificate evidencing the filing

of the certificate of formation an original of the certificate of

formation; and

(5) deliver a certificate evidencing the filing of the

certificate of formation and the attached certificate of formation

to:

(A) the organizers or the organizers'

representatives; and

(B) the governing body of:

(i) the corporation's authorizing unit; or

(ii) any county in the county alliance that

authorized the creation of the corporation, for a county alliance

corporation.

evidencing the filing of the certificate of formation and the

attached certificate of formation are delivered under Subsection

(b)(5)(B)(ii) shall provide photocopies of the certificate

evidencing the filing of the certificate of formation and the

attached certificate of formation to each other member of the

county alliance. (V.A.C.S. Art. 5190.6, Secs. 4(a) (part), 7(a),

(b).)

Sec. 501.058. EFFECT OF ISSUANCE OF CERTIFICATE EVIDENCING

FILING. (a) A corporation's existence begins when the certificate

evidencing the filing of its certificate of formation is issued.

(b) After the issuance of the certificate evidencing the

filing of the certificate of formation, the formation of the

corporation may not be contested for any reason.

of formation is conclusive evidence that:

(1) the organizers and the unit have performed all

conditions precedent for the formation of the corporation; and

(2) the corporation is formed under this subtitle.

(V.A.C.S. Art. 5190.6, Sec. 7(c).)

Sec. 501.059. CORPORATE SEAL. A corporation may have a

corporate seal and with respect to a project may impress, affix, or

otherwise reproduce the seal or a facsimile of the seal on an

instrument required to be executed by the corporation's appropriate

officers. (V.A.C.S. Art. 5190.6, Sec. 23(a) (part).)

Sec. 501.060. MAY SUE AND BE SUED. With respect to a

project, a corporation may sue, be sued, complain, and defend in the

corporation's name. (V.A.C.S. Art. 5190.6, Sec. 23(a) (part).)

Sec. 501.061. CORPORATION'S ORGANIZATION NOT RESTRICTED.

Except as provided by this subtitle, no proceeding, notice, or

approval is required for the organization of a corporation.

(V.A.C.S. Art. 5190.6, Sec. 37 (part).)

Sec. 501.062. BOARD OF DIRECTORS. (a) All of the powers of

a corporation are vested in a board of directors consisting of three

or more directors appointed by the governing body of the

corporation's authorizing unit.

(b) A director serves for a term of not more than six years.

unit may remove a director for cause or at will.

(d) A director serves without compensation, but is entitled

to reimbursement for actual expenses incurred in the performance of

the director's duties under this subtitle. (V.A.C.S. Art. 5190.6,

Sec. 11(a).)

Sec. 501.063. ORGANIZATIONAL MEETING. (a) After issuance

of the certificate evidencing the filing of the certificate of

formation, the board of directors named in the certificate of

formation shall hold an organizational meeting in this state to

adopt bylaws and elect officers and for other purposes.

(b) Not later than the third day before the date of the

meeting, the organizers who call the meeting shall give notice by

mail of the time and place of the meeting to each director named in

the certificate of formation. (V.A.C.S. Art. 5190.6, Sec. 12.)

Sec. 501.064. BYLAWS. (a) A corporation may adopt and

amend bylaws for the administration and regulation of the

corporation's affairs.

(b) The board of directors shall adopt a corporation's

initial bylaws.

(1) be consistent with state law and with the

certificate of formation of the corporation; and

(2) be approved by resolution of the governing body of

the corporation's authorizing unit. (V.A.C.S. Art. 5190.6, Secs.

13, 23(a) (part).)

Sec. 501.065. OFFICERS. (a) A corporation has the

following officers:

(1) a president;

(2) at least one vice president;

(3) a secretary;

(4) a treasurer; and

(5) other officers or assistant officers considered

necessary.

(b) An officer of the corporation is elected or appointed at

the time, in the manner, and for the term prescribed by the

certificate of formation or bylaws, except that an officer's term

may not exceed three years. In the absence of provisions in the

certificate of formation or the bylaws prescribing the selection or

terms of officers, the board of directors shall annually elect or

appoint officers.

same person may not hold the offices of president and secretary.

(V.A.C.S. Art. 5190.6, Sec. 16.)

Sec. 501.066. INDEMNIFICATION. (a) In this section,

"director or officer" includes a former director or officer.

(b) Except as provided by Subsection (d), a corporation may

indemnify a director or officer of the corporation for necessary

expenses and costs, including attorney's fees, actually incurred by

the director or officer in connection with a claim asserted against

the director or officer, by action in court or another forum, by

reason of the director's or officer's being or having been a

director or officer of the corporation.

has not fully indemnified a director or officer under Subsection

(b), the court in a proceeding in which a claim is asserted against

the director or officer or a court having jurisdiction over an

action brought by the director or officer on a claim for indemnity

may assess indemnity against the corporation or the corporation's

receiver or trustee. The assessment must equal the amount that the

director or officer paid to satisfy the judgment or compromise the

claim, including attorney's fees and not including any amount paid

to the corporation, to the extent that:

(1) the amount paid was actually and necessarily

incurred; and

(2) the court considers the amount paid reasonable and

equitable.

(d) A corporation may not indemnify a director or officer

for a matter in which the director or officer is guilty of

negligence or misconduct. A court may assess indemnity against the

corporation only if the court finds that the director or officer was

not guilty of negligence or misconduct in the matter for which

indemnity is sought. (V.A.C.S. Art. 5190.6, Secs. 15(a), (b);

New.)

Sec. 501.067. INSURANCE AND BENEFITS. (a) Notwithstanding

any law to the contrary and with the consent of the corporation's

authorizing unit, a corporation may obtain:

(1) health benefits coverage, liability coverage,

workers' compensation coverage, and property coverage under the

authorizing unit's insurance policies, through self-funded

coverage, or under coverage provided under an interlocal agreement

with a political subdivision; or

(2) retirement benefits under a retirement program the

authorizing unit participates in or operates.

(b) Health benefits coverage may be extended to the

corporation's directors and employees, and to the dependents of the

directors and employees.

corporation's directors, employees, and volunteers.

(d) Liability coverage may be extended to protect the

corporation and the corporation's directors and employees.

(e) Retirement benefits may be extended to the

corporation's employees. (V.A.C.S. Art. 5190.6, Secs. 23(c), (d).)

Sec. 501.068. BOARD MEETINGS; NOTICE OF MEETING. (a) A

board of directors may hold a regular meeting in this state with or

without notice as prescribed by the corporation's bylaws.

(b) A board of directors may hold a special meeting with

notice as prescribed by the corporation's bylaws.

waiver of notice of the meeting, unless the director attends the

meeting for the express purpose of objecting to the transaction of

any business at the meeting because the meeting has not been

lawfully called or convened.

(d) Unless required by the corporation's bylaws, notice or

waiver of notice of a board meeting is not required to specify the

business to be transacted at the meeting or the purpose of the

meeting. (V.A.C.S. Art. 5190.6, Sec. 15(c).)

Sec. 501.069. WAIVER OF NOTICE. If a notice is required to

be given to a director of a corporation under this subtitle or the

corporation's certificate of formation or bylaws, a written waiver

of the notice signed by the person entitled to the notice is

equivalent to giving the required notice. The waiver may be given

before or after the time that would have been stated in the notice.

(V.A.C.S. Art. 5190.6, Sec. 15(d).)

Sec. 501.070. ACTION OF BOARD; QUORUM. (a) A quorum of a

board of directors is the lesser of:

(1) a majority of the number of directors:

(A) established by the corporation's bylaws; or

(B) stated in the corporation's certificate of

formation, if the bylaws do not establish the number of directors;

(2) the number of directors, not less than three,

established as a quorum by the certificate of formation or bylaws.

(b) The act of a majority of the directors present at a

meeting at which a quorum is present is an act of the board of

directors, unless the act of a larger number is required by the

certificate of formation or bylaws of the corporation. (V.A.C.S.

Art. 5190.6, Secs. 14(a), (b).)

Sec. 501.071. ACTION WITHOUT MEETING. (a) An action that

may be taken at a meeting of a board of directors, including an

action required by this subtitle to be taken at a meeting, may be

taken without a meeting if each director signs a written consent

providing the action to be taken.

(b) The consent has the same effect as a unanimous vote and

may be stated as such in a document filed with the secretary of

state under this subtitle. (V.A.C.S. Art. 5190.6, Sec. 14(c).)

Sec. 501.072. OPEN MEETINGS AND PUBLIC INFORMATION. A

board of directors is subject to the open meetings law, Chapter 551,

Government Code, and the public information law, Chapter 552,

Government Code. (V.A.C.S. Art. 5190.6, Secs. 11(b), 14A.)

Sec. 501.073. SUPERVISION BY AUTHORIZING UNIT. (a) The

corporation's authorizing unit will approve all programs and

expenditures of a corporation and annually review any financial

statements of the corporation.

(b) A corporation's authorizing unit is entitled to access

to the corporation's books and records at all times. (V.A.C.S. Art.

5190.6, Sec. 21 (part).)

Sec. 501.074. PURCHASING. A corporation may use the

reverse auction procedure defined by Section 2155.062(d),

Government Code, for purchasing. (V.A.C.S. Art. 5190.6, Sec.

23(e).)

Sec. 501.075. EXEMPTION FROM TAXATION. (a) The activities

of a corporation affect all the residents of the corporation's

authorizing unit by the corporation's assuming to a material extent

what otherwise might be an obligation or duty of the authorizing

unit, and therefore the corporation is an institution of purely

public charity within the tax exemption of Section 2, Article VIII,

Texas Constitution.

(b) A corporation is exempt from the tax imposed by Chapter

171, Tax Code, only if the corporation is exempted by that chapter.

(V.A.C.S. Art. 5190.6, Sec. 32.)

[Sections 501.076-501.100 reserved for expansion]

SUBCHAPTER C. AUTHORIZED PROJECTS

Sec. 501.101. PROJECTS RELATED TO CREATION OR RETENTION OF

PRIMARY JOBS. In this subtitle, "project" includes the land,

buildings, equipment, facilities, expenditures, targeted

infrastructure, and improvements that are:

(1) for the creation or retention of primary jobs; and

(2) found by the board of directors to be required or

suitable for the development, retention, or expansion of:

(A) manufacturing and industrial facilities;

(B) research and development facilities;

realigned military bases;

(D) transportation facilities, including

airports, ports, mass commuting facilities, and parking

facilities;

(E) sewage or solid waste disposal facilities;

(F) recycling facilities;

(G) air or water pollution control facilities;

(H) facilities for furnishing water to the

public;

(I) distribution centers;

(J) small warehouse facilities capable of

serving as decentralized storage and distribution centers;

(K) primary job training facilities for use by

institutions of higher education; or

(L) regional or national corporate headquarters

facilities. (V.A.C.S. Art. 5190.6, Sec. 2(11) (part), as amended

Acts 79th Leg., R.S., Chs. 1, 1048, 1148.)

Sec. 501.102. PROJECTS RELATED TO CERTAIN JOB TRAINING. In

this subtitle, "project" includes job training required or suitable

for the promotion of development and expansion of business

enterprises and other enterprises described by this subtitle, as

provided by Section 501.162. (V.A.C.S. Art. 5190.6, Sec. 2(11)

(part), as amended Acts 79th Leg., R.S., Chs. 1, 1048, 1148.)

Sec. 501.103. CERTAIN INFRASTRUCTURE IMPROVEMENT PROJECTS.

In this subtitle, "project" includes expenditures that are found by

the board of directors to be required or suitable for

infrastructure necessary to promote or develop new or expanded

business enterprises, limited to:

(1) streets and roads, rail spurs, water and sewer

utilities, electric utilities, or gas utilities, drainage, site

improvements, and related improvements;

(2) telecommunications and Internet improvements; or

(3) beach remediation along the Gulf of Mexico.

(V.A.C.S. Art. 5190.6, Sec. 2(11) (part), as amended Acts 79th

Leg., R.S., Chs. 1, 1048, 1148.)

Sec. 501.104. PROJECTS RELATED TO CERTAIN MILITARY BASES OR

MISSIONS. In this subtitle, "project" includes the infrastructure,

improvements, land acquisition, buildings, or expenditures that:

(1) are for the creation or retention of primary jobs

or jobs that are included in North American Industry Classification

System (NAICS) sector number 926120, Regulation and Administration

of Transportation Programs, for the corresponding index entry for

Coast Guard (except the Coast Guard Academy); and

(2) are found by the board of directors to be required

or suitable for:

(A) promoting or supporting a military base in

active use to prevent the possible future closure or realignment of

the base;

(B) attracting new military missions to a

military base in active use; or

closed or realigned, including a military base closed or realigned

according to the recommendation of the Defense Base Closure and

Realignment Commission under the Defense Base Closure and

Realignment Act of 1990 (10 U.S.C. Section 2687 note). (V.A.C.S.

Art. 5190.6, Sec. 2(11) (part), as amended Acts 79th Leg., R.S., Ch.

1.)

Sec. 501.105. CAREER CENTER PROJECTS OUTSIDE OF JUNIOR

COLLEGE DISTRICT. In this subtitle, "project" includes the land,

buildings, equipment, facilities, improvements, and expenditures

found by the board of directors to be required or suitable for use

for a career center, if the area to be benefited by the career

center is not located in the taxing jurisdiction of a junior college

district. (V.A.C.S. Art. 5190.6, Sec. 2(11) (part), as amended Acts

79th Leg., R.S., Ch. 1048.)

Sec. 501.106. AIRPORT FACILITIES OR OTHER PROJECTS BY

CORPORATIONS AUTHORIZED BY CERTAIN BORDER MUNICIPALITIES. (a)

This section applies only to a corporation authorized to be created

by a municipality, any part of which is located within 25 miles of

an international border.

(b) For a corporation to which this section applies, in this

subtitle, "project" includes the land, buildings, facilities,

infrastructure, and improvements that:

(1) the corporation's board of directors finds are

required or suitable for the development or expansion of airport

facilities; or

(2) are undertaken by the corporation if the

municipality that authorized the creation of the corporation has,

at the time the corporation approves the project as provided by this

subtitle:

(A) a population of less than 50,000; or

(B) an average rate of unemployment that is

greater than the state average rate of unemployment during the most

recent 12-month period for which data is available that precedes

the date the project is approved. (V.A.C.S. Art. 5190.6, Sec. 2(11)

(part), as amended Acts 79th Leg., R.S., Ch. 1148.)

Sec. 501.107. INFRASTRUCTURE PROJECTS BY CORPORATIONS

AUTHORIZED BY MUNICIPALITIES IN CERTAIN BORDER COUNTIES. (a) This

section applies only to a corporation that:

(1) is authorized to be created by a municipality

wholly or partly located in a county that:

(A) is bordered by the Rio Grande;

(B) has a population of at least 500,000; and

least four municipalities each of which has a population of at least

25,000; and

(2) does not support a project, as defined by this

subchapter, with sales and use tax revenue collected under Chapter

504 or 505.

(b) For a corporation to which this section applies, in this

subtitle, "project" includes expenditures found by the board of

directors to be required or suitable for infrastructure necessary

to promote or develop new or expanded business enterprises,

including airports, ports, and sewer or solid waste disposal

facilities. (V.A.C.S. Art. 5190.6, Sec. 2(11) (part), as amended

Acts 79th Leg., R.S., Ch. 1148.)

[Sections 501.108-501.150 reserved for expansion]

SUBCHAPTER D. CORPORATE POWERS AND LIMITATIONS RELATING TO

PROJECTS

Sec. 501.151. AUTHORITY TO FINANCE PROJECT. A corporation

is a constituted authority for the purpose of financing one or more

projects. (V.A.C.S. Art. 5190.6, Sec. 2(10) (part).)

Sec. 501.152. DEFINITION OF COST WITH RESPECT TO PROJECT.

In this subtitle, "cost," with respect to a project, means the cost

of the acquisition, cleanup, construction, reconstruction,

improvement, or expansion of a project, including:

(1) the cost of acquiring all land, rights-of-way,

property rights, easements, and interests;

(2) the cost of all machinery and equipment;

(3) financing charges;

(4) the cost of inventory, raw materials, and other

supplies;

(5) research and development costs;

(6) interest accruing before and during construction

and until the first anniversary of the date the construction is

completed, regardless of whether capitalized;

(7) necessary reserve funds;

(8) the cost of estimates, including estimates of cost

and revenue;

(9) the cost of engineering or legal services;

(10) the cost of plans, specifications, or surveys;

(11) other expenses necessary or incident to

determining the feasibility and practicability of acquiring,

cleaning, constructing, reconstructing, improving, and expanding

the project;

(12) administrative expenses; and

(13) other expenditures necessary or incident to:

(A) acquiring, cleaning, constructing,

reconstructing, improving, and expanding the project;

(B) placing the project in operation; and

including refunding any outstanding obligations, mortgages, or

advances issued, made, or given by a person for a cost described by

this section. (V.A.C.S. Art. 5190.6, Sec. 2(4).)

Sec. 501.153. LEASE OR SALE OF PROJECT. (a) A corporation

may:

(1) lease all or any part of a project to a user, for

the rental and on the terms that the corporation's board of

directors considers advisable and not in conflict with this

subtitle; or

(2) sell, by installment payments or otherwise, and

convey all or any part of a project to a user for the purchase price

and on the terms the corporation's board of directors considers

advisable and not in conflict with this subtitle.

(b) A corporation may grant a lessee an option to purchase

all or any part of a project when all bonds of the corporation

delivered to provide those facilities have been paid or provision

has been made for the bonds' final payment. This subsection is

procedurally exclusive for authority to convey or grant an option

to purchase all or part of a project, and reference to another law

is not required. (V.A.C.S. Art. 5190.6, Secs. 23(a) (part), 29.)

Sec. 501.154. CONVEYANCE OF PROPERTY TO INSTITUTION OF

HIGHER EDUCATION. With respect to a project, a corporation may

donate, exchange, convey, sell, or lease land, improvements, or any

other interest in real property, fixtures, furnishings, equipment,

or personal property to an institution of higher education for a

legal purpose of the institution, on the terms the corporation's

board of directors considers advisable and not in conflict with

this subtitle. (V.A.C.S. Art. 5190.6, Sec. 23(a) (part).)

Sec. 501.155. LOAN TO FINANCE PROJECT. (a) A corporation

may make a secured or unsecured loan to a user for the purpose of

providing temporary or permanent financing or refinancing of all or

part of the cost of a project, including the refunding of an

outstanding obligation, mortgage, or advance issued, made, or given

by a person for the cost of a project.

(b) For a loan made under this section, a corporation may

charge and collect interest on the terms the corporation's board of

directors considers advisable and not in conflict with this

subtitle. (V.A.C.S. Art. 5190.6, Sec. 23(a) (part).)

Sec. 501.156. AGREEMENT MUST BENEFIT CORPORATION. An

agreement relating to a project must be for the benefit of the

corporation. (V.A.C.S. Art. 5190.6, Sec. 28(a) (part).)

Sec. 501.157. DEFAULT ON AGREEMENT; ENFORCEMENT. An

agreement relating to a project must provide that if a default

occurs in the payment of the principal of or the interest or premium

on the bonds or in the performance of any agreement contained in a

proceeding, mortgage, or instrument, the payment or performance may

be enforced by:

(1) mandamus; or

(2) the appointment of a receiver in equity with the

power to:

(A) charge and collect rents, purchase price

payments, and loan payments; and

(B) apply the revenue from the project in

accordance with the resolution, mortgage, or instrument. (V.A.C.S.

Art. 5190.6, Sec. 28(a) (part).)

Sec. 501.158. PERFORMANCE AGREEMENTS. (a) A corporation

may not provide a direct incentive to or make an expenditure on

behalf of a business enterprise under a project as defined by

Subchapter C of this chapter or by Subchapter D, Chapter 505, unless

the corporation enters into a performance agreement with the

business enterprise.

(b) A performance agreement between a corporation and

business enterprise must:

(1) provide, at a minimum, for a schedule of

additional payroll or jobs to be created or retained and capital

investment to be made as consideration for any direct incentives

provided or expenditures made by the corporation under the

agreement; and

(2) specify the terms under which repayment must be

made if the business enterprise does not meet the performance

requirements specified in the agreement. (V.A.C.S. Art. 5190.6,

Sec. 40.)

Sec. 501.159. POWERS CONCERNING PROJECTS; JURISDICTION.

(a) A corporation may acquire, by construction, devise, purchase,

gift, lease, or otherwise, or any one or more of those methods and

may construct, improve, maintain, equip, and furnish one or more

projects undertaken by another corporation or located within this

state, including within the coastal waters of this state, and

within or partially within the limits of the authorizing unit of the

corporation or within the limits of another unit, if the governing

body of the other corporation or the unit requests the corporation

to exercise its powers within that unit.

(b) A corporation may recover the costs of an investment

under Subsection (a) from a unit or another corporation under a

contract with a limited or unlimited duration. (V.A.C.S. Art.

5190.6, Sec. 23(a) (part).)

Sec. 501.160. OWNING OR OPERATING PROJECT AS BUSINESS. (a)

Except as provided by Subsection (d), a corporation may not own or

operate a project as a business other than:

(1) as a lessor, seller, or lender; or

(2) according to the requirements of any trust

agreement securing the credit transaction.

(b) The user under a lease, sale, or loan agreement relating

to a project is considered the owner of the project for purposes of

ad valorem taxes, sales and use taxes, or any other taxes imposed by

this state or a political subdivision of this state.

other security interest or contracting for the servicing of a

mortgage, deed of trust, or other security interest is not

considered the operation of a project.

(d) A corporation has all the powers necessary to own and

operate a project as a business if the project is a military

installation or military facility that has been closed or

realigned, including a military installation or facility closed or

realigned under the Defense Base Closure and Realignment Act of

1990 (10 U.S.C. Section 2687 note), as amended. (V.A.C.S. Art.

5190.6, Sec. 23(b).)

Sec. 501.161. CERTAIN ECONOMIC INCENTIVES PROHIBITED. (a)

In this section, "related party" means a person who owns at least 80

percent of the business enterprise to which the sales and use tax

would be rebated as part of an economic incentive.

(b) Notwithstanding any other provision of this subtitle, a

corporation may not offer to provide an economic incentive for a

business enterprise whose business consists primarily of

purchasing taxable items using a resale certificate and then

reselling those items to a related party. (V.A.C.S. Art. 5190.6,

Sec. 42.)

Sec. 501.162. USE OF TAX REVENUE FOR JOB TRAINING. A

corporation may spend tax revenue received under this subtitle for

job training offered through a business enterprise only if the

business enterprise has committed in writing to:

(1) create new jobs that pay wages that are at least

equal to the prevailing wage for the applicable occupation in the

local labor market area; or

(2) increase its payroll to pay wages that are at least

equal to the prevailing wage for the applicable occupation in the

local labor market area. (V.A.C.S. Art. 5190.6, Sec. 38.)

[Sections 501.163-501.200 reserved for expansion]

SUBCHAPTER E. CORPORATE POWERS AND LIMITATIONS RELATING TO BONDS

Sec. 501.201. AUTHORITY TO ISSUE BONDS. (a) A corporation

may issue bonds to defray all or part of the cost of a project,

regardless of whether the bonds are wholly or partly exempt from

federal income taxation.

(b) Except as limited by this subtitle or rules and

guidelines of the economic development office, a corporation has

full authority with respect to bonds.

corporation may issue bonds under this subtitle without obtaining

the consent or approval of any department, division, or agency of

this state, other than the attorney general under Chapter 1202,

Government Code. (V.A.C.S. Art. 5190.6, Secs. 23(a) (part), 25(d)

(part), 30 (part).)

Sec. 501.202. TERMS. Bonds issued by a corporation must be

dated and must mature in not more than 40 years. (V.A.C.S. Art.

5190.6, Sec. 25(a) (part).)

Sec. 501.203. SECURITIES COMMISSIONER PERMIT TO SELL

SECURITIES REQUIRED. A corporation may not sell or offer for sale

bonds or other securities until the securities commissioner grants

a permit authorizing the corporation to offer and sell the bonds or

other securities under the registration provisions of The

Securities Act (Article 581-1 et seq., Vernon's Texas Civil

Statutes), except as exempted from registration by rule or order of

the State Securities Board. Appeal from an adverse decision of the

securities commissioner or the State Securities Board is under the

administrative procedure law, Chapter 2001, Government Code. The

substantial evidence rule applies in an appeal under this

subsection. (V.A.C.S. Art. 5190.6, Sec. 24(d).)

Sec. 501.204. AUTHORIZING UNIT'S APPROVAL OF BONDS. (a) A

corporation may not deliver bonds, including refunding bonds,

unless the governing body of the corporation's authorizing unit

adopts a resolution, not earlier than the 60th day before the date

the bonds are delivered, specifically approving the corporation's

resolution providing for the issuance of the bonds.

(b) If the corporation is authorized to be created by a

county alliance, the resolution required by Subsection (a) must be

adopted by the commissioners courts of at least three-fifths of the

members of the county alliance. (V.A.C.S. Art. 5190.6, Sec.

25(f).)

Sec. 501.205. BOND COUNSEL AND FINANCIAL ADVISORS. Bond

counsel and financial advisors participating in a bond issue must

be mutually acceptable to the corporation and the user. (V.A.C.S.

Art. 5190.6, Sec. 24(e) (part).)

Sec. 501.206. MONEY USED TO PAY BONDS. The principal of and

interest on bonds issued by a corporation are payable only from the

money provided for that payment and from the revenue of the project

or projects for which the bonds were authorized. (V.A.C.S. Art.

5190.6, Secs. 22 (part), 25(a) (part).)

Sec. 501.207. BONDS NOT DEBT OF STATE OR AUTHORIZING UNIT.

(a) Bonds issued under this subtitle are not a debt or pledge of the

faith and credit of this state, the authorizing unit of the

corporation issuing the bonds, or any other political corporation,

subdivision, or agency of this state.

(b) The revenue bonds issued under this subtitle must

contain on their face a statement to the effect that:

(1) neither this state, the authorizing unit of the

corporation issuing the bonds, nor any other political corporation,

subdivision, or agency of this state is obligated to pay the

principal of or the interest on the bonds; and

(2) neither the faith and credit nor the taxing power

of this state, the authorizing unit of the corporation issuing the

bonds, or any other political corporation, subdivision, or agency

of this state is pledged to the payment of the principal of or the

interest on the bonds. (V.A.C.S. Art. 5190.6, Sec. 22 (part).)

Sec. 501.208. BOND SECURITY; DEFAULT. (a) The principal of

and interest on any bonds issued by a corporation shall be secured

by a pledge of the revenues and receipts derived by the corporation

from the lease or sale of the project financed by the bonds or from

the loan made by the corporation with respect to the project

financed or refinanced by the bonds.

(b) As security for the payment of the principal of and

interest on any bonds issued by a corporation and any agreements

made in connection with the issuance of bonds, the corporation may:

(1) mortgage and pledge any or all of the corporation's

projects or any part of a project, including the project financed or

refinanced and any enlargements of and additions to the project,

owned before or acquired after the time of the mortgage or pledge;

and

(2) assign any mortgage and repledge any security

conveyed to the corporation to secure any loan made by the

corporation, and pledge the revenues and receipts from the assigned

mortgage or security.

mortgage covering all or part of the project financed may include

any agreement or provision that the board of directors considers

advisable and not in conflict with this subtitle and that relates

to:

(1) the maintenance of the project covered by the

bonds or mortgage;

(2) the fixing and collection of rents;

(3) purchase price payments;

(4) loan payments;

(5) the creation and maintenance of special funds from

those revenues; or

(6) the rights and remedies available in the event of a

default.

(d) A mortgage to secure bonds may also provide that, in the

event of a default in the payment of the bonds or a violation of

another agreement contained in the mortgage, the mortgage may be

foreclosed and the mortgaged property may be sold in any manner

permitted by law. The mortgage may provide that a trustee under the

mortgage or the holder of any of the bonds secured by the mortgage

may purchase property at a foreclosure sale if the trustee or holder

is the highest bidder.

(e) A pledge, agreement, or mortgage made for the benefit or

security of any of the corporation's bonds continues in effect

until the principal of and interest on the bonds benefited or

secured by the pledge, agreement, or mortgage have been fully paid.

(V.A.C.S. Art. 5190.6, Secs. 23(a) (part), 25(e) (part), 28(b).)

Sec. 501.209. TRUST AGREEMENT. (a) Bonds issued under this

subtitle may be secured by a trust agreement between the

corporation and a trust company or bank having the powers of a trust

company. The trust company or bank may be located in or outside of

this state.

(b) The trust agreement may:

(1) pledge or assign the lease, sale, or loan revenues

to be received with respect to a project from a lessee, purchaser,

or borrower for the payment of the principal of and interest and any

premium on the bonds as the bonds become due and payable;

(2) provide for the creation and maintenance of

reserves for a purpose described by Subdivision (1);

(3) state the rights and remedies of the bondholders

and the trustee;

(4) restrict the individual right of action by

bondholders in a manner that is customary in trust agreements or

trust indentures securing bonds and debentures of private

corporations; and

(5) include any additional provision that the

corporation considers reasonable and proper for the security of the

bondholders.

issuance of the bonds may provide for the protection and

enforcement of the rights and remedies of the bondholders as may be

reasonable and proper and not in violation of law, including

covenants providing the duties relating to:

(1) the acquisition of property and the construction,

improvement, maintenance, repair, operation, and insurance of the

project in connection with which the bonds are authorized; and

(2) the custody, protection, and application of all

money.

(d) A bank or trust company incorporated under the laws of

this state that acts as depository of the bond proceeds or of

revenues may furnish indemnifying bonds or pledge securities as

required by the corporation.

(e) All expenses incurred in carrying out the trust

agreement may be treated as a part of the cost of operating the

project. (V.A.C.S. Art. 5190.6, Sec. 27.)

Sec. 501.210. FINANCIAL ASSURANCE OR RESPONSIBILITY

REQUIREMENTS FOR CERTAIN PROJECTS. (a) The resolution or mortgage

described by Section 501.208(c) may contain any agreement or

provision for satisfying the financial assurance or responsibility

requirements applicable to a project for which a permit is required

under Chapter 361, Health and Safety Code, or Chapter 27, Water

Code, including a requirement relating to construction, proper

operation, liability coverage, emergency response capability, well

plugging, closure, and post-closure care.

(b) Evidence of the passage of a resolution by a governing

body approving or agreeing to approve the issuance of bonds for the

purpose of satisfying the financial assurance or responsibility

requirements applicable to the project is an adequate demonstration

that sufficient financial resources will be available to comply

with all existing financial assurance or responsibility

requirements. (V.A.C.S. Art. 5190.6, Sec. 25(e) (part).)

Sec. 501.211. USE OF BOND PROCEEDS. (a) The proceeds of

the bonds of each issue shall be:

(1) used to pay or make a loan in the amount of all or

part of the cost of the project or projects for which the bonds were

authorized; and

(2) disbursed in the manner and under any restrictions

provided in the resolution authorizing the issuance of the bonds or

in any trust agreement securing the bonds.

(b) Bond proceeds may be used to:

(1) pay all costs incurred in issuing the bonds;

(2) pay interest on the bonds for any time determined

by the board of directors of the corporation issuing the bonds; and

(3) establish reserve funds and sinking funds for the

bonds.

project exceed the cost of the project for which the bonds were

issued, the surplus shall be:

(1) deposited to the credit of the sinking fund for the

bonds; or

(2) used to purchase bonds in the open market.

(V.A.C.S. Art. 5190.6, Sec. 25(c).)

Sec. 501.212. INTERIM BONDS. (a) Before the preparation of

definitive bonds, the corporation may, under like restrictions,

issue interim bonds that may be exchanged for definitive bonds when

the definitive bonds are executed and available for delivery.

(b) The corporation may issue interim bonds with or without

coupons. (V.A.C.S. Art. 5190.6, Sec. 25(d) (part).)

Sec. 501.213. REFUNDING BONDS. (a) A corporation may

provide by resolution for the issuance of refunding bonds:

(1) to refund outstanding bonds issued under this

subtitle for a project, including the payment of any redemption

premium on the bonds and the interest accrued or to accrue to the

date of redemption; and

(2) if considered advisable by the corporation,

additionally to finance improvements, extensions, or enlargements

to the project for which the bonds being refunded were issued or for

another project.

(b) The provisions of this subtitle relating to other bonds

govern the issuance, maturities, and other details of the refunding

bonds, the rights of the holders of the refunding bonds, and the

rights, duties, and obligations of the corporation with respect to

the same to the extent those provisions may be applicable.

exchange for outstanding bonds or may sell the refunding bonds and

use the proceeds to redeem outstanding bonds. (V.A.C.S. Art.

5190.6, Sec. 26.)

Sec. 501.214. SALE OR EXCHANGE OF BONDS. With respect to a

project, a corporation may:

(1) sell bonds; or

(2) exchange bonds for property, labor, services,

material, or equipment comprising a project or incidental to the

acquisition of a project. (V.A.C.S. Art. 5190.6, Sec. 23(a)

(part).)

[Sections 501.215-501.250 reserved for expansion]

SUBCHAPTER F. ADMINISTRATION BY ECONOMIC DEVELOPMENT OFFICE

Sec. 501.251. STATE STANDARDS FOR PROJECT ELIGIBILITY. The

economic development office shall adopt rules providing minimum

standards for project eligibility. (V.A.C.S. Art. 5190.6, Sec.

24(a) (part).)

Sec. 501.252. STATE STANDARDS AND GUIDELINES FOR LEASE,

SALE, OR LOAN AGREEMENTS. (a) The economic development office

shall adopt rules:

(1) providing minimum standards for lease, sale, and

loan agreements entered into under this subtitle; and

(2) providing guidelines with respect to the business

experience, financial resources, and responsibilities of the

lessee, purchaser, or borrower under a lease, sale, or loan

agreement entered into under this subtitle.

(b) The economic development office may adopt rules

governing the terms of a loan made by a corporation to a bank or

other lending institution the proceeds of which are reloaned as

permanent or temporary financing of a project. (V.A.C.S. Art.

5190.6, Secs. 24(a) (part), (f) (part).)

Sec. 501.253. RULES FOR SMALL BUSINESS PROGRAMS. The

economic development office shall adopt rules governing programs

for small businesses receiving loans guaranteed wholly or partly by

the United States Small Business Administration or another federal

agency. (V.A.C.S. Art. 5190.6, Sec. 24(f) (part).)

Sec. 501.254. FILING OF RULES AND GUIDELINES WITH SECRETARY

OF STATE. Rules and guidelines adopted by the economic development

office and amendments to the rules and guidelines take effect only

after the filing of the rules and guidelines or amendments with the

secretary of state. (V.A.C.S. Art. 5190.6, Sec. 24(a) (part).)

Sec. 501.255. APPROVAL OF LEASE, SALE, OR LOAN AGREEMENT.

(a) A lease, sale, or loan agreement entered into under this

subtitle must be approved by the economic development office. The

economic development office may not approve an agreement unless the

office affirmatively finds that the project sought to be financed

furthers the public purposes of this subtitle.

(b) The corporation may appeal an adverse ruling or decision

of the economic development office under Subsection (a) to a

district court of Travis County. The substantial evidence rule

applies in an appeal under this subsection.

(1) may enter into a lease, sale, or loan agreement

under this subtitle without obtaining the consent or approval of

any department, division, or agency of this state except as

otherwise provided by this subtitle; and

(2) has full authority with respect to a lease, sale,

or loan agreement, except as limited by this subtitle or by rules

and guidelines of the economic development office. (V.A.C.S. Art.

5190.6, Secs. 24(a) (part), 25(d) (part), 30 (part).)

Sec. 501.256. APPROVAL OF BONDS BY ECONOMIC DEVELOPMENT

OFFICE. (a) A corporation may submit a transcript of proceedings

in connection with the issuance of bonds to the economic

development office and request that the office approve the bonds. A

corporation shall include a nonrefundable filing fee with the

request. The office shall set the amount of the fee at a reasonable

amount that is not less than $500 or more than $25,000.

(b) If the economic development office refuses to approve

the bond issue solely on the basis of law, the corporation may seek

a writ of mandamus from the Texas Supreme Court, and for this

purpose the executive director of the economic development office

is considered a state officer under Section 22.002, Government

Code. (V.A.C.S. Art. 5190.6, Sec. 24(b).)

Sec. 501.257. FILING OF FEE SCHEDULE AND BOND PROCEDURES.

The economic development office by rule shall require a corporation

to file fee schedules and bond procedures. (V.A.C.S. Art. 5190.6,

Sec. 24(e) (part).)

Sec. 501.258. DELEGATION OF AUTHORITY. The economic

development office may delegate to the executive director of the

office the authority to approve a lease, sale, or loan agreement

made under this subtitle or bonds issued by a corporation or any

documents submitted as provided in this subtitle. (V.A.C.S. Art.

5190.6, Sec. 24(c).)

[Sections 501.259-501.300 reserved for expansion]

SUBCHAPTER G. AMENDMENT OR RESTATEMENT OF

CERTIFICATE OF FORMATION

Sec. 501.301. AMENDMENT BY BOARD OF DIRECTORS. (a) The

board of directors of a corporation at any time may file with the

governing body of the corporation's authorizing unit a written

application requesting that the authorizing unit approve an

amendment to the certificate of formation.

(b) The application must specify the proposed amendment.

The board of directors shall amend the certificate of formation in

accordance with this subchapter if the governing body of the

authorizing unit by resolution:

(1) determines that it is advisable to adopt the

amendment;

(2) authorizes the adoption of the amendment; and

(3) approves the form of the amendment. (V.A.C.S.

Art. 5190.6, Sec. 17(a).)

Sec. 501.302. AMENDMENT BY UNIT. The governing body of the

authorizing unit of a corporation, at the unit's sole discretion,

may in accordance with this subchapter amend the corporation's

certificate of formation at any time by:

(1) adopting the amendment by resolution; and

(2) delivering the certificate of amendment to the

secretary of state. (V.A.C.S. Art. 5190.6, Sec. 17(b).)

Sec. 501.303. AMENDMENT TO COUNTY ALLIANCE CORPORATION'S

CERTIFICATE OF FORMATION. An amendment to the certificate of

formation of a county alliance corporation may not be adopted

unless approved by the governing body of each member of the county

alliance that authorized the creation of the corporation.

(V.A.C.S. Art. 5190.6, Sec. 17(c).)

Sec. 501.304. CONTENTS OF CERTIFICATE OF AMENDMENT. The

certificate of amendment must:

(1) state the name of the corporation;

(2) if the amendment alters a provision of the

certificate of formation, identify by reference or describe the

altered provision and include the provision's text as amended;

(3) if the amendment is an addition to the certificate

of formation, state that fact and include the text of each provision

added; and

(4) state that the amendment was adopted or approved

by the governing body of the authorizing unit and give the date the

governing body adopted or approved the amendment. (V.A.C.S. Art.

5190.6, Sec. 18 (part).)

Sec. 501.305. EXECUTION AND VERIFICATION OF CERTIFICATE OF

AMENDMENT. (a) A certificate of amendment shall be executed:

(1) on behalf of the corporation by the president or a

vice president of the corporation and by the secretary or an

assistant secretary of the corporation; or

(2) by the presiding officer of the governing body of

the corporation's authorizing unit and by the secretary or clerk of

the governing body.

(b) One of the officers who signs the certificate of

amendment shall verify the certificate of amendment. (V.A.C.S.

Art. 5190.6, Sec. 18 (part).)

Sec. 501.306. DELIVERY AND FILING OF CERTIFICATE OF

AMENDMENT. (a) Three originals of the certificate of amendment

shall be delivered to the secretary of state.

(b) If the secretary of state determines that the

certificate of amendment conforms to this subchapter and on receipt

of a $25 fee, the secretary of state shall:

(1) endorse the word "Filed" and the date of the filing

on each original of the certificate of amendment;

(2) file one of the original certificates of amendment

in the secretary of state's office;

(3) issue two certificates evidencing the filing of

the certificate of amendment;

(4) attach to each certificate evidencing the filing

of the certificate of amendment; and

(5) deliver a certificate evidencing the filing of the

certificate of amendment and the attached certificate of amendment

to:

(A) the corporation or the corporation's

representative; and

(B) the governing body of the corporation's

authorizing unit.

of the certificate of amendment, the amendment becomes effective

and the certificate of formation is amended accordingly. (V.A.C.S.

Art. 5190.6, Secs. 19(a), (b), (c).)

Sec. 501.307. SUITS OR RIGHTS NOT AFFECTED. (a) An

amendment to a corporation's certificate of formation does not

affect:

(1) any existing cause of action in favor of or against

the corporation;

(2) any pending suit to which the corporation is a

party; or

(3) the existing rights of any person.

(b) If a corporation's name is changed by amendment to the

certificate of formation, a suit brought by or against the

corporation under its former name does not abate for that reason.

(V.A.C.S. Art. 5190.6, Sec. 19(d).)

Sec. 501.308. RESTATED CERTIFICATE OF FORMATION. A

corporation may authorize, execute, and file a restated certificate

of formation by following the procedure to amend the certificate of

formation provided by this subchapter, including obtaining the

approval of the governing body of the corporation's authorizing

unit. (V.A.C.S. Art. 5190.6, Sec. 20(a) (part).)

Sec. 501.309. RESTATEMENT WITHOUT ADDITIONAL AMENDMENT.

(a) A corporation may, without making any additional amendment,

restate the entire text of the certificate of formation as amended

or supplemented by all certificates evidencing the filing of a

certificate of amendment previously issued by the secretary of

state.

(b) The introductory paragraph of a restatement under this

section must contain a statement that the restatement:

(1) accurately copies the certificate of formation and

all amendments to the certificate of formation that are in effect;

and

(2) does not contain any change to the certificate of

formation. (V.A.C.S. Art. 5190.6, Secs. 20(a) (part), (b) (part).)

Sec. 501.310. RESTATEMENT WITH ADDITIONAL AMENDMENT. (a)

A corporation may:

(1) restate the entire text of the certificate of

formation as amended or supplemented by all certificates evidencing

the filing of a certificate of amendment previously issued by the

secretary of state; and

(2) as part of the restatement, make additional

amendments to the certificate of formation.

(b) A restatement under this section must:

(1) state that each additional amendment to the

certificate of formation conforms to this subtitle;

(2) contain any statement required by this subtitle

for the certificate of amendment, except that the full text of an

additional amendment is not required to be set out other than in the

restatement itself;

(3) contain a statement that:

(A) the restatement is an accurate copy of the

certificate of formation and all amendments to the certificate of

formation that are in effect and all additional amendments made to

the certificate of formation; and

(B) the restatement does not contain any other

change to the certificate of formation; and

(4) restate the text of the entire certificate of

formation as amended or supplemented by all certificates evidencing

the filing of a certificate of amendment previously issued by the

secretary of state and as additionally amended by the restated

certificate of formation. (V.A.C.S. Art. 5190.6, Secs. 20(a)

(part), (c) (part).)

Sec. 501.311. CHANGE IN CERTAIN INFORMATION NOT AMENDMENT.

For purposes of restating the certificate of formation under

Sections 501.309 and 501.310, substituting the current number,

names, and addresses of the directors for similar information of

the initial board of directors or omitting the name and address of

each organizer is not an amendment to or change in the certificate

of formation. (V.A.C.S. Art. 5190.6, Secs. 20(b) (part), (c)

(part).)

Sec. 501.312. EXECUTION AND VERIFICATION OF RESTATED

CERTIFICATE OF FORMATION. (a) Originals of the restated

certificate of formation shall be executed on behalf of the

corporation by the president or a vice president of the corporation

and by the secretary or an assistant secretary of the corporation.

(b) One of the officers who signs the restated certificate

of formation shall verify the restated certificate. (V.A.C.S. Art.

5190.6, Sec. 20(d) (part).)

Sec. 501.313. DELIVERY AND FILING OF RESTATED CERTIFICATE

OF FORMATION. (a) Three originals of the restated certificate of

formation shall be delivered to the secretary of state.

(b) If the secretary of state determines that the restated

certificate of formation conforms to law and on receipt of a $25

fee, the secretary of state shall:

(1) endorse the word "Filed" and the date of the filing

on each original of the restated certificate of formation;

(2) file one of the original restated certificates of

formation in the secretary of state's office;

(3) issue two certificates evidencing the filing of

the restated certificate of formation;

(4) attach to each certificate evidencing the filing

of the restated certificate of formation an original of the

restated certificate of formation; and

(5) deliver a certificate evidencing the filing of the

restated certificate of formation and the attached restated

certificate of formation to:

(A) the corporation or the corporation's

representative; and

(B) the governing body of:

(i) the corporation's authorizing unit; or

(ii) any county in the county alliance that

authorized the creation of the corporation, for a county alliance

corporation.

evidencing the filing of the restated certificate of formation and

the attached restated certificate of formation are delivered under

Subsection (b)(5)(B)(ii) shall provide photocopies of the

certificate evidencing the filing of the restated certificate of

formation and the attached restated certificate of formation to

each other member of the county alliance. (V.A.C.S. Art. 5190.6,

Secs. 20(d) (part), (e).)

Sec. 501.314. EFFECT OF ISSUANCE OF CERTIFICATE EVIDENCING

FILING OF RESTATED CERTIFICATE OF FORMATION. On the issuance of the

certificate evidencing the filing of the restated certificate of

formation by the secretary of state:

(1) the original certificate of formation and all

amendments to the original certificate of formation are superseded;

and

(2) the restated certificate of formation becomes the

certificate of formation of the corporation. (V.A.C.S. Art.

5190.6, Sec. 20(f).)

[Sections 501.315-501.350 reserved for expansion]

SUBCHAPTER H. REGISTERED OFFICE AND AGENT; SERVICE OF PROCESS

Sec. 501.351. REGISTERED OFFICE AND AGENT. (a) A

corporation shall continuously maintain in this state a registered

office and registered agent.

(b) A corporation's registered office may, but is not

required to be, the same as the corporation's principal office.

(1) an individual who is a resident of this state and

whose business office is the same as the corporation's registered

office; or

(2) a domestic or foreign for-profit or nonprofit

corporation that:

(A) is authorized to transact business or to

conduct affairs in this state; and

(B) has a principal or business office that is

the same as the corporation's registered office. (V.A.C.S. Art.

5190.6, Sec. 8.)

Sec. 501.352. CHANGE OF REGISTERED OFFICE OR AGENT. (a) A

corporation may change its registered office or registered agent by

filing in the office of the secretary of state a statement

declaring:

(1) the name of the corporation;

(2) the postal mailing address of the corporation's

registered office at the time of filing;

(3) the postal address to which the registered office

is to be changed, if the postal mailing address of the corporation's

registered office is to be changed;

(4) the name of the corporation's registered agent at

the time of filing;

(5) the name of the corporation's successor registered

agent, if the corporation's registered agent is to be changed;

(6) that the postal mailing address of the

corporation's registered office and the postal mailing address of

the business office of the corporation's registered agent as

changed will be the same; and

(7) that the change was authorized by:

(A) the corporation's board of directors; or

(B) an officer of the corporation authorized by

the corporation's board of directors to make the change.

(b) Two originals of the statement shall be:

(1) executed on behalf of the corporation by the

president or a vice president of the corporation;

(2) verified by the executing officer; and

(3) delivered to the secretary of state.

conforms to this section and on receipt of a $25 fee, the secretary

of state shall:

(1) endorse the word "Filed" and the date of the filing

on each original of the statement;

(2) file one of the original statements in the

secretary of state's office; and

(3) return the other original statement to the

corporation or the corporation's representative.

(d) A change made by the statement becomes effective on the

filing of the statement by the secretary of state. (V.A.C.S. Art.

5190.6, Secs. 9(a), (b), (c).)

Sec. 501.353. RESIGNATION OF REGISTERED AGENT. (a) A

corporation's registered agent may resign by:

(1) giving written notice to the corporation at the

corporation's last known address; and

(2) giving three originals of the written notice to

the secretary of state not later than the 10th day after the date

the notice is mailed or delivered to the corporation.

(b) The notice of resignation must include:

(1) the corporation's last known address;

(2) a statement that written notice of the resignation

was given to the corporation; and

(3) the date on which the written notice of

resignation was given to the corporation.

resignation conforms to this section, the secretary of state shall:

(1) endorse the word "Filed" and the date of the filing

on each original of the notice of resignation;

(2) file one of the original notices of resignation in

the secretary of state's office;

(3) return one original notice of resignation to the

resigning registered agent; and

(4) return one original notice of resignation to the

corporation at the corporation's last known address shown in the

notice.

(d) The appointment of a registered agent terminates on the

31st day after the date the secretary of state receives the notice

of resignation that complies with this section. (V.A.C.S. Art.

5190.6, Secs. 9(d), (e).)

Sec. 501.354. AGENTS FOR SERVICE. (a) The president, each

vice president, and the registered agent of a corporation are the

corporation's agents on whom a process, notice, or demand required

or permitted by law to be served on the corporation may be served.

(b) If a corporation does not appoint or maintain a

registered agent in this state or if the corporation's registered

agent cannot with reasonable diligence be found at the registered

office, the secretary of state is an agent of the corporation on

whom a process, notice, or demand described by Subsection (a) may be

served.

of state is made by delivering two copies of the process, notice, or

demand to the secretary of state, the deputy secretary of state, or

a clerk in charge of the corporation department of the secretary of

state's office. The secretary of state shall immediately forward

by registered mail one copy of the process, notice, or demand to the

corporation at the corporation's registered office.

(d) Service made on the secretary of state under this

section is returnable not earlier than the 30th day after the date

of service.

(e) The secretary of state shall keep a record of each

process, notice, and demand served on the secretary of state under

this subtitle and shall include in the record the time of the

service and the secretary of state's action in response to the

service. (V.A.C.S. Art. 5190.6, Sec. 10.)

[Sections 501.355-501.400 reserved for expansion]

SUBCHAPTER I. ALTERATION OR TERMINATION OF CORPORATION

Sec. 501.401. ALTERATION OR TERMINATION BY AUTHORIZING

UNIT. (a) At any time a corporation's authorizing unit, in its

sole discretion, may in accordance with this subtitle:

(1) alter the corporation's structure, organization,

programs, or activities; or

(2) terminate the existence of the corporation.

(b) The authority of an authorizing unit under this section

is limited only by the law of this state on the impairment of

contracts entered into by the corporation.

terminate the corporation's existence only by a written resolution

of the authorizing unit's governing body. (V.A.C.S. Art. 5190.6,

Sec. 34.)

Sec. 501.402. TERMINATION OF CORPORATION ON COMPLETION OF

PURPOSE. The board of directors of a corporation, with the approval

by written resolution of the corporation's authorizing unit, shall

terminate the corporation's existence as provided by this subtitle

if the board by resolution determines that:

(1) the purposes for which the corporation was formed

have been substantially fulfilled; and

(2) all bonds issued by the corporation have been

fully paid. (V.A.C.S. Art. 5190.6, Secs. 23(a) (part), 35.)

Sec. 501.403. EXECUTION OF CERTIFICATE OF TERMINATION. A

certificate of termination shall be executed:

(1) on behalf of the corporation by the president or a

vice president of the corporation and by the secretary or an

assistant secretary of the corporation; or

(2) by the presiding officer of the governing body of

the corporation's authorizing unit and the secretary or clerk of

the governing body. (V.A.C.S. Art. 5190.6, Sec. 36(a) (part).)

Sec. 501.404. DELIVERY AND FILING OF CERTIFICATE OF

TERMINATION. (a) Three originals of the certificate of

termination shall be delivered to the secretary of state.

(b) If the secretary of state determines that the

certificate of termination conforms to this subtitle and on receipt

of a $25 fee, the secretary of state shall:

(1) endorse the word "Filed" and the date of the filing

on each original of the certificate of termination;

(2) file one of the original certificates of

termination in the secretary of state's office;

(3) issue two certificates evidencing the filing of

the certificate of termination;

(4) attach to each certificate evidencing the filing

of the certificate of termination an original of the certificate of

termination; and

(5) deliver a certificate evidencing the filing of the

certificate of termination and the attached certificate of

termination to:

(A) the representative of the terminated

corporation; and

(B) the governing body of the terminated

corporation's authorizing unit. (V.A.C.S. Art. 5190.6, Secs. 36(a)

(part), (b) (part).)

Sec. 501.405. EFFECT OF ISSUANCE OF CERTIFICATE EVIDENCING

FILING OF CERTIFICATE OF TERMINATION. The corporate existence ends

on the issuance of the certificate evidencing the filing of the

certificate of termination except for the purpose of:

(1) any suit or other proceeding; and

(2) appropriate corporate action by a director or

officer under this subtitle. (V.A.C.S. Art. 5190.6, Sec. 36(b)

(part).)

Sec. 501.406. ASSETS ON TERMINATION. On termination the

title to all funds and property owned by the corporation is

transferred to the corporation's authorizing unit. (V.A.C.S. Art.

5190.6, Sec. 36(c).)

Sec. 501.407. TERMINATION WITH TRANSFER OF ASSETS TO TYPE A

CORPORATION. On approval of the governing bodies of each unit and

corporation involved, a corporation that is not a Type A

corporation may transfer all of the corporation's assets to a Type A

corporation and terminate its existence as provided by this

subtitle. (V.A.C.S. Art. 5190.6, Sec. 4A(l).)

CHAPTER 502. PROVISIONS APPLICABLE TO TYPE A AND

TYPE B CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 502.001. APPLICABILITY OF CHAPTER

[Sections 502.002-502.050 reserved for expansion]

SUBCHAPTER B. FINANCIAL PROVISIONS

Sec. 502.051. WRITTEN CONTRACT REQUIRED FOR BUSINESS

RECRUITMENT OR DEVELOPMENT

[Sections 502.052-502.100 reserved for expansion]

SUBCHAPTER C. TRAINING REQUIREMENTS

Sec. 502.101. TRAINING REGARDING OPERATION OF

CORPORATION

Sec. 502.102. PROVISION OF TRAINING SEMINAR

Sec. 502.103. PROOF OF COMPLIANCE

[Sections 502.104-502.150 reserved for expansion]

SUBCHAPTER D. REPORTING REQUIREMENTS

Sec. 502.151. REPORT TO COMPTROLLER

Sec. 502.152. NOTICE OF FAILURE TO REPORT

Sec. 502.153. REPORT TO LEGISLATURE

CHAPTER 502. PROVISIONS APPLICABLE TO TYPE A AND

TYPE B CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 502.001. APPLICABILITY OF CHAPTER. This chapter

applies only to Type A and Type B corporations. (New.)

[Sections 502.002-502.050 reserved for expansion]

SUBCHAPTER B. FINANCIAL PROVISIONS

Sec. 502.051. WRITTEN CONTRACT REQUIRED FOR BUSINESS

RECRUITMENT OR DEVELOPMENT. (a) Except under a written contract

approved by the corporation's board of directors, a corporation may

not pay compensation, including a commission or fee, or another

thing of value to a broker, agent, or other third party who:

(1) is involved in business recruitment or

development; and

(2) is not an employee of the corporation.

(b) A corporation that violates Subsection (a) is liable to

this state for a civil penalty in an amount not to exceed $10,000.

civil penalty in a district court in Travis County or the county in

which the violation occurred. (V.A.C.S. Art. 5190.6, Sec. 41.)

[Sections 502.052-502.100 reserved for expansion]

SUBCHAPTER C. TRAINING REQUIREMENTS

Sec. 502.101. TRAINING REGARDING OPERATION OF CORPORATION.

(a) At least once in each 24-month period, the following persons

associated with a corporation shall attend a training seminar

regarding the operation of a corporation created under this

subtitle:

(1) the municipal attorney, administrator, or clerk of

the municipality that authorized the creation of the corporation;

and

(2) the corporation's executive director or other

person responsible for the corporation's daily administration.

(b) The training seminar must provide at least six hours of

instruction on topics relating to the legal and proper operation of

a corporation created under this subtitle.

each calendar year in a different geographical region of this

state.

(d) A corporation may spend corporate revenue to pay for

required attendance at the training seminar. (V.A.C.S. Art.

5190.6, Secs. 39(a), (b) (part), (d), (e) (part).)

Sec. 502.102. PROVISION OF TRAINING SEMINAR. (a) A

training seminar under Section 502.101 must be provided by a

statewide organization representing corporations created under

this subtitle, except that if the economic development office

determines that no statewide organization is able to provide a

seminar as required by Section 502.101, the office, in conjunction

with the attorney general and the comptroller, shall by rule

develop the seminar. The office may enter into an agreement for

provision of a seminar developed under those rules with a person the

office determines is qualified to provide the seminar.

(b) A person providing a training seminar may:

(1) charge a reasonable fee for attending the seminar;

and

(2) compensate an individual who provides instruction

at the seminar. (V.A.C.S. Art. 5190.6, Secs. 39(e) (part), (f),

(g).)

Sec. 502.103. PROOF OF COMPLIANCE. (a) A person providing

a training seminar under Section 502.101 shall issue a certificate

of completion, on a form approved by the comptroller, to each person

who completes the seminar.

(b) A corporation shall present proof of compliance with

Section 502.101 to the comptroller by presenting the certificate of

completion issued under Subsection (a) for each person required to

attend a training seminar. The comptroller may impose an

administrative penalty, in an amount not to exceed $1,000 for each

violation, against a corporation that fails to present proof in

accordance with this subsection. (V.A.C.S. Art. 5190.6, Secs.

39(c), (h).)

[Sections 502.104-502.150 reserved for expansion]

SUBCHAPTER D. REPORTING REQUIREMENTS

Sec. 502.151. REPORT TO COMPTROLLER. (a) Not later than

February 1 of each year, the board of directors of a corporation

shall submit a report to the comptroller that includes:

(1) a statement of:

(A) the corporation's primary economic

development objectives;

(B) the corporation's total revenue during the

preceding fiscal year;

the preceding fiscal year; and

(D) the corporation's total expenditures during

the preceding fiscal year in each of the following categories:

(i) administration;

(ii) personnel;

(iii) marketing or promotion;

(iv) direct business incentives;

(v) job training;

(vi) debt service;

(vii) capital costs;

(viii) affordable housing; and

(ix) payments to taxing units, including

school districts;

(2) a list of the corporation's capital assets,

including land and buildings; and

(3) any other information the comptroller requires to

determine the use of the sales and use tax imposed under Chapter 504

or 505 to encourage economic development in this state.

(b) The report:

(1) must be in the form required by the comptroller;

and

(2) may not exceed one page. (V.A.C.S. Art. 5190.6,

Secs. 4C(a), (b).)

Sec. 502.152. NOTICE OF FAILURE TO REPORT. (a) If a

corporation does not submit a report as required by Section 502.151

or does not include sufficient information in the report, the

comptroller shall provide to the corporation written notice of the

failure, including information on how to correct the failure.

(b) The comptroller may impose an administrative penalty of

$200 against a corporation that does not correct the failure before

the 31st day after the date the corporation receives notice under

Subsection (a). The comptroller by rule shall prescribe the

procedures for imposition of the administrative penalty. The rules

must protect the corporation's due process rights. (V.A.C.S. Art.

5190.6, Secs. 4C(c), (d), (e).)

Sec. 502.153. REPORT TO LEGISLATURE. Not later than

November 1 of each even-numbered year, the comptroller shall submit

to the legislature a report on the use of the sales and use tax

imposed under Chapters 504 and 505 to encourage economic

development in this state. On request, the comptroller shall

provide without charge a copy of the report to a corporation.

(V.A.C.S. Art. 5190.6, Secs. 4C(f), (g).)

CHAPTER 503. TEXAS SMALL BUSINESS INDUSTRIAL

DEVELOPMENT CORPORATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 503.001. STATUS AS CORPORATION

Sec. 503.002. ACTION ON BEHALF OF STATE

Sec. 503.003. INCONSISTENCY WITH OTHER PROVISION OF

SUBTITLE

[Sections 503.004-503.050 reserved for expansion]

SUBCHAPTER B. OPERATION OF CORPORATION

Sec. 503.051. BOARD OF DIRECTORS

Sec. 503.052. LIMITATION ON LIABILITY

Sec. 503.053. EXPENDITURES; APPROVAL OF PROGRAMS

Sec. 503.054. USE OF MONEY BY TEXAS ECONOMIC DEVELOPMENT

BANK

Sec. 503.055. DEPOSITORY

[Sections 503.056-503.100 reserved for expansion]

SUBCHAPTER C. SPECIFIC POWERS AND LIMITATIONS ON POWERS

Sec. 503.101. FINANCING FOR USERS

Sec. 503.102. ADDITIONAL PROJECTS AUTHORIZED

Sec. 503.103. BONDS

CHAPTER 503. TEXAS SMALL BUSINESS INDUSTRIAL

DEVELOPMENT CORPORATION

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 503.001. STATUS AS CORPORATION. (a) The Texas Small

Business Industrial Development Corporation is a corporation under

this subtitle and shall be organized and governed in accordance

with this subtitle.

(b) The corporation has the powers of and is subject to the

limitations applicable to a corporation under this subtitle, except

as otherwise provided by this chapter. (V.A.C.S. Art. 5190.6, Sec.

4(b) (part).)

Sec. 503.002. ACTION ON BEHALF OF STATE. (a) For purposes

of this subtitle, this state is considered to be the unit that

authorized creation of the Texas Small Business Industrial

Development Corporation.

(b) The corporation shall act on behalf of this state to

implement the public purposes of this subtitle. (V.A.C.S. Art.

5190.6, Sec. 4(b) (part).)

Sec. 503.003. INCONSISTENCY WITH OTHER PROVISION OF

SUBTITLE. To the extent this chapter is inconsistent with another

provision of this subtitle relating to the existence, powers,

limitations, organization, operation, or affairs of the Texas Small

Business Industrial Development Corporation, this chapter

controls. (V.A.C.S. Art. 5190.6, Sec. 4(b) (part).)

[Sections 503.004-503.050 reserved for expansion]

SUBCHAPTER B. OPERATION OF CORPORATION

Sec. 503.051. BOARD OF DIRECTORS. (a) The governor shall

appoint the board of directors of the Texas Small Business

Industrial Development Corporation.

(b) The governor or the governor's designee and the

executive director of the economic development office serve as

nonvoting ex officio members of the board. (V.A.C.S. Art. 5190.6,

Sec. 4(d).)

Sec. 503.052. LIMITATION ON LIABILITY. A director,

officer, employee, or member of the economic development office

acting on behalf of the Texas Small Business Industrial Development

Corporation is not personally liable:

(1) for damage, loss, or injury resulting from the

performance of the person's duties under this subtitle; or

(2) on any commitment or agreement executed on behalf

of the corporation under this subtitle. (V.A.C.S. Art. 5190.6,

Sec. 4(e).)

Sec. 503.053. EXPENDITURES; APPROVAL OF PROGRAMS. (a)

Expenses that the Texas Small Business Industrial Development

Corporation incurs in operating and administering the

corporation's programs and affairs, including expenses for

employees and program assistance or development, shall be paid out

of fees collected or revenue generated under this subtitle.

(b) Each program or expenditure of the corporation must be

approved on behalf of this state by the Texas Economic Development

Bank. (V.A.C.S. Art. 5190.6, Sec. 4(f).)

Sec. 503.054. USE OF MONEY BY TEXAS ECONOMIC DEVELOPMENT

BANK. Money of the Texas Small Business Industrial Development

Corporation may not be used or made available for use by the Texas

Economic Development Bank except to reimburse the bank for expenses

the bank incurs in its official capacity on behalf of the

corporation. (V.A.C.S. Art. 5190.6, Sec. 4(g) (part).)

Sec. 503.055. DEPOSITORY. Revenue and other money of the

Texas Small Business Industrial Development Corporation shall be

deposited with one or more financial institutions that the

corporation's board of directors chooses for that purpose.

(V.A.C.S. Art. 5190.6, Sec. 4(g) (part).)

[Sections 503.056-503.100 reserved for expansion]

SUBCHAPTER C. SPECIFIC POWERS AND LIMITATIONS ON POWERS

Sec. 503.101. FINANCING FOR USERS. In addition to

exercising any other power of a corporation under this subtitle,

the Texas Small Business Industrial Development Corporation may:

(1) make a loan through the purchase of or

participation in, and pledge, negotiate, or sell, bonds, notes, and

other evidences of indebtedness of a user to finance a project that

represents a direct loan, a grant, or a loan participation, or the

repayment of which is wholly or partly insured or otherwise

guaranteed, by the United States, this state, or an agency,

department, or instrumentality of the United States or this state;

and

(2) otherwise directly or indirectly provide

financing for a user in the manner that the corporation determines

to be necessary or convenient for the performance of the

corporation's public purposes, functions, and duties under this

subtitle. (V.A.C.S. Art. 5190.6, Sec. 4(h).)

Sec. 503.102. ADDITIONAL PROJECTS AUTHORIZED. (a)

Notwithstanding any other provision of this subtitle, "project"

includes use of amounts financed through the Texas Small Business

Industrial Development Corporation's purchase of bonds, notes, or

other evidences of indebtedness of a user under this chapter if the

corporation's board of directors finds the use to be required or

suitable for promoting economic development in this state.

(b) A finding under Subsection (a) may be based solely on

review by the corporation's board of directors of the criteria used

to determine eligibility of a user to obtain a direct loan, a grant,

a loan participation, insurance, or another guarantee from the

United States, this state, or an agency or instrumentality of the

United States or this state. (V.A.C.S. Art. 5190.6, Sec. 4(i)

(part).)

Sec. 503.103. BONDS. (a) The Texas Small Business

Industrial Development Corporation may not issue bonds.

(b) All bonds issued and delivered by the Texas Small

Business Industrial Development Corporation before September 1,

1987, and all proceedings authorizing those bonds are

incontestable.

be used:

(1) to pay all or part of the cost of a project

regardless of whether the cost or project was, before that date,

within the definitions of those terms under the Texas Department of

Commerce Act, Chapter 374, Acts of the 70th Legislature, Regular

Session, 1987; or

(2) for any other purpose authorized by this subtitle.

(V.A.C.S. Art. 5190.6, Secs. 4(c) (part), (i) (part), (j).)

CHAPTER 504. TYPE A CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 504.001. DEFINITION

Sec. 504.002. APPLICABILITY OF CHAPTER

Sec. 504.003. AUTHORITY TO CREATE CORPORATION

Sec. 504.004. CONTENTS OF CERTIFICATE OF FORMATION

Sec. 504.005. CORPORATION NOT SUBJECT TO CERTAIN

PROVISIONS

[Sections 504.006-504.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 504.051. BOARD OF DIRECTORS

Sec. 504.052. OFFICERS

Sec. 504.053. QUORUM

Sec. 504.054. LOCATION OF BOARD MEETINGS

Sec. 504.055. RESTRICTIONS ON REGISTERED AGENT AND

OFFICE

[Sections 504.056-504.100 reserved for expansion]

SUBCHAPTER C. GENERAL POWERS AND DUTIES

Sec. 504.101. APPLICABILITY OF OTHER LAW; CONFLICTS

Sec. 504.102. CONTRACT WITH OTHER PRIVATE CORPORATION

Sec. 504.103. LIMITATION ON PRIMARY PURPOSE OF

PROJECT; EXCEPTIONS

Sec. 504.104. ASSUMPTION OR PAYMENT OF PREEXISTING

DEBT PROHIBITED

Sec. 504.105. LIMITATION ON USE OF REVENUES FOR

PROMOTIONAL PURPOSE

Sec. 504.106. EMINENT DOMAIN

Sec. 504.107. LIABILITY

[Sections 504.108-504.150 reserved for expansion]

SUBCHAPTER D. AUTHORIZATION FOR ADDITIONAL PROJECTS

Sec. 504.151. DEFINITIONS

Sec. 504.152. ELECTION TO AUTHORIZE PROJECTS

APPLICABLE TO TYPE B CORPORATIONS

Sec. 504.153. PUBLIC HEARING PRECEDING ELECTION

Sec. 504.154. LIMITATION ON SUBSEQUENT ELECTION

Sec. 504.155. SUBSEQUENT APPROVAL OF ADDITIONAL

PROJECTS

Sec. 504.156. APPLICABILITY OF CHAPTER TO ADDITIONAL

PROJECT

[Sections 504.157-504.200 reserved for expansion]

SUBCHAPTER E. INVESTMENT AGREEMENTS

Sec. 504.201. DEFINITIONS

Sec. 504.202. AGREEMENT TO INVEST IN EXTRATERRITORIAL

PROJECT

Sec. 504.203. REQUIRED AGREEMENT WITH CORRESPONDING

TAXING UNIT

Sec. 504.204. EFFECT ON AUTHORITY UNDER OTHER LAW

[Sections 504.205-504.250 reserved for expansion]

SUBCHAPTER F. SALES AND USE TAX

Sec. 504.251. TAX AUTHORIZED

Sec. 504.252. SALES TAX

Sec. 504.253. USE TAX

Sec. 504.254. COMBINED TAX RATE

Sec. 504.255. APPLICABILITY OF TAX CODE

Sec. 504.256. BALLOT

Sec. 504.257. LIMITATION ON DURATION OF TAX

Sec. 504.258. ELECTION TO REDUCE OR INCREASE TAX RATE

Sec. 504.259. REDUCTION OF TAX WITHIN REGIONAL

TRANSPORTATION AUTHORITY

Sec. 504.260. LIMITED SALES AND USE TAX FOR SPECIFIC

PROJECT

Sec. 504.261. CONCURRENT ELECTION WITH ELECTION UNDER

TAX CODE

Sec. 504.262. PROCEDURES ON EXPIRATION OF TAX

[Sections 504.263-504.300 reserved for expansion]

SUBCHAPTER G. USE OF TAX PROCEEDS

Sec. 504.301. DELIVERY AND GENERAL USE OF TAX PROCEEDS

Sec. 504.302. PAYMENT OF MAINTENANCE AND OPERATING

COSTS; ELECTION

Sec. 504.303. PAYMENT OF BONDS

Sec. 504.304. PAYMENT FOR CLEANUP OF CONTAMINATED

PROPERTY; ELECTION

Sec. 504.305. PAYMENT FOR JOB TRAINING

[Sections 504.306-504.350 reserved for expansion]

SUBCHAPTER H. TERMINATION OF CORPORATION

Sec. 504.351. ELECTION TO TERMINATE EXISTENCE OF CORPORATION ON

PETITION

Sec. 504.352. BALLOT

Sec. 504.353. TERMINATION OF EXISTENCE OF CORPORATION

CHAPTER 504. TYPE A CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 504.001. DEFINITION. In this chapter, "authorizing

municipality" means the municipality that authorizes the creation

of a Type A corporation. (New.)

Sec. 504.002. APPLICABILITY OF CHAPTER. This chapter

applies only to a municipality that:

(1) is located in a county that has a population of

500,000 or less; or

(2) has a population of less than 50,000 and:

(A) is located in two or more counties, one of

which has a population of 500,000 or more;

(B) is located within the territorial limits of,

but has not elected to become a part of, a metropolitan rapid

transit authority:

(i) the principal municipality of which has

a population of less than 1.9 million; and

(ii) that was created before January 1,

1980, under Chapter 141, Acts of the 63rd Legislature, Regular

Session, 1973, and is operating under Chapter 451, Transportation

Code; or

but has not elected to become a part of, a regional transportation

authority:

(i) the principal municipality of which has

a population of more than 750,000; and

(ii) that was created under Chapter 683,

Acts of the 66th Legislature, Regular Session, 1979, or Chapter

452, Transportation Code, and is operating under Chapter 452,

Transportation Code. (V.A.C.S. Art. 5190.6, Sec. 4A(a).)

Sec. 504.003. AUTHORITY TO CREATE CORPORATION. (a) A

municipality may authorize the creation under this subtitle of a

Type A corporation.

(b) A municipality may not authorize the creation of more

than one Type A corporation. (V.A.C.S. Art. 5190.6, Sec. 4A(b)(1)

(part).)

Sec. 504.004. CONTENTS OF CERTIFICATE OF FORMATION. The

certificate of formation of a Type A corporation must state that the

corporation is governed by this chapter. (V.A.C.S. Art. 5190.6,

Sec. 4A(b)(1) (part).)

Sec. 504.005. CORPORATION NOT SUBJECT TO CERTAIN

PROVISIONS. Sections 501.203, 501.205, 501.251-501.254,

501.255(a) and (b), 501.256, and 501.257 do not apply to a

corporation under this chapter. (V.A.C.S. Art. 5190.6, Sec.

4A(h).)

[Sections 504.006-504.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 504.051. BOARD OF DIRECTORS. (a) The board of

directors of a Type A corporation consists of at least five

directors.

(b) A director is appointed by the governing body of the

authorizing municipality, serves at the pleasure of that governing

body, and may be removed by that governing body at any time without

cause.

shall determine the number of directors and the length of each

director's term, except that the length of a director's term may not

exceed six years. (V.A.C.S. Art. 5190.6, Sec. 4A(c) (part).)

Sec. 504.052. OFFICERS. The board of directors of a Type A

corporation shall appoint:

(1) a president;

(2) a secretary; and

(3) other officers of the corporation that the

governing body of the authorizing municipality considers

necessary. (V.A.C.S. Art. 5190.6, Sec. 4A(c) (part).)

Sec. 504.053. QUORUM. A majority of the entire membership

of the board of directors of a Type A corporation is a quorum.

(V.A.C.S. Art. 5190.6, Sec. 4A(c) (part).)

Sec. 504.054. LOCATION OF BOARD MEETINGS. The board of

directors of a Type A corporation shall conduct each board meeting

within the boundaries of the authorizing municipality. (V.A.C.S.

Art. 5190.6, Sec. 4A(c) (part).)

Sec. 504.055. RESTRICTIONS ON REGISTERED AGENT AND OFFICE.

(a) The registered agent of a Type A corporation must be an

individual who is a resident of this state.

(b) The registered office of a Type A corporation must be

located within the boundaries of the authorizing municipality.

(V.A.C.S. Art. 5190.6, Sec. 4A(c) (part).)

[Sections 504.056-504.100 reserved for expansion]

SUBCHAPTER C. GENERAL POWERS AND DUTIES

Sec. 504.101. APPLICABILITY OF OTHER LAW; CONFLICTS. A

Type A corporation has the powers and is subject to the limitations

of a corporation created under another provision of this subtitle

outside of this chapter. To the extent of a conflict between this

chapter and another provision of this subtitle, this chapter

prevails. (V.A.C.S. Art. 5190.6, Sec. 4A(b)(1) (part).)

Sec. 504.102. CONTRACT WITH OTHER PRIVATE CORPORATION. A

Type A corporation may contract with another private corporation

to:

(1) carry out an industrial development program or

objective; or

(2) assist with the development or operation of an

economic development program or objective consistent with the

purposes and duties provided by this subtitle. (V.A.C.S. Art.

5190.6, Sec. 4A(b)(1) (part).)

Sec. 504.103. LIMITATION ON PRIMARY PURPOSE OF PROJECT;

EXCEPTIONS. (a) Except as otherwise provided by this section, a

Type A corporation may not undertake a project the primary purpose

of which is to provide:

(1) a transportation facility;

(2) a solid waste disposal facility;

(3) a sewage facility;

(4) a facility for furnishing water to the general

public; or

(5) an air or water pollution control facility.

(b) A Type A corporation may provide a facility described by

Subsection (a) to benefit property acquired for a project that has

another primary purpose.

purpose of which is to provide:

(1) a general aviation business service airport that

is an integral part of an industrial park;

(2) a port-related facility to support waterborne

commerce; or

(3) an airport-related facility, if the authorizing

municipality:

(A) is wholly or partly located within 25 miles

of an international border; and

(B) has, at the time the project is approved by

the corporation as provided by this subtitle:

(i) a population of less than 50,000; or

(ii) an average rate of unemployment that

is greater than the state average rate of unemployment during the

most recent 12-month period for which data is available that

precedes the date the project is approved. (V.A.C.S. Art. 5190.6,

Sec. 4A(i).)

Sec. 504.104. ASSUMPTION OR PAYMENT OF PREEXISTING DEBT

PROHIBITED. A Type A corporation may not:

(1) assume a debt that existed before the date the

authorizing municipality authorized the creation of the

corporation; or

(2) make an expenditure to pay the principal of or

interest on a debt that existed before the date prescribed by

Subdivision (1). (V.A.C.S. Art. 5190.6, Sec. 4A(q).)

Sec. 504.105. LIMITATION ON USE OF REVENUES FOR PROMOTIONAL

PURPOSE. (a) Except as provided by Subsection (b), a Type A

corporation may spend not more than 10 percent of the corporate

revenues for promotional purposes.

(b) A Type A corporation may spend not more than 25 percent

of the corporate revenues for promotional purposes if the

authorizing municipality:

(1) is located in two counties;

(2) has a population of less than 24,250 according to

the 1990 federal census; and

(3) is located wholly or partly within 10 miles of a

federal military reservation. (V.A.C.S. Art. 5190.6, Secs.

4A(b)(1) (part), (2).)

Sec. 504.106. EMINENT DOMAIN. A Type A corporation may not

exercise the power of eminent domain except by action of the

governing body of the authorizing municipality. (V.A.C.S. Art.

5190.6, Sec. 4A(g).)

Sec. 504.107. LIABILITY. (a) The following are not liable

for damages arising from the performance of a governmental function

of a Type A corporation or the authorizing municipality:

(1) the corporation;

(2) a director of the corporation;

(3) the municipality;

(4) a member of the governing body of the

municipality; and

(5) an employee of the corporation or municipality.

(b) For purposes of Chapter 101, Civil Practice and Remedies

Code (Texas Tort Claims Act), a Type A corporation is a governmental

unit and the corporation's actions are governmental functions.

(V.A.C.S. Art. 5190.6, Sec. 4A(j).)

[Sections 504.108-504.150 reserved for expansion]

SUBCHAPTER D. AUTHORIZATION FOR ADDITIONAL PROJECTS

Sec. 504.151. DEFINITIONS. In this subchapter:

(1) "Related infrastructure" has the meaning assigned

by Section 334.001.

(2) "Sports venue" means an arena, coliseum, stadium,

or other type of area or facility:

(A) that is primarily used or is planned for

primary use for one or more professional or amateur sports or

athletics events; and

(B) for which a fee is charged or is planned to be

charged for admission to the sports or athletics events, other than

occasional civic, charitable, or promotional events. (V.A.C.S.

Art. 5190.6, Sec. 4A(s)(5), as added Acts 75th Leg., R.S., Ch. 551.)

Sec. 504.152. ELECTION TO AUTHORIZE PROJECTS APPLICABLE TO

TYPE B CORPORATIONS. (a) An authorizing municipality may submit to

the voters of the municipality a ballot proposition that authorizes

the Type A corporation to use the sales and use tax imposed under

this chapter, including any amount previously authorized and

collected, for a specific project or for a specific category of

projects that do not qualify under this chapter but qualify under

Chapter 505, including a sports venue and related infrastructure.

(b) The project or category of projects described by

Subsection (a) must be clearly described on the ballot so that a

voter is able to discern the limits of the specific project or

category of projects authorized by the proposition. If maintenance

and operating costs of an otherwise authorized facility are to be

paid from the sales and use tax, the ballot language must clearly

state that fact.

proposition at:

(1) an election held under another provision of this

subtitle, including the election at which the proposition to

initially approve the adoption of a sales and use tax for the

benefit of the corporation is submitted; or

(2) a separate election to be held on a uniform

election date. (V.A.C.S. Art. 5190.6, Secs. 4A(s)(1) (part), (2).)

Sec. 504.153. PUBLIC HEARING PRECEDING ELECTION. Before an

election may be held under Section 504.152, a public hearing must be

held in the authorizing municipality to inform the municipality's

residents of the cost and impact of the project or category of

projects. At least 30 days before the date set for the hearing,

notice of the date, time, place, and subject of the hearing must be

published in a newspaper with general circulation in the

municipality in which the project is located. The notice should be

published on a weekly basis until the date of the hearing.

(V.A.C.S. Art. 5190.6, Sec. 4A(s)(3), as added Acts 75th Leg.,

R.S., Chs. 551, 958.)

Sec. 504.154. LIMITATION ON SUBSEQUENT ELECTION. If a

majority of the voters voting on the issue do not approve a specific

project or a specific category of projects at an election under

Section 504.152, another election concerning the same project or

category of projects may not be held before the first anniversary of

the date of the most recent election disapproving the project or

category of projects. (V.A.C.S. Art. 5190.6, Sec. 4A(s)(4).)

Sec. 504.155. SUBSEQUENT APPROVAL OF ADDITIONAL PROJECTS.

Prior approval of a specific project at an election or completion of

a specific project approved at an election does not prevent an

authorizing municipality from seeking voter approval of an

additional project or category of projects under this subchapter to

be funded from the same sales and use tax. (V.A.C.S. Art. 5190.6,

Sec. 4A(s)(1) (part).)

Sec. 504.156. APPLICABILITY OF CHAPTER TO ADDITIONAL

PROJECT. A project undertaken under this subchapter is governed by

this chapter, including the provisions of this chapter relating to

the authorization and expiration of a sales and use tax. (V.A.C.S.

Art. 5190.6, Sec. 4A(s)(5), as added Acts 75th Leg., R.S., Ch. 958.)

[Sections 504.157-504.200 reserved for expansion]

SUBCHAPTER E. INVESTMENT AGREEMENTS

Sec. 504.201. DEFINITIONS. In this subchapter:

(1) "Base taxable value" means the taxable value of

property located in the defined area of a project as of January 1 of

the year in which the agreement is entered into under Section

504.202.

(2) "Corresponding taxing unit" means another taxing

unit that:

(A) is of the same type of political subdivision

as a taxing unit that enters into an agreement under Section

504.202; and

(B) taxes property located in the defined area of

a project that is the subject of the agreement.

(3) "Taxing unit" has the meaning assigned by Section

1.04, Tax Code. (V.A.C.S. Art. 5190.6, Secs. 4A(u)(1), (5) (part),

(6) (part).)

Sec. 504.202. AGREEMENT TO INVEST IN EXTRATERRITORIAL

PROJECT. (a) A taxing unit may enter into an agreement with a Type

A corporation to invest in a project that is undertaken by the

corporation and that is not located in the territory of the taxing

unit. A Type A corporation may enter into an agreement under this

section with more than one taxing unit.

(b) Before entering into the agreement, the Type A

corporation undertaking the project must designate a defined area

that includes the territory where the project is to be located.

property in the defined area of the project.

(d) The agreement may provide that the taxing unit is

entitled to receive from the Type A corporation, in exchange for the

investment, an amount equal to a specified percentage of the tax

revenue from taxes imposed by the corresponding taxing unit on the

taxable value of the property in the defined area that exceeds the

base taxable value, during the period the corresponding taxing unit

imposes taxes on that property. (V.A.C.S. Art. 5190.6, Secs.

4A(u)(2), (3), (4), (5) (part).)

Sec. 504.203. REQUIRED AGREEMENT WITH CORRESPONDING TAXING

UNIT. A Type A corporation that enters into an agreement under

Section 504.202 shall enter into an agreement with a corresponding

taxing unit to recover the amount paid by the corporation to a

taxing unit as provided by Section 504.202(d). (V.A.C.S. Art.

5190.6, Sec. 4A(u)(6) (part).)

Sec. 504.204. EFFECT ON AUTHORITY UNDER OTHER LAW. (a)

This subchapter does not affect a taxing unit's authority to grant a

tax abatement.

(b) This subchapter does not affect a Type A corporation's

authority to invest in a project or recover its total investment by

contract under Section 501.159. (V.A.C.S. Art. 5190.6, Secs.

4A(u)(7), (8).)

[Sections 504.205-504.250 reserved for expansion]

SUBCHAPTER F. SALES AND USE TAX

Sec. 504.251. TAX AUTHORIZED. The authorizing municipality

may adopt a sales and use tax for the benefit of a Type A corporation

if the tax is approved by a majority of the voters of the

municipality voting at an election held for that purpose.

(V.A.C.S. Art. 5190.6, Sec. 4A(d) (part).)

Sec. 504.252. SALES TAX. (a) If the authorizing

municipality adopts the tax under Section 504.251, a tax is imposed

on the receipts from the sale at retail of taxable items within the

municipality at the rate approved by the voters.

(b) The rate of the tax imposed under Subsection (a) must be

equal to one-eighth, one-fourth, three-eighths, or one-half of one

percent. (V.A.C.S. Art. 5190.6, Sec. 4A(d) (part).)

Sec. 504.253. USE TAX. (a) If the authorizing municipality

adopts the tax under Section 504.251, an excise tax is imposed on

the use, storage, or other consumption within the municipality of

taxable items purchased, leased, or rented from a retailer during

the period that the tax is effective within the municipality.

(b) The rate of the excise tax is the same as the rate of the

sales tax portion of the sales and use tax and is applied to the

sales price of the taxable items. (V.A.C.S. Art. 5190.6, Sec. 4A(d)

(part).)

Sec. 504.254. COMBINED TAX RATE. (a) An authorizing

municipality may not adopt a rate under this chapter that, when

added to the rates of all other sales and use taxes imposed by the

authorizing municipality and other political subdivisions of this

state having territory in the authorizing municipality, would

result in a combined rate exceeding two percent.

(b) An election adopting a rate that would result in a rate

exceeding the combined rate limit under Subsection (a) has no

effect. (V.A.C.S. Art. 5190.6, Sec. 4A(d) (part).)

Sec. 504.255. APPLICABILITY OF TAX CODE. (a) Chapter 321,

Tax Code, governs an election to approve the adoption of the sales

and use tax under this chapter and governs the imposition,

computation, administration, governance, use, and abolition of the

tax except as inconsistent with this chapter.

(b) The tax imposed under this chapter takes effect as

provided by Section 321.102(a), Tax Code. (V.A.C.S. Art. 5190.6,

Sec. 4A(e).)

Sec. 504.256. BALLOT. In an election to adopt the sales and

use tax under this chapter, the ballot shall be printed to provide

for voting for or against the proposition: "The adoption of a sales

and use tax for the promotion and development of new and expanded

business enterprises at the rate of __________ of one percent"

(one-eighth, one-fourth, three-eighths, or one-half to be inserted

as appropriate). (V.A.C.S. Art. 5190.6, Sec. 4A(m).)

Sec. 504.257. LIMITATION ON DURATION OF TAX. (a) At an

election held under Section 504.251 or 504.258, the authorizing

municipality may also allow the voters to vote on a ballot

proposition to limit the period for imposition of a sales and use

tax. If an authorizing municipality elects to limit the period for

imposition of the tax, the following phrase shall be added to the

end of the ballot proposition prescribed by Section 504.256: "to be

imposed for __________ years" (the number of years to be inserted as

appropriate). The governing body of the municipality shall set the

expiration date of the proposed tax to occur on the appropriate

anniversary of the effective date of the tax.

(b) A sales and use tax imposed for a limited period under

this section expires on the date set by the governing body of the

authorizing municipality under Subsection (a) unless the tax is

repealed on an earlier date by a majority of the voters voting in an

election held in the municipality. If an election to abolish the

tax is held, Sections 321.102(a) and 321.402(b), Tax Code, apply to

the date of repeal.

additional sales and use tax under Chapter 321, Tax Code, to impose

a tax under this chapter for a limited period as provided by this

section, and the municipality does not have an election to change

the rate of the additional sales and use tax before the tax under

this chapter expires, on the date the tax under this chapter

expires, the rate of the municipality's additional sales and use

tax returns to the rate in effect immediately before the tax under

this chapter was adopted. The municipality is not required to hold

an election under Chapter 321, Tax Code, to impose the additional

sales and use tax at that rate.

(d) A sales and use tax that is approved without limiting

the period during which the tax is imposed remains in effect until

repealed by election.

(e) An authorizing municipality that has imposed a tax under

this chapter may extend the period of the tax's imposition or

reimpose the tax only if the extension or reimposition is approved

by a majority of the voters of the municipality voting at an

election held for that purpose. (V.A.C.S. Art. 5190.6, Sec. 4A(n)

(part).)

Sec. 504.258. ELECTION TO REDUCE OR INCREASE TAX RATE. (a)

An authorizing municipality that has imposed a sales and use tax

under this chapter may, in the same manner and by the same procedure

as the municipality imposed the tax, reduce or increase the tax rate

by a majority of the voters of the municipality voting at an

election held for that purpose.

(b) On petition of 10 percent or more of the registered

voters of the authorizing municipality requesting an election to

reduce or increase the tax rate under this chapter, the governing

body of the municipality shall order an election on the issue.

(1) reduced in one or more increments of one-eighth of

one percent, to a minimum rate of one-eighth of one percent; or

(2) increased in one or more increments of one-eighth

of one percent, to a maximum rate of one-half of one percent.

(d) The ballot for an election under this section shall be

printed in the same manner as the ballot under Section 504.256.

(V.A.C.S. Art. 5190.6, Sec. 4A(o).)

Sec. 504.259. REDUCTION OF TAX WITHIN REGIONAL

TRANSPORTATION AUTHORITY. Notwithstanding any other provision of

this chapter, a tax under this chapter imposed by an authorizing

municipality that is located within the territorial limits of a

regional transportation authority and that has been added to the

territory of the authority under Section 452.6025, Transportation

Code, is subject to reduction in the manner prescribed by Section

452.6025, Transportation Code. (V.A.C.S. Art. 5190.6, Sec.

4A(o-1).)

Sec. 504.260. LIMITED SALES AND USE TAX FOR SPECIFIC

PROJECT. (a) At an election held under Section 504.251 or 504.258,

the authorizing municipality may also allow the voters to vote on a

ballot proposition to limit the use of the sales and use tax to a

specific project. If an authorizing municipality elects to limit

the use of the tax to a specific project, in the ballot proposition

prescribed by Section 504.256 or 504.261 a description of the

project shall be substituted for the words "new and expanded

business enterprises."

(b) When the last of a Type A corporation's obligations have

been satisfied regarding the specific project for which the sales

and use tax was limited, the corporation shall send to the

comptroller a notice stating that the sales and use tax imposed for

the specific project may not be collected after the last day of the

first calendar quarter beginning after the date of notification. A

sales and use tax imposed for a specific project under this section

may not be collected after the last day of the first calendar

quarter beginning after the date of the notification to the

comptroller. The state shall forward revenue collected after the

obligations for the specific project have been satisfied to the

governing body of the authorizing municipality to be used to pay

current bonded indebtedness of the municipality.

project under this section may retain its corporate existence and

perform any other project approved by the voters of the authorizing

municipality at an election held under Section 504.251 or 504.258.

(V.A.C.S. Art. 5190.6, Sec. 4A(r).)

Sec. 504.261. CONCURRENT ELECTION WITH ELECTION UNDER TAX

CODE. (a) At an election to adopt, reduce, increase, or abolish

the sales and use tax under this chapter, the authorizing

municipality may also allow voters to vote on the same ballot on a

proposition to impose, reduce, increase, or abolish the additional

sales and use tax imposed under Section 321.101(b), Tax Code, if the

municipality is authorized by Chapter 321, Tax Code, to impose,

reduce, increase, or abolish the additional sales and use tax.

Except as provided by Subsection (b), the municipality must follow

the procedures of Chapter 321, Tax Code, in relation to the

imposition, reduction, increase, or abolishment of the additional

sales and use tax imposed under Section 321.101(b), Tax Code.

(b) In an election to impose, reduce, increase, or abolish

the tax under this chapter and the additional sales and use tax, the

ballot shall be printed to provide for voting for or against the

proposition: "The adoption of a sales and use tax within the

municipality for the promotion and development of new and expanded

business enterprises at the rate of __________ of one percent

(one-eighth, one-fourth, three-eighths, or one-half to be inserted

as appropriate) and the adoption of an additional sales and use tax

within the municipality at the rate of __________ of one percent to

be used to reduce the property tax rate" (one-eighth, one-fourth,

three-eighths, or one-half to be inserted as appropriate).

(V.A.C.S. Art. 5190.6, Sec. 4A(p).)

Sec. 504.262. PROCEDURES ON EXPIRATION OF TAX. (a) Before

the 60th day before the date that a sales and use tax imposed under

this chapter is to expire, the governing body of the authorizing

municipality imposing the tax shall send to the comptroller a

notice stating the expiration date of the tax.

(b) The state shall forward revenue collected from the

imposition of the tax after the tax's expiration date to the

governing body of the authorizing municipality to be used to pay

current bonded indebtedness of the municipality. (V.A.C.S. Art.

5190.6, Sec. 4A(n) (part).)

[Sections 504.263-504.300 reserved for expansion]

SUBCHAPTER G. USE OF TAX PROCEEDS

Sec. 504.301. DELIVERY AND GENERAL USE OF TAX PROCEEDS. On

the authorizing municipality's receipt from the comptroller of the

proceeds of the sales and use tax imposed under this chapter, the

authorizing municipality shall deliver the proceeds to the Type A

corporation for use in carrying out the corporation's functions.

(V.A.C.S. Art. 5190.6, Sec. 4A(f) (part).)

Sec. 504.302. PAYMENT OF MAINTENANCE AND OPERATING COSTS;

ELECTION. (a) The costs of a publicly owned and operated project

purchased or constructed under this chapter include the maintenance

and operating costs of the project.

(b) The proceeds of the sales and use tax imposed under this

chapter may be used to pay the maintenance and operating costs of a

project unless, not later than the 60th day after the date notice of

the specific use of the tax proceeds is first published, the

governing body of the authorizing municipality of the Type A

corporation undertaking the project receives a petition from more

than 10 percent of the registered voters of the municipality

requesting that an election be held before the tax proceeds may be

used to pay the maintenance and operating costs of the project.

(V.A.C.S. Art. 5190.6, Sec. 4A(c-1).)

Sec. 504.303. PAYMENT OF BONDS. The proceeds of the sales

and use tax imposed under this chapter may be used to pay the

principal of, interest on, and other costs relating to the Type A

corporation's bonds, but the bonds or any instrument related to the

bonds may not give a bondholder a right to demand payment from tax

proceeds in excess of the proceeds collected from the tax imposed

under this chapter. (V.A.C.S. Art. 5190.6, Sec. 4A(f) (part).)

Sec. 504.304. PAYMENT FOR CLEANUP OF CONTAMINATED PROPERTY;

ELECTION. (a) The economic development office, with the

assistance of the Texas Commission on Environmental Quality, may

encourage a Type A corporation to use proceeds from the sales and

use tax imposed under this chapter for the cleanup of contaminated

property.

(b) A Type A corporation may use proceeds from the sales and

use tax for the cleanup of contaminated property only if the use of

tax proceeds for that purpose is authorized by a majority of the

voters of the authorizing municipality voting at an election held

for that purpose. The ballot in an election held under this

subsection shall be printed to provide for voting for or against the

proposition: "The use of sales and use tax proceeds for the cleanup

of contaminated property." (V.A.C.S. Art. 5190.6, Sec. 4A(t).)

Sec. 504.305. PAYMENT FOR JOB TRAINING. The proceeds of the

sales and use tax imposed under this chapter may also be used to pay

expenses relating to job training incurred by the Type A

corporation under Section 501.162. (V.A.C.S. Art. 5190.6, Sec.

4A(f) (part).)

[Sections 504.306-504.350 reserved for expansion]

SUBCHAPTER H. TERMINATION OF CORPORATION

Sec. 504.351. ELECTION TO TERMINATE EXISTENCE OF

CORPORATION ON PETITION. (a) On petition of 10 percent or more of

the registered voters of an authorizing municipality requesting an

election on the termination of the existence of the Type A

corporation, the governing body of the municipality shall order an

election on the issue.

(b) The authorizing municipality shall hold the election on

the next available uniform election date that occurs after the time

required by Section 3.005, Election Code. (V.A.C.S. Art. 5190.6,

Sec. 4A(k) (part).)

Sec. 504.352. BALLOT. The ballot for an election held

under Section 504.351 shall be printed to provide for voting for or

against the proposition: "Termination of the __________ (name of

the corporation)." (V.A.C.S. Art. 5190.6, Sec. 4A(k) (part).)

Sec. 504.353. TERMINATION OF EXISTENCE OF CORPORATION. (a)

If a majority of voters voting on the issue at an election held

under Section 504.351 approve the termination, the Type A

corporation shall:

(1) continue operations only as necessary to pay the

principal of and interest on the corporation's bonds and to meet

obligations incurred before the date of the election; and

(2) dispose of the corporation's assets and apply the

proceeds to satisfy obligations described by Subdivision (1), to

the extent practicable.

(b) When the last of the Type A corporation's obligations

are satisfied, any remaining assets of the corporation shall be

transferred to the authorizing municipality, and the existence of

the corporation is terminated.

after the last day of the first calendar quarter that begins after

the Type A corporation notifies the comptroller that the last of the

corporation's obligations has been satisfied. (V.A.C.S. Art.

5190.6, Sec. 4A(k) (part).)

CHAPTER 505. TYPE B CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 505.001. DEFINITION

Sec. 505.002. APPLICABILITY OF CHAPTER

Sec. 505.003. AUTHORITY TO CREATE CORPORATION

Sec. 505.004. CONTENTS OF CERTIFICATE OF FORMATION

Sec. 505.005. CORPORATION NOT SUBJECT TO CERTAIN

PROVISIONS

[Sections 505.006-505.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 505.051. BOARD OF DIRECTORS

Sec. 505.052. RESTRICTION ON BOARD MEMBERSHIP

Sec. 505.053. OFFICERS

Sec. 505.054. QUORUM

Sec. 505.055. LOCATION OF BOARD MEETINGS

Sec. 505.056. RESTRICTIONS ON REGISTERED AGENT AND

OFFICE

[Sections 505.057-505.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 505.101. APPLICABILITY OF OTHER LAW; CONFLICTS

Sec. 505.102. CONTRACT WITH OTHER PRIVATE CORPORATION

Sec. 505.103. LIMITATION ON USE OF REVENUES FOR

PROMOTIONAL PURPOSES

Sec. 505.104. BOND REPAYMENT

Sec. 505.105. EMINENT DOMAIN

Sec. 505.106. LIABILITY

[Sections 505.107-505.150 reserved for expansion]

SUBCHAPTER D. AUTHORIZED PROJECTS

Sec. 505.151. AUTHORIZED PROJECTS

Sec. 505.152. PROJECTS RELATED TO RECREATIONAL OR

COMMUNITY FACILITIES

Sec. 505.153. PROJECTS RELATED TO AFFORDABLE HOUSING

Sec. 505.154. PROJECTS RELATED TO WATER SUPPLY

FACILITIES AND WATER CONSERVATION

PROGRAMS

Sec. 505.155. PROJECTS RELATED TO BUSINESS ENTERPRISES

THAT CREATE OR RETAIN PRIMARY JOBS

Sec. 505.156. PROJECTS RELATED TO BUSINESS ENTERPRISES

IN CERTAIN MUNICIPALITIES

Sec. 505.157. PROJECTS RELATED TO BUSINESS ENTERPRISES

IN LANDLOCKED COMMUNITIES

Sec. 505.158. PROJECTS RELATED TO BUSINESS DEVELOPMENT

IN CERTAIN SMALL MUNICIPALITIES

Sec. 505.159. HEARING REQUIRED TO UNDERTAKE PROJECT

Sec. 505.160. ELECTION REQUIRED FOR PROJECT; PETITION

Sec. 505.161. PUBLIC PURPOSE DESIGNATION; EXEMPTION

FROM TAXATION

[Sections 505.162-505.200 reserved for expansion]

SUBCHAPTER E. SPORTS VENUE PROJECTS AND RELATED INFRASTRUCTURE

Sec. 505.201. DEFINITIONS

Sec. 505.202. ELECTION: USE OF TAX PROCEEDS FOR

SPORTS VENUE PROJECTS

Sec. 505.203. PUBLIC HEARING PRECEDING ELECTION

Sec. 505.204. LIMITATION ON SUBSEQUENT ELECTION

Sec. 505.205. SUBSEQUENT APPROVAL OF ADDITIONAL

PROJECTS

Sec. 505.206. EFFECT OF SUBCHAPTER ON ELECTION

AUTHORITY

[Sections 505.207-505.250 reserved for expansion]

SUBCHAPTER F. SALES AND USE TAX

Sec. 505.251. TAX AUTHORIZED

Sec. 505.252. SALES TAX

Sec. 505.253. USE TAX

Sec. 505.254. SPECIFICATION OF TAX RATE ON BALLOT

Sec. 505.255. ADOPTION OF TAX AT ELECTION TO REDUCE

OR ABOLISH TAX FOR TYPE A CORPORATION

Sec. 505.256. APPLICABILITY OF TAX CODE

Sec. 505.257. REDUCTION OF TAX WITHIN REGIONAL

TRANSPORTATION AUTHORITY

Sec. 505.258. CESSATION OF COLLECTION OF TAXES

Sec. 505.259. ELECTION REQUIREMENT FOR CERTAIN

MUNICIPALITIES

[Sections 505.260-505.300 reserved for expansion]

SUBCHAPTER G. USE OF TAX PROCEEDS

Sec. 505.301. DELIVERY OF TAX PROCEEDS

Sec. 505.302. PAYMENT OF PROJECT COSTS, BONDS, OR

OTHER OBLIGATIONS

Sec. 505.303. PAYMENT OF MAINTENANCE AND OPERATING

COSTS; ELECTION

Sec. 505.304. PAYMENT FOR CERTAIN WATER-RELATED

PROJECTS: ELECTION REQUIRED

Sec. 505.305. PAYMENT FOR CLEANUP OF CONTAMINATED

PROPERTY; ELECTION

[Sections 505.306-505.350 reserved for expansion]

SUBCHAPTER H. TERMINATION OF CORPORATION

Sec. 505.351. APPLICABILITY OF SUBCHAPTER

Sec. 505.352. ELECTION TO TERMINATE EXISTENCE OF CORPORATION ON

PETITION

Sec. 505.353. BALLOT

Sec. 505.354. TERMINATION OF EXISTENCE OF CORPORATION

Sec. 505.355. ELECTION REJECTING TERMINATION

CHAPTER 505. TYPE B CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 505.001. DEFINITION. In this chapter, "authorizing

municipality" means the municipality that authorizes the creation

of a Type B corporation. (New.)

Sec. 505.002. APPLICABILITY OF CHAPTER. This chapter

applies only to:

(1) a municipality:

(A) that is located in a county with a population

of 500,000 or more; and

(B) in which the combined rate of all sales and

use taxes imposed by the municipality, this state, and other

political subdivisions of this state having territory in the

municipality does not exceed 8.25 percent on the date of any

election held under or made applicable to this chapter;

(2) a municipality:

(A) that has a population of 400,000 or more;

(B) that is located in more than one county; and

use taxes imposed by the municipality, this state, and other

political subdivisions of this state having territory in the

municipality, including taxes imposed under this chapter, does not

exceed 8.25 percent; or

(3) a municipality to which Chapter 504 applies.

(V.A.C.S. Art. 5190.6, Sec. 4B(a)(1).)

Sec. 505.003. AUTHORITY TO CREATE CORPORATION. (a) A

municipality may authorize the creation under this subtitle of a

Type B corporation.

(b) A municipality may not authorize the creation of more

than one Type B corporation. (V.A.C.S. Art. 5190.6, Sec. 4B(b)

(part).)

Sec. 505.004. CONTENTS OF CERTIFICATE OF FORMATION. The

certificate of formation of a Type B corporation:

(1) must state that the corporation is governed by

this chapter; and

(2) may include in the corporation's name any word or

phrase the authorizing municipality specifies. (V.A.C.S. Art.

5190.6, Sec. 4B(b) (part).)

Sec. 505.005. CORPORATION NOT SUBJECT TO CERTAIN

PROVISIONS. Sections 501.203, 501.205, 501.251-501.254,

501.255(a) and (b), 501.256, and 501.257 do not apply to a

corporation under this chapter. (V.A.C.S. Art. 5190.6, Sec.

4B(l).)

[Sections 505.006-505.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 505.051. BOARD OF DIRECTORS. (a) The board of

directors of a Type B corporation consists of seven directors.

(b) A director is appointed by the governing body of the

authorizing municipality for a two-year term.

authorizing municipality at any time without cause. (V.A.C.S. Art.

5190.6, Sec. 4B(c) (part).)

Sec. 505.052. RESTRICTION ON BOARD MEMBERSHIP. (a) Each

director of a Type B corporation authorized to be created by a

municipality with a population of 20,000 or more must be a resident

of the municipality.

(b) Each director of a Type B corporation authorized to be

created by a municipality with a population of less than 20,000

must:

(1) be a resident of the municipality;

(2) be a resident of the county in which the major part

of the area of the municipality is located; or

(3) reside:

(A) within 10 miles of the municipality's

boundaries; and

(B) in a county bordering the county in which

most of the area of the municipality is located.

who are not employees, officers, or members of the governing body of

the authorizing municipality.

(d) Notwithstanding Subsections (a)-(c), if a municipality

terminates a Type A corporation's existence and authorizes the

creation of a Type B corporation, a person serving as a director of

the Type A corporation at the time of termination may serve on the

board of directors of the Type B corporation. (V.A.C.S. Art.

5190.6, Secs. 4B(c) (part), (e-1).)

Sec. 505.053. OFFICERS. The board of directors of a Type B

corporation shall appoint:

(1) a president;

(2) a secretary; and

(3) other officers of the corporation the governing

body of the authorizing municipality considers necessary.

(V.A.C.S. Art. 5190.6, Sec. 4B(c) (part).)

Sec. 505.054. QUORUM. A majority of the entire membership

of the board of directors of a Type B corporation is a quorum.

(V.A.C.S. Art. 5190.6, Sec. 4B(c) (part).)

Sec. 505.055. LOCATION OF BOARD MEETINGS. The board of

directors of a Type B corporation shall conduct all meetings within

the boundaries of the authorizing municipality. (V.A.C.S. Art.

5190.6, Sec. 4B(c) (part).)

Sec. 505.056. RESTRICTIONS ON REGISTERED AGENT AND OFFICE.

(a) The registered agent of a Type B corporation must be an

individual who is a resident of this state.

(b) The registered office of a Type B corporation must be

located within the boundaries of the authorizing municipality.

(V.A.C.S. Art. 5190.6, Sec. 4B(c) (part).)

[Sections 505.057-505.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 505.101. APPLICABILITY OF OTHER LAW; CONFLICTS. A

Type B corporation has the powers granted by this chapter and by

other chapters of this subtitle and is subject to the limitations of

a corporation created under another provision of this subtitle. To

the extent of a conflict between this chapter and another provision

of this subtitle, this chapter prevails. (V.A.C.S. Art. 5190.6,

Sec. 4B(b) (part).)

Sec. 505.102. CONTRACT WITH OTHER PRIVATE CORPORATION. A

Type B corporation may contract with another private corporation

to:

(1) carry out an industrial development program or

objective; or

(2) assist with the development or operation of an

economic development program or objective consistent with the

purposes and duties specified by this subtitle. (V.A.C.S. Art.

5190.6, Sec. 4B(b) (part).)

Sec. 505.103. LIMITATION ON USE OF REVENUES FOR PROMOTIONAL

PURPOSES. A Type B corporation may spend not more than 10 percent

of the corporate revenues for promotional purposes. (V.A.C.S. Art.

5190.6, Sec. 4B(b) (part).)

Sec. 505.104. BOND REPAYMENT. (a) Bonds or other

obligations that mature in 30 years or less and that are issued to

pay the costs of projects of a type added to the definition of

"project" by Subchapter D may be made payable from any source of

funds available to the Type B corporation, including the proceeds

of a sales and use tax imposed under this chapter.

(b) Bonds or other obligations that by their terms are

payable from the tax proceeds:

(1) may not be paid wholly or partly from any property

taxes imposed or to be imposed by the authorizing municipality; and

(2) are not a debt of and do not give rise to a claim

for payment against the authorizing municipality, except as to

sales and use tax revenue held by the municipality and required

under this chapter to be delivered to the Type B corporation.

(V.A.C.S. Art. 5190.6, Sec. 4B(h).)

Sec. 505.105. EMINENT DOMAIN. A Type B corporation may

exercise the power of eminent domain only:

(1) on approval of the action by the governing body of

the authorizing municipality; and

(2) in accordance with and subject to the laws

applicable to the authorizing municipality. (V.A.C.S. Art. 5190.6,

Sec. 4B(j).)

Sec. 505.106. LIABILITY. (a) The following are not liable

for damages arising from the performance of a governmental function

of a Type B corporation or the authorizing municipality:

(1) the corporation;

(2) a director of the corporation;

(3) the municipality;

(4) a member of the governing body of the

municipality; or

(5) an employee of the corporation or municipality.

(b) For purposes of Chapter 101, Civil Practice and Remedies

Code, a Type B corporation is a governmental unit and the

corporation's actions are governmental functions. (V.A.C.S. Art.

5190.6, Sec. 4B(m).)

[Sections 505.107-505.150 reserved for expansion]

SUBCHAPTER D. AUTHORIZED PROJECTS

Sec. 505.151. AUTHORIZED PROJECTS. In this chapter,

"project" means land, buildings, equipment, facilities,

expenditures, and improvements included in the definition of

"project" under Chapter 501, including:

(1) job training as provided by Section 501.162; and

(2) recycling facilities. (V.A.C.S. Art. 5190.6, Sec.

4B(a)(2) (part).)

Sec. 505.152. PROJECTS RELATED TO RECREATIONAL OR COMMUNITY

FACILITIES. For purposes of this chapter, "project" includes land,

buildings, equipment, facilities, and improvements found by the

board of directors to be required or suitable for use for

professional and amateur sports, including children's sports,

athletic, entertainment, tourist, convention, and public park

purposes and events, including stadiums, ball parks, auditoriums,

amphitheaters, concert halls, parks and park facilities, open space

improvements, museums, exhibition facilities, and related store,

restaurant, concession, and automobile parking facilities, related

area transportation facilities, and related roads, streets, and

water and sewer facilities, and other related improvements that

enhance any of the items described by this section. (V.A.C.S. Art.

5190.6, Sec. 4B(a)(2) (part).)

Sec. 505.153. PROJECTS RELATED TO AFFORDABLE HOUSING. For

purposes of this chapter, "project" includes land, buildings,

equipment, facilities, and improvements found by the board of

directors to be required or suitable for the promotion of

development and expansion of affordable housing, as described by 42

U.S.C. Section 12745. (V.A.C.S. Art. 5190.6, Sec. 4B(a)(2)

(part).)

Sec. 505.154. PROJECTS RELATED TO WATER SUPPLY FACILITIES

AND WATER CONSERVATION PROGRAMS. For purposes of this chapter,

"project" includes land, buildings, equipment, facilities, and

improvements found by the board of directors to be required or

suitable for:

(1) the development or improvement of water supply

facilities, including dams, transmission lines, well field

developments, and other water supply alternatives; or

(2) the development and institution of water

conservation programs, including incentives to install

water-saving plumbing fixtures, educational programs, brush

control programs, and programs to replace malfunctioning or leaking

water lines and other water facilities. (V.A.C.S. Art. 5190.6,

Sec. 4B(a)(2) (part).)

Sec. 505.155. PROJECTS RELATED TO BUSINESS ENTERPRISES THAT

CREATE OR RETAIN PRIMARY JOBS. For purposes of this chapter,

"project" includes land, buildings, equipment, facilities, and

improvements found by the board of directors to promote or develop

new or expanded business enterprises that create or retain primary

jobs, including:

(1) a project to provide public safety facilities,

streets and roads, drainage and related improvements, demolition of

existing structures, general municipally owned improvements, and

any improvements or facilities related to a project described by

this subdivision; and

(2) any other project that the board of directors in

the board's discretion determines promotes or develops new or

expanded business enterprises that create or retain primary jobs.

(V.A.C.S. Art. 5190.6, Sec. 4B(a)(2) (part).)

Sec. 505.156. PROJECTS RELATED TO BUSINESS ENTERPRISES IN

CERTAIN MUNICIPALITIES. For purposes of this chapter, "project"

includes land, buildings, equipment, facilities, and improvements

found by the board of directors to be required or suitable for the

development, retention, or expansion of business enterprises if the

project is undertaken by a Type B corporation authorized to be

created by a municipality:

(1) that has not for each of the preceding two fiscal

years received more than $50,000 in revenues from sales and use

taxes imposed under this chapter; and

(2) the governing body of which has authorized the

project by adopting a resolution only after giving the resolution

at least two separate readings conducted at least one week apart.

(V.A.C.S. Art. 5190.6, Sec. 4B(a)(2) (part).)

Sec. 505.157. PROJECTS RELATED TO BUSINESS ENTERPRISES IN

LANDLOCKED COMMUNITIES. (a) In this section, "landlocked

community" means a municipality that:

(1) is wholly or partly located in a county with a

population of two million or more; and

(2) has within its municipal limits and

extraterritorial jurisdiction less than 100 acres that can be used

for the development of manufacturing or industrial facilities in

accordance with the municipality's zoning laws or land use

restrictions.

(b) For a landlocked community that authorizes or has

authorized the creation of a Type B corporation, "project" also

includes expenditures found by the board of directors to be

required for the promotion of new or expanded business enterprises

in the landlocked community. (V.A.C.S. Art. 5190.6, Sec.

4B(a)(4).)

Sec. 505.158. PROJECTS RELATED TO BUSINESS DEVELOPMENT IN

CERTAIN SMALL MUNICIPALITIES. (a) For a Type B corporation

authorized to be created by a municipality with a population of

20,000 or less, "project" also includes the land, buildings,

equipment, facilities, expenditures, targeted infrastructure, and

improvements found by the corporation's board of directors to

promote new or expanded business development.

(b) A Type B corporation may not undertake a project

authorized by this section that requires an expenditure of more

than $10,000 until the governing body of the corporation's

authorizing municipality adopts a resolution authorizing the

project after giving the resolution at least two separate readings.

(V.A.C.S. Art. 5190.6, Sec. 4B(a)(3).)

Sec. 505.159. HEARING REQUIRED TO UNDERTAKE PROJECT. A Type

B corporation shall hold at least one public hearing on a proposed

project before spending money to undertake the project. (V.A.C.S.

Art. 5190.6, Sec. 4B(n).)

Sec. 505.160. ELECTION REQUIRED FOR PROJECT; PETITION. (a)

A Type B corporation may undertake a project under this chapter

unless, not later than the 60th day after the date notice of the

specific project or general type of project is first published, the

governing body of the authorizing municipality receives a petition

from more than 10 percent of the registered voters of the

municipality requesting that an election be held before the

specific project or general type of project is undertaken.

(b) The governing body of the authorizing municipality is

not required to hold an election after the submission of a petition

under Subsection (a) if the voters of the municipality have

previously approved the undertaking of the specific project or

general type of project:

(1) at an election ordered for that purpose by the

governing body of the municipality; or

(2) in conjunction with another election required

under this chapter. (V.A.C.S. Art. 5190.6, Sec. 4B(a-1).)

Sec. 505.161. PUBLIC PURPOSE DESIGNATION; EXEMPTION FROM

TAXATION. (a) The legislature finds for all constitutional and

statutory purposes that:

(1) a project of the type added to the definition of

"project" by this subchapter is owned, used, and held for a public

purpose for and on behalf of the municipality that authorized the

creation of the Type B corporation; and

(2) except as otherwise provided by this section,

Section 501.160 of this subtitle and Section 25.07(a), Tax Code, do

not apply to a leasehold or other possessory interest granted by a

Type B corporation during the period the corporation owns projects

on behalf of the authorizing municipality.

(b) A project is exempt from ad valorem taxation under

Section 11.11, Tax Code, for the period described by Subsection

(a)(2) of this section.

authorizing municipality of a Type B corporation have not approved

the adoption of a sales and use tax for the benefit of the

corporation under Section 505.251. An ownership, leasehold, or

other possessory interest of a person other than the corporation in

real property constituting a project of the corporation described

by this section:

(1) is subject to ad valorem taxation under Section

25.07(a), Tax Code; or

(2) if the interest was created under an agreement

entered into by the corporation before September 1, 1999, is

covered by the provisions of the law codified by this section that

govern ad valorem taxation of the ownership, leasehold, or other

possessory interest that were in effect on the date the agreement

was executed. (V.A.C.S. Art. 5190.6, Sec. 4B(k).)

[Sections 505.162-505.200 reserved for expansion]

SUBCHAPTER E. SPORTS VENUE PROJECTS AND RELATED INFRASTRUCTURE

Sec. 505.201. DEFINITIONS. In this subchapter:

(1) "Related infrastructure" has the meaning assigned

by Section 334.001.

(2) "Sports venue" means an arena, coliseum, stadium,

or other type of area or facility that is primarily used or is

planned for primary use for one or more professional or amateur

sports or athletics events and for which a fee is charged or is

planned to be charged for admission to the sports or athletics

events, other than occasional civic, charitable, or promotional

events. The term does not include an arena, coliseum, stadium, or

other type of area or facility that is or will be owned and operated

by a state-supported institution of higher education. (V.A.C.S.

Art. 5190.6, Sec. 4B(a-4).)

Sec. 505.202. ELECTION: USE OF TAX PROCEEDS FOR SPORTS

VENUE PROJECTS. (a) An authorizing municipality may submit to the

voters of the municipality a ballot proposition that authorizes the

Type B corporation to use the sales and use tax, including any

amount previously authorized and collected, for a specific sports

venue project, including related infrastructure, or for a specific

category of sports venue projects, including related

infrastructure.

(b) The project or category of projects described by

Subsection (a) must be clearly described on the ballot so that a

voter is able to discern the limits of the specific project or

category of projects authorized by the proposition. If maintenance

and operating costs of an otherwise authorized facility are to be

paid from the sales and use tax, the ballot language must clearly

state that fact.

proposition at:

(1) an election held under another provision of this

subtitle, including the election at which the proposition to

initially approve the adoption of a sales and use tax for the

benefit of the Type B corporation is submitted; or

(2) a separate election to be held on a uniform

election date. (V.A.C.S. Art. 5190.6, Secs. 4B(a-3)(1) (part),

(2).)

Sec. 505.203. PUBLIC HEARING PRECEDING ELECTION. Before an

election may be held under Section 505.202, a public hearing must be

held in the authorizing municipality to inform the municipality's

residents of the cost and impact of the project or category of

projects. At least 30 days before the date set for the hearing,

notice of the date, time, place, and subject of the hearing must be

published each week until the date of the hearing in a newspaper

with general circulation in the municipality in which the project

is located. (V.A.C.S. Art. 5190.6, Sec. 4B(a-3)(3).)

Sec. 505.204. LIMITATION ON SUBSEQUENT ELECTION. If a

majority of the voters voting on the issue do not approve a specific

sports venue project or a specific category of sports venue

projects at an election under Section 505.202, another election

concerning the same project or category of projects may not be held

before the first anniversary of the date of the most recent election

disapproving the project or category of projects. (V.A.C.S. Art.

5190.6, Sec. 4B(a-3)(4).)

Sec. 505.205. SUBSEQUENT APPROVAL OF ADDITIONAL PROJECTS.

Prior approval of a specific sports venue project at an election or

completion of a specific sports venue project approved at an

election does not prevent an authorizing municipality from seeking

voter approval of an additional project or category of projects

under this subchapter to be funded from the same sales and use tax

that is used to fund the previously approved sports venue project.

(V.A.C.S. Art. 5190.6, Secs. 4B(a-3)(1) (part).)

Sec. 505.206. EFFECT OF SUBCHAPTER ON ELECTION AUTHORITY.

This subchapter does not affect an authorizing municipality's

authority to call an election under this chapter to impose a sales

and use tax for any purpose authorized by this chapter after the

sales and use tax described by this subchapter is, in accordance

with Section 505.258, no longer collected. (V.A.C.S. Art. 5190.6,

Sec. 4B(a-3)(1) (part).)

[Sections 505.207-505.250 reserved for expansion]

SUBCHAPTER F. SALES AND USE TAX

Sec. 505.251. TAX AUTHORIZED. The governing body of the

authorizing municipality by ordinance may adopt a sales and use tax

for the benefit of a Type B corporation if the tax is approved by a

majority of the voters of the municipality voting at an election

held for that purpose in accordance with Chapter 321, Tax Code.

(V.A.C.S. Art. 5190.6, Sec. 4B(d) (part).)

Sec. 505.252. SALES TAX. (a) If the authorizing

municipality adopts the tax under Section 505.251, a tax is imposed

on the receipts from the sale at retail of taxable items within the

municipality at the rate approved at the election.

(b) The rate of a tax adopted under this chapter must be

equal to one-eighth, one-fourth, three-eighths, or one-half of one

percent. (V.A.C.S. Art. 5190.6, Sec. 4B(e) (part).)

Sec. 505.253. USE TAX. (a) If the authorizing municipality

adopts the tax under Section 505.251, an excise tax is imposed on

the use, storage, or other consumption within the municipality of

tangible personal property purchased, leased, or rented from a

retailer during the period that the tax is effective within the

municipality.

(b) The rate of the excise tax is the same as the rate of the

sales tax portion of the sales and use tax and is applied to the sale

price of the tangible personal property. (V.A.C.S. Art. 5190.6,

Sec. 4B(e) (part).)

Sec. 505.254. SPECIFICATION OF TAX RATE ON BALLOT. In an

election held to adopt the sales and use tax under this chapter, the

ballot proposition must specify the rate of the tax to be adopted.

(V.A.C.S. Art. 5190.6, Sec. 4B(e) (part).)

Sec. 505.255. ADOPTION OF TAX AT ELECTION TO REDUCE OR

ABOLISH TAX FOR TYPE A CORPORATION. A municipality that holds an

election to reduce the rate of or abolish a tax imposed under

Chapter 504 may in the same proposition or in a separate proposition

on the same ballot adopt a tax under this chapter. (V.A.C.S. Art.

5190.6, Sec. 4B(e) (part).)

Sec. 505.256. APPLICABILITY OF TAX CODE. (a) Chapter 321,

Tax Code, governs the imposition, computation, administration,

collection, and remittance of the sales and use tax, except as

inconsistent with this chapter.

(b) Except as provided by this subsection, the tax imposed

under this chapter takes effect as provided by Section 321.102(a),

Tax Code. If an election is held under this chapter at the same time

an election is held to impose or change the rate of the additional

municipal sales and use tax, the tax under this chapter and the

imposition or change in rate of the additional municipal sales and

use tax take effect as provided by Section 321.102(b), Tax Code.

chapter, the adoption of a sales and use tax or the attempted

adoption of a sales and use tax by the authorizing municipality or

another taxing jurisdiction having territory in the municipality

does not impair the taxes imposed under this chapter. (V.A.C.S.

Art. 5190.6, Sec. 4B(f).)

Sec. 505.257. REDUCTION OF TAX WITHIN REGIONAL

TRANSPORTATION AUTHORITY. Notwithstanding any other provision of

this chapter, a tax imposed under this chapter by an authorizing

municipality that is located within the territorial limits of a

regional transportation authority and that has been added to the

territory of the authority under Section 452.6025, Transportation

Code, is subject to reduction in the manner prescribed by Section

452.6025, Transportation Code. (V.A.C.S. Art. 5190.6, Sec.

4B(n-1).)

Sec. 505.258. CESSATION OF COLLECTION OF TAXES. A sales and

use tax imposed under this chapter may not be collected after the

last day of the first calendar quarter that occurs after the Type B

corporation notifies the comptroller that:

(1) all bonds or other obligations of the corporation,

including any refunding bonds, payable wholly or partly from the

proceeds of the sales and use tax imposed under this chapter, have

been paid in full; or

(2) the total amount, exclusive of guaranteed

interest, necessary to pay in full the bonds and other obligations

has been set aside in a trust account dedicated to the payment of

the bonds and other obligations. (V.A.C.S. Art. 5190.6, Sec.

4B(i).)

Sec. 505.259. ELECTION REQUIREMENT FOR CERTAIN

MUNICIPALITIES. The election requirement under Section 505.251 is

satisfied and another election is not required if the voters of the

authorizing municipality approved the imposition of an additional

one-half cent sales and use tax at an election held before March 28,

1991, under an ordinance calling the election that:

(1) was published in a newspaper of general

circulation in the municipality at least 14 days before the date of

the election; and

(2) expressly stated that the election was being held

in anticipation of the enactment of enabling and implementing

legislation without further elections. (V.A.C.S. Art. 5190.6, Sec.

4B(d) (part).)

[Sections 505.260-505.300 reserved for expansion]

SUBCHAPTER G. USE OF TAX PROCEEDS

Sec. 505.301. DELIVERY OF TAX PROCEEDS. On the authorizing

municipality's receipt from the comptroller of the proceeds of the

sales and use tax imposed under this chapter, the authorizing

municipality shall deliver the proceeds to the Type B corporation.

(V.A.C.S. Art. 5190.6, Sec. 4B(g) (part).)

Sec. 505.302. PAYMENT OF PROJECT COSTS, BONDS, OR OTHER

OBLIGATIONS. The proceeds of the sales and use tax imposed under

this chapter may be used to:

(1) pay the costs of projects of the types added to the

definition of "project" by Subchapter D; or

(2) pay the principal of, interest on, and other costs

relating to bonds or other obligations issued by the Type B

corporation to:

(A) pay the costs of the projects; or

(B) refund bonds or other obligations issued to

pay the costs of projects. (V.A.C.S. Art. 5190.6, Sec. 4B(g)

(part).)

Sec. 505.303. PAYMENT OF MAINTENANCE AND OPERATING COSTS;

ELECTION. (a) The costs of a publicly owned and operated project

purchased or constructed under this chapter include the maintenance

and operating costs of the project.

(b) The proceeds of taxes may be used to pay the maintenance

and operating costs of a project, unless not later than the 60th day

after the date notice of the specific use of the tax proceeds is

first published, the governing body of the authorizing municipality

of the Type B corporation undertaking the project receives a

petition from more than 10 percent of the registered voters of the

municipality requesting that an election be held before the tax

proceeds may be used to pay the maintenance and operating costs of a

project.

not required to hold an election after the submission of a petition

under Subsection (b) if the voters of the municipality have

previously approved at an election ordered for that purpose by the

governing body or in conjunction with another election required

under this chapter that:

(1) the costs of a publicly owned and operated project

purchased or constructed under this chapter include the maintenance

and operating costs of the project; and

(2) the tax proceeds may be used to pay the maintenance

and operating costs of a project.

(d) An authorizing municipality is not required to hold an

election under this section if the municipality:

(1) is located in a county with a population of more

than 1.3 million; and

(2) has held before February 1, 1993, an election

under this chapter at which the additional sales tax was approved.

(V.A.C.S. Art. 5190.6, Sec. 4B(a-2).)

Sec. 505.304. PAYMENT FOR CERTAIN WATER-RELATED PROJECTS:

ELECTION REQUIRED. (a) A Type B corporation may not use proceeds

from the sales and use tax to undertake a project described by

Section 505.154 unless the use of tax proceeds for that purpose is

authorized by a majority of the voters voting at an election held in

the municipality for that purpose.

(b) The ballot in an election held under this section shall

be printed to provide for voting for or against the proposition:

"The use of sales and use tax proceeds for infrastructure relating

to __________ (insert water supply facilities or water conservation

programs, as appropriate)."

the governing body of an authorizing municipality subsequent to an

earlier election authorized under Section 505.251. (V.A.C.S. Art.

5190.6, Sec. 4B(a-5).)

Sec. 505.305. PAYMENT FOR CLEANUP OF CONTAMINATED PROPERTY;

ELECTION. (a) The economic development office, with the

assistance of the Texas Commission on Environmental Quality, may

encourage a Type B corporation to use proceeds from the sales and

use tax imposed under this chapter for the cleanup of contaminated

property.

(b) Notwithstanding any other provision of this chapter, a

Type B corporation may use proceeds from the sales and use tax for

the cleanup of contaminated property only if the use of tax proceeds

for that purpose is authorized by a majority of the voters voting at

an election held in the authorizing municipality for that purpose.

The ballot in an election held under this subsection shall be

printed to provide for voting for or against the proposition: "The

use of sales and use tax proceeds for the cleanup of contaminated

property." (V.A.C.S. Art. 5190.6, Sec. 4B(p).)

[Sections 505.306-505.350 reserved for expansion]

SUBCHAPTER H. TERMINATION OF CORPORATION

Sec. 505.351. APPLICABILITY OF SUBCHAPTER. This subchapter

applies only to a Type B corporation created on or after September

1, 1999. (Acts 76th Leg., R.S., Ch. 21, Sec. 2 (part).)

Sec. 505.352. ELECTION TO TERMINATE EXISTENCE OF

CORPORATION ON PETITION. (a) The governing body of an authorizing

municipality shall order an election on the termination of the

existence of the Type B corporation on receipt of a petition

requesting the election that is signed by at least 10 percent of the

registered voters of the municipality.

(b) The authorizing municipality shall hold the election on

the first available uniform election date that occurs after the

time required by Section 3.005, Election Code. (V.A.C.S. Art.

5190.6, Sec. 4B(o)(1).)

Sec. 505.353. BALLOT. The ballot for an election held under

Section 505.352 shall be printed to permit voting for or against the

proposition: "Termination of the __________ (name of

corporation)." (V.A.C.S. Art. 5190.6, Sec. 4B(o)(2).)

Sec. 505.354. TERMINATION OF EXISTENCE OF CORPORATION. (a)

If a majority of the votes cast at an election held under Section

505.352 approve the termination, the Type B corporation shall:

(1) continue operations only as necessary to meet the

obligations the corporation incurred before the date of the

election, including paying the principal of and interest on the

corporation's bonds; and

(2) liquidate the corporation's assets and apply the

proceeds to satisfy the corporation's obligations, to the extent

practicable.

(b) After the Type B corporation has satisfied all of the

corporation's obligations, any remaining assets of the corporation

shall be transferred to the authorizing municipality, and the

existence of the corporation is terminated.

comptroller and the secretary of state of the date the existence of

a Type B corporation is terminated under this subchapter.

(d) A tax imposed under this chapter may not be collected

after the last day of the first calendar quarter that begins after

the authorizing municipality provides notice under Subsection (c).

(V.A.C.S. Art. 5190.6, Secs. 4B(o)(3), (4).)

Sec. 505.355. ELECTION REJECTING TERMINATION. If less than

a majority of the votes cast at an election held under Section

505.352 approve the termination, Section 505.354 has no effect.

(V.A.C.S. Art. 5190.6, Sec. 4B(o)(5).)

CHAPTER 506. COUNTY ALLIANCE CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 506.001. DEFINITION

Sec. 506.002. CREATION OF COUNTY ALLIANCE; AUTHORITY

TO CREATE CORPORATION

Sec. 506.003. STATUS OF COUNTY ALLIANCE AS SINGLE UNIT

Sec. 506.004. APPLICABILITY OF SUBTITLE

[Sections 506.005-506.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 506.051. APPOINTMENT OF DIRECTORS; TERM

Sec. 506.052. NO COMPENSATION; REIMBURSEMENT FOR

EXPENSES

Sec. 506.053. REMOVAL OF DIRECTOR

[Sections 506.054-506.100 reserved for expansion]

SUBCHAPTER C. MEMBERSHIP IN COUNTY ALLIANCE

Sec. 506.101. MEMBERSHIP IN ESTABLISHED COUNTY

ALLIANCE

Sec. 506.102. WITHDRAWAL FROM COUNTY ALLIANCE

[Sections 506.103-506.150 reserved for expansion]

SUBCHAPTER D. FINANCIAL PROVISIONS

Sec. 506.151. DISTRIBUTION OF NET EARNINGS

[Sections 506.152-506.200 reserved for expansion]

SUBCHAPTER E. TERMINATION OF CORPORATION

Sec. 506.201. EFFECT OF WITHDRAWAL OF COUNTY

Sec. 506.202. DISTRIBUTION OF ASSETS

CHAPTER 506. COUNTY ALLIANCE CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 506.001. DEFINITION. In this chapter, "county

alliance corporation" means the corporation authorized to be

created by a county alliance. (New.)

Sec. 506.002. CREATION OF COUNTY ALLIANCE; AUTHORITY TO

CREATE CORPORATION. Two or more counties that are adjacent or in

close proximity, as determined by the commissioners courts of the

counties involved, may establish a county alliance to authorize the

creation of a corporation. (V.A.C.S. Art. 5190.6, Sec. 4D(a)

(part), as added Acts 76th Leg., R.S., Ch. 973.)

Sec. 506.003. STATUS OF COUNTY ALLIANCE AS SINGLE UNIT. For

purposes of this subtitle, a county alliance is considered a single

unit. (V.A.C.S. Art. 5190.6, Sec. 4D(a) (part), as added Acts 76th

Leg., R.S., Ch. 973.)

Sec. 506.004. APPLICABILITY OF SUBTITLE. The provisions of

this subtitle outside of this chapter apply to a county alliance and

to a county alliance corporation, except to the extent inconsistent

with this chapter or another provision of this subtitle that

expressly applies to a county alliance or to a county alliance

corporation. (V.A.C.S. Art. 5190.6, Sec. 4D(a) (part), as added

Acts 76th Leg., R.S., Ch. 973.)

[Sections 506.005-506.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 506.051. APPOINTMENT OF DIRECTORS; TERM. (a) The

board of directors of a county alliance corporation consists of

directors appointed by the commissioners court of each county in

the alliance as follows:

(1) three directors from each county if the alliance

includes 10 or fewer counties; or

(2) two directors from each county if the alliance

includes more than 10 counties.

(b) A director may not serve more than six years. (V.A.C.S.

Art. 5190.6, Sec. 4D(b) (part), as added Acts 76th Leg., R.S., Ch.

973.)

Sec. 506.052. NO COMPENSATION; REIMBURSEMENT FOR EXPENSES.

A director serves without compensation but is entitled to

reimbursement for expenses incurred in the performance of the

director's duties. (V.A.C.S. Art. 5190.6, Sec. 4D(b) (part), as

added Acts 76th Leg., R.S., Ch. 973.)

Sec. 506.053. REMOVAL OF DIRECTOR. A director is subject to

removal at the will of the appointing county. (V.A.C.S. Art.

5190.6, Sec. 4D(b) (part), as added Acts 76th Leg., R.S., Ch. 973.)

[Sections 506.054-506.100 reserved for expansion]

SUBCHAPTER C. MEMBERSHIP IN COUNTY ALLIANCE

Sec. 506.101. MEMBERSHIP IN ESTABLISHED COUNTY ALLIANCE. A

county may become a member of an established county alliance that

has authorized the creation of a county alliance corporation. The

county becomes a member of the county alliance if:

(1) the commissioners court of the county proposing to

join the county alliance petitions the board of directors of the

established county alliance corporation for admission;

(2) the board approves the admission of the

petitioning county; and

(3) the petitioning county:

(A) agrees to abide by the bylaws of the county

alliance corporation;

(B) pays a fee to the county alliance as

determined by the board; and

the board. (V.A.C.S. Art. 5190.6, Sec. 4D(c), as added Acts 76th

Leg., R.S., Ch. 973.)

Sec. 506.102. WITHDRAWAL FROM COUNTY ALLIANCE. (a) A

county may withdraw from a county alliance if all of the county's

obligations and entitlements relating to the county alliance

corporation have been properly settled.

(b) The county withdrawing from the county alliance may not

receive any assets, including money or other property, of the

county alliance corporation until the existence of the corporation

is terminated as provided by Section 506.202. (V.A.C.S. Art.

5190.6, Sec. 4D(e) (part), as added Acts 76th Leg., R.S., Ch. 973.)

[Sections 506.103-506.150 reserved for expansion]

SUBCHAPTER D. FINANCIAL PROVISIONS

Sec. 506.151. DISTRIBUTION OF NET EARNINGS. If the board of

directors of a county alliance corporation determines that

sufficient provisions have been made to pay the corporation's

expenses, bonds, and other obligations, any net earnings may be

distributed among the counties in the county alliance as a

percentage of the per capita contributions made by each of the

counties during the corporation's existence. (V.A.C.S. Art.

5190.6, Sec. 4D(d), as added Acts 76th Leg., R.S., Ch. 973.)

[Sections 506.152-506.200 reserved for expansion]

SUBCHAPTER E. TERMINATION OF CORPORATION

Sec. 506.201. EFFECT OF WITHDRAWAL OF COUNTY. A county

alliance corporation is not required to terminate its existence as

a result of the withdrawal of a county from the county alliance if

at least two counties remain in the county alliance. (V.A.C.S. Art.

5190.6, Sec. 4D(g), as added Acts 76th Leg., R.S., Ch. 973.)

Sec. 506.202. DISTRIBUTION OF ASSETS. (a) Subject to

Subsection (b), on termination of the existence of a county

alliance corporation, any assets of the corporation remaining after

all the corporation's obligations have been met shall be

distributed among the counties in the county alliance as a

percentage of the per capita contributions made by each of the

counties during the corporation's existence.

(b) A county that withdraws from a county alliance is

entitled to receive a distribution under Subsection (a) that is

reduced by one percent for each year the corporation operated

without the county's membership in the alliance. (V.A.C.S. Art.

5190.6, Secs. 4D(e) (part), (f), as added Acts 76th Leg., R.S., Ch.

973.)

CHAPTER 507. SPACEPORT DEVELOPMENT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 507.001. DEFINITIONS

Sec. 507.002. SCOPE OF PROJECT

Sec. 507.003. AUTHORITY TO CREATE CORPORATION

BY ELIGIBLE ENTITIES

Sec. 507.004. CONTENTS OF CERTIFICATE OF FORMATION

Sec. 507.005. CORPORATION NOT SUBJECT TO CERTAIN

PROVISIONS

Sec. 507.006. CONFLICTS OF LAW

[Sections 507.007-507.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 507.051. BOARD OF DIRECTORS

Sec. 507.052. OFFICERS

Sec. 507.053. MEETINGS

[Sections 507.054-507.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 507.101. GENERAL POWERS AND LIMITATIONS OF

CORPORATION

Sec. 507.102. ACQUISITION, MORTGAGE, OR DISPOSAL OF

PROPERTY

Sec. 507.103. EMINENT DOMAIN

Sec. 507.104. CONTRACTS

Sec. 507.105. GENERAL POWERS RELATED TO FINANCES

Sec. 507.106. DONATIONS, GRANTS, AND LOANS

Sec. 507.107. AUTHORITY TO SUE AND BE SUED

Sec. 507.108. HIGHER EDUCATION COURSES AND DEGREE

PROGRAMS

[Sections 507.109-507.150 reserved for expansion]

SUBCHAPTER D. BONDS

Sec. 507.151. AUTHORITY TO ISSUE BONDS; APPROVAL

Sec. 507.152. BONDS NOT OBLIGATION OF CERTAIN ENTITIES

Sec. 507.153. BOND REQUIREMENTS

[Sections 507.154-507.200 reserved for expansion]

SUBCHAPTER E. TAXES

Sec. 507.201. EXEMPTION FROM CERTAIN TAXES

Sec. 507.202. PAYMENT IN LIEU OF AD VALOREM TAXES

CHAPTER 507. SPACEPORT DEVELOPMENT CORPORATIONS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 507.001. DEFINITIONS. In this chapter:

(1) "Authorizing entity" means the political

subdivision or combination of political subdivisions that

authorizes the creation of a spaceport development corporation as

permitted under Section 507.003.

(2) "Spacecraft" includes a satellite.

(3) "Spaceport" includes:

(A) an area intended to be used to launch or land

a spacecraft;

(B) a spaceport building or facility located on

an area appurtenant to a launching or landing area;

area that is intended for use for a spaceport building or facility;

and

(D) a right-of-way related to a launching or

landing area, building, facility, or other area that is appurtenant

to a launching or landing area.

(4) "Spaceport development corporation" means a

corporation governed by this chapter. (V.A.C.S. Art. 5190.6, Secs.

4D(a)(3), (4), as added Acts 76th Leg., R.S., Ch. 1537, Secs.

4E(a)(3), (4); New.)

Sec. 507.002. SCOPE OF PROJECT. For purposes of a spaceport

development corporation, in addition to land, buildings,

equipment, facilities, and improvements that constitute a project

under Chapter 501, "project" includes the land, buildings,

equipment, facilities, and improvements found by the board of

directors of the corporation to:

(1) be required or suitable for use for the promotion

or development of a spaceport, related area transportation

facilities, automobile parking facilities, and related roads,

streets, and water and sewer facilities, and other related

improvements that enhance the spaceport or another item specified

by this subdivision;

(2) promote or develop new or expanded business

enterprises relating to a spaceport;

(3) promote or develop educational programs or job

training relating to a spaceport; or

(4) be required or suitable for the promotion of

development and expansion of affordable housing, as defined by 42

U.S.C. Section 12745, relating to a spaceport. (V.A.C.S. Art.

5190.6, Sec. 4D(a)(2), as added Acts 76th Leg., R.S., Ch. 1537, Sec.

4E(a)(2).)

Sec. 507.003. AUTHORITY TO CREATE CORPORATION BY ELIGIBLE

ENTITIES. The following entities are eligible to authorize the

creation under this subtitle of a spaceport development

corporation:

(1) a county; or

(2) a combination of one or more municipalities and

one or more counties. (V.A.C.S. Art. 5190.6, Secs. 4D(a)(1), (c)

(part), as added Acts 76th Leg., R.S., Ch. 1537, Secs. 4E(a)(1), (b)

(part).)

Sec. 507.004. CONTENTS OF CERTIFICATE OF FORMATION. The

certificate of formation of a spaceport development corporation:

(1) must state that the corporation is governed by

this chapter; and

(2) may include in the corporation's name any word or

phrase the authorizing entity specifies. (V.A.C.S. Art. 5190.6,

Sec. 4D(c) (part), as added Acts 76th Leg., R.S., Ch. 1537, Sec.

4E(b) (part).)

Sec. 507.005. CORPORATION NOT SUBJECT TO CERTAIN

PROVISIONS. Sections 501.203, 501.205, 501.251-254, 501.255(a)

and (b), 501.256, and 501.257 do not apply to a corporation under

this chapter. (V.A.C.S. Art. 5190.6, Sec. 4D(n), as added Acts 76th

Leg., R.S., Ch. 1537, Sec. 4E(l).)

Sec. 507.006. CONFLICTS OF LAW. To the extent of any

conflict between this chapter and any other provision of this

subtitle, this chapter prevails. (V.A.C.S. Art. 5190.6, Sec.

4D(b), as added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(b) (part).)

[Sections 507.007-507.050 reserved for expansion]

SUBCHAPTER B. GOVERNANCE OF CORPORATION

Sec. 507.051. BOARD OF DIRECTORS. (a) A spaceport

development corporation is governed by a board of seven directors.

(b) If a single county authorizes the creation of a

spaceport development corporation, the commissioners court of the

county shall appoint the directors of the corporation. If more than

one political subdivision authorizes the creation of a spaceport

development corporation, the governing bodies of the political

subdivisions shall appoint the directors through written agreement

between the governing bodies.

of each odd-numbered year, except that three or four of the initial

directors may serve a one-year term so that the terms may be

staggered in the future. (V.A.C.S. Art. 5190.6, Sec. 4D(d) (part),

as added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(g) (part).)

Sec. 507.052. OFFICERS. (a) The board of directors of a

spaceport development corporation shall elect a presiding officer

from among its members.

(b) The board of directors by rule may provide for the

election of other officers. (V.A.C.S. Art. 5190.6, Sec. 4D(d)

(part), as added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(g) (part).)

Sec. 507.053. MEETINGS. The board of directors of a

spaceport development corporation shall meet:

(1) at least once every three months; and

(2) at the call of the presiding officer or a majority

of the directors. (V.A.C.S. Art. 5190.6, Sec. 4D(d) (part), as

added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(g) (part).)

[Sections 507.054-507.100 reserved for expansion]

SUBCHAPTER C. POWERS AND DUTIES

Sec. 507.101. GENERAL POWERS AND LIMITATIONS OF

CORPORATION. A spaceport development corporation:

(1) has the powers granted by this chapter and by other

chapters of this subtitle; and

(2) is subject to the limitations of a corporation

authorized to be created under another provision of this subtitle.

(V.A.C.S. Art. 5190.6, Sec. 4D(c) (part), as added Acts 76th Leg.,

R.S., Ch. 1537, Sec. 4E(b) (part).)

Sec. 507.102. ACQUISITION, MORTGAGE, OR DISPOSAL OF

PROPERTY. (a) A spaceport development corporation may acquire

property but only if a site in the territory of the authorizing

entity has been designated as the site for a spaceport.

(b) A spaceport development corporation may:

(1) mortgage property; or

(2) convey or otherwise dispose of property.

(V.A.C.S. Art. 5190.6, Secs. 4D(e) (part), (f) (part), as added

Acts 76th Leg., R.S., Ch. 1537, Secs. 4E(c) (part), (d) (part).)

Sec. 507.103. EMINENT DOMAIN. (a) A spaceport development

corporation may exercise the power of eminent domain to acquire

property for a spaceport, including the power to:

(1) acquire fee title in land condemned;

(2) relocate or modify a railroad, utility line,

pipeline, or other facility that may interfere with a spaceport; or

(3) impose a reasonable restriction on using the

surface of the property for mineral development if the corporation

does not own the mineral rights.

(b) Before exercising the power of eminent domain under this

chapter, a spaceport development corporation must obtain a

resolution approving the proposed condemnation from the governing

body of a county or municipality in which the property is located.

For purposes of this chapter, territory in the extraterritorial

jurisdiction of a municipality is considered to be in the

jurisdiction of the municipality.

power of eminent domain by a spaceport development corporation.

(V.A.C.S. Art. 5190.6, Secs. 4D(e) (part), (g), as added Acts 76th

Leg., R.S., Ch. 1537, Secs. 4E(c) (part), (e).)

Sec. 507.104. CONTRACTS. (a) Except as provided by

Subsection (b), a spaceport development corporation may enter into:

(1) an agreement with any person; or

(2) an interlocal contract under Chapter 791,

Government Code.

(b) A spaceport development corporation may not enter into a

contract to operate a spaceport unless the agreement provides that

the person contracting with the corporation assumes the

corporation's liability for a cause of action arising from

environmental damage. (V.A.C.S. Art. 5190.6, Sec. 4D(h) (part), as

added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(f) (part).)

Sec. 507.105. GENERAL POWERS RELATED TO FINANCES. A

spaceport development corporation may:

(1) impose a charge for using a spaceport or a service

the corporation provides;

(2) borrow money;

(3) loan money to fund a spaceport; and

(4) invest money under the corporation's control in an

investment authorized by Chapter 2256, Government Code. (V.A.C.S.

Art. 5190.6, Sec. 4D(k) (part), as added Acts 76th Leg., R.S., Ch.

1537, Sec. 4E(i) (part).)

Sec. 507.106. DONATIONS, GRANTS, AND LOANS. A spaceport

development corporation may accept a donation, grant, or loan from

any person. (V.A.C.S. Art. 5190.6, Sec. 4D(h) (part), as added Acts

76th Leg., R.S., Ch. 1537, Sec. 4E(f) (part).)

Sec. 507.107. AUTHORITY TO SUE AND BE SUED. A spaceport

development corporation may sue and be sued. (V.A.C.S. Art. 5190.6,

Sec. 4D(i), as added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(f)

(part).)

Sec. 507.108. HIGHER EDUCATION COURSES AND DEGREE PROGRAMS.

(a) The board of directors of a spaceport development corporation

by rule may develop a plan for higher education courses and degree

programs to be offered at or near a spaceport.

(b) A course or degree program offered under this section

must be related to the purposes of this chapter.

Development and Tourism Office and the Texas Higher Education

Coordinating Board shall cooperate with and advise the board of

directors in carrying out this section. (V.A.C.S. Art. 5190.6,

Sec. 4D(j), as added Acts 76th Leg., R.S., Ch. 1537, Sec. 4E(h).)

[Sections 507.109-507.150 reserved for expansion]

SUBCHAPTER D. BONDS

Sec. 507.151. AUTHORITY TO ISSUE BONDS; APPROVAL. (a) A

spaceport development corporation may issue bonds only if a site in

the territory of the authorizing entity has been designated as the

site for a spaceport.

(b) Bonds issued under this chapter must be approved by the

governing body of each political subdivision that authorized

creation of the spaceport development corporation. (V.A.C.S. Art.

5190.6, Secs. 4D(f) (part), (k) (part), (m) (part), as added Acts

76th Leg., R.S., Ch. 1537, Secs. 4E(d) (part), (i) (part), (k)

(part).)

Sec. 507.152. BONDS NOT OBLIGATION OF CERTAIN ENTITIES.

Bonds issued by a spaceport development corporation are not an

obligation or a pledge of the faith and credit of this state, a

political subdivision that authorized the creation of the

corporation, or another political subdivision or agency of this

state. (V.A.C.S. Art. 5190.6, Sec. 4D(m) (part), as added Acts 76th

Leg., R.S., Ch. 1537, Sec. 4E(k) (part).)

Sec. 507.153. BOND REQUIREMENTS. Bonds issued under this

chapter must:

(1) be payable only from the revenue of a spaceport

developed by the spaceport development corporation issuing the

bonds;

(2) mature not later than 50 years after the date of

issuance; and

(3) state on their faces that the bonds are not an

obligation of the State of Texas or a political subdivision of this

state, other than the corporation that issued the bonds. (V.A.C.S.

Art. 5190.6, Sec. 4D(m) (part), as added Acts 76th Leg., R.S., Ch.

1537, Sec. 4E(k) (part).)

[Sections 507.154-507.200 reserved for expansion]

SUBCHAPTER E. TAXES

Sec. 507.201. EXEMPTION FROM CERTAIN TAXES. (a) The

property, income, and operations of a spaceport development

corporation are exempt from taxes imposed by this state or a

political subdivision of this state.

(b) Tangible personal property located in the spaceport,

such as a spacecraft or other property necessary to launch the

spacecraft, is exempt from ad valorem taxation.

personal property purchased by a person for use in a spaceport.

(V.A.C.S. Art. 5190.6, Sec. 4D(l) (part), as added Acts 76th Leg.,

R.S., Ch. 1537, Sec. 4E(j) (part).)

Sec. 507.202. PAYMENT IN LIEU OF AD VALOREM TAXES. In lieu

of taxes, a spaceport development corporation shall pay to each

political subdivision of this state in which land owned by the

corporation is located an amount equal to the amount of ad valorem

taxes that would be imposed on that land if the land were privately

owned. (V.A.C.S. Art. 5190.6, Sec. 4D(l) (part), as added Acts 76th

Leg., R.S., Ch. 1537, Sec. 4E(j) (part).)

SECTION 3.02. CONFORMING AMENDMENT. Section 403.030(a),

Government Code, is amended to read as follows:

(a) For purposes of evaluating the effect on economic

development in this state, the comptroller, before each regular

session of the legislature, shall collect and make available

information that:

(1) lists the strategies in the General Appropriations

Act identified as meeting the statewide priority goal or service

category of economic development, if any, of each state agency and

institution of higher education, as defined by Section 61.003,

Education Code, including:

(A) legislative appropriations or actual

expenditures, as applicable, for each strategy;

(B) the method of financing of each strategy; and

appropriate strategy that are listed in the General Appropriations

Act or the Automated Budget and Evaluation System of Texas (ABEST);

(2) lists all investments financed with money from the

Texas growth fund created by Section 70, Article XVI, Texas

Constitution;

(3) contains a summary of the information reported

under Subchapter D, Chapter 502, Local Government Code [~~Section 4C,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~], by each corporation created under Chapter 504

[~~Section 4A~~] or 505, Local Government Code, [~~4B of that Act~~] and a

copy of the report submitted by each of the 10 corporations with the

largest total revenue in the most recent fiscal year ending before

the date the information compiled under this section is made

available;

(4) contains a summary of the report required by

Section 403.014 and information on the effect on revenues of

allocation or apportionment under Sections 171.106 and 171.1061,

Tax Code;

(5) contains a summary of reports the comptroller is

required to submit by other law to evaluate the effectiveness of Tax

Code provisions, including reports required by Sections 171.707,

171.727, 171.759, and 171.809, Tax Code; and

(6) to the extent practicable, contains information on

employment, capital investment, and personal income relating to:

(A) at least two tax provisions described by

Section 403.014; and

(B) changes in school district property tax law

or Tax Code provisions enacted by the most recent legislature.

SECTION 3.03. CONFORMING AMENDMENT. Section

481.0069(a)(2), Government Code, is amended to read as follows:

(2) "Spaceport" has the meaning assigned by Section

507.001, Local Government Code [~~4D(a), Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes), as added~~

~~by Chapter 1537, Acts of the 76th Legislature, Regular Session,~~

~~1999~~].

SECTION 3.04. CONFORMING AMENDMENT. Section 481.0069(d),

Government Code, is amended to read as follows:

(d) Money in the spaceport trust fund may not be spent

unless the office certifies to the comptroller that:

(1) a viable business entity has been established

that:

(A) has a business plan that demonstrates that

the entity has available the financial, managerial, and technical

expertise and capability necessary to launch and land a reusable

launch vehicle; and

(B) has committed to locating its facilities at a

spaceport in this state;

(2) a development corporation for spaceport

facilities created under Chapter 507, Local Government Code

[~~Section 4D, Development Corporation Act of 1979 (Article 5190.6,~~

~~Vernon's Texas Civil Statutes), as added by Chapter 1537, Acts of~~

~~the 76th Legislature, Regular Session, 1999~~], has established a

development plan for the spaceport project and has secured at least

90 percent of the funding required for the project; and

(3) the spaceport or launch operator has obtained the

appropriate Federal Aviation Administration license.

SECTION 3.05. CONFORMING AMENDMENT. Section 481.023(a),

Government Code, is amended to read as follows:

(a) The office shall perform the administrative duties

prescribed under:

(1) Chapter 1433; and

(2) the Development Corporation Act (Subtitle C1,

Title 12, Local Government Code) [~~of 1979 (Article 5190.6, Vernon's~~

~~Texas Civil Statutes)~~].

SECTION 3.06. CONFORMING AMENDMENT. Section 481.072,

Government Code, is amended to read as follows:

Sec. 481.072. DEFINITIONS. In this subchapter:

(1) "Cost" has the meaning assigned that term by

Subtitle C1, Title 12, Local Government Code [~~the Development~~

~~Corporation Act~~].

(2) [~~"Development Corporation Act" means the~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes).~~

[~~(3)~~] "Project" has the meaning assigned that term by

Subtitle C1, Title 12, Local Government Code [~~the Development~~

~~Corporation Act~~].

(3) [~~(4)~~] "User" includes any person.

SECTION 3.07. CONFORMING AMENDMENT. Section 481.502(a),

Government Code, is amended to read as follows:

(a) The office, in coordination with the Texas Strategic

Military Planning Commission, shall assist defense communities in

obtaining financing for economic development projects that seek to

address future realignment or closure of a defense base that is in,

adjacent to, or near the defense community. The office and the

commission shall refer the defense community to:

(1) a local economic development corporation created

under the Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~] for possible financing; or

(2) an appropriate state agency that has an existing

program to provide financing for the project, including:

(A) the Texas Water Development Board; or

(B) the Texas Department of Transportation.

SECTION 3.08. CONFORMING AMENDMENT. Section 489.106,

Government Code, is amended to read as follows:

Sec. 489.106. ADMINISTRATION OF FUND AND CHAPTER. The

office shall administer the fund. In administering the fund and

this chapter, the office has the powers necessary to carry out the

purposes of this chapter, including the power to:

(1) make, execute, and deliver contracts,

conveyances, and other instruments;

(2) impose and collect fees and charges in connection

with any transaction and provide for reasonable penalties for

delinquent payments or performance; and

(3) issue bonds for economic development projects as

that term is defined by Section 501.101, Local Government Code,

[~~2(11)(A)~~] or Section 505.151, 505.152, 505.153, 505.154, 505.155,

or 505.156, Local Government Code [~~4B(a)(2), Development~~

~~Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~].

SECTION 3.09. CONFORMING AMENDMENT. Section 489.108,

Government Code, is amended to read as follows:

Sec. 489.108. PROGRAMS, SERVICES, AND FUNDS UNDER BANK'S

DIRECTION. Notwithstanding any other law, the bank shall perform

the duties and functions of the office with respect to the following

programs, services, and funds:

(1) the Texas Small Business Industrial Development

Corporation established under Chapter 503, Local Government Code

[~~Section 4, Development Corporation Act of 1979 (Article 5190.6,~~

~~Vernon's Texas Civil Statutes)~~];

(2) the capital access program established under

Section 481.405;

(3) the Texas leverage fund;

(4) the linked deposit program established under

Section 481.193;

(5) the enterprise zone program established under

Chapter 2303;

(6) the industrial revenue bond program;

(7) the defense economic readjustment zone program

established under Chapter 2310;

(8) the Empowerment Zone and Enterprise Community

grant program established under Section 481.025; and

(9) the renewal community program.

SECTION 3.10. CONFORMING AMENDMENT. Sections 551.056(b)

and (c), Government Code, are amended to read as follows:

(b) In addition to the other place at which notice is

required to be posted by this subchapter, the following

governmental bodies and economic development corporations must

also concurrently post notice of a meeting on the Internet website

of the governmental body or economic development corporation:

(1) a municipality;

(2) a county;

(3) a school district;

(4) the governing body of a junior college or junior

college district, including a college or district that has changed

its name in accordance with Chapter 130, Education Code; and

(5) a development corporation organized under the

Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~].

development corporations must also concurrently post the agenda for

the meeting on the Internet website of the governmental body or

economic development corporation:

(1) a municipality with a population of 48,000 or

more;

(2) a county with a population of 65,000 or more;

(3) a school district that contains all or part of the

area within the corporate boundaries of a municipality with a

population of 48,000 or more;

(4) the governing body of a junior college district,

including a district that has changed its name in accordance with

Chapter 130, Education Code, that contains all or part of the area

within the corporate boundaries of a municipality with a population

of 48,000 or more; and

(5) a development corporation organized under the

Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~] that was created by or for:

(A) a municipality with a population of 48,000 or

more; or

(B) a county or district that contains all or

part of the area within the corporate boundaries of a municipality

with a population of 48,000 or more.

SECTION 3.11. CONFORMING AMENDMENT. Section 2301.091(c),

Government Code, is amended to read as follows:

has the powers granted to industrial development corporations by

Sections 501.054, 501.059, 501.060, 501.064(a), 501.067, 501.074,

501.153(a), 501.154, 501.155, 501.159, 501.201(a), 501.210(b),

501.214, and 501.402, Local Government Code [~~Section 23~~], except

the limitations provided by Section 501.064(c), Local Government

Code [~~Subsection (a)(11) of that section~~], and Sections 501.153(b),

501.208(a), (c), and (e), 501.209, 501.210, and 501.213, Local

Government Code [~~25(e), 26, 27, and 29, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], but is

otherwise governed by this chapter.

SECTION 3.12. CONFORMING AMENDMENT. Section 2303.509,

Government Code, is amended to read as follows:

Sec. 2303.509. DEVELOPMENT BONDS. To finance a project in

an enterprise zone, bonds may be issued under:

(1) Chapter 1433; or

(2) the Development Corporation Act (Subtitle C1,

Title 12, Local Government Code) [~~of 1979 (Article 5190.6, Vernon's~~

~~Texas Civil Statutes)~~].

SECTION 3.13. CONFORMING AMENDMENT. Sections 2303.510(a)

and (b), Government Code, are amended to read as follows:

(a) The governing body of a municipality that is the

governing body of an enterprise zone may create, in accordance with

the Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~], an industrial development corporation for use by the

enterprise zone.

(b) A corporation created under this section has the powers

and is subject to the limitations of a corporation created under the

Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979~~]. To the extent of a conflict between this

section and that subtitle [~~Act~~], that subtitle [~~Act~~] prevails.

SECTION 3.14. CONFORMING AMENDMENT. Section 2310.408,

Government Code, is amended to read as follows:

Sec. 2310.408. DEVELOPMENT BONDS. To finance a project in a

readjustment zone, bonds may be issued under:

(1) Chapter 1433; or

(2) the Development Corporation Act (Subtitle C1,

Title 12, Local Government Code) [~~of 1979 (Article 5190.6, Vernon's~~

~~Texas Civil Statutes)~~].

SECTION 3.15. CONFORMING AMENDMENT. Section 362.017,

Health and Safety Code, is amended to read as follows:

Sec. 362.017. INDUSTRIAL DEVELOPMENT CORPORATION. (a) A

public agency that has entered into a contract under Section

362.014 may sponsor the creation of an industrial development

corporation under the Development Corporation Act (Subtitle C1,

Title 12, Local Government Code) [~~of 1979 (Article 5190.6, Vernon's~~

~~Texas Civil Statutes)~~].

(b) The corporation may issue bonds, notes, or other

evidences of indebtedness under the Development Corporation Act

(Subtitle C1, Title 12, Local Government Code) [~~of 1979~~] to finance

the cost of a system under the contract regardless of whether the

system is located within the boundaries of the public agency.

SECTION 3.16. CONFORMING AMENDMENT. Section 363.118(a),

Health and Safety Code, is amended to read as follows:

(a) A public agency that enters into a contract under

Section 363.116 may sponsor the creation of an industrial

development corporation as provided by the Development Corporation

Act (Subtitle C1, Title 12, Local Government Code) [~~of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~].

SECTION 3.17. CONFORMING AMENDMENT. Section 253.009(a),

Local Government Code, is amended to read as follows:

(a) A municipality may convey to a municipally created

economic development corporation, including a development

corporation organized under the Development Corporation Act

(Subtitle C1, Title 12) [~~of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~], real property that has been conveyed by gift to

the municipality or conveyed to the municipality as part of a legal

settlement and that is adjacent to an area designated for

development by the corporation.

SECTION 3.18. CONFORMING AMENDMENT. Section 283.053(d),

Local Government Code, is amended to read as follows:

(d) The base amount for a municipality that was involved in

litigation relating to franchise fees with one or more certificated

telecommunications providers during any part of 1998 and that, not

later than December 1, 1999, repeals any ordinance subject to

dispute in the litigation, voluntarily dismisses with prejudice any

claims in the litigation for compensation, and agrees to waive any

potential claim for compensation under any franchise agreement or

ordinance expired or in existence on September 1, 1999, is equal to,

at the municipality's election:

(1) an amount not to exceed the state average access

line rate on a per category basis for the certificated

telecommunications provider with the greatest number of access

lines in that municipality multiplied by the total number of access

lines located within the boundaries of the municipality on December

31, 1998, including any newly annexed areas; or

(2) an amount not to exceed 21 percent of the total

sales and use tax revenue received by the municipality pursuant to

Chapter 321, Tax Code. The amount does not include sales and use

taxes collected under:

(A) Chapter 451, 452, 453, or 454, Transportation

Code, for a mass transit authority;

(B) Chapter 504 or 505 [~~the Development~~

~~Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes), for a 4A or 4B Development Corporation~~];

(D) Chapters 321, 322, and 323, Tax Code, for a

special district, including health service, crime control,

hospital, and emergency service districts.

SECTION 3.19. CONFORMING AMENDMENT. Section 334.003, Local

Government Code, is amended to read as follows:

Sec. 334.003. APPLICATION TO VENUE CONSTRUCTED UNDER OTHER

LAW. A county or municipality may use this chapter for a venue

project relating to a venue and related infrastructure planned,

acquired, established, developed, constructed, or renovated under

other law, including Chapter 505 of this code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes),~~] or Subchapter E, Chapter 451, Transportation

Code.

SECTION 3.20. CONFORMING AMENDMENT. Section 334.085(a),

Local Government Code, is amended to read as follows:

(a) In this section, "taxing authority" means:

(1) a rapid transit authority created under Chapter

451, Transportation Code;

(2) a regional transportation authority created under

Chapter 452, Transportation Code;

(3) a crime control district created under the Crime

Control and Prevention District Act (Article 2370c-4, Vernon's

Texas Civil Statutes); or

(4) a [~~an industrial development~~] corporation created

under Chapter 504 or 505 [~~Section 4A or 4B, Development Corporation~~

~~Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~].

SECTION 3.21. CONFORMING AMENDMENT. Section 335.002, Local

Government Code, is amended to read as follows:

Sec. 335.002. APPLICATION TO VENUE CONSTRUCTED UNDER OTHER

LAW. A district may use this chapter for a venue project relating

to a venue and related infrastructure planned, acquired,

established, developed, constructed, or renovated under other law,

including Chapter 505 of this code [~~Section 4B, Development~~

~~Corporation Act of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes),~~] or Subchapter E, Chapter 451, Transportation Code.

SECTION 3.22. CONFORMING AMENDMENT. Section 375.303(2),

Local Government Code, is amended to read as follows:

(2) "Eligible project" means a program authorized by

Section 379A.051 and a project as defined by Section 501.002

[~~Sections 2(11)~~] and Sections 505.151-505.156 [~~4B(a)(2),~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~]. Notwithstanding this definition, seeking a

charter for or operating an open-enrollment charter school

authorized by Subchapter D, Chapter 12, Education Code, shall not

be an eligible project.

SECTION 3.23. CONFORMING AMENDMENT. Section 377.001(3),

Local Government Code, is amended to read as follows:

(3) "Development project" means:

(A) a "project" as that term is defined by

Sections 505.151-505.158 [~~Section 4B(a), Development Corporation~~

~~Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~]; or

(B) a convention center facility or related

improvement such as a convention center, civic center, civic center

building, civic center hotel, or auditorium, including parking

areas or facilities that are used to park vehicles and that are

located at or in the vicinity of other convention center

facilities.

SECTION 3.24. CONFORMING AMENDMENT. Section 379B.002(b),

Local Government Code, is amended to read as follows:

(b) When establishing an authority, the municipality may

designate the authority in the municipality's resolution to be the

successor in interest to a nonprofit corporation organized under

the Development Corporation Act (Subtitle C1, Title 12) [~~of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~]. On adoption of

the resolution, the corporation is dissolved and the authority

succeeds to all rights and liabilities of that corporation.

SECTION 3.25. CONFORMING AMENDMENT. Section 379B.011(b),

Local Government Code, is amended to read as follows:

(b) Section 25.07(a), Tax Code, applies to a leasehold or

other possessory interest in real property granted by an authority

for a project designated under Section 379B.009(a) in the same

manner as it applies to a leasehold or other possessory interest in

real property constituting a project described by Section 505.161

[~~4B(k), Development Corporation Act of 1979 (Article 5190.6,~~

~~Vernon's Texas Civil Statutes)~~], except for the requirement in

Section 505.161 [~~4B(k)~~] that the voters of the municipality that

created the authority have authorized the levy of a sales and use

tax for the benefit of the authority.

SECTION 3.26. CONFORMING AMENDMENT. Section 380.002(b),

Local Government Code, is amended to read as follows:

(b) A home-rule municipality may, under a contract with a

development corporation created by the municipality under the

Development Corporation Act (Subtitle C1, Title 12) [~~of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~], grant public

money to the corporation. The development corporation shall use the

grant money for the development and diversification of the economy

of the state, elimination of unemployment or underemployment in the

state, and development and expansion of commerce in the state.

SECTION 3.27. CONFORMING AMENDMENT. Sections 383.004(4)

and (8), Local Government Code, are amended to read as follows:

(4) "Cost" has the meaning assigned by Section 501.152

[~~2(4), Development Corporation Act of 1979 (Article 5190.6,~~

~~Vernon's Texas Civil Statutes)~~].

(8) "Project" has the meaning assigned by Sections

505.151-505.156 [~~Section 4B(a)(2), Development Corporation Act of~~

~~1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~].

SECTION 3.28. CONFORMING AMENDMENT. Section 383.112, Local

Government Code, is amended to read as follows:

Sec. 383.112. EXEMPTION. Notwithstanding any other

provision of this chapter to the contrary, any contract between the

district and a governmental entity or nonprofit corporation created

under the Development Corporation Act (Subtitle C1, Title 12) [of

~~1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~] is not

subject to the competitive bidding requirements of this chapter.

SECTION 3.29. CONFORMING AMENDMENT. Section 387.002, Local

Government Code, is amended to read as follows:

Sec. 387.002. APPLICABILITY. This chapter applies only to

a county that has a population of less than 45,000 if:

(1) any portion of the county is included in an

authority governed by Chapter 451 or 452, Transportation Code; or

(2) the county does not contain any part of a

municipality that, before the commissioners court of the county

calls an election on the question of creating a district under

Section 387.003, has:

(A) created a development corporation under

Chapter 504 or 505 [~~Section 4A or 4B, Development Corporation Act of~~

~~1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~]; or

(B) imposed a sales and use tax that when

combined with any other sales and use tax applicable in the

municipality, exceeds two percent.

SECTION 3.30. CONFORMING AMENDMENT. Section 3801.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3801.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code;

(3) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, the Development Corporation~~

~~Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and

the power to own, operate, acquire, construct, lease, improve, and

maintain projects, other than a domed football stadium, described

by that chapter [~~section~~]; and

(4) the powers of a housing finance corporation

created under Chapter 394, Local Government Code, to provide

housing or residential development projects in the district.

SECTION 3.31. CONFORMING AMENDMENT. Section 3802.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3802.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code; and

(3) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects described by that chapter [~~section~~].

SECTION 3.32. CONFORMING AMENDMENT. Section 3803.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3803.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, and authority of a

district created under Chapter 375, Local Government Code;

(3) the powers given to a corporation created under

the Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~], including:

(A) the power to own, operate, acquire,

construct, lease, improve, and maintain the projects described by

that Act and this chapter and any other authorized project; and

(B) the power to acquire land and other property

in accordance with Chapter 505, Local Government Code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~]; and

(4) the power to create, tax, assess, and hold

elections in a defined area under Chapter 54, Water Code, to provide

improvements or services in the defined area for any project or

activity the district is authorized to acquire, construct, improve,

or provide.

SECTION 3.33. CONFORMING AMENDMENT. Section 3804.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3804.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code; and

(3) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects.

SECTION 3.34. CONFORMING AMENDMENT. Section 3805.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3805.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code;

(3) the powers, duties, and contracting authority

specified by Subchapters H and I, Chapter 49, Water Code;

(4) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation~~

~~Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~],

including the power to own, operate, acquire, construct, lease,

improve, and maintain the projects described by that chapter

[~~section~~]; and

(5) the powers of a housing finance corporation

created under Chapter 394, Local Government Code.

SECTION 3.35. CONFORMING AMENDMENT. Section 3806.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3806.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code; and

(3) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects.

SECTION 3.36. CONFORMING AMENDMENT. Section 3807.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3807.101. POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created; and

(2) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects.

SECTION 3.37. CONFORMING AMENDMENT. Section 3808.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3808.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects; and

(3) the powers given to a housing finance corporation

created under Chapter 394, Local Government Code, to provide

housing or residential development projects in the district.

SECTION 3.38. CONFORMING AMENDMENT. Section 3809.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3809.101. DISTRICT POWERS. The district may exercise

the powers given to:

(1) a corporation created under Chapter 505, Local

Government Code [~~Section 4B, Development Corporation Act of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~]; and

(2) a housing finance corporation created under

Chapter 394, Local Government Code, to provide housing or

residential development projects in the district.

SECTION 3.39. CONFORMING AMENDMENT. Section 3810.101(a),

Special District Local Laws Code, is amended to read as follows:

(a) The district may exercise the powers given to:

(1) a corporation created under Chapter 505, Local

Government Code [~~Section 4B, Development Corporation Act of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~];

(2) a housing finance corporation created under

Chapter 394, Local Government Code, to provide housing or

residential development projects in the district; and

(3) an eligible political subdivision under Chapter

221, Natural Resources Code.

SECTION 3.40. CONFORMING AMENDMENT. Section 3811.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3811.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects; and

(3) the powers given to a housing finance corporation

created under Chapter 394, Local Government Code, to provide

housing or residential development projects in the district.

SECTION 3.41. CONFORMING AMENDMENT. Section 3812.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3812.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created; and

(2) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and the

power to own, operate, acquire, construct, lease, improve, and

maintain projects.

SECTION 3.42. CONFORMING AMENDMENT. Section 3813.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3813.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the powers and duties of a municipal management

district under Subchapter E, Chapter 375, Local Government Code;

and

(3) the powers given to a [~~an industrial development~~]

corporation organized under the Development Corporation Act

(Subtitle C1, Title 12, Local Government Code) [~~of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~].

SECTION 3.43. CONFORMING AMENDMENT. Section 3814.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3814.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation created under Chapter 505, Local

Government Code [~~Section 4B, Development Corporation Act of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~], including the

power to own, operate, acquire, construct, lease, improve, or

maintain a project described by that chapter [~~section~~]; and

(2) a housing finance corporation created under

Chapter 394, Local Government Code, to provide housing or

residential development projects in the district.

SECTION 3.44. CONFORMING AMENDMENT. Section 3815.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3815.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, the Development Corporation~~

~~Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], and

the power to own, operate, acquire, construct, lease, improve, and

maintain projects; and

(3) the powers given to a housing finance corporation

created under Chapter 394, Local Government Code, to provide

housing or residential development projects in the district.

SECTION 3.45. CONFORMING AMENDMENT. Section 3816.101(b),

Special District Local Laws Code, is amended to read as follows:

(b) The district may exercise the powers given to:

(1) a corporation created under Chapter 505, Local

Government Code [~~Section 4B, Development Corporation Act of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~]; or

(2) a housing finance corporation created under

Chapter 394, Local Government Code, to provide housing or

residential development projects in the district.

SECTION 3.46. CONFORMING AMENDMENT. Section 3817.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3817.101. EXERCISE OF POWERS OF DEVELOPMENT

CORPORATION. The district may exercise the powers of a corporation

created under Chapter 505, Local Government Code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~].

SECTION 3.47. CONFORMING AMENDMENT. Section 3819.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3819.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, and maintain

projects described by that chapter [~~section~~];

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district; and

(3) a municipality under Chapter 380, Local Government

Code.

SECTION 3.48. CONFORMING AMENDMENT. Section 3820.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3820.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, and maintain

projects described by that chapter [~~section~~];

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district; and

(3) a municipality under Chapter 380, Local Government

Code.

SECTION 3.49. CONFORMING AMENDMENT. Section 3821.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3821.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, and maintain

projects described by that chapter [~~section~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.50. CONFORMING AMENDMENT. Section 3822.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3822.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, and maintain

projects described by that chapter [~~section~~];

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district; and

(3) a municipality under Chapter 380, Local Government

Code.

SECTION 3.51. CONFORMING AMENDMENT. Section 3823.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3823.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.52. CONFORMING AMENDMENT. Section 3824.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3824.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, and maintain

projects described by that chapter [~~section~~];

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district;

(3) a municipality under Chapter 380, Local Government

Code;

(4) an entity described in Chapters 284 and 441,

Transportation Code; and

(5) a district governed by Subchapters E and M,

Chapter 60, Water Code, and Section 61.116, Water Code.

SECTION 3.53. CONFORMING AMENDMENT. Section 3828.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3828.101. GENERAL POWERS AND DUTIES. The district has

the powers and duties provided by:

(1) the general laws relating to conservation and

reclamation districts created under Section 59, Article XVI, Texas

Constitution, including Chapters 49 and 54, Water Code, except that

the district's bonds and other securities are not subject to the

jurisdiction or supervision of the commission under Chapter 49,

Water Code, or other law;

(2) the general laws relating to road districts and

road utility districts created under Section 52(b), Article III,

Texas Constitution, including Chapter 441, Transportation Code;

(3) Chapter 372, Local Government Code, in the same

manner as a municipality or a county;

(4) Chapter 375, Local Government Code; and

(5) Chapter 505, Local Government Code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~].

SECTION 3.54. CONFORMING AMENDMENT. Section 3829.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3829.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, and maintain

projects described by that chapter [~~section~~];

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district; and

(3) a municipality under Chapter 380, Local Government

Code.

SECTION 3.55. CONFORMING AMENDMENT. Section 3830.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3830.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.56. CONFORMING AMENDMENT. Section 3831.107(b),

Special District Local Laws Code, is amended to read as follows:

(b) Section 375.221, Local Government Code, does not apply

to a contract between the district and:

(1) another governmental entity;

(2) a nonprofit corporation, including a scientific

research corporation; or

(3) a corporation created under the Development

Corporation Act (Subtitle C1, Title 12, Local Government Code) [of

~~1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~].

SECTION 3.57. CONFORMING AMENDMENT. Section 3834.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3834.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.58. CONFORMING AMENDMENT. Section 3835.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3835.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, or maintain a

project described by that chapter [~~section~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.59. CONFORMING AMENDMENT. Section 3835.158(a),

Special District Local Laws Code, is amended to read as follows:

(a) The district may issue by competitive bid or negotiated

sale bonds or other obligations payable wholly or partly from

taxes, assessments, impact fees, revenue, grants, or other money of

the district, or any combination of those sources of money, to pay

for any authorized purpose of the district. The sources of money may

include economic development money contributed by the City of

Richmond or Rosenberg or by an economic development corporation

created under the Development Corporation Act (Subtitle C1, Title

12, Local Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~].

SECTION 3.60. CONFORMING AMENDMENT. Section 3838.001(3),

Special District Local Laws Code, is amended to read as follows:

(3) "Economic development corporation" means a

corporation created under the Development Corporation Act

(Subtitle C1, Title 12, Local Government Code) [~~of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~].

SECTION 3.61. CONFORMING AMENDMENT. Section 3838.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3838.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to an economic development

corporation under Chapter 505, Local Government Code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~], including the power to own, operate, acquire,

construct, lease, improve, or maintain a project described by that

chapter [~~section~~].

SECTION 3.62. CONFORMING AMENDMENT. Section 3841.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3841.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) an economic development corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], including

the power to own, operate, acquire, construct, lease, improve, or

maintain a project described by that chapter [~~section~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.63. CONFORMING AMENDMENT. Section 3843.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3843.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code;

(3) the powers, duties, and contracting authority

specified by Subchapters H and I, Chapter 49, Water Code;

(4) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], including

the power to own, operate, acquire, construct, lease, improve, and

maintain the projects described by that chapter [~~section~~]; and

(5) the powers of a housing finance corporation

created under Chapter 394, Local Government Code.

SECTION 3.64. CONFORMING AMENDMENT. Section 3844.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3844.101. DISTRICT POWERS. The district has:

(1) all powers necessary to accomplish the purposes

for which the district was created;

(2) the rights, powers, privileges, authority, and

functions of a district created under Chapter 375, Local Government

Code;

(3) the powers, duties, and contracting authority

specified by Subchapters H and I, Chapter 49, Water Code;

(4) the powers given to a corporation under Chapter

505, Local Government Code [~~Section 4B, Development Corporation Act~~

~~of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], including

the power to own, operate, acquire, construct, lease, improve, and

maintain the projects described by that chapter [~~section~~]; and

(5) the powers of a housing finance corporation

created under Chapter 394, Local Government Code.

SECTION 3.65. CONFORMING AMENDMENT. Section 3847.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3847.101. EXERCISE OF POWERS OF DEVELOPMENT

CORPORATION. The district may exercise the powers of a corporation

created under Chapter 505, Local Government Code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~].

SECTION 3.66. CONFORMING AMENDMENT. Section 3850.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3850.101. EXERCISE OF POWERS OF DEVELOPMENT

CORPORATION. The district may exercise the powers of a corporation

created under Chapter 505, Local Government Code [~~Section 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~], including the power to own, operate, acquire,

construct, lease, improve, and maintain projects described by that

chapter [~~section~~].

SECTION 3.67. CONFORMING AMENDMENT. Section 3852.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3852.101. ADDITIONAL DISTRICT POWERS. The district

may exercise the powers given to a corporation created under

Chapter 504 or 505, Local Government Code [~~Section 4A or 4B,~~

~~Development Corporation Act of 1979 (Article 5190.6, Vernon's Texas~~

~~Civil Statutes)~~].

SECTION 3.68. CONFORMING AMENDMENT. Section 3853.101,

Special District Local Laws Code, is amended to read as follows:

Sec. 3853.101. ADDITIONAL POWERS OF DISTRICT. The district

may exercise the powers given to:

(1) a corporation under Chapter 505, Local Government

Code [~~Section 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], including the power to

own, operate, acquire, construct, lease, improve, or maintain a

project described by that chapter [~~section~~]; and

(2) a housing finance corporation under Chapter 394,

Local Government Code, to provide housing or residential

development projects in the district.

SECTION 3.69. CONFORMING AMENDMENT. Section 23.55(f), Tax

Code, is amended to read as follows:

(f) The sanctions provided by Subsection (a) of this section

do not apply if the change of use occurs as a result of:

(1) a sale for right-of-way;

(2) a condemnation;

(3) a transfer of the property to the state or a

political subdivision of the state to be used for a public purpose;

(4) a transfer of the property from the state, a

political subdivision of the state, or a nonprofit corporation

created by a municipality with a population of more than one million

under the Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~] to an individual or a business entity for purposes of

economic development if the comptroller determines that the

economic development is likely to generate for deposit in the

general revenue fund during the next two fiscal bienniums an amount

of taxes and other revenues that equals or exceeds 20 times the

amount of additional taxes and interest that would have been

imposed under Subsection (a) had the sanctions provided by that

subsection applied to the transfer.

SECTION 3.70. CONFORMING AMENDMENT. Section 25.07(b), Tax

Code, is amended to read as follows:

(b) Except as provided by Subsections (b) and (c) of Section

11.11 of this code, a leasehold or other possessory interest in

exempt property may not be listed if:

(1) the property is permanent university fund land;

(2) the property is county public school fund

agricultural land;

(3) the property is a part of a public transportation

facility owned by an incorporated city or town and:

(A) is an airport passenger terminal building or

a building used primarily for maintenance of aircraft or other

aircraft services, for aircraft equipment storage, or for air

cargo;

(B) is an airport fueling system facility;

(i) that has been granted to a joint airport

board under Chapter 129, Acts of the 65th Legislature, Regular

Session, 1977 (Article 1446.8, Vernon's Texas Civil Statutes);

(ii) the area of which in the portion of the

zone located in the airport operated by the joint airport board does

not exceed 2,500 acres; and

(iii) that is established and operating

pursuant to federal law; or

(D)(i) is in a foreign trade zone established

pursuant to federal law after June 1, 1991, which operates pursuant

to federal law;

(ii) is contiguous to or has access via a

taxiway to an airport located in two counties, one of which has a

population of 500,000 or more according to the federal decennial

census most recently preceding the establishment of the foreign

trade zone; and

(iii) is owned, directly or through a

corporation organized under the Development Corporation Act

(Subtitle C1, Title 12, Local Government Code) [~~of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~], by the same incorporated

city or town which owns the airport;

(4) the interest is in a part of:

(A) a park, market, fairground, or similar public

facility that is owned by an incorporated city or town; or

(B) a convention center, visitor center, sports

facility with permanent seating, concert hall, arena, or stadium

that is owned by an incorporated city or town as such leasehold or

possessory interest serves a governmental, municipal, or public

purpose or function when the facility is open to the public,

regardless of whether a fee is charged for admission;

(5) the interest involves only the right to use the

property for grazing or other agricultural purposes;

(6) the property is owned by the Texas National

Research Laboratory Commission or by a corporation formed by the

Texas National Research Laboratory Commission under Section

465.008(g), Government Code, and is used or is useful in connection

with an eligible undertaking as defined by Section 465.021,

Government Code; or

(7) the property is:

(A) owned by a municipality, a public port, or a

navigation district created or operating under Section 59, Article

XVI, Texas Constitution, or under a statute enacted under Section

59, Article XVI, Texas Constitution; and

(B) used as an aid or facility incidental to or

useful in the operation or development of a port or waterway or in

aid of navigation-related commerce.

SECTION 3.71. CONFORMING AMENDMENT. Section 151.341(a),

Tax Code, is amended to read as follows:

(a) A taxable item sold, leased, or rented to or stored,

used, or consumed by a nonprofit corporation formed under the

Development Corporation Act (Subtitle C1, Title 12, Local

Government Code) [~~of 1979 (Article 5190.6, Vernon's Texas Civil~~

~~Statutes)~~], is exempted from the taxes imposed by this chapter if

the item is for the exclusive use and benefit of the nonprofit

corporation.

SECTION 3.72. CONFORMING AMENDMENT. Section 171.074, Tax

Code, is amended to read as follows:

Sec. 171.074. EXEMPTION--DEVELOPMENT CORPORATION. A

nonprofit corporation organized under the Development Corporation

Act (Subtitle C1, Title 12, Local Government Code) [~~of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~] is exempted from

the franchise tax.

SECTION 3.73. CONFORMING AMENDMENT. Section 321.101(i),

Tax Code, is amended to read as follows:

(i) A municipality for which the adoption or increase of a

sales and use tax approved by the voters in an election held after

May 1, 1995, and before December 31, 1995, is invalid because the

election combined into a single proposition proposal for adopting

an economic development sales and use tax under Chapter 505, Local

Government Code [~~Section 4B, Development Corporation Act of 1979~~

~~(Article 5190.6, Vernon's Texas Civil Statutes)~~], and an additional

sales and use tax under Subsection (b) may adopt or increase the

sales and use tax previously approved by the voters by ordinance or

resolution of the governing body of the municipality. If the

governing body of the municipality adopts or increases the sales

and use tax under this subsection, the municipal secretary shall

send to the comptroller by certified or registered mail a certified

copy of the ordinance or resolution. The tax takes effect on the

first day of the month following the expiration of the calendar

quarter occurring after the date on which the comptroller receives

the ordinance or resolution.

SECTION 3.74. CONFORMING AMENDMENT. Section 452.6025(a),

Transportation Code, is amended to read as follows:

(a) In this section, "special sales and use tax" means:

(1) a sales and use tax levied by a municipality under:

(A) Chapter 504 or 505, Local Government Code

[~~Section 4A or 4B, Development Corporation Act of 1979 (Article~~

~~5190.6, Vernon's Texas Civil Statutes)~~];

(B) Section 379A.081, Local Government Code, for

the benefit of a municipal development corporation; or

the benefit of a crime control and prevention district; or

(2) an additional municipal sales and use tax levied

by a municipality under Chapter 321, Tax Code.

SECTION 3.75. CONFORMING AMENDMENT. Section 152.051(c),

Water Code, is amended to read as follows:

501.058, 501.062, 501.063, 501.064, except as that section applies

to amending a corporation's bylaws, 501.065, 501.066,

501.068-501.072, 501.401-501.406, and Subchapters G and H, Chapter

501, Local Government Code [~~5-20 and 33-36, Development Corporation~~

~~Act of 1979 (Article 5190.6, Vernon's Texas Civil Statutes)~~], apply

to a corporation created under this section, except that in those

sections:

(1) a reference to the Development Corporation [~~that~~]

Act (Subtitle C1, Title 12, Local Government Code) includes this

chapter; and

(2) a reference to a unit includes a river authority to

which this chapter applies.

SECTION 3.76. RENUMBERING. (a) The following changes are

made to Subtitle A, Title 13, Local Government Code, for

organizational purposes:

(1) Chapter 401, Local Government Code, is renumbered

as Chapter 551, Local Government Code, and sections in the

renumbered chapter, Sections 401.001, 401.002, 401.003, 401.004,

and 401.005, are renumbered as Sections 551.001, 551.002, 551.003,

551.004, and 551.005, respectively; and

(2) Chapter 402, Local Government Code, is renumbered

as Chapter 552, Local Government Code, and:

(A) Subchapter A in the renumbered chapter is

redesignated as Subchapter A, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.001,

402.002, 402.0025, and 402.003, are renumbered as Sections 552.001,

552.002, 552.0025, and 552.003, respectively;

(B) Subchapter B in the renumbered chapter is

redesignated as Subchapter B, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.011,

402.012, 402.013, 402.014, 402.015, 402.016, 402.017, 402.018,

402.019, 402.020, 402.0205, 402.021, 402.022, and 402.023, are

renumbered as Sections 552.011, 552.012, 552.013, 552.014,

552.015, 552.016, 552.017, 552.018, 552.019, 552.020, 552.0205,

552.021, 552.022, and 552.023, respectively;

redesignated as Subchapter C, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.041,

402.042, 402.043, 402.044, 402.045, 402.0451, 402.046, 402.047,

402.048, 402.049, 402.050, 402.051, 402.052, 402.053, and 402.054,

are renumbered as Sections 552.041, 552.042, 552.043, 552.044,

552.045, 552.0451, 552.046, 552.047, 552.048, 552.049, 552.050,

552.051, 552.052, 552.053, and 552.054, respectively;

(D) Subchapter D in the renumbered chapter is

redesignated as Subchapter D, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.061,

402.062, 402.063, 402.064, 402.065, 402.066, 402.067, 402,068,

402.069, 402.070, 402.071, 402.072, 402.073, 402.074, and 402.075,

are renumbered as Sections 552.061, 552.062, 552.063, 552.064,

552.065, 552.066, 552.067, 552.068, 552.069, 552.070, 552.071,

552.072, 552.073, 552.074, and 552.075, respectively;

(E) Subchapter E in the renumbered chapter is

redesignated as Subchapter E, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.091 and

402.092, are renumbered as Sections 552.091 and 552.092,

respectively;

(F) Subchapter F in the renumbered chapter is

redesignated as Subchapter F, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.101,

402.102, 402.103, 402.104, and 402.105, are renumbered as Sections

552.101, 552.102, 552.103, 552.104, and 552.105, respectively;

(G) Subchapter G in the renumbered chapter is

redesignated as Subchapter G, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.121,

402.122, 402.123, and 402.124, are renumbered as Sections 552.121,

552.122, 552.123, and 552.124, respectively;

(H) Subchapter H in the renumbered chapter is

redesignated as Subchapter H, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.141 and

402.142, are renumbered as Sections 552.141 and 552.142,

respectively; and

(I) Subchapter Z in the renumbered chapter is

redesignated as Subchapter Z, Chapter 552, Local Government Code,

and sections in the redesignated subchapter, Sections 402.901,

402.902, 402.903, 402.904, 402.905, 402.906, 402.907, 402.909, and

402.910, are renumbered as Sections 552.901, 552.902, 552.903,

552.904, 552.905, 552.906, 552.907, 552.909, and 552.910,

respectively.

(b) The following changes are made to Subtitle B, Title 13,

Local Government Code, for organizational purposes:

(1) Chapter 411, Local Government Code, is renumbered

as Chapter 561, Local Government Code, and sections in the

renumbered chapter, Sections 411.001, 411.002, 411.003, 411.004,

411.005, 411.006, 411.007, 411.008, and 411.009, are renumbered as

Sections 561.001, 561.002, 561.003, 561.004, 561.005, 561.006,

561.007, 561.008, and 561.009, respectively;

(2) Chapter 412, Local Government Code, is renumbered

as Chapter 562, Local Government Code, and:

(A) Subchapter A in the renumbered chapter is

redesignated as Subchapter A, Chapter 562, Local Government Code,

and sections in the redesignated subchapter, Sections 412.001,

412.002, 412.003, 412.004, and 412.005, are renumbered as Sections

562.001, 562.002, 562.003, 562.004, and 562.005, respectively; and

(B) Subchapter B in the renumbered chapter is

redesignated as Subchapter B, Chapter 562, Local Government Code,

and sections in the redesignated subchapter, Sections 412.011,

412.012, 412.013, 412,014, 412.015, and 412.016, are renumbered as

Sections 562.011, 562.012, 562.013, 562.014, 562.015, and 562.016,

respectively; and

(3) Chapter 413, Local Government Code, is renumbered

as Chapter 563, Local Government Code, and:

(A) Subchapter A in the renumbered chapter is

redesignated as Subchapter A, Chapter 563, Local Government Code,

and sections in the redesignated subchapter, Sections 413.001 and

413.002, are renumbered as Sections 563.001 and 563.002,

respectively;

(B) Subchapter B in the renumbered chapter is

redesignated as Subchapter B, Chapter 563, Local Government Code,

and sections in the redesignated subchapter, Sections 413.051,

413.052, 413.053, 413.054, 413.055, 413.056, 413.057, 413.058,

413.059, 413.060, 413.061, 413.062, 413.063, 413.064, 413.065,

413.066, 413.067, and 413.068, are renumbered as Sections 563.051,

563.052, 563.053, 563.054, 563.055, 563.056, 563.057, 563.058,

563.059, 563.060, 563.061, 563.062, 563.063, 563.064, 563.065,

563.066, 563.067, and 563.068, respectively;

redesignated as Subchapter C, Chapter 563, Local Government Code,

and sections in the redesignated subchapter, Sections 413.101,

413.102, 413.103, 413.104, 413.105, 413.106, and 413.107, are

renumbered as Sections 563.101, 563.102, 563.103, 563.104,

563.105, 563.106, and 563.107, respectively; and

(D) Subchapter D in the renumbered chapter is

redesignated as Subchapter D, Chapter 563, Local Government Code,

and sections in the redesignated subchapter, Sections 413.151,

413.152, 413.153, 413.154, and 413.155, are renumbered as Sections

563.151, 563.152, 563.153, 563.154, and 563.155, respectively.

Local Government Code, for organizational purposes:

(1) Chapter 421, Local Government Code, is renumbered

as Chapter 571, Local Government Code, and Subchapter A in the

renumbered chapter is redesignated as Subchapter A, Chapter 571,

Local Government Code, and sections in the redesignated subchapter,

Sections 421.001, 421.002, 421.003, 421.004, 421.005, 421.006,

421.007, 421.008, 421.009, 421.010, and 421.011, are renumbered as

Sections 571.001, 571.002, 571.003, 571.004, 571.005, 571.006,

571.007, 571.008, 571.009, 571.010, and 571.011, respectively;

(2) Chapter 422, Local Government Code, is renumbered

as Chapter 572, Local Government Code, and:

(A) Subchapter A in the renumbered chapter is

redesignated as Subchapter A, Chapter 572, Local Government Code,

and sections in the redesignated subchapter, Sections 422.001,

422.002, 422.003, and 422.004, are renumbered as Sections 572.001,

572.002, 572.003, and 572.004, respectively;

(B) Subchapter B in the renumbered chapter is

redesignated as Subchapter B, Chapter 572, Local Government Code,

and sections in the redesignated subchapter, Sections 422.011,

422.012, 422.013, and 422.014, are renumbered as Sections 572.011,

572.012, 572.013, and 572.014, respectively; and

redesignated as Subchapter C, Chapter 572, Local Government Code,

and sections in the redesignated subchapter, Sections 422.051,

422.052, 422.053, 422.054, 422.055, 422.056, 422.057, 422.058,

422.059, 422.060, 422.061, 422.062, 422.063, and 422.064, are

renumbered as Sections 572.051, 572.052, 572.053, 572.054,

572.055, 572.056, 572.057, 572.058, 572.059, 572.060, 572.061,

572.062, 572.063, and 572.064, respectively;

(3) Chapter 423, Local Government Code, is renumbered

as Chapter 573, Local Government Code, and sections in the

renumbered chapter, Sections 423.001, 423.002, and 423.003, are

renumbered as Sections 573.001, 573.002, and 573.003,

respectively; and

(4) Chapter 430, Local Government Code, is renumbered

as Chapter 580, Local Government Code, and sections in the

renumbered chapter, Sections 430.001, 430.002, and 430.003, are

renumbered as Sections 580.001, 580.002, and 580.003,

respectively.

(d) Chapter 431, Local Government Code, is renumbered for

organizational purposes as Chapter 601, Local Government Code, and:

(1) Subchapter A in the renumbered chapter is

redesignated as Subchapter A, Chapter 601, Local Government Code,

and the section in the redesignated subchapter, Section 431.001, is

renumbered as Section 601.001; and

(2) Subchapter B in the renumbered chapter is

redesignated as Subchapter B, Chapter 601, Local Government Code,

and the sections in the redesignated subchapter, Sections 431.021,

431.022, 431.023, 431.024, 431.025, 431.026, 431.027, 431.028,

431.029, 431.030, 431.031, 431.032, 431.033, 431.034, 431.035,

431.036, 431.037, 431.038, 431.039, 431.040, 431.041, 431.042,

431.043, and 431.044, are renumbered as Sections 601.021, 601.022,

601.023, 601.024, 601.025, 601.026, 601.027, 601.028, 601.029,

601.030, 601.031, 601.032, 601.033, 601.034, 601.035, 601.036,

601.037, 601.038, 601.039, 601.040, 601.041, 601.042, 601.043, and

601.044, respectively.

(e) Chapter 445, Local Government Code, is renumbered for

organizational purposes as Chapter 615, Local Government Code, and:

(1) Subchapter A in the renumbered chapter is

redesignated as Subchapter A, Chapter 615, Local Government Code,

and the sections in the redesignated subchapter, Sections 445.001,

445.002, 445.003, and 445.004, are renumbered as Sections 615.001,

615.002, 615.003, and 615.004, respectively;

(2) Subchapter B in the renumbered chapter is

redesignated as Subchapter B, Chapter 615, Local Government Code,

and the section in the redesignated subchapter, Section 445.011, is

renumbered as Section 615.011;

(3) Subchapter C in the renumbered chapter is

redesignated as Subchapter C, Chapter 615, Local Government Code,

and the sections in the redesignated subchapter, Sections 445.021,

445.022, 445.023, and 445.024, are renumbered as Sections 615.021,

615.022, 615.023, and 615.024, respectively; and

(4) Subchapter D in the renumbered chapter is

redesignated as Subchapter D, Chapter 615, Local Government Code,

and the sections in the redesignated subchapter, Sections 445.101,

445.102, and 445.103, are renumbered as Sections 615.101, 615.102,

and 615.103, respectively.

SECTION 3.77. CONFORMING AMENDMENT. The following

reference changes are made to conform the provisions amended to the

renumbering changes made by Section 3.76 of this article:

(1) Section 30.00005(b), Government Code, is amended

to read as follows:

(b) The court has jurisdiction over criminal cases arising

under ordinances authorized by Sections 215.072, 217.042, 341.903,

and 551.002 [~~401.002~~], Local Government Code.

(2) Section 364.037(a), Health and Safety Code, is

amended to read as follows:

(a) A county or public agency that offers solid waste

disposal services under this subchapter may enter an agreement for

the collection of unpaid utility or solid waste disposal services

fees with:

(1) another county or public agency that provides

solid waste disposal services under this subchapter;

(2) a municipality that operates a utility system, as

defined by Section 552.001 [~~402.001~~], Local Government Code; or

(3) another political subdivision acting on behalf of

a municipality, county, or public agency to assist in the

collection of unpaid utility charges or solid waste disposal fees.

(3) Section 252.022(b), Local Government Code, is

amended to read as follows:

(b) This chapter does not apply to bonds or warrants issued

under Subchapter A, Chapter 571 [~~421~~].

(4) Section 271.045(c), Local Government Code, is

amended to read as follows:

certificates of obligation to pay all or part of a municipality's

obligations incurred by contract for interests in and rights to

water or sewer treatment capacity in connection with a water supply

and transmission project or sewer treatment or collection project

to be constructed in whole or in part on behalf of the municipality

by another governmental entity or political subdivision pursuant to

a written agreement expressly authorized under Section 552.014

[~~402.014~~] of this code or Section 791.026, Government Code.

(5) Subdivisions (1) and (8), Section 552.044, Local

Government Code, as renumbered from Section 402.044, Local

Government Code, by this Act, are amended to read as follows:

(1)(A) "Benefitted property" means an improved lot or

tract to which drainage service is made available under this

subchapter.

(B) "Benefitted property," in a municipality

with a population of more than 1.18 million which is operating a

drainage utility system under this chapter, means a lot or tract,

but does not include land appraised for agricultural use, to which

drainage service is made available under this subchapter and which

discharges into a creek, river, slough, culvert, or other channel

that is part of the municipality's drainage utility system.

Sections 552.053(c)(2) [~~402.053(c)(2)~~] and (c)(3) do not apply to a

municipality described in this subdivision.

(8) "Service area" means the municipal boundaries and

any other land areas outside the municipal boundaries which, as a

result of topography or hydraulics, contribute overland flow into

the watersheds served by the drainage system of a municipality;

provided, however, that in no event may a service area extend

farther than the boundaries of a municipality's current

extraterritorial jurisdiction, nor, except as provided by Section

552.0451 [~~402.0451~~], may a service area of one municipality extend

into the boundaries of another municipality. The service area is to

be established in the ordinance establishing the drainage utility.

Provided, that no municipality shall extend a service area outside

of its municipal boundaries except:

(A) a municipality of more than 400,000

population located in one or more counties of less than 600,000

population according to the most recent federal census;

(B) a municipality all or part of which is

located over or within the Edwards Aquifer recharge zone or the

Edwards Aquifer transition zone, as designated by the Texas Natural

Resource Conservation Commission; or

(6) Subsection (c), Section 552.0451, Local

Government Code, as renumbered from Section 402.0451, Local

Government Code, by this Act, is amended to read as follows:

Subsection (b)(2) must comply with Section 552.047 [~~402.047~~].

(7) Subsection (a), Section 552.052, Local Government

Code, as renumbered from Section 402.052, Local Government Code, by

this Act, is amended to read as follows:

(a) If, after at least five years of substantially

continuous operation of a municipal drainage system, the governing

body of the municipality determines that the system should be

discontinued, that the powers under this subchapter should be

revoked, and that provision for municipal drainage should be made

by other revenues, the governing body may adopt an ordinance to that

effect after providing notice and a public hearing as provided by

Section 552.045 [~~402.045~~].

(8) Subsection (c), Section 552.065, Local Government

Code, as renumbered from Section 402.065, Local Government Code, by

this Act, is amended to read as follows:

section is collectable with interest, cost of collection, and

reasonable attorney's fees. The assessment is a first and prior

lien on the assessed property and the lien takes effect on the date

that a notice of proposed improvements is made under Section

552.067 [~~402.067~~]. The lien is superior to any other lien or claim

except a state, county, school district, or municipal property tax

lien. The assessment is a personal liability and charge against the

owners of the assessed property on the date on which the lien takes

effect, whether or not the owners are named in a notice, instrument,

certificate, or ordinance provided for under this subchapter.

(9) Subsection (a), Section 552.067, Local Government

Code, as renumbered from Section 402.067, Local Government Code, by

this Act, is amended to read as follows:

(a) If the governing body of the municipality proposes to

levy or assess any of the cost of improvements against the

benefitted property as provided by Section 552.065 [~~402.065~~], the

governing body may file a notice, signed on behalf of the

municipality by the municipal clerk, secretary, mayor, or other

officer performing the duties of those officers, with the county

clerk of the county in which the property is located. The notice

must substantially show that the governing body has determined by

order, directive, or otherwise that water or sewer system

improvements are necessary, identify the required improvements by

location or otherwise, state that a portion of the cost of the

improvements is to be or has been specially assessed as a lien

against the benefitted property, and describe that property. One

notice may contain any number of systems or improvements.

(10) Subsection (b), Section 552.071, Local

Government Code, as renumbered from Section 402.071, Local

Government Code, by this Act, is amended to read as follows:

(b) A person who owns or claims an interest in property

against which a reassessment is levied has the same right of appeal

provided under this subchapter for an original assessment. If the

person does not appeal within 15 days after the date of the hearing

relating to the reassessment, the provisions of Section 552.069

[~~402.069~~] relating to waiver, bar, estoppel, and defense apply.

(11) Section 552.074, Local Government Code, as

renumbered from Section 402.074, Local Government Code, by this

Act, is amended to read as follows:

Sec. 552.074 [~~402.074~~]. AUTHORIZED INVESTMENT. A

certificate of special assessment issued under this subchapter,

including a certificate issued under a joint proceeding under

Section 552.072 [~~402.072~~], is a legal and authorized investment for

a bank, savings bank, trust company, savings and loan association,

insurance company, sinking fund of a municipality, county, school

district, or other political subdivision of this state, and for all

other public funds of this state or an agency of this state.

(12) Section 552.075, Local Government Code, as

renumbered from Section 402.075, Local Government Code, by this

Act, is amended to read as follows:

Sec. 552.075 [~~402.075~~]. HOME-RULE MUNICIPALITY. A

home-rule municipality to which this subchapter applies may adopt

plans and specifications for improvements as provided by this

subchapter and may pay in cash to the contractor who is the

successful bidder that part of the cost assessed against the owner

and the benefitted property. The municipality may reimburse itself

by levying an assessment against the benefitted property and its

owner after notice and hearing as provided by this subchapter. The

municipality may reimburse itself up to the amount of the

enhancement in value represented by the benefits and as permitted

under this subchapter and may issue assignable certificates in

favor of the municipality for the assessment. The certificates are

enforceable in the manner provided by Section 552.065 [~~402.065~~].

The municipality may use its own forces to make the improvements if

the work may be performed more expeditiously and economically in

that manner.

(13) Subsection (a), Section 552.910, Local

Government Code, as renumbered from Section 402.910, Local

Government Code, by this Act, is amended to read as follows:

(a) A municipality that operates a utility system, as

defined by Section 552.001 [~~402.001~~], or provides solid waste

disposal services may enter an agreement for the collection of

unpaid utility charges or solid waste disposal services fees with:

(1) another municipality that operates a utility

system;

(2) a county or public agency that provides solid

waste disposal services; or

(3) another political subdivision acting on behalf of

a municipality, county, or public agency to assist in the

collection of unpaid utility charges or solid waste disposal fees.

(14) Section 562.015, Local Government Code, as

renumbered from Section 412.015, Local Government Code, by this

Act, is amended to read as follows:

Sec. 562.015 [~~412.015~~]. COUNTY WATER AND SEWER UTILITY. An

affected county, as defined by Section 16.341, Water Code, may own,

operate, or maintain a water or sewer utility in the same manner as

a municipality under Chapter 552 [~~402~~].

(15) Subsection (a), Section 562.016, Local

Government Code, as renumbered from Section 412.016, Local

Government Code, by this Act, is amended to read as follows:

(a) A county may acquire, own, operate, or contract for the

operation of, a water or sewer utility system to serve an

unincorporated area of the county in the same manner and under the

same regulations as a municipality under Chapter 552 [~~402~~]. The

county must comply with all provisions of Chapter 13, Water Code,

that apply to a municipality. However, a county with a population

of 2.8 million or more and any adjoining county may, with the

municipality's approval, serve an area within a municipality.

(16) Section 563.001, Local Government Code, as

renumbered from Section 413.001, Local Government Code, by this

Act, is amended to read as follows:

Sec. 563.001 [~~413.001~~]. APPLICABILITY OF CHAPTER. This

chapter applies only to a county that:

(1) adopts an order under Section 563.052 [~~413.052~~];

and

(2) has a population of 10,000 or less, according to

the most recent federal census, on the date on which the order is

adopted.

(17) Section 563.051, Local Government Code, as

renumbered from Section 413.051, Local Government Code, by this

Act, is amended to read as follows:

Sec. 563.051 [~~413.051~~]. DEFINITION. In this subchapter,

"board" means a county utility system board established under

Section 563.052 [~~413.052~~].

(18) Section 563.067, Local Government Code, as

renumbered from Section 413.067, Local Government Code, by this

Act, is amended to read as follows:

Sec. 563.067 [~~413.067~~]. AUTHORITY TO ISSUE REVENUE

OBLIGATIONS. The board by resolution may authorize the issuance of

obligations for one or more of the purposes described by Section

563.066(b) [~~413.066(b)~~] that are payable solely from the revenue of

one or more systems.

(19) Subsection (a), Section 571.006, Local

Government Code, as renumbered from Section 421.006, Local

Government Code, by this Act, is amended to read as follows:

(a) The commissioners court or municipal authority may

impose a tax to pay the debt incurred under Section 571.002

[~~421.002~~]. The rate of the tax in any year may not exceed 50 cents

on each $100 of the taxable value of property taxable by the county

or municipality.

(20) Section 572.055, Local Government Code, as

renumbered from Section 422.055, Local Government Code, by this

Act, is amended to read as follows:

Sec. 572.055 [~~422.055~~]. CONTENTS OF CONCURRENT ORDINANCE. A

concurrent ordinance creating a public utility agency under Section

572.052 [~~422.052~~] or re-creating an agency under Section 572.053

[~~422.053~~] must, as adopted by each public entity:

(1) contain identical provisions;

(2) define the boundaries of the agency to include the

territory within the boundaries of each participating public entity

as the boundaries are changed periodically;

(3) designate the name of the agency; and

(4) designate the number, place, initial term, and

manner of appointment of directors in accordance with Section

572.057 [~~422.057~~].

(21) Section 86.014(a), Parks and Wildlife Code, is

amended to read as follows:

(a) The commission shall grant to any county, city, or town

that is authorized under Subchapter A, Chapter 571 [~~421~~], Local

Government Code, to build and maintain seawalls a permit for the

taking of marl, sand, gravel, shell, or mudshell to be used for the

building, extending, protecting, maintaining, or improving any

seawall, breakwater, levee, dike, floodway, or drainway.

(22) Section 3503.101(b), Special District Local Laws

Code, is amended to read as follows:

(b) The authority may exercise any power or duty necessary

or appropriate to carry out a project described by Section

3503.003(a)(3) and the purposes of this chapter, including the

power to:

(1) sue and be sued, and plead and be impleaded, in its

own name;

(2) adopt an official seal;

(3) adopt, enforce, and amend rules for the conduct of

its affairs;

(4) acquire, hold, own, pledge, and dispose of its

revenue, income, receipts, and money from any source;

(5) select its depository;

(6) acquire, own, rent, lease, accept, hold, or

dispose of any property, or any interest in property, including

rights or easements, in performing its duties and exercising its

powers under this chapter, by purchase, exchange, gift, assignment,

sale, lease, or other method;

(7) hold, manage, operate, or improve the property;

(8) sell, assign, lease, encumber, mortgage, or

otherwise dispose of property, or any interest in property, and

relinquish a property right, title, claim, lien, interest,

easement, or demand, however acquired;

(9) perform an activity authorized by Subdivision (8)

by public or private sale, with or without public bidding,

notwithstanding any other law;

(10) lease or rent any land and building, structure,

or facility from or to any person to carry out a chapter purpose;

(11) request and accept an appropriation, grant,

allocation, subsidy, guarantee, aid, service, labor, material, or

gift, from the federal government, the state, a public agency or

political subdivision, or any other source;

(12) operate and maintain an office and appoint and

determine the duties, tenure, qualifications, and compensation of

officers, employees, agents, professional advisors and counselors,

including financial consultants, accountants, attorneys,

architects, engineers, appraisers, and financing experts, as

considered necessary or advisable by the board;

(13) borrow money and issue bonds, payable solely from

all or a portion of any authority revenue, by resolution or order of

the board and without the necessity of an election;

(14) set and collect rents, rates, fees, and charges

regarding the property and any services provided by the authority;

(15) exercise the powers Chapters 373 and 380, Local

Government Code, grant to a municipality for the development of

housing and expansion of economic development and commercial

activity;

(16) exercise the powers Chapter 49, Water Code,

grants to a general-law district;

(17) exercise the powers Chapter 54, Water Code,

grants to a municipal utility district;

(18) exercise the powers Chapter 441, Transportation

Code, grants to a road utility district;

(19) exercise the powers Subchapter C, Chapter 271,

Local Government Code, grants to a municipality or county;

(20) exercise the powers Chapter 552 [~~402~~], Local

Government Code, grants to a municipality for the provision of

municipal utilities;

(21) contract and be contracted with, in the

authority's own name, another person in the performance of the

authority's powers or duties to carry out a project described by

Section 3503.003(a)(3), or to accomplish the purposes of this

chapter for a period of years, on the terms, and by competitive

bidding or by negotiated contract, all as the board considers

appropriate, desirable, and in the best interests of the authority

and the accomplishment of chapter purposes; and

(22) acquire, hold, own, sell, assign, lease,

encumber, mortgage, or otherwise dispose of any real, personal, or

mixed property located outside the perimeter of the property

described by Section 3503.004 if the other property enhances or

facilitates the development, redevelopment, maintenance, or

expansion of new and existing businesses, industry, or commercial

activity on the property.

(23) Section 8104.204(d), Special District Local Laws

Code, is amended to read as follows:

(d) Section 552.014 [~~402.014~~], Local Government Code,

applies to any contract between the authority and a municipality,

including the City of Baytown.

(24) Section 9501.002(a), Special District Local Laws

Code, is amended to read as follows:

(a) The commissioners court and the governing body of a

municipality in Matagorda County by resolution may establish a

seawall commission to perform the functions described by Section

571.002 [~~421.002~~], Local Government Code.

(25) Section 9501.101, Special District Local Laws

Code, is amended to read as follows:

Sec. 9501.101. COMMISSION POWERS. The commission may

exercise the authority granted to a county or municipality under

Section 571.002, 571.003, 571.004, or 571.005 or Section 571.011(a)

[~~421.002, 421.003, 421.004, or 421.005 or Section 421.011(a)~~] or

(b), Local Government Code.

(26) Section 9501.102, Special District Local Laws

Code, is amended to read as follows:

Sec. 9501.102. AUTHORITY TO CONTRACT. The commission may

enter into a contract relating to the performance of any function

described by Section 571.002 [~~421.002~~], Local Government Code.

(27) Section 227.015, Transportation Code, is amended

to read as follows:

Sec. 227.015. LOCATION OF FACILITIES. Notwithstanding any

other law, including Chapter 181, Utilities Code, Chapter 552

[~~402~~], Local Government Code, and Section 49.220, Water Code, the

department may:

(1) specify the location of any facility on the

Trans-Texas Corridor;

(2) direct the time and manner of construction of a

public utility facility on the Trans-Texas Corridor; and

(3) direct the time and manner of construction or

operation of any other facility on the Trans-Texas Corridor.

(28) Sections 227.081(a) and (e), Transportation

Code, are amended to read as follows:

(a) Notwithstanding any other law, including Chapters 161,

162, 163, and 181, Utilities Code, Chapter 552 [~~402~~], Local

Government Code, and Chapter 49, Water Code, and except as provided

in Subsection (e), the department may require a person, including a

governmental or private entity, to pay a fee as a condition of using

any part of the Trans-Texas Corridor.

(e) If a public road is replaced or eliminated by the

Trans-Texas Corridor and a facility used the right-of-way of that

road under Chapter 161, 162, 163, or 181, Utilities Code, Chapter

552 [~~402~~], Local Government Code, or Chapter 49, Water Code, the

department may not require the owner of that facility to pay a fee

as a condition of using a segment of the Trans-Texas Corridor for

the location of a replacement facility.

(29) Section 40.002, Utilities Code, is amended to

read as follows:

Sec. 40.002. DEFINITION. For purposes of this chapter,

"body vested with the power to manage and operate a municipally

owned utility" means a body created in accordance with Section

1502.070, Government Code, or Subchapter G, Chapter 552 [~~402~~],

Local Government Code, or by municipal charter.

(30) Section 164.006, Utilities Code, is amended to

read as follows:

Sec. 164.006. CONSTRUCTION WITH OTHER LAWS. To provide

full authority for the execution of an agreement under this

chapter, this chapter applies to a municipality as if this chapter

were originally contained in Chapter 1501 or 1502, Government Code,

or Chapter 552 [~~402~~], Local Government Code. This chapter prevails

over any charter provision or general or special law.

(31) Section 26.049(h), Water Code, is amended to read

as follows:

(h) When a home-rule municipality has a plan to control or

minimize sanitary sewer overflows, Section 552.901 [~~402.901~~],

Local Government Code, does not limit the power of a home-rule

municipality, in exercising its home-rule powers under Section 5,

Article XI, Texas Constitution, to maintain, repair, relocate, or

replace a water or sanitary sewer lateral or service line on private

property without making an assessment against the property or a

person.

(32) Section 67.010(d), Water Code, is amended to read

as follows:

(d) A political subdivision may contract with a corporation

under Section 552.014 [~~402.014~~], Local Government Code, to carry

out this chapter. If a corporation issues bonds secured by a

contract entered into under Section 552.014 [~~402.014~~], Local

Government Code, the corporation is considered to be acting for or

on behalf of that political subdivision for the purposes of Section

1201.002(1), Government Code. A political subdivision is

authorized to approve by ordinance, resolution, or order the

articles of incorporation and the bylaws of a corporation that is

created for the purpose of constructing facilities under a contract

as provided by Section 552.014 [~~402.014~~], Local Government Code.

(33) Section 221.006(c), Water Code, is amended to

read as follows:

in the state substantially in the manner prescribed by Section

552.020 [~~402.020~~], Local Government Code, for districts organized

or created under Section 59, Article XVI, Texas Constitution, and

may execute water supply contracts with other users of water.

SECTION 3.78. REPEALER. The Development Corporation Act of

1979 (Article 5190.6, Vernon's Texas Civil Statutes) is repealed.

ARTICLE 4. LEGISLATIVE INTENT; EFFECTIVE DATE

SECTION 4.01. LEGISLATIVE INTENT OF NO SUBSTANTIVE CHANGE.

This Act is enacted under Section 43, Article III, Texas

Constitution. No substantive change in law is intended by this Act.

SECTION 4.02. EFFECTIVE DATE. This Act takes effect April

1, 2009.

______________________________

President of the Senate

Speaker of the House

I certify that H.B. No. 2278 was passed by the House on April

30, 2007, by the following vote: Yeas 132, Nays 0, 1 present, not

voting.

______________________________

Chief Clerk of the House

I certify that H.B. No. 2278 was passed by the Senate on May

15, 2007, by the following vote: Yeas 31, Nays 0.

______________________________

Secretary of the Senate

APPROVED: _____________________

Date

_____________________

Governor