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H.B. No. 2278

H.B. No. 2278

AN ACT

relating to a nonsubstantive revision of statutes relating to
business and commerce; including conforming amendments.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. GENERAL MATTERS
SECTION 1.01. PURPOSE OF ACT. (a) This Act is enacted as a
part of the state’s continuing statutory revision program under
Section 323.007, Government Code. The program contemplates a
topic-by-topic revision of the state’s general and permanent
statute law without substantive change.
(b) Consistent with the objectives of the statutory
revision program, the purpose of this Act is to make the law
encompassed by this Act more accessible and understandable by:
(1) rearranging the statutes into a more logical
order;
(2) employing a format and numbering system designed
to facilitate citation of the law and to accommodate future
expansion of the law;
(3) eliminating repealed, duplicative,
unconstitutional, expired, executed, and other ineffective
provisions; and
(4) restating the law in modern American English to
the greatest extent possible.
ARTICLE 2. MISCELLANEOUS COMMERCIAL PROVISIONS
SECTION 2.01. TITLES 4 THROUGH 15 AND 99. The Business &
Commerce Code is amended by revising Title 4 and adding Titles 5
through 15 and 99 to read as follows:
TITLE 4. BUSINESS OPPORTUNITIES AND AGREEMENTS
CHAPTER 51. BUSINESS OPPORTUNITIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 51.001. SHORT TITLE
Sec. 51.002. GENERAL DEFINITIONS
Sec. 51.003. DEFINITION OF BUSINESS OPPORTUNITY
Sec. 51.004. LIBERAL CONSTRUCTION AND APPLICATION
Sec. 51.005. BURDEN OF PROOF
Sec. 51.006. WAIVER
Sec. 51.007. MAINTENANCE OF RECORDS
Sec. 51.008. FILING FEE
Sec. 51.009. RULES
[Sections 51.010-51.050 reserved for expansion]
SUBCHAPTER B. REGISTRATION OF BUSINESS OPPORTUNITY
Sec. 51.051. FILING OF DISCLOSURE STATEMENTS AND LIST
OF SELLERS
Sec. 51.052. UPDATING OF INFORMATION ON FILE
Sec. 51.053. FILING OF DISCLOSURE DOCUMENT FROM OTHER
REGULATORY AGENCY
Sec. 51.054. FILING OF COPY OF BOND OR NOTIFICATION OF
ACCOUNT
[Sections 51.055-51.100 reserved for expansion]
SUBCHAPTER C. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT
Sec. 51.101. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT
REQUIRED
Sec. 51.102. ACTION AGAINST BOND, TRUST ACCOUNT, OR
LETTER OF CREDIT
[Sections 51.103-51.150 reserved for expansion]
SUBCHAPTER D. DISCLOSURE STATEMENT
Sec. 51.151. DISCLOSURE TO PURCHASER OF BUSINESS
OPPORTUNITY
Sec. 51.152. COVER SHEET OF DISCLOSURE STATEMENT
Sec. 51.153. CONTENTS: NAMES AND ADDRESSES
Sec. 51.154. CONTENTS: SALES PERIODS
Sec. 51.155. CONTENTS: SERVICES DESCRIPTION
Sec. 51.156. CONTENTS: UPDATED FINANCIAL STATEMENT
Sec. 51.157. CONTENTS: TRAINING DESCRIPTION
Sec. 51.158. CONTENTS: SECURITY DESCRIPTION
Sec. 51.159. CONTENTS: DELIVERY DATE; CANCELLATION OF
CONTRACT
Sec. 51.160. CONTENTS: SALES OR EARNINGS
REPRESENTATION
Sec. 51.161. CONTENTS: LEGAL ACTION HISTORY
Sec. 51.162. CONTENTS: BANKRUPTCY OR REORGANIZATION
Sec. 51.163. CONTENTS: CONTRACT COPY
Sec. 51.164. USE OF DISCLOSURE DOCUMENT FROM OTHER
REGULATORY AGENCY
[Sections 51.165-51.200 reserved for expansion]
SUBCHAPTER E. BUSINESS OPPORTUNITY CONTRACT
Sec. 51.201. FORM OF BUSINESS OPPORTUNITY CONTRACT
Sec. 51.202. DELIVERY OF COPIES OF DOCUMENTS TO
PURCHASER
Sec. 51.203. EFFECT OF ASSIGNMENT OF BUSINESS
OPPORTUNITY CONTRACT
[Sections 51.204-51.250 reserved for expansion]
SUBCHAPTER F. TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION
Sec. 51.251. VOLUNTARY TERMINATION OF BUSINESS
OPPORTUNITY REGISTRATION
Sec. 51.252. INVOLUNTARY TERMINATION OF BUSINESS
OPPORTUNITY REGISTRATION
[Sections 51.253-51.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT
Sec. 51.301. PROHIBITED ACTS
Sec. 51.302. DECEPTIVE TRADE PRACTICE; REMEDIES
Sec. 51.303. REVIEW AND SUIT BY ATTORNEY GENERAL
CHAPTER 51. BUSINESS OPPORTUNITIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 51.001. SHORT TITLE. This chapter may be cited as the
Business Opportunity Act. (Bus. & Com. Code, Sec. 41.001.)
Sec. 51.002. GENERAL DEFINITIONS. In this chapter:
(1) “Business opportunity contract” means an
agreement that obligates or is intended to obligate a purchaser to a
seller.
(2) “Buy-back” or “secured investment” means a
representation that implies a purchaser’s payment is protected from
loss.
(3) “Equipment” includes electrical devices, video
and audio devices, molds, display units, including display racks,
and machines, including coin-operated game machines and vending and
other machines that dispense products.
(4) “Initial consideration” means the total amount a
purchaser is obligated to pay under a business opportunity contract
before or at the time products, equipment, supplies, or services
are delivered or within six months after the date the purchaser
begins operation of the business opportunity plan. The term means
the total sale price if the contract states a specific total sale
price for purchase of the business opportunity plan and the total
sale price is to be paid as a down payment and one or more additional
payments. The term does not include the not-for-profit sale of
sales demonstration materials, samples, or equipment for not more
than $500.
(5) “Marketing program” means advice or training that
a seller or a person recommended by a seller gives to a purchaser
regarding the sale of products, equipment, supplies, or services.
The term includes the preparation or provision of:
(A) a brochure, pamphlet, or advertising
material, including promotional literature;
(B) training regarding the promotion, operation,
or management of a business opportunity; or
(C) operational, managerial, technical, or
financial guidelines or assistance.
(6) “Product” includes tangible personal property.
(7) “Purchaser” means a person who becomes or is
solicited to become obligated under a business opportunity
contract.
(8) “Seller” means a principal or agent who sells or
leases or offers to sell or lease a business opportunity.
(9) “Services” includes any assistance, guidance,
direction, work, labor, or other services provided by a seller to
initiate or maintain a business opportunity.
(10) “Supplies” includes materials used to make,
produce, grow, or breed a product or item. (Bus. & Com. Code, Secs.
41.003(1), (2), (4), (5), (6), (7), (8), (9), (10), (11), (12).)
Sec. 51.003. DEFINITION OF BUSINESS OPPORTUNITY. (a) In
this chapter, “business opportunity” means a sale or lease for an
initial consideration of more than $500 of products, equipment,
supplies, or services that will be used by or for the purchaser to
begin a business in which the seller represents that:
(1) the purchaser will earn or is likely to earn a
profit in excess of the amount of the initial consideration the
purchaser paid; and
(2) the seller will:
(A) provide a location or assist the purchaser in
finding a location for the use or operation of the products,
equipment, supplies, or services on premises that are not owned or
leased by the purchaser or seller;
(B) provide a sales, production, or marketing
program; or
(C) buy back or is likely to buy back products,
equipment, or supplies purchased or products made, produced, grown,
or bred by the purchaser using wholly or partly the products,
equipment, supplies, or services that the seller initially sold or
leased or offered for sale or lease to the purchaser.
(b) In this chapter, “business opportunity” does not
include:
(1) the sale or lease of an established and ongoing
business or enterprise that has actively conducted business before
the sale or lease, whether composed of one or more than one
component business or enterprise, if the sale or lease represents
an isolated transaction or series of transactions involving a bona
fide change of ownership or control of the business or enterprise or
liquidation of the business or enterprise;
(2) a sale by a retailer of goods or services under a
contract or other agreement to sell the inventory of one or more
ongoing leased departments to a purchaser who is granted the right
to sell the goods or services within or adjoining a retail business
establishment as a department or division of the retail business
establishment;
(3) a transaction that is:
(A) regulated by the Texas Department of
Licensing and Regulation, the Texas Department of Insurance, the
Texas Real Estate Commission, or the director of the Motor Vehicle
Division of the Texas Department of Transportation; and
(B) engaged in by a person licensed by one of
those agencies;
(4) a real estate syndication;
(5) a sale or lease to a business enterprise that also
sells or leases products, equipment, or supplies or performs
services:
(A) that are not supplied by the seller; and
(B) that the purchaser does not use with the
seller’s products, equipment, supplies, or services;
(6) the offer or sale of a franchise as described by
the Petroleum Marketing Practices Act (15 U.S.C. Section 2801 et
seq.) and its subsequent amendments;
(7) the offer or sale of a business opportunity if the
seller:
(A) has a net worth of $25 million or more
according to the seller’s audited balance sheet as of a date not
earlier than the 13th month before the date of the transaction; or
(B) is at least 80 percent owned by another
person who:
(i) in writing unconditionally guarantees
performance by the person offering the business opportunity plan;
and
(ii) has a net worth of more than $25
million according to the person’s most recent audited balance sheet
as of a date not earlier than the 13th month before the date of the
transaction; or
(8) an arrangement defined as a franchise by 16 C.F.R.
Section 436.2(a) and its subsequent amendments if:
(A) the franchisor complies in all material
respects in this state with 16 C.F.R. Part 436 and each order or
other action of the Federal Trade Commission; and
(B) before offering for sale or selling a
franchise in this state, a person files with the secretary of state
a notice containing:
(i) the name of the franchisor;
(ii) the name under which the franchisor
intends to transact business; and
(iii) the franchisor’s principal business
address.
(c) The secretary of state shall prescribe the form of the
notice described by Subsection (b)(8)(B). (Bus. & Com. Code, Sec.
41.004.)
Sec. 51.004. LIBERAL CONSTRUCTION AND APPLICATION. (a)
This chapter shall be liberally construed and applied to:
(1) protect persons against false, misleading, or
deceptive practices in the advertising, offering for sale or lease,
or sale or lease of business opportunities; and
(2) provide efficient and economical procedures to
secure that protection.
(b) In construing this chapter, a court to the extent
possible shall follow the interpretations given by the Federal
Trade Commission and the federal courts to Section 5(a)(1), Federal
Trade Commission Act (15 U.S.C. Section 45(a)(1)), and 16 C.F.R.
Part 436 and their subsequent amendments. (Bus. & Com. Code, Sec.
41.002.)
Sec. 51.005. BURDEN OF PROOF. A person who claims to be
exempt from this chapter has the burden of proving the exemption.
(Bus. & Com. Code, Sec. 41.005.)
Sec. 51.006. WAIVER. A waiver of this chapter is contrary
to public policy and void. (Bus. & Com. Code, Sec. 41.009.)
Sec. 51.007. MAINTENANCE OF RECORDS. (a) A seller shall
maintain a complete set of books, records, and accounts of business
opportunity sales made by the seller.
(b) A document relating to a business opportunity sold or
leased shall be maintained until the fourth anniversary of the date
of the business opportunity contract. (Bus. & Com. Code, Sec.
41.008.)
Sec. 51.008. FILING FEE. The secretary of state may charge a
reasonable fee to cover the costs incurred as a result of a filing
required by Subchapter B or Section 51.003 or 51.251. (Bus. & Com.
Code, Sec. 41.007.)
Sec. 51.009. RULES. The secretary of state may adopt rules
to administer and enforce this chapter. (Bus. & Com. Code, Sec.
41.006.)
[Sections 51.010-51.050 reserved for expansion]
SUBCHAPTER B. REGISTRATION OF BUSINESS OPPORTUNITY
Sec. 51.051. FILING OF DISCLOSURE STATEMENTS AND LIST OF
SELLERS. Before a sale or offer for sale, including advertising, of
a business opportunity, the principal seller must register the
business opportunity with the secretary of state by filing:
(1) a copy of the disclosure statement required by
Subchapter D, except as provided by Section 51.053; and
(2) a list of the name and resident address of any
individual who sells or will sell the business opportunity for the
principal seller. (Bus. & Com. Code, Sec. 41.051.)
Sec. 51.052. UPDATING OF INFORMATION ON FILE. (a) A copy
of a disclosure statement filed under Section 51.051 must be
updated through a new filing:
(1) annually; and
(2) when a material change occurs.
(b) The list filed under Section 51.051(2) must be updated
through a new filing every six months. (Bus. & Com. Code, Sec.
41.052.)
Sec. 51.053. FILING OF DISCLOSURE DOCUMENT FROM OTHER
REGULATORY AGENCY. Instead of filing with the secretary of state a
copy of a disclosure statement, a seller may file a copy of a
similar document required by the State Securities Board, Securities
and Exchange Commission, or Federal Trade Commission that contains
all the information required to be disclosed by this chapter. (Bus. &
Com. Code, Sec. 41.054 (part).)
Sec. 51.054. FILING OF COPY OF BOND OR NOTIFICATION OF
ACCOUNT. A principal seller who is required to obtain a bond or
establish a trust account under Subchapter C shall
contemporaneously file with the secretary of state a copy of:
(1) the bond; or
(2) the formal notification by the depository that the
trust account is established. (Bus. & Com. Code, Sec. 41.053.)
[Sections 51.055-51.100 reserved for expansion]
SUBCHAPTER C. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT
Sec. 51.101. BOND, TRUST ACCOUNT, OR LETTER OF CREDIT
REQUIRED. (a) Before a seller makes a representation described by
Section 51.003(a)(1) or otherwise represents that the purchaser is
assured of making a profit from a business opportunity, the
principal seller must:
(1) obtain a surety bond from a surety company
authorized to transact business in this state;
(2) establish a trust account; or
(3) obtain an irrevocable letter of credit.
(b) The bond, trust account, or irrevocable letter of credit
must be:
(1) in an amount of $25,000 or more; and
(2) in favor of this state. (Bus. & Com. Code, Sec.
41.101.)
Sec. 51.102. ACTION AGAINST BOND, TRUST ACCOUNT, OR LETTER
OF CREDIT. (a) A person may bring an action against the bond, trust
account, or irrevocable letter of credit obtained or established
under Section 51.101 to recover actual damages for:
(1) a violation of this chapter; or
(2) the seller’s breach of:
(A) the business opportunity contract; or
(B) an obligation arising from a business
opportunity sale.
(b) The aggregate liability of the surety, trustee, or
issuer in an action under Subsection (a) may not exceed the amount
of the bond, trust account, or irrevocable letter of credit. (Bus. &
Com. Code, Sec. 41.102.)
[Sections 51.103-51.150 reserved for expansion]
SUBCHAPTER D. DISCLOSURE STATEMENT
Sec. 51.151. DISCLOSURE TO PURCHASER OF BUSINESS
OPPORTUNITY. (a) Except as provided by Section 51.164, a seller
must provide a purchaser with a written disclosure statement that
meets the requirements of this subchapter.
(b) The seller must provide the disclosure statement at
least 10 business days before the earlier of the date:
(1) the purchaser signs a business opportunity
contract; or
(2) the seller receives any consideration. (Bus. &
Com. Code, Sec. 41.151.)
Sec. 51.152. COVER SHEET OF DISCLOSURE STATEMENT. (a) A
disclosure statement must have a cover sheet titled, in at least
12-point boldface capital letters, “DISCLOSURES REQUIRED BY TEXAS
LAW.” The following statement must appear below the title in at
least 10-point boldface type: “The State of Texas has not reviewed
and does not endorse, approve, recommend, or sponsor any business
opportunity. The information contained in this disclosure has not
been verified by the state. If you have any questions about this
investment, see an attorney before you sign a contract or
agreement.”
(b) Only the title and required statement may appear on the
cover sheet. (Bus. & Com. Code, Sec. 41.152.)
Sec. 51.153. CONTENTS: NAMES AND ADDRESSES. A disclosure
statement must contain:
(1) the name of the seller;
(2) each name under which the seller has transacted,
is transacting, or intends to transact business;
(3) the name of any parent or affiliated company that
will engage in a business transaction with the purchaser or that
takes responsibility for statements made by the seller; and
(4) the names, addresses, and titles of:
(A) the seller’s officers, directors, trustees,
general partners, general managers, and principal executives;
(B) shareholders owning more than 20 percent of
the shares of the seller; and
(C) any other persons responsible for the
seller’s business activities relating to the sale of business
opportunities. (Bus. & Com. Code, Sec. 41.153.)
Sec. 51.154. CONTENTS: SALES PERIODS. A disclosure
statement must:
(1) specify the period during which the seller has
sold business opportunities; and
(2) specify the period during which the seller has
sold business opportunities involving the products, equipment,
supplies, or services the seller is offering to the purchaser.
(Bus. & Com. Code, Sec. 41.154.)
Sec. 51.155. CONTENTS: SERVICES DESCRIPTION. A disclosure
statement must contain:
(1) a detailed description of the actual services the
seller undertakes to perform for the purchaser; and
(2) if the seller promises to perform services in
connection with the placement of products, equipment, or supplies
at a location:
(A) the full nature of those services; and
(B) the nature of any agreements to be made with
the owners or managers of that location. (Bus. & Com. Code, Sec.
41.155.)
Sec. 51.156. CONTENTS: UPDATED FINANCIAL STATEMENT. A
disclosure statement must contain a copy of a financial statement
of the seller that:
(1) was prepared according to generally accepted
accounting principles within the previous 13 months; and
(2) has been updated to reflect any material change in
the seller’s financial condition. (Bus. & Com. Code, Sec. 41.156.)
Sec. 51.157. CONTENTS: TRAINING DESCRIPTION. If the
seller promises training, the disclosure statement must contain a
complete description of the training, including:
(1) the length of the training; and
(2) any costs of the training that the purchaser will
be required to incur, including travel and lodging expenses. (Bus. &
Com. Code, Sec. 41.157.)
Sec. 51.158. CONTENTS: SECURITY DESCRIPTION. If the
seller is required to obtain a bond or establish a trust account,
the disclosure statement must contain one of the following
statements, as applicable:
(1) “As required by Texas law, the seller has secured a
bond issued by ______, a surety company authorized to do business in
this state. Before signing a contract to purchase this business
opportunity, you should confirm the bond’s status with the surety
company.”; or
(2) “As required by Texas law, the seller has
established a trust account with ______. Before signing a contract
to purchase this business opportunity, you should confirm with the
bank or savings institution the current status of the trust
account.” (Bus. & Com. Code, Sec. 41.158.)
Sec. 51.159. CONTENTS: DELIVERY DATE; CANCELLATION OF
CONTRACT. If the seller is required to deliver to the purchaser the
product, equipment, or supplies necessary to begin substantial
operation of the business and states a definite or approximate
delivery date for the product, equipment, or supplies, the
disclosure statement must contain the following statement: “If the
seller fails to deliver the product, equipment, or supplies
necessary to begin substantial operation of the business within 45
days of the delivery date stated in your contract, you may notify
the seller in writing and cancel your contract.” (Bus. & Com. Code,
Sec. 41.159.)
Sec. 51.160. CONTENTS: SALES OR EARNINGS REPRESENTATION.
If the seller makes a statement concerning sales or earnings that
may be made through the business opportunity, the disclosure
statement must contain a statement disclosing:
(1) the total number of purchasers of business
opportunities involving the product, equipment, supplies, or
services being offered who to the seller’s knowledge have, not
earlier than the third year before the date of the disclosure
statement, actually achieved sales of or received earnings in the
amount or range specified; and
(2) the total number of purchasers who, not earlier
than the third year before the date of the disclosure statement,
purchased business opportunities involving the product, equipment,
supplies, or services being offered. (Bus. & Com. Code, Sec.
41.160.)
Sec. 51.161. CONTENTS: LEGAL ACTION HISTORY. (a) A
disclosure statement must contain a statement disclosing any person
described by Section 51.153 who:
(1) has, during the previous seven fiscal years:
(A) been convicted of a felony, or pleaded nolo
contendere to a felony charge, involving fraud, embezzlement,
fraudulent conversion, or misappropriation of property; or
(B) been held liable in a civil action resulting
in a final judgment, or has settled out of court a civil action,
involving:
(i) allegations of fraud, embezzlement,
fraudulent conversion, or misappropriation of property;
(ii) the use of untrue or misleading
representations in an attempt to sell or dispose of property; or
(iii) the use of unfair, unlawful, or
deceptive business practices;
(2) is a party to a civil action involving:
(A) allegations of fraud, embezzlement,
fraudulent conversion, or misappropriation of property;
(B) the use of untrue or misleading
representations in an attempt to sell or dispose of property; or
(C) the use of unfair, unlawful, or deceptive
business practices; or
(3) is subject to an injunction or restrictive order
relating to business activity as a result of an action brought by a
public agency or department.
(b) A statement required by Subsection (a) must include:
(1) the identity and location of any court or agency;
(2) the date of any entry of a plea of nolo contendere,
conviction, judgment, or decision;
(3) any penalty imposed;
(4) any damages assessed;
(5) the terms of any settlement or order; and
(6) the date, nature, and issuer of any order or
ruling. (Bus. & Com. Code, Sec. 41.161.)
Sec. 51.162. CONTENTS: BANKRUPTCY OR REORGANIZATION. (a)
A disclosure statement must contain a statement disclosing any
person described by Section 51.153 who has, during the previous
seven fiscal years:
(1) filed in bankruptcy;
(2) been adjudged bankrupt;
(3) been reorganized because of insolvency; or
(4) been a principal, director, executive officer, or
partner of any other person that, during or not later than the first
anniversary of the end of the period the person held the position in
relation to the other person, filed in bankruptcy, was adjudged
bankrupt, or was reorganized because of insolvency.
(b) A statement required by Subsection (a)(4) must include:
(1) the name and location of the person who filed in
bankruptcy, was adjudged bankrupt, or was reorganized;
(2) the date of the filing, adjudication, or
reorganization; and
(3) any other material fact relating to the filing,
adjudication, or reorganization. (Bus. & Com. Code, Sec. 41.162.)
Sec. 51.163. CONTENTS: CONTRACT COPY. A disclosure
statement must contain a copy of the business opportunity contract
that the seller uses as a matter of course and that will be
presented to the purchaser at closing. (Bus. & Com. Code, Sec.
41.163.)
Sec. 51.164. USE OF DISCLOSURE DOCUMENT FROM OTHER
REGULATORY AGENCY. Instead of providing a disclosure statement to
a purchaser under this subchapter, a seller may provide a copy of a
similar document required by the State Securities Board, Securities
and Exchange Commission, or Federal Trade Commission that contains
all the information required to be disclosed by this chapter. (Bus. &
Com. Code, Sec. 41.054 (part).)
[Sections 51.165-51.200 reserved for expansion]
SUBCHAPTER E. BUSINESS OPPORTUNITY CONTRACT
Sec. 51.201. FORM OF BUSINESS OPPORTUNITY CONTRACT. A
business opportunity contract must be in writing and include, in
10-point type or in handwriting of an equivalent size, the
following:
(1) the terms of payment, including the initial
consideration, down payment, and additional payments required;
(2) a detailed description of the acts or services the
seller undertakes to perform for the purchaser;
(3) the seller’s principal business address;
(4) the name and address of the seller’s agent in this
state authorized to receive service of process;
(5) the delivery date or, if the contract provides for
staggered delivery times to the purchaser, the approximate delivery
date of the products, equipment, or supplies the seller is to:
(A) deliver to the purchaser’s home or business
address; or
(B) place at a location owned or managed by a
person other than the purchaser; and
(6) a complete description of the nature of the
buy-back or security arrangement if the seller has represented
orally or in writing when selling, leasing, soliciting, or offering
a business opportunity that there is a buy-back or that the initial
consideration is secured. (Bus. & Com. Code, Sec. 41.201.)
Sec. 51.202. DELIVERY OF COPIES OF DOCUMENTS TO PURCHASER.
A copy of the completed business opportunity contract and any other
document the seller requires the purchaser to sign shall be given to
the purchaser at the time the purchaser signs the contract. (Bus. &
Com. Code, Sec. 41.202.)
Sec. 51.203. EFFECT OF ASSIGNMENT OF BUSINESS OPPORTUNITY
CONTRACT. An assignee of a business opportunity contract or of the
seller’s rights under the contract is subject to all equities,
rights, and defenses of the purchaser against the seller. (Bus. &
Com. Code, Sec. 41.203.)
[Sections 51.204-51.250 reserved for expansion]
SUBCHAPTER F. TERMINATION OF BUSINESS OPPORTUNITY REGISTRATION
Sec. 51.251. VOLUNTARY TERMINATION OF BUSINESS OPPORTUNITY
REGISTRATION. The principal seller of a registered business
opportunity may voluntarily terminate the business opportunity’s
registration with the secretary of state if:
(1) the registered business opportunity will no longer
be offered in this state;
(2) the registered business opportunity has changed to
the extent that it no longer meets the definition of a business
opportunity under Section 51.003(a);
(3) the registered business opportunity has become
exempt under Section 51.003(b); or
(4) the principal seller offering the registered
business opportunity ceases to exist as a legal entity. (Bus. &
Com. Code, Sec. 41.251.)
Sec. 51.252. INVOLUNTARY TERMINATION OF BUSINESS
OPPORTUNITY REGISTRATION. (a) The secretary of state may
terminate the registration of a business opportunity registered
under Section 51.051 if the seller does not comply with Section
51.052.
(b) The secretary of state must give the business
opportunity registrant notice of the delinquency not later than the
31st day before the date of termination of the business opportunity
registration under Subsection (a).
(c) The notice of delinquency must be given by certified
mail addressed to the registered agent or the principal place of
business of the business opportunity registrant noted in the latest
filing made under this chapter.
(d) The secretary of state may adopt rules governing:
(1) the termination of a delinquent registration;
(2) the effective date of the termination; and
(3) the grace period, if any. (Bus. & Com. Code, Sec.
41.252.)
[Sections 51.253-51.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT
Sec. 51.301. PROHIBITED ACTS. A seller may not:
(1) employ a representation, device, scheme, or
artifice to deceive a purchaser;
(2) make an untrue statement of a material fact or omit
to state a material fact in connection with the documents and
information required to be provided to the secretary of state or
purchaser;
(3) represent that the business opportunity provides
or will provide income or earning potential unless the seller:
(A) has documented data to substantiate the
representation of income or earning potential; and
(B) discloses the data to the purchaser when the
representation is made; or
(4) make a claim or representation that is
inconsistent with the information required to be disclosed by this
chapter in:
(A) advertising or other promotional material;
or
(B) an oral sales presentation, solicitation, or
discussion between the seller and the purchaser. (Bus. & Com. Code,
Sec. 41.301.)
Sec. 51.302. DECEPTIVE TRADE PRACTICE; REMEDIES. (a) A
violation of this chapter is a false, misleading, or deceptive act
or practice under Section 17.46.
(b) A public or private right or remedy prescribed by
Chapter 17 may be used to enforce this chapter. (Bus. & Com. Code,
Sec. 41.302.)
Sec. 51.303. REVIEW AND SUIT BY ATTORNEY GENERAL. (a) The
attorney general may review the copy of a disclosure statement
filed with the secretary of state under Subchapter B.
(b) If the disclosure statement fails to comply with this
chapter, the attorney general may:
(1) notify the secretary of state and the seller in
writing of the deficiency; and
(2) file suit to enjoin the seller from transacting
business until the failure to comply has been corrected.
(c) If the attorney general notifies the secretary of state
under Subsection (b), the secretary of state shall:
(1) attach a copy of the notice to the front of the
disclosure statement; and
(2) on inquiry of the status of the disclosure
statement, disclose that a statement has been filed but that the
attorney general has questioned the correctness of the statement.
(Bus. & Com. Code, Sec. 41.303.)
CHAPTER 52. INVENTION DEVELOPMENT SERVICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 52.001. SHORT TITLE
Sec. 52.002. DEFINITIONS
Sec. 52.003. APPLICABILITY OF CHAPTER TO CONTRACT FOR
INVENTION DEVELOPMENT SERVICES
Sec. 52.004. WAIVER BY CUSTOMER PROHIBITED
[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
(C) preparing or prosecuting a patent
application by a person not registered to practice before the
United States Patent and Trademark Office. (V.A.C.S. Art. 9020,
Secs. 2, 3, 4.)
Sec. 52.003. APPLICABILITY OF CHAPTER TO CONTRACT FOR
INVENTION DEVELOPMENT SERVICES. This chapter applies to each
contract under which an invention developer agrees to perform
invention development services for a customer. (V.A.C.S. Art.
9020, Sec. 5(a) (part).)
Sec. 52.004. WAIVER BY CUSTOMER PROHIBITED. A waiver by a
customer of a provision of this chapter is void. (V.A.C.S. Art.
9020, Sec. 9(a) (part).)
[Sections 52.005-52.050 reserved for expansion]
SUBCHAPTER B. FINANCIAL REQUIREMENTS OF INVENTION DEVELOPERS
Sec. 52.051. BOND REQUIRED. (a) Except as provided by
Section 52.053, an invention developer performing or offering to
perform invention development services in this state shall maintain
a bond issued by a surety company authorized to transact business in
this state.
(b) The principal amount of the bond must equal at least the
greater of:
(1) five percent of the invention developer’s gross
income from the invention development business in this state during
the invention developer’s last fiscal year; or
(2) $25,000.
(c) The invention developer must file a copy of the bond
with the secretary of state before the date the invention developer
begins business in this state.
(d) Before the 91st day after the last day of the invention
developer’s fiscal year, the invention developer shall change the
amount of the bond if necessary to conform with this section and
Section 52.052. (V.A.C.S. Art. 9020, Sec. 11(a).)
Sec. 52.052. BENEFICIARY OF BOND; CLAIM AGAINST BOND. (a)
The bond required by Section 52.051 must be:
(1) in favor of this state; and
(2) for the benefit of any person who, after entering
into a contract for invention development services with the
invention developer, is damaged by fraud, dishonesty, or failure to
provide the invention developer’s services in performance of the
contract.
(b) A person making a claim against the bond may bring an
action against the invention developer and the surety. The
aggregate liability of the surety to all persons for all breaches of
conditions of the bond required by this section is limited to the
amount of the bond. (V.A.C.S. Art. 9020, Sec. 11(b).)
Sec. 52.053. CASH DEPOSIT INSTEAD OF BOND. Instead of
furnishing the bond required by Section 52.051, the invention
developer may provide for, in an amount equal to the amount of the
bond required:
(1) cash deposited with the secretary of state;
(2) a certificate of deposit payable to the secretary
of state and issued by a bank that is:
(A) transacting business in this state; and
(B) insured by the Federal Deposit Insurance
Corporation;
(3) an investment certificate of a share account
assigned to the secretary of state and issued by a savings and loan
association that is:
(A) transacting business in this state; and
(B) insured by the Federal Deposit Insurance
Corporation; or
(4) a bearer bond issued by the United States
government or this state. (V.A.C.S. Art. 9020, Sec. 11(c).)
[Sections 52.054-52.100 reserved for expansion]
SUBCHAPTER C. INVENTION DEVELOPMENT SERVICES CONTRACT
Sec. 52.101. WRITTEN CONTRACT REQUIRED; CUSTOMER COPY. (a)
A contract for invention development services must be in writing.
(b) The invention developer shall give a copy of the
contract to the customer at the time the customer signs the
contract. (V.A.C.S. Art. 9020, Sec. 5(a) (part).)
Sec. 52.102. MANDATORY CONTRACT TERMS. (a) A contract for
invention development services must contain in boldfaced type of
not less than 10-point size:
(1) the payment terms;
(2) the contract termination rights required by
Section 52.104;
(3) a full, clear, and concise description of the
specific acts or services that the invention developer agrees to
perform for the customer;
(4) a statement of whether the invention developer
agrees to construct, sell, or distribute one or more prototypes,
models, or devices embodying the customer’s invention;
(5) the full name and principal place of business of
the invention developer;
(6) the name and principal place of business of any
parent, subsidiary, or affiliated company that may engage in
performing any of the invention development services;
(7) if the invention developer makes an oral or
written representation of estimated or projected customer
earnings, a statement of estimated or projected customer earnings
and a description of the data on which the estimation or projection
is based;
(8) the name and address of the custodian of all
records and correspondence pertaining to the invention development
services described by the contract;
(9) a statement that the invention developer:
(A) is required to maintain all records and
correspondence relating to performance of the invention
development services for the customer until the second anniversary
of the date the contract expires; and
(B) on seven days’ written notice will make the
invention development services records and correspondence
available to the customer or the customer’s representative for
review and copying at the customer’s reasonable expense on the
invention developer’s premises during normal business hours; and
(10) a time schedule for performance of the invention
development services, including an estimated date by which
performance is expected to be completed.
(b) An invention developer is a fiduciary to the extent that
the description of specific acts or services required by Subsection
(a)(3) gives the invention developer discretion in determining
which acts or services will be performed. (V.A.C.S. Art. 9020, Sec.
8.)
Sec. 52.103. MULTIPLE CONTRACTS. If it is the invention
developer’s normal practice to seek more than one contract in
connection with an invention or if the invention developer normally
seeks to perform services in connection with an invention in more
than one phase with the performance of each phase covered in one or
more subsequent contracts, the invention developer shall give to
the customer at the time the customer signs the first contract:
(1) a written statement describing that practice; and
(2) a written summary of the developer’s normal terms,
if any, for subsequent contracts, including the approximate amount
of the developer’s normal fees or other consideration that the
developer may require from the customer. (V.A.C.S. Art. 9020, Sec.
5(b).)
Sec. 52.104. PAYMENT FOR SERVICES; OPTION TO TERMINATE
CONTRACT. (a) For purposes of this section, delivery of a
promissory note, bill of exchange, or negotiable instrument of any
kind to the invention developer or to a third party for the benefit
of the invention developer is payment, regardless of the date or
dates appearing on the instrument.
(b) Notwithstanding any contractual provision to the
contrary, payment for invention development services may not be
required, made, or received before the fourth working day after the
date the customer receives a copy of the contract for invention
development services signed by the invention developer and the
customer.
(c) Until the payment for invention development services is
made, the parties to the contract have the option to terminate the
contract. The customer may exercise the option to terminate by
refraining from making payment to the invention developer. The
invention developer may exercise the option to terminate by giving
to the customer a written notice of the invention developer’s
exercise of the option. The written notice becomes effective when
the customer receives the notice. (V.A.C.S. Art. 9020, Secs. 5(c),
(d), (e).)
Sec. 52.105. COVER NOTICE REQUIRED. (a) A contract for
invention development services must have attached a conspicuous and
legible cover sheet that contains:
(1) the name, home address, office address, and local
office address of the invention developer; and
(2) the following notice in boldfaced type of not less
than 10-point size:
THIS CONTRACT BETWEEN YOU AND AN INVENTION DEVELOPER IS
REGULATED BY THE STATE OF TEXAS’ REGULATION OF INVENTION
DEVELOPMENT SERVICES ACT. YOU ARE NOT PERMITTED OR REQUIRED TO MAKE
ANY PAYMENTS UNDER THIS CONTRACT UNTIL FOUR (4) WORKING DAYS AFTER
YOU SIGN THIS CONTRACT AND RECEIVE A COMPLETED COPY OF IT.
IF YOU ASSIGN EVEN A PARTIAL INTEREST IN THE INVENTION TO THE
INVENTION DEVELOPER, THE INVENTION DEVELOPER MAY HAVE THE RIGHT TO
SELL OR DISPOSE OF THE INVENTION WITHOUT YOUR CONSENT AND MAY NOT
HAVE TO SHARE THE PROFITS WITH YOU.
THE TOTAL NUMBER OF CUSTOMERS WHO HAVE CONTRACTED WITH THE
INVENTION DEVELOPER SINCE (year) IS (number). THE TOTAL NUMBER OF
CUSTOMERS KNOWN BY THIS INVENTION DEVELOPER TO HAVE RECEIVED, BY
VIRTUE OF THIS INVENTION DEVELOPER’S PERFORMANCE, AN AMOUNT OF
MONEY IN EXCESS OF THE AMOUNT PAID BY THE CUSTOMER TO THIS INVENTION
DEVELOPER IS (number).
YOU ARE ENCOURAGED TO CONSULT WITH A QUALIFIED ATTORNEY
BEFORE SIGNING THIS CONTRACT. BY PROCEEDING WITHOUT THE ADVICE OF A
QUALIFIED ATTORNEY, YOU COULD LOSE ANY RIGHTS YOU MIGHT HAVE IN YOUR
IDEA OR INVENTION.
(b) The invention developer shall complete the cover sheet
by providing the proper information in the blanks of the cover
sheet. In the first blank the invention developer shall enter the
later of the year that the invention developer began to transact
business or May 7, 1981. The invention developer may round the
numbers the invention developer enters in the last two blanks to the
nearest 100 and, in computing the numbers, may exclude persons who
have contracted with the invention developer during the three
calendar months preceding the date of the contract. If the number
to be inserted in the third blank is zero, the invention developer
shall enter a zero in the blank.
(c) The cover sheet may not contain anything other than the
information required by Subsection (a). (V.A.C.S. Art. 9020, Sec.
6.)
Sec. 52.106. QUARTERLY REPORTS TO CUSTOMER REQUIRED. At
least once each calendar quarter during the term of a contract for
invention development services, the invention developer shall
deliver to the customer at the address specified in the contract a
written report that identifies the contract and contains:
(1) a full, clear, and concise description of the
services performed up to the date of the report and of the services
to be performed; and
(2) the name and address of each person to whom the
subject matter of the contract has been disclosed, the reason for
each disclosure, the nature of the disclosure, and copies of all
responses received as a result of those disclosures. (V.A.C.S.
Art. 9020, Sec. 7.)
[Sections 52.107-52.150 reserved for expansion]
SUBCHAPTER D. ENFORCEMENT
Sec. 52.151. CONTRACT VOIDABLE. A contract for invention
development services is voidable at the option of the customer if
the contract:
(1) does not substantially comply with this chapter;
or
(2) was entered into in reliance on any false,
fraudulent, or misleading information, representation, notice, or
advertisement of the invention developer. (V.A.C.S. Art. 9020,
Sec. 9(a) (part).)
Sec. 52.152. PRIVATE CAUSE OF ACTION. (a) This section
applies only to a customer who is injured by an invention
developer’s:
(1) violation of this chapter;
(2) false or fraudulent statement, representation, or
omission of material fact; or
(3) failure to make all disclosures required by this
chapter.
(b) A customer to whom this section applies may recover in a
civil action against the invention developer:
(1) the greater of:
(A) the amount of any actual damages sustained by
the customer; or
(B) $1,000;
(2) court costs; and
(3) attorney’s fees. (V.A.C.S. Art. 9020, Sec. 9(b).)
Sec. 52.153. DECEPTIVE TRADE PRACTICE. The following acts,
omissions, or failures by an invention developer constitute a
deceptive trade practice under Chapter 17:
(1) a violation of this chapter;
(2) an omission of material fact; or
(3) a failure to make a disclosure required by this
chapter. (V.A.C.S. Art. 9020, Sec. 9(c) (part).)
Sec. 52.154. MUTUALLY EXCLUSIVE REMEDIES. Remedies
available under Sections 52.152 and 52.153 are mutually exclusive.
(V.A.C.S. Art. 9020, Sec. 9(c) (part).)
Sec. 52.155. PRESUMPTION OF INJURY. For purposes of
Sections 52.152 and 52.153, a rebuttable presumption of injury is
established by:
(1) a substantial violation of this chapter by an
invention developer; or
(2) a customer’s execution of a contract for invention
development services in reliance on a false or fraudulent
statement, representation, or an omission of material fact.
(V.A.C.S. Art. 9020, Sec. 9(d).)
Sec. 52.156. ENFORCEMENT BY ATTORNEY GENERAL. (a) The
attorney general shall enforce this chapter.
(b) The attorney general may:
(1) recover a civil penalty not to exceed $2,000 for
each violation of this chapter; and
(2) seek equitable relief to restrain a violation of
this chapter. (V.A.C.S. Art. 9020, Sec. 10.)
Sec. 52.157. APPLICATION OF OTHER LAWS. This chapter does
not nullify or limit any obligation, right, or remedy that is
applicable or available under the law of this state. (V.A.C.S. Art.
9020, Sec. 12.)
CHAPTER 53. STORE LEASES
Sec. 53.001. STORE LEASE CONTRACT
CHAPTER 53. STORE LEASES
Sec. 53.001. STORE LEASE CONTRACT. (a) A provision of a
lease contract that requires a store to be open when another store
located in the same shopping center is open does not apply on Sunday
unless the provision specifically states that it applies on Sunday.
(b) This section applies to a contract executed before or
after September 1, 1985. (Bus. & Com. Code, Sec. 35.44.)
CHAPTER 54. COMPENSATION AGREEMENTS FOR SALES REPRESENTATIVES
Sec. 54.001. DEFINITIONS
Sec. 54.002. CONTRACT
Sec. 54.003. PAYMENT ON TERMINATION OF CERTAIN
COMPENSATION AGREEMENTS
Sec. 54.004. DAMAGES
Sec. 54.005. PERSONAL JURISDICTION
Sec. 54.006. WAIVER
CHAPTER 54. COMPENSATION AGREEMENTS FOR SALES REPRESENTATIVES
Sec. 54.001. DEFINITIONS. In this chapter:
(1) “Commission” means compensation paid a sales
representative by a principal in an amount based on a percentage of
the dollar amount of certain orders for or sales of the principal’s
product.
(2) “Principal” means a person who:
(A) manufactures, produces, imports, or
distributes a product for sale;
(B) uses a sales representative to solicit orders
for the product; and
(C) compensates the sales representative wholly
or partly by commission.
(3) “Sales representative” means an independent
contractor who solicits, on behalf of a principal, orders for the
purchase at wholesale of the principal’s product. (Bus. & Com.
Code, Sec. 35.81.)
Sec. 54.002. CONTRACT. (a) A contract between a principal
and a sales representative under which the sales representative is
to solicit wholesale orders within this state must:
(1) be in writing or in a computer-based medium; and
(2) state the method by which the sales
representative’s commission is to be computed and paid.
(b) The principal shall provide the sales representative
with a copy of the contract.
(c) A provision in the contract establishing venue for an
action arising under the contract in a state other than this state
is void. (Bus. & Com. Code, Sec. 35.82.)
Sec. 54.003. PAYMENT ON TERMINATION OF CERTAIN COMPENSATION
AGREEMENTS. If a compensation agreement between a sales
representative and a principal that does not comply with Section
54.002 is terminated, the principal shall pay all commissions due
the sales representative not later than the 30th working day after
the date of the termination. (Bus. & Com. Code, Sec. 35.83.)
Sec. 54.004. DAMAGES. A principal who fails to comply with
a provision of a contract under Section 54.002 relating to payment
of a commission or who fails to pay a commission as required by
Section 54.003 is liable to the sales representative in a civil
action for:
(1) three times the unpaid commission due the sales
representative; and
(2) reasonable attorney’s fees and costs. (Bus. & Com.
Code, Sec. 35.84.)
Sec. 54.005. PERSONAL JURISDICTION. A principal who is not
a resident of this state and who enters into a contract subject to
this chapter is considered to be transacting business in this state
for purposes of the exercise of personal jurisdiction over the
principal. (Bus. & Com. Code, Sec. 35.85.)
Sec. 54.006. WAIVER. A provision of this chapter may not be
waived, whether by an express waiver or by an attempt to make a
contract or agreement subject to the laws of another state. A
waiver of a provision of this chapter is void. (Bus. & Com. Code,
Sec. 35.86.)
CHAPTER 55. FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION, FORESTRY
HARVESTING, AND OUTDOOR POWER EQUIPMENT DEALER AGREEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 55.001. DEFINITIONS
Sec. 55.002. SECURITY INTEREST
Sec. 55.003. WAIVER OF CHAPTER
[Sections 55.004-55.050 reserved for expansion]
SUBCHAPTER B. PROVISIONS REGARDING DEALER AGREEMENT OR DEALERSHIP
Sec. 55.051. SUPPLEMENTARY AGREEMENT
Sec. 55.052. CHANGE IN COMPETITIVE CIRCUMSTANCES
Sec. 55.053. INTEREST IN DEALERSHIP BY SALE OR
TRANSFER
Sec. 55.054. TRANSFER OF CONTROLLING INTEREST IN
DEALERSHIP BY SUCCESSION
Sec. 55.055. CONTINUATION OF AGREEMENT
Sec. 55.056. CAUSE REQUIRED FOR TERMINATION
Sec. 55.057. RENOVATION OR ADDITIONAL SPACE
[Sections 55.058-55.100 reserved for expansion]
SUBCHAPTER C. WARRANTIES
Sec. 55.101. APPLICABILITY OF SUBCHAPTER
Sec. 55.102. ACCEPTANCE OR REJECTION OF WARRANTY CLAIM
Sec. 55.103. SUPPLIER’S RECOVERY OF WARRANTY CLAIM
Sec. 55.104. PURCHASER’S WARRANTY AGREEMENT
[Sections 55.105-55.150 reserved for expansion]
SUBCHAPTER D. DELIVERY, SALE, AND RETURN OF EQUIPMENT
Sec. 55.151. COERCED ORDERS, DELIVERIES, OR REFUSALS
TO PURCHASE PROHIBITED
Sec. 55.152. DISCRIMINATION AMONG DEALERS
Sec. 55.153. LATE DELIVERY OF BACK-ORDERED SEASONAL
DEMAND ITEM
Sec. 55.154. SALES TO AFFILIATED DEALER
Sec. 55.155. RETURN OF INVENTORY; RESPONSIBILITY FOR
COSTS
Sec. 55.156. RETURN OF DATA PROCESSING OR PERIPHERAL
EQUIPMENT, SOFTWARE, OR CERTAIN TOOLS;
RESPONSIBILITY FOR COSTS
Sec. 55.157. SUPPLIER’S LIABILITY FOR LATE PAYMENT
Sec. 55.158. EXCEPTIONS TO SUPPLIER’S REPURCHASE,
PURCHASE, OR ASSUMPTION RESPONSIBILITY
[Sections 55.159-55.200 reserved for expansion]
SUBCHAPTER E. ENFORCEMENT
Sec. 55.201. ACTION FOR VIOLATION OF CHAPTER
CHAPTER 55. FARM, INDUSTRIAL, OFF-ROAD CONSTRUCTION, FORESTRY
HARVESTING, AND OUTDOOR POWER EQUIPMENT DEALER AGREEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 55.001. DEFINITIONS. In this chapter:
(1) “Controlling interest” means 50 percent or more
ownership of or a managing interest in a dealership.
(2) “Current price” means an amount equal to the price
listed in the supplier’s printed price list in effect when a dealer
agreement is terminated, less applicable trade and cash discounts.
(3) “Dealer” means a person in the business of the
retail sale of equipment. The term does not include an individual,
partnership, or corporation who:
(A) is primarily engaged in the retail sale and
service of off-road construction and earth-moving equipment;
(B) has purchased 75 percent or more of the
dealer’s total new product inventory from a single supplier under
all agreements with that supplier; and
(C) has a total annual average sales volume in
excess of $100 million for the preceding three years with that
single supplier for the territory for which the dealer is
responsible in this state.
(4) “Dealer agreement” means an oral or written
contract, of definite or indefinite duration, between a supplier
and a dealer, that states the rights and obligations of the parties
with respect to the purchase or sale of equipment.
(5) “Dealer cost” means an amount equal to the sum of
the original invoice price that the dealer paid for inventory and
the cost to the dealer of the inventory’s delivery from the supplier
to the dealer, less applicable discounts.
(6) “Dealership” means the retail sale business
engaged in by a dealer under a dealer agreement.
(7) “Equipment” means farm tractors, farm implements,
utility tractors, industrial tractors, forklifts,
material-handling equipment, forestry harvesting equipment,
off-road construction equipment, and outdoor power equipment and
any attachments to or repair parts for those items.
(8) “Inventory” means new or unused equipment that is
provided by a supplier to a dealer under a dealer agreement and that
was:
(A) purchased within the 30-month period
preceding the date of the termination of the dealership; or
(B) listed in the supplier’s current sales manual
on the date of termination.
(9) “Outdoor power equipment” means machinery
operated by an engine or electric power and used in the landscaping
or cultivation of land for nonagricultural purposes. The term
includes lawn and garden implements.
(10) “Supplier” means:
(A) a person engaged in the manufacture,
assembly, or wholesale distribution of equipment; or
(B) the person’s successor in interest,
including a purchaser of assets or stock and a surviving
corporation resulting from a merger, liquidation, or
reorganization. (Bus. & Com. Code, Secs. 19.01(2), (3), (4), (5),
(6), (7), (8), (9), (10), (11), (12).)
Sec. 55.002. SECURITY INTEREST. This chapter does not
affect a supplier’s security interest in inventory. (Bus. & Com.
Code, Sec. 19.03.)
Sec. 55.003. WAIVER OF CHAPTER. An attempted waiver of a
provision of this chapter is void. (Bus. & Com. Code, Sec. 19.05.)
[Sections 55.004-55.050 reserved for expansion]
SUBCHAPTER B. PROVISIONS REGARDING DEALER AGREEMENT OR DEALERSHIP
Sec. 55.051. SUPPLEMENTARY AGREEMENT. A supplier may not
coerce or compel a dealer to enter into a written or oral agreement
supplementing a dealer agreement with the supplier unless the
supplementary agreement is imposed on all other similarly situated
dealers in this state. (Bus. & Com. Code, Sec. 19.21.)
Sec. 55.052. CHANGE IN COMPETITIVE CIRCUMSTANCES. A
supplier may not substantially change the competitive
circumstances of a dealer agreement without cause. (Bus. & Com.
Code, Sec. 19.27.)
Sec. 55.053. INTEREST IN DEALERSHIP BY SALE OR TRANSFER.
(a) A supplier may not prevent, by contract or otherwise, a dealer
or an officer, member, partner, or shareholder of a dealer from
selling or transferring a noncontrolling interest in the dealership
to another person.
(b) A supplier may prevent a person from selling or
transferring a controlling interest in a dealership without the
supplier’s written consent. A supplier may not unreasonably
withhold the supplier’s consent to a sale or transfer of a
controlling interest. (Bus. & Com. Code, Secs. 19.26(a), (b).)
Sec. 55.054. TRANSFER OF CONTROLLING INTEREST IN DEALERSHIP
BY SUCCESSION. (a) In this section, “family member” means an
individual related within the second degree by consanguinity or
affinity to an individual owning a controlling interest.
(b) A supplier and a dealer may provide by written agreement
for succession rights to a controlling interest in a dealership on
the death of an individual owning the controlling interest.
(c) If not otherwise determined by a written agreement
between the dealer and supplier, on the death of an individual
owning a controlling interest in a dealership, the family member to
whom the interest passes by will or intestate succession may
request that the supplier consent to a transfer of the ownership
interest to the family member.
(d) The supplier shall consent to a transfer described by
Subsection (c) if the family member meets the reasonable financial,
business experience, and character standards of the supplier.
Before the 91st day after the date the supplier receives the family
member’s request, the supplier shall send a written response to the
family member that:
(1) grants the supplier’s consent; or
(2) states the supplier’s refusal to consent and the
specific reasons for the refusal. (Bus. & Com. Code, Secs.
19.26(c), (d).)
Sec. 55.055. CONTINUATION OF AGREEMENT. Section 55.053 or
55.054 does not require a supplier to continue a dealer agreement if
the supplier determines that the dealer’s area of responsibility or
trade area lacks sufficient sales potential to reasonably support
continuation of the agreement. (Bus. & Com. Code, Sec. 19.26(e).)
Sec. 55.056. CAUSE REQUIRED FOR TERMINATION. A supplier
may not terminate, cancel, or fail to renew a dealer agreement
without cause. (Bus. & Com. Code, Sec. 19.41.)
Sec. 55.057. RENOVATION OR ADDITIONAL SPACE. A supplier
may not require as a condition of renewal or extension of a dealer
agreement that the dealer complete substantial renovation of the
dealer’s place of business or acquire new or additional space to
serve as the dealer’s place of business, unless the supplier gives
the dealer:
(1) one year’s written notice of the requirement that
states all grounds for the requirement; and
(2) reasonable time to complete the renovation or
acquisition. (Bus. & Com. Code, Sec. 19.42.)
[Sections 55.058-55.100 reserved for expansion]
SUBCHAPTER C. WARRANTIES
Sec. 55.101. APPLICABILITY OF SUBCHAPTER. This subchapter
applies only to a warranty claim submitted by a dealer:
(1) while the dealer agreement is in effect; or
(2) after the termination of the dealer agreement, if
the claim is for work performed before the effective date of the
termination. (Bus. & Com. Code, Sec. 19.28(a).)
Sec. 55.102. ACCEPTANCE OR REJECTION OF WARRANTY CLAIM.
(a) Not later than the 30th day after the date a supplier receives a
warranty claim from a dealer, the supplier shall accept or reject
the claim. A claim not rejected before that date is considered
accepted.
(b) Not later than the 30th day after the date a warranty
claim is accepted or rejected, the supplier shall:
(1) pay the accepted claim; or
(2) send the dealer written notice of the grounds for
rejecting the claim.
(c) A supplier, including a supplier of an electric engine
or motor, who pays a claim may not pay less than the hourly labor
rate and other expenses involved in the work that the dealer
regularly charges to a retail customer who does not assert a
warranty and the dealer’s net price plus 15 percent for parts. The
number of hours of labor claimed may not exceed 1-1/2 times the
supplier’s recommended hours for the work. (Bus. & Com. Code, Secs.
19.28(b), (c), (d).)
Sec. 55.103. SUPPLIER’S RECOVERY OF WARRANTY CLAIM. After
paying a warranty claim, a supplier may not charge back, set off, or
otherwise attempt to recover all or part of the amount of the claim
unless:
(1) the claim was fraudulent;
(2) the work for which the claim was made was not
properly performed or was unnecessary to comply with the warranty;
or
(3) the dealer did not substantiate the claim
according to the supplier’s written requirements in effect when the
claim arose. (Bus. & Com. Code, Sec. 19.28(e).)
Sec. 55.104. PURCHASER’S WARRANTY AGREEMENT. A dealer or
supplier authorized to sell new farm, industrial, or outdoor power
equipment shall give the purchaser a written warranty agreement
including replacement or cash refund. If the dealer determines the
equipment cannot be made usable, the manufacturer is liable to the
purchaser for the replacement or cash refund. (Bus. & Com. Code,
Sec. 19.28(f).)
[Sections 55.105-55.150 reserved for expansion]
SUBCHAPTER D. DELIVERY, SALE, AND RETURN OF EQUIPMENT
Sec. 55.151. COERCED ORDERS, DELIVERIES, OR REFUSALS TO
PURCHASE PROHIBITED. A supplier may not coerce or compel a dealer
to:
(1) order or accept delivery of equipment with a
special feature or accessory not included in the base list price of
the equipment as publicly advertised by the supplier unless the
special feature or accessory is a safety feature or accessory
required by the supplier or by applicable law; or
(2) refuse to purchase equipment manufactured by
another manufacturer. (Bus. & Com. Code, Sec. 19.22.)
Sec. 55.152. DISCRIMINATION AMONG DEALERS. (a) A supplier
may not discriminate among dealers in the supplier’s delivery, in
reasonable quantities and within a reasonable time after receipt of
a dealer’s order, of equipment covered by the dealer agreement and
specifically represented by the supplier as available for immediate
delivery.
(b) Subsection (a) does not apply if the discrimination is
because of:
(1) the supplier’s restrictions on extending credit to
the dealer;
(2) the dealer’s default under a dealership agreement;
or
(3) an act of God, work stoppage or delay because of a
strike or labor difficulty, bona fide shortage of materials,
freight embargo, or other cause over which the supplier has no
control. (Bus. & Com. Code, Sec. 19.23.)
Sec. 55.153. LATE DELIVERY OF BACK-ORDERED SEASONAL DEMAND
ITEM. (a) Unless the supplier notifies a dealer of the status of a
back-ordered item before shipment of the item to the dealer, a
dealer may reject the delivery of an item of equipment other than a
repair part or attachment from a supplier if:
(1) the item has special value in a particular time of
year because of predictable seasonal demand and is less marketable
and less valuable after the seasonal demand period ends;
(2) the item was back-ordered and delivery is made
after the seasonal demand period ends; and
(3) the dealer sends written notice of the rejection
to the supplier before the 11th day after the delivery of the item.
(b) The supplier shall pay the costs of the return of an item
the delivery of which is rejected under Subsection (a).
(c) A supplier may not coerce or compel a dealer to accept
late delivery of back-ordered seasonal demand equipment other than
repair parts or attachments. (Bus. & Com. Code, Sec. 19.24.)
Sec. 55.154. SALES TO AFFILIATED DEALER. (a) In this
section, “affiliated dealer” means a dealer in which a supplier has
an ownership interest.
(b) Except as provided by Subsection (c), a supplier may
not:
(1) sell or offer to sell new or unused equipment to an
affiliated dealer at a price lower than the price for a sale of the
same equipment, identically equipped, to a nonaffiliated dealer; or
(2) use a sales promotion plan or other program or
device that results in a sale or offer of sale of new or unused
equipment to an affiliated dealer at an actual price that is:
(A) lower than the price for a nonaffiliated
dealer; or
(B) fixed and predetermined solely by the
supplier.

(c) This section does not apply to sales made to a dealer for
resale to:
(1) a unit, agency, or political subdivision of the
United States or this state;
(2) a major fleet account; or
(3) an organization for testing or demonstrating the
equipment. (Bus. & Com. Code, Secs. 19.01(1), 19.25.)
Sec. 55.155. RETURN OF INVENTORY; RESPONSIBILITY FOR COSTS.
(a) If on termination of a dealer agreement the dealer delivers to
the supplier or a person designated by the supplier inventory
purchased from the supplier and held by the dealer on the date of
the termination, the supplier shall pay to the dealer:
(1) the dealer cost of new, unsold, undamaged, and
complete equipment, other than repair parts, returned by the
dealer; and
(2) an amount equal to:
(A) 85 percent of the current price of new,
undamaged repair parts returned by the dealer, if the supplier
handles, packs, and loads the parts; or
(B) 90 percent of the current price of new,
undamaged repair parts returned by the dealer, if the supplier does
not handle, pack, or load the parts.
(b) Before returning inventory under this section and not
later than the 120th day after the effective date of termination,
the dealer shall submit to the supplier a list of the inventory the
dealer intends to return, including, to the extent possible, each
item’s trade name, description, and serial number. Not later than
the 60th day after the date the supplier receives the list, the
supplier shall notify the dealer in writing of:
(1) each item that the supplier claims is not subject
to reimbursement under this section; and
(2) the destination for each item the dealer is to
deliver to a person designated by the supplier.
(c) The supplier may subtract from the amount owed under
Subsection (a) the amount of debt owed by the dealer to the
supplier.
(d) The supplier and dealer are each responsible for
one-half of the cost of delivering the inventory to the supplier or
a person designated by the supplier, except that if the dealer
delivers an item to a person designated by the supplier the dealer
is not responsible for the amount that exceeds the amount for which
the dealer would have been responsible if the item had been
delivered to the supplier.
(e) The supplier shall pay the amount owed under this
section:
(1) before the 91st day after the date the supplier or
person designated by the supplier receives inventory from the
dealer; and
(2) after the dealer has furnished proof that the
inventory was purchased from the supplier.
(f) On payment of the amount owed under this section, title
to the inventory is transferred to the supplier or person
designated by the supplier.
(g) A supplier and dealer may by agreement alter the time
limits provided by this section. (Bus. & Com. Code, Sec. 19.43.)
Sec. 55.156. RETURN OF DATA PROCESSING OR PERIPHERAL
EQUIPMENT, SOFTWARE, OR CERTAIN TOOLS; RESPONSIBILITY FOR COSTS.
(a) If on termination of a dealer agreement the dealer delivers to
the supplier data processing or peripheral equipment, software, or
specialized repair tools that the supplier required the dealer to
purchase or lease, the supplier shall:
(1) assume any responsibilities of the dealer under
the lease for that equipment or software; and
(2) pay the dealer:
(A) an amount equal to the fair market value of
the data processing or peripheral equipment or software purchased
by the dealer and delivered to the supplier; and
(B) an amount equal to 75 percent of the cost to
the dealer of the specialized repair tools purchased by the dealer
and delivered to the supplier.
(b) The supplier and dealer are each responsible for
one-half of the cost of delivering the data processing or
peripheral equipment, software, or specialized repair tools to the
supplier.
(c) The supplier shall assume the responsibilities under
the lease and pay the amount required by this section before the
61st day after the date the supplier receives the data processing or
peripheral equipment, software, or specialized repair tools.
(d) On payment of the amount required by this section, title
or the right of possession to the data processing or peripheral
equipment or specialized repair tools purchased or leased by the
dealer is transferred to the supplier. (Bus. & Com. Code, Sec.
19.44.)
Sec. 55.157. SUPPLIER’S LIABILITY FOR LATE PAYMENT. A
supplier who does not make a payment required by Section 55.155 or
55.156 before the 61st day after the date the supplier receives the
final shipment of the inventory, data processing or peripheral
equipment, software, or specialized repair tools from the dealer is
liable to the dealer for:
(1) the greater of the dealer cost or current price of
any inventory;
(2) any cost to the dealer of the data processing or
peripheral equipment, software, or specialized repair tools;
(3) any expense incurred by the dealer in returning
the inventory, data processing or peripheral equipment, software,
or specialized repair tools to the supplier;
(4) interest on any amounts owed under Subdivision
(1), (2), or (3), at the rate applicable to a judgment of a court of
this state, beginning on the 61st day after the date the supplier
received the inventory, data processing or peripheral equipment,
software, or specialized repair tools;
(5) reasonable attorney’s fees; and
(6) court costs. (Bus. & Com. Code, Sec. 19.47.)
Sec. 55.158. EXCEPTIONS TO SUPPLIER’S REPURCHASE,
PURCHASE, OR ASSUMPTION RESPONSIBILITY. (a) A supplier is not
required to repurchase:
(1) inventory:
(A) that the dealer orders after the dealer
receives notice of the termination of the dealer agreement from the
supplier; or
(B) for which the dealer cannot furnish evidence
of clear title that is satisfactory to the supplier; or
(2) a repair part that:
(A) has a limited storage life and was purchased
from the supplier more than two years before the date of termination
of the dealer agreement;
(B) is in a broken or damaged package;
(C) is usually sold as part of a set, if the part
is separated from the set; or
(D) cannot be sold without reconditioning or
repackaging.
(b) A supplier is not required to purchase or assume the
responsibilities under the lease for:
(1) data processing or peripheral equipment or
software that the dealer purchased that was not specifically
required by the supplier; or
(2) a specialized repair tool that:
(A) is not unique to the supplier’s product line;
(B) is not in complete and salable condition; or
(C) was not purchased by the dealer within the
three-year period preceding the date of termination of the dealer
agreement. (Bus. & Com. Code, Sec. 19.45.)
[Sections 55.159-55.200 reserved for expansion]
SUBCHAPTER E. ENFORCEMENT
Sec. 55.201. ACTION FOR VIOLATION OF CHAPTER. A person
injured by a violation of this chapter may bring an action for:
(1) an injunction to prevent further violation;
(2) damages;
(3) reasonable attorney’s fees; and
(4) costs. (Bus. & Com. Code, Sec. 19.02.)
TITLE 5. REGULATION OF BUSINESSES AND SERVICES
SUBTITLE A. GENERAL PRACTICES
CHAPTER 71. ASSUMED BUSINESS OR PROFESSIONAL NAME
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 71.001. SHORT TITLE
Sec. 71.002. DEFINITIONS
Sec. 71.003. APPLICABILITY OF CHAPTER
[Sections 71.004-71.050 reserved for expansion]
SUBCHAPTER B. REQUIREMENTS APPLICABLE TO CERTAIN UNINCORPORATED
PERSONS
Sec. 71.051. CERTIFICATE FOR CERTAIN UNINCORPORATED
PERSONS
Sec. 71.052. CONTENTS OF CERTIFICATE
Sec. 71.053. EXECUTION OF CERTIFICATE
Sec. 71.054. PLACE OF FILING
[Sections 71.055-71.100 reserved for expansion]
SUBCHAPTER C. REQUIREMENTS APPLICABLE TO INCORPORATED BUSINESS OR
PROFESSION AND CERTAIN OTHER ENTITIES
Sec. 71.101. CERTIFICATE FOR INCORPORATED BUSINESS OR
PROFESSION, LIMITED PARTNERSHIP,
REGISTERED LIMITED LIABILITY
PARTNERSHIP, OR LIMITED LIABILITY
COMPANY
Sec. 71.102. CONTENTS OF CERTIFICATE
Sec. 71.103. PLACE OF FILING
Sec. 71.104. EXECUTION OF CERTIFICATE
[Sections 71.105-71.150 reserved for expansion]
SUBCHAPTER D. GENERAL PROVISIONS REGARDING ASSUMED NAME
CERTIFICATE
Sec. 71.151. DURATION AND RENEWAL OF CERTIFICATE
Sec. 71.152. MATERIAL CHANGE IN INFORMATION; NEW
CERTIFICATE
Sec. 71.153. ABANDONMENT OF USE OF BUSINESS OR
PROFESSIONAL NAME
Sec. 71.154. INDEX OF CERTIFICATES
Sec. 71.155. FILING FEES
Sec. 71.156. PRESCRIBED FORMS
Sec. 71.157. EFFECT OF FILING
Sec. 71.158. FILING OF REPRODUCTION
[Sections 71.159-71.200 reserved for expansion]
SUBCHAPTER E. PENALTIES
Sec. 71.201. CIVIL ACTION; SANCTION
Sec. 71.202. CRIMINAL PENALTY: GENERAL VIOLATION
Sec. 71.203. CRIMINAL PENALTY: FRAUDULENT FILING
CHAPTER 71. ASSUMED BUSINESS OR PROFESSIONAL NAME
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 71.001. SHORT TITLE. This chapter may be cited as the
Assumed Business or Professional Name Act. (Bus. & Com. Code, Sec.
36.01.)
Sec. 71.002. DEFINITIONS. In this chapter:
(1) “Address” means:
(A) a post office address; and
(B) a street address, if the street address is
not the same as the post office address.
(2) “Assumed name” means:
(A) for an individual, a name that does not
include the surname of the individual;
(B) for a partnership, a name that does not
include the surname or other legal name of each joint venturer or
general partner;
(C) for an individual or a partnership, a name,
including a surname, that suggests the existence of additional
owners by including words such as “Company,” “& Company,” “& Son,”
“& Sons,” “& Associates,” “Brothers,” and similar words, but not
words that merely describe the business being conducted or the
professional service being rendered;
(D) for a limited partnership, a name other than
the name stated in its certificate of formation;
(E) for a company, a name used by the company;
(F) for a corporation, a name other than the name
stated in its certificate of formation or a comparable document;
(G) for a registered limited liability
partnership, a name other than the name stated in its application
filed with the office of the secretary of state or a comparable
document; and
(H) for a limited liability company, a name other
than the name stated in its certificate of formation or a comparable
document.
(3) “Certificate” means an assumed name certificate.
(4) “Company” means a real estate investment trust, a
joint-stock company, or any other business, professional, or other
association or legal entity that is not incorporated, other than a
partnership, limited partnership, limited liability company, or
registered limited liability partnership.
(5) “Corporation” means:
(A) a domestic or foreign corporation,
professional corporation, professional association, or other
corporation; or
(B) any other business, professional, or other
association or legal entity that is incorporated.
(6) “Estate” means a person’s property that is
administered by a representative.
(7) “Office” means:
(A) for a person that is not an individual or that
is a corporation that is not required to or does not maintain a
registered office in this state, the person’s:
(i) principal office; and
(ii) principal place of business if not the
same as the person’s principal office; and
(B) for a corporation, limited partnership,
registered limited liability partnership, or limited liability
company that is required to maintain a registered office in this
state, the entity’s:
(i) registered office; and
(ii) principal office if not the same as the
entity’s registered office.
(8) “Partnership” means a joint venture or general
partnership other than a limited partnership or a registered
limited liability partnership.
(9) “Person” includes an individual, partnership,
limited partnership, limited liability company, registered limited
liability partnership, company, or corporation.
(10) “Registrant” means a person who has filed, or on
whose behalf there has been filed, a certificate under this chapter
or other law.
(11) “Representative” means a trustee, administrator,
executor, independent executor, guardian, conservator, trustee in
bankruptcy, receiver, or other person appointed by a court or by
trust or will to have custody of, take possession of, have title to,
or otherwise be empowered to control the person or property of any
person. (Bus. & Com. Code, Sec. 36.02; New.)
Sec. 71.003. APPLICABILITY OF CHAPTER. (a) This chapter
does not apply to an insurer authorized to engage in business in
this state and described in Subchapter A, Chapter 805, Insurance
Code, except as specifically provided by the Insurance Code.
(b) This chapter does not require a corporation, limited
partnership, registered limited liability partnership, or limited
liability company or its shareholders, associates, partners, or
members to file a certificate to conduct business or render a
professional service in this state under the name of the entity as
stated in the certificate of formation, application filed with the
office of the secretary of state, or other comparable document of
the entity. (Bus. & Com. Code, Secs. 36.03, 36.11(c).)
[Sections 71.004-71.050 reserved for expansion]
SUBCHAPTER B. REQUIREMENTS APPLICABLE TO CERTAIN UNINCORPORATED
PERSONS
Sec. 71.051. CERTIFICATE FOR CERTAIN UNINCORPORATED
PERSONS. A person must file a certificate under this subchapter if
the person regularly conducts business or renders a professional
service in this state under an assumed name other than as a
corporation, limited partnership, registered limited liability
partnership, or limited liability company. (Bus. & Com. Code, Sec.
36.10(a) (part).)
Sec. 71.052. CONTENTS OF CERTIFICATE. The certificate must
state:
(1) the assumed name under which the business is or is
to be conducted or the professional service is or is to be rendered;
(2) if the registrant is:
(A) an individual, the individual’s full name and
residence address;
(B) a partnership:
(i) the venture or partnership name;
(ii) the venture or partnership office
address;
(iii) the full name of each joint venturer
or general partner; and
(iv) each joint venturer’s or general
partner’s residence address if the venturer or partner is an
individual or the joint venturer’s or general partner’s office
address if the venturer or partner is not an individual;
(C) an estate:
(i) the name of the estate;
(ii) the estate’s office address, if any;
(iii) the full name of each representative
of the estate; and
(iv) each representative’s residence
address if the representative is an individual or the
representative’s office address if the representative is not an
individual;
(D) a real estate investment trust:
(i) the name of the trust;
(ii) the address of the trust;
(iii) the full name of each trustee
manager; and
(iv) each trustee manager’s residence
address if the trustee manager is an individual or the trustee
manager’s office address if the trustee manager is not an
individual; or
(E) a company, other than a real estate
investment trust, or a corporation:
(i) the name of the company or corporation;
(ii) the state, country, or other
jurisdiction under the laws of which the company or corporation was
organized or incorporated; and
(iii) the company’s or corporation’s office
address;
(3) the period, not to exceed 10 years, during which
the registrant will use the assumed name; and
(4) a statement specifying that the business that is
or will be conducted or the professional service that is or will be
rendered in the county under the assumed name is being or will be
conducted or rendered as a proprietorship, sole practitioner,
partnership, real estate investment trust, joint-stock company, or
other form of unincorporated business or professional association
or entity other than a limited partnership, limited liability
company, or registered limited liability partnership. (Bus. & Com.
Code, Sec. 36.10(a) (part).)
Sec. 71.053. EXECUTION OF CERTIFICATE. (a) The
certificate must be executed and acknowledged:
(1) by each individual whose name is required to be
stated in the certificate or the individual’s representative or
attorney-in-fact; and
(2) under oath on behalf of each person whose name is
required to be stated in the certificate and who is not an
individual, by:
(A) the person’s representative or
attorney-in-fact; or
(B) a joint venturer, general partner, trustee
manager, officer, or other person having authority regarding the
person comparable to the person’s representative or
attorney-in-fact.
(b) A certificate executed and acknowledged by an
attorney-in-fact must include a statement that the attorney has
been authorized in writing by the attorney’s principal to execute
and acknowledge the certificate. (Bus. & Com. Code, Sec.
36.10(b).)
Sec. 71.054. PLACE OF FILING. A person shall file the
certificate in the office of the county clerk in each county in
which the person:
(1) has or will maintain business or professional
premises; or
(2) conducts business or renders a professional
service, if the person does not or will not maintain business or
professional premises in any county. (Bus. & Com. Code, Sec.
36.10(a) (part).)
[Sections 71.055-71.100 reserved for expansion]
SUBCHAPTER C. REQUIREMENTS APPLICABLE TO INCORPORATED BUSINESS OR
PROFESSION AND CERTAIN OTHER ENTITIES
Sec. 71.101. CERTIFICATE FOR INCORPORATED BUSINESS OR
PROFESSION, LIMITED PARTNERSHIP, REGISTERED LIMITED LIABILITY
PARTNERSHIP, OR LIMITED LIABILITY COMPANY. A corporation, limited
partnership, registered limited liability partnership, or limited
liability company must file a certificate under this subchapter if
the entity:
(1) regularly conducts business or renders
professional services in this state under an assumed name; or
(2) is required by law to use an assumed name in this
state to conduct business or render professional services. (Bus. &
Com. Code, Sec. 36.11(a) (part).)
Sec. 71.102. CONTENTS OF CERTIFICATE. The certificate must
state:
(1) the assumed name under which the business is or is
to be conducted or the professional service is or is to be rendered;
(2) the registrant’s name as stated in the
registrant’s certificate of formation or application filed with the
office of the secretary of state or other comparable document;
(3) the state, country, or other jurisdiction under
the laws of which the registrant was incorporated or organized and
the registrant’s registered or similar office address in that
state, country, or jurisdiction;
(4) the period, not to exceed 10 years, during which
the registrant will use the assumed name;
(5) a statement specifying that the registrant is:
(A) a business corporation, nonprofit
corporation, professional corporation, professional association,
or other type of corporation;
(B) a limited partnership, registered limited
liability partnership, or limited liability company; or
(C) another type of incorporated business,
professional or other association, or legal entity;
(6) the address of:
(A) the registrant’s:
(i) registered office in this state and the
name of its registered agent at that address; and
(ii) principal office, if the principal
office address is not the same as the registrant’s registered
office address in this state; or
(B) if the registrant is not required to or does
not maintain a registered office in this state:
(i) the registrant’s office in this state;
and
(ii) the registrant’s place of business in
this state and any office of the registrant outside this state, if
the registrant is not incorporated or organized under the laws of
this state; and
(7) the county or counties in this state where the
registrant is or will be conducting business or rendering
professional services under the assumed name. (Bus. & Com. Code,
Sec. 36.11(a) (part).)
Sec. 71.103. PLACE OF FILING. (a) The corporation, limited
partnership, registered limited liability partnership, or limited
liability company shall file the certificate in the office of the
secretary of state and in the office or offices of each county clerk
as specified by Subsection (b) or (c).
(b) Except as provided by Subsection (c), the entity shall
file the certificate in the offices of the county clerk of the
county in which the entity’s:
(1) registered office is located; and
(2) principal office is located if the principal
office is in this state and not in the same county where the
registered office is located.
(c) If the entity is not required to or does not maintain a
registered office in this state, the entity shall file the
certificate:
(1) in the office of the county clerk of the county in
which the entity’s office in this state is located; or
(2) in the office of the county clerk of the county in
which the entity’s principal place of business in this state is
located, if:
(A) the entity is not incorporated or organized
under the laws of this state; and
(B) the county in which the entity’s principal
place of business in this state is located is not the same county
where the entity’s office is located. (Bus. & Com. Code, Sec.
36.11(a) (part).)
Sec. 71.104. EXECUTION OF CERTIFICATE. (a) A certificate
filed in the secretary of state’s office must be executed by an
officer, general partner, member, manager, or representative of or
attorney-in-fact for the registrant.
(b) A certificate filed in a county clerk’s office must be
executed and acknowledged in the manner provided by Section 71.053
for a certificate filed under that section.
(c) A certificate executed by an attorney-in-fact must
include a statement that the attorney has been authorized in
writing by the attorney’s principal to execute the certificate.
(Bus. & Com. Code, Sec. 36.11(b).)
[Sections 71.105-71.150 reserved for expansion]
SUBCHAPTER D. GENERAL PROVISIONS REGARDING ASSUMED NAME
CERTIFICATE
Sec. 71.151. DURATION AND RENEWAL OF CERTIFICATE. (a) A
certificate is effective for a term not to exceed 10 years from the
date the certificate is filed.
(b) A certificate is void at the end of the certificate’s
stated term, unless within six months preceding the certificate’s
expiration date the registrant files in the office of a county clerk
and the secretary of state, if applicable, a renewal certificate
complying with the requirements of this chapter for an original
certificate.
(c) A registrant may renew a certificate under this section
for any number of successive terms, but each term may not exceed 10
years. (Bus. & Com. Code, Sec. 36.13.)
Sec. 71.152. MATERIAL CHANGE IN INFORMATION; NEW
CERTIFICATE. (a) Not later than the 60th day after an event occurs
that causes the information in a certificate to become materially
misleading, a registrant must file a new certificate complying with
this chapter in the office in which the original or renewal
certificate was filed.
(b) An event that causes the information in a certificate to
become materially misleading includes:
(1) a change in the name, identity, entity, form of
business or professional organization, or location of a registrant;
(2) for a proprietorship or sole practitioner, a
change in ownership;
(3) for a partnership:
(A) the admission of a new partner or joint
venturer; or
(B) the end of a general partner’s or joint
venturer’s association with the partnership; or
(4) for a registrant required by law to maintain a
registered office or similar office and a registered agent or
similar agent at that office, a change in the address of the office
or in the identity of the agent.
(c) A new certificate filed under this section is effective
for a term not to exceed 10 years from the date the certificate is
filed. (Bus. & Com. Code, Sec. 36.12.)
Sec. 71.153. ABANDONMENT OF USE OF BUSINESS OR PROFESSIONAL
NAME. (a) A registrant who has filed a certificate under this
chapter and who ceases to conduct business or render professional
services in this state under the assumed name stated in the
certificate may file a statement of abandonment of use of the
assumed name in the office in which the registrant’s certificate
was filed.
(b) The statement of abandonment of use of an assumed name
must state:
(1) the assumed name being abandoned;
(2) the date on which the certificate was filed in the
office in which the statement of abandonment is being filed and in
any other office in which the certificate was filed; and
(3) the registrant’s name and residence or office
address as required for a certificate filed under this chapter.
(c) A statement of abandonment must be executed and
acknowledged in the same manner as if the registrant were filing a
certificate under this chapter. (Bus. & Com. Code, Sec. 36.14.)
Sec. 71.154. INDEX OF CERTIFICATES. (a) The secretary of
state and each county clerk shall keep an alphabetical index of:
(1) all assumed names that have been filed in the
office of the respective officer; and
(2) the persons filing the certificates.
(b) A copy of a certificate or statement is presumptive
evidence in any court in this state of the facts contained in the
copy if the copy is certified to by:
(1) the county clerk in whose office the certificate
or statement was filed; or
(2) the secretary of state. (Bus. & Com. Code, Sec.
36.15 (part).)
Sec. 71.155. FILING FEES. (a) The county clerk shall
collect a fee of:
(1) $2 for filing each certificate or statement
required or permitted to be filed under this chapter; and
(2) 50 cents for each name to be indexed.
(b) The secretary of state shall collect for the use of this
state a fee of:
(1) $25 for indexing and filing each certificate or
statement required or permitted to be filed under this chapter; and
(2) $10 for filing each statement of abandonment of
use of an assumed name. (Bus. & Com. Code, Sec. 36.15 (part).)
Sec. 71.156. PRESCRIBED FORMS. (a) The secretary of state
may prescribe a form to be used for filing a certificate or
statement that complies with this chapter in the secretary’s office
or in the office of any county clerk in this state.
(b) Unless otherwise specifically provided by law, the use
of a form prescribed under this section is not mandatory. (Bus. &
Com. Code, Sec. 36.16.)
Sec. 71.157. EFFECT OF FILING. (a) This chapter does not
give a registrant a right to use the assumed name in violation of
the common or statutory law of unfair competition or unfair trade
practices, common law copyright, or similar law.
(b) The filing of a certificate under this chapter does not
in itself constitute actual use of the assumed name stated in the
certificate for purposes of determining priority of rights. (Bus. &
Com. Code, Sec. 36.17.)
Sec. 71.158. FILING OF REPRODUCTION. (a) The secretary of
state may accept for filing a photographic, photostatic, or similar
reproduction of a signed original document required or authorized
to be filed in the secretary’s office under this chapter.
(b) A signature on a document required or authorized to be
filed in the secretary of state’s office under this chapter may be a
facsimile. (Bus. & Com. Code, Sec. 36.18.)
[Sections 71.159-71.200 reserved for expansion]
SUBCHAPTER E. PENALTIES
Sec. 71.201. CIVIL ACTION; SANCTION. (a) A person’s
failure to comply with this chapter does not impair the validity of
any contract or act by the person or prevent the person from
defending any action or proceeding in any court of this state, but
the person may not maintain in a court of this state an action or
proceeding arising out of a contract or act in which an assumed name
was used until an original, new, or renewed certificate has been
filed as required by this chapter.
(b) In an action or proceeding brought against a person who
has not complied with this chapter, the court may award the
plaintiff or other party bringing the action or proceeding expenses
incurred, including attorney’s fees, in locating and effecting
service of process on the defendant. (Bus. & Com. Code, Sec.
36.25.)
Sec. 71.202. CRIMINAL PENALTY: GENERAL VIOLATION. (a) A
person commits an offense if the person:
(1) conducts business or renders a professional
service in this state under an assumed name; and
(2) intentionally violates this chapter.
(b) An offense under this section is a Class A misdemeanor.
(Bus. & Com. Code, Sec. 36.26.)
Sec. 71.203. CRIMINAL PENALTY: FRAUDULENT FILING. (a) A
person may not knowingly or intentionally sign and present for
filing or cause to be presented for filing a document authorized or
required to be filed under this chapter that:
(1) indicates that the person signing the document has
the authority to act on behalf of the entity for which the document
is presented and the person does not have that authority;
(2) contains a material false statement; or
(3) is forged.
(b) A person commits an offense if the person violates
Subsection (a). An offense under this subsection is punishable as
if it were an offense under Section 37.10, Penal Code. (Bus. & Com.
Code, Sec. 36.27.)
CHAPTER 72. BUSINESS RECORDS
SUBCHAPTER A. DISPOSAL OF CERTAIN BUSINESS RECORDS
Sec. 72.001. DEFINITIONS
Sec. 72.002. DESTRUCTION OF CERTAIN BUSINESS RECORDS
Sec. 72.003. RETENTION OF REPRODUCTION OF BUSINESS
RECORDS
Sec. 72.004. DISPOSAL OF BUSINESS RECORDS CONTAINING
PERSONAL IDENTIFYING INFORMATION
[Sections 72.005-72.050 reserved for expansion]
SUBCHAPTER B. DELETION OF CERTAIN RECORDS OR INFORMATION RELATING
TO CUSTOMERS’ CHECKS
Sec. 72.051. REQUIRED DELETION OF CERTAIN ELECTRONIC
RECORDS
CHAPTER 72. BUSINESS RECORDS
SUBCHAPTER A. DISPOSAL OF CERTAIN BUSINESS RECORDS
Sec. 72.001. DEFINITIONS. In this subchapter:
(1) “Business record” means letters, words, sounds, or
numbers, or the equivalent of letters, words, sounds, or numbers,
recorded in the operation of a business by:
(A) handwriting;
(B) typewriting;
(C) printing;
(D) photostat;
(E) photograph;
(F) magnetic impulse;
(G) mechanical or electronic recording;
(H) digitized optical image; or
(I) another form of data compilation.
(2) “Personal identifying information” means an
individual’s first name or initial and last name in combination
with one or more of the following:
(A) date of birth;
(B) social security number or other
government-issued identification number;
(C) mother’s maiden name;
(D) unique biometric data, including the
individual’s fingerprint, voice data, or retina or iris image;
(E) unique electronic identification number,
address, or routing code;
(F) telecommunication access device as defined
by Section 32.51, Penal Code, including debit or credit card
information; or
(G) financial institution account number or any
other financial information.
(3) “Reproduction” means a counterpart of an original
business record produced by:
(A) production from the same impression or the
same matrix as the original;
(B) photography, including an enlargement or
miniature;
(C) mechanical or electronic rerecording;
(D) chemical reproduction;
(E) digitized optical imaging; or
(F) another technique that accurately reproduces
the original. (Bus. & Com. Code, Sec. 35.48(a).)
Sec. 72.002. DESTRUCTION OF CERTAIN BUSINESS RECORDS. (a)
A business record required to be retained by a law of this state may
be destroyed at any time after the third anniversary of the date the
business record was created.
(b) Subsection (a) does not apply if a law or rule
applicable to the business record prescribes a different retention
period or procedure for disposal. (Bus. & Com. Code, Sec.
35.48(b).)
Sec. 72.003. RETENTION OF REPRODUCTION OF BUSINESS RECORDS.
A law of this state that requires retention of a business record is
satisfied by retention of a reproduction of the original record.
(Bus. & Com. Code, Sec. 35.48(c).)
Sec. 72.004. DISPOSAL OF BUSINESS RECORDS CONTAINING
PERSONAL IDENTIFYING INFORMATION. (a) This section does not apply
to:
(1) a financial institution as defined by 15 U.S.C.
Section 6809; or
(2) a covered entity as defined by Section 601.001 or
602.001, Insurance Code.
(b) When a business disposes of a business record that
contains personal identifying information of a customer of the
business, the business shall modify, by shredding, erasing, or
other means, the personal identifying information so as to make the
information unreadable or undecipherable.
(c) A business is considered to comply with Subsection (b)
if the business contracts with a person engaged in the business of
disposing of records for the modification of personal identifying
information on behalf of the business in accordance with that
subsection.
(d) A business that disposes of a business record without
complying with Subsection (b) is liable for a civil penalty in an
amount not to exceed $500 for each business record. The attorney
general may bring an action against the business to:
(1) recover the civil penalty;
(2) obtain any other remedy, including injunctive
relief; and
(3) recover costs and reasonable attorney’s fees
incurred in bringing the action.
(e) A business that in good faith modifies a business record
as required by Subsection (b) is not liable for a civil penalty
under Subsection (d) if the business record is reconstructed,
wholly or partly, through extraordinary means.
(f) Subsection (b) does not require a business to modify a
business record if:
(1) the business is required to retain the business
record under another law; or
(2) the business record is historically significant
and:
(A) there is no potential for identity theft or
fraud while the business retains custody of the business record; or
(B) the business record is transferred to a
professionally managed historical repository. (Bus. & Com. Code,
Secs. 35.48(d), (e), (f), (g), (h), (i).)
[Sections 72.005-72.050 reserved for expansion]
SUBCHAPTER B. DELETION OF CERTAIN RECORDS OR INFORMATION RELATING
TO CUSTOMERS’ CHECKS
Sec. 72.051. REQUIRED DELETION OF CERTAIN ELECTRONIC
RECORDS. (a) In this section, “law enforcement agency” has the
meaning assigned by Article 59.01, Code of Criminal Procedure.
(b) This section applies only to a business that accepts
checks from customers in the ordinary course of business. This
section does not apply to a financial institution as defined by 31
U.S.C. Section 5312(a)(2), as amended.
(c) A business shall delete any electronic record
indicating that a customer has issued a dishonored check or any
other information except for a checking account number or bank
routing transit number on which the business bases a refusal to
accept a check from a customer. The record must be deleted not
later than the 30th day after the date:
(1) the customer and the business agree that the
information contained in the electronic record is incorrect; or
(2) the customer presents to the business:
(A) a copy of a report filed by the customer with
a law enforcement agency stating that the dishonored check was
unauthorized; and
(B) a written statement of the customer
indicating that the dishonored check was unauthorized.
(d) A business that violates Subsection (c) is liable to
this state for a civil penalty in an amount not to exceed $1,000.
The attorney general may:
(1) bring an action to recover the civil penalty; and
(2) recover reasonable expenses incurred in
recovering the penalty, including court costs, reasonable
attorney’s fees, investigative costs, witness fees, and deposition
expenses. (Bus. & Com. Code, Sec. 35.62.)
[Chapters 73-90 reserved for expansion]
SUBTITLE B. RENTAL PRACTICES
CHAPTER 91. PRIVATE PASSENGER VEHICLE RENTAL COMPANIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 91.001. DEFINITIONS
[Sections 91.002-91.050 reserved for expansion]
SUBCHAPTER B. DAMAGE WAIVERS AND MANDATORY CHARGES
Sec. 91.051. WRITTEN AGREEMENT REQUIRED FOR DAMAGE
WAIVER
Sec. 91.052. NOTICE TO RENTER
Sec. 91.053. POSTED NOTICE
Sec. 91.054. PROHIBITED REPRESENTATIONS AND COERCION
Sec. 91.055. MANDATORY CHARGE
Sec. 91.056. VOIDING OF DAMAGE WAIVER
[Sections 91.057-91.100 reserved for expansion]
SUBCHAPTER C. ENFORCEMENT PROVISIONS
Sec. 91.101. CIVIL PENALTY
Sec. 91.102. INJUNCTION
Sec. 91.103. SUIT FOR CIVIL PENALTY OR INJUNCTIVE
RELIEF
CHAPTER 91. PRIVATE PASSENGER VEHICLE RENTAL COMPANIES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 91.001. DEFINITIONS. In this chapter:
(1) “Authorized driver” means:
(A) the renter;
(B) a person whom the rental company expressly
designates on the rental agreement as an authorized driver;
(C) the renter’s spouse if the spouse:
(i) holds a driver’s license; and
(ii) satisfies any minimum age requirement
established by the rental company;
(D) an employer, employee, or coworker of the
renter if the person:
(i) holds a driver’s license;
(ii) satisfies any minimum age requirement
established by the rental company; and
(iii) is engaged in a business activity
with the renter at the time of the rental; or
(E) a person who:
(i) holds a driver’s license; and
(ii) is driving directly to a medical or
police facility under circumstances reasonably believed to
constitute an emergency.
(2) “Damage” means damage to or loss of a rented
vehicle, regardless of fault involved in the damage or loss. The
term includes:
(A) theft and loss of use; and
(B) any cost incident to the damage or loss,
including storage, impound, towing, and administrative charges.
(3) “Damage waiver” means a rental company’s agreement
not to hold an authorized driver liable for all or part of any
damage to a rented vehicle.
(4) “Mandatory charge” means a charge for an item or
service provided in connection with a rental transaction, other
than a charge imposed by law:
(A) that is in addition to the base rental rate;
and
(B) that the renter may not avoid or decline.
(5) “Private passenger vehicle” means a motor vehicle
of the private passenger type, including a passenger van, primarily
intended for private use.
(6) “Rental agreement” means an agreement for 30 days
or less that states the terms governing the use of a private
passenger vehicle rented by a rental company.
(7) “Rental company” means a person in the business of
renting private passenger vehicles to the public for 30 days or
less. The term does not include a person who holds a license under
Chapter 2301, Occupations Code, and whose primary business activity
is not renting private passenger vehicles.
(8) “Renter” means a person who obtains use of a
private passenger vehicle from a rental company under a rental
agreement. (V.A.C.S. Art. 9026c, Secs. 1, 4(a).)
[Sections 91.002-91.050 reserved for expansion]
SUBCHAPTER B. DAMAGE WAIVERS AND MANDATORY CHARGES
Sec. 91.051. WRITTEN AGREEMENT REQUIRED FOR DAMAGE WAIVER.
A rental company may not sell a damage waiver unless the renter
agrees to the damage waiver in writing at or before the time the
rental agreement is executed. (V.A.C.S. Art. 9026c, Sec. 2(a).)
Sec. 91.052. NOTICE TO RENTER. (a) A rental company shall
provide each renter who purchases a damage waiver, the charge for
which is not included in the base rental rate, the following notice:
NOTICE: Your rental agreement offers, for an
additional charge, an optional waiver to cover all or a
part of your responsibility for damage to or loss of
the vehicle. Before deciding whether to purchase the
waiver, you may wish to determine whether your own
automobile insurance or credit card agreement provides
you coverage for rental vehicle damage or loss and
determine the amount of the deductible under your own
insurance coverage. The purchase of the waiver is not
mandatory. The waiver is not insurance.
(b) The notice under Subsection (a) must be in at least
10-point type. (V.A.C.S. Art. 9026c, Sec. 3(a).)
Sec. 91.053. POSTED NOTICE. In addition to providing the
notice required by Section 91.052, a rental company shall post in a
conspicuous location where the damage waiver is offered the
following notice:
Notice to Texas Residents Regarding Damage Waivers
Your personal automobile insurance policy may or may
not provide coverage for your responsibility for the
loss of or damage to a rented vehicle during the rental
term. Before deciding whether to purchase a damage
waiver, you may wish to determine whether your
automobile insurance policy provides you coverage for
rental vehicle damage or loss. If you file a claim
under your personal automobile insurance policy, your
insurance company may choose to nonrenew your policy
at your renewal date, but may do so only if you are at
fault for the claim.
(V.A.C.S. Art. 9026c, Sec. 3(b).)
Sec. 91.054. PROHIBITED REPRESENTATIONS AND COERCION. (a)
An employee or agent of a rental company may not:
(1) make an oral or written representation that
contradicts this chapter; or
(2) use coercive language or a coercive act in an
attempt to persuade a renter to purchase a damage waiver.
(b) For purposes of this section, if the renter has declined
the damage waiver, a further statement or question by the employee
or agent that refers to the damage waiver, other than a statement
made in conjunction with review of the rental agreement that the
waiver has been declined, is considered coercive. (V.A.C.S. Art.
9026c, Sec. 5.)
Sec. 91.055. MANDATORY CHARGE. (a) A rental company that
includes a mandatory charge in a rental agreement shall prominently
display and fully disclose the charge:
(1) separately on the face of the agreement; and
(2) in all of the rental company’s price advertising,
price quotes, price offers, and price displays, including displays
in computerized reservation systems.
(b) A rental company may not impose or require the purchase
of a damage waiver as a mandatory charge. (V.A.C.S. Art. 9026c,
Secs. 4(b), (c).)
Sec. 91.056. VOIDING OF DAMAGE WAIVER. A rental company may
not void a damage waiver unless:
(1) an authorized driver causes the damage
intentionally or by wilful and wanton misconduct;
(2) the damage arises out of use of the vehicle:
(A) by a person:
(i) who is not an authorized driver;
(ii) while under the influence of an
intoxicant that impairs driving ability, including alcohol, an
illegal drug, or a controlled substance; or
(iii) while engaged in commission of a
crime other than a traffic infraction;
(B) to carry persons or property for hire;
(C) to push or tow anything;
(D) for driver’s training;
(E) to engage in a speed contest; or
(F) outside the continental United States,
unless the rental agreement specifically authorizes the use; or
(3) the rental company entered into the rental
transaction based on fraudulent information supplied by the renter.
(V.A.C.S. Art. 9026c, Sec. 2(b).)
[Sections 91.057-91.100 reserved for expansion]
SUBCHAPTER C. ENFORCEMENT PROVISIONS
Sec. 91.101. CIVIL PENALTY. A rental company that violates
this chapter is liable for a civil penalty in an amount of not less
than $500 or more than $1,000 for each act of violation. (V.A.C.S.
Art. 9026c, Sec. 6(a).)
Sec. 91.102. INJUNCTION. A person injured or threatened
with injury by a violation of this chapter may seek injunctive
relief against the person committing or threatening to commit the
violation. (V.A.C.S. Art. 9026c, Sec. 6(c).)
Sec. 91.103. SUIT FOR CIVIL PENALTY OR INJUNCTIVE RELIEF.
The attorney general or a county or district attorney may bring an
action in the name of the state for a civil penalty under Section
91.101, injunctive relief under Section 91.102, or both. (V.A.C.S.
Art. 9026c, Sec. 6(b).)
CHAPTER 92. RENTAL-PURCHASE AGREEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 92.001. DEFINITIONS
Sec. 92.002. ADVERTISEMENT REQUIREMENTS
[Sections 92.003-92.050 reserved for expansion]
SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS
Sec. 92.051. FORM OF AGREEMENT
Sec. 92.052. REQUIRED DISCLOSURES
Sec. 92.053. OTHER REQUIRED PROVISIONS
Sec. 92.054. PROHIBITED PROVISIONS
Sec. 92.055. RESTRICTIONS ON LATE CHARGES AND
REINSTATEMENT FEES
[Sections 92.056-92.100 reserved for expansion]
SUBCHAPTER C. REPOSSESSION AND REINSTATEMENT
Sec. 92.101. MERCHANT’S REPOSSESSION RIGHT
Sec. 92.102. EFFECT OF REPOSSESSION DURING
REINSTATEMENT PERIOD
Sec. 92.103. EFFECT ON REINSTATEMENT PERIOD OF
MERCHANDISE RETURN
Sec. 92.104. MERCHANT’S DUTIES ON REINSTATEMENT
[Sections 92.105-92.150 reserved for expansion]
SUBCHAPTER D. LOSS DAMAGE WAIVERS
Sec. 92.151. CONTRACT FOR WAIVER
Sec. 92.152. CHARGE FOR WAIVER
Sec. 92.153. RESTRICTIONS ON MERCHANT CONCERNING
WAIVER
Sec. 92.154. REQUIRED NOTICE IN WAIVER
Sec. 92.155. STATEMENT OF TOTAL CHARGE
Sec. 92.156. AUTHORIZED EXCLUSIONS
Sec. 92.157. RELATIONSHIP TO INSURANCE
Sec. 92.158. RULES FOR REVIEW OF CERTAIN CONTRACTS
Sec. 92.159. FEES
Sec. 92.160. ADMINISTRATIVE ENFORCEMENT OF SUBCHAPTER
[Sections 92.161-92.200 reserved for expansion]
SUBCHAPTER E. CIVIL ENFORCEMENT
Sec. 92.201. ACTION FOR VIOLATION OF CHAPTER
Sec. 92.202. DECEPTIVE TRADE PRACTICE
CHAPTER 92. RENTAL-PURCHASE AGREEMENTS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 92.001. DEFINITIONS. In this chapter:
(1) “Advertisement” means a commercial message in any
medium that directly or indirectly promotes or assists a
rental-purchase agreement.
(2) “Commission” means the Texas Commission of
Licensing and Regulation.
(3) “Consumer” means an individual who leases personal
property under a rental-purchase agreement.
(4) “Department” means the Texas Department of
Licensing and Regulation.
(5) “Loss damage waiver” means a merchant’s agreement
to not hold a consumer liable for loss from all or part of any damage
to merchandise.
(6) “Merchandise” means the personal property that is
the subject of a rental-purchase agreement.
(7) “Merchant” means a person who, in the ordinary
course of business, regularly leases, offers to lease, or arranges
for the leasing of merchandise under a rental-purchase agreement.
The term includes a person who is assigned an interest in a
rental-purchase agreement.
(8) “Rental-purchase agreement” means an agreement
under which a consumer may use merchandise for personal, family, or
household purposes for an initial period of four months or less, and
that:
(A) is automatically renewable with each payment
after the initial period; and
(B) permits the consumer to become the owner of
the merchandise. (Bus. & Com. Code, Secs. 35.71(1), (3), (3-a),
(4), (5), (6), 35.722(a).)
Sec. 92.002. ADVERTISEMENT REQUIREMENTS. An advertisement
for a rental-purchase agreement that refers to or states the amount
of a payment or the right to acquire ownership of any one particular
item under the agreement must clearly and conspicuously state:
(1) that the transaction advertised is a
rental-purchase agreement;
(2) the total amount and number of payments necessary
to acquire ownership; and
(3) that the consumer does not acquire ownership
rights unless the merchandise is rented for a specified number of
payment periods. (Bus. & Com. Code, Sec. 35.73.)
[Sections 92.003-92.050 reserved for expansion]
SUBCHAPTER B. FORM AND CONTENT OF AGREEMENTS
Sec. 92.051. FORM OF AGREEMENT. (a) A rental-purchase
agreement must be written in:
(1) plain English; and
(2) any other language used by the merchant in an
advertisement related to the agreement.
(b) A numerical amount included in a rental-purchase
agreement must be stated in figures.
(c) A disclosure required by this chapter must be printed or
typed in each rental-purchase agreement in a size equal to at least
10-point boldfaced type.
(d) The attorney general shall provide a form agreement that
may be used to satisfy the requirements of a rental-purchase
agreement under this chapter. (Bus. & Com. Code, Secs. 35.72(a),
(b).)
Sec. 92.052. REQUIRED DISCLOSURES. (a) A rental-purchase
agreement must disclose:
(1) whether the merchandise is new or used;
(2) the price for which the merchant would have sold
the merchandise to the consumer for cash on the date of the
agreement;
(3) the amount and timing of payments;
(4) the total number of payments necessary and the
total amount to be paid to acquire ownership of the merchandise;
(5) that the consumer does not acquire ownership
rights unless the consumer complies with the ownership terms of the
agreement;
(6) the amount and purpose of any payment, charge, or
fee in addition to the regular periodic payments; and
(7) whether the consumer is liable for loss or damage
to the merchandise and, if so, the maximum amount for which the
consumer may be liable.
(b) Notice of the right to reinstate the agreement must be
disclosed in the agreement. (Bus. & Com. Code, Secs. 35.71(2),
35.72(f) (part), (g).)
Sec. 92.053. OTHER REQUIRED PROVISIONS. A rental-purchase
agreement must provide that:
(1) any charge in addition to periodic payments must
be reasonably related to the service performed; and
(2) a consumer who fails to make a timely payment may
reinstate an agreement, without losing any right or option
previously acquired, by taking the required action before the later
of:
(A) one week after the due date of the payment; or
(B) the number of days after the due date of the
payment that is equal to half the number of days in a regular
payment period. (Bus. & Com. Code, Sec. 35.72(e).)
Sec. 92.054. PROHIBITED PROVISIONS. (a) A rental-purchase
agreement may not:
(1) require a consumer to:
(A) pay a late charge or reinstatement fee except
as provided by Section 92.055(b);
(B) make a payment at the end of the scheduled
rental-purchase term in excess of or in addition to a regular
periodic payment to acquire ownership of the merchandise; or
(C) purchase insurance or a loss damage waiver
from the merchant to cover the merchandise;
(2) require a confession of judgment;
(3) authorize a merchant or an agent of the merchant to
commit a breach of the peace in repossessing merchandise; or
(4) waive a defense, counterclaim, or right the
consumer may have against the merchant or an agent of the merchant.
(b) A consumer may not in any event be required to pay a sum
greater than the total amount to be paid to acquire ownership of the
merchandise as disclosed under Section 92.052(a)(4). (Bus. & Com.
Code, Sec. 35.72(c) (part).)
Sec. 92.055. RESTRICTIONS ON LATE CHARGES AND REINSTATEMENT
FEES. (a) Only one late charge or reinstatement fee may be
collected on a payment regardless of the period during which the
payment remains in default.

(b) A rental-purchase agreement may require the consumer to
pay a late charge or reinstatement fee only if:
(1) a periodic payment is delinquent for more than:
(A) seven days, if the payment is due monthly; or
(B) three days, if the payment is due more
frequently than monthly; and
(2) the charge or fee is in an amount not less than $5
and not more than the lesser of:
(A) $10; or
(B) 10 percent of the delinquent payment. (Bus. &
Com. Code, Secs. 35.72(c) (part), (d).)
[Sections 92.056-92.100 reserved for expansion]
SUBCHAPTER C. REPOSSESSION AND REINSTATEMENT
Sec. 92.101. MERCHANT’S REPOSSESSION RIGHT. This chapter
does not prevent a merchant from attempting repossession of
merchandise during the reinstatement period. (Bus. & Com. Code,
Sec. 35.72(f) (part).)
Sec. 92.102. EFFECT OF REPOSSESSION DURING REINSTATEMENT
PERIOD. A consumer’s right to reinstate a rental-purchase
agreement is not affected by the merchant’s repossession of the
merchandise during the reinstatement period. (Bus. & Com. Code,
Sec. 35.72(f) (part).)
Sec. 92.103. EFFECT ON REINSTATEMENT PERIOD OF MERCHANDISE
RETURN. If merchandise is returned during the applicable
reinstatement period, other than through judicial process, the
right to reinstate the rental-purchase agreement is extended for a
period of not less than 30 days after the date of return. (Bus. &
Com. Code, Sec. 35.72(f) (part).)
Sec. 92.104. MERCHANT’S DUTIES ON REINSTATEMENT. (a) On
reinstatement, the merchant shall provide the consumer with:
(1) the same merchandise; or
(2) substitute merchandise of comparable quality and
condition.
(b) A merchant who provides the consumer with substitute
merchandise shall also provide the consumer with the disclosures
required by Section 92.052(a). (Bus. & Com. Code, Sec. 35.72(f)
(part).)
[Sections 92.105-92.150 reserved for expansion]
SUBCHAPTER D. LOSS DAMAGE WAIVERS
Sec. 92.151. CONTRACT FOR WAIVER. In addition to other
charges permitted by this chapter, a consumer may contract for a
loss damage waiver. (Bus. & Com. Code, Sec. 35.721(a) (part).)
Sec. 92.152. CHARGE FOR WAIVER. A merchant may charge a
periodic fee for a loss damage waiver in an amount not to exceed 10
percent of the periodic rental payment. (Bus. & Com. Code, Sec.
35.721(e).)
Sec. 92.153. RESTRICTIONS ON MERCHANT CONCERNING WAIVER. A
merchant may not:
(1) sell a loss damage waiver unless:
(A) the department has approved the form of the
contract containing the waiver; and
(B) the consumer agrees to the waiver in writing;
or
(2) impose or require the purchase of a loss damage
waiver as a mandatory charge. (Bus. & Com. Code, Secs. 35.721(b),
(g).)
Sec. 92.154. REQUIRED NOTICE IN WAIVER. A contract that
offers a loss damage waiver must include the following notice:
“This contract offers an optional loss damage waiver for an
additional charge to cover your responsibility for loss of or
damage to the merchandise. You do not have to purchase this
coverage. Before deciding whether or not to purchase this
loss damage waiver, you may consider whether your homeowners’
or casualty insurance policy affords you coverage for loss of
or damage to rental merchandise and the amount of the
deductible you would pay under your policy.”
(Bus. & Com. Code, Sec. 35.721(f).)
Sec. 92.155. STATEMENT OF TOTAL CHARGE. A loss damage
waiver agreement must include a statement of the total charge for
the loss damage waiver. (Bus. & Com. Code, Sec. 35.721(d).)
Sec. 92.156. AUTHORIZED EXCLUSIONS. A loss damage waiver
may exclude:
(1) loss or damage to the merchandise that is caused by
an unexplained disappearance or abandonment of the merchandise;
(2) damage that is intentionally caused by the
consumer; or
(3) damage that results from the consumer’s wilful or
wanton misconduct. (Bus. & Com. Code, Sec. 35.721(c).)
Sec. 92.157. RELATIONSHIP TO INSURANCE. A loss damage
waiver is not insurance. (Bus. & Com. Code, Sec. 35.721(a) (part).)
Sec. 92.158. RULES FOR REVIEW OF CERTAIN CONTRACTS. The
commission by rule shall provide the method for annually submitting
to the department for review any contract, including any amendment
to a contract, that contains a loss damage waiver. (Bus. & Com.
Code, Sec. 35.721(h) (part).)
Sec. 92.159. FEES. The commission by rule shall set a
reasonable fee to be paid by a merchant for:
(1) the review of a contract form under Section
92.158; and
(2) the administration of this chapter by the
department. (Bus. & Com. Code, Sec. 35.721(h) (part).)
Sec. 92.160. ADMINISTRATIVE ENFORCEMENT OF SUBCHAPTER. (a)
The department shall enforce this subchapter and, as necessary, may
investigate a merchant who has one or more contracts that include a
loss damage waiver.
(b) A person may file a complaint with the department
alleging a violation of this subchapter. The department shall
investigate the alleged violation on receipt of the complaint and
may inspect any record relevant to the complaint.
(c) If, as a result of an investigation, the department
determines that a violation may have occurred, the commission shall
provide an opportunity for a hearing in the manner provided for a
contested case under Chapter 2001, Government Code.
(d) If, after opportunity for hearing, the commission
determines that the merchant has violated this subchapter, the
commission may:
(1) impose an administrative penalty under Chapter 51,
Occupations Code; or
(2) award the complainant damages in an amount not to
exceed the amount of the contract price for the merchandise. (Bus. &
Com. Code, Secs. 35.722(b), (c), (d), (e).)
[Sections 92.161-92.200 reserved for expansion]
SUBCHAPTER E. CIVIL ENFORCEMENT
Sec. 92.201. ACTION FOR VIOLATION OF CHAPTER. (a) A
consumer damaged by a merchant’s violation of this chapter is
entitled to recover from the merchant:
(1) actual damages;
(2) an amount equal to 25 percent of the total amount
of payments required to obtain ownership of the merchandise, except
that the amount recovered under this subdivision may not be less
than $250 or more than $1,000; and
(3) reasonable attorney’s fees and court costs.
(b) A merchant is not liable under this section for a
violation of this chapter caused by the merchant’s error if,
subject to Subsection (c), the merchant:
(1) provides the consumer written notice of the error;
and
(2) makes adjustments in the consumer’s account as
necessary to ensure:
(A) the consumer will not be required to pay an
amount in excess of the amount disclosed; and
(B) the agreement otherwise complies with this
chapter.
(c) A merchant must take action under Subsection (b) before:
(1) the 31st day after the date the merchant discovers
the error; and
(2) the merchant receives written notice of the error
from the consumer or an action under this section is filed. (Bus. &
Com. Code, Secs. 35.74(a), (b).)
Sec. 92.202. DECEPTIVE TRADE PRACTICE. A violation of this
chapter is a deceptive trade practice under Subchapter E, Chapter
17. (Bus. & Com. Code, Sec. 35.74(c).)
[Chapters 93-100 reserved for expansion]
SUBTITLE C. BUSINESS OPERATIONS
CHAPTER 101. INTERNATIONAL MATCHMAKING ORGANIZATIONS
Sec. 101.001. DEFINITIONS
Sec. 101.002. PROVIDING CRIMINAL HISTORY, MARITAL
HISTORY, AND BASIC RIGHTS INFORMATION
Sec. 101.003. PROVIDING ADDITIONAL CRIMINAL HISTORY,
MARITAL HISTORY, AND BASIC RIGHTS
INFORMATION
Sec. 101.004. OBTAINING CRIMINAL HISTORY RECORD
INFORMATION AND MARITAL HISTORY
INFORMATION
Sec. 101.005. CIVIL PENALTY
CHAPTER 101. INTERNATIONAL MATCHMAKING ORGANIZATIONS
Sec. 101.001. DEFINITIONS. In this chapter:
(1) “Basic rights information” means information
applicable to a noncitizen, including information about human
rights, immigration, and emergency assistance and resources.
(2) “Client” means a person who is a resident of the
United States and who contracts with an international matchmaking
organization to meet recruits.
(3) “Criminal history record information” means
criminal history record information obtained from the Department of
Public Safety under Subchapter F, Chapter 411, Government Code, and
from the Federal Bureau of Investigation under Section 411.087,
Government Code.
(4) “International matchmaking organization” means a
corporation, partnership, sole proprietorship, or other legal
entity that does business in the United States and offers to
residents of this state dating, matrimonial, or social referral
services involving recruits by:
(A) exchanging names, telephone numbers,
addresses, or statistics;
(B) selecting photographs; or
(C) providing a social environment for
introducing clients to recruits in a country other than the United
States.
(5) “Marital history information” means a declaration
of a person’s current marital status, the number of times the person
has been married, and whether any marriage occurred as a result of
receiving services from an international matchmaking organization.
(6) “Recruit” means a person who:
(A) is not a citizen or resident of the United
States; and
(B) is recruited by an international matchmaking
organization for the purpose of providing dating, matrimonial, or
social referral services. (Bus. & Com. Code, Sec. 35.121.)
Sec. 101.002. PROVIDING CRIMINAL HISTORY, MARITAL HISTORY,
AND BASIC RIGHTS INFORMATION. (a) An international matchmaking
organization shall provide each recruit with the criminal history
record information and marital history information of the
organization’s clients and with basic rights information.
(b) The information under Subsection (a) must:
(1) be in the recruit’s native language; and
(2) be displayed in a manner that:
(A) separates the criminal history record
information, the marital history information, and the basic rights
information from any other information; and
(B) is highly noticeable. (Bus. & Com. Code,
Sec. 35.122.)
Sec. 101.003. PROVIDING ADDITIONAL CRIMINAL HISTORY,
MARITAL HISTORY, AND BASIC RIGHTS INFORMATION. (a) An
international matchmaking organization shall disseminate to a
recruit the criminal history record information and marital history
information of a client and the basic rights information not later
than the 30th day after the date the organization receives the
criminal history record information and the marital history
information from the client.
(b) The international matchmaking organization shall
provide the information to the recruit in the recruit’s native
language. The organization shall pay the costs incurred to
translate the information. (Bus. & Com. Code, Sec. 35.123.)
Sec. 101.004. OBTAINING CRIMINAL HISTORY RECORD
INFORMATION AND MARITAL HISTORY INFORMATION. (a) A client shall:
(1) obtain a copy of the client’s own criminal history
record information;
(2) provide the criminal history record information to
the international matchmaking organization; and
(3) provide the client’s own marital history
information to the international matchmaking organization.
(b) The international matchmaking organization shall
require the client to affirm that the marital history information
is complete and accurate and includes information regarding
marriages, annulments, and dissolutions that occurred in another
state or a foreign country.
(c) The international matchmaking organization may not
provide any further services to the client or the recruit until the
organization has:
(1) obtained the requested criminal history record
information and marital history information; and
(2) provided the information to the recruit. (Bus. &
Com. Code, Sec. 35.124.)
Sec. 101.005. CIVIL PENALTY. (a) An international
matchmaking organization that violates this chapter is subject to a
civil penalty not to exceed $20,000 for each violation.
(b) In determining the amount of the civil penalty, the
court shall consider:
(1) any previous violations of this chapter by the
international matchmaking organization;
(2) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the violation;
(3) the demonstrated good faith of the international
matchmaking organization; and
(4) the amount necessary to deter future violations.
(c) The attorney general or the appropriate district or
county attorney may bring an action under this section in the name
of the state in a district court in:
(1) Travis County; or
(2) a county in which any part of the violation occurs.
(d) A penalty collected under this section by the attorney
general or a district or county attorney shall be deposited in the
state treasury to the credit of the compensation to victims of crime
fund under Article 56.54, Code of Criminal Procedure. (Bus. & Com.
Code, Sec. 35.125.)
CHAPTER 102. SEXUALLY ORIENTED BUSINESSES
Sec. 102.001. DEFINITIONS
Sec. 102.002. PROHIBITION ON CERTAIN ACTIVITIES BY SEX
OFFENDER IN RELATION TO BUSINESS
Sec. 102.003. PROHIBITION ON CERTAIN ACTIVITIES BY
BUSINESS IN RELATION TO SEX OFFENDER
Sec. 102.004. INJUNCTION OR OTHER RELIEF
Sec. 102.005. CRIMINAL PENALTIES
CHAPTER 102. SEXUALLY ORIENTED BUSINESSES
Sec. 102.001. DEFINITIONS. In this chapter:
(1) “Sex offender” means a person who has been
convicted of or placed on deferred adjudication for an offense for
which a person is subject to registration under Chapter 62, Code of
Criminal Procedure.
(2) “Sexually oriented business” has the meaning
assigned by Section 243.002, Local Government Code. (Bus. & Com.
Code, Sec. 47.001.)
Sec. 102.002. PROHIBITION ON CERTAIN ACTIVITIES BY SEX
OFFENDER IN RELATION TO BUSINESS. A sex offender may not:
(1) wholly or partly own a sexually oriented business;
or
(2) serve as a director, officer, operator, manager,
or employee of a sexually oriented business. (Bus. & Com. Code,
Sec. 47.002(a).)
Sec. 102.003. PROHIBITION ON CERTAIN ACTIVITIES BY BUSINESS
IN RELATION TO SEX OFFENDER. If a sexually oriented business knows
that a person is a sex offender, the business may not:
(1) contract with that person to operate or manage the
business as an independent contractor; or
(2) employ that person as an officer, operator,
manager, or other employee. (Bus. & Com. Code, Sec. 47.002(b).)
Sec. 102.004. INJUNCTION OR OTHER RELIEF. (a) The attorney
general or appropriate district or county attorney, in the name of
the state, may bring an action for an injunction or other process
against a person who violates or threatens to violate Section
102.002 or 102.003.
(b) The action may be brought in a district court in:
(1) Travis County; or
(2) a county in which any part of the violation or
threatened violation occurs.
(c) The court may grant any prohibitory or mandatory relief
warranted by the facts, including a temporary restraining order,
temporary injunction, or permanent injunction. (Bus. & Com. Code,
Sec. 47.003.)
Sec. 102.005. CRIMINAL PENALTIES. (a) A sex offender
commits an offense if the sex offender violates Section 102.002.
(b) A sexually oriented business commits an offense if the
business violates Section 102.003.
(c) An offense under this section is a Class A misdemeanor.
(Bus. & Com. Code, Sec. 47.004.)
CHAPTER 103. APPRAISALS IMPROPERLY INDUCED BY MORTGAGE LENDERS
Sec. 103.001. DEFINITIONS
Sec. 103.002. CRIMINAL PENALTY
CHAPTER 103. APPRAISALS IMPROPERLY INDUCED BY MORTGAGE LENDERS
Sec. 103.001. DEFINITIONS. In this chapter:
(1) “Lender” means a person who lends money for or
invests money in mortgage loans.
(2) “Mortgage loan” means a loan secured by a deed of
trust, security deed, or other lien on real property. (Bus. & Com.
Code, Sec. 35.56(a).)
Sec. 103.002. CRIMINAL PENALTY. (a) A lender commits an
offense if in connection with a mortgage loan transaction the
lender pays or offers to pay a person, including an individual
licensed or certified by the Texas Appraiser Licensing and
Certification Board or the Texas Real Estate Commission, a fee or
other consideration for appraisal services and the payment:
(1) is contingent on a minimum, maximum, or pre-agreed
estimate of value of property securing the loan; and
(2) interferes with the person’s ability or obligation
to provide an independent and impartial opinion of the property’s
value.
(b) An offense under this section is a Class A misdemeanor.
(c) An instruction a lender gives to a real estate appraiser
regarding a legal or other regulatory requirement for the appraisal
of property, or any other communication between a lender or real
estate appraiser necessary or appropriate under a law, regulation,
or underwriting standard applicable to a real estate appraisal,
does not constitute interference by a lender for purposes of
Subsection (a)(2). (Bus. & Com. Code, Secs. 35.56(b), (c), (d).)
CHAPTER 104. RESTRICTIONS ON CHARGES BY MOTOR FUEL FRANCHISORS
Sec. 104.001. DEFINITIONS
Sec. 104.002. PROHIBITED FEES, CHARGES, AND DISCOUNTS
Sec. 104.003. CIVIL ACTION
CHAPTER 104. RESTRICTIONS ON CHARGES BY MOTOR FUEL FRANCHISORS
Sec. 104.001. DEFINITIONS. In this chapter:
(1) “Franchise”:
(A) includes:
(i) a contract under which a distributor or
retailer is authorized to occupy marketing premises in connection
with the sale, consignment, or distribution of motor fuel under a
trademark owned or controlled by a franchisor-refiner or by a
refiner who supplies motor fuel to a distributor who authorizes the
occupancy;
(ii) a contract relating to the supply of
motor fuel to be sold, consigned, or distributed under a trademark
owned or controlled by a refiner; and
(iii) the unexpired portion of any
franchise transferred or assigned under the franchise provisions or
any applicable provision of state or federal law authorizing the
transfer or assignment regardless of the franchise provisions; and
(B) does not include a contract:
(i) that is made in the distribution of
motor fuels through a card-lock or key-operated pumping system; and
(ii) to which a refiner or producer of the
motor fuel is not a party.
(2) “Franchisee” means a distributor or retailer who
is authorized under a franchise to use a trademark in connection
with the sale, consignment, or distribution of motor fuel.
(3) “Franchisor” means a refiner or distributor who
authorizes under a franchise the use of a trademark in connection
with the sale, consignment, or distribution of motor fuel.
(4) “Motor fuel” includes diesel fuel and gasoline:
(A) delivered to a service station by a
franchisor; and
(B) usable as a propellant of a motor vehicle.
(V.A.C.S. Art. 8612, Secs. 1(1), (2), (3), (5).)
Sec. 104.002. PROHIBITED FEES, CHARGES, AND DISCOUNTS. (a)
For purposes of this section, wholesale price is computed by adding
to the invoice price or purchase price per gallon charged to a
franchisee who buys motor fuel any excise tax paid by the buyer and
any reasonable freight charges paid by the buyer, and subtracting
that portion of any refund, rebate, or subsidy not designed to
offset the fee, charge, or discount described by this section.
(b) Except as provided by Subsection (c), a franchisor may
not require a franchisee to pay to the franchisor a fee, charge, or
discount for:
(1) honoring a credit card issued by the franchisor;
or
(2) submitting to the franchisor, for payment or
credit to the franchisee’s account, documents or other evidence of
indebtedness of the holder of a credit card issued by the
franchisor.
(c) A franchisor may require a franchisee to pay the fee,
charge, or discount if the franchisor, in consideration of
competitive prices in the relevant market, has adjusted the
wholesale prices charged or rebates credited to franchisees for
motor fuel by amounts that on average for franchisees in this state
substantially offset the fee, charge, or discount. (V.A.C.S. Art.
8612, Secs. 1(4), 2.)
Sec. 104.003. CIVIL ACTION. (a) A franchisee may bring a
civil action against a franchisor who violates Section 104.002,
without regard to the amount in controversy, in the district court
in any county in which the franchisor or franchisee transacts
business. An action under this section must be commenced and
prosecuted not later than the second anniversary of the date the
cause of action accrues against the franchisor.
(b) The court shall award to a franchisee who prevails in an
action under this section:
(1) the amount of actual damages;
(2) equitable relief as determined by the court to be
necessary to remedy the effects of the franchisor’s violation of
Section 104.002, including a declaratory judgment, permanent
injunctive relief, and temporary injunctive relief; and
(3) court costs and attorney’s fees that are
reasonable in relation to the amount of work expended.
(c) In addition to the remedies provided under Subsection
(b), on finding that the defendant wilfully and knowingly committed
the violation, the trier of fact shall award not more than three
times the amount of actual damages.
(d) In an action under this section, the franchisor has the
burden of establishing the offset described by Section 104.002 as
an affirmative defense. (V.A.C.S. Art. 8612, Sec. 3.)
CHAPTER 105. REFUELING SERVICES FOR PERSONS WITH DISABILITIES
Sec. 105.001. DEFINITIONS
Sec. 105.002. APPLICABILITY OF CHAPTER
Sec. 105.003. REFUELING SERVICES
Sec. 105.004. NOTICE
Sec. 105.005. OFFENSE; PENALTY
Sec. 105.006. ENFORCEMENT
CHAPTER 105. REFUELING SERVICES FOR PERSONS WITH DISABILITIES
Sec. 105.001. DEFINITIONS. (a) In this chapter:
(1) “Refueling service” means the service of pumping
motor vehicle fuel into the fuel tank of a motor vehicle.
(2) “Service station” means a gasoline service station
or other facility that offers gasoline or other motor vehicle fuel
for sale to the public from the facility.
(b) In this chapter, with respect to the operation of a
service station, “person” means an individual, firm, partnership,
association, trustee, or corporation. (V.A.C.S. Art. 8613, Sec. 1;
New.)
Sec. 105.002. APPLICABILITY OF CHAPTER. (a) This chapter
applies to a service station that ordinarily provides pump island
service, except that such a service station is not required to
provide refueling service under this chapter during any regularly
scheduled hours during which, for security reasons, the service
station does not provide pump island service.
(b) This chapter does not apply to:
(1) a service station or other facility that:
(A) never provides pump island service; and
(B) has only remotely controlled pumps; or
(2) a refueling service used to provide liquefied gas,
as defined by Section 162.001, Tax Code. (V.A.C.S. Art. 8613, Sec.
3.)
Sec. 105.003. REFUELING SERVICES. (a) A person who
operates a service station shall provide, on request, refueling
service to a person with a disability who is the driver of a vehicle
and displays:
(1) a license plate issued under Section 504.201 or
504.203, Transportation Code; or
(2) a disabled parking placard issued under Section
681.004, Transportation Code.
(b) The price charged for motor vehicle fuel provided under
Subsection (a) may not exceed the price the service station would
otherwise generally charge the public for the purchase of motor
vehicle fuel without refueling service. (V.A.C.S. Art. 8613, Sec.
2.)
Sec. 105.004. NOTICE. (a) The Department of Agriculture
shall provide a notice that states the provisions of this chapter to
each person who operates a service station.
(b) The Texas Department of Transportation shall provide a
notice that states the provisions of this chapter to each person
with a disability who is issued:
(1) license plates under Section 504.201,
Transportation Code; or
(2) a disabled parking placard under Section 681.004,
Transportation Code. (V.A.C.S. Art. 8613, Sec. 4.)
Sec. 105.005. OFFENSE; PENALTY. (a) A person commits an
offense if the person violates Section 105.003 and the person is:
(1) a manager responsible for setting the service
policy of a service station subject to this chapter; or
(2) an employee acting independently against the
established service policy of the service station.
(b) An offense under this section is a Class C misdemeanor.
(V.A.C.S. Art. 8613, Sec. 5.)
Sec. 105.006. ENFORCEMENT. In addition to enforcement by
the prosecuting attorney who represents the state, this chapter may
be enforced by the attorney general. (V.A.C.S. Art. 8613, Sec. 6.)
TITLE 6. SALE OR TRANSFER OF GOODS
CHAPTER 201. SALE OF ITEMS AT FLEA MARKETS
Sec. 201.001. DEFINITION
Sec. 201.002. INAPPLICABILITY OF CHAPTER TO CERTAIN
ITEMS
Sec. 201.003. SALE OF CERTAIN ITEMS PROHIBITED
Sec. 201.004. FRAUDULENT AUTHORIZATION FOR SALE OF
CERTAIN ITEMS AT RETAIL
Sec. 201.005. PROVISION OF BOOTH OR SIMILAR SPACE NOT
AN OFFENSE
Sec. 201.006. INVESTIGATION RECORDS REQUIRED
CHAPTER 201. SALE OF ITEMS AT FLEA MARKETS
Sec. 201.001. DEFINITION. In this chapter, “flea market”
means a location at which booths or similar spaces are rented or
otherwise made temporarily available to two or more persons and at
which the persons offer tangible personal property for sale. (Bus. &
Com. Code, Sec. 35.55(a).)
Sec. 201.002. INAPPLICABILITY OF CHAPTER TO CERTAIN ITEMS.
This chapter does not apply to the sale or offer for sale of a
nutritional supplement or vitamin. (Bus. & Com. Code, Sec.
35.55(h).)
Sec. 201.003. SALE OF CERTAIN ITEMS PROHIBITED. (a) A
person commits an offense if the person sells or offers for sale at
a flea market:
(1) infant formula or baby food of a type usually
consumed by children younger than two years of age;
(2) a drug, as defined by Section 431.002, Health and
Safety Code; or
(3) contact lenses, including disposable contact
lenses.
(b) It is a defense to prosecution under this section that
the person selling the item:
(1) is authorized in writing to sell the item at retail
by the manufacturer of the item or the manufacturer’s authorized
distributor and the authorization states the person’s name; and
(2) provides the authorization for examination by any
person at the flea market who requests to see the authorization.
(c) It is a defense to prosecution under this section that
only a sample of the item or a catalog or brochure displaying the
item was available at the flea market and the item sold was not
delivered to the buyer at the flea market.
(d) An offense under this section is a misdemeanor
punishable by a fine not to exceed $100.
(e) The penalty provided by this section is in addition to
any other sanction provided by law. (Bus. & Com. Code, Secs.
35.55(b), (d), (f).)
Sec. 201.004. FRAUDULENT AUTHORIZATION FOR SALE OF CERTAIN
ITEMS AT RETAIL. (a) A person commits an offense if the person
provides to another person an authorization under Section
201.003(b) and:
(1) the authorization is forged or contains a false
statement; or
(2) the person displaying the authorization obtained
the authorization by fraud.
(b) An offense under this section is a misdemeanor
punishable by a fine not to exceed $100. (Bus. & Com. Code, Secs.
35.55(e), (f).)
Sec. 201.005. PROVISION OF BOOTH OR SIMILAR SPACE NOT AN
OFFENSE. A person does not commit an offense under this chapter
solely because the person provides booths or similar spaces at a
flea market. (Bus. & Com. Code, Sec. 35.55(c).)
Sec. 201.006. INVESTIGATION RECORDS REQUIRED. A law
enforcement agency investigating a violation of this chapter shall
maintain a record of the investigation. The record is public
information. (Bus. & Com. Code, Sec. 35.55(g).)
CHAPTER 202. SALES OF MOTOR VEHICLES WITH STOPLAMP COVERINGS
Sec. 202.001. SALE OF MOTOR VEHICLE WITH CERTAIN
STOPLAMP COVERING PROHIBITED
CHAPTER 202. SALES OF MOTOR VEHICLES WITH STOPLAMP COVERINGS
Sec. 202.001. SALE OF MOTOR VEHICLE WITH CERTAIN STOPLAMP
COVERING PROHIBITED. (a) In this section, “motor vehicle” has the
meaning assigned by Section 541.201, Transportation Code.
(b) A person in the business of selling motor vehicles may
not sell a motor vehicle with a transparent or semitransparent
covering:
(1) placed over a stoplamp that is mounted on the rear
center line of the vehicle either in or on the rear window or within
six inches from the rear window of the vehicle for the purpose of
emitting light when the vehicle’s brakes are applied; and
(2) on which is impressed or imprinted a name, trade
name, logotype, or other message that a person behind the vehicle
can read when the stoplamp is illuminated.
(c) A person who violates this section commits an offense.
An offense under this section is a Class C misdemeanor. (Bus. &
Com. Code, Sec. 35.46.)
CHAPTER 203. EXPORTING ARTICLES WITHOUT INSPECTION
Sec. 203.001. CRIMINAL PENALTY FOR EXPORTING ARTICLES
WITHOUT REQUIRED INSPECTION
CHAPTER 203. EXPORTING ARTICLES WITHOUT INSPECTION
Sec. 203.001. CRIMINAL PENALTY FOR EXPORTING ARTICLES
WITHOUT REQUIRED INSPECTION. (a) A person commits an offense if
the person:
(1) exports from this state, or ships for the purpose
of exportation to a state other than this state or to a foreign
port, an article of commerce that by law of this state is required
to be inspected by a public inspector; and
(2) does not have the article inspected as required by
law.
(b) An offense under this section is a misdemeanor
punishable by a fine not to exceed $100. (Bus. & Com. Code, Sec.
35.57.)
TITLE 7. RECEIPTS, DOCUMENTS OF TITLE, AND OTHER INSTRUMENTS
CHAPTER 251. WAREHOUSE RECEIPTS
Sec. 251.001. DEFINITIONS
Sec. 251.002. WAREHOUSEMAN ISSUING FRAUDULENT WAREHOUSE
RECEIPT
Sec. 251.003. WAREHOUSEMAN FAILING TO STATE
WAREHOUSEMAN’S OWNERSHIP OF GOODS ON
RECEIPT
Sec. 251.004. WAREHOUSEMAN ISSUING WAREHOUSE RECEIPT
WITHOUT CONTROL OF GOODS
Sec. 251.005. WAREHOUSEMAN ISSUING DUPLICATE OR
ADDITIONAL WAREHOUSE RECEIPT
Sec. 251.006. WAREHOUSEMAN WRONGFULLY DELIVERING GOODS
Sec. 251.007. FAILURE TO DISCLOSE LACK OF OWNERSHIP OF
GOODS
Sec. 251.008. FAILURE TO DISCLOSE EXISTENCE OF LIEN ON
GOODS
CHAPTER 251. WAREHOUSE RECEIPTS
Sec. 251.001. DEFINITIONS. In this chapter:
(1) “Goods” means all things treated as movable for
purposes of a contract of storage or transportation.
(2) “Issue” includes aiding in the issuance of a
warehouse receipt.
(3) “Warehouse receipt” means a receipt issued by a
warehouseman.
(4) “Warehouseman” means a person engaged in the
business of storing goods for hire. The term includes an officer,
agent, or employee of a warehouseman. (Bus. & Com. Code, Sec.
35.27; New.)
Sec. 251.002. WAREHOUSEMAN ISSUING FRAUDULENT WAREHOUSE
RECEIPT. (a) A warehouseman may not, with intent to defraud, issue
a warehouse receipt that contains a false statement.
(b) A warehouseman who violates this section commits an
offense. An offense under this section is a misdemeanor punishable
by:
(1) confinement in the county jail for a term of not
more than one year;
(2) a fine not to exceed $1,000; or
(3) both the fine and confinement. (Bus. & Com. Code,
Sec. 35.28.)
Sec. 251.003. WAREHOUSEMAN FAILING TO STATE WAREHOUSEMAN’S
OWNERSHIP OF GOODS ON RECEIPT. (a) A warehouseman may not
knowingly issue a negotiable warehouse receipt describing goods the
warehouseman owns, whether solely, jointly, or in common, and is
storing, unless the warehouseman states the warehouseman’s
ownership of the goods on the receipt.
(b) A warehouseman who violates this section commits an
offense. An offense under this section is a misdemeanor punishable
by:
(1) confinement in the county jail for a term of not
more than one year; or
(2) a fine not to exceed $1,000. (Bus. & Com. Code,
Sec. 35.29.)
Sec. 251.004. WAREHOUSEMAN ISSUING WAREHOUSE RECEIPT
WITHOUT CONTROL OF GOODS. (a) A warehouseman may not issue a
warehouse receipt for goods if the warehouseman knows at the time of
issuance that the goods described in the receipt are not under the
warehouseman’s control.
(b) A warehouseman who violates this section commits an
offense. An offense under this section is a felony punishable by:
(1) imprisonment in the Texas Department of Criminal
Justice for a term of not more than five years;
(2) a fine not to exceed $5,000; or
(3) both the fine and imprisonment. (Bus. & Com. Code,
Sec. 35.30.)
Sec. 251.005. WAREHOUSEMAN ISSUING DUPLICATE OR ADDITIONAL
WAREHOUSE RECEIPT. (a) A warehouseman may not issue a duplicate or
additional negotiable warehouse receipt for goods if the
warehouseman knows at the time of issuance that a previously issued
negotiable warehouse receipt describing the goods is outstanding
and uncanceled.
(b) This section does not apply if:
(1) the word “duplicate” is plainly placed on the
duplicate or additional negotiable warehouse receipt; or
(2) goods described in the outstanding and uncanceled
negotiable warehouse receipt were delivered under a court order on
proof that the receipt was lost or destroyed.
(c) A warehouseman who violates this section commits an
offense. An offense under this section is a felony punishable by:
(1) imprisonment in the Texas Department of Criminal
Justice for a term of not more than five years;
(2) a fine not to exceed $5,000; or
(3) both the fine and imprisonment. (Bus. & Com. Code,
Sec. 35.31.)
Sec. 251.006. WAREHOUSEMAN WRONGFULLY DELIVERING GOODS.
(a) A warehouseman may not knowingly deliver goods that are
described in a negotiable warehouse receipt and stored with the
warehouseman, unless the receipt is surrendered to the warehouseman
at or before the time the warehouseman delivers the goods.
(b) This section does not apply if the goods are:
(1) delivered under a court order on proof that the
negotiable warehouse receipt describing the goods was lost or
destroyed;
(2) lawfully sold to satisfy a warehouseman’s lien; or
(3) disposed of because of the perishable or hazardous
nature of the goods.
(c) A warehouseman who violates this section commits an
offense. An offense under this section is a misdemeanor punishable
by:
(1) confinement in the county jail for a term of not
more than one year;
(2) a fine not to exceed $1,000; or
(3) both the fine and confinement. (Bus. & Com. Code,
Sec. 35.32.)
Sec. 251.007. FAILURE TO DISCLOSE LACK OF OWNERSHIP OF
GOODS. (a) A person who obtains a negotiable warehouse receipt
describing goods the person does not own may not, with intent to
defraud, negotiate the receipt for value without disclosing the
person’s lack of ownership.
(b) A person who violates this section commits an offense.
An offense under this section is a misdemeanor punishable by:
(1) confinement in the county jail for a term of not
more than one year;
(2) a fine not to exceed $1,000; or
(3) both the fine and confinement. (Bus. & Com. Code,
Sec. 35.33 (part).)
Sec. 251.008. FAILURE TO DISCLOSE EXISTENCE OF LIEN ON
GOODS. (a) A person who obtains a negotiable warehouse receipt
describing goods subject to a lien may not, with intent to defraud,
negotiate the receipt for value without disclosing the lien’s
existence.
(b) A person who violates this section commits an offense.
An offense under this section is a misdemeanor punishable by:
(1) confinement in the county jail for a term of not
more than one year;
(2) a fine not to exceed $1,000; or
(3) both the fine and confinement. (Bus. & Com. Code,
Sec. 35.33 (part).)
CHAPTER 252. BILLS OF LADING
Sec. 252.001. DEFINITIONS
Sec. 252.002. DUTIES OF RAILROAD COMMISSION
Sec. 252.003. AGENT WRONGFULLY FAILING OR REFUSING TO
ISSUE BILL OF LADING
Sec. 252.004. AGENT ISSUING FRAUDULENT BILL OF LADING
Sec. 252.005. AGENT ISSUING ORDER BILL OF LADING IN
DUPLICATE OR SET OF PARTS
Sec. 252.006. FRAUDULENTLY INDUCING ISSUANCE OF BILL
OF LADING
Sec. 252.007. FRAUDULENTLY NEGOTIATING OR TRANSFERRING
BILL OF LADING
CHAPTER 252. BILLS OF LADING
Sec. 252.001. DEFINITIONS. In this chapter:
(1) “Agent” includes an officer, employee, or
receiver.
(2) “Bill of lading” means a document evidencing the
receipt of goods for shipment issued by a person engaged in the
business of transporting or forwarding goods. The term includes an
air consignment note, air waybill, or other document for air
transportation comparable to a bill of lading for marine or rail
transportation.
(3) “Goods” means all things treated as movable for
purposes of a contract of storage or transportation. (Bus. & Com.
Code, Sec. 35.14 (part).)
Sec. 252.002. DUTIES OF RAILROAD COMMISSION. (a) In this
section, “common carrier” does not include a pipeline company or
express company.
(b) The Railroad Commission of Texas shall:
(1) prescribe forms, terms, and conditions for
authenticating, certifying, or validating bills of lading issued by
a common carrier;
(2) regulate the manner by which a common carrier
issues bills of lading; and
(3) take other action necessary to carry out the
purposes of Chapter 7.
(c) After giving reasonable notice to interested common
carriers and to the public, the railroad commission may amend a rule
adopted under Subsection (b). (Bus. & Com. Code, Secs. 35.14
(part), 35.15.)
Sec. 252.003. AGENT WRONGFULLY FAILING OR REFUSING TO ISSUE
BILL OF LADING. (a) In this section, “common carrier” does not
include a pipeline company or express company.
(b) An agent of a common carrier may not after lawful demand
fail or refuse to issue a bill of lading in accordance with Chapter
7 or a rule of the railroad commission.
(c) An agent who violates this section commits an offense.
An offense under this section is a misdemeanor punishable by:
(1) confinement in the county jail for a term of not
more than six months;
(2) a fine not to exceed $200; or
(3) both the fine and confinement. (Bus. & Com. Code,
Secs. 35.14 (part), 35.16.)
Sec. 252.004. AGENT ISSUING FRAUDULENT BILL OF LADING. (a)
In this section, “common carrier” does not include a pipeline
company or express company.
(b) An agent of a common carrier may not with intent to
defraud a person:
(1) issue a bill of lading;
(2) incorrectly describe goods or the quantity of
goods in a bill of lading; or
(3) issue a bill of lading without authority.
(c) An agent who violates this section commits an offense.
An offense under this section is a felony punishable by
imprisonment in the Texas Department of Criminal Justice for a term
of not more than 10 years or less than two years. (Bus. & Com. Code,
Secs. 35.14 (part), 35.17.)
Sec. 252.005. AGENT ISSUING ORDER BILL OF LADING IN
DUPLICATE OR SET OF PARTS. (a) Except where customary in overseas
transportation, an agent of a common carrier may not knowingly
issue or aid in issuing an order bill of lading in duplicate or in a
set of parts.
(b) An agent who violates this section commits an offense.
An offense under this section is a felony punishable by:
(1) imprisonment in the Texas Department of Criminal
Justice for a term of not more than five years; and
(2) a fine not to exceed $5,000. (Bus. & Com. Code,
Sec. 35.18.)
Sec. 252.006. FRAUDULENTLY INDUCING ISSUANCE OF BILL OF
LADING. (a) A person may not, with intent to defraud, induce an
agent of a common carrier to:
(1) issue to the person a bill of lading; or
(2) materially misrepresent in a bill of lading issued
on behalf of the common carrier the quantity of goods described in
the bill of lading.
(b) A person who violates this section commits an offense.
An offense under this section is a felony punishable by
imprisonment in the Texas Department of Criminal Justice for a term
of not more than five years or less than two years. (Bus. & Com.
Code, Sec. 35.20.)
Sec. 252.007. FRAUDULENTLY NEGOTIATING OR TRANSFERRING
BILL OF LADING. (a) A person may not, with intent to defraud,
negotiate or transfer a bill of lading that:
(1) is issued in violation of Chapter 7; or
(2) contains a false, material statement of fact.
(b) A person who violates this section commits an offense.
An offense under this section is a felony punishable by
imprisonment in the Texas Department of Criminal Justice for a term
of not more than 10 years. (Bus. & Com. Code, Sec. 35.21.)
CHAPTER 253. PROTESTED OUT-OF-STATE DRAFTS
Sec. 253.001. DAMAGES ON PROTESTED OUT-OF-STATE DRAFTS
CHAPTER 253. PROTESTED OUT-OF-STATE DRAFTS
Sec. 253.001. DAMAGES ON PROTESTED OUT-OF-STATE DRAFTS.
The holder of a protested draft is entitled to damages in an amount
equal to 10 percent of the amount of the draft, plus interest and
the costs of suit, if:
(1) the draft was drawn by a merchant in this state on
the merchant’s agent or factor outside this state; and
(2) the drawer’s or indorser’s liability on the draft
has been fixed. (Bus. & Com. Code, Sec. 35.39.)
CHAPTER 254. NOTE OR LIEN IDENTIFYING A PATENT RIGHT
Sec. 254.001. IDENTIFICATION OF PATENT RIGHT
Sec. 254.002. FAILURE TO IDENTIFY PATENT RIGHT;
CRIMINAL PENALTY
CHAPTER 254. NOTE OR LIEN IDENTIFYING A PATENT RIGHT
Sec. 254.001. IDENTIFICATION OF PATENT RIGHT. (a) A note
or lien evidencing or securing the purchase price for a patent right
or patent right territory must contain on the face of the note or
lien a statement that the note or lien was given for a patent right
or patent right territory.
(b) The statement required by Subsection (a):
(1) is notice to a subsequent purchaser of the note or
lien of all equities between the original parties to the note or
lien; and
(2) subjects a subsequent holder of the note or lien to
all defenses available against the original parties to the note or
lien. (Bus. & Com. Code, Secs. 35.40(a), (b).)
Sec. 254.002. FAILURE TO IDENTIFY PATENT RIGHT; CRIMINAL
PENALTY. (a) A person selling a patent right or patent right
territory may not take a note or lien evidencing or securing the
purchase price for the patent right or patent right territory
without placing on the face of the note or lien the statement
required by Section 254.001(a).
(b) A person who violates this section commits an offense.
An offense under this section is a misdemeanor punishable by a fine
of not less than $25 or more than $200. (Bus. & Com. Code, Secs.
35.40(c), (d).)
TITLE 8. SECURITY INSTRUMENTS
CHAPTER 261. UTILITY SECURITY INSTRUMENTS
Sec. 261.001. DEFINITIONS
Sec. 261.002. ACT CONSTITUTING FILING
Sec. 261.003. APPLICABILITY OF CHAPTER
Sec. 261.004. FILING UTILITY SECURITY INSTRUMENT WITH
SECRETARY OF STATE: PERFECTION AND
NOTICE
Sec. 261.005. DURATION OF PERFECTION AND NOTICE
Sec. 261.006. PRIORITIES AND REMEDIES APPLICABLE TO
CERTAIN PERFECTED SECURITY INTERESTS
Sec. 261.007. NOTICE OF NAME CHANGE, MERGER, OR
CONSOLIDATION
Sec. 261.008. ENDORSEMENT AND FILING BY SECRETARY OF
STATE; FEES
Sec. 261.009. CERTIFICATE OF FILING; FEE
Sec. 261.010. COPY OF FILED UTILITY SECURITY
INSTRUMENT; FEE
Sec. 261.011. NOTICE OF UTILITY SECURITY INSTRUMENT
AFFECTING REAL PROPERTY
CHAPTER 261. UTILITY SECURITY INSTRUMENTS
Sec. 261.001. DEFINITIONS. (a) In this chapter:
(1) “Utility” means a person engaged in this state in:
(A) generating, transmitting, or distributing
and selling electric power;
(B) transporting, distributing, and selling,
through a local distribution system, natural or other gas for
domestic, commercial, industrial, or other use;
(C) owning or operating a pipeline to transmit or
sell natural or other gas, natural gas liquids, crude oil, or
petroleum products to another pipeline company or to a refinery,
local distribution system, municipality, or industrial consumer;
(D) providing telephone or telegraph service to
others;
(E) producing, transmitting, or distributing and
selling steam or water;
(F) operating a railroad; or
(G) providing sewer service to others.
(2) “Utility security instrument” means:
(A) a mortgage, deed of trust, security
agreement, or other instrument executed to secure payment of a
bond, note, or other obligation of a utility; or
(B) an instrument that supplements or amends an
instrument described by Paragraph (A), including a signed copy of
the instrument.
(b) The definitions in Chapters 1 and 9 apply to this
chapter. (Bus. & Com. Code, Sec. 35.01.)
Sec. 261.002. ACT CONSTITUTING FILING. For purposes of
this chapter, a utility security instrument is filed when it is
deposited for filing with the secretary of state. (New.)
Sec. 261.003. APPLICABILITY OF CHAPTER. A utility is
subject to the requirements and entitled to the benefits of this
chapter:
(1) only if the utility files with the secretary of
state a utility security instrument that states conspicuously on
its title page: “This Instrument Grants A Security Interest By A
Utility”; and
(2) only with respect to collateral covered by a
utility security instrument filed by the utility in accordance with
Subdivision (1). (Bus. & Com. Code, Secs. 35.015(1), (2).)
Sec. 261.004. FILING UTILITY SECURITY INSTRUMENT WITH
SECRETARY OF STATE: PERFECTION AND NOTICE. (a) Subject to
Subsection (b), the filing with the secretary of state of a utility
security instrument executed by a utility and described by Section
261.003(1) and payment of the filing fee prescribed by Section
261.008:
(1) constitute perfection of a security interest
created by the instrument in any personal property:
(A) in which a security interest may be perfected
by filing under Chapter 9, including any goods that are or will
become a fixture;
(B) that is located in this state; and
(C) that was owned by the utility when the
instrument was executed or is to be acquired by the utility after
the instrument is executed; and
(2) if the instrument is proven, acknowledged, or
certified as otherwise required by law for the recording of real
property mortgages, serve as notice to all persons of the existence
of the instrument and the security interest granted by the
instrument in any real property, or in any fixture on or to be
placed on the property, that:
(A) is located in this state; and
(B) was owned by the utility when the instrument
was executed or is to be acquired by the utility after the
instrument is executed.
(b) For perfection or notice under Subsection (a) to be
effective as to a particular item of property, the filed utility
security instrument must:
(1) identify the property by type, character, or
description if the property is presently owned personal property,
including a fixture, and for that purpose any description of
personal property or real property is sufficient, regardless of
whether specific, if it reasonably identifies what is described;
(2) provide a description of the property if the
property is presently owned real property; or
(3) if the property is to be acquired after the
instrument is executed, state conspicuously on its title page:
“This Instrument Contains After-Acquired Property Provisions.”
(c) A filing under this section satisfies any requirement
of:
(1) a filing of the utility security instrument or a
financing statement in the office of a county clerk if that filing
would otherwise be necessary to perfect a security interest; and
(2) a recording of the utility security instrument in
the office of a county clerk if that recording would otherwise make
the instrument effective as to all creditors and subsequent
purchasers for valuable consideration without notice. (Bus. & Com.
Code, Secs. 35.02(a), (b), (c).)
Sec. 261.005. DURATION OF PERFECTION AND NOTICE. The
perfection and notice provided by the filing of a utility security
instrument under Section 261.004 take effect on the date of filing
and remain in effect without any renewal, refiling, or continuation
statement until the interest granted as security is released by the
filing of a termination statement, or a release of all or a part of
the property, signed by the secured party. (Bus. & Com. Code, Sec.
35.03.)
Sec. 261.006. PRIORITIES AND REMEDIES APPLICABLE TO CERTAIN
PERFECTED SECURITY INTERESTS. The provisions of Chapter 9 relating
to priorities and remedies apply to security interests in personal
property, including fixtures, perfected under Section 261.004.
(Bus. & Com. Code, Sec. 35.02(d).)
Sec. 261.007. NOTICE OF NAME CHANGE, MERGER, OR
CONSOLIDATION. (a) A utility that changes its name or merges or
consolidates after filing a utility security instrument under
Section 261.004 shall promptly file with the secretary of state a
written statement of the name change, merger, or consolidation.
The written statement must:
(1) be signed by the secured party and the utility;
(2) identify the appropriate utility security
instrument by file number; and
(3) state the name of the utility after the name
change, merger, or consolidation.
(b) Unless a written statement is filed under Subsection (a)
not later than four months after the effective date of the name
change, merger, or consolidations, the filing of a utility security
instrument before the name change, merger, or consolidation does
not constitute perfection or serve as notice under Section 261.004
of a security interest in property acquired by the utility more than
four months after the name change, merger, or consolidation. (Bus. &
Com. Code, Sec. 35.04.)
Sec. 261.008. ENDORSEMENT AND FILING BY SECRETARY OF STATE;
FEES. (a) The secretary of state shall endorse on a utility
security instrument and any statement of name change, merger, or
consolidation filed with the secretary of state:
(1) the day and hour of receipt; and
(2) the assigned file number.
(b) In the absence of other evidence, an endorsement under
Subsection (a) is conclusive proof of the time and fact of filing.
(c) The secretary of state shall file in adequate filing
devices and retain in the secretary of state’s office all utility
security instruments and statements of name change, merger, or
consolidation filed with the secretary of state.
(d) The secretary of state shall charge a $25 fee to:
(1) file and index:
(A) a utility security instrument;
(B) an instrument that supplements or amends a
utility security instrument; or
(C) a statement of name change, merger, or
consolidation; and
(2) stamp a copy of a document described by
Subdivision (1), provided by the secured party or the utility, to
indicate the date and place of filing. (Bus. & Com. Code, Sec.
35.05.)
Sec. 261.009. CERTIFICATE OF FILING; FEE. (a) On request
of any person, the secretary of state shall issue a certificate
that:
(1) indicates whether on the date and hour stated in
the request, there is on file any presently effective utility
security instrument naming a particular utility; and
(2) if there is, states:
(A) the date and hour the utility security
instrument was filed; and
(B) the names and addresses of each secured
party.
(b) The fee for a certificate under this section is:
(1) $10, if the request for the certificate is in the
standard form prescribed by the secretary of state; or
(2) $25, if the request is not in the standard form.
(Bus. & Com. Code, Sec. 35.06 (part).)
Sec. 261.010. COPY OF FILED UTILITY SECURITY INSTRUMENT;
FEE. (a) On request and payment of the fee prescribed by
Subsection (b), the secretary of state shall provide a person with a
copy of any filed utility security instrument.
(b) The fee for a copy under this section is $1.50 per page,
but may not be less than $5 or more than $100 for each request
concerning a particular utility. (Bus. & Com. Code, Sec. 35.06
(part).)
Sec. 261.011. NOTICE OF UTILITY SECURITY INSTRUMENT
AFFECTING REAL PROPERTY. (a) If a utility security instrument
filed with the secretary of state under Section 261.004 grants a
security interest in real property owned by the utility, a notice of
utility security instrument affecting real property must be
recorded in the office of the county clerk in the county in which
the real property is located. The notice must state:
(1) the name of the utility that executed the utility
security instrument;
(2) that a utility security instrument affecting real
property in the county has been executed by the utility; and
(3) that the utility security instrument was filed,
and other security instruments may be on file, with the secretary of
state.
(b) A notice recorded under Subsection (a) is sufficient to
provide notice of any other security instrument filed with the
secretary of state that:
(1) was executed by the utility; and
(2) grants a security interest in any real property
located in the county in which the notice was recorded or in any
fixture on the property.
(c) The county clerk shall record and index a notice
described by Subsection (a) in the same records and indices as the
clerk records and indexes mortgages on real property.
(d) The county clerk shall maintain a separate index of
utility security instruments and continuation statements recorded
under prior law. (Bus. & Com. Code, Secs. 35.07(a), (b) (part),
(c), (d).)
TITLE 9. APPLICABILITY OF LAW TO COMMERCIAL TRANSACTIONS
CHAPTER 271. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE
TO CERTAIN TRANSACTIONS
Sec. 271.001. DEFINITION
Sec. 271.002. SUBSTANTIALLY SIMILAR OR RELATED
TRANSACTIONS
Sec. 271.003. CONFLICT-OF-LAWS RULES
Sec. 271.004. DETERMINATION OF REASONABLE RELATION OF
TRANSACTION TO PARTICULAR JURISDICTION
Sec. 271.005. LAW GOVERNING ISSUE RELATING TO
QUALIFIED TRANSACTION
Sec. 271.006. LAW GOVERNING INTERPRETATION OR
CONSTRUCTION OF AGREEMENT RELATING TO
QUALIFIED TRANSACTION
Sec. 271.007. LAW GOVERNING VALIDITY OR ENFORCEABILITY
OF TERM OF AGREEMENT RELATING TO
QUALIFIED TRANSACTION
Sec. 271.008. APPLICABILITY TO CERTAIN REAL PROPERTY
TRANSACTIONS; EXCEPTIONS
Sec. 271.009. EXCEPTION: MARRIAGE OR ADOPTION
Sec. 271.010. EXCEPTION: DECEDENT’S ESTATE
Sec. 271.011. EXCEPTION: OTHER STATUTE SPECIFYING
GOVERNING LAW
CHAPTER 271. RIGHTS OF PARTIES TO CHOOSE LAW APPLICABLE
TO CERTAIN TRANSACTIONS
Sec. 271.001. DEFINITION. In this chapter, “qualified
transaction” means a transaction under which a party:
(1) pays or receives, or is obligated to pay or is
entitled to receive, consideration with an aggregate value of at
least $1 million; or
(2) lends, advances, borrows, or receives, or is
obligated to lend or advance or is entitled to borrow or receive,
money or credit with an aggregate value of at least $1 million.
(Bus. & Com. Code, Sec. 35.51(a)(2).)
Sec. 271.002. SUBSTANTIALLY SIMILAR OR RELATED
TRANSACTIONS. For purposes of this chapter, two or more
substantially similar or related transactions are considered a
single transaction if the transactions:
(1) are entered into contemporaneously; and
(2) have at least one common party. (Bus. & Com. Code,
Sec. 35.51(a)(1).)
Sec. 271.003. CONFLICT-OF-LAWS RULES. For purposes of this
chapter, a reference to the law of a particular jurisdiction does
not include that jurisdiction’s conflict-of-laws rules. (Bus. &
Com. Code, Secs. 35.51(b) (part), (c) (part), (e) (part).)
Sec. 271.004. DETERMINATION OF REASONABLE RELATION OF
TRANSACTION TO PARTICULAR JURISDICTION. (a) For purposes of this
chapter, a transaction bears a reasonable relation to a particular
jurisdiction if the transaction, the subject matter of the
transaction, or a party to the transaction is reasonably related to
that jurisdiction.
(b) A transaction bears a reasonable relation to a
particular jurisdiction if:
(1) a party to the transaction is a resident of that
jurisdiction;
(2) a party to the transaction has the party’s place of
business or, if that party has more than one place of business, the
party’s chief executive office or an office from which the party
conducts a substantial part of the negotiations relating to the
transaction, in that jurisdiction;
(3) all or part of the subject matter of the
transaction is located in that jurisdiction;
(4) a party to the transaction is required to perform
in that jurisdiction a substantial part of the party’s obligations
relating to the transaction, such as delivering payments; or
(5) a substantial part of the negotiations relating to
the transaction occurred in that jurisdiction and an agreement
relating to the transaction was signed in that jurisdiction by a
party to the transaction. (Bus. & Com. Code, Sec. 35.51(d).)
Sec. 271.005. LAW GOVERNING ISSUE RELATING TO QUALIFIED
TRANSACTION. (a) Except as provided by Section 271.007,
271.008(b), 271.009, 271.010, or 271.011 or by Chapter 272, the law
of a particular jurisdiction governs an issue relating to a
qualified transaction if:
(1) the parties to the transaction agree in writing
that the law of that jurisdiction governs the issue, including the
validity or enforceability of an agreement relating to the
transaction or a provision of the agreement; and
(2) the transaction bears a reasonable relation to
that jurisdiction.
(b) The law of a particular jurisdiction governs an issue
described by this section regardless of whether the application of
that law is contrary to a fundamental or public policy of this state
or of any other jurisdiction. (Bus. & Com. Code, Sec. 35.51(b)
(part).)
Sec. 271.006. LAW GOVERNING INTERPRETATION OR CONSTRUCTION
OF AGREEMENT RELATING TO QUALIFIED TRANSACTION. Except as provided
by Section 271.008(b), 271.009, 271.010, or 271.011 and by Chapter
272, if the parties to a qualified transaction agree in writing that
the law of a particular jurisdiction governs the interpretation or
construction of an agreement relating to the transaction or a
provision of the agreement, the law of that jurisdiction governs
that issue regardless of whether the transaction bears a reasonable
relation to that jurisdiction. (Bus. & Com. Code, Sec. 35.51(c)
(part).)
Sec. 271.007. LAW GOVERNING VALIDITY OR ENFORCEABILITY OF
TERM OF AGREEMENT RELATING TO QUALIFIED TRANSACTION. (a) Except as
provided by Section 271.008(b), 271.009, 271.010, or 271.011 or by
Chapter 272, this section applies if:
(1) the parties to a qualified transaction agree in
writing that the law of a particular jurisdiction governs the
validity or enforceability of an agreement relating to the
transaction or a provision of the agreement;
(2) the transaction bears a reasonable relation to
that jurisdiction; and
(3) a term of the agreement or of that provision is
invalid or unenforceable under the law of that jurisdiction but is
valid or enforceable under the law of the jurisdiction that has the
most significant relation to the transaction, the subject matter of
the transaction, and the parties.
(b) If this section applies:
(1) the law of the jurisdiction that has the most
significant relation to the transaction, the subject matter of the
transaction, and the parties governs the validity or enforceability
of a term described by Subsection (a)(3); and
(2) the law of the jurisdiction that the parties agree
would govern the validity or enforceability of the agreement or
provision governs the validity or enforceability of the other terms
of the agreement or provision. (Bus. & Com. Code, Sec. 35.51(e)
(part).)
Sec. 271.008. APPLICABILITY TO CERTAIN REAL PROPERTY
TRANSACTIONS; EXCEPTIONS. (a) Sections 271.004-271.007 apply to
the determination of the law that governs an issue relating to a
transaction involving real property other than a matter described
by Subsection (b), including the validity or enforceability of an
indebtedness incurred in consideration for the transfer of, or the
payment of which is secured by a lien on, real property.
(b) Sections 271.004-271.007 do not apply to the
determination of the law that governs:
(1) whether a transaction transfers or creates an
interest in real property for security purposes or otherwise;
(2) the nature of an interest in real property that is
transferred or created by a transaction;
(3) the method for foreclosure of a lien on real
property;
(4) the nature of an interest in real property that
results from foreclosure; or
(5) the manner and effect of recording or failing to
record evidence of a transaction that transfers or creates an
interest in real property. (Bus. & Com. Code, Secs. 35.51(f)
(part), (g).)
Sec. 271.009. EXCEPTION: MARRIAGE OR ADOPTION. Sections
271.004-271.007 do not apply to the determination of the law that
governs:
(1) the validity of a marriage or an adoption;
(2) whether a marriage has been terminated; or
(3) the effect of a marriage on property owned by a
spouse at the time of the marriage or acquired by either spouse
during the marriage. (Bus. & Com. Code, Sec. 35.51(f) (part).)
Sec. 271.010. EXCEPTION: DECEDENT’S ESTATE. Sections
271.004-271.007 do not apply to the determination of the law that
governs:
(1) whether an instrument is a will;
(2) the rights of persons under a will; or
(3) the rights of persons in the absence of a will.
(Bus. & Com. Code, Sec. 35.51(f) (part).)
Sec. 271.011. EXCEPTION: OTHER STATUTE SPECIFYING
GOVERNING LAW. Sections 271.004-271.007 do not apply to the
determination of the law that governs an issue that another statute
of this state or a statute of the United States provides is governed
by the law of a particular jurisdiction. (Bus. & Com. Code, Sec.
35.51(f) (part).)
CHAPTER 272. LAW APPLICABLE TO CERTAIN CONTRACTS FOR CONSTRUCTION
OR REPAIR OF REAL PROPERTY IMPROVEMENTS
Sec. 272.001. VOIDABLE CONTRACT PROVISION
Sec. 272.002. CONTRACT PRINCIPALLY FOR CONSTRUCTION OR
REPAIR OF REAL PROPERTY IMPROVEMENTS
CHAPTER 272. LAW APPLICABLE TO CERTAIN CONTRACTS FOR CONSTRUCTION
OR REPAIR OF REAL PROPERTY IMPROVEMENTS
Sec. 272.001. VOIDABLE CONTRACT PROVISION. (a) This section
applies only to a contract that is principally for the construction
or repair of an improvement to real property located in this state.
(b) If a contract contains a provision making the contract
or any conflict arising under the contract subject to another
state’s law, litigation in the courts of another state, or
arbitration in another state, that provision is voidable by the
party obligated by the contract to perform the construction or
repair. (Bus. & Com. Code, Sec. 35.52(a).)
Sec. 272.002. CONTRACT PRINCIPALLY FOR CONSTRUCTION OR
REPAIR OF REAL PROPERTY IMPROVEMENTS. (a) For purposes of this
chapter, a contract is principally for the construction or repair
of an improvement to real property located in this state if the
contract obligates a party, as the party’s principal obligation
under the contract, to provide labor or labor and materials as a
general contractor or subcontractor for the construction or repair
of an improvement to real property located in this state.
(b) For purposes of this chapter, a contract is not
principally for the construction or repair of an improvement to
real property located in this state if the contract:
(1) is a partnership agreement or other agreement
governing an entity or trust;
(2) provides for a loan or other extension of credit
and the party promising to construct or repair the improvement is
doing so as part of the party’s agreements with the lender or other
person who extends credit; or
(3) is for the management of real property or
improvements and the obligation to construct or repair the
improvement is part of that management.
(c) Subsections (a) and (b) do not provide an exclusive list
of the situations in which a contract is or is not principally for
the construction or repair of an improvement to real property
located in this state. (Bus. & Com. Code, Secs. 35.52(b), (c), (d).)
CHAPTER 273. LAW OR FORUM APPLICABLE TO CERTAIN CONTRACTS FOR
DISPOSITION OF GOODS
Sec. 273.001. CONTRACTS SUBJECT TO CHAPTER
Sec. 273.002. NOTICE OF APPLICABLE LAW OR FORUM
Sec. 273.003. FAILURE TO PROVIDE NOTICE
CHAPTER 273. LAW OR FORUM APPLICABLE TO CERTAIN CONTRACTS FOR
DISPOSITION OF GOODS
Sec. 273.001. CONTRACTS SUBJECT TO CHAPTER. This chapter
applies to a contract only if:
(1) the contract is for the sale, lease, exchange, or
other disposition for value of goods for the price, rental, or other
consideration of $50,000 or less;
(2) any element of the contract’s execution occurred
in this state;
(3) a party to the contract is:
(A) an individual resident of this state; or
(B) an association or corporation that is created
under the laws of this state or has its principal place of business
in this state; and
(4) Section 1.301 does not apply to the contract.
(Bus. & Com. Code, Sec. 35.53(a).)
Sec. 273.002. NOTICE OF APPLICABLE LAW OR FORUM. If a
contract contains a provision making the contract or any conflict
arising under the contract subject to another state’s laws,
litigation in the courts of another state, or arbitration in
another state, that provision must be set out conspicuously in
print, type, or other form of writing that is boldfaced,
capitalized, underlined, or otherwise set out in such a manner that
a reasonable person against whom the provision may operate would
notice the provision. (Bus. & Com. Code, Sec. 35.53(b) (part).)
Sec. 273.003. FAILURE TO PROVIDE NOTICE. A contract
provision that does not comply with Section 273.002 is voidable by a
party against whom the provision is sought to be enforced. (Bus. &
Com. Code, Sec. 35.53(b) (part).)
CHAPTER 274. LAW APPLICABLE TO CONTRACT MADE OVER INTERNET
Sec. 274.001. DEFINITION
Sec. 274.002. APPLICABILITY OF CHAPTER; EXCEPTION
Sec. 274.003. STATE LAW GOVERNING CONTRACT; BURDEN OF
PROOF
Sec. 274.004. APPLICABILITY OF OTHER LAW TO CONTRACT
CHAPTER 274. LAW APPLICABLE TO CONTRACT MADE OVER INTERNET
Sec. 274.001. DEFINITION. In this chapter, “Internet”
means the largest nonproprietary nonprofit cooperative public
computer network, popularly known as the Internet. (Bus. & Com.
Code, Sec. 35.531(a).)
Sec. 274.002. APPLICABILITY OF CHAPTER; EXCEPTION. (a)
Except as provided by Subsection (b), this chapter applies only to a
contract made solely over the Internet between a person located in
this state and a person located outside this state who does not
maintain an office or agent in this state for transacting business
in this state.
(b) This chapter does not apply to a contract to which
Chapter 271 applies. (Bus. & Com. Code, Secs. 35.531(b), (e)
(part).)
Sec. 274.003. STATE LAW GOVERNING CONTRACT; BURDEN OF
PROOF. (a) A contract is governed by the law of this state unless
each party to the contract who is located in this state:
(1) is given notice that the law of the state in which
another party to the contract is located applies to the contract;
and
(2) agrees to the application of that state’s law.
(b) A person asserting that the law of another state governs
a contract has the burden of proving that notice was given and
agreement was obtained as specified by Subsection (a). (Bus. & Com.
Code, Secs. 35.531(c), (d).)
Sec. 274.004. APPLICABILITY OF OTHER LAW TO CONTRACT.
Section 1.031 and Chapter 273 do not apply to a contract to which
this chapter applies. (Bus. & Com. Code, Sec. 35.531(e) (part).)
TITLE 10. USE OF TELECOMMUNICATIONS
SUBTITLE A. TELEPHONES
CHAPTER 301. TELEPHONE SOLICITATION PRACTICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 301.001. DEFINITIONS
[Sections 301.002-301.050 reserved for expansion]
SUBCHAPTER B. PERMITTED AND PROHIBITED PRACTICES
Sec. 301.051. TELEPHONE SOLICITATION REQUIREMENTS
Sec. 301.052. CHARGES TO CONSUMER’S CREDIT CARD
ACCOUNT
[Sections 301.053-301.100 reserved for expansion]
SUBCHAPTER C. ENFORCEMENT
Sec. 301.101. INVESTIGATION BY ATTORNEY GENERAL’S
OFFICE
Sec. 301.102. INJUNCTIVE RELIEF
Sec. 301.103. CIVIL PENALTY; RESTITUTION
Sec. 301.104. CIVIL ACTION
Sec. 301.105. VENUE
CHAPTER 301. TELEPHONE SOLICITATION PRACTICES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 301.001. DEFINITIONS. In this chapter:
(1) “Automated dial announcing device” means
automated equipment used for telephone solicitation or collection
that can:
(A) store telephone numbers to be called or
produce numbers to be called through use of a random or sequential
number generator; and
(B) convey, alone or in conjunction with other
equipment, a prerecorded or synthesized voice message to the number
called without the use of a live operator.
(2) “Consumer” means a person who is solicited to
purchase, lease, or receive a consumer good or service.
(3) “Consumer good or service” means:
(A) real property or tangible or intangible
personal property that is normally used for personal, family, or
household purposes, including:
(i) personal property intended to be
attached to or installed in any real property;
(ii) a cemetery lot; and
(iii) a time-share estate; or
(B) a service related to real or personal
property.
(4) “Consumer telephone call” means an unsolicited
call made to a residential telephone number by a telephone
solicitor to:
(A) solicit a sale of a consumer good or service;
(B) solicit an extension of credit for a consumer
good or service; or
(C) obtain information that will or may be used
to directly solicit a sale of a consumer good or service or to
extend credit for the sale.
(5) “Telephone solicitor” means a person who makes or
causes to be made a consumer telephone call, including a call made
by an automated dial announcing device. (Bus. & Com. Code, Sec.
37.01.)
[Sections 301.002-301.050 reserved for expansion]
SUBCHAPTER B. PERMITTED AND PROHIBITED PRACTICES
Sec. 301.051. TELEPHONE SOLICITATION REQUIREMENTS. (a)
This section does not apply to a consumer telephone call made:
(1) in response to the express request of the
consumer;
(2) primarily in connection with an existing debt or
contract for which payment or performance has not been completed at
the time of the call; or
(3) to a consumer with whom the telephone solicitor
has a prior or existing business relationship.
(b) A telephone solicitor may not make a consumer telephone
call to a consumer unless:
(1) the telephone solicitor, immediately after making
contact with the consumer to whom the call is made, identifies:
(A) himself or herself by name;
(B) the business on whose behalf the telephone
solicitor is calling; and
(C) the purpose of the call;
(2) the telephone solicitor makes the call after 12
noon and before 9 p.m. on a Sunday or after 9 a.m. and before 9 p.m.
on a weekday or a Saturday; and
(3) for those calls in which an automated dial
announcing device is used, the device disconnects the consumer’s
telephone line within the period specified by Section 55.126,
Utilities Code, after either the telephone solicitor or the
consumer terminates the call. (Bus. & Com. Code, Sec. 37.02.)
Sec. 301.052. CHARGES TO CONSUMER’S CREDIT CARD ACCOUNT. A
person who sells consumer goods or services through the use of a
telephone solicitor may not make or submit a charge to a consumer’s
credit card account unless the seller:
(1) provides that:
(A) the consumer may receive a full refund for
returning undamaged and unused goods or canceling services by
providing notice to the seller not later than the seventh day after
the date the consumer receives the goods or services; and
(B) the seller will process:
(i) a refund not later than the 30th day
after the date the seller receives the returned goods from the
consumer; or
(ii) a full refund not later than the 30th
day after the date the consumer cancels an order for the purchase of
services not performed or a pro rata refund for any services not yet
performed for the consumer;
(2) provides to the consumer a written contract fully
describing the goods or services being offered, the total price to
be charged, the name, address, and business telephone number of the
seller, and any terms affecting the sale and receives from the
consumer a signed copy of the contract; or
(3) is an organization that qualifies for an exemption
from federal income taxation under Section 501(c)(3), Internal
Revenue Code of 1986, and has obtained that exemption from the
Internal Revenue Service. (Bus. & Com. Code, Sec. 37.03.)
[Sections 301.053-301.100 reserved for expansion]
SUBCHAPTER C. ENFORCEMENT
Sec. 301.101. INVESTIGATION BY ATTORNEY GENERAL’S OFFICE.
The attorney general’s office shall investigate a complaint
relating to a violation of this chapter. (Bus. & Com. Code, Sec.
37.04(a) (part).)
Sec. 301.102. INJUNCTIVE RELIEF. (a) The attorney
general’s office may petition a district court for a temporary
restraining order to restrain a continuing violation of this
chapter.
(b) A district court, on petition of the attorney general’s
office and on finding that a person is violating this chapter, may:
(1) issue an injunction prohibiting the person from
continuing the violation; or
(2) grant any other injunctive relief warranted by the
facts. (Bus. & Com. Code, Secs. 37.04(a) (part), (b).)
Sec. 301.103. CIVIL PENALTY; RESTITUTION. (a) A person who
knowingly violates this chapter is liable for a civil penalty of not
more than $10,000 for each violation.
(b) In addition to bringing an action for injunctive relief
under Section 301.102, the attorney general’s office may seek
restitution and petition a district court for the assessment of a
civil penalty as provided by this chapter. (Bus. & Com. Code, Secs.
37.04(a) (part), 37.05(a), (b).)
Sec. 301.104. CIVIL ACTION. A consumer injured by a
violation of this chapter may bring an action for recovery of
damages. The damages awarded may not be less than the amount the
consumer paid the person who sold the consumer goods or services
through the use of the telephone solicitor, plus reasonable
attorney’s fees and court costs. (Bus. & Com. Code, Sec. 37.05(c).)
Sec. 301.105. VENUE. Venue for an action brought under this
chapter is in:
(1) the county in which the consumer telephone call
originated;
(2) the county in which the consumer telephone call
was received; or
(3) Travis County. (Bus. & Com. Code, Sec. 37.04(c).)
CHAPTER 302. REGULATION OF TELEPHONE SOLICITATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 302.001. DEFINITIONS
Sec. 302.002. MAKING TELEPHONE SOLICITATION
Sec. 302.003. LIBERAL CONSTRUCTION AND APPLICATION
Sec. 302.004. ATTEMPTED WAIVER VOID
[Sections 302.005-302.050 reserved for expansion]
SUBCHAPTER B. EXEMPTIONS
Sec. 302.051. BURDEN OF PROOF
Sec. 302.052. EXEMPTIONS APPLY ONLY TO SELLERS;
EXCEPTION
Sec. 302.053. EXEMPTION: PERSONS REGULATED BY OTHER
LAW
Sec. 302.054. EXEMPTION: PERSONS SELLING MEDIA
SUBSCRIPTIONS, CERTAIN MERCHANDISE, OR
ITEMS FROM CERTAIN CATALOGS
Sec. 302.055. EXEMPTION: EDUCATIONAL AND NONPROFIT
ORGANIZATIONS
Sec. 302.056. EXEMPTION: CERTAIN COMMERCIAL SALES
Sec. 302.057. EXEMPTION: PERSON SOLICITING FOOD SALES
Sec. 302.058. EXEMPTION: SOLICITATION OF FORMER OR
CURRENT CUSTOMERS
Sec. 302.059. EXEMPTION: PERSONS WHO MAKE CERTAIN
SALES PRESENTATIONS OR MAKE SALES AT
ESTABLISHED RETAIL LOCATIONS
Sec. 302.060. EXEMPTION: CERTAIN PERSONS PROVIDING
TELEPHONE SOLICITATION SERVICES
PREDOMINANTLY FOR EXEMPT PERSONS
Sec. 302.061. EXEMPTION: PERSONS CONDUCTING CERTAIN
ISOLATED TELEPHONE SOLICITATIONS
[Sections 302.062-302.100 reserved for expansion]
SUBCHAPTER C. REGISTRATION
Sec. 302.101. REGISTRATION CERTIFICATE REQUIRED
Sec. 302.102. FILING OF REGISTRATION STATEMENT; PUBLIC
INFORMATION
Sec. 302.103. ISSUANCE OF REGISTRATION CERTIFICATE
Sec. 302.104. EFFECTIVE DATE OF REGISTRATION
STATEMENT; RENEWAL
Sec. 302.105. ADDENDA REQUIREMENTS
Sec. 302.106. FILING FEE
Sec. 302.107. SECURITY REQUIREMENTS
Sec. 302.108. APPOINTMENT OF SECRETARY OF STATE AS
AGENT FOR SERVICE
[Sections 302.109-302.150 reserved for expansion]
SUBCHAPTER D. DISCLOSURES REQUIRED IN REGISTRATION STATEMENT
Sec. 302.151. DISCLOSURE OF CERTAIN NAMES, ADDRESSES,
TELEPHONE NUMBERS, AND ORGANIZATIONAL
INFORMATION
Sec. 302.152. DISCLOSURE OF CERTAIN CONVICTIONS,
PLEAS, JUDGMENTS, ORDERS,
BANKRUPTCIES, AND REORGANIZATIONS
Sec. 302.153. DISCLOSURE OF CERTAIN SALES INFORMATION
[Sections 302.154-302.200 reserved for expansion]
SUBCHAPTER E. ADDITIONAL INFORMATION FROM SELLER
Sec. 302.201. INFORMATION REQUIRED TO BE POSTED OR
AVAILABLE AT SELLER’S BUSINESS
LOCATION
Sec. 302.202. DISCLOSURES REQUIRED BEFORE PURCHASE
Sec. 302.203. REFERENCE TO COMPLIANCE WITH STATUTE
PROHIBITED
[Sections 302.204-302.250 reserved for expansion]
SUBCHAPTER F. OFFENSES
Sec. 302.251. VIOLATION OF CERTAIN PROVISIONS
Sec. 302.252. ACTING AS SALESPERSON FOR UNREGISTERED
SELLER
Sec. 302.253. REQUEST FOR CREDIT CARD ACCOUNT NUMBER
OR CHECKING ACCOUNT NUMBER AFTER OFFER
OF FREE ITEM
[Sections 302.254-302.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT
Sec. 302.301. INJUNCTION
Sec. 302.302. CIVIL PENALTIES
Sec. 302.303. DECEPTIVE TRADE PRACTICES
Sec. 302.304. ACTION TO RECOVER AGAINST SECURITY
CHAPTER 302. REGULATION OF TELEPHONE SOLICITATION
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 302.001. DEFINITIONS. In this chapter:
(1) “Item” means property or a service. The term
includes a coupon book to be used with a business.
(2) “Owner” means a person who has control of or is
entitled to, by ownership or other claim, at least 10 percent of a
seller’s net income.

(3) “Purchaser” means a person who:
(A) is solicited to become or becomes obligated
for the purchase or rental of an item; or
(B) is offered an opportunity to claim or receive
an item.
(4) “Salesperson” means a person who is employed or
authorized by a seller to make a telephone solicitation.
(5) “Seller” means a person who makes a telephone
solicitation on the person’s own behalf.
(6) “Supervised financial institution” means a bank,
trust company, savings and loan association, credit union,
industrial loan company, personal property broker, consumer
finance lender, commercial finance lender, insurer, or other
financial institution that is subject to supervision by an official
or agency of this state or the United States.
(7) “Telephone solicitation” means a telephone call a
seller or salesperson initiates to induce a person to purchase,
rent, claim, or receive an item. The term includes a telephone call
a purchaser makes in response to a solicitation sent by mail or made
by any other means. (Bus. & Com. Code, Sec. 38.001.)
Sec. 302.002. MAKING TELEPHONE SOLICITATION. For purposes
of this chapter, a person makes a telephone solicitation if the
person effects or attempts to effect a telephone solicitation,
including a solicitation initiated by an automatic dialing machine
or a recorded message device. (Bus. & Com. Code, Sec. 38.002.)
Sec. 302.003. LIBERAL CONSTRUCTION AND APPLICATION. This
chapter shall be liberally construed and applied to promote its
underlying purpose to protect persons against false, misleading, or
deceptive practices in the telephone solicitation business. (Bus. &
Com. Code, Sec. 38.003.)
Sec. 302.004. ATTEMPTED WAIVER VOID. An attempted waiver
of a provision of this chapter is void. (Bus. & Com. Code, Sec.
38.305.)
[Sections 302.005-302.050 reserved for expansion]
SUBCHAPTER B. EXEMPTIONS
Sec. 302.051. BURDEN OF PROOF. (a) In a civil proceeding
in which a violation of this chapter is alleged, a person who claims
an exemption from the application of this chapter has the burden of
proving the exemption.
(b) In a criminal proceeding in which a violation of this
chapter is alleged, a person who claims an exemption from the
application of this chapter as a defense to prosecution has the
burden of producing evidence to support the defense. (Bus. & Com.
Code, Sec. 38.051.)
Sec. 302.052. EXEMPTIONS APPLY ONLY TO SELLERS; EXCEPTION.
Except as provided by Section 302.060, an exemption from the
application of this chapter applies only to a seller. (Bus. & Com.
Code, Sec. 38.052.)
Sec. 302.053. EXEMPTION: PERSONS REGULATED BY OTHER LAW.
This chapter does not apply to:
(1) a person offering or selling a security that has
been qualified for sale under Section 7, The Securities Act
(Article 581-7, Vernon’s Texas Civil Statutes), or that is subject
to an exemption under Section 5 or 6 of that Act;
(2) a publicly traded corporation registered with the
Securities and Exchange Commission or the State Securities Board,
or a subsidiary or agent of the corporation;
(3) a person who holds a license issued under the
Insurance Code if the solicited transaction is governed by that
code;
(4) a supervised financial institution or a parent, a
subsidiary, or an affiliate of a supervised financial institution;
(5) a person whose business is regulated by the Public
Utility Commission of Texas or an affiliate of that person, except
that this chapter applies to such a person or affiliate only with
respect to one or more automated dial announcing devices;
(6) a person subject to the control or licensing
regulations of the Federal Communications Commission;
(7) a person selling a contractual plan regulated by
the Federal Trade Commission trade regulation on use of negative
option plans by sellers in commerce under 16 C.F.R. Part 425;
(8) a person subject to filing requirements under
Chapter 1803, Occupations Code; or
(9) a person who:
(A) is soliciting a transaction regulated by the
Commodity Futures Trading Commission; and
(B) is registered or holds a temporary license
for the activity described by Paragraph (A) with the Commodity
Futures Trading Commission under the Commodity Exchange Act (7
U.S.C. Section 1 et seq.), if the registration or license has not
expired or been suspended or revoked. (Bus. & Com. Code, Sec.
38.053.)
Sec. 302.054. EXEMPTION: PERSONS SELLING MEDIA
SUBSCRIPTIONS, CERTAIN MERCHANDISE, OR ITEMS FROM CERTAIN
CATALOGS. This chapter does not apply to:
(1) a person soliciting the sale of a subscription to:
(A) a daily or weekly newspaper of general
circulation;
(B) a magazine or other periodical of general
circulation; or
(C) a cable television service;
(2) a person selling merchandise under an arrangement
in which the seller periodically ships the merchandise to a
consumer who has consented in advance to receive the merchandise
periodically; or
(3) a person periodically issuing and delivering to
purchasers catalogs that each:
(A) include a written description or
illustration and the sales price of each item offered for sale;
(B) include at least 24 full pages of written
material or illustrations;
(C) are distributed in more than one state; and
(D) have an annual circulation of at least
250,000 customers. (Bus. & Com. Code, Sec. 38.054.)
Sec. 302.055. EXEMPTION: EDUCATIONAL AND NONPROFIT
ORGANIZATIONS. This chapter does not apply to an educational
institution or organization or a nonprofit organization exempt from
taxation under Section 501(c)(3), Internal Revenue Code of 1986.
(Bus. & Com. Code, Sec. 38.055.)
Sec. 302.056. EXEMPTION: CERTAIN COMMERCIAL SALES. This
chapter does not apply to a sale in which the purchaser is a
business that intends to:
(1) resell the item purchased; or
(2) use the item purchased in a recycling, reuse,
remanufacturing, or manufacturing process. (Bus. & Com. Code, Sec.
38.056.)
Sec. 302.057. EXEMPTION: PERSON SOLICITING FOOD SALES.
This chapter does not apply to a person soliciting the sale of food.
(Bus. & Com. Code, Sec. 38.057.)
Sec. 302.058. EXEMPTION: SOLICITATION OF FORMER OR CURRENT
CUSTOMERS. This chapter does not apply to:
(1) the solicitation of a contract for the maintenance
or repair of an item previously purchased from the person making the
solicitation or on whose behalf the solicitation is made; or
(2) a person who:
(A) is soliciting business from a former or
current customer; and
(B) has operated under the same business name for
at least two years. (Bus. & Com. Code, Sec. 38.058.)
Sec. 302.059. EXEMPTION: PERSONS WHO MAKE CERTAIN SALES
PRESENTATIONS OR MAKE SALES AT ESTABLISHED RETAIL LOCATIONS. This
chapter does not apply to:
(1) a person conducting a telephone solicitation who:
(A) does not intend to complete or obtain
provisional acceptance of a sale during the telephone solicitation;
(B) does not make a major sales presentation
during the telephone solicitation but arranges for a major sales
presentation to be made face-to-face at a later meeting between the
salesperson and the purchaser; and
(C) does not cause an individual to go to the
purchaser to collect payment for the purchase or to deliver an item
purchased directly following the telephone solicitation; or
(2) a person who for at least two years, under the same
name as that used in connection with the person’s telemarketing
operations, has operated a retail establishment where consumer
goods are displayed and offered for sale continuously, if a
majority of the person’s business involves buyers obtaining
services or products at the retail establishment. (Bus. & Com.
Code, Sec. 38.059.)
Sec. 302.060. EXEMPTION: CERTAIN PERSONS PROVIDING
TELEPHONE SOLICITATION SERVICES PREDOMINANTLY FOR EXEMPT PERSONS.
This chapter does not apply to a person:
(1) who provides telephone solicitation services
under contract to a seller;
(2) who has been operating continuously for at least
three years under the same business name; and
(3) for whom at least 75 percent of the person’s
contracts are performed on behalf of other persons exempt from the
application of this chapter under this section. (Bus. & Com. Code,
Sec. 38.060(a).)
Sec. 302.061. EXEMPTION: PERSONS CONDUCTING CERTAIN
ISOLATED TELEPHONE SOLICITATIONS. This chapter does not apply to a
person engaging in a telephone solicitation that:
(1) is an isolated transaction; and
(2) is not done in the course of a pattern of repeated
transactions of a similar nature. (Bus. & Com. Code, Sec. 38.061.)
[Sections 302.062-302.100 reserved for expansion]
SUBCHAPTER C. REGISTRATION
Sec. 302.101. REGISTRATION CERTIFICATE REQUIRED. (a) A
seller may not make a telephone solicitation from a location in this
state or to a purchaser located in this state unless the seller
holds a registration certificate for the business location from
which the telephone solicitation is made.
(b) A separate registration certificate is required for
each business location from which a telephone solicitation is made.
(Bus. & Com. Code, Sec. 38.101.)
Sec. 302.102. FILING OF REGISTRATION STATEMENT; PUBLIC
INFORMATION. (a) To obtain a registration certificate, a seller
must file with the secretary of state a registration statement
that:
(1) is in the form prescribed by the secretary of
state;
(2) contains the information required by Subchapter D;
(3) is verified by each principal of the seller; and
(4) specifies the date and location of verification.
(b) Information included in or attached to a registration
statement is public information.
(c) In this section, “principal” means an owner, an
executive officer of a corporation, a general partner of a
partnership, a sole proprietor, a trustee of a trust, or another
individual with similar supervisory functions with respect to any
person. (Bus. & Com. Code, Sec. 38.302.)
Sec. 302.103. ISSUANCE OF REGISTRATION CERTIFICATE. (a)
The secretary of state shall issue a registration certificate and
mail the certificate to the seller when the secretary of state
receives:
(1) a completed registration statement required by
Section 302.102;
(2) the filing fee prescribed by Section 302.106;
(3) the security required by Section 302.107; and
(4) the consent regarding service of process required
by Section 302.108.
(b) If the seller uses a single registration statement to
register more than one business location, the secretary of state
shall:
(1) issue a registration certificate for each business
location; and
(2) mail all the certificates to the principal
business location shown on the registration statement. (Bus. &
Com. Code, Sec. 38.104.)
Sec. 302.104. EFFECTIVE DATE OF REGISTRATION STATEMENT;
RENEWAL. (a) A registration statement takes effect on the date the
secretary of state issues the registration certificate and is
effective for one year.
(b) A registration statement may be renewed annually by:
(1) filing a renewal registration statement
containing the information required by Subchapter D; and
(2) paying the filing fee prescribed by Section
302.106. (Bus. & Com. Code, Sec. 38.105.)
Sec. 302.105. ADDENDA REQUIREMENTS. (a) For each quarter
after the effective date of a registration statement, the seller
shall file with the secretary of state an addendum providing the
required registration information for each salesperson who is
soliciting or has solicited on behalf of the seller during the
preceding quarter.
(b) A seller may comply with Subsection (a) by filing with
the secretary of state a copy of the “Employer’s Quarterly Report”
for employee wages that the seller files with the Texas Workforce
Commission.
(c) In addition to filing the quarterly addendum, if a
material change in information submitted in a registration
statement, other than the information described by Subsection (a),
occurs before the date for renewal, a seller shall submit that
information to the secretary of state by filing an addendum. (Bus. &
Com. Code, Sec. 38.106.)
Sec. 302.106. FILING FEE. The filing fee for a registration
statement is $200. (Bus. & Com. Code, Sec. 38.103.)
Sec. 302.107. SECURITY REQUIREMENTS. A registration
statement must be accompanied by security that:
(1) is in the amount of $10,000;
(2) is in the form of:
(A) a bond executed by a corporate security that:
(i) is approved by the secretary of state;
and
(ii) holds a license to transact business
in this state;
(B) an irrevocable letter of credit issued for
the benefit of the registrant by a supervised financial institution
whose deposits are insured by an agency of the federal government;
or
(C) a certificate of deposit in a supervised
financial institution whose deposits are insured by an agency of
the federal government, the principal of which may be withdrawn
only on the order of the secretary of state; and
(3) is conditioned on the seller’s compliance with
this chapter. (Bus. & Com. Code, Sec. 38.107.)
Sec. 302.108. APPOINTMENT OF SECRETARY OF STATE AS AGENT
FOR SERVICE. (a) A seller shall file with the secretary of state,
in the form prescribed by the secretary of state, an irrevocable
consent appointing the secretary of state to act as the seller’s
agent to receive service of process in a noncriminal action or
proceeding that may arise under this chapter against the seller or
the seller’s successor, executor, or administrator if:
(1) an agent has not been named under Section
302.151(15);
(2) the agent named under Section 302.151(15) has
resigned or died and the name of a successor agent has not been
submitted under Section 302.105; or
(3) the agent named under Section 302.151(15) cannot
with reasonable diligence be found at the disclosed address.
(b) Service on the secretary of state under this section has
the same effect as service on the seller. Service on the secretary
of state may be made by:
(1) leaving a copy of the process in the office of the
secretary of state;
(2) promptly sending by first class mail a notice of
the service and a copy of the process to the seller’s principal
business location at the last address on file with the secretary of
state; and
(3) filing the plaintiff’s affidavit of compliance
with this section in the action or proceeding on or before the
return date of any process or within an additional period that the
court allows. (Bus. & Com. Code, Sec. 38.108.)
[Sections 302.109-302.150 reserved for expansion]
SUBCHAPTER D. DISCLOSURES REQUIRED IN REGISTRATION STATEMENT
Sec. 302.151. DISCLOSURE OF CERTAIN NAMES, ADDRESSES,
TELEPHONE NUMBERS, AND ORGANIZATIONAL INFORMATION. A registration
statement must contain:
(1) the seller’s name and, if different from the
seller’s name, the name under which the seller is transacting or
intends to transact business;
(2) the name of each parent and affiliated
organization of the seller that:
(A) will transact business with a purchaser
relating to sales solicited by the seller; or
(B) accepts responsibility for statements made
by, or acts of, the seller relating to sales solicited by the
seller;
(3) the seller’s:
(A) form of business; and
(B) place of organization;
(4) for a seller who is a corporation, a copy of the
seller’s certificate of formation and bylaws;
(5) for a seller who is a partnership, a copy of the
partnership agreement;
(6) for a seller who is operating under an assumed
business name, the location where the assumed name has been
registered;
(7) for any parent or affiliated organization
disclosed under Subdivision (2), the applicable information that is
required of a seller under Subdivisions (3) through (6);
(8) the complete street address of each location of
the seller, designating the principal location from which the
seller will be transacting business;
(9) if the principal business location of the seller
is not in this state, a designation of the seller’s main location in
this state;
(10) a listing of each telephone number to be used by
the seller and the address where each telephone using the number is
located;
(11) the name and title of each of the seller’s
officers, directors, trustees, general and limited partners, and
owners, as applicable, and the name of each of those persons who has
management responsibilities in connection with the seller’s
business activities;
(12) for each person whose name is disclosed under
Subdivision (11) and for each seller who is a sole proprietor:
(A) the complete address of the person’s
principal residence;
(B) the person’s date of birth; and
(C) the number of and state that issued the
person’s driver’s license;
(13) the name and principal residence address of each
person the seller leaves in charge at each location from which the
seller transacts business in this state and the business location
at which each of those persons is or will be in charge;
(14) the name and principal residence address of each
salesperson who solicits on the seller’s behalf or a copy of the
“Employer’s Quarterly Report” for employee wages the seller files
with the Texas Workforce Commission and the name the salesperson
uses while soliciting;
(15) the name and address of the seller’s agent in this
state, other than the secretary of state, who is authorized to
receive service of process; and
(16) the name and address of each financial
institution with which the seller makes banking or similar monetary
transactions and the identification number of each of the seller’s
accounts in each institution. (Bus. & Com. Code, Sec. 38.151.)
Sec. 302.152. DISCLOSURE OF CERTAIN CONVICTIONS, PLEAS,
JUDGMENTS, ORDERS, BANKRUPTCIES, AND REORGANIZATIONS. (a) With
respect to the seller and each person identified under Section
302.151(11) or (13), a registration statement must identify each
person:
(1) who has been convicted of or pleaded nolo
contendere to:
(A) an offense involving an alleged violation of
this chapter; or
(B) fraud, theft, embezzlement, fraudulent
conversion, or misappropriation of property;
(2) against whom a final judgment or order has been
entered in a civil or administrative action, including a stipulated
judgment or order, in which the complaint or petition alleged:
(A) acts constituting:
(i) a violation of this chapter; or
(ii) fraud, theft, embezzlement,
fraudulent conversion, or misappropriation of property;
(B) the use of false or misleading
representations in an attempt to sell or otherwise dispose of
property; or
(C) the use of unfair, unlawful, or deceptive
business practices;
(3) who is subject to an injunction or restrictive
court order relating to business activity as the result of an action
brought by a federal, state, or local public agency, including an
action affecting a vocational license; or
(4) who, during the previous seven tax years:
(A) has filed in bankruptcy;
(B) has been adjudged a bankrupt;
(C) has been reorganized because of insolvency;
or
(D) has been a principal, director, officer,
trustee, or general or limited partner of, or had management
responsibilities for, a corporation, partnership, joint venture,
or other business entity that has filed in bankruptcy, been
adjudged a bankrupt, or been reorganized because of insolvency
while the person held that position or on or before the first
anniversary of the date on which the person last held that position.
(b) For each person identified under Subsection (a)(1),
(2), or (3), the statement must disclose:
(1) the court that received the plea of nolo
contendere or the court or administrative agency that rendered the
conviction, judgment, or order;
(2) the docket number of the matter;
(3) the date the plea of nolo contendere was received
or the date of the conviction, judgment, or order; and
(4) the name of any government agency that brought the
action resulting in the plea or the conviction, judgment, or order.
(c) For each person identified under Subsection (a)(4), the
statement must disclose:
(1) the name and location of the person filing in
bankruptcy, adjudged a bankrupt, or reorganized because of
insolvency;
(2) the date of the filing, judgment, or
reorganization order;
(3) the court having jurisdiction; and
(4) the docket number of the matter. (Bus. & Com.
Code, Sec. 38.152.)
Sec. 302.153. DISCLOSURE OF CERTAIN SALES INFORMATION. (a)
A registration statement must be accompanied by:
(1) a description of the items the seller is offering
for sale;
(2) a copy of all sales information and literature,
including scripts, outlines, instructions, and information
regarding the conduct of telephone solicitations, sample
introductions, sample closings, product information, and contest
or premium-award information, that the seller provides to
salespersons or about which the seller informs salespersons;
(3) a copy of all written material the seller sends to
any purchaser; and
(4) as applicable, the information and documents
specified by Subsections (b) through (h).
(b) If the seller represents or implies, or directs a
salesperson to represent or imply, to a purchaser that the
purchaser will receive a specific item, including a certificate
that the purchaser must redeem to obtain the item described in the
certificate, or one or more items from among designated items,
regardless of whether the items are designated as gifts, premiums,
bonuses, or prizes or otherwise, the registration statement must be
accompanied by:
(1) a list of the items described;
(2) the value of each item and the basis for the
valuation;
(3) the price the seller paid for each item to the
seller’s supplier and the name, address, and telephone number of
each item’s supplier;
(4) all rules and terms a purchaser must meet to
receive the item; and
(5) if the purchaser will not receive all of the items
described by the seller:
(A) the manner in which the seller decides which
item a particular purchaser is to receive;
(B) for each item, the odds of a single purchaser
receiving the item; and
(C) the name and address of each purchaser who
has received, during the preceding 12 months, the item with the
greatest value and the item with the lowest odds of being received.
(c) If the seller is offering an item that the seller does
not manufacture or supply, the registration statement must be
accompanied by:
(1) the name, address, and telephone number of each of
the seller’s suppliers;
(2) a description of each item provided by each
supplier named in Subdivision (1); and
(3) as applicable, the information and documents
specified by Subsections (d) through (g).
(d) If the seller is offering an item that the seller does
not manufacture or supply and the possession of the item is to be
retained by the seller or will not be transferred to the purchaser
until the purchaser has paid in full, the registration statement
must be accompanied by:
(1) the address of each location where the item will be
kept;
(2) if the item is not kept on premises owned by the
seller or at an address registered under Section 302.151(8) or (9),
the name of the owner of the business at which the item will be kept;
and
(3) a copy of any contract or other document that
evidences the seller’s right to store the item at the address
designated under Subdivision (2).
(e) If the seller is offering an item that the seller does
not manufacture or supply and the seller is not selling the item
from the seller’s own inventory but purchases the item to fill an
order previously taken from a purchaser, the registration statement
must be accompanied by a copy of each contract or other document
that evidences the seller’s ability to call on suppliers to fill the
seller’s orders.
(f) If the seller is offering an item that the seller does
not manufacture or supply and the seller represents to purchasers
that the seller has insurance or a surety bond relating to a
purchaser’s purchase of an item, the registration statement must be
accompanied by a copy of each insurance policy or bond.
(g) If the seller is offering an item that the seller does
not manufacture or supply and the seller makes a representation
regarding the post-purchase earning or profit potential of an item,
the registration statement must be accompanied by:
(1) data to substantiate the claims made; and
(2) if the representation relates to previous sales
made by the seller or a related entity, substantiating data based on
the experiences of at least 50 percent of purchasers of that
particular type of item from the seller or related entity during the
preceding six months, including:
(A) the period the seller or related entity has
been selling the particular type of item being offered;
(B) the number of purchasers of the item known to
the seller or related entity to have made at least the same earnings
or profit as those represented; and
(C) the percentage that the number disclosed
under Paragraph (B) represents of the total number of purchasers
from the seller or related entity of the particular type of item
offered.
(h) If the seller is offering to sell an interest in an oil,
gas, or mineral field, well, or exploration site, the registration
statement must be accompanied by:
(1) any ownership interest of the seller in each
field, well, or site being offered for sale;
(2) the total number of interests to be sold in each
field, well, or site being offered for sale; and
(3) if, in selling an interest in any particular
field, well, or site, reference is made to an investigation of the
field, well, or site by the seller or anyone else:
(A) the name, business address, telephone
number, and professional credentials of the person who conducted
the investigation; and
(B) a copy of the report and other documents
relating to the investigation prepared by the person who conducted
the investigation. (Bus. & Com. Code, Sec. 38.153.)
[Sections 302.154-302.200 reserved for expansion]
SUBCHAPTER E. ADDITIONAL INFORMATION FROM SELLER
Sec. 302.201. INFORMATION REQUIRED TO BE POSTED OR
AVAILABLE AT SELLER’S BUSINESS LOCATION. (a) A seller shall post
the registration certificate in a conspicuous place at the location
for which the certificate is issued.
(b) A seller shall post in close proximity to the
registration certificate the name of each individual in charge of
the location.
(c) A seller shall make available at each of the seller’s
business locations a copy of the entire registration statement and
any addenda for inspection by a purchaser or by a representative of
a government agency. (Bus. & Com. Code, Sec. 38.201.)
Sec. 302.202. DISCLOSURES REQUIRED BEFORE PURCHASE. When a
telephone solicitation is made and before consummation of any sales
transaction, a seller shall provide to each purchaser:
(1) the complete street address of the location from
which the salesperson is calling the purchaser and, if different,
the complete street address of the seller’s principal location;
(2) if the seller represents or implies that a
purchaser will receive without charge a specified item or one item
from among designated items, regardless of whether the items are
designated as gifts, premiums, bonuses, prizes, or otherwise:
(A) the information required to be filed by
Sections 302.153(b)(4) and (5)(A) and (B), as appropriate; and
(B) the total number of individuals who have
actually received from the seller during the preceding 12 months
the item having the greatest value and the item with the smallest
odds of being received;
(3) if the seller is offering to sell an interest in an
oil, gas, or mineral field, well, or exploration site, the
information required by Section 302.153(h); and
(4) if the seller represents that an item is being
offered at a price below that usually charged for the item, the name
of the item’s manufacturer. (Bus. & Com. Code, Sec. 38.202.)
Sec. 302.203. REFERENCE TO COMPLIANCE WITH STATUTE
PROHIBITED. A seller may not make or authorize the making of a
reference to the seller’s compliance with this chapter to a
purchaser. (Bus. & Com. Code, Sec. 38.203.)
[Sections 302.204-302.250 reserved for expansion]
SUBCHAPTER F. OFFENSES
Sec. 302.251. VIOLATION OF CERTAIN PROVISIONS. (a) A
person commits an offense if the person knowingly violates Section
302.101, 302.105, 302.201, 302.202, or 302.203. Each violation
constitutes a separate offense.
(b) An offense under this section is a Class A misdemeanor.
(Bus. & Com. Code, Sec. 38.251.)
Sec. 302.252. ACTING AS SALESPERSON FOR UNREGISTERED
SELLER. (a) A person commits an offense if the person knowingly
acts as a salesperson on behalf of a seller who violates the
registration requirements of this chapter. Each violation
constitutes a separate offense.
(b) An offense under this section is a Class A misdemeanor.
(Bus. & Com. Code, Sec. 38.252.)
Sec. 302.253. REQUEST FOR CREDIT CARD ACCOUNT NUMBER OR
CHECKING ACCOUNT NUMBER AFTER OFFER OF FREE ITEM. (a) A seller
commits an offense if the seller knowingly:
(1) represents or implies that a purchaser will
receive an item without charge, regardless of whether the item is
designated as a gift, premium, bonus, or prize or otherwise; and
(2) requests a credit card account number or checking
account number from the purchaser to charge to the credit card
account or debit from the checking account an amount as a condition
precedent to the purchaser’s receipt of the item.
(b) An offense under this section is a Class A misdemeanor.
(Bus. & Com. Code, Sec. 38.253.)
[Sections 302.254-302.300 reserved for expansion]
SUBCHAPTER G. ENFORCEMENT
Sec. 302.301. INJUNCTION. (a) The attorney general may
bring an action to enjoin a person from violating this chapter.
(b) The attorney general shall notify the defendant of the
alleged prohibited conduct not later than the seventh day before
the date the action is filed, except that notice is not required if
the attorney general intends to request that the court issue a
temporary restraining order.
(c) The attorney general is entitled to recover all
reasonable costs of prosecuting the action, including court costs
and investigation costs, deposition expenses, witness fees, and
attorney’s fees. (Bus. & Com. Code, Sec. 38.301.)
Sec. 302.302. CIVIL PENALTIES. (a) A person who violates
this chapter is subject to a civil penalty of not more than $5,000
for each violation.
(b) A person who violates an injunction issued under Section
302.301 is liable to this state for a civil penalty of not more
than:
(1) $25,000 for each violation of the injunction; and
(2) $50,000 for all violations of the injunction.
(c) The attorney general may bring an action to recover a
civil penalty under Subsection (b) in the court that issued the
original injunction.
(d) The party bringing the action also is entitled to
recover all reasonable costs of prosecuting the action, including
court costs and investigation costs, deposition expenses, witness
fees, and attorney’s fees. (Bus. & Com. Code, Sec. 38.302.)
Sec. 302.303. DECEPTIVE TRADE PRACTICES. (a) A violation
of this chapter is a false, misleading, or deceptive act or practice
under Subchapter E, Chapter 17.
(b) A public or private right or remedy prescribed by
Subchapter E, Chapter 17, may be used to enforce this chapter.
(Bus. & Com. Code, Sec. 38.303.)
Sec. 302.304. ACTION TO RECOVER AGAINST SECURITY. (a) A
person injured by a seller’s bankruptcy or by a seller’s breach of
an agreement entered into during a telephone solicitation may bring
an action to recover against the security required under Section
302.107.
(b) The liability of the surety on a bond provided under
Section 302.107 may not exceed the amount of the bond, regardless of
the number of claims filed or the aggregate amount claimed. If the
amount claimed exceeds the amount of the bond, the surety shall
deposit the amount of the bond with the secretary of state for
distribution to claimants entitled to recovery, and the surety is
then relieved of all liability under the bond. (Bus. & Com. Code,
Sec. 38.304.)
CHAPTER 303. TELEPHONE SOLICITATION FOR CERTAIN LAW
ENFORCEMENT-RELATED CHARITABLE ORGANIZATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 303.001. DEFINITIONS
Sec. 303.002. SOLICITATION GOVERNED BY CHAPTER
Sec. 303.003. PUBLIC ACCESS TO CERTAIN DOCUMENTS AND
INFORMATION
Sec. 303.004. RULES; PROCEDURES; FORMS
[Sections 303.005-303.050 reserved for expansion]
SUBCHAPTER B. REGISTRATION AND BOND REQUIREMENTS
Sec. 303.051. RECORD OF ORGANIZATIONS
Sec. 303.052. FORM AND CONTENT OF REGISTRATION
STATEMENT
Sec. 303.053. INITIAL REGISTRATION STATEMENT
Sec. 303.054. EXPIRATION OF REGISTRATION; RENEWAL
Sec. 303.055. FILING FEE
Sec. 303.056. EXEMPTION: VOLUNTEER
Sec. 303.057. REGISTRATION DOES NOT IMPLY ENDORSEMENT
Sec. 303.058. BOOKS AND RECORDS
Sec. 303.059. BOND
[Sections 303.060-303.100 reserved for expansion]
SUBCHAPTER C. SOLICITATION PRACTICES
Sec. 303.101. DECEPTIVE ACT OR PRACTICE
Sec. 303.102. REPRESENTATION OF BENEFIT TO SURVIVORS
Sec. 303.103. NOTICE OF DISPOSITION OF MONEY
Sec. 303.104. HOURS OF SOLICITATION
[Sections 303.105-303.150 reserved for expansion]
SUBCHAPTER D. VIOLATION; REMEDIES
Sec. 303.151. NOTIFICATION OF NONCOMPLIANCE
Sec. 303.152. VIOLATIONS RELATING TO FILING OF
DOCUMENTS
Sec. 303.153. REMEDIES
Sec. 303.154. VENUE
CHAPTER 303. TELEPHONE SOLICITATION FOR CERTAIN LAW
ENFORCEMENT-RELATED CHARITABLE ORGANIZATIONS
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 303.001. DEFINITIONS. In this chapter:
(1) “Commercial telephone solicitor” means a person
whom a law enforcement-related charitable organization retains to
make a telephone solicitation, directly or through another person
under the direction of the person retained. The term does not
include a bona fide officer, director, or employee of, or volunteer
for, a law enforcement-related charitable organization.
(2) “Contribution” means a promise to give or a gift of
money or other property, credit, financial assistance, or another
thing of any kind or value. The term does not include:
(A) volunteer services; or
(B) bona fide fees, dues, or assessments a member
pays if membership is not conferred solely as consideration for
making a contribution in response to a telephone solicitation.
(3) “Law enforcement-related charitable organization”
means a person who solicits a contribution and is or purports to be
established or operating for a charitable purpose relating to law
enforcement. The term includes a nongovernmental law enforcement
organization or publication and survivors of law enforcement
officers killed in the line of duty. The term does not include a
governmental law enforcement agency or organization.
(4) “Telephone solicitation” means the use of a
telephone to solicit another person to make a charitable
contribution to a law enforcement-related charitable organization.
(V.A.C.S. Art. 9023e, Secs. 2(1), (2), (3), (6).)
Sec. 303.002. SOLICITATION GOVERNED BY CHAPTER. The
telephone solicitation of a contribution from a person in this
state is considered to be engaging in telephone solicitation in
this state regardless of where the solicitation originates.
(V.A.C.S. Art. 9023e, Sec. 1.)
Sec. 303.003. PUBLIC ACCESS TO CERTAIN DOCUMENTS AND
INFORMATION. (a) Except as provided by Subsection (b), a document
required to be filed with the attorney general under this chapter is
public information available to members of the public under Chapter
552, Government Code.
(b) A document that identifies the donors to a law
enforcement-related charitable organization is confidential and
not subject to disclosure. (V.A.C.S. Art. 9023e, Sec. 3(b).)
Sec. 303.004. RULES; PROCEDURES; FORMS. The attorney
general may adopt rules, procedures, and forms necessary to
administer and enforce this chapter. (V.A.C.S. Art. 9023e, Sec.
14.)
[Sections 303.005-303.050 reserved for expansion]
SUBCHAPTER B. REGISTRATION AND BOND REQUIREMENTS
Sec. 303.051. RECORD OF ORGANIZATIONS. The attorney
general shall maintain:
(1) a register of law enforcement-related charitable
organizations subject to this chapter; and
(2) a registry of law enforcement-related charitable
organizations that submit to the attorney general a completed
registration statement containing the information required by
Section 303.052. (V.A.C.S. Art. 9023e, Secs. 3(a), 4(a) (part).)
Sec. 303.052. FORM AND CONTENT OF REGISTRATION STATEMENT.
A registration statement under Section 303.051(2) must be submitted
on a form the attorney general prescribes or approves and must
contain:
(1) for each of the organization’s offices, chapters,
local units, branches, and affiliates:
(A) the legal name and each assumed name;
(B) the mailing address and street address; and
(C) each telephone number and facsimile number;
(2) the organization’s employer identification
number;
(3) the name, title, address, and telephone number of:
(A) the organization’s executive director or
other chief operating officer; and
(B) each of the organization’s officers and
directors;
(4) the name of each officer, director, or employee:
(A) whom the organization compensates or who has
custody and control of the organization’s money; and
(B) who has been convicted of or pleaded nolo
contendere to:
(i) a felony; or
(ii) a misdemeanor involving fraud or the
theft, misappropriation, misapplication, or misuse of another’s
property;
(5) for each person listed under Subdivision (4), a
statement of:
(A) the offense; and
(B) the state, court, and date of each conviction
or plea of nolo contendere;
(6) if the organization is a corporation, the date and
state of incorporation;
(7) if the organization is not a corporation, the type
of organization and date established;
(8) the date the organization began transacting
business in this state;
(9) the name and address of the organization’s
registered agent in this state;
(10) a statement of the organization’s charitable
purposes;
(11) a list of the programs for which funds are
solicited;
(12) the day and month on which the organization’s
fiscal year ends;
(13) a statement of whether the organization:
(A) is eligible to receive tax-deductible
contributions under Section 170, Internal Revenue Code of 1986; and
(B) has applied for or been granted tax-exempt
status by the Internal Revenue Service and, if so:
(i) the Internal Revenue Code of 1986
section on which the application was based;
(ii) the application date;
(iii) the date the exemption was granted or
denied; and
(iv) a statement of whether or when the tax
exemption has ever been denied, revoked, or modified;
(14) a statement that includes:
(A) the method of accounting used and the name,
address, and telephone number of each of the organization’s
accountants and auditors;
(B) for the preceding 12 months:
(i) the total contributions received;
(ii) the total fund-raising costs, computed
according to generally accepted accounting principles;
(iii) if the organization retained a
commercial telephone solicitor:
(a) the name and address of each
commercial telephone solicitor; and
(b) a written confirmation from each
commercial telephone solicitor that it has complied with all state
and local registration laws; and
(iv) the amount paid to commercial
telephone solicitors; and
(C) a statement that:
(i) the organization has attempted in good
faith to comply with each ordinance of a municipality or each order
of a county in this state regarding telephone solicitation that has
been filed with the attorney general; or
(ii) no ordinance or order described by
Subparagraph (i) applies;
(15) if the organization files a federal tax return, a
copy of:
(A) the organization’s most recently filed
Internal Revenue Service Form 990 and other federal tax returns;
(B) each supplement, amendment, and attachment
to those returns; and
(C) each request for an extension to file any of
those returns;
(16) if the organization does not file a federal tax
return:
(A) a statement of the reason a return is not
filed; and
(B) the organization’s most recent financial
statements, including audited financial statements, if any have
been prepared; and
(17) a sworn statement verifying that the information
contained in the registration statement and each attachment to the
registration statement is true, correct, and complete to the best
of the affiant’s knowledge. (V.A.C.S. Art. 9023e, Secs. 4(a)
(part), (e).)
Sec. 303.053. INITIAL REGISTRATION STATEMENT. A law
enforcement-related charitable organization shall file the
organization’s initial registration statement before the 10th
working day before the date the organization begins telephone
solicitation in this state. (V.A.C.S. Art. 9023e, Sec. 4(b).)
Sec. 303.054. EXPIRATION OF REGISTRATION; RENEWAL. (a) A
law enforcement-related charitable organization’s registration
expires on the 15th day of the fifth month after the last day of the
organization’s fiscal year.
(b) The organization shall file a renewal registration
statement on the form required under Section 303.052. The renewal
registration statement must include the organization’s name and
employer identification number and any changes to information
previously submitted to the attorney general. For an item on which
there is no change from the previous year’s registration statement,
“no change” may be indicated. (V.A.C.S. Art. 9023e, Sec. 4(c).)
Sec. 303.055. FILING FEE. (a) An initial registration
statement must be accompanied by a filing fee not to exceed $50.
(b) A renewal registration statement must be accompanied by
a filing fee of $50. (V.A.C.S. Art. 9023e, Sec. 4(d).)
Sec. 303.056. EXEMPTION: VOLUNTEER. A volunteer
authorized to solicit on behalf of a law enforcement-related
charitable organization is not required to register under this
chapter. (V.A.C.S. Art. 9023e, Sec. 4(f).)
Sec. 303.057. REGISTRATION DOES NOT IMPLY ENDORSEMENT. (a)
Registration under this chapter does not imply endorsement by this
state or the attorney general.
(b) A law enforcement-related charitable organization may
not state or imply that registration under this chapter is
endorsement by this state or the attorney general. (V.A.C.S. Art.
9023e, Sec. 8.)
Sec. 303.058. BOOKS AND RECORDS. (a) A law
enforcement-related charitable organization required to file a
registration statement shall maintain books and records of the
organization’s activities in this state. The books and records must
be maintained:
(1) in a form that enables the organization to
accurately provide the information required by this chapter; and
(2) until at least the third anniversary of the end of
the period to which the registration statement relates.
(b) On written request of authorized personnel of the
attorney general, the organization shall make the books and records
available for inspection and copying by authorized personnel:
(1) at the organization’s principal place of business
not later than the 10th working day after the date of the request;
or
(2) at another agreed place and time.
(c) The authority provided by this section is in addition to
the attorney general’s other statutory or common law audit or
investigative authority. (V.A.C.S. Art. 9023e, Sec. 7.)
Sec. 303.059. BOND. A commercial telephone solicitor shall
post with the secretary of state a surety bond that:
(1) is in the amount of $50,000; and
(2) is issued by a surety company authorized to
transact business in this state. (V.A.C.S. Art. 9023e, Sec. 5.)
[Sections 303.060-303.100 reserved for expansion]
SUBCHAPTER C. SOLICITATION PRACTICES
Sec. 303.101. DECEPTIVE ACT OR PRACTICE. A person may not
commit an unfair or deceptive act or practice in making a telephone
solicitation for a law enforcement-related charitable
organization. (V.A.C.S. Art. 9023e, Sec. 13(a).)
Sec. 303.102. REPRESENTATION OF BENEFIT TO SURVIVORS. A
person may not represent to a person solicited that a contribution
is to be used to benefit the survivors of a law enforcement officer
killed in the line of duty unless:
(1) all of the contributions collected are used to
benefit those survivors; or
(2) the person solicited is informed in writing of the
percentage of the contribution that will directly benefit those
survivors. (V.A.C.S. Art. 9023e, Sec. 13(b).)
Sec. 303.103. NOTICE OF DISPOSITION OF MONEY. (a) If less
than 90 percent of the contributions collected by a law
enforcement-related charitable organization or commercial
telephone solicitor are paid to a law enforcement-related
charitable organization, the commercial telephone solicitor shall
notify each person solicited by telephone, before accepting a
contribution from the person, of:
(1) the percentage of the contributions that will be
paid to the organization for which the contributions are being
solicited; and
(2) the percentage of the contributions that the
solicitor will retain.
(b) Information required to be disclosed under Subsection
(a) shall also be included on any written statement mailed to the
contributor. (V.A.C.S. Art. 9023e, Sec. 12(a).)
Sec. 303.104. HOURS OF SOLICITATION. A law
enforcement-related charitable organization or commercial
telephone solicitor may not make a telephone solicitation call
unless the call is made after 9 a.m. and before 7 p.m., Monday
through Friday. (V.A.C.S. Art. 9023e, Sec. 12(b).)
[Sections 303.105-303.150 reserved for expansion]
SUBCHAPTER D. VIOLATION; REMEDIES
Sec. 303.151. NOTIFICATION OF NONCOMPLIANCE. If a law
enforcement-related charitable organization does not file a
document required by this chapter, files an incomplete or
inaccurate document, or otherwise does not comply with this
chapter, the attorney general shall notify the organization of the
organization’s noncompliance by first class mail sent to the
organization’s last reported address. (V.A.C.S. Art. 9023e, Sec.
6(a).)
Sec. 303.152. VIOLATIONS RELATING TO FILING OF DOCUMENTS.
(a) A law enforcement-related charitable organization violates
this chapter if the organization:
(1) does not file complete documents before the 31st
day after the date a notice under Section 303.151 is mailed; or
(2) with actual awareness files materially inaccurate
documents.
(b) For purposes of Subsection (a)(2), actual awareness may
be inferred from an objective manifestation that indicates that a
person acted with actual awareness. (V.A.C.S. Art. 9023e, Secs.
2(4), 6(b).)
Sec. 303.153. REMEDIES. (a) The attorney general may bring
an action against a person who violates this chapter to:
(1) cancel or suspend the person’s registration;
(2) obtain an injunction to restrain the person from
continuing the violation;
(3) restrain the person from transacting business in
this state while violating this chapter;
(4) impose a civil penalty of not more than $25,000 for
each violation; or
(5) both obtain an injunction and impose a civil
penalty.
(b) A person who violates an injunction issued under this
section is liable to this state for a civil penalty of not less than
$100,000.
(c) In an action that the attorney general successfully
prosecutes under this chapter, the court may allow the attorney
general to recover civil penalties and the reasonable costs,
attorney’s fees, and expenses, including investigative costs,
witness fees, and deposition expenses, incurred in bringing the
action.
(d) A remedy authorized by this chapter is in addition to
any other procedure or remedy provided by another statutory law or
common law. (V.A.C.S. Art. 9023e, Secs. 9, 10 (part).)
Sec. 303.154. VENUE. An action under this chapter must be
brought in:
(1) Travis County;
(2) the county in which the law enforcement-related
charitable organization has its principal place of business or a
fixed and established place of business at the time the action is
brought; or
(3) the county in which solicitation occurred.
(V.A.C.S. Art. 9023e, Sec. 11.)
CHAPTER 304. TELEMARKETING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 304.001. SHORT TITLE
Sec. 304.002. DEFINITIONS
Sec. 304.003. MAKING TELEMARKETING CALL
Sec. 304.004. INAPPLICABILITY OF CHAPTER TO CERTAIN
CALLS
Sec. 304.005. LIBERAL CONSTRUCTION AND APPLICATION
Sec. 304.006. ATTEMPTED WAIVER VOID
[Sections 304.007-304.050 reserved for expansion]
SUBCHAPTER B. TEXAS NO-CALL LIST
Sec. 304.051. MAINTENANCE OF TEXAS NO-CALL LIST
Sec. 304.052. TELEMARKETING CALL TO TELEPHONE NUMBER
ON LIST PROHIBITED
Sec. 304.053. EXPIRATION, RENEWAL, AND DELETION OF
ENTRY
Sec. 304.054. FEE
Sec. 304.055. PUBLICATION IN TELEPHONE DIRECTORY
Sec. 304.056. PLACEMENT OF ENTRIES ON NATIONAL
DO-NOT-CALL REGISTRY
Sec. 304.057. GENERAL RULEMAKING AUTHORITY
Sec. 304.058. RULES REGARDING ISOLATED CALLS
Sec. 304.059. RULES REGARDING PUBLIC NOTICE
Sec. 304.060. RULES REGARDING DISSEMINATION OF LIST
Sec. 304.061. EDUCATIONAL PROGRAMS
Sec. 304.062. ASSISTANCE OF DEPARTMENT OF INFORMATION
RESOURCES
[Sections 304.063-304.100 reserved for expansion]
SUBCHAPTER C. FACSIMILE TRANSMISSIONS
Sec. 304.101. NOTICE IN FACSIMILE SOLICITATION
Sec. 304.102. ACKNOWLEDGMENT REQUIRED; TRANSMISSION
PROHIBITED
[Sections 304.103-304.150 reserved for expansion]
SUBCHAPTER D. CALLER IDENTIFICATION
Sec. 304.151. INTERFERENCE WITH CALLER IDENTIFICATION
SERVICE OR DEVICE PROHIBITED
Sec. 304.152. EXCEPTION: USE OF CERTAIN SERVICE OR
EQUIPMENT
[Sections 304.153-304.200 reserved for expansion]
SUBCHAPTER E. REGULATORY REPORTS
Sec. 304.201. REPORT BY COMMISSION
Sec. 304.202. REPORT BY ATTORNEY GENERAL
[Sections 304.203-304.250 reserved for expansion]
SUBCHAPTER F. ENFORCEMENT
Sec. 304.251. ENFORCEMENT BY COMMISSION
Sec. 304.252. ENFORCEMENT BY ATTORNEY GENERAL
Sec. 304.253. ENFORCEMENT BY LICENSING AGENCY
Sec. 304.254. DETERMINATION OF AMOUNT OF
ADMINISTRATIVE PENALTY
Sec. 304.255. STAY OF ADMINISTRATIVE PENALTY
Sec. 304.256. CONTESTED CASE
Sec. 304.257. PRIVATE ACTION: TELEMARKETING CALLS
Sec. 304.258. PRIVATE ACTION: FACSIMILE TRANSMISSION
Sec. 304.259. VENUE
CHAPTER 304. TELEMARKETING
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 304.001. SHORT TITLE. This chapter may be cited as the
Texas Telemarketing Disclosure and Privacy Act. (Bus. & Com. Code,
Sec. 44.001.)
Sec. 304.002. DEFINITIONS. In this chapter:
(1) “Caller identification service or device” means a
service or device designed to provide the user of the service or
device with the telephone number of an incoming telephone call.
(2) “Commission” means the Public Utility Commission
of Texas.
(3) “Consumer good or service” means property of any
kind that is normally used for personal, family, or household
purposes. The term does not include a security, as defined by
Section 4, The Securities Act (Article 581-4, Vernon’s Texas Civil
Statutes).
(4) “Established business relationship” means a
relationship that:
(A) is formed by a voluntary two-way
communication between a person and a consumer, regardless of
whether consideration is exchanged;
(B) pertains to a consumer good or service
offered by the person; and
(C) has not been terminated by either party.
(5) “Facsimile recording device” means a device
capable of receiving a facsimile transmission.
(6) “Facsimile solicitation” means a telemarketing
call made by a transmission to a facsimile recording device.
(7) “State licensee” means a person licensed by a
state agency under a law of this state that requires the person to
obtain a license as a condition of engaging in a profession or
business.
(8) “Telemarketer” means a person who makes or causes
to be made a telemarketing call.
(9) “Telemarketing call” means an unsolicited
telephone call made to:
(A) solicit a sale of a consumer good or service;
(B) solicit an extension of credit for a consumer
good or service; or
(C) obtain information that may be used to
solicit a sale of a consumer good or service or to extend credit for
the sale.
(10) “Telephone call” means a call or other
transmission made to or received at a telephone number, including:
(A) a call made by an automated telephone dialing
system;
(B) a transmission to a facsimile recording
device; and
(C) a call to a mobile telephone number serviced
by a provider of commercial mobile service, as defined by Section
332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.),
as amended, Federal Communications Commission rules, or the Omnibus
Budget Reconciliation Act of 1993 (Pub. L. No. 103-66), as amended.
(Bus. & Com. Code, Secs. 44.002, 44.003(a).)
Sec. 304.003. MAKING TELEMARKETING CALL. For purposes of
this chapter, a person makes a telemarketing call if the person
effects a telemarketing call on the person’s own behalf or on behalf
of another entity. A person makes a telemarketing call on behalf of
another entity if, as a result of the telemarketing call, the other
entity can:
(1) become entitled to receive money or other property
of any kind from a sale solicited during the call; or
(2) receive information obtained during the call to:
(A) extend or offer to extend to the person
solicited credit for a consumer good or service; or
(B) directly solicit a sale of a consumer good or
service or extend credit for the sale. (Bus. & Com. Code, Sec.
44.004.)
Sec. 304.004. INAPPLICABILITY OF CHAPTER TO CERTAIN
CALLS. This chapter does not apply to a call made:
(1) by a consumer:
(A) as the result of a solicitation by a seller or
telemarketer; or
(B) in response to general media advertising by a
direct mail solicitation that clearly, conspicuously, and
truthfully makes all disclosures required by federal or state law;
(2) in connection with:
(A) an established business relationship; or
(B) a business relationship that has been
terminated, if the call is made before the later of:
(i) the publication date of the first Texas
no-call list in which the consumer’s telephone number appears; or
(ii) the first anniversary of the date of
termination;
(3) between a telemarketer and a business, other than
by a facsimile solicitation, unless the business has informed the
telemarketer that the business does not wish to receive a
telemarketing call from the telemarketer;
(4) to collect a debt; or
(5) by a state licensee if:
(A) the call is not made by an automated
telephone dialing system;
(B) the solicited transaction is not completed
until a face-to-face sales presentation by the seller occurs and
the consumer is not required to pay or authorize payment until after
the presentation; and
(C) the consumer has not informed the
telemarketer that the consumer does not wish to receive a
telemarketing call from the telemarketer. (Bus. & Com. Code, Sec.
44.003(b).)
Sec. 304.005. LIBERAL CONSTRUCTION AND APPLICATION. This
chapter shall be liberally construed and applied to promote its
underlying purpose to protect the public against false, misleading,
abusive, or deceptive practices in the telemarketing business.
(Bus. & Com. Code, Sec. 44.005.)
Sec. 304.006. ATTEMPTED WAIVER VOID. An attempted waiver
of a provision of this chapter is void. (Bus. & Com. Code, Sec.
44.006.)
[Sections 304.007-304.050 reserved for expansion]
SUBCHAPTER B. TEXAS NO-CALL LIST
Sec. 304.051. MAINTENANCE OF TEXAS NO-CALL LIST. (a) The
commission shall provide for the operation of a database to compile
a list of names, zip codes, and telephone numbers of consumers in
this state who object to receiving telemarketing calls or other
unsolicited telephone calls.
(b) The Texas no-call list is a combined list consisting of
the name and telephone numbers of:
(1) each consumer in this state who has requested to be
on that list; and
(2) each person in the portion of the national
do-not-call registry maintained by the United States government
that relates to this state.
(c) The commission shall:
(1) make available an Internet website at which a
person may request that a telephone number be placed on the Texas
no-call list; and
(2) provide a toll-free telephone number and mailing
address that a person may call or write to obtain a copy of a form to
request placement of a telephone number on the Texas no-call list.
(d) The Texas no-call list shall be updated and published on
January 1, April 1, July 1, and October 1 of each year.
(e) The commission may contract with a private vendor to
maintain the Texas no-call list if the vendor has maintained a
no-call list database containing the names and telephone numbers of
consumers who have previously requested to be added to a no-call
list. A contract under this subsection must require the vendor to
publish the Texas portion of the national no-call list in an
electronic format for any telemarketer who agrees to use the Texas
no-call list only to update the telemarketer’s no-call list to
include those persons with whom the telemarketer does not have an
established business relationship. (Bus. & Com. Code, Secs.
44.101(a), (b), (c) (part).)
Sec. 304.052. TELEMARKETING CALL TO TELEPHONE NUMBER ON
LIST PROHIBITED. A telemarketer may not make a telemarketing call
to a telephone number published on the Texas no-call list more than
60 days after the date the telephone number appears on the current
list. (Bus. & Com. Code, Sec. 44.102(a).)
Sec. 304.053. EXPIRATION, RENEWAL, AND DELETION OF ENTRY.
(a) An entry on the Texas no-call list expires on the third
anniversary of the date the entry is first published on the list.
An entry may be renewed for successive three-year periods.
(b) The telephone number of a consumer on the Texas no-call
list may be deleted from the list if:
(1) the consumer makes a written request; or
(2) the telephone number of the consumer is changed.
(Bus. & Com. Code, Sec. 44.101(c) (part).)
Sec. 304.054. FEE. (a) Except as provided by Subsection
(b), the commission may charge a person a reasonable amount not to
exceed $3 for a request to place a telephone number on the Texas
no-call list or to renew an entry on the list.
(b) The commission shall provide a method for placement or
renewal of an entry by use of the Internet at no charge. (Bus. &
Com. Code, Sec. 44.101(c) (part).)
Sec. 304.055. PUBLICATION IN TELEPHONE DIRECTORY. A
private for-profit publisher of a residential telephone directory
that is distributed to the public at minimal or no cost shall
include in the directory a prominently displayed Internet website
address, toll-free number, and mailing address established by the
commission through which a person may request placement of a
telephone number on the Texas no-call list or order a copy of the
form to make that request. (Bus. & Com. Code, Sec. 44.101(c)
(part).)
Sec. 304.056. PLACEMENT OF ENTRIES ON NATIONAL DO-NOT-CALL
REGISTRY. The commission or a person the commission designates
may:
(1) provide information on the Texas no-call list to
the administrator of the national do-not-call registry; and
(2) allow the names and telephone numbers on the Texas
no-call list to be placed on the national do-not-call registry.
(Bus.& Com. Code, Sec. 44.101(d).)
Sec. 304.057. GENERAL RULEMAKING AUTHORITY. The commission
may adopt rules to administer this subchapter and Subchapter F,
other than Sections 304.254, 304.255, 304.256, and 304.258, as that
subchapter relates to the Texas no-call list. (Bus. & Com. Code,
Sec. 44.103(a) (part).)
Sec. 304.058. RULES REGARDING ISOLATED CALLS. The
commission shall adopt rules providing that a telemarketing call
made to a telephone number on the Texas no-call list is not a
violation of Section 304.052 if the telemarketing call:
(1) is an isolated occurrence; and
(2) is made by a person who has in place adequate
procedures to comply with this subchapter. (Bus. & Com. Code, Sec.
44.103(a) (part).)
Sec. 304.059. RULES REGARDING PUBLIC NOTICE. The
commission shall adopt rules requiring each local exchange
telephone company and each provider of commercial mobile service,
as described by Section 304.002(10)(C), that provides commercial
mobile service in this state to inform its customers of the
requirements of this subchapter and Sections 304.251, 304.252,
304.253, 304.257, and 304.259, as those sections relate to the
Texas no-call list, through:
(1) annual inserts in billing statements mailed to
customers;
(2) notification:
(A) included in a customer’s electronic bill;
(B) printed on a customer’s paper bill;
(C) sent free of charge by messaging service to a
customer’s mobile telephone number; or
(D) conspicuously published in the consumer
information pages of local telephone directories; or
(3) other appropriate means of notice. (Bus. & Com.
Code, Sec. 44.103(a) (part).)
Sec. 304.060. RULES REGARDING DISSEMINATION OF LIST. The
commission shall adopt rules providing for:
(1) the distribution of the Texas no-call list in
formats, including electronic formats, commonly used by persons
making telemarketing calls; and
(2) a fee for each distribution, not to exceed $75.
(Bus. & Com. Code, Sec. 44.103(a) (part).)
Sec. 304.061. EDUCATIONAL PROGRAMS. In addition to
requiring the notice under Section 304.059, the commission may
conduct educational programs designed to inform members of the
public of their rights and telemarketers of their obligations under
this subchapter and Sections 304.251, 304.252, 304.253, 304.257,
and 304.259, as those sections relate to the Texas no-call list.
(Bus. & Com. Code, Sec. 44.103(b).)
Sec. 304.062. ASSISTANCE OF DEPARTMENT OF INFORMATION
RESOURCES. On request of the commission, the Department of
Information Resources shall assist the commission in administering
this subchapter. (Bus. & Com. Code, Sec. 44.104.)
[Sections 304.063-304.100 reserved for expansion]
SUBCHAPTER C. FACSIMILE TRANSMISSIONS
Sec. 304.101. NOTICE IN FACSIMILE SOLICITATION. In
addition to complying with the technical and procedural standards
established by federal statutes or regulations regarding telephone
facsimile machines and transmissions, a person in this state who
makes or causes to be made a facsimile solicitation shall include in
the transmitted document or on a cover page to the document a
statement, in at least 12-point type, containing:
(1) the complete name of the person making the
facsimile solicitation and street address of the person’s place of
business; and
(2) a toll-free or local exchange accessible telephone
number of the person that:
(A) is answered in the order in which calls are
received by an individual capable of responding to inquiries from
recipients of facsimile solicitations at all times after 9 a.m. and
before 5 p.m. on each day except Saturday and Sunday; or
(B) automatically and immediately deletes the
specified telephone number of the recipient. (Bus. & Com. Code,
Sec. 44.151.)
Sec. 304.102. ACKNOWLEDGMENT REQUIRED; TRANSMISSION
PROHIBITED. On receiving oral or written notice from the recipient
of a facsimile solicitation not to send any further facsimile
transmissions to one or more specified telephone numbers, the
person making the solicitation:
(1) shall within 24 hours after receiving the notice
send the recipient of the solicitation written acknowledgment of
the receipt; and
(2) other than a single transmission to comply with
Subdivision (1), may not make or cause to be made a transmission to
a telephone number specified by the recipient. (Bus. & Com. Code,
Sec. 44.152.)
[Sections 304.103-304.150 reserved for expansion]
SUBCHAPTER D. CALLER IDENTIFICATION
Sec. 304.151. INTERFERENCE WITH CALLER IDENTIFICATION
SERVICE OR DEVICE PROHIBITED. (a) In making a telemarketing
call, a telemarketer may not block the identity of the telephone
number from which the call is made to evade a device designed to
identify a telephone caller.
(b) A telemarketer may not:
(1) interfere with or circumvent the capability of a
caller identification service or device to access or provide to the
recipient of the telemarketing call any information regarding the
call that the service or device is capable of providing; or
(2) fail to provide caller identification information
in a manner that is accessible by a caller identification service or
device, if the telemarketer is capable of providing the information
in that manner. (Bus. & Com. Code, Secs. 44.051(a), (b).)
Sec. 304.152. EXCEPTION: USE OF CERTAIN SERVICE OR
EQUIPMENT. For purposes of Section 304.151, use of a
telecommunications service or telecommunications equipment that is
incapable of transmitting caller identification information does
not of itself constitute interference with or circumvention of the
capability of a caller identification service or device to access
or provide the information. (Bus. & Com. Code, Sec. 44.051(c).)
[Sections 304.153-304.200 reserved for expansion]
SUBCHAPTER E. REGULATORY REPORTS
Sec. 304.201. REPORT BY COMMISSION. (a) Before December
31 of each even-numbered year, the commission shall submit a report
to the lieutenant governor and the speaker of the house of
representatives.
(b) The report must contain for the two-year period ending
August 31 of the year of the report:
(1) a statement of:
(A) the number of telephone numbers included on
the Texas no-call list;
(B) the number of no-call lists distributed; and
(C) the amount collected for requests to place
telephone numbers and renew entries on the list and for
distribution of the list;
(2) a list of complaints the commission received
concerning activities regulated by this chapter, itemized by type;
(3) a summary of any enforcement efforts made by the
commission; and
(4) the commission’s recommendations for any changes
to this chapter. (Bus. & Com. Code, Sec. 44.201.)
Sec. 304.202. REPORT BY ATTORNEY GENERAL. (a) Before
December 31 of each even-numbered year, the attorney general shall
submit a report to the lieutenant governor and the speaker of the
house of representatives.
(b) The report must contain for the two-year period ending
August 31 of the year of the report:
(1) a list of complaints the attorney general received
concerning activities regulated by this chapter, itemized by type;
(2) a summary of any enforcement efforts made by the
attorney general; and
(3) the attorney general’s recommendations for any
changes to this chapter. (Bus. & Com. Code, Sec. 44.202.)
[Sections 304.203-304.250 reserved for expansion]
SUBCHAPTER F. ENFORCEMENT
Sec. 304.251. ENFORCEMENT BY COMMISSION. (a) Except as
provided by Section 304.253, the commission shall receive and
investigate complaints concerning violations of Subchapters B, C,
and D and may impose an administrative penalty not to exceed $1,000
for each violation.
(b) Notwithstanding Section 304.252, if a complaint alleges
that the person violating Subchapter B, C, or D is a
telecommunications provider, as defined by Section 51.002,
Utilities Code, the commission has exclusive jurisdiction over the
violation alleged in the complaint. (Bus. & Com. Code, Secs.
44.052(a), 44.102(b) (part), 44.153(a) (part).)
Sec. 304.252. ENFORCEMENT BY ATTORNEY GENERAL. (a) Except
as provided by Section 304.253, the attorney general may
investigate violations of Subchapters B, C, and D and file civil
enforcement actions seeking:
(1) a civil penalty in an amount not to exceed $1,000
for each violation, except as provided by Subsection (b);
(2) injunctive relief; and
(3) attorney’s fees.
(b) If the court finds the defendant wilfully or knowingly
violated Subchapter B, C, or D, the court may increase the amount of
the civil penalty to an amount not to exceed $3,000 for each
violation.
(c) A violation of Subchapter B, C, or D is subject to
enforcement action by the attorney general’s consumer protection
division under Sections 17.47, 17.58, 17.60, and 17.61. (Bus. &
Com. Code, Secs. 44.052(b), 44.102(c), 44.153(b).)
Sec. 304.253. ENFORCEMENT BY LICENSING AGENCY. (a) A state
agency that issues a license to a state licensee shall:
(1) receive and investigate complaints concerning
violations of Subchapters B and C by the state licensee; and
(2) may receive and investigate complaints concerning
violations of Subchapter D by the state licensee.
(b) The state agency may:
(1) impose an administrative penalty not to exceed
$1,000 for each violation;
(2) order restitution for any monetary damages of the
complainant in the case of a violation of Subchapter B or D; and
(3) suspend or revoke the state licensee’s license, if
the agency finds that the licensee wilfully or knowingly violated
Subchapter B, C, or D. (Bus. & Com. Code, Secs. 44.052(c),
44.102(d), 44.153(c).)
Sec. 304.254. DETERMINATION OF AMOUNT OF ADMINISTRATIVE
PENALTY. The amount of an administrative penalty imposed under
this subchapter must be based on:
(1) the seriousness of the violation, including the
nature, circumstances, extent, and gravity of the violation;
(2) any history of previous violations;
(3) the amount necessary to deter a future violation;
(4) any effort to correct the violation; and
(5) any other matter that justice may require. (Bus. &
Com. Code, Sec. 44.251.)
Sec. 304.255. STAY OF ADMINISTRATIVE PENALTY. (a) The
enforcement of an administrative penalty imposed under this
subchapter may be stayed during the time the order is under judicial
review if the person on whom the penalty is imposed pays the penalty
to the clerk of the court or files a supersedeas bond with the court
in the amount of the penalty.
(b) A person who cannot afford to pay the penalty or file the
bond may stay the enforcement by filing an affidavit in the manner
required by the Texas Rules of Civil Procedure for a party who
cannot afford to file security for costs, subject to the right to
contest the affidavit as provided by those rules. (Bus. & Com.
Code, Sec. 44.252.)
Sec. 304.256. CONTESTED CASE. A proceeding to impose an
administrative penalty under this subchapter is a contested case
under Chapter 2001, Government Code. (Bus. & Com. Code, Sec.
44.253.)
Sec. 304.257. PRIVATE ACTION: TELEMARKETING CALLS. (a) A
consumer on the Texas no-call list is presumed to be adversely
affected by a telemarketer who calls the consumer more than once.
The consumer may bring a civil action based on the second or a
subsequent violation of Subchapter B if:
(1) the consumer has notified the telemarketer of the
alleged violation;
(2) not later than the 30th day after the date of the
call, the consumer files with the commission, the attorney general,
or a state agency that licenses the person making the call a
verified complaint stating the relevant facts surrounding the
violation; and
(3) the commission, attorney general, or state agency
receiving the complaint does not initiate an administrative action
or a civil enforcement action, as appropriate, against the
telemarketer named in the complaint before the 121st day after the
date the complaint is filed.
(b) If the consumer brings an action based on a violation of
Section 304.052 and the court finds that the defendant wilfully or
knowingly violated that section, the court may award damages in an
amount not to exceed $500 for each violation.
(c) Section 304.251(b) does not affect the right of a
consumer to bring an action under Subsection (a). (Bus. & Com.
Code, Secs. 44.102(b) (part), (f), (g).)
Sec. 304.258. PRIVATE ACTION: FACSIMILE TRANSMISSION. (a)
A person may bring a civil action based on a violation of Subchapter
C:
(1) for damages in an amount equal to the greater of:
(A) the person’s actual monetary loss from the
violation; or
(B) $500 for each violation;
(2) to enjoin the violation; or
(3) for both damages and an injunction.
(b) If the court finds that the defendant wilfully or
knowingly violated Subchapter C, the court may increase the amount
of the damages awarded to an amount equal to not more than three
times the amount available under Subsection (a)(1).
(c) Section 304.251(b) does not affect the right of a
consumer to bring an action under Subsection (a). (Bus. & Com.
Code, Secs. 44.153(a) (part), (e), (f).)
Sec. 304.259. VENUE. (a) Venue for an action based on a
violation of Subchapter B or C is in:
(1) the county in which the telemarketing call was
made or received; or
(2) Travis County, if the action is brought by the
commission, the attorney general, or a state agency.
(b) Venue for an action under Subchapter D is in Travis
County. (Bus. & Com. Code, Secs. 44.052(d), 44.102(e), 44.153(d).)
CHAPTER 305. TELEPHONIC COMMUNICATIONS MADE FOR
PURPOSE OF SOLICITATION
SUBCHAPTER A. PROHIBITED COMMUNICATIONS MADE FOR
PURPOSE OF SOLICITATION
Sec. 305.001. PROHIBITED TELEPHONE CALLS
Sec. 305.002. PROHIBITED FACSIMILE TRANSMISSIONS:
CHARGE TO RECIPIENT
Sec. 305.003. PROHIBITED FACSIMILE TRANSMISSIONS:
HOURS OF TRANSMISSION
[Sections 305.004-305.050 reserved for expansion]
SUBCHAPTER B. ENFORCEMENT
Sec. 305.051. INVESTIGATION
Sec. 305.052. CRIMINAL PENALTY
Sec. 305.053. CIVIL ACTION
CHAPTER 305. TELEPHONIC COMMUNICATIONS MADE FOR
PURPOSE OF SOLICITATION
SUBCHAPTER A. PROHIBITED COMMUNICATIONS MADE FOR
PURPOSE OF SOLICITATION
Sec. 305.001. PROHIBITED TELEPHONE CALLS. A person may not
make a telephone call or use an automatic dial announcing device to
make a telephone call for the purpose of making a sale if:
(1) the person making the call or using the device
knows or should have known that the called number is a mobile
telephone for which the called person will be charged for that
specific call; and
(2) the called person has not consented to the making
of such a call to the person calling or using the device or to the
business enterprise for which the person is calling or using the
device. (Bus. & Com. Code, Sec. 35.47(a).)
Sec. 305.002. PROHIBITED FACSIMILE TRANSMISSIONS: CHARGE
TO RECIPIENT. A person may not make or cause to be made a
transmission for the purpose of a solicitation or sale to a
facsimile recording device or other telecopier for which the person
receiving the transmission will be charged for the transmission,
unless the person receiving the transmission has, before the
transmission, consented to the making of the transmission. (Bus. &
Com. Code, Sec. 35.47(b).)
Sec. 305.003. PROHIBITED FACSIMILE TRANSMISSIONS: HOURS OF
TRANSMISSION. A person may not make or cause to be made a
transmission for the purpose of a solicitation or sale to a
facsimile recording device after 11 p.m. and before 7 a.m. (Bus. &
Com. Code, Sec. 35.47(c).)
[Sections 305.004-305.050 reserved for expansion]
SUBCHAPTER B. ENFORCEMENT
Sec. 305.051. INVESTIGATION. (a) On complaint of a called
person that a person has violated Section 305.001, 305.002, or
305.003, the county or district attorney of the county in which the
called person resides shall investigate the complaint and file
charges if appropriate.
(b) A telephone company serving the caller or called person
is not responsible for investigating a complaint or keeping records
relating to this chapter. (Bus. & Com. Code, Sec. 35.47(d).)
Sec. 305.052. CRIMINAL PENALTY. (a) A person who violates
Section 305.001, 305.002, or 305.003 commits an offense.
(b) An offense under this section is a Class C misdemeanor.
(Bus. & Com. Code, Sec. 35.47(e).)
Sec. 305.053. CIVIL ACTION. (a) A person who receives a
communication that violates 47 U.S.C. Section 227, a regulation
adopted under that provision, or Subchapter A may bring an action in
this state against the person who originates the communication for:
(1) an injunction;
(2) damages in the amount provided by this section; or
(3) both an injunction and damages.
(b) A plaintiff who prevails in an action for damages under
this section is entitled to the greater of:
(1) $500 for each violation; or
(2) the plaintiff’s actual damages.
(c) If the court finds that the defendant committed the
violation knowingly or intentionally, the court may increase the
amount of the award of damages under Subsection (b) to not more than
the greater of:
(1) $1,500 for each violation; or
(2) three times the plaintiff’s actual damages. (Bus. &
Com. Code, Sec. 35.47(f).)
[Chapters 306-320 reserved for expansion]
SUBTITLE B. ELECTRONIC COMMUNICATIONS
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
(C) provides to an end user of an electronic mail
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
(C) has not been terminated by either person.
(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;
or
(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.
(c) The attorney general or prosecuting attorney may
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.
(c) A person injured by a violation of this chapter does not
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.
(c) This chapter applies to an electronic record or
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.
(c) A party that agrees to conduct a transaction by
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.
(c) If a law requires a record to be in writing, an
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.
(c) If a sender inhibits the ability of a recipient to store
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.
(c) In an automated transaction involving an individual,
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.
(c) A person may satisfy Subsection (a) by using the
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.
(c) A contract may be formed by the interaction of an
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.
(c) Subsection (b) applies even if the place the information
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.
(c) A system satisfies Subsection (b), and a person is
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.
(c) Except as otherwise provided in Section 322.012(f),
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.
(c) A person who charges a fee to provide an interactive
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;
(C) an electronic mail address;
(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;
(C) a password or access code associated with a
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
(C) a list of bookmarks used to access web pages;
(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
(C) to play a particular type of musical or other
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.

(c) In addition to any other remedy provided by law and
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;
or
(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.
(c) The attorney general is entitled to recover reasonable
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.
(c) The court may increase the amount of an award of actual
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).
(c) A person, other than a government or a governmental
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.
(c) The attorney general may bring an action in the name of
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
(C) the Health Insurance Portability and
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;
or
(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.
(c) A merchant or a third party under contract with a
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.
(c) A restaurant or bar owner shall display in a prominent
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.
(c) A person who provides, leases, or sells a cash register
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
(C) is printed with information relating to the
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.
(c) The option under Subsection (b) to require the signature
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.
(c) A person who possesses a biometric identifier of an
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;
(C) the disclosure is required or permitted by a
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
(C) a member of the family of a person described
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.
(c) A person commits an offense if the person violates
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;
(C) unique biometric data, including the
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
(C) account number or credit or debit card number
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.
(c) 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. (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.
(c) This section does not apply to a financial institution
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.
(c) Any person who maintains computerized data that
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;
(C) the dollar amount of the account or
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.
(c) Information contained in a copy of an order provided to
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.
(c) An action brought under Subsection (b) must be filed in
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.
(c) If conduct that constitutes an offense under this
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.
(c) A license issued under Subtitle B, Title 4, Finance
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.
(c) If a consumer has included with a security alert a
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.”
(c) A victim of identity theft who requests that a financial
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;
or
(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
(C) the transaction is negotiated at a place
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.

(c) If the merchant fails to demand possession of the goods
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;
(C) cancel and return a negotiable instrument
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
(C) the value of which is reduced on redemption;
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
(C) an air carrier holding a certificate of
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
(C) an educational institution for fund-raising
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
(C) all offered prizes are awarded.
(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
(C) both name and number, letter, or symbol.
(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.
(c) If a prize or gift involves lodging, airfare, a trip, or
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.
(c) A condition that restricts the refund of the deposit
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.
(c) An offeror may not charge a redemption or shipping fee
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.
(c) The contest period for a matched contest may not exceed
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;
or
(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.
(c) If the odds of winning a prize cannot be determined
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.
(c) Except as provided by Sections 621.152-621.154, an
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;
(C) the number of major prizes awarded;
(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;
(C) the date each major prize was 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.
(c) An offense under this section is:
(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;
(C) a graphic or symbol; and
(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
(C) either:
(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.
(c) Subsections (a)(1) and (b)(3) do not apply to a single
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;
(C) a winner will be selected at a time or place
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;
(C) will be a winner if certain conditions are
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
(C) a combination of images and sounds.
(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
(C) possesses the recording for a purpose
described by Paragraph (A) or (B).
(c) 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 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).
(c) In the absence of a written agreement or law to the
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.
(c) An offense under this section is a Class A misdemeanor,
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
(C) possesses a recording for a purpose described
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.
(c) The following occurrences are not considered a
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.
(c) The voting board members must include:
(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;
(C) a county, municipality, or special district;
or
(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.
(c) The corporation or entity may apply for or adopt any
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.
(c) An offense under this section is a misdemeanor
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:
(c) If a transaction that is subject to this title is a
“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;
(C) Chapters 17, 53, 54, 72, 92, 101, 103, 305,
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.
(c) If a motor fuel pump is supplied by a storage tank into
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.
(c) The commissioner by rule may prescribe the form of the
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.
(c) The commissioner or an authorized representative of the
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.
(c) The commissioner or an authorized representative of the
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.
(c) The commissioner by rule shall prescribe the form for
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.
(c) The court shall award to a motor fuel user 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 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.
(c) An offense under Subsection (a) is a Class C
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.
(c) The amount of the penalty shall be based on:
(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.
(c) A subrogated surety seeking execution on the judgment
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;
(C) equipment used to promote or advertise an
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;
(C) the 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;
(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
(C) a rental-purchase agreement that complies
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
(C) Chapters 51, 302, 601, and 621 [38-41],
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:
(c) For purposes of this section:
(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.
(c) As provided by Subsections (d) and (e), an advertisement
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;
(C) is in a foreign-trade zone:
(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;
(C) used for emergency communications; or
(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

42 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.
(c) A unit may authorize the creation of one or more
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.
(c) The governing body of a county to which a certificate
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.
(c) A certificate evidencing the filing of the certificate
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.
(c) The governing body of the corporation’s authorizing
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.
(c) The bylaws and each amendment of the bylaws must:
(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.
(c) A person may hold more than one office, except that the
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.
(c) Except as provided by Subsection (d), if a 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.
(c) Workers’ compensation benefits may be extended to the
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.
(c) A director’s attendance at a board meeting constitutes a
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;
or
(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;
(C) military facilities, including closed or
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
(C) redeveloping a military base that has been
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
(C) has wholly or partly within its boundaries at
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
(C) financing or refinancing the project,
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.
(c) Purchasing and holding a mortgage, deed of trust, or
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.
(c) Except as otherwise provided by this subtitle, a
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.
(c) The resolution authorizing the issuance of bonds and any
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.
(c) The trust agreement or a resolution approving the
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.
(c) If the proceeds of the bonds of any series issued for a
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.
(c) The corporation may issue the refunding bonds in
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.
(c) A corporation:
(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.
(c) On the issuance of the certificate evidencing the filing
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.
(c) The governing body of a county to which a certificate
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.
(c) A corporation’s registered agent may be:
(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.
(c) If the secretary of state determines that the statement
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.
(c) If the secretary of state determines that the notice of
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.
(c) Service of a process, notice, or demand on the secretary
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.
(c) An authorizing unit may make an alteration or may
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.
(c) The attorney general may bring an action to recover the
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.
(c) The training seminar must be held at least four times
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;
(C) the corporation’s total expenditures during
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.
(c) Proceeds of bonds issued before September 1, 1987, may
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
(C) is located within the territorial limits of,
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.
(c) The governing body of the authorizing municipality
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.
(c) A Type A corporation may undertake a project the primary
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.
(c) The authorizing municipality may submit the ballot
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.
(c) The agreement must state the base taxable value of the
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.
(c) If an authorizing municipality reduces the rate of an
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.
(c) The tax rate may be:
(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.
(c) A Type A corporation created to perform a specific
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.
(c) A tax imposed under this chapter may not be collected
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
(C) 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, 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.
(c) A director may be removed by the governing body of the
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.
(c) Three directors of a Type B corporation must be persons
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.
(c) This subsection applies only if the voters of the
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.
(c) The authorizing municipality may submit the ballot
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.
(c) After the effective date of the taxes imposed under this
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.
(c) The governing body of the authorizing municipality is
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).”
(c) An election held under this section may be authorized by
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.
(c) The authorizing municipality shall promptly notify the
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
(C) meets any other requirement established by
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;
(C) an area appurtenant to a launching or landing
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.

(c) Each director serves a two-year term that expires June 1
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.
(c) Chapter 21, Property Code, governs the exercise of the
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.
(c) The aerospace and aviation office of the Texas Economic
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.
(c) Chapter 151, Tax Code, does not apply to tangible
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
(C) outcome measures associated with each
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)].
(c) The following governmental bodies and economic
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:
(c) To accomplish the purposes of this chapter, an authority
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];
(C) Chapters 334 and 335, Local Government Code;
or
(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;
or
(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;
(C) is in a foreign-trade zone:
(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
(C) Section 363.055, Local Government Code, for
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:
(c) Sections 501.052, 501.053, 501.056, 501.057(b) and (c),
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;
(C) Subchapter C in the renumbered chapter is
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;
(C) Subchapter C in the renumbered chapter is
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.
(c) The following changes are made to Subtitle C, Title 13,
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
(C) Subchapter C in the renumbered chapter is
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:
(c) The governing body of a municipality may issue
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
(C) as provided by Section 552.0451 [402.0451].
(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:
(c) Charges and methods of assessment agreed to under
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:
(c) An assessment against benefitted property under this
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:
(c) The authority may execute contracts with municipalities
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