| 1 | 1 | | S.B. No. 1701 |
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| 2 | 2 | | |
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| 3 | 3 | | |
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| 4 | 4 | | AN ACT |
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| 5 | 5 | | relating to the franchise arrangements excluded from the Business |
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| 6 | 6 | | Opportunity Act. |
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| 7 | 7 | | BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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| 8 | 8 | | SECTION 1. Subsection (b), Section 51.003, Business & |
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| 9 | 9 | | Commerce Code, as effective April 1, 2009, is amended to read as |
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| 10 | 10 | | follows: |
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| 11 | 11 | | (b) In this chapter, "business opportunity" does not |
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| 12 | 12 | | include: |
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| 13 | 13 | | (1) the sale or lease of an established and ongoing |
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| 14 | 14 | | business or enterprise that has actively conducted business before |
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| 15 | 15 | | the sale or lease, whether composed of one or more than one |
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| 16 | 16 | | component business or enterprise, if the sale or lease represents |
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| 17 | 17 | | an isolated transaction or series of transactions involving a bona |
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| 18 | 18 | | fide change of ownership or control of the business or enterprise or |
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| 19 | 19 | | liquidation of the business or enterprise; |
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| 20 | 20 | | (2) a sale by a retailer of goods or services under a |
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| 21 | 21 | | contract or other agreement to sell the inventory of one or more |
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| 22 | 22 | | ongoing leased departments to a purchaser who is granted the right |
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| 23 | 23 | | to sell the goods or services within or adjoining a retail business |
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| 24 | 24 | | establishment as a department or division of the retail business |
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| 25 | 25 | | establishment; |
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| 26 | 26 | | (3) a transaction that is: |
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| 27 | 27 | | (A) regulated by the Texas Department of |
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| 28 | 28 | | Licensing and Regulation, the Texas Department of Insurance, the |
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| 29 | 29 | | Texas Real Estate Commission, or the director of the Motor Vehicle |
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| 30 | 30 | | Division of the Texas Department of Transportation; and |
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| 31 | 31 | | (B) engaged in by a person licensed by one of |
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| 32 | 32 | | those agencies; |
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| 33 | 33 | | (4) a real estate syndication; |
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| 34 | 34 | | (5) a sale or lease to a business enterprise that also |
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| 35 | 35 | | sells or leases products, equipment, or supplies or performs |
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| 36 | 36 | | services: |
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| 37 | 37 | | (A) that are not supplied by the seller; and |
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| 38 | 38 | | (B) that the purchaser does not use with the |
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| 39 | 39 | | seller's products, equipment, supplies, or services; |
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| 40 | 40 | | (6) the offer or sale of a franchise as described by |
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| 41 | 41 | | the Petroleum Marketing Practices Act (15 U.S.C. Section 2801 et |
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| 42 | 42 | | seq.) and its subsequent amendments; |
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| 43 | 43 | | (7) the offer or sale of a business opportunity if the |
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| 44 | 44 | | seller: |
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| 45 | 45 | | (A) has a net worth of $25 million or more |
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| 46 | 46 | | according to the seller's audited balance sheet as of a date not |
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| 47 | 47 | | earlier than the 13th month before the date of the transaction; or |
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| 48 | 48 | | (B) is at least 80 percent owned by another |
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| 49 | 49 | | person who: |
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| 50 | 50 | | (i) in writing unconditionally guarantees |
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| 51 | 51 | | performance by the person offering the business opportunity plan; |
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| 52 | 52 | | and |
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| 53 | 53 | | (ii) has a net worth of more than $25 |
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| 54 | 54 | | million according to the person's most recent audited balance sheet |
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| 55 | 55 | | as of a date not earlier than the 13th month before the date of the |
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| 56 | 56 | | transaction; or |
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| 57 | 57 | | (8) an arrangement defined as a franchise by 16 C.F.R. |
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| 58 | 58 | | Part 436 [Section 436.2(a)] and its subsequent amendments if: |
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| 59 | 59 | | (A) the franchisor complies in all material |
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| 60 | 60 | | respects in this state with 16 C.F.R. Part 436 and each order or |
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| 61 | 61 | | other action of the Federal Trade Commission; and |
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| 62 | 62 | | (B) before offering for sale or selling a |
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| 63 | 63 | | franchise in this state, a person files with the secretary of state |
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| 64 | 64 | | a notice containing: |
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| 65 | 65 | | (i) the name of the franchisor; |
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| 66 | 66 | | (ii) the name under which the franchisor |
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| 67 | 67 | | intends to transact business; and |
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| 68 | 68 | | (iii) the franchisor's principal business |
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| 69 | 69 | | address. |
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| 70 | 70 | | SECTION 2. This Act takes effect September 1, 2009. |
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| 71 | 71 | | ______________________________ ______________________________ |
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| 72 | 72 | | President of the Senate Speaker of the House |
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| 73 | 73 | | I hereby certify that S.B. No. 1701 passed the Senate on |
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| 74 | 74 | | April 23, 2009, by the following vote: Yeas 30, Nays 0. |
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| 75 | 75 | | ______________________________ |
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| 76 | 76 | | Secretary of the Senate |
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| 77 | 77 | | I hereby certify that S.B. No. 1701 passed the House on |
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| 78 | 78 | | May 26, 2009, by the following vote: Yeas 144, Nays 0, one |
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| 79 | 79 | | present not voting. |
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| 80 | 80 | | ______________________________ |
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| 81 | 81 | | Chief Clerk of the House |
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| 82 | 82 | | Approved: |
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| 83 | 83 | | ______________________________ |
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| 84 | 84 | | Date |
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| 85 | 85 | | ______________________________ |
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| 86 | 86 | | Governor |
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