S.B. No. 776
AN ACT
relating to regulating the collection or solicitation of donated
goods subsequently sold by for-profit entities or individuals;
providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 17, Business & Commerce Code, is amended
by adding Subchapter K to read as follows:
SUBCHAPTER K. REGULATING THE COLLECTION OR SOLICITATION BY
FOR-PROFIT ENTITIES OF CERTAIN PUBLIC DONATIONS
Sec. 17.921. DEFINITIONS. In this subchapter:
(1) "Charitable organization" means an organization
that is exempt from federal income tax under Section 501(a) of the
Internal Revenue Code of 1986 by being listed as an exempt
organization in Section 501(c) of that code.
(2) "For-profit entity" has the meaning assigned by
Section 1.002, Business Organizations Code.
(3) "Household goods" mean furniture, furnishings, or
personal effects used or for use in a dwelling.
(4) "Public donations receptacle" means a large
container or bin in a parking lot or public place that is intended
for use as a collection point for clothing or household goods
donated by the public.
Sec. 17.922. REQUIRED DISCLOSURE FOR COLLECTIONS THROUGH
PUBLIC RECEPTACLE. (a) A for-profit entity or individual may not
use a public donations receptacle to collect donated clothing or
household goods and subsequently sell the donated items unless the
for-profit entity or individual attaches to the receptacle a notice
that:
(1) is permanently and prominently displayed on the
front and at least one side of the receptacle;
(2) is in bold print, with letters at least two inches
in height and one inch in width;
(3) contains the business address, other than a post
office box number, and telephone number of the for-profit entity or
individual; and
(4) contains the appropriate disclosure prescribed by
this section in English and Spanish.
(b) If none of the proceeds from the sale of the donated
items will be given to a charitable organization, the disclosure
required by Subsection (a)(4) must state:
"DONATIONS ARE NOT FOR CHARITABLE ORGANIZATIONS AND WILL BE
SOLD FOR PROFIT."
(c) If any of the proceeds from the sale of the donated items
will be given to a charitable organization, the disclosure required
by Subsection (a)(4) must state:
"DONATIONS ARE TO (NAME OF FOR-PROFIT ENTITY OR INDIVIDUAL)
AND WILL BE SOLD FOR PROFIT. ____ PERCENT (INSERT PERCENTAGE) OF
ALL PROCEEDS WILL BE DONATED TO (NAME OF CHARITABLE ORGANIZATION)."
(d) If the for-profit entity or individual pays to a
charitable organization a flat fee that is not contingent on the
proceeds generated from the sale of the donated items and the
for-profit entity or individual retains a percentage of the
proceeds from the sale, the disclosure required by Subsection
(a)(4) must state:
"THIS DONATION RECEPTACLE IS OPERATED BY (NAME OF FOR-PROFIT
ENTITY OR INDIVIDUAL) ON BEHALF OF (NAME OF CHARITABLE
ORGANIZATION). Donations are sold for profit by (name of
for-profit entity or individual) and a flat fee of (insert amount)
is paid to (name of charitable organization)."
Sec. 17.923. REQUIRED DISCLOSURES FOR TELEPHONE OR
DOOR-TO-DOOR SOLICITATIONS. (a) A for-profit entity or
individual who makes, or directs another person to make, a
telephone or door-to-door solicitation requesting that the person
solicited donate clothing or household goods may not subsequently
sell the donated items unless the solicitor provides to each person
solicited, before accepting a donation from the person, the
appropriate disclaimer prescribed by this section.
(b) If none of the proceeds from the sale of the donated
items will be given to a charitable organization, the solicitor
must state:
"DONATIONS ARE NOT FOR CHARITABLE ORGANIZATIONS AND WILL BE
SOLD FOR PROFIT."
(c) If any of the proceeds from the sale of the donated items
will be given to a charitable organization, the solicitor must
state:
"DONATIONS TO (NAME OF FOR-PROFIT ENTITY OR INDIVIDUAL) WILL
BE SOLD FOR PROFIT AND ____ PERCENT (INSERT PERCENTAGE) OF ALL
PROCEEDS WILL BE DONATED TO (NAME OF CHARITABLE ORGANIZATION)."
(d) If the for-profit entity or individual pays to a
charitable organization a flat fee that is not contingent on the
proceeds generated from the sale of the donated items and the
for-profit entity or individual retains a percentage of the
proceeds from the sale, the solicitor must state:
"SOLICITATIONS FOR DONATIONS ARE MADE BY (NAME OF FOR-PROFIT
ENTITY OR INDIVIDUAL) ON BEHALF OF (NAME OF CHARITABLE
ORGANIZATION). Donations will be sold for profit by (name of
for-profit entity or individual) and a flat fee of (insert amount)
is paid to (name of charitable organization)."
Sec. 17.924. REQUIRED DISCLOSURES FOR MAIL SOLICITATIONS.
(a) A for-profit entity or individual who mails, or directs
another person to mail, a solicitation requesting that the
recipient donate clothing or household goods may not subsequently
sell the donated items unless the solicitor includes with the
mailed solicitation the appropriate disclosure prescribed by this
section, prominently displayed in boldfaced type or capital letters
in English and Spanish.
(b) If none of the proceeds from the sale of the donated
items will be given to a charitable organization, the disclosure
required by Subsection (a) must state:
"DONATIONS ARE NOT FOR CHARITABLE ORGANIZATIONS AND WILL BE
SOLD FOR PROFIT."
(c) If any of the proceeds from the sale of the donated items
will be given to a charitable organization, the disclosure required
by Subsection (a) must state:
"DONATIONS TO (NAME OF FOR-PROFIT ENTITY OR INDIVIDUAL) WILL
BE SOLD FOR PROFIT AND _______ PERCENT (INSERT PERCENTAGE) OF ALL
PROCEEDS WILL BE DONATED TO (NAME OF CHARITABLE ORGANIZATION)."
(d) If the for-profit entity or individual pays to a
charitable organization a flat fee that is not contingent on the
proceeds generated from the sale of the donated items and the
for-profit entity or individual retains a percentage of the
proceeds from the sale, the disclosure required by Subsection (a)
must state:
"SOLICITATIONS FOR DONATIONS ARE MADE BY (NAME OF FOR-PROFIT
ENTITY OR INDIVIDUAL) ON BEHALF OF (NAME OF CHARITABLE
ORGANIZATION). Donations will be sold for profit by (name of
for-profit entity or individual) and a flat fee of (insert amount)
is paid to (name of charitable organization)."
Sec. 17.925. LOCAL ORDINANCE OR REGULATION. Nothing in
this subchapter shall be construed to limit the authority of a local
government to adopt an ordinance or regulation relating to the use
of public donations receptacles as a collection point for donated
clothing or household goods if the ordinance or regulation is
compatible with and equal to or more stringent than a requirement
prescribed by this subchapter.
Sec. 17.926. CIVIL PENALTY. (a) Except as provided by
Subsection (b), 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. Each sale of a donated item is considered a
separate violation for purposes of this subsection.
(b) The total amount of penalties that may be imposed under
Subsection (a) may not exceed $2,000 for donated items sold during a
single transaction.
(c) In determining the amount of the civil penalty imposed
under this section, the court shall consider the amount necessary
to deter future violations.
(d) 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. In this subsection,
"prosecuting attorney" has the meaning assigned by Section 41.101,
Government Code.
SECTION 2. This Act takes effect September 1, 2009.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 776 passed the Senate on
April 2, 2009, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 776 passed the House on
May 20, 2009, by the following vote: Yeas 138, Nays 0, one present
not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor