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Texas Vernon's Texas Civil Statutes - Article 9023e. Telephone Solicitations By Charitable Organizations

Legal Research Home > Texas Lawyer > Vernon's Texas Civil Statutes > Texas Vernon's Texas Civil Statutes - Article 9023e. Telephone Solicitations By Charitable Organizations

Art. 9023e. TELEPHONE SOLICITATIONS BY CHARITABLE 
ORGANIZATIONS.             

Scope of Act
	Sec. 1. The solicitation of contributions from persons in 
this state shall be considered to be engaging in telephone 
solicitation in Texas, regardless of where the solicitation 
originates.

Definitions
	Sec. 2. In this Act:                                                           
	(1)  "Charitable organization" means a person, other than a 
governmental law enforcement agency or organization, who solicits 
contributions or funds and is or holds himself, herself, or itself 
out to be established or operating for a charitable purpose 
relating to law enforcement, including nongovernmental law 
enforcement organizations, nongovernmental law enforcement 
publications, and survivors of law enforcement officers who are 
killed in the line of duty.
	(2)  "Commercial telephone solicitor" means a person who is 
retained by a charitable organization to solicit contributions or 
funds by telephone, whether done individually or through another 
person under the direction of the commercial telephone solicitor.  
The term does not include a bona fide employee, officer, director, 
or volunteer of a charitable organization.
	(3)  "Contribution" means the promise to give or the gift of 
money, credit, property, financial assistance, or other thing of 
any kind or value, except volunteer services.  The term does not 
include bona fide fees, dues, or assessments paid by members if 
membership is not conferred solely as consideration for making a 
contribution in response to a telephone solicitation.
	(4)  "Knowingly" means with actual awareness, but actual 
awareness may be inferred if objective manifestations indicate that 
a person acted with actual awareness.
	(5)  "Person" means an individual, partnership, corporation, 
association, or other legal entity.
	(6)  "Telephone solicitation" means the use of a telephone to 
solicit another person to make a charitable contribution to an 
organization.

Register To Be Maintained
	Sec. 3. (a) The attorney general shall establish and maintain 
a register of charitable organizations subject to this Act.
	(b)  All documents required to be filed with the attorney 
general under this Act are public information and shall be 
available to the public under the open records law, Chapter 552, 
Government Code, except those documents that identify the donors of 
a charitable organization, which information is confidential and is 
not subject to disclosure.

Registration
	Sec. 4. (a) The attorney general shall maintain a registry of 
charitable organizations that submit to the attorney general 
completed registration statements that contain:
	(1)  the legal name and each assumed name, the mailing 
address and street address, and each telephone number and facsimile 
number of each office, chapter, local unit, branch, and affiliate 
of the charitable organization;
	(2)  the employer identification number of the charitable 
organization;      
	(3)  the name, title, address, and telephone number of each 
officer, director, and executive director or other chief operating 
officer of the charitable organization;
	(4)  the name of each officer, director, or employee who is 
compensated by the charitable organization or who has custody and 
control of funds of the charitable organization and who has been 
convicted of or pleaded nolo contendere to a misdemeanor involving 
fraud or the theft, misappropriation, misapplication, or misuse of 
property of another, or any felony, including the offense and the 
state, court, and date of each conviction or plea of nolo 
contendere;
	(5)  the date the charitable organization was incorporated 
and the state of incorporation or, if not incorporated, the type of 
organization and the date established;  the day and month on which 
the organization's fiscal year ends;  and whether the organization 
is eligible to receive tax-deductible contributions under Section 
170, Internal Revenue Code of 1986 (26 U.S.C. Section 170);
	(6)  a statement as to whether the organization has applied 
for or been granted tax exempt status by the Internal Revenue 
Service and, if so, the date of the application, the date the 
exemption was granted or denied, the Internal Revenue Code section 
on which the application was based, and a statement as to whether or 
when the tax exemption has ever been denied, revoked, or modified;
	(7)  the date the organization began doing business in this 
state and the name and address of the organization's registered 
agent in this state;
	(8)  a statement of the charitable organization's charitable 
purposes and a list of the programs for which funds are solicited;
	(9)  a statement that includes:                                                
	(A)  the names, addresses, and telephone numbers of the 
organization's accountants and auditors and the method of 
accounting used;
	(B)  a statement that the charitable organization has 
attempted in good faith to comply with all Texas county and 
municipal ordinances regarding telephone solicitation that have 
been filed with the attorney general or, if none apply, a statement 
to that effect;
	(C)  for charitable organizations that engage the services 
of commercial telephone solicitors, the name and address of each 
commercial telephone solicitor engaged in the preceding 12 months, 
as well as written confirmation from the commercial telephone 
solicitor that it has complied with all state and local 
registration laws;
	(D)  the amount paid to commercial telephone solicitors 
during the preceding 12 months;
	(E)  the total contributions received during the preceding 
12 months;  and   
	(F)  the total fund-raising costs during the preceding 12 
months, computed pursuant to generally accepted accounting 
principles;
	(10)  a copy of the charitable organization's most recently 
filed Internal Revenue Service Form 990 and other federal tax 
returns, including all supplements, amendments, and attachments to 
those returns and requests for extensions to file those returns or, 
if the charitable organization does not file federal tax returns:
	(A)  a statement as to the reason none is filed;  and                          
	(B)  the charitable organization's most recent financial 
statements, including audited financial statements, if any have 
been prepared;  and
	(11)  a sworn statement verifying that the information 
contained in the registration statement and all attachments to the 
statement are true, correct, and complete to the best of the 
affiant's knowledge.
	(b)  A charitable organization shall file its initial 
registration statement before the 10th working day preceding the 
date on which the organization begins telephone solicitation in 
this state.
	(c)  Registration expires on the 15th day of the fifth month 
after the last day of a charitable organization's fiscal year.  
Renewal registration statements shall be filed on the same forms 
required for initial registration statements and must include the 
name and employer identification number of the charitable 
organization and any changes to the information previously 
submitted to the attorney general.  For items on which there is no 
change from the previous year's registration statement, "no change" 
may be indicated.
	(d)  A filing fee not to exceed $50 must accompany the 
initial registration statement.  A $50 filing fee must accompany 
all renewal registration statements.
	(e)  The registration statements shall be submitted on forms 
prescribed or approved by the attorney general.
	(f)  A volunteer that has been authorized to solicit on 
behalf of a charitable organization is not required to register 
under this Act.

Bond
	Sec. 5. A commercial telephone solicitor shall post a surety 
bond with the secretary of state in the amount of $50,000 issued by 
a surety company authorized to do business in this state.

Notification of Noncompliance
	Sec. 6. (a) A charitable organization that is not in 
compliance with this Act shall be notified of noncompliance by the 
attorney general by first class mail at the organization's last 
reported address.  Noncompliance includes failure to file any 
documents required by this Act or the filing of incomplete or 
inaccurate documents.
	(b)  A charitable organization violates this Act if the 
organization:        
	(1)  fails to file complete documents within 30 days after 
the date the notice required by Subsection (a) of this section has 
been mailed;  or
	(2)  knowingly files materially inaccurate documents.                          

Recordkeeping;  Audit Powers of Attorney General
	Sec. 7. (a) Each charitable organization required to file a 
registration statement shall keep true books and records as to its 
activities within this state in a form to enable it to accurately 
provide the information required by this Act.  The books and records 
shall be retained for a period of at least three years after the end 
of the period to which the registration statement relates.  All 
books and records of a charitable organization shall be made 
available for inspection and copying by authorized personnel of the 
attorney general on written request by authorized personnel of the 
attorney general.
	(b)  A charitable organization shall make available the 
information requested by authorized personnel of the attorney 
general at the organization's principal place of business within 10 
working days of the date of the request, or at a time and place as 
may be agreed.
	(c)  The authority established by this section is in addition 
to other statutory or common law audit or investigative authority 
of the attorney general.

Registration Does Not Imply Endorsement
	Sec. 8. Registration under this Act does not imply 
endorsement by this state or the attorney general, and charitable 
organizations are prohibited from stating or implying to the 
contrary.

Remedies
	Sec. 9. (a) The attorney general may institute an action for 
failure to fully and accurately comply with this Act and may obtain 
injunctive relief to restrain a person from continuing a violation, 
cancellation or suspension of the registration, an order 
restraining the person from doing business in this state while 
violating this Act, a civil penalty of not more than $25,000 per 
violation, or injunctive relief and a civil penalty.  A person who 
violates an injunction issued under this section is liable to the 
state for a civil penalty of not less than $100,000.
	(b)  The remedies authorized by this Act are not exclusive 
but are in addition to any other procedure or remedy provided for by 
other statutory or common law.
	(c)  In any proceeding successfully prosecuted by the 
attorney general under this Act, the court may allow the attorney 
general to recover civil penalties and the reasonable costs, 
expenses, and attorney's fees incurred in bringing the suit.

Dedication of Fees and Civil Penalties
	Sec. 10. In addition to other money, all fees assessed under 
this Act and all recovered expenses incurred in obtaining 
injunctive relief and administrative and civil penalties 
authorized by this Act are dedicated for use by the attorney general 
in enforcing and administering this Act.  Recovered expenses 
include investigative costs, witness fees, attorney's fees, and 
deposition expenses.

Venue
	Sec. 11. An action under this Act shall be brought in a court 
of competent jurisdiction in Travis County, in the county in which 
the charitable organization has its principal place of business or 
has a fixed and established place of business at the time the suit 
is brought, or in the county in which solicitation occurred.

Notice to Contributors;  Prohibition
	Sec. 12. (a) If less than 90 percent of the contributions or 
funds collected by a charitable organization or commercial 
telephone solicitor are paid by the charitable organization or 
commercial telephone solicitor to a charitable organization, the 
commercial telephone solicitor shall notify each person solicited 
by telephone, before accepting a contribution or funds from the 
person, of the percentage of the contributions or funds that will be 
paid to the organization for which the contributions or funds are 
being solicited and the percentage that will be retained by the 
solicitor.  This information shall also be included on any written 
statement mailed to the contributor.
	(b)  A charitable organization or commercial telephone 
solicitor may not make a telephone call to solicit contributions or 
funds unless the call is made after 9 a.m. and before 7 p.m., Monday 
through Friday.

Prohibited Practices
	Sec. 13. (a) A person may not commit an unfair or deceptive 
act or practice in the conduct of solicitations for a charitable 
organization.
	(b)  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)  100 percent of the contributions collected are used to 
benefit those survivors;  or
	(2)  the person solicited is informed in writing of the exact 
percentage of the contribution that will directly benefit those 
survivors.

Rules
	Sec. 14. The attorney general may adopt rules, procedures, 
and forms that are consistent with and necessary for the proper 
administration and enforcement of this Act.

Acts 1997, 75th Leg., ch. 1202, Sec. 1 to 14, eff. Sept. 1, 1997.             

Last modified: August 10, 2007