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