By Valery Piedra and Shannon Zmud Teicher

Texas has expanded its “mini-TCPA” telemarketing law with the passage of Senate Bill 140, that may create new compliance obligations for businesses that send text messages or initiate calls to or from Texas. In addition to the general requirements of the federal Telephone Consumer Protection Act (TCPA), covered entities may now be required to register with the state and post a bond before conducting certain outbound calls or texts. A violation is a Class A Misdemeanor and can result in substantial civil penalties, including fines of up to $5,000 per violation. Private lawsuits and additional damages are also possible.

Key Impacts of SB 140

• Bonding and Registration: Many businesses may now need to register with the Texas Secretary of State and post a surety bond before making covered solicitations. This is in addition to federal TCPA consent, disclosure, and opt-out requirements.
• Broader Scope: The law applies to a wide range of telemarketing activities, including SMS, MMS, and other text-based messages, including telephone solicitations sent by an automatic dialing machine or a recorded message device.

A Few General Exemptions

• Entities Regulated by Other Laws: Publicly traded companies and subsidiaries, registered securities dealers, insurance companies/licensees (if the transaction is covered by the Insurance Code), supervised financial institutions (banks, credit unions, etc.), regulated utilities, persons subject to FCC control or licensing, and CFTC-registered commodity traders.
• Nonprofit and Educational Organizations: 501(c)(3) nonprofits and accredited educational institutions.
• Retail Sellers: Retailers with a physical location operating under the same name for at least two years, where most sales occur at the location.
• Current or Former Customers: Businesses soliciting only current or former customers, with at least two years under the same name.
• Food Solicitations: Persons soliciting the sale of food.
• Media and Catalog Sales: Sellers of media subscriptions (newspapers, magazines, etc.), sellers using qualifying large-format catalogs, and sellers of periodic-shipment merchandise with advance consent.
• Business-to-Business (B2B) Calls: Solicitation is for the sale of goods or services, and the sale, lease, or rental of the goods or services is not intended primarily for personal, family, or household use.
• Face-to-Face Sales Presentations: Solicitations where the transaction is not completed until a face-to-face sales presentation occurs and no payment is required until after the presentation.
• Isolated Transactions: Individuals making isolated solicitations not part of a pattern of repeated, similar transactions.

Exemptions are fact specific, and the burden of proof is on the business to demonstrate qualification. If your business initiates marketing calls or texts, you should review your practices for compliance with both the federal TCPA and the expanded Texas law. This is a developing area of the law, and further regulatory guidance and enforcement actions are expected.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice. For assistance, please contact an attorney in Jackson Walker’s Entertainment, Digital, & Sports practice.