75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session
Enrolled
House Bill 3706
Sponsored by COMMITTEE ON REVENUE
CHAPTER ................
AN ACT
Relating to application of Unlawful Trade Practices Act; creating
new provisions; amending ORS 646.605, 646.618 and 646.632; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 646.605 is amended to read:
646.605. As used in ORS 646.605 to 646.652:
(1) 'Appropriate court' means the circuit court of a county:
(a) Where one or more of the defendants reside;
(b) Where one or more of the defendants maintain a principal
place of business;
(c) Where one or more of the defendants are alleged to have
committed an act prohibited by ORS 646.605 to 646.652; or
(d) With the defendant's consent, where the prosecuting
attorney maintains an office.
(2) 'Documentary material' means the original or a copy of any
book, record, report, memorandum, paper, communication,
tabulation, map, chart, photograph, mechanical transcription, or
other tangible document or recording, wherever situate.
(3) 'Examination' of documentary material shall include
inspection, study or copying of any such material, and taking
testimony under oath or acknowledgment in respect of any such
documentary material or copy thereof.
(4) 'Person' means natural persons, corporations, trusts,
partnerships, incorporated or unincorporated associations and any
other legal entity except bodies or officers acting under
statutory authority of this state or the United States.
(5) 'Prosecuting attorney' means the Attorney General or the
district attorney of any county in which a violation of ORS
646.605 to 646.652 is alleged to have occurred.
(6) { + (a) + } 'Real estate, goods or services' means those
that are or may be obtained primarily for personal, family or
household purposes, or that are or may be obtained for any
purposes as a result of a telephone solicitation, and includes
{ + loans and extensions of credit, and + } franchises,
distributorships and other similar business opportunities, but
does not include insurance.
{ - Except as provided in section 2, chapter 658, Oregon Laws
2003, real estate does not cover conduct covered by ORS chapter
90. - }
{ + (b) Notwithstanding paragraph (a) of this subsection:
Enrolled House Bill 3706 (HB 3706-B) Page 1
(A) 'Real estate' does not cover conduct covered by ORS chapter
90 except as provided in section 2, chapter 658, Oregon Laws
2003.
(B) 'Loans and extensions of credit' does not include
transactions involving a pawnbroker, as defined in ORS 726.010,
that is required to be licensed under ORS chapter 726. + }
(7) 'Telephone solicitation' means a solicitation where a
person, in the course of the person's business, vocation or
occupation, uses a telephone or an automatic dialing-announcing
device to initiate telephonic contact with a potential customer
and the person is not one of the following:
(a) A person who is a broker-dealer or salesperson licensed
under ORS 59.175, or a mortgage banker or mortgage broker
licensed under ORS 86A.106 when the solicitation is for a
security qualified for sale pursuant to ORS 59.055.
(b) A real estate licensee or a person who is otherwise
authorized to engage in professional real estate activity
pursuant to ORS chapter 696, when the solicitation involves
professional real estate activity.
(c) A person licensed or exempt from licensure as a builder
pursuant to ORS chapter 701, when the solicitation involves the
construction, alteration, repair, improvement or demolition of a
structure.
(d) A person licensed or otherwise authorized to sell insurance
as an insurance producer pursuant to ORS chapter 744, when the
solicitation involves insurance.
(e) A person soliciting the sale of a newspaper of general
circulation, a magazine or membership in a book or record club
who complies with ORS 646.611, when the solicitation involves
newspapers, magazines or membership in a book or record club.
(f) A person soliciting without the intent to complete and who
does not complete the sales presentation during the telephone
solicitation and who only completes the sales presentation at a
later face-to-face meeting between the solicitor and the
prospective purchaser.
(g) A supervised financial institution or parent, subsidiary or
affiliate thereof. As used in this paragraph, 'supervised
financial institution' means any financial institution or trust
company, as those terms are defined in ORS 706.008, or any
personal property broker, consumer finance lender, commercial
finance lender or insurer that is subject to regulation by an
official or agency of this state or of the United States.
(h) A person who is authorized to conduct prearrangement or
preconstruction funeral or cemetery sales, pursuant to ORS
chapter 692, when the solicitation involves prearrangement or
preconstruction funeral or cemetery plans.
(i) A person who solicits the services provided by a cable
television system licensed or franchised pursuant to state, local
or federal law, when the solicitation involves cable television
services.
(j) A person or affiliate of a person whose business is
regulated by the Public Utility Commission of Oregon.
(k) A person who sells farm products as defined by ORS 576.006
if the solicitation neither intends to nor actually results in a
sale that costs the purchaser in excess of $100.
(L) An issuer or subsidiary of an issuer that has a class of
securities that is subject to section 12 of the Securities
Exchange Act of 1934 and that is either registered or exempt from
registration under paragraph (A), (B), (C), (E), (F), (G) or (H)
or subsection (g) of that section.
Enrolled House Bill 3706 (HB 3706-B) Page 2
(m) A person soliciting exclusively the sale of telephone
answering services to be provided by that person or that person's
employer when the solicitation involves answering services.
(n) A telecommunications utility with access lines of 15,000 or
less or a cooperative telephone association when the solicitation
involves regulated goods or services.
(8) 'Trade' and 'commerce' mean advertising, offering or
distributing, whether by sale, rental or otherwise, any real
estate, goods or services, and include any trade or commerce
directly or indirectly affecting the people of this state.
(9) 'Unconscionable tactics' include, but are not limited to,
actions by which a person:
(a) Knowingly takes advantage of a customer's physical
infirmity, ignorance, illiteracy or inability to understand the
language of the agreement;
(b) Knowingly permits a customer to enter into a transaction
from which the customer will derive no material benefit;
(c) Permits a customer to enter into a transaction with
knowledge that there is no reasonable probability of payment of
the attendant financial obligation in full by the customer when
due; or
(d) Knowingly takes advantage of a customer who is a disabled
veteran, a disabled servicemember or a servicemember in active
service, or the spouse of a disabled veteran, disabled
servicemember or servicemember in active service. For purposes of
this paragraph:
(A) 'Disabled veteran' has the meaning given that term in ORS
408.225.
(B) 'Disabled servicemember' means a servicemember, as defined
in 50 U.S.C. App. 511 as in effect on January 1, 2010, who may be
entitled to disability compensation under laws administered by
the United States Department of Veterans Affairs.
(C) 'Servicemember in active service' means:
(i) A servicemember called into active service under Title 10
or Title 32 of the United States Code as in effect on January 1,
2010; or
(ii) A servicemember on active state duty, as defined in ORS
398.002.
(10) A willful violation occurs when the person committing the
violation knew or should have known that the conduct of the
person was a violation.
(11) A loan is made 'in close connection with the sale of a
manufactured dwelling' if:
(a) The lender directly or indirectly controls, is controlled
by or is under common control with the seller, unless the
relationship is remote and is not a factor in the transaction;
(b) The lender gives a commission, rebate or credit in any form
to a seller who refers the borrower to the lender, other than
payment of the proceeds of the loan jointly to the seller and the
borrower;
(c) The lender is related to the seller by blood or marriage;
(d) The seller directly and materially assists the borrower in
obtaining the loan;
(e) The seller prepares documents that are given to the lender
and used in connection with the loan; or
(f) The lender supplies documents to the seller used by the
borrower in obtaining the loan.
SECTION 2. ORS 646.605, as amended by section 12, chapter 658,
Oregon Laws 2003, section 199, chapter 71, Oregon Laws 2007,
Enrolled House Bill 3706 (HB 3706-B) Page 3
section 32, chapter 319, Oregon Laws 2007, and section 2, chapter
215, Oregon Laws 2009, is amended to read:
646.605. As used in ORS 646.605 to 646.652:
(1) 'Appropriate court' means the circuit court of a county:
(a) Where one or more of the defendants reside;
(b) Where one or more of the defendants maintain a principal
place of business;
(c) Where one or more of the defendants are alleged to have
committed an act prohibited by ORS 646.605 to 646.652; or
(d) With the defendant's consent, where the prosecuting
attorney maintains an office.
(2) 'Documentary material' means the original or a copy of any
book, record, report, memorandum, paper, communication,
tabulation, map, chart, photograph, mechanical transcription, or
other tangible document or recording, wherever situate.
(3) 'Examination' of documentary material shall include
inspection, study or copying of any such material, and taking
testimony under oath or acknowledgment in respect of any such
documentary material or copy thereof.
(4) 'Person' means natural persons, corporations, trusts,
partnerships, incorporated or unincorporated associations and any
other legal entity except bodies or officers acting under
statutory authority of this state or the United States.
(5) 'Prosecuting attorney' means the Attorney General or the
district attorney of any county in which a violation of ORS
646.605 to 646.652 is alleged to have occurred.
(6) { + (a) + } 'Real estate, goods or services' means those
that are or may be obtained primarily for personal, family or
household purposes, or that are or may be obtained for any
purposes as a result of a telephone solicitation, and includes
{ + loans and extensions of credit, and + } franchises,
distributorships and other similar business opportunities, but
does not include insurance.
{ - Real estate does not cover conduct covered by ORS chapter
90. - }
{ + (b) Notwithstanding paragraph (a) of this subsection:
(A) 'Real estate' does not cover conduct covered by ORS chapter
90.
(B) 'Loans and extensions of credit' does not include
transactions involving a pawnbroker, as defined in ORS 726.010,
that is required to be licensed under ORS chapter 726. + }
(7) 'Telephone solicitation' means a solicitation where a
person, in the course of the person's business, vocation or
occupation, uses a telephone or an automatic dialing-announcing
device to initiate telephonic contact with a potential customer
and the person is not one of the following:
(a) A person who is a broker-dealer or salesperson licensed
under ORS 59.175, or a mortgage banker or mortgage broker
licensed under ORS 86A.106 when the solicitation is for a
security qualified for sale pursuant to ORS 59.055.
(b) A real estate licensee or a person who is otherwise
authorized to engage in professional real estate activity
pursuant to ORS chapter 696, when the solicitation involves
professional real estate activity.
(c) A person licensed or exempt from licensure as a builder
pursuant to ORS chapter 701, when the solicitation involves the
construction, alteration, repair, improvement or demolition of a
structure.
Enrolled House Bill 3706 (HB 3706-B) Page 4
(d) A person licensed or otherwise authorized to sell insurance
as an insurance producer pursuant to ORS chapter 744, when the
solicitation involves insurance.
(e) A person soliciting the sale of a newspaper of general
circulation, a magazine or membership in a book or record club
who complies with ORS 646.611, when the solicitation involves
newspapers, magazines or membership in a book or record club.
(f) A person soliciting without the intent to complete and who
does not complete the sales presentation during the telephone
solicitation and who only completes the sales presentation at a
later face-to-face meeting between the solicitor and the
prospective purchaser.
(g) A supervised financial institution or parent, subsidiary or
affiliate thereof. As used in this paragraph, 'supervised
financial institution' means any financial institution or trust
company, as those terms are defined in ORS 706.008, or any
personal property broker, consumer finance lender, commercial
finance lender or insurer that is subject to regulation by an
official or agency of this state or of the United States.
(h) A person who is authorized to conduct prearrangement or
preconstruction funeral or cemetery sales, pursuant to ORS
chapter 692, when the solicitation involves prearrangement or
preconstruction funeral or cemetery plans.
(i) A person who solicits the services provided by a cable
television system licensed or franchised pursuant to state, local
or federal law, when the solicitation involves cable television
services.
(j) A person or affiliate of a person whose business is
regulated by the Public Utility Commission of Oregon.
(k) A person who sells farm products as defined by ORS 576.006
if the solicitation neither intends to nor actually results in a
sale that costs the purchaser in excess of $100.
(L) An issuer or subsidiary of an issuer that has a class of
securities that is subject to section 12 of the Securities
Exchange Act of 1934 and that is either registered or exempt from
registration under paragraph (A), (B), (C), (E), (F), (G) or (H)
or subsection (g) of that section.
(m) A person soliciting exclusively the sale of telephone
answering services to be provided by that person or that person's
employer when the solicitation involves answering services.
(n) A telecommunications utility with access lines of 15,000 or
less or a cooperative telephone association when the solicitation
involves regulated goods or services.
(8) 'Trade' and 'commerce' mean advertising, offering or
distributing, whether by sale, rental or otherwise, any real
estate, goods or services, and include any trade or commerce
directly or indirectly affecting the people of this state.
(9) 'Unconscionable tactics' include, but are not limited to,
actions by which a person:
(a) Knowingly takes advantage of a customer's physical
infirmity, ignorance, illiteracy or inability to understand the
language of the agreement;
(b) Knowingly permits a customer to enter into a transaction
from which the customer will derive no material benefit;
(c) Permits a customer to enter into a transaction with
knowledge that there is no reasonable probability of payment of
the attendant financial obligation in full by the customer when
due; or
(d) Knowingly takes advantage of a customer who is a disabled
veteran, a disabled servicemember or a servicemember in active
Enrolled House Bill 3706 (HB 3706-B) Page 5
service, or the spouse of a disabled veteran, disabled
servicemember or servicemember in active service. For purposes of
this paragraph:
(A) 'Disabled veteran' has the meaning given that term in ORS
408.225.
(B) 'Disabled servicemember' means a servicemember, as defined
in 50 U.S.C. App. 511 as in effect on January 1, 2010, who may be
entitled to disability compensation under laws administered by
the United States Department of Veterans Affairs.
(C) 'Servicemember in active service' means:
(i) A servicemember called into active service under Title 10
or Title 32 of the United States Code as in effect on January 1,
2010; or
(ii) A servicemember on active state duty, as defined in ORS
398.002.
(10) A willful violation occurs when the person committing the
violation knew or should have known that the conduct of the
person was a violation.
(11) A loan is made 'in close connection with the sale of a
manufactured dwelling' if:
(a) The lender directly or indirectly controls, is controlled
by or is under common control with the seller, unless the
relationship is remote and is not a factor in the transaction;
(b) The lender gives a commission, rebate or credit in any form
to a seller who refers the borrower to the lender, other than
payment of the proceeds of the loan jointly to the seller and the
borrower;
(c) The lender is related to the seller by blood or marriage;
(d) The seller directly and materially assists the borrower in
obtaining the loan;
(e) The seller prepares documents that are given to the lender
and used in connection with the loan; or
(f) The lender supplies documents to the seller used by the
borrower in obtaining the loan.
SECTION 3. ORS 646.618 is amended to read:
646.618. (1) { + Except as provided in section 6 of this 2010
Act, + } when it appears to the prosecuting attorney that a
person has engaged in, is engaging in, or is about to engage in
any act or practice declared to be unlawful by ORS 646.607 or
646.608, the prosecuting attorney may execute in writing and
cause to be served an investigative demand upon any person who is
believed to have information, documentary material or physical
evidence relevant to the alleged or suspected violation. The
investigative demand shall require such person, under oath or
otherwise, to appear and testify, to answer written
interrogatories, or to produce relevant documentary material or
physical evidence for examination, at such reasonable time and
place as may be stated in the investigative demand, or to do any
of the foregoing, concerning conduct of any trade or commerce
which is the subject matter of the investigation.
(2) At any time before the return date specified in an
investigative demand, or within 20 days after the demand has been
served, whichever period is shorter, a petition to extend the
return date, or to modify or set aside the demand, stating good
cause including privileged material, may be filed in the
appropriate court.
SECTION 4. ORS 646.632 is amended to read:
646.632. (1) { + Except as provided in section 6 of this 2010
Act, + } a prosecuting attorney who has probable cause to believe
that a person is engaging in, has engaged in, or is about to
Enrolled House Bill 3706 (HB 3706-B) Page 6
engage in an unlawful trade practice may bring suit in the name
of the State of Oregon in the appropriate court to restrain such
person from engaging in the alleged unlawful trade practice.
(2) Except as provided in subsections (5) and (6) of this
section, before filing a suit under subsection (1) of this
section, the prosecuting attorney shall in writing notify the
person charged of the alleged unlawful trade practice and the
relief to be sought. Such notice shall be served in the manner
set forth in ORS 646.622 for the service of investigative
demands. The person charged thereupon shall have 10 days within
which to execute and deliver to the prosecuting attorney an
assurance of voluntary compliance. Such assurance shall set forth
what actions, if any, the person charged intends to take with
respect to the alleged unlawful trade practice. The assurance of
voluntary compliance shall not be considered an admission of a
violation for any purpose. If the prosecuting attorney is
satisfied with the assurance of voluntary compliance, it may be
submitted to an appropriate court for approval and if approved
shall thereafter be filed with the clerk of the court. If an
approved assurance of voluntary compliance provides for the
payment of an amount of money, as restitution or otherwise, and
if the amount is not paid within 90 days of the date the court
approves the assurance, or, if the assurance of voluntary
compliance requires periodic payments and if any periodic payment
is not paid within 30 days of the date specified in the assurance
of voluntary compliance for any periodic payment, then the
prosecuting attorney may submit that portion of the assurance of
voluntary compliance which provides for the payment of money to
the court with a certificate stating the unpaid balance in a form
which fully complies with the requirements of ORS 18.038 and
18.042. Upon submission of an assurance of voluntary compliance
under this subsection, the court shall sign the assurance of
voluntary compliance and it shall be entered in the register of
the court and the clerk of the court shall note in the register
that it creates a lien. The assurance of voluntary compliance
shall thereupon constitute a judgment in favor of the State of
Oregon and may be enforced as provided in ORS chapter 18. The
notice of the prosecuting attorney under this subsection shall
not be deemed a public record until the expiration of 10 days
from the service of the notice.
(3) The prosecuting attorney may reject as unsatisfactory any
assurance:
(a) Which does not contain a promise to make restitution in
specific amounts or through arbitration for persons who suffered
any ascertainable loss of money or property as a result of the
alleged unlawful trade practice; or
(b) Which does not contain any provision, including but not
limited to the keeping of records, which the prosecuting attorney
reasonably believes to be necessary to ensure the continued
cessation of the alleged unlawful trade practice, if such
provision was included in a proposed assurance attached to the
notice served pursuant to this section.
(4) Violation of any of the terms of an assurance of voluntary
compliance which has been approved by and filed with the court
shall constitute a contempt of court.
(5) The prosecuting attorney need not serve notice pursuant to
subsection (2) of this section before filing a suit if, within
two years of the filing of such suit, the person charged with the
alleged unfair trade practice submitted to any prosecuting
attorney an assurance of voluntary compliance which was accepted
Enrolled House Bill 3706 (HB 3706-B) Page 7
by and filed with an appropriate court. The prosecuting attorney
shall in such case serve notice on the defendant in the manner
set forth in ORS 646.622 for the service of investigative
demands, on the 10th or earlier day previous to the filing of
suit.
(6) If the prosecuting attorney alleges that the prosecuting
attorney has reason to believe that the delay caused by complying
with the provisions of subsection (2) or (5) of this section
would cause immediate harm to the public health, safety or
welfare, the prosecuting attorney may immediately institute a
suit under subsection (1) of this section.
(7) A temporary restraining order may be granted without prior
notice to the person if the court finds there is a threat of
immediate harm to the public health, safety or welfare. Such a
temporary restraining order shall expire by its terms within such
time after entry, not to exceed 10 days, as the court fixes,
unless within the time so fixed the order, for good cause shown,
is extended for a like period or unless the person restrained
consents that it may be extended for a longer period.
(8) The court may award reasonable attorney fees to the
prevailing party in an action under this section. If the
defendant prevails in such suit and the court finds that the
defendant had in good faith submitted to the prosecuting attorney
a satisfactory assurance of voluntary compliance prior to the
institution of the suit or that the prosecuting attorney, in a
suit brought under subsections (5) and (6) of this section, did
not have reasonable grounds to proceed under those subsections,
the court shall award reasonable attorney fees at trial and on
appeal to the defendant.
SECTION 5. { + Section 6 of this 2010 Act is added to and made
a part of ORS 646.605 to 646.652. + }
SECTION 6. { + (1) For purposes of this section, 'state
regulated lender' means:
(a) A banking institution as defined in ORS 706.008;
(b) A credit union as defined in ORS 723.006;
(c) A person that is required to be licensed under ORS 725.045;
(d) A pawnbroker, as defined in ORS 726.010, that is required
to be licensed under ORS chapter 726; or
(e) A mortgage banker, mortgage broker or loan originator, as
those terms are defined in ORS 86A.100, that is required to be
licensed under ORS 86A.095 to 86A.198.
(2) A prosecuting attorney may not take action under ORS
646.618 or 646.632 with respect to an alleged unlawful practice
under ORS 646.607 or 646.608 when the conduct involves loans or
extensions of credit and was engaged in by a state regulated
lender unless requested to do so by the Director of the
Department of Consumer and Business Services. In any action
requested to be taken by the director under this subsection, the
director may elect to be named as a party to the proceeding or
suit.
(3) The Attorney General may not adopt rules under ORS 646.608
(4) with respect to conduct involving loans or extensions of
credit that is engaged in by a state regulated lender except with
the prior review and approval of the proposed rules by the
director. The Attorney General may not adopt rules under ORS
646.608 (4) with respect to conduct involving loans or extensions
of credit that is engaged in by a state regulated lender except
as provided in this subsection.
(4) As soon as practicable upon receipt, the Attorney General
shall provide the director with copies of any complaint or other
Enrolled House Bill 3706 (HB 3706-B) Page 8
initial pleading or any judgment received under ORS 646.638 when
the action involves the conduct of a state regulated lender. + }
SECTION 7. { + This 2010 Act being necessary for the immediate
preservation of the public peace, health and safety, an emergency
is declared to exist, and this 2010 Act takes effect on its
passage. + }
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Passed by House February 17, 2010
Repassed by House February 23, 2010
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate February 23, 2010
...........................................................
President of Senate
Enrolled House Bill 3706 (HB 3706-B) Page 9
Received by Governor:
......M.,............., 2010
Approved:
......M.,............., 2010
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 2010
...........................................................
Secretary of State
Enrolled House Bill 3706 (HB 3706-B) Page 10