79R20 ATP-D

By:  Howard                                                       H.B. No. 533



A BILL TO BE ENTITLED

AN ACT

relating to the automatic renewal of contracts for services or 
subscriptions.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 4, Business & Commerce Code, is amended by 
adding Chapter 48 to read as follows:
	CHAPTER 48.  AUTOMATIC RENEWAL OF CONTRACTS
	Sec. 48.001.  APPLICABILITY.  This chapter applies only to a 
contract that:
		(1)  is for:                                                           
			(A)  a service, including Internet or telephone 
service; or         
			(B)  a magazine or newspaper subscription; and                        
		(2)  specifies a term during which the service or 
subscription will be provided.
	Sec. 48.002.  DEFINITIONS.  In this chapter:                            
		(1)  "Automatic renewal clause" means a provision of a 
contract that extends the term of or renews a contract if the 
consumer does not take a specified action.
		(2)  "Consumer" means a person to whom a service is 
provided or a subscription is sold.
		(3)  "Seller" means a person who provides a service or 
sells a subscription.
	Sec. 48.003.  AUTOMATIC RENEWAL MAY BE CANCELLED AT ANY 
TIME.  Notwithstanding any provision of a contract, a consumer may 
prevent the automatic extension or renewal of a contract with a 
seller at any time during the term of the contract by notifying the 
seller that the consumer does not want the contract to be extended 
or renewed.
	Sec. 48.004.  NOTICE OF AUTOMATIC RENEWAL.  (a)  If a 
contract between a seller and a consumer contains an automatic 
renewal clause, the seller must notify the consumer, not earlier 
than the 45th day and not later than the 30th day before the term of 
the contract expires, of:
		(1)  the contract's automatic renewal clause;                          
		(2)  the date on which the term of the contract expires; 
and         
		(3)  the consumer's right to prevent the automatic 
extension or renewal by notifying the seller before the expiration 
of the contract that the consumer does not want the contract to be 
extended or renewed.
	(b)  A seller may notify a consumer by mail, electronic mail, 
or telephone.  A notice that is mailed is considered given on the 
third day after the date of mailing.
	(c)  If a seller does not notify a consumer as required by 
this section, and the contract is extended or renewed under the 
automatic renewal clause, the consumer may terminate the contract 
at any time during the contract's extended or renewed term.
	SECTION 2.  The change in law made by Chapter 48, Business &
Commerce Code, as added by this Act, applies only to a contract 
executed on or after September 1, 2005.  A contract executed before 
September 1, 2005, is governed by the law as it existed on the date 
the contract was executed, and the former law is continued in effect 
for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.