By:  Chisum                                                       H.B. No. 1833



A BILL TO BE ENTITLED

AN ACT

relating to disclosures required for the creation of certain 
consumer contracts solicited by mail; providing a civil penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Subchapter D, Chapter 35, Business & Commerce 
Code, is amended by adding Section 35.455 to read as follows:
	Sec. 35.455.  DISCLOSURES REQUIRED FOR CERTAIN CONSUMER 
CONTRACTS SOLICITED BY MAIL.  (a)  Unless the context requires a 
different definition, the definitions of Chapter 3 apply to this 
section.
	(b)  This section applies only to a person that solicits 
business in this state by mailing an individual a check or draft 
payable to the individual.  This section does not apply to a 
financial institution as defined in Section 201.101, Finance Code, 
or an authorized lender as defined in Section 341.001, Finance 
Code, that sends a check to an existing or prospective account 
holder authorizing the account holder to access an extension of 
credit.
	(c)  A person that makes an offer that the recipient may 
accept by endorsing and negotiating the check or draft shall state 
on the check or draft in uppercase 12-point boldfaced type next to 
the place for endorsement: "BY SIGNING AND NEGOTIATING THIS 
DOCUMENT YOU AGREE TO PAY FOR FUTURE SERVICES ARISING OUT OF THIS 
CONTRACT."
	(d)  If a person makes an offer under Subsection (c) that 
includes a free membership period, trial period, or other incentive 
with a time limit, and if the offer results in a contract unless the 
recipient cancels, rescinds, or revokes the offer by the end of the 
time period, the offeror shall send notice to the recipient, at 
least two weeks before the expiration of the time period, of the 
recipient's obligation to cancel, rescind, revoke, or otherwise 
terminate the recipient's acceptance. The notice must be in 
uppercase 12-point boldfaced type and state: "YOU MUST ACT NOW TO 
AVOID FUTURE CHARGES."
	(e)  An offer is void if the offeror:                                   
		(1)  does not make the disclosure required by 
Subsection (c);        
		(2)  does not give notice as required by Subsection 
(d), if applicable; or
		(3)  provides an incentive with a time limit, including 
a free trial or membership period, that is less than two weeks.
	(f)  If an offer described by Subsection (c) does not contain 
the required disclosure, or is not followed by any notice required 
by Subsection (d), the delivery of any goods or services to the 
recipient does not operate to form a contract between the offeror 
and the recipient.
	(g)  A violation of this section is a deceptive trade 
practice in addition to the practices described by Subchapter E, 
Chapter 17, and is actionable under that subchapter.
	SECTION 2.  Section 35.455, Business & Commerce Code, as 
added by this Act, applies only to a solicitation that is mailed on 
or after September 1, 2005.  A solicitation that is mailed before 
September 1, 2005, is covered by the law in effect on the date the 
solicitation was mailed, and the former law is continued in effect 
for that purpose.
	SECTION 3.  This Act takes effect September 1, 2005.