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By:  Chisum (Senate Sponsor - Seliger)                            H.B. No. 1833
	(In the Senate - Received from the House April 27, 2005; 
April 29, 2005, read first time and referred to Committee on 
Business and Commerce; May 16, 2005, reported adversely, with 
favorable Committee Substitute by the following vote:  Yeas 7, 
Nays 0; May 16, 2005, sent to printer.)


COMMITTEE SUBSTITUTE FOR H.B. No. 1833                                   By:  Estes

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 or draft to an existing or prospective account holder authorizing the existing or prospective 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 clearly and conspicuously disclose on the check or draft, next to the place for endorsement, that by signing and negotiating the document the depositor agrees to pay for future goods or services as a result 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 debiting any account, of the recipient's obligation to cancel, rescind, revoke, or otherwise terminate the recipient's acceptance. The notice must be clear and conspicuous. If the offeror bills the consumer by mailing an invoice, notice may be included with the invoice. (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), or if the offeror fails to honor the recipient's request to cancel made under the terms of the offer or as 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.
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