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79R7860 ATP-D

By:  Reyna                                                        H.B. No. 2229



A BILL TO BE ENTITLED

AN ACT

relating to the automatic renewal of contracts for security 
services.       
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Title 4, Business & Commerce Code, is amended by 
adding Chapter 49 to read as follows:

CHAPTER 49.  AUTOMATIC RENEWAL OF CONTRACTS
	Sec. 49.001.  APPLICABILITY.  This chapter applies only to a 
contract that:
		(1)  is for a security service;                                        
		(2)  specifies a term during which the service will be 
provided; and 
		(3)  automatically renews for a period of more than one 
month.       
	Sec. 49.002.  DEFINITIONS.  In this chapter:                            
		(1)  "Automatic renewal clause" means a provision of a 
contract that provides that the contract's term is considered 
renewed for a specified additional period if the consumer does not 
give notice of the consumer's intention to terminate the contract 
at the expiration of the term.
		(2)  "Consumer" means a person to whom a security 
service is provided.
		(3)  "Security service" means the service of providing, 
monitoring, or maintaining an alarm system, as that term is defined 
by Section 1702.002, Occupations Code.
	Sec. 49.003.  NOTICE OF AUTOMATIC RENEWAL.  (a)  If a 
contract for a security service contains an automatic renewal 
clause, the service provider shall give the consumer notice as 
provided by this section during the initial and each renewal term.
	(b)  A service provider must give notice not earlier than the 
30th day and not later than the 15th day before the date before 
which the consumer must notify the service provider of the 
consumer's intention to terminate the contract at the expiration of 
the term.
	(c)  Notice given by a service provider under this section 
must state:
		(1)  that the contract contains an automatic renewal 
clause;         
		(2)  the date on which the term of the contract expires;               
		(3)  the date specified by the contract, before which 
the consumer must notify the service provider of the consumer's 
intention to terminate the contract at the expiration of the term; 
and
		(4)  the consumer's right to prevent the automatic 
renewal by notifying the service provider of the consumer's 
intention to terminate the contract at the expiration of the term 
before the date specified by the contract.
	(d)  A service provider may notify a consumer under this 
section by certified mail or personal service.  A notice that is 
mailed is considered given on the date the notice is received.
	Sec. 49.004.  ENFORCEMENT OF CONTRACT AGAINST CONSUMER.  If 
a service provider does not notify a consumer as required by Section 
49.003 and the contract is renewed under the automatic renewal 
clause, the contract is unenforceable against the consumer during 
that renewal term.
	SECTION 2.  The change in law made by Chapter 49, 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.