BILL ANALYSIS |
C.S.H.B. 3625 |
By: Turner, Sylvester |
Business & Industry |
Committee Report (Substituted) |
BACKGROUND AND PURPOSE
Many consumers, interested parties note, purchase service contracts for their recently purchased automobiles to ensure that the automobile will be repaired if necessary. The parties suggest that some Texans are taken advantage of due to their lack of understanding with regard to service contracts and their limitations and are ultimately left to cover the costs of automobile repairs despite thinking they would be covered under a service contract. C.S.H.B. 3625 seeks to better protect consumers purchasing service contracts.
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CRIMINAL JUSTICE IMPACT
It is the committee's opinion that this bill does not expressly create a criminal offense, increase the punishment for an existing criminal offense or category of offenses, or change the eligibility of a person for community supervision, parole, or mandatory supervision.
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RULEMAKING AUTHORITY
It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution.
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ANALYSIS
C.S.H.B. 3625 amends the Occupations Code to require a service contract marketed, sold, offered for sale, issued, made, proposed to be made, or administered in Texas to state that the administration of the contract is governed by the Service Contract Regulatory Act. The bill requires a service contract for a motor vehicle, in addition to complying with the required form and disclosures applicable to a service contract in general, to do the following: · state the effective date and duration of the contract and, if the contract is for a duration of less than one year, provide for the automatic extension of the contract if the motor vehicle is undergoing repair, replacement, or maintenance by the provider on the contract's expiration date; · specify the obligations of the provider and the additional services that the provider will provide; · specify limitations on the obligations of the provider, including repairs, remedies, and services relating to certain parts, components, defects, malfunctions, and conditions that are not covered by the contract; · specify the nature and frequency of the duties of the service contract holder and the consequences of the service contract holder's failure to comply with those duties; · identify the legal name and business name of the provider, the mailing address of the provider, the persons who are authorized by the provider to provide services under the contract, and the name or title and address of each agent, employee, or department of the provider with responsibility for performing the provider's obligations under the contract; · provide a step-by-step procedure for the service contract holder to follow in order to obtain products and services under the contract; · specify the method by which the service contract holder must notify the provider of the need for products and services under the contract; · specify whether in-home repair, replacement, or maintenance is available under the contract and, if not, whether the cost of transporting the motor vehicle for repair, replacement, or maintenance will be paid by the provider and the place where the motor vehicle must be delivered for repair, replacement, or maintenance or a toll-free telephone number that the service contract holder may call to obtain that information; and · specify all fees, charges, or other costs that the service contract holder must pay to obtain products and services under the contract.
C.S.H.B. 3625 applies only to a service contract sold or issued on or after January 1, 2016, and prohibits a service contract sold or issued before that date from being extended or renewed at the end of the service contract term unless the contract complies with the bill's provisions.
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EFFECTIVE DATE
September 1, 2015.
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COMPARISON OF ORIGINAL AND SUBSTITUTE
While C.S.H.B. 3625 may differ from the original in minor or nonsubstantive ways, the following comparison is organized and formatted in a manner that indicates the substantial differences between the introduced and committee substitute versions of the bill.
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