84R5981 EES-D

By: Turner of Harris, Simmons H.B. No. 3625

Substitute the following for H.B. No. 3625:

By: Oliveira C.S.H.B. No. 3625

A BILL TO BE ENTITLED

AN ACT

relating to requirements for certain service contracts.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 1304.156(a), Occupations Code, is amended to read as follows:

(a) A service contract marketed, sold, offered for sale, issued, made, proposed to be made, or administered in this state must:

(1) be written, printed, or typed in clear, understandable language that is easy to read;

(2) state the name and address of the provider;

(3) state the purchase price of the contract and the terms under which the contract is sold;

(4) state the terms and restrictions governing cancellation of the contract by the provider or the service contract holder before the expiration date of the contract;

(5) identify:

(A) any administrator and any registration number issued to the administrator under this chapter;

(B) the seller; and

(C) the service contract holder, if the service contract holder provides the holder's name;

(6) state the amount of any deductible;

(7) specify the products and services to be provided under the contract and any limitation, exception, or exclusion;

(8) specify any restriction governing the transferability of the contract;

(9) state the duties of the service contract holder, including any duty to protect against any further damage and any requirement to follow the instructions in the owner's manual; [and]

(10) state whether the contract provides for or excludes consequential damages or preexisting conditions, if applicable; and

(11) state that the administration of the contract is governed by Chapter 1304, Occupations Code (Service Contract Regulatory Act).

SECTION 2. Subchapter D, Chapter 1304, Occupations Code, is amended by adding Section 1304.157 to read as follows:

Sec. 1304.157. ADDITIONAL REQUIREMENTS FOR CERTAIN SERVICE CONTRACTS. (a) In this section, "motor vehicle" has the meaning assigned by Section 501.002, Transportation Code.

(b) In addition to the requirements in Section 1304.156, a service contract for a motor vehicle must:

(1) 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;

(2) specify the obligations of the provider and the additional services that the provider will provide;

(3) 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;

(4) 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;

(5) identify:

(A) the legal name and business name of the provider;

(B) the mailing address of the provider;

(C) the persons who are authorized by the provider to provide services under the contract; and

(D) 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;

(6) provide a step-by-step procedure for the service contract holder to follow in order to obtain products and services under the contract;

(7) specify the method by which the service contract holder must notify the provider of the need for products and services under the contract;

(8) specify whether in-home repair, replacement, or maintenance is available under the contract and, if not:

(A) whether the cost of transporting the motor vehicle for repair, replacement, or maintenance will be paid by the provider; and

(B) 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

(9) specify all fees, charges, or other costs that the service contract holder must pay to obtain products and services under the contract.

SECTION 3. (a) Section 1304.156, Occupations Code, as amended by this Act, and Section 1304.157, Occupations Code, as added by this Act, apply only to a service contract sold or issued on or after January 1, 2016. A service contract sold or issued before that date is governed by the law in effect on the date the contract was sold or issued, and the former law is continued in effect for that purpose.

(b) Notwithstanding Subsection (a) of this section, a service contract sold or issued before January 1, 2016, may not be extended or renewed at the end of the service contract term unless the contract complies with Sections 1304.156, Occupations Code, as amended by this Act, and, if applicable, Section 1304.157, Occupations Code, as added by this Act.

SECTION 4. This Act takes effect September 1, 2015.