84R6957 T

By: Seliger S.B. No. 1392

A BILL TO BE ENTITLED

AN ACT

relating to service contracts, vehicle protection products and loss damage waivers for heavy equipment; requiring an occupational license; expanding the applicability of an occupational license.

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

SECTION 1. Section 1304.002, Occupations Code, is amended by amending Subdivision (4) and adding Subdivision (5-b) to read as follows:

Sec. 1304.002. DEFINITIONS. In this chapter:

(4) "Consumer" means a person [an individual] who, for a purpose other than resale, buys tangible personal property that is:

(A) distributed in commerce; and

(B) normally used for personal, family, [or] household, [purposes and not for] business or research purposes.

(5-b) "Heavy equipment" has the meaning assigned by Section 23.1241, Tax Code.

SECTION 2. Section 1304.003(c), Occupations Code, is amended to read as follows:

Sec. 1304.003. SERVICE CONTRACT.

(c) For purposes of Subsection (a), normal wear for a motor vehicle or heavy equipment may include minor and reasonable wear and tear sustained [that a vehicle sustains] in everyday ordinary operation including:

(1) small dents, dings, and creases repairable by the process of paintless dent removal without affecting the existing paint finish and without replacing [vehicle] body panels or sanding, bonding, or painting;

(2) small windshield chips and cracks repairable without replacement of the entire windshield;

(3) worn tire tread;

(4) worn interior fabric or carpet items; and

(5) tire and wheel damage resulting from ordinary road hazards such as potholes, rocks, wood debris, metal parts, glass, plastic, or composite scraps.

SECTION 3. Section 2306.002, Occupations Code, is amended as follows:

(8) "Vehicle" includes a "motor vehicle" as defined by Section 2301.002(23), Occupations Code, or "heavy equipment" as defined by Section 23.1241, Tax Code.

(9) "Vehicle protection product" means a product or system, which includes a written warranty, that is:

(A) installed on or applied to a vehicle;

(B) designed to prevent loss or damage to a vehicle from a specific cause; and

(C) subject to the limitation of Section 2306.003.

SECTION 4. Business and Commerce Code, Title 5, Subtitle B, is amended to create Chapter 93 to read as follows: Chapter 93. HEAVY EQUIPMENT LOSS DAMAGE WAIVER

Sec. 93.001. DEFINITIONS. In this chapter:

(1) "Customer" means a person who rents heavy equipment under a rental agreement.

(2) "Heavy equipment" has the meaning found under Section 23.1241, Tax Code.

(3) "Heavy equipment loss damage waiver" means a merchant's agreement to not hold a customer liable for loss from all or part of any damage to heavy equipment.

(4) "Merchant" means a person who, in the ordinary course of business, regularly rents, offers to rent, or arranges for the rental of heavy equipment under a rental agreement.

(5) "Rental agreement" means an agreement under which a customer may pay a fee and uses heavy equipment.

Sec. 93.002. CONTRACT FOR WAIVER. A customer may contract with a merchant for a heavy equipment loss damage waiver.

Sec. 92.003. RESTRICTIONS ON MERCHANT CONCERNING WAIVER. A merchant may not:

(1) sell a heavy equipment loss damage waiver unless:

(A) the contract containing the waiver complies with this chapter; and

(B) the customer agrees to the waiver in writing.

(2) impose or require the purchase of a heavy equipment loss damage waiver when entering into a rental agreement.

Sec. 92.004. REQUIRED NOTICE IN WAIVER. A contract that offers a loss damage waiver must include the following notice:

"This contract offers an optional loss damage waiver for an additional charge to cover your responsibility for loss of or damage to the heavy equipment. You do not have to purchase this coverage. Before deciding whether or not to purchase this loss damage waiver, you may consider whether your insurance policies afford you coverage for loss of or damage to items rented and the amount of the deductible you would pay under your policy."

Sec. 92.005. STATEMENT OF TOTAL CHARGE. A heavy equipment loss damage waiver must include a statement of the total charge for the waiver.

Sec. 92.006. AUTHORIZED EXCLUSIONS. A heavy equipment loss damage waiver may exclude:

(1) loss or damage to the heavy equipment that is caused by an unexplained disappearance or abandonment of the commercial equipment;

(2) damage that is intentionally caused by the customer; or

(3) damage that results from the customer's wilful or wanton misconduct.

Sec. 92.007. RELATIONSHIP TO INSURANCE. A heavy equipment loss damage waiver is not insurance.

Sec. 91.008. CIVIL PENALTY. A merchant that violates this chapter is liable for a civil penalty in an amount of not less than $500 or more than $1,000 for each act of violation.

Sec. 91.009. INJUNCTION. A person injured or threatened with injury by a violation of this chapter may seek injunctive relief against the person committing or threatening to commit the violation.

Sec. 91.010. SUIT FOR CIVIL PENALTY OR INJUNCTIVE RELIEF. The attorney general or a county or district attorney may bring an action in the name of the state for a civil penalty under Section 91.008, injunctive relief under Section 91.009, or both.

SECTION 5. The changes in law made by this Act apply to a service contract or vehicle protection product contract entered into on or after the effective date of this Act. A service contract or vehicle protection product contract entered into before the effective date of this Act is governed by the law in effect when the contract was entered into, and the former law is continued in effect for that purpose.

SECTION 6. This Act takes effect September 1, 2015.