By: Taylor of Collin  S.B. No. 938
         (In the Senate - Filed January 16, 2017; March 1, 2017, read
  first time and referred to Committee on Business & Commerce;
  May 1, 2017, reported adversely, with favorable Committee
  Substitute by the following vote:  Yeas 9, Nays 0; May 1, 2017, sent
  to printer.)
 
  COMMITTEE SUBSTITUTE FOR S.B. No. 938 By:  Creighton
 
 
A BILL TO BE ENTITLED
 
AN ACT
 
  relating to certain rental-purchase agreements.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 92.001, Business & Commerce Code, is
  amended to read as follows:
         Sec. 92.001.  DEFINITIONS.  (a)  In this chapter:
               (1)  "Advertisement" means a commercial message in any
  medium that directly or indirectly promotes or assists a
  rental-purchase agreement.
               (3)  "Consumer" means an individual who leases personal
  property under a rental-purchase agreement.
               (5)  "Loss damage waiver" means a merchant's agreement
  to not hold a consumer liable for loss from all or part of any damage
  to merchandise.
               (6)  "Merchandise" means the personal property that is
  the subject of a rental-purchase agreement.
               (7)  "Merchant" means a person who, in the ordinary
  course of business, regularly leases, offers to lease, or arranges
  for the leasing of merchandise under a rental-purchase agreement.  
  The term includes a person who is assigned an interest in a
  rental-purchase agreement.
               (8)  "Rental-purchase agreement" means an agreement
  under which a consumer may use merchandise for personal, family, or
  household purposes for an initial period of four months or less, and
  that:
                     (A)  is automatically renewable with each payment
  after the initial period; and
                     (B)  permits the consumer to become the owner of
  the merchandise.
         (b)  For purposes of this chapter, merchandise is displayed
  or offered to consumers primarily for lease under a rental-purchase
  agreement if the merchandise is displayed or offered at a place of
  business that derives at least 50 percent of its revenue from
  rental-purchase agreements. 
         SECTION 2.  Subchapter A, Chapter 92, Business & Commerce
  Code, is amended by adding Section 92.003 to read as follows:
         Sec. 92.003.  POINT-OF-RENTAL DISCLOSURES. (a)  If
  merchandise is not displayed or offered to consumers primarily for
  lease under a rental-purchase agreement, the merchant shall make
  the following disclosures to a consumer before presenting a
  rental-purchase agreement for specific merchandise to the consumer
  for execution:
               (1)  the price for which the merchant would sell the
  merchandise to the consumer for cash on the date of the disclosure;
               (2)  the amount of the periodic payments that would be
  provided for in the agreement if it is executed on the date of the
  disclosure; and
               (3)  the total number and amount of periodic payments
  necessary to acquire ownership of the merchandise under the
  agreement if it is executed on the date of the disclosure.
         (b)  The disclosures required by Subsection (a) must be made
  separately from the rental-purchase agreement. 
         SECTION 3.  Subchapter B, Chapter 92, Business & Commerce
  Code, is amended by adding Section 92.0535 to read as follows:
         Sec. 92.0535.  ACKNOWLEDGMENT REQUIRED FOR CERTAIN
  AGREEMENTS. If merchandise is not displayed or offered to
  consumers primarily for lease under a rental-purchase agreement,
  the merchant shall provide to the consumer at the time the agreement
  is presented to the consumer the additional disclosures prescribed
  by this section. The disclosures must:
               (1)  be entitled "Acknowledgment of Rental-Purchase
  Transaction";
               (2)  be on a separate page;
               (3)  be signed by the consumer; and
               (4)  include an acknowledgment that the consumer
  understands the consumer is entering into a rental-purchase
  agreement and that:
                     (A)  under the agreement, the consumer does not
  own the merchandise but may acquire ownership rights by complying
  with the ownership option terms specified in the agreement;
                     (B)  the agreement is not a credit transaction;
                     (C)  if provided by the agreement, the consumer
  has the right to return the merchandise at any time without
  additional charge or penalty, and, on the merchandise's return, the
  consumer will owe only unpaid rental charges and fees;
                     (D)  if the consumer fails to make a timely
  payment, the consumer has a right to reinstate the agreement as
  provided by the agreement and, if the merchandise is returned, the
  consumer is entitled to rent the same merchandise or substitute
  merchandise of comparable quality and condition if the consumer
  complies with the agreement and any applicable law; and
                     (E)  the consumer has reviewed and understands the
  agreement, including the consumer's right and options to acquire
  ownership of the merchandise and the total cost of the merchandise
  if all scheduled payments are made.
         SECTION 4.  Section 92.0535, Business & Commerce Code, as
  added by this Act, applies only to a rental-purchase agreement
  entered into on or after the effective date of this Act. A
  rental-purchase agreement entered into before the effective date of
  this Act is governed by the law in effect on the date the
  rental-purchase agreement was entered into, and the former law is
  continued in effect for that purpose.
         SECTION 5.  This Act takes effect September 1, 2017.
 
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