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A BILL TO BE ENTITLED
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AN ACT
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relating to service contract providers. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 1304.003, Occupations Code, is amended |
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by amending Subsection (a) and adding Subsection (e) to read as |
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follows: |
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(a) In this chapter: |
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(1) "Identity recovery" means a process, through a |
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limited power of attorney and the assistance of an identity |
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recovery expert, that returns the identity of an identity theft |
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victim to pre-identity theft event status. |
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(2) "Service contract" means an agreement that is |
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entered into for a separately stated consideration and for a |
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specified term under which a provider agrees to: |
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(A) repair, replace, or maintain a product, or |
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provide indemnification for the repair, replacement, or |
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maintenance of a product, for operational or structural failure or |
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damage caused by a defect in materials or workmanship or by normal |
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wear; [or] |
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(B) provide identity recovery, if the service |
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contract is financed under Chapter 348 or 353, Finance Code; or |
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(C) provide compensation to the buyer of a |
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vehicle on the total constructive loss under a depreciation benefit |
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optional member program. |
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(3) "Depreciation benefit optional member program" |
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means a service contract financed under Chapter 348 or 353, Finance |
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Code, that pays to the buyer, as a credit toward the purchase of a |
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replacement vehicle at a participating dealer, an amount less than |
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or equal to the difference between the purchase price and actual |
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cash value for a total constructive loss. |
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(e) A service contract described by Subsection (a)(2)(C): |
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(1) may not be required as a condition of approval of a |
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loan for the purchase of a vehicle; |
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(2) may not be offered by a dealer who requires a loan |
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for the purchase of a vehicle to be financed exclusively with the |
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dealer; |
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(3) may be canceled by the buyer not later than the |
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30th day after a buyer enters into the contract, without a penalty; |
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(4) may be canceled by the buyer later than the 30th |
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day after a buyer enters into the contract, with a pro rata refund |
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to be provided to the buyer; and |
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(5) may only charge a fee that is reasonable in |
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relation to the benefit provided by the service contract. |
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SECTION 2. The changes in law made by this Act apply only to |
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a depreciation benefit optional member program service contract |
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entered into or renewed on or after the effective date of this Act. |
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A depreciation benefit optional member program service contract |
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entered into or renewed before the effective date of this Act is |
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governed by the law in effect immediately before the effective date |
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of this Act, and that law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect September 1, 2017. |