| |
| |
| |
|
|
AN ACT
|
|
|
relating to service contracts for leased or purchased motor |
|
|
vehicles. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Sections 1304.003(a)(2) and (3), Occupations |
|
|
Code, are amended to read as follows: |
|
|
(2) "Service contract" means an agreement that is |
|
|
entered into for a separately stated consideration and for a |
|
|
specified term under which a provider agrees to: |
|
|
(A) repair, replace, or maintain a product, or |
|
|
provide indemnification for the repair, replacement, or |
|
|
maintenance of a product, for operational or structural failure or |
|
|
damage caused by a defect in materials or workmanship or by normal |
|
|
wear; |
|
|
(B) provide identity recovery, if the service |
|
|
contract is financed under Chapter 348 or 353, Finance Code; or |
|
|
(C) provide compensation to the lessee or buyer |
|
|
of a vehicle on the total constructive loss under a depreciation |
|
|
benefit optional member program. |
|
|
(3) "Depreciation benefit optional member program" |
|
|
means a service contract for a vehicle, regardless of whether the |
|
|
vehicle is purchased for cash, financed, or leased [financed under |
|
|
Chapter 348 or 353, Finance Code], that pays to the lessee or buyer |
|
|
a specified amount, as a credit that may be used toward the lease or |
|
|
purchase of a replacement vehicle at a participating dealer after |
|
|
[, an amount less than or equal to the difference between the |
|
|
purchase price and actual cash value for] a total constructive loss |
|
|
of the vehicle. |
|
|
SECTION 2. Section 1304.003(e), Occupations Code, is |
|
|
amended to read as follows: |
|
|
(e) A service contract described by Subsection (a)(2)(C): |
|
|
(1) may not be required as a condition of approval of a |
|
|
lease of a vehicle or a loan for the purchase of a vehicle; |
|
|
(2) may not be offered by a dealer who requires a loan |
|
|
for the purchase of a vehicle to be financed exclusively with the |
|
|
dealer; |
|
|
(3) may be canceled by the buyer of the service |
|
|
contract not later than the 30th day after the [a] buyer enters into |
|
|
the contract, without a penalty; |
|
|
(4) may be canceled by the buyer of the service |
|
|
contract later than the 30th day after the [a] buyer enters into the |
|
|
contract, with a pro rata refund to be provided to the buyer; and |
|
|
(5) may only charge a fee that is reasonable in |
|
|
relation to the benefit provided by the service contract. |
|
|
SECTION 3. The changes in law made by this Act apply only to |
|
|
a service contract entered into or renewed on or after the effective |
|
|
date of this Act. A service contract entered into or renewed before |
|
|
the effective date of this Act is governed by the law in effect |
|
|
immediately before the effective date of this Act, and that law is |
|
|
continued in effect for that purpose. |
|
|
SECTION 4. This Act takes effect September 1, 2021. |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
| |
|
|
I certify that H.B. No. 735 was passed by the House on April |
|
|
9, 2021, by the following vote: Yeas 143, Nays 1, 2 present, not |
|
|
voting. |
|
|
|
|
|
______________________________ |
|
|
Chief Clerk of the House |
| |
| |
|
|
I certify that H.B. No. 735 was passed by the Senate on April |
|
|
29, 2021, by the following vote: Yeas 31, Nays 0. |
|
|
|
|
|
______________________________ |
|
|
Secretary of the Senate |
|
|
APPROVED: _____________________ |
|
|
Date |
|
|
|
|
|
_____________________ |
|
|
Governor |