Texas 2009 - 81st Regular

Texas House Bill HB2672 Compare Versions

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1	1	81R30477 E
2	2	By: Howard of Fort Bend H.B. No. 2672
3	3	Substitute the following for H.B. No. 2672:
4	4	By: Elkins C.S.H.B. No. 2672
5	5
6	6
7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to restrictions on the automatic renewal of contracts.
10	10	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
11	11	SECTION 1. Title 12, Business & Commerce Code, is amended by
12	12	adding Chapter 606 to read as follows:
13	13	CHAPTER 606. AUTOMATIC RENEWAL OF CONTRACTS
14	14	Sec. 606.001. APPLICABILITY. (a) This chapter applies
15	15	only to the renewal of a contract if:
16	16	(1) the original contract term is for six months or
17	17	more and the contract automatically renews for a term of at least
18	18	one month; or
19	19	(2) the price for goods or services under the contract
20	20	as renewed is greater than the price of goods or services under the
21	21	contract during the immediately preceding contract term.
22	22	(b) This chapter applies only to a contract that:
23	23	(1) is for:
24	24	(A) a service, including Internet or telephone
25	25	service; or
26	26	(B) a magazine or newspaper subscription; and
27	27	(2) specifies a term during which the service or
28	28	subscription will be provided.
29	29	(c) This chapter does not apply to a contract:
30	30	(1) that has an original contract term of six months or
31	31	more and automatically renews for a term of at least one month, if
32	32	the consumer:
33	33	(A) may cancel the contract after the original
34	34	contract term has expired without penalty; and
35	35	(B) is required to pay only the amount due for
36	36	each month the contract is in effect, including the month during
37	37	which the consumer canceled the contract, if services are provided
38	38	until the end of that month; or
39	39	(2) for the sale, lease, or management of real
40	40	property.
41	41	Sec. 606.002. DEFINITIONS. In this chapter:
42	42	(1) "Automatic renewal clause" means a provision of a
43	43	contract that extends the term of or renews a contract if the
44	44	consumer does not take a specified action.
45	45	(2) "Consumer" means a person who acquires goods or
46	46	services for personal, family, or household purposes.
47	47	(3) "Seller" means a person who provides a service or
48	48	sells goods.
49	49	Sec. 606.003. REQUIREMENTS FOR AUTOMATIC RENEWAL. If a
50	50	contract between a seller and a consumer contains an automatic
51	51	renewal clause, the seller shall:
52	52	(1) for a contract described by Section 606.001(a)(1),
53	53	clearly and conspicuously disclose to the consumer the automatic
54	54	renewal clause and the procedure for canceling the automatic
55	55	renewal:
56	56	(A) at the time that the seller enters into the
57	57	contract with the consumer; or
58	58	(B) in writing not later than the 60th day after
59	59	the date the seller enters into the contract with the consumer; and
60	60	(2) give the consumer written notice of the automatic
61	61	renewal clause and the procedure for canceling the automatic
62	62	renewal not before the 90th day and not after the 15th day before
63	63	the last date on which the consumer may cancel the automatic
64	64	renewal.
65	65	Sec. 606.004. NOTICE OF AUTOMATIC RENEWAL. (a) Written
66	66	notice provided under Section 606.003(2) must clearly and
67	67	conspicuously disclose:
68	68	(1) that the contract will automatically renew if the
69	69	consumer does not cancel the automatic renewal;
70	70	(2) the cancellation procedure;
71	71	(3) a facsimile number, electronic mail address,
72	72	telephone number, or mailing address that a consumer may contact to
73	73	cancel the automatic renewal; and
74	74	(4) the dates during which the consumer may cancel the
75	75	automatic renewal.
76	76	(b) A seller may opt to send to a consumer written notice
77	77	under Section 606.003(2) by mail, certified mail, or personal
78	78	service, by including a statement in an invoice as provided by
79	79	Subsection (c), or, if the consumer agrees, by written electronic
80	80	communication, including electronic mail. The seller may assume
81	81	that written notice deposited with the United States Postal Service
82	82	with first class postage paid will be received by the consumer on
83	83	the third federal business day after the notice is so deposited.
84	84	(c) Notice included in an invoice must be in red ink or in
85	85	boldfaced type large enough to be easily noticed.
86	86	Sec. 606.005. CANCELLATION OF AUTOMATIC RENEWAL BY
87	87	FACSIMILE, ELECTRONIC MAIL, TELEPHONE, OR MAIL. A seller shall
88	88	allow a consumer to cancel the automatic renewal of a contract by
89	89	contacting a facsimile number, electronic mail address, telephone
90	90	number, or mailing address provided by the seller.
91	91	Sec. 606.006. CONSUMER'S RIGHT TO CANCEL. (a) A consumer
92	92	may cancel the automatic renewal of a contract at any time before
93	93	the beginning of the automatic renewal period, at no cost to the
94	94	consumer, by following the procedure set out in the disclosure and
95	95	notice provided under Sections 606.003 and 606.004.
96	96	(b) If the seller fails to provide either the disclosure
97	97	under Section 606.003(1), if required, or the notice required by
98	98	Section 606.003(2), the consumer may cancel the automatic renewal
99	99	by any reasonable means at any time, at no cost to the consumer.
100	100	(c) If a consumer cancels the automatic renewal as provided
101	101	by this section, the seller must cancel the automatic renewal with
102	102	no additional cost to the consumer.
103	103	SECTION 2. The change in law made by Chapter 606, Business &
104	104	Commerce Code, as added by this Act, applies only to a contract
105	105	executed on or after September 1, 2009. A contract executed before
106	106	September 1, 2009, is governed by the law as it existed on the date
107	107	the contract was executed, and the former law is continued in effect
108	108	for that purpose.
109	109	SECTION 3. This Act takes effect September 1, 2009.