By: Turner of Harris H.B. No. 3625
A BILL TO BE ENTITLED
AN ACT
relating to the regulation of extended warranties.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 1304, Occupations Code, is amended by
adding Subchapter F to read as follows:
Sec. 1304.301, Subchapter F. EXTENDED WARRANTIES
(a) As used in this section:
(1) "Extended warranty" means a contract or agreement
entered into for consideration and for a specified term to either
perform or provide indemnification for the repair, replacement, or
maintenance of a product because of operational or structural
failure of such product due to a defect in materials, skill,
workmanship, or normal wear and tear given for consideration over
and above the lease or purchase price of a product.
(2) "Extended warranty provider" means a person who issues,
makes, provides, or offers to provide an extended warranty to a
consumer and who is contractually obligated to provide service
under such extended warranty.
(3) "Consumer" means a person who purchases an extended
warranty from an extended warranty provider.
(4) "Extended warranty reimbursement insurance policy"
means a policy of insurance providing coverage for all obligations
and liabilities incurred by an extended warranty provider under the
terms of the extended warranty sold to a buyer by such provider.
(b) An extended warranty shall obligate the extended
warranty provider to supply to the buyer all services and
functional parts that may be necessary to repair the product for
the duration of the extended warranty without additional charge,
except as otherwise expressly provided.
(c) An extended warranty shall contain all of the following:
(1) A clear description and identification of the product or
service to be provided;
(2) The date when the extended warranty commences and its
duration, and, if the extended warranty is for less than one year,
the extended warranty shall include a provision for the automatic
extension of the extended warranty while the product is in the
custody of the extended warranty provider for repair under such
warranty;
(3) A description of the limits on transfer or assignment of
the extended warranty if the enforceability of an extended warranty
is limited to the original buyer or is limited to persons other
than every consumer owner of the covered product during the term of
the extended warranty;
(4) A statement of the obligation of the extended warranty
provider including statements: (A) including but not limited to,
services, parts, components, defects, malfunctions, conditions,
repairs or remedies that are excluded from the scope of the
extended warranty; (B) limits on the obligations of the extended
warranty provider; (C) additional services which the extended
warranty provider will supply; (D) whether the buyer has the
responsibility of any other obligations and, if so, the nature and
frequency of such obligations, and the consequences of any
noncompliance;
(5) A step-by-step explanation of the procedure which the
buyer shall follow in order to obtain performance of any obligation
under the extended warranty including: (A) the full legal and
business name of the extended warranty provider; (B) the mailing
address of the extended warranty provider; (C) the persons or class
of persons that are authorized to perform service; (D) the name or
title and address of any agent, employee, or department of the
extended warranty provider that is responsible for the performance
of any obligations; (E) the method of giving notice to the extended
warranty provider of the need for service; (F) whether in-home
service is provided or, if not, whether the costs of transporting
the product for service or repairs will be paid by the extended
warranty provider; (G) if the product must be transported to the
extended warranty provider, either the place where the product may
be delivered for service or repairs or a toll-free telephone number
which the buyer may call to obtain that information; (H) all other
steps which the buyer must take to obtain service; and (I) all
fees, charges and other costs that the buyer must pay to obtain
service;
(6) A description of the services the extended warranty
provider will supply and perform under the extended warranty; and
(7) A statement of a right to cancel the warranty if the
buyer returns the product or the product is sold, lost, stolen, or
destroyed, or a statement that there is no right to cancel.
(d) (1) An extended warranty shall not be issued, sold, or
offered for sale unless the extended warranty provider is insured
under an extended warranty reimbursement insurance policy issued by
an insurer authorized by the Texas Department of Insurance to do
business in this state. An insurer authorized to issue an extended
warranty reimbursement insurance policy in this state shall, at the
time the policy is filed with the Executive Director of the Texas
Department of Licensing and Regulations, continuously thereafter
maintain policy limits and requirements as determined by the
Commissioner of the Texas Department of Insurance.
(2) The extended warranty reimbursement insurance policy
shall cover the obligations under the extended warranty while the
policy is in force.
Section 2. The change in law made by this Act applies only
to an offense committed on or after the effective date of this Act.
An offense committed before the effective date of this Act is
covered by the law in effect when the offense was committed, and the
former law is continued in effect for that purpose. For purposes of
this section, an offense was committed before the effective date of
this Act if any element of the offense was committed before that
date.
SECTION 3. This Act takes effect September 1, 2015.