Texas 2017 - 85th Regular

Texas Senate Bill SB1500 Compare Versions

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1	1		By: Zaffirini S.B. No. 1500
2		-	(Kuempel)
3	2
4	3
5	4		A BILL TO BE ENTITLED
6	5		AN ACT
7	6		relating to certain vehicle protection products.
8	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
9	8		SECTION 1. Section 17.45, Business & Commerce Code, is
10	9		amended by adding Subdivisions (14), (15), and (16) to read as
11	10		follows:
12	11		(14) "Vehicle protection product":
13	12		(A) means a product or system, including a
14	13		written warranty:
15	14		(i) that is:
16	15		(a) installed on or applied to a
17	16		vehicle; and
18	17		(b) designed to prevent loss or damage
19	18		to a vehicle from a specific cause; and
20	19		(ii) under which, after installation or
21	20		application of the product or system described by Subparagraph (i),
22	21		if loss or damage results from the failure of the product or system
23	22		to perform as represented in the warranty, the warrantor, to the
24	23		extent agreed on as part of the warranty, is required to pay
25	24		expenses to the person in this state who purchases or otherwise
26	25		possesses the product or system for the loss of or damage to the
27	26		vehicle; and
28	27		(B) may also include identity recovery, as
29	28		defined by Section 1304.003, Occupations Code, if the product or
30	29		system described by Paragraph (A) is financed under Chapter 348 or
31	30		353, Finance Code.
32	31		(15) "Warrantor" means a person named under the terms
33	32		of a vehicle protection product warranty as the contractual obligor
34	33		to a person in this state who purchases or otherwise possesses a
35	34		vehicle protection product.
36	35		(16) "Loss of or damage to the vehicle," for purposes
37	36		of Subdivision (14)(A)(ii), may also include unreimbursed
38	37		incidental expenses that may be incurred by the warrantor,
39	38		including expenses for a replacement vehicle, temporary vehicle
40	39		rental expenses, and registration expenses for replacement
41	40		vehicles.
42	41		SECTION 2. Section 17.46(b), Business & Commerce Code, as
43	42		amended by Chapters 1023 (H.B. 1265) and 1080 (H.B. 2573), Acts of
44	43		the 84th Legislature, Regular Session, 2015, is reenacted and
45	44		amended to read as follows:
46	45		(b) Except as provided in Subsection (d) of this section,
47	46		the term "false, misleading, or deceptive acts or practices"
48	47		includes, but is not limited to, the following acts:
49	48		(1) passing off goods or services as those of another;
50	49		(2) causing confusion or misunderstanding as to the
51	50		source, sponsorship, approval, or certification of goods or
52	51		services;
53	52		(3) causing confusion or misunderstanding as to
54	53		affiliation, connection, or association with, or certification by,
55	54		another;
56	55		(4) using deceptive representations or designations
57	56		of geographic origin in connection with goods or services;
58	57		(5) representing that goods or services have
59	58		sponsorship, approval, characteristics, ingredients, uses,
60	59		benefits, or quantities which they do not have or that a person has
61	60		a sponsorship, approval, status, affiliation, or connection which
62	61		the person does not;
63	62		(6) representing that goods are original or new if
64	63		they are deteriorated, reconditioned, reclaimed, used, or
65	64		secondhand;
66	65		(7) representing that goods or services are of a
67	66		particular standard, quality, or grade, or that goods are of a
68	67		particular style or model, if they are of another;
69	68		(8) disparaging the goods, services, or business of
70	69		another by false or misleading representation of facts;
71	70		(9) advertising goods or services with intent not to
72	71		sell them as advertised;
73	72		(10) advertising goods or services with intent not to
74	73		supply a reasonable expectable public demand, unless the
75	74		advertisements disclosed a limitation of quantity;
76	75		(11) making false or misleading statements of fact
77	76		concerning the reasons for, existence of, or amount of price
78	77		reductions;
79	78		(12) representing that an agreement confers or
80	79		involves rights, remedies, or obligations which it does not have or
81	80		involve, or which are prohibited by law;
82	81		(13) knowingly making false or misleading statements
83	82		of fact concerning the need for parts, replacement, or repair
84	83		service;
85	84		(14) misrepresenting the authority of a salesman,
86	85		representative or agent to negotiate the final terms of a consumer
87	86		transaction;
88	87		(15) basing a charge for the repair of any item in
89	88		whole or in part on a guaranty or warranty instead of on the value of
90	89		the actual repairs made or work to be performed on the item without
91	90		stating separately the charges for the work and the charge for the
92	91		warranty or guaranty, if any;
93	92		(16) disconnecting, turning back, or resetting the
94	93		odometer of any motor vehicle so as to reduce the number of miles
95	94		indicated on the odometer gauge;
96	95		(17) advertising of any sale by fraudulently
97	96		representing that a person is going out of business;
98	97		(18) advertising, selling, or distributing a card
99	98		which purports to be a prescription drug identification card issued
100	99		under Section 4151.152, Insurance Code, in accordance with rules
101	100		adopted by the commissioner of insurance, which offers a discount
102	101		on the purchase of health care goods or services from a third party
103	102		provider, and which is not evidence of insurance coverage, unless:
104	103		(A) the discount is authorized under an agreement
105	104		between the seller of the card and the provider of those goods and
106	105		services or the discount or card is offered to members of the
107	106		seller;
108	107		(B) the seller does not represent that the card
109	108		provides insurance coverage of any kind; and
110	109		(C) the discount is not false, misleading, or
111	110		deceptive;
112	111		(19) using or employing a chain referral sales plan in
113	112		connection with the sale or offer to sell of goods, merchandise, or
114	113		anything of value, which uses the sales technique, plan,
115	114		arrangement, or agreement in which the buyer or prospective buyer
116	115		is offered the opportunity to purchase merchandise or goods and in
117	116		connection with the purchase receives the seller's promise or
118	117		representation that the buyer shall have the right to receive
119	118		compensation or consideration in any form for furnishing to the
120	119		seller the names of other prospective buyers if receipt of the
121	120		compensation or consideration is contingent upon the occurrence of
122	121		an event subsequent to the time the buyer purchases the merchandise
123	122		or goods;
124	123		(20) representing that a guaranty or warranty confers
125	124		or involves rights or remedies which it does not have or involve,
126	125		provided, however, that nothing in this subchapter shall be
127	126		construed to expand the implied warranty of merchantability as
128	127		defined in Sections 2.314 through 2.318 and Sections 2A.212 through
129	128		2A.216 to involve obligations in excess of those which are
130	129		appropriate to the goods;
131	130		(21) promoting a pyramid promotional scheme, as
132	131		defined by Section 17.461;
133	132		(22) representing that work or services have been
134	133		performed on, or parts replaced in, goods when the work or services
135	134		were not performed or the parts replaced;
136	135		(23) filing suit founded upon a written contractual
137	136		obligation of and signed by the defendant to pay money arising out
138	137		of or based on a consumer transaction for goods, services, loans, or
139	138		extensions of credit intended primarily for personal, family,
140	139		household, or agricultural use in any county other than in the
141	140		county in which the defendant resides at the time of the
142	141		commencement of the action or in the county in which the defendant
143	142		in fact signed the contract; provided, however, that a violation of
144	143		this subsection shall not occur where it is shown by the person
145	144		filing such suit that the person neither knew or had reason to know
146	145		that the county in which such suit was filed was neither the county
147	146		in which the defendant resides at the commencement of the suit nor
148	147		the county in which the defendant in fact signed the contract;
149	148		(24) failing to disclose information concerning goods
150	149		or services which was known at the time of the transaction if such
151	150		failure to disclose such information was intended to induce the
152	151		consumer into a transaction into which the consumer would not have
153	152		entered had the information been disclosed;
154	153		(25) using the term "corporation," "incorporated," or
155	154		an abbreviation of either of those terms in the name of a business
156	155		entity that is not incorporated under the laws of this state or
157	156		another jurisdiction;
158	157		(26) selling, offering to sell, or illegally promoting
159	158		an annuity contract under Chapter 22, Acts of the 57th Legislature,
160	159		3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
161	160		Statutes), with the intent that the annuity contract will be the
162	161		subject of a salary reduction agreement, as defined by that Act, if
163	162		the annuity contract is not an eligible qualified investment under
164	163		that Act or is not registered with the Teacher Retirement System of
165	164		Texas as required by Section 8A of that Act;
166	165		(27) taking advantage of a disaster declared by the
167	166		governor under Chapter 418, Government Code, by:
168	167		(A) selling or leasing fuel, food, medicine, or
169	168		another necessity at an exorbitant or excessive price; or
170	169		(B) demanding an exorbitant or excessive price in
171	170		connection with the sale or lease of fuel, food, medicine, or
172	171		another necessity;
173	172		(28) using the translation into a foreign language of
174	173		a title or other word, including "attorney," "lawyer," "licensed,"
175	174		"notary," and "notary public," in any written or electronic
176	175		material, including an advertisement, a business card, a
177	176		letterhead, stationery, a website, or an online video, in reference
178	177		to a person who is not an attorney in order to imply that the person
179	178		is authorized to practice law in the United States;
180	179		(29) [(28)] delivering or distributing a solicitation
181	180		in connection with a good or service that:
182	181		(A) represents that the solicitation is sent on
183	182		behalf of a governmental entity when it is not; or
184	183		(B) resembles a governmental notice or form that
185	184		represents or implies that a criminal penalty may be imposed if the
186	185		recipient does not remit payment for the good or service;
187	186		(30) [(29)] delivering or distributing a solicitation
188	187		in connection with a good or service that resembles a check or other
189	188		negotiable instrument or invoice, unless the portion of the
190	189		solicitation that resembles a check or other negotiable instrument
191	190		or invoice includes the following notice, clearly and conspicuously
192	191		printed in at least 18-point type:
193	192		"SPECIMEN-NON-NEGOTIABLE";
194	193		(31) [(30)] in the production, sale, distribution, or
195	194		promotion of a synthetic substance that produces and is intended to
196	195		produce an effect when consumed or ingested similar to, or in excess
197	196		of, the effect of a controlled substance or controlled substance
198	197		analogue, as those terms are defined by Section 481.002, Health and
199	198		Safety Code:
200	199		(A) making a deceptive representation or
201	200		designation about the synthetic substance; or
202	201		(B) causing confusion or misunderstanding as to
203	202		the effects the synthetic substance causes when consumed or
204	203		ingested; [or]
205	204		(32) [(31)] a licensed public insurance adjuster
206	205		directly or indirectly soliciting employment, as defined by Section
207	206		38.01, Penal Code, for an attorney, or a licensed public insurance
208	207		adjuster entering into a contract with an insured for the primary
209	208		purpose of referring the insured to an attorney without the intent
210	209		to actually perform the services customarily provided by a licensed
211	210		public insurance adjuster, provided that this subdivision may not
212	211		be construed to prohibit a licensed public insurance adjuster from
213	212		recommending a particular attorney to an insured; or
214	213		(33) a warrantor of a vehicle protection product
215	214		warranty using, in connection with the product, a name that
216	215		includes "casualty," "surety," "insurance," "mutual," or any other
217	216		word descriptive of an insurance business, including property or
218	217		casualty insurance, or a surety business.
219	218		SECTION 3. Subchapter A, Chapter 348, Finance Code, is
220	219		amended by adding Section 348.014 to read as follows:
221	220		Sec. 348.014. TRANSACTION CONDITIONED ON PURCHASE OF
222	221		VEHICLE PROTECTION PRODUCT PROHIBITED. (a) In this section,
223	222		"vehicle protection product" has the meaning assigned by Section
224	223		17.45, Business & Commerce Code.
225	224		(b) A retail seller may not require as a condition of a
226	225		retail installment transaction or the cash sale of a motor vehicle
227	226		that the buyer purchase a vehicle protection product that is not
228	227		installed on the vehicle at the time of the transaction.
229	228		(c) A violation of this section is a false, misleading, or
230	229		deceptive act or practice within the meaning of Section 17.46,
231	230		Business & Commerce Code, and is actionable in a public or private
232	231		suit brought under Subchapter E, Chapter 17, Business & Commerce
233	232		Code.
234	233		SECTION 4. Subchapter A, Chapter 353, Finance Code, is
235	234		amended by adding Section 353.017 to read as follows:
236	235		Sec. 353.017. TRANSACTION CONDITIONED ON PURCHASE OF
237	236		VEHICLE PROTECTION PRODUCT PROHIBITED. (a) In this section,
238	237		"vehicle protection product" has the meaning assigned by Section
239	238		17.45, Business & Commerce Code.
240	239		(b) A retail seller may not require as a condition of a
241	240		retail installment transaction or the cash sale of a commercial
242	241		vehicle that the buyer purchase a vehicle protection product that
243	242		is not installed on the vehicle at the time of the transaction.
244	243		(c) A violation of this section is a false, misleading, or
245	244		deceptive act or practice within the meaning of Section 17.46,
246	245		Business & Commerce Code, and is actionable in a public or private
247	246		suit brought under Subchapter E, Chapter 17, Business & Commerce
248	247		Code.
249	248		SECTION 5. Chapter 2306, Occupations Code, is repealed.
250	249		SECTION 6. (a) On the effective date of this Act:
251	250		(1) an action, including a disciplinary or
252	251		administrative proceeding, pending under Chapter 51 or 2306,
253	252		Occupations Code, on the effective date of this Act related to an
254	253		alleged violation of Chapter 2306, Occupations Code, as that
255	254		chapter existed immediately before the effective date of this Act,
256	255		is dismissed;
257	256		(2) the Vehicle Protection Product Warrantor Advisory
258	257		Board is abolished; and
259	258		(3) a registration issued under former Chapter 2306,
260	259		Occupations Code, expires.
261	260		(b) As soon as practicable after the effective date of this
262	261		Act, the Texas Commission of Licensing and Regulation shall repeal
263	262		all rules regarding the regulation of vehicle protection product
264	263		warrantors adopted under former Chapter 2306, Occupations Code.
265	264		(c) An administrative penalty assessed by the Texas
266	265		Commission of Licensing and Regulation or the executive director of
267	266		the Texas Department of Licensing and Regulation related to a
268	267		violation of Chapter 2306, Occupations Code, as that chapter
269	268		existed immediately before the effective date of this Act, may be
270	269		collected as provided by Chapter 51, Occupations Code.
271	270		(d) The repeal by this Act of Chapter 2306, Occupations
272	271		Code, does not affect the validity or terms of a vehicle protection
273	272		product warranty that was issued or renewed before the effective
274	273		date of this Act.
275	274		SECTION 7. Section 17.46(b), Business & Commerce Code, as
276	275		amended by this Act, applies only to a cause of action that accrues
277	276		on or after the effective date of this Act. A cause of action that
278	277		accrued before the effective date of this Act is governed by the law
279	278		in effect immediately before the effective date of this Act, and
280	279		that law is continued in effect for that purpose.
281	280		SECTION 8. Sections 348.014 and 353.017, Finance Code, as
282	281		added by this Act, apply only to a transaction for the purchase of a
283	282		motor vehicle or commercial vehicle, as applicable, that occurs on
284	283		or after the effective date of this Act. A transaction for the
285	284		purchase of a motor vehicle or commercial vehicle that occurs
286	285		before the effective date of this Act is governed by the law in
287	286		effect on the date the transaction occurred, and the former law is
288	287		continued in effect for that purpose.
289	288		SECTION 9. To the extent of any conflict, this Act prevails
290	289		over another Act of the 85th Legislature, Regular Session, 2017,
291	290		relating to nonsubstantive additions to and corrections in enacted
292	291		codes.
293	292		SECTION 10. This Act takes effect September 1, 2017.