85R5022 EES-F
By: Taylor of Collin S.B. No. 938
A BILL TO BE ENTITLED
AN ACT
relating to certain rental-purchase agreements.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 92.001, Business & Commerce Code, is
amended to read as follows:
Sec. 92.001. DEFINITIONS. (a) In this chapter:
(1) "Advertisement" means any [a] commercial message
in any medium that directly or indirectly promotes [or assists] a
rental-purchase agreement.
(3) "Consumer" means an individual who is offered or
leases personal property under a rental-purchase agreement.
(5) "Loss damage waiver" means a merchant's agreement
to not hold a consumer liable for loss from all or part of any damage
to merchandise.
(6) "Merchandise" means the personal property that is
the subject or proposed subject of a rental-purchase agreement.
(7) "Merchant" means a person who, in the ordinary
course of business, regularly leases, offers to lease, or arranges
for the leasing of merchandise under a rental-purchase
agreement. The term includes a person who is assigned an interest
in a rental-purchase agreement.
(8) "Rental-purchase agreement" means an agreement
under which a consumer may use merchandise for personal, family, or
household purposes for an initial period of four months or less, and
that:
(A) is automatically renewable with each payment
after the initial period; and
(B) permits the consumer to become the owner of
the merchandise.
(b) For purposes of this chapter, merchandise is displayed
or offered to consumers primarily for lease under a rental-purchase
agreement if the merchandise is displayed or offered at a place of
business that derives at least 50 percent of its revenue from
rental-purchase agreements.
SECTION 2. Subchapter A, Chapter 92, Business & Commerce
Code, is amended by adding Section 92.003 to read as follows:
Sec. 92.003. POINT-OF-RENTAL DISCLOSURES. (a) If a
merchant's merchandise is not displayed or offered to consumers
primarily for lease under a rental-purchase agreement, the merchant
shall make the following disclosures to a consumer before
presenting a rental-purchase agreement for specific merchandise to
the consumer for execution:
(1) the price for which the merchant would sell the
merchandise to the consumer for cash on the date of the disclosure;
(2) the amount of the periodic payments that would be
provided for in the agreement if it is executed on the date of the
disclosure; and
(3) the total number and amount of periodic payments
necessary to acquire ownership of the merchandise under the
agreement if it is executed on the date of the disclosure.
(b) The disclosures required by Subsection (a) must be made
separately from the rental-purchase agreement.
SECTION 3. Subchapter B, Chapter 92, Business & Commerce
Code, is amended by adding Section 92.0535 to read as follows:
Sec. 92.0535. ACKNOWLEDGMENT REQUIRED FOR CERTAIN
AGREEMENTS. If a merchant's merchandise is not displayed or
offered to consumers primarily for lease under a rental-purchase
agreement, the merchant shall provide to the consumer at the time
the agreement is presented to the consumer the additional
disclosures prescribed by this section. The disclosures must:
(1) be entitled "Acknowledgment of Rental-Purchase
Transaction";
(2) be on a separate page;
(3) be signed by the consumer before the consumer
signs the agreement; and
(4) include an acknowledgment that the consumer
understands the consumer is entering into a rental-purchase
agreement and that:
(A) under the agreement, the consumer does not
own the merchandise but may acquire ownership rights by complying
with the ownership option terms specified in the agreement;
(B) the agreement is not a credit transaction;
(C) the consumer has the right to return the
merchandise at any time without additional charge or penalty, and,
on the merchandise's return, the consumer will owe only unpaid
rental charges and fees;
(D) if the consumer fails to make a timely
payment, the consumer has a right to reinstate the agreement as
provided by the agreement and, if the merchandise is returned, the
consumer is entitled to rent the same merchandise or substitute
merchandise of comparable quality and condition if the consumer
complies with the agreement and any applicable law; and
(E) the consumer has reviewed and understands the
agreement, including the consumer's right and options to acquire
ownership of the merchandise and the total cost of the merchandise
if all scheduled payments are made.
SECTION 4. Section 92.0535, Business & Commerce Code, as
added by this Act, applies only to a rental-purchase agreement
entered into on or after the effective date of this Act. A
rental-purchase agreement entered into before the effective date of
this Act is governed by the law in effect on the date the
rental-purchase agreement was entered into, and the former law is
continued in effect for that purpose.
SECTION 5. This Act takes effect September 1, 2017.