Texas 2017 - 85th Regular

Texas Senate Bill SB938 Compare Versions

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1	1	By: Taylor of Collin S.B. No. 938
2	2	(In the Senate - Filed January 16, 2017; March 1, 2017, read
3	3	first time and referred to Committee on Business & Commerce;
4	4	May 1, 2017, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 9, Nays 0; May 1, 2017, sent
6	6	to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 938 By: Creighton
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to certain rental-purchase agreements.
13	13	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
14	14	SECTION 1. Section 92.001, Business & Commerce Code, is
15	15	amended to read as follows:
16	16	Sec. 92.001. DEFINITIONS. (a) In this chapter:
17	17	(1) "Advertisement" means a commercial message in any
18	18	medium that directly or indirectly promotes or assists a
19	19	rental-purchase agreement.
20	20	(3) "Consumer" means an individual who leases personal
21	21	property under a rental-purchase agreement.
22	22	(5) "Loss damage waiver" means a merchant's agreement
23	23	to not hold a consumer liable for loss from all or part of any damage
24	24	to merchandise.
25	25	(6) "Merchandise" means the personal property that is
26	26	the subject of a rental-purchase agreement.
27	27	(7) "Merchant" means a person who, in the ordinary
28	28	course of business, regularly leases, offers to lease, or arranges
29	29	for the leasing of merchandise under a rental-purchase agreement.
30	30	The term includes a person who is assigned an interest in a
31	31	rental-purchase agreement.
32	32	(8) "Rental-purchase agreement" means an agreement
33	33	under which a consumer may use merchandise for personal, family, or
34	34	household purposes for an initial period of four months or less, and
35	35	that:
36	36	(A) is automatically renewable with each payment
37	37	after the initial period; and
38	38	(B) permits the consumer to become the owner of
39	39	the merchandise.
40	40	(b) For purposes of this chapter, merchandise is displayed
41	41	or offered to consumers primarily for lease under a rental-purchase
42	42	agreement if the merchandise is displayed or offered at a place of
43	43	business that derives at least 50 percent of its revenue from
44	44	rental-purchase agreements.
45	45	SECTION 2. Subchapter A, Chapter 92, Business & Commerce
46	46	Code, is amended by adding Section 92.003 to read as follows:
47	47	Sec. 92.003. POINT-OF-RENTAL DISCLOSURES. (a) If
48	48	merchandise is not displayed or offered to consumers primarily for
49	49	lease under a rental-purchase agreement, the merchant shall make
50	50	the following disclosures to a consumer before presenting a
51	51	rental-purchase agreement for specific merchandise to the consumer
52	52	for execution:
53	53	(1) the price for which the merchant would sell the
54	54	merchandise to the consumer for cash on the date of the disclosure;
55	55	(2) the amount of the periodic payments that would be
56	56	provided for in the agreement if it is executed on the date of the
57	57	disclosure; and
58	58	(3) the total number and amount of periodic payments
59	59	necessary to acquire ownership of the merchandise under the
60	60	agreement if it is executed on the date of the disclosure.
61	61	(b) The disclosures required by Subsection (a) must be made
62	62	separately from the rental-purchase agreement.
63	63	SECTION 3. Subchapter B, Chapter 92, Business & Commerce
64	64	Code, is amended by adding Section 92.0535 to read as follows:
65	65	Sec. 92.0535. ACKNOWLEDGMENT REQUIRED FOR CERTAIN
66	66	AGREEMENTS. If merchandise is not displayed or offered to
67	67	consumers primarily for lease under a rental-purchase agreement,
68	68	the merchant shall provide to the consumer at the time the agreement
69	69	is presented to the consumer the additional disclosures prescribed
70	70	by this section. The disclosures must:
71	71	(1) be entitled "Acknowledgment of Rental-Purchase
72	72	Transaction";
73	73	(2) be on a separate page;
74	74	(3) be signed by the consumer; and
75	75	(4) include an acknowledgment that the consumer
76	76	understands the consumer is entering into a rental-purchase
77	77	agreement and that:
78	78	(A) under the agreement, the consumer does not
79	79	own the merchandise but may acquire ownership rights by complying
80	80	with the ownership option terms specified in the agreement;
81	81	(B) the agreement is not a credit transaction;
82	82	(C) if provided by the agreement, the consumer
83	83	has the right to return the merchandise at any time without
84	84	additional charge or penalty, and, on the merchandise's return, the
85	85	consumer will owe only unpaid rental charges and fees;
86	86	(D) if the consumer fails to make a timely
87	87	payment, the consumer has a right to reinstate the agreement as
88	88	provided by the agreement and, if the merchandise is returned, the
89	89	consumer is entitled to rent the same merchandise or substitute
90	90	merchandise of comparable quality and condition if the consumer
91	91	complies with the agreement and any applicable law; and
92	92	(E) the consumer has reviewed and understands the
93	93	agreement, including the consumer's right and options to acquire
94	94	ownership of the merchandise and the total cost of the merchandise
95	95	if all scheduled payments are made.
96	96	SECTION 4. Section 92.0535, Business & Commerce Code, as
97	97	added by this Act, applies only to a rental-purchase agreement
98	98	entered into on or after the effective date of this Act. A
99	99	rental-purchase agreement entered into before the effective date of
100	100	this Act is governed by the law in effect on the date the
101	101	rental-purchase agreement was entered into, and the former law is
102	102	continued in effect for that purpose.
103	103	SECTION 5. This Act takes effect September 1, 2017.
104	104	* * * * *