Texas 2019 - 86th Regular

Texas House Bill HB2403 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1	1		86R30521 GRM-F
2	2		By: Goldman H.B. No. 2403
	3	+	Substitute the following for H.B. No. 2403:
	4	+	By: Goldman C.S.H.B. No. 2403
3	5
4	6
5	7		A BILL TO BE ENTITLED
6	8		AN ACT
7	9		relating to the regulation of residential service companies and
8	10		residential service contracts.
9	11		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	12		SECTION 1. Section 1303.101(b), Occupations Code, is
11	13		amended to read as follows:
12	14		(b) Except for the license requirement in Subsection (a), a
13	15		person who administers, issues, makes, provides, sells, markets, or
14	16		offers to sell a residential service contract is exempt from any
15	17		other licensing requirements of this state with respect to the
16	18		administration, issuance, making, provision, sale, marketing, or
17	19		offering for sale of [A person may not sell, offer to sell, arrange
18	20		or solicit the sale of, or receive an application for] a residential
19	21		service contract [unless:
20	22		[(1) the person is:
21	23		[(A) employed by a residential service company
22	24		licensed under this chapter; or
23	25		[(B) licensed as a real estate salesperson, real
24	26		estate broker, mobile home dealer, or insurance agent in this
25	27		state; and
26	28		[(2) the contract is issued by a residential service
27	29		company licensed under this chapter].
28	30		SECTION 2. Section 1303.152(a), Occupations Code, is
29	31		amended to read as follows:
30	32		(a) The amount of the reserve required by Section 1303.151
31	33		is based on the amount of liability remaining under outstanding
32	34		residential service contracts written in this state by the
33	35		residential service company, as determined by multiplying the total
34	36		number of days [months] remaining on all of those contracts by the
35	37		pro rata daily [monthly] contract charge.
36	38		SECTION 3. Section 1303.202(b), Occupations Code, is
37	39		amended to read as follows:
38	40		(b) The report must:
39	41		(1) be on a form prescribed by the commission;
40	42		(2) be verified by at least two of the residential
41	43		service company's principal officers; and
42	44		(3) include:
43	45		(A) financial statements of the residential
44	46		service company, including its balance sheet and receipts and
45	47		disbursements for the preceding year, certified as accurate by:
46	48		(i) an independent public accountant; or
47	49		(ii) at least two of the residential
48	50		service company's principal officers[, if the residential service
49	51		company uses a reimbursement insurance policy to insure its
50	52		outstanding residential service contracts written in this state in
51	53		accordance with Section 1303.151(b)];
52	54		(B) any material change to the information
53	55		submitted under Section 1303.103, except an amendment to a
54	56		residential service contract filed with the commission under
55	57		Section 1303.251;
56	58		(C) if the residential service company maintains
57	59		a reserve required by Section 1303.151(a), the number of
58	60		residential service contracts entered into during the year, the
59	61		number of contract holders as of the end of the year, and the number
60	62		of contracts terminating during the year; and
61	63		(D) any other information that:
62	64		(i) relates to the performance and solvency
63	65		of the residential service company; and
64	66		(ii) is necessary for the commission to
65	67		perform its duties under this chapter.
66	68		SECTION 4. Section 1303.253, Occupations Code, is amended
67	69		by amending Subsections (c), (e), and (f) and adding Subsection (k)
68	70		to read as follows:
69	71		(c) A filing made under Subsection (a) by a residential
70	72		service company that maintains a reserve required by Section
71	73		1303.151(a) may [not] be implemented beginning on the later of the
72	74		date:
73	75		(1) the filing is made; or
74	76		(2) the commission receives any associated filing fee
75	77		[until approved by the commission].
76	78		(e) If the commission determines that a filing made under
77	79		Subsection (a) is not reasonably related to the amount, term, and
78	80		conditions of the contract to which the filing applies [as
79	81		described by Subsection (d)], the commission may disapprove the
80	82		filing. If the commission disapproves the filing, the commission
81	83		shall notify the company of the disapproval and shall specify in
82	84		detail the reason for the disapproval.
83	85		(f) For a filing made under Subsection (a) by a residential
84	86		service company described by Subsection (c) after the residential
85	87		service company is licensed, the commission shall have 30 days to
86	88		disapprove [consider] the filing from the date of the filing or the
87	89		date that the commission receives any associated filing fee,
88	90		whichever is later. On the 31st day after that date[,] the filing
89	91		is considered approved [unless the commission disapproves the
90	92		filing or notifies the residential service company in writing that
91	93		the filing is not reasonably related to the amount, term, and
92	94		conditions of the contract to which the filing applies].
93	95		(k) If a filing is disapproved under Subsection (f), the
94	96		commission may order the residential service company to pay a
95	97		refund as provided by Section 1101.659.
96	98		SECTION 5. Section 1303.302(b), Occupations Code, is
97	99		amended to read as follows:
98	100		(b) A sales contract must state [A seller of a residential
99	101		property or the buyer's or seller's agent shall provide to the buyer
100	102		a statement that clearly and conspicuously states] that:
101	103		(1) the purchase of a residential service contract is
102	104		optional; and
103	105		(2) the buyer and seller of a residential property may
104	106		negotiate the amount paid toward, the coverage provided by, and the
105	107		provider of a [purchase similar coverage through another]
106	108		residential service contract [company or insurance company
107	109		authorized to engage in business in this state].
108	110		SECTION 6. Section 1303.352(a), Occupations Code, is
109	111		amended to read as follows:
110	112		(a) The commission may discipline a residential service
111	113		company under Section 1303.351 if the continued operation of the
112	114		company would be hazardous to its contract holders or if the
113	115		company:
114	116		(1) operates in conflict with its basic organizational
115	117		document or in a manner that is contrary to that described in and
116	118		reasonably inferred from information submitted under Section
117	119		1303.103, unless an amendment to the information has been filed
118	120		with and approved by the commission;
119	121		(2) issues a residential service contract that does
120	122		not comply with Sections 1303.251 and 1303.252;
121	123		(3) uses a schedule of charges that does not comply
122	124		with Section 1303.253;
123	125		(4) is not financially responsible and may be
124	126		reasonably expected to be unable to meet the company's obligations
125	127		to contract holders;
126	128		(5) did not comply with Subchapter D;
127	129		(6) advertised or marketed the company's services in a
128	130		false, misrepresentative, misleading, deceptive, or unfair manner;
129	131		[or]
130	132		(7) fails to pay the fee for filing the report under
131	133		Section 1303.202;
132	134		(8) provides false or misleading information to the
133	135		commission on a report required by Subchapter E or on a filing
134	136		required by Subchapter F;
135	137		(9) fails to provide, within a reasonable time,
136	138		information requested by the commission that relates to a formal or
137	139		informal complaint to the commission; or
138	140		(10) otherwise did not substantially comply with this
139	141		chapter or a rule adopted under this chapter.
140	142		SECTION 7. Sections 1303.101(c) and 1303.253(d),
141	143		Occupations Code, are repealed.
142	144		SECTION 8. The changes in law made by this Act apply only to
143	145		a residential service contract entered into or renewed on or after
144	146		the effective date of this Act. A residential service contract
145	147		entered into or renewed before that date is governed by the law as
146	148		it existed immediately before the effective date of this Act, and
147	149		that law is continued in effect for that purpose.
148	150		SECTION 9. This Act takes effect September 1, 2019.