Texas 2023 - 88th Regular

Texas House Bill HB4316 Compare Versions

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Version 2 (New)

Old	New	Differences
1	1	H.B. No. 4316
2	2
3	3
4	4	AN ACT
5	5	relating to regulation of residential service contract providers,
6	6	sellers, and administrators.
7	7	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	8	SECTION 1. Subchapter A, Chapter 1304, Occupations Code, is
9	9	amended by adding Section 1304.0051 to read as follows:
10	10	Sec. 1304.0051. CONFIDENTIALITY OF CERTAIN INFORMATION.
11	11	(a) The following information submitted to or maintained by the
12	12	department under this chapter that pertains to an applicant for
13	13	registration or a seller, provider, or administrator is
14	14	confidential and not subject to disclosure under Chapter 552,
15	15	Government Code:
16	16	(1) the financial condition of the applicant, seller,
17	17	provider, or administrator;
18	18	(2) the identity or number of service contract
19	19	holders; or
20	20	(3) documents that are claimed, in a manner determined
21	21	by the department, proprietary or confidential for competitive
22	22	purposes.
23	23	(b) The department may withhold the information described
24	24	by Subsection (a) without requesting a decision from the attorney
25	25	general under Subchapter G, Chapter 552, Government Code.
26	26	SECTION 2. Section 1304.151(b), Occupations Code, is
27	27	amended to read as follows:
28	28	(b) If the provider ensures its obligations under
29	29	Subsection (a)(2), the amount maintained in the reserve account may
30	30	not be less than an amount computed by subtracting the amount of any
31	31	claims paid from the product of [equal to] 40 percent and [of] the
32	32	gross consideration the provider received from consumers from the
33	33	sale of all service contracts issued and outstanding in this state
34	34	[, minus any claims paid]. The department shall prescribe a
35	35	calculation form to be used by a provider to calculate the minimum
36	36	amount required to be maintained in the provider's reserve account
37	37	under this subsection. The executive director may review and
38	38	examine the reserve account. Except as provided by Subsections
39	39	(b-1) and (b-4), the amount of the security deposit may not be less
40	40	than $250,000. The provider must submit to the executive director
41	41	on request a copy of the provider's financial statements that must
42	42	be prepared in accordance with generally accepted accounting
43	43	principles, be without qualification as to the going concern status
44	44	of the provider, and be audited by an independent certified public
45	45	accountant. The commission by rule may require the provider to
46	46	submit additional financial reports.
47	47	SECTION 3. Section 1304.157(c), Occupations Code, is
48	48	amended to read as follows:
49	49	(c) Notwithstanding Section 1304.151(a)(1), a provider of a
50	50	residential service contract may use a reimbursement insurance
51	51	policy issued by a captive insurance company as defined by Section
52	52	964.001, Insurance Code, to insure the provider's residential
53	53	service contracts if the provider maintains a funded reserve equal
54	54	to not less than an amount computed by subtracting the amount of any
55	55	claims paid from the product of 25 percent and [of] the gross
56	56	consideration the provider received from consumers from the sale of
57	57	all the provider's service contracts issued and outstanding in this
58	58	state [, minus any claims paid]. The department shall prescribe a
59	59	calculation form to be used by a provider to calculate the minimum
60	60	amount required to be maintained in the provider's reserve account
61	61	under this subsection. A reimbursement insurance policy issued to
62	62	a residential service contract provider in accordance with this
63	63	subsection:
64	64	(1) is not subject to Section 1304.152; and
65	65	(2) is considered to satisfy the requirements of
66	66	Sections 1304.1025 and 1304.151(a)(1) for purposes of this chapter.
67	67	SECTION 4. Notwithstanding Section 4.13(b), Chapter 663
68	68	(H.B. 1560), Acts of the 87th Legislature, Regular Session, 2021, a
69	69	license issued by the Texas Real Estate Commission under former
70	70	Chapter 1303, Occupations Code, before September 1, 2021, is
71	71	continued in effect until January 1, 2024, as a provider or
72	72	administrator registration issued by the Texas Department of
73	73	Licensing and Regulation under Chapter 1304, Occupations Code.
74	74	SECTION 5. Any information designated as confidential for
75	75	competitive purposes under former Chapter 1303, Occupations Code,
76	76	by an applicant, seller, provider, or administrator before the
77	77	effective date of this Act is confidential and not subject to
78	78	disclosure under Chapter 552, Government Code. The Texas
79	79	Department of Licensing and Regulation may withhold the information
80	80	without requesting a decision from the attorney general under
81	81	Subchapter G, Chapter 552, Government Code.
82	82	SECTION 6. This Act takes effect September 1, 2023.
83	83	______________________________ ______________________________
84	84	President of the Senate Speaker of the House
85	85	I certify that H.B. No. 4316 was passed by the House on May 6,
86	86	2023, by the following vote: Yeas 132, Nays 2, 2 present, not
87	87	voting.
88	88	______________________________
89	89	Chief Clerk of the House
90	90	I certify that H.B. No. 4316 was passed by the Senate on May
91	91	21, 2023, by the following vote: Yeas 31, Nays 0.
92	92	______________________________
93	93	Secretary of the Senate
94	94	APPROVED: _____________________
95	95	Date
96	96	_____________________
97	97	Governor