Texas 2025 - 89th Regular

Texas House Bill HB2859 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	89R8391 MLH-D
2	2	By: Guerra H.B. No. 2859
3	3
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5	5
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7	7	A BILL TO BE ENTITLED
8	8	AN ACT
9	9	relating to requirements for subscription service contracts;
10	10	providing a civil penalty.
11	11	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
12	12	SECTION 1. Title 12, Business & Commerce Code, is amended by
13	13	adding Chapter 611 to read as follows:
14	14	CHAPTER 611. SUBSCRIPTION SERVICE CONTRACTS
15	15	SUBCHAPTER A. SUBSCRIPTION SERVICE CONTRACTS GENERALLY
16	16	Sec. 611.001. DEFINITIONS. In this chapter:
17	17	(1) "Automatic renewal clause" means a provision of a
18	18	contract that extends the term of or renews a contract for a period
19	19	of at least one month if the consumer does not take a specified
20	20	action.
21	21	(2) "Consumer" means a person who acquires goods or
22	22	services for personal, family, or household purposes.
23	23	(3) "Seller" means a person who sells or contracts to
24	24	sell goods.
25	25	(4) "Service provider" means a business that provides
26	26	a service to a consumer.
27	27	(5) "Subscription service" means a service provided by
28	28	a service provider or a periodic sale of goods provided by a seller
29	29	to a consumer under a contract that:
30	30	(A) has an automatic renewal clause; or
31	31	(B) continues indefinitely until canceled by a
32	32	party.
33	33	Sec. 611.002. APPLICABILITY OF CHAPTER. This chapter does
34	34	not apply to:
35	35	(1) a person that provides:
36	36	(A) an offering or contract of insurance;
37	37	(B) evidence of coverage under Chapter 843,
38	38	Insurance Code; or
39	39	(C) a service contract under Section 1304.003,
40	40	Occupations Code; or
41	41	(2) an affiliate of a person described by Subdivision
42	42	(1).
43	43	Sec. 611.003. NOTICE REQUIREMENTS FOR SUBSCRIPTION SERVICE
44	44	CONTRACTS. (a) If a consumer enters into a contract with a service
45	45	provider or seller for a subscription service, the service provider
46	46	or seller shall:
47	47	(1) at the time the service provider or seller enters
48	48	into the contract with the consumer, clearly and conspicuously
49	49	disclose to the consumer the nature of the contract;
50	50	(2) in the disclosure required under Subdivision (1)
51	51	or in a retainable confirmation sent to the consumer not later than
52	52	the date the consumer's first payment is due, clearly and
53	53	conspicuously disclose to the consumer the procedure for canceling
54	54	the contract; and
55	55	(3) if the contract has a term of 12 months or more and
56	56	automatically renews for a term of more than one month, give the
57	57	consumer additional written notice of the automatic renewal and the
58	58	procedure for canceling the contract not earlier than the 90th day
59	59	and not later than the 15th day before the date the contract is set
60	60	to renew.
61	61	(b) A service provider or seller may provide the written
62	62	notice required under Subsection (a)(3):
63	63	(1) by regular mail or certified mail;
64	64	(2) on an invoice delivered to the consumer; or
65	65	(3) by written electronic communication, including
66	66	e-mail, if the consumer has provided contact information for a
67	67	means of electronic communication to the service provider or
68	68	seller.
69	69	(c) Notice provided under Subsection (b) must be clear and
70	70	conspicuous. For purposes of Subsection (b)(1), the service
71	71	provider or seller may assume that written notice sent by regular
72	72	mail is received by the consumer on the third business day after the
73	73	date the notice is deposited in the mail.
74	74	Sec. 611.004. METHOD OF CANCELLATION. (a) Subject to
75	75	Subsections (b) and (c), a service provider or seller shall provide
76	76	a consumer with one or more methods for canceling a contract for a
77	77	subscription service, which may include cancellation by:
78	78	(1) toll-free telephone number;
79	79	(2) e-mail;
80	80	(3) mailing address, if the service provider or seller
81	81	bills the consumer using mail; and
82	82	(4) any other cost-effective, timely, and easy-to-use
83	83	method.
84	84	(b) A service provider or seller shall allow a consumer to
85	85	cancel a contract for a subscription service by using the same
86	86	method as the consumer used to enter into the contract, including
87	87	allowing cancellation online, by mail, or by telephone. A consumer
88	88	who enters into a contract online must be able to cancel the
89	89	contract online.
90	90	(c) If a subscription service contract is not entered into
91	91	electronically, the service provider or seller shall allow the
92	92	consumer to cancel the contract by mail.
93	93	SUBCHAPTER B. ADDITIONAL REQUIREMENTS FOR SUBSCRIPTION SERVICE
94	94	CONTRACTS FOR GOODS
95	95	Sec. 611.021. APPLICABILITY OF SUBCHAPTER. This subchapter
96	96	applies to a person who provides a subscription service contract
97	97	for the periodic sale of goods.
98	98	Sec. 611.022. REQUIREMENTS FOR PROMOTIONAL MATERIAL. A
99	99	seller who enters into a subscription service contract with a
100	100	consumer for the periodic sale of goods shall include in the notice
101	101	required by Section 611.003(a)(1):
102	102	(1) a description of the manner in which the consumer
103	103	may opt to not purchase goods during a period identified by the
104	104	consumer;
105	105	(2) a description of the notices the consumer will
106	106	receive under Section 611.023;
107	107	(3) a statement of the frequency with which the seller
108	108	will send notices under Section 611.023;
109	109	(4) a statement of the maximum number of notices
110	110	required by Section 611.023 that a consumer will receive in a
111	111	12-month period;
112	112	(5) a description of any obligation the consumer has
113	113	under the contract to purchase a minimum quantity of goods;
114	114	(6) a declaration of whether the bill to the customer
115	115	includes costs for shipping and handling the goods; and
116	116	(7) a description of the seller's duties under Section
117	117	611.024.
118	118	Sec. 611.023. REQUIRED NOTICE BEFORE PERIODIC SALE. (a)
119	119	Not later than the 20th day before completing a periodic sale under
120	120	this subchapter, a seller shall send a notice by mail reminding the
121	121	customer of the upcoming periodic sale.
122	122	(b) The notice required by Subsection (a) must:
123	123	(1) identify the goods to be sold;
124	124	(2) describe the process by which the consumer may
125	125	cancel or modify the periodic sale;
126	126	(3) provide notice that the consumer has not less than
127	127	10 days to return a request to cancel or modify the periodic sale
128	128	before the sale is completed; and
129	129	(4) provide assurance that the seller will credit the
130	130	consumer and pay the cost of shipping when required by Section
131	131	611.024.
132	132	(c) A seller that sends a notice under this section shall
133	133	accompany the notice with a form that the consumer may use to cancel
134	134	or modify the periodic sale.
135	135	(d) The form required by Subsection (c) must:
136	136	(1) clearly and conspicuously state that the seller
137	137	will complete the periodic sale if the consumer does not send a
138	138	request to cancel or modify the sale;
139	139	(2) describe how the form may be used to cancel or
140	140	modify the sale;
141	141	(3) state that to cancel or modify the sale, the
142	142	consumer must mail the form before the third day before the sale is
143	143	completed; and
144	144	(4) if the consumer entered into the subscription
145	145	service contract online, state the Internet website at which the
146	146	consumer may cancel or modify the sale online.
147	147	Sec. 611.024. RETURN OF GOODS DUE TO LATE NOTICE OF UPCOMING
148	148	SALE. A seller shall credit a consumer and pay the cost of shipping
149	149	for any return that is necessary because:
150	150	(1) a periodic sale was completed despite timely
151	151	receipt by the seller of a request by the consumer to cancel or
152	152	modify the sale;
153	153	(2) the consumer wanted to cancel or modify a periodic
154	154	sale and:
155	155	(A) the notice required under this section was
156	156	not delivered to the consumer before the 15th day before the date
157	157	the sale was completed; or
158	158	(B) the customer mailed a request to cancel or
159	159	modify the sale that was postmarked on or before the third day
160	160	before the date the sale was completed, but the request did not
161	161	arrive before the seller fulfilled the sale; or
162	162	(3) a periodic sale was made to a consumer who had
163	163	canceled the subscription services contract.
164	164	Sec. 611.025. INITIAL GOODS ON CREATION OF CONTRACT. (a) A
165	165	seller that offers initial or bonus goods as an incentive for a
166	166	consumer to enter into a subscription services contract for the
167	167	periodic sale of goods shall ship those goods not later than the
168	168	28th day after the consumer enters into a subscription services
169	169	contract.
170	170	(b) If a seller is unable to fulfill the sale due to
171	171	unanticipated circumstances beyond the seller's control, the
172	172	seller may offer a reasonably equivalent alternative to the
173	173	consumer and allow the consumer the opportunity to:
174	174	(1) accept the alternative goods; or
175	175	(2) cancel the subscription services contract for the
176	176	periodic sale of goods.
177	177	(c) A seller may require the return of any goods already
178	178	sent to the consumer as a condition for the refund of the consumer's
179	179	purchase.
180	180	(d) A seller may not send alternative goods under this
181	181	section without the express consent of the consumer.
182	182	Sec. 611.026. METHOD OF CANCELLATION OR MODIFICATION. If
183	183	the consumer entered into the subscription service contract online,
184	184	the seller shall provide a manner by which the consumer may cancel
185	185	or modify a periodic sale online.
186	186	SUBCHAPTER C. ENFORCEMENT
187	187	Sec. 611.051. DECEPTIVE TRADE PRACTICE. Except as provided
188	188	by Section 611.052, a violation of this chapter is a false,
189	189	misleading, or deceptive act or practice under Subchapter E,
190	190	Chapter 17, and is actionable under that subchapter.
191	191	Sec. 611.052. NO PRIVATE CAUSE OF ACTION. A private cause
192	192	of action for a violation of this chapter may not be brought under
193	193	this chapter or under Subchapter E, Chapter 17.
194	194	Sec. 611.053. OPPORTUNITY TO CURE. (a) Before the attorney
195	195	general may bring an action against a service provider or seller
196	196	under Section 611.054 for an initial violation of this chapter, the
197	197	attorney general, on behalf of a consumer, must provide written
198	198	notice to the service provider or seller identifying the specific
199	199	provisions of this chapter that the service provider or seller
200	200	allegedly violated.
201	201	(b) Not later than the 30th day after the date the notice
202	202	required by Subsection (a) was received by the service provider or
203	203	seller, the service provider or seller shall:
204	204	(1) cure each violation alleged in the notice; and
205	205	(2) provide a written statement to the attorney
206	206	general certifying that:
207	207	(A) each violation alleged in the notice has been
208	208	cured; and
209	209	(B) the service provider or seller will not
210	210	further violate this chapter in that same manner.
211	211	Sec. 611.054. CIVIL PENALTY; REMEDIES. (a) A service
212	212	provider or seller who violates this chapter is liable to this state
213	213	for a civil penalty of not more than $2,000 for each violation if
214	214	the service provider or seller:
215	215	(1) fails to cure the violation as provided by Section
216	216	611.053; or
217	217	(2) commits the violation after curing an initial
218	218	violation and providing a written statement to the attorney general
219	219	under Section 611.053.
220	220	(b) The attorney general may bring an action to:
221	221	(1) recover the civil penalty imposed under this
222	222	section;
223	223	(2) obtain a temporary or permanent injunction to
224	224	restrain the violation; or
225	225	(3) seek restitution for consumers who are residents
226	226	of this state and who incurred damages as a direct result of the
227	227	violation.
228	228	(c) An action under this section may be brought in a
229	229	district court in:
230	230	(1) Travis County; or
231	231	(2) a county in which any part of the violation occurs.
232	232	Sec. 611.055. LIABILITY OF SERVICE PROVIDER OR SELLER. A
233	233	service provider or seller acting in good faith to comply with the
234	234	requirements of this chapter is not liable under this chapter.
235	235	Sec. 611.056. CONSUMER'S OBLIGATIONS UNDER CONTRACT NOT
236	236	AFFECTED. Nothing in this chapter relieves a consumer of the
237	237	consumer's duties under the terms of a contract for subscription
238	238	services if the consumer cancels the contract's automatic renewal
239	239	clause.
240	240	SECTION 2. Chapter 611, Business & Commerce Code, as added
241	241	by this Act, applies only to a contract entered into or renewed on
242	242	or after the effective date of this Act.
243	243	SECTION 3. This Act takes effect January 1, 2026.