Bill Text: TX SB1500 | 2017-2018 | 85th Legislature | Comm Sub

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Bill Title: Relating to certain vehicle protection products.

Spectrum: Bipartisan Bill

Status: (Engrossed - Dead) 2017-05-18 - Committee report sent to Calendars [SB1500 Detail]

Download: Texas-2017-SB1500-Comm_Sub.html

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By: Zaffirini S.B. No. 1500
(Kuempel)

A BILL TO BE ENTITLED
AN ACT
relating to certain vehicle protection products.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 17.45, Business & Commerce Code, is
amended by adding Subdivisions (14), (15), and (16) to read as
follows:
(14) "Vehicle protection product":
(A) means a product or system, including a
written warranty:
(i) that is:
(a) installed on or applied to a
vehicle; and
(b) designed to prevent loss or damage
to a vehicle from a specific cause; and
(ii) under which, after installation or
application of the product or system described by Subparagraph (i),
if loss or damage results from the failure of the product or system
to perform as represented in the warranty, the warrantor, to the
extent agreed on as part of the warranty, is required to pay
expenses to the person in this state who purchases or otherwise
possesses the product or system for the loss of or damage to the
vehicle; and
(B) may also include identity recovery, as
defined by Section 1304.003, Occupations Code, if the product or
system described by Paragraph (A) is financed under Chapter 348 or
353, Finance Code.
(15) "Warrantor" means a person named under the terms
of a vehicle protection product warranty as the contractual obligor
to a person in this state who purchases or otherwise possesses a
vehicle protection product.
(16) "Loss of or damage to the vehicle," for purposes
of Subdivision (14)(A)(ii), may also include unreimbursed
incidental expenses that may be incurred by the warrantor,
including expenses for a replacement vehicle, temporary vehicle
rental expenses, and registration expenses for replacement
vehicles.
SECTION 2. Section 17.46(b), Business & Commerce Code, as
amended by Chapters 1023 (H.B. 1265) and 1080 (H.B. 2573), Acts of
the 84th Legislature, Regular Session, 2015, is reenacted and
amended to read as follows:
(b) Except as provided in Subsection (d) of this section,
the term "false, misleading, or deceptive acts or practices"
includes, but is not limited to, the following acts:
(1) passing off goods or services as those of another;
(2) causing confusion or misunderstanding as to the
source, sponsorship, approval, or certification of goods or
services;
(3) causing confusion or misunderstanding as to
affiliation, connection, or association with, or certification by,
another;
(4) using deceptive representations or designations
of geographic origin in connection with goods or services;
(5) representing that goods or services have
sponsorship, approval, characteristics, ingredients, uses,
benefits, or quantities which they do not have or that a person has
a sponsorship, approval, status, affiliation, or connection which
the person does not;
(6) representing that goods are original or new if
they are deteriorated, reconditioned, reclaimed, used, or
secondhand;
(7) representing that goods or services are of a
particular standard, quality, or grade, or that goods are of a
particular style or model, if they are of another;
(8) disparaging the goods, services, or business of
another by false or misleading representation of facts;
(9) advertising goods or services with intent not to
sell them as advertised;
(10) advertising goods or services with intent not to
supply a reasonable expectable public demand, unless the
advertisements disclosed a limitation of quantity;
(11) making false or misleading statements of fact
concerning the reasons for, existence of, or amount of price
reductions;
(12) representing that an agreement confers or
involves rights, remedies, or obligations which it does not have or
involve, or which are prohibited by law;
(13) knowingly making false or misleading statements
of fact concerning the need for parts, replacement, or repair
service;
(14) misrepresenting the authority of a salesman,
representative or agent to negotiate the final terms of a consumer
transaction;
(15) basing a charge for the repair of any item in
whole or in part on a guaranty or warranty instead of on the value of
the actual repairs made or work to be performed on the item without
stating separately the charges for the work and the charge for the
warranty or guaranty, if any;
(16) disconnecting, turning back, or resetting the
odometer of any motor vehicle so as to reduce the number of miles
indicated on the odometer gauge;
(17) advertising of any sale by fraudulently
representing that a person is going out of business;
(18) advertising, selling, or distributing a card
which purports to be a prescription drug identification card issued
under Section 4151.152, Insurance Code, in accordance with rules
adopted by the commissioner of insurance, which offers a discount
on the purchase of health care goods or services from a third party
provider, and which is not evidence of insurance coverage, unless:
(A) the discount is authorized under an agreement
between the seller of the card and the provider of those goods and
services or the discount or card is offered to members of the
seller;
(B) the seller does not represent that the card
provides insurance coverage of any kind; and
(C) the discount is not false, misleading, or
deceptive;
(19) using or employing a chain referral sales plan in
connection with the sale or offer to sell of goods, merchandise, or
anything of value, which uses the sales technique, plan,
arrangement, or agreement in which the buyer or prospective buyer
is offered the opportunity to purchase merchandise or goods and in
connection with the purchase receives the seller's promise or
representation that the buyer shall have the right to receive
compensation or consideration in any form for furnishing to the
seller the names of other prospective buyers if receipt of the
compensation or consideration is contingent upon the occurrence of
an event subsequent to the time the buyer purchases the merchandise
or goods;
(20) representing that a guaranty or warranty confers
or involves rights or remedies which it does not have or involve,
provided, however, that nothing in this subchapter shall be
construed to expand the implied warranty of merchantability as
defined in Sections 2.314 through 2.318 and Sections 2A.212 through
2A.216 to involve obligations in excess of those which are
appropriate to the goods;
(21) promoting a pyramid promotional scheme, as
defined by Section 17.461;
(22) representing that work or services have been
performed on, or parts replaced in, goods when the work or services
were not performed or the parts replaced;
(23) filing suit founded upon a written contractual
obligation of and signed by the defendant to pay money arising out
of or based on a consumer transaction for goods, services, loans, or
extensions of credit intended primarily for personal, family,
household, or agricultural use in any county other than in the
county in which the defendant resides at the time of the
commencement of the action or in the county in which the defendant
in fact signed the contract; provided, however, that a violation of
this subsection shall not occur where it is shown by the person
filing such suit that the person neither knew or had reason to know
that the county in which such suit was filed was neither the county
in which the defendant resides at the commencement of the suit nor
the county in which the defendant in fact signed the contract;
(24) failing to disclose information concerning goods
or services which was known at the time of the transaction if such
failure to disclose such information was intended to induce the
consumer into a transaction into which the consumer would not have
entered had the information been disclosed;
(25) using the term "corporation," "incorporated," or
an abbreviation of either of those terms in the name of a business
entity that is not incorporated under the laws of this state or
another jurisdiction;
(26) selling, offering to sell, or illegally promoting
an annuity contract under Chapter 22, Acts of the 57th Legislature,
3rd Called Session, 1962 (Article 6228a-5, Vernon's Texas Civil
Statutes), with the intent that the annuity contract will be the
subject of a salary reduction agreement, as defined by that Act, if
the annuity contract is not an eligible qualified investment under
that Act or is not registered with the Teacher Retirement System of
Texas as required by Section 8A of that Act;
(27) taking advantage of a disaster declared by the
governor under Chapter 418, Government Code, by:
(A) selling or leasing fuel, food, medicine, or
another necessity at an exorbitant or excessive price; or
(B) demanding an exorbitant or excessive price in
connection with the sale or lease of fuel, food, medicine, or
another necessity;
(28) using the translation into a foreign language of
a title or other word, including "attorney," "lawyer," "licensed,"
"notary," and "notary public," in any written or electronic
material, including an advertisement, a business card, a
letterhead, stationery, a website, or an online video, in reference
to a person who is not an attorney in order to imply that the person
is authorized to practice law in the United States;
(29) [(28)] delivering or distributing a solicitation
in connection with a good or service that:
(A) represents that the solicitation is sent on
behalf of a governmental entity when it is not; or
(B) resembles a governmental notice or form that
represents or implies that a criminal penalty may be imposed if the
recipient does not remit payment for the good or service;
(30) [(29)] delivering or distributing a solicitation
in connection with a good or service that resembles a check or other
negotiable instrument or invoice, unless the portion of the
solicitation that resembles a check or other negotiable instrument
or invoice includes the following notice, clearly and conspicuously
printed in at least 18-point type:
"SPECIMEN-NON-NEGOTIABLE";
(31) [(30)] in the production, sale, distribution, or
promotion of a synthetic substance that produces and is intended to
produce an effect when consumed or ingested similar to, or in excess
of, the effect of a controlled substance or controlled substance
analogue, as those terms are defined by Section 481.002, Health and
Safety Code:
(A) making a deceptive representation or
designation about the synthetic substance; or
(B) causing confusion or misunderstanding as to
the effects the synthetic substance causes when consumed or
ingested; [or]
(32) [(31)] a licensed public insurance adjuster
directly or indirectly soliciting employment, as defined by Section
38.01, Penal Code, for an attorney, or a licensed public insurance
adjuster entering into a contract with an insured for the primary
purpose of referring the insured to an attorney without the intent
to actually perform the services customarily provided by a licensed
public insurance adjuster, provided that this subdivision may not
be construed to prohibit a licensed public insurance adjuster from
recommending a particular attorney to an insured; or
(33) a warrantor of a vehicle protection product
warranty using, in connection with the product, a name that
includes "casualty," "surety," "insurance," "mutual," or any other
word descriptive of an insurance business, including property or
casualty insurance, or a surety business.
SECTION 3. Subchapter A, Chapter 348, Finance Code, is
amended by adding Section 348.014 to read as follows:
Sec. 348.014. TRANSACTION CONDITIONED ON PURCHASE OF
VEHICLE PROTECTION PRODUCT PROHIBITED. (a) In this section,
"vehicle protection product" has the meaning assigned by Section
17.45, Business & Commerce Code.
(b) A retail seller may not require as a condition of a
retail installment transaction or the cash sale of a motor vehicle
that the buyer purchase a vehicle protection product that is not
installed on the vehicle at the time of the transaction.
(c) A violation of this section is a false, misleading, or
deceptive act or practice within the meaning of Section 17.46,
Business & Commerce Code, and is actionable in a public or private
suit brought under Subchapter E, Chapter 17, Business & Commerce
Code.
SECTION 4. Subchapter A, Chapter 353, Finance Code, is
amended by adding Section 353.017 to read as follows:
Sec. 353.017. TRANSACTION CONDITIONED ON PURCHASE OF
VEHICLE PROTECTION PRODUCT PROHIBITED. (a) In this section,
"vehicle protection product" has the meaning assigned by Section
17.45, Business & Commerce Code.
(b) A retail seller may not require as a condition of a
retail installment transaction or the cash sale of a commercial
vehicle that the buyer purchase a vehicle protection product that
is not installed on the vehicle at the time of the transaction.
(c) A violation of this section is a false, misleading, or
deceptive act or practice within the meaning of Section 17.46,
Business & Commerce Code, and is actionable in a public or private
suit brought under Subchapter E, Chapter 17, Business & Commerce
Code.
SECTION 5. Chapter 2306, Occupations Code, is repealed.
SECTION 6. (a) On the effective date of this Act:
(1) an action, including a disciplinary or
administrative proceeding, pending under Chapter 51 or 2306,
Occupations Code, on the effective date of this Act related to an
alleged violation of Chapter 2306, Occupations Code, as that
chapter existed immediately before the effective date of this Act,
is dismissed;
(2) the Vehicle Protection Product Warrantor Advisory
Board is abolished; and
(3) a registration issued under former Chapter 2306,
Occupations Code, expires.
(b) As soon as practicable after the effective date of this
Act, the Texas Commission of Licensing and Regulation shall repeal
all rules regarding the regulation of vehicle protection product
warrantors adopted under former Chapter 2306, Occupations Code.
(c) An administrative penalty assessed by the Texas
Commission of Licensing and Regulation or the executive director of
the Texas Department of Licensing and Regulation related to a
violation of Chapter 2306, Occupations Code, as that chapter
existed immediately before the effective date of this Act, may be
collected as provided by Chapter 51, Occupations Code.
(d) The repeal by this Act of Chapter 2306, Occupations
Code, does not affect the validity or terms of a vehicle protection
product warranty that was issued or renewed before the effective
date of this Act.
SECTION 7. Section 17.46(b), Business & Commerce Code, as
amended by this Act, applies only to a cause of action that accrues
on or after the effective date of this Act. A cause of action that
accrued before the effective date of this Act is governed by the law
in effect immediately before the effective date of this Act, and
that law is continued in effect for that purpose.
SECTION 8. Sections 348.014 and 353.017, Finance Code, as
added by this Act, apply only to a transaction for the purchase of a
motor vehicle or commercial vehicle, as applicable, that occurs on
or after the effective date of this Act. A transaction for the
purchase of a motor vehicle or commercial vehicle that occurs
before the effective date of this Act is governed by the law in
effect on the date the transaction occurred, and the former law is
continued in effect for that purpose.
SECTION 9. To the extent of any conflict, this Act prevails
over another Act of the 85th Legislature, Regular Session, 2017,
relating to nonsubstantive additions to and corrections in enacted
codes.
SECTION 10. This Act takes effect September 1, 2017.