By: Taylor of Collin	S.B. No. 938
	(In the Senate - Filed January 16, 2017; March 1, 2017, read
	first time and referred to Committee on Business & Commerce;
	May 1, 2017, reported adversely, with favorable Committee
	Substitute by the following vote:  Yeas 9, Nays 0; May 1, 2017, sent
	to printer.)
	COMMITTEE SUBSTITUTE FOR S.B. No. 938	By:  Creighton

	A BILL TO BE ENTITLED
	AN ACT
	relating to certain rental-purchase agreements.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 92.001, Business & Commerce Code, is
	amended to read as follows:
	Sec. 92.001.  DEFINITIONS.  (a)  In this chapter:
	(1)  "Advertisement" means a commercial message in any
	medium that directly or indirectly promotes or assists a
	rental-purchase agreement.
	(3)  "Consumer" means an individual who leases personal
	property under a rental-purchase agreement.
	(5)  "Loss damage waiver" means a merchant's agreement
	to not hold a consumer liable for loss from all or part of any damage
	to merchandise.
	(6)  "Merchandise" means the personal property that is
	the subject of a rental-purchase agreement.
	(7)  "Merchant" means a person who, in the ordinary
	course of business, regularly leases, offers to lease, or arranges
	for the leasing of merchandise under a rental-purchase agreement.
	The term includes a person who is assigned an interest in a
	rental-purchase agreement.
	(8)  "Rental-purchase agreement" means an agreement
	under which a consumer may use merchandise for personal, family, or
	household purposes for an initial period of four months or less, and
	that:
	(A)  is automatically renewable with each payment
	after the initial period; and
	(B)  permits the consumer to become the owner of
	the merchandise.
	(b)  For purposes of this chapter, merchandise is displayed
	or offered to consumers primarily for lease under a rental-purchase
	agreement if the merchandise is displayed or offered at a place of
	business that derives at least 50 percent of its revenue from
	rental-purchase agreements.
	SECTION 2.  Subchapter A, Chapter 92, Business & Commerce
	Code, is amended by adding Section 92.003 to read as follows:
	Sec. 92.003.  POINT-OF-RENTAL DISCLOSURES. (a)  If
	merchandise is not displayed or offered to consumers primarily for
	lease under a rental-purchase agreement, the merchant shall make
	the following disclosures to a consumer before presenting a
	rental-purchase agreement for specific merchandise to the consumer
	for execution:
	(1)  the price for which the merchant would sell the
	merchandise to the consumer for cash on the date of the disclosure;
	(2)  the amount of the periodic payments that would be
	provided for in the agreement if it is executed on the date of the
	disclosure; and
	(3)  the total number and amount of periodic payments
	necessary to acquire ownership of the merchandise under the
	agreement if it is executed on the date of the disclosure.
	(b)  The disclosures required by Subsection (a) must be made
	separately from the rental-purchase agreement.
	SECTION 3.  Subchapter B, Chapter 92, Business & Commerce
	Code, is amended by adding Section 92.0535 to read as follows:
	Sec. 92.0535.  ACKNOWLEDGMENT REQUIRED FOR CERTAIN
	AGREEMENTS. If merchandise is not displayed or offered to
	consumers primarily for lease under a rental-purchase agreement,
	the merchant shall provide to the consumer at the time the agreement
	is presented to the consumer the additional disclosures prescribed
	by this section. The disclosures must:
	(1)  be entitled "Acknowledgment of Rental-Purchase
	Transaction";
	(2)  be on a separate page;
	(3)  be signed by the consumer; and
	(4)  include an acknowledgment that the consumer
	understands the consumer is entering into a rental-purchase
	agreement and that:
	(A)  under the agreement, the consumer does not
	own the merchandise but may acquire ownership rights by complying
	with the ownership option terms specified in the agreement;
	(B)  the agreement is not a credit transaction;
	(C)  if provided by the agreement, the consumer
	has the right to return the merchandise at any time without
	additional charge or penalty, and, on the merchandise's return, the
	consumer will owe only unpaid rental charges and fees;
	(D)  if the consumer fails to make a timely
	payment, the consumer has a right to reinstate the agreement as
	provided by the agreement and, if the merchandise is returned, the
	consumer is entitled to rent the same merchandise or substitute
	merchandise of comparable quality and condition if the consumer
	complies with the agreement and any applicable law; and
	(E)  the consumer has reviewed and understands the
	agreement, including the consumer's right and options to acquire
	ownership of the merchandise and the total cost of the merchandise
	if all scheduled payments are made.
	SECTION 4.  Section 92.0535, Business & Commerce Code, as
	added by this Act, applies only to a rental-purchase agreement
	entered into on or after the effective date of this Act. A
	rental-purchase agreement entered into before the effective date of
	this Act is governed by the law in effect on the date the
	rental-purchase agreement was entered into, and the former law is
	continued in effect for that purpose.
	SECTION 5.  This Act takes effect September 1, 2017.
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