85R6515 CLG-F     By: Kuempel H.B. No. 3308       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.