Bill Text: OR SB577 | 2013 | Regular Session | Enrolled
Bill Title: Relating to methods for protecting property.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2013-07-03 - Effective date, January 1, 2014. [SB577 Detail]
Download: Oregon-2013-SB577-Enrolled.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
Enrolled
Senate Bill 577
Sponsored by Senator THOMSEN
CHAPTER ................
AN ACT
Relating to methods for protecting property; creating new
provisions; and amending ORS 646A.152, 646A.154 and 646A.430.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 646A.152 is amended to read:
646A.152. As used in ORS 646A.150 to 646A.172:
(1) 'Maintenance agreement' means a contract of limited
duration that provides for scheduled maintenance only.
(2) { + (a) + } 'Obligor' means { - the person who - } { +
a person that + } is contractually obligated to the service
contract holder to provide service under a service
contract { + . + } { - and who: - }
{ - (a) Sold the merchandise covered by the service
contract; - }
{ - (b) Sells merchandise similar to that covered by the
service contract; or - }
{ - (c) Is acting through or with the written consent of the
manufacturer, importer or seller of the merchandise covered by
the service contract. - }
{ + (b) 'Obligor' does not include a person that has a home
services contractor license, as described in section 5a, chapter
300, Oregon Laws 2013 (Enrolled Senate Bill 207), and offers or
provides services under a home service agreement, as defined in
ORS 731.164. + }
(3) 'Person' means an individual, partnership, corporation,
incorporated or unincorporated association, joint stock company,
reciprocal, syndicate or any similar entity or combination of
entities acting in concert.
(4) 'Service contract' is a contract described in ORS 646A.154.
(5) 'Service contract holder' or 'contract holder' means a
person { - who is the purchaser or holder of - } { + that
purchases or holds + } a service contract.
(6) 'Service contract seller' means a person { - who - }
{ + that + } markets, sells or offers to sell a service
contract.
(7) 'Warranty' means a warranty { - made solely by the
manufacturer, importer or seller of - } { + that a person that
manufactures, imports or sells + } property or services
{ - , - } { + makes + } without charge, that is not negotiated
or separated from the sale of the product and is incidental to
the sale of the product, and that guarantees indemnity for
defective parts, mechanical or electrical breakdown, labor or
Enrolled Senate Bill 577 (SB 577-C) Page 1
other remedial measures, such as repair or replacement of the
property or repetition of services.
SECTION 2. ORS 646A.154 is amended to read:
646A.154. (1) { + (a) + } For the purposes of this section, a
service contract is a contract or agreement to perform or
indemnify for a specific duration the repair, replacement or
maintenance of property for operational or structural failure
{ - due to - } { + that results from + } a defect in
materials, workmanship or normal wear and tear, with or
without { + an + } additional { + incidental + } provision
{ - for incidental payment of - } { + to pay + } indemnity
under limited circumstances, including but not limited to rental
and emergency road service. A service contract may also provide
for { + :
(A) + } { - the repair, replacement or maintenance of - }
{ + Repairing, replacing or maintaining + } property for damage
{ - resulting - } { + that results + } from lightning, power
surges or accidental damage from handling { - . - } { + ;
(B) Repairing or replacing tires or wheels on a motor vehicle
damaged as a result of contacting a road hazard;
(C) Removing dents, dings, creases or other damage on a motor
vehicle that a process of paintless dent removal can repair
without affecting an existing paint finish or replacing vehicle
body panels, sanding, bonding or repainting;
(D) Repairing chips or cracks in motor vehicle windshields or
replacing motor vehicle windshields because of damage that
results from road hazards;
(E) Replacing motor vehicle keys or key fobs that become
inoperable or that are lost or stolen;
(F) Paying specified incidental costs that result from the
failure of a vehicle protection product, as defined in ORS
646A.430, to perform according to the specifications for the
vehicle protection product; and
(G) Other services the Director of the Department of Consumer
and Business Services specifies by rule, to the extent that the
services are similar to services described in this paragraph.
(b) For the purposes of this section, a service contract does
not include coverage for repairing damage to or replacing
components of a motor vehicle's interior or exterior paint or
finish unless the service contract provides the services
described in this paragraph in connection with the sale of a
vehicle protection product, as defined in ORS 646A.430.
(c) + } Consideration for a service contract must be stated
separately from the price of the consumer product.
{ + (d) For purposes of this section, a service contract + }
{ - The term 'service contract' - } does not include insurance
policies { - issued by - } { + that + } insurers { +
issue + } under the Insurance Code { - , - } or maintenance
agreements.
(2) An obligor may not issue, sell or offer for sale a service
contract in this state unless the obligor has complied with the
provisions of this section and ORS 646A.156 and 646A.158.
(3) All obligors of service contracts issued, sold or covering
property located in this state shall file a registration with the
{ - Director of the - } Department of Consumer and Business
Services on a form, at a fee and at a frequency { - prescribed
by - } { + that + } the director { - pursuant to - } { +
specifies under + } ORS 646A.168.
Enrolled Senate Bill 577 (SB 577-C) Page 2
(4) An obligor shall keep accurate accounts, books and records
concerning transactions { - involving - } { + that
involve + } service contracts.
(5) Except as provided in subsection (6) of this section, to
ensure the faithful performance of an obligor's obligations to
{ - its - } { + the obligor's + } contract holders, each
obligor shall provide the director with one of the following as
proof of financial stability:
(a) A copy of the obligor's { - or, if the obligor's
financial statements are consolidated with those of its parent
company, the obligor's parent company's - } most recent Form
10-K { + that the obligor or the obligor's parent company, if
the obligor consolidates financial statements with a parent
company, + } filed with the Securities and Exchange
Commission { + . A Form 10-K that the obligor or the obligor's
parent company filed within the last calendar year must show that
the obligor or the obligor's parent company has + } { - which
shows - } a net worth of { - the obligor or its parent company
of - } at least $100 million { - provided the Form 10-K was
filed with the Securities and Exchange Commission within the last
calendar year - } . If the obligor's parent { - company's - }
{ + company files the + } Form 10-K { - is filed - } to meet
the obligor's financial stability requirement, { - then - }
the parent company shall agree to guarantee the obligations
{ - of the obligor relating to - } { + the obligor has in + }
service contracts { - sold by the obligor - } { + the obligor
sells + } in this state.
(b) Evidence of a reimbursement insurance policy described in
ORS 742.390 that { - is obtained by - } { + an authorized
insurer issues to + } the obligor and { - issued by an
authorized insurer - } that insures all service contracts
{ - issued by - } the obligor { + sells + }.
(6)(a) An obligor of a home service agreement as defined in ORS
731.164 shall file with the director a surety bond executed to
the State of Oregon in the sum of $25,000. The surety bond
{ - shall - } { + must + } be issued by a surety company
authorized to do business in this state. An obligor of a home
service agreement { - is not required - } { + does not
need + } to file proof of financial stability under subsection
(5) of this section.
(b) The surety bond { + described in paragraph (a) of this
subsection must + } { - shall - } be issued on the condition
that the obligor comply with all provisions of ORS 646A.150 to
646A.172 and fully perform on all contracts or agreements
{ - entered - } into { + which the obligor enters + }.
(c) The surety bond { - shall - } { + must + } be
continuous until canceled and { - shall - } { + must + }
remain in full force and unimpaired at all times to comply with
this section. The surety shall give the director at least 30
days' written notice by registered or certified mail before the
surety cancels or terminates { - its - } { + the surety's + }
liability under the bond.
(d) Any person who suffers damage as a result of a violation of
any provision of ORS 646A.150 to 646A.172 or any rule
{ - adopted by - } the director { + adopts + } pursuant to ORS
646A.150 to 646A.172
{ - shall have - } { + has + } a right of action under the
bond. { - An action under the bond may be brought by - } The
state or { - by any - } { + a + } person with a right of
action { + may bring an action under the bond + }by filing a
Enrolled Senate Bill 577 (SB 577-C) Page 3
complaint in a court of competent jurisdiction not later than one
year after the surety bond is canceled or terminated. The court
may award the prevailing plaintiff reasonable attorney fees and
costs in an action under the bond.
(e) The aggregate liability of the surety { - shall - } { +
may + } not exceed the principal sum of the bond.
(7) Filing requirements are as follows:
(a) The obligor shall file with the director proof of financial
stability or a surety bond as required by subsection (5) or (6)
of this section.
(b) The director { + by rule + } may { - adopt rules
concerning - } { + specify + } the procedure for filing the
proof of financial stability or the surety bond.
(c) A person may not file or cause to be filed with the
director any article, certificate, report, statement, application
or any other information required or permitted to be filed under
this subsection that the person knows { - to be - } { +
is + } false or misleading in any material respect.
(8) Service contract sellers and { - their employees
marketing, selling or offering - } { + employees of service
contract sellers that market, sell or offer + } to sell service
contracts for obligors who comply with this section and ORS
646A.156 and 646A.158 are exempt from the requirements of the
Insurance Code including, but not limited to, the requirement to
belong to the Oregon Insurance Guaranty Association.
(9) Obligors { - complying - } { + that comply + } with ORS
646A.156 and 646A.158 { - are not required - } { + do not
need + } to comply with the Insurance Code including, but not
limited to, the requirement to belong to the Oregon Insurance
Guaranty Association.
(10) If a service contract seller is not the same person as the
obligor under the service contract, the service contract seller
shall remit the agreed-upon consumer purchase price of the
service contract to the obligor within 30 days { - of the sale
of such - } { + after selling the + } service contract or
{ - upon such - } { + in accordance with + }terms and
conditions { - as may be agreed to in writing between - } { +
to which + } the service contract seller and obligor { + agree
in writing + }.
SECTION 3. ORS 646A.430 is amended to read:
646A.430. As used in ORS 646A.430 to 646A.450:
(1) 'Consumer' means a person in this state who purchases a
vehicle protection product or who possesses a vehicle protection
product and is entitled to enforce a warranty for the product by
reason of the person's possession.
(2) 'Reimbursement insurance policy' means an insurance policy
issued to a warrantor that:
(a) Reimburses the warrantor for expenses or other obligations
the warrantor incurs in complying with the terms and conditions
in a vehicle protection product warranty; or
(b) Pays on a warrantor's behalf all obligations due under the
terms and conditions of the warrantor's vehicle protection
product warranty.
(3) 'Reimbursement insurer' means an insurer that issues a
reimbursement insurance policy.
(4) 'Seller' means a person engaged in the business of offering
a vehicle protection product for sale to a consumer.
{ - (5) 'Vehicle protection product' means a product, system
or service that is designed to prevent a particular type of loss
or damage to a vehicle from theft, and that is: - }
Enrolled Senate Bill 577 (SB 577-C) Page 4
{ - (a) Provided as a product or system that is installed on
or applied to a vehicle or provided as a service for a specific
vehicle; and - }
{ - (b) Accompanied by a written warranty. - }
{ + (5)(a) 'Vehicle protection product' means:
(A) A protective chemical, substance, device, product or system
that is:
(i) Designed to prevent loss or damage to a vehicle from a
specific cause; and
(ii) Accompanied by a written warranty that provides that if
the vehicle protection product fails to prevent a specified loss
or damage, the warrantor will reimburse a consumer for specified
related and incidental costs the consumer incurs as a result of
the vehicle protection product's failure to perform in accordance
with the terms of the vehicle protection product warranty, if the
consumer purchases a physical product that is designed or
formulated to make the specified related and incidental costs
less likely to occur;
(B) An alarm system;
(C) A product to mark motor vehicle body parts;
(D) A lock for a motor vehicle steering wheel, pedal or
ignition;
(E) A product to etch motor vehicle windows;
(F) A kill switch for motor vehicle ignitions or fuel systems;
(G) A tracking system that uses satellites, radio or electronic
means; or
(H) Other similar or related chemicals, substances, devices,
products, systems or services that are designed to prevent loss
or damage to a motor vehicle from a specific cause.
(b) 'Vehicle protection product' does not include:
(A) A fuel or oil additive; or
(B) Other chemical products that are applied to a motor
vehicle's engine, transmission or fuel system. + }
(6) { + (a) + } 'Warrantor' means a person { - named under
the terms of - } { + that + } a vehicle protection product
warranty { + names + } as the contractual obligor to the
consumer.
{ + (b) + } 'Warrantor' does not include an authorized
insurer that provides a warranty reimbursement insurance policy.
SECTION 4. { + The amendments to ORS 646A.152, 646A.154 and
646A.430 by sections 1 to 3 of this 2013 Act apply to service
contracts into which a consumer enters and vehicle protection
product warranties that go into effect on or after the effective
date of this 2013 Act. + }
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Enrolled Senate Bill 577 (SB 577-C) Page 5
Passed by Senate April 22, 2013
Repassed by Senate June 18, 2013
.............................................................
Robert Taylor, Secretary of Senate
.............................................................
Peter Courtney, President of Senate
Passed by House June 14, 2013
.............................................................
Tina Kotek, Speaker of House
Enrolled Senate Bill 577 (SB 577-C) Page 6
Received by Governor:
......M.,............., 2013
Approved:
......M.,............., 2013
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2013
.............................................................
Kate Brown, Secretary of State
Enrolled Senate Bill 577 (SB 577-C) Page 7
