Bill Text: TX HB2259 | 2021-2022 | 87th Legislature | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to requirements for subscription service contracts; providing a civil penalty.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2021-05-05 - Committee report sent to Calendars [HB2259 Detail]

Download: Texas-2021-HB2259-Introduced.html
  87R4318 MLH-D
  By: Guerra H.B. No. 2259
  relating to requirements for subscription service contracts.
         SECTION 1.  Title 12, Business & Commerce Code, is amended by
  adding Chapter 608 to read as follows:
         Sec. 608.001.  DEFINITIONS. In this chapter:
               (1)  "Automatic renewal clause" means a provision of a
  contract that extends the term of or renews a contract if the
  consumer does not take a specified action.
               (2)  "Consumer" means a person who acquires goods or
  services for personal, family, or household purposes.
               (3)  "Service provider" means a business that provides
  a service to a consumer.
               (4)  "Subscription service" means a service provided by
  a service provider to a consumer under a contract that:
                     (A)  has an automatic renewal clause; or
                     (B)  continues indefinitely until canceled by a
  CONTRACTS. (a) If a service provider and a consumer enter into a
  contract for a subscription service, the service provider shall:
               (1)  at the time the service provider enters into the
  contract with the consumer, clearly and conspicuously disclose to
  the consumer the:
                     (A)  nature of the contract; and 
                     (B)  procedure for canceling the contract;
               (2)  if the contract has a term of six months or more
  and automatically renews for a term of at least one month, give the
  consumer additional written notice of the automatic renewal and the
  procedure for canceling the contract not earlier than the 90th day
  and not later than the 15th day before the date the contract is set
  to renew; and
               (3)  if the contract does not automatically renew but
  continues until canceled, give the consumer additional written
  notice of an upcoming payment not earlier than the 30th day and not
  later than the fifth day before the date the payment is due.
         (b)  A service provider may provide the written notice
  required under Subsection (a)(2) or (3):
               (1)  by regular mail or certified mail;
               (2)  on an invoice delivered to the consumer; or
               (3)  by written electronic communication, including
  electronic mail, if agreed to by the consumer.
         (c)  Notice provided under Subsection (b) must be clear and
  conspicuous. For purposes of Subsection (b)(1), the service
  provider may assume that written notice sent by regular mail is
  received by the consumer on the third business day after the date
  the notice is deposited in the mail.
         Sec. 608.003.  METHOD OF CANCELLATION. (a) A service
  provider shall allow a consumer to cancel a contract for a
  subscription service by using the same method as the consumer used
  to enter into the contract, including allowing cancellation online,
  by mail, or by telephone.
         (b)  This section does not prohibit the service provider from
  allowing the consumer to cancel a contract by additional methods.
         Sec. 608.004.  DECEPTIVE TRADE PRACTICE. (a) Except as
  provided by Subsection (b), a violation of this chapter is a false,
  misleading, or deceptive act or practice as defined by Section
  17.46(b), and any remedy under Subchapter E, Chapter 17, is
  available for a violation of this chapter.
         (b)  A violation of this chapter is not a false, misleading,
  or deceptive act or practice if the service provider can
  demonstrate that:
               (1)  as a part of its routine business practice, the
  service provider has established and implemented written
  procedures to comply with this chapter and enforces compliance with
  the procedures;
               (2)  the violation of this chapter is the result of
  error; and
               (3)  the service provider prospectively canceled the
  contract for the subscription service within a reasonable time
  after becoming aware of the error that caused the violation of this
  chapter, without penalty to the consumer, and has not subsequently
  automatically renewed or revived that same contract.
         (c)  Subsection (b)(3) does not relieve a consumer of the
  consumer's duties under a contract before the date the contract is
         SECTION 2.  Chapter 608, Business & Commerce Code, as added
  by this Act, applies only to a contract entered into or renewed on
  or after the effective date of this Act.
         SECTION 3.  This Act takes effect September 1, 2021.