85R10107 TYPED
	By: Hughes	S.B. No. 1263

	A BILL TO BE ENTITLED
	AN ACT
	relating to the regulation of a service contract.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 1304.003(b), Occupations Code, is
	amended to read as follows:
	(b)  A service contract described by Subsection (a)(2)(A)
	may also provide for:
	(1)  incidental payment or indemnity under limited
	circumstances, including towing, rental, and emergency road
	service;
	(2)  the replacement of a motor vehicle key or key-fob
	in the event that the key or key-fob becomes inoperable or is lost
	or stolen;
	(3)  the repair or replacement of a product for damage
	resulting from a power surge or for accidental damage incurred in
	handling the product; or
	[(3)] (4)  identity recovery, if the service contract
	is financed under Chapter 348 or 353, Finance Code.
	SECTION 2.  Section 1304.1581, Occupations Code, is amended
	by adding Subsection (d) to read as follows:
	(d) (1)  A provider may allow a service contract holder to
	cancel a service contract on other terms included in the contract,
	provided the terms do not conflict with this section.
	(2)  A provider is not required to deduct the amount of
	any claims paid under a service contract from the amount of a refund
	due pursuant to this section.
	SECTION 3.  Section 1304.159, Occupations Code, is amended
	by adding Subsection (d) to read as follows:
	(d)  A provider is not required to deduct the amount of any
	claims paid under a service contract from the amount of a refund due
	pursuant to this section.
	SECTION 4.  The change in law made by this Act applies only
	to a contract entered into or renewed on or after the effective date
	of this Act. A contract entered into or renewed before that date 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 5.  This Act takes effect September 1, 2017.