HBA-ATS H.B. 2523 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 2523 By: Wise Business & Industry 3/26/1999 Introduced BACKGROUND AND PURPOSE Home security systems are common in many homes across Texas. Although most companies that install and service these systems are reputable, some companies use unscrupulous tactics on unwary consumers. Last summer, the Texas Board of Private Investigators and Private Security Agencies (board) issued an alert that advised elderly consumers to look at the fine print of their home security system contracts. The board reported that some elderly consumers had unwittingly purchased 10year contracts (the industry standard is two- to three-year contracts) without being told or having contract terms adequately explained to them. Another hidden provision in these contracts to which consumers were alerted involved the continuation of the contract even if the consumer no longer resides at the house at which the system was installed (the standard industry contract addresses situations in which homeowners move or sell property). In addition, some consumers were threatened with collection efforts and legal action if they did not pay the full balance at signing. H.B. 2523 requires that the term of a contract for the sale or maintenance of a home security system not exceed three years. A contract must be in writing, state the name of the person providing or maintaining the system, and state the term of the contract and details of any maintenance agreement provided, including a description and specifications of the services to be furnished. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subchapter D, Chapter 35, Business & Commerce Code, by adding Section 35.55, as follows: Sec. 35.55. CONTRACT FOR HOME SECURITY SYSTEM. Requires that the term of a contract for the sale or maintenance of a home security system (system) not exceed three years. Provides that the contract must be in writing, state the name of the person providing or maintaining the system, and state the term of the contract and details of any maintenance agreement provided, including a description and specifications of the services to be furnished. Provides that a violation of this section by a person providing or maintaining a system is a false, misleading, or deceptive act or practice under Subchapter E (Deceptive Trade Practices and Consumer Protection), Chapter 17 (Deceptive Trade Practices), and authorizes the use of any public or private right or remedy prescribed by that subchapter to enforce this section. SECTION 2. Effective date: September 1, 1999. Makes application of this Act prospective. SECTION 3. Emergency clause.