HBA-NRS S.B. 560 77(R)    BILL ANALYSIS


Office of House Bill AnalysisS.B. 560
By: Sibley
Business & Industry
5/9/2001
Engrossed



BACKGROUND AND PURPOSE 

Current law protects consumers from abuse resulting from door-to-door sales
by requiring a merchant who solicits a consumer away from the merchant's
place of business to permit a consumer to cancel an agreement entered into
with the merchant within three days.  Both insurance sales regulated by the
Texas Department of Insurance and sales of real property are exempt from
this provision.  A residential service contract may be considered similar
to an insurance policy in that it involves a premium to repair or replace
many of the mechanical, electrical, structural, or plumbing systems in a
consumer's home. Senate Bill 560 exempts a residential service contract
from law pertaining to the cancellation of certain transactions that take
place away from the merchant's place of business. 

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. 

ANALYSIS

Senate Bill 560 amends the Business & Commerce Code to exempt a residential
service contract sale regulated by the Texas Real Estate Commission from
provisions regarding the cancellation of consumer transactions in which an
agreement involves the purchase of goods or services in excess of $25 or
real property for more than $100 at a place other than the merchant's place
of business. 

EFFECTIVE DATE

September 1, 2001.