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.