Bill Text: TX HB4120 | 2019-2020 | 86th Legislature | Enrolled
Bill Title: Relating to the financial security requirement for providers obligated under certain service contracts.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2019-06-14 - Effective on 9/1/19 [HB4120 Detail]
Download: Texas-2019-HB4120-Enrolled.html
H.B. No. 4120 |
|
||
relating to the financial security requirement for providers | ||
obligated under certain service contracts. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 1304.151, Occupations Code, is amended | ||
by amending Subsection (b) and adding Subsections (b-1), (b-2), and | ||
(b-3) to read as follows: | ||
(b) If the provider ensures its obligations under | ||
Subsection (a)(2), the amount maintained in the reserve account may | ||
not be less than an amount equal to 40 percent of the gross | ||
consideration the provider received from consumers from the sale of | ||
all service contracts issued and outstanding in this state, minus | ||
any claims paid. The executive director may review and examine the | ||
reserve account. Except as provided by Subsection (b-1), the [ |
||
amount of the security deposit may not be less than $250,000. The | ||
provider must submit to the executive director on request a copy of | ||
the provider's financial statements that must be prepared in | ||
accordance with generally accepted accounting principles, be | ||
without qualification as to the going concern status of the | ||
provider, and be audited by an independent certified public | ||
accountant. The commission by rule may require the provider to | ||
submit additional financial reports. | ||
(b-1) Subject to Subsection (b-2), the amount of the | ||
security deposit required under Subsection (b) may not be less than | ||
$25,000 if the provider: | ||
(1) is a motor vehicle dealer licensed under Chapter | ||
2301; and | ||
(2) offers to sell service contracts only on motor | ||
vehicles sold by the provider. | ||
(b-2) The amount of the security deposit required under | ||
Subsection (b-1) is: | ||
(1) $25,000 for a motor vehicle dealer that generated | ||
$1,125,000 or less in annual gross revenue in this state from the | ||
sale of service contracts in the preceding year; | ||
(2) $50,000 for a motor vehicle dealer that generated | ||
more than $1,125,000 and not more than $2,500,000 in annual gross | ||
revenue in this state from the sale of service contracts in the | ||
preceding year; and | ||
(3) $75,000 for a motor vehicle dealer that generated | ||
more than $2,500,000 in annual gross revenue in this state from the | ||
sale of service contracts in the preceding year. | ||
(b-3) If a motor vehicle dealer described by Subsection | ||
(b-1) has no gross revenue in this state from the sale of service | ||
contracts in the preceding year, the security deposit shall be | ||
$25,000. | ||
SECTION 2. This Act takes effect September 1, 2019. | ||
______________________________ | ______________________________ | |
President of the Senate | Speaker of the House | |
I certify that H.B. No. 4120 was passed by the House on April | ||
25, 2019, by the following vote: Yeas 131, Nays 5, 1 present, not | ||
voting; and that the House concurred in Senate amendments to H.B. | ||
No. 4120 on May 24, 2019, by the following vote: Yeas 139, Nays 3, | ||
2 present, not voting. | ||
______________________________ | ||
Chief Clerk of the House | ||
I certify that H.B. No. 4120 was passed by the Senate, with | ||
amendments, on May 22, 2019, by the following vote: Yeas 31, Nays | ||
0. | ||
______________________________ | ||
Secretary of the Senate | ||
APPROVED: __________________ | ||
Date | ||
__________________ | ||
Governor |