Bill Text: TX HB4120 | 2019-2020 | 86th Legislature | Introduced
NOTE: There are more recent revisions of this legislation. Read Latest Draft
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-Introduced.html
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-Introduced.html
86R14093 GRM-F | ||
By: Lucio III | H.B. No. 4120 |
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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 Subsection (b-1) 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 [ |
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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) 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. | ||
SECTION 2. This Act takes effect September 1, 2019. |