H.B. No. 4830 seeks to amend the regulation of service contracts and their providers and administrators in Texas, with a focus on enhancing consumer protection. The bill revises the definition of "consumer" to refer specifically to individuals purchasing service contracts, rather than those acquiring tangible personal property for non-resale. It expands the definition of "service contract" to include coverage for repairs due to operational failures, power surges, and normal wear, as well as specific provisions for leased motor vehicles. Additionally, it introduces new terms like "maintenance agreement" and "scheduled maintenance," clarifying the scope of services covered. The bill also emphasizes the responsibilities of service contract providers, including maintaining accurate records and providing written evidence of contract purchases.

Further amendments to the Occupations Code include requirements for providers to keep detailed records of claims and specify that individuals selling residential service contracts must be employed by a registered provider or licensed in relevant fields. The bill allows for compensation of non-employees, provided it is disclosed in boldface type on the contract. It also permits residential service contract providers to use reimbursement insurance from captive insurance companies, contingent on maintaining sufficient reserves. Misleading statements in communications regarding service contracts are prohibited, and a previous section of the code is repealed. Importantly, these changes will only apply to service contracts entered into after the bill's effective date of September 1, 2025, ensuring that existing contracts remain under the previous law.

Statutes affected:
Introduced: Occupations Code 1304.002, Occupations Code 1304.003, Occupations Code 1304.004, Occupations Code 1304.0041, Occupations Code 1304.051, Occupations Code 1304.101, Occupations Code 1304.1531, Occupations Code 1304.154, Occupations Code 1304.155, Occupations Code 1304.157, Occupations Code 1304.1025, Occupations Code 1304.1521 (Occupations Code 1304)