2023-2024 Regular Session HB 2196 PN 3139 Bill Text (HTM)

PRIOR PRINTER'S NO. 2871

PRINTER'S NO. 3139

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

2196

Session of

2024

INTRODUCED BY CONKLIN, RABB, HILL-EVANS, KINSEY, GIRAL,

McANDREW, PARKER, GUENST, MERSKI, SANCHEZ, McNEILL, HOWARD,

KHAN, HARKINS, DALEY, HADDOCK, DELLOSO AND WARREN,

APRIL 8, 2024

AS REPORTED FROM COMMITTEE ON COMMERCE, HOUSE OF

REPRESENTATIVES, AS AMENDED, MAY 21, 2024

AN ACT

Providing for automatic renewal provisions in certain contracts

for goods and services.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Short title.

This act shall be known and may be cited as the Contract

Automatic Renewal Act.

Section 2. Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Acquirer." A person who purchased PURCHASES OR ACQUIRES a

contract or business FROM A SELLER and becomes a party to a

contract involving the sale or lease of a good or service.

"Automatic renewal provision." A provision of a contract

under which the contract is renewed for a specific period of

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more than one month, if the renewal causes the contract to be in

effect for more than six months after the ORIGINAL effective

date of the original contract.

"Consumer." A person who receives goods, services,

maintenance or repairs PURCHASES OR LEASES SERVICES under a

contract.

"Contract." A written agreement for the sale OR LEASE of a

good or performance of a service, including maintenance or

repair service, between a consumer and a seller VENDOR over a

fixed period of time or for a specified duration. The term does

not include an agreement that allows a consumer to cancel the

agreement at any time and to receive upon cancellation a pro

rata refund of any unearned amounts paid by the consumer.

"SELLER." A PERSON WHO SELLS OR TRANSFERS A CONTRACT TO AN

ACQUIRER.

"Seller." "VENDOR." A person engaged in trade or commerce in

this Commonwealth who advertises, sells, leases or offers to

sell or lease a good or service to a consumer under a contract.

Section 3. Contracts with automatic renewal provisions.

(a) Disclosure required.--

(1) A seller VENDOR that enters or attempts to enter

into a contract in this Commonwealth that WHICH includes an

automatic renewal provision shall disclose the automatic

renewal provision in the contract or contract offer in

boldface of a size no less than that of the surrounding text,

but under no circumstances in a font size less than 10

points.

(2) A contract that is amended or modified after the

effective date of this paragraph shall be amended or modified

to include the disclosure specified in paragraph (1).

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(b) Notification upon sale OR ACQUISITION of business or

contract.--After the sale OR ACQUISITION of a business that is a

party to a contract with an automatic renewal clause, or after

the sale OR ACQUISITION of a contract with an automatic renewal

clause, the acquirer shall, within 60 days, notify the customer

CONSUMER of the sale. The notification shall clearly indicate

the change in ownership of the business or contract and provide

the customer CONSUMER with an opportunity to opt out of the

automatic renewal provision.

(1) A seller VENDOR or acquirer that has entered into a

IS PARTY TO A contract in this Commonwealth that WHICH

automatically renews for a specified period of more than one

month shall provide the consumer with written or electronic

notification of the automatic renewal provision. If the

seller VENDOR has changed and is no longer the original

seller VENDOR, the notification shall include a statement

indicating the change. No notice shall be required where the

consumer has canceled the contract.

(2) The notification under this subsection shall be

provided to the consumer no less than 30 days nor more than

60 days before the cancellation deadline under the automatic

renewal provision. An acquirer shall have complied with the

requirement under this paragraph if a notification under

subsection (b) was provided at least 120 days before the

cancellation deadline under the automatic renewal provision.

(3) For a contract that is scheduled to automatically

renew following the effective date of this paragraph, the

seller VENDOR shall provide the consumer with notification of

the automatic renewal in accordance with the requirements of

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this section.

(d) Contents of notice.--The notification required under

subsection (c) shall disclose clearly and conspicuously:

(1) That unless the consumer cancels the contract before

the cancellation deadline, the contract will automatically

renew.

(2) The cancellation deadline.

(3) The method by which the consumer may obtain details

of the automatic renewal provision and cancellation

procedure, whether by contacting the seller VENDOR at a

specified telephone number or address, by referring to the

contract or by any other method.

(e) Proof of notification.--A seller VENDOR must retain

proof of the notification provided to a consumer subject to a

contract with an automatic renewal provision. The proof of

notification shall be retained by the seller VENDOR for six

years following the expiration of the term during which the

notification was sent. The proof of notification may be retained

in an electronic format.

(f) Automatic renewal effective.--An automatic renewal

provision in a contract shall be valid unless the consumer gives

notice to the seller of the consumer's intention VENDOR to

cancel the contract or unless the seller VENDOR fails to comply

with the requirements of this section.

(g) Right of rescission.--A contract that contains an

automatic renewal provision in which the goods or services have

a sale price of at least $25 and which are sold or contracted to

be sold to a consumer as a result of, or in connection with, a

contact with or call on the consumer at the consumer's residence

either in person or by telephone shall comply with the notice

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provisions specified in section 7 of the act of December 17,

1968 (P.L.1224, No.387), known as the Unfair Trade Practices and

Consumer Protection Law.

Section 4. Violations.

A seller VENDOR that fails to comply with the requirements of

section 3 is in violation of this act.

Section 5. Void provisions.

An automatic renewal provision of a contract in violation of

this act is void and unenforceable in this Commonwealth.

Section 6. Enforcement.

A violation of this act shall constitute an unfair or

deceptive trade or practice for purposes of the act of December

17, 1968 (P.L.1224, No.387), known as the Unfair Trade Practices

and Consumer Protection Law, and shall be subject to the penalty

and enforcement provisions of that act.

Section 7. Applicability.

(a) General rule.--Except as provided in subsection (b),

this act shall apply to contracts executed or renewed after the

effective date of this subsection.

(b) Exceptions.--This act shall not apply to:

(1) A lease subject to the act of April 6, 1951 (P.L.69,

No.20), known as The Landlord and Tenant Act of 1951.

(2) A contract subject to the act of December 21, 1989

(P.L.672, No.87), known as the Health Club Act.

(3) A PERSON OR ENTITY PROVIDING SERVICE CONTRACTS AS

DEFINED IN SECTION 358 OF THE ACT OF MAY 17, 1921 (P.L.682,

NO.284), KNOWN AS THE INSURANCE COMPANY LAW OF 1921, OR AN

AFFILIATE OF THE PERSON OR ENTITY.

(4) A PERSON OR ENTITY REGULATED BY THE INSURANCE

DEPARTMENT OR AN AFFILIATE OF THE PERSON OR ENTITY.

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(5) A CONTRACT SUBJECT TO THE ACT OF DECEMBER 3, 1996

(P.L.802, NO.138), KNOWN AS THE ELECTRICITY GENERATION

CUSTOMER CHOICE AND COMPETITION ACT.

(6) A CONTRACT SUBJECT TO THE ACT OF JUNE 22, 1999

(P.L.122, NO.21), KNOWN AS THE NATURAL GAS CHOICE AND

COMPETITION ACT.

(7) A CONTRACT BETWEEN A CONSUMER AND A BANK, SAVINGS

ASSOCIATION, CREDIT UNION, TRUST COMPANY, A LICENSEE SUBJECT

TO 7 PA.C.S. CH. 61 (RELATING TO MORTGAGE LOAN INDUSTRY

LICENSING AND CONSUMER PROTECTION), OR AN AFFILIATE OF ANY OF

THESE BUSINESSES, INCLUDING THE SALE, ASSIGNMENT OR TRANSFER

OF A CONTRACT TO ANY OTHER BUSINESS OR AFFILIATE.

Section 8. Effective date.

This act shall take effect in 60 days.

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