CHAPTER 722. AUTOMOBILE CLUB SERVICES - Texas Statutes

TRANSPORTATION CODE

TITLE 7. VEHICLES AND TRAFFIC

SUBTITLE J. MISCELLANEOUS PROVISIONS

CHAPTER 722. AUTOMOBILE CLUB SERVICES

Sec. 722.001. SHORT TITLE. This chapter may be cited as the

Automobile Club Services Act.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.002. DEFINITIONS. In this chapter:

(1) "Agent" means a salesman or other individual appointed by an

automobile club to sell memberships in the club to the public.

(2) "Automobile club" means a person who, for consideration,

promises the membership assistance in matters relating to travel,

and to the operation, use, or maintenance of a motor vehicle, by

supplying services such as services related to:

(A) community traffic safety;

(B) travel and touring;

(C) theft prevention or rewards;

(D) maps;

(E) towing;

(F) emergency road assistance;

(G) bail bonds and legal fee reimbursement in the defense of

traffic offenses; and

(H) purchase of accidental injury and death benefits insurance

coverage from an authorized insurance company.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.003. CERTIFICATE OF AUTHORITY REQUIRED. (a) A person

may not engage in business as an automobile club unless the

person meets the requirements of this chapter and obtains an

automobile club certificate of authority from the secretary of

state.

(b) A person may not solicit or aid in the solicitation of

another person to purchase a service contract or membership

issued by an automobile club that does not hold an automobile

club certificate of authority.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.004. APPLICATION. (a) Each applicant for an

automobile club certificate of authority must file an application

with the secretary of state in the form and manner prescribed by

the secretary. The secretary shall adopt the forms necessary for

an applicant to comply with this chapter and shall furnish those

forms on request to an applicant for a certificate of authority.

(b) An application must be executed under oath by the club

president or other principal club officer and must be accompanied

by:

(1) the first year's annual fee for the certificate of

authority;

(2) a certificate by the secretary of state stating that the

applicant has complied with the corporation laws of this state,

if the applicant is a corporation;

(3) a list of each person who holds an ownership interest in the

applicant and each officer of the applicant, if the applicant is

not incorporated;

(4) a copy of any operating agreement or management agreement

affecting the club and a list of each party to the agreement if

the applicant is not incorporated; and

(5) proof of security in a manner that complies with Section

722.005.

(c) The secretary of state shall issue the automobile club

certificate of authority or deny the application not later than

the 15th day after the day the secretary receives the

application, certificate, or security. Failure to issue the

certificate of authority within the prescribed time entitles the

applicant to a refund of all money and security deposited with

the application.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.005. SECURITY REQUIREMENTS. (a) An applicant for an

automobile club certificate of authority may provide the security

required for that certificate by depositing with the state or

pledging in the form prescribed by the secretary of state:

(1) $25,000 in securities approved by the secretary;

(2) $25,000 in cash; or

(3) a $25,000 bond in the form prescribed by the secretary that

is:

(A) payable to the state;

(B) executed by a corporate surety licensed to do business in

this state; and

(C) conditioned on the faithful performance of the automobile

club in selling or providing club services and the payment of any

fines or penalties levied against the club for failure to comply

with this chapter.

(b) The aggregate liability of the surety for all breaches of

the bond conditions and for payment of all fines and penalties

may not exceed the amount of the bond.

(c) The required security shall be maintained as long as the

automobile club has any liability or obligation in this state. On

showing to the satisfaction of the secretary of state that the

club has ceased to do business and that all liabilities and

obligations of the club have been satisfied, the secretary may

return the security to the club or deliver the security in

accordance with a court order.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.006. RENEWAL. (a) An automobile club certificate of

authority expires annually on August 31. The certificate may be

renewed by filing a renewal application in the manner prescribed

by the secretary of state and paying the annual fee.

(b) The secretary of state may adopt forms for the renewal

application.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.007. ANNUAL FEE. The annual fee for an automobile club

certificate of authority is $150.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.008. CERTIFICATE REVOCATION OR SUSPENSION. (a) After

a public hearing, the secretary of state shall revoke or suspend

an automobile club's certificate of authority if the secretary

determines, for good cause shown, that:

(1) the club:

(A) has violated this chapter;

(B) is not acting as an automobile club;

(C) is insolvent or has assets valued at less than its

liabilities;

(D) has refused to submit to an examination by the secretary; or

(E) is transacting business in a fraudulent manner; or

(2) an owner, officer, or manager of the club is not of good

moral character.

(b) The secretary of state shall give public notice of the

suspension or revocation in the manner the secretary considers

appropriate.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.009. SERVICE CONTRACT; MEMBERSHIP INFORMATION. (a)

Each automobile club operating under this chapter shall furnish

to the membership a service contract or membership card that

includes the following information:

(1) the club's name;

(2) the street address of the club's home office and of its

usual place of business in this state; and

(3) a description of the services or benefits to which the

members are entitled.

(b) For purposes of this chapter, the completed application for

an automobile club certificate of authority and the description

of services listed under Subsection (a) constitute the service

contract.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.010. FILING OF INFORMATION. (a) Each automobile club

shall file a certified copy of its service contract with the

secretary of state.

(b) If an automobile club provides participation in a group

accidental injury or death policy, the club shall file with the

service contract a copy of the certificate of participation.

(c) An automobile club shall file with the secretary of state

any change to the service contract.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.011. AGENT REGISTRATION. (a) An automobile club that

operates in this state under an automobile club certificate of

authority shall file with the secretary of state a notice of

appointment of each agent not later than the 30th day after the

date on which that agent is employed by the club.

(b) The notice of appointment must be in the form prescribed by

the secretary of state and must contain:

(1) the name, address, age, sex, and social security number of

the agent; and

(2) proof satisfactory to the secretary that the agent is of

good moral character.

(c) Registration under this section is valid for one year from

the date of the initial registration and may be renewed on each

anniversary of that date. The annual registration fee is $10.

(d) Each automobile club shall notify the secretary of state of

the termination of an agent's employment by the club not later

than the 30th day after the date of the termination.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.012. ADVERTISING RESTRICTIONS. An automobile club

operating under this chapter may not:

(1) refer to its certificate of authority or to approval by the

secretary of state in any advertising, contract, or membership

card; or

(2) advertise or describe its services in a manner that would

lead the public to believe that the services include automobile

insurance.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.

Sec. 722.014. CRIMINAL PENALTY. (a) A person commits an

offense if the person violates this chapter.

(b) An offense under this section is a misdemeanor punishable

by:

(1) a fine not to exceed $500; and

(2) confinement in the county jail for a term not to exceed six

months.

Acts 1995, 74th Leg., ch. 165, Sec. 1, eff. Sept. 1, 1995.