88R16851 TYPED     By: Parker S.B. No. 1918       A BILL TO BE ENTITLED   AN ACT   relating to the regulation of accounts receivable purchase   transaction actions          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Title 4, Business and Commerce Code, is amended   by adding a new Chapter 60 as follows:   CHAPTER 60. ACCOUNTS RECEIVABLE PURCHASE TRANSACTIONS          Sec. 60.001.  DEFINITIONS. For the purposes of this   chapter, these terms are defined as follows:                (1)  "Account receivable purchase transaction" means a   transaction in which a business forwards or otherwise sells to a   person all or a portion of the business's accounts or payment   intangibles, as defined in Texas Business and Commerce Code,   Chapter 9, Section 9.102, at a discount to the accounts' or payment   intangibles' expected value.                (2)  "Broker" means any person who, for compensation or   the expectation of compensation, obtains an account receivable   purchase transaction or an offer for an account receivable purchase   transaction from a third party that would, if executed, be binding   upon that third party and communicates that offer to a business   located in Texas. The term "broker" excludes a "provider," and any   person whose compensation is not based on or dependent upon the   terms of the specific account receivable purchase transaction   obtained or offered.                (3)  "Provider" means a person who consummates more   than five account receivable purchase transactions in Texas during   any calendar year, including a person who, under a written   agreement with a depository institution, offers one or more account   receivable purchase transactions provided by the depository   institution via an online platform that the person administers.          Sec. 60.02.  EXEMPTIONS. The provisions of this subsection   do not apply to          (a)  an account receivable purchase transaction offered or   made by a provider:                (1)  that is a depository institution, a subsidiary of   a depository institution, or a service corporation for a depository   institution that is regulated by a federal banking agency;                (2)  that is regulated under the federal Farm Credit   Act 12 U.S.C. Sec. 2001 et seq.; and                (3)  that is licensed as a money transmitter in any   state;          (b)  a person who consummates five or fewer account   receivable purchase transactions in Texas during any 12-month   period;          (c)  a person who offers or makes an account receivable   purchase transaction in connection with the sale or lease of a   product or service that:                (1)  the person manufactures, licenses, or   distributes;                (2)  the person's parent company or the person's   directly or indirectly owned and controlled subsidiary   manufactures, licenses, or distributes.          (d)  an account receivable purchase transaction of more than   $500,000.          Sec. 60.03.  DISCLOSURES. (a) At or before consummating an   account receivable purchase transaction, a provider shall disclose   the terms of the account receivable purchase transaction in   accordance with subsection (c).          (b)  Only one disclosure must be provided for each account   receivable purchase transaction, and a disclosure is not required   as a result of a modification or forbearance.          (c)  A provider shall disclose the following terms of the   account receivable purchase transaction:                (1)  the total amount of funds provided to the   business;                (2)  the total amount of funds disbursed to the   business, if less than the amount described in Subsection (c)(1);                (3)  the total amount to be paid to the provider;                (4)  the total dollar cost, calculated by finding the   difference between:                      (A)  the amount described in Subsection (c)(1);   and                      (B)  the amount described in Subsection (c)(3);                (5)  the manner, frequency, and amount of each payment;   or if the amount of each payment may vary, the manner, frequency,   and estimated amount of the initial payment; and                (6)  a statement of whether there are any costs or   discounts associated with prepayment, including a reference to the   paragraph in the account receivable purchase transaction agreement   that creates each cost or discount.          (d)  The account receivable purchase transaction agreement   shall include a description of the methodology for calculating any   variable payment amount and the circumstances that may cause a   payment amount to vary.          Sec. 60.04.  ACCOUNT RECEIVABLE PURCHASE TRANSACTION. (a)   An account receivable purchase transaction cannot be made for   personal, family, or household purposes.          (b)  An account receivable purchase transaction is a form of   an account purchase transaction as established by Section 306.103,   Finance Code. An amount of a discount in, or charged under, an   account receivable purchase transaction is not interest.          (c)  For the purposes of this chapter, the parties'   characterization of an account receivable purchase transaction as a   purchase is conclusive that the account receivable purchase   transaction is not a transaction for the use, forbearance, or   detention of money.          Sec. 60.05.  ACCOUNT RECEIVABLE PURCHASE TRANSACTION BROKER   REGISTRATION REQUIREMENTS. (a) Beginning January 1, 2024, it is   unlawful for a broker to engage in business as a broker of account   receivable purchase transactions in Texas or with a Texas business,   unless the person annually registers with the Secretary of State in   accordance with this chapter.          (b)  the officers or employees of a broker are not required   to register under this chapter if the broker for whom the individual   is an officer or employee is registered.          (c)  To register or renew a registration under this section,   a broker shall:                (1)  pay a fee established by the Secretary; and                (2)  submit a registration statement containing the   information described in Subsection (d).          (d)  Each registration or renewal statement shall state:                (1)  the name of the broker and name of the business   under which the service will be transacted;                (2)  the address of the broker's principal place of   business;                (3)  if the broker, or an officer, director, employee,   manager, operator, or principal of that broker has a conviction of a   felony involving an act of fraud, dishonesty, breach of trust, or   money laundering.          (e)  the Secretary may implement rules to implement and   enforce this section.          Sec. 60.06.  ENFORCEMENT. (a) The Attorney General is   authorized to seek to enjoin violations of this chapter. The court   having jurisdiction may enjoin such violations notwithstanding the   existence of an adequate remedy at law.          (b)  The Attorney General may also seek, and the court may   order or decree, damages and such other relief allowed by law,   including restitution to the extent available under applicable law.   Persons entitled to any relief as authorized by this section shall   be identified by order of the court within 180 days from the date of   the order permanently enjoining the unlawful act or practice.          (c)  In any action brought by the Attorney General by virtue   of the authority granted in this provision, the Attorney General   shall be entitled to seek reasonable attorney fees and costs.          (d)  This chapter does not create a private right of action.          SECTION 2.  This act takes effect September 1, 2023.