NOTE: This bill has been prepared for the signatures of the appropriate legislative officers and the Governor. To determine whether the Governor has signed the bill or taken other action on it, please consult the legislative status sheet, the legislative history, or the Session Laws. HOUSE BILL 15-1223 BY REPRESENTATIVE(S) Williams, Nordberg, Fields; also SENATOR(S) Balmer and Jahn, Holbert. Concerning the extension of current standards regarding home service contracts to new homes. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. In Colorado Revised Statutes, 12-61-602, repeal (5) and (6); and add (2.3) and (2.5) as follows: 12-61-602. Definitions. As used in this part 6, unless the context otherwise requires: (2.3) "Home warranty service company", referred to in this part 6 as the "company", means any person who undertakes a contractual obligation on a new or preowned home through a home warranty service contract. (2.5) (a) "Home warranty service contract" means any contract or agreement whereby a person undertakes for a predetermined fee, with respect to a specified period of time, to maintain, repair, or replace any or all of the following elements of a specified new or preowned home: (I) Structural components, such as the roof, foundation, basement, walls, ceilings, or floors; (II) Utility systems, such as electrical, air conditioning, plumbing, and heating systems, including furnaces; and (III) Appliances, such as stoves, washers, dryers, and dishwashers. (b) "Home warranty service contract" does not include: (I) Any contract or agreement whereby a public utility undertakes for a predetermined fee, with respect to a specified period of time, to repair or replace any or all of the elements of a specified new or preowned home as specified in subparagraph (II) or (III) of paragraph (a) of this subsection (2.5); or (II) A builder's warranty provided in connection with the sale of a new home. (5) "Preowned home warranty service company", referred to in this part 6 as the "company", means any person who undertakes a contractual obligation on a preowned home through a preowned home warranty service contract. (6) (a) "Preowned home warranty service contract" means any contract or agreement whereby a person undertakes for a predetermined fee, with respect to a specified period of time, to maintain, repair, or replace any or all of the following elements of a specified preowned home: (I) Structural components, such as the roof, foundation, basement, walls, ceilings, or floors; (II) Utility systems, such as electrical, air conditioning, plumbing, and heating systems, including furnaces; and (III) Appliances, such as stoves, washers, dryers, and dishwashers. (b) "Preowned home warranty service contract" does not include any contract or agreement whereby a public utility undertakes for a predetermined fee, with respect to a specified period of time, to repair or replace any or all of the elements of a specified preowned home as specified in subparagraph (II) or (III) of paragraph (a) of this subsection (6). SECTION 2. In Colorado Revised Statutes, amend 12-61-611 as follows: 12-61-611. Purchase of service contract not to be compulsory. No A company selling, offering to sell, or effecting the issuance of a preowned home warranty service contract under this part 6 shall not in any manner require a home buyer or seller, or prospective home buyer or seller, or person refinancing a home to purchase a preowned home warranty service contract. SECTION 3. In Colorado Revised Statutes, 12-61-611.5, amend (1) introductory portion, (1) (e), (1) (f), and (1) (g) as follows: 12-61-611.5. Contract requirements. (1) Every preowned home warranty service contract shall contain the following information: (e) The specific duration of the preowned home warranty service contract, including an exact termination date that is not contingent upon an unspecified future closing date or other indefinite event; (f) A statement as to whether the preowned home warranty service contract is transferable; (g) A statement that actions under a preowned home warranty service contract may be covered by the provisions of the "Colorado Consumer Protection Act" or the "Unfair Practices Act", articles 1 and 2 of title 6, C.R.S., and that a party to such a contract may have a right of civil action under such those laws, including obtaining the recourse or penalties specified in such those laws. SECTION 4. In Colorado Revised Statutes, amend 12-61-614 as follows: 12-61-614. Prohibitions. It shall be is unlawful for any lending institution to require the purchase of preowned home warranty insurance as a condition for granting financing for the purchase of said the home. SECTION 5. In Colorado Revised Statutes, amend 12-61-615 as follows: 12-61-615. Repeal of part. This part 6 is repealed, effective July 1, 2017 2020. Prior to such the repeal, the provisions in this part 6 shall be reviewed as provided for in section 24-34-104, C.R.S. SECTION 6. In Colorado Revised Statutes, 10-3-903, amend (2) introductory portion and (2) (g) as follows: 10-3-903. Definition of transacting insurance business. (2) The provisions of This section do does not apply to: (g) The transaction of business by a preowned home warranty service company pursuant to part 6 of article 61 of title 12, C.R.S.; SECTION 7. In Colorado Revised Statutes, 10-4-1602, amend (1) (f) and (1) (g); and add (1) (h) as follows: 10-4-1602. Exemptions. (1) The following items are exempt from this part 16: (f) Preowned Home warranty service contracts governed by part 6 of article 61 of title 12, C.R.S.; and (g) Motor vehicle service contracts governed by article 11 of title 42, C.R.S.; and (h) A builder's warranty provided in connection with the sale of a new home. SECTION 8. Act subject to petition - effective date. This act takes effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly (August 5, 2015, if adjournment sine die is on May 6, 2015); except that, if a referendum petition is filed pursuant to section 1 (3) of article V of the state constitution against this act or an item, section, or part of this act within such period, then the act, item, section, or part will not take effect unless approved by the people at the general election to be held in November 2016 and, in such case, will take effect on the date of the official declaration of the vote thereon by the governor. ________________________________________________________ Dickey Lee Hullinghorst Bill L. Cadman SPEAKER OF THE HOUSE PRESIDENT OF OF REPRESENTATIVES THE SENATE ____________________________ ____________________________ Marilyn Eddins Cindi L. Markwell CHIEF CLERK OF THE HOUSE SECRETARY OF OF REPRESENTATIVES THE SENATE APPROVED________________________________________ _________________________________________ John W. Hickenlooper GOVERNOR OF THE STATE OF COLORADO