Senate committee advances bill to curb automatic renewals for small-business service contracts

Senate Bill 127 (LC 550462) cleared the Senate Regulated Industries and Utilities Committee on Feb. 14, 2025, after the panel approved an amendment that sets the acteffective date to July 1, 2026.

The bill targets automatic-renewal provisions in service contracts for small businesses (the bill defines a small business for this chapter as 200 employees or fewer). It would require vendors to “clearly and conspicuously” disclose any automatic-renewal provision in a contract or contract offer. For contracts that renew on a 12-month cycle, vendors must provide written or electronic notification no less than 30 days and no more than 60 days before the cancellation deadline. For contracts of 24 months or longer, vendors must also obtain written or electronic acknowledgment from the small business confirming receipt of the notice and an affirmative response indicating the business does not intend to terminate the service.

The bill exempts several categories from these requirements, and specifically excludes contracts with renewal fees greater than $200 per month from the notice provisions. Committee discussion noted other enumerated exclusions referenced in existing code (transcript cited chapter references in relevant statutory sections).

The bill includes a remedy clause stating a violation of the chapter renders the contract void and unenforceable.

Committee consideration included an amendment (m550071) offered during the hearing that revised the effective date to July 1, 2026 and specified applicability; Senator Albers seconded the amendment and the committee approved it unanimously. Chairman Summers moved to pass the bill as amended; Senator Brass seconded. The committee approved the bill as amended by voice/hand vote; the transcript records unanimous passage but does not list a numeric roll-call tally.

Committee members asked whether the bill should extend beyond small businesses; proponents said the statutory carve-out was intentionally focused on smaller firms that often lack dedicated contracting/legal staff. The National Federation of Independent Business (NFIB) communicated it had no objection, according to the sponsor.

The bill will proceed under the Senate's legislative process to later committee or floor consideration as required.