H.B. No. 606
    1-1                                AN ACT
    1-2  relating to finance charge limitations.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Section (6), Article 7.03, Title 79, Revised
    1-5  Statutes (Article 5069-7.03, Vernon's Texas Civil Statutes), is
    1-6  amended to read as follows:
    1-7        (6)  The holder of a retail installment contract, other than
    1-8  for the purchase of a heavy commercial vehicle, may collect a
    1-9  delinquency charge on each installment in default for a period of
   1-10  more than fifteen <ten> days in an amount not to exceed five
   1-11  percent of each installment <or Five Dollars, whichever is less>,
   1-12  or, in lieu thereof, interest after maturity on each such
   1-13  installment not to exceed the highest lawful contract rate.  The
   1-14  holder of a retail installment contract for the purchase of a heavy
   1-15  commercial vehicle may collect a delinquency charge on each
   1-16  installment in default for a period of more than ten days in an
   1-17  amount not to exceed five percent of the installment or, in lieu of
   1-18  the delinquency charge, interest after maturity on the installment
   1-19  that does not exceed the highest lawful contract rate.  In any
   1-20  retail installment contract, only one delinquency charge under this
   1-21  section may be collected on any installment regardless of the
   1-22  period during which it remains in default.  In addition, such
   1-23  contracts may provide for the payment of an attorney's reasonable
    2-1  fee where it is referred for collection to an attorney not a
    2-2  salaried employee of the seller or holder of the contract, and for
    2-3  court costs and disbursements, and in the event of repossession,
    2-4  sequestration, or other action necessary to secure possession of a
    2-5  motor vehicle securing the payment of a retail installment
    2-6  contract, such contracts may provide for the charge and collection
    2-7  of actual and reasonable out-of-pocket expenses incurred in
    2-8  connection with such repossession or foreclosure, including costs
    2-9  of storing, reconditioning and reselling such motor vehicle,
   2-10  subject to the standards of good faith and commercial
   2-11  reasonableness set by the Uniform Commercial Code as adopted in
   2-12  Texas.
   2-13        SECTION 2.  This Act applies only to installment contracts
   2-14  initiated on or after the effective date of the passage of this
   2-15  Act.   Finance charges on installment contracts under this section
   2-16  shall be charged according to the law in existence and the law is
   2-17  continued in effect for that purpose.  For purposes of this section
   2-18  a contract takes effect before the effective date of this Act if
   2-19  any element of the contractual agreement occurs before that date.
   2-20        SECTION 3.  The importance of this legislation and the
   2-21  crowded condition of the calendars in both houses create an
   2-22  emergency and an imperative public necessity that the
   2-23  constitutional rule requiring bills to be read on three several
   2-24  days in each house be suspended, and this rule is hereby suspended.