By Heflin                                                  H.B. 606
                                 A BILL TO BE ENTITLED
    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.  Chapter 48, Acts of the 70th Legislature, Regular
    1-5  Session, 1987 (Article 5069-7.03 (6), Vernon's Texas Civil
    1-6  Statutes), is 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 ten days in an amount not to exceed five percent of each
   1-11  installment <or Five Dollars, whichever is less>, or, in lieu
   1-12  thereof, interest after maturity on each such installment not to
   1-13  exceed the highest lawful contract rate.  The holder of a retail
   1-14  installment contract for the purchase of a heavy commercial vehicle
   1-15  may collect a delinquency charge on each such installment in
   1-16  default for a period of more than ten days in an amount not to
   1-17  exceed five percent of the installment, or, in lieu of the
   1-18  delinquency charge, interest after maturity of the installment that
   1-19  does not exceed the highest lawful contract rate.  In any retail
   1-20  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 of the contract, and for court
    2-3  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.