By Marchant                                            H.B. No. 813
                                 A BILL TO BE ENTITLED
    1-1                                AN ACT
    1-2  relating to the regulation of certain installment sales.
    1-3        BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
    1-4        SECTION 1.  Subsection (f), Article 7.01, Title 79, Revised
    1-5  Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes) is
    1-6  amended to read as follows:
    1-7        (f)  "Cash Price" means the price at which a creditor, in the
    1-8  ordinary course of business, offers to sell for cash the property
    1-9  or service that is the subject of the transaction.  At the
   1-10  creditor's option, the term may include the price of accessories,
   1-11  services related to the sale, service contracts and taxes and fees
   1-12  for license, title, and registration.  The term does not include
   1-13  any finance charge <stated in a retail installment contract for
   1-14  which the seller would have sold to the buyer and the buyer would
   1-15  have bought from the seller, the motor vehicle and other goods and
   1-16  services which are the subject matter of such contract if such sale
   1-17  had been a sale for cash.  The cash price may include any taxes and
   1-18  charges for delivering, servicing, repairing, altering or improving
   1-19  the motor vehicle, or for installation of the motor vehicle or of
   1-20  goods to the motor vehicle, and charges for accessories and goods
   1-21  related to or used with the motor vehicle, if such charges are made
   1-22  to both cash and credit buyers alike and may include any of the
   1-23  charges described in Subsections (ii) and (iii) of Section (g) of
    2-1  this Article if they are not separately itemized on the contract>.
    2-2        SECTION 2.  Subsection (h-1), Article 7.01, Title 79, Revised
    2-3  Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes) is
    2-4  amended to read as follows:
    2-5        (h-1)  In addition to the provisions of Section (h) of this
    2-6  article, "principal balance" includes a motor vehicle inspection
    2-7  fee and a documentary fee for services actually rendered to, for or
    2-8  on behalf of the retail buyer in preparing, handling, and
    2-9  processing documents relating to the motor vehicle and the closing
   2-10  of the transaction evidenced by the retail installment contract.
   2-11  If a documentary fee is charged:
   2-12        (i)  it must be charged to both cash and credit buyers;
   2-13        (ii)  it may not exceed $50 <25>;
   2-14        (iii)  it shall be disclosed on the retail installment
   2-15  contract as a separate itemized charge; and
   2-16        (iv)  the buyer's order and the retail installment contract
   2-17  shall include in reasonable proximity to the point in the buyer's
   2-18  order and retail installment contract where the documentary fee is
   2-19  disclosed the amount of the documentary fee to be charged and the
   2-20  following notice in type that is boldfaced, capitalized,
   2-21  underlined, or otherwise set out from surrounding written material
   2-22  so as to be conspicuous:
   2-23        "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE.  A
   2-24        DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE
   2-25        CHARGED TO BUYERS FOR HANDLING DOCUMENTS AND PERFORMING
    3-1        SERVICES RELATING TO THE CLOSING OF A SALE.  BUYERS MAY
    3-2        AVOID PAYMENT OF THE FEE TO THE SELLER BY HANDLING THE
    3-3        DOCUMENTS AND PERFORMING THE SERVICES RELATING TO THE
    3-4        CLOSING OF THE SALE. A DOCUMENTARY FEE MAY NOT EXCEED
    3-5        $50 <25>.  THIS NOTICE IS REQUIRED BY LAW."
    3-6        (v)  If the language primarily used in the oral sales
    3-7  presentation is not the same as that in which the retail
    3-8  installment contract is written, the seller shall furnish to the
    3-9  buyer a written statement containing the notice set out in
   3-10  Subsection (iv) in the language primarily used in the oral sales
   3-11  presentation.
   3-12        SECTION 3.  Section 9, Article 7.06, Title 79, Revised
   3-13  Statutes (Article 5069-7.06, Vernon's Texas Civil Statutes), is
   3-14  amended to read as follows:
   3-15        (9)  A buyer and seller may agree to include motor vehicle
   3-16  property damage or bodily injury liability insurance, mechanical
   3-17  breakdown insurance, or any other type of insurance coverage
   3-18  relating to the seller's or holder's security interest, or a
   3-19  warranty or service contract relating to the motor vehicle as a
   3-20  separate charge in a contract for the sale of a motor vehicle.  If
   3-21  a charge is added to a contract as provided by this section, the
   3-22  contract shall clearly and conspicuously disclose that fact.
   3-23        SECTION 4.  Article 7.09, Title 79, Revised Statutes (Article
   3-24  5069-7.09, Vernon's Texas Civil Statutes), is amended to read as
   3-25  follows:
    4-1        Article 7.09.  Application.  None of the provisions of this
    4-2  Chapter shall affect or apply to any loans or to the business of
    4-3  making loans under or in accordance with the laws of this State,
    4-4  nor shall any of the provisions of the loan or interest statutes of
    4-5  this State affect or apply to any retail installment transaction.
    4-6  Nor shall any seller pay, promise to pay, or otherwise tender cash
    4-7  to any buyer as a part of any transaction made pursuant to this
    4-8  Chapter unless otherwise specifically authorized by this Chapter.
    4-9  A seller may pay, promise to pay, or tender cash or other thing of
   4-10  value to the manufacturer, distributor or buyer of the product if
   4-11  the payment, promise, or tender is made in order to participate in
   4-12  a financial incentive program offered by the manufacturer or
   4-13  distributor of the product to the retail purchaser.  Nothing in
   4-14  this Chapter shall be construed to impair or in any way affect any
   4-15  rule of law applicable to, or governing retail installment sales
   4-16  not otherwise subject hereto.  This Chapter shall apply exclusively
   4-17  to all retail installment transactions as defined in  Article 7.01.
   4-18        The provisions of this Chapter defining specific rates and
   4-19  amounts of charges requiring certain credit disclosures to be made
   4-20  shall be deemed to control over any contrary Texas law respecting
   4-21  those subjects.  Except as displaced by the particular provisions
   4-22  of this Chapter, the Uniform Commercial Code as adopted in Texas,
   4-23  other applicable statutes, and the principles of the common law
   4-24  shall remain applicable to transactions hereunder to the extent
   4-25  they are applicable.
    5-1        SECTION 5.  Article 7.11, Title 79, Revised Statutes (Article
    5-2  5069-7.11, Vernon's Texas Civil Statutes), is amended to read as
    5-3  follows"
    5-4        Article 7.11.  Registration.  (1) Each holder governed by
    5-5  this chapter who is not a credit union or an authorized lender
    5-6  under Chapter 3 of this title shall register with the Office of
    5-7  Consumer Credit Commissioner.  Each holder shall pay an annual fee
    5-8  of $10 for each location at which credit transactions subject to
    5-9  this chapter are originated, serviced, or collected.  The
   5-10  commissioner by rule may establish procedures to facilitate the
   5-11  registration and collection of fees, including rules staggering the
   5-12  due dates of the fees throughout the year.
   5-13        (2)  The commissioner may impose a penalty not to exceed $50
   5-14  for failure to register as required by this Article.  That is the
   5-15  sole and exclusive penalty for a violation of this Article.  The
   5-16  fact that a holder or seller was not registered as required by this
   5-17  Article at the time of execution of a contract does not render
   5-18  invalid or unenforceable a contract otherwise valid and enforceable
   5-19  and does not subject an unregistered holder to liability to the
   5-20  state or to any person under Article 8.01 of this Subtitle or any
   5-21  other provision of this Subtitle or other law or at common law,
   5-22  other than that liability established by this subsection.
   5-23        SECTION 6.  Section (b), Article 8.01, Title 79, Revised
   5-24  Statutes (Article 5069-8.01, Vernon's Texas Civil Statutes), is
   5-25  amended to read as follows:
    6-1        (b)  Except as otherwise provided by a provision of this
    6-2  Subtitle, a <Any> person who violates this Subtitle <or Chapter 14
    6-3  of this Title> by (i) failing to perform any duty or requirement
    6-4  specifically imposed on him by any provision of this Subtitle <or
    6-5  Chapter 14 of this Title>, or by (ii) committing any act or
    6-6  practice prohibited by this Subtitle <or Chapter 14 of this Title>,
    6-7  shall be liable to the obligor for a penalty in an amount equal to
    6-8  twice the actual economic loss suffered by the obligor as a result
    6-9  of the violation, and, on a showing that the violation was
   6-10  committed knowingly and wilfully, a penalty of not less than $100
   6-11  and not more than $1000, together with <the time price differential
   6-12  or interest contracted for, charged, or received but not to exceed
   6-13  $2000 in a transaction in which the amount financed is $5000 or
   6-14  less, and not to exceed $4000 in a transaction in which the amount
   6-15  financed is in excess of $5000 and> reasonable attorneys' fees
   6-16  fixed by the court.
   6-17        SECTION 7.  Subsection (3), Section (c), Article 8.01, Title
   6-18  79, Revised Statutes (Article 5069-8.01, Vernon's Texas Civil
   6-19  Statutes), is amended to read as follows:
   6-20        (3)  If, subsequent to the times specified in Article
   6-21  8.01(c)(1) and (2) of this Act but prior to the obligor having
   6-22  given written notice of or having filed an action alleging a
   6-23  violation for which a penalty is provided in Article 8.01(b) of
   6-24  this Act, such violation is corrected as to such obligor by
   6-25  performing the required duty or act and written notice of such
    7-1  violation is given to such obligor, then the liability of any
    7-2  person to such obligor shall be limited in each transaction to a
    7-3  penalty in an amount equal to the actual economic loss suffered by
    7-4  the obligor as a result of the violation <time price differential
    7-5  or interest contracted for, charged, or received but not to exceed
    7-6  $2000> and reasonable attorneys' fees fixed by the court.
    7-7        SECTION 8.  The amendments to Articles 7.11 and 8.01, Title
    7-8  79, Revised Statutes (Article 5069-7.11 and Article 5069-8.01,
    7-9  Vernon's Texas Civil Statutes), made by this Act apply only to
   7-10  claims made after the effective date of this Act.
   7-11        SECTION 9.  The importance of this legislation and the
   7-12  crowded condition of the calendars in both houses create an
   7-13  emergency and an imperative public necessity that the
   7-14  constitutional rule requiring bills to be read on three several
   7-15  days in each house be suspended, and this rule is hereby suspended,
   7-16  and that this Act take effect and be in force from and after its
   7-17  passage, and it is so enacted.