By: Gutierrez H.B. No. 1623
73R5314 LJD-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to motor vehicle installment sales.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Subsection (d), 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 (d) "Retail Installment Transaction" or "Transaction" means
1-8 any transaction as a result of which a retail buyer acquires a
1-9 motor vehicle from a retail seller <under a retail installment
1-10 contract for a sum consisting of the cash sale price and other
1-11 charges as limited by this Chapter> and agrees with a retail seller
1-12 to pay part or all of the total sales price <such sum> in one or
1-13 more deferred installments. The term shall include every
1-14 transaction wherein the promise or agreement to pay the deferred
1-15 balance of such purchase price <sum> is made by the retail buyer to
1-16 the retail seller notwithstanding the existence or occurrence of
1-17 any one or more of the following events: (i) that the retail
1-18 seller has arranged or arranges to sell, transfer or assign the
1-19 retail buyer's obligation; (ii) that the amount of the charges, if
1-20 any, is determined by reference to charts or information furnished
1-21 by a financing institution; (iii) that the forms of instruments
1-22 used to evidence the retail installment transaction are furnished
1-23 by a financing institution; and (iv) that the credit standing of
1-24 the retail buyer is or has been evaluated by a financing
2-1 institution.
2-2 SECTION 2. Section (1), Article 7.02, Title 79, Revised
2-3 Statutes (Article 5069-7.02, Vernon's Texas Civil Statutes), is
2-4 amended to read as follows:
2-5 (1) Each retail installment transaction is subject to the
2-6 provisions of this Chapter and must be documented by a retail
2-7 installment contract. Each retail installment contract shall be in
2-8 writing, dated, signed by both the buyer and the seller, and
2-9 completed as to all essential provisions before it is signed by the
2-10 buyer; provided, however, if delivery of the motor vehicle is not
2-11 made at the time of the execution of the contract, the identifying
2-12 numbers or marks or similar information and the due date of the
2-13 first installment may be inserted in the contract after its
2-14 execution. A retail installment contract need not be contained in
2-15 a single document.
2-16 SECTION 3. Section 8, Article 7.06, Title 79, Revised
2-17 Statutes (Article 5069-7.06, Vernon's Texas Civil Statutes), is
2-18 amended to read as follows:
2-19 (8)(a) If the insurance is cancelled, adjusted or terminated
2-20 for any reason, other than prepayment in full of the indebtedness
2-21 subject to Subsections (b) and (c) of this section, the refund for
2-22 unearned insurance premiums received by the seller or the holder
2-23 shall, at holder's option, be applied to replace required insurance
2-24 coverages, or be credited to the final maturing installments of the
2-25 retail installment contract, and the remaining balance of the
2-26 unearned insurance premiums shall be refunded to the buyer<;
2-27 provided, however, that no cash refund shall be required if the
3-1 amount thereof is less than One Dollar>.
3-2 (b) If a charge for credit life insurance, credit health and
3-3 accident insurance, or property insurance affording protection only
3-4 to the holder is included in a contract or agreement made under
3-5 this Chapter and the indebtedness evidenced by the contract or
3-6 agreement is prepaid in full, each policy or certificate for that
3-7 insurance in effect on the date of prepayment shall be cancelled as
3-8 of that date and any unearned insurance premiums received by the
3-9 holder shall be refunded to the buyer. On prepayment in full of
3-10 the indebtedness, the holder of the contract or agreement shall:
3-11 (1) if the refund is to be made by the insurer, send a
3-12 written notice, not later than the 10th day after the date of
3-13 prepayment in full, by certified mail, return receipt requested, to
3-14 the insurer, which notice must include the name and current address
3-15 of the buyer, and provide a copy of the notice to the buyer; or
3-16 (2) if the refund is to be made by the holder, allow
3-17 the retail buyer a refund credit in the amount of all unearned
3-18 premiums for the cancelled insurance.
3-19 (c) A holder receiving an amount that exceeds the unpaid
3-20 balance due on a contract or agreement after crediting unearned
3-21 time price differential and unearned insurance premiums shall
3-22 refund the excess amount to the buyer not later than the 30th day
3-23 after the date the holder received the excess payment.
3-24 (d) A cash refund is not required under this section if the
3-25 amount of the refund is less than One Dollar.
3-26 SECTION 4. The change in law made by this Act applies only
3-27 to a motor vehicle retail installment transaction entered into on
4-1 or after the effective date of this Act. A motor vehicle retail
4-2 installment transaction entered into before the effective date of
4-3 this Act is governed by the law in effect when the transaction was
4-4 entered into, and the former law is continued in effect for this
4-5 purpose.
4-6 SECTION 5. This Act takes effect September 1, 1993.
4-7 SECTION 6. The importance of this legislation and the
4-8 crowded condition of the calendars in both houses create an
4-9 emergency and an imperative public necessity that the
4-10 constitutional rule requiring bills to be read on three several
4-11 days in each house be suspended, and this rule is hereby suspended.