BILL ANALYSIS


                                                        H.B. 1227
                                             By: Bosse (Whitmire)
                                             Economic Development
                                                         05-19-95
                              Senate Committee Report (Unamended)
BACKGROUND

A 1985 state law allows mechanics to repossess vehicles from people
who pay repair bills with bad checks.  The intention of the law is
to protect mechanics, but it has led some repossession companies to
engage in unscrupulous business practices due to vagueness in the
language of the current statute.  A vehicle owner must pay the
repair debt and repossession and storage costs in order to recover
the vehicle.  Language in a 1993 amendment limits the repossession
charge to a "reasonable fair market value."  This provision has
been manipulated to the advantage of some repossession companies.

PURPOSE

As proposed, H.B. 1227 allows repossession of a motor vehicle due
to a default on the payment of repair charges by the vehicle owner
as a result of insufficient funds.

RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 70.001, Property Code, by amending
Subsections (b), (e), and (f) and by adding Subsection (g), as
follows:

     (b) Provides that the lien provided by this section continues
     to exist and the worker is entitled to possession of the
     vehicle, motorboat, vessel, or outboard motor (vehicle) until
     the amount due is paid unless the vehicle is possessed by a
     person who became a bona fide purchaser of the vehicle after
     a stop payment order was made if a worker relinquishes
     possession of a vehicle in return for a check or money order,
     rather than a written order for payment, on which payment is
     stopped.
     
     (e) Prohibits a worker from transferring, rather than selling
     for cash or other consideration to a third party, and
     prohibits a person who performs repossession services from
     accepting a check or money order that is received as payment
     for repair of an article and that is returned to the worker
     because of insufficient funds or no funds, because the drawer
     or maker of the check or money order has no account, or
     because the account on which the check or money order is drawn
     has been closed.
     
     (f) Provides that a person commits a Class B misdemeanor for
     transferring or accepting, rather than selling, a check or
     money order in violation of Subsection (e).
     
     (g) Requires a motor vehicle that is repossessed under this
     section to be delivered to the location where the repair was
     performed or a vehicle storage facility licensed under Article
     6687-9a, V.T.C.S. (Vehicle Storage Facility Act).  Requires
     the motor vehicle to remain at the repair location or a
     licensed vehicle storage facility at all times until the motor
     vehicle is lawfully returned to the motor vehicle's owner or
     lienholder or is disposed of as provided by this subchapter.
     
     SECTION 2.     Effective date: September 1, 1995.

SECTION 3. Emergency clause.