BILL ANALYSIS H.B. 1616 By: Carona 03-16-95 Committee Report (Amended) BACKGROUND Chapter 6 and 7 of the Texas Credit Code (Article 5069-6.01 et seq., V.T.C.S.) govern the sale of consumer goods, services, and motor vehicles on retail installment contracts. PURPOSE HB 1616 accomplishes several purposes: (1) HB 1616 would amend the definition of "goods" to include certain trailers used for personal, family, or household use. This change would allow the contract for purchase of certain goods, such as a motorcycle and its trailer, to be written as one contract, rather than as two contracts as is required under current law; (2) HB 1616 would extend the requirements for "boldfaced" type notices throughout the Texas Credit Code as was intended by legislation in 1991, but not accomplished due to technical defects in the bill; (3) HB 1616 would provide that medical or dental services could be financed on a retail installment contract, but only at rates authorized by Article 1.04 of the Texas Credit Code; (4) HB 1616 would make the documentary fee notice language identical in Chapters 6 and 7 so that one credit contract can be used under both chapters; and (5) HB 1616 would amend the definition of a retail installment transaction to clarify that the statute governing motor vehicle installment sales governs all such transactions whether or not the seller acknowledges charging a finance charge. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Subsections (a) and (b), Article 6.01, Title 79, Revised Statutes (Article 5069-6.01, V.T.C.S.) to change the definition of "goods" to include a "trailer designed or intended to be pulled by, or to transport, a motor scooter, motor-assisted bicycle, motorcycle or all-terrain vehicle, recreational vehicles commonly known as travel trailers designed for temporary living accommodations" and to delete medical services from the exceptions to the definition of "services." SECTION 2. Amends Subsections (2) and (3), Article 6.02, Title 79, Revised Statutes (Article 5069-6.02, V.T.C.S.), to delete the word "bold" before "type", and add the following language after the word "type": "that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous". SECTION 3. Amends Subsection (1), Article 6.03, Title 79, Revised Statutes (Article 5069-6.03, V.T.C.S.), to delete the word "bold" before "type", and add the following language after the word "type": "that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous". SECTION 4. Amends Chapter 6, Title 79, Revised Statutes (Article 5069-6.01 et seq., V.T.C.S.), to require that medical or dental services may be financed on a retail installment contract, but only at rates authorized by Article 1.04 of this title. SECTION 5. Amends Subsection (1), Article 6.06, Title 79, Revised Statutes (Article 5069-6.06, V.T.C.S.), to delete the word "bold" before "type", and add the following language after the word "type": "that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous". SECTION 6. Amends Article 6.07, Title 79, Revised Statutes (Article 5069-6.07, V.T.C.S.), to delete the word "bold" before "type", and add the following language after the word "type": "that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous". SECTION 7. Amends Subsection (b), Article 6.10, Title 79, Revised Statutes (Article 5069-6.10, V.T.C.S.), to conform the documentary fee language in Chapters 6 and 7 and to delete the word "bold" before "type", and add the following language after the word "type": "that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous." SECTION 8. Amends Subsection (d), Article 7.01, Title 79, Revised Statutes (Article 5069-7.01, V.T.C.S.), to clarify the definition of retail installment transaction such that all transactions are subject to the provisions of Chapter 7, whether or not the seller acknowledges charging a finance charge. SECTION 9. Amends Subsections (2)-(4), Article 7.02, Title 79, Revised Statutes (Article 5069-7.02, V.T.C.S.), to delete the word "bold" before "type", and add the following language after the word "type": "that is boldfaced, capitalized, underlined, or otherwise set out from surrounding written material so as to be conspicuous". SECTION 10. Provides that this Act applies only to acts done and transactions entered into on or after the effective date of this Act. SECTION 11. Effective date: September 1, 1995 SECTION 12. Emergency clause. EXPLANATION OF AMENDMENTS Committee Amendment #1 is a technical amendment to include language which was inadvertently left out of the original draft. It clarifies that the bill does not exclude medical or dental services. SUMMARY OF COMMITTEE ACTION The committee convened in a public hearing on March 20, 1995 to consider HB 1616. The Chair laid out HB 1616 and recognized Rep. Carona to explain the bill. The following person testified in favor of the bill: Robert Duke. The following person testified neutrally on the bill: Lesli L. Pettijohn. The Chair offered committee amendment #1 which was adopted without objection. The motion to report HB 1616 favorably as amended, with the recommendation that it do pass and be printed, prevailed by the following record vote: 7 Ayes, 0 Nays, 0 PNV, 2 Absent.