BILL ANALYSIS


                                                    C.S.S.B. 1381
                                                    By: Wentworth
                                                    Jurisprudence
                                                          4-20-95
                                   Committee Report (Substituted)
BACKGROUND

At one time Texas arbitration law contained a provision that
allowed an arbitration clause in a contract only if the contract
contained a warning concerning the arbitration clause.  When this
warning was removed, a provision was added which rendered void an
arbitration clause in a transaction of less than $50,000.  The
bracket was inserted in order to preserve a consumer's right to
have the person's day in court should a dispute arise.

This provision, however, may lead to an increase in full-blown
litigation, rather than increasing the efficiency of the dispute
resolution process.

PURPOSE

As proposed, C.S.S.B. 1381 deletes a provision that holds certain
arbitration agreements invalid in a transaction of less than
$50,000. 

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 Article 224, V.T.C.S., to delete a provision
providing that the Validity of Arbitrations Agreement Act does not
apply to any contract for the acquisition by a person (as
distinguished from a legal entity) of real or person property, or
services, or money or credit where the total consideration to be
paid or furnished by the individual is $50,000 or less, unless the
individual and the other parties agree in writing to submit to
arbitration and such agreement is signed by all parties and their
attorneys.  Makes conforming changes.

SECTION 2. Effective date: September 1, 1995.
           Makes application of this Act prospective.

SECTION 3. Emergency clause.