1-1 By: Madla S.B. No. 872
1-2 (In the Senate - Filed March 2, 1995; March 6, 1995, read
1-3 first time and referred to Committee on Economic Development;
1-4 April 5, 1995, reported favorably, as amended, by the following
1-5 vote: Yeas 8, Nays 0; April 5, 1995, sent to printer.)
1-6 COMMITTEE AMENDMENT NO. 1 By: Madla
1-7 Amend S.B. No. 872 as follows:
1-8 (1) In SECTION 1 of the bill, in Article 6.01(b)(i), Title
1-9 79, Revised Statutes (introduced version page 2, line 16; committee
1-10 printing page 1 line 52), insert "medical or dental services, or"
1-11 between "than" and "prepaid".
1-12 A BILL TO BE ENTITLED
1-13 AN ACT
1-14 relating to the regulation of retail installment contracts of
1-15 certain goods and services.
1-16 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-17 SECTION 1. Sections (a) and (b), Article 6.01, Title 79,
1-18 Revised Statutes (Article 5069-6.01, Vernon's Texas Civil
1-19 Statutes), are amended to read as follows:
1-20 (a) "Goods" means all tangible personal property when
1-21 purchased primarily for personal, family or household use and not
1-22 for commercial or business use, including such property which is
1-23 furnished or used at the time of sale or subsequently, in the
1-24 modernization, rehabilitation, repair, alteration, improvement or
1-25 construction of real property so as to become a part thereof
1-26 whether or not severable therefrom. The term also includes, but is
1-27 not limited to, a structure, except a mobile home, to be used as a
1-28 residence, any boat, boat-trailer, motor scooter, motor-assisted
1-29 bicycle, motorcycle, trailer designed or intended to be pulled by
1-30 or to transport a motor scooter, motor-assisted bicycle, motorcycle
1-31 or all-terrain vehicle, recreational vehicle commonly known as a
1-32 travel trailer designed for temporary living accommodations,
1-33 camper-type trailer, horse trailer, any vehicle propelled or drawn
1-34 exclusively by muscular power, and merchandise certificates or
1-35 coupons, issued by a retail seller, not redeemable in cash and to
1-36 be used in their face amount in lieu of cash, in exchange for goods
1-37 or services sold by such seller.
1-38 The term does not include (i) money, things in action or
1-39 intangible personal property, other than merchandise certificates
1-40 or coupons as herein described; or (ii) any automobile, mobile
1-41 home, truck, trailer, other than a trailer expressly included in
1-42 the term, semi-trailer, truck tractor or bus designed and used
1-43 primarily to transport persons or property on a public highway; or
1-44 (iii) any vehicle designed to run only on rails or tracks or in the
1-45 air, as defined in Chapter 7 of this Subtitle; or (iv) any goods
1-46 which are authorized to be and are included in a contract subject
1-47 to Chapter 7 of this Subtitle.
1-48 (b) "Services" means work, labor, or services of any kind
1-49 when purchased primarily for personal, family or household use and
1-50 not for commercial or business use, and includes a maintenance or
1-51 service contract or agreement or warranty, but does not include
1-52 (i) the services, other than prepaid funeral benefits regulated by
1-53 Article 548b, Vernon's Texas Civil Statutes, of a professional
1-54 person licensed by the State except when those services are
1-55 rendered in connection with the purchase of goods; or (ii) services
1-56 for which the cost is by law fixed or approved by, or filed with or
1-57 subject to approval or disapproval by the United States or the
1-58 State of Texas, or any agency, instrumentality or subdivision
1-59 thereof; or (iii) educational services provided by an accredited
1-60 college or university or a primary or secondary school providing
1-61 education required by the State of Texas or services of a
1-62 kindergarten or nursery school; or (iv) any services which are
1-63 authorized to be and are included in a contract subject to Chapter
1-64 7 of this Subtitle; or (v) any <medical or> legal services.
1-65 SECTION 2. Sections (2) and (3), Article 6.02, Title 79,
1-66 Revised Statutes (Article 5069-6.02, Vernon's Texas Civil
1-67 Statutes), are amended to read as follows:
1-68 (2) The printed or typed portion of the contract, other than
2-1 instructions for completion, shall be in a size equal to at least
2-2 eight-point type. The contract shall be designated "Retail
2-3 Installment Contract" and shall contain substantially the following
2-4 notice printed or typed in a size equal to at least ten-point
2-5 <bold> type that is boldface, capitalized, underlined, or otherwise
2-6 set out from surrounding written material so as to be conspicuous:
2-7 "NOTICE TO THE BUYER. DO NOT SIGN THIS CONTRACT BEFORE
2-8 YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
2-9 ENTITLED TO A COPY OF THE CONTRACT YOU SIGN. UNDER THE
2-10 LAW YOU HAVE THE RIGHT TO PAY OFF IN ADVANCE THE FULL
2-11 AMOUNT DUE AND UNDER CERTAIN CONDITIONS MAY OBTAIN A
2-12 PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS
2-13 CONTRACT TO PROTECT YOUR LEGAL RIGHTS."
2-14 (3) The retail seller shall deliver to the retail buyer, or
2-15 mail to him at his address shown on the retail installment
2-16 contract, a copy of the contract as accepted by the seller. Until
2-17 the seller does so, a buyer, who has not received delivery of the
2-18 goods or been furnished or rendered the services, shall have the
2-19 right to rescind the contract and to receive a refund of all
2-20 payments made and return of all goods traded in to the seller on
2-21 account of or in contemplation of the contract, or if such goods
2-22 cannot be returned, the trade-in allowance thereof. Any
2-23 acknowledgement by the buyer of delivery of a copy of the contract
2-24 shall be in a size equal to at least ten-point <bold> type that is
2-25 boldface, capitalized, underlined, or otherwise set out from
2-26 surrounding written material so as to be conspicuous and, if
2-27 contained in the contract, shall appear directly above the buyer's
2-28 signature.
2-29 SECTION 3. Section (1), Article 6.03, Title 79, Revised
2-30 Statutes (Article 5069-6.03, Vernon's Texas Civil Statutes), is
2-31 amended to read as follows:
2-32 (1) A retail charge agreement may be established by a seller
2-33 or credit card issuer upon the request of a buyer or prospective
2-34 buyer. The retail charge agreement shall be in writing and signed
2-35 by the buyer. A copy of such agreement executed on or after the
2-36 effective date of this Chapter shall be delivered or mailed to the
2-37 buyer prior to the date on which the first payment is due
2-38 thereunder. Any acknowledgment by the buyer of delivery of a copy
2-39 of the agreement contained in the body thereof shall be in a size
2-40 equal to at least ten-point <bold> type that is boldface,
2-41 capitalized, underlined, or otherwise set out from surrounding
2-42 written material so as to be conspicuous and shall appear directly
2-43 above the buyer's signature. No agreement executed on or after the
2-44 effective date of this Chapter shall be signed by the buyer when it
2-45 contains blank spaces to be filled in after it has been signed.
2-46 The buyer's acknowledgment, conforming to the requirements of this
2-47 section, of delivery of a copy of an agreement, shall be
2-48 presumptive proof, in any action or proceeding, of such delivery
2-49 and that the agreement, when signed, did not contain any blank
2-50 spaces as herein provided. If no copy of the agreement is retained
2-51 by the seller, a notation in his permanent record showing that such
2-52 agreement was mailed and the date of mailing shall serve as
2-53 presumptive proof of such mailing. Any such agreement shall
2-54 contain substantially the following notice printed or typed in a
2-55 size equal to at least ten-point <bold> type that is boldface,
2-56 capitalized, underlined, or otherwise set out from surrounding
2-57 written material so as to be conspicuous:
2-58 "NOTICE TO THE BUYER--DO NOT SIGN THIS AGREEMENT BEFORE
2-59 YOU READ IT OR IF IT CONTAINS BLANK SPACES. YOU ARE
2-60 ENTITLED TO A COPY OF THE AGREEMENT YOU SIGN. KEEP
2-61 THIS AGREEMENT TO PROTECT YOUR LEGAL RIGHTS."
2-62 SECTION 4. Chapter 6, Title 79, Revised Statutes (Article
2-63 5069-6.01 et seq., Vernon's Texas Civil Statutes), is amended by
2-64 adding Article 6.13 to read as follows:
2-65 Art. 6.13. RATES FOR MEDICAL AND DENTAL SERVICES. Medical
2-66 or dental services may be financed only at rates authorized by
2-67 Article 1.04 of this title.
2-68 SECTION 5. Section (1), Article 6.06, Title 79, Revised
2-69 Statutes (Article 5069-6.06, Vernon's Texas Civil Statutes), is
2-70 amended to read as follows:
3-1 (1) A seller who has entered into a retail installment
3-2 transaction to perform services or install goods for the
3-3 modernization, rehabilitation, repair, alteration, improvement or
3-4 construction of improvements on real property shall obtain a
3-5 certificate of completion or certificate of satisfaction
3-6 (hereinafter designated "certificate") signed by the buyer, when
3-7 all such goods and/or services purchased under a retail installment
3-8 contract have been performed or installed as required by such
3-9 contract; and may obtain such a certificate whether or not any
3-10 guarantee or warranty of the goods or services remains in force.
3-11 Such certificate shall be a separate writing and shall have the
3-12 following notation at the top thereof in at least ten-point <bold>
3-13 type that is boldface, capitalized, underlined, or otherwise set
3-14 out from surrounding written material so as to be conspicuous:
3-15 WARNING TO BUYER--DO NOT SIGN THIS CERTIFICATE UNTIL
3-16 ALL SERVICES HAVE BEEN SATISFACTORILY PERFORMED AND
3-17 MATERIALS SUPPLIED OR GOODS RECEIVED AND FOUND
3-18 SATISFACTORY.
3-19 SECTION 6. Article 6.07, Title 79, Revised Statutes (Article
3-20 5069-6.07, Vernon's Texas Civil Statutes), is amended to read as
3-21 follows:
3-22 Art. 6.07. ASSIGNMENT AND NEGOTIATION. Notwithstanding the
3-23 provisions of any other law, a person may purchase or acquire or
3-24 agree to purchase or acquire any retail installment contract or
3-25 retail charge agreement or any outstanding balance under either
3-26 from another person on such terms and conditions and for such price
3-27 as may be mutually agreed upon. Notice to the buyer of the
3-28 assignment or negotiation and any requirement that the seller be
3-29 deprived of dominion over payments upon a retail installment
3-30 contract or retail charge agreement, or over the goods if returned
3-31 to or repossessed by the seller, is not necessary to the validity
3-32 of a written assignment or negotiation of the retail installment
3-33 contract or retail charge agreement or any outstanding balance
3-34 under either, as against creditors, subsequent purchasers, pledges,
3-35 mortgagees and lien claimants of the seller. Unless the buyer has
3-36 notice of the assignment or negotiation of his retail installment
3-37 contract, retail charge agreement or any outstanding balance under
3-38 either, payment therefor made by the buyer to the holder last known
3-39 to him shall be binding upon all subsequent holders. No right of
3-40 action or defense of a buyer arising out of a retail installment
3-41 transaction which would be cut off by negotiation, shall be cut off
3-42 by negotiation of the retail installment contract or retail charge
3-43 agreement to any third party unless such holder acquires the
3-44 contract relying in good faith upon a certificate of completion or
3-45 certificate of satisfaction, if required by the provisions of
3-46 Article 6.06; and such holder gives notice of the negotiation to
3-47 the buyer as provided in this Article, and within thirty days of
3-48 the mailing of such notice receives no written notice from the
3-49 buyer of any facts giving rise to any claim or defense of the
3-50 buyer. Such notice of negotiation shall be in writing addressed to
3-51 the buyer at the address shown on the contract and shall: identify
3-52 the contract; state the names and addresses of the seller and
3-53 buyer; describe the goods or services; state the time balance and a
3-54 description of the payment schedule. The notice of negotiation
3-55 shall contain the following warning to the buyer in at least
3-56 ten-point <bold face> type that is boldface, capitalized,
3-57 underlined, or otherwise set out from surrounding written material
3-58 so as to be conspicuous:
3-59 ARE THE TERMS OF THE CONTRACT DESCRIBED ABOVE CORRECT
3-60 AND ARE YOU SATISFIED WITH THE GOODS OR SERVICES
3-61 FURNISHED? IF NOT, YOU SHOULD NOTIFY US GIVING DETAILS
3-62 WITHIN 30 DAYS FROM THE DATE THE ABOVE NOTICE WAS
3-63 MAILED.
3-64 SECTION 7. Section (b), Article 6.10, Title 79, Revised
3-65 Statutes (Article 5069-6.10, Vernon's Texas Civil Statutes), is
3-66 amended to read as follows:
3-67 (b) Preliminary worksheets that are shown to the buyer in
3-68 which a sale price is computed, an order from the buyer, and the
3-69 retail installment contract must include, in reasonable proximity
3-70 to the place in the worksheet, order, or contract where the
4-1 documentary fee is disclosed, the amount of the fee and the
4-2 following notice in <bold-faced> type that is boldface,
4-3 capitalized, underlined, or otherwise set out from surrounding
4-4 written material so as to be conspicuous:
4-5 "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
4-6 DOCUMENTARY FEE <AND> IS NOT REQUIRED BY LAW, BUT MAY
4-7 BE CHARGED TO BUYERS <A BUYER> FOR <THE> HANDLING <OF>
4-8 DOCUMENTS AND <THE> PERFORMING <OF> SERVICES RELATING
4-9 <RELATED> TO THE CLOSING OF A SALE. BUYERS <A BUYER>
4-10 MAY AVOID PAYMENT OF THE FEE TO THE SELLER BY HANDLING
4-11 THE <THESE> DOCUMENTS AND PERFORMING THE <THESE>
4-12 SERVICES RELATING TO THE CLOSING OF THE SALE. A
4-13 DOCUMENTARY FEE MAY NOT EXCEED $50. THIS NOTICE IS
4-14 REQUIRED BY LAW."
4-15 SECTION 8. Section (d), Article 7.01, Title 79, Revised
4-16 Statutes (Article 5069-7.01, Vernon's Texas Civil Statutes), is
4-17 amended to read as follows:
4-18 (d) "Retail Installment Transaction" or "Transaction" means
4-19 any transaction as a result of which a retail buyer acquires a
4-20 motor vehicle from a retail seller <under a retail installment
4-21 contract for a sum consisting of the cash sale price and other
4-22 charges as limited by this Chapter> and agrees with a retail seller
4-23 to pay part or all of the cash price <such sum> in one or more
4-24 deferred installments. All such transactions shall be under a
4-25 retail installment contract and be subject to the provisions of
4-26 this chapter. The term shall include every transaction wherein the
4-27 promise or agreement to pay the deferred balance of the cash price
4-28 <such sum> is made by the retail buyer to the retail seller
4-29 notwithstanding the existence or occurrence of any one or more of
4-30 the following events: (i) that the retail seller has arranged or
4-31 arranges to sell, transfer or assign the retail buyer's obligation;
4-32 (ii) that the amount of any <the> charges is determined by
4-33 reference to charts or information furnished by a financing
4-34 institution; (iii) that the forms of instruments used to evidence
4-35 the retail installment transaction are furnished by a financing
4-36 institution; and (iv) that the credit standing of the retail buyer
4-37 is or has been evaluated by a financing institution.
4-38 SECTION 9. Sections (2), (3), and (4), Article 7.02, Title
4-39 79, Revised Statutes (Article 5069-7.02, Vernon's Texas Civil
4-40 Statutes), are amended to read as follows:
4-41 (2) The printed portion of the retail installment contract,
4-42 other than instructions for completion, shall be in a size equal to
4-43 at least eight-point type. Such contract shall contain
4-44 substantially the following notice in a size equal to at least
4-45 ten-point <bold> type that is boldface, capitalized, underlined, or
4-46 otherwise set out from surrounding written material so as to be
4-47 conspicuous:
4-48 "NOTICE TO THE BUYER--DO NOT SIGN THIS CONTRACT BEFORE
4-49 YOU READ IT OR IF IT CONTAINS ANY BLANK SPACES. YOU
4-50 ARE ENTITLED TO A COPY OF THE CONTRACT YOU SIGN. UNDER
4-51 THE LAW YOU HAVE THE RIGHT TO PAY OFF IN ADVANCE THE
4-52 FULL AMOUNT DUE AND UNDER CERTAIN CONDITIONS MAY OBTAIN
4-53 A PARTIAL REFUND OF THE FINANCE CHARGE. KEEP THIS
4-54 CONTRACT TO PROTECT YOUR LEGAL RIGHTS."
4-55 (3) A retail installment contract or separate written
4-56 statement shall also contain, in a size equal to at least ten-point
4-57 <bold> type that is boldface, capitalized, underlined, or otherwise
4-58 set out from surrounding written material so as to be conspicuous,
4-59 a specific statement that liability insurance coverage for bodily
4-60 injury and property damage caused to others is not included, if
4-61 that is the case.
4-62 (4) The seller shall deliver to the buyer, or mail to him at
4-63 his address shown on the retail installment contract, a copy of
4-64 such contract as accepted by the seller. Until the seller does so,
4-65 a buyer who has not received delivery of the motor vehicle shall
4-66 have the right to rescind his contract and to receive a refund of
4-67 all payments made and a return of all goods traded in to the seller
4-68 on account of or in contemplation of such contract, or if the goods
4-69 traded in cannot be returned, the value thereof. Any
4-70 acknowledgment by the buyer of delivery of a copy of the retail
5-1 installment contract shall be in a size equal to at least ten-point
5-2 <bold> type that is boldface, capitalized, underlined, or otherwise
5-3 set out from surrounding written material so as to be conspicuous
5-4 and shall appear directly above the buyer's signature.
5-5 SECTION 10. This Act applies only to acts done and
5-6 transactions entered into on or after the effective date of this
5-7 Act. Acts done and transactions entered into before the effective
5-8 date of this Act are governed by the law in effect immediately
5-9 before this Act takes effect, and that law continues in effect for
5-10 that purpose.
5-11 SECTION 11. This Act takes effect September 1, 1995.
5-12 SECTION 12. The importance of this legislation and the
5-13 crowded condition of the calendars in both houses create an
5-14 emergency and an imperative public necessity that the
5-15 constitutional rule requiring bills to be read on three several
5-16 days in each house be suspended, and this rule is hereby suspended.
5-17 * * * * *