SRC-PNG, SLL H.B. 3072 76(R) BILL ANALYSIS
Senate Research Center H.B. 3072
By: Averitt (Brown)
State Affairs
5/13/1999
Engrossed
DIGEST
Under current law, the only situation in which the seller of a motor
vehicle is allowed to pay off the outstanding debt against a vehicle owned
by the buyer is when the vehicle being paid off is to be used as a trade-in
on the vehicle being purchased. When the vehicle a buyer intends to use as
a trade-in vehicle has been rendered a total loss, the law does not allow
the seller to pay off the amount owed against the total-loss vehicle and
incorporate that amount into the retail installment agreement in the sale.
This is because a total-loss vehicle cannot be used as a trade-in. H.B.
3072 removes the phrase "used as a trade-in" and replaces the phrase with
"owned by the buyer." This allows a seller to pay off the outstanding debt
against a vehicle owned by the buyer whether or not the vehicle is
technically to be used as a trade-in.
PURPOSE
As proposed, H.B. 3072 sets forth provisions regarding certain payments by
a retail seller in a retail installment transaction involving a motor
vehicle.
RULEMAKING AUTHORITY
This bill does not grant any additional rulemaking authority to a state
officer, institution, or agency.
SECTION BY SECTION ANALYSIS
SECTION 1. Amends Section 348.404, Finance Code, as follows:
Sec. 348.404. New heading: SELLER'S ACTION FOR INCENTIVE PROGRAM OR TO
PAY FOR BUYER'S MOTOR VEHICLE. Authorizes a retail seller, in connection
with a retail instrument transaction, to advance money to retire an amount
owed by the buyer that has been declared a total loss by the buyer's
insurer. Authorizes a retail seller to pay in cash to the retail buyer any
portion of the net cash value of a motor vehicle owned by the buyer and
used as a trade-in in a transaction involving the sale of another m otor
vehicle. Defines "net cash value."
SECTION 2. Amends Section 152.002(b), Tax Code, to redefine "total
consideration."
SECTION 3. Emergency clause.
Effective date: upon passage.