1-1 By: Ehrhardt (Senate Sponsor - Carona) H.B. No. 2337
1-2 (In the Senate - Received from the House May 10, 1999;
1-3 May 10, 1999, read first time and referred to Committee on Economic
1-4 Development; May 14, 1999, reported favorably by the following
1-5 vote: Yeas 5, Nays 0; May 14, 1999, sent to printer.)
1-6 A BILL TO BE ENTITLED
1-7 AN ACT
1-8 relating to additional interest for default on a loan contract
1-9 including simple interest.
1-10 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11 ARTICLE 1. AMENDMENTS TO TITLE 79, REVISED STATUTES
1-12 SECTION 1.01. Article 3A.303, Title 79, Revised Statutes
1-13 (Article 5069-3A.303, Vernon's Texas Civil Statutes), is amended to
1-14 read as follows:
1-15 Art. 3A.303. ADDITIONAL INTEREST FOR DEFAULT: REGULAR
1-16 TRANSACTION. (a) A loan contract that includes precomputed
1-17 interest and that is a regular transaction may provide for
1-18 additional interest for default if any part of an installment
1-19 remains unpaid after the 10th day after the date on which the
1-20 installment is due, including Sundays and holidays.
1-21 (b) A loan contract that uses the scheduled installment
1-22 earnings method and that is a regular transaction may provide for
1-23 additional interest for default if any part of an installment
1-24 remains unpaid after the 10th day after the date on which the
1-25 installment is due, including Sundays and holidays.
1-26 (c) A loan contract that includes simple interest and that
1-27 is a regular transaction may provide for additional interest for
1-28 default if any part of an installment remains unpaid after the 10th
1-29 day after the date on which the installment is due, including
1-30 Sundays and holidays.
1-31 (d) The additional interest may not exceed five cents for
1-32 each $1 of a scheduled installment.
1-33 (e) [(d)] Interest under this article may not be collected
1-34 more than once on the same installment.
1-35 SECTION 1.02. Article 3A.306, Title 79, Revised Statutes
1-36 (Article 5069-3A.306, Vernon's Texas Civil Statutes), is amended to
1-37 read as follows:
1-38 Art. 3A.306. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR
1-39 TRANSACTION. (a) A loan contract that includes precomputed
1-40 interest and that is an irregular transaction may provide for
1-41 additional interest for default using the true daily earnings
1-42 method for the period from the maturity date of an installment
1-43 until the date the installment is paid. The rate of the additional
1-44 interest may not exceed the maximum contract interest rate.
1-45 (b) A loan contract that includes simple interest and that
1-46 is an irregular transaction may provide for additional interest for
1-47 default if any part of an installment remains unpaid after the
1-48 10th day after the date on which the installment is due, including
1-49 Sundays and holidays. The additional interest may not exceed five
1-50 cents for each $1 of a scheduled installment. Interest under this
1-51 subsection may not be collected more than once on the same
1-52 installment.
1-53 ARTICLE 2. AMENDMENTS TO FINANCE CODE
1-54 SECTION 2.01. Section 342.203, Finance Code, is amended to
1-55 read as follows:
1-56 Sec. 342.203. ADDITIONAL INTEREST FOR DEFAULT: REGULAR
1-57 TRANSACTION. (a) A loan contract that includes precomputed
1-58 interest and that is a regular transaction may provide for
1-59 additional interest for default if any part of an installment
1-60 remains unpaid after the 10th day after the date on which the
1-61 installment is due, including Sundays and holidays.
1-62 (b) A loan contract that uses the scheduled installment
1-63 earnings method and that is a regular transaction may provide for
1-64 additional interest for default if any part of an installment
2-1 remains unpaid after the 10th day after the date on which the
2-2 installment is due, including Sundays and holidays.
2-3 (c) A loan contract that includes simple interest and that
2-4 is a regular transaction may provide for additional interest for
2-5 default if any part of an installment remains unpaid after the 10th
2-6 day after the date on which the installment is due, including
2-7 Sundays and holidays.
2-8 (d) The additional interest may not exceed five cents for
2-9 each $1 of a scheduled installment.
2-10 (e) [(d)] Interest under this section may not be collected
2-11 more than once on the same installment.
2-12 SECTION 2.02. Section 342.206, Finance Code, is amended to
2-13 read as follows:
2-14 Sec. 342.206. ADDITIONAL INTEREST FOR DEFAULT: IRREGULAR
2-15 TRANSACTION. (a) A loan contract that includes precomputed
2-16 interest and that is an irregular transaction may provide for
2-17 additional interest for default using the true daily earnings
2-18 method for the period from the maturity date of an installment
2-19 until the date the installment is paid. The rate of the additional
2-20 interest may not exceed the maximum contract interest rate.
2-21 (b) A loan contract that includes simple interest and that
2-22 is an irregular transaction may provide for additional interest for
2-23 default if any part of an installment remains unpaid after the 10th
2-24 day after the date on which the installment is due, including
2-25 Sundays and holidays. The additional interest may not exceed five
2-26 cents for each $1 of a scheduled installment. Interest under this
2-27 subsection may not be collected more than once on the same
2-28 installment.
2-29 ARTICLE 3. EFFECTIVE DATE; EMERGENCY
2-30 SECTION 3.01. (a) Except as provided by Subsections (b) and
2-31 (c) of this section, this Act takes effect September 1, 1999.
2-32 (b) Article 1 of this Act takes effect only if the Act of
2-33 the 76th Legislature, Regular Session, 1999, relating to
2-34 nonsubstantive additions to and corrections in enacted codes does
2-35 not take effect.
2-36 (c) Article 2 of this Act takes effect only if the Act of
2-37 the 76th Legislature, Regular Session, 1999, relating to
2-38 nonsubstantive additions to and corrections in enacted codes takes
2-39 effect.
2-40 SECTION 3.02. The importance of this legislation and the
2-41 crowded condition of the calendars in both houses create an
2-42 emergency and an imperative public necessity that the
2-43 constitutional rule requiring bills to be read on three several
2-44 days in each house be suspended, and this rule is hereby suspended.
2-45 * * * * *