By Marchant H.B. No. 3515 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the nature of certain contracts included in the cash 1-3 price of motor vehicles sold at retail. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. Section 345.005, Finance Code, is amended to read 1-6 as follows: 1-7 Sec. 345.005. Itemized Charge. An amount charged to a 1-8 retail buyer in a retail installment contract or retail charge 1-9 agreement is an itemized charge if the amount is not included in 1-10 the cash price and is the amount of: 1-11 (1) fees prescribed by law for filing, recording, or 1-12 otherwise perfecting, releasing, or satisfying a security interest 1-13 created in connection with a retail installment transaction or 1-14 nonfiling insurance premiums as authorized by Section 345.212; 1-15 (2) fees for registration or a certificate of title; 1-16 (3) any taxes; 1-17 (4) fees or charges prescribed by law and connected 1-18 with the sale or inspection of the goods or services subject to the 1-19 contract or agreement; 1-20 (5) premiums and other charges for insurance or debt 1-21 cancellation contracts or waivers authorized by Subchapter E; 1-22 (6) official fees for a construction permit or the 1-23 filing or recording of a construction permit; 1-24 (7) a documentary fee authorized under Section 2-1 345.251; and 2-2 (8) in a retail installment transaction involving 2-3 modernization, rehabilitation, repair, alteration, improvement, or 2-4 construction of real property, reasonable and necessary costs, 2-5 including amounts, paid by the holder: 2-6 (A) for title insurance or title examination and 2-7 opinion that does not exceed the amount set by the commissioner of 2-8 insurance for title insurance for the transaction; 2-9 (B) to a person who is not a salaried employee 2-10 of the holder for an appraisal or inspection or for investigating 2-11 the credit standing or creditworthiness of the retail buyer; or 2-12 (C) to an attorney who is not a salaried 2-13 employee of the holder as a legal fee for the preparation of 2-14 documents in connection with the transaction. 2-15 SECTION 2. Chapter 345, Finance Code, is amended by adding 2-16 Section 345.216 to read as follows: 2-17 Sec. 345.216. CHARGE FOR DEBT CANCELLATION PROVISION 2-18 INCLUDED IN RETAIL INSTALLMENT CONTRACT. (a) Notwithstanding 2-19 other law, a buyer and seller may agree to include in a retail 2-20 installment contract for the sale of goods described in Section 2-21 345.002(b)(5) a separate charge for a debt cancellation contract or 2-22 waiver by which the seller or holder agrees that, if the goods are 2-23 rendered a total loss because of theft or collision, the seller or 2-24 holder will waive the difference, if any, between the actual cash 2-25 value of the goods immediately before the loss and the amount owed 2-26 on the goods. 2-27 (b) In addition to other liability incurred under a debt 3-1 cancellation contract or waiver included in a contract as provided 3-2 by this subsection, a seller or holder may agree to waive the 3-3 deductible amount, if any, the buyer is required to pay under the 3-4 buyer's personal insurance policy. 3-5 (c) A debt cancellation contract or waiver included in a 3-6 contract as provided by this section is not insurance or an 3-7 insurance product or service and is not subject to regulation by 3-8 the commissioner of insurance or the Texas Department of Insurance. 3-9 SECTION 3. Section 348.005, Finance Code, is amended to read 3-10 as follows: 3-11 Sec. 348.005. Itemized Charge. An amount in a retail 3-12 installment contract is an itemized charge if the amount is not 3-13 included in the cash price and is the amount of: 3-14 (1) fees for registration, certificate of title, and 3-15 license and any additional registration fees charged by a full 3-16 service deputy under Section 502.114, Transportation Code; 3-17 (2) any taxes; 3-18 (3) fees or charges prescribed by law and connected 3-19 with the sale or inspection of the motor vehicle; and 3-20 (4) charges authorized for insurance, service 3-21 contracts, debt cancellation contracts or waivers, or warranties by 3-22 Subchapter C. 3-23 SECTION 4. Section 348.202(b), Finance Code, is amended to 3-24 read as follows: 3-25 (b) As additional protection for the contract, a seller may 3-26 offer involuntary unemployment insurance to the buyer at the time 3-27 the contract is executed. 4-1 (c) A holder may include the cost of insurance provided 4-2 under Subsection (a) or (b) as a separate charge in the contract. 4-3 SECTION 5. Section 348.208, Finance Code, is amended by 4-4 adding Subsections (c), (d), and (e) to read as follows: 4-5 (c) Notwithstanding other law, a warranty or service 4-6 contract sold by the retail seller of a motor vehicle to a retail 4-7 buyer is not insurance. 4-8 (d) Notwithstanding other law, a buyer and seller may agree 4-9 to include in a retail installment contract for the sale of a motor 4-10 vehicle a separate charge for a debt cancellation contract or 4-11 waiver by which the seller or holder agrees that, if the vehicle is 4-12 rendered a total loss because of theft or collision, the seller or 4-13 holder will waive the difference, if any, between the actual cash 4-14 value of the vehicle immediately before the loss and the amount 4-15 owed on the vehicle. 4-16 (e) In addition to other liability incurred under a debt 4-17 cancellation contract or waiver included in a contract as provided 4-18 by this subsection, a seller or holder may agree to waive the 4-19 deductible amount, if any, the buyer is required to pay under the 4-20 buyer's personal automobile policy. 4-21 SECTION 6. The importance of this legislation and the 4-22 crowded condition of the calendars in both houses create an 4-23 emergency and an imperative public necessity that the 4-24 constitutional rule requiring bills to be read on three several 4-25 days in each house be suspended, and this rule is hereby suspended, 4-26 and that this Act take effect and be in force from and after its 4-27 passage, and it is so enacted.