By Marchant H.B. No. 3515
Substitute the following for H.B. No. 3515:
By Marchant C.S.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(a), Finance Code, is amended by
3-24 adding a new Subsection (b) and by amending current Subsection (b)
3-25 to read as follows:
3-26 (b) As additional protection for the contract, a seller may
3-27 offer involuntary unemployment insurance to the buyer at the time
4-1 the contract is executed.
4-2 (c) [(b)] A holder may include the cost of insurance
4-3 provided under Subsection (a) or (b) as a separate charge in the
4-4 contract.
4-5 SECTION 5. Section 348.208, Finance Code, is amended by
4-6 adding Subsections (c), (d), and (e) to read as follows:
4-7 (c) Notwithstanding other law, a warranty or service
4-8 contract sold by the retail seller of a motor vehicle to a retail
4-9 buyer is not insurance.
4-10 (d) Notwithstanding other law, a buyer and seller may agree
4-11 to include in a retail installment contract for the sale of a motor
4-12 vehicle a separate charge for a debt cancellation contract or
4-13 waiver by which the seller or holder agrees that, if the vehicle is
4-14 rendered a total loss because of theft or collision, the seller or
4-15 holder will waive the difference, if any between the actual cash
4-16 value of the vehicle immediately before the loss and the amount
4-17 owed on the vehicle.
4-18 (e) In addition to other liability incurred under a debt
4-19 cancellation contract or waiver included in a contract as provided
4-20 by this subsection, a seller or holder may agree to waive the
4-21 deductible amount, if any, the buyer is required to pay under the
4-22 buyer's personal auto policy.
4-23 SECTION 6. The importance of this legislation and the
4-24 crowded condition of the calendars in both houses create an
4-25 emergency and an imperative public necessity that the
4-26 constitutional rule requiring bills to be read on three several
4-27 days in each house be suspended, and this rule is hereby suspended,
5-1 and that this Act take effect and be in force from and after its
5-2 passage, and it is so enacted.