By:  Carona, Moncrief, Ellis                            S.B. No. 88
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to certain transactions subject to regulation as loans.
 1-2           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-3           SECTION 1.  Subchapter A, Chapter 342, Finance Code, is
 1-4     amended by adding Section 342.007 to read as follows:
 1-5           Sec. 342.007.  CERTAIN SALES OF PERSONAL PROPERTY.  (a)  A
 1-6     sale or purported sale of personal property used primarily for
 1-7     personal, family, or household use is a loan subject to this
 1-8     subtitle if:
 1-9                 (1)  the buyer agrees to lease the property back to the
1-10     seller for lease  payments that in the aggregate equal or exceed
1-11     the price paid for the property by the buyer;
1-12                 (2)  the buyer agrees to resell the property to the
1-13     seller  for an amount that equals or exceeds the price paid for the
1-14     property by the buyer; or
1-15                 (3)  the seller gives the buyer a check, negotiable
1-16     order of withdrawal, or share draft for an amount that equals or
1-17     exceeds the price paid for the property by the buyer and agrees
1-18     that the instrument may be deposited or negotiated if the seller
1-19     does not exercise a purchase option or make lease payments.
1-20           (b)  If, in a transaction described by Subsection (a), the
1-21     total amount received by the buyer exceeds the price paid for the
1-22     property by the buyer, the excess amount is interest subject to
1-23     this subtitle.
1-24           (c)  The purported taking of title to or a security interest
 2-1     or other lien in property by a buyer in connection with a
 2-2     transaction described by Subsection (a)  is a deceptive trade
 2-3     practice under Subchapter E, Chapter 17, Business & Commerce Code.
 2-4     Title to the property is not transferred and the security interest
 2-5     or other lien does not attach.
 2-6           (d)  This section does not apply to a sale or purported sale
 2-7     of personal property used for business, commercial, investment,
 2-8     agricultural, or similar purposes.
 2-9           SECTION 2.  Subchapter D, Chapter 392, Finance Code, is
2-10     amended by adding Section 392.307 to read as follows:
2-11           Sec. 392.307.  THREATENING OR PURSUING ACTION TO COLLECT
2-12     CERTAIN CHECKS.  (a)  In this section, "check" includes a
2-13     negotiable order of  withdrawal or share draft.
2-14           (b)  A person may not file or threaten to file a charge,
2-15     complaint, or criminal prosecution under Section 31.03, 31.04, or
2-16     32.41, Penal Code, based on nonpayment of a check if the person
2-17     from whom collection is sought gave the check:
2-18                 (1)  in exchange for a cash advance and the person
2-19     making the advance received compensation exceeding five percent of
2-20     the amount of the check; or
2-21                 (2)  as the seller in a transaction described by
2-22     Section 342.007.
2-23           SECTION 3.  This Act takes effect September 1, 1999.
2-24           SECTION 4.  The importance of this legislation and the
2-25     crowded condition of the calendars in both houses create an
2-26     emergency and an imperative public necessity that the
 3-1     constitutional rule requiring bills to be read on three several
 3-2     days in each house be suspended, and this rule is hereby suspended.