1-1     By:  Carona, Moncrief                                   S.B. No. 88
 1-2           (In the Senate - Filed December 10, 1998; January 26, 1999,
 1-3     read first time and referred to Committee on Economic Development;
 1-4     April 15, 1999, reported adversely, with favorable Committee
 1-5     Substitute by the following vote:  Yeas 4, Nays 2; April 15, 1999,
 1-6     sent to printer.)
 1-7     COMMITTEE SUBSTITUTE FOR S.B. No. 88                    By:  Carona
 1-8                            A BILL TO BE ENTITLED
 1-9                                   AN ACT
1-10     relating to certain transactions subject to regulation as loans.
1-11           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-12           SECTION 1.  Subchapter A, Chapter 342, Finance Code, is
1-13     amended by adding Section 342.007 to read as follows:
1-14           Sec. 342.007.  CERTAIN SALES OF PERSONAL PROPERTY.  (a)  A
1-15     sale or purported sale of personal property used primarily for
1-16     personal, family, or household use is a loan subject to this
1-17     subtitle if:
1-18                 (1)  the buyer agrees to lease the property back to the
1-19     seller for lease  payments that in the aggregate equal or exceed
1-20     the price paid for the property by the buyer;
1-21                 (2)  the buyer agrees to resell the property to the
1-22     seller  for an amount that equals or exceeds the price paid for the
1-23     property by the buyer; or
1-24                 (3)  the seller gives the buyer a check, negotiable
1-25     order of withdrawal, or share draft for an amount that equals or
1-26     exceeds the price paid for the property by the buyer and agrees
1-27     that the instrument may be deposited or negotiated if the seller
1-28     does not exercise a purchase option or make lease payments.
1-29           (b)  If, in a transaction described by Subsection (a), the
1-30     total amount received by the buyer exceeds the price paid for the
1-31     property by the buyer, the excess amount is interest subject to
1-32     this subtitle.
1-33           (c)  The purported taking of title to or a security interest
1-34     or other lien in property by a buyer in connection with a
1-35     transaction described by Subsection (a)  is a deceptive trade
1-36     practice under Subchapter E, Chapter 17, Business & Commerce Code.
1-37     Title to the property is not transferred and the security interest
1-38     or other lien does not attach.
1-39           (d)  This section does not apply to a sale or purported sale
1-40     of personal property used for business, commercial, investment,
1-41     agricultural, or similar purposes.
1-42           SECTION 2.  Subchapter D, Chapter 392, Finance Code, is
1-43     amended by adding Section 392.307 to read as follows:
1-44           Sec. 392.307.  THREATENING OR PURSUING ACTION TO COLLECT
1-45     CERTAIN CHECKS.  (a)  In this section, "check" includes a
1-46     negotiable order of  withdrawal or share draft.
1-47           (b)  A person may not file or threaten to file a charge,
1-48     complaint, or criminal prosecution under Section 31.03, 31.04, or
1-49     32.41, Penal Code, based on nonpayment of a check if the person
1-50     from whom collection is sought gave the check:
1-51                 (1)  in exchange for a cash advance and the person
1-52     making the advance received compensation exceeding five percent of
1-53     the amount of the check; or
1-54                 (2)  as the seller in a transaction described by
1-55     Section 342.007.
1-56           SECTION 3.  This Act takes effect September 1, 1999.
1-57           SECTION 4.  The importance of this legislation and the
1-58     crowded condition of the calendars in both houses create an
1-59     emergency and an imperative public necessity that the
1-60     constitutional rule requiring bills to be read on three several
1-61     days in each house be suspended, and this rule is hereby suspended.
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