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. 1-62 * * * * *