HBA-LJP, JLV H.B. 2139 77(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 2139 By: Marchant Financial Institutions 7/2/2001 Enrolled BACKGROUND AND PURPOSE Under current law, a retail buyer and retail seller may agree in a motor vehicle retail installment contract (contract) to include a separate charge for a debt cancellation agreement which is insurance coverage that reimburses the retail buyer with the amount of the difference between the proceeds of the buyer's basic collision insurance policy on the motor vehicle and the remaining amount owed on the vehicle (gap amount), if the vehicle has been rendered a total loss. House Bill 2139 allows a debt cancellation agreement that forgives the gap amount and that is not considered insurance or an insurance product to be included in a contract. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. ANALYSIS House Bill 2139 amends the Finance Code to provide that a motor vehicle retail installment contract (contract) may include as a separate charge an amount for a debt cancellation agreement or waiver by which, if the motor vehicle is rendered a total loss, the holder agrees to cancel indebtedness on the contract in an amount computed by subtracting the proceeds of the retail buyer's basic collision insurance policy on the motor vehicle from the amount remaining unpaid under the contract. In addition to other liability incurred under the debt cancellation agreement or waiver, the bill authorizes a holder to agree to waive any deductible amount the retail buyer is required to pay under the policy. The bill provides that a debt cancellation agreement or waiver included in a contract is not insurance or an insurance product or service and is not subject to regulation by the commissioner of insurance or the Texas Department of Insurance. EFFECTIVE DATE Vetoed.