1-1     By:  Marchant (Senate Sponsor - Carona)               H.B. No. 1994
 1-2           (In the Senate - Received from the House April 25, 2001;
 1-3     April 26, 2001, read first time and referred to Committee on
 1-4     Business and Commerce; May 7, 2001, reported favorably by the
 1-5     following vote:  Yeas 5, Nays 0; May 7, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to certain charges included in a retail installment
 1-9     agreement.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1. Sections 345.251(b) and (c), Finance Code, are
1-12     amended to read as follows:
1-13           (b)  If a documentary fee is charged under this section the
1-14     fee:
1-15                 (1)  must be charged to cash buyers and credit buyers;
1-16                 (2)  may not exceed $75 [$50]; and
1-17                 (3)  must be disclosed on the retail installment
1-18     contract as a separate itemized charge.
1-19           (c)  A preliminary work sheet on which a sale price is
1-20     computed and that is shown to the retail buyer, an order from the
1-21     buyer, or a retail installment contract must include in reasonable
1-22     proximity to the place on the document where the documentary fee is
1-23     disclosed:
1-24                 (1)  the amount of the fee; and
1-25                 (2)  the following notice in type that is bold-faced,
1-26     capitalized, or underlined or otherwise conspicuously set out from
1-27     the surrounding written material:
1-28     "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE.  A DOCUMENTARY FEE IS
1-29     NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING
1-30     DOCUMENTS AND PERFORMING SERVICES RELATING TO THE CLOSING OF A
1-31     SALE.  A DOCUMENTARY FEE MAY NOT EXCEED $75 [$50].  THIS NOTICE IS
1-32     REQUIRED BY LAW."
1-33           SECTION 2. Section 348.006(c), Finance Code, is amended to
1-34     read as follows:
1-35           (c)  For a documentary fee to be included in the principal
1-36     balance of a retail installment contract:
1-37                 (1)  the retail seller must charge the documentary fee
1-38     to cash buyers and credit buyers;
1-39                 (2)  the documentary fee may not exceed $75 [$50] for a
1-40     motor vehicle retail installment contract or a reasonable amount
1-41     agreed to by the retail seller and retail buyer for a heavy
1-42     commercial vehicle retail installment contract; and
1-43                 (3)  the buyer's order and the retail installment
1-44     contract must include:
1-45                       (A)  a statement of the amount of the documentary
1-46     fee; and
1-47                       (B)  in reasonable proximity to the place in each
1-48     where the amount of the documentary fee is disclosed, the following
1-49     notice in type that is bold-faced, capitalized, underlined, or
1-50     otherwise conspicuously set out from surrounding written material:
1-51     "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE.  A DOCUMENTARY FEE IS
1-52     NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING
1-53     DOCUMENTS AND PERFORMING SERVICES RELATING TO THE CLOSING OF A
1-54     SALE.  A DOCUMENTARY FEE MAY NOT EXCEED $75 [$50] FOR A MOTOR
1-55     VEHICLE CONTRACT OR A REASONABLE AMOUNT AGREED TO BY THE PARTIES
1-56     FOR A HEAVY COMMERCIAL VEHICLE CONTRACT.  THIS NOTICE IS REQUIRED
1-57     BY LAW."
1-58           SECTION 3.  This Act takes effect immediately if it receives
1-59     a vote of two-thirds of all the members elected to each house, as
1-60     provided by Section 39, Article III, Texas Constitution.  If this
1-61     Act does not receive the vote necessary for immediate effect, this
1-62     Act takes effect September 1, 2001.
1-63                                  * * * * *