By Marchant                                           H.B. No. 2139
         77R6324 DWS-F                           
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to certain agreements under a retail installment contract
 1-3     for the purchase of a motor vehicle.
 1-5           SECTION 1. Section 348.208, Finance Code, is amended by
 1-6     redesignating Subsection (c) as added by Chapter 1559, Acts of the
 1-7     76th Legislature, Regular Session, 1999, as Subsection (d) and by
 1-8     adding Subsection (e) to read as follows:
 1-9           (d) [(c)]  Notwithstanding any other law, service contracts
1-10     sold by a retail seller of a motor vehicle to a retail buyer are
1-11     not subject to 1.14-1, Insurance Code.
1-12           (e)  A retail installment contract may include as a separate
1-13     charge an amount for a debt cancellation agreement or waiver by
1-14     which, if the motor vehicle is rendered a total loss, the holder
1-15     agrees to cancel indebtedness on the contract in an amount computed
1-16     by subtracting the proceeds of the retail buyer's basic collision
1-17     insurance policy on the motor vehicle from the amount remaining
1-18     unpaid under the contract.  In addition to other liability incurred
1-19     under the debt cancellation agreement or waiver, a holder may agree
1-20     to waive the deductible amount, if any, the retail buyer is
1-21     required to pay under the policy.  A debt cancellation agreement or
1-22     waiver included in a retail installment contract as provided by
1-23     this subsection is not insurance or an insurance product or service
1-24     and is not subject to regulation by the commissioner of insurance
 2-1     or the Texas Department of Insurance.
 2-2           SECTION 2.  This Act takes effect immediately if it receives
 2-3     a vote of two-thirds of all the members elected to each house, as
 2-4     provided by Section 39, Article III, Texas Constitution.  If this
 2-5     Act does not receive the vote necessary for immediate effect, this
 2-6     Act takes effect September 1, 2001.