1-1     By:  Marchant (Senate Sponsor - Carona)               H.B. No. 2139
 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 10, 2001, reported favorably, as
 1-5     amended, by the following vote:  Yeas 7, Nays 0; May 10, 2001, sent
 1-6     to printer.)
 1-8           Amend H.B. 2139, House Engrossment, as follows:
 1-9                 (1)  On page 1, following line 54, insert the following
1-10     new paragraphs:
1-11                 "(f)  Any debt canceled pursuant to an agreement
1-12     authorized by Finance Code Section 348.208(e) by a retail seller
1-13     that is a dealer licensed under Chapter 503, Transportation Code,
1-14     or any affiliate of such retail seller, who extends credit under a
1-15     retail installment contract to a purchaser of a used motor vehicle
1-16     sold by the motor vehicle dealer, or an affiliate of such dealer
1-17     with a direct or indirect interest in the retail installment
1-18     contract, is entitled to credit or reimbursement for the motor
1-19     vehicle sales tax paid.  The dealer shall also be entitled to a
1-20     credit or reimbursement for motor vehicle sales tax paid on the
1-21     portion of the debt that has been determined to be worthless and
1-22     actually charged off for federal income tax purposes; or the
1-23     remaining unpaid balance of the sales price of the motor vehicle
1-24     after the motor vehicle is repossessed under a retail installment
1-25     contract or debt cancellation agreement.
1-26                 (g)  For purposes of subsection (f), affiliate means
1-27     any entity or entities that would be classified as a member of a
1-28     group under 26 U.S.C. Section 1504 or 1563."
1-29                            A BILL TO BE ENTITLED
1-30                                   AN ACT
1-31     relating to certain agreements under a retail installment contract
1-32     for the purchase of a motor vehicle.
1-34           SECTION 1. Section 348.208, Finance Code, is amended by
1-35     redesignating Subsection (c) as added by Chapter 1559, Acts of the
1-36     76th Legislature, Regular Session, 1999, as Subsection (d) and by
1-37     adding Subsection (e) to read as follows:
1-38           (d) [(c)]  Notwithstanding any other law, service contracts
1-39     sold by a retail seller of a motor vehicle to a retail buyer are
1-40     not subject to 1.14-1, Insurance Code.
1-41           (e)  A retail installment contract may include as a separate
1-42     charge an amount for a debt cancellation agreement or waiver by
1-43     which, if the motor vehicle is rendered a total loss, the holder
1-44     agrees to cancel indebtedness on the contract in an amount computed
1-45     by subtracting the proceeds of the retail buyer's basic collision
1-46     insurance policy on the motor vehicle from the amount remaining
1-47     unpaid under the contract.  In addition to other liability incurred
1-48     under the debt cancellation agreement or waiver, a holder may agree
1-49     to waive the deductible amount, if any, the retail buyer is
1-50     required to pay under the policy.  A debt cancellation agreement or
1-51     waiver included in a retail installment contract as provided by
1-52     this subsection is not insurance or an insurance product or service
1-53     and is not subject to regulation by the commissioner of insurance
1-54     or the Texas Department of Insurance.
1-55           SECTION 2.  This Act takes effect immediately if it receives
1-56     a vote of two-thirds of all the members elected to each house, as
1-57     provided by Section 39, Article III, Texas Constitution.  If this
1-58     Act does not receive the vote necessary for immediate effect, this
1-59     Act takes effect September 1, 2001.
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