1-1     By:  Averitt (Senate Sponsor - Shapiro)               H.B. No. 2154
 1-2           (In the Senate - Received from the House May 11, 2001;
 1-3     May 11, 2001, read first time and referred to Committee on State
 1-4     Affairs; May 11, 2001, reported favorably by the following vote:
 1-5     Yeas 6, Nays 0; May 11, 2001, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to charges for default on a motor vehicle retail
 1-9     installment contract.
1-10           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-11           SECTION 1. Section 348.107, Finance Code, is amended to read
1-12     as follows:
1-13           Sec. 348.107.  CHARGE FOR DEFAULT IN PAYMENT OF INSTALLMENT.
1-14     (a)  A retail installment contract may provide that if an
1-15     installment remains unpaid after the 10th day after the maturity of
1-16     the installment for a heavy commercial vehicle or after the 15th
1-17     day after the maturity of the installment for any other motor
1-18     vehicle the holder may collect:
1-19                 (1)  a delinquency charge that does not exceed five
1-20     percent of the amount of the installment; or
1-21                 (2)  interest on the amount of the installment accruing
1-22     after the maturity of the installment and until the installment is
1-23     paid in full at a rate that does not exceed the maximum rate
1-24     authorized for the contract.
1-25           (b)  A retail installment contract that provides for the
1-26     accrual earnings method may provide for the delinquency charge
1-27     authorized by Subsection (a)(1), the interest authorized by
1-28     Subsection (a)(2), or both.
1-29           (c)  Only one delinquency charge may be collected on an
1-30     installment under this section regardless of the duration of the
1-31     default.
1-32           SECTION 2. The change in law made by this Act applies only to
1-33     a retail installment transaction entered into on or after the
1-34     effective date of this Act.  A retail installment transaction
1-35     entered into before the effective date of this Act is governed by
1-36     the law in effect when the retail installment transaction was
1-37     entered into, and the former law is continued in effect for that
1-38     purpose.
1-39           SECTION 3.  This Act takes effect immediately if it receives
1-40     a vote of two-thirds of all the members elected to each house, as
1-41     provided by Section 39, Article III, Texas Constitution.  If this
1-42     Act does not receive the vote necessary for immediate effect, this
1-43     Act takes effect September 1, 2001.
1-44                                  * * * * *