By:  Carona                                            S.B. No. 567
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                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.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 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, as Subsection (d) and by adding
 1-8     Subsection (e), to read as follows:
 1-9           (e)  A retail installment contract may include as a separate
1-10     charge an amount for a debt cancellation agreement or waiver by
1-11     which, in the event that the vehicle has been rendered a total
1-12     loss, the holder of the contract agrees to cancel the indebtedness
1-13     on the contract in an amount computed by subtracting the proceeds
1-14     of the buyer's basic collision policy on the motor vehicle from the
1-15     amount remaining unpaid under the contract.  In addition to other
1-16     liability incurred under a debt cancellation contract or waiver
1-17     included in a contract under this subsection, a seller or holder
1-18     may agree to waive the deductible amount, if any, the buyer is
1-19     required to pay under the buyer's personal auto policy.  A debt
1-20     cancellation contract or waiver included in a contract as provided
1-21     by this subsection is not insurance or an insurance product or
1-22     service and is not subject to regulation by the commissioner of
1-23     insurance or the Texas Department of Insurance.
 2-1           SECTION 2.  This Act takes effect immediately if it receives
 2-2     a vote of two-thirds of all the members elected to each house, as
 2-3     provided by Section 39, Article III, Texas Constitution.  If this
 2-4     Act does not receive the vote necessary for immediate effect, this
 2-5     Act takes effect September 1, 2001.