By:  Carona                                           S.B. No. 1075
         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 retail installment contracts.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 348.107 Finance Code is amended to read
 1-5     as follows:
 1-6           Sec. 348.107.  CHARGE FOR DEFAULT IN PAYMENT OF INSTALLMENT.
 1-7     (a)  A retail installment contract may provide that if an
 1-8     installment remains unpaid after the 10th day after the maturity of
 1-9     the installment for a heavy commercial vehicle or after the 15th
1-10     day after the maturity of the installment for any other motor
1-11     vehicle the holder may collect:
1-12                 (1)  a delinquency charge that does not exceed five
1-13     percent of the amount of the installment; or
1-14                 (2)  interest on the amount of the installment accruing
1-15     after the maturity of the installment and until paid in full at a
1-16     rate that does not exceed the maximum rate authorized for the
1-17     contract.
1-18           (b)  A retail installment contract that provides for the
1-19     accrual earnings method may provide for:
1-20                 (1)  the charges authorized in (a)(1) of this section;
1-21                 (2)  the interest authorized in (a)(2) of this section;
1-22     or
1-23                 (3)  both (1) and (2).
 2-1           (c)  Only one delinquency charge may be collected on an
 2-2     installment under this section regardless of the duration of the
 2-3     default.
 2-4           SECTION 2.  This Act takes effect immediately if it receives
 2-5     a vote of two-thirds of all the members elected to each house, as
 2-6     provided by Section 39, Article III, Texas Constitution.  If this
 2-7     Act does not receive the vote necessary for immediate effect, this
 2-8     Act takes effect September 1, 2001.