1-1 By: Armbrister S.B. No. 1836 1-2 (In the Senate - Filed May 3, 2001; May 4, 2001, read first 1-3 time and referred to Committee on State Affairs; May 9, 2001, 1-4 reported favorably by the following vote: Yeas 8, Nays 0; 1-5 May 9, 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 1-33 to 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 * * * * *