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78R7095 DWS-F

By:  Howard                                                       H.B. No. 1916



A BILL TO BE ENTITLED

AN ACT

relating to a prepayment penalty on a commercial loan.                        
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  Section 306.005, Finance Code, is amended to 
read as follows:    
	Sec. 306.005.  PREPAYMENT PENALTY.  A creditor and an 
obligor may agree to a reasonable prepayment penalty in a loan 
subject to this chapter.  A prepayment penalty is not interest.
	SECTION 2.  This Act takes effect immediately if it receives 
a vote of two-thirds of all the members elected to each house, as 
provided by Section 39, Article III, Texas Constitution.  If this 
Act does not receive the vote necessary for immediate effect, this 
Act takes effect September 1, 2003.