By:  Averitt                                                      S.B. No. 1430


A BILL TO BE ENTITLED

AN ACT

relating to additional interest for default on certain secondary 
mortgage loans.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:                        
	SECTION 1.  The heading of Section 342.302, Finance Code, is 
amended to read as follows:
	Sec. 342.302.  ADDITIONAL INTEREST FOR DEFAULT: REGULAR 
TRANSACTION OR TRANSACTION INCLUDING SIMPLE INTEREST.
	SECTION 2.  Section 342.302, Finance Code, is amended by 
amending Subsection (c) and adding Subsection (e) to read as 
follows:
	(c)  The additional interest for default under this section
may not exceed five cents for each $1 of a scheduled installment.
	(e)  A secondary mortgage loan that includes simple interest 
may provide for additional interest for default if any part of an 
installment remains unpaid after the 10th day after the date on 
which the installment is due, including Sundays and holidays.
	SECTION 3.  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.