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A BILL TO BE ENTITLED
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AN ACT
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relating to a documentary fee included in the principal balance of a |
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retail installment contract for the purchase of a motor vehicle. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Sections 348.006(a) and (c), Finance Code, are |
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amended to read as follows: |
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(a) The principal balance under a retail installment |
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contract is computed by: |
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(1) adding: |
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(A) the cash price of the motor vehicle; |
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(B) each amount included in the retail |
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installment contract for an itemized charge; and |
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(C) subject to Subsection (c), a documentary fee |
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for services rendered for or on behalf of the retail buyer in |
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preparing, handling, and processing documents and complying with |
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federal and state statutes, rules, and regulations, including those |
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regarding privacy, security safeguards, and reporting |
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requirements, relating to the motor vehicle and to the closing of |
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the retail installment transaction; and |
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(2) subtracting from the results under Subdivision (1) |
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the amount of the retail buyer's down payment in money, goods, or |
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both. |
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(c) For a documentary fee to be included in the principal |
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balance of a retail installment contract: |
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(1) the retail seller must charge the documentary fee |
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to cash buyers and credit buyers; |
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(2) the documentary fee may not exceed $100 [$50] for a |
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motor vehicle retail installment contract or a reasonable amount |
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agreed to by the retail seller and retail buyer for a heavy |
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commercial vehicle retail installment contract; and |
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(3) the buyer's order and the retail installment |
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contract must include: |
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(A) a statement of the amount of the documentary |
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fee; and |
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(B) in reasonable proximity to the place in each |
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where the amount of the documentary fee is disclosed, the following |
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notice in type that is bold-faced, capitalized, underlined, or |
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otherwise conspicuously set out from surrounding written material: |
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"A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A DOCUMENTARY FEE |
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IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING |
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DOCUMENTS AND PERFORMING SERVICES RELATING TO THE CLOSING OF A |
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SALE. A DOCUMENTARY FEE MAY NOT EXCEED $100 [$50] FOR A MOTOR |
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VEHICLE CONTRACT OR A REASONABLE AMOUNT AGREED TO BY THE PARTIES FOR |
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A HEAVY COMMERCIAL VEHICLE CONTRACT. THIS NOTICE IS REQUIRED BY |
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LAW." |
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SECTION 2. The change in law made by this Act applies only |
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to a retail installment contract entered into on or after the |
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effective date of this Act. A retail installment contract entered |
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into before the effective date of this Act is governed by the law in |
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effect when the retail installment contract is entered into, and |
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the former law is continued in effect for that purpose. |
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SECTION 3. This Act takes effect immediately if it receives |
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a vote of two-thirds of all the members elected to each house, as |
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provided by Section 39, Article III, Texas Constitution. If this |
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Act does not receive the vote necessary for immediate effect, this |
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Act takes effect September 1, 2007. |