| |
| |
| |
|
|
AN ACT
|
|
|
relating to debt cancellation agreements offered in connection with |
|
|
motor vehicle retail installment contracts. |
|
|
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
|
|
SECTION 1. Section 348.001, Finance Code, is amended by |
|
|
adding Subdivision (1-a) to read as follows: |
|
|
(1-a) "Debt cancellation agreement" means a retail |
|
|
installment contract term or a contractual arrangement modifying a |
|
|
retail installment contract term under which a retail seller or |
|
|
holder agrees to cancel all or part of an obligation of the retail |
|
|
buyer to repay an extension of credit from the retail seller or |
|
|
holder on the occurrence of the total loss or theft of the motor |
|
|
vehicle that is the subject of the retail installment contract but |
|
|
does not include an offer to pay a specified amount on the total |
|
|
loss or theft of the motor vehicle. |
|
|
SECTION 2. Section 348.005, Finance Code, is amended to |
|
|
read as follows: |
|
|
Sec. 348.005. ITEMIZED CHARGE. An amount in a retail |
|
|
installment contract is an itemized charge if the amount is not |
|
|
included in the cash price and is the amount of: |
|
|
(1) fees for registration, certificate of title, and |
|
|
license and any additional registration fees charged by a full |
|
|
service deputy under Section 502.114, Transportation Code; |
|
|
(2) any taxes; |
|
|
(3) fees or charges prescribed by law and connected |
|
|
with the sale or inspection of the motor vehicle; and |
|
|
(4) charges authorized for insurance, service |
|
|
contracts, [or] warranties, or a debt cancellation agreement by |
|
|
Subchapter C. |
|
|
SECTION 3. Subchapter B, Chapter 348, Finance Code, is |
|
|
amended by adding Section 348.124 to read as follows: |
|
|
Sec. 348.124. DEBT CANCELLATION AGREEMENTS. (a) In |
|
|
connection with a retail installment transaction under this |
|
|
chapter, a retail seller may offer to the retail buyer a debt |
|
|
cancellation agreement. The retail seller may not require that the |
|
|
purchase of a debt cancellation agreement by the retail buyer be |
|
|
made in order to enter into a retail installment transaction. |
|
|
(b) A debt cancellation agreement is not considered an |
|
|
insurance product. |
|
|
(c) The amount charged for a debt cancellation agreement |
|
|
made in connection with a retail installment contract must be |
|
|
reasonable. |
|
|
(d) In addition to other disclosures required by state or |
|
|
federal law, the retail seller shall provide to the retail buyer a |
|
|
separate notice in connection with the retail installment contract |
|
|
stating that the retail buyer is not required to accept or provide a |
|
|
debt cancellation agreement in order to purchase the motor vehicle |
|
|
under a retail installment contract. |
|
|
SECTION 4. Subsections (b) and (c), Section 348.208, |
|
|
Finance Code, are amended to read as follows: |
|
|
(b) A retail installment contract may include as a separate |
|
|
charge an amount for: |
|
|
(1) motor vehicle property damage or bodily injury |
|
|
liability insurance; |
|
|
(2) mechanical breakdown insurance; |
|
|
(3) participation in a motor vehicle theft protection |
|
|
plan; |
|
|
(4) insurance to reimburse the retail buyer for the |
|
|
amount computed by subtracting the proceeds of the buyer's basic |
|
|
collision policy on the motor vehicle from the amount owed on the |
|
|
vehicle if the vehicle has been rendered a total loss; [or] |
|
|
(5) a warranty or service contract relating to the |
|
|
motor vehicle; or |
|
|
(6) a debt cancellation agreement if the agreement is |
|
|
included as a term of a retail installment contract under Section |
|
|
348.124. |
|
|
(c) Notwithstanding any other law, service contracts and |
|
|
debt cancellation agreements sold by a retail seller of a motor |
|
|
vehicle to a retail buyer are not subject to Chapter 101 or 226, |
|
|
Insurance Code. |
|
|
SECTION 5. This Act takes effect September 1, 2009. |
|
|
|
|
|
|
| |
| |
| |
| |
______________________________ |
______________________________ |
| |
President of the Senate |
Speaker of the House |
| |
|
|
I hereby certify that S.B. No. 1966 passed the Senate on |
|
|
April 16, 2009, by the following vote: Yeas 31, Nays 0; and that |
|
|
the Senate concurred in House amendment on May 12, 2009, by the |
|
|
following vote: Yeas 31, Nays 0. |
|
|
|
| |
| |
______________________________ |
| |
Secretary of the Senate |
| |
|
|
I hereby certify that S.B. No. 1966 passed the House, with |
|
|
amendment, on April 30, 2009, by the following vote: Yeas 144, |
|
|
Nays 0, one present not voting. |
|
|
|
| |
| |
______________________________ |
| |
Chief Clerk of the House |
| |
|
|
|
| |
|
|
Approved: |
|
|
|
|
|
______________________________ |
|
|
Date |
|
|
|
|
|
|
|
|
______________________________ |
|
|
Governor |