HBA-TYH H.B. 1510 76(R)BILL ANALYSIS


Office of House Bill AnalysisH.B. 1510
By: Marchant
Financial Institutions
6/3/1999
Enrolled



BACKGROUND AND PURPOSE 

Prior to the 76th Legislature, Chapter 349 (Motor Vehicle Installment
Sales), Finance Code, authorized a documentary fee that may not exceed $50
to be included in the principal balance of a retail installment contract
for the sale of a motor vehicle.  "Motor vehicle" included an automobile,
truck, truck tractor, trailer, semitrailer, or bus, and a commercial
vehicle or heavy commercial vehicle.  This fee was intended to compensate
the retail seller for services rendered for or on behalf of the retail
buyer in preparing, handling, and processing documents relating to the
motor vehicle and to the closing of the retail installment transaction. 

The majority of motor vehicle retail installment transactions in Texas
involve the sale of automobiles and light trucks to consumers for personal,
or family use.  Few transactions involve heavy commercial vehicles.
However, many buyers of commercial vehicles are corporations, and it is
common that multiple units of trucks and trailers may be purchased at one
time, such that the total contract price is several hundred thousand
dollars, or more.  The time and paperwork included in documenting a heavy
commercial vehicle transaction is more extensive than that which is
required in an automobile transaction.  H.B 1510 authorizes a documentary
fee of $50 for a motor vehicle retail installment contract or a reasonable
amount agreed to by the retail seller and retail buyer for a heavy
commercial vehicle retail installment contract. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Section 348.006(c), Finance Code, to prohibit the
documentary fee from exceeding $50 for a motor vehicle retail installment
contract or a reasonable amount agreed to by the retail seller and retail
buyer for a heavy commercial vehicle retail installment contract.  Makes a
conforming change. 

SECTION 2.  Effective date: September 1, 1999.

SECTION 3.  Emergency clause.