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


Office of House Bill AnalysisC.S.H.B. 1510
By: Marchant
Financial Institutions
5/4/1999
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Currently, Chapter 349 (Motor Vehicle Installment Sales), Finance Code,
authorizes 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" includes an automobile, truck, truck tractor,
trailer, semitrailer, or bus, and a commercial vehicle or heavy commercial
vehicle.  This fee is 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.  C.S.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.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute modifies the original bill in SECTION 1 by prohibiting 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.  The
original bill prohibited the documentary fee from exceeding $50 for a motor
vehicle or $250 for a heavy commercial vehicle.  The substitute also
modifies the original bill by making conforming changes to the required
notice.