Texas 2017 - 85th Regular

Texas House Bill HB2339 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Thompson of Harris H.B. No. 2339
2		-	(Senate Sponsor - Zaffirini)
3		-	(In the Senate - Received from the House May 5, 2017;
4		-	May 5, 2017, read first time and referred to Committee on Business &
5		-	Commerce; May 17, 2017, reported favorably by the following vote:
6		-	Yeas 8, Nays 0; May 17, 2017, sent to printer.)
7		-	Click here to see the committee vote
	1	+	H.B. No. 2339
8	2
9	3
10		-	A BILL TO BE ENTITLED
11	4		AN ACT
12	5		relating to trade-in credit agreements offered in connection with
13	6		certain motor vehicle retail installment contracts.
14	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
15	8		SECTION 1. Section 348.001, Finance Code, is amended by
16	9		adding Subdivision (11) to read as follows:
17	10		(11) "Trade-in credit agreement" means a contractual
18	11		arrangement under which a retail seller agrees to provide a
19	12		specified amount as a motor vehicle trade-in credit for the
20	13		diminished value of the motor vehicle that is the subject of the
21	14		retail installment contract in connection with which the trade-in
22	15		credit agreement is offered if the motor vehicle is damaged but not
23	16		rendered a total loss as a result of a collision accident, with the
24	17		credit to be applied toward the purchase or lease of a different
25	18		motor vehicle from the retail seller or an affiliate of the retail
26	19		seller. A trade-in credit agreement is a separate agreement from a
27	20		retail installment contract and is not a term of the retail
28	21		installment contract.
29	22		SECTION 2. Section 348.005, Finance Code, is amended to
30	23		read as follows:
31	24		Sec. 348.005. ITEMIZED CHARGE. An amount in a retail
32	25		installment contract is an itemized charge if the amount is not
33	26		included in the cash price and is the amount of:
34	27		(1) fees for registration, certificate of title, and
35	28		license and any additional registration fees charged by a deputy as
36	29		authorized by rules adopted under Section 520.0071, Transportation
37	30		Code;
38	31		(2) any taxes;
39	32		(3) fees or charges prescribed by law and connected
40	33		with the sale or inspection of the motor vehicle; and
41	34		(4) charges authorized for insurance, service
42	35		contracts, warranties, automobile club memberships, trade-in
43	36		credit agreements, or a debt cancellation agreement by Subchapter
44	37		C.
45	38		SECTION 3. Subchapter B, Chapter 348, Finance Code, is
46	39		amended by adding Section 348.125 to read as follows:
47	40		Sec. 348.125. TRADE-IN CREDIT AGREEMENTS OFFERED IN
48	41		CONNECTION WITH RETAIL INSTALLMENT CONTRACTS. (a) A retail seller
49	42		may, at the time a retail installment contract is executed, offer to
50	43		sell to a retail buyer a trade-in credit agreement or similarly
51	44		named agreement.
52	45		(b) A trade-in credit agreement is not considered an
53	46		insurance product.
54	47		(c) To ensure the faithful performance of a retail seller's
55	48		obligations to a retail buyer under a trade-in credit agreement,
56	49		the retail seller must be insured under a contractual liability
57	50		reimbursement policy approved by the commissioner of insurance and
58	51		issued for the benefit of Texas residents.
59	52		(d) In addition to other disclosures required by state or
60	53		federal law, if a retail seller offers to a retail buyer a trade-in
61	54		credit agreement, the retail seller shall give the retail buyer at
62	55		the time the retail installment contract is executed a copy of the
63	56		written trade-in credit agreement and written notice that the
64	57		retail buyer:
65	58		(1) is not required to purchase the trade-in credit
66	59		agreement as a condition for approval of the retail installment
67	60		contract;
68	61		(2) is entitled to cancel the trade-in credit
69	62		agreement before the 31st day after the date the retail installment
70	63		contract is executed and receive a full refund;
71	64		(3) may terminate the trade-in credit agreement at any
72	65		time on or after the 31st day after the date the retail installment
73	66		contract is executed and receive a pro rata refund minus any
74	67		applicable cancellation fee which may not exceed $50; and
75	68		(4) has been provided a clear and concise disclosure
76	69		of the amount of the credit available during the term of the
77	70		trade-in credit agreement.
78	71		(e) The amount charged for a trade-in credit agreement
79	72		offered in connection with a retail installment contract may not
80	73		exceed five percent of the cash price of the motor vehicle that is
81	74		the subject of the retail installment contract, including any
82	75		attached accessories and excluding the price of services related to
83	76		the sale, the price of service contracts, taxes, and fees for
84	77		license, title, and registration.
85	78		(f) A trade-in credit agreement must require the retail
86	79		buyer to provide proof of insurance settlement documents in order
87	80		to obtain the credit. A trade-in credit agreement may not require
88	81		the retail buyer to provide any other documentation in order to
89	82		obtain the credit.
90	83		(g) If a retail seller enters a trade-in credit agreement
91	84		with a retail buyer, the retail seller must comply with the terms of
92	85		the trade-in credit agreement in connection with the purchase or
93	86		lease of a subsequent motor vehicle. A retail seller must provide
94	87		any credit required under a trade-in credit agreement at the time of
95	88		the purchase or lease of a subsequent motor vehicle.
96	89		(h) The benefit to be provided in connection with a trade-in
97	90		credit agreement must bear a reasonable relationship to the amount
98	91		charged for the trade-in credit agreement and the amount, term, and
99	92		conditions of the retail installment contract.
100	93		SECTION 4. Sections 348.208(b) and (c), Finance Code, are
101	94		amended to read as follows:
102	95		(b) A retail installment contract may include as a separate
103	96		charge an amount for:
104	97		(1) motor vehicle property damage or bodily injury
105	98		liability insurance;
106	99		(2) mechanical breakdown insurance;
107	100		(3) participation in a motor vehicle theft protection
108	101		plan;
109	102		(4) insurance to reimburse the retail buyer for the
110	103		amount computed by subtracting the proceeds of the buyer's basic
111	104		collision policy on the motor vehicle from the amount owed on the
112	105		vehicle if the vehicle has been rendered a total loss;
113	106		(5) a warranty or service contract relating to the
114	107		motor vehicle;
115	108		(6) an identity recovery service contract; [or]
116	109		(7) a debt cancellation agreement if the agreement is
117	110		included as a term of a retail installment contract under Section
118	111		348.124; or
119	112		(8) a trade-in credit agreement.
120	113		(c) Notwithstanding any other law, service contracts, [and]
121	114		debt cancellation agreements, and trade-in credit agreements sold
122	115		by a retail seller of a motor vehicle to a retail buyer are not
123	116		subject to Chapter 101 or 226, Insurance Code.
124	117		SECTION 5. This Act takes effect September 1, 2017.
125		-	* * * * *
	118	+	______________________________ ______________________________
	119	+	President of the Senate Speaker of the House
	120	+	I certify that H.B. No. 2339 was passed by the House on May 4,
	121	+	2017, by the following vote: Yeas 143, Nays 0, 2 present, not
	122	+	voting.
	123	+	______________________________
	124	+	Chief Clerk of the House
	125	+	I certify that H.B. No. 2339 was passed by the Senate on May
	126	+	24, 2017, by the following vote: Yeas 31, Nays 0.
	127	+	______________________________
	128	+	Secretary of the Senate
	129	+	APPROVED: _____________________
	130	+	Date
	131	+	_____________________
	132	+	Governor