H.B. No. 2559
 
 
 
 
AN ACT
  relating to commercial motor vehicle installment sales.
         BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
         SECTION 1.  Section 14.107(b), Finance Code, is amended to
  read as follows:
         (b)  The finance commission by rule shall set the fees for
  licensing and examination, as applicable, under Chapter 342, 347,
  348, 351, 353, or 371 at amounts or rates necessary to recover the
  costs of administering those chapters.  The rules may provide that
  the amount of a fee charged to a license holder is based on the
  volume of the license holder's regulated business and other key
  factors.  The commissioner may provide for collection of a single
  annual fee from a person licensed under Chapter 342, 347, 348, 351,
  or 371 to include amounts due for both licensing and examination.
         SECTION 2.  Sections 303.001(b) and (c), Finance Code, are
  amended to read as follows:
         (b)  A contract that is subject to Chapter 342, 345, 347,
  [or] 348, or 353, including a contract for an open-end account, may,
  as an alternative to an interest rate or amount of time price
  differential allowed under that chapter, provide for a simple or
  precomputed rate or amount of time price differential that does not
  exceed the applicable ceiling provided by this chapter or by the
  equivalent yield authorized by Chapter 342, 345, 347, [or] 348, or
  353.
         (c)  Except as inconsistent with this chapter, a party to a
  contract that is subject to Chapter 342, 345, 347, [or] 348, or 353,
  or the party's assignee, has all rights, duties, and obligations
  under the applicable chapter, including those relating to refund
  credits on prepayment or acceleration.
         SECTION 3.  Section 303.002, Finance Code, is amended to
  read as follows:
         Sec. 303.002.  WEEKLY CEILING. The parties to a written
  agreement may agree to an interest rate, or in an agreement
  described by Chapter 345, 347, [or] 348, or 353, an amount of time
  price differential producing a rate, that does not exceed the
  applicable weekly ceiling.
         SECTION 4.  Section 303.402(a), Finance Code, is amended to
  read as follows:
         (a)  A person who contracts for, charges, or receives under a
  contract subject to Chapter 342, 345, 346, 347, [or] 348, or 353,
  including a contract for an open-end account, a rate or amount of
  time price differential that exceeds the maximum applicable rate or
  amount authorized by the applicable chapter or this chapter is
  subject to a penalty for that violation determined under Chapter
  349.
         SECTION 5.  Section 307.051(f), Finance Code, is amended to
  read as follows:
         (f)  Collateral protection insurance does not include
  insurance coverage that:
               (1)  is purchased by the creditor for which the debtor
  is not charged;
               (2)  is purchased at the inception of a credit
  transaction in which the debtor is a party or to which the debtor
  agrees, whether or not costs are included in a payment plan under
  the credit transaction;
               (3)  is maintained by the creditor for the protection
  of collateral that comes into the possession or control of the
  creditor through foreclosure, repossession, or a similar event;
               (4)  is credit insurance, mortgage protection
  insurance, insurance issued to cover the life or health of the
  debtor, or any other insurance maintained to cover the inability or
  failure of the debtor to make payment under the credit agreement;
               (5)  is title insurance;
               (6)  is flood insurance required to be placed by
  creditors under Section 102, National Flood Insurance Act of 1968
  (42 U.S.C. Section 4012a); or
               (7)  is insurance on a commercial vehicle securing a
  retail installment contract under Chapter 353 [348].
         SECTION 6.  Section 341.502(a), Finance Code, is amended to
  read as follows:
         (a)  A contract for a loan under Chapter 342, a retail
  installment transaction under Chapter 348 [other than a contract
  for a commercial vehicle], or a home equity loan regulated by the
  Office of Consumer Credit Commissioner must be:
               (1)  written in plain language designed to be easily
  understood by the average consumer; and
               (2)  printed in an easily readable font and type size.
         SECTION 7.  Section 348.001(1-a), Finance Code, as added by
  Chapter 238 (S.B. 1965), Acts of the 81st Legislature, Regular
  Session, 2009, and Section 348.001(2), Finance Code, are amended to
  read as follows:
               (1-a) "Commercial vehicle" has the meaning assigned by
  Section 353.001 [means a motor vehicle that is not used primarily
  for personal, family, or household use.   The term includes:
                     [(A)     a motor vehicle with a gross vehicular
  weight of 10,001 pounds or more;
                     [(B)     a motor vehicle that will be owned by a
  corporation, limited liability company, limited partnership, or
  other business entity formed, organized, or registered in this
  state, another state, or another country; and
                     [(C)     a motor vehicle that will be part of a fleet
  of five or more vehicles owned by the same person].
               (2)  "Heavy commercial vehicle" has the meaning
  assigned by Section 353.001 [means:
                     [(A)  a truck or truck tractor that:
                           [(i)     has a gross vehicular weight of 19,000
  pounds or more; and
                           [(ii)     is not used primarily for personal,
  family, or household use; or
                     [(B)     a trailer or semitrailer designed for use in
  combination with a vehicle described by Paragraph (A)].
         SECTION 8.  Section 348.0015(a), Finance Code, is amended to
  read as follows:
         (a)  A motor vehicle that is not described by Section
  353.001(1)(A) [348.001(1-a)(A)], (B), or (C) or a motor vehicle
  that is of a type typically used for personal, family, or household
  use, as determined by finance commission rule, is presumed not to be
  a commercial vehicle.
         SECTION 9.  Section 348.006(c), Finance Code, is amended to
  read as follows:
         (c)  For a documentary fee to be included in the principal
  balance of a retail installment contract:
               (1)  the retail seller must charge the documentary fee
  to cash buyers and credit buyers;
               (2)  the documentary fee may not exceed[:
                     [(A)     for a motor vehicle retail installment
  contract other than a contract for a commercial vehicle,] a
  reasonable amount agreed to by the retail seller and retail buyer
  for the documentary services; [or
                     [(B)     for a commercial vehicle retail installment
  contract, an amount agreed to in writing by the retail seller and
  retail buyer;] and
               (3)  [except for a buyer's order or retail installment
  contract for a commercial vehicle,] the buyer's order and the
  retail installment contract must include:
                     (A)  a statement of the amount of the documentary
  fee; and
                     (B)  in reasonable proximity to the place in each
  where the amount of the documentary fee is disclosed, the following
  notice in type that is bold-faced, capitalized, underlined, or
  otherwise conspicuously set out from surrounding written material:
         "A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE.  A DOCUMENTARY FEE
  IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS FOR HANDLING
  DOCUMENTS RELATING TO THE SALE.  A DOCUMENTARY FEE MAY NOT EXCEED A
  REASONABLE AMOUNT AGREED TO BY THE PARTIES.  THIS NOTICE IS REQUIRED
  BY LAW."
         SECTION 10.  Section 348.007, Finance Code, is amended by
  adding Subsection (d) to read as follows:
         (d)  A retail installment transaction in which a retail buyer
  purchases a motor vehicle that is a commercial vehicle is not
  subject to this chapter and is subject to Chapter 353 if the retail
  installment contract states that Chapter 353 applies.
         SECTION 11.  Sections 348.104(b) and (c), Finance Code, are
  amended to read as follows:
         (b)  The add-on charge is $7.50 per $100 per year on the
  principal balance for  a new motor vehicle[, other than a heavy
  commercial vehicle,] designated by the manufacturer by a model year
  that is not earlier than the year in which the sale is made.
         (c)  The add-on charge is $10 per $100 per year on the
  principal balance for:
               (1)  a new motor vehicle not covered by Subsection (b);
  or
               (2)  a used motor vehicle designated by the
  manufacturer by a model year that is not more than two years before
  the year in which the sale is made[; or
               [(3)     a new or used heavy commercial vehicle designated
  by the manufacturer by a model year that is not more than two years
  before the year in which the sale is made].
         SECTION 12.  Section 348.107(a), Finance Code, is amended to
  read as follows:
         (a)  A retail installment contract may provide that if an
  installment remains unpaid after the [10th day after the maturity
  of the installment for a heavy commercial vehicle or after the] 15th
  day after the maturity of the installment [for any other motor
  vehicle] the holder may collect:
               (1)  a delinquency charge that does not exceed five
  percent of the amount of the installment; or
               (2)  interest on the amount of the installment accruing
  after the maturity of the installment and until the installment is
  paid in full at a rate that does not exceed the maximum rate
  authorized for the contract.
         SECTION 13.  Section 348.109, Finance Code, is amended to
  read as follows:
         Sec. 348.109.  ACCELERATION OF DEBT MATURITY. A retail
  installment contract may not authorize the holder to accelerate the
  maturity of all or a part of the amount owed under the contract
  unless:
               (1)  the retail buyer is in default in the performance
  of any of the buyer's obligations; or
               (2)  the holder believes in good faith that the
  prospect of buyer's payment or performance is impaired[; or
               [(3)     if the retail installment contract is for a
  commercial vehicle, the retail buyer or an affiliate of the retail
  buyer is in default in its obligations under another financing
  agreement or leasing agreement held by the same holder or an
  affiliate of the holder].
         SECTION 14.  Section 348.120(b), Finance Code, is amended to
  read as follows:
         (b)  On a contract for a motor vehicle [other than a heavy
  commercial vehicle] the minimum amount of the refund credit is
  computed by:
               (1)  subtracting an acquisition cost of $25 from the
  original time price differential; and
               (2)  multiplying the amount computed under Subdivision
  (1) by the percentage of refund computed under Subsection (d).
         SECTION 15.  Section 348.213(b), Finance Code, is amended to
  read as follows:
         (b)  A policy of insurance described by Subsection (a) must
  comply with the applicable requirements of Sections 348.201,
  348.203, [and] 348.208, and[, except if the policy relates to a
  retail installment contract for a commercial vehicle, Section]
  348.209.
         SECTION 16.  Section 348.413(b), Finance Code, is amended to
  read as follows:
         (b)  The holder may charge for the transfer of equity an
  amount that does not exceed[:
               [(1)]  $25 [for a motor vehicle that is not a heavy
  commercial vehicle; or
               [(2)  $50 for a heavy commercial vehicle].
         SECTION 17.  Subtitle B, Title 4, Finance Code, is amended by
  adding Chapter 353 to read as follows:
  CHAPTER 353.  COMMERCIAL MOTOR VEHICLE INSTALLMENT SALES
  SUBCHAPTER A.  GENERAL PROVISIONS
         Sec. 353.001.  DEFINITIONS.  In this chapter:
               (1)  "Commercial vehicle" means a motor vehicle that is
  not used primarily for personal, family, or household use. The term
  includes:
                     (A)  a motor vehicle with a gross vehicular weight
  of 10,001 pounds or more;
                     (B)  a motor vehicle that will be owned by a
  corporation, limited liability company, limited partnership, or
  other business entity formed, organized, or registered in this
  state, another state, or another country; and
                     (C)  a motor vehicle that will be part of a fleet
  of five or more vehicles owned by the same person.
               (2)  "Debt cancellation agreement" means an agreement
  of the holder of the retail installment contract to waive:
                     (A)  all or part of the difference between the
  amount owed under a retail installment contract and the amount paid
  under a physical damage insurance policy maintained by the retail
  buyer or its assign, in the event of a total loss or theft of the
  commercial vehicle;
                     (B)  all or part of the amount owed under the
  retail installment contract, in the event of the death of the retail
  buyer; or
                     (C)  one or more payments owed under the retail
  installment contract, in the event of the disability of the retail
  buyer.
               (3)  "Heavy commercial vehicle" means:
                     (A)  a commercial vehicle that has a gross
  vehicular weight of 19,000 pounds or more;  or
                     (B)  a trailer or semitrailer designed for use in
  combination with a vehicle described by Paragraph (A).
               (4)  "Holder" means a person who is:
                     (A)  a retail seller; or
                     (B)  the assignee or transferee of a retail
  installment contract.
               (5)  "Motor vehicle" has the meaning assigned by
  Section 348.001.
               (6)  "Precomputed earnings method" means a method of
  computing the time price differential in which the time price
  differential is computed at the inception of the contract based on
  the principal balance for the full contract term, as if the
  principal balance under the contract will not decline over the term
  of the contract, and in which the retail buyer agrees to pay the
  total of payments that includes both the principal balance of the
  contract and the time price differential.
               (7)  "Retail buyer" means a person who purchases or
  agrees to purchase a commercial vehicle from a retail seller in a
  retail installment transaction.
               (8)  "Retail installment contract" means one or more
  instruments entered into in this state that evidence a retail
  installment transaction. The term includes a security agreement and
  a document that evidences a bailment or lease described by Section
  353.003.
               (9)  "Retail installment transaction" means a
  transaction in which a retail buyer purchases a commercial vehicle
  from a retail seller other than principally for the purpose of
  resale and agrees with the retail seller to pay part or all of the
  cash price in one or more deferred installments.
               (10)  "Retail seller" means a person in the business of
  selling commercial vehicles to retail buyers in retail installment
  transactions.
               (11)  "Scheduled installment earnings method" means a
  method of computing the time price differential by applying a daily
  rate to the unpaid principal balance as if each scheduled payment
  will be paid on the payment's scheduled installment date.
               (12)  "Time price differential" means the total amount
  added to the principal balance to determine the balance of the
  retail buyer's indebtedness under a retail installment contract.
               (13)  "True daily earnings method" means a method of
  computing the time price differential by applying a daily rate to
  the unpaid principal balance based on the actual payment date as
  provided by Section 353.016.
         Sec. 353.002.  PRESUMPTION REGARDING NONCOMMERCIAL
  VEHICLES; EXCEPTION.  (a)  A motor vehicle that is not described by
  Section 353.001(1)(A), (B), or (C) or a motor vehicle that is of a
  type typically used for personal, family, or household use, as
  determined by finance commission rule, is presumed not to be a
  commercial vehicle.
         (b)  Notwithstanding Subsection (a), if a retail buyer
  represents in writing that a motor vehicle is not for personal,
  family, or household use, or that the vehicle is for commercial use,
  a retail seller or holder may rely on that representation unless the
  retail seller or holder, as applicable, has actual knowledge that
  the representation is not true.
         Sec. 353.003.  BAILMENT OR LEASE AS RETAIL INSTALLMENT
  TRANSACTION. (a)  A bailment or lease of a commercial vehicle is a
  retail installment transaction if the bailee or lessee:
               (1)  contracts to pay as compensation for use of the
  vehicle an amount that is substantially equal to or exceeds the
  value of the vehicle; and
               (2)  on full compliance with the bailment or lease is
  bound to become the owner or, for no or nominal additional
  consideration, has the option to become the owner of the vehicle.
         (b)  An agreement for the lease of a commercial vehicle does
  not create a retail installment transaction by merely providing
  that the rental price is permitted or required to be adjusted under
  the agreement as determined by the amount realized on the sale or
  other disposition of the vehicle, as provided by Section 501.112,
  Transportation Code.
         Sec. 353.004.  CLASSIFICATION AS RETAIL INSTALLMENT
  TRANSACTION UNAFFECTED.  A transaction is not excluded as a retail
  installment transaction because:
               (1)  the retail seller arranges to transfer the retail
  buyer's obligation;
               (2)  the amount of any charge in the transaction is
  determined by reference to a chart or other information furnished
  by a financing institution;
               (3)  a form for all or part of the retail installment
  contract is furnished by a financing institution; or
               (4)  the credit standing of the retail buyer is
  evaluated by a financing institution.
         Sec. 353.005.  CASH PRICE.  (a)  The cash price is the price
  at which the retail seller offers in the ordinary course of business
  to sell for cash the goods or services that are subject to the
  transaction.  An advertised price does not necessarily establish a
  cash price.
         (b)  The cash price does not include any finance charge.
         (c)  At the retail seller's option, the cash price may
  include:
               (1)  the price of accessories;
               (2)  the price of services related to the sale;
               (3)  the price of service contracts;
               (4)  taxes; and
               (5)  fees for license, title, and registration.
         Sec. 353.006.  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 commercial vehicle;
               (4)  charges authorized for insurance, service
  contracts, and warranties by Subchapter C; and
               (5)  advances or payments authorized under Section
  353.402(b) or (c) made by the retail seller to or for the benefit of
  the retail buyer.
         Sec. 353.007.  ADDITIONAL CHARGES PERMITTED.  (a)  In
  addition to the amounts allowed under Sections 353.005 and 353.006,
  the following amounts may be included as an itemized charge or in
  the cash price in a retail installment contract for a commercial
  vehicle:
               (1)  any fees prescribed by law;
               (2)  any amounts charged by a titling or registration
  service relating to the sale;
               (3)  any other amount agreed to by the retail buyer and
  retail seller, including amounts payable to the retail seller or
  another person for the provision of goods or services relating to:
                     (A)  the commercial vehicle;
                     (B)  the sale or use of the commercial vehicle; or
                     (C)  the retail buyer's business in which the
  commercial vehicle will be used; and
               (4)  an amount paid to the retail seller or other person
  as consideration for a debt cancellation agreement.
         (b)  If a charge for a debt cancellation agreement is
  included in the contract, the contract and debt cancellation
  agreement must each conspicuously disclose that the debt
  cancellation agreement is optional.
         (c)  Notwithstanding any other law, a charge for a debt
  cancellation agreement is not a charge for insurance, and the sale,
  provision, or waiving of a balance owed or other action relating to
  a debt cancellation agreement is not considered insurance or
  engaging in the business of insurance.
         Sec. 353.008.  PRINCIPAL BALANCE; INCLUSION OF DOCUMENTARY
  FEE.  (a)  The principal balance under a retail installment contract
  is computed by:
               (1)  adding:
                     (A)  the cash price of the commercial vehicle;
                     (B)  each amount included in the retail
  installment contract for an itemized charge; and
                     (C)  subject to Subsection (c), a documentary fee
  for services rendered for or on behalf of the retail buyer in
  handling and processing documents relating to the sale of the
  commercial vehicle; and
               (2)  subtracting from the results under Subdivision (1)
  the amount of the retail buyer's down payment in money, goods, or
  both.
         (b)  The computation of the principal balance may include an
  amount authorized under Section 353.402(b).
         (c)  For a documentary fee to be included in the principal
  balance of a retail installment contract:
               (1)  the retail seller must charge the documentary fee
  to cash buyers and credit buyers; and
               (2)  the documentary fee may not exceed an amount
  agreed to in writing by the retail seller and retail buyer.
         Sec. 353.009.  APPLICABILITY OF CHAPTER.  (a)  Except as
  provided by this section, this chapter applies to a retail
  installment transaction for a commercial vehicle if the retail
  installment contract states that this chapter applies.
         (b)  If a retail installment contract does not state that
  this chapter applies, the transaction is governed by Chapter 348,
  and this chapter does not apply.
         (c)  This chapter does not affect or apply to a loan made or
  the business of making loans under other law of this state and does
  not affect a rule of law applicable to a retail installment sale
  that is not a retail installment transaction.
         (d)  The provisions of this chapter defining specific rates
  and amounts of charges and requiring certain credit disclosures to
  be made control over any contrary law of this state respecting those
  subjects.
         Sec. 353.010.  APPLICABILITY OF OTHER STATUTES TO RETAIL
  INSTALLMENT TRANSACTION.  (a)  A loan or interest statute of this
  state, other than Chapter 303, does not apply to a retail
  installment transaction subject to this chapter.
         (b)  Except as provided by this chapter, an applicable
  statute, including Title 1 and Chapter 322, Business & Commerce
  Code, or a principle of common law continues to apply to a retail
  installment transaction unless it is displaced by this chapter.
         Sec. 353.011.  FEDERAL DISCLOSURE REQUIREMENTS.  If a
  disclosure requirement of this chapter and one of a federal law,
  including a regulation or an interpretation of federal law, are
  inconsistent or conflict, federal law controls and the inconsistent
  or conflicting disclosures required by this chapter need not be
  given.
         Sec. 353.012.  ADDITIONAL INFORMATION ALLOWED IN CONTRACT.  
  Information not required by this chapter may be included in a retail
  installment contract.
         Sec. 353.013.  ORDER OF ITEMS IN CONTRACT.  Items required by
  this chapter to be in a retail installment contract are not required
  to be stated in the order set forth in this chapter.
         Sec. 353.014.  APPLICABILITY OF INSURANCE PREMIUM FINANCING
  PROVISIONS.  Chapter 651, Insurance Code, does not apply to a retail
  installment transaction.
         Sec. 353.015.  CONDITIONAL DELIVERY AGREEMENT.  (a)  In this
  section, "conditional delivery agreement" means a contract between
  a retail seller and prospective retail buyer under the terms of
  which the retail seller allows the prospective retail buyer the use
  and benefit of a commercial vehicle for a specified term.
         (b)  A retail seller and prospective retail buyer may enter
  into a conditional delivery agreement.
         (c)  A conditional delivery agreement is:
               (1)  an enforceable contract; and
               (2)  void on the execution of a retail installment
  contract between the parties to the conditional delivery agreement
  for the sale of the commercial vehicle that is the subject of the
  conditional delivery agreement.
         (d)  A conditional delivery agreement may only confer rights
  consistent with this section and may not confer any legal or
  equitable rights of ownership, including ownership of the
  commercial vehicle that is the subject of the conditional delivery
  agreement.
         (e)  A conditional delivery agreement may not exceed a term
  of 15 days.
         (f)  If a prospective retail buyer tenders to a retail seller
  a trade-in motor vehicle in connection with a conditional delivery
  agreement:
               (1)  the parties must agree on the value of the trade-in
  motor vehicle;
               (2)  the conditional delivery agreement must contain
  the agreed value of the trade-in motor vehicle described by
  Subdivision (1); and
               (3)  the retail seller must use reasonable care to
  conserve the trade-in motor vehicle while the vehicle is in the
  retail seller's possession.
         (g)  If the parties to a conditional delivery agreement do
  not subsequently enter into a retail installment contract for the
  sale of the commercial vehicle that is the subject of the
  conditional delivery agreement, the retail seller shall, not later
  than the seventh day after termination of the conditional delivery
  agreement:
               (1)  deliver to the prospective retail buyer any
  trade-in motor vehicle that the prospective retail buyer tendered
  in connection with the conditional delivery agreement in the same
  or substantially the same condition as it was at the time of
  execution of the agreement and shall return any down payment or
  other consideration received from the prospective retail buyer in
  connection with the agreement; or
               (2)  if the trade-in motor vehicle cannot be returned
  in the same or substantially the same condition as it was at the
  time of execution of the conditional delivery agreement, deliver to
  the prospective retail buyer a sum of money equal to the agreed
  value of the trade-in motor vehicle as described by Subsection (f)
  and shall return any down payment or other consideration described
  by Subdivision (1).
         (h)  Any money that a retail seller is obligated to provide a
  prospective retail buyer under Subsection (g) must be tendered at
  the same time that the trade-in motor vehicle is delivered for
  return to the prospective retail buyer or when the trade-in motor
  vehicle would have been delivered if the vehicle was damaged or
  could not be returned.
         (i)  If a prospective retail buyer returns a commercial
  vehicle under a conditional delivery agreement at the request of
  the retail seller, the retail seller, notwithstanding the period
  prescribed by Subsection (g), must return the trade-in vehicle at
  the same time that the commercial vehicle under the conditional
  delivery agreement is returned by the prospective retail buyer.
         (j)  The prospective retail buyer shall return the
  commercial vehicle received under the conditional delivery
  agreement in the same or substantially the same condition as it was
  at the time of the execution of the conditional delivery agreement.
         (k)  An amount paid or required to be paid by the retail
  seller under Subsection (g) is subject to review by the
  commissioner.  If the commissioner determines that the retail
  seller in fact owes the prospective retail buyer a certain amount
  under Subsection (g), the commissioner may order the retail seller
  to pay the amount to the prospective retail buyer.  If the trade-in
  motor vehicle is not returned by the retail seller in accordance
  with this section and the retail seller does not pay the prospective
  retail buyer an amount equal to the agreed value of the trade-in
  motor vehicle within the period prescribed by this section, the
  commissioner may assess an administrative penalty against the
  retail seller in an amount that is reasonable in relation to the
  value of the trade-in motor vehicle.  The commissioner shall
  provide notice to the retail seller and the prospective retail
  buyer of the commissioner's determination under this subsection.
         (l)  Not later than the 30th day after the date the parties
  receive notice of the commissioner's determination under
  Subsection (k), the retail seller or prospective retail buyer may
  file with the commissioner an appeal of the commissioner's
  determination requesting a time and place for a hearing before a
  hearings officer designated by the commissioner.  A hearing under
  this subsection is governed by Chapter 2001, Government Code.  
  After the hearing, based on the findings of fact, conclusions of
  law, and recommendations of the hearings officer, the commissioner
  shall enter a final order.
         (m)  A person who files an appeal under Subsection (l) is
  required to pay a deposit to secure the payment of the costs of the
  hearing in a reasonable amount as determined by the commissioner,
  unless the person cannot afford to pay the deposit and files an
  affidavit to that effect with the hearings officer in the form and
  content prescribed by finance commission rule.  The entire deposit
  must be refunded to the person if the person prevails at the
  hearing.  If the person does not prevail, any portion of the deposit
  in excess of the costs of the hearing assessed against the person is
  refundable.
         (n)  Notice of the commissioner's final order under
  Subsection (l), given to the person in accordance with Chapter
  2001, Government Code, must include a statement of the person's
  right to judicial review of the order.
         (o)  The hearings officer may order the retail seller or the
  prospective retail buyer, or both, to pay reasonable expenses
  incurred by the commissioner in connection with obtaining a final
  order under Subsection (l), including attorney's fees,
  investigative costs, and witness fees.
         (p)  This section does not:
               (1)  apply to a bailment agreement under Section
  353.003; or
               (2)  create a private right of action.
         (q)  Except as otherwise provided by this section, the
  commissioner has exclusive jurisdiction to enforce this section.
         Sec. 353.016.  COMPUTATION OF TIME PRICE DIFFERENTIAL USING
  TRUE DAILY EARNINGS METHOD.  Under the true daily earnings method,
  the earned time price differential is computed by multiplying the
  daily rate of the time price differential by the number of days the
  actual unpaid principal balance is outstanding. Under this method:
               (1)  a payment is credited at the time received, with a
  payment received before the scheduled installment date resulting in
  a greater reduction in the unpaid principal balance than otherwise
  scheduled, and a payment received after the scheduled installment
  date resulting in less of a reduction in the unpaid principal
  balance than otherwise scheduled;
               (2)  a partial payment is applied first to time price
  differential with any remainder applied to the unpaid principal
  balance; and
               (3)  accrued but unpaid time price differential is not:
                     (A)  added to the unpaid principal balance; or
                     (B)  compounded.
  [Sections 353.017-353.100 reserved for expansion]
  SUBCHAPTER B.  RETAIL INSTALLMENT CONTRACT
         Sec. 353.101.  RETAIL INSTALLMENT CONTRACT GENERAL
  REQUIREMENTS.  (a)  A retail installment contract is required for
  each retail installment transaction in which the retail buyer is
  purchasing a commercial vehicle.  A retail installment contract may
  be more than one document.
         (b)  A retail installment contract must be:
               (1)  in writing;
               (2)  dated;
               (3)  signed by the retail buyer and retail seller; and
               (4)  completed as to all essential provisions before it
  is signed by the retail buyer except as provided by Subsection (d).
         (c)  The printed part of a retail installment contract, other
  than instructions for completion, must be in at least eight-point
  type unless a different size of type is required under this
  subchapter.
         (d)  If the commercial vehicle is not delivered when the
  retail installment contract is executed, the following information
  may be inserted after the contract is executed:
               (1)  the identifying numbers or marks of the vehicle or
  similar information; and
               (2)  the due date of the first installment.
         Sec. 353.102.  CONTRACT CONDITIONED ON SUBSEQUENT
  ASSIGNMENT PROHIBITED.  (a)  A retail installment contract may not
  be conditioned on the subsequent assignment of the contract to a
  holder.
         (b)  A provision in violation of this section is void.  This
  subsection does not affect the validity of other provisions of the
  contract that may be given effect without the voided provision, and
  to that extent those provisions are severable.
         (c)  This section does not create a private right of action.
         (d)  The commissioner has exclusive jurisdiction to enforce
  this section.
         Sec. 353.103.  TIME PRICE DIFFERENTIAL FOR RETAIL
  INSTALLMENT CONTRACT.  (a)  A retail installment contract may
  provide for:
               (1)  any amount of time price differential permitted
  under Section 353.104, 353.105, or 353.106; or
               (2)  any rate of time price differential not exceeding
  a yield permitted under Section 353.104, 353.105, or 353.106.
         (b)  The time price differential may be computed using the:
               (1)  precomputed earnings method;
               (2)  scheduled installment earnings method; or
               (3)  true daily earnings method.
         Sec. 353.104.  TIME PRICE DIFFERENTIAL FOR CONTRACT WITH
  EQUAL MONTHLY SUCCESSIVE PAYMENTS.  (a)  A retail installment
  contract that is payable in substantially equal successive monthly
  installments beginning one month after the date of the contract may
  provide for a time price differential that does not exceed the
  add-on charge provided by this section.
         (b)  The add-on charge is $7.50 per $100 per year on the
  principal balance for a new commercial vehicle, other than a heavy
  commercial vehicle, designated by the manufacturer by a model year
  that is not earlier than the year in which the sale is made.
         (c)  The add-on charge is $10 per $100 per year on the
  principal balance for:
               (1)  a new commercial vehicle not covered by Subsection
  (b);
               (2)  a used commercial vehicle designated by the
  manufacturer by a model year that is not more than two years before
  the year in which the sale is made; or
               (3)  a new or used heavy commercial vehicle designated
  by the manufacturer by a model year that is not more than two years
  before the year in which the sale is made.
         (d)  The add-on charge is $12.50 per $100 per year on the
  principal balance for a used commercial vehicle not covered by
  Subsection (c) that is a commercial vehicle designated by the
  manufacturer by a model year that is not more than four years before
  the year in which the sale is made.
         (e)  For a used commercial vehicle not covered by Subsection
  (c) or (d), the add-on charge is:
               (1)  $15 per $100 per year on the principal balance; or
               (2)  $18 per $100 per year on the principal balance if
  the principal balance under the retail installment contract does
  not exceed $300.
         (f)  The time price differential is computed on the original
  principal balance under the retail installment contract from the
  date of the contract until the maturity of the final installment,
  notwithstanding that the balance is payable in installments.
         (g)  If the retail installment contract is payable for a
  period that is shorter or longer than a year or is for an amount that
  is less or greater than $100, the amount of the maximum time price
  differential computed under this section is decreased or increased
  proportionately.
         (h)  For the purpose of a computation under this section, 16
  or more days of a month may be considered a full month.
         Sec. 353.105.  USE OF OPTIONAL CEILING.  As an alternative to
  the maximum rate or amount authorized for a time price differential
  under Section 353.104 or 353.106, a retail installment contract may
  provide for a rate or amount of time price differential that does
  not exceed the rate or amount authorized by Chapter 303.
         Sec. 353.106.  TIME PRICE DIFFERENTIAL FOR OTHER CONTRACTS.  
  A retail installment contract that is payable other than in
  substantially equal successive monthly installments or the first
  installment of which is not payable one month from the date of the
  contract may provide for a time price differential that does not
  exceed an amount that, having due regard for the schedule of
  payments, provides the same effective return as if the contract
  were payable in substantially equal successive monthly
  installments beginning one month from the date of the contract.
         Sec. 353.107.  CHARGE FOR DEFAULT IN PAYMENT OF INSTALLMENT.  
  (a)  A retail installment contract may provide that if an
  installment remains unpaid after the 10th day after the maturity of
  the installment for a heavy commercial vehicle or after the 15th day
  after the maturity of the installment for any other commercial
  vehicle the holder may collect:
               (1)  a delinquency charge that does not exceed five
  percent of the amount of the installment; or
               (2)  interest on the amount of the installment accruing
  after the maturity of the installment and until the installment is
  paid in full at a rate that does not exceed the maximum rate
  authorized for the contract.
         (b)  A retail installment contract that provides for the true
  daily earnings method or the scheduled installment earnings method
  may provide for the delinquency charge authorized by Subsection
  (a)(1), the interest authorized by Subsection (a)(2), or both.
         (c)  Only one delinquency charge under Subsection (a)(1) may
  be collected on an installment under this section regardless of the
  duration of the default.
         Sec. 353.108.  CHARGES FOR COLLECTING DEBT.  A retail
  installment contract may provide for the payment of:
               (1)  reasonable attorney's fees if the contract is
  referred for collection to an attorney who is not a salaried
  employee of the holder;
               (2)  court costs and disbursements; and
               (3)  reasonable out-of-pocket expenses incurred in
  connection with the repossession or sequestration of the commercial
  vehicle securing the payment of the contract or foreclosure of a
  security interest in the vehicle, including the costs of storing,
  reconditioning, and reselling the vehicle, subject to the standards
  of good faith and commercial reasonableness set by Title 1,
  Business & Commerce Code.
         Sec. 353.109.  ACCELERATION OF DEBT MATURITY.  A retail
  installment contract may not authorize the holder to accelerate the
  maturity of all or a part of the amount owed under the contract
  unless:
               (1)  the retail buyer is in default in the performance
  of any of the buyer's obligations;
               (2)  the holder believes in good faith that the
  prospect of the buyer's payment or performance is impaired; or
               (3)  the retail buyer or an affiliate of the retail
  buyer is in default in its obligations under another financing
  agreement or leasing agreement held by the same holder or an
  affiliate of the holder.
         Sec. 353.110.  DELIVERY OF COPY OF CONTRACT.  A retail seller
  shall:
               (1)  deliver to the retail buyer a copy of the retail
  installment contract as accepted by the retail seller; or
               (2)  mail to the retail buyer at the address shown on
  the retail installment contract a copy of the retail installment
  contract as accepted by the retail seller.
         Sec. 353.111.  BUYER'S RIGHT TO RESCIND CONTRACT.  Until the
  retail seller complies with Section 353.110, a retail buyer who has
  not received delivery of the commercial vehicle is entitled to:
               (1)  rescind the contract;
               (2)  receive a refund of all payments made under or in
  contemplation of the contract; and
               (3)  receive the return of all goods traded in to the
  retail seller under or in contemplation of the contract or, if those
  goods cannot be returned, to receive the value of those goods.
         Sec. 353.112.  BUYER'S ACKNOWLEDGMENT OF DELIVERY OF
  CONTRACT COPY.  (a)  Any retail buyer's acknowledgment of delivery
  of a copy of the retail installment contract must:
               (1)  be in at least 10-point type that is boldfaced,
  capitalized, or underlined or otherwise conspicuously set out from
  the surrounding written material; and
               (2)  appear directly above the buyer's signature.
         (b)  Any retail buyer's acknowledgment conforming to this
  section of delivery of a copy of the retail installment contract is,
  in an action or proceeding by or against a holder of the contract
  who was without knowledge to the contrary when the holder purchased
  it, conclusive proof:
               (1)  that the copy was delivered to the buyer;
               (2)  that the contract did not contain a blank space
  that was required to have been completed under this chapter when the
  contract was signed by the buyer; and
               (3)  of compliance with Sections 353.011, 353.101,
  353.205, 353.403, 353.404, and 353.405.
         Sec. 353.113.  AMENDMENT OF RETAIL INSTALLMENT CONTRACT.  On
  request by a retail buyer, the holder may agree to one or more
  amendments to the retail installment contract to:
               (1)  extend or defer the scheduled due date of all or a
  part of one or more installments; or
               (2)  renew, restate, or reschedule the unpaid balance
  under the contract.
         Sec. 353.114.  CHARGES FOR DEFERRING INSTALLMENT.  (a)  If a
  retail installment contract is amended to defer all or a part of one
  or more installments for not longer than three months, the holder
  may collect from the retail buyer:
               (1)  an amount computed on the amount deferred for the
  period of deferment at a rate that does not exceed the effective
  return for time price differential permitted for a monthly payment
  retail installment contract; and
               (2)  the amount of the additional cost to the holder
  for:
                     (A)  premiums for continuing in force any
  insurance coverages provided for by the contract; and
                     (B)  any additional necessary official fees.
         (b)  The minimum charge under Subsection (a)(1) is $1.
         Sec. 353.115.  CHARGE FOR OTHER AMENDMENT.  (a)  If the
  unpaid balance of a retail installment contract is extended,
  renewed, restated, or rescheduled under this subchapter and Section
  353.114 does not apply, the holder may collect an amount computed on
  the principal balance of the amended contract for the term of the
  amended contract at the time price differential for a retail
  installment contract that is applicable after reclassifying the
  commercial vehicle by its model year at the time of the amendment.
         (b)  The principal balance of the amended contract is
  computed by:
               (1)  adding:
                     (A)  the unpaid balance as of the date of
  amendment;
                     (B)  the cost of any insurance incidental to the
  amendment;
                     (C)  the amount of each additional necessary
  official fee; and
                     (D)  the amount of each accrued delinquency or
  collection charge; and
               (2)  if the time price differential was computed using
  the precomputed earnings method or the scheduled installment
  earnings method, subtracting from the total computed under
  Subdivision (1) an amount equal to the prepayment refund credit
  required by Section 353.120 or 353.121, as applicable.
         (c)  Subsection (b)(2) does not apply to a retail installment
  contract in which the time price differential is computed using the
  true daily earnings method.
         (d)  The provisions of this chapter relating to acquisition
  costs under the refund schedule under Section 353.120 do not apply
  in computing the principal balance of the amended contract.
         Sec. 353.116.  CONFIRMATION OF AMENDMENT.  An amendment to a
  retail installment contract must be confirmed in a writing signed
  by the retail buyer.  The holder shall:
               (1)  deliver a copy of the confirmation to the buyer; or
               (2)  mail a copy of the confirmation to the buyer at the
  buyer's most recent address shown on the records of the holder.
         Sec. 353.117.  CONTRACT AFTER AMENDMENT.  After amendment
  the retail installment contract is the original contract and each
  amendment to the original contract.
         Sec. 353.118.  PREPAYMENT OF CONTRACT.  A retail buyer may
  prepay a retail installment contract in full at any time before
  maturity. This section prevails over a conflicting provision of the
  contract.
         Sec. 353.119.  REFUND CREDIT ON PREPAYMENT.  (a)  This
  section does not apply to a retail installment contract in which the
  time price differential is computed using the true daily earnings
  method.
         (b)  If a retail buyer prepays a retail installment contract
  in full or if the holder of the contract demands payment of the
  unpaid balance of the contract in full before the contract's final
  installment is due and the time price differential is computed
  using the precomputed earnings method or the scheduled installment
  earnings method, the buyer is entitled to receive a refund credit as
  provided by Section 353.120 or 353.121, as applicable.
         Sec. 353.120.  AMOUNT OF REFUND CREDIT FOR MONTHLY
  INSTALLMENT CONTRACT.  (a)  This section:
               (1)  applies only to a refund credit on the prepayment
  of a retail installment contract that is payable in substantially
  equal successive monthly installments beginning one month after the
  date of the contract; and
               (2)  does not apply to a retail installment contract in
  which the time price differential is computed using the true daily
  earnings method or the scheduled installment earnings method.
         (b)  On a contract for a commercial vehicle other than a
  heavy commercial vehicle the minimum amount of the refund credit is
  computed by:
               (1)  subtracting an acquisition cost of $25 from the
  original time price differential; and
               (2)  multiplying the amount computed under Subdivision
  (1) by the percentage of refund computed under Subsection (d).
         (c)  On a contract for a heavy commercial vehicle the minimum
  amount of the refund credit is computed by:
               (1)  multiplying the amount of the original time price
  differential by the percentage of refund computed under Subsection
  (d); and
               (2)  subtracting an acquisition cost of $150 from the
  amount computed under Subdivision (1).
         (d)  The percentage of refund is computed by:
               (1)  computing the sum of all of the monthly balances
  under the contract's schedule of payments; and
               (2)  dividing the amount computed under Subdivision (1)
  into the sum of the unpaid monthly balances under the contract's
  schedule of payments beginning:
                     (A)  on the first day, after the date of the
  prepayment or demand for payment in full, that is the date of a
  month that corresponds to the date of the month that the first
  installment is due under the contract; or
                     (B)  if the prepayment or demand for payment in
  full is made before the first installment date under the contract,
  one month after the next monthly anniversary date of the contract
  occurring after the prepayment or demand.
         (e)  A refund credit is not required if the amount of the
  refund credit is less than $1.
         Sec. 353.121.  REFUND ON CONTRACTS USING SCHEDULED
  INSTALLMENT EARNINGS METHOD. (a)  This section:
               (1)  applies to a retail installment contract:
                     (A)  that includes precomputed time price
  differential; and
                     (B)  to which Section 353.120 does not apply; and
               (2)  does not apply to a retail installment contract in
  which the time price differential is computed using the true daily
  earnings method.
         (b)  If a retail installment contract is prepaid in full or
  if the holder demands payment in full of the unpaid balance before
  final maturity of the contract, the holder earns time price
  differential for the period beginning on the date of the contract
  and ending on the date of the earlier of the prepayment or demand,
  in an amount that does not exceed the amount allowed by this
  section.
         (c)  If prepayment in full or demand for payment in full
  occurs during an installment period, the holder may retain, in
  addition to time price differential that accrued during any elapsed
  installment periods, an amount computed by:
               (1)  multiplying the simple annual rate under the
  contract by the unpaid principal balance of the contract determined
  according to the schedule of payments to be outstanding on the
  preceding installment due date;
               (2)  dividing 365 into the product computed under
  Subdivision (1); and
               (3)  multiplying the number of days in the period,
  beginning on the day after the installment due date and ending on
  the date of the earlier of the prepayment or demand, by the result
  obtained under Subdivision (2).
         (d)  In addition to the earned time price differential
  computed under this section, the holder may also earn a $150
  acquisition fee for a heavy commercial vehicle, or a $25
  acquisition fee for other commercial vehicles, if the sum of the
  earned time price differential and the acquisition fee does not
  exceed the time price differential disclosed in the contract.
         (e)  The holder shall refund or credit, as applicable, to the
  retail buyer the amount computed by subtracting the total amount
  earned or retained under Subsections (b), (c), and (d) from the
  total amount of time price differential contracted for and
  precomputed in the contract.
         Sec. 353.122.  REINSTATEMENT OF CONTRACT AFTER DEMAND FOR
  PAYMENT.  After a demand for payment in full under a retail
  installment contract, the retail buyer and holder of the contract
  may:
               (1)  agree to reinstate the contract; and
               (2)  amend the contract as provided by Section 353.113.
  [Sections 353.123-353.200 reserved for expansion]
  SUBCHAPTER C.  INSURANCE
         Sec. 353.201.  PROPERTY INSURANCE.  (a)  A holder may require
  a retail buyer to insure the commercial vehicle purchased under a
  retail installment transaction and accessories and related goods
  subject to the holder's security interest.
         (b)  The holder may offer to provide insurance on a
  commercial vehicle purchased under a retail installment
  transaction and accessories and related goods subject to the
  holder's security interest, regardless of whether the holder
  requires a retail buyer to insure the commercial vehicle.
         (c)  The insurance required by the holder, and the premiums
  or charges for any insurance that is provided by the holder, must
  bear a reasonable relationship to:
               (1)  the amount, term, and conditions of the retail
  installment contract; and
               (2)  the existing hazards or risk of loss, damage, or
  destruction.
         (d)  Any insurance under this section may not:
               (1)  cover unusual or exceptional risks; or
               (2)  provide coverage not ordinarily included in
  policies issued to the public or for commercial purposes.
         (e)  The holder may include the cost of the insurance as a
  separate charge in the contract.
         Sec. 353.202.  CREDIT LIFE AND CREDIT HEALTH AND ACCIDENT
  INSURANCE.  (a)  A holder may require a retail buyer to provide
  credit life insurance and credit health and accident insurance.
         (b)  The holder may offer to provide credit life insurance
  and credit health and accident insurance, regardless of whether the
  holder requires a retail buyer to provide the insurance under
  Subsection (a).
         (c)  A retail seller may offer involuntary unemployment
  insurance to the buyer at the time the contract is negotiated or
  executed.
         (d)  A holder may include the cost of insurance provided
  under this section, and a policy or agent fee charged in connection
  with insurance provided under Subsection (b) or (c), as a separate
  charge in the contract.
         Sec. 353.203.  MAXIMUM AMOUNT OF CREDIT LIFE AND CREDIT
  HEALTH AND ACCIDENT COVERAGE.  (a)  At any time the total amount of
  the policies of credit life insurance in force on one retail buyer
  on one retail installment contract may not exceed:
               (1)  the total amount repayable under the contract; and
               (2)  the greater of the scheduled or actual amount of
  unpaid indebtedness if the indebtedness is repayable in
  substantially equal installments.
         (b)  At any time the total amount of the policies of credit
  health and accident insurance in force on one retail buyer on one
  retail installment contract may not exceed the total amount payable
  under the contract, and the amount of each periodic indemnity
  payment may not exceed the scheduled periodic payment on the
  indebtedness.
         Sec. 353.204.  INSURANCE STATEMENT.  (a)  If insurance is
  required in connection with a retail installment contract, the
  holder shall give to the retail buyer a written statement that
  clearly and conspicuously states that:
               (1)  insurance is required in connection with the
  contract; and
               (2)  the buyer as an option may furnish the required
  insurance through:
                     (A)  an existing policy of insurance owned or
  controlled by the buyer; or
                     (B)  an insurance policy obtained through an
  insurance company authorized to do business in this state.
         (b)  A statement under Subsection (a) may be provided with or
  as part of the retail installment contract or separately.
         Sec. 353.205.  STATEMENT IF LIABILITY INSURANCE NOT INCLUDED
  IN CONTRACT.  If liability insurance coverage for bodily injury and
  property damage caused to others is not included in a retail
  installment contract, the retail installment contract or a separate
  writing must contain, in at least 10-point type that is boldfaced,
  capitalized, underlined, or otherwise conspicuously set out from
  the surrounding written material, a specific statement that
  liability insurance coverage for bodily injury and property damage
  caused to others is not included.
         Sec. 353.206.  BUYER'S FAILURE TO PROVIDE EVIDENCE OF
  INSURANCE.  (a)  If a retail buyer fails to present to the holder
  reasonable evidence that the buyer has obtained or maintained a
  coverage required by the retail installment contract, the holder
  may:
               (1)  obtain substitute insurance coverage that is
  substantially equal to or more limited than the coverage required;
  and
               (2)  add the amount of the premium advanced for the
  substitute insurance to the unpaid balance of the contract.
         (b)  Substitute insurance coverage under Subsection (a)(1):
               (1)  may at the holder's option be limited to coverage
  only of the interest of the holder or the interest of the holder and
  the buyer; and
               (2)  must be written at lawful rates in accordance with
  the Insurance Code by a company authorized to do business in this
  state.
         (c)  If substitute insurance is obtained by the holder under
  Subsection (a), the amendment adding the premium or rescheduling
  the contract is not required to be signed by the retail buyer. The
  holder shall deliver to the buyer or send to the buyer's most recent
  address shown on the records of the holder specific written notice
  that the holder has obtained substitute insurance.
         Sec. 353.207.  CHARGES FOR OTHER INSURANCE AND FORMS OF
  PROTECTION INCLUDED IN RETAIL INSTALLMENT CONTRACT.  (a)  A retail
  installment contract may include as a separate charge an amount for
  insurance coverage that is:
               (1)  for a risk of loss or liability reasonably related
  to:
                     (A)  the commercial vehicle;
                     (B)  the use of the commercial vehicle; or
                     (C)  goods or services that:
                           (i)  are related to the commercial vehicle;
  and
                           (ii)  may ordinarily be insured with a
  commercial vehicle;
               (2)  written on policies or endorsement forms
  prescribed or approved by the commissioner of insurance; and
               (3)  ordinarily available in policies or endorsements
  offered to the public or for commercial purposes.
         (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 pay all or part of the amount computed
  by subtracting the proceeds of the retail buyer's basic collision
  policy on the commercial vehicle from the amount owed on the vehicle
  in the event of a total loss or theft of the vehicle;
               (5)  a warranty or service contract relating to the
  commercial vehicle;
               (6)  an identity recovery service contract defined by
  Section 1306.003, Occupations Code; or
               (7)  a debt cancellation agreement.
         (c)  Notwithstanding any other law, service contracts and
  debt cancellation agreements sold by a retail seller of a
  commercial vehicle to a retail buyer are not subject to Chapter 101
  or 226, Insurance Code.
         (d)  In addition to the charges for insurance coverage
  permitted under Subsection (a) or (b), a retail installment
  contract may include a charge for insurance coverage relating to:
               (1)  the commercial vehicle;
               (2)  the use of the commercial vehicle; or
               (3)  the retail installment contract.
         (e)  Insurance coverage under Subsection (d) may be provided
  only by:
               (1)  an insurer authorized under the Insurance Code to
  engage in the business of insurance in this state; or
               (2)  if permitted under the Insurance Code, a surplus
  lines insurer eligible to provide the insurance under Chapter 981,
  Insurance Code.
         (f)  A retail installment contract must set forth the amount
  of each charge for insurance coverage under Subsection (d) and the
  type of the coverage provided for that charge.
         Sec. 353.208.  HOLDER'S DUTY IF INSURANCE IS ADJUSTED OR
  TERMINATED.  (a)  If insurance for which a charge is included in or
  added to a retail installment contract is canceled, adjusted, or
  terminated, the holder shall, at the holder's option:
               (1)  apply the amount of the refund for unearned
  insurance premiums received by the holder to replace required
  insurance coverage; or
               (2)  credit the refund to the final maturing
  installments of the retail installment contract.
         (b)  If the amount to be applied or credited under Subsection
  (a) is more than the amount unpaid on the retail installment
  contract, the holder shall refund to the retail buyer the
  difference between those amounts.
         (c)  A cash refund is not required under this section if the
  amount of the refund is less than $1.
         Sec. 353.209.  GAIN OR ADVANTAGE FROM INSURANCE NOT
  ADDITIONAL CHARGE.  Any gain or advantage to the holder or the
  holder's employee, officer, director, agent, general agent,
  affiliate, or associate from insurance or the provision or sale of
  insurance under this subchapter is not an additional charge or
  additional time price differential in connection with a retail
  installment contract except as specifically provided by this
  chapter.
         Sec. 353.210.  ADDING TO RETAIL INSTALLMENT CONTRACT
  PREMIUMS FOR INSURANCE ACQUIRED AFTER TRANSACTION.  (a)  A retail
  buyer and holder may agree to add to the unpaid balance of a retail
  installment contract premiums for insurance policies obtained
  after the date of the retail installment transaction for coverages
  of the types allowed under Sections 353.201, 353.202, and 353.207,
  including premiums for the renewal of a policy included in the
  contract.
         (b)  A policy of insurance described by Subsection (a) must
  comply with the requirements of Sections 353.201, 353.202, 353.203,
  and 353.207, as applicable.
         Sec. 353.211.  EFFECT OF ADDING PREMIUM TO CONTRACT.  If a
  premium is added to the unpaid balance of a retail installment
  contract under Section 353.206 or 353.210, the rate applicable to
  the time price differential agreed to in the retail installment
  contract remains in effect and shall be applied to the new unpaid
  balance, or the contract may be rescheduled in accordance with
  Sections 353.114 and 353.115, without reclassifying the commercial
  vehicle by its year model at the time of the amendment.
         Sec. 353.212.  FINANCING ENTITY MAY NOT REQUIRE INSURANCE
  FROM PARTICULAR SOURCE.  If a retail installment contract presented
  to a financing entity for acceptance includes any insurance
  coverage, the financing entity may not directly or indirectly
  require, as a condition of its agreement to finance the commercial
  vehicle, that the retail buyer purchase the insurance coverage from
  a particular source.
  [Sections 353.213-353.300 reserved for expansion]
  SUBCHAPTER D. ACQUISITION OF CONTRACT OR BALANCE
         Sec. 353.301.  AUTHORITY TO ACQUIRE.  A person may acquire a
  retail installment contract or an outstanding balance under a
  contract from another person on the terms, including the price, to
  which they agree.  Notwithstanding any other law of this state, a
  person acquiring or assigning a retail installment contract, or any
  balance under a contract, does not have a duty to disclose to any
  other person the terms on which a contract or balance under a
  contract is acquired or assigned, including the consideration for
  the acquisition or assignment and any discount or difference
  between the rates, charges, or balance under the contract and the
  consideration rates, charges, or balance acquired or assigned, as
  applicable.
         Sec. 353.302.  LACK OF NOTICE DOES NOT AFFECT VALIDITY AS TO
  CERTAIN CREDITORS.  Notice to a retail buyer of an assignment or
  negotiation of a retail installment contract or an outstanding
  balance under the contract or a requirement that the retail seller
  be deprived of dominion over payments on a retail installment
  contract or over the commercial vehicle if returned to or
  repossessed by the retail seller is not necessary for a written
  assignment or negotiation of the contract or balance to be valid as
  against a creditor, subsequent purchaser, pledgee, mortgagee, or
  lien claimant of the retail seller.
         Sec. 353.303.  PAYMENT BY BUYER.  Unless a retail buyer has
  notice of the assignment or negotiation of the buyer's retail
  installment contract or an outstanding balance under the contract,
  a payment by the buyer to the most recent holder known to the buyer
  is binding on all subsequent holders.
  [Sections 353.304-353.400 reserved for expansion]
  SUBCHAPTER E. HOLDER'S RIGHTS, DUTIES, AND LIMITATIONS
         Sec. 353.401.  SELLER'S PROMISE TO PAY OR TENDER OF CASH TO
  BUYER AS PART OF TRANSACTION.  A retail seller may not promise to
  pay, pay, or otherwise tender cash to a retail buyer as a part of a
  transaction under this chapter unless specifically authorized by
  this chapter.
         Sec. 353.402.  SELLER'S ACTION FOR INCENTIVE PROGRAM OR TO
  PAY FOR BUYER'S MOTOR VEHICLE.  (a)  A retail seller may pay,
  promise to pay, or tender cash or another thing of value to the
  manufacturer, distributor, or retail buyer of the product if the
  payment, promise, or tender is made in order to participate in a
  financial incentive program offered by the manufacturer or
  distributor of the vehicle to the buyer.
         (b)  A retail seller, in connection with a retail installment
  transaction, may:
               (1)  advance money to retire:
                     (A)  an amount owed against a motor vehicle used
  as a trade-in or a motor vehicle owned by the buyer that has been
  declared a total loss by the buyer's insurer; or
                     (B)  the retail buyer's outstanding obligation
  under a motor vehicle lease contract, a credit transaction for the
  purchase of a motor vehicle, or another retail installment
  transaction; and
               (2)  finance repayment of that money in a retail
  installment contract.
         (c)  A retail seller may pay in cash to the retail buyer any
  portion of the net cash value of a motor vehicle owned by the buyer
  and used as a trade-in in a transaction involving the sale of a
  commercial vehicle. In this subsection, "net cash value" means the
  cash value of a motor vehicle after payment of all amounts secured
  by the motor vehicle.
         Sec. 353.403.  STATEMENT OF PAYMENTS AND AMOUNT DUE UNDER
  CONTRACT.  (a)  On written request of a retail buyer, the holder of a
  retail installment contract shall give or send to the buyer a
  written statement of the dates and amounts of payments and the total
  amount unpaid under the contract.
         (b)  A retail buyer is entitled to one statement during a
  six-month period without charge.  The charge for each additional
  requested statement may not exceed $1.
         Sec. 353.404.  RECEIPT FOR CASH PAYMENT.  A holder of a
  retail installment contract shall give the retail buyer a written
  receipt for each cash payment.
         Sec. 353.405.  OUTSTANDING BALANCE INFORMATION; PAYMENT IN
  FULL.  (a)  The holder of a retail installment contract who gives
  the retail buyer or the buyer's designee outstanding balance
  information relating to the contract is bound by that information
  and shall honor that information for a reasonable time.
         (b)  If the retail buyer or the buyer's designee tenders to
  the holder as payment in full an amount derived from that
  outstanding balance information, the holder shall:
               (1)  accept the amount as payment in full; and
               (2)  release the holder's lien against the commercial
  vehicle within a reasonable time not later than the 10th day after
  the date on which the amount is tendered.
         (c)  A retail seller must pay in full the outstanding balance
  of a vehicle traded in to the retail seller as part of the retail
  installment transaction not later than the 25th day after the date
  that:
               (1)  the retail installment contract is signed by the
  retail buyer and the retail buyer receives delivery of the
  commercial vehicle; and
               (2)  the retail seller receives delivery of the motor
  vehicle traded in and the necessary and appropriate documents to
  transfer title from the buyer.
         Sec. 353.406.  LIABILITY RELATING TO OUTSTANDING BALANCE
  INFORMATION.  A holder who violates Section 353.405 is liable to the
  retail buyer or the buyer's designee in an amount computed by
  adding:
               (1)  three times the difference between the amount
  tendered and the amount sought by the holder at the time of tender;
               (2)  interest;
               (3)  reasonable attorney's fees; and
               (4)  costs.
         Sec. 353.407.  PROHIBITION ON POWER OF ATTORNEY TO CONFESS
  JUDGMENT OR ASSIGNMENT OF WAGES.  A retail installment contract may
  not contain:
               (1)  a power of attorney to confess judgment in this
  state; or
               (2)  an assignment of wages.
         Sec. 353.408.  PROHIBITION ON CERTAIN ACTS OF REPOSSESSION.  
  A retail installment contract may not:
               (1)  authorize the holder or a person acting on the
  holder's behalf to:
                     (A)  enter the retail buyer's premises in
  violation of Chapter 9, Business & Commerce Code; or
                     (B)  commit a breach of the peace in the
  repossession of the commercial vehicle; or
               (2)  contain, or provide for the execution of, a power
  of attorney by the retail buyer appointing, as the buyer's agent in
  the repossession of the vehicle, the holder or a person acting on
  the holder's behalf.
         Sec. 353.409.  BUYER'S WAIVER.  (a)  A retail installment
  contract may not:
               (1)  provide for a waiver of the retail buyer's rights
  of action against the holder or a person acting on the holder's
  behalf for an illegal act committed in:
                     (A)  the collection of payments under the
  contract; or
                     (B)  the repossession of the commercial vehicle;
  or
               (2)  provide that the retail buyer agrees not to assert
  against the holder a claim or defense arising out of the sale.
         (b)  An act or agreement of the retail buyer before or at the
  time of the making of a retail installment contract or a purchase
  under the contract does not waive any provision of this chapter.
         Sec. 353.410.  TRANSFER OF EQUITY.  (a)  With the written
  consent of the holder, a retail buyer may transfer at any time the
  buyer's equity in the commercial vehicle subject to the retail
  installment contract to another person.
         (b)  The holder may charge for the transfer of equity an
  amount that does not exceed:
               (1)  $25 for a commercial vehicle that is not a heavy
  commercial vehicle; or
               (2)  $50 for a heavy commercial vehicle.
  [Sections 353.411-353.500 reserved for expansion]
  SUBCHAPTER F. LICENSING; ADMINISTRATION OF CHAPTER
         Sec. 353.501.  LICENSE REQUIRED.  (a)  A person may not act
  as a holder under this chapter unless the person:
               (1)  is an authorized lender or a credit union; or
               (2)  holds a license issued under Chapter 348 or this
  chapter.
         (b)  A person who is required to hold a license under this
  chapter must ensure that each office at which retail installment
  transactions are made, serviced, held, or collected under this
  chapter is licensed or otherwise authorized to make, service, hold,
  or collect retail installment transactions in accordance with this
  chapter and rules implementing this chapter.
         (c)  A person may not use any device, subterfuge, or pretense
  to evade the application of this section.
         Sec. 353.502.  APPLICATION REQUIREMENTS.  (a)  The
  application for a license under this chapter must:
               (1)  be under oath;
               (2)  identify the applicant's principal parties in
  interest; and
               (3)  contain other relevant information that the
  commissioner requires.
         (b)  On the filing of a license application, the applicant
  shall pay to the commissioner:
               (1)  an investigation fee not to exceed $200; and
               (2)  for the license's year of issuance, a license fee
  in an amount determined as provided by Section 14.107.
         Sec. 353.503.  INVESTIGATION OF APPLICATION.  On the filing
  of an application and payment of the required fees, the
  commissioner shall conduct an investigation to determine whether to
  issue the license.
         Sec. 353.504.  APPROVAL OR DENIAL OF APPLICATION.  (a)  The
  commissioner shall approve the application and issue to the
  applicant a license under this chapter if the commissioner finds
  that the financial responsibility, experience, character, and
  general fitness of the applicant are sufficient to:
               (1)  command the confidence of the public; and
               (2)  warrant the belief that the business will be
  operated lawfully and fairly, within the purposes of this chapter.
         (b)  If the commissioner does not find the eligibility
  requirements of Subsection (a), the commissioner shall notify the
  applicant.
         (c)  If an applicant requests a hearing on the application
  not later than the 30th day after the date of notification under
  Subsection (b), the applicant is entitled to a hearing not later
  than the 60th day after the date of the request.
         (d)  The commissioner shall approve or deny the application
  not later than the 60th day after the date of the filing of a
  completed application with payment of the required fees, or if a
  hearing is held, after the date of the completion of the hearing on
  the application. The commissioner and the applicant may agree to a
  later date in writing.
         Sec. 353.505.  DISPOSITION OF FEES ON DENIAL OF APPLICATION.  
  If the commissioner denies the application, the commissioner shall
  retain the investigation fee and shall return to the applicant the
  license fee submitted with the application.
         Sec. 353.506.  ANNUAL LICENSE FEE.  Not later than December
  1, a license holder shall pay to the commissioner for each license
  held an annual fee for the year beginning the next January 1, in an
  amount determined as provided by Section 14.107.
         Sec. 353.507.  EXPIRATION OF LICENSE ON FAILURE TO PAY
  ANNUAL FEE.  If the annual fee for a license is not paid before the
  16th day after the date on which the written notice of delinquency
  of payment has been given to the license holder, the license expires
  on the later of:
               (1)  that day; or
               (2)  December 31 of the last year for which an annual
  fee was paid.
         Sec. 353.508.  LICENSE SUSPENSION OR REVOCATION.  After
  notice and a hearing the commissioner may suspend or revoke a
  license if the commissioner finds that:
               (1)  the license holder failed to pay the annual
  license fee, an investigation fee, or another charge imposed by the
  commissioner;
               (2)  the license holder, knowingly or without the
  exercise of due care, violated this chapter or a rule adopted or
  order issued under this chapter; or
               (3)  a fact or condition exists that, if it had existed
  or had been known to exist at the time of the original application
  for the license, clearly would have justified the commissioner's
  denial of the application.
         Sec. 353.509.  REINSTATEMENT OF SUSPENDED LICENSE; ISSUANCE
  OF NEW LICENSE AFTER REVOCATION.  The commissioner may reinstate a
  suspended license or issue a new license on application to a person
  whose license has been revoked if at the time of the reinstatement
  or issuance no fact or condition exists that clearly would have
  justified the commissioner's denial of an original application for
  the license.
         Sec. 353.510.  SURRENDER OF LICENSE.  A license holder may
  surrender a license issued under this chapter by delivering to the
  commissioner:
               (1)  the license; and
               (2)  a written notice of the license's surrender.
         Sec. 353.511.  EFFECT OF LICENSE SUSPENSION, REVOCATION, OR
  SURRENDER.  (a)  The suspension, revocation, or surrender of a
  license issued under this chapter does not affect the obligation of
  a contract between the license holder and a retail buyer entered
  into before the suspension, revocation, or surrender.
         (b)  Surrender of a license does not affect the license
  holder's civil or criminal liability for an act committed before
  surrender.
         Sec. 353.512.  TRANSFER OR ASSIGNMENT OF LICENSE.  A license
  may be transferred or assigned only with the approval of the
  commissioner.
         Sec. 353.513.  ADOPTION OF RULES.  (a)  The finance
  commission may adopt rules to enforce this chapter.
         (b)  The commissioner shall recommend proposed rules to the
  finance commission.
         Sec. 353.514.  GENERAL INVESTIGATION.  To discover a
  violation of this chapter or to obtain information required under
  this chapter, the commissioner or the commissioner's
  representative may investigate the records, including books,
  accounts, papers, and correspondence, of a person, including a
  license holder, who the commissioner has reasonable cause to
  believe is violating this chapter, regardless of whether the person
  claims to not be subject to this chapter.
         Sec. 353.515.  SHARING OF INFORMATION.  To ensure consistent
  enforcement of law and minimization of regulatory burdens, the
  commissioner and the Texas Department of Motor Vehicles may share
  information, including criminal history information, relating to a
  person licensed under this chapter.  Information otherwise
  confidential remains confidential after it is shared under this
  section.
         SECTION 18.  Section 411.095, Government Code, is amended to
  read as follows:
         Sec. 411.095.  ACCESS TO CRIMINAL HISTORY RECORD
  INFORMATION: CONSUMER CREDIT COMMISSIONER. The consumer credit
  commissioner is entitled to obtain from the department criminal
  history record information that relates to a person who is an
  applicant for or holder of a license under Chapter 342, 347, 348,
  351, 353, or 371, Finance Code.
         SECTION 19.  Section 1304.003(b), Occupations Code, is
  amended to read as follows:
         (b)  A service contract may also provide for:
               (1)  incidental payment or indemnity under limited
  circumstances, including towing, rental, and emergency road
  service;
               (2)  the repair or replacement of a product for damage
  resulting from a power surge or for accidental damage incurred in
  handling the product; or
               (3)  identity recovery, as defined by Section 1306.002,
  if the service contract is financed under Chapter 348 or 353,
  Finance Code.
         SECTION 20.  Section 1306.003, Occupations Code, is amended
  to read as follows:
         Sec. 1306.003.  IDENTITY RECOVERY SERVICE CONTRACT. In this
  chapter, "identity recovery service contract" means an agreement:
               (1)  to provide identity recovery;
               (2)  that is entered into for a separately stated
  consideration and for a specified term; and
               (3)  that is financed through a retail installment
  contract under Chapter 348 or 353, Finance Code.
         SECTION 21.  Section 2305.007(b), Occupations Code, is
  amended to read as follows:
         (b)  For the purposes of tracing or locating a stolen motor
  vehicle on the premises of a person engaging in a business or
  activity regulated under this chapter who is also licensed under
  Chapter 348 or 353, Finance Code, only an officer of the Department
  of Public Safety may at a reasonable time:
               (1)  enter the premises of the person's business; and
               (2)  inspect or copy any document, record, vehicle,
  part, or other item regulated under:
                     (A)  this chapter; or
                     (B)  Chapter 348 or 353, Finance Code.
         SECTION 22.  Section 2306.003(c), Occupations Code, is
  amended to read as follows:
         (c)  A vehicle protection product may also include identity
  recovery, as defined by Section 1306.002, if the vehicle protection
  product is financed under Chapter 348 or 353, Finance Code.
         SECTION 23.  Section 152.002(b), Tax Code, is amended to
  read as follows:
         (b)  "Total consideration" does not include:
               (1)  a cash discount;
               (2)  a full cash or credit refund to a customer of the
  sales price of a motor vehicle returned to the seller;
               (3)  the amount charged for labor or service rendered
  in installing, applying, remodeling, or repairing the motor vehicle
  sold;
               (4)  a financing, carrying, or service charge or
  interest on credit extended on a motor vehicle sold under a
  conditional sale or other deferred payment contract;
               (5)  the value of a motor vehicle taken by a seller as
  all or a part of the consideration for sale of another motor
  vehicle, including any cash payment to the buyer under Section
  348.404 or 353.402, Finance Code;
               (6)  a charge for transportation of the motor vehicle
  after a sale;
               (7)  motor vehicle inventory tax; or
               (8)  an amount made available to the customer under
  Subchapter G, Chapter 382, Health and Safety Code.
         SECTION 24.  Section 501.115(a), Transportation Code, is
  amended to read as follows:
         (a)  When a debt or claim secured by a lien has been
  satisfied, the lienholder shall, within a reasonable time not to
  exceed the maximum time allowed by Section 348.408 or 353.405(b),
  Finance Code, as applicable, execute and deliver to the owner, or
  the owner's designee, a discharge of the lien on a form prescribed
  by the department.
         SECTION 25.  Section 26.342(7), Water Code, is amended to
  read as follows:
               (7)  "Lender" means:
                     (A)  a state or national bank;
                     (B)  a state or federal savings and loan
  association or savings bank;
                     (C)  a credit union;
                     (D)  a state or federal agency that customarily
  provides financing; or
                     (E)  an entity that is registered with the Office
  of Consumer Credit Commissioner pursuant to Chapter 348 or 353,
  Finance Code, if the entity is regularly engaged in the business of
  extending credit and if extending credit represents the majority of
  the entity's total business activity.
         SECTION 26.  The following provisions of the Finance Code
  are repealed:
               (1)  Section 348.007(a-2), as added by Chapter 238
  (S.B. 1965), Acts of the 81st Legislature, Regular Session, 2009;
               (2)  Section 348.007(a-2), as added by Chapter 676
  (H.B. 2438), Acts of the 81st Legislature, Regular Session, 2009;
  and
               (3)  Sections 348.0051, 348.006(j), 348.120(c), and
  348.208(d), (e), and (f).
         SECTION 27.  This Act takes effect September 1, 2011.
 
 
  ______________________________ ______________________________
     President of the Senate Speaker of the House     
 
 
         I certify that H.B. No. 2559 was passed by the House on April
  19, 2011, by the following vote:  Yeas 148, Nays 0, 1 present, not
  voting.
 
  ______________________________
  Chief Clerk of the House   
 
 
         I certify that H.B. No. 2559 was passed by the Senate on May
  10, 2011, by the following vote:  Yeas 31, Nays 0.
 
  ______________________________
  Secretary of the Senate    
  APPROVED:  _____________________
                     Date          
   
            _____________________
                   Governor