HBA-NMO, TYH H.B. 3072 76(R)BILL ANALYSIS Office of House Bill AnalysisH.B. 3072 By: Averitt Financial Institutions 10/27/1999 Enrolled BACKGROUND AND PURPOSE Prior to the 76th Legislature, state law authorized the seller of a motor vehicle to pay off the outstanding debt against a vehicle owned by the buyer only when the debt was being paid off for the use of the vehicle as a trade-in on the vehicle being purchased. However, when the vehicle a buyer intended to use as a trade-in had been rendered a total loss, the law did not authorize the seller to pay off the amount owed against the total-loss vehicle and incorporate that amount into the retail installment agreement in the sale. H.B. 3072 authorizes a seller to pay off the outstanding debt against a vehicle owned by the buyer that has been declared a total loss by the buyer's insurer. When both the seller and the retail buyer agree to a monthly installment plan, the retail buyer uses a trade-in vehicle for a down payment, and the net value of the trade-in vehicle exceeds the amount of the agreed down payment, the retail buyer can choose to apply the excess amount to the monthly payment. While the buyer might wish to take the excess back in cash, prior to the 76th Legislature, state law prohibited the seller from tendering in cash to the retail buyer any excess amount from the retail buyer's trade-in. H.B. 3072 authorizes the retail buyer and seller of a motor vehicle to agree to allow the seller to return to the retail buyer a portion of the net cash value of a vehicle used as a trade-in for the cash down payment on a vehicle being purchased. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 348.404, Finance Code, as follows: Sec. 348.404. New title: SELLER'S ACTION FOR INCENTIVE PROGRAM OR TO PAY FOR BUYER'S MOTOR VEHICLE. Authorizes a retail seller, in connection with a retail installment transaction, to advance money to retire an amount owed against a motor vehicle owned by the buyer that has been declared a total loss by the buyer's insurer, in addition to a vehicle used as a trade-in; and to finance repayment of that money in a retail installment contract. Authorizes a retail seller to 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 another motor vehicle. Defines "net cash value." SECTION 2. Amends Section 152.002(b), Tax Code, to make a conforming change. SECTION 3. Emergency clause. Effective date: upon passage.