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.