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I’ , = , If ‘I I .1 *till Inns ingrown, 1.11 f rate lobbies. Such a judgment is not based just on the big bills of the sessionraising mortgage interest rates \(Obs., primary \(Obs ., the Consumer Protection Act \(Obs.., laws \(Obs., whole bunch of less-publicized measures. These are little bad ol’ bills that add up to an embarrassment’ of riches for special interests, and just plain embarrassment for Texans. By no means is this an exhaustive list, but it’ll give you an idea of the kind of stuff getting serious consideration by your lawmakers. Money changers Though Sen. Bill Melees hopes of raising the interest rate ceiling on home mortgages from 10 to 12 percent were dashed for this session by Gov. Bill Clements’ promise to veto any such move, this does not mean that the money changers’ lobby is going home from Austin empty-handed. Take SB 246. Please. This little offering by Sen. Ray Farabee lets savings and loan companies come through the back door to get around the state usury law. His bill allows mortgage lenders to play a complicated game of hide-and-seek with the principal of a loan, and the result is that the effective rate of interest charged on the borrower’s note will be as high as 11.4 percent. The bill passed the Senate 23 to 6 and is already out of the House committee. Just in case that tricky maneuver might later be determined by some court to be less than kosher, Farabee has also offered SB 247, which reduces the civil penalties that a lender would have to pay if convicted of charging usurious rates. This measure invites lenders to take the risk of charging more than the legal rate, since few borrowers challenge it in the first place and since the penalty for getting caught would not be so burdensome. SB 247 has already passed the Senate. SB 10, by Sen. Ike Harris, would allow savings and loans to squeeze higher interest payments from family farmers and small businesses. Lenders now can charge up to 18 percent interest on business loans above $500,000. Harris’ bill would lower that loan level to $175,000. It was approved by the Senate, 21 to 8. Other lenders are trying to pick up a little extra change at the Legislature, too. Finance companiessometimes called “loan sharks”are back trying for higher rates on short-term loans between $150 and $300. Senator Harris is carrying their measure, SB 639, which would allow them to charge as high as 71 percent interest for a nine-month $300 loan. Senator Farabee is sponsor of SB 811, termed the “Bankamericard Bill,” which removes significant disclosure requirements from credit card loans. Those Texans with retail charge accounts will be interested in HB 1659 by Rep. Don Cartwright, which would hike the interest on such charges. And Rep. Jim Rudd is carrying HB 1412, which raises the interest rates on installment purchases about 14 percent to about 18 percent. Relief for the rich By a four-to-one vote last fall, Texans approved a constitutional amendment to provide tax relief, including a provision to help family farmers by appraising their land on its productivity value, rather than the higher market value. HB 1060 would implement the amendment, but when it came to the floor, Speaker Bill Clayton had his team knock a loophole in it to allow big corporate farms and timber companies to cash in on the productivity provision. A motion by Rep. John Bryant to restrict the tax break to family-owned companies and farms was drubbed, 80 to 56. Another amendment, by Rep. Ron Coleman, said that at least the corporate farms should have to file their holdings, so taxpayers would know whom they were subsidizing, but that was defeated 72 to 60. Then, an effort to prevent timber companies from horning in on the farm break was beaten, 76 to 60. If allowed to stand in the Senate, HB 1060 will assure that Time magazine, owner of a million acres of East Texas timberland, and other out-of-state paper companies will be the primary beneficiaries of a tax advantage that voters only meant to give to TexaS family farmers. The House -leadership also is making every effort to protect the incomes of corporations and the wealthy from state taxation. Rep. Al Brown, chairman of the constitutional amendments committee, proposed HJR 102, a measure to prohibit the levying of an income tax in Texas. Rep. Bob Leonard moved to tack on a prohibition against any corporate income tax as well. His amendment was approved 93 to 41, and the entire package, banning both personal and corporate income taxes, was okayed by 99 membersone short of the 100 votes needed to put it before the voters as a constitutional amendment. A second try also failed, 82 to 51, after crippling amendments were added to HJR 102 by progressive forces. That may have killed the resolution in the House, but nothing is certain this session. Consumer gouges Give the auto dealers’ lobby a mile and they’ll take another inch. Not only have they had their way in the Senate with their pet projectoverhauling the Consumer Protection Act so that it effec tively exempts them from being sued under itbut they also want to nickeland-dime their customers. Sen. Tom Creighton toted their bill, SB 359, which would allow them to charge car buyers an extra $35 each for a “paperwork fee.” Sen. Lloyd Doggett pointed out that county officials perform the same paperwork service for a fee of 65 cents, and Sen. Babe Schwartz added that what this bill does is give car dealers “a way to pick the pockets of the American people.” But the lobby won in the Senate by a vote of 18 to 10. Then there’s the “Montgomery Ward Bill,” sponsored by Sen. Carl Parker and pushed by the giant retail chain \(a subSB 219 would allow them to do is to sell a catch-all insurance policy to customers who buy an appliance or other product on an installment plan. What it amounts to is selling insurance to a customer to cover that customer’s debt to Ward’s. There’s no assurance that Ward’s won’t pressure installment buyers to take the insurance, no special disclosure requirements on the terms of the policy, no ability to take just one piece of coverage rather than the whole package, and nothing to keep the retailer from setting a rate on the policy without prior approval of the State Board of Insurance. The Senate passed the bill on second reading by a vote of 26 to 5. Utilities are doing a great deal of shifting around this sessionelectric companies and at least one gas utility want the Legislature to move original ratemaking authority from local comRep. Richard Slack, chairman of the energy resources committee, is carrying another bill for the gas companies, HB 845, which would let them negotiate rates with individual industrial users without getting the approval of the Railroad Commission, or even having to report what the rates are. Slack’s bill allows the utilities to discriminate against 10 APRIL 27, 1979 em0.1961.Aak……: ‘Op 0’4 .140,7.svx ‘ ,140,111,4164.1