BILL ANALYSIS C.S.S.B. 1234 By: Armbrister State Affairs 4-24-95 Committee Report (Substituted) BACKGROUND Currently, motor vehicles owned by rental car companies must be licensed and registered in the same manner as private motor vehicles. Additionally, property taxes must be paid on the rental fleet at each business location. Rental vehicle fleets normally turn over in less than a year. The size of the fleet is seasonal and changes during different periods in the year, making the size of the fleet subject to manipulation. In the current system, it has become increasingly difficult to remain profitable. PURPOSE As proposed, C.S.S.B. 1234 authorizes a motor vehicle rental company to be reimbursed for certain fees and taxes; provides a civil penalty. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not grant any additional rulemaking authority to a state officer, institution, or agency. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 20, Title 132, V.T.C.S., by adding Article 9026a, as follows: Art. 9026a. MOTOR VEHICLE RENTAL REIMBURSEMENT CHARGES Sec. 1. DEFINITIONS. Defines "gross rental receipts tax," "motor vehicle," "person," "rental agreement," "rental company," "renter," and "rental day." Sec. 2. APPLICATION. Sets forth the circumstances to which this article does and does not apply. Sec. 3. REIMBURSEMENT CHARGE. Authorizes a rental company to include in each rental agreement a charge to reimburse the rental company for amounts the rental company paid during the calendar year preceding the year of the agreement for title fees, registration fees, and property taxes on the rental company's motor vehicle rental fleet. Authorizes the rental company to retain amounts collected under this section. Requires the charge, if a rental company elects to charge the reimbursement, to be non-discriminatory and to be collected from all persons entering into rental agreements with the rental company except those persons exempted by this article. Sec. 4. NOTICE OF CHARGE. Requires the reimbursement charge, if any, to be listed on the face of the rental agreement above the place where the applicable tax is listed and labeled as "reimbursement for title, registration, and personal property taxes" or by the abbreviation "Reimb--TRPPT." Sec. 5. COMPUTATION OF CHARGE. (a) Sets forth the computation of the amount of the reimbursement charge applicable to each rental agreement. (b) Requires a rental company to make the computation authorized by this section before January 15 of the year during which the computation applies and begin collecting the computed amount on the day after the date of the computation. Prohibits the amount applicable to a year from being altered after initial computation. Sec. 6. DURATION OF COLLECTION. (a) Authorizes a rental company to collect the reimbursement charge from each renter to which the charge applies until the earlier of January 15 of the following year or the date on which the rental company collects the charges or the computation for the following year takes effect. (b) Prohibits the rental company from collecting the reimbursement charge after the amount is collected. Requires the company to list "$0.00" in the place where reimbursement charge is required to be listed on the rental agreement. Sec. 7. EXCESSIVE OR DEFICIENT COLLECTION. (a) Requires the rental company to subtract the amount of the excess from the amount the rental company is entitled to collect during the following year if the company collects more than the company is entitled to collect. (b) Prohibits the rental company from adjusting the amount collected during the following year or otherwise attempting to collect the deficiency if a rental company collects less than the company is entitled. Sec. 8. CHARGE SUBJECT TO TAX. Provides that a reimbursement charge is subject to the gross rental receipts tax. Sec. 9. CIVIL PENALTY. (a) Provides that a rental company that violates this article is liable to the state for a civil penalty in an amount of not less than $500 and not more than $1,000 for each violation or each day of a continuing violation. (b) Authorizes the attorney general or a county or district attorney to sue to recover the civil penalty for the state, to enjoin a violation of this article, or for both the penalty and injunction. SECTION 2. Effective date: January 1, 1996. SECTION 3. Emergency clause.