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.