By Siebert H.B. No. 3091
76R11590 DWS-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to rental car damage waivers; providing a penalty.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Chapter 20, Title 132, Revised Statutes, is
1-5 amended by adding Article 9026c to read as follows:
1-6 Art. 9026c. RENTAL CAR DAMAGE WAIVER
1-7 Sec. 1. DEFINITIONS. In this article:
1-8 (1) "Rental company" means a person or other entity
1-9 that is in the business of renting private passenger vehicles to
1-10 the public for 30 days or less. The term does not include an
1-11 individual or other entity who holds a license issued by the Motor
1-12 Vehicle Board of the Texas Department of Transportation under the
1-13 Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's
1-14 Texas Civil Statutes) and whose primary business activity is not
1-15 the renting of private passenger automobiles.
1-16 (2) "Renter" means a person or other entity that
1-17 obtains the use of a private passenger vehicle from a rental
1-18 company under terms of a rental agreement.
1-19 (3) "Rental agreement" means an agreement for 30 days
1-20 or less setting forth the terms and conditions governing the use of
1-21 a private passenger vehicle provided by a rental company.
1-22 (4) "Damage" means damage to or loss of a rented
1-23 vehicle, including theft and loss of use, and any cost or expense
1-24 incident to the damage or loss, including storage, impound, towing,
2-1 and administrative charges, regardless of fault involved in the
2-2 damage or loss.
2-3 (5) "Private passenger vehicle" means a motor vehicle
2-4 of the private passenger type, including a passenger van, that is
2-5 primarily intended for private use.
2-6 (6) "Authorized driver" means:
2-7 (A) the renter;
2-8 (B) the renter's spouse if the spouse is a
2-9 licensed driver and satisfies the rental company's minimum age
2-10 requirement;
2-11 (C) the renter's employer, employee, or coworker
2-12 if the person is a licensed driver, satisfies the rental company's
2-13 minimum age requirement, and at the time of the rental is engaged
2-14 in a business activity with the renter;
2-15 (D) any person who is expressly listed by the
2-16 rental company on the rental agreement as an authorized driver; and
2-17 (E) any person driving directly to a medical or
2-18 police facility under circumstances reasonably believed to
2-19 constitute an emergency and who is a licensed driver.
2-20 (7) "Damage waiver" means a rental company's agreement
2-21 not to hold an authorized driver liable for all or a part of any
2-22 damage to a rented vehicle.
2-23 Sec. 2. PROHIBITED PRACTICES. (a) A rental company may not
2-24 sell a damage waiver unless the renter agrees to the damage waiver
2-25 in writing at or before the time the rental agreement is executed.
2-26 (b) A rental company may not void a damage waiver except for
2-27 one or more of the following reasons:
3-1 (1) the damage is caused intentionally or as a result
3-2 of wilful, wanton, or reckless conduct;
3-3 (2) the damage arises out of the use of the vehicle
3-4 while under the influence of alcohol, illegal drugs, a controlled
3-5 substance, or any other intoxicant that impairs driving ability;
3-6 (3) the rental company entered into the rental
3-7 transaction based on fraudulent or materially false information
3-8 supplied by the renter;
3-9 (4) the damage arises out of the use of the vehicle
3-10 while engaged in the commission of a crime other than a traffic
3-11 infraction;
3-12 (5) the damage arises out of the use of the vehicle to
3-13 carry persons or property for hire, to push or tow anything, to
3-14 engage in a speed contest, or for driver's training;
3-15 (6) the damage arises out of the use of the vehicle by
3-16 a person other than an authorized driver; or
3-17 (7) the damage arises out of the use of the vehicle
3-18 outside the continental United States and the use is not
3-19 specifically authorized by the rental agreement.
3-20 Sec. 3. DISCLOSURE NOTICE REQUIREMENTS. A rental company
3-21 shall provide each renter who purchases a damage waiver that is not
3-22 included in the base rental rate the following disclosure notice,
3-23 which must be in at least 10-point type:
3-24 NOTICE: Your rental agreement offers, for an
3-25 additional charge, an optional waiver to cover all or a
3-26 part of your responsibility for damage to or loss of
3-27 the vehicle. Before deciding whether to purchase the
4-1 waiver, you may wish to determine whether your own
4-2 automobile insurance or credit card agreement provides
4-3 you coverage for rental vehicle damage or loss and
4-4 determine the amount of the deductible under your own
4-5 insurance coverage. The purchase of the waiver is not
4-6 mandatory. The waiver is not insurance.
4-7 Sec. 4. MANDATORY CHARGES. (a) In this section, "mandatory
4-8 charge" means any charge, surcharge, or fee in addition to the base
4-9 rental rate for an item or service provided in connection with a
4-10 rental transaction that the renter does not have the option of
4-11 avoiding or declining and that is not otherwise imposed by law.
4-12 (b) A rental agreement containing a mandatory charge must
4-13 prominently display and fully disclose the charge:
4-14 (1) separately on the face of the agreement; and
4-15 (2) in all of the rental company's price advertising,
4-16 price displays, price quotes, and price offers, including displays
4-17 in computerized reservation systems.
4-18 (c) A rental company may not impose or require the purchase
4-19 of a damage waiver as a mandatory charge.
4-20 Sec. 5. PENALTY. (a) A rental company that violates this
4-21 article is subject to a civil penalty in an amount of at least $500
4-22 and not to exceed $1,000 for each act of violation.
4-23 (b) A county or district attorney or the attorney general
4-24 may institute and conduct a suit in the name of the state to
4-25 recover the civil penalty, injunctive relief, or both the civil
4-26 penalty and injunctive relief.
4-27 (c) Any person or entity injured or threatened with injury
5-1 by a violation of this article may seek injunctive relief against
5-2 any company or person who violates or threatens to violate this
5-3 article.
5-4 SECTION 2. Article 9026, Revised Statutes, is repealed.
5-5 SECTION 3. The change in law made by this Act applies only
5-6 to a rental agreement entered on or after the effective date of
5-7 this Act. A rental agreement entered before the effective date of
5-8 this Act is governed by the law in effect when the rental agreement
5-9 was entered, and the former law is continued in effect for that
5-10 purpose.
5-11 SECTION 4. This Act takes effect September 1, 1999.
5-12 SECTION 5. The importance of this legislation and the
5-13 crowded condition of the calendars in both houses create an
5-14 emergency and an imperative public necessity that the
5-15 constitutional rule requiring bills to be read on three several
5-16 days in each house be suspended, and this rule is hereby suspended.