1-1 By: Siebert (Senate Sponsor - Brown) H.B. No. 3091 1-2 (In the Senate - Received from the House April 28, 1999; 1-3 April 29, 1999, read first time and referred to Committee on 1-4 Administration; May 10, 1999, reported favorably, as amended, by 1-5 the following vote: Yeas 4, Nays 0; May 10, 1999, sent to 1-6 printer.) 1-7 COMMITTEE AMENDMENT NO. 1 By: Harris 1-8 Amend HB 3091 as follows: 1-9 (1) On page 2, line 56, between the period and "A rental company" 1-10 insert "(a)". 1-11 (2) On page 2, line 69, after the Final period, insert the 1-12 following: (b) In addition to the notice provided to each renter 1-13 who purchases a damage waiver, a rental company shall post in a 1-14 conspicuous location where the waiver is being offered the 1-15 following notice: 1-16 Notice to Texas Residents Regarding Damage Waivers 1-17 The Texas personal automobile insurance policy provides coverage 1-18 with NO DEDUCTIBLE for the legal liabilities of the policyholder in 1-19 connection with the loss of or damage to a rented vehicle, except 1-20 for damages caused intentionally, up to the maximum of the property 1-21 damage limits under your liability coverage. If you file a claim 1-22 under your personal automobile insurance policy, your insurance 1-23 company may choose to nonrenew your policy at your renewal date, 1-24 but may do so only if you are at fault for the claim. 1-25 (3) On page 2, line 37, strike Sec. 2(b)(1) and replace it with 1-26 the following: 1-27 (1) damage is caused intentionally by an authorized driver 1-28 or as a result of willful and wanton misconduct of an authorized 1-29 driver; 1-30 (4) On page 2, line 42, strike Sec. 2(b)(3) and replace it with 1-31 the following: 1-32 (3) the rental company entered into the rental transaction 1-33 based on fraudulent information supplied by the renter; 1-34 (5) On page 3, line 14, insert new Sec. 5 to read as follows and 1-35 renumber subsequent sections: 1-36 Sec. 5. PROHIBITED REPRESENTATIONS. No oral or written 1-37 representations shall be made by any employee or agent of the 1-38 rental car company which contradict the provisions of this Act. No 1-39 coercive language or action shall be used by any employee or agent 1-40 of the rental car company in an attempt to persuade a rental 1-41 customer to purchase the loss damage waiver. For the purposes of 1-42 this subsection, if the rental customer has declined the waiver, 1-43 further statements or questions by an employee or agent of the 1-44 rental company making reference to the loss damage waiver, other 1-45 than a statement that the waiver has been declined made in 1-46 conjunction with a review of the rental agreement, shall be deemed 1-47 coercive. 1-48 A BILL TO BE ENTITLED 1-49 AN ACT 1-50 relating to rental car damage waivers; providing a penalty. 1-51 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-52 SECTION 1. Chapter 20, Title 132, Revised Statutes, is 1-53 amended by adding Article 9026c to read as follows: 1-54 Art. 9026c. RENTAL CAR DAMAGE WAIVER 1-55 Sec. 1. DEFINITIONS. In this article: 1-56 (1) "Rental company" means a person or other entity 1-57 that is in the business of renting private passenger vehicles to 1-58 the public for 30 days or less. The term does not include an 1-59 individual or other entity who holds a license issued by the Motor 1-60 Vehicle Board of the Texas Department of Transportation under the 1-61 Texas Motor Vehicle Commission Code (Article 4413(36), Vernon's 1-62 Texas Civil Statutes) and whose primary business activity is not 1-63 the renting of private passenger automobiles. 2-1 (2) "Renter" means a person or other entity that 2-2 obtains the use of a private passenger vehicle from a rental 2-3 company under terms of a rental agreement. 2-4 (3) "Rental agreement" means an agreement for 30 days 2-5 or less setting forth the terms and conditions governing the use of 2-6 a private passenger vehicle provided by a rental company. 2-7 (4) "Damage" means damage to or loss of a rented 2-8 vehicle, including theft and loss of use, and any cost or expense 2-9 incident to the damage or loss, including storage, impound, towing, 2-10 and administrative charges, regardless of fault involved in the 2-11 damage or loss. 2-12 (5) "Private passenger vehicle" means a motor vehicle 2-13 of the private passenger type, including a passenger van, that is 2-14 primarily intended for private use. 2-15 (6) "Authorized driver" means: 2-16 (A) the renter; 2-17 (B) the renter's spouse if the spouse is a 2-18 licensed driver and satisfies the rental company's minimum age 2-19 requirement; 2-20 (C) the renter's employer, employee, or coworker 2-21 if the person is a licensed driver, satisfies the rental company's 2-22 minimum age requirement, and at the time of the rental is engaged 2-23 in a business activity with the renter; 2-24 (D) any person who is expressly listed by the 2-25 rental company on the rental agreement as an authorized driver; and 2-26 (E) any person driving directly to a medical or 2-27 police facility under circumstances reasonably believed to 2-28 constitute an emergency and who is a licensed driver. 2-29 (7) "Damage waiver" means a rental company's agreement 2-30 not to hold an authorized driver liable for all or a part of any 2-31 damage to a rented vehicle. 2-32 Sec. 2. PROHIBITED PRACTICES. (a) A rental company may not 2-33 sell a damage waiver unless the renter agrees to the damage waiver 2-34 in writing at or before the time the rental agreement is executed. 2-35 (b) A rental company may not void a damage waiver except for 2-36 one or more of the following reasons: 2-37 (1) the damage is caused intentionally or as a result 2-38 of wilful, wanton, or reckless conduct; 2-39 (2) the damage arises out of the use of the vehicle 2-40 while under the influence of alcohol, illegal drugs, a controlled 2-41 substance, or any other intoxicant that impairs driving ability; 2-42 (3) the rental company entered into the rental 2-43 transaction based on fraudulent or materially false information 2-44 supplied by the renter; 2-45 (4) the damage arises out of the use of the vehicle 2-46 while engaged in the commission of a crime other than a traffic 2-47 infraction; 2-48 (5) the damage arises out of the use of the vehicle to 2-49 carry persons or property for hire, to push or tow anything, to 2-50 engage in a speed contest, or for driver's training; 2-51 (6) the damage arises out of the use of the vehicle by 2-52 a person other than an authorized driver; or 2-53 (7) the damage arises out of the use of the vehicle 2-54 outside the continental United States and the use is not 2-55 specifically authorized by the rental agreement. 2-56 Sec. 3. DISCLOSURE NOTICE REQUIREMENTS. A rental company 2-57 shall provide each renter who purchases a damage waiver that is not 2-58 included in the base rental rate the following disclosure notice, 2-59 which must be in at least 10-point type: 2-60 NOTICE: Your rental agreement offers, for an 2-61 additional charge, an optional waiver to cover all or a 2-62 part of your responsibility for damage to or loss of 2-63 the vehicle. Before deciding whether to purchase the 2-64 waiver, you may wish to determine whether your own 2-65 automobile insurance or credit card agreement provides 2-66 you coverage for rental vehicle damage or loss and 2-67 determine the amount of the deductible under your own 2-68 insurance coverage. The purchase of the waiver is not 2-69 mandatory. The waiver is not insurance. 3-1 Sec. 4. MANDATORY CHARGES. (a) In this section, "mandatory 3-2 charge" means any charge, surcharge, or fee in addition to the base 3-3 rental rate for an item or service provided in connection with a 3-4 rental transaction that the renter does not have the option of 3-5 avoiding or declining and that is not otherwise imposed by law. 3-6 (b) A rental agreement containing a mandatory charge must 3-7 prominently display and fully disclose the charge: 3-8 (1) separately on the face of the agreement; and 3-9 (2) in all of the rental company's price advertising, 3-10 price displays, price quotes, and price offers, including displays 3-11 in computerized reservation systems. 3-12 (c) A rental company may not impose or require the purchase 3-13 of a damage waiver as a mandatory charge. 3-14 Sec. 5. PENALTY. (a) A rental company that violates this 3-15 article is subject to a civil penalty in an amount of at least $500 3-16 and not to exceed $1,000 for each act of violation. 3-17 (b) A county or district attorney or the attorney general 3-18 may institute and conduct a suit in the name of the state to 3-19 recover the civil penalty, injunctive relief, or both the civil 3-20 penalty and injunctive relief. 3-21 (c) Any person or entity injured or threatened with injury 3-22 by a violation of this article may seek injunctive relief against 3-23 any company or person who violates or threatens to violate this 3-24 article. 3-25 SECTION 2. Article 9026, Revised Statutes, is repealed. 3-26 SECTION 3. The change in law made by this Act applies only 3-27 to a rental agreement entered on or after the effective date of 3-28 this Act. A rental agreement entered before the effective date of 3-29 this Act is governed by the law in effect when the rental agreement 3-30 was entered, and the former law is continued in effect for that 3-31 purpose. 3-32 SECTION 4. This Act takes effect September 1, 1999. 3-33 SECTION 5. The importance of this legislation and the 3-34 crowded condition of the calendars in both houses create an 3-35 emergency and an imperative public necessity that the 3-36 constitutional rule requiring bills to be read on three several 3-37 days in each house be suspended, and this rule is hereby suspended. 3-38 * * * * *