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                                  * * * * *