By Brown S.B. No. 1246
76R7677 DWS-D
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.
1-11 (2) "Renter" means a person or other entity that
1-12 obtains the use of a private passenger vehicle from a rental
1-13 company under terms of a rental agreement.
1-14 (3) "Rental agreement" means an agreement for 30 days
1-15 or less setting forth the terms and conditions governing the use of
1-16 a private passenger vehicle provided by a rental company.
1-17 (4) "Damage" means damage to or loss of a rented
1-18 vehicle, including theft and loss of use, and any cost or expense
1-19 incident to the damage or loss, including storage, impound, towing,
1-20 and administrative charges, regardless of fault involved in the
1-21 damage or loss.
1-22 (5) "Private passenger vehicle" means a motor vehicle
1-23 of the private passenger type, including a passenger van, that is
1-24 primarily intended for private use.
2-1 (6) "Authorized driver" means:
2-2 (A) the renter;
2-3 (B) the renter's spouse if the spouse is a
2-4 licensed driver and satisfies the rental company's minimum age
2-5 requirement;
2-6 (C) the renter's employer, employee, or coworker
2-7 if the person is a licensed driver, satisfies the rental company's
2-8 minimum age requirement, and at the time of the rental is engaged
2-9 in a business activity with the renter;
2-10 (D) any person who is expressly listed by the
2-11 rental company on the rental agreement as an authorized driver; and
2-12 (E) any person driving directly to a medical or
2-13 police facility under circumstances reasonably believed to
2-14 constitute an emergency and who is a licensed driver.
2-15 (7) "Damage waiver" means a rental company's agreement
2-16 not to hold an authorized driver liable for all or a part of any
2-17 damage to a rented vehicle.
2-18 Sec. 2. PROHIBITED PRACTICES. (a) A rental company may not
2-19 sell a damage waiver unless the renter agrees to the damage waiver
2-20 in writing at or before the time the rental agreement is executed.
2-21 (b) A rental company may not void a damage waiver except for
2-22 one or more of the following reasons:
2-23 (1) the damage is caused intentionally or as a result
2-24 of wilful, wanton, or reckless conduct;
2-25 (2) the damage arises out of the use of the vehicle
2-26 while under the influence of alcohol, illegal drugs, a controlled
2-27 substance, or any other intoxicant that impairs driving ability;
3-1 (3) the rental company entered into the rental
3-2 transaction based on fraudulent or materially false information
3-3 supplied by the renter;
3-4 (4) the damage arises out of the use of the vehicle
3-5 while engaged in the commission of a crime other than a traffic
3-6 infraction;
3-7 (5) the damage arises out of the use of the vehicle to
3-8 carry persons or property for hire, to push or tow anything, to
3-9 engage in a speed contest, or for driver's training;
3-10 (6) the damage arises out of the use of the vehicle by
3-11 a person other than an authorized driver; or
3-12 (7) the damage arises out of the use of the vehicle
3-13 outside the continental United States and the use is not
3-14 specifically authorized by the rental agreement.
3-15 Sec. 3. DISCLOSURE NOTICE REQUIREMENTS. A rental company
3-16 shall provide each renter who purchases a damage waiver that is not
3-17 included in the base rental rate the following disclosure notice,
3-18 which must be in at least 10-point type:
3-19 NOTICE: Your rental agreement offers, for an
3-20 additional charge, an optional waiver to cover all or a
3-21 part of your responsibility for damage to or loss of
3-22 the vehicle. Before deciding whether to purchase the
3-23 waiver, you may wish to determine whether your own
3-24 automobile insurance or credit card agreement provides
3-25 you coverage for rental vehicle damage or loss and
3-26 determine the amount of the deductible under your own
3-27 insurance coverage. The purchase of the waiver is not
4-1 mandatory. The waiver is not insurance.
4-2 Sec. 4. MANDATORY CHARGES. (a) In this section, "mandatory
4-3 charge" means any charge, surcharge, or fee in addition to the base
4-4 rental rate for an item or service provided in connection with a
4-5 rental transaction that the renter does not have the option of
4-6 avoiding or declining and that is not otherwise imposed by law.
4-7 (b) A rental agreement containing a mandatory charge must
4-8 prominently display and fully disclose the charge:
4-9 (1) separately on the face of the agreement; and
4-10 (2) in all of the rental company's price advertising,
4-11 price displays, price quotes, and price offers, including displays
4-12 in computerized reservation systems.
4-13 (c) A rental company may not impose or require the purchase
4-14 of a damage waiver as a mandatory charge.
4-15 Sec. 5. PENALTY. (a) A rental company that violates this
4-16 article is subject to a civil penalty in an amount of at least $500
4-17 and not to exceed $1,000 for each act of violation.
4-18 (b) A county or district attorney or the attorney general
4-19 may institute and conduct a suit in the name of the state to
4-20 recover the civil penalty, injunctive relief, or both the civil
4-21 penalty and injunctive relief.
4-22 (c) Any person or entity injured or threatened with injury
4-23 by a violation of this article may seek injunctive relief against
4-24 any company or person who violates or threatens to violate this
4-25 article.
4-26 SECTION 2. Article 9026, Revised Statutes, is repealed.
4-27 SECTION 3. The change in law made by this Act applies only
5-1 to a rental agreement entered on or after the effective date of
5-2 this Act. A rental agreement entered before the effective date of
5-3 this Act is governed by the law in effect when the rental agreement
5-4 was entered, and the former law is continued in effect for that
5-5 purpose.
5-6 SECTION 4. This Act takes effect September 1, 1999.
5-7 SECTION 5. The importance of this legislation and the
5-8 crowded condition of the calendars in both houses create an
5-9 emergency and an imperative public necessity that the
5-10 constitutional rule requiring bills to be read on three several
5-11 days in each house be suspended, and this rule is hereby suspended.