1-1     By:  Brown                                            S.B. No. 1246
 1-2           (In the Senate - Filed March 11, 1999; March 11, 1999, read
 1-3     first time and referred to Committee on Economic Development;
 1-4     April 22, 1999, reported favorably by the following vote:  Yeas 7,
 1-5     Nays 0; April 22, 1999, sent to printer.)
 1-6                            A BILL TO BE ENTITLED
 1-7                                   AN ACT
 1-8     relating to rental car damage waivers; providing a civil penalty.
 1-9           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-10           SECTION 1.  Chapter 20, Title 132, Revised Statutes, is
1-11     amended by adding Article 9026c to read as follows:
1-12           Art. 9026c.  RENTAL CAR DAMAGE WAIVER
1-13           Sec. 1.  DEFINITIONS.  In this article:
1-14                 (1)  "Rental company" means a person or other entity
1-15     that is in the business of renting private passenger vehicles to
1-16     the public for 30 days or less.
1-17                 (2)  "Renter" means a person or other entity that
1-18     obtains the use of a private passenger vehicle from a rental
1-19     company under terms of a rental agreement.
1-20                 (3)  "Rental agreement" means an agreement for 30 days
1-21     or less setting forth the terms and conditions governing the use of
1-22     a private passenger vehicle provided by a rental company.
1-23                 (4)  "Damage" means damage to or loss of a rented
1-24     vehicle, including theft and loss of use, and any cost or expense
1-25     incident to the damage or loss, including storage, impound, towing,
1-26     and administrative charges, regardless of fault involved in the
1-27     damage or loss.
1-28                 (5)  "Private passenger vehicle" means a motor vehicle
1-29     of the private passenger type, including a passenger van, that is
1-30     primarily intended for private use.
1-31                 (6)  "Authorized driver" means:
1-32                       (A)  the renter;
1-33                       (B)  the renter's spouse if the spouse is a
1-34     licensed driver and satisfies the rental company's minimum age
1-35     requirement;
1-36                       (C)  the renter's employer, employee, or coworker
1-37     if the person is a licensed driver, satisfies the rental company's
1-38     minimum age requirement, and at the time of the rental is engaged
1-39     in a business activity with the renter;
1-40                       (D)  any person who is expressly listed by the
1-41     rental company on the rental agreement as an authorized driver; and
1-42                       (E)  any person driving directly to a medical or
1-43     police facility under circumstances reasonably believed to
1-44     constitute an emergency and who is a licensed driver.
1-45                 (7)  "Damage waiver" means a rental company's agreement
1-46     not to hold an authorized driver liable for all or a part of any
1-47     damage to a rented vehicle.
1-48           Sec. 2.  PROHIBITED PRACTICES.  (a)  A rental company may not
1-49     sell a damage waiver unless the renter agrees to the damage waiver
1-50     in writing at or before the time the rental agreement is executed.
1-51           (b)  A rental company may not void a damage waiver except for
1-52     one or more of the following reasons:
1-53                 (1)  the damage is caused intentionally or as a result
1-54     of wilful, wanton, or reckless conduct;
1-55                 (2)  the damage arises out of the use of the vehicle
1-56     while under the influence of alcohol, illegal drugs, a controlled
1-57     substance, or any other intoxicant that impairs driving ability;
1-58                 (3)  the rental company entered into the rental
1-59     transaction based on fraudulent or materially false information
1-60     supplied by the renter;
1-61                 (4)  the damage arises out of the use of the vehicle
1-62     while engaged in the commission of a crime other than a traffic
1-63     infraction;
1-64                 (5)  the damage arises out of the use of the vehicle to
 2-1     carry persons or property for hire, to push or tow anything, to
 2-2     engage in a speed contest, or for driver's training;
 2-3                 (6)  the damage arises out of the use of the vehicle by
 2-4     a person other than an authorized driver; or
 2-5                 (7)  the damage arises out of the use of the vehicle
 2-6     outside the continental United States and the use is not
 2-7     specifically authorized by the rental agreement.
 2-8           Sec. 3.  DISCLOSURE NOTICE REQUIREMENTS.  A rental company
 2-9     shall provide each renter who purchases a damage waiver that is not
2-10     included in the base rental rate the following disclosure notice,
2-11     which must be in at least 10-point type:
2-12           NOTICE:  Your rental agreement offers, for an
2-13           additional charge, an optional waiver to cover all or a
2-14           part of your responsibility for damage to or loss of
2-15           the vehicle.  Before deciding whether to purchase the
2-16           waiver, you may wish to determine whether your own
2-17           automobile insurance or credit card agreement provides
2-18           you coverage for rental vehicle damage or loss and
2-19           determine the amount of the deductible under your own
2-20           insurance coverage. The purchase of the waiver is not
2-21           mandatory.  The waiver is not insurance.
2-22           Sec. 4.  MANDATORY CHARGES.  (a)  In this section, "mandatory
2-23     charge" means any charge, surcharge, or fee in addition to the base
2-24     rental rate for an item or service provided in connection with a
2-25     rental transaction that the renter does not have the option of
2-26     avoiding or declining and that is not otherwise imposed by law.
2-27           (b)  A rental agreement containing a mandatory charge must
2-28     prominently display and fully disclose the charge:
2-29                 (1)  separately on the face of the agreement; and
2-30                 (2)  in all of the rental company's price advertising,
2-31     price displays, price quotes, and price offers, including displays
2-32     in computerized reservation systems.
2-33           (c)  A rental company may not impose or require the purchase
2-34     of a damage waiver as a mandatory charge.
2-35           Sec. 5.  PENALTY.  (a)  A rental company that violates this
2-36     article is subject to a civil penalty in an amount of at least $500
2-37     and not to exceed $1,000 for each act of violation.
2-38           (b)  A county or district attorney or the attorney general
2-39     may institute and conduct a suit in the name of the state to
2-40     recover the civil penalty, injunctive relief, or both the civil
2-41     penalty and injunctive relief.
2-42           (c)  Any person or entity injured or threatened with injury
2-43     by a violation of this article may seek injunctive relief against
2-44     any company or person who violates or threatens to violate this
2-45     article.
2-46           SECTION 2.  Article 9026, Revised Statutes, is repealed.
2-47           SECTION 3.  The change in law made by this Act applies only
2-48     to a rental agreement entered on or after the effective date of
2-49     this Act.  A rental agreement entered before the effective date of
2-50     this Act is governed by the law in effect when the rental agreement
2-51     was entered, and the former law is continued in effect for that
2-52     purpose.
2-53           SECTION 4.  This Act takes effect September 1, 1999.
2-54           SECTION 5.  The importance of this legislation and the
2-55     crowded condition of the calendars in both houses create an
2-56     emergency and an imperative public necessity that the
2-57     constitutional rule requiring bills to be read on three several
2-58     days in each house be suspended, and this rule is hereby suspended.
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