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. 2-59 * * * * *