SRC-MWN, TBR S.B. 957 77(R)   BILL ANALYSIS


Senate Research Center   S.B. 957
2001s0612/1 02/23/01By: Brown, J. E. "Buster"
Business & Commerce
4/16/2001
As Filed


DIGEST AND PURPOSE 

Currently, the Business & Commerce Code subchapter concerning
rental-purchase agreements does not address loss damage waivers. As
proposed, S.B. 957 provides consumer protections for certain loss damage
waiver agreements. 

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a
state officer, institution or agency. 

SECTION BY SECTION ANALYSIS

SECTION 1.Amends Section 35.71, Business & Commerce Code, as follows:

 Sec. 35.71.  DEFINITIONS.  Defines "Loss damage waiver."

SECTION 2.  Amends Chapter 35F, Business & Commerce Code, by adding Section
35.721 as follows: 

Sec. 35.721.  LOSS DAMAGE WAIVER.  (a)  Authorizes a consumer, in addition
to other charges permitted by this subchapter, to contract for a loss
damage waiver.  Provides that a loss damage waiver is not insurance. 

(b)  Prohibits a merchant from selling a loss damage waiver unless the
consumer agrees to the waiver in writing at or before the time the
rental-purchase agreement is executed. Prohibits a merchant from imposing
or requiring the purchase of a loss damage waiver as a mandatory charge. 

(c)  Provides that a loss damage waiver can exclude loss or damage to the
merchandise caused by moisture, scratches, mysterious disappearance,
vandalism, abandonment of the merchandise or any other damage intentionally
caused by the consumer or that results from the consumer's willful or
wanton misconduct or negligence. 

(d)  Requires a loss damage waiver agreement to include a statement of the
total charge for the loss damage waiver.  Requires the loss damage waiver
amount from exceeding certain specified amounts. 

(e)  Requires the loss damage waiver agreement display a certain specified
notice. 

(f)  Prohibits oral or written representations from being made by an
employee or agent of the merchant that contradict the provisions of this
section.  Provides that no coercive language or action to be used by an
employee or agent of the merchant in an attempt to persuade a consumer to
purchase a loss damage waiver.  Requires that for the purposes of this
subsection, if the consumer has declined a loss damage waiver, further
statements or questions by an employee or agent of the merchant making
reference to the loss damage waiver, other than a statement that the waiver
has been declined, made in conjunction with a review of the rental-purchase
agreement to be deemed coercive. 

SECTION 3.  Makes application of this Act prospective.

SECTION 4.  Effective date: September 1, 2001.