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


Senate Research CenterC.S.S.B. 957
77R13256 ATP-FBy: Brown, J. E. "Buster"
Business & Commerce
4/22/2001
Committee Report (Substituted)


DIGEST AND PURPOSE 

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

RULEMAKING AUTHORITY

Rulemaking authority is expressly granted to the Texas Department of
Licensing and Regulation in SECTION 3 (Section 35.721, Business and
Commerce Code), of this bill. 

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 Section 35.72(c), Business and Commerce Code, to
authorize a rentalpurchase agreement to contain a provision requiring the
purchase of a loss damage waiver. 

SECTION 3.  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 periodic charge for the loss damage waiver.  Prohibits the periodic
charge for a  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 may 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. 

(g)  Prohibits a merchant from selling a loss damage waiver unless the
merchant meets certain requirements. 

(h)  Authorizes the Texas Department of Licensing and Regulation to charge
a merchant a fee for registration under Subsection (g) in an amount
designed to recover the department's costs in issuing the registration, set
the amount of the registration fee by rule, and by rule adopt procedures
for applying for registration under Subsection (g). 

(i)  Requires the commissioner of the Texas Department of Licensing and
Regulation to enforce this section and to investigate any consumer
complaint concerning the amount of loss damage waiver fees charged by a
merchant. 

SECTION 4.  Makes application of this Act prospective.

SECTION 5.  Effective date: September 1, 2001.


SUMMARY OF COMMITTEE CHANGES

Amends As Filed S.B. 957 by adding amendments to Section 35.72(c) Business
and Commerce Code. 

Amends As Filed S.B. 957 by adding Subsections (g), (h), and (i) to the
proposed language of Section 35.271, Business and Commerce Code.