Bill Caption

Relating to excess loss damage waivers in connection with the lease of motor vehicles; providing a civil penalty.

Fiscal Notes

No significant fiscal implication to the State is anticipated. 

Bill Analysis

Currently, the Business and Commerce Code provides for excess wear and use waivers for rental cars, heavy equipment, and other rental goods, but it does not have a provision for leased motor vehicles.

SB 1778 would provide rules for excess wear and use waivers for leased motor vehicles, which are provisions in lease agreements where the lessor agrees to not hold a lessee liable for all or part of the excess wear and use to a motor vehicle. Lessors would be prohibited from selling an excess wear and use waiver (unless the lease agreement complies with the bill provisions and the lessee agrees to the waiver in writing), or from imposing or requiring the purchase of an excess wear and use waiver as a condition of entering into a lease agreement.

This bill also provides language for a required written notice of an excess wear and use waiver. Additionally, a lease agreement that includes an excess wear and use waiver must disclose (1) the total charge for the excess wear and use waiver, and (2) any exclusions or limitations on the amount of excess wear and use that may be waived under the excess wear and use waiver.

Finally, this bill would impose a civil penalty of between $500 and $1,000 for each violation. It would also authorize the attorney general or a county or district attorney to bring an action in the name of the state for a civil penalty or injunctive relief.

Vote Recommendation Notes

Texas Action remains neutral on SB 1778 because it does not affect our liberty principles.