S.B. No. 1778
AN ACT
relating to excess wear and use waivers in connection with the lease
of motor vehicles; providing a civil penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle B, Title 5, Business & Commerce Code, is
amended by adding Chapter 94 to read as follows:
CHAPTER 94. EXCESS WEAR AND USE WAIVERS FOR LEASES OF MOTOR
VEHICLES
Sec. 94.001. DEFINITIONS. In this chapter:
(1) "Excess wear and use waiver" means a provision of
or addendum to a lease agreement under which the lessor agrees to
not hold a lessee liable for all or part of the excess wear and use
to a motor vehicle.
(2) "Lease agreement" means an agreement, including
any addendum to the agreement, entered into in this state under
which a lessee pays a fee or other consideration to a lessor for the
right to possession and use of a motor vehicle for a term of more
than 180 days, regardless of whether the agreement provides the
lessee an option to purchase or otherwise become the owner of the
motor vehicle upon the expiration of the term of the agreement.
(3) "Lessee" means an individual who acquires the
right to possession and use of a motor vehicle under a lease
agreement primarily for personal, family, or household purposes.
(4) "Lessor" means a person who, in the ordinary
course of business, regularly leases, offers to lease, or arranges
for the lease of a motor vehicle under a lease agreement. Unless
the context clearly indicates otherwise, the term includes an
assignee of the lessor.
(5) "Motor vehicle" has the meaning assigned by
Section 541.201, Transportation Code.
Sec. 94.002. CONTRACT FOR EXCESS WEAR AND USE WAIVER. A
lessee may contract with a lessor for an excess wear and use waiver
in connection with a lease agreement.
Sec. 94.003. RESTRICTIONS ON LESSOR CONCERNING EXCESS WEAR
AND USE WAIVER. A lessor may not:
(1) sell an excess wear and use waiver, unless:
(A) the lease agreement containing the excess
wear and use waiver complies with this chapter; and
(B) the lessee agrees to the excess wear and use
waiver in writing; or
(2) impose or require the purchase of an excess wear
and use waiver as a condition of entering into a lease agreement.
Sec. 94.004. REQUIRED NOTICE. An excess wear and use waiver
must be in writing and include a notice substantially similar to the
following:
"This excess wear and use waiver is optional, is not a
condition of leasing the vehicle, and is being provided for an
additional charge to cover your responsibility for any excess wear
and use to the leased vehicle."
Sec. 94.005. REQUIRED DISCLOSURES. 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.
Sec. 94.006. RELATIONSHIP TO INSURANCE. An excess wear and
use waiver is not insurance.
Sec. 94.007. CIVIL PENALTY. A lessor that violates this
chapter is liable for a civil penalty in an amount of not less than
$500 or more than $1,000 for each violation.
Sec. 94.008. INJUNCTIVE RELIEF. A person injured or
threatened with injury by a violation of this chapter may seek
injunctive relief against the person committing or threatening to
commit the violation.
Sec. 94.009. SUIT FOR CIVIL PENALTY OR INJUNCTIVE RELIEF.
The attorney general or a county or district attorney may bring an
action in the name of the state for a civil penalty under Section
94.007, injunctive relief under Section 94.008, or both.
SECTION 2. The change in law made by this Act applies only
to a lease agreement entered into on or after the effective date of
this Act. A lease agreement entered into before the effective date
of this Act is governed by the law in effect on the date the lease
agreement was entered into, and the former law is continued in
effect for that purpose.
SECTION 3. This Act takes effect September 1, 2019.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1778 passed the Senate on
April 29, 2019, by the following vote: Yeas 31, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1778 passed the House on
May 22, 2019, by the following vote: Yeas 139, Nays 5, two
present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor