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TARA Legislative Accomplishments

Since 1985, TARA has represented the Texas rent to own industry before the Texas Legislature, and before the Texas state agencies that regulate portions of the RTO industry. During that time, the association has successfully passed legislation that benefits all rent-to-own dealers and consumers across the Lone Star State. Here is a summary of the major pieces of legislation that have benefited the industry for years.

Copies of the following legislation, the statutes containing the legislation, and any agency rules and regulations implementing the legislation, are listed in the News Room.

Texas Rental-Purchase Agreements Act
In the 1985 session, the association successfully passed the Texas Rental-Purchase Agreements Act. At the time, this legislation was only the second state law passed in the country to regulate and legitimize the rent to own business. The Texas bill is widely regarded as the most favorable RTO legislation in the country because it provides a fair guideline for the industry while protecting rental customers with full disclosure of total costs, rental rates, and terms.

Loss Damage Waivers/Late Fee Payments
In 2003, TARA worked with the Consumers Union to pass a bill that defined and legalized Loss Damage Waivers on rental agreements. Consumers who accept LDWs are not required to pay for merchandise destroyed by fire, windstorm or other act of GOD, or if the item is stolen. The law requires language explaining and describing the fee and what it covers.In addition, the bill established the following criteria for loss damage waivers:

  1. An LDW is not insurance.
  2. The consumer must agree to the waiver, and the merchant may not require purchase of it.
  3. The total cost of the waiver must be stated in the waiver.
  4. The merchant may charge a fee for a waiver not to exceed 10% of the regular payment.
  5. Rental contracts must include notice that an LDW is available.
  6. All LDWs must be pre-approved by the Texas Department of Licensing and Regulation.

This legislation was necessary because several law suits had filed claiming a Texas rental company was selling insurance without a license.

In addition, this bill further defined when late fees can be assessed. The bill allows rental agreements to contain a provision requiring the payment of a late charge or reinstatement fee unless a regular payment is delinquent for more than seven days if the payment is due monthly, or is delinquent for more than three days if the payment is due more frequently than monthly.

Late Fee Increases
In 2005, TARA successfully passed legislation that resulted in the first increase in late fees for the Texas RTO industry in 20 years. SB 709 increased the maximum late fee to not more than the lesser of 10% (from 5%) of the delinquent payment or $10 (from $5) and not less than $5 (from $2). In effect, the legislation doubled the late fee. This statutory change raised over $1.2 million in additional fee revenue to Texas rental dealers in the first year alone.

Bed Bug Bill
In 2005, TARA played a key role in the passage of HB 1752, commonly referred to as the "Bed Bug Bill". This legislation exempts rental dealers from certain onerous "premises" rules regarding the germicidal treatment of used bedding. The specific exemption included in the bill is noted below:

Texas Health and Safety Code


Sec. 345.045.  MINIMUM SANITARY STANDARDS FOR GERMICIDAL TREATMENT PERMIT. (a) The holder of a germicidal treatment permit must maintain the permit holder's place of business in a sanitary condition free from refuse, dirt contamination, insects, and vermin.

(b) The executive commissioner of the Health and Human Services Commission, by rule, may establish additional requirements regulating the sanitary condition of a permit holder's place of business. The holder of a germicidal treatment permit who germicidally treats not more than 10 items at the permit holder's place of business each week is exempt from any additional requirements regulating the sanitary condition of a permit holder's place of business adopted under this subsection.

Current Legislative Efforts
In the 2009 Texas Legislature, TARA is pursuing legislation to eliminate state property tax on rented inventory. In 2007, the association was able to get this legislation through the House, but the bill died in the Senate. This session, the association is attempting to resolve the issues in the Senate first, to clear a path for the bill through the legislature.