[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1954 Reported in House (RH)]






                                                 Union Calendar No. 510
106th CONGRESS
  2d Session
                                H. R. 1954

                      [Report No. 106-774, Part I]

   To regulate motor vehicle insurance activities to protect against 
   retroactive regulatory and legal action and to create fairness in 
        ultimate insurer laws and vicarious liability standards.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 26, 1999

  Mr. Bryant (for himself, Mr. Oxley, Mr. Burr of North Carolina, Mr. 
  Largent, Mr. Shadegg, Mr. Pickering, and Mr. Coburn) introduced the 
    following bill; which was referred to the Committee on Commerce

                             July 20, 2000

    Reported with an amendment and referred to the Committee on the 
 Judiciary for a period ending not later than September 15, 2000, for 
  consideration of such provisions of the bill and amendment as fall 
within the jurisdiction of that committee pursuant to clause 1(k), rule 
                                   X
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                           September 15, 2000

 Additional sponsors: Mrs. Cubin, Mr. Barton of Texas, Mr. Blunt, Mr. 
       Moran of Virginia, Mr. Stearns, Mr. Rogan, and Mr. Wicker

                           September 15, 2000

 The Committee on the Judiciary discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed
[For text of introduced bill, see copy of bill as introduced on May 26, 
                                 1999]

_______________________________________________________________________

                                 A BILL


 
   To regulate motor vehicle insurance activities to protect against 
   retroactive regulatory and legal action and to create fairness in 
        ultimate insurer laws and vicarious liability standards.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Rental Fairness 
Act of 2000''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title and table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Definitions.
Sec. 4. General fairness and responsibility rule.
Sec. 5. Preservation of State law.
Sec. 6. Preservation of liability based on negligence.
Sec. 7. Applicability and effective date.

SEC. 2. FINDINGS AND PURPOSES.

    The Congress finds that--
            (1) The vast majority of State statutes and common law 
        follow the generally accepted principle of law that a party 
        should be held liable only for harm that the party could guard 
        against.
            (2) A small number of State common laws and statutes still 
        do not recognize this accepted principle of law, and continue 
        to subject companies that rent or lease motor vehicles to 
        vicarious liability for the negligence of their rental 
        customers in operating the motor vehicle simply because of the 
        company's ownership, even where the rental company has not been 
        negligent in any way and the motor vehicle operated properly.
            (3) An even smaller minority of State laws impose unlimited 
        liability on the companies for the tortious acts of their 
        customers, without regard to fault.
            (4) These small number of vicarious liability laws pose a 
        significant competitive barrier to entry for smaller companies 
        attempting to compete in these markets, in contravention of the 
        fundamental legal principle of fairness prohibiting liability 
        without fault.
            (5) Furthermore, because rented or leased motor vehicles 
        are frequently driven across State lines, these small number of 
        vicarious liability laws impose a disproportionate and undue 
        burden on interstate commerce by increasing rental rates for 
        all customers across the nation.
            (6) Due to high liability costs and unwarranted litigation 
        costs, consumers face higher vehicle rental costs in all States 
        because of the increased insurance expenses required to provide 
        coverage in the interstate insurance and rental markets.
            (7) Rental fairness will lessen burdens on interstate 
        commerce and decrease litigiousness.
            (8) Legislation to address these concerns is an appropriate 
        exercise of the powers of Congress under clauses 3, 9, and 18 
        of section 8 of article I of the Constitution of the United 
        States, and the 14th amendment to the Constitution of the 
        United States.

SEC. 3. DEFINITIONS.

    For the purpose of this Act--
            (1) Harm.--The term ``harm'' means--
                    (A) any injury to or damage suffered by a person;
                    (B) any illness, disease, or death of that person 
                resulting from that injury or damage; and
                    (C) any loss to that person or any other person 
                resulting from that injury or damage.
            (2) Motor Vehicle.--The term ``motor vehicle'' shall have 
        the meaning given to this term under section 13102(14) of title 
        49, United States Code.
            (3) Owner.--The term ``owner'' means a person who is--
                    (A) a record or beneficial owner or lessee of a 
                motor vehicle;
                    (B) entitled to the use and possession of a motor 
                vehicle subject to a security interest in another 
                person; or
                    (C) a lessee or bailee of a motor vehicle, in the 
                trade or business of renting or leasing motor vehicles, 
                having the use or possession thereof, under a lease, 
                bailment, or otherwise.
            (4) Person.--The term ``person'' means any individual, 
        corporation, company, limited liability company, trust, 
        association, firm, partnership, society, joint stock company, 
        or any other entity (including any governmental entity).
            (5) State.--The term ``State'' means each of the several 
        States, the District of Columbia, the Commonwealth of Puerto 
        Rico, the Virgin Islands, Guam, American Samoa, the Northern 
        Mariana Islands, any other territory or possession of the 
        United States, or any political subdivision of any such State, 
        commonwealth, territory, or possession.

SEC. 4. GENERAL FAIRNESS AND RESPONSIBILITY RULE.

    (a) In General.--No owner engaged in the trade or business of 
renting or leasing motor vehicles may be held liable for harm caused by 
a person to himself or herself, to another person, or to property, 
which results or arises from that person's use, operation, or 
possession of a rented or leased motor vehicle, by reason of being the 
owner of such motor vehicle, except to the extent of any required 
financial responsibility statute.
    (b) Construction.--Subsection (a) shall not apply if such owner 
does not maintain the required limits of financial responsibility for 
such vehicle, as required by State law.

SEC. 5. PRESERVATION OF STATE LAW.

    (a) State Financial Responsibility Requirements.--Nothing in this 
Act shall relieve any owner engaged in the trade or business of renting 
or leasing motor vehicles from the obligation to comply with a State's 
minimum financial responsibility, motor vehicle, or insurance statutes 
or regulations imposed by that State for the privilege of registering 
and operating a motor vehicle within that State.
    (b) Priority of Payments.--Nothing in this Act shall preempt any 
State law regarding priority of payment requirements or whether 
coverages provided under such statutes or regulations are primary or 
secondary.

SEC. 6. PRESERVATION OF LIABILITY BASED ON NEGLIGENCE.

    Nothing in this Act shall preempt the ability of the States to 
impose liability based on acts of negligence or criminal wrongdoing.

SEC. 7. APPLICABILITY AND EFFECTIVE DATE.

    Notwithstanding any other provision of law, this Act shall apply 
with respect to any action commenced on or after the date of enactment 
of this Act without regard to whether the harm that is the subject of 
the action or the conduct that caused the harm occurred before such 
date of enactment.
                                                 Union Calendar No. 510

106th CONGRESS

  2d Session

                               H. R. 1954

                      [Report No. 106-774, Part I]

_______________________________________________________________________

                                 A BILL

   To regulate motor vehicle insurance activities to protect against 
   retroactive regulatory and legal action and to create fairness in 
        ultimate insurer laws and vicarious liability standards.

_______________________________________________________________________

                           September 15, 2000

 The Committee on the Judiciary discharged; committed to the Committee 
 of the Whole House on the State of the Union and ordered to be printed