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[House Report 107-661]
[From the U.S. Government Publishing Office]

107th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 2d Session                                                     107-661
======================================================================
 
  PROVIDING FOR CONSIDERATION OF H.R. 1701, CONSUMER RENTAL PURCHASE 
                             AGREEMENT ACT

                                _______
                                

 September 17, 2002.--Referred to the House Calendar and ordered to be 
                                printed

                                _______
                                

    Mr. Linder, from the Committee on Rules, submitted the following

                              R E P O R T

                       [To accompany H. Res. 528]

    The Committee on Rules, having had under consideration 
House Resolution 528, by a nonrecord vote, report the same to 
the House with the recommendation that the resolution be 
adopted.

                SUMMARY OF PROVISIONS OF THE RESOLUTION

    The resolution provides for the consideration of H.R. 1701, 
the Consumer Rental Purchase Agreement Act, under a structured 
rule. The rule provides one hour of general debate, with 50 
minutes equally divided and controlled by the chairman and 
ranking minority member of the Committee on Financial Services 
and 10 minutes equally divided and controlled by the chairman 
and ranking minority member of the Committee on the Judiciary.
    The rule provides that the amendment in the nature of a 
substitute recommended by the Committee on Financial Services, 
as amended by the amendment recommended by the Committee on the 
Judiciary, now printed in the bill shall be considered as an 
original bill for the purpose of amendment and shall be 
considered as read.
    The rule makes in order only those amendments printed in 
this report. The rule provides that the amendments printed in 
this report shall be considered only in the order printed, may 
be offered only by a Member designated in this report, shall be 
considered as read, shall be debatable for the time specified 
in this report equally divided and controlled by the proponent 
and an opponent, shall not be subject to amendment, and shall 
not be subject to a demand for division of the question in the 
House or in the Committee of the Whole. The rule waives all 
points of order against the amendments printed in this report.
    Finally, the rule provides one motion to recommit with or 
without instructions.

           SUMMARY OF AMENDMENTS MADE IN ORDER UNDER THE RULE

    1. LaFalce: Incorporates the standard for limiting the 
total purchase price of rental-purchase merchandise from New 
York, Ohio and Nebraska state law, and establishes a process 
for determining standards in regulation for determining the 
cash price of rental-purchase merchandise. (20 minutes)
    2. Waters: Prohibits the shifting of liability for loss, 
damage or destruction of the property subject to rental-
purchase agreement to the consumer. The liability remains with 
the merchant. (20 minutes)

            TEXT OF AMENDMENTS MADE IN ORDER UNDER THE RULE

1. An Amendment To Be Offered by Representative LaFalce of New York, or 
                  a Designee, Debatable for 20 Minutes

  Page 5, strike line 5 and all that follows through line 8, 
and insert the following new paragraph:
          ``(4) Cash price.--
                  ``(A) In general.--The term `cash price' 
                means the price at which a merchant, in the 
                ordinary course of business, would offer to 
                sell for cash the property that is the subject 
                of the rental-purchase agreement, as determined 
                by the Board pursuant to this paragraph.
                  ``(B) Determination of cash price.--The Board 
                shall determine in regulation the formula or 
                criteria for calculating the cash price of a 
                product that is the subject of the rental-
                purchase agreement, which shall approximate the 
                equivalent fair market value of the product if 
                offered under a cash or credit sale, as 
                adjusted to reflect additional charges or 
                services, if any, that the Board determines are 
                appropriate for purposes of rental-purchase 
                transactions.
                  ``(C) Minimum cash price.--Notwithstanding 
                subparagraph (B), the cash price determined by 
                the Board pursuant to subparagraph (B) shall 
                not be less than an amount equal to twice the 
                documented actual acquisition cost of the 
                property to the merchant, which shall include 
                the cost of shipment, refurbishing or other 
                charges, as determined by the Board; except 
                that, a merchant shall not be precluded from 
                selling a product for cash for an amount that 
                is less than the cash price determined under 
                this paragraph.
                  ``(D) Adjustment for used property.--The cash 
                price of used or previously rented property 
                that is the subject of the rental-purchase 
                agreement shall be determined by adjustment of 
                the cash price determined under this paragraph 
                according to such formula or criteria as the 
                Board shall prescribe by regulation.
                  ``(E) Periodic adjustment required.--The 
                Board shall, by regulation, periodically review 
                and revise, as necessary, the formula or 
                criteria for determining cash price under this 
                paragraph in response to changes in merchant 
                costs, market conditions, or other factors 
                determined by the Board.
  Page 17, beginning on line 4, strike ``either by payment of 
the total cost'' and all that follows through line 7, and 
insert ``in accordance with section 1006;''
  Page 18, beginning on line 8, strike `` or any early payment 
option provided in the rental purchase agreement,''.
  Page 18, strike line 12 and all that follows through line 17 
and insert the following new subsection:
  ``(b) Transfer of Ownership.--
          ``(1) Scheduled payments.--The consumer shall acquire 
        ownership of the rental property upon payment of 
        periodic payments totaling more than an amount, 50 
        percent of which equals the cash price of the rental 
        property.
          ``(2) Early payment option.--The consumer shall 
        acquire ownership of the rental property, at any time 
        after the initial payment, upon payment by the consumer 
        of an amount equal to the amount by which the cash 
        price of the leased property exceeds 50 percent of all 
        previous payments under the rental-purchase agreement.
  Page 18, beginning on line 23, strike ``, or any early 
purchase option amount provided in the rental-purchase 
agreement, as applicable''.
  Page 19, line 4, strike ``Rights'' and insert ``Documents''.
  Page 19, beginning on line 6, strike `` or any early purchase 
option amount provided in the rental-purchase agreement, as 
appropriate''.

 2. An Amendment To Be Offered by Representative Waters of California, 
                or a Designee, Debatable for 20 Minutes

  Page 19, line 22, strike `` `A rental-purchase agreement'' 
and insert `` `(a) In General.--A rental-purchase agreement''.
  Page 21, after line 13, insert the following new subsection:
  ``(b) Continued Applicability of Existing Law.--
          ``(1) In general.--Except as provided in paragraph 
        (2), the risk of any loss, damage, or destruction of 
        the property that is the subject of a rental-purchase 
        agreement shall remain with the merchant throughout the 
        period such agreement is in effect and any rental-
        purchase agreement, or any waiver or other form of 
        agreement between the merchant and the consumer, that 
        purports to shift the burden of any such risk, and the 
        cost of insuring against any such risk, to the consumer 
        shall be null and void.
          ``(2) Exception for loss, damage, or destruction for 
        which the consumer is directly responsible.--Paragraph 
        (1) shall not apply with respect to any loss, damage, 
        or destruction that was deliberately caused by the 
        consumer or that occurred due to the negligence of the 
        consumer.

                                
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