IB
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 jurisdic-
tion 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 Representa-
tives 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 com-
mon 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 owner-
ship, 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 im-
pose 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 dis-
proportionate and undue burden on interstate com-
merce 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 inter-
state 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 sec-
tion 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 an-
other 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 in-
dividual, corporation, company, limited liability
company, trust, association, firm, partnership, soci-
ety, joint stock company, or any other entity (includ-
ing any governmental entity).
(5) STATE.—The term ‘‘State’’ means each of the
several States, the District of Columbia, the Common-
wealth 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, common-
wealth, 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 finan-
cial responsibility for such vehicle, as required by State law.
SEC. 5. PRESERVATION OF STATE LAW.
(a) STATE FINANCIAL RESPONSIBILITY REQUIRE-
MENTS.—Nothing in this Act shall relieve any owner en-
gaged in the trade or business of renting or leasing motor
vehicles from the obligation to comply with a State’s min-
imum financial responsibility, motor vehicle, or insurance
statutes or regulations imposed by that State for the privi-
lege 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 stat-
utes or regulations are primary or secondary.
SEC. 6. PRESERVATION OF LIABILITY BASED ON NEG-
LIGENCE.
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