SB 582-1_ Filed 04/07/2011, 07:29 Goodin


Text Box


    PREVAILED      Roll Call No. _______
    FAILED        Ayes _______
    WITHDRAWN        Noes _______
    RULED OUT OF ORDER


[

HOUSE MOTION ____

]

MR. SPEAKER:

    I move that Engrossed Senate Bill 582 be amended to read as follows:

SOURCE: Page 13, line 32; (11)MO058203.13. -->     Page 13, between lines 32 and 33, begin a new paragraph and insert:
SOURCE: IC 24-7-2-2.5; (11)MO058203.5. -->     "SECTION 5. IC 24-7-2-2.5 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2.5. "Cash price", with respect to property that is the subject of a rental purchase agreement, means the price that:
        (1) is disclosed in the rental purchase agreement under IC 24-7-3-3(a)(5)(A); and
        (2) represents the price that the lessee may pay in cash, as of the date of the consummation of the rental purchase agreement, to the lessor in order to acquire ownership of the property.

SOURCE: IC 24-7-2-3.3; (11)MO058203.6. -->     SECTION 6. IC 24-7-2-3.3 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3.3. "Cost of rental", with respect to property that is the subject of a rental purchase agreement, means the cost that:
        (1) is disclosed in the rental purchase agreement under IC 24-7-3-3(a)(5)(B); and
        (2) represents the difference between:
            (A) the total amount of rental payments, as disclosed in the rental purchase agreement under IC 24-7-3-3(a)(4)(B); minus
            (B) the cash price of the property, as disclosed in the rental purchase agreement under IC 24-7-3-3(a)(5)(A).

SOURCE: IC 24-7-2-8.5; (11)MO058203.7. -->     SECTION 7. IC 24-7-2-8.5 IS ADDED TO THE INDIANA CODE

AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 8.5. "Renewal period", with respect to a rental purchase agreement, means:
        (1) a day;
        (2) a week;
        (3) a month; or
        (4) another part of a year;
during which the lessee is entitled to the use and possession of the property that is the subject of the rental purchase agreement, upon the lessee's payment of the rental payment required under the rental purchase agreement for the particular period described in subdivisions (1) through (4).

SOURCE: IC 24-7-2-8.7; (11)MO058203.8. -->     SECTION 8. IC 24-7-2-8.7 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 8.7. "Rental payment", with respect to a rental purchase agreement, means a payment:
        (1) the amount of which:
            (A) is disclosed in the rental purchase agreement under IC 24-7-3-3(a)(3)(C); and
            (B) includes
taxes paid to or through the lessor;
        (2) that, under the terms of the rental purchase agreement, is required to be made by the lessee with respect to a renewal period; and
        (3) that entitles the lessee, during the renewal period for which the payment is made, to the use and possession of the property that is the subject of the rental purchase agreement.

SOURCE: IC 24-7-2-8.8; (11)MO058203.9. -->     SECTION 9. IC 24-7-2-8.8 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 8.8. "Rental period", with respect to a rental purchase agreement, means the period that:
        (1) is disclosed in the rental purchase agreement under IC 24-7-3-3(a)(3)(B); and
        (2) represents the duration of the rental purchase agreement if all regularly scheduled rental payments are made.

SOURCE: IC 24-7-2-10; (11)MO058203.10. -->     SECTION 10. IC 24-7-2-10 IS ADDED TO THE INDIANA CODE AS A NEW SECTION TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 10. "Total amount of rental payments" means the amount that:
        (1) is disclosed in a rental purchase agreement under IC 24-7-3-3(a)(4)(B); and
        (2) represents the total dollar amount of all rental payments that the lessee must make under the rental purchase agreement in order to acquire ownership of the property if the lessee:
            (A) does not exercise an early purchase option; and
            (B) makes all regularly scheduled rental payments.

SOURCE: IC 24-7-3-3; (11)MO058203.11. -->     SECTION 11. IC 24-7-3-3 IS AMENDED TO READ AS

FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 3. (a) Subject to subsections (b) and (c) and sections 4 and 6 of this chapter, the lessor shall disclose the following in the rental purchase agreement or in a separate writing that references the rental purchase agreement, as permitted by section 4(b) of this chapter:
         (1) In the case of a rental purchase agreement that is consummated after June 30, 2011, the following:
            (A) The name, business address, and telephone number of the lessor.
            (B) The name and address of the lessee.
            (C) The date on which the rental purchase agreement is consummated.

        (1) (2) A brief description of the property sufficient to identify the property to the lessee and lessor.
         (3) In the case of a rental purchase agreement that is consummated after June 30, 2011, the following:
            (A) The minimum period for which the lessee is obligated under the rental purchase agreement.
            (B) The rental period.

             (C) The amount of each rental payment.
        (2) (4) The following information:
            (A) The
total number total amount, and timing of all rental payments including taxes paid to or through the lessor, necessary to acquire ownership of the property.
             (B) The total amount of rental payments.
         (5) In the case of a rental purchase agreement that is consummated after June 30, 2011, the following:
            (A) The cash price of the
property that is the subject of the rental purchase agreement.
            (B) The cost of rental.

        (3) (6) A statement that the lessee will not own the property until the lessee has:
            (A) made the number of rental payments and the total amount of rental payments necessary to acquire ownership of the property; or
            (B) exercised an early purchase option.
        (4) (7) A statement that charges in addition to the total amount of rental payments necessary to acquire ownership of the leased property may be imposed under the agreement and that the lessee should read the contract rental purchase agreement for an explanation of these charges.
        (5) (8) A brief explanation of all additional charges that may be imposed under the agreement, including any late charges or security deposits. If a security deposit is required, the explanation must include an explanation of the conditions under which the deposit will be returned to the lessee.


        (6) (9) A statement indicating who is responsible for property if it is lost, stolen, damaged, or destroyed.
        (7) (10) If the lessee is liable for lost, stolen, damaged, or destroyed property, as disclosed under subdivision (9), a statement indicating that the maximum dollar amount for which the lessee will be liable with respect to the lost, stolen, damaged, or destroyed property is the fair market value of the lost, stolen, damaged, or destroyed property is its fair market value on the date that it is lost, stolen, damaged, or destroyed.
        (8) (11) A statement indicating whether the property is new or used. However, property that is new may be described as used.
        (9) (12) A statement that the lessee has an early purchase option to purchase the property at any time during the period that the rental purchase agreement is in effect. The statement must specify the price or the formula or other method for determining the price at which the property may be purchased.
        (10) (13) A brief explanation of the lessee's right to reinstate a rental purchase agreement and a description of the amount, or method of determining the amount, of any penalty or other charge applicable under IC 24-7-5 to the reinstatement of a rental purchase agreement.
         (14) In the case of a rental purchase agreement that is consummated after June 30, 2011, the following statement, surrounded by black lines:
         "NOTICE:
        You are renting this property. You will not own it until you make all of the scheduled rental payments or you use the early purchase option. You do not have the right to keep the property if you do not make required rental payments or do not use the early purchase option. If you miss a scheduled rental payment, (name of lessor) can repossess the property, but you may have the right to the return of the same or similar property if you meet the requirements for reinstatement set forth in this agreement.".

     (b) This subsection applies to a rental purchase agreement that is consummated after June 30, 2011. The information required to be disclosed under subsection (a)(4)(B) and (a)(5) must be set forth in the rental purchase agreement in a format that incorporates the following text, surrounded by black lines:
        "TOTAL OF    COST OF RENTAL    CASH PRICE
        PAYMENTS
    $ (total amount    $ (cost of rental)    $ (cash price)
    of rental payments)
    You must pay     Amount over cash    Property available
    this amount to    price you will pay if    at this price for cash
    own the property    you make all     from (name of lessor).
    if you make all    scheduled rental    Please consult this
    scheduled rental    payments.    agreement for
    payments. You        your early purchase
    can buy the         option rights.
    property for less
    under the early
    purchase option.".
The rental purchase agreement must include a space reserved for the lessee's signature immediately below the disclosures required under this subsection.
    (c) This subsection applies to a rental purchase agreement that is consummated after June 30, 2011. The information required to be disclosed under subsection (a)(3)(B), (a)(3)(C), and (a)(4)(A) must be set forth in the rental purchase agreement in a format that incorporates the following text, surrounded by black lines:
    "AMOUNT OF     NUMBER OF    RENTAL
    EACH     PAYMENTS    PERIOD
    PAYMENT
    $ (amount to be    (number to be    (period to be
    disclosed under     disclosed under    disclosed under

     subsection    subsection     subsection
    (a)(3)(C))    (a)(4)(A))    (a)(3)(B))
    per (applicable
    renewal period)".

The rental purchase agreement must include a space reserved for the lessee's signature immediately below the disclosures required under this subsection.
SOURCE: IC 24-7-3-4; (11)MO058203.12. -->     SECTION 12. IC 24-7-3-4 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 4. (a) The disclosures required under section 3 of this chapter shall be stated:
        (1) clearly and conspicuously; and
        (2) in words and phrases that have a nontechnical meaning.
    (b) Except as provided in the rules adopted by the department, In the case of a rental purchase agreement that is consummated before July 1, 2011, the disclosures required under section 3 of this chapter may be included in the rental purchase agreement or in a separate writing that references the rental purchase agreement. In the case of a rental purchase agreement that is consummated after June 30, 2011, a rental purchase agreement and the disclosures required under section 3 of this chapter must be contained in a single document that sets forth all the agreements of the lessor and the lessee with respect to the rights and obligations of each party under the rental purchase agreement.
    (c) Except as provided in the rules adopted by the department, the disclosures required under section 3 of this chapter may be provided in a different sequence than the sequence set forth in section 3 of this chapter.
    (d) Additional information or explanations supplied by the lessor may not have the effect of circumventing, evading, or unduly complicating the information required to be disclosed.
     (e) The department may adopt a standard rental purchase agreement form that:
        (1) may be used by lessors that enter into rental purchase agreements with lessees after June 30, 2011; and
        (2) is formatted in a manner that allows a lessor to make the disclosures required under section 3 of this chapter.

SOURCE: IC 24-7-3-7; (11)MO058203.13. -->     SECTION 13. IC 24-7-3-7 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 7. The terms of the rental purchase agreement shall be set forth in not less than:
         (1) 8 point type, in the case of a rental purchase agreement that is consummated before July 1, 2011; or
        (2) 10 point bold type, in the case of a rental purchase agreement that is consummated after June 30, 2011.

SOURCE: IC 24-7-4-11; (11)MO058203.14. -->     SECTION 14. IC 24-7-4-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 11. (a) Except as provided in section 1 of this chapter, a lessee may not be required to:
        (1) make any payment in addition to regular rental payments in order to acquire ownership of the property; or
        (2) subject to subsections (b) and (c), pay rental payments totaling more than the cost to acquire ownership stated in the rental purchase agreement.
     (b) This subsection applies to a rental purchase agreement that is consummated after June 30, 2011. The total amount of rental payments under a rental purchase agreement, as disclosed in the rental purchase agreement under IC 24-7-3-3(a)(4)(B), may not exceed the product of:
        (1) the cash price of the property that is the subject of the rental purchase agreement, as disclosed in the rental purchase agreement under IC 24-7-3-3(a)(5)(A); multiplied by
        (2) two and twenty-five hundredths (2.25).

     (c) This subsection applies to a rental purchase agreement that is consummated after June 30, 2011. If a lessor intentionally discloses or charges a total amount of rental payments that exceeds the amount permitted by subsection (b):
        (1) the rental purchase agreement is void;
        (2) the lessee may retain the property that is the subject of the rental purchase agreement without any further obligation; and
        (3) the lessor shall refund to the lessee all amounts paid by the lessee under the rental purchase agreement.

SOURCE: IC 24-7-5-10; (11)MO058203.15. -->     SECTION 15. IC 24-7-5-10 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 10. If a lessee is liable to a lessor for the replacement cost of property leased under a rental purchase agreement, the lessor may not charge the lessee more than the

fair market value for the property on the date the property being replaced was lost, stolen, damaged, or destroyed.

SOURCE: IC 24-7-5-11; (11)MO058203.16. -->     SECTION 16. IC 24-7-5-11 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 11. (a) In addition to the other charges permitted by this chapter, a lessor and a lessee may contract for a liability waiver fee in the following amounts:
        (1) In the case of a rental purchase agreement with weekly or biweekly renewal dates, the liability waiver fee may not exceed the greater of:
            (A) ten percent (10%) of a periodic lease payment due; or
            (B) two dollars ($2).
        (2) In the case of a rental purchase agreement with monthly renewal dates, the liability may not exceed the greater of:
            (A) ten percent (10%) of a periodic lease payment due; or
            (B) five dollars ($5).
    (b) The selling or offering for sale of a liability damage waiver under this section is subject to the following prohibitions and requirements:
        (1) A lessor may not sell or offer to sell a liability damage waiver unless all restrictions, conditions, and exclusions are:
            (A) printed:
                 (i) in the rental purchase agreement, or in a separate agreement, in 8 point type or larger, in the case of a rental purchase agreement that is consummated before July 1, 2011; or
                (ii) in the rental purchase agreement in at least 10 point bold type, in the case of a rental purchase agreement that is consummated after June 30, 2011;
or
            (B) written in ink or typewritten in or on the face of the rental purchase agreement in a blank space provided therefor.
        (2) The liability damage waiver may exclude only loss or damage to the property that is the subject of the rental purchase agreement caused by moisture, scratches, mysterious disappearance, vandalism, abandonment of the property, or any other damage intentionally caused by the lessee or that results from the lessee's willful or wanton misconduct.
        (3) The liability damage waiver agreement must include a statement of the total charge for the liability damage waiver. The liability damage waiver agreement must display in 8 point boldface type the following:
            "NOTICE: THIS CONTRACT OFFERS, FOR AN ADDITIONAL CHARGE, A LIABILITY DAMAGE WAIVER TO COVER YOUR RESPONSIBILITY FOR DAMAGE TO THE PROPERTY. BEFORE DECIDING WHETHER TO PURCHASE THE LIABILITY DAMAGE WAIVER, YOU MAY WISH TO DETERMINE WHETHER

YOUR OWN HOMEOWNERS OR CASUALTY INSURANCE AFFORDS YOU COVERAGE FOR DAMAGE TO THE RENTAL PROPERTY, AND THE AMOUNT OF THE DEDUCTIBLE UNDER YOUR OWN INSURANCE COVERAGE. THE PURCHASE OF THIS LIABILITY DAMAGE WAIVER IS NOT MANDATORY AND MAY BE DECLINED.".
         In the case of a rental purchase agreement that is consummated after June 30, 2011, the statement required by this subdivision must be included in at least 10 point bold type in the rental purchase agreement.
        (4) The restrictions, conditions, and exclusions of the liability damage waiver must be disclosed on the agreement or on a separate agreement, sheet, or handout given to the lessee before entering into the rental purchase agreement. The separate contract, sheet, or handout must be signed or otherwise acknowledged by the lessee as being received before entering into the rental purchase agreement. In the case of a rental purchase agreement that is consummated after June 30, 2011, the restrictions, conditions, and exclusions of the liability damage waiver must be disclosed on the rental purchase agreement, and the rental purchase agreement must include a space reserved for the lessee's signature immediately below the disclosures required under this subdivision.
        (5) The lessor shall keep and maintain records as prescribed by the director of the department. The director of the department may inspect the records and determine whether the rates charged under this section are fair and reasonable.

SOURCE: IC 24-7-6-1; (11)MO058203.17. -->     SECTION 17. IC 24-7-6-1 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 1. (a) This subsection applies to a rental purchase agreement that is consummated before July 1, 2011. A lessee who fails to make timely rental payments has the right to reinstate the original rental purchase agreement without losing any rights or options previously acquired under the rental purchase agreement if:
        (1) subsequent to having failed to make a timely rental payment, the lessee promptly surrenders the property to the lessor, if requested by the lessor; and
        (2) not more than sixty (60) days elapse after the lessee returns the property.
     (b) This subsection applies to a rental purchase agreement that is consummated after June 30, 2011. A lessee who fails to make timely rental payments has the right to reinstate the original rental purchase agreement without losing any rights or options previously acquired under the rental purchase agreement if either of the following applies:
        (1) The lessee pays the amounts described in section 2(a)(1) and 2(a)(3) of this chapter not later than the later of:
            (A) seven (7) days; or
            (B) one-half (1/2) the number of days in a regular renewal period under the rental purchase agreement;
        after the due date of the last accrued rental payment due under the rental purchase agreement.
        (2) Both of the following apply:
            (A) The lessee surrenders the property to the lessor within the time specified in subdivision (1).
            (B) The lessee pays the amounts described in section 2(a)(1), 2(a)(2), and 2(a)(3) of this chapter not later than one (1) year after the date the lessee returns the property to the lessor.

SOURCE: IC 24-7-7-2; (11)MO058203.18. -->     SECTION 18. IC 24-7-7-2, AS AMENDED BY P.L.35-2010, SECTION 92, IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JULY 1, 2011]: Sec. 2. (a) A person subject to this article shall make the books and records of the person reasonably available for inspection by the department or the department's representative. At a minimum, every lessor shall keep a record of the following:
        (1) In the case of property that is acquired by the lessor after June 30, 2011, the following information for each item of property that is acquired by the lessor for lease by the lessor under one (1) or more rental purchase agreements:
            (A) A brief description of the property sufficient to identify the property.
            (B) The name of the wholesaler, distributor, supplier, manufacturer, or other person from whom the property was acquired.
            (C) The date the lessor accepted delivery of the property.
            (D) The cost paid for the property by the lessor to the wholesaler, distributor, supplier, manufacturer, or other person from whom the property was acquired. For purposes of this subdivision, the cost paid by the lessor includes any freight charges paid by the lessor and is net of any:
                (i) discounts;
                (ii) rebates; or
                (iii) incentives;
            that the lessor received in purchasing the property and that are vested and calculable as of the date the lessor accepted delivery of the property. The cost paid for the property by the lessor shall be evidenced by a receipt, invoice, bill of sale, or other document setting forth the cost.
            (E) Each rental purchase agreement, identified by the name of the lessee or some other unique identifier assigned

by the lessor to the rental purchase agreement, under which the lessor rents the item of property to a lessee.
        (2)
All payments remitted by the lessee on a rental purchase agreement, including the following:
            (1) (A) The name of the lessee.
            (2) (B) The date of each transaction.
            (3) (C) The total amount of each payment.
            (4) (D) A breakdown of each payment reflecting:
                (A) (i) each type of charge; and
                (B) (ii) the amount of each type of charge.
The method of maintaining this the data required under this subsection is at the discretion of the lessor, if hard copies of the required data are readily available. The record keeping system of the lessor shall be made available in Indiana for examination. The director shall determine the sufficiency of the records and whether the lessor has made the required information reasonably available.
    (b) In administering this article and in order to determine compliance with this article, the department or the department's representative may examine the books and records of persons subject to the article and may make investigations of persons necessary to determine compliance. For this purpose, the department may administer oaths or affirmations, and, upon the department's own motion or upon request of any party, may subpoena witnesses, compel their attendance, compel testimony, and require the production of any matter that is relevant to the investigation, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of relevant facts, or any other matter reasonably calculated to lead to the discovery of admissible evidence.
    (c) If the person's records are located outside Indiana, the person shall, at the person's option, either make them available to the department at a convenient location in Indiana, or pay the reasonable and necessary expenses for the department or the department's representative to examine them at the place where they are maintained. The department may designate representatives, including comparable officials of the state in which the records are located, to inspect them on the department's behalf.
    (d) Upon failure without lawful excuse to obey a subpoena or to give testimony and upon reasonable notice to all persons affected thereby, the department may apply to a court for an order compelling compliance.
    (e) The department may not make public the name or identity of a person whose acts or conduct the department investigates under this section or the facts disclosed in the investigation, but this subsection does not apply to disclosures in actions or enforcement proceedings under this article.


    (f) A lessor shall use generally accepted accounting principles and practices in keeping books and records so that the department or the department's representative may determine if the lessor is in compliance with this article or a rule adopted under this article.
    (g) A lessor shall keep the lessor's books and records that pertain to a rental purchase agreement for at least two (2) years after the rental purchase agreement has terminated.
    (h) If a lessor contracts with an outside vendor to provide a service that would otherwise be undertaken internally by the lessor and be subject to the department's routine examination procedures, the person that provides the service to the lessor shall, at the request of the director, submit to an examination by the department. If the director determines that an examination under this subsection is necessary or desirable, the examination may be made at the expense of the person to be examined. If the person to be examined under this subsection refuses to permit the examination to be made, the director may order any lessor that receives services from the person refusing the examination to:
        (1) discontinue receiving one (1) or more services from the person; or
        (2) otherwise cease conducting business with the person.".
SOURCE: Page 31, line 18; (11)MO058203.31. -->     Page 31, between lines 18 and 19, begin a new paragraph and insert:
SOURCE: IC 24-7-2-7; (11)MO058203.29. -->     "SECTION 29. IC 24-7-2-7 IS REPEALED [EFFECTIVE JULY 1, 2011].".
    Renumber all SECTIONS consecutively.
    (Reference is to ESB 582 as printed April 5, 2011.)

________________________________________

Representative Goodin


MO058203/DI 97     2011