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Signed Into Law
Signed May 27, 2025Effective 2025-09-01
SB72

Regular Session

Relating to the regulation of private passenger vehicle rental companies.

Government Affairs & Regulatory Compliance Analysis

SB72: Government Affairs Overview

Senate Bill 72 fundamentally expands the regulatory definition of a "rental agreement" from 30 days to 180 days, subjecting long-term and "mini-lease" rentals to Chapter 91 compliance. Additionally, the law mandates pro-rated refunds for damage waivers upon early return or mid-rental cancellation, requiring immediate reconfiguration of Point-of-Sale (POS) financial logic.

Sen. Judith Zaffirini·Senate Bill·Regular Session

Critical
Medium Cost
Effective:2025-09-01
Business Impact

Who SB72 Affects

This legislation has regulatory implications for the following Texas businesses and organizations:

Regulatory Priority: critical

Significant regulatory changes (effective 2025-09-01). Review with your legal and compliance teams to understand implications.

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Manufacturing & Business

Affected business types:

  • Manufacturers
  • Industrial facilities
  • Supply chain companies
  • Logistics providers
View all manufacturing & business legislation

Key Operational Considerations

  • 1Master Rental Agreements: You must revise the definition of "Rental Period" in your terms and conditions. Any language limiting Chapter 91 disclosures to 30 days must be extended to 180 days.
  • 2Counter Scripting: Agents must be retrained to stop quoting waivers as "non-refundable" for long-term rentals.

Estimated Cost Impact

mediumModerate costs expected for implementation.

Enforcing Agencies

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SB72
Critical
Relating to the regulation of private passenger vehicle rental companies.
Critical Compliance Urgency
Requires immediate attention
Cost Impact
Medium
Effective
2025-09-01
Enforcing Agencies
Office of the Attorney General
Primary Author: Sen. Judith Zaffirini
89th Texas Legislature
jdkey.com
01

Compliance Analysis

Key implementation requirements and action items for compliance with this legislation

Implementation Timeline

  • Effective Date: September 1, 2025
  • Compliance Deadline: September 1, 2025. All agreements executed on or after this date must comply. Agreements signed prior to this date are grandfathered under the previous 30-day definition.
  • Agency Rulemaking: The statute does not explicitly mandate new rulemaking by the Office of the Attorney General (OAG), meaning the text stands as written. Expect enforcement via consumer complaints rather than proactive agency guidance.

Immediate Action Plan

  • Immediately: Contact your fleet software provider to schedule the development of "180-day" and "auto-refund" logic patches.
  • By May 2025: Audit all "long-term" or "monthly" rental contracts to ensure they meet Chapter 91 disclosure requirements (previously only required for <30 day rentals).
  • By July 2025: Draft the "Mid-Rental Inspection" protocol and integrate it into your operations manual.
  • By August 2025: Distribute updated rental jackets/contracts to all branches.

Operational Changes Required

Contracts

  • Master Rental Agreements: You must revise the definition of "Rental Period" in your terms and conditions. Any language limiting Chapter 91 disclosures to 30 days must be extended to 180 days.
  • Waiver Clauses: Remove any "non-refundable," "fully earned," or "minimum term" language regarding Damage Waivers (DW). These clauses will be void and unenforceable for contracts signed after September 1, 2025.

Hiring/Training

  • Mid-Rental Inspections: Staff must be trained on a new protocol: Waiver Cancellation Inspections. If a customer requests to cancel a waiver mid-rental, staff must physically inspect the vehicle to confirm "no damage" before processing the cancellation.
  • Counter Scripting: Agents must be retrained to stop quoting waivers as "non-refundable" for long-term rentals.

Reporting & Record-Keeping

  • Refund Audit Trails: Your accounting system must generate a clear audit trail showing the calculation of pro-rated refunds (Daily Rate x Unused Days).
  • Inspection Logs: You must implement a specific log or digital form for "Mid-Rental Inspections." If you deny a waiver refund due to damage, you must possess a time-stamped inspection report and photos dated *prior* to the cancellation request to defend against OAG inquiries.

Fees & Costs

  • Revenue Impact: Anticipate a reduction in ancillary revenue from Damage Waivers due to the new refund mandate.
  • Software Costs: Budget immediately for vendor fees to update fleet management software (e.g., TSD, ARS) to handle the 180-day regulatory cap and automated pro-ration logic.

Strategic Ambiguities & Considerations

  • "No Damage" Standard: The statute requires a refund if the vehicle is not damaged, but does not define the threshold for "damage" (e.g., normal wear and tear vs. scratches).
  • *Risk:* A customer cancels the waiver, and you find a scratch later.
  • *Mitigation:* Your mid-rental inspection must be as rigorous as a final return inspection.
  • "Calendar Day" Calculation: The law mandates refunds for full "calendar days." It does not specify if this follows a 24-hour clock or a calendar date.
  • *Guidance:* Until clarified, adopt a policy where the refund applies to the *next* full calendar day following the cancellation request to avoid disputes over partial days.

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JD Key Consulting specializes in Texas regulatory compliance strategy. Work directly with James Dickey—former Chairman of the Republican Party of Texas—to understand this bill's impact on your operations and develop an actionable compliance plan.

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Information presented is for general knowledge only and is provided without warranty, express or implied. Consult qualified government affairs professionals and legal counsel before making compliance decisions.

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Legislative Timeline

This bill's path through the Texas Legislature

Filed
Nov 12, 2024
Passed Senate
Mar 6, 2025
Passed House
May 6, 2025
Signed
May 27, 2025
Effective
Sep 1, 2025
TopicsBusiness & CommerceBusiness & Commerce--generalRental Cars
03

Senate Authors

Sen. Judith ZaffiriniDemocrat · Primary Author

House Sponsor

Rep. John LujanRepublican · Primary Sponsor

Bill Text(with markup)

View bill text in multiple formats on Texas Legislature website

Fiscal NoteView Original

Related Legislation

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More from Sen. Judith Zaffirini

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Related by Topic

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Quick Reference

Frequently Asked Questions

Common questions about SB72

Q

What does Texas SB72 do?

Senate Bill 72 fundamentally expands the regulatory definition of a "rental agreement" from 30 days to 180 days, subjecting long-term and "mini-lease" rentals to Chapter 91 compliance. Additionally, the law mandates pro-rated refunds for damage waivers upon early return or mid-rental cancellation, requiring immediate reconfiguration of Point-of-Sale (POS) financial logic.

Q

Who authored SB72?

SB72 was authored by Texas Senator Judith Zaffirini during the Regular Session.

Q

When was SB72 signed into law?

SB72 was signed into law by Governor Greg Abbott on May 27, 2025.

Q

Which agencies enforce SB72?

SB72 is enforced by Office of the Attorney General (Consumer Protection Division).

Q

How significant are the changes in SB72?

The regulatory priority for SB72 is rated as "critical". Businesses and organizations should review the legislation to understand potential impacts.

Q

What is the cost impact of SB72?

The cost impact of SB72 is estimated as "medium". This may vary based on industry and implementation requirements.

Q

What topics does SB72 address?

SB72 addresses topics including business & commerce, business & commerce--general and rental cars.

Q

What are the key dates for SB72?

Key dates for SB72: Effective date is 2025-09-01. Consult with legal counsel regarding applicability.

Q

Which Texas businesses are affected by SB72?

SB72 primarily affects Texas businesses and commercial enterprises. These businesses should review the legislation with their legal and compliance teams to understand potential impacts.

Need Strategic Guidance on This Legislation?

JD Key Consulting is an Austin, Texas-based government affairs firm led by James Dickey, former Chairman of the Republican Party of Texas. We specialize in Texas regulatory compliance and legislative strategy for data centers, energy, banking, and manufacturing.

Legislative data provided by LegiScanLast updated: January 11, 2026