A BILL TO BE ENTITLED
AN ACT to enact the lease‑purchase agreement act and to amend the law on enrollment priority for charter schools.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  The General Statutes are amended by adding a new Chapter to read:
"Chapter 25D.
"North Carolina Lease‑Purchase Agreement Act.
"§ 25D‑1.  Title.
This Chapter shall be known and may be cited as the "North Carolina Lease‑Purchase Agreement Act."
"§ 25D‑2.  Definitions.
As used in this Chapter, the following definitions apply:
(1)	Advertisement. – A commercial message in any medium that directly aids, promotes, or assists a lease‑purchase agreement.
(2)	Cash price. – The price at which the property is offered for sale by the lessor to a consumer for cash in the ordinary course of business, measured on the date of the lease‑purchase agreement.
(3)	Consumer. – An individual who rents personal property under a lease‑purchase agreement to be used primarily for personal, family, or household purposes.
(4)	Consummation. – The point in time when a consumer becomes contractually obligated via a lease‑purchase agreement.
(5)	Lessor. – A person who regularly provides the use of property through lease‑purchase agreements and to whom lease payments are initially payable on the face of the lease‑purchase agreement.
(6)	Lease‑purchase agreement. – An agreement for the use of personal property by a consumer for an initial period of four months or less that contains all of the following characteristics:
a.	Automatic periodic renewal with each payment after the initial period.
b.	Contains no provision obligating the consumer to continue use of the property beyond the initial period.
c.	A provision permitting the consumer to become the owner of the property.
"§ 25D‑3.  Applicability of Chapter.
(a)	The provisions of this Chapter do not apply to the following:
(1)	A lease‑purchase agreement entered into primarily for business, commercial, or agricultural purposes, or those entered into with governmental entities.
(2)	A lease of a safe deposit box.
(3)	A lease or bailment of personal property which is incidental to the lease of property and which does not provide the consumer an option to purchase the leased property.
(4)	A lease of an automobile.
(b)	A lease‑purchase agreement meeting the requirements of this Chapter shall not be governed by the statutes relating to any of the following:
(1)	A home solicitation sale, as defined in G.S. 25A‑38.
(2)	A closed‑end installment loan.
(3)	A security interest, as defined in G.S. 25‑1‑201(35).
"§ 25D‑4.  Disclosures.
(a)	The lessor shall disclose to the consumer in the lease‑purchase agreement all of the following, if applicable:
(1)	The total number, full amount, and timing of all payments necessary to acquire ownership of the property.
(2)	A statement that the consumer will not own the property until the consumer has satisfied all payment requirements necessary to acquire ownership.
(3)	A statement that the consumer is responsible for the fair market value of property lost, stolen, damaged, or destroyed, measured at the time the property is lost, stolen, damaged, or destroyed.
(4)	A brief description of the property, sufficient to identify the property to the consumer and the lessor, and a statement indicating whether the property is new or used. A statement that indicates that the property is used, if subsequently found to be false, shall not constitute a violation of this Chapter.
(5)	A statement of the cash price of the property. For agreements covering a lease of five or more items as a set, a statement of the aggregate cash price of all items.
(6)	The total amount of payments to be paid prior to consummation of the agreement or delivery of the property, whichever is later.
(7)	A statement that the total amount of payments does not include other charges, including late payment, default, pickup, and reinstatement fees.
(8)	A statement clearly summarizing the terms of the consumer's option to purchase, including a statement that the consumer has the right to exercise an early purchase option. The terms shall list the formula or method used to determine the price of the purchase of the property.
(9)	A statement (i) identifying the party responsible for maintaining or servicing the property during the term of the lease; (ii) providing a description of the maintenance or service responsibility; and (iii) notifying the consumer that any applicable express warranties covering the lease property at the time the consumer acquires ownership of the property shall be transferred to the consumer, if the terms of the warranty allow.
(10)	The date of the transaction and the identities of the lessor and consumer.
(11)	A statement that the consumer may terminate the agreement without penalty by voluntarily surrendering or returning the property in good repair upon expiration of any lease term along with any past due rental payments and fees owed.
(12)	Notice of the right to reinstate an agreement.
(b)	For transactions involving more than one lessor, the disclosures required pursuant to this section may be made by a single lessor, however, all lessors shall be bound by those disclosures.
(c)	All disclosures shall be made (i) at or before consummation of the agreement, (ii) clearly and conspicuously, (iii) in writing, (iv) on the face of the agreement, and (v) above the consumer's signature line. A copy of the lease‑purchase agreement shall be provided to the consumer.
(d)	If a disclosure subsequently becomes inaccurate as the result of any act, occurrence, or agreement by the consumer, the inaccuracy shall not constitute a violation of this Chapter.
(e)	Compliance with the disclosure requirements of the federal Consumer Credit Protection Act 15 U.S.C. § 1667, et seq., as amended, shall be deemed to meet the disclosure requirements of this section.
"§ 25D‑5.  Prohibited practices.
(a)	A lease purchase agreement may not contain any of the following:
(1)	A confession of judgment.
(2)	A negotiable instrument.
(3)	A security interest or any other claim of a property interest in any goods except those goods delivered by the lessor to the consumer pursuant to the terms of the lease‑purchase agreement.
(4)	A wage assignment.
(5)	A waiver of claims or defenses by the consumer.
(6)	An authorization for the lessor or the lessor's agent to enter upon the consumer's premises, or to commit any breach of the peace, in the repossession of goods.
(b)	No fees, charges, or penalties shall be chargeable to the consumer in conjunction with a lease‑purchase agreement unless those fees, costs, or penalties are disclosed in the agreement.
"§ 25D‑6.  Reinstatement.
(a)	A consumer who fails to make a timely rental payment shall be entitled to reinstate the agreement without losing any rights or options that exist under the terms of the agreement, provided that the consumer pays all past due payments, fees, charges, and penalties within five days of the renewal date, if the consumer pays monthly, or within two days of the renewal date, if the consumer pays more frequently than monthly.
(b)	If a consumer has (i) returned or voluntarily surrendered the property, other than through judicial process, during the reinstatement period and (ii) paid less than two‑thirds of the total payments necessary to acquire ownership pursuant to the lease‑purchase agreement, then the consumer shall be entitled to reinstate the agreement for a period of at least 21 days after the date the property was returned or voluntarily surrendered.
(c)	If a consumer has (i) returned or voluntarily surrendered the property, other than through judicial process, during the reinstatement period and (ii) paid two‑thirds or more of the total payments necessary to acquire ownership pursuant to the lease‑purchase agreement, then the consumer shall be entitled to reinstate the agreement for a period of at least 45 days after the date the property was returned or voluntarily surrendered.
(d)	Nothing in this section shall prohibit a lessor from repossessing the property pursuant to the lease‑purchase agreement. However, upon reinstatement by the consumer, the lessor shall provide the consumer with the same property or substitute property of comparable quality and condition.
"§ 25D‑7.  Receipts and accounts.
A lessor shall provide the consumer with a written receipt for each payment made by cash or money order.
"§ 25D‑8.  Renegotiations and extensions.
(a)	A lessor and consumer may renegotiate an existing lease‑purchase agreement. A renegotiated agreement shall satisfy and replace the prior agreement and shall be considered a new lease‑purchase agreement, subject to all of the terms of this Chapter.
(b)	The following are not considered a renegotiation:
(1)	The addition or return of property in an agreement covering multiple items of property or the substitution of the property; provided, however, that the average payment allocable to a payment period is not changed by more than twenty‑five percent (25%).
(2)	A deferral or extension of one or more periodic payments or a portion of a periodic payment.
(3)	A reduction of charges in the agreement.
(4)	A lease or agreement involved in a court proceeding.
(c)	Disclosures shall not be required for an extension of a lease‑purchase agreement.
"§ 25D‑9.  Advertising.
(a)	If an advertisement for a lease‑purchase agreement refers to or states the dollar amount of any payment and the right to acquire ownership of any one specific item, the advertisement shall clearly and conspicuously state all of the following, as applicable:
(1)	The advertised transaction is a lease‑purchase agreement.
(2)	The total amount of payments necessary to acquire ownership.
(3)	A consumer acquires no ownership rights if the total amount necessary to acquire ownership is not paid.
(b)	Nothing in this section shall be construed to impose liability on any entity, or its employees, that serves as a medium in which an advertisement appears or is disseminated.
(c)	A listing in a telephone or other similar business directory is not considered an advertisement for the purposes of this section.
"§ 25D‑10.  Conflict with Consumer Credit Protection Act.
In all cases of irreconcilable conflict between the provisions of this Chapter and the provisions of the Consumer Credit Protection Act, 15 U.S.C. § 1601, et seq., as amended, the provisions of the Consumer Credit Protection Act shall control."
SECTION 1.(b)  This section becomes effective January 1, 2019, and applies to lease‑purchase agreements advertised or entered into on or after that date.
SECTION 2.  G.S. 115C‑218.45(f) reads as rewritten:
"(f)	The charter school may give enrollment priority to any of the following:
(1)	Siblings of currently enrolled students who were admitted to the charter school. For the purposes of this section, the term "siblings" includes any of the following who reside in the same household: half siblings, stepsiblings, and children residing in a family foster home.
…."
SECTION 3.  Except as otherwise provided, this act is effective when it becomes law.