BILL ANALYSIS Ó
AB 753
Page 1
ASSEMBLY THIRD READING
AB 753 (Monning)
As Amended April 14, 2011
Majority vote
JUDICIARY 6-4
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|Ayes:|Feuer, Atkins, Dickinson, | | |
| |Huffman, Monning, | | |
| |Wieckowski | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wagner, Silva, Huber, | | |
| |Jones | | |
| | | | |
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SUMMARY : Prohibits car rental companies from renting or selling
cars that are subject to federal recall notices. Specifically,
this bill :
1)Forbids car rental companies from renting or selling a vehicle
once notice has been received that the vehicle is subject to a
safety recall for a defect or noncompliance with federal
safety standards.
2)Requires car rental companies to make the required repairs to
a vehicle subject to a safety recall under federal law before
allowing the vehicle to be rented or sold to consumers.
FISCAL EFFECT : None
COMMENTS : The author explains the purpose of the bill as
follows: "Existing federal and state laws permit rental car
companies to rent out cars that are being recalled due to safety
defects, or that fail to comply with federal safety standards.
Federal law already prohibits auto dealers from selling new cars
that are being recalled. A consumer should be able to rent a
car without worrying about safety issues that should have
already been repaired. We need to ensure that rental car
companies don't become complacent with their policies and rent
out recalled cars, as well as ensure that smaller rental car
companies who do not have policies do not rent out recalled cars
to retain their smaller customer base."
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The author states that a tragic example of this risk occurred in
the Santa Cruz area when sisters Raechel and Jacqueline Houck
were killed while driving a recalled PT Cruiser rented from
Enterprise. Approximately one month before the Houck sisters
were killed, Enterprise received notice from Chrysler that the
PT Cruiser had a defective steering component that was prone to
catch fire, the author reports. Despite the warning, Enterprise
reportedly rented out the car to three other customers before
renting the PT Cruiser to the Houck sisters. According to the
author, while some rental car companies claim they have
voluntarily changed their policies as a result of the Houck
case, legislation is necessary to ensure that rental car
customers are not placed in unknown danger when renting a car
under a manufacturer's safety recall notice.
Supporters state that manufacturers are required by law to
recall unsafe vehicles. Although some wait for a federal order,
supporters say, manufacturers almost always agree with National
Highway Traffic Safety Administration (NHTSA), which has
regulatory authority over auto manufacturers, if NHTSA
determines that a vehicle is not safe. Auto manufacturers are
required by federal law to provide the repairs to customers,
including rental car companies, for free.
According to supporters, typical safety recalls include seat
belts that fail to buckle or unlatch during impact; components
prone to catch fire; wheels that fall off; steering that fails,
causing loss of vehicle control; brake failure; intermittent
stalling in traffic; doors that fail to unlock, trapping
occupants inside; fuel tanks that don't meet federal standards;
air bags that fail to deploy when needed. If a defect is not
sufficiently serious to justify a safety recall, supporters
state, federal law allows manufacturers to petition NHTSA.
Manufacturers have on occasion filed such petitions and NHTSA on
occasion has agreed that a recall is not necessary.
Auto manufacturers are required to send safety recall notices to
the registered owners, including rental car companies. If the
recall notice is sent to an individual, they are at liberty to
research information on the NHTSA Web site or in publications,
in order to assess the risk. However, renters are in a
different position, as they usually lack access to information
about the level of risk represented in a safety recall. If
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parts are delayed, supporters state, auto manufacturers and
NHTSA generally coordinate the scheduling of recall notices, and
stagger when they are sent out, in order to avoid lengthy repair
delays after a recall has been issued. The recall notice states
the manufacturer's estimate of the time needed to perform the
labor to correct the problem, often a matter of hours.
Manufacturers must replace or buy back vehicles that are not
repaired within a reasonable time. Failure to repair a vehicle
within 60 days of its presentation for repair is presumed to be
unreasonable.
The car rental industry responds that automakers issue recall
notices for a wide variety of problems that do not necessarily
affect the safe operation of the vehicle at all. They note, for
example, that recall notices generally do not prohibit or advise
owners against driving their cars. Rather, the industry
contends, recall notices are issued for problems that often
merely "relate to" safety - a standard that, they argue, may
cover a wide variety of relatively minor problems that may cause
the car to be defective as a product - and therefore
necessitating correction -but simply do not warrant grounding
the vehicle. They add that existing negligence principles
appropriately guide rental industry practices, and that
negligence principles have resulted in the adoption of internal
policies that have proven to be largely effective to ensure
rental car safety.
The bill's supporters disagree with the industry's contention.
They argue that the bill is limited to safety recall notices.
If a vehicle is subject to a recall that is not safety related,
they contend, it is not subject to the bill. Those lesser
problems identified by the industry, supporters argue, are dealt
with via a service campaign or a Technical Service Bulletin.
When a defect or noncompliance rises to the level where a
vehicle falls under a safety recall, they contend, those
vehicles are by definition unsafe. Moreover, supporters note, a
manufacturer that believes a defect does not rise to the level
that makes a safety recall appropriate, may petition NHTSA not
to make a safety determination.
Rental car company opponents contend that federal safety notices
are simply not a rational proxy for them to be governed by as
measure of safety. They contend they remain open to working
with the author, his sponsor and committee staff to try to
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develop an alternate statutory approach to address the concern
that unsafe vehicles be removed from rental car company fleets.
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334
FN: 0000314