California Legislature—2013–14 Regular Session

Assembly BillNo. 359


Introduced by Assembly Member Holden

(Principal coauthor: Assembly Member Allen)

February 14, 2013


An act to amend Section 1936 of the Civil Code, relating to vehicle rental agreements.

LEGISLATIVE COUNSEL’S DIGEST

AB 359, as introduced, Holden. Vehicle rental agreements: customer facility charge.

Existing law governs contracts between rental car companies and their customers. Existing law authorizes a company that rents passenger vehicles to the public to collect a customer facility charge, which means a fee that is required by an airport to be collected to finance, design, and construct airport car rental facilities, transportation systems, and terminal modifications, if specified circumstances apply. Existing law requires the aggregate amount collected from customer facility charges not exceed the reasonable costs, determined based on an independent audit, to finance, design, and construct those facilities.

This bill would remove the audit requirement in relation to determining the aggregate amount of the customer facility charge and would make related revisions.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 1936 of the Civil Code, as amended by
2Section 2 of Chapter 32 of the Statutes of 2012, is amended to
3read:

4

1936.  

(a) For the purpose of this section, the following
5definitions shall apply:

6(1) “Rental company” means a person or entity in the business
7of renting passenger vehicles to the public.

8(2) “Renter” means any person in a manner obligated under a
9contract for the lease or hire of a passenger vehicle from a rental
10company for a period of less than 30 days.

11(3) “Authorized driver” means (A) the renter, (B) the renter’s
12spouse if that person is a licensed driver and satisfies the rental
13company’s minimum age requirement, (C) the renter’s employer
14or coworker if he or she is engaged in business activity with the
15renter, is a licensed driver, and satisfies the rental company’s
16minimum age requirement, and (D) a person expressly listed by
17the rental company on the renter’s contract as an authorized driver.

18(4) (A) “Customer facility charge” means any fee, including
19an alternative fee, required by an airport to be collected by a rental
20company from a renter for any of the following purposes:

21(i) To finance, design, and construct consolidated airport car
22rental facilities.

23(ii) To finance, design, construct, and operate common-use
24transportation systems that move passengers between airport
25terminals and those consolidated car rental facilities, and acquire
26vehicles for use in that system.

27(iii) To finance, design, and construct terminal modifications
28solely to accommodate and provide customer access to
29common-use transportation systems.

30(B) The aggregate amount to be collected shall not exceed the
31reasonablebegin delete costs, as determined by an independent audit paid for
32by the airport,end delete
begin insert costsend insert to finance, design, and construct those
33facilities. Copies of thebegin delete auditend deletebegin insert customer facility charge informationend insert
34 shall be provided to the Assembly and Senate Committees on
35Judiciary, the Assembly Committee on Transportation, and the
36Senate Committee on Transportation and Housing.begin delete In the case of
37a transportation system, the audit also shall consider the reasonable
38costs of providing the transit system or busing network.end delete

P3    1 Notwithstanding clause (iii) of subparagraph (A), the fees
2designated as a customer facility charge shall not be used to pay
3for terminal expansion, gate expansion, runway expansion, changes
4in hours of operation, or changes in the number of flights arriving
5or departing from the airport.

6(C) Except as provided in subparagraph (D), the authorization
7given pursuant to this section for an airport to impose a customer
8facility charge shall become inoperative when the bonds used for
9financing are paid.

10(D) If a bond or other form of indebtedness is not used for
11financing, or the bond or other form of indebtedness used for
12financing has been paid, the Oakland International Airport may
13require the collection of a customer facility charge for a period of
14up to 10 years from the imposition of the charge for the purposes
15allowed by, and subject to the conditions imposed by, this section.

16(5) “Damage waiver” means a rental company’s agreement not
17to hold a renter liable for all or any portion of any damage or loss
18related to the rented vehicle, any loss of use of the rented vehicle,
19or any storage, impound, towing, or administrative charges.

20(6) “Electronic surveillance technology” means a technological
21method or system used to observe, monitor, or collect information,
22including telematics, Global Positioning System (GPS), wireless
23technology, or location-based technologies. “Electronic
24surveillance technology” does not include event data recorders
25(EDR), sensing and diagnostic modules (SDM), or other systems
26that are used either:

27(A) For the purpose of identifying, diagnosing, or monitoring
28functions related to the potential need to repair, service, or perform
29maintenance on the rental vehicle.

30(B) As part of the vehicle’s airbag sensing and diagnostic system
31in order to capture safety systems-related data for retrieval after a
32crash has occurred or in the event that the collision sensors are
33activated to prepare the decisionmaking computer to make the
34determination to deploy or not to deploy the airbag.

35(7) “Estimated time for replacement” means the number of hours
36of labor, or fraction thereof, needed to replace damaged vehicle
37parts as set forth in collision damage estimating guides generally
38used in the vehicle repair business and commonly known as “crash
39books.”

P4    1(8) “Estimated time for repair” means a good faith estimate of
2the reasonable number of hours of labor, or fraction thereof, needed
3to repair damaged vehicle parts.

4(9) “Membership program” means a service offered by a rental
5company that permits customers to bypass the rental counter and
6go directly to the car previously reserved. A membership program
7shall meet all of the following requirements:

8(A) The renter initiates enrollment by completing an application
9on which the renter can specify a preference for type of vehicle
10and acceptance or declination of optional services.

11(B) The rental company fully discloses, prior to the enrollee’s
12first rental as a participant in the program, all terms and conditions
13of the rental agreement as well as all required disclosures.

14(C) The renter may terminate enrollment at any time.

15(D) The rental company fully explains to the renter that
16designated preferences, as well as acceptance or declination of
17optional services, may be changed by the renter at any time for
18the next and future rentals.

19(E) An employee designated to receive the form specified in
20subparagraph (C) of paragraph (1) of subdivision (t) is present at
21the lot where the renter takes possession of the car, to receive any
22change in the rental agreement from the renter.

23(10) “Passenger vehicle” means a passenger vehicle as defined
24in Section 465 of the Vehicle Code.

25(b) Except as limited by subdivision (c), a rental company and
26a renter may agree that the renter will be responsible for no more
27than all of the following:

28(1) Physical or mechanical damage to the rented vehicle up to
29its fair market value, as determined in the customary market for
30the sale of that vehicle, resulting from collision regardless of the
31cause of the damage.

32(2) Loss due to theft of the rented vehicle up to its fair market
33value, as determined in the customary market for the sale of that
34vehicle, provided that the rental company establishes by clear and
35convincing evidence that the renter or the authorized driver failed
36to exercise ordinary care while in possession of the vehicle. In
37addition, the renter shall be presumed to have no liability for any
38loss due to theft if (A) an authorized driver has possession of the
39ignition key furnished by the rental company or an authorized
40driver establishes that the ignition key furnished by the rental
P5    1company was not in the vehicle at the time of the theft, and (B) an
2authorized driver files an official report of the theft with the police
3or other law enforcement agency within 24 hours of learning of
4the theft and reasonably cooperates with the rental company and
5the police or other law enforcement agency in providing
6information concerning the theft. The presumption set forth in this
7paragraph is a presumption affecting the burden of proof which
8the rental company may rebut by establishing that an authorized
9driver committed, or aided and abetted the commission of, the
10theft.

11(3) Physical damage to the rented vehicle up to its fair market
12value, as determined in the customary market for the sale of that
13vehicle, resulting from vandalism occurring after, or in connection
14with, the theft of the rented vehicle. However, the renter shall have
15no liability for any damage due to vandalism if the renter would
16have no liability for theft pursuant to paragraph (2).

17(4) Physical damage to the rented vehicle up to a total of five
18hundred dollars ($500) resulting from vandalism unrelated to the
19theft of the rented vehicle.

20(5) Actual charges for towing, storage, and impound fees paid
21by the rental company if the renter is liable for damage or loss.

22(6) An administrative charge, which shall include the cost of
23 appraisal and all other costs and expenses incident to the damage,
24loss, repair, or replacement of the rented vehicle.

25(c) The total amount of the renter’s liability to the rental
26company resulting from damage to the rented vehicle shall not
27exceed the sum of the following:

28(1) The estimated cost of parts which the rental company would
29have to pay to replace damaged vehicle parts. All discounts and
30price reductions or adjustments that are or will be received by the
31rental company shall be subtracted from the estimate to the extent
32not already incorporated in the estimate, or otherwise promptly
33credited or refunded to the renter.

34(2) The estimated cost of labor to replace damaged vehicle parts,
35which shall not exceed the product of (A) the rate for labor usually
36paid by the rental company to replace vehicle parts of the type that
37were damaged and (B) the estimated time for replacement. All
38discounts and price reductions or adjustments that are or will be
39received by the rental company shall be subtracted from the
P6    1estimate to the extent not already incorporated in the estimate, or
2otherwise promptly credited or refunded to the renter.

3(3) (A) The estimated cost of labor to repair damaged vehicle
4parts, which shall not exceed the lesser of the following:

5(i) The product of the rate for labor usually paid by the rental
6company to repair vehicle parts of the type that were damaged and
7the estimated time for repair.

8(ii) The sum of the estimated labor and parts costs determined
9under paragraphs (1) and (2) to replace the same vehicle parts.

10(B) All discounts and price reductions or adjustments that are
11or will be received by the rental company shall be subtracted from
12the estimate to the extent not already incorporated in the estimate,
13or otherwise promptly credited or refunded to the renter.

14(4) For the purpose of converting the estimated time for repair
15into the same units of time in which the rental rate is expressed, a
16day shall be deemed to consist of eight hours.

17(5) Actual charges for towing, storage, and impound fees paid
18by the rental company.

19(6) The administrative charge described in paragraph (6) of
20subdivision (b) shall not exceed (A) fifty dollars ($50) if the total
21estimated cost for parts and labor is more than one hundred dollars
22($100) up to and including five hundred dollars ($500), (B) one
23hundred dollars ($100) if the total estimated cost for parts and
24labor exceeds five hundred dollars ($500) up to and including one
25thousand five hundred dollars ($1,500), and (C) one hundred fifty
26dollars ($150) if the total estimated cost for parts and labor exceeds
27one thousand five hundred dollars ($1,500). An administrative
28charge shall not be imposed if the total estimated cost of parts and
29labor is one hundred dollars ($100) or less.

30(d) (1) The total amount of an authorized driver’s liability to
31the rental company, if any, for damage occurring during the
32authorized driver’s operation of the rented vehicle shall not exceed
33the amount of the renter’s liability under subdivision (c).

34(2) A rental company shall not recover from the renter or other
35authorized driver an amount exceeding the renter’s liability under
36subdivision (c).

37(3) A claim against a renter resulting from damage or loss,
38excluding loss of use, to a rental vehicle shall be reasonably and
39rationally related to the actual loss incurred. A rental company
40shall mitigate damages where possible and shall not assert or collect
P7    1a claim for physical damage which exceeds the actual costs of the
2repairs performed or the estimated cost of repairs, if the rental
3company chooses not to repair the vehicle, including all discounts
4and price reductions. However, if the vehicle is a total loss vehicle,
5the claim shall not exceed the total loss vehicle value established
6in accordance with procedures that are customarily used by
7insurance companies when paying claims on total loss vehicles,
8less the proceeds from salvaging the vehicle, if those proceeds are
9retained by the rental company.

10(4) If insurance coverage exists under the renter’s applicable
11personal or business insurance policy and the coverage is confirmed
12during regular business hours, the renter may require that the rental
13company submit any claims to the renter’s applicable personal or
14business insurance carrier. The rental company shall not make any
15written or oral representations that it will not present claims or
16negotiate with the renter’s insurance carrier. For purposes of this
17paragraph, confirmation of coverage includes telephone
18confirmation from insurance company representatives during
19regular business hours. Upon request of the renter and after
20confirmation of coverage, the amount of claim shall be resolved
21between the insurance carrier and the rental company. The renter
22shall remain responsible for payment to the rental car company
23for any loss sustained that the renter’s applicable personal or
24business insurance policy does not cover.

25(5) A rental company shall not recover from the renter or other
26authorized driver for an item described in subdivision (b) to the
27extent the rental company obtains recovery from another person.

28(6) This section applies only to the maximum liability of a renter
29or other authorized driver to the rental company resulting from
30damage to the rented vehicle and not to the liability of another
31person.

32(e) (1) Except as provided in subdivision (f), a damage waiver
33shall provide or, if not expressly stated in writing, shall be deemed
34to provide that the renter has no liability for a damage, loss, loss
35of use, or a cost or expense incident thereto.

36(2) Except as provided in subdivision (f), every limitation,
37exception, or exclusion to a damage waiver is void and
38unenforceable.

P8    1(f) A rental company may provide in the rental contract that a
2damage waiver does not apply under any of the following
3 circumstances:

4(1) Damage or loss results from an authorized driver’s (A)
5intentional, willful, wanton, or reckless conduct, (B) operation of
6the vehicle under the influence of drugs or alcohol in violation of
7Section 23152 of the Vehicle Code, (C) towing or pushing
8anything, or (D) operation of the vehicle on an unpaved road if
9the damage or loss is a direct result of the road or driving
10conditions.

11(2) Damage or loss occurs while the vehicle is (A) used for
12commercial hire, (B) used in connection with conduct that could
13be properly charged as a felony, (C) involved in a speed test or
14contest or in driver training activity, (D) operated by a person other
15than an authorized driver, or (E) operated outside the United States.

16(3) An authorized driver who has (A) provided fraudulent
17information to the rental company, or (B) provided false
18information and the rental company would not have rented the
19vehicle if it had instead received true information.

20(g) (1) A rental company that offers or provides a damage
21waiver for any consideration in addition to the rental rate shall
22clearly and conspicuously disclose the following information in
23the rental contract or holder in which the contract is placed and,
24also, in signs posted at the place, such as the counter, where the
25renter signs the rental contract, and, for renters who are enrolled
26in the rental company’s membership program, in a sign that shall
27be posted in a location clearly visible to those renters as they enter
28the location where their reserved rental cars are parked or near the
29exit of the bus or other conveyance that transports the enrollee to
30a reserved car: (A) the nature of the renter’s liability, such as
31liability for all collision damage regardless of cause, (B) the extent
32of the renter’s liability, such as liability for damage or loss up to
33a specified amount, (C) the renter’s personal insurance policy or
34the credit card used to pay for the car rental transaction may
35provide coverage for all or a portion of the renter’s potential
36liability, (D) the renter should consult with his or her insurer to
37determine the scope of insurance coverage, including the amount
38of the deductible, if any, for which the renter is obligated, (E) the
39renter may purchase an optional damage waiver to cover all
40liability, subject to whatever exceptions the rental company
P9    1expressly lists that are permitted under subdivision (f), and (F) the
2range of charges for the damage waiver.

3(2) In addition to the requirements of paragraph (1), a rental
4company that offers or provides a damage waiver shall orally
5disclose to all renters, except those who are participants in the
6rental company’s membership program, that the damage waiver
7may be duplicative of coverage that the customer maintains under
8his or her own policy of motor vehicle insurance. The renter’s
9receipt of the oral disclosure shall be demonstrated through the
10renter’s acknowledging receipt of the oral disclosure near that part
11of the contract where the renter indicates, by the renter’s own
12initials, his or her acceptance or declination of the damage waiver.
13Adjacent to that same part, the contract also shall state that the
14damage waiver is optional. Further, the contract for these renters
15shall include a clear and conspicuous written disclosure that the
16damage waiver may be duplicative of coverage that the customer
17maintains under his or her own policy of motor vehicle insurance.

18(3) The following is an example, for purposes of illustration
19and not limitation, of a notice fulfilling the requirements of
20paragraph (1) for a rental company that imposes liability on the
21renter for collision damage to the full value of the vehicle:
22

23“NOTICE ABOUT YOUR FINANCIAL RESPONSIBILITY
24AND OPTIONAL DAMAGE WAIVER
25

26You are responsible for all collision damage to the rented vehicle
27even if someone else caused it or the cause is unknown. You are
28responsible for the cost of repair up to the value of the vehicle,
29and towing, storage, and impound fees.

30Your own insurance, or the issuer of the credit card you use to
31pay for the car rental transaction, may cover all or part of your
32financial responsibility for the rented vehicle. You should check
33with your insurance company, or credit card issuer, to find out
34about your coverage and the amount of the deductible, if any, for
35which you may be liable.

36Further, if you use a credit card that provides coverage for your
37potential liability, you should check with the issuer to determine
38if you must first exhaust the coverage limits of your own insurance
39before the credit card coverage applies.

P10   1The rental company will not hold you responsible if you buy a
2damage waiver. But a damage waiver will not protect you if (list
3exceptions).”


5(A) When the above notice is printed in the rental contract or
6holder in which the contract is placed, the following shall be printed
7immediately following the notice:


9“The cost of an optional damage waiver is $____ for every (day
10or week).”


12(B) When the above notice appears on a sign, the following
13shall appear immediately adjacent to the notice:


15“The cost of an optional damage waiver is $____ to $____ for
16every (day or week), depending upon the vehicle rented.”


18(h) Notwithstanding any other provision of law, a rental
19company may sell a damage waiver subject to the following rate
20limitations for each full or partial 24-hour rental day for the damage
21waiver.

22(1) For rental vehicles that the rental company designates as an
23“economy car,” “subcompact car,” “compact car,” or another term
24having similar meaning when offered for rental, or another vehicle
25having a manufacturer’s suggested retail price of nineteen thousand
26dollars ($19,000) or less, the rate shall not exceed nine dollars
27($9).

28(2) For rental vehicles that have a manufacturer’s suggested
29retail price from nineteen thousand one dollars ($19,001) to
30thirty-four thousand nine hundred ninety-nine dollars ($34,999),
31inclusive, and that are also either vehicles of next year’s model,
32or not older than the previous year’s model, the rate shall not
33exceed fifteen dollars ($15). For those rental vehicles older than
34the previous year’s model-year, the rate shall not exceed nine
35dollars ($9).

36(i) The manufacturer’s suggested retail prices described in
37subdivision (h) shall be adjusted annually to reflect changes from
38the previous year in the Consumer Price Index. For the purposes
39of this section, “Consumer Price Index” means the United States
40Consumer Price Index for All Urban Consumers, for all items.

P11   1(j) A rental company that disseminates in this state an
2advertisement containing a rental rate shall include in that
3advertisement a clearly readable statement of the charge for a
4damage waiver and a statement that a damage waiver is optional.

5(k) (1) A rental company shall not require the purchase of a
6damage waiver, optional insurance, or another optional good or
7service.

8(2) A rental company shall not engage in any unfair, deceptive,
9or coercive conduct to induce a renter to purchase the damage
10waiver, optional insurance, or another optional good or service,
11including conduct such as, but not limited to, refusing to honor
12the renter’s reservation, limiting the availability of vehicles,
13requiring a deposit, or debiting or blocking the renter’s credit card
14account for a sum equivalent to a deposit if the renter declines to
15purchase the damage waiver, optional insurance, or another
16optional good or service.

17(l) (1) In the absence of express permission granted by the
18renter subsequent to damage to, or loss of, the vehicle, a rental
19company shall not seek to recover any portion of a claim arising
20out of damage to, or loss of, the rented vehicle by processing a
21credit card charge or causing a debit or block to be placed on the
22renter’s credit card account.

23(2) A rental company shall not engage in any unfair, deceptive,
24or coercive tactics in attempting to recover or in recovering on any
25claim arising out of damage to, or loss of, the rented vehicle.

26(m) (1) A customer facility charge may be collected by a rental
27company under the following circumstances:

28(A) Collection of the fee by the rental company is required by
29an airport operated by a city, a county, a city and county, a joint
30powers authority, a special district, or the San Diego County
31Regional Airport Authority formed pursuant to Division 17
32 (commencing with Section 170000) of the Public Utilities Code.

33(B) The fee is calculated on a per contract basis or as provided
34in paragraph (2).

35(C) The fee is a user fee, not a tax imposed upon real property
36or an incidence of property ownership under Article XIII D of the
37California Constitution.

38(D) Except as otherwise provided in subparagraph (E), the fee
39shall be ten dollars ($10) per contract or the amount provided in
40paragraph (2).

P12   1(E) The fee for a consolidated rental car facility shall be
2collected only from customers of on-airport rental car companies.
3If the fee imposed by the airport is for both a consolidated rental
4car facility and a common-use transportation system, the fee
5collected from customers of on-airport rental car companies shall
6be ten dollars ($10) or the amount provided in paragraph (2), but
7the fee imposed on customers of off-airport rental car companies
8who are transported on the common-use transportation system is
9proportionate to the costs of the common-use transportation system
10only. The fee is uniformly applied to each class of on-airport or
11off-airport customers, provided that the airport requires off-airport
12customers to use the common-use transportation system. For
13purposes of this subparagraph, “on-airport rental car company”
14means a rental company operating under an airport property lease
15or an airport concession or license agreement whose customers
16use or will use the consolidated rental car facility and the collection
17of the fee as to those customers is consistent with subparagraph
18(C).

19(F) Revenues collected from the fee do not exceed the reasonable
20costs of financing, designing, and constructing the facility and
21financing, designing, constructing, and operating any common-use
22transportation system, or acquiring vehicles for use in that system,
23and shall not be used for any other purpose.

24(G) The fee is separately identified on the rental agreement.

25(H) This paragraph does not apply to fees which are governed
26by Section 50474.1 of the Government Code or Section 57.5 of
27the San Diego Unified Port District Act.

28(I) For any airport seeking to require rental car companies to
29collect an alternative customer facility charge pursuant to paragraph
30(2), the following provisions apply:

31(i) Notwithstanding Section 10231.5 of the Government Code,
32the airport shall provide reports on an annual basis to the Senate
33and Assembly Committees on Judiciary detailing all of the
34following:

35(I) The total amount of the customer facility charge collected.

36(II) How the funds are being spent.

37(III) The amount of and reason for any changes in the airport’s
38budget or financial needs for the facility or common-use
39transportation system.

P13   1(IV) Whether airport concession fees authorized by Section
21936.01 have increased since the prior report, if any.

begin delete

3(ii) The airport shall complete the independent audit required
4by subparagraph (B) of paragraph (4) of subdivision (a) prior to
5initial collection of the customer facility charge, prior to any
6increase pursuant to paragraph (2), and every three years after
7initial collection and any increase until such time as the fee
8authorization becomes inoperative pursuant to subparagraph (C)
9of paragraph (4) of subdivision (a).

end delete
begin delete

10(iii)

end delete

11begin insert(ii)end insert Use of the bonds shall be limited to construction and design
12of the consolidated rental car facility, terminal modifications, and
13operating costs of the common-use transportation system, as
14specified in paragraph (4) of subdivision (a).

15(2) Any airport may require rental car companies to collect an
16alternative customer facility charge under the following conditions:

17(A) The airport first conducts a publicly noticed hearing pursuant
18to the Ralph M. Brown Act (Chapter 9 (commencing with Section
1954950) of Part 1 of Division 2 of Title 5 of the Government Code)
20to review the costs of financing the design and construction of a
21consolidated rental car facility and the design, construction, and
22operation of any common-use transportation system in which all
23of the following occur:

24(i) The airport establishes the amount of revenue necessary to
25finance the reasonable cost to design and construct a consolidated
26rental car facility and to design, construct, and operate any
27common-use transportation system, or acquire vehicles for use in
28that system, based on evidence presented during the hearing.

29(ii) The airport finds, based on evidence presented during the
30hearing, that the fee authorized in paragraph (1) will not generate
31sufficient revenue to finance the reasonable costs to design and
32construct a consolidated rental car facility and to design, construct,
33and operate any common-use transportation system, or acquire
34vehicles for use in that system.

35(iii) The airport finds that the reasonable cost of the project
36requires the additional amount of revenue that would be generated
37by the proposed daily rate, including any rate increase, authorized
38pursuant to this paragraph.

39(iv) The airport outlines each of the following:

40(I) Steps it has taken to limit costs.

P14   1(II) Other potential alternatives for meeting its revenue needs
2other than the collection of the fee.

3(III) The extent to which rental car companies or other
4businesses or individuals using the facility or common-use
5transportation system will pay for the costs associated with these
6facilities and systems other than the fee from rental customers.

7(B) The airport may not require the fee authorized in this
8paragraph to be collected at any time that the fee authorized in
9paragraph (1) of this subdivision is being collected.

10(C) Pursuant to the procedure set forth in this subdivision, the
11fee may be collected at a rate charged on a per-day basis subject
12to the following conditions:

13(i) Commencing January 1, 2011, the amount of the fee may
14not exceed six dollars ($6) per day.

15(ii) Commencing January 1, 2014, the amount of the fee may
16not exceed seven dollars and fifty cents ($7.50) per day.

17(iii) Commencing January 1, 2017, and thereafter, the amount
18of the fee may not exceed nine dollars ($9) per day.

19(iv) At no time shall the fee authorized in this paragraph be
20collected from any customer for more than five days for each
21individual rental car contract.

22(v) An airport subject to this paragraph shall initiate the process
23for obtaining the authority to require or increase the alternative
24fee no later than January 1, 2018. Any airport that obtains the
25authority to require or increase an alternative fee shall be authorized
26to continue collecting that fee until the fee authorization becomes
27inoperative pursuant to subparagraph (C) of paragraph (4) of
28subdivision (a).

29(3) Notwithstanding any other provision of law, including, but
30not limited to, Part 1 (commencing with Section 6001) to Part 1.7
31(commencing with Section 7280), inclusive, of Division 2 of the
32 Revenue and Taxation Code, the fees collected pursuant to this
33section, or another law whereby a local agency operating an airport
34requires a rental car company to collect a facility financing fee
35from its customers, are not subject to sales, use, or transaction
36taxes.

37(n) (1) A rental company shall only advertise, quote, and charge
38a rental rate that includes the entire amount except taxes, a
39customer facility charge, if any, and a mileage charge, if any, that
40a renter must pay to hire or lease the vehicle for the period of time
P15   1to which the rental rate applies. A rental company shall not charge
2in addition to the rental rate, taxes, a customer facility charge, if
3any, and a mileage charge, if any, any fee that is required to be
4paid by the renter as a condition of hiring or leasing the vehicle,
5including, but not limited to, required fuel or airport surcharges
6other than customer facility charges, nor a fee for transporting the
7renter to the location where the rented vehicle will be delivered to
8the renter.

9(2) In addition to the rental rate, taxes, customer facility charges,
10if any, and mileage charges, if any, a rental company may charge
11for an item or service provided in connection with a particular
12rental transaction if the renter could have avoided incurring the
13charge by choosing not to obtain or utilize the optional item or
14service. Items and services for which the rental company may
15impose an additional charge include, but are not limited to, optional
16insurance and accessories requested by the renter, service charges
17incident to the renter’s optional return of the vehicle to a location
18other than the location where the vehicle was hired or leased, and
19charges for refueling the vehicle at the conclusion of the rental
20transaction in the event the renter did not return the vehicle with
21as much fuel as was in the fuel tank at the beginning of the rental.
22A rental company also may impose an additional charge based on
23reasonable age criteria established by the rental company.

24(3) A rental company shall not charge a fee for authorized
25drivers in addition to the rental charge for an individual renter.

26(4) If a rental company states a rental rate in print advertisement
27or in a telephonic, in-person, or computer-transmitted quotation,
28the rental company shall disclose clearly in that advertisement or
29quotation the terms of mileage conditions relating to the advertised
30or quoted rental rate, including, but not limited to, to the extent
31applicable, the amount of mileage and gas charges, the number of
32miles for which no charges will be imposed, and a description of
33geographic driving limitations within the United States and Canada.

34(5) (A) When a rental rate is stated in an advertisement,
35quotation, or reservation in connection with a car rental at an airport
36where a customer facility charge is imposed, the rental company
37shall disclose clearly the existence and amount of the customer
38facility charge. For purposes of this subparagraph, advertisements
39include radio, television, other electronic media, and print
40advertisements. For purposes of this subparagraph, quotations and
P16   1reservations include those that are telephonic, in-person, and
2computer-transmitted. If the rate advertisement is intended to
3include transactions at more than one airport imposing a customer
4facility charge, a range of fees may be stated in the advertisement.
5However, all rate advertisements that include car rentals at airport
6destinations shall clearly and conspicuously include a toll-free
7telephone number whereby a customer can be told the specific
8amount of the customer facility charge to which the customer will
9be obligated.

10(B) If a person or entity other than a rental car company,
11including a passenger carrier or a seller of travel services, advertises
12or quotes a rate for a car rental at an airport where a customer
13facility charge is imposed, that person or entity shall, provided
14that he, she, or it is provided with information about the existence
15and amount of the fee, to the extent not specifically prohibited by
16federal law, clearly disclose the existence and amount of the fee
17in any telephonic, in-person, or computer-transmitted quotation at
18the time of making an initial quotation of a rental rate and at the
19time of making a reservation of a rental car. If a rental car company
20provides the person or entity with rate and customer facility charge
21information, the rental car company is not responsible for the
22failure of that person or entity to comply with this subparagraph
23when quoting or confirming a rate to a third person or entity.

24(6) If a rental company delivers a vehicle to a renter at a location
25other than the location where the rental company normally carries
26on its business, the rental company shall not charge the renter an
27amount for the rental for the period before the delivery of the
28vehicle. If a rental company picks up a rented vehicle from a renter
29at a location other than the location where the rental company
30normally carries on its business, the rental company shall not
31charge the renter an amount for the rental for the period after the
32renter notifies the rental company to pick up the vehicle.

33(o) A rental company shall not use, access, or obtain any
34information relating to the renter’s use of the rental vehicle that
35was obtained using electronic surveillance technology, except in
36the following circumstances:

37(1) (A) When the equipment is used by the rental company
38only for the purpose of locating a stolen, abandoned, or missing
39rental vehicle after one of the following:

P17   1(i) The renter or law enforcement has informed the rental
2company that the vehicle is missing or has been stolen or
3abandoned.

4(ii) The rental vehicle has not been returned following one week
5after the contracted return date, or by one week following the end
6of an extension of that return date.

7(iii) The rental company discovers the rental vehicle has been
8stolen or abandoned, and, if stolen, it shall report the vehicle stolen
9to law enforcement by filing a stolen vehicle report, unless law
10enforcement has already informed the rental company that the
11vehicle is missing or has been stolen or abandoned.

12(B) If electronic surveillance technology is activated pursuant
13to subparagraph (A), a rental company shall maintain a record, in
14either electronic or written form, of information relevant to the
15activation of that technology. That information shall include the
16rental agreement, including the return date, and the date and time
17the electronic surveillance technology was activated. The record
18shall also include, if relevant, a record of written or other
19communication with the renter, including communications
20regarding extensions of the rental, police reports, or other written
21communication with law enforcement officials. The record shall
22be maintained for a period of at least 12 months from the time the
23record is created and shall be made available upon the renter’s
24request. The rental company shall maintain and furnish explanatory
25codes necessary to read the record. A rental company shall not be
26required to maintain a record if electronic surveillance technology
27is activated to recover a rental vehicle that is stolen or missing at
28a time other than during a rental period.

29(2) In response to a specific request from law enforcement
30pursuant to a subpoena or search warrant.

31(3) This subdivision does not prohibit a rental company from
32equipping rental vehicles with GPS-based technology that provides
33navigation assistance to the occupants of the rental vehicle, if the
34rental company does not use, access, or obtain information relating
35to the renter’s use of the rental vehicle that was obtained using
36that technology, except for the purposes of discovering or repairing
37a defect in the technology and the information may then be used
38only for that purpose.

39(4) This subdivision does not prohibit a rental company from
40equipping rental vehicles with electronic surveillance technology
P18   1that allows for the remote locking or unlocking of the vehicle at
2the request of the renter, if the rental company does not use, access,
3or obtain information relating to the renter’s use of the rental
4vehicle that was obtained using that technology, except as
5necessary to lock or unlock the vehicle.

6(5) This subdivision does not prohibit a rental company from
7equipping rental vehicles with electronic surveillance technology
8that allows the company to provide roadside assistance, such as
9towing, flat tire, or fuel services, at the request of the renter, if the
10rental company does not use, access, or obtain information relating
11to the renter’s use of the rental vehicle that was obtained using
12that technology except as necessary to provide the requested
13roadside assistance.

14(6) This subdivision does not prohibit a rental company from
15obtaining, accessing, or using information from electronic
16surveillance technology for the sole purpose of determining the
17date and time the vehicle is returned to the rental company, and
18the total mileage driven and the vehicle fuel level of the returned
19vehicle. This paragraph, however, shall apply only after the renter
20has returned the vehicle to the rental company, and the information
21shall only be used for the purpose described in this paragraph.

22(p) A rental company shall not use electronic surveillance
23technology to track a renter in order to impose fines or surcharges
24relating to the renter’s use of the rental vehicle.

25(q) A renter may bring an action against a rental company for
26the recovery of damages and appropriate equitable relief for a
27violation of this section. The prevailing party shall be entitled to
28recover reasonable attorney’s fees and costs.

29(r) A rental company that brings an action against a renter for
30loss due to theft of the vehicle shall bring the action in the county
31in which the renter resides or, if the renter is not a resident of this
32state, in the jurisdiction in which the renter resides.

33(s) A waiver of any of the provisions of this section shall be
34void and unenforceable as contrary to public policy.

35(t) (1) A rental company’s disclosure requirements shall be
36satisfied for renters who are enrolled in the rental company’s
37membership program if all of the following conditions are met:

38(A) Prior to the enrollee’s first rental as a participant in the
39program, the renter receives, in writing, the following:

P19   1(i) All of the disclosures required by paragraph (1) of subdivision
2(g), including the terms and conditions of the rental agreement
3then in effect.

4(ii) An Internet Web site address, as well as a contact number
5or address, where the enrollee can learn of changes to the rental
6agreement or to the laws of this state governing rental agreements
7since the effective date of the rental company’s most recent
8restatement of the rental agreement and distribution of that
9restatement to its members.

10(B) At the commencement of each rental period, the renter is
11provided, on the rental record or the folder in which it is inserted,
12with a printed notice stating that he or she had either previously
13selected or declined an optional damage waiver and that the renter
14has the right to change preferences.

15(C) At the commencement of each rental period, the rental
16company provides, on the rearview mirror, a hanger on which a
17statement is printed, in a box, in at least 12-point boldface type,
18notifying the renter that the collision damage waiver offered by
19the rental company may be duplicative of coverage that the
20customer maintains under his or her own policy of motor vehicle
21insurance. If it is not feasible to hang the statement from the
22rearview mirror, it shall be hung from the steering wheel.

23The hanger shall provide the renter a box to initial if he or she
24(not his or her employer) has previously accepted or declined the
25collision damage waiver and that he or she now wishes to change
26his or her decision to accept or decline the collision damage waiver,
27as follows:


28
29“◻ If I previously accepted the collision damage waiver, I
30now decline it.


31  
32◻ If I previously declined the collision damage waiver, I now
33accept it.”


35The hanger shall also provide a box for the enrollee to indicate
36whether this change applies to this rental transaction only or to all
37future rental transactions. The hanger shall also notify the renter
38that he or she may make that change, prior to leaving the lot, by
39returning the form to an employee designated to receive the form
P20   1who is present at the lot where the renter takes possession of the
2car, to receive any change in the rental agreement from the renter.

3(2) (A) This subdivision is not effective unless the employee
4designated pursuant to subparagraph (E) of paragraph (8) of
5subdivision (a) is actually present at the required location.

6(B) This subdivision does not relieve the rental company from
7the disclosures required to be made within the text of a contract
8or holder in which the contract is placed; in or on an advertisement
9containing a rental rate; or in a telephonic, in-person, or
10computer-transmitted quotation or reservation.

11(u) The amendments made to this section during the 2001-02
12Regular Session of the Legislature do not affect litigation pending
13on or before January 1, 2003, alleging a violation of Section 22325
14of the Business and Professions Code as it read at the time the
15action was commenced.

16(v) (1) When a rental company enters into a rental agreement
17in the state for the rental of a vehicle to any renter who is not a
18resident of this country and, as part of, or associated with, the rental
19agreement, the renter purchases liability insurance, as defined in
20subdivision (b) of Section 1758.85 of the Insurance Code, from
21the rental company in its capacity as a rental car agent for an
22authorized insurer, the rental company shall be authorized to accept,
23and, if served as set forth in this subdivision, shall accept, service
24of a summons and complaint and any other required documents
25against the foreign renter for any accident or collision resulting
26from the operation of the rental vehicle within the state during the
27rental period. If the rental company has a registered agent for
28service of process on file with the Secretary of State, process shall
29be served on the rental company’s registered agent, either by
30first-class mail, return receipt requested, or by personal service.

31(2) Within 30 days of acceptance of service of process, the rental
32company shall, provide a copy of the summons and complaint and
33any other required documents served in accordance with this
34subdivision to the foreign renter by first-class mail, return receipt
35requested.

36(3) Any plaintiff, or his or her representative, who elects to serve
37the foreign renter by delivering a copy of the summons and
38complaint and any other required documents to the rental company
39pursuant to paragraph (1) shall agree to limit his or her recovery
P21   1against the foreign renter and the rental company to the limits of
2the protection extended by the liability insurance.

3(4) Notwithstanding the requirements of Sections 17450 to
417456, inclusive, of the Vehicle Code, service of process in
5compliance with paragraph (1) shall be deemed valid and effective
6service.

7(5) Notwithstanding any other provision of law, the requirement
8that the rental company accept service of process pursuant to
9 paragraph (1) shall not create any duty, obligation, or agency
10relationship other than that provided in paragraph (1).

11(w) This section shall remain in effect only until January 1,
122015, and as of that date is repealed, unless a later enacted statute,
13that is enacted before January 1, 2015, deletes or extends that date.

14

SEC. 2.  

Section 1936 of the Civil Code, as amended by Section
153 of Chapter 32 of the Statutes of 2012, is amended to read:

16

1936.  

(a) For the purpose of this section, the following
17definitions shall apply:

18(1) “Rental company” means a person or entity in the business
19of renting passenger vehicles to the public.

20(2) “Renter” means any person in a manner obligated under a
21contract for the lease or hire of a passenger vehicle from a rental
22company for a period of less than 30 days.

23(3) “Authorized driver” means (A) the renter, (B) the renter’s
24spouse if that person is a licensed driver and satisfies the rental
25company’s minimum age requirement, (C) the renter’s employer
26or coworker if he or she is engaged in business activity with the
27renter, is a licensed driver, and satisfies the rental company’s
28minimum age requirement, and (D) a person expressly listed by
29the rental company on the renter’s contract as an authorized driver.

30(4) (A) “Customer facility charge” means any fee, including
31an alternative fee, required by an airport to be collected by a rental
32company from a renter for any of the following purposes:

33(i) To finance, design, and construct consolidated airport car
34rental facilities.

35(ii) To finance, design, construct, and operate common-use
36transportation systems that move passengers between airport
37terminals and those consolidated car rental facilities, and acquire
38vehicles for use in that system.

P22   1(iii) To finance, design, and construct terminal modifications
2solely to accommodate and provide customer access to
3common-use transportation systems.

4(B) The aggregate amount to be collected shall not exceed the
5reasonablebegin delete costs, as determined by an independent audit paid for
6by the airport,end delete
begin insert costsend insert to finance, design, and construct those
7facilities. Copies of thebegin delete auditend deletebegin insert customer facility charge informationend insert
8 shall be provided to the Assembly and Senate Committees on
9Judiciary, the Assembly Committee on Transportation, and the
10Senate Committee on Transportation and Housing.begin delete In the case of
11a transportation system, the audit also shall consider the reasonable
12costs of providing the transit system or busing network.end delete

13 Notwithstanding clause (iii) of subparagraph (A), the fees
14designated as a customer facility charge shall not be used to pay
15for terminal expansion, gate expansion, runway expansion, changes
16in hours of operation, or changes in the number of flights arriving
17or departing from the airport.

18(C) Except as provided in subparagraph (D), the authorization
19given pursuant to this section for an airport to impose a customer
20facility charge shall become inoperative when the bonds used for
21financing are paid.

22(D) If a bond or other form of indebtedness is not used for
23financing, or the bond or other form of indebtedness used for
24financing has been paid, the Oakland International Airport may
25require the collection of a customer facility charge for a period of
26up to 10 years from the imposition of the charge for the purposes
27allowed by, and subject to the conditions imposed by, this section.

28(5) “Damage waiver” means a rental company’s agreement not
29to hold a renter liable for all or any portion of any damage or loss
30related to the rented vehicle, any loss of use of the rented vehicle,
31or any storage, impound, towing, or administrative charges.

32(6) “Electronic surveillance technology” means a technological
33method or system used to observe, monitor, or collect information,
34including telematics, Global Positioning System (GPS), wireless
35technology, or location-based technologies. “Electronic
36surveillance technology” does not include event data recorders
37(EDR), sensing and diagnostic modules (SDM), or other systems
38that are used either:

P23   1(A) For the purpose of identifying, diagnosing, or monitoring
2functions related to the potential need to repair, service, or perform
3maintenance on the rental vehicle.

4(B) As part of the vehicle’s airbag sensing and diagnostic system
5in order to capture safety systems-related data for retrieval after a
6crash has occurred or in the event that the collision sensors are
7activated to prepare the decisionmaking computer to make the
8determination to deploy or not to deploy the airbag.

9(7) “Estimated time for replacement” means the number of hours
10of labor, or fraction thereof, needed to replace damaged vehicle
11parts as set forth in collision damage estimating guides generally
12used in the vehicle repair business and commonly known as “crash
13books.”

14(8) “Estimated time for repair” means a good faith estimate of
15the reasonable number of hours of labor, or fraction thereof, needed
16to repair damaged vehicle parts.

17(9) “Membership program” means a service offered by a rental
18company that permits customers to bypass the rental counter and
19go directly to the car previously reserved. A membership program
20shall meet all of the following requirements:

21(A) The renter initiates enrollment by completing an application
22on which the renter can specify a preference for type of vehicle
23and acceptance or declination of optional services.

24(B) The rental company fully discloses, prior to the enrollee’s
25first rental as a participant in the program, all terms and conditions
26of the rental agreement as well as all required disclosures.

27(C) The renter may terminate enrollment at any time.

28(D) The rental company fully explains to the renter that
29designated preferences, as well as acceptance or declination of
30optional services, may be changed by the renter at any time for
31the next and future rentals.

32(E) An employee designated to receive the form specified in
33subparagraph (C) of paragraph (1) of subdivision (t) is present at
34the lot where the renter takes possession of the car, to receive any
35change in the rental agreement from the renter.

36(10) “Passenger vehicle” means a passenger vehicle as defined
37in Section 465 of the Vehicle Code.

38(b) Except as limited by subdivision (c), a rental company and
39a renter may agree that the renter will be responsible for no more
40than all of the following:

P24   1(1) Physical or mechanical damage to the rented vehicle up to
2its fair market value, as determined in the customary market for
3the sale of that vehicle, resulting from collision regardless of the
4cause of the damage.

5(2) Loss due to theft of the rented vehicle up to its fair market
6value, as determined in the customary market for the sale of that
7vehicle, provided that the rental company establishes by clear and
8convincing evidence that the renter or the authorized driver failed
9to exercise ordinary care while in possession of the vehicle. In
10addition, the renter shall be presumed to have no liability for any
11loss due to theft if (A) an authorized driver has possession of the
12ignition key furnished by the rental company or an authorized
13driver establishes that the ignition key furnished by the rental
14company was not in the vehicle at the time of the theft, and (B) an
15authorized driver files an official report of the theft with the police
16or other law enforcement agency within 24 hours of learning of
17the theft and reasonably cooperates with the rental company and
18the police or other law enforcement agency in providing
19information concerning the theft. The presumption set forth in this
20paragraph is a presumption affecting the burden of proof which
21the rental company may rebut by establishing that an authorized
22driver committed, or aided and abetted the commission of, the
23theft.

24(3) Physical damage to the rented vehicle up to its fair market
25value, as determined in the customary market for the sale of that
26vehicle, resulting from vandalism occurring after, or in connection
27with, the theft of the rented vehicle. However, the renter shall have
28no liability for any damage due to vandalism if the renter would
29have no liability for theft pursuant to paragraph (2).

30(4) Physical damage to the rented vehicle up to a total of five
31hundred dollars ($500) resulting from vandalism unrelated to the
32theft of the rented vehicle.

33(5) Actual charges for towing, storage, and impound fees paid
34by the rental company if the renter is liable for damage or loss.

35(6) An administrative charge, which shall include the cost of
36 appraisal and all other costs and expenses incident to the damage,
37loss, repair, or replacement of the rented vehicle.

38(c) The total amount of the renter’s liability to the rental
39company resulting from damage to the rented vehicle shall not
40exceed the sum of the following:

P25   1(1) The estimated cost of parts which the rental company would
2have to pay to replace damaged vehicle parts. All discounts and
3price reductions or adjustments that are or will be received by the
4rental company shall be subtracted from the estimate to the extent
5not already incorporated in the estimate, or otherwise promptly
6credited or refunded to the renter.

7(2) The estimated cost of labor to replace damaged vehicle parts,
8which shall not exceed the product of (A) the rate for labor usually
9paid by the rental company to replace vehicle parts of the type that
10were damaged and (B) the estimated time for replacement. All
11discounts and price reductions or adjustments that are or will be
12received by the rental company shall be subtracted from the
13estimate to the extent not already incorporated in the estimate, or
14otherwise promptly credited or refunded to the renter.

15(3) (A) The estimated cost of labor to repair damaged vehicle
16parts, which shall not exceed the lesser of the following:

17(i) The product of the rate for labor usually paid by the rental
18company to repair vehicle parts of the type that were damaged and
19the estimated time for repair.

20(ii) The sum of the estimated labor and parts costs determined
21under paragraphs (1) and (2) to replace the same vehicle parts.

22(B) All discounts and price reductions or adjustments that are
23or will be received by the rental company shall be subtracted from
24the estimate to the extent not already incorporated in the estimate,
25or otherwise promptly credited or refunded to the renter.

26(4) For the purpose of converting the estimated time for repair
27into the same units of time in which the rental rate is expressed, a
28day shall be deemed to consist of eight hours.

29(5) Actual charges for towing, storage, and impound fees paid
30by the rental company.

31(6) The administrative charge described in paragraph (6) of
32subdivision (b) shall not exceed (A) fifty dollars ($50) if the total
33estimated cost for parts and labor is more than one hundred dollars
34($100) up to and including five hundred dollars ($500), (B) one
35hundred dollars ($100) if the total estimated cost for parts and
36labor exceeds five hundred dollars ($500) up to and including one
37thousand five hundred dollars ($1,500), and (C) one hundred fifty
38dollars ($150) if the total estimated cost for parts and labor exceeds
39one thousand five hundred dollars ($1,500). An administrative
P26   1charge shall not be imposed if the total estimated cost of parts and
2labor is one hundred dollars ($100) or less.

3(d) (1) The total amount of an authorized driver’s liability to
4the rental company, if any, for damage occurring during the
5authorized driver’s operation of the rented vehicle shall not exceed
6the amount of the renter’s liability under subdivision (c).

7(2) A rental company shall not recover from the renter or other
8authorized driver an amount exceeding the renter’s liability under
9subdivision (c).

10(3) A claim against a renter resulting from damage or loss,
11excluding loss of use, to a rental vehicle shall be reasonably and
12rationally related to the actual loss incurred. A rental company
13shall mitigate damages where possible and shall not assert or collect
14a claim for physical damage which exceeds the actual costs of the
15repairs performed or the estimated cost of repairs, if the rental
16company chooses not to repair the vehicle, including all discounts
17and price reductions. However, if the vehicle is a total loss vehicle,
18the claim shall not exceed the total loss vehicle value established
19in accordance with procedures that are customarily used by
20insurance companies when paying claims on total loss vehicles,
21less the proceeds from salvaging the vehicle, if those proceeds are
22retained by the rental company.

23(4) If insurance coverage exists under the renter’s applicable
24personal or business insurance policy and the coverage is confirmed
25during regular business hours, the renter may require that the rental
26company submit any claims to the renter’s applicable personal or
27business insurance carrier. The rental company shall not make any
28written or oral representations that it will not present claims or
29negotiate with the renter’s insurance carrier. For purposes of this
30paragraph, confirmation of coverage includes telephone
31confirmation from insurance company representatives during
32regular business hours. Upon request of the renter and after
33confirmation of coverage, the amount of claim shall be resolved
34between the insurance carrier and the rental company. The renter
35shall remain responsible for payment to the rental car company
36for any loss sustained that the renter’s applicable personal or
37business insurance policy does not cover.

38(5) A rental company shall not recover from the renter or other
39authorized driver for an item described in subdivision (b) to the
40extent the rental company obtains recovery from another person.

P27   1(6) This section applies only to the maximum liability of a renter
2or other authorized driver to the rental company resulting from
3damage to the rented vehicle and not to the liability of another
4person.

5(e) (1) Except as provided in subdivision (f), a damage waiver
6shall provide or, if not expressly stated in writing, shall be deemed
7to provide that the renter has no liability for a damage, loss, loss
8of use, or a cost or expense incident thereto.

9(2) Except as provided in subdivision (f), every limitation,
10exception, or exclusion to a damage waiver is void and
11unenforceable.

12(f) A rental company may provide in the rental contract that a
13damage waiver does not apply under any of the following
14 circumstances:

15(1) Damage or loss results from an authorized driver’s (A)
16intentional, willful, wanton, or reckless conduct, (B) operation of
17the vehicle under the influence of drugs or alcohol in violation of
18Section 23152 of the Vehicle Code, (C) towing or pushing
19anything, or (D) operation of the vehicle on an unpaved road if
20the damage or loss is a direct result of the road or driving
21conditions.

22(2) Damage or loss occurs while the vehicle is (A) used for
23commercial hire, (B) used in connection with conduct that could
24be properly charged as a felony, (C) involved in a speed test or
25contest or in driver training activity, (D) operated by a person other
26than an authorized driver, or (E) operated outside the United States.

27(3) An authorized driver who has (A) provided fraudulent
28information to the rental company, or (B) provided false
29information and the rental company would not have rented the
30vehicle if it had instead received true information.

31(g) (1) A rental company that offers or provides a damage
32waiver for any consideration in addition to the rental rate shall
33clearly and conspicuously disclose the following information in
34the rental contract or holder in which the contract is placed and,
35also, in signs posted at the place, such as the counter, where the
36renter signs the rental contract, and, for renters who are enrolled
37in the rental company’s membership program, in a sign that shall
38be posted in a location clearly visible to those renters as they enter
39the location where their reserved rental cars are parked or near the
40exit of the bus or other conveyance that transports the enrollee to
P28   1a reserved car: (A) the nature of the renter’s liability, such as
2liability for all collision damage regardless of cause, (B) the extent
3of the renter’s liability, such as liability for damage or loss up to
4a specified amount, (C) the renter’s personal insurance policy or
5the credit card used to pay for the car rental transaction may
6provide coverage for all or a portion of the renter’s potential
7liability, (D) the renter should consult with his or her insurer to
8determine the scope of insurance coverage, including the amount
9of the deductible, if any, for which the renter is obligated, (E) the
10renter may purchase an optional damage waiver to cover all
11liability, subject to whatever exceptions the rental company
12expressly lists that are permitted under subdivision (f), and (F) the
13range of charges for the damage waiver.

14(2) In addition to the requirements of paragraph (1), a rental
15company that offers or provides a damage waiver shall orally
16disclose to all renters, except those who are participants in the
17rental company’s membership program, that the damage waiver
18may be duplicative of coverage that the customer maintains under
19his or her own policy of motor vehicle insurance. The renter’s
20receipt of the oral disclosure shall be demonstrated through the
21renter’s acknowledging receipt of the oral disclosure near that part
22of the contract where the renter indicates, by the renter’s own
23initials, his or her acceptance or declination of the damage waiver.
24Adjacent to that same part, the contract also shall state that the
25damage waiver is optional. Further, the contract for these renters
26shall include a clear and conspicuous written disclosure that the
27damage waiver may be duplicative of coverage that the customer
28maintains under his or her own policy of motor vehicle insurance.

29(3) The following is an example, for purposes of illustration
30and not limitation, of a notice fulfilling the requirements of
31paragraph (1) for a rental company that imposes liability on the
32renter for collision damage to the full value of the vehicle:
33

34“NOTICE ABOUT YOUR FINANCIAL RESPONSIBILITY
35AND OPTIONAL DAMAGE WAIVER
36

37You are responsible for all collision damage to the rented vehicle
38even if someone else caused it or the cause is unknown. You are
39responsible for the cost of repair up to the value of the vehicle,
40and towing, storage, and impound fees.

P29   1Your own insurance, or the issuer of the credit card you use to
2pay for the car rental transaction, may cover all or part of your
3financial responsibility for the rented vehicle. You should check
4with your insurance company, or credit card issuer, to find out
5about your coverage and the amount of the deductible, if any, for
6which you may be liable.

7Further, if you use a credit card that provides coverage for your
8potential liability, you should check with the issuer to determine
9if you must first exhaust the coverage limits of your own insurance
10before the credit card coverage applies.

11The rental company will not hold you responsible if you buy a
12damage waiver. But a damage waiver will not protect you if (list
13exceptions).”

14(A) When the above notice is printed in the rental contract or
15holder in which the contract is placed, the following shall be printed
16immediately following the notice:

17“The cost of an optional damage waiver is $____ for every (day
18or week).”

19(B) When the above notice appears on a sign, the following
20shall appear immediately adjacent to the notice:

21“The cost of an optional damage waiver is $____ to $____ for
22every (day or week), depending upon the vehicle rented.”

23(h) Notwithstanding any other provision of law, a rental
24company may sell a damage waiver subject to the following rate
25limitations for each full or partial 24-hour rental day for the damage
26waiver.

27(1) For rental vehicles that the rental company designates as an
28“economy car,” “subcompact car,” “compact car,” or another term
29having similar meaning when offered for rental, or another vehicle
30having a manufacturer’s suggested retail price of nineteen thousand
31dollars ($19,000) or less, the rate shall not exceed nine dollars
32($9).

33(2) For rental vehicles that have a manufacturer’s suggested
34retail price from nineteen thousand one dollars ($19,001) to
35thirty-four thousand nine hundred ninety-nine dollars ($34,999),
36inclusive, and that are also either vehicles of next year’s model,
37or not older than the previous year’s model, the rate shall not
38exceed fifteen dollars ($15). For those rental vehicles older than
39the previous year’s model-year, the rate shall not exceed nine
40dollars ($9).

P30   1(i) The manufacturer’s suggested retail prices described in
2subdivision (h) shall be adjusted annually to reflect changes from
3the previous year in the Consumer Price Index. For the purposes
4of this section, “Consumer Price Index” means the United States
5Consumer Price Index for All Urban Consumers, for all items.

6(j) A rental company that disseminates in this state an
7advertisement containing a rental rate shall include in that
8advertisement a clearly readable statement of the charge for a
9damage waiver and a statement that a damage waiver is optional.

10(k) (1) A rental company shall not require the purchase of a
11damage waiver, optional insurance, or another optional good or
12 service.

13(2) A rental company shall not engage in any unfair, deceptive,
14or coercive conduct to induce a renter to purchase the damage
15waiver, optional insurance, or another optional good or service,
16including conduct such as, but not limited to, refusing to honor
17the renter’s reservation, limiting the availability of vehicles,
18requiring a deposit, or debiting or blocking the renter’s credit card
19account for a sum equivalent to a deposit if the renter declines to
20purchase the damage waiver, optional insurance, or another
21optional good or service.

22(l) (1) In the absence of express permission granted by the
23renter subsequent to damage to, or loss of, the vehicle, a rental
24company shall not seek to recover any portion of a claim arising
25out of damage to, or loss of, the rented vehicle by processing a
26credit card charge or causing a debit or block to be placed on the
27renter’s credit card account.

28(2) A rental company shall not engage in any unfair, deceptive,
29or coercive tactics in attempting to recover or in recovering on any
30claim arising out of damage to, or loss of, the rented vehicle.

31(m) (1) A customer facility charge may be collected by a rental
32company under the following circumstances:

33(A) Collection of the fee by the rental company is required by
34an airport operated by a city, a county, a city and county, a joint
35powers authority, a special district, or the San Diego County
36Regional Airport Authority formed pursuant to Division 17
37(commencing with Section 170000) of the Public Utilities Code.

38(B) The fee is calculated on a per contract basis or as provided
39in paragraph (2).

P31   1(C) The fee is a user fee, not a tax imposed upon real property
2or an incidence of property ownership under Article XIII D of the
3California Constitution.

4(D) Except as otherwise provided in subparagraph (E), the fee
5shall be ten dollars ($10) per contract or the amount provided in
6paragraph (2).

7(E) The fee for a consolidated rental car facility shall be
8collected only from customers of on-airport rental car companies.
9If the fee imposed by the airport is for both a consolidated rental
10car facility and a common-use transportation system, the fee
11collected from customers of on-airport rental car companies shall
12be ten dollars ($10) or the amount provided in paragraph (2), but
13the fee imposed on customers of off-airport rental car companies
14who are transported on the common-use transportation system is
15proportionate to the costs of the common-use transportation system
16only. The fee is uniformly applied to each class of on-airport or
17off-airport customers, provided that the airport requires off-airport
18customers to use the common-use transportation system. For
19purposes of this subparagraph, “on-airport rental car company”
20means a rental company operating under an airport property lease
21or an airport concession or license agreement whose customers
22use or will use the consolidated rental car facility and the collection
23of the fee as to those customers is consistent with subparagraph
24(C).

25(F) Revenues collected from the fee do not exceed the reasonable
26costs of financing, designing, and constructing the facility and
27financing, designing, constructing, and operating any common-use
28transportation system, or acquiring vehicles for use in that system,
29and shall not be used for any other purpose.

30(G) The fee is separately identified on the rental agreement.

31(H) This paragraph does not apply to fees which are governed
32by Section 50474.1 of the Government Code or Section 57.5 of
33the San Diego Unified Port District Act.

34(I) For any airport seeking to require rental car companies to
35collect an alternative customer facility charge pursuant to paragraph
36(2), the following provisions apply:

37(i) Notwithstanding Section 10231.5 of the Government Code,
38the airport shall provide reports on an annual basis to the Senate
39and Assembly Committees on Judiciary detailing all of the
40following:

P32   1(I) The total amount of the customer facility charge collected.

2(II) How the funds are being spent.

3(III) The amount of and reason for any changes in the airport’s
4budget or financial needs for the facility or common-use
5transportation system.

6(IV) Whether airport concession fees authorized by Section
71936.01 have increased since the prior report, if any.

8(ii) The airport shall complete the independent audit required
9by subparagraph (B) of paragraph (4) of subdivision (a) prior to
10initial collection of the customer facility charge, prior to any
11increase pursuant to paragraph (2), and every three years after
12initial collection and any increase until such time as the fee
13authorization becomes inoperative pursuant to subparagraph (C)
14of paragraph (4) of subdivision (a).

15(iii) Use of the bonds shall be limited to construction and design
16of the consolidated rental car facility, terminal modifications, and
17operating costs of the common-use transportation system, as
18specified in paragraph (4) of subdivision (a).

19(2) Any airport may require rental car companies to collect an
20alternative customer facility charge under the following conditions:

21(A) The airport first conducts a publicly noticed hearing pursuant
22to the Ralph M. Brown Act (Chapter 9 (commencing with Section
2354950) of Part 1 of Division 2 of Title 5 of the Government Code)
24to review the costs of financing the design and construction of a
25consolidated rental car facility and the design, construction, and
26operation of any common-use transportation system in which all
27of the following occur:

28(i) The airport establishes the amount of revenue necessary to
29finance the reasonable cost to design and construct a consolidated
30rental car facility and to design, construct, and operate any
31common-use transportation system, or acquire vehicles for use in
32that system, based on evidence presented during the hearing.

begin delete

33(ii) The airport finds, based on evidence presented during the
34hearing, that the fee authorized in paragraph (1) will not generate
35sufficient revenue to finance the reasonable costs to design and
36construct a consolidated rental car facility and to design, construct,
37and operate any common-use transportation system, or acquire
38vehicles for use in that system.

end delete
begin delete

39(iii)

end delete

P33   1begin insert(ii)end insert The airport finds that the reasonable cost of the project
2requires the additional amount of revenue that would be generated
3by the proposed daily rate, including any rate increase, authorized
4pursuant to this paragraph.

begin delete

5(iv)

end delete

6begin insert(iii)end insert The airport outlines each of the following:

7(I) Steps it has taken to limit costs.

8(II) Other potential alternatives for meeting its revenue needs
9other than the collection of the fee.

10(III) The extent to which rental car companies or other
11businesses or individuals using the facility or common-use
12transportation system will pay for the costs associated with these
13facilities and systems other than the fee from rental customers.

14(B) The airport may not require the fee authorized in this
15paragraph to be collected at any time that the fee authorized in
16paragraph (1) of this subdivision is being collected.

17(C) Pursuant to the procedure set forth in this subdivision, the
18fee may be collected at a rate charged on a per-day basis subject
19to the following conditions:

20(i) Commencing January 1, 2011, the amount of the fee may
21not exceed six dollars ($6) per day.

22(ii) Commencing January 1, 2014, the amount of the fee may
23not exceed seven dollars and fifty cents ($7.50) per day.

24(iii) Commencing January 1, 2017, and thereafter, the amount
25of the fee may not exceed nine dollars ($9) per day.

26(iv) At no time shall the fee authorized in this paragraph be
27collected from any customer for more than five days for each
28individual rental car contract.

29(v) An airport subject to this paragraph shall initiate the process
30for obtaining the authority to require or increase the alternative
31fee no later than January 1, 2018. Any airport that obtains the
32authority to require or increase an alternative fee shall be authorized
33to continue collecting that fee until the fee authorization becomes
34inoperative pursuant to subparagraph (C) of paragraph (4) of
35subdivision (a).

36(3) Notwithstanding any other provision of law, including, but
37not limited to, Part 1 (commencing with Section 6001) to Part 1.7
38(commencing with Section 7280), inclusive, of Division 2 of the
39Revenue and Taxation Code, the fees collected pursuant to this
40section, or another law whereby a local agency operating an airport
P34   1requires a rental car company to collect a facility financing fee
2from its customers, are not subject to sales, use, or transaction
3taxes.

4(n) (1) A rental company shall only advertise, quote, and charge
5a rental rate that includes the entire amount except taxes, a
6customer facility charge, if any, and a mileage charge, if any, that
7a renter must pay to hire or lease the vehicle for the period of time
8to which the rental rate applies. A rental company shall not charge
9in addition to the rental rate, taxes, a customer facility charge, if
10any, and a mileage charge, if any, any fee that is required to be
11paid by the renter as a condition of hiring or leasing the vehicle,
12including, but not limited to, required fuel or airport surcharges
13other than customer facility charges, nor a fee for transporting the
14renter to the location where the rented vehicle will be delivered to
15the renter.

16(2) In addition to the rental rate, taxes, customer facility charges,
17if any, and mileage charges, if any, a rental company may charge
18for an item or service provided in connection with a particular
19rental transaction if the renter could have avoided incurring the
20charge by choosing not to obtain or utilize the optional item or
21service. Items and services for which the rental company may
22impose an additional charge include, but are not limited to, optional
23insurance and accessories requested by the renter, service charges
24incident to the renter’s optional return of the vehicle to a location
25other than the location where the vehicle was hired or leased, and
26charges for refueling the vehicle at the conclusion of the rental
27transaction in the event the renter did not return the vehicle with
28as much fuel as was in the fuel tank at the beginning of the rental.
29A rental company also may impose an additional charge based on
30reasonable age criteria established by the rental company.

31(3) A rental company shall not charge a fee for authorized
32drivers in addition to the rental charge for an individual renter.

33(4) If a rental company states a rental rate in print advertisement
34or in a telephonic, in-person, or computer-transmitted quotation,
35the rental company shall disclose clearly in that advertisement or
36quotation the terms of mileage conditions relating to the advertised
37or quoted rental rate, including, but not limited to, to the extent
38applicable, the amount of mileage and gas charges, the number of
39miles for which no charges will be imposed, and a description of
40geographic driving limitations within the United States and Canada.

P35   1(5) (A) When a rental rate is stated in an advertisement,
2quotation, or reservation in connection with a car rental at an airport
3where a customer facility charge is imposed, the rental company
4shall disclose clearly the existence and amount of the customer
5facility charge. For purposes of this subparagraph, advertisements
6include radio, television, other electronic media, and print
7advertisements. For purposes of this subparagraph, quotations and
8reservations include those that are telephonic, in-person, and
9computer-transmitted. If the rate advertisement is intended to
10include transactions at more than one airport imposing a customer
11facility charge, a range of fees may be stated in the advertisement.
12However, all rate advertisements that include car rentals at airport
13destinations shall clearly and conspicuously include a toll-free
14telephone number whereby a customer can be told the specific
15amount of the customer facility charge to which the customer will
16be obligated.

17(B) If a person or entity other than a rental car company,
18including a passenger carrier or a seller of travel services, advertises
19or quotes a rate for a car rental at an airport where a customer
20facility charge is imposed, that person or entity shall, provided
21that he, she, or it is provided with information about the existence
22and amount of the fee, to the extent not specifically prohibited by
23federal law, clearly disclose the existence and amount of the fee
24in any telephonic, in-person, or computer-transmitted quotation at
25the time of making an initial quotation of a rental rate and at the
26time of making a reservation of a rental car. If a rental car company
27provides the person or entity with rate and customer facility charge
28information, the rental car company is not responsible for the
29failure of that person or entity to comply with this subparagraph
30when quoting or confirming a rate to a third person or entity.

31(6) If a rental company delivers a vehicle to a renter at a location
32other than the location where the rental company normally carries
33on its business, the rental company shall not charge the renter an
34amount for the rental for the period before the delivery of the
35vehicle. If a rental company picks up a rented vehicle from a renter
36at a location other than the location where the rental company
37normally carries on its business, the rental company shall not
38charge the renter an amount for the rental for the period after the
39renter notifies the rental company to pick up the vehicle.

P36   1(o) A rental company shall not use, access, or obtain any
2information relating to the renter’s use of the rental vehicle that
3was obtained using electronic surveillance technology, except in
4the following circumstances:

5(1) (A) When the equipment is used by the rental company
6only for the purpose of locating a stolen, abandoned, or missing
7rental vehicle after one of the following:

8(i) The renter or law enforcement has informed the rental
9company that the vehicle is missing or has been stolen or
10abandoned.

11(ii) The rental vehicle has not been returned following one week
12after the contracted return date, or by one week following the end
13of an extension of that return date.

14(iii) The rental company discovers the rental vehicle has been
15stolen or abandoned, and, if stolen, it shall report the vehicle stolen
16to law enforcement by filing a stolen vehicle report, unless law
17enforcement has already informed the rental company that the
18vehicle is missing or has been stolen or abandoned.

19(B) If electronic surveillance technology is activated pursuant
20to subparagraph (A), a rental company shall maintain a record, in
21either electronic or written form, of information relevant to the
22activation of that technology. That information shall include the
23rental agreement, including the return date, and the date and time
24the electronic surveillance technology was activated. The record
25shall also include, if relevant, a record of written or other
26communication with the renter, including communications
27regarding extensions of the rental, police reports, or other written
28communication with law enforcement officials. The record shall
29be maintained for a period of at least 12 months from the time the
30record is created and shall be made available upon the renter’s
31request. The rental company shall maintain and furnish explanatory
32codes necessary to read the record. A rental company shall not be
33required to maintain a record if electronic surveillance technology
34is activated to recover a rental vehicle that is stolen or missing at
35a time other than during a rental period.

36(2) In response to a specific request from law enforcement
37pursuant to a subpoena or search warrant.

38(3) This subdivision does not prohibit a rental company from
39equipping rental vehicles with GPS-based technology that provides
40navigation assistance to the occupants of the rental vehicle, if the
P37   1rental company does not use, access, or obtain information relating
2to the renter’s use of the rental vehicle that was obtained using
3that technology, except for the purposes of discovering or repairing
4a defect in the technology and the information may then be used
5only for that purpose.

6(4) This subdivision does not prohibit a rental company from
7equipping rental vehicles with electronic surveillance technology
8that allows for the remote locking or unlocking of the vehicle at
9the request of the renter, if the rental company does not use, access,
10or obtain information relating to the renter’s use of the rental
11vehicle that was obtained using that technology, except as
12necessary to lock or unlock the vehicle.

13(5) This subdivision does not prohibit a rental company from
14equipping rental vehicles with electronic surveillance technology
15that allows the company to provide roadside assistance, such as
16towing, flat tire, or fuel services, at the request of the renter, if the
17rental company does not use, access, or obtain information relating
18to the renter’s use of the rental vehicle that was obtained using
19that technology except as necessary to provide the requested
20roadside assistance.

21(6) This subdivision does not prohibit a rental company from
22obtaining, accessing, or using information from electronic
23surveillance technology for the sole purpose of determining the
24date and time the vehicle is returned to the rental company, and
25the total mileage driven and the vehicle fuel level of the returned
26vehicle. This paragraph, however, shall apply only after the renter
27has returned the vehicle to the rental company, and the information
28shall only be used for the purpose described in this paragraph.

29(p) A rental company shall not use electronic surveillance
30technology to track a renter in order to impose fines or surcharges
31relating to the renter’s use of the rental vehicle.

32(q) A renter may bring an action against a rental company for
33the recovery of damages and appropriate equitable relief for a
34violation of this section. The prevailing party shall be entitled to
35recover reasonable attorney’s fees and costs.

36(r) A rental company that brings an action against a renter for
37loss due to theft of the vehicle shall bring the action in the county
38in which the renter resides or, if the renter is not a resident of this
39state, in the jurisdiction in which the renter resides.

P38   1(s) A waiver of any of the provisions of this section shall be
2void and unenforceable as contrary to public policy.

3(t) (1) A rental company’s disclosure requirements shall be
4satisfied for renters who are enrolled in the rental company’s
5membership program if all of the following conditions are met:

6(A) Prior to the enrollee’s first rental as a participant in the
7program, the renter receives, in writing, the following:

8(i) All of the disclosures required by paragraph (1) of subdivision
9(g), including the terms and conditions of the rental agreement
10then in effect.

11(ii) An Internet Web site address, as well as a contact number
12or address, where the enrollee can learn of changes to the rental
13agreement or to the laws of this state governing rental agreements
14since the effective date of the rental company’s most recent
15restatement of the rental agreement and distribution of that
16restatement to its members.

17(B) At the commencement of each rental period, the renter is
18provided, on the rental record or the folder in which it is inserted,
19with a printed notice stating that he or she had either previously
20selected or declined an optional damage waiver and that the renter
21has the right to change preferences.

22(C) At the commencement of each rental period, the rental
23company provides, on the rearview mirror, a hanger on which a
24statement is printed, in a box, in at least 12-point boldface type,
25notifying the renter that the collision damage waiver offered by
26the rental company may be duplicative of coverage that the
27customer maintains under his or her own policy of motor vehicle
28insurance. If it is not feasible to hang the statement from the
29rearview mirror, it shall be hung from the steering wheel.

30The hanger shall provide the renter a box to initial if he or she
31(not his or her employer) has previously accepted or declined the
32collision damage waiver and that he or she now wishes to change
33his or her decision to accept or decline the collision damage waiver,
34as follows:


35“◻ If I previously accepted the collision damage waiver, I
36now decline it.

  
37◻ If I previously declined the collision damage waiver, I now
38accept it.”

39The hanger shall also provide a box for the enrollee to indicate
40whether this change applies to this rental transaction only or to all
P39   1future rental transactions. The hanger shall also notify the renter
2that he or she may make that change, prior to leaving the lot, by
3returning the form to an employee designated to receive the form
4who is present at the lot where the renter takes possession of the
5car, to receive any change in the rental agreement from the renter.

6(2) (A) This subdivision is not effective unless the employee
7designated pursuant to subparagraph (E) of paragraph (8) of
8subdivision (a) is actually present at the required location.

9(B) This subdivision does not relieve the rental company from
10the disclosures required to be made within the text of a contract
11or holder in which the contract is placed; in or on an advertisement
12containing a rental rate; or in a telephonic, in-person, or
13computer-transmitted quotation or reservation.

14(u) The amendments made to this section during the 2001-02
15Regular Session of the Legislature do not affect litigation pending
16on or before January 1, 2003, alleging a violation of Section 22325
17of the Business and Professions Code as it read at the time the
18action was commenced.

19(v) This section shall become operative on January 1, 2015.



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