BILL ANALYSIS Ó
AB 675
Page 1
ASSEMBLY THIRD READING
AB
675 (Alejo)
As Amended April 30, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, Cristina | |
| | |Garcia, Holden, | |
| | |Maienschein, | |
| | |O'Donnell | |
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SUMMARY: Revises the statute governing agreements between rental
car companies and their customers in order to achieve relatively
non-controversial changes. Specifically, this bill:
1)Permits a rental car company, when providing a quote or imposing
charges, to separately state the rental rate, additional
mandatory charges, if any, and a mileage charge, if any, that a
renter must pay to hire or lease the vehicle for the period of
time to which the rental rate applies.
2)Provides, consistent with existing law, that if additional
mandatory charges apply, the rental company shall do the
following:
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a) Provide the person receiving the quote, at the time the
quote is given, with a good faith estimate of the rental rate
and all mandatory charges, as well as the total charges for
the entire rental. Specifies that if quotes and total
charges are provided online, then the total charges shall be
displayed in a typeface at least as large as any rental rate
and shall be obtainable by the person receiving the quote by
following links through no more than two Internet Web site
pages, including the page on which the rental rate is first
provided.
b) Clearly and conspicuously disclose in the rental contract
the total of the rental rate, additional mandatory charges,
for the entire rental period, exclusive of charges that
cannot be determined at the time the rental commences.
Prohibits the rental car company from charging more than the
quoted amount unless the renter makes changes subsequent to
making the reservation.
3)Provides that if a damage waiver is offered orally at the rental
counter, a rental company shall orally disclose at the time of
the offer that the damage waiver may be duplicative of coverage
provided by the customer's own motor vehicle insurance policy.
However, if the damage waiver is obtained online, then the
rental car company may forgo the oral disclosure and instead
provide a clear and conspicuous written disclosure on the
company's Internet Web site, at the time the quote is given.
4)Permits the rental car company to use information from the
rental vehicle's electronic surveillance technology if the
rental vehicle has not been returned three days following the
contracted return date, or three days following the end of an
extension of the return date.
5)Eliminates a requirement that the rental car company hang on the
rear-view mirror of all rental vehicles a paper hanger that
duplicates the damage waiver information that is already
disclosed when offered at the counter or online.
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6)Defines "additional mandatory charges" to mean any charges
imposed by a government entity that the renter must pay,
including, but not limited to, a customer facility charge,
airport concession fee, tourism commission assessment, vehicle
license recovery fee, or other government imposed taxes or fees.
7)Makes several organizational changes to account for provisions
that have become inoperative, to consolidate sections so as to
avoid redundancy, or otherwise provide a more logical structure
to the existing statute.
EXISTING LAW sets forth general rules governing contracts between
rental car companies and their customers on a variety of matters,
including, but not limited to, the manner in which rental car
companies advertise and quote rental charges and additional fees,
the renter's liability or lack thereof for damages to a rental
vehicle, the amount that rental car companies may charge for
damage waivers and the manner in which they are offered, and the
conditions under which a rental car company may access, obtain,
and use geo-location and other information from the rental
vehicle's electronic surveillance technology.
FISCAL EFFECT: None
COMMENTS: According to the author, the purpose of this bill is to
"modernize" Civil Code Section 1936, which regulates rental car
contracts. The author believes that this measure will promote
transparency by clearly delineating the private charges imposed by
the rental car company from the many government-imposed exactions,
including tourism fees, airport concession and facility fees,
vehicle fees, and related fees and surcharges. According to the
author, delineation will allow the consumer to know which parts of
the total charge reflect the rental company's fees, and which
parts represent government-imposed fees. However, the author
stresses, the existing consumer protection that requires the
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rental car company to clearly and conspicuously quote the total
charge will be preserved in this bill. The author contends that
the other changes proposed by this bill - such as allowing
disclosures to be made online when a rental vehicle is reserved
online - "simply modernize the code." This bill, in fact, makes
many changes to existing law; however, the changes are not nearly
as extensive as they appear at first glance. For example, many of
the changes - some of which were apparently made by Legislative
Counsel - delete sections or subdivisions that have become
inoperative or redundant. For example, part of the adjacent
statute, Civil Code Section 1936.01, duplicates much of Civil Code
Section 1936 except for some provisions that have become
inoperative. Therefore, this bill deletes Civil Code Section
1936.01 but re-inserts the still operative parts of that statute
into Civil Code Section 1936. Other changes move substantive
provisions that were awkwardly placed in definitional sections
into more appropriate substantive sections.
In brief, there are three substantive changes made by this bill
that merit attention: 1) updating a provision that allows a
rental car company to separate its rental fees from
government-imposed charges in order to reflect more recently
imposed charges; 2) eliminating a requirement that damage waiver
disclosures be made orally to reflect the fact that an increasing
number of people reserve rental vehicles online; and 3)
notwithstanding a general prohibition on the use of information
obtained from the rental vehicle's global positioning system (GPS)
device, permitting the company to access and use GPS information
to locate the vehicle if the vehicle is not returned within three
days after the contracted return date, shortened from the one week
period in existing law.
Separation of Private and Public Fees. Civil Code Section 1936
sets forth the general rules governing rental car contracts and
the respective duties and liabilities of rental car companies and
their customers. One of the key issues that prompted the initial
legislation, and which has been the subject of several amendments
over the years, concerns the various taxes, assessments, and
surcharges typically tacked on to the rental company's fees and
the manner in which the company may quote those fees and charges
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to customers. Under existing law a rental car company must quote
the entire amount, with the rental fees and additional surcharges
"bundled" together into a single quote. Because rental car
companies wanted customers to know which part of the total was
attributable to the rental car company and which part to
government-imposed fees, the statute was amended in 2007 to
authorize rental car companies to separate, or effectively
itemize, company fees from other mandatory charges. The problem
with existing law, however, is that it specifically names the fees
and charges that existed in 2007 when the legislation was amended.
Since that time, several new mandatory charges have been imposed,
but they cannot be separately listed because they are not
specifically named. This bill would address this shortcoming by
permitting the rental car company to separate its rental charges
from any "additional mandatory charges."
Damage Waiver Disclosure. Under existing law the rental car
company must disclose to the consumer that the damage waiver
offered by the company may be duplicative of the renter's personal
car insurance policy. Since 2001, existing law has mandated that
this disclosure must be made orally at the counter and at the time
when the damage waiver is offered. However, since 2001, the
method by which rental vehicles are reserved and rental agreements
are entered into has changed dramatically because of the Internet,
with most customers reserving rental vehicles and selecting
options online. This bill would acknowledge this reality by
allowing the disclosure to be made online if the vehicle is
reserved online. If the customer reserves the vehicle or selects
the damage waiver option at the counter, then the disclosure must
still be made orally. Relatedly, this bill would eliminate an
existing requirement for a paper "hanger," since it repeats the
disclosure and options offered online or at the counter.
Use of GPS Information. California is one of a handful of states
that prohibit rental car companies from using information obtained
from the rental vehicle's GPS device to track the vehicle during
the rental period, except in a few narrowly defined exceptions.
One of the exceptions allows the rental company to access and use
the information if the customer fails to return the vehicle within
one week of the contracted return date. The author and sponsor
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contend, not unreasonably, that one week is a long time to wait
before using GPS to try to determine the whereabouts of a vehicle
that has not been returned, and where the renter has failed to
notify the rental company or sought to extend the contracted
return date. This bill would reduce the period from one week to
three days after the contracted return date.
Analysis Prepared by: Thomas Clark / JUD. / (916)
319-2334 FN: 0000210