BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 675


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          CONCURRENCE IN SENATE AMENDMENTS


          AB  
          675 (Alejo)


          As Amended  August 17, 2015


          Majority vote


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          Original Committee Reference:  JUD.




          SUMMARY:  Revises and recasts the statute governing agreements  
          between rental car companies and their customers in order to  
          allow a rental car company to better separate rental fees from  
          government-imposed charges and achieve other 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.  Requires  
            all rate advertisements to include a specified disclaimer. 


          2)Defines "additional mandatory charges" to mean any charges  








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            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.  Defines several other new terms for the purpose of  
            identifying and clarifying additional mandatory charges. 


          3)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. 


          4)Removes a sunset and thus makes permanent a provision in  
            existing law relating to the service of a summons and  
            complaint against a renter who resides outside of this country  
            for an accident or collision resulting from the operation of a  
            rental vehicle within California. 


          The Senate amendments: 


          1)Restore provisions relating to disclosures on the effect of  
            damage waivers, a rental car company's ability to obtain  
            information from electronic surveillance technology, and a  
            requirement that a rental car company provide a specified  
            notice on a rearview mirror hangar. 


          2)Require rate advertisements to contain a specified disclaimer.  



          3)Remove the sunset on a provision relating to service of  
            summons and complain against a foreign renter.


          4)Make additional non-substantive organizational and  
            definitional changes. 









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          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.  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 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.  However the  
          problem with existing law, according to the author, 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  








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          mandatory charges."  This bill 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.


          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.  The author stresses,  
          however, that this bill will preserve the existing consumer  
          protection that requires the rental car company to clearly and  
          conspicuously quote the total charge.  


          In addition to the primary goal of unbundling government charges  
          from the fees charged by the rental company, this bill also  
          makes a number of organizational and definitional changes to  
          Civil Code Section 1936 and delete sections or subdivisions that  
          have become inoperative or redundant.  Related changes move  
          substantive provisions that were awkwardly placed in  
          definitional sections into more appropriate substantive  
          sections.  


          Analysis Prepared by:                                             
          Thomas Clark / JUD. / (916) 319-2334FN: 0001407

















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