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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|ASSEMBLY: |77-1 |(May 4, 2015) |SENATE: | 39-0 |(August 27, |
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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
AB 675
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