Amended in Senate June 13, 2016

Amended in Assembly April 4, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2051

Introduced by Assembly Member O'Donnell

February 17, 2016

An act to add Chapter 1.5 (commencing with Section 1939.01) to Title 5 of Part 4 of Division 3 of, and to repeal Sections 1936, 1936.05, 1936.1, and 1936.5 of, the Civil Code, and to amend Section 50474.1 of, and to add Sections 50474.21, 50474.22, 50474.3, and 50474.4 to, the Government Code, relating to rental passenger vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 2051, as amended, O'Donnell. Rental passenger vehicles.

(1) Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental company’s use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines terms for its purposes.

This bill, among other things, would recast and reorganize these provisions, would modify definitions and terms for uniformity, and would make conforming changes.

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(2) Existing law, as part of the restrictions on the use of electronic surveillance technology referenced above, prohibits a rental car company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using electronic surveillance technology unless certain conditions are met, including that the rental vehicle has not been returned following one week after the contracted return date, or by one week following the end of an extension of that return date.

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This bill would instead authorize a rental car company to use, access, or obtain that information if the rental vehicle has not been returned following 3 calendar days after the contracted return date, or by 3 calendar days following the end of an extension of that return date. The bill would further authorize a rental company, in connection with a qualified business rental under a business program, to use technology, including electronic surveillance technology, to determine specific information for the sole purposes of commencing and concluding the rental.

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(3)

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begin insert (2) end insert  Existing law, as part of the required disclosures referenced above, requires a rental company’s rental rate advertisements to include a clearly readable statement of the charge for a damage waiver, a statement that a damage waiver is optional, and a specific disclaimer regarding additional mandatory charges. Existing law also provides that a rental company’s disclosure requirements are satisfied for renters enrolled in the rental company’s membership program if certain conditions are begin delete met, including, among others, a requirement that the rental company provide, prior to the commencement of each rental period, a rearview mirror hanger containing a disclosure and form regarding the collision damage waiver offered by the rental company, as specified. end delete begin insert met. end insert

This bill would begin delete discontinue the requirement that a rental company provide that hanger. end delete begin insert revise the definition of membership program to include the ability to select an alternative vehicle. end insert The bill would require a rental rate advertisement to instead include a statement that additional charges may apply if an optional good or service, such as a damage waiver, is purchased, and to comply with a revised disclaimer requirement regarding additional mandatory charges. The bill would require a person or entity, that is not a rental company, that advertises a vehicle rental rate that includes additional mandatory charges, to clearly disclose the charges. The bill would provide that a rental company that provides a person or entity with information on the charges and rental rate is not responsible for the person’s or entity’s failure to comply with this requirement.

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(4)

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begin insert (3) end insert  Existing law authorizes airports to require rental companies to collect a customer facility charge for specified purposes and requires airports to provide certain audits and reports regarding those fees to specified committees of the Legislature.

This bill also would recast and reorganize these provisions, including establishing authority for a certain airport to charge those same fees for additional specified purposes.

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

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

SECTION 1.  

Section 1936 of the Civil Code is repealed.

SEC. 2.  

Section 1936.05 of the Civil Code is repealed.

SEC. 3.  

Section 1936.1 of the Civil Code is repealed.

SEC. 4.  

Section 1936.5 of the Civil Code is repealed.

SEC. 5.  

Chapter 1.5 (commencing with Section 1939.01) is
added to Title 5 of Part 4 of Division 3 of the Civil Code, to read:

 

Chapter  1.5. Rental Passenger Vehicle Transactions

 

1939.01.  

For the purpose of this chapter, the following
definitions shall apply:

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

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

(c) “Additional mandatory charges” means any separately stated
charges that the rental company requires the renter to pay to hire
or lease the vehicle for the period of time to which the rental rate
applies, which are imposed by a governmental entity and
specifically relate to the operation of a rental vehicle business,
including, but not limited to, a customer facility charge, airport
concession fee, tourism commission assessment, vehicle license
recovery fee, or other begin delete government imposed end delete begin insert government-imposed end insert
taxes or fees.

(d) “Airport concession fee” means a charge collected by a
rental company from a renter that is the renter’s proportionate
share of the amount paid by the rental company to the owner or
operator of an airport for the right or privilege of conducting a
vehicle rental business on the airport’s premises.

(e) “Authorized driver” means all of the following:

(1) The renter.

(2) The renter’s spouse, if that person is a licensed driver and
satisfies the rental company’s minimum age requirement.

(3) The renter’s employer or coworker, if he or she is engaged
in business activity with the renter, is a licensed driver, and satisfies
the rental company’s minimum age requirement.

(4) A person expressly listed by the rental company on that
renter’s contract as an authorized driver.

(f) “Customer facility charge” means any fee, including an
alternative fee, required by an airport to be collected by a rental
company from a renter pursuant to Section 50474.21 or 50474.22
of the Government Code.

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

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

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

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

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

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

(k) “Membership program” means a service offered by a rental
company that permits customers to bypass the rental counter and
go directly to the vehicle previously begin delete reserved. end delete begin insert reserved or select
an alternate vehicle. end insert A membership program shall meet all of the
following requirements:

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

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

(3) The renter may terminate enrollment at any time.

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

(5)  begin delete A designated employee is present end delete begin insert An employee is available end insert
at the lot where the renter takes possession of the vehicle, to receive
any change in the rental agreement from the renter.

(l) “Passenger vehicle” or “vehicle” means a “passenger vehicle”
as defined in Section 465 of the Vehicle Code.

(m) “Quote” means an estimated cost of rental provided by a
rental company or a third party to a potential customer that is based
on information provided by the potential customer and used to
generate an estimated cost of rental, including, but not limited to,
potential dates of rental, locations, or classes of vehicle.

(n) “Tourism commission assessment” means the charge
collected by a rental company from a renter that has been
established by the California Travel and Tourism Commission
pursuant to Section 13995.65 of the Government Code.

(o) “Vehicle license fee” means the tax imposed pursuant to the
Vehicle License Fee Law (Part 5 (commencing with Section 10701)
of Division 2 of the Revenue and Taxation Code).

(p) “Vehicle registration fee” means any fee imposed pursuant
to any provision of Chapter 6 (commencing with Section 9101)
of Division 3 of the Vehicle Code or any other law that imposes
a fee upon the registration of vehicles in this state.

(q) “Vehicle license recovery fee” means a charge that seeks to
recover the amount of any vehicle license fee and vehicle
registration fee paid by a rental company for the particular class
of vehicle being rented. begin insert If imposed, the vehicle license recovery
fee shall be separately stated as a single charge in the quote and
rental contract. end insert

1939.03.  

Except as limited by Section 1939.05, a rental
company and a renter may agree that the renter will be responsible
for no more than all of the following:

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

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

(c) Physical damage to the rented vehicle up to its fair market
value, as determined in the customary market for the sale of that
vehicle, resulting from vandalism occurring after, or in connection
with, the theft of the rented vehicle. However, the renter shall have
no liability for any damage due to vandalism if the renter would
have no liability for theft pursuant to subdivision (b).

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

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

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

1939.05.  

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

(1) The estimated cost of parts which the rental company would
have to pay to replace damaged vehicle parts.

(2) The estimated cost of labor to replace damaged vehicle parts,
which shall not exceed the product of (A) the rate for labor usually
paid by the rental company to replace vehicle parts of the type that
were damaged and (B) the estimated time for replacement.

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

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

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

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

(b) For purposes of subdivision (a), all discounts and price
reductions or adjustments that are or will be received by the rental
company shall be subtracted from the estimate to the extent not
already incorporated in the estimate, or otherwise promptly credited
or refunded to the renter.

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

(d) The administrative charge described in subdivision (f) of
Section 1939.03 shall not exceed (1) fifty dollars ($50) if the total
estimated cost for parts and labor is more than one hundred dollars
($100) up to and including five hundred dollars ($500), (2) one
hundred dollars ($100) if the total estimated cost for parts and
labor exceeds five hundred dollars ($500) up to and including one
thousand five hundred dollars ($1,500), or (3) one hundred fifty
dollars ($150) if the total estimated cost for parts and labor exceeds
one thousand five hundred dollars ($1,500). An administrative
charge shall not be imposed if the total estimated cost of parts and
labor is one hundred dollars ($100) or less.

(e) The total amount of an authorized driver’s liability to the
rental company, if any, for damage occurring during the authorized
driver’s operation of the rented vehicle shall not exceed the amount
of the renter’s liability under this section.

(f) A rental company shall not recover from an authorized driver
an amount exceeding the renter’s liability under this section.

1939.07.  

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

(b) If insurance coverage exists under the renter’s applicable
personal or business insurance policy and the coverage is confirmed
during regular business hours, the renter may require that the rental
company submit any claims to the renter’s applicable personal or
business insurance carrier. The rental company shall not make any
written or oral representations that it will not present claims or
negotiate with the renter’s insurance carrier. For purposes of this
subdivision, confirmation of coverage includes telephone
confirmation from insurance company representatives during
regular business hours. Upon request of the renter and after
confirmation of coverage, the amount of claim shall be resolved
between the insurance carrier and the rental company. The renter
shall remain responsible for payment to the rental company for
any loss sustained that the renter’s applicable personal or business
insurance policy does not cover.

(c) A rental company shall not recover from an authorized driver
for an item described in Section 1939.03 to the extent the rental
company obtains recovery from another person.

(d) This chapter applies only to the maximum liability of an
authorized driver to the rental company resulting from damage to
the rented vehicle and not to the liability of another person.

1939.09.  

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

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

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

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

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

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

(c) (1) A rental company that offers or provides a damage
waiver for any consideration in addition to the rental rate shall
clearly and conspicuously disclose the following information in
the rental contract or holder in which the contract is placed and,
also, in signs posted at the begin delete place end delete begin insert location end insert where the renter signs
the rental contract, and, for renters who are enrolled in the rental
company’s membership program, in a sign that shall be posted in
a location clearly visible to those renters as they enter the location
where their reserved rental vehicles are parked or near the exit of
the bus or other conveyance that transports the enrollee to a
reserved vehicle: (A) the nature of the renter’s liability, such as
liability for all collision damage regardless of cause, (B) the extent
of the renter’s liability, such as liability for damage or loss up to
a specified amount, (C) the renter’s personal insurance policy or
the credit card used to pay for the vehicle rental transaction may
provide coverage for all or a portion of the renter’s potential
liability, (D) the renter should consult with his or her insurer to
determine the scope of insurance coverage, including the amount
of the deductible, if any, for which the renter is obligated, (E) the
renter may purchase an optional damage waiver to cover all
liability, subject to whatever exceptions the rental company
expressly lists that are permitted under subdivision (b), and (F)
the range of charges for the damage waiver.

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

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

“NOTICE ABOUT YOUR FINANCIAL RESPONSIBILITY
AND OPTIONAL DAMAGE WAIVER

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

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

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

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

(B) When the notice in subparagraph (A) is printed in the rental
contract or holder in which the contract is placed, the following
shall be printed immediately following the notice:

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

(C) When the notice in subparagraph (A) appears on a sign, the
following shall appear immediately adjacent to the notice:

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

(d) Notwithstanding any other law, a rental company may sell
a damage waiver subject to the following rate limitations for each
full or partial 24-hour rental day for the damage waiver:

(1) For rental vehicles that the rental company designates as an
“economy car,” “compact car,” or another term having similar
meaning to the two smallest body-size categories of vehicles
established by the Association of Car Rental Industry Systems
Standards for North America, as of January 1, 2014, when offered
for rental, the rate shall not exceed eleven dollars ($11).

(2) For rental vehicles that the rental company designates as an
“intermediate car,” “standard car,” or “full-size car,” or another
term having similar meaning to the next three body-size categories
of vehicles established by the Association of Car Rental Industry
Systems Standards for North America, as of January 1, 2014, and
that are also either vehicles of the next model-year, or not older
than the previous year’s model, when offered for rental, the rate
shall not exceed seventeen dollars ($17). For rental vehicles that
are older than the previous year’s model-year, the rate shall not
exceed eleven dollars ($11).

1939.13.  

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

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

1939.15.  

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

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

1939.17.  

A customer facility charge or alternative customer
facility charge may be collected by a rental company pursuant to
Section 50474.3 or 50474.4 of the Government Code.

1939.19.  

(a) When providing a quote, or imposing charges for
a rental, the rental company may 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. A rental company shall not
charge in addition to the rental rate, additional mandatory charges,
or a mileage charge, as those may be applicable, any other fee that
is required to be paid by the renter as a condition of hiring or
leasing the vehicle.

(b) If additional mandatory charges are imposed, the rental
company shall do each of the following:

(1) At the time the quote is given, provide the person receiving
the quote with a good faith estimate of the rental rate and all
additional mandatory charges, as well as the total charges for the
entire rental. The total charges, if provided on an Internet Web site
page, shall be displayed in a typeface at least as large as any rental
rate disclosed on that page and shall be provided on a page that
the person receiving the quote may reach by following begin delete links
through no more than two Internet Web site pages, including end delete begin insert a
link directly from end insert the page on which the rental rate is first provided.
The good faith estimate may exclude mileage charges and charges
for optional items that cannot be determined prior to completing
the reservation based upon the information provided by the person.

(2) At the time and place the rental commences, clearly and
conspicuously disclose in the rental contract, or that portion of the
contract that is provided to the renter, the total of the rental rate
and additional mandatory charges, for the entire rental, exclusive
of charges that cannot be determined at the time the rental
commences. Charges imposed pursuant to this paragraph shall be
no more than the amount of the quote provided in a confirmed
reservation, unless the person changes the terms of the rental
contract subsequent to making the reservation.

(3) Provide each person, other than those persons within the
rental company, offering quotes to actual or prospective customers
access to information about additional mandatory charges, as well
as access to information about when those charges apply. Any
person providing quotes to actual or prospective customers for the
hire or lease of a vehicle from a rental company shall provide the
quotes in the manner described in paragraph (1).

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

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

(e) If a rental company states a rental rate in print advertisement
or in a quotation, the rental company shall disclose clearly in that
advertisement or quotation the terms of mileage begin delete conditions, end delete
begin insert conditions relating to the advertised for quoted rental rate, end insert
including, but not limited to, to the extent applicable, the amount
of mileage and gas charges, the number of miles for which no
charges will be imposed, and a description of geographic driving
limitations within the United States and Canada.

(f) All rate advertisements shall include a disclaimer, which
shall be prominently displayed, providing that additional mandatory
charges may be imposed, including, but not limited to, airport fees,
tourism fees, vehicle license recovery fees, or other government
imposed taxes or fees, and indicating that this begin delete information end delete
begin insert information, including an estimate of the total rental cost, end insert is
displayed on the rental company’s Internet Web site. All rate
advertisements shall also include a statement that additional charges
may apply if an optional good or service, such as a damage waiver,
is purchased.

(g) If any person or entity other than a rental company, including
a passenger carrier or a seller of travel services, advertises a rental
rate for a vehicle rental that includes additional mandatory charges,
that person or entity shall clearly disclose the existence and amount
of the charges. If a rental company provides the person or entity
with rental rate and additional mandatory charges information, the
rental car company is not responsible for the failure of that person
or entity to comply with this subdivision.

(h) If a rental company delivers a vehicle to a renter at a location
other than the location where the rental company normally carries
on its business, the rental company shall not charge the renter an
amount for the rental for the period before the delivery of the
vehicle. If a rental company picks up a rented vehicle from a renter
at a location other than the location where the rental company
normally carries on its business, the rental company shall not
charge the renter an amount for the rental for the period after the
renter notifies the rental company to pick up the vehicle.

(i) Except as otherwise permitted pursuant to the customer
facility charge, a rental company shall not separately charge, in
addition to the rental rate, a fee for transporting the renter to a
location where the rented vehicle will be delivered to the renter.

1939.21.  

(a) For purposes of this section:

(1) “Additional charges” means charges other than a per period
base rental rate established by the business program.

(2) “Business program” means either of the following:

(A) A contract between a rental company and a business
program sponsor that has established the per period base rental
rate, and any other material terms relating to additional charges,
on which the rental company will rent passenger vehicles to persons
authorized by the sponsor.

(B) A plan, program, or other arrangement established by a
rental company at the request of, or with the consent of, a business
program sponsor under which the rental company offers to rent
passenger vehicles to persons authorized by the sponsor at per
period base rental rates, and any other material terms relating to
additional charges, that are not the same as those generally offered
by the rental company to the public.

(3) “Business program sponsor” means a legal entity, other than
a natural person, that is a corporation, limited liability company,
or partnership.

(4) “Business renter” means, for any business program sponsor,
a person who is authorized by the sponsor, through the use of an
identifying number or program name or code, to enter into a rental
contract under the sponsor’s business program. In no case shall
the term “business renter” include a person renting as any of the
following:

(A) A nonemployee member of a not-for-profit organization.

(B) The purchaser of a voucher or other prepaid rental
arrangement from a person, including a tour operator, engaged in
the business of reselling those vouchers or prepaid rental
arrangements to the general public.

(C) An individual whose vehicle rental is eligible for
reimbursement in whole or in part as a result of the person being
insured or provided coverage under a policy of insurance issued
by an insurance company.

(D) An individual whose vehicle rental is eligible for
reimbursement in whole or in part as a result of the person
purchasing passenger vehicle repair services from a person licensed
to perform such services.

(5) “Qualified business rental” under a business program
established for a business program sponsor by a rental company
means the rental of a passenger vehicle under the business program
if either:(A) in the 12-month period ending on the date of the rental
or in the calendar year immediately preceding the year in which
the rental occurs, the rentals under all business programs
established by the rental company for the business program sponsor
and its affiliates produced gross rental revenues in excess of
twenty-five thousand dollars ($25,000) or (B) the rental company
in good faith estimates that rentals under all the business programs
established by the rental company for the business program sponsor
and its affiliates will produce gross rental revenues in excess of
twenty-five thousand dollars ($25,000) in the 12-month period
commencing with the date of the rental or in the calendar year in
which the rental occurs. The rental company has the burden of
establishing by objectively verifiable evidence that the rental was
a qualified business rental.

(6) “Quote” means telephonic, in-person, and
computer-transmitted quotations.

(b) Notwithstanding any provision to the contrary contained in
Section 1939.19 or 1939.23, a rental company may, in connection
with the qualified business rental of a passenger vehicle to a
business renter of a business program sponsor under the sponsor’s
business program, do begin delete all end delete begin insert both end insert of the following:

(1) Separately quote additional charges for the rental if, at the
time the quote is provided, the person receiving the quote is also
provided a good faith estimate of the total of all the charges for
the entire rental. The estimate may exclude mileage charges and
charges for optional items and services that cannot be determined
prior to completing the reservation based upon the information
provided by the renter.

(2) Separately impose additional charges for the rental, if the
rental contract, or another document provided to the business renter
at the time and place the rental commences, clearly and
conspicuously discloses the total of all the charges for the entire
rental, exclusive of charges that cannot be determined at the time
the rental commences.

begin delete

(3) Use technology, including electronic surveillance technology,
or information obtained from the use of the technology, to
determine the date and time the vehicle departs from, or is returned
to, the rental company, for the sole purposes of commencing and
concluding the rental.

end delete

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

(d) Any waiver of any of the provisions of this section shall be
void and unenforceable as contrary to public policy.

(e) This section shall not be interpreted to mean that a rental
company is not required to comply with the requirements of
subdivisions (c) to (h), inclusive, of Section 1939.19.

1939.23.  

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

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

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

(ii) The rental vehicle has not been returned following begin delete three
calendar days after the contracted return date, or by three calendar
days end delete begin insert one week after the contracted return date or by one week end insert
following the end of an extension of that return date.

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

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

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

(b) Subdivision (a) does not prohibit a rental company from
equipping rental vehicles with any of the following:

(1) GPS-based technology that provides navigation assistance
to the occupants of the rental vehicle, if the rental company does
not use, access, or obtain information relating to the renter’s use
of the rental vehicle that was obtained using that technology, except
for the purposes of discovering or repairing a defect in the
technology and the information may then be used only for that
purpose.

(2) Electronic surveillance technology that allows for the remote
locking or unlocking of the vehicle at the request of the renter, if
the rental company does not use, access, or obtain information
relating to the renter’s use of the rental vehicle that was obtained
using that technology, except as necessary to lock or unlock the
vehicle.

(3) Electronic surveillance technology that allows the company
to provide roadside assistance, such as towing, flat tire, or fuel
services, at the request of the renter, if the rental company does
not use, access, or obtain information relating to the renter’s use
of the rental vehicle that was obtained using that technology except
as necessary to provide the requested roadside assistance.

(c) Subdivision (a) does not prohibit a rental company from
obtaining, accessing, or using information from electronic
surveillance technology for the sole purpose of determining the
date and time the vehicle begin insert departs from and end insert is returned to the rental
company, and the total mileage driven and the vehicle fuel level
of the returned vehicle. begin delete This subdivision, however, shall apply
only after the renter has returned the vehicle to the rental company,
and the end delete begin insert The end insert information begin insert obtained or accessed from this electronic
surveillance technology end insert shall only be used for the purpose
described in this subdivision.

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

1939.25.  

A renter may bring an action against a rental company
for the recovery of damages and appropriate equitable relief for a
violation of this chapter, except for Sections 1939.21, 1939.35,
and 1939.37. The prevailing party shall be entitled to recover
reasonable attorney’s fees and costs.

1939.27.  

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

1939.29.  

A waiver of any of the provisions of this chapter,
except for Sections 1939.21, 1939.35, and 1939.37, shall be void
and unenforceable as contrary to public policy.

1939.31.  

(a) A rental company’s disclosure requirements shall
be satisfied for renters who are enrolled in the rental company’s
membership program if all of the following conditions are met:

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

(A) All of the disclosures required by paragraph (1) of
subdivision (c) of Section 1939.09, including the terms and
conditions of the rental agreement then in effect.

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

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

begin insert

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

end insert begin insert

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

end insert
begin insert end insert
begin insert

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

end insert begin insert

“If I previously declined the collision damage waiver, I now
accept it.”

end insert
begin insert end insert
begin insert

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

end insert

(b) (1) This section is not effective unless begin delete the employee
designated end delete begin insert an employee is available end insert pursuant to paragraph (5) of
subdivision (k) of Section 1939.01 is actually present at the
required location.

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

1939.33.  

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

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

(c) Any plaintiff, or his or her representative, who elects to serve
the foreign renter by delivering a copy of the summons and
complaint and any other required documents to the rental company
pursuant to subdivision (a) shall agree to limit his or her recovery
against the foreign renter and the rental company to the limits of
the protection extended by the liability insurance.

(d) Notwithstanding the requirements of Sections 17450 to
17456, inclusive, of the Vehicle Code, service of process in
compliance with subdivision (a) shall be deemed a valid and
effective service.

(e) Notwithstanding any other law, the requirement that the
rental company accept service of process pursuant to subdivision
(a) shall not create any duty, obligation, or agency relationship
other than that provided in subdivision (a).

1939.35.  

(a) (1) A rental company shall provide a renter of a
15-passenger van with a copy of the United States Department of
Transportation, National Highway Traffic Safety Administration’s
consumer advisory for 15-passenger vans titled “Reducing the
Risk of Rollover Crashes” or, if that advisory is updated, a copy
of the updated advisory. The renter shall acknowledge receipt of
that copy by signing an acknowledgment of receipt on the rental
agreement or on an attached form.

(2) If the rental of that 15-passenger van is for a business
purpose or use, the rental company shall also provide on the
document described in paragraph (1) that only an employee with
the proper licensing may drive that vehicle. The renter shall
acknowledge the receipt thereof in the same manner as described
in paragraph (1).

(b) (1) Except as provided in paragraph (2), for purposes of
this section, a “15-passenger van” means any van manufactured
to accommodate 15 passengers, including the driver, regardless
of whether that van has been altered to accommodate fewer than
15 passengers.

(2) For purposes of this section, a “15-passenger van” does not
mean a 15-passenger van with dual rear wheels that has a gross
weight rating equal to, or greater than, 11,500 pounds.

1939.37.  

A rental company is not subject to the requirements
of Section 14608 of the Vehicle Code if the rental is subject to the
terms of a membership agreement that allows the renter to gain
physical access to a vehicle without a key through use of a code,
key card, or by other means that allow the vehicle to be accessed
at a remote location, or at a business location of the rental company
outside of that location’s regular hours of operation.

SEC. 6.  

Section 50474.1 of the Government Code is amended
to read:

50474.1.  

(a) An airport operated by a city and county may
require a rental car company, in writing, to collect a fee from its
customers on behalf of the airport for the use of an
airport-mandated common use busing system or light rail transit
system operated for the movement of passengers between the
terminal and a consolidated on-airport rental car facility. If a rental
car company is required pursuant to this section to collect a fee,
the following conditions shall apply:

(1) The fees shall be calculated on a per contract basis.

(2) All fees collected for this purpose constitute debts owed to
the airport by the collecting party. The debts are due and payable
to the airport quarterly or at any other interval the airport may
establish to facilitate collection and insure payment.

(3) The fee is a user fee, not a tax.

(4) Revenues collected from the fee may not exceed the
reasonable costs of providing the busing and light rail transit
service and shall not be used for any other purpose.

(b) Notwithstanding any other law, including, but not limited
to, Chapter 1.5 (commencing with Section 1939.01) of Title 5 of
Part 4 of Division 3 of the Civil Code, a rental car company that
is required to collect fees under this section shall do all of the
following:

(1) Collect the fee from those of its customers subject to the fee
as required in subdivision (a).

(2) Clearly disclose the existence of the fee in any radio,
television, or print advertisement that states a rental rate applicable
to an airport at which the fee is to be imposed, and the amount of
the fee at the airport where it is imposed, or a range of fees if the
fee is imposed at more than one airport.

(3) Clearly disclose the existence of the fee in a telephonic,
in-person, or computer-transmitted quotation that states a rental
rate applicable to an airport at which the fee is to be imposed and
the amount of the fee at the airport where it is imposed.

(4) Separately identify the fee on its rental agreement.

SEC. 7.  

Section 50474.21 is added to the Government Code,
to read:

50474.21.  

(a) Except as provided in Section 50474.22, for
purposes of this article, “customer facility charge” means any fee,
including an alternative fee, required by an airport, other than Los
Angeles International Airport, to be collected by a rental company
from a renter for any of the following purposes:

(1) To finance, design, and construct consolidated airport vehicle
rental facilities.

(2) To finance, design, construct, and operate common-use
transportation systems that move passengers between airport
terminals and those consolidated vehicle rental facilities, and
acquire vehicles for use in that system.

(3) To finance, design, and construct terminal modifications
solely to accommodate and provide customer access to
common-use transportation systems. The fees designated as a
customer facility charge shall not otherwise be used to pay for
terminal expansion, gate expansion, runway expansion, changes
in hours of operation, or changes in the number of flights arriving
or departing from the airport.

(b) The aggregate amount to be collected shall not exceed the
reasonable costs, as determined by an audit by an independent
auditor paid for by the airport, to finance, design, and construct
those facilities. The auditor shall independently examine and
substantiate the necessity for, and the amount of, the customer
facility charge, including whether the airport’s actual or projected
costs are supported and justified, any steps the airport may take to
limit costs, potential alternatives for meeting the airport’s revenue
needs other than the collection of the fee, and whether and to what
extent rental companies or other businesses or individuals using
the facility or common-use transportation system may pay for the
costs associated with these facilities and systems apart from the
fee from rental customers, or whether the airport did not comply
with any provision of this section. Copies of the audit shall be
provided to the Assembly and Senate Committees on Judiciary,
the Assembly Committee on Transportation, and the Senate
Committee on Transportation and Housing and shall be posted on
the airport’s Internet Web site. In the case of a customer facility
charge for a common-use transportation system, the audit shall
also consider the reasonable costs of providing the transit system
or busing network pursuant to paragraph (1) of subdivision (a).
Any audit required by this subdivision may be included as a part
of an audit of an airport’s finances.

(c) Except as provided in subdivision (d), the authorization
given pursuant to this article for an airport to impose a customer
facility charge shall become inoperative when the bonds used for
financing are paid.

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

(e) This section begin delete shall end delete begin insert does end insert not apply to any fee, including an
alternative fee, required by the Los Angeles International Airport
to be collected by a rental company pursuant to Section 50474.22.

SEC. 8.  

Section 50474.22 is added to the Government Code,
to read:

50474.22.  

(a) For purposes of this article, “customer facility
charge” means any fee, including an alternative fee, required by
the Los Angeles International Airport to be collected by a rental
company from a renter for any of the following purposes:

(1) To finance, design, construct, or otherwise improve
consolidated airport vehicle rental facilities.

(2) To finance, design, construct, operate, maintain, or otherwise
improve common-use transportation systems that move passengers
between airport terminals and those consolidated vehicle rental
facilities, and acquire vehicles for use in that system.

(3) To finance, design, construct, or otherwise improve terminal
modifications solely to accommodate and provide customer access
to common-use transportation systems. The fees designated as a
customer facility charge shall not otherwise be used to pay for
terminal expansion, gate expansion, runway expansion, changes
in hours of operation, or changes in the number of flights arriving
or departing from the airport.

(b) The aggregate amount to be collected shall not exceed the
reasonable costs, as determined by an audit by an independent
auditor paid for by the airport, to finance, design, construct,
operate, maintain, or otherwise improve, as applicable, those
facilities, systems, and modifications. The auditor shall
independently examine and substantiate the necessity for, and the
amount of, the customer facility charge, including whether the
airport’s actual or projected costs are supported and justified, any
steps the airport may take to limit costs, potential alternatives for
meeting the airport’s revenue needs other than the collection of
the fee, and whether and to what extent rental companies or other
businesses or individuals using the facility or common-use
transportation system may pay for the costs associated with these
facilities and systems apart from the fee from rental customers, or
whether the airport did not comply with any provision of this
section. Copies of the audit shall be provided to the Assembly and
Senate Committees on Judiciary, the Assembly Committee on
Transportation, and the Senate Committee on Transportation and
Housing and shall be posted on the airport’s Internet Web site. In
the case of a customer facility charge for a common-use
transportation system, the audit also shall consider the reasonable
costs of providing the transit system or busing network pursuant
to paragraph (1) of subdivision (a). Any audit required by this
subdivision may be included as a part of an audit of an airport’s
finances.

(c) The authorization under to this section for an airport to
impose a customer facility charge shall become inoperative when
bonds, capital contributions, availability payment contracts, lease
agreements, or other forms for financing are paid or reimbursed.

(d) This section shall not apply to any fee, including an
alternative fee, required by an airport other than the Los Angeles
International Airport to be collected by a rental company from a
renter.

SEC. 9.  

Section 50474.3 is added to the Government Code, to
read:

50474.3.  

(a) A customer facility charge, as defined in begin delete section end delete
begin insert Section end insert 50474.21, may be collected by a rental company under the
following circumstances:

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

(2) The fee is calculated on a per contract basis or as provided
in subdivision (b).

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

(4) Except as otherwise provided in paragraph (5), the fee shall
be ten dollars ($10) per contract or the amount provided in
subdivision (b).

(5) The fee for a consolidated rental vehicle facility shall be
collected only from customers of on-airport rental vehicle
companies. If the fee imposed by the airport is for both a
consolidated rental vehicle facility and a common-use
transportation system, the fee collected from customers of
on-airport rental vehicle companies shall be ten dollars ($10) or
the amount provided in subdivision (b), but the fee imposed on
customers of off-airport rental vehicle companies who are
transported on the common-use transportation system is only that
amount that is proportionate to the costs of the common-use
transportation system. The fee is uniformly applied to each class
of on-airport or off-airport customers, provided that the airport
requires off-airport customers to use the common-use transportation
system. For purposes of this paragraph, “on-airport rental vehicle
company” means a rental company operating under an airport
property lease or an airport concession or license agreement whose
customers use or will use the consolidated rental vehicle facility
and the fee as to those customers is a user fee described in
paragraph (3).

(6) Revenues collected from the fee do not exceed the reasonable
costs of financing, designing, and constructing the facility and
financing, designing, constructing, and operating any common-use
transportation system, or acquiring vehicles for use in that system,
and are not used for any other purpose.

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

(8) This subdivision does not apply to fees which are governed
by Section 50474.1 or Section 57.5 of the San Diego Unified Port
District Act (Chapter 67 of the First Extraordinary Session of the
Statutes of 1962).

(b) Any airport may require rental companies to collect an
alternative customer facility charge, as defined in Section 50474.21,
under the following conditions:

(1) The airport first conducts a publicly noticed hearing pursuant
to the Ralph M. Brown Act (Chapter 9 (commencing with Section
54950) of Part 1 of Division 2) to review the costs of financing
the design and construction of a consolidated rental vehicle facility
and the design, construction, and operation of any common-use
transportation system in which all of the following occur:

(A) The airport establishes the amount of revenue necessary to
finance the reasonable costs of designing and constructing a
consolidated rental vehicle facility and to design, construct, and
operate any common-use transportation system, or acquire vehicles
for use in that system, based on evidence presented during the
hearing.

(B) The airport finds, based on evidence presented during the
hearing, that the fee authorized in subdivision (a) will not generate
sufficient revenue to finance the reasonable costs of designing and
constructing a consolidated rental vehicle facility and of designing,
constructing, and operating any common-use transportation system,
or acquire vehicles for use in that system.

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

(D) The airport outlines each of the following:

(i) Steps it has taken to limit costs.

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

(iii) The extent to which rental companies or other businesses
or individuals using the facility or common-use transportation
system will pay for the costs associated with these facilities and
systems apart from the fee collected from rental customers.

(2) The airport may not require the fee authorized in this
subdivision to be collected at any time that the fee authorized in
subdivision (a) is being collected.

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

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

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

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

(D) At no time shall the fee authorized in this paragraph be
collected from any customer for more than five days for each
individual rental vehicle contract.

(E) An airport subject to this paragraph shall initiate the process
for obtaining the authority to require or increase the alternative
fee no later than January 1, 2018. Any airport that obtains the
authority to require or increase an alternative fee shall be authorized
to continue collecting that fee until the fee authorization becomes
inoperative pursuant to subdivision (c) of Section 50474.21.

(4) For any airport seeking to require rental companies to collect
an alternative customer facility charge pursuant to this subdivision
the following provisions apply:

(A) The airport shall provide reports on an annual basis to the
Senate and Assembly Committees on Judiciary detailing all of the
following:

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

(ii) How the funds are being spent.

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

(B) (i) The airport shall complete an independent audit as
required by subdivision (b) of Section 50474.21 prior to the initial
collection of the customer facility charge. Copies of the audit shall
be provided to the Assembly and Senate Committees on Judiciary,
the Assembly Committee on Transportation, and the Senate
Committee on Transportation and Housing and shall be posted on
the airport’s Internet Web site.

(ii) Prior to any increase pursuant to subdivision (b), the airport
shall update the information provided in the initial collection audit
completed pursuant to clause (i). Copies of the updated audit shall
be provided to the Assembly and Senate Committees on Judiciary,
the Assembly Committee on Transportation, and the Senate
Committee on Transportation and Housing, and shall be posted
on the airport’s Internet Web site.

(iii) An audit shall be completed every three years after initial
collection if the customer facility charge is collected for the purpose
of operating a common-use transportation system or to acquire
vehicles for use in the system pursuant to paragraph (2) of
subdivision (a) of Section 50474.21. A regularly conducted audit
of airport finances that includes the customer facility charge
information, that satisfies the requirements of subdivision (b) of
Section 50474.21, and is produced in accordance with the generally
accepted accounting principles of the Government Accounting
Standards Board, shall satisfy the requirements of this clause. This
obligation shall continue until the fee authorization becomes
inoperative pursuant to subdivision (c) of Section 50474.21. The
information reported pursuant to this clause shall be compiled into
one document, shall be provided to the Assembly and Senate
Committees on Judiciary, the Assembly Committee on
Transportation, and the Senate Committee on Transportation and
Housing and shall be posted on the airport’s Internet Web site
accessible to the public. The information reported shall be
contained within one easily accessible page contained within the
airport’s Internet Web site.

(iv) This section shall not be construed to require an airport to
audit a common-use transportation system not financed by a
customer facility charge and used for the purposes permitted
pursuant to paragraph (2) of subdivision (a) of Section 50474.21.

(v) The airport shall post on the airport’s Internet Web site
copies of the completed audits required by this subparagraph for
a period of six years following the audit’s completion.

(C) Use of proceeds of any bonds backed by alternative customer
facility charges shall be limited to construction and design of the
consolidated rental vehicle facility, terminal modifications, and
operating costs of the common-use transportation system, as
specified in Section 50474.21.

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

SEC. 10.  

Section 50474.4 is added to the Government Code,
to read:

50474.4.  

(a) A customer facility charge, as defined in Section
50474.22, may be collected by a rental company under the
following circumstances:

(1) Collection of the fee by the rental company is required by
Los Angeles International Airport .

(2) The fee is calculated on a per contract basis or as provided
in subdivision (b).

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

(4) Except as otherwise provided in paragraph (5), the fee shall
be ten dollars ($10) per contract or the amount provided in
subdivision (b).

(5) The fee for a consolidated rental vehicle facility shall be
collected only from customers of on-airport rental vehicle
companies. If the fee imposed by the airport is for both a
consolidated rental vehicle facility and a common-use
transportation system, the fee collected from customers of
on-airport rental vehicle companies shall be ten dollars ($10) or
the amount provided in subdivision (b), but the fee imposed on
customers of off-airport rental vehicle companies who are
transported on the common-use transportation system is only that
amount that is proportionate to the costs of the common-use
transportation system. The fee is uniformly applied to each class
of on-airport or off-airport customers, provided that the airport
requires off-airport customers to use the common-use transportation
system. For purposes of this paragraph, “on-airport rental vehicle
company” means a rental company operating under an airport
property lease or an airport concession or license agreement whose
customers use or will use the consolidated rental vehicle facility
and the fee as to those customers is a user fee described in
paragraph (3).

(6) Revenues collected from the fee do not exceed the reasonable
costs of financing, designing, constructing, operating, or improving
as applicable, a consolidated rental car facility, any common-use
transportation system, and terminal modifications, and are not used
for any other purpose.

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

(b) The Los Angeles International Airport may require rental
companies to collect an alternative customer facility charge, as
defined in Section 50474.22, under the following conditions:

(1) The airport first conducts a publicly noticed hearing pursuant
to the Ralph M. Brown Act (Chapter 9 (commencing with Section
54950) of Part 1 of Division 2) to review the costs to finance,
design, construct, maintain, or otherwise improve, as applicable,
a consolidated rental vehicle facility, any common-use
transportation system, and terminal modifications in which all of
the following occur:

(A) The airport establishes the amount of revenue reasonably
necessary to finance the design, construction, operation,
maintenance, or other improvement, as applicable, of a
consolidated rental vehicle facility, any common-use transportation
system, and terminal modifications based on evidence presented
during the hearing.

(B) The airport finds, based on evidence presented during the
hearing, that the fee authorized in subdivision (a) will not generate
sufficient revenue to finance the design, construction, operation,
maintenance, or other improvement, as applicable, of a
consolidated rental vehicle facility, any common-use transportation
system, and terminal modifications.

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

(D) The airport outlines each of the following:

(i) Steps it has taken to limit costs.

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

(iii) The extent to which rental companies or other businesses
or individuals using the facility or common-use transportation
system will pay for the costs associated with these facilities and
systems apart from the fee collected from rental customers.

(2) The airport may not require the fee authorized in this
subdivision to be collected at any time that the fee authorized in
subdivision (a) is being collected.

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

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

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

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

(D) At no time shall the fee authorized in this paragraph be
collected from any customer for more than five days for each
individual rental vehicle contract.

(E) An airport subject to this paragraph shall initiate the process
for obtaining the authority to require or increase the alternative
fee no later than January 1, 2018. An airport that obtains the
authority to require or increase an alternative fee shall be authorized
to continue collecting that fee until the fee authorization becomes
inoperative pursuant to subdivision (c) of Section 50474.22.

(4) For an airport seeking to require rental companies to collect
an alternative customer facility charge pursuant to this subdivision,
the following provisions apply:

(A) The airport shall provide reports on an annual basis to the
Senate and Assembly Committees on Judiciary detailing all of the
following:

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

(ii) How the funds are being spent.

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

(B) (i) The airport shall complete an independent audit as
required by subdivision (b) of Section 50474.22 prior to the initial
collection of the customer facility charge. Copies of the audit shall
be provided to the Assembly and Senate Committees on Judiciary,
the Assembly Committee on Transportation, and the Senate
Committee on Transportation and Housing and shall be posted on
the airport’s Internet Web site.

(ii) Prior to any increase pursuant to subdivision (b), the airport
shall update the information provided in the initial collection audit
completed pursuant to clause (i). Copies of the updated audit shall
be provided to the Assembly and Senate Committees on Judiciary,
the Assembly Committee on Transportation, and the Senate
Committee on Transportation and Housing, and shall be posted
on the airport’s Internet Web site.

(iii) An audit shall be completed every three years after initial
collection if the customer facility charge is collected for the purpose
of operating a common-use transportation system or to acquire
vehicles for use in the system pursuant to paragraph (2) of
subdivision (a) of Section 50474.22. A regularly conducted audit
of airport finances that includes the customer facility charge
information, that satisfies the requirements of subdivision (b) of
Section 50474.22, and is produced in accordance with the generally
accepted accounting principles of the Government Accounting
Standards Board, shall satisfy the requirements of this clause. This
obligation shall continue until the fee authorization becomes
inoperative pursuant to subdivision (c) of Section 50474.22. The
information reported pursuant to this clause shall be compiled into
one document, shall be provided to the Assembly and Senate
Committees on Judiciary, the Assembly Committee on
Transportation, and the Senate Committee on Transportation and
Housing and shall be posted on the airport’s Internet Web site
accessible to the public. The information reported shall be
contained within one easily accessible page contained within the
airport’s Internet Web site.

(iv) This section shall not be construed to require an airport to
audit a common-use transportation system not financed by a
customer facility charge and used for the purposes permitted
pursuant to paragraph (2) of subdivision (a) of Section 50474.22.

(v) The airport shall post on the airport’s Internet Web site
copies of the completed audits required by this subparagraph for
a period of six years following the audit’s completion.

(C) Use of proceeds of any bonds backed by alternative customer
facility charges shall be limited to the purposes specified in Section
50474.22.

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