Amended in Senate August 2, 2016

Amended in Senate June 13, 2016

Amended in Assembly April 4, 2016

California Legislature—2015–16 Regular Session

Assembly BillNo. 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 Sectionsbegin delete 50474.21, 50474.22, 50474.3, and 50474.4end deletebegin insert 50474.21 and 50474.3end insert 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.

(2) 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 met.

This bill would revise the definition of membership program to include the ability to select an alternative vehicle. 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.

(3) 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 thesebegin delete provisions, including establishing authority for a certain airport to charge those same fees for additional specified purposes.end deletebegin insert provisions.end insert

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

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

P2    1

SECTION 1.  

Section 1936 of the Civil Code is repealed.

2

SEC. 2.  

Section 1936.05 of the Civil Code is repealed.

3

SEC. 3.  

Section 1936.1 of the Civil Code is repealed.

4

SEC. 4.  

Section 1936.5 of the Civil Code is repealed.

5

SEC. 5.  

Chapter 1.5 (commencing with Section 1939.01) is
6added to Title 5 of Part 4 of Division 3 of the Civil Code, to read:

 

P3    1Chapter  1.5. Rental Passenger Vehicle Transactions
2

 

3

1939.01.  

For the purpose of this chapter, the following
4definitions shall apply:

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

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

10(c) “Additional mandatory charges” means any separately stated
11charges that the rental company requires the renter to pay to hire
12or lease the vehicle for the period of time to which the rental rate
13applies, which are imposed by a governmental entity and
14specifically relate to the operation of a rental vehicle business,
15including, but not limited to, a customer facility charge, airport
16concession fee, tourism commission assessment, vehicle license
17recovery fee, or other government-imposed taxes or fees.

18(d) “Airport concession fee” means a charge collected by a
19rental company from a renter that is the renter’s proportionate
20share of the amount paid by the rental company to the owner or
21operator of an airport for the right or privilege of conducting a
22vehicle rental business on the airport’s premises.

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

24(1) The renter.

25(2) The renter’s spouse, if that person is a licensed driver and
26satisfies the rental company’s minimum age requirement.

27(3) The renter’s employer or coworker, if he or she is engaged
28in business activity with the renter, is a licensed driver, and satisfies
29the rental company’s minimum age requirement.

30(4) A person expressly listed by the rental company on that
31renter’s contract as an authorized driver.

32(f) “Customer facility charge” means any fee, including an
33alternative fee, required by an airport to be collected by a rental
34company from a renter pursuant to Section 50474.21begin delete or 50474.22end delete
35 of the Government Code.

36(g) “Damage waiver” means a rental company’s agreement not
37to hold a renter liable for all or any portion of any damage or loss
38related to the rented vehicle, any loss of use of the rented vehicle,
39or any storage, impound, towing, or administrative charges.

P4    1(h) “Electronic surveillance technology” means a technological
2method or system used to observe, monitor, or collect information,
3including telematics, Global Positioning System (GPS), wireless
4technology, or location-based technologies. “Electronic
5surveillance technology” does not include event data recorders
6(EDR), sensing and diagnostic modules (SDM), or other systems
7that are used either:

8(1) For the purpose of identifying, diagnosing, or monitoring
9functions related to the potential need to repair, service, or perform
10maintenance on the rental vehicle.

11(2) As part of the vehicle’s airbag sensing and diagnostic system
12in order to capture safety systems-related data for retrieval after a
13crash has occurred or in the event that the collision sensors are
14activated to prepare the decisionmaking computer to make the
15determination to deploy or not to deploy the airbag.

16(i) “Estimated time for replacement” means the number of hours
17of labor, or fraction thereof, needed to replace damaged vehicle
18parts as set forth in collision damage estimating guides generally
19used in the vehicle repair business and commonly known as “crash
20books.”

21(j) “Estimated time for repair” means a good faith estimate of
22the reasonable number of hours of labor, or fraction thereof, needed
23to repair damaged vehicle parts.

24(k) “Membership program” means a service offered by a rental
25company that permits customers to bypass the rental counter and
26go directly to the vehicle previously reserved or select an alternate
27vehicle. A membership program shall meet all of the following
28 requirements:

29(1) The renter initiates enrollment by completing an application
30on which the renter can specify a preference for type of vehicle
31and acceptance or declination of optional services.

32(2) The rental company fully discloses, prior to the enrollee’s
33first rental as a participant in the program, all terms and conditions
34of the rental agreement as well as all required disclosures.

35(3) The renter may terminate enrollment at any time.

36(4) The rental company fully explains to the renter that
37designated preferences, as well as acceptance or declination of
38optional services, may be changed by the renter at any time for
39the next and future rentals.

P5    1(5) An employee is available at the lot where the renter takes
2possession of the vehicle, to receive any change in the rental
3agreement from the renter.

4(l) “Passenger vehicle” or “vehicle” means a “passenger vehicle”
5as defined in Section 465 of the Vehicle Code.

6(m) “Quote” means an estimated cost of rental provided by a
7rental company or a third party to a potential customer that is based
8on information provided by the potential customer and used to
9generate an estimated cost of rental, including, but not limited to,
10potential dates of rental, locations, or classes of vehicle.

11(n) “Tourism commission assessment” means the charge
12collected by a rental company from a renter that has been
13established by the California Travel and Tourism Commission
14pursuant to Section 13995.65 of the Government Code.

15(o) “Vehicle license fee” means the tax imposed pursuant to the
16Vehicle License Fee Law (Part 5 (commencing with Section 10701)
17of Division 2 of the Revenue and Taxation Code).

18(p) “Vehicle registration fee” means any fee imposed pursuant
19to any provision of Chapter 6 (commencing with Section 9101)
20of Division 3 of the Vehicle Code or any other law that imposes
21a fee upon the registration of vehicles in this state.

22(q) “Vehicle license recovery fee” means a charge that seeks to
23recover the amount of any vehicle license fee and vehicle
24registration fee paid by a rental company for the particular class
25of vehicle being rented. If imposed, the vehicle license recovery
26fee shall be separately stated as a single charge in the quote and
27rental contract.

28

1939.03.  

Except as limited by Section 1939.05, a rental
29company and a renter may agree that the renter will be responsible
30for no more than all of the following:

31(a) Physical or mechanical damage to the rented vehicle up to
32its fair market value, as determined in the customary market for
33the sale of that vehicle, resulting from collision regardless of the
34cause of the damage.

35(b) Loss due to theft of the rented vehicle up to its fair market
36value, as determined in the customary market for the sale of that
37vehicle, provided that the rental company establishes by clear and
38convincing evidence that the renter or the authorized driver failed
39to exercise ordinary care while in possession of the vehicle. In
40 addition, the renter shall be presumed to have no liability for any
P6    1loss due to theft if (1) an authorized driver has possession of the
2ignition key furnished by the rental company or an authorized
3driver establishes that the ignition key furnished by the rental
4company was not in the vehicle at the time of the theft, and (2) an
5authorized driver files an official report of the theft with the police
6or other law enforcement agency within 24 hours of learning of
7the theft and reasonably cooperates with the rental company and
8the police or other law enforcement agency in providing
9information concerning the theft. The presumption set forth in this
10subdivision is a presumption affecting the burden of proof which
11the rental company may rebut by establishing that an authorized
12driver committed, or aided and abetted the commission of, the
13theft.

14(c) Physical damage to the rented vehicle up to its fair market
15value, as determined in the customary market for the sale of that
16vehicle, resulting from vandalism occurring after, or in connection
17with, the theft of the rented vehicle. However, the renter shall have
18no liability for any damage due to vandalism if the renter would
19have no liability for theft pursuant to subdivision (b).

20(d) Physical damage to the rented vehicle up to a total of five
21hundred dollars ($500) resulting from vandalism unrelated to the
22theft of the rented vehicle.

23(e) Actual charges for towing, storage, and impound fees paid
24by the rental company if the renter is liable for damage or loss.

25(f) An administrative charge, which shall include the cost of
26appraisal and all other costs and expenses incident to the damage,
27loss, repair, or replacement of the rented vehicle.

28

1939.05.  

(a) The total amount of the renter’s liability to the
29rental company resulting from damage to the rented vehicle shall
30not exceed the sum of the following:

31(1) The estimated cost of parts which the rental company would
32have to pay to replace damaged vehicle parts.

33(2) The estimated cost of labor to replace damaged vehicle parts,
34which shall not exceed the product of (A) the rate for labor usually
35paid by the rental company to replace vehicle parts of the type that
36were damaged and (B) the estimated time for replacement.

37(3) The estimated cost of labor to repair damaged vehicle parts,
38which shall not exceed the lesser of the following:

P7    1(A) The product of the rate for labor usually paid by the rental
2company to repair vehicle parts of the type that were damaged and
3the estimated time for repair.

4(B) The sum of the estimated labor and parts costs determined
5under paragraphs (1) and (2) to replace the same vehicle parts.

6(4) Actual charges for towing, storage, and impound fees paid
7by the rental company.

8(b) For purposes of subdivision (a), all discounts and price
9reductions or adjustments that are or will be received by the rental
10company shall be subtracted from the estimate to the extent not
11already incorporated in the estimate, or otherwise promptly credited
12or refunded to the renter.

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

16(d) The administrative charge described in subdivision (f) of
17Section 1939.03 shall not exceed (1) fifty dollars ($50) if the total
18estimated cost for parts and labor is more than one hundred dollars
19($100) up to and including five hundred dollars ($500), (2) one
20hundred dollars ($100) if the total estimated cost for parts and
21labor exceeds five hundred dollars ($500) up to and including one
22thousand five hundred dollars ($1,500), or (3) one hundred fifty
23dollars ($150) if the total estimated cost for parts and labor exceeds
24one thousand five hundred dollars ($1,500). An administrative
25charge shall not be imposed if the total estimated cost of parts and
26labor is one hundred dollars ($100) or less.

27(e) The total amount of an authorized driver’s liability to the
28rental company, if any, for damage occurring during the authorized
29driver’s operation of the rented vehicle shall not exceed the amount
30of the renter’s liability under this section.

31(f) A rental company shall not recover from an authorized driver
32an amount exceeding the renter’s liability under this section.

33

1939.07.  

(a) A claim against a renter resulting from damage
34or loss, excluding loss of use, to a rental vehicle shall be reasonably
35and rationally related to the actual loss incurred. A rental company
36shall mitigate damages where possible and shall not assert or collect
37a claim for physical damage which exceeds the actual costs of the
38repairs performed or the estimated cost of repairs, if the rental
39company chooses not to repair the vehicle, including all discounts
40and price reductions. However, if the vehicle is a total loss vehicle,
P8    1the claim shall not exceed the total loss vehicle value established
2in accordance with procedures that are customarily used by
3insurance companies when paying claims on total loss vehicles,
4less the proceeds from salvaging the vehicle, if those proceeds are
5retained by the rental company.

6(b) If insurance coverage exists under the renter’s applicable
7personal or business insurance policy and the coverage is confirmed
8during regular business hours, the renter may require that the rental
9company submit any claims to the renter’s applicable personal or
10business insurance carrier. The rental company shall not make any
11written or oral representations that it will not present claims or
12negotiate with the renter’s insurance carrier. For purposes of this
13subdivision, confirmation of coverage includes telephone
14confirmation from insurance company representatives during
15regular business hours. Upon request of the renter and after
16confirmation of coverage, the amount of claim shall be resolved
17between the insurance carrier and the rental company. The renter
18shall remain responsible for payment to the rental company for
19any loss sustained that the renter’s applicable personal or business
20insurance policy does not cover.

21(c) A rental company shall not recover from an authorized driver
22for an item described in Section 1939.03 to the extent the rental
23company obtains recovery from another person.

24(d) This chapter applies only to the maximum liability of an
25authorized driver to the rental company resulting from damage to
26the rented vehicle and not to the liability of another person.

27

1939.09.  

(a) (1) Except as provided in subdivision (b), a
28damage waiver shall provide or, if not expressly stated in writing,
29shall be deemed to provide that the renter has no liability for
30damage, loss, loss of use, or a cost or expense incident thereto.

31(2) Except as provided in subdivision (b), every limitation,
32exception, or exclusion to a damage waiver is void and
33unenforceable.

34(b) A rental company may provide in the rental contract that a
35damage waiver does not apply under any of the following
36circumstances:

37(1) Damage or loss results from an authorized driver’s (A)
38intentional, willful, wanton, or reckless conduct, (B) operation of
39the vehicle under the influence of drugs or alcohol in violation of
40Section 23152 of the Vehicle Code, (C) towing or pushing
P9    1anything, or (D) operation of the vehicle on an unpaved road if
2the damage or loss is a direct result of the road or driving
3conditions.

4(2) Damage or loss occurs while the vehicle is (A) used for
5commercial hire, (B) used in connection with conduct that could
6be properly charged as a felony, (C) involved in a speed test or
7contest or in driver training activity, (D) operated by a person other
8than an authorized driver, or (E) operated outside the United States.

9(3) An authorized driver who has (A) provided fraudulent
10information to the rental company, or (B) provided false
11information and the rental company would not have rented the
12vehicle if it had instead received true information.

13(c) (1) A rental company that offers or provides a damage
14waiver for any consideration in addition to the rental rate shall
15clearly and conspicuously disclose the following information in
16the rental contract or holder in which the contract is placed and,
17also, in signs posted at the location where the renter signs the rental
18contract, and, for renters who are enrolled in the rental company’s
19membership program, in a sign that shall be posted in a location
20clearly visible to those renters as they enter the location where
21their reserved rental vehicles are parked or near the exit of the bus
22or other conveyance that transports the enrollee to a reserved
23vehicle: (A) the nature of the renter’s liability, such as liability for
24all collision damage regardless of cause, (B) the extent of the
25renter’s liability, such as liability for damage or loss up to a
26specified amount, (C) the renter’s personal insurance policy or the
27credit card used to pay for the vehicle rental transaction may
28provide coverage for all or a portion of the renter’s potential
29liability, (D) the renter should consult with his or her insurer to
30determine the scope of insurance coverage, including the amount
31of the deductible, if any, for which the renter is obligated, (E) the
32renter may purchase an optional damage waiver to cover all
33liability, subject to whatever exceptions the rental company
34expressly lists that are permitted under subdivision (b), and (F)
35the range of charges for the damage waiver.

36(2) In addition to the requirements of paragraph (1), a rental
37company that offers or provides a damage waiver shall orally
38disclose to all renters, except those who are participants in the
39rental company’s membership program, that the damage waiver
40may be duplicative of coverage that the customer maintains under
P10   1his or her own policy of motor vehicle insurance. The renter shall
2acknowledge receipt of the oral disclosure near that part of the
3contract where the renter indicates, by the renter’s own initials,
4his or her acceptance or declination of the damage waiver. Adjacent
5to that same part, the contract also shall state that the damage
6waiver is optional. Further, the contract for these renters shall
7include a clear and conspicuous written disclosure that the damage
8waiver may be duplicative of coverage that the customer maintains
9under his or her own policy of motor vehicle insurance.

10(3) (A) The following is an example, for purposes of illustration
11and not limitation, of a notice fulfilling the requirements of
12paragraph (1) for a rental company that imposes liability on the
13renter for collision damage to the full value of the vehicle:


15“NOTICE ABOUT YOUR FINANCIAL RESPONSIBILITY
16AND OPTIONAL DAMAGE WAIVER

17You are responsible for all collision damage to the rented vehicle
18even if someone else caused it or the cause is unknown. You are
19responsible for the cost of repair up to the value of the vehicle,
20and towing, storage, and impound fees.

21Your own insurance, or the issuer of the credit card you use to
22pay for the vehicle rental transaction, may cover all or part of your
23financial responsibility for the rented vehicle. You should check
24with your insurance company, or credit card issuer, to find out
25about your coverage and the amount of the deductible, if any, for
26which you may be liable.

27Further, if you use a credit card that provides coverage for your
28potential liability, you should check with the issuer to determine
29if you must first exhaust the coverage limits of your own insurance
30before the credit card coverage applies.

31The rental company will not hold you responsible if you buy a
32damage waiver. But a damage waiver will not protect you if (list
33exceptions).”


35(B) When the notice in subparagraph (A) is printed in the rental
36contract or holder in which the contract is placed, the following
37shall be printed immediately following the notice:


39“The cost of an optional damage waiver is $____ for every (day
40or week).”


P11   2(C) When the notice in subparagraph (A) appears on a sign, the
3following shall appear immediately adjacent to the notice:


5“The cost of an optional damage waiver is $____ to $____ for
6every (day or week), depending upon the vehicle rented.”


8(d) Notwithstanding any other law, a rental company may sell
9a damage waiver subject to the following rate limitations for each
10full or partial 24-hour rental day for the damage waiver:

11(1) For rental vehicles that the rental company designates as an
12“economy car,” “compact car,” or another term having similar
13meaning to the two smallest body-size categories of vehicles
14established by the Association of Car Rental Industry Systems
15Standards for North America, as of January 1, 2014, when offered
16for rental, the rate shall not exceed eleven dollars ($11).

17(2) For rental vehicles that the rental company designates as an
18“intermediate car,” “standard car,” or “full-size car,” or another
19term having similar meaning to the next three body-size categories
20of vehicles established by the Association of Car Rental Industry
21Systems Standards for North America, as of January 1, 2014, and
22that are also either vehicles of the next model-year, or not older
23than the previous year’s model, when offered for rental, the rate
24shall not exceed seventeen dollars ($17). For rental vehicles that
25are older than the previous year’s model-year, the rate shall not
26exceed eleven dollars ($11).

27

1939.13.  

(a) A rental company shall not require the purchase
28of a damage waiver, optional insurance, or another optional good
29or service.

30(b) A rental company shall not engage in any unfair, deceptive,
31or coercive conduct to induce a renter to purchase the damage
32waiver, optional insurance, or another optional good or service,
33including conduct such as, but not limited to, refusing to honor
34the renter’s reservation, limiting the availability of vehicles,
35requiring a deposit, or debiting or blocking the renter’s credit card
36account for a sum equivalent to a deposit if the renter declines to
37purchase the damage waiver, optional insurance, or another
38optional good or service.

39

1939.15.  

(a) In the absence of express permission granted by
40the renter subsequent to damage to, or loss of, the rented vehicle,
P12   1a rental company shall not seek to recover any portion of a claim
2arising out of damage to, or loss of, the vehicle by processing a
3credit card charge or causing a debit or block to be placed on the
4renter’s credit card account.

5(b) A rental company shall not engage in any unfair, deceptive,
6or coercive tactics in attempting to recover or in recovering on any
7claim arising out of damage to, or loss of, the rented vehicle.

8

1939.17.  

A customer facility charge or alternative customer
9facility charge may be collected by a rental company pursuant to
10Section 50474.3begin delete or 50474.4end delete of the Government Code.

11

1939.19.  

(a) When providing a quote, or imposing charges for
12a rental, the rental company may separately state the rental rate,
13additional mandatory charges, if any, and a mileage charge, if any,
14that a renter must pay to hire or lease the vehicle for the period of
15time to which the rental rate applies. A rental company shall not
16charge in addition to the rental rate, additional mandatory charges,
17or a mileage charge, as those may be applicable, any other fee that
18is required to be paid by the renter as a condition of hiring or
19leasing the vehicle.

20(b) If additional mandatory charges are imposed, the rental
21company shall do each of the following:

22(1) At the time the quote is given, provide the person receiving
23the quote with a good faith estimate of the rental rate and all
24additional mandatory charges, as well as the total charges for the
25entire rental. The total charges, if provided on an Internet Web site
26page, shall be displayed in a typeface at least as large as any rental
27rate disclosed on that page and shall be provided on a page that
28the person receiving the quote may reach by following a link
29directly from the page on which the rental rate is first provided.
30The good faith estimate may exclude mileage charges and charges
31for optional items that cannot be determined prior to completing
32the reservation based upon the information provided by the person.

33(2) At the time and place the rental commences, clearly and
34conspicuously disclose in the rental contract, or that portion of the
35contract that is provided to the renter, the total of the rental rate
36and additional mandatory charges, for the entire rental, exclusive
37 of charges that cannot be determined at the time the rental
38commences. Charges imposed pursuant to this paragraph shall be
39no more than the amount of the quote provided in a confirmed
P13   1reservation, unless the person changes the terms of the rental
2contract subsequent to making the reservation.

3(3) Provide each person, other than those persons within the
4rental company, offering quotes to actual or prospective customers
5access to information about additional mandatory charges, as well
6as access to information about when those charges apply. Any
7person providing quotes to actual or prospective customers for the
8hire or lease of a vehicle from a rental company shall provide the
9quotes in the manner described in paragraph (1).

10(c) In addition to the rental rate, taxes, additional mandatory
11charges, if any, and mileage charges, if any, a rental company may
12charge for an item or service provided in connection with a
13particular rental transaction if the renter could have avoided
14incurring the charge by choosing not to obtain or utilize the
15optional item or service. Items and services for which the rental
16company may impose an additional charge include, but are not
17limited to, optional insurance and accessories requested by the
18renter, service charges incident to the renter’s optional return of
19the vehicle to a location other than the location where the vehicle
20was hired or leased, and charges for refueling the vehicle at the
21conclusion of the rental transaction in the event the renter did not
22return the vehicle with as much fuel as was in the fuel tank at the
23beginning of the rental. A rental company also may impose an
24additional charge based on reasonable age criteria established by
25the rental company.

26(d) A rental company shall not charge a fee for authorized
27drivers in addition to the rental charge for an individual renter.

28(e) If a rental company states a rental rate in print advertisement
29or in a quotation, the rental company shall disclose clearly in that
30advertisement or quotation the terms of mileage conditions relating
31to the advertisedbegin delete forend deletebegin insert orend insert quoted rental rate, including, but not limited
32to, to the extent applicable, the amount of mileage and gas charges,
33the number of miles for which no charges will be imposed, and a
34description of geographic driving limitations within the United
35States and Canada.

36(f) All rate advertisements shall include a disclaimer, which
37shall be prominently displayed, providing that additional mandatory
38charges may be imposed, including, but not limited to, airport fees,
39 tourism fees, vehicle license recovery fees, or other government
40imposed taxes or fees, and indicating that this information,
P14   1including an estimate of the total rental cost, is displayed on the
2rental company’s Internet Web site. All rate advertisements shall
3also include a statement that additional charges may apply if an
4optional good or service, such as a damage waiver, is purchased.

5(g) If any person or entity other than a rental company, including
6a passenger carrier or a seller of travel services, advertises a rental
7rate for a vehicle rental that includes additional mandatory charges,
8that person or entity shall clearly disclose the existence and amount
9of the charges. If a rental company provides the person or entity
10with rental rate and additional mandatory charges information, the
11rental car company is not responsible for the failure of that person
12or entity to comply with this subdivision.

13(h) If a rental company delivers a vehicle to a renter at a location
14other than the location where the rental company normally carries
15on its business, the rental company shall not charge the renter an
16amount for the rental for the period before the delivery of the
17vehicle. If a rental company picks up a rented vehicle from a renter
18at a location other than the location where the rental company
19normally carries on its business, the rental company shall not
20charge the renter an amount for the rental for the period after the
21renter notifies the rental company to pick up the vehicle.

22(i) Except as otherwise permitted pursuant to the customer
23facility charge, a rental company shall not separately charge, in
24addition to the rental rate, a fee for transporting the renter to a
25location where the rented vehicle will be delivered to the renter.

26

1939.21.  

(a) For purposes of this section:

27(1) “Additional charges” means charges other than a per period
28base rental rate established by the business program.

29(2) “Business program” means either of the following:

30(A) A contract between a rental company and a business
31program sponsor that has established the per period base rental
32rate, and any other material terms relating to additional charges,
33on which the rental company will rent passenger vehicles to persons
34authorized by the sponsor.

35(B) A plan, program, or other arrangement established by a
36rental company at the request of, or with the consent of, a business
37program sponsor under which the rental company offers to rent
38passenger vehicles to persons authorized by the sponsor at per
39period base rental rates, and any other material terms relating to
P15   1additional charges, that are not the same as those generally offered
2by the rental company to the public.

3(3) “Business program sponsor” means a legal entity, other than
4a natural person, that is a corporation, limited liability company,
5or partnership.

6(4) “Business renter” means, for any business program sponsor,
7a person who is authorized by the sponsor, through the use of an
8identifying number or program name or code, to enter into a rental
9contract under the sponsor’s business program. In no case shall
10the term “business renter” include a person renting as any of the
11following:

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

13(B) The purchaser of a voucher or other prepaid rental
14arrangement from a person, including a tour operator, engaged in
15the business of reselling those vouchers or prepaid rental
16arrangements to the general public.

17(C) An individual whose vehicle rental is eligible for
18reimbursement in whole or in part as a result of the person being
19insured or provided coverage under a policy of insurance issued
20by an insurance company.

21(D) An individual whose vehicle rental is eligible for
22reimbursement in whole or in part as a result of the person
23purchasing passenger vehicle repair services from a person licensed
24to perform such services.

25(5) “Qualified business rental” under a business program
26 established for a business program sponsor by a rental company
27means the rental of a passenger vehicle under the business program
28if either:(A) in the 12-month period ending on the date of the rental
29or in the calendar year immediately preceding the year in which
30the rental occurs, the rentals under all business programs
31established by the rental company for the business program sponsor
32and its affiliates produced gross rental revenues in excess of
33twenty-five thousand dollars ($25,000) or (B) the rental company
34in good faith estimates that rentals under all the business programs
35established by the rental company for the business program sponsor
36and its affiliates will produce gross rental revenues in excess of
37twenty-five thousand dollars ($25,000) in the 12-month period
38commencing with the date of the rental or in the calendar year in
39which the rental occurs. The rental company has the burden of
P16   1establishing by objectively verifiable evidence that the rental was
2a qualified business rental.

3(6) “Quote” means telephonic, in-person, and
4computer-transmitted quotations.

5(b) Notwithstanding any provision to the contrary contained in
6Section 1939.19 or 1939.23, a rental company may, in connection
7with the qualified business rental of a passenger vehicle to a
8business renter of a business program sponsor under the sponsor’s
9business program, do both of the following:

10(1) Separately quote additional charges for the rental if, at the
11time the quote is provided, the person receiving the quote is also
12provided a good faith estimate of the total of all the charges for
13the entire rental. The estimate may exclude mileage charges and
14charges for optional items and services that cannot be determined
15prior to completing the reservation based upon the information
16 provided by the renter.

17(2) Separately impose additional charges for the rental, if the
18rental contract, or another document provided to the business renter
19at the time and place the rental commences, clearly and
20conspicuously discloses the total of all the charges for the entire
21rental, exclusive of charges that cannot be determined at the time
22the rental commences.

23(c) A renter may bring an action against a rental company for
24the recovery of damages and appropriate equitable relief for a
25violation of this section. The prevailing party shall be entitled to
26recover reasonable attorney’s fees and costs.

27(d) Any waiver of any of the provisions of this section shall be
28void and unenforceable as contrary to public policy.

29(e) This section shall not be interpreted to mean that a rental
30company is not required to comply with the requirements of
31subdivisions (c) to (h), inclusive, of Section 1939.19.

32

1939.23.  

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

36(1) (A) When the equipment is used by the rental company
37only for the purpose of locating a stolen, abandoned, or missing
38rental vehicle after one of the following:

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

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

7(iii) The rental company discovers the rental vehicle has been
8stolen or abandoned, and, if stolen, the rental company shall report
9the vehicle stolen to law enforcement by filing a stolen vehicle
10report, unless law enforcement has already informed the rental
11company that the vehicle is missing or has been stolen or
12abandoned.

13(B) If electronic surveillance technology is activated pursuant
14to subparagraph (A), a rental company shall maintain a record, in
15either electronic or written form, of information relevant to the
16activation of that technology. That information shall include the
17rental agreement, including the return date, and the date and time
18the electronic surveillance technology was activated. The record
19shall also include, if relevant, a record of written or other
20communication with the renter, including communications
21regarding extensions of the rental, police reports, or other written
22communication with law enforcement officials. The record shall
23be maintained for a period of at least 12 months from the time the
24record is created and shall be made available upon the renter’s
25request. The rental company shall maintain and furnish explanatory
26codes necessary to read the record. A rental company shall not be
27required to maintain a record if electronic surveillance technology
28is activated to recover a rental vehicle that is stolen or missing at
29a time other than during a rental period.

30(2) In response to a specific request from law enforcement
31pursuant to a subpoena or search warrant.

32(b) Subdivision (a) does not prohibit a rental company from
33equipping rental vehicles with any of the following:

34(1) GPS-based technology that provides navigation assistance
35to the occupants of the rental vehicle, if the rental company does
36not use, access, or obtain information relating to the renter’s use
37of the rental vehicle that was obtained using that technology, except
38for the purposes of discovering or repairing a defect in the
39technology and the information may then be used only for that
40purpose.

P18   1(2) Electronic surveillance technology that allows for the remote
2locking or unlocking of the vehicle at the request of the renter, if
3the rental company does not use, access, or obtain information
4relating to the renter’s use of the rental vehicle that was obtained
5using that technology, except as necessary to lock or unlock the
6vehicle.

7(3) Electronic surveillance technology that allows the company
8to provide roadside assistance, such as towing, flat tire, or fuel
9services, at the request of the renter, if the rental company does
10not use, access, or obtain information relating to the renter’s use
11of the rental vehicle that was obtained using that technology except
12as necessary to provide the requested roadside assistance.

13(c) Subdivision (a) does not prohibit a rental company from
14obtaining, accessing, or using information from electronic
15surveillance technology for the sole purpose of determining the
16date and time the vehicle departs from and is returned to the rental
17company, and the total mileage driven and the vehicle fuel level
18of the returned vehicle. The information obtained or accessed from
19this electronic surveillance technology shall only be used for the
20purpose described in this subdivision.

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

24

1939.25.  

A renter may bring an action against a rental company
25for the recovery of damages and appropriate equitable relief for a
26violation of this chapter, except for Sections 1939.21, 1939.35,
27and 1939.37. The prevailing party shall be entitled to recover
28reasonable attorney’s fees and costs.

29

1939.27.  

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

33

1939.29.  

A waiver of any of the provisions of this chapter,
34except for Sections 1939.21, 1939.35, and 1939.37, shall be void
35and unenforceable as contrary to public policy.

36

1939.31.  

(a) A rental company’s disclosure requirements shall
37be satisfied for renters who are enrolled in the rental company’s
38membership program if all of the following conditions are met:

39(1) Prior to the enrollee’s first rental as a participant in the
40program, the renter receives, in writing, the following:

P19   1(A) All of the disclosures required by paragraph (1) of
2subdivision (c) of Section 1939.09, including the terms and
3conditions of the rental agreement then in effect.

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

10(2) At the commencement of each rental period, the renter is
11provided, on the rental record or the folder in which it is inserted,
12with a printed notice stating that he or she had either previously
13selected or declined an optional damage waiver and that the renter
14has the right to change preferences.

15(3) (A) At the commencement of each rental period, the rental
16company provides, on the rearview mirror, a hanger on which a
17statement is printed, in a box, in at least 12-point boldface type,
18notifying the renter that the collision damage waiver offered by
19the rental company may be duplicative of coverage that the
20customer maintains under his or her own policy of motor vehicle
21insurance. If it is not feasible to hang the statement from the
22rearview mirror, it shall be hung from the steering wheel.

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


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

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


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

3(b) (1) This section is not effective unless an employee is
4available pursuant to paragraph (5) of subdivision (k) of Section
51939.01 is actually present at the required location.

6(2) This section does not relieve the rental company from the
7disclosures required to be made within the text of a contract or
8holder in which the contract is placed; in or on an advertisement
9containing a rental rate; or in a telephonic, in-person, or
10computer-transmitted quotation or reservation.

11

1939.33.  

(a) When a rental company enters into a rental
12agreement in the state for the rental of a vehicle to any renter who
13is not a resident of this country and, as part of, or associated with,
14the rental agreement, the renter purchases liability insurance, as
15defined in subdivision (b) of Section 1758.85 of the Insurance
16Code, from the rental company in its capacity as a rental vehicle
17agent for an authorized insurer, the rental company shall be
18authorized to accept, and, if served as set forth in this section, shall
19accept, service of a summons and complaint and any other required
20documents against the foreign renter for any accident or collision
21resulting from the operation of the rental vehicle within the state
22during the rental period. If the rental company has a registered
23agent for service of process on file with the Secretary of State,
24process shall be served on the rental company’s registered agent,
25either by first-class mail, return receipt requested, or by personal
26service.

27(b) Within 30 days of acceptance of service of process, the rental
28company shall provide a copy of the summons and complaint and
29any other required documents served in accordance with this
30section to the foreign renter by first-class mail, return receipt
31requested.

32(c) Any plaintiff, or his or her representative, who elects to serve
33the foreign renter by delivering a copy of the summons and
34complaint and any other required documents to the rental company
35pursuant to subdivision (a) shall agree to limit his or her recovery
36against the foreign renter and the rental company to the limits of
37the protection extended by the liability insurance.

38(d) Notwithstanding the requirements of Sections 17450 to
3917456, inclusive, of the Vehicle Code, service of process in
P21   1compliance with subdivision (a) shall be deemed a valid and
2effective service.

3(e) Notwithstanding any other law, the requirement that the
4rental company accept service of process pursuant to subdivision
5(a) shall not create any duty, obligation, or agency relationship
6other than that provided in subdivision (a).

7

1939.35.  

(a) (1) A rental company shall provide a renter of a
815-passenger van with a copy of the United States Department of
9Transportation, National Highway Traffic Safety Administration’s
10consumer advisory for 15-passenger vans titled “Reducing the
11Risk of Rollover Crashes” or, if that advisory is updated, a copy
12of the updated advisory. The renter shall acknowledge receipt of
13that copy by signing an acknowledgment of receipt on the rental
14agreement or on an attached form.

15(2) If the rental of that 15-passenger van is for a business
16purpose or use, the rental company shall also provide on the
17document described in paragraph (1) that only an employee with
18the proper licensing may drive that vehicle. The renter shall
19acknowledge the receipt thereof in the same manner as described
20in paragraph (1).

21(b) (1) Except as provided in paragraph (2), for purposes of
22this section, a “15-passenger van” means any van manufactured
23to accommodate 15 passengers, including the driver, regardless
24of whether that van has been altered to accommodate fewer than
2515 passengers.

26(2) For purposes of this section, a “15-passenger van” does not
27mean a 15-passenger van with dual rear wheels that has a gross
28weight rating equal to, or greater than, 11,500 pounds.

29

1939.37.  

A rental company is not subject to the requirements
30of Section 14608 of the Vehicle Code if the rental is subject to the
31terms of a membership agreement that allows the renter to gain
32physical access to a vehicle without a key through use of a code,
33key card, or by other means that allow the vehicle to be accessed
34at a remote location, or at a business location of the rental company
35outside of that location’s regular hours of operation.

36

SEC. 6.  

Section 50474.1 of the Government Code is amended
37to read:

38

50474.1.  

(a) An airport operated by a city and county may
39require a rental car company, in writing, to collect a fee from its
40customers on behalf of the airport for the use of an
P22   1airport-mandated common use busing system or light rail transit
2system operated for the movement of passengers between the
3terminal and a consolidated on-airport rental car facility. If a rental
4car company is required pursuant to this section to collect a fee,
5the following conditions shall apply:

6(1) The fees shall be calculated on a per contract basis.

7(2) All fees collected for this purpose constitute debts owed to
8the airport by the collecting party. The debts are due and payable
9to the airport quarterly or at any other interval the airport may
10establish to facilitate collection and insure payment.

11(3) The fee is a user fee, not a tax.

12(4) Revenues collected from the fee may not exceed the
13reasonable costs of providing the busing and light rail transit
14service and shall not be used for any other purpose.

15(b) Notwithstanding any other law, including, but not limited
16to, Chapter 1.5 (commencing with Section 1939.01) of Title 5 of
17Part 4 of Division 3 of the Civil Code, a rental car company that
18is required to collect fees under this section shall do all of the
19following:

20(1) Collect the fee from those of its customers subject to the fee
21as required in subdivision (a).

22(2) Clearly disclose the existence of the fee in any radio,
23television, or print advertisement that states a rental rate applicable
24to an airport at which the fee is to be imposed, and the amount of
25the fee at the airport where it is imposed, or a range of fees if the
26fee is imposed at more than one airport.

27(3) Clearly disclose the existence of the fee in a telephonic,
28in-person, or computer-transmitted quotation that states a rental
29rate applicable to an airport at which the fee is to be imposed and
30the amount of the fee at the airport where it is imposed.

31(4) Separately identify the fee on its rental agreement.

32

SEC. 7.  

Section 50474.21 is added to the Government Code,
33to read:

34

50474.21.  

(a) begin deleteExcept as provided in Section 50474.22, for end deletebegin insertForend insert
35 purposes of this article, “customer facility charge” means any fee,
36including an alternative fee, required by anbegin delete airport, other than Los
37Angeles International Airport,end delete
begin insert airportend insert to be collected by a rental
38company from a renter for any of the following purposes:

39(1) To finance, design, and construct consolidated airport vehicle
40rental facilities.

P23   1(2) To finance, design, construct, and operate common-use
2transportation systems that move passengers between airport
3terminals and those consolidated vehicle rental facilities, and
4acquire vehicles for use in that system.

5(3) To finance, design, and construct terminal modifications
6solely to accommodate and provide customer access to
7common-use transportation systems. The fees designated as a
8customer facility charge shall not otherwise be used to pay for
9terminal expansion, gate expansion, runway expansion, changes
10in hours of operation, or changes in the number of flights arriving
11or departing from the airport.

12(b) The aggregate amount to be collected shall not exceed the
13reasonable costs, as determined by an audit by an independent
14auditor paid for by the airport, to finance, design, and construct
15those facilities. The auditor shall independently examine and
16substantiate the necessity for, and the amount of, the customer
17facility charge, including whether the airport’s actual or projected
18costs are supported and justified, any steps the airport may take to
19limit costs, potential alternatives for meeting the airport’s revenue
20needs other than the collection of the fee, and whether and to what
21extent rental companies or other businesses or individuals using
22the facility or common-use transportation system may pay for the
23costs associated with these facilities and systems apart from the
24fee from rental customers, or whether the airport did not comply
25with any provision of this section. Copies of the audit shall be
26provided to the Assembly and Senate Committees on Judiciary,
27the Assembly Committee on Transportation, and the Senate
28Committee on Transportation and Housing and shall be posted on
29the airport’s Internet Web site. In the case of a customer facility
30charge for a common-use transportation system, the audit shall
31also consider the reasonable costs of providing the transit system
32or busing network pursuant to paragraph (1) of subdivision (a).
33Any audit required by this subdivision may be included as a part
34of an audit of an airport’s finances.

35(c) Except as provided in subdivision (d), the authorization
36given pursuant to this article for an airport to impose a customer
37facility charge shall become inoperative when the bonds used for
38financing are paid.

39(d) If a bond or other form of indebtedness is not used for
40financing, or a bond or other form of indebtedness used for
P24   1financing has been paid, the Oakland International Airport may
2require the collection of a customer facility charge for a period of
3up to 10 years from the imposition of the charge for the purposes
4allowed by, and subject to the conditions imposed by, this article.

begin delete

5(e) This section does not apply to any fee, including an
6alternative fee, required by the Los Angeles International Airport
7to be collected by a rental company pursuant to Section 50474.22.

end delete
begin delete
8

SEC. 8.  

Section 50474.22 is added to the Government Code,
9to read:

10

50474.22.  

(a) For purposes of this article, “customer facility
11charge” means any fee, including an alternative fee, required by
12the Los Angeles International Airport to be collected by a rental
13company from a renter for any of the following purposes:

14(1) To finance, design, construct, or otherwise improve
15consolidated airport vehicle rental facilities.

16(2) To finance, design, construct, operate, maintain, or otherwise
17improve common-use transportation systems that move passengers
18between airport terminals and those consolidated vehicle rental
19facilities, and acquire vehicles for use in that system.

20(3) To finance, design, construct, or otherwise improve terminal
21modifications solely to accommodate and provide customer access
22to common-use transportation systems. The fees designated as a
23customer facility charge shall not otherwise be used to pay for
24terminal expansion, gate expansion, runway expansion, changes
25in hours of operation, or changes in the number of flights arriving
26or departing from the airport.

27(b) The aggregate amount to be collected shall not exceed the
28reasonable costs, as determined by an audit by an independent
29auditor paid for by the airport, to finance, design, construct,
30operate, maintain, or otherwise improve, as applicable, those
31facilities, systems, and modifications. The auditor shall
32independently examine and substantiate the necessity for, and the
33amount of, the customer facility charge, including whether the
34airport’s actual or projected costs are supported and justified, any
35steps the airport may take to limit costs, potential alternatives for
36meeting the airport’s revenue needs other than the collection of
37the fee, and whether and to what extent rental companies or other
38businesses or individuals using the facility or common-use
39transportation system may pay for the costs associated with these
40facilities and systems apart from the fee from rental customers, or
P25   1whether the airport did not comply with any provision of this
2section. Copies of the audit shall be provided to the Assembly and
3Senate Committees on Judiciary, the Assembly Committee on
4Transportation, and the Senate Committee on Transportation and
5Housing and shall be posted on the airport’s Internet Web site. In
6the case of a customer facility charge for a common-use
7transportation system, the audit also shall consider the reasonable
8costs of providing the transit system or busing network pursuant
9to paragraph (1) of subdivision (a). Any audit required by this
10subdivision may be included as a part of an audit of an airport’s
11finances.

12(c) The authorization under to this section for an airport to
13impose a customer facility charge shall become inoperative when
14bonds, capital contributions, availability payment contracts, lease
15agreements, or other forms for financing are paid or reimbursed.

16(d) This section shall not apply to any fee, including an
17alternative fee, required by an airport other than the Los Angeles
18International Airport to be collected by a rental company from a
19renter.

end delete
20

begin deleteSEC. 9.end delete
21
begin insertSEC. 8.end insert  

Section 50474.3 is added to the Government Code, to
22read:

23

50474.3.  

(a) A customer facilitybegin delete charge, as defined in Section
2450474.21,end delete
begin insert chargeend insert may be collected by a rental company under the
25following circumstances:

26(1) Collection of the fee by the rental company is required by
27an airport operated by a city, a county, a city and county, a joint
28powers authority, a special district, or the San Diego County
29Regional Airport Authority formed pursuant to Division 17
30(commencing with Section 170000) of the Public Utilities Code.

31(2) The fee is calculated on a per contract basis or as provided
32in subdivision (b).

33(3) The fee is a user fee, not a tax imposed upon real property
34or an incident of property ownership under Articlebegin delete XIII Dend deletebegin insert XIIIend insertbegin insertend insertbegin insertDend insert
35 of the California Constitution.

36(4) Except as otherwise provided in paragraph (5), the fee shall
37be ten dollars ($10) per contract or the amount provided in
38subdivision (b).

39(5) The fee for a consolidated rental vehicle facility shall be
40collected only from customers of on-airport rental vehicle
P26   1companies. If the fee imposed by the airport is for both a
2consolidated rental vehicle facility and a common-use
3transportation system, the fee collected from customers of
4on-airport rental vehicle companies shall be ten dollars ($10) or
5the amount provided in subdivision (b), but the fee imposed on
6customers of off-airport rental vehicle companies who are
7transported on the common-use transportation system is only that
8amount that is proportionate to the costs of the common-use
9transportation system. The fee is uniformly applied to each class
10of on-airport or off-airport customers, provided that the airport
11requires off-airport customers to use the common-use transportation
12system. For purposes of this paragraph, “on-airport rental vehicle
13company” means a rental company operating under an airport
14property lease or an airport concession or license agreement whose
15customers use or will use the consolidated rental vehicle facility
16and the fee as to those customers is a user fee described in
17paragraph (3).

18(6) Revenues collected from the fee do not exceed the reasonable
19costs of financing, designing, and constructing the facility and
20financing, designing, constructing, and operating any common-use
21transportation system, or acquiring vehicles for use in that system,
22and are not used for any other purpose.

23(7) The fee is separately identified on the rental agreement.

24(8) This subdivision does not apply to fees which are governed
25by Section 50474.1 or Section 57.5 of the San Diego Unified Port
26District Act (Chapter 67 of the First Extraordinary Session of the
27Statutes of 1962).

28(b) Any airport may require rental companies to collect an
29alternative customer facility charge, as defined in Section 50474.21,
30under the following conditions:

31(1) The airport first conducts a publicly noticed hearing pursuant
32to the Ralph M. Brown Act (Chapter 9 (commencing with Section
3354950) of Part 1 of Division 2) to review the costs of financing
34the design and construction of a consolidated rental vehicle facility
35and the design, construction, and operation of any common-use
36transportation system in which all of the following occur:

37(A) The airport establishes the amount of revenue necessary to
38finance the reasonable costs of designing and constructing a
39consolidated rental vehicle facility and to design, construct, and
40operate any common-use transportation system, or acquire vehicles
P27   1for use in that system, based on evidence presented during the
2hearing.

3(B) The airport finds, based on evidence presented during the
4hearing, that the fee authorized in subdivision (a) will not generate
5sufficient revenue to finance the reasonable costs of designing and
6constructing a consolidated rental vehicle facility and of designing,
7 constructing, and operating any common-use transportation system,
8or acquire vehicles for use in that system.

9(C) The airport finds that the reasonable cost of the project
10requires the additional amount of revenue that would be generated
11by the proposed daily rate, including any rate increase, authorized
12pursuant to this paragraph.

13(D) The airport outlines each of the following:

14(i) Steps it has taken to limit costs.

15(ii) Other potential alternatives for meeting its revenue needs
16other than the collection of the fee.

17(iii) The extent to which rental companies or other businesses
18or individuals using the facility or common-use transportation
19system will pay for the costs associated with these facilities and
20systems apart from the fee collected from rental customers.

21(2) The airport may not require the fee authorized in this
22subdivision to be collected at any time that the fee authorized in
23subdivision (a) is being collected.

24(3) Pursuant to the procedure set forth in this subdivision, the
25fee may be collected at a rate charged on a per-day basis subject
26to the following conditions:

27(A) Commencing January 1, 2011, the amount of the fee may
28not exceed six dollars ($6) per day.

29(B) Commencing January 1, 2014, the amount of the fee may
30not exceed seven dollars and fifty cents ($7.50) per day.

31(C) Commencing January 1, 2017, and thereafter, the amount
32of the fee may not exceed nine dollars ($9) per day.

33(D) At no time shall the fee authorized in this paragraph be
34collected from any customer for more than five days for each
35individual rental vehicle contract.

36(E) An airport subject to this paragraph shall initiate the process
37for obtaining the authority to require or increase the alternative
38fee no later than January 1, 2018. Any airport that obtains the
39authority to require or increase an alternative fee shall be authorized
P28   1to continue collecting that fee until the fee authorization becomes
2inoperative pursuant to subdivision (c) of Section 50474.21.

3(4) For any airport seeking to require rental companies to collect
4an alternative customer facility charge pursuant to this subdivision
5the following provisions apply:

6(A) The airport shall provide reports on an annual basis to the
7Senate and Assembly Committees on Judiciary detailing all of the
8following:

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

10(ii) How the funds are being spent.

11(iii) The amount of and reason for any changes in the airport’s
12budget or financial needs for the facility or common-use
13transportation system.

14(B) (i) The airport shall complete an independent audit as
15required by subdivision (b) of Section 50474.21 prior to the initial
16collection of the customer facility charge. Copies of the audit shall
17be provided to the Assembly and Senate Committees on Judiciary,
18the Assembly Committee on Transportation, and the Senate
19Committee on Transportation and Housing and shall be posted on
20the airport’s Internet Web site.

21(ii) Prior to any increase pursuant to subdivision (b), the airport
22shall update the information provided in the initial collection audit
23completed pursuant to clause (i). Copies of the updated audit shall
24be provided to the Assembly and Senate Committees on Judiciary,
25the Assembly Committee on Transportation, and the Senate
26Committee on Transportation and Housing, and shall be posted
27on the airport’s Internet Web site.

28(iii) An audit shall be completed every three years after initial
29collection if the customer facility charge is collected for the purpose
30of operating a common-use transportation system or to acquire
31vehicles for use in the system pursuant to paragraph (2) of
32subdivision (a) of Section 50474.21. A regularly conducted audit
33of airport finances that includes the customer facility charge
34information, that satisfies the requirements of subdivision (b) of
35Section 50474.21, and is produced in accordance with the generally
36accepted accounting principles of the Government Accounting
37Standards Board, shall satisfy the requirements of this clause. This
38obligation shall continue until the fee authorization becomes
39inoperative pursuant to subdivision (c) of Section 50474.21. The
40information reported pursuant to this clause shall be compiled into
P29   1one document, shall be provided to the Assembly and Senate
2Committees on Judiciary, the Assembly Committee on
3Transportation, and the Senate Committee on Transportation and
4Housing and shall be posted on the airport’s Internet Web site
5accessible to the public. The information reported shall be
6contained within one easily accessible page contained within the
7airport’s Internet Web site.

8(iv) This section shall not be construed to require an airport to
9audit a common-use transportation system not financed by a
10customer facility charge and used for the purposes permitted
11pursuant to paragraph (2) of subdivision (a) of Section 50474.21.

12(v) The airport shall post on the airport’s Internet Web site
13copies of the completed audits required by this subparagraph for
14a period of six years following the audit’s completion.

15(C) Use of proceeds of any bonds backed by alternative customer
16facility charges shall be limited to construction and design of the
17consolidated rental vehicle facility, terminal modifications, and
18operating costs of the common-use transportation system, as
19specified in Section 50474.21.

20(c) Notwithstanding any other provision of law, including, but
21not limited to, Part 1 (commencing with Section 6001) to Part 1.7
22(commencing with Section 7280), inclusive, of Division 2 of the
23Revenue and Taxation Code, the fees collected pursuant to this
24section, or another law whereby a local agency operating an airport
25requires a rental car company to collect a facility financing fee
26from its customers, are not subject to sales, use, or transaction
27taxes.

begin delete
28

SEC. 10.  

Section 50474.4 is added to the Government Code,
29to read:

30

50474.4.  

(a) A customer facility charge, as defined in Section
3150474.22, may be collected by a rental company under the
32following circumstances:

33(1) Collection of the fee by the rental company is required by
34Los Angeles International Airport .

35(2) The fee is calculated on a per contract basis or as provided
36in subdivision (b).

37(3) The fee is a user fee, not a tax imposed upon real property
38or an incident of property ownership under Article XIII D of the
39California Constitution.

P30   1(4) Except as otherwise provided in paragraph (5), the fee shall
2be ten dollars ($10) per contract or the amount provided in
3subdivision (b).

4(5) The fee for a consolidated rental vehicle facility shall be
5collected only from customers of on-airport rental vehicle
6companies. If the fee imposed by the airport is for both a
7consolidated rental vehicle facility and a common-use
8transportation system, the fee collected from customers of
9on-airport rental vehicle companies shall be ten dollars ($10) or
10the amount provided in subdivision (b), but the fee imposed on
11customers of off-airport rental vehicle companies who are
12transported on the common-use transportation system is only that
13amount that is proportionate to the costs of the common-use
14transportation system. The fee is uniformly applied to each class
15of on-airport or off-airport customers, provided that the airport
16requires off-airport customers to use the common-use transportation
17system. For purposes of this paragraph, “on-airport rental vehicle
18company” means a rental company operating under an airport
19property lease or an airport concession or license agreement whose
20customers use or will use the consolidated rental vehicle facility
21and the fee as to those customers is a user fee described in
22paragraph (3).

23(6) Revenues collected from the fee do not exceed the reasonable
24costs of financing, designing, constructing, operating, or improving
25as applicable, a consolidated rental car facility, any common-use
26transportation system, and terminal modifications, and are not used
27for any other purpose.

28(7) The fee is separately identified on the rental agreement.

29(b) The Los Angeles International Airport may require rental
30companies to collect an alternative customer facility charge, as
31defined in Section 50474.22, under the following conditions:

32(1) The airport first conducts a publicly noticed hearing pursuant
33to the Ralph M. Brown Act (Chapter 9 (commencing with Section
3454950) of Part 1 of Division 2) to review the costs to finance,
35design, construct, maintain, or otherwise improve, as applicable,
36a consolidated rental vehicle facility, any common-use
37transportation system, and terminal modifications in which all of
38the following occur:

39(A) The airport establishes the amount of revenue reasonably
40necessary to finance the design, construction, operation,
P31   1maintenance, or other improvement, as applicable, of a
2consolidated rental vehicle facility, any common-use transportation
3system, and terminal modifications based on evidence presented
4during the hearing.

5(B) The airport finds, based on evidence presented during the
6hearing, that the fee authorized in subdivision (a) will not generate
7sufficient revenue to finance the design, construction, operation,
8maintenance, or other improvement, as applicable, of a
9consolidated rental vehicle facility, any common-use transportation
10system, and terminal modifications.

11(C) The airport finds that the reasonable cost of the project
12requires the additional amount of revenue that would be generated
13by the proposed daily rate, including any rate increase, authorized
14pursuant to this paragraph.

15(D) The airport outlines each of the following:

16(i) Steps it has taken to limit costs.

17(ii) Other potential alternatives for meeting its revenue needs
18other than the collection of the fee.

19(iii) The extent to which rental companies or other businesses
20or individuals using the facility or common-use transportation
21system will pay for the costs associated with these facilities and
22systems apart from the fee collected from rental customers.

23(2) The airport may not require the fee authorized in this
24subdivision to be collected at any time that the fee authorized in
25subdivision (a) is being collected.

26(3) Pursuant to the procedure set forth in this subdivision, the
27fee may be collected at a rate charged on a per-day basis subject
28to the following conditions:

29(A) Commencing January 1, 2011, the amount of the fee may
30not exceed six dollars ($6) per day.

31(B) Commencing January 1, 2014, the amount of the fee may
32not exceed seven dollars and fifty cents ($7.50) per day.

33(C) Commencing January 1, 2017, and thereafter, the amount
34of the fee may not exceed nine dollars ($9) per day.

35(D) At no time shall the fee authorized in this paragraph be
36collected from any customer for more than five days for each
37individual rental vehicle contract.

38(E) An airport subject to this paragraph shall initiate the process
39for obtaining the authority to require or increase the alternative
40fee no later than January 1, 2018. An airport that obtains the
P32   1authority to require or increase an alternative fee shall be authorized
2to continue collecting that fee until the fee authorization becomes
3inoperative pursuant to subdivision (c) of Section 50474.22.

4(4) For an airport seeking to require rental companies to collect
5an alternative customer facility charge pursuant to this subdivision,
6the following provisions apply:

7(A) The airport shall provide reports on an annual basis to the
8Senate and Assembly Committees on Judiciary detailing all of the
9following:

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

11(ii) How the funds are being spent.

12(iii) The amount of and reason for any changes in the airport’s
13budget or financial needs for the facility or common-use
14transportation system.

15(B) (i) The airport shall complete an independent audit as
16required by subdivision (b) of Section 50474.22 prior to the initial
17collection of the customer facility charge. Copies of the audit shall
18be provided to the Assembly and Senate Committees on Judiciary,
19the Assembly Committee on Transportation, and the Senate
20Committee on Transportation and Housing and shall be posted on
21the airport’s Internet Web site.

22(ii) Prior to any increase pursuant to subdivision (b), the airport
23shall update the information provided in the initial collection audit
24completed pursuant to clause (i). Copies of the updated audit shall
25be provided to the Assembly and Senate Committees on Judiciary,
26the Assembly Committee on Transportation, and the Senate
27Committee on Transportation and Housing, and shall be posted
28on the airport’s Internet Web site.

29(iii) An audit shall be completed every three years after initial
30collection if the customer facility charge is collected for the purpose
31of operating a common-use transportation system or to acquire
32vehicles for use in the system pursuant to paragraph (2) of
33 subdivision (a) of Section 50474.22. A regularly conducted audit
34of airport finances that includes the customer facility charge
35information, that satisfies the requirements of subdivision (b) of
36Section 50474.22, and is produced in accordance with the generally
37accepted accounting principles of the Government Accounting
38Standards Board, shall satisfy the requirements of this clause. This
39obligation shall continue until the fee authorization becomes
40inoperative pursuant to subdivision (c) of Section 50474.22. The
P33   1information reported pursuant to this clause shall be compiled into
2one document, shall be provided to the Assembly and Senate
3Committees on Judiciary, the Assembly Committee on
4Transportation, and the Senate Committee on Transportation and
5Housing and shall be posted on the airport’s Internet Web site
6accessible to the public. The information reported shall be
7contained within one easily accessible page contained within the
8airport’s Internet Web site.

9(iv) This section shall not be construed to require an airport to
10audit a common-use transportation system not financed by a
11customer facility charge and used for the purposes permitted
12pursuant to paragraph (2) of subdivision (a) of Section 50474.22.

13(v) The airport shall post on the airport’s Internet Web site
14copies of the completed audits required by this subparagraph for
15a period of six years following the audit’s completion.

16(C) Use of proceeds of any bonds backed by alternative customer
17facility charges shall be limited to the purposes specified in Section
1850474.22.

19(c) Notwithstanding any other provision of law, including, but
20not limited to, Part 1 (commencing with Section 6001) to Part 1.7
21(commencing with Section 7280), inclusive, of Division 2 of the
22Revenue and Taxation Code, the fees collected pursuant to this
23section, or another law whereby a local agency operating an airport
24requires a rental car company to collect a facility financing fee
25from its customers, are not subject to sales, use, or transaction
26taxes.

end delete


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