BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 2051

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          2051 (O'Donnell)

          As Amended  August 2, 2016

          Majority vote

          |ASSEMBLY:  | 78-0 | (May 12,      |SENATE: | 37-0 |(August 11,      |
          |           |      |2016)          |        |      |2016)            |
          |           |      |               |        |      |                 |
          |           |      |               |        |      |                 |

          Original Committee Reference:  JUD.

          SUMMARY:  Reorganizes the statute regulating rental car  
          agreements and modifies certain regulations that no longer  
          reflect prevailing practices in consumer and industry behavior.   
          Specifically, this bill:

          1)Repeals the existing statutory framework that governs  
            agreements between a rental car company and its customers and  
            replaces it with a new statutory framework that eliminates  
            duplicative and inoperative sections, adds and updates  
            definitions, and modifies certain substantive requirements, as  
            noted below. 

          2)Provides that if a person or entity other than a rental  
            company, including a passenger carrier or travel service,  
            advertises a rental rate for a vehicle that includes  
            additional mandatory charges, that person or entity shall  


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            clearly disclose the existence and amount of the charges.  If  
            a rental company provides the person or entity with a 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 the disclosure requirement.

          The Senate amendments: 

          1)Specify that a vehicle license recovery fee shall be  
            separately stated as a single charge in the quote and rental  

          2)Restore a provision requiring hangars on review mirrors that  
            give the renter a final notice of his or her damage waiver  
            options, as specified. 

          3)Restore existing law by extending the period after which a  
            rental company may use electronic surveillance technology from  
            three days to one week after failure to return by the  
            scheduled return date. 

          4)Eliminate a provision that allows the use of electronic  
            surveillance to determine the date and time the vehicle  
            departs from, or is returned to, the rental car company for  
            the sole purpose of commencing or concluding the rental.

          5)Eliminate provisions authorizing specified airport facility  

          EXISTING LAW: 

          1)Sets forth general rules governing contracts between rental  
            car companies and their customers on a variety of matters,  
            including, but not limited to, the manner in which rental car  


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            companies advertise and quote rental charges and additional  
            fees, the renter's liability or lack thereof for damages to a  
            rental vehicle, the amount that rental car companies may  
            charge for damage waivers and the manner in which they are  
            offered, and the conditions under which a rental car company  
            may access, obtain, and use geo-location and other information  
            from the rental vehicle's electronic surveillance technology.   

          2)Requires a rental company that offers a damage waiver to  
            disclose specified information to the renter in a prescribed  
            manner, including an oral disclosure at the counter informing  
            the renter that the damage waiver may be duplicative of  
            coverage that the customer maintains under his or her own  
            motor vehicle insurance policy.  Provides that a rental  
            company's disclosure requirements shall be satisfied for  
            renters who are enrolled in its membership program if certain  
            conditions are met, including by placing on the rental  
            vehicle's rearview mirror a hangar that notifies the renter  
            that the damage waiver may be duplicative of the coverage that  
            the customer maintains under his or her own insurance policy  
            and provides the renter a final opportunity to either decline  
            a damage waiver that was previously accepted or accept a  
            damage waiver that was previously declined.  

          3)Provides that when providing a quote, or imposing charges for  
            a rental company, 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.  Prohibits the rental car company from charging  
            any fee other than the quoted rental rate, additional  
            mandatory charges, or mileage charges.  

          4)Permits the rental company to collect an authorized customer  
            facility charge at specified airports if certain conditions  
            are met and the fees are used for purposes of maintaining a  
            consolidated rental car facility and a common-use  
            transportation system.  Requires the airports to conduct  


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            audits as specified.  

          5)Prohibits a rental 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 the technology is used to locate a stolen,  
            abandoned, or missing rental vehicle after one of the  

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

             b)   The rental vehicle has not been returned following one  
               week after the contracted return date, or one week  
               following the end of an extension of that return date.

             c)   The rental car company discovers that the vehicle has  
               been stolen or abandoned and, if stolen, reports the  
               vehicle stolen to law enforcement by filing a stolen  
               vehicle report.  

          FISCAL EFFECT:  None 

          COMMENTS:  According to the author, this bill seeks to  
          "modernize" the statute that governs rental car contracts, fees,  
          disclosures, and advertisements.  Many of the provisions in the  
          bill under consideration are similar, and in some cases  
          identical, to last year's AB 675 (Alejo), Chapter 333, Statutes  
          of 2015, which passed out of the Judiciary Committee  
          unanimously.  AB 675 was eventually chaptered, but only after it  
          was significantly amended in the Senate to focus more narrowly  
          on the issue that prompted AB 675:  the rental car industry's  
          desire to clearly distinguish the fees imposed on its customers  
          by a rental car company from the many government-imposed  
          exactions, including tourism fees, airport concession and  


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          facility fees, vehicle fees, and other related fees and  
          surcharges.  Understandably, the rental car companies wanted  
          their customers to know which parts of the total charge were  
          attributable to the rental car company, and which were  
          attributable to additional mandatory fees over which the rental  
          company had no control.  This bill seeks to restore some the  
          provisions that were in AB 675 before it was pared back in the  
          Senate.  To the Judiciary Committee's understanding, the Senate  
          amendments did not necessarily reflect any fundamental  
          disagreement with the other changes proposed by AB 675; rather,  
          it reflected a desire to focus the bill on the most pressing  
          change sought by the author and sponsors (separating rental  
          company fees from government-imposed fees in quotes and  
          statements) and leave a more comprehensive "clean-up" and  
          reorganization for a later date.  This bill, therefore, seeks to  
          achieve that reorganization while at the same time incorporating  
          some, but not all, of the substantive changes that were in AB  

          Advertisers Responsibility for Disclosure:  When a consumer  
          arranges to rent a vehicle from someone other than the rental  
          car company - such as an airline or travel service - this bill  
          would require that the other person or entity make specified  
          disclosures regarding any additional charges that the customer  
          will need to pay, so long as the rental car company provides  
          this information to the other person or entity.  The bill also  
          specifies that if the other person or entity has been provided  
          with that information by the rental car, but the other person or  
          entity fails to disclose it properly, the rental company is not  
          responsible for that failure.  In other words, this provision  
          apportions responsibility to the person or entity that failed to  
          comply with the requirements.

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


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