BILL ANALYSIS
AB 2592
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 2592 (Leno)
As Amended August 24, 2006
Majority vote
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|ASSEMBLY: |64-3 |(May 4, 2006) |SENATE: |37-3 |(August 29, |
| | | | | |2006) |
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Original Committee Reference: A.,E.,S.,T. & I.M.
SUMMARY : Modifies the conditions and terms of appointees and
elected members of the California Travel and Tourism Commission
(CTTC), broadens industry segments which may voluntary
participate in CTTC programs, and clarifies certain assessment
and referendum procedures. Additionally, the bill makes changes
to the way the passenger car rental industry is assessed by the
CTTC which will permit rental car companies to separately state
specified fees in advertising, quotes and charges for rental
cars which become operational only if the rental car industry
agrees to increase its Tourism Marketing Assessment (assessment)
to specified levels,
The Senate amendments :
1)Permit rental car companies to take the following actions if
those companies approve a referendum that increases the
assessment paid by rental car companies to a level sufficient
for the CTTC's budget to be brought up to $25 million in
fiscal year 2006-07 and $50 million in fiscal year 2007-08:
a) Advertise rental rates that include the entire charge,
except taxes and customer facility and mileage charges,
which a renter must pay to hire or lease a vehicle.
b) Separately state in a quote or separately charge the
rental rate, taxes, customer facilities charges, airport
concession fees, tourism commission assessments and mileage
charges which a renter must pay to hire or lease a vehicle.
c) Require additional specified actions at the time a quote
is given, at the time and place the rental commences, or if
a rental is provided by a third party, if customer facility
charges, airport concession fees, or tourism commission
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assessments are imposed.
d) Prohibit additional charges for:
i) additional drivers on a car rental agreement;
ii) the period of time which occurs between the time a
vehicle being delivered leaves the rental car facility
and arrives at the location of the customer, or, when the
rental company picks up a vehicle, the interval between
the time the renter notifies the rental company the
vehicle is available for pick up and the time it is
picked up; and
iii) transporting a renter to a location where a rented
vehicle will be delivered, unless permitted as part of a
customer facility charge.
e) Permit a car renter to bring a civil action against a
rental car company for specified violations including
damage waivers and disclosure, quote and advertising
requirements; the prevailing party is entitled to recover
attorney's fees and costs.
2)Permit the CTTC to take the following actions if rental car
companies approve a referendum that increases the assessment
paid by those companies to a level sufficient for the CTTC's
budget to be brought up to $25 million in fiscal year 2006-07
and $50 million in fiscal year 2007-08:
a) Establish a separate category of assessment for
passenger rental car companies.
b) Establish differing caps on assessments for each
industry category or segment.
c) Allow commissioners elected from each industry category
to be determined by the weighted percentage of assessment
from that category with a cap of six commissioners from the
passenger rental car category.
d) Allow the weighted percentage assigned to a business in
the passenger car rental category that pays an assessment
greater than the cap, to be the same as though its
assessment were equal to the highest maximum assessment.
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e) Restrict assessments on the passenger car rental
category to rental transactions that commence at an
airport, hotel, or overnight lodging facility.
3)Revert $6.3 million to the General Fund from the CTTC if
rental car companies approve a referendum that increases the
assessment paid by those companies to a level sufficient for
the CTTC's budget to be brought up to $25 million in fiscal
year 2006-07 and $50 million in fiscal year 2007-08.
4)Revise the terms of office for commissioners elected to the
CTTC to July 1 through June 30.
5)Automatically extend the terms of office for elected
commissioners which expire December 31, 2006, to June 30,
2007.
6)Clarify that voluntary assessments shall be "proportionally"
equivalent to the assessment levied from an assessed business.
7)Provide that if the CTTC delivers a resolution to the
Secretary of the Business, Transportation, and Housing Agency
(Secretary), then the Secretary may call a referendum at any
time.
8)Require the Secretary to identify, to the extent reasonably
feasible, those businesses that would become newly assessed
due to a change sought in a referendum, and provide those
businesses the opportunity to vote in that referendum.
9)Provide procedures for persons sharing common ownership,
management, or control of more than one assessed business to
calculate, administer, and pay the assessment owed by each
business.
10)Specify that the threshold for small businesses to be exempt
from assessment ($1,000,000 in total California gross annual
revenue) may be lowered by referendum, but is never to be set
lower than $500,000.
11)Make other technical and clarifying changes.
EXISTING LAW :
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1)Requires rental car companies to advertise, quote, and charge
a renter for the entire rental rate a consumer must pay to
hire or lease a vehicle, except for taxes.
2)Permits a car renter to bring a civil action against a rental
car company for specified violations including damage waivers
and disclosure, quote and advertising requirements; the
prevailing party is entitled to recover attorney's fees and
costs.
3)Creates the California Tourism Marketing Act of 1995 (Act) and
the California Division of Tourism in the Business,
Transportation and Housing Agency (BTHA) to promote travel and
tourism to and within California.
4)Establishes CTTC, a separate, independent, nonprofit
corporation consisting of 37 members (BTHA Secretary, 12
members appointed by the Governor, and 24 commissioners
elected by industry category in a referendum).
5)Authorizes the CTTC to levy assessments on specified
businesses which benefit from travel and tourism spending,
according to referendum of the assessed businesses for the
purpose of producing a variety of marketing activities,
including: a) advertising; b) visitor publications; and, c)
cooperative programs.
6)Authorizes the CTTC to levy assessments on specified
businesses which benefit from travel and tourism spending
according to referendum of the "assessed businesses" for the
purpose of producing a variety of marketing activities.
7)Exempts persons or businesses with less than $1 million in
California gross annual revenue from assessment.
AS PASSED BY THE ASSEMBLY , this bill modified the conditions and
terms of appointees and elected members to the CTTC, and
broadened industry segments which may voluntary participate in
the program.
FISCAL EFFECT : According to the Senate Appropriations
Committee, additional state costs are not significant. This
bill does not require the appropriation of additional state
funds, and will cause no significant reduction in revenues.
(Senate Rule 28.8) This analysis did not include August
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amendments concerning rental car agencies.
COMMENTS : According to the author, this bill is necessary to
update and make clarifying changes to the Act with respect to
the CTTC including the parameters for serving as a commissioner,
allowing gaming interests to participate in the program on a
voluntary basis,
The Legislature adopted the Act to allow the self-imposition of
an assessment by businesses that benefit from travel and
tourism. It also authorized the establishment of a non-profit,
public benefit corporation, CTTC, to oversee the promotion of
California as a premier travel destination. In 2001, the Act
was renewed by assessed businesses by an 84% margin and will
subsequently be renewable by industry vote every six years. The
act intended that the state would match industry assessments,
but budget limitations have severely reduced the state's
participation.
The primary focus of CTTC is to develop and implement a
marketing plan that promotes travel to and within California.
In support of this purpose, the plan is divided into four
program areas: 1) Research and Rural Tourism Marketing; 2)
Communications and Visitor Information (i.e., media relations,
Web site, welcome centers, and collateral and fulfillment); 3)
National Advertising and Cooperative Marketing Activities; and,
4) International, Travel Trade Development and Marketing.
Analysis Prepared by : Kellie Smith / A.,E.,S.,T. & I.M. /
(916) 319-3450
FN: 0017354