BILL NUMBER: AB 675 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 30, 2015
AMENDED IN ASSEMBLY APRIL 15, 2015
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Alejo
FEBRUARY 25, 2015
An act to amend Section 1936.05 of, to amend and repeal Section
1936 of, and to repeal Sections 1936.01 and 1936.015 of, the Civil
Code, relating to rental vehicles.
LEGISLATIVE COUNSEL'S DIGEST
AB 675, as amended, Alejo. Rental vehicles: disclosures:
obligations.
(1) Existing law governs contracts between rental car companies
and their customers in connection with the rental of a passenger
vehicle. Existing law requires a rental company that offers or
provides a damage waiver to orally disclose to all renters, except
participants in the rental company's membership program, that the
damage waiver may be duplicative of coverage that the customer
maintains under his or her own policy of motor vehicle insurance, and
requires that the contract include that information in a clear and
conspicuous written disclosure.
This bill would specify that the oral disclosure only applies if a
damage waiver is offered orally at the rental counter, at the time
of the offer, and, if a damage waiver may be obtained online, would
require the clear and conspicuous written disclosure to also be
included on the Internet Web site page on which an estimate of total
charges is provided for any reservation made through the rental
company's online reservation system.
(2) Existing law requires a rental company to only advertise a
rental rate that includes the entire amount except taxes, and any
applicable customer facility charge or mileage charge that a renter
must pay to hire or lease the vehicle for the period of time to which
the rental rate applies. Existing law prohibits a rental company
from charging any fee that is required to be paid by the renter as a
condition of hiring or leasing the vehicle, other than the rental
rate, taxes, or any applicable customer facility charge, airport
concession fee, tourism commission assessment, or mileage charge.
This bill would repeal that advertisement requirement and that
prohibition against charging any other required fees.
(3) Existing law authorizes, when providing a quote, or imposing
charges for a rental, a rental company to separately state the rental
rate, taxes, and any applicable customer facility charge, airport
concession fee, tourism commission assessment, mileage charge that a
renter must pay to hire or lease the vehicle for the period of time
to which the rental rate applies.
This bill would revise and recast that law to provide that a
rental company is authorized to separately state any additional
mandatory charges, defined to mean any charges imposed by a
governmental entity that a renter must pay to hire or lease the
vehicle for the period of time to which the rental rate applies,
including, but not limited to, a customer facility charge, airport
concession fee, tourism commission assessment, vehicle license
recovery fee, or other government imposed taxes or fees. This bill
would further define the term vehicle license recovery fee to mean
the amount of vehicle license fee and vehicle registration fee, as
those terms are defined, paid by the rental company for the
particular class of vehicle being rented.
(4) Existing law requires a rental company, if customer facility
charges, airport concession fees, or tourism commission assessments
are imposed, to take specified actions, including, when a quote is
given, providing the person receiving the quote with a good faith
estimate of the rental rate, taxes, customer facility charge, if any,
airport concession fee, if any, and tourism commission assessment,
if any, as well as the total charges for the entire rental.
This bill would require a rental company to take those specified
actions when any additional mandatory charge is imposed.
(5) Existing law requires, when a rental rate is stated in an
advertisement, in connection with a car rental at an airport where a
customer facility charge is imposed, the rental company to clearly
disclose the existence and amount of the customer facility charge, as
specified. Existing law requires, if any person or entity other than
a rental car company, advertises a rental rate for a car rental at
an airport where a customer facility charge is imposed, that person
or entity to clearly disclose the existence and amount of the charge,
as specified.
This bill would repeal these disclosure requirements.
(6) Existing law prohibits a rental company from using, accessing,
or obtaining information relating to the renter's use of the rental
vehicle obtained using electronic surveillance technology, except in
specified circumstances.
This bill would instead allow a rental company to access or obtain
information relating to the renter's use of the rental vehicle
obtained using electronic surveillance technology, and also revise
and expand the circumstances when information from electronic
surveillance technology can be used by a rental company, as
specified.
(7) Existing law provides that a rental company's disclosure
requirements for renters enrolled in the company's membership program
are satisfied if specified conditions are met, including a
requirement that the rental company provide a specified notice on a
hanger, as provided. Existing law specifies that this provision is
effective only if a designated employee is actually present at the
required location, and specifies that the provision does not relieve
the rental company from the disclosures required to be made within
the text of a contract or holder in which the contract is
placed; placed, in or on an advertisement
containing a rental rate; rate, or in a
telephonic, in-person, or computer-transmitted quotation or
reservation.
This bill would eliminate that requirement that the rental company
provide a specified notice on a hanger. This bill would eliminate
the requirement that a designated employee be present. This bill
would expand the circumstances in which a rental company's disclosure
requirements for renters enrolled in the company's membership
program are relieved when those specified conditions are met.
(8) Existing law, until January 1, 2020, requires a rental company
or its registered agent to accept service of a summons and complaint
and any other required documents against a renter who resides out of
this country for an accident or collision resulting from the
operation of the rental vehicle in this state, if the rental company
provides liability insurance coverage as part of, or associated with,
the rental agreement. Existing law requires any plaintiff who elects
to serve the foreign renter by delivering the summons and complaint
and any other required documents to the rental company pursuant to
these provisions to agree to limit his or her recovery against the
foreign renter and rental company to the limits of the protection of
the liability insurance.
This bill would remove the repeal of these requirements on January
1, 2020, thus making these requirements apply indefinitely.
(9) This bill would also make other technical, nonsubstantive
changes by reorganizing several provisions and repealing obsolete
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 1936 of the Civil Code, as amended by Section
5.2 of Chapter 913 of the Statutes of 2014, is amended to read:
1936. (a) For the purpose of this section, the following
definitions shall apply:
(1) "Rental company" means a person or entity in the business of
renting passenger vehicles to the public.
(2) "Renter" means any person in a manner obligated under a
contract for the lease or hire of a passenger vehicle from a rental
company for a period of less than 30 days.
(3) "Additional mandatory charges" means any charges imposed by a
governmental entity that a renter must pay to hire or lease the
vehicle for the period of time to which the rental rate applies,
including, but not limited to, a customer facility charge, airport
concession fee, tourism commission assessment, vehicle license
recovery fee, or other government imposed taxes or fees.
(4) "Airport concession fee" means a charge collected by a rental
company from a renter that is the renter's proportionate share of the
amount paid by the rental company to the owner or operator of an
airport for the right or privilege of conducting a vehicle rental
business on the airport's premises.
(5) "Authorized driver" means all of the following:
(A) The renter.
(B) The renter's spouse if that person is a licensed driver and
satisfies the rental company's minimum age requirement.
(C) The renter's employer or coworker if he or she is engaged in
business activity with the renter, is a licensed driver, and
satisfies the rental company's minimum age requirement.
(D) A person expressly listed by the rental company on that renter'
s contract as an authorized driver.
(6) "Customer facility charge" means any fee, including an
alternative fee, required by an airport to be collected by a rental
company from a renter for any of the following purposes:
(i) To finance, design, and construct consolidated airport car
rental facilities.
(ii) To finance, design, construct, and operate common-use
transportation systems that move passengers between airport terminals
and those consolidated car rental facilities, and acquire vehicles
for use in that system.
(iii) To finance, design, and construct terminal modifications
solely to accommodate and provide customer access to common-use
transportation systems.
(7) "Damage waiver" means a rental company's agreement not to hold
a renter liable for all or any portion of any damage or loss related
to the rented vehicle, any loss of use of the rented vehicle, or any
storage, impound, towing, or administrative charges.
(8) "Electronic surveillance technology" means a technological
method or system used to observe, monitor, or collect information,
including telematics, Global Positioning System (GPS), wireless
technology, or location-based technologies. "Electronic surveillance
technology" does not include event data recorders (EDR), sensing and
diagnostic modules (SDM), or other systems that are used either:
(A) For the purpose of identifying, diagnosing, or monitoring
functions related to the potential need to repair, service, or
perform maintenance on the rental vehicle.
(B) As part of the vehicle's airbag sensing and diagnostic system
in order to capture safety systems-related data for retrieval after a
crash has occurred or in the event that the collision sensors are
activated to prepare the decisionmaking computer to make the
determination to deploy or not to deploy the airbag.
(9) "Estimated time for replacement" means the number of hours of
labor, or fraction thereof, needed to replace damaged vehicle parts
as set forth in collision damage estimating guides generally used in
the vehicle repair business and commonly known as "crash books."
(10) "Estimated time for repair" means a good faith estimate of
the reasonable number of hours of labor, or fraction thereof, needed
to repair damaged vehicle parts.
(11) "Membership program" means a service offered by a rental
company that permits customers to bypass the rental counter and go
directly to the car previously reserved. A membership program shall
meet all of the following requirements:
(A) The renter initiates enrollment by completing an application
on which the renter can specify a preference for type of vehicle and
acceptance or declination of optional services.
(B) The rental company fully discloses, prior to the enrollee's
first rental as a participant in the program, all terms and
conditions of the rental agreement as well as all required
disclosures.
(C) The renter may terminate enrollment at any time.
(D) The rental company fully explains to the renter that
designated preferences, as well as acceptance or declination of
optional services, may be changed by the renter at any time for the
next and future rentals.
(12) "Passenger vehicle" means a passenger vehicle as defined in
Section 465 of the Vehicle Code.
(13) "Quote" means an estimated cost of rental provided by a
rental company or a third party to a potential customer by telephone,
in-person, computer-transmission, or other means, that is based on
information provided by the potential customer and used to generate
an estimated cost of rental, including, but not limited to, any of
the following: potential dates of rental, locations, or classes of
car.
(14) "Tourism commission assessment" means the charge collected by
a rental company from a renter that has been established by the
California Travel and Tourism Commission pursuant to Section 13995.65
of the Government Code.
(15) "Vehicle license fee" means the tax imposed pursuant to the
Vehicle License Fee Law (Part 5 (commencing with Section 10701) of
Division 2 of the Revenue and Taxation Code).
(16) "Vehicle registration fee" means any fee imposed pursuant to
any provision of Chapter 6 (commencing with Section 9101) of Division
3 of the Vehicle Code.
(17) "Vehicle license recovery fee" means a charge that seeks to
recover the amount of any vehicle license fee and vehicle
registration fee paid by a rental company for the particular class of
vehicle being rented.
(b) Except as limited by subdivision (c), a rental company and a
renter may agree that the renter will be responsible for no more than
all of the following:
(1) Physical or mechanical damage to the rented vehicle up to its
fair market value, as determined in the customary market for the sale
of that vehicle, regardless of the cause of the damage.
(2) Loss due to theft of the rented vehicle up to its fair market
value, as determined in the customary market for the sale of that
vehicle, provided that the rental company establishes by clear and
convincing evidence that the renter or the authorized driver failed
to exercise ordinary care while in possession of the vehicle. In
addition, the renter shall be presumed to have no liability for any
loss due to theft if (A) an authorized driver has possession of the
ignition key furnished by the rental company or an authorized driver
establishes that the ignition key furnished by the rental company was
not in the vehicle at the time of the theft, and (B) an authorized
driver files an official report of the theft with the police or other
law enforcement agency within 24 hours of learning of the theft and
reasonably cooperates with the rental company and the police or other
law enforcement agency in providing information concerning the
theft. The presumption set forth in this paragraph is a presumption
affecting the burden of proof which the rental company may rebut by
establishing that an authorized driver committed, or aided and
abetted the commission of, the theft.
(3) Physical damage to the rented vehicle up to its fair market
value, as determined in the customary market for the sale of that
vehicle, resulting from vandalism occurring after, or in connection
with, the theft of the rented vehicle. However, the renter shall have
no liability for any damage due to vandalism if the renter would
have no liability for theft pursuant to paragraph (2).
(4) Physical damage to the rented vehicle up to a total of five
hundred dollars ($500) resulting from vandalism unrelated to the
theft of the rented vehicle.
(5) Actual charges for towing, storage, and impound fees paid by
the rental company if the renter is liable for damage or loss.
(6) An administrative charge, which shall include the cost of
appraisal and all other costs and expenses incident to the damage,
loss, repair, or replacement of the rented vehicle.
(c) The total amount of the renter's liability to the rental
company resulting from damage to the rented vehicle shall not exceed
the sum of the following:
(1) The estimated cost of parts which the rental company would
have to pay to replace damaged vehicle parts. All discounts and price
reductions or adjustments that are or will be received by the rental
company shall be subtracted from the estimate to the extent not
already incorporated in the estimate, or otherwise promptly credited
or refunded to the renter.
(2) The estimated cost of labor to replace damaged vehicle parts,
which shall not exceed the product of (A) the rate for labor usually
paid by the rental company to replace vehicle parts of the type that
were damaged and (B) the estimated time for replacement. All
discounts and price reductions or adjustments that are or will be
received by the rental company shall be subtracted from the estimate
to the extent not already incorporated in the estimate, or otherwise
promptly credited or refunded to the renter.
(3) (A) The estimated cost of labor to repair damaged vehicle
parts, which shall not exceed the lesser of the following:
(i) The product of the rate for labor usually paid by the rental
company to repair vehicle parts of the type that were damaged and the
estimated time for repair.
(ii) The sum of the estimated labor and parts costs determined
under paragraphs (1) and (2) to replace the same vehicle parts.
(B) All discounts and price reductions or adjustments that are or
will be received by the rental company shall be subtracted from the
estimate to the extent not already incorporated in the estimate, or
otherwise promptly credited or refunded to the renter.
(4) For the purpose of converting the estimated time for repair
into the same units of time in which the rental rate is expressed, a
day shall be deemed to consist of eight hours.
(5) Actual charges for towing, storage, and impound fees paid by
the rental company.
(6) The administrative charge described in paragraph (6) of
subdivision (b) shall not exceed (A) fifty dollars ($50) if the total
estimated cost for parts and labor is more than one hundred dollars
($100) up to and including five hundred dollars ($500), (B) one
hundred dollars ($100) if the total estimated cost for parts and
labor exceeds five hundred dollars ($500) up to and including one
thousand five hundred dollars ($1,500), and (C) one hundred fifty
dollars ($150) if the total estimated cost for parts and labor
exceeds one thousand five hundred dollars ($1,500). An administrative
charge shall not be imposed if the total estimated cost of parts and
labor is one hundred dollars ($100) or less.
(d) (1) The total amount of an authorized driver's liability to
the rental company, if any, for damage occurring during the
authorized driver's operation of the rented vehicle shall not exceed
the amount of the renter's liability under subdivision (c).
(2) A rental company shall not recover from the renter or other
authorized driver an amount exceeding the renter's liability under
subdivision (c).
(3) A claim against a renter resulting from damage or loss,
excluding loss of use, to a rental vehicle shall be reasonably and
rationally related to the actual loss incurred. A rental company
shall mitigate damages where possible and shall not assert or collect
a claim for physical damage which exceeds the actual costs of the
repairs performed or the estimated cost of repairs, if the rental
company chooses not to repair the vehicle, including all discounts
and price reductions. However, if the vehicle is a total loss
vehicle, the claim shall not exceed the total loss vehicle value
established in accordance with procedures that are customarily used
by insurance companies when paying claims on total loss vehicles,
less the proceeds from salvaging the vehicle, if those proceeds are
retained by the rental company.
(4) If insurance coverage exists under the renter's applicable
personal or business insurance policy and the coverage is confirmed
during regular business hours, the renter may require that the rental
company submit any claims to the renter's applicable personal or
business insurance carrier. The rental company shall not make any
written or oral representations that it will not present claims or
negotiate with the renter's insurance carrier. For purposes of this
paragraph, confirmation of coverage includes telephone confirmation
from insurance company representatives during regular business hours.
Upon request of the renter and after confirmation of coverage, the
amount of claim shall be resolved between the insurance carrier and
the rental company. The renter shall remain responsible for payment
to the rental car company for any loss sustained that the renter's
applicable personal or business insurance policy does not cover.
(5) A rental company shall not recover from the renter or other
authorized driver for an item described in subdivision (b) to the
extent the rental company obtains recovery from another person.
(6) This section applies only to the maximum liability of a renter
or other authorized driver to the rental company resulting from
damage to the rented vehicle and not to the liability of another
person.
(e) (1) Except as provided in subdivision (f), a damage waiver
shall provide or, if not expressly stated in writing, shall be deemed
to provide that the renter has no liability for damage, loss, loss
of use, or a cost or expense incident thereto.
(2) Except as provided in subdivision (f), every limitation,
exception, or exclusion to a damage waiver is void and unenforceable.
(f) A rental company may provide in the rental contract that a
damage waiver does not apply under any of the following
circumstances:
(1) Damage or loss results from an authorized driver's (A)
intentional, willful, wanton, or reckless conduct, (B) operation of
the vehicle under the influence of drugs or alcohol in violation of
Section 23152 of the Vehicle Code, (C) towing or pushing anything, or
(D) operation of the vehicle on an unpaved road if the damage or
loss is a direct result of the road or driving conditions.
(2) Damage or loss occurs while the vehicle is (A) used for
commercial hire, (B) used in connection with conduct that could be
properly charged as a felony, (C) involved in a speed test or contest
or in driver training activity, (D) operated by a person other than
an authorized driver, or (E) operated outside the United States.
(3) An authorized driver who has (A) provided fraudulent
information to the rental company, or (B) provided false information
and the rental company would not have rented the vehicle if it had
instead received true information.
(g) (1) A rental company that offers or provides a damage waiver
for any consideration in addition to the rental rate shall clearly
and conspicuously disclose the following information in the rental
contract or holder in which the contract is placed and, also, in
signs posted at the place, such as the counter, where the renter
signs the rental contract, and, for renters who are enrolled in the
rental company's membership program, in a sign that shall be posted
in a location clearly visible to those renters as they enter the
location where their reserved rental cars are parked or near the exit
of the bus or other conveyance that transports the enrollee to a
reserved car: (A) the nature of the renter's liability, such as
liability for all collision damage regardless of cause, (B) the
extent of the renter's liability, such as liability for damage or
loss up to a specified amount, (C) the renter's personal insurance
policy or the credit card used to pay for the car rental transaction
may provide coverage for all or a portion of the renter's potential
liability, (D) the renter should consult with his or her insurer to
determine the scope of insurance coverage, including the amount of
the deductible, if any, for which the renter is obligated, (E) the
renter may purchase an optional damage waiver to cover all liability,
subject to whatever exceptions the rental company expressly lists
that are permitted under subdivision (f), and (F) the range of
charges for the damage waiver.
(2) In addition to the requirements of paragraph (1), if a damage
waiver is offered orally at the rental counter, a rental company
shall orally disclose at the time of the offer, that the damage
waiver may be duplicative of coverage that the customer maintains
under his or her own policy of motor vehicle insurance. The renter's
receipt of the oral disclosure shall be demonstrated through the
renter's acknowledging receipt of the oral disclosure near that part
of the contract where the renter indicates, by the renter's own
initials, his or her acceptance or declination of the damage waiver.
Adjacent to that same part, the contract also shall state that the
damage waiver is optional. Further, the contract for these renters,
and, if a damage waiver may be obtained online, the Internet Web site
page on which an estimate of total charges is provided pursuant to
subparagraph (A) of paragraph (2) of subdivision (m) for any
reservation made through the rental company's online reservation
system, shall include a clear and conspicuous written disclosure that
the damage waiver may be duplicative of coverage that the customer
maintains under his or her own policy of motor vehicle insurance. No
oral disclosure shall be required for renters that are participants
in the rental company's membership program.
(3) The following is an example, for purposes of illustration and
not limitation, of a notice fulfilling the requirements of paragraph
(1) for a rental company that imposes liability on the renter for
collision damage to the full value of the vehicle:
"NOTICE ABOUT YOUR FINANCIAL RESPONSIBILITY AND OPTIONAL DAMAGE
WAIVER
You are responsible for all collision damage to the rented vehicle
even if someone else caused it or the cause is unknown. You are
responsible for the cost of repair up to the value of the vehicle,
and towing, storage, and impound fees.
Your own insurance, or the issuer of the credit card you use to
pay for the car rental transaction, may cover all or part of your
financial responsibility for the rented vehicle. You should check
with your insurance company, or credit card issuer, to find out about
your coverage and the amount of the deductible, if any, for which
you may be liable.
Further, if you use a credit card that provides coverage for your
potential liability, you should check with the issuer to determine if
you must first exhaust the coverage limits of your own insurance
before the credit card coverage applies.
The rental company will not hold you responsible if you buy a
damage waiver. But a damage waiver will not protect you if (list
exceptions)."
(A) When the above notice is printed in the rental contract or
holder in which the contract is placed, the following shall be
printed immediately following the notice:
"The cost of an optional damage waiver is $____ for every (day or
week)."
(B) When the above notice appears on a sign, the following shall
appear immediately adjacent to the notice:
"The cost of an optional damage waiver is $____ to $____ for every
(day or week), depending upon the vehicle rented."
(h) Notwithstanding any other provision of law, a rental company
may sell a damage waiver subject to the following rate limitations
for each full or partial 24-hour rental day for the damage waiver:
(1) For rental vehicles that the rental company designates as an
"economy car," "compact car," or another term having similar meaning
to the two smallest body-size categories of vehicles established by
the Association of Car Rental Industry Systems Standards for North
America, as of January 1, 2014, when offered for rental, the rate
shall not exceed eleven dollars ($11).
(2) For rental vehicles that the rental company designates as an
"intermediate car," "standard car," or "full-size car," or another
term having similar meaning to the next three body-size categories of
vehicles established by the Association of Car Rental Industry
Systems Standards for North America, as of January 1, 2014, and that
are also either vehicles of the next model year,
model-year or not older than the previous year's model,
when offered for rental, the rate shall not exceed seventeen dollars
($17). For rental vehicles that are older than the previous year's
model-year, the rate shall not exceed eleven dollars ($11).
(i) A rental company that disseminates in this state an
advertisement containing a rental rate shall include in that
advertisement a clearly readable statement of the charge for a damage
waiver and a statement that a damage waiver is optional.
(j) (1) A rental company shall not require the purchase of a
damage waiver, optional insurance, or another optional good or
service.
(2) A rental company shall not engage in any unfair, deceptive, or
coercive conduct to induce a renter to purchase the damage waiver,
optional insurance, or another optional good or service, including
conduct such as, but not limited to, refusing to honor the renter's
reservation, limiting the availability of vehicles, requiring a
deposit, or debiting or blocking the renter's credit card account for
a sum equivalent to a deposit if the renter declines to purchase the
damage waiver, optional insurance, or another optional good or
service.
(k) (1) In the absence of express permission granted by the renter
subsequent to damage to, or loss of, the vehicle, a rental company
shall not seek to recover any portion of a claim arising out of
damage to, or loss of, the rented vehicle by processing a credit card
charge or causing a debit or block to be placed on the renter's
credit card account.
(2) A rental company shall not engage in any unfair, deceptive, or
coercive tactics in attempting to recover or in recovering on any
claim arising out of damage to, or loss of, the rented vehicle.
(l) (1) A customer facility charge may be collected by a rental
company under the following circumstances:
(A) Collection of the fee by the rental company is required by an
airport operated by a city, a county, a city and county, a joint
powers authority, a special district, or the San Diego County
Regional Airport Authority formed pursuant to Division 17 (commencing
with Section 170000) of the Public Utilities Code.
(B) The fee is calculated on a per contract basis or as provided
in paragraph (2).
(C) The fee is a user fee, not a tax imposed upon real property or
an incident of property ownership under Article XIII D of the
California Constitution.
(D) Except as otherwise provided in subparagraph (E), the fee
shall be ten dollars ($10) per contract or the amount provided in
paragraph (2).
(E) The fee for a consolidated rental car facility shall be
collected only from customers of on-airport rental car companies. If
the fee imposed by the airport is for both a consolidated rental car
facility and a common-use transportation system, the fee collected
from customers of on-airport rental car companies shall be ten
dollars ($10) or the amount provided in paragraph (2), but the fee
imposed on customers of off-airport rental car companies who are
transported on the common-use transportation system is proportionate
to the costs of the common-use transportation system only. The fee is
uniformly applied to each class of on-airport or off-airport
customers, provided that the airport requires off-airport customers
to use the common-use transportation system. For purposes of this
subparagraph, "on-airport rental car company" means a rental company
operating under an airport property lease or an airport concession or
license agreement whose customers use or will use the consolidated
rental car facility and the collection of the fee as to those
customers is consistent with subparagraph (C).
(F) Revenues collected from the fee do not exceed the reasonable
costs of financing, designing, and constructing the facility and
financing, designing, constructing, and operating any common-use
transportation system, or acquiring vehicles for use in that system,
and shall not be used for any other purpose.
(G) The fee is separately identified on the rental agreement.
(H) This paragraph does not apply to fees which are governed by
Section 50474.1 of the Government Code or Section 57.5 of the San
Diego Unified Port District Act (Chapter 67 of the First
Extraordinary Session of the Statutes of 1962).
(I) (i) The aggregate amount to be collected shall not exceed the
reasonable costs, as determined by an audit, by an independent
auditor, paid for by the airport, to finance, design, and construct
those facilities. The auditor shall independently examine and
substantiate the necessity for and the amount of the customer
facility charge, including whether the airport's actual or projected
costs are supported and justified, any steps the airport may take to
limit costs, potential alternatives for meeting the airport's revenue
needs other than the collection of the fee, and whether and to what
extent car rental companies or other businesses or individuals using
the facility or common-use transportation system may pay for the
costs associated with these facilities and systems other than the fee
from rental customers, or whether the airport did not comply with
any provision of this clause. Copies of the audit shall be provided
to the Assembly and Senate Committees on Judiciary, the Assembly
Committee on Transportation, and the Senate Committee on
Transportation and Housing and shall be posted on the airport's
Internet Web site. In the case of a customer facility charge for a
common-use transportation system, the audit also shall consider the
reasonable costs of providing the transit system or busing network.
Any audit required by this subclause may be included as a part of an
audit of an airport's finances. Notwithstanding clause (iii) of
subparagraph (A) of paragraph (6) of subdivision
(a), the fees designated as a customer
facility charge shall not be used to pay for terminal expansion, gate
expansion, runway expansion, changes in hours of operation, or
changes in the number of flights arriving or departing from the
airport.
(ii) Except as provided in clause (iii), the authorization given
pursuant to this section for an airport to impose a customer facility
charge shall become inoperative when the bonds used for financing
are paid.
(iii) If a bond or other form of indebtedness is not used for
financing, or the bond or other form of indebtedness used for
financing has been paid, the Oakland International Airport may
require the collection of a customer facility charge for a period of
up to 10 years from the imposition of the charge for the purposes
allowed by, and subject to the conditions imposed by, this section.
(I)
(J) For any airport seeking to require rental car
companies to collect an alternative customer facility charge pursuant
to paragraph (2), the following provisions apply:
(i) Notwithstanding Section 10231.5 of the Government Code, the
airport shall provide reports on an annual basis to the Senate and
Assembly Committees on Judiciary detailing all of the following:
(I) The total amount of the customer facility charge collected.
(II) How the funds are being spent.
(III) The amount of and reason for any changes in the airport's
budget or financial needs for the facility or common-use
transportation system.
(IV) Whether airport concession fees authorized by Section 1936.01
have increased since the prior report, if any.
(ii) (I) The aggregate amount to be collected shall not exceed the
reasonable costs, as determined by an audit, by an independent
auditor, paid for by the airport, to finance, design, and construct
those facilities. The auditor shall independently examine and
substantiate the necessity for and the amount of the customer
facility charge, including whether the airport's actual or projected
costs are supported and justified, any steps the airport may take to
limit costs, potential alternatives for meeting the airport's revenue
needs other than the collection of the fee, and whether and to what
extent car rental companies or other businesses or individuals using
the facility or common-use transportation system may pay for the
costs associated with these facilities and systems other than the fee
from rental customers, or whether the airport did not comply with
any provision of this subclause. Copies of the audit shall be
provided to the Assembly and Senate Committees on Judiciary, the
Assembly Committee on Transportation, and the Senate Committee on
Transportation and Housing and shall be posted on the airport's
Internet Web site. In the case of a customer facility charge for a
common-use transportation system, the audit also shall consider the
reasonable costs of providing the transit system or busing network.
Any audit required by this subclause may be included as a part of an
audit of an airport's finances. Notwithstanding clause (iii) of
subparagraph (A) of paragraph (6) of subdivision (a), the fees
designated as a customer facility charge shall not be used to pay for
terminal expansion, gate expansion, runway expansion, changes in
hours of operation, or changes in the number of flights arriving or
departing from the airport.
(II) Except as provided in subclause (III), the authorization
given pursuant to this section for an airport to impose a customer
facility charge shall become inoperative when the bonds used for
financing are paid.
(III) If a bond or other form of indebtedness is not used for
financing, or the bond or other form of indebtedness used for
financing has been paid, the Oakland International Airport may
require the collection of a customer facility charge for a period of
up to 10 years from the imposition of the charge for the purposes
allowed by, and subject to the conditions imposed by, this section.
(ii) (I) The airport shall complete the audit required by clause
(i) of subclause (I) prior to the initial collection of the customer
facility charge.
(IV)
(II) Notwithstanding Section 10231.5 of the Government
Code, copies of the audit shall be provided to the Assembly and
Senate Committees on Judiciary, the Assembly Committee on
Transportation, and the Senate Committee on Transportation and
Housing and shall be posted on the airport's Internet Web site.
(V)
(III) Prior to any increase pursuant to paragraph (2),
the airport shall update the information provided in the initial
collection audit pursuant to subclause (I). Notwithstanding Section
10231.5 of the Government Code, copies of the updated audit shall be
provided to the Assembly and Senate Committees on Judiciary, the
Assembly Committee on Transportation, and the Senate Committee on
Transportation and Housing, and shall be posted on the airport's
Internet Web site.
(VI)
(IV ) An audit shall be completed every
three years after initial collection only if the customer facility
charge is collected for the purpose of operating a common-use
transportation system or to acquire vehicles for use in the system
pursuant to clause (ii) of subparagraph (A) of paragraph (6) of
subdivision (a). A regularly conducted audit of airport finances that
includes the customer facility charge information, that satisfies
the requirements of this subdivision, and is produced in accordance
with the generally accepted accounting principles of the Government
Accounting Standards Board, shall satisfy the requirements of this
subclause. This obligation shall continue until the fee authorization
becomes inoperative pursuant to subclause (II). Notwithstanding
Section 10231.5 of the Government Code, the information reported
pursuant to this subclause shall be compiled into one document, shall
be provided to the Assembly and Senate Committees on Judiciary, the
Assembly Committee on Transportation, and the Senate Committee on
Transportation and Housing and shall be posted on the airport's
Internet Web site accessible to the public. The information reported
shall be contained within one easily accessible page contained within
the airport's Internet Web site.
(VII)
(V) This section shall not be construed to require an
airport to audit a common-use transportation system not financed by a
customer facility charge and used for the purposes permitted
pursuant to clause (ii) of subparagraph (A) of paragraph (6) of
subdivision (a).
(VIII)
(VI) The airport shall post on the airport's Internet
Web site copies of the completed audits required by this clause for a
period of six years following the audit's completion.
(iii) Use of the bonds shall be limited to construction and design
of the consolidated rental car facility, terminal modifications, and
operating costs of the common-use transportation system, as
specified in paragraph (6) of subdivision (a).
(2) Any airport may require rental car companies to collect an
alternative customer facility charge under the following conditions:
(A) The airport first conducts a publicly noticed hearing pursuant
to the Ralph M. Brown Act (Chapter 9 (commencing with Section 54950)
of Part 1 of Division 2 of Title 5 of the Government Code) to review
the costs of financing the design and construction of a consolidated
rental car facility and the design, construction, and operation of
any common-use transportation system in which all of the following
occur:
(i) The airport establishes the amount of revenue necessary to
finance the reasonable cost to design and construct a consolidated
rental car facility and to design, construct, and operate any
common-use transportation system, or acquire vehicles for use in that
system, based on evidence presented during the hearing.
(ii) The airport finds, based on evidence presented during the
hearing, that the fee authorized in paragraph (1) will not generate
sufficient revenue to finance the reasonable costs to design and
construct a consolidated rental car facility and to design,
construct, and operate any common-use transportation system, or
acquire vehicles for use in that system.
(iii) The airport finds that the reasonable cost of the project
requires the additional amount of revenue that would be generated by
the proposed daily rate, including any rate increase, authorized
pursuant to this paragraph.
(iv) The airport outlines each of the following:
(I) Steps it has taken to limit costs.
(II) Other potential alternatives for meeting its revenue needs
other than the collection of the fee.
(III) The extent to which rental car companies or other businesses
or individuals using the facility or common-use transportation
system will pay for the costs associated with these facilities and
systems other than the fee from rental customers.
(B) The airport may not require the fee authorized in this
paragraph to be collected at any time that the fee authorized in
paragraph (1) of this subdivision is being collected.
(C) Pursuant to the procedure set forth in this subdivision, the
fee may be collected at a rate charged on a per-day basis subject to
the following conditions:
(i) Commencing January 1, 2011, the amount of the fee may not
exceed six dollars ($6) per day.
(ii) Commencing January 1, 2014, the amount of the fee may not
exceed seven dollars and fifty cents ($7.50) per day.
(iii) Commencing January 1, 2017, and thereafter, the amount of
the fee may not exceed nine dollars ($9) per day.
(iv) At no time shall the fee authorized in this paragraph be
collected from any customer for more than five days for each
individual rental car contract.
(v) An airport subject to this paragraph shall initiate the
process for obtaining the authority to require or increase the
alternative fee no later than January 1, 2018. Any airport that
obtains the authority to require or increase an alternative fee shall
be authorized to continue collecting that fee until the fee
authorization becomes inoperative pursuant to subparagraph (C) of
paragraph (4) of subdivision (a).
(3) Notwithstanding any other provision of law, including, but not
limited to, Part 1 (commencing with Section 6001) to Part 1.7
(commencing with Section 7280), inclusive, of Division 2 of the
Revenue and Taxation Code, the fees collected pursuant to this
section, or another law whereby a local agency operating an airport
requires a rental car company to collect a facility financing fee
from its customers, are not subject to sales, use, or transaction
taxes.
(m) (1) When providing a quote, or imposing charges for a rental,
the rental company may separately state the rental rate, additional
mandatory charges, if any, and a mileage charge, if any, that a
renter must pay to hire or lease the vehicle for the period of time
to which the rental rate applies.
(2) If additional mandatory charges are imposed, the rental
company shall do each of the following:
(A) At the time the quote is given, provide the person receiving
the quote with a good faith estimate of the rental rate and all
additional mandatory charges, as well as the total charges for the
entire rental. The total charges, if provided on an Internet Web site
page, shall be displayed in a typeface at least as large as any
rental rate disclosed on that page and shall be provided on a page
that the person receiving the quote may reach by following links
through no more than two Internet Web site pages, including the page
on which the rental rate is first provided. The good faith estimate
may exclude mileage charges and charges for optional items that
cannot be determined prior to completing the reservation based upon
the information provided by the person.
(B) At the time and place the rental commences, clearly and
conspicuously disclose in the rental contract, or that portion of the
contract that is provided to the renter, the total of the rental
rate, additional mandatory charges, for the entire rental, exclusive
of charges that cannot be determined at the time the rental
commences. Charges imposed pursuant to this subparagraph shall be no
more than the amount of the quote provided in a confirmed
reservation, unless the person changes the terms of the rental
contract subsequent to making the reservation.
(C) Provide each person, other than those persons within the
rental company, offering quotes to actual or prospective customers
access to information about additional mandatory charges, as well as
access to information about when those charges apply. Any person
providing quotes to actual or prospective customers for the hire or
lease of a vehicle from a rental company shall provide the quotes in
the manner described in subparagraph (A).
(3) In addition to the rental rate, additional mandatory charges,
if any, and mileage charges, if any, a rental company may charge for
an item or service provided in connection with a particular rental
transaction if the renter could have avoided incurring the charge by
choosing not to obtain or utilize the optional item or service. Items
and services for which the rental company may impose an additional
charge, include, but are not limited to, optional insurance and
accessories requested by the renter, service charges incident to the
renter's optional return of the vehicle to a location other than the
location where the vehicle was hired or leased, and charges for
refueling the vehicle at the conclusion of the rental transaction in
the event the renter did not return the vehicle with as much fuel as
was in the fuel tank at the beginning of the rental. A rental company
also may impose an additional charge based on reasonable age
criteria established by the rental company.
(4) A rental company shall not charge a fee for authorized drivers
in addition to the rental charge for an individual renter.
(5) If a rental company states a rental rate in print
advertisement or in a telephonic, in-person, or computer-transmitted
quotation, the rental company shall disclose clearly in that
advertisement or quotation the terms of mileage conditions relating
to the advertised or quoted rental rate, including, but not limited
to, to the extent applicable, the amount of mileage and gas charges,
the number of miles for which no charges will be imposed, and a
description of geographic driving limitations within the United
States and Canada.
(6) All rate advertisements that include car rentals at airport
destinations shall clearly and conspicuously include a toll-free
telephone number whereby a customer can be told the specific amount
of the customer facility charge to which the customer will be
obligated.
(7) If a rental company delivers a vehicle to a renter at a
location other than the location where the rental company normally
carries on its business, the rental company shall not charge the
renter an amount for the rental for the period before the delivery of
the vehicle. If a rental company picks up a rented vehicle from a
renter at a location other than the location where the rental company
normally carries on its business, the rental company shall not
charge the renter an amount for the rental for the period after the
renter notifies the rental company to pick up the vehicle.
(8) Except as otherwise permitted pursuant to the customer
facility charge, a rental company may not separately charge, in
addition to the rental rate, a fee for transporting the renter to the
location where the rented vehicle will be delivered to the renter.
(n) A rental company shall not use any information relating to the
renter's use of the rental vehicle that was obtained using
electronic surveillance technology, except in the following
circumstances:
(1) (A) When the equipment is used by the rental company only for
the purpose of locating a stolen, abandoned, or missing rental
vehicle after one of the following:
(i) The renter or law enforcement has informed the rental company
that the vehicle is missing or has been stolen or abandoned.
(ii) The rental vehicle has not been returned following three days
after the contracted return date, or by three days following the end
of an extension of that return date.
(iii) The rental company discovers the rental vehicle has been
stolen or abandoned, and, if stolen, it shall report the vehicle
stolen to law enforcement by filing a stolen vehicle report, unless
law enforcement has already informed the rental company that the
vehicle is missing or has been stolen or abandoned.
(B) If electronic surveillance technology is activated pursuant to
subparagraph (A), a rental company shall maintain a record, in
either electronic or written form, of information relevant to the
activation of that technology. That information shall include the
rental agreement, including the return date, and the date and time
the electronic surveillance technology was activated. The record
shall also include, if relevant, a record of written or other
communication with the renter, including communications regarding
extensions of the rental, police reports, or other written
communication with law enforcement officials. The record shall be
maintained for a period of at least 12 months from the time the
record is created and shall be made available upon the renter's
request. The rental company shall maintain and furnish explanatory
codes necessary to read the record. A rental company shall not be
required to maintain a record if electronic surveillance technology
is activated to recover a rental vehicle that is stolen or missing at
a time other than during a rental period.
(2) In response to a specific request from law enforcement
pursuant to a subpoena or search warrant.
(3) This subdivision does not prohibit a rental company from
equipping rental vehicles with GPS-based technology that provides
navigation assistance to the occupants of the rental vehicle, if the
rental company does not use information relating to the renter's use
of the rental vehicle that was obtained using that technology, except
for the purposes of providing such navigation assistance or
discovering or repairing a defect in the technology and the
information may then be used only for that purpose.
(4) This subdivision does not prohibit a rental company from
equipping rental vehicles with electronic surveillance technology
that allows for the remote locking or unlocking of the vehicle at the
request of the renter, if the rental company does not use, access,
or obtain information relating to the renter's use of the rental
vehicle that was obtained using that technology, except as necessary
to lock or unlock the vehicle.
(5) This subdivision does not prohibit a rental company from
equipping rental vehicles with electronic surveillance technology
that allows the company to provide roadside assistance, such as
towing, flat tire, or fuel services, at the request of the renter, if
the rental company does not use, access, or obtain information
relating to the renter's use of the rental vehicle that was obtained
using that technology except as necessary to provide the requested
roadside assistance.
(6) This subdivision does not prohibit a rental company from using
information from electronic surveillance technology for the purpose
of determining the date and time the vehicle is returned to the
rental company, the return location, the total mileage driven and the
vehicle fuel level of the returned vehicle. This paragraph, however,
shall apply only after the renter has returned the vehicle to the
rental company, or is at one of the rental companies
company 's facilities and is in the
process of returning the vehicle, and the information shall only be
used for the purpose described in this paragraph.
(o) A rental company shall not use electronic surveillance
technology to track a renter in order to impose fines or surcharges
relating to the renter's use of the rental vehicle.
(p) A renter may bring an action against a rental company for the
recovery of damages and appropriate equitable relief for a violation
of this section. The prevailing party shall be entitled to recover
reasonable attorney's fees and costs.
(q) A rental company that brings an action against a renter for
loss due to theft of the vehicle shall bring the action in the county
in which the renter resides or, if the renter is not a resident of
this state, in the jurisdiction in which the renter resides.
(r) A waiver of any of the provisions of this section shall be
void and unenforceable as contrary to public policy.
(s) A rental company's disclosure requirements shall be satisfied
for renters who are enrolled in the rental company's membership
program if all of the following conditions are met:
(1) Prior to the enrollee's first rental as a participant in the
program, the renter receives, in writing, the following:
(A) All of the disclosures required by paragraph (1) of
subdivision (g), including the terms and conditions of the rental
agreement then in effect.
(B) An Internet Web site address, as well as a contact number or
address, where the enrollee can learn of changes to the rental
agreement or to the laws of this state governing rental agreements
since the effective date of the rental company's most recent
restatement of the rental agreement and distribution of that
restatement to its members.
(2) At the commencement of each rental period, the renter is
provided, on the rental record or the folder in which it is inserted,
with a printed notice stating that he or she had either previously
selected or declined an optional damage waiver and that the renter
has the right to change preferences.
(t) The amendments made to this section during the 2001-02 Regular
Session of the Legislature do not affect litigation pending on or
before January 1, 2003, alleging a violation of Section 22325 of the
Business and Professions Code as it read at the time the action was
commenced.
(u) (1) When a rental company enters into a rental agreement in
the state for the rental of a vehicle to any renter who is not a
resident of this country and, as part of, or associated with, the
rental agreement, the renter purchases liability insurance, as
defined in subdivision (b) of Section 1758.85 of the Insurance Code,
from the rental company in its capacity as a rental car agent for an
authorized insurer, the rental company shall be authorized to accept,
and, if served as set forth in this subdivision, shall accept,
service of a summons and complaint and any other required documents
against the foreign renter for any accident or collision resulting
from the operation of the rental vehicle within the state during the
rental period. If the rental company has a registered agent for
service of process on file with the Secretary of State, process shall
be served on the rental company's registered agent, either by
first-class mail, return receipt requested, or by personal service.
(2) Within 30 days of acceptance of service of process, the rental
company shall provide a copy of the summons and complaint and any
other required documents served in accordance with this subdivision
to the foreign renter by first-class mail, return receipt requested.
(3) Any plaintiff, or his or her representative, who elects to
serve the foreign renter by delivering a copy of the summons and
complaint and any other required documents to the rental company
pursuant to paragraph (1) shall agree to limit his or her recovery
against the foreign renter and the rental company to the limits of
the protection extended by the liability insurance.
(4) Notwithstanding the requirements of Sections 17450 to 17456,
inclusive, of the Vehicle Code, service of process in compliance with
paragraph (1) shall be deemed valid and effective service.
(5) Notwithstanding any other provision of law, the requirement
that the rental company accept service of process pursuant to
paragraph (1) shall not create any duty, obligation, or agency
relationship other than that provided in paragraph (1).
SEC. 2. Section 1936 of the Civil Code, as amended by Section 5.7
of Chapter 913 of the Statutes of 2014, is repealed.
SEC. 3. Section 1936.01 of the Civil Code is repealed.
SEC. 4. Section 1936.015 of the Civil Code is repealed.
SEC. 5. Section 1936.05 of the Civil Code is amended to read:
1936.05. (a) For purposes of this section:
(1) "Additional charges" means charges other than a per period
base rental rate established by the business program.
(2) "Business program" means (A) a contract between a rental
company and a business program sponsor that has established the per
period base rental rate, and any other material terms relating to
additional charges, on which the rental company will rent passenger
vehicles to persons authorized by the sponsor, or (B) a plan,
program, or other arrangement established by a rental company at the
request of, or with the consent of, a business program sponsor under
which the rental company offers to rent passenger vehicles to persons
authorized by the sponsor at per period base rental rates, and any
other material terms relating to additional charges, that are not the
same as those generally offered by the rental company to the public.
(3) "Business program sponsor" means a legal entity, other than a
natural person, that is a corporation, limited liability company, or
partnership.
(4) "Business renter" means, for any business program sponsor, a
person who is authorized by the sponsor, through the use of an
identifying number or program name or code, to enter into a rental
contract under the sponsor's business program. In no case shall the
term "business renter" include a person renting as: (A) a nonemployee
member of a not-for-profit organization, (B) the purchaser of a
voucher or other prepaid rental arrangement from a person, including
a tour operator, engaged in the business of reselling those vouchers
or prepaid rental arrangements to the general public, (C) an
individual whose car rental is eligible for reimbursement in whole or
in part as a result of the person being insured or provided coverage
under a policy of insurance issued by an insurance company, or (D)
an individual whose car rental is eligible for reimbursement in
whole or in part as a result
of the person purchasing passenger vehicle repair services from a
person licensed to perform such services.
(5) "Qualified business rental" under a business program
established for a business program sponsor by a rental company means
the rental of a passenger vehicle under the business program if
either (A) in the 12-month period ending on the date of the rental or
in the calendar year immediately preceding the year in which the
rental occurs, the rentals under all business programs established by
the rental company for the business program sponsor and its
affiliates produced gross rental revenues in excess of twenty-five
thousand dollars ($25,000) or (B) the rental company in good faith
estimates that rentals under all the business programs established by
the rental company for the business program sponsor and its
affiliates will produce gross rental revenues in excess of
twenty-five thousand dollars ($25,000) in the 12-month period
commencing with the date of the rental or in the calendar year in
which the rental occurs. The rental company has the burden of
establishing by objectively verifiable evidence that the rental was a
qualified business rental.
(6) "Quote" means telephonic, in-person, and computer-transmitted
quotations.
(b) Notwithstanding any provision to the contrary contained in
subdivision (m) of Section 1936, a rental car company may, in
connection with the qualified business rental of a passenger vehicle
to a business renter of a business program sponsor under the sponsor'
s business program, do both of the following:
(1) Separately quote additional charges for the rental if, at the
time the quote is provided, the person receiving the quote is also
provided a good faith estimate of the total of all the charges for
the entire rental. The estimate may exclude mileage charges and
charges for optional items and services that cannot be determined
prior to completing the reservation based upon the information
provided by the renter.
(2) Separately impose additional charges for the rental, if the
rental contract, or another document provided to the business renter
at the time and place the rental commences, clearly and conspicuously
discloses the total of all the charges for the entire rental,
exclusive of charges that cannot be determined at the time the rental
commences.
(c) A renter may bring an action against a rental company for the
recovery of damages and appropriate equitable relief for a violation
of this section. The prevailing party shall be entitled to recover
reasonable attorney's fees and costs.
(d) Any waiver of any of the provisions of this section shall be
void and unenforceable as contrary to public policy.
(e) Nothing in this section shall be interpreted to mean that a
rental company is not required to comply with the requirements of
paragraphs (2) to (6), inclusive, of subdivision (m) of Section 1936.