Amended in Assembly April 15, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 675

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: begin delete separately stated changes: disclosures. end delete begin insert disclosures: obligations. end insert

begin delete

Existing

end delete

begin insert (1) end insert begin insert   end insert begin insert Existing end insert law governs contracts between rental car companies and their customers in connection with the rental of a passenger begin delete vehicle. end delete

begin delete Existing end delete begin insert vehicle. Existing end insert 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.

begin delete

Existing

end delete

begin insert (2) end insert begin insert   end insert begin insert Existing end insert 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.

begin delete

Existing

end delete

begin insert (3) end insert begin insert   end insert begin insert Existing end insert 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 begin delete in addition to a per period base rental rate and mileage charge, if any, end delete begin insert imposed by a governmental entity end insert 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, begin delete registration fee, end delete or other government imposed taxes or fees. begin insert 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. end insert

begin delete

Existing

end delete

begin insert (4) end insert begin insert   end insert begin insert Existing end insert 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.

begin delete

Existing

end delete

begin insert (5) end insert begin insert   end insert begin insert Existing end insert 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.

begin delete

Existing

end delete

begin insert (6) end insert begin insert   end insert begin insert Existing end insert 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.

begin delete

Existing

end delete

begin insert (7) end insert begin insert   end insert begin insert Existing end insert 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; in or on an advertisement containing a rental 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.

begin delete

Existing

end delete

begin insert (8) end insert begin insert   end insert begin insert Existing end insert 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.

begin delete

This

end delete

begin insert (9) end insert begin insert   end insert begin insert This end insert 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 begin delete in
addition to a per period base rental rate and mileage charge, if any, end delete
begin insert imposed by a governmental entity end insert 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 begin delete fee, registration end delete 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).

begin insert

(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.

end insert begin delete

(16)

end delete

begin insert (17) end insert  “Vehicle license recovery fee” means a charge that seeks
to recover the amount of begin insert any end insert vehicle license begin delete fees end delete begin insert fee and vehicle
registration fee end insert 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, 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) 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.

(IV) 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) 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) 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) 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) 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 begin delete two end delete begin insert three end insert
days after the contracted return date, or by begin delete two end delete begin insert three end insert 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 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.