BILL ANALYSIS Ó AB 675 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 675 (Alejo) As Amended August 17, 2015 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |77-1 |(May 4, 2015) |SENATE: | 39-0 |(August 27, | | | | | | |2015) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: JUD. SUMMARY: Revises and recasts the statute governing agreements between rental car companies and their customers in order to allow a rental car company to better separate rental fees from government-imposed charges and achieve other relatively non-controversial changes. Specifically, this bill: 1)Permits a rental car company, when providing a quote or imposing charges, to 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. Requires all rate advertisements to include a specified disclaimer. 2)Defines "additional mandatory charges" to mean any charges AB 675 Page 2 imposed by a government entity that the renter must pay, 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. Defines several other new terms for the purpose of identifying and clarifying additional mandatory charges. 3)Makes several organizational changes to account for provisions that have become inoperative, to consolidate sections so as to avoid redundancy, or otherwise provide a more logical structure to the existing statute. 4)Removes a sunset and thus makes permanent a provision in existing law relating to the service of a summons and complaint against a renter who resides outside of this country for an accident or collision resulting from the operation of a rental vehicle within California. The Senate amendments: 1)Restore provisions relating to disclosures on the effect of damage waivers, a rental car company's ability to obtain information from electronic surveillance technology, and a requirement that a rental car company provide a specified notice on a rearview mirror hangar. 2)Require rate advertisements to contain a specified disclaimer. 3)Remove the sunset on a provision relating to service of summons and complain against a foreign renter. 4)Make additional non-substantive organizational and definitional changes. AB 675 Page 3 EXISTING LAW sets forth general rules governing contracts between rental car companies and their customers on a variety of matters, including, but not limited to, the manner in which rental car companies advertise and quote rental charges and additional fees, the renter's liability or lack thereof for damages to a rental vehicle, the amount that rental car companies may charge for damage waivers and the manner in which they are offered, and the conditions under which a rental car company may access, obtain, and use geo-location and other information from the rental vehicle's electronic surveillance technology. FISCAL EFFECT: None COMMENTS: According to the author, the purpose of this bill is to "modernize" Civil Code Section 1936, which regulates rental car contracts. Civil Code Section 1936 sets forth the general rules governing rental car contracts and the respective duties and liabilities of rental car companies and their customers. One of the key issues that prompted the initial legislation, and which has been the subject of several amendments over the years, concerns the various taxes, assessments, and surcharges typically tacked on to the rental company's fees and the manner in which the company may quote those fees and charges to customers. Under existing law a rental car company must quote the entire amount, with the rental fees and additional surcharges "bundled" together into a single quote. Because rental car companies wanted customers to know which part of the total was attributable to the rental car company and which part to government-imposed fees, the statute was amended in 2007 to authorize rental car companies to separate, or effectively itemize, company fees from other mandatory charges. However the problem with existing law, according to the author, is that it specifically names the fees and charges that existed in 2007 when the legislation was amended. Since that time, several new mandatory charges have been imposed, but they cannot be separately listed because they are not specifically named. This bill would address this shortcoming by permitting the rental car company to separate its rental charges from any "additional AB 675 Page 4 mandatory charges." This bill defines "additional mandatory charges" to mean any charges imposed by a government entity that the renter must pay, 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. The author believes that this measure will promote transparency by clearly delineating the private charges imposed by the rental car company from the many government-imposed exactions, including tourism fees, airport concession and facility fees, vehicle fees, and related fees and surcharges. According to the author, delineation will allow the consumer to know which parts of the total charge reflect the rental company's fees, and which parts represent government-imposed fees. The author stresses, however, that this bill will preserve the existing consumer protection that requires the rental car company to clearly and conspicuously quote the total charge. In addition to the primary goal of unbundling government charges from the fees charged by the rental company, this bill also makes a number of organizational and definitional changes to Civil Code Section 1936 and delete sections or subdivisions that have become inoperative or redundant. Related changes move substantive provisions that were awkwardly placed in definitional sections into more appropriate substantive sections. Analysis Prepared by: Thomas Clark / JUD. / (916) 319-2334FN: 0001407 AB 675 Page 5