Existing law generally governs the transactions between a rental company, also referred to as a rental car company, and its customers, including, among other provisions, restrictions on a rental companys use of electronic surveillance technology. Existing law, as part of those restrictions, prohibits a rental company from using, accessing, or obtaining any information relating to the renters use of the rental vehicle that was obtained using electronic surveillance technology, except under specified circumstances including that the rental vehicle has not been returned following one week after the contracted return date or extension of the return date.

This bill would require a rental company to send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement. The bill would prohibit a rental company from denying a rental or lease agreement if the renter chooses not to receive communications electronically. The bill would specify that electronically for those purposes does not include a cellular telephone.

The bill would, until January 1, 2024, additionally authorize electronic surveillance technology to be used by a rental company in circumstances in which the rental vehicle has not been returned within 72 hours after the contract return date or extension of the return date. The bill would require, subject to exceptions, that the rental company notify the renter, as specified, 24 hours in advance of activating the electronic surveillance technology, pursuant to the 72-hour activation provisions. The bill would require rental and lease agreements for rental passenger vehicles to advise the renter for these purposes that electronic surveillance technology may be activated if the rental vehicle is not returned within 72 hours after the contracted return date or extension of the return date. The bill would require a renter to acknowledge the advisement in the rental or lease agreement by initials and would also require an oral advisement to that effect, as specified.

Existing law generally governs the transactions between a rental company, also referred to as a rental car company, and its customers, including, among other provisions, restrictions on a rental companys use of electronic surveillance technology. Existing law, as part of those restrictions, prohibits a rental company from using, accessing, or obtaining any information relating to the renters use of the rental vehicle that was obtained using electronic surveillance technology, except under specified circumstances including that the rental vehicle has not been returned following one week after the contracted return date or extension of the return date.

This bill would require a rental company to send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement. The bill would prohibit a rental company from denying a rental or lease agreement if the renter chooses not to receive communications electronically. The bill would specify that electronically for those purposes does not include a cellular telephone.

The bill would, until January 1, 2024, additionally authorize electronic surveillance technology to be used by a rental company in circumstances in which the rental vehicle has not been returned within 72 hours after the contract return date or extension of the return date. The bill would require, subject to exceptions, that the rental company notify the renter, as specified, 24 hours in advance of activating the electronic surveillance technology, pursuant to the 72-hour activation provisions. The bill would require rental and lease agreements for rental passenger vehicles to advise the renter for these purposes that electronic surveillance technology may be activated if the rental vehicle is not returned within 72 hours after the contracted return date or extension of the return date. The bill would require a renter to acknowledge the advisement in the rental or lease agreement by initials and would also require an oral advisement to that effect, as specified.

Existing law generally governs the transactions between a rental company, also referred to as a rental car company, and its customers, including, among other provisions, restrictions on a rental companys use of electronic surveillance technology. Existing law, as part of those restrictions, prohibits a rental company from using, accessing, or obtaining any information relating to the renters use of the rental vehicle that was obtained using electronic surveillance technology, except under specified circumstances including that the rental vehicle has not been returned following one week after the contracted return date or extension of the return date.

This bill would require a rental company to send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement. The bill would prohibit a rental company from denying a rental or lease agreement if the renter chooses not to receive communications electronically. The bill would specify that electronically for those purposes does not include a cellular telephone.

The bill would, until January 1, 2024, additionally authorize electronic surveillance technology to be used by a rental company in circumstances in which the rental vehicle has not been returned within 48 72 hours after the contract return date or extension of the return date. The bill would require, subject to exceptions, that the rental company notify the renter, as specified, 24 hours in advance of activating the electronic surveillance technology. technology, pursuant to the 72-hour activation provisions. The bill would require rental and lease agreements for rental passenger vehicles to advise the renter for these purposes that electronic surveillance technology may be activated if the rental vehicle is not returned within 48 72 hours after the contracted return date or extension of the return date. The bill would require a renter to acknowledge this the advisement in the rental or lease agreement by initials. initials and would also require an oral advisement to that effect, as specified.

Existing law establishes a presumption that a person who willfully and intentionally fails to return a leased or rented vehicle to its owner within 5 days of the expiration of the agreement has embezzled the vehicle. Existing law requires a peace officer, upon receiving a report based on reliable information that a registered vehicle has been stolen, or that a leased or rented vehicle has not been returned within 5 days after its owner has made written demand for its return following the expiration of the lease or rental agreement, to report the information to the Department of Justice Stolen Vehicle System.

This bill would reduce the period following the expiration of the vehicle lease or rental agreement to 3 days 48 hours for the presumption of embezzlement to apply. The bill would require a peace officer, upon receiving a report that a leased or rented vehicle has not been returned within 3 days 48 hours after its owner has made written demand for its return following the expiration of the lease or rental agreement, to report the information to the Department of Justice Stolen Vehicle System.

Existing law defines specified property crimes, including arson, burglary, larceny, extortion, and trespass and imposes specified penalties for the commission of those crimes.

This bill would state the intent of the Legislature to enact legislation that would make changes to property crime.

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 2620

Author:(Ting)

As Amended Ver:July 2, 2018

Majority vote

(vote not relevant)

(P. & C.P.)

Original Committee Reference: P. & C.P.

SUMMARY: This bill allows rental car companies to use, access, or obtain information relating to a renter's use of a rental vehicle obtained using electronic surveillance technology when the vehicle has not been returned following 72 hours after the contracted return date or the end of any extension. Requires the company to provide various forms of notice to the customer. This bill also authorizes a company to send renters communications electronically, as specified.

The Senate amendments stripped the prior contents of the bill which reduced the period of time a rental car company must wait before reporting a vehicle as stolen if it is not returned at the end of the rental term, and inserted the current provisions allowing electronic surveillance of rental cars that are not returned within 72 hours of the end of the rental term, as specified.

EXISTING LAW:

1. Governs the obligations arising from rental passenger vehicle transactions. (Civil Code Section 1939.01 et seq.)
2. Prohibits a rental car company from using, accessing, or obtaining any information relating to the renter's use of the rental vehicle that was obtained using electronic surveillance technology, except in limited circumstances. (Civil Code Section 1939.23(a).)
3. Provides that rental car companies are permitted to use electronic surveillance technology in response to a specific request from law enforcement pursuant to a subpoena or search warrant or for the purpose of locating a stolen, abandoned, or missing rental vehicle after one of the following:
   1. the renter or law enforcement has informed the rental car company that the vehicle is missing or has been stolen or abandoned;
   2. the rental vehicle has not been returned following one week after the contracted return date or one week after the end of an extension of that return date;
   3. the rental car company discovers that the vehicle has been stolen or abandoned and, if stolen, reports the vehicle stolen to law enforcement by filing a stolen vehicle report, unless law enforcement has already informed the rental company that the vehicle is missing or has been stolen or abandoned; or
4. The rental vehicle is the subject of an AMBER Alert issued pursuant to Section 8594 of the Government Code. If the rental company uses the equipment in connection with this provision relating to an AMBER Alert, the rental company shall notify law enforcement that one of the rental company's vehicles is the subject of an AMBER Alert upon becoming aware of the situation, unless law enforcement has already informed the rental company that the vehicle was the subject of an AMBER Alert. (Civil Code Section 1939.23(a).)
5. Requires a rental car company to maintain a record of information relevant to the activation of electronic surveillance technology, including information regarding communications with the renter and law enforcement. Existing law specifies that this information shall include the return date, the date and time the electronic surveillance technology was activated, and, 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. (Civil Code Section 1939.23 (a)(1)(B).)
6. Permits a rental company to equip its rental vehicles with certain electronic surveillance technology, but prohibits the rental company from using, accessing, or obtaining any information relating to the renter's use of the rental vehicle that was obtained using the electronic surveillance technology, except: a) to discover or repair a defect in global positioning systems (GPS)-based technology that provides navigation assistance to the occupants of the rental vehicle; b) to allow for the remote locking or unlocking of a vehicle at the request of the renter; c) to provide roadside assistance, such as towing, flat tire, or fuel services at the request of the renter; and d) for the sole purpose of determining the date and time the vehicle departs from or is returned to the rental company, and the total mileage driven and the vehicle fuel level of the returned vehicle. (Civil Code Section 1939.23(b) to (c).)
7. Prohibits a rental car company from using electronic surveillance technology to track a renter in order to impose fines or surcharges relating to the renter's use of the rental vehicle. (Civil Code Section 1939.23(d).)
8. Provides that whenever any person who has leased or rented a vehicle willfully and intentionally fails to return the vehicle to its owner within five days after the lease or rental agreement has expired, that person shall be presumed to have embezzled the vehicle. (Vehicle Code Section 10855.)
9. Provides that every peace officer, upon receiving a report based on reliable information that a leased or rented vehicle has not been returned within five days after its owner has made written demand for its return, by certified or registered mail, following the expiration of the lease or rental agreement, shall immediately report the information to the Department of Justice Stolen Vehicle System. (Vehicle Code Section 10500.)
10. Provides, through the California Constitution, that all people are by nature free and independent and have inalienable rights. Among these are pursuing and obtaining safety, happiness, and privacy. (California Constitution article I, Section 1.)

FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel.

COMMENTS: AB 2840 (Corbett), Chapter 317, Statutes of 2004, was enacted into law in response to press accounts of rental car companies using electronic surveillance technology, such as Global Positioning System (GPS), to monitor the driving habits of renters. AB 2840 created protections for renters' privacy by prohibiting a rental company's access to or use of information gathered using electronic surveillance technology except in certain limited situations, such as when the vehicle is missing or stolen; in response to a renter's specific request for navigation assistance or remote access to a vehicle; or in response to a specific request from law enforcement pursuant to a subpoena or search warrant. The provisions were later reorganized and are currently found in Section 1939.23 of the Civil Code.

This bill amends one of the existing exceptions for rental companies' use of electronic surveillance on their customers. It provides that a company can use electronic surveillance to track a vehicle when the vehicle has not been returned 72 hours after the contracted return.

The author states, "Rental car thefts are becoming more and more commonplace across California, and it's especially rampant in my city of San Francisco. This issue became more prevalent when a local van rental company couldn't even obtain assistance from law enforcement to recover [its] own vehicle, which was late. AB 2620 will help rental car companies recover their stolen vehicles by shortening the waiting period to turn on GPS tracking from one week to [three] days after a vehicle hasn't been returned."

Relevant here is the exception under existing law that allows a company to use surveillance technology when a vehicle has not been returned after one week. That provision allows a rental company to utilize this technology without any notification that the vehicle has been stolen or abandoned if one week had passed from the agreed-upon return date. The author contends that the one week timeline is "far too long for the rental car companies because oftentimes if a renter is late with returning their vehicle it usually doesn't take a week to contact the rental car company to state that they need the vehicle longer than their contracted date." Accordingly, this bill would reduce that one week waiting period, to a 72-hour waiting period.

While reducing the time that a rental car company must wait before employing surveillance technology, this bill would also increase consumer privacy protections by requiring a disclosure in the rental agreement, specifically acknowledged by the renter, that electronic surveillance of the vehicle under these circumstances may take place. In addition, rental companies would be required to verbally notify customers of this possibility. Consumers would also be protected by a required 24-hour notice that must be provided by telephone and electronically, as specified, to the renter before the surveillance technology is activated. Furthermore, this bill places a sunset on this provision of January 1, 2024. This allows the Legislature to reconsider these provisions should any issues with the provisions of this bill arise.

Analysis Prepared by: Nichole Rapier / P. & C.P. / (916) 319-2200 FN: 0004782

Date of Hearing: August 23, 2018

ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION

Ed Chau, Chair

ABPCA Bill Id:AB 2620 (

Author:Ting) – As Amended Ver:July 2, 2018

PURSUANT TO ASSEMBLY RULE 77.2

SUBJECT: Rental passenger vehicle transactions

SUMMARY: This bill would allow rental car companies to use, access, or obtain information relating to a renter’s use of a rental vehicle using electronic surveillance technology when the vehicle has not been returned following 72 hours after the contracted return date or the end of any extension, as specified. Specifically, this bill would:

1. Provide that until January 1, 2024, if a rental vehicle has not been returned following 72 hours after the contracted return date, as specified, the rental company may activate electronic surveillance technology.
2. Require that a rental company provide, electronically and by telephone, notice of activation of the electronic surveillance technology 24 hours prior to activation, unless the renter has not provided a telephone number or the renter has not agreed to electronic communication, as specified.
3. Require rental companies that use surveillance technology pursuant to provisions above, to advise the renter orally and in the rental or lease agreement that electronic surveillance technology may be activated if the rental vehicle has not been returned within 72 hours after the contracted return date or extension of the return date, and would require that the renter acknowledge this advisement in the rental or lease agreement by initials.
4. Exempt members of the rental company’s membership program from the advisement requirement above, but would require that those advisements be provided upon enrolling in the rental company’s membership program.
5. Require a rental company to send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement, and prohibit a rental company from denying a rental or lease agreement if the renter chooses not to receive communications electronically.

EXISTING LAW:

1. Provides, through the California Constitution, that all people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy. (Cal. Const, art. I, Sec. 1.)
2. Governs the obligations arising from rental passenger vehicle transactions. (Civ. Code Sec. 1939.01 et seq.)
3. Prohibits a rental car company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using electronic surveillance technology, except in limited circumstances. (Civ. Code Sec. 1939.23(a).)
4. Provides that rental car companies are permitted to use electronic surveillance technology in response to a specific request from law enforcement pursuant to a subpoena or search warrant or for the purpose of locating a stolen, abandoned, or missing rental vehicle after one of the following:

• the renter or law enforcement has informed the rental car company that the vehicle is missing or has been stolen or abandoned;
• the rental vehicle has not been returned following one week after the contracted return date or one week after the end of an extension of that return date;
• the rental car company discovers that the vehicle has been stolen or abandoned and, if stolen, reports the vehicle stolen to law enforcement by filing a stolen vehicle report, unless law enforcement has already informed the rental company that the vehicle is missing or has been stolen or abandoned; or
• the rental vehicle is the subject of an AMBER Alert issued pursuant to Section 8594 of the Government Code. If the rental company uses the equipment in connection with this provision relating to an AMBER Alert, the rental company shall notify law enforcement that one of the rental company’s vehicles is the subject of an AMBER Alert upon becoming aware of the situation, unless law enforcement has already informed the rental company that the vehicle was the subject of an AMBER Alert. (Civ. Code Sec. 1939.23(a).)

1. Requires a rental car company to maintain a record of information relevant to the activation of electronic surveillance technology, including information regarding communications with the renter and law enforcement. Existing law specifies that this information shall include the return date, the date and time the electronic surveillance technology was activated, and, 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. (Civ. Code Sec. 1939.23 (a)(1)(B).)
2. Permits a rental company to equip its rental vehicles with certain electronic surveillance technology, but prohibits the rental company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using the electronic surveillance technology, except:
   • to discover or repair a defect in global positioning systems (GPS)-based technology that provides navigation assistance to the occupants of the rental vehicle;
   • to allow for the remote locking or unlocking of a vehicle at the request of the renter;
   • to provide roadside assistance, such as towing, flat tire, or fuel services at the request of the renter; or
   • for the sole purpose of determining the date and time the vehicle departs from or is returned to the rental company, and the total mileage driven and the vehicle fuel level of the returned vehicle. (Civ. Code Sec. 1939.23(b)-(c).)
3. Prohibits a rental car company from using electronic surveillance technology to track a renter in order to impose fines or surcharges relating to the renter’s use of the rental vehicle. (Civ. Code Sec. 1939.23(d).)
4. Provides that whenever any person who has leased or rented a vehicle willfully and intentionally fails to return the vehicle to its owner within five days after the lease or rental agreement has expired, that person shall be presumed to have embezzled the vehicle. (Veh. Code Sec. 10855.)
5. Provides that every peace officer, upon receiving a report based on reliable information that a leased or rented vehicle has not been returned within five days after its owner has made written demand for its return, by certified or registered mail, following the expiration of the lease or rental agreement, shall immediately report the information to the Department of Justice Stolen Vehicle System. (Veh. Code Sec. 10500.)

FISCAL EFFECT: None. This bill has been keyed nonfiscal by the Legislative Counsel.

COMMENTS:

1. Purpose of the bill: This bill seeks to shorten the time period, from one week to three days, that a rental car company must wait before activating GPS in vehicles that have not been returned by the end of the contract period. This bill is sponsored by Bandago Van Rental.
2. Author’s statement: According to the author, “Existing law requires a rental car company to wait seven days before turning on GPS to recover their vehicles that have been out of contract for that period of time. One week is far too long for the rental car companies because oftentimes if a renter is late with returning their vehicle it usually doesn’t take a week to contact the rental car company to state that they need the vehicle longer than their contracted date. Rental car companies have reported that their vehicles have been found as far as Mexico after waiting the necessary one week period. Oftentimes these vehicles are stripped for parts or are used to commit other crimes.

[…]

AB 2620 would shorten the waiting period for rental car companies to turn on GPS from seven to three days after a vehicle has not been returned by its contracted date until January 1, 2024. The rental company would first have to provide notice 24 hours prior to triggering GPS and must provide this information verbally and in the lease agreement. The bill would additionally allow rental car companies to send communications electronically if the renter agrees to do so.”

1. Privacy and electronic surveillance technology: Placed in the state constitution by ballot proposition in 1972, Californians have an inalienable right to privacy, which is enforceable against both the government and private parties. Consistent with that right, the Legislature has enacted numerous policies intended to safeguard individuals’ privacy, including the surveillance restrictions this bill seeks to amend. After reports of a Connecticut rental company charging customers extra for speeding, California became one of only a handful of states to restrict the practice of using electronic surveillance technology in rental cars. (See AB 2840 (Corbett, Ch. 317, Stats. 2004).)

AB 2840 defined “electronic surveillance technology” to mean a technological method or system used to observe, monitor, or collect information, including telematics, GPS, wireless technology, or location-based technologies, and recognized that despite electronic surveillance technology’s utility to the entities employing it and the populations being surveilled, such technology also may violate an individual’s right to privacy. Thus, while that bill prohibited rental companies from using, accessing, or obtaining information derived from electronic surveillance technology, it intentionally did not affect rental companies’ ability to contract with third parties offering various services, such as navigational assistance or the remote locking or unlocking of a vehicle. However, those third parties are not permitted to share data obtained from surveillance technology with the rental company.

1. Options for rental companies when a vehicle is not returned on time: Existing law authorizes rental companies to equip their vehicles with surveillance technology, but only allows the company to access information obtained with the use of that technology in a limited number of circumstances, including when the vehicle is reported stolen by the renter or when the vehicle is the subject of an AMBER alert. Relevant to this bill, existing law also allows a rental company to use surveillance technology after a vehicle has not been returned for one week after the end of the contract term. (Civ. Code Sec. 1939.23.)

At the same time, existing law also presumes that a person who has not returned a rental car within five days after the lease or rental agreement has expired is presumed to have embezzled the vehicle, and provides that the punishment for embezzlement is the same as prescribed for the theft of property of the value or kind embezzled. (Veh. Code Sec. 10855; Pen. Code Sec. 514.) Thus, embezzlement of a vehicle may result in charges of grand theft. (See Pen. Code Sec. 484.)

An earlier version of this bill would have shortened the waiting period to establish a presumption of embezzlement to three days. Proponents of the bill argued that this was necessary because of an increase in the theft of rental vehicles, as evidenced by “a San Francisco rental van company owner [who] spotted one of his past-due vans and tried to obtain assistance from law enforcement to recover his vehicle. Despite having all the paperwork proving that the perpetrator was unlawfully occupying the vehicle, the police were not able to provide assistance because the van could only be reported as embezzled five days after it was due. The owner asked police for assistance, but he was not able to obtain it despite only being a few blocks away, so he recovered his vehicle without their assistance.”

In opposition to that version of the bill the California Public Defenders Association wrote that “five days, as opposed to three days, allows more time for an individual to remedy an honest mistake. Allowing for an individual to remedy a mistake, or correct his or her misbehavior, is more advantageous than prosecution or bureaucratic documentation.” In response to these concerns, the author subsequently struck the embezzlement provisions and amended the bill to instead shorten the waiting period before a rental company may access information obtained from electronic surveillance technology.

Accordingly, the current version of the bill allows rental companies to glean information about the vehicle using surveillance technology, including the vehicle’s whereabouts, prior to pursuing charges of embezzlement. Knowing the location of a vehicle that has not been returned in three days may help the rental company ascertain whether the vehicle has in fact been stolen, but it may also help locate a renter who is lost, injured, or otherwise in distress. If a renter has not contacted the rental company within three days after a scheduled return date, it seems reasonable to believe that either the vehicle has been stolen or that the renter is in need of aid. In either case, knowing the location of the vehicle, and the renter, could be critically important.

1. Meaningful consumer protections balance competing rights and interests: As noted in the Comments 3 and 4 above, despite the benefits that surveillance technology may offer to rental companies, consumers, and law enforcement, the unregulated tracking of the whereabouts and habits of drivers would violate the right to privacy guaranteed to Californians by the state constitution. It should be noted that, as a general matter, rights do not exist in a vacuum, and in addition to privacy, the California constitution equally protects “acquiring, possessing, and protecting property.” (Cal. Const, art. I, Sec. 1.) The constitutional rights of individuals have to be balanced against each other so that each may be given effect.

To that end, the author has included a number of provisions in this bill to reasonably protect individuals’ privacy and ensure consumer protection, while simultaneously giving rental companies the opportunity to better protect their property by allowing them to activate electronic surveillance technology sooner. Specifically, this bill would require that a rental company notify a renter, both orally and in the rental or lease agreement, that the company may use electronic surveillance if the rental vehicle has not been returned within 72 hours after the contracted return date or extension of the return date. Additionally, the bill would require that a rental company provide, electronically and by telephone, notice of activation of the electronic surveillance technology 24 hours prior to activation, as specified. This should ensure that the renter is reminded that his or her use of the vehicle is about to be monitored, and will arguably give a renter another opportunity to extend his or her contract prior to the rental vehicle being tracked.

Finally, the provisions related to electronic surveillance under this bill would sunset on January 1, 2024. This should ensure that prior to these provisions being permanently enacted, the Legislature will have an opportunity to evaluate the policy and determine if the privacy rights of individuals are being appropriately balanced with the property interests of rental companies.

1. Modernizing communication between rental companies and consumers: This bill would require a rental company to send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement. Many consumers prefer electronic communication because information can be stored electronically and accessible from a variety of devices, but as an important protection for consumers who prefer communication by more traditional means, this bill would also prohibit a rental company from denying a rental or lease agreement if the renter chooses not to receive communications electronically. This provision should serve to ensure that consumers have a meaningful choice in how they choose to interact with car rental companies.
2. Prior legislation: AB 1185 (O’Donnell, 2017) would have revised provisions relating to rental company membership programs, advertising, and disclosures. This bill died in the Senate Judiciary Committee.

AB 2051 (O’Donnell, Ch. 183, Stats. 2016), reorganized and reconciled several Civil Code sections addressing rental cars and rental car facilities. The bill provided that entities outside rental companies that rent vehicles provide disclosures to the consumer about customer charges.

AB 675 (Alejo, Ch. 333, Stats 2015), revised and recast 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.

AB 2840 (Corbett, Ch. 317, Stats. 2004) see Comment 3. .

REGISTERED SUPPORT / OPPOSITION:

Support

Bandago Van Rental (sponsor)

AAA Rent a Van Inc.

AVR Van Rental

Escape Campervans

Los Angeles County District Attorney

Midway Auto Group

Zeeba Rent-A-Van

Opposition

None on file

Analysis Prepared by: Nichole Rapier / P. & C.P. / (916) 319-2200

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2620

Author:(Ting)

As Amended Ver:July 2, 2018

Majority vote

Original Committee Reference: P. & C.P.

SUMMARY: This bill allows rental car companies to use, access, or obtain information relating to a renter's use of a rental vehicle obtained using electronic surveillance technology when the vehicle has not been returned following 72 hours after the contracted return date or the end of any extension. Requires the company to provide various forms of notice to the customer. This bill also authorizes a company to send renters communications electronically, as specified.

The Senate amendments stripped the prior contents of the bill which reduced the period of time a rental car company must wait before reporting a vehicle as stolen if it is not returned at the end of the rental term, and inserted the current provisions allowing electronic surveillance of rental cars that are not returned within 72 hours of the end of the rental term, as specified.

EXISTING LAW:

1. Governs the obligations arising from rental passenger vehicle transactions. (Civil Code Section (CIV) 1939.01 et seq.)
2. Prohibits a rental car company from using, accessing, or obtaining any information relating to the renter's use of the rental vehicle that was obtained using electronic surveillance technology, except in limited circumstances. (CIV 1939.23(a).)
3. Provides that rental car companies are permitted to use electronic surveillance technology in response to a specific request from law enforcement pursuant to a subpoena or search warrant or for the purpose of locating a stolen, abandoned, or missing rental vehicle after one of the following:
   1. The renter or law enforcement has informed the rental car company that the vehicle is missing or has been stolen or abandoned;
   2. The rental vehicle has not been returned following one week after the contracted return date or one week after the end of an extension of that return date;
   3. The rental car company discovers that the vehicle has been stolen or abandoned and, if stolen, reports the vehicle stolen to law enforcement by filing a stolen vehicle report, unless law enforcement has already informed the rental company that the vehicle is missing or has been stolen or abandoned; or
   4. The rental vehicle is the subject of an AMBER Alert issued pursuant to Government Code Section 8594. If the rental company uses the equipment in connection with this provision relating to an AMBER Alert, the rental company shall notify law enforcement that one of the rental company's vehicles is the subject of an AMBER Alert upon becoming aware of the situation, unless law enforcement has already informed the rental company that the vehicle was the subject of an AMBER Alert. (CIV 1939.23(a).)
4. Requires a rental car company to maintain a record of information relevant to the activation of electronic surveillance technology, including information regarding communications with the renter and law enforcement. Existing law specifies that this information shall include the return date, the date and time the electronic surveillance technology was activated, and, 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. (CIV 1939.23 (a)(1)(B).)
5. Permits a rental company to equip its rental vehicles with certain electronic surveillance technology, but prohibits the rental company from using, accessing, or obtaining any information relating to the renter's use of the rental vehicle that was obtained using the electronic surveillance technology, except: (a) to discover or repair a defect in global positioning systems (GPS)-based technology that provides navigation assistance to the occupants of the rental vehicle; (b) to allow for the remote locking or unlocking of a vehicle at the request of the renter; (c) to provide roadside assistance, such as towing, flat tire, or fuel services at the request of the renter; and (d) for the sole purpose of determining the date and time the vehicle departs from or is returned to the rental company, and the total mileage driven and the vehicle fuel level of the returned vehicle. (CIV 1939.23(b)-(c).)
6. Prohibits a rental car company from using electronic surveillance technology to track a renter in order to impose fines or surcharges relating to the renter's use of the rental vehicle. (CIV 1939.23(d).)
7. Provides that whenever any person who has leased or rented a vehicle willfully and intentionally fails to return the vehicle to its owner within five days after the lease or rental agreement has expired, that person shall be presumed to have embezzled the vehicle. (Vehicle Code Section 10855.)
8. Provides that every peace officer, upon receiving a report based on reliable information that a leased or rented vehicle has not been returned within five days after its owner has made written demand for its return, by certified or registered mail, following the expiration of the lease or rental agreement, shall immediately report the information to the Department of Justice Stolen Vehicle System. (Vehicle Code Section. 10500.)
9. Provides, through the California Constitution, that all people are by nature free and independent and have inalienable rights. Among these are pursuing and obtaining safety, happiness, and privacy. (California Constitution, Article. I, Section 1.)

FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel.

COMMENTS: AB 2840 (Corbett) Chapter 317, Statutes of 2004) was enacted into law in response to press accounts of rental car companies using electronic surveillance technology, such as Global Positioning System (GPS), to monitor the driving habits of renters. AB 2840 created protections for renters' privacy by prohibiting a rental company's access to or use of information gathered using electronic surveillance technology except in certain limited situations, such as when the vehicle is missing or stolen; in response to a renter's specific request for navigation assistance or remote access to a vehicle; or in response to a specific request from law enforcement pursuant to a subpoena or search warrant. The provisions were later reorganized and are currently found in Civil Code Section 1939.23.

This bill amends one of the existing exceptions for rental companies' use of electronic surveillance on their customers. It provides that a company can use electronic surveillance to track a vehicle when the vehicle has not been returned 72 hours after the contracted return.

The author states, "Rental car thefts are becoming more and more commonplace across California, and it's especially rampant in my city of San Francisco. This issue became more prevalent when a local van rental company couldn't even obtain assistance from law enforcement to recover [its] own vehicle, which was late. AB 2620 will help rental car companies recover their stolen vehicles by shortening the waiting period to turn on GPS tracking from one week to [three] days after a vehicle hasn't been returned."

Relevant here is the exception under existing law that allows a company to use surveillance technology when a vehicle has not been returned after one week. That provision allows a rental company to utilize this technology without any notification that the vehicle has been stolen or abandoned if one week had passed from the agreed-upon return date. The author contends that the one week timeline is "far too long for the rental car companies because oftentimes if a renter is late with returning their vehicle it usually doesn't take a week to contact the rental car company to state that they need the vehicle longer than their contracted date." Accordingly, this bill would reduce that one week waiting period, to a 72-hour waiting period.

While reducing the time that a rental car company must wait before employing surveillance technology, this bill would also increase consumer privacy protections by requiring a disclosure in the rental agreement, specifically acknowledged by the renter, that electronic surveillance of the vehicle under these circumstances may take place. In addition, rental companies would be required to verbally notify customers of this possibility. Consumers would also be protected by a required 24-hour notice that must be provided by telephone and electronically, as specified, to the renter before the surveillance technology is activated. Furthermore, this bill places a sunset on this provision of January 1, 2024. This allows the Legislature to reconsider these provisions should any issues with the provisions of this bill arise.

Analysis Prepared by: Nichole Rapier / P. & C.P. / (916) 319-2200 FN: 0004015

 THIRD READING  

Bill No: AB 2620

Author:

:

Vote:

SENATE JUDICIARY COMMITTEE: 7-0, 6/26/18

AYES: Jackson, Moorlach, Anderson, Hertzberg, Monning, Stern, Wieckowski

ASSEMBLY FLOOR: 71-0, 5/3/18 (Consent) - See last page for vote

SUBJECT:

SOURCE: Bandago Van Rental

DIGEST:

This bill allows rental car companies to use, access, or obtain information relating to a renter’s use of a rental vehicle obtained using electronic surveillance technology when the vehicle has not been returned following 72 hours after the contracted return date or the end of any extension. Requires the company to provide various forms of notice to the customer. This bill also authorizes a company to send renters communications electronically, as specified.

ANALYSIS:

Existing law:

1. Governs the obligations arising from rental passenger vehicle transactions. (Civ. Code Sec. 1939.01 et seq.)
2. Prohibits a rental car company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using electronic surveillance technology, except in limited circumstances. (Civ. Code Sec. 1939.23(a).)
3. Provides that rental car companies are permitted to use electronic surveillance technology in response to a specific request from law enforcement pursuant to a subpoena or search warrant or for the purpose of locating a stolen, abandoned, or missing rental vehicle after one of the following:

• the renter or law enforcement has informed the rental car company that the vehicle is missing or has been stolen or abandoned;
• the rental vehicle has not been returned following one week after the contracted return date or one week after the end of an extension of that return date;
• the rental car company discovers that the vehicle has been stolen or abandoned and, if stolen, reports the vehicle stolen to law enforcement by filing a stolen vehicle report, unless law enforcement has already informed the rental company that the vehicle is missing or has been stolen or abandoned; or
• the rental vehicle is the subject of an AMBER Alert issued pursuant to Section 8594 of the Government Code. If the rental company uses the equipment in connection with this provision relating to an AMBER Alert, the rental company shall notify law enforcement that one of the rental company’s vehicles is the subject of an AMBER Alert upon becoming aware of the situation, unless law enforcement has already informed the rental company that the vehicle was the subject of an AMBER Alert. (Civ. Code Sec. 1939.23(a).)

1. Requires a rental car company to maintain a record of information relevant to the activation of electronic surveillance technology, including information regarding communications with the renter and law enforcement. Existing law specifies that this information shall include the return date, the date and time the electronic surveillance technology was activated, and, 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. (Civ. Code Sec. 1939.23 (a)(1)(B).)
2. Permits a rental company to equip its rental vehicles with certain electronic surveillance technology, but prohibits the rental company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using the electronic surveillance technology, except: (a) to discover or repair a defect in global positioning systems (GPS)-based technology that provides navigation assistance to the occupants of the rental vehicle; (b) to allow for the remote locking or unlocking of a vehicle at the request of the renter; (c) to provide roadside assistance, such as towing, flat tire, or fuel services at the request of the renter; and (d) for the sole purpose of determining the date and time the vehicle departs from or is returned to the rental company, and the total mileage driven and the vehicle fuel level of the returned vehicle. (Civ. Code Sec. 1939.23(b)-(c).)
3. Prohibits a rental car company from using electronic surveillance technology to track a renter in order to impose fines or surcharges relating to the renter’s use of the rental vehicle. (Civ. Code Sec. 1939.23(d).)
4. Provides that whenever any person who has leased or rented a vehicle willfully and intentionally fails to return the vehicle to its owner within five days after the lease or rental agreement has expired, that person shall be presumed to have embezzled the vehicle. (Veh. Code Sec. 10855.)
5. Provides that every peace officer, upon receiving a report based on reliable information that a leased or rented vehicle has not been returned within five days after its owner has made written demand for its return, by certified or registered mail, following the expiration of the lease or rental agreement, shall immediately report the information to the Department of Justice Stolen Vehicle System. (Veh. Code Sec. 10500.)
6. Provides, through the California Constitution, that all people are by nature free and independent and have inalienable rights. Among these are pursuing and obtaining safety, happiness, and privacy. (Cal. Const, Art. I, Sec. 1.)

This bill:

1. Provides that a rental company shall send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement. A rental company shall not deny a rental or lease agreement if the renter chooses not to receive communications electronically. For purposes of this section, “electronically” does not include a cellular telephone.
2. Provides that until January 1, 2024, if a rental vehicle has not been returned following 72 hours after the contracted return date or by 72 hours following the end of an extension of that return date, the rental company may activate electronic surveillance technology. The rental company shall provide notice of activation of the electronic surveillance technology 24 hours prior to activation, by telephone and electronically pursuant to Section 1939.22, unless the renter has not provided a telephone number or the renter has not agreed to electronic communication pursuant to Section 1939.22.
3. Provides that, if the rental company wishes to use surveillance technology pursuant to the above provision, the rental or lease agreement shall advise the renter that electronic surveillance technology may be activated if the rental vehicle has not been returned within 72 hours after the contracted return date or extension of the return date. The renter shall acknowledge this advisement in the rental or lease agreement by initials. The advisement shall also be made orally to the renter at the time of executing the rental or lease agreement. The advisements are not required to be made to members of the rental company’s membership program executing a rental or lease agreement; however, a renter shall be given those advisements upon enrolling in the rental company’s membership program.

Background

AB 2840 (Corbett, Chapter 317, Statutes 2004) was enacted into law in response to press accounts of rental car companies using electronic surveillance technology, such as GPS, to monitor the driving habits of renters and thereby violate their privacy rights in the process. Companies used the systems to track renters’ routes and speeds, imposing fees and penalties. The bill created protections for renters’ privacy by prohibiting a rental company’s access to or use of information gathered using electronic surveillance technology except in certain limited situations, such as when the vehicle is missing or stolen; in response to a renter’s specific request for navigation assistance or remote access to a vehicle; or in response to a specific request from law enforcement pursuant to a subpoena or search warrant. It was supported by rental car companies, civil liberties organizations, consumer groups, and the Attorney General. These provisions were later reorganized and are currently found in Section 1939.23 of the Civil Code.

This bill amends one of the existing exceptions for rental companies’ use of electronic surveillance on their customers. It provides that a company can use electronic surveillance to track a vehicle when the vehicle has not been returned 72 hours after the contracted return. A company is required to disclose this possibility in the rental contract and is required to provide notice 24 hours in advance of the planned use of electronic surveillance. This provision sunsets on January 1, 2024. This bill also requires a rental company to send communications electronically if renters agree to such communications.

Comments

The author states, “Rental car thefts are becoming more and more commonplace across California, and it’s especially rampant in my city of San Francisco. This issue became more prevalent when a local van rental company couldn’t even obtain assistance from law enforcement to recover [its] own vehicle, which was late. AB 2620 will help rental car companies recover their stolen vehicles by shortening the waiting period to turn on GPS tracking from one week to [three] days after a vehicle hasn’t been returned.”

Reducing the period before which an unreturned car can be surveilled

Given that the use of electronic surveillance technology by rental companies to obtain information about or track their vehicles while rented to customers can have serious privacy implications, existing law only provides several narrowly circumscribed exceptions to the general prohibition on electronic surveillance technology use. A rental company is prohibited from using, accessing, or obtaining any information relating to a renter’s use of a rental vehicle that was obtained using electronic surveillance technology, except in two circumstances.

The first exception is in direct response to a specific request from law enforcement pursuant to a subpoena or search warrant. The second is when the equipment is used only for the purpose of locating a stolen, abandoned, or missing rental vehicle. This latter exception requires that the rental company has discovered the rental vehicle has been stolen or abandoned, either through the renter, law enforcement, or other means; that the vehicle is the subject of an AMBER Alert; or that the vehicle has not been returned following one week after the contracted return date or the end of an extension of that date.

Relevant here is the exception that allows a company to use surveillance technology when a vehicle has not been returned after one week. Based on the Senate Judiciary Committee’s analysis of the inclusion of this exception in the statute, it was added in response to concerns from rental companies that the other exceptions were too restrictive because “rental companies often seek to locate missing vehicles themselves prior to seeking assistance from law enforcement.” (Senate Judiciary Committee, AB 2840 Analysis, 2004.) The amendment allowed a rental company to utilize this technology without any information that the vehicle has been stolen or abandoned if one week had passed from the agreed-upon return date.

The author contends that the one-week timeline is “far too long for the rental car companies because oftentimes if a renter is late with returning their vehicle it usually doesn’t take a week to contact the rental car company to state that they need the vehicle longer than their contracted date.” Arguably a customer’s right to privacy diminishes the more time elapses beyond the contracted return date and a rented vehicle is not returned.

While a missed return date should not automatically trigger the rather exceptional power to electronically track the customer’s vehicle, it is arguably reasonable that after three days, the customer has lost the right to privacy over the vehicle’s whereabouts in the face of the countervailing interest of the rental company locating a vehicle kept so far beyond a contractually agreed-upon return date.

Customers’ privacy interests are further buttressed by the required disclosure in the rental agreement, specifically acknowledged by the renter, that electronic surveillance of the vehicle under these circumstances may take place. In addition, rental companies are required to verbally notify customers of this possibility.

Consumers are also protected by the 24-hour notice that must be provided the renter before the surveillance technology is activated. The 24-hour notice must be provided both by telephone, if a number is provided, and electronically, if agreed to by the customer in the rental agreement.

Furthermore, this bill places a sunset on this provision of January 1, 2024. This allows the Legislature to reconsider these provisions should any issues with the additional surveillance powers arise.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 7/3/18)

Bandago Van Rental (source)

Airport Van Rental

Escape Campervans

Los Angeles County District Attorney’s Office

Midway Auto Group

State Van Rental

Zeeba Company, Inc.

OPPOSITION: (Verified 7/3/18)

None received

ARGUMENTS IN SUPPORT: Escape Campervans writes that “AB 2620 would ease the process of recovering vehicles to rental car companies by shortening presumption of embezzlement reporting time from five to three days.”

ASSEMBLY FLOOR: 71-0, 5/3/18

AYES: Acosta, Aguiar-Curry, Arambula, Baker, Berman, Bigelow, Bloom, Bonta, Brough, Burke, Calderon, Carrillo, Cervantes, Chau, Chávez, Chen, Chiu, Chu, Cooley, Cooper, Cunningham, Dahle, Daly, Eggman, Flora, Fong, Frazier, Friedman, Gallagher, Eduardo Garcia, Gipson, Gloria, Gonzalez Fletcher, Gray, Harper, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Kiley, Lackey, Levine, Limón, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Obernolte, O'Donnell, Patterson, Quirk, Reyes, Rodriguez, Rubio, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Waldron, Weber, Wood, Rendon

NO VOTE RECORDED: Travis Allen, Caballero, Choi, Cristina Garcia, Grayson, Quirk-Silva, Voepel

Prepared by:

7/3/18 15:23:09

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2017-2018 Regular Session

Bill No: AB 2620 (Author:Ting)

Version: May 29, 2018

Hearing Date: June 26, 2018

Fiscal: No

Urgency: No

Consultant: CK

SUBJECT

Rental passenger vehicle transactions

DESCRIPTION

This bill would allow rental car companies to use, access, or obtain information relating to a renter’s use of a rental vehicle obtained using electronic surveillance technology when the vehicle has not been returned following 48 hours after the contracted return date or the end of any extension. The company would be required to provide notice to the customer 24 hours in advance, by telephone and electronically, as specified. In addition, the rental contract would have to advise the customer that the surveillance may be activated in such situations and such shall be acknowledged by the customer’s initials. This bill would also authorize a company to send communications electronically to a renter if the renter agrees to such communications in the contract.

BACKGROUND

AB 2840 (Corbett, Chapter 317, Statutes 2004) was enacted into law in response to press accounts of rental car companies using electronic surveillance technology, such as global positioning systems (GPS), to monitor the driving habits of renters and thereby violate their privacy rights in the process. Companies used the systems to track renters’ routes and speeds, imposing fees and penalties. The bill created protections for renters’ privacy by prohibiting a rental company’s access to or use of information gathered using electronic surveillance technology except in certain limited situations, such as when the vehicle is missing or stolen; in response to a renter’s specific request for navigation assistance or remote access to a vehicle; or in response to a specific request from law enforcement pursuant to a subpoena or search warrant. It was supported by rental car companies, civil liberties organizations, consumer groups, and the Attorney General. These provisions were later reorganized and are currently found in Section 1939.23 of the Civil Code.

This bill would amend one of the existing exceptions for rental companies’ use of electronic surveillance on their customers. It would provide that a company can use electronic surveillance to track a vehicle when the vehicle has not been returned 48 hours after the contracted return date rather than the one-week period that existing law requires. A company would be required to disclose this possibility in the rental contract and would be required to provide notice 24 hours in advance of the planned use of electronic surveillance. On January 1, 2024, this provision would revert back to existing law. This bill would also require a rental company to send communications electronically if renters agree to such communications.

CHANGES TO EXISTING LAW

Existing law governs the obligations arising from rental passenger vehicle transactions. (Civ. Code Sec. 1939.01 et seq.)

Existing law prohibits a rental car company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using electronic surveillance technology, except in limited circumstances. (Civ. Code Sec. 1939.23(a).)

Existing law provides that rental car companies are permitted to use electronic surveillance technology in response to a specific request from law enforcement pursuant to a subpoena or search warrant or for the purpose of locating a stolen, abandoned, or missing rental vehicle after one of the following:

• the renter or law enforcement has informed the rental car company that the vehicle is missing or has been stolen or abandoned;
• the rental vehicle has not been returned following one week after the contracted return date or one week after the end of an extension of that return date;
• the rental car company discovers that the vehicle has been stolen or abandoned and, if stolen, reports the vehicle stolen to law enforcement by filing a stolen vehicle report, unless law enforcement has already informed the rental company that the vehicle is missing or has been stolen or abandoned; or
• the rental vehicle is the subject of an AMBER Alert issued pursuant to Section 8594 of the Government Code. If the rental company uses the equipment in connection with this provision relating to an AMBER Alert, the rental company shall notify law enforcement that one of the rental company’s vehicles is the subject of an AMBER Alert upon becoming aware of the situation, unless law enforcement has already informed the rental company that the vehicle was the subject of an AMBER Alert. (Civ. Code Sec. 1939.23(a).)

Existing law requires a rental car company to maintain a record of information relevant to the activation of electronic surveillance technology, including information regarding communications with the renter and law enforcement. Existing law specifies that this information shall include the return date, the date and time the electronic surveillance technology was activated, and, 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. (Civ. Code Sec. 1939.23 (a)(1)(B).)

Existing law permits a rental company to equip its rental vehicles with certain electronic surveillance technology, but prohibits the rental company from using, accessing, or obtaining any information relating to the renter’s use of the rental vehicle that was obtained using the electronic surveillance technology, except: (1) to discover or repair a defect in GPS-based technology that provides navigation assistance to the occupants of the rental vehicle; to allow for the remote locking or unlocking of a vehicle at the request of the renter; to provide roadside assistance, such as towing, flat tire, or fuel services at the request of the renter; and for the sole purpose of determining the date and time the vehicle departs from or is returned to the rental company, and the total mileage driven and the vehicle fuel level of the returned vehicle. (Civ. Code Sec. 1939.23(b)-(c).)

Existing law prohibits a rental car company from using electronic surveillance technology to track a renter in order to impose fines or surcharges relating to the renter’s use of the rental vehicle. (Civ. Code Sec. 1939.23(d).)

Existing law provides that whenever any person who has leased or rented a vehicle willfully and intentionally fails to return the vehicle to its owner within five days after the lease or rental agreement has expired, that person shall be presumed to have embezzled the vehicle. (Veh. Code Sec. 10855.)

Existing law provides that every peace officer, upon receiving a report based on reliable information that a leased or rented vehicle has not been returned within five days after its owner has made written demand for its return, by certified or registered mail, following the expiration of the lease or rental agreement, shall immediately report the information to the Department of Justice Stolen Vehicle System. (Veh. Code Sec. 10500.)

Existing law, the California Constitution, provides that all people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy. (Cal. Const, art. I, Sec. 1.)

This bill would provide that a rental company shall send communications to a renter electronically if the renter agrees to that communication in the rental or lease agreement. A rental company shall not deny a rental or lease agreement if the renter chooses not to receive communications electronically. For purposes of this section, “electronically” does not include a cellular telephone.

This bill would provide that until January 1, 2024, if a rental vehicle has not been returned following 48 hours after the contracted return date or by 48 hours following the end of an extension of that return date, the rental company may activate electronic surveillance technology. The rental company shall provide notice of activation of the electronic surveillance technology 24 hours prior to activation, by telephone and electronically pursuant to Section 1939.22, unless the renter has not provided a telephone number or the renter has not agreed to electronic communication pursuant to Section 1939.22. The rental or lease agreement shall advise the renter that electronic surveillance technology may be activated if the rental vehicle has not been returned within 48 hours after the contracted return date or extension of the return date. The renter shall acknowledge this advisement in the rental or lease agreement by initials.

This bill would revert back to existing law, commencing January 1, 2024, and provide that a rental company can use electronic surveillance technology for the purpose of locating a stolen, abandoned, or missing rental vehicle after a rental vehicle has not been returned following one week after the contracted return date or by one week following the end of an extension of that return date.

COMMENT

1. Stated need for the bill

According to the author:

Rental car thefts are becoming more and more commonplace across California, and it’s especially rampant in my city of San Francisco. This issue became more prevalent when a local van rental company couldn’t even obtain assistance from law enforcement to recover [its] own vehicle, which was late. AB 2620 will help rental car companies recover their stolen vehicles by shortening the waiting period to turn on GPS tracking from one week to two days after a vehicle hasn’t been returned.

2. Reducing the period before which an unreturned car can be surveilled

Given that the use of electronic surveillance technology by rental companies to obtain information about or track their vehicles while rented to customers can have serious privacy implications, existing law only provides several narrowly circumscribed exceptions to the general prohibition on electronic surveillance technology use. A rental company is prohibited from using, accessing, or obtaining any information relating to a renter’s use of a rental vehicle that was obtained using electronic surveillance technology, except in two circumstances.

The first exception is in direct response to a specific request from law enforcement pursuant to a subpoena or search warrant. The second is when the equipment is used only for the purpose of locating a stolen, abandoned, or missing rental vehicle. This latter exception requires that the rental company has discovered the rental vehicle has been stolen or abandoned, either through the renter, law enforcement, or other means; that the vehicle is the subject of an AMBER Alert; or that the vehicle has not been returned following one week after the contracted return date or the end of an extension of that date.

Relevant here is the exception that allows a company to use surveillance technology when a vehicle has not been returned after one week. Based on this Committee’s analysis of the inclusion of this exception in the statute, it was added in response to concerns from rental companies that the other exceptions were too restrictive because “rental companies often seek to locate missing vehicles themselves prior to seeking assistance from law enforcement.” (Senate Judiciary Committee, AB 2840 Analysis, 2004.) The amendment was taken allowing a rental company to utilize this technology without any information that the vehicle has been stolen or abandoned if one week had passed from the agreed-upon return date.

The author contends that the one-week timeline is “far too long for the rental car companies because oftentimes if a renter is late with returning their vehicle it usually doesn’t take a week to contact the rental car company to state that they need the vehicle longer than their contracted date.” Arguably a customer’s right to privacy diminishes the more time elapses beyond the contracted return date and a rented vehicle is not returned. To further alleviate any privacy concerns, the Committee suggests extending the time period provided in this bill from 48 to 72 hours:

Committee Amendment:

On page 3, delete “48 hours” on line 17, on line 18, and on lines 27-28, and replace with “72 hours”

While a missed return date should not automatically trigger the rather exceptional power to electronically track the customer’s vehicle, it is arguably reasonable that after three days, the customer has lost the right to privacy over the vehicle’s whereabouts in the face of the countervailing interest of the rental company locating a vehicle kept so far beyond a contractually agreed-upon return date.

Customers’ privacy interests are further buttressed by the required disclosure in the rental agreement, specifically acknowledged by the renter, that electronic surveillance of the vehicle under these circumstances may take place. However, given concerns that renters may still not fully comprehend that surveillance technology will be used by simply including it in the contract, the Committee proposes the following amendment that would ensure a customer is explicitly told of this mechanism:

Committee Amendment:

Insert a provision requiring that a rental company orally disclose to all renters, except those who are participants in the rental company’s membership program who shall be informed when they are enrolled in the rental company’s membership program, that electronic surveillance technology may be activated if the rental vehicle has not been returned within 72 hours

Allow for rental companies to active surveillance to locate a car after one week, as provided for under existing law, as an alternative to the above approach

Consumers are also protected by the 24-hour notice that must be provided the renter before the surveillance technology is activated. The 24-hour notice would be provided both by telephone, if a number is provided, and electronically, if agreed to by the customer in the rental agreement.

Furthermore, the bill would return this provision regarding the activation of surveillance technology back to existing law as of January 1, 2024. This would allow the Legislature to reconsider these provisions should any issues with the additional surveillance powers arise.

Support: Airport Van Rental; Escape Campervans; Los Angeles County District Attorney’s Office; Midway Auto Group; State Van Rental; Zeeba Company, Inc.

Opposition: None Known

HISTORY

Source: Bandago Van Rental

Related Pending Legislation:

AB 2169 (Voepel, 2018) would provide that if a person who has leased or rented a vehicle willfully and intentionally fails to return it to its owner 48 hours after the agreement has expired, it is presumed that the person has embezzled the vehicle. Current law sets this time period at five days after the agreement’s expiration. It would also allow an owner to report a car that has been leased or rented to law enforcement as stolen as soon as it discovers that the vehicle was procured by fraud. This bill is currently in the Senate Appropriations Committee.

AB 1185 (O’Donnell, 2017) would allow rental car companies to use, access, or obtain information relating to a renter’s use of a rental vehicle obtained using electronic surveillance technology when the vehicle has not been returned following three calendar days after the contracted return date or the end of any extension. It would also allow a rental company to use an electronic sign to comply with various signage requirements. This bill is currently in the Senate Judiciary Committee.

Prior Legislation:

SB 466 (Bates, Ch. 163, Stats. 2017) authorized a rental company to use and obtain information from electronic surveillance technology regarding one of its rental vehicles when that vehicle is the subject of an AMBER Alert. It would also require the company to contact law enforcement if they were not the source of the information.

AB 2051 (O’Donnell, Chapter 183, Statutes 2016) revised provisions relating to rental company membership programs, advertising, and disclosures.

AB 2840 (Corbett, Ch. 317, Stats. 2004) See Background.

Prior Vote:

Assembly Floor (Ayes 71, Noes 0)

Assembly Appropriations Committee (Ayes 17, Noes 0)

Assembly Public Safety Committee (Ayes 7, Noes 0)

**************

Date of Hearing: April 25, 2018

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

ABPCA Bill Id:AB 2620

Author:(Ting) – As Amended Ver:April 16, 2018

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill decreases the waiting period for a car rental company to report a vehicle as stolen if the vehicle is not returned at the end of the agreed upon rental term. Specifically, this bill reduces the waiting period from five days to 48 hours.

FISCAL EFFECT:

Negligible fiscal effect.

COMMENTS:

1. Background and purpose. This bill shortens the period of time a rental car company must wait before reporting a vehicle stolen if it is not returned at the end of the rental term. According to the author:

In February, a San Francisco rental van company owner spotted one of his past-due vans and was not able to obtain assistance from law enforcement to recover his vehicle, so he had to recover it on his own. With the increase in rental car thefts in California, current law is insufficient in assisting rental car companies to recover their vehicles. AB 2620 would shorten the process of reporting a rental car as embezzled to ease the process of recovering stolen vehicles for rental car companies.

1. Related legislation. AB 2169 (Voepel), of the current legislative session, decrease the five-day period following the expiration of an auto-rental agreement or lease for the presumption of embezzlement to 48 hours. AB 2169 is pending a vote on the Assembly Floor.
2. Staff comments. Earlier this year, this committee passed AB 2169 (Voepel), which is similar to this bill. Both bills change the waiting period before a rental car may be reported as stolen to 48 hours. However, AB 2169 also contains a consumer protection provision, specifically a requirement that car rental companies notify customers that vehicles not returned within 48 hours of the end of the rental term can be reported as stolen. This bill, AB 2620 does not contain this consumer protection provision.

Analysis Prepared by: Jessica Peters / APPR. / (916) 319-2081

Date of Hearing:

Counsel: Sandra Uribe

ASSEMBLY COMMITTEE ON PUBLIC SAFETY

Reginald Byron Jones-Sawyer, Sr., Chair

ABPCA Bill Id:AB 2620

Author:(Ting) – As Amended Ver:March 22, 2018

As Proposed to be Amended in Committee

SUMMARY:

Decreases the five-day period following the expiration of an auto-rental agreement or lease for the presumption of embezzlement to apply to 48 hours. Specifically, this bill:

1. Provides that if a person who has leased or rented a vehicle willfully and intentionally fails to return it to its owner within 48 hours after the agreement has expired, it is presumed that the person has embezzled the vehicle.
   
2. Makes conforming changes to the provisions related to law enforcement reporting to the Department of Justice (DOJ) Stolen Vehicle System.

EXISTING LAW:

1. Creates a rebuttable presumption that a person has embezzled a leased or rented car if the person willfully and intentionally fails to return the vehicle to its owner within five days after the lease or rental agreement has expired. (Veh. Code, § 10855.)
   
2. Provides that any person who drives or takes a vehicle not his or her own, without the owner’s consent, and with intent either to permanently or temporarily deprive the owner of his or her title to, or possession, of the vehicle, whether with or without intent to steal it, is guilty of a crime punishable by imprisonment in a county jail for not more than one year, in the county jail pursuant to realignment, or by a fine of up to $5,000, or by both the fine and imprisonment. (Veh. Code, § 10851.)
   
3. States that a person who feloniously steals, takes, carries, leads, or drives away the personal property of another, or who fraudulently appropriates property which has been entrusted to him or her is guilty of theft. (Pen. Code, § 484, subd. (a).)
   
4. States that if the stolen property is an automobile, then the offense constitutes grand theft. (Pen. Code, § 487, subd. (d)(1).)
   
5. Punishes grand theft of a vehicle by imprisonment in a county jail not exceeding one year, or in the county jail pursuant to realignment. (Pen. Code, § 489, subd. (c).)
   
6. Defines “embezzlement” as “the fraudulent appropriation of property by a person to whom it has been intrusted.” (Pen. Code, § 503.)
   
7. Provides that every person guilty of embezzlement is punishable in the manner prescribed for theft of property of the value or kind embezzled. (Pen. Code, § 514.)
   
8. Requires a peace officer who receives a report based on reliable information that a vehicle has been stolen or unlawfully taken, or that a leased or rented vehicle has not been returned within five days after the lease or rental agreement has expired, to immediately report the information to the DOJ Stolen Vehicle System. (Veh. Code, § 10500.)
   
9. Prohibits a rental company from using, accessing, or obtaining any information relating to the renter's use of the rental vehicle that was obtained using electronic surveillance technology, unless the technology is used to locate a stolen, abandoned, or missing rental vehicle after one of the following:
   
   1. The renter or law enforcement has informed the rental car company that the vehicle is missing or has been stolen or abandoned;
      
   2. The rental vehicle has not been returned following one week after the contracted return date, or one week following the end of an extension of that return date; or
      
   3. The rental car company discovers that the vehicle has been stolen or abandoned and, if stolen, reports the vehicle stolen to law enforcement by filing a stolen vehicle report. (Civil Code, § 1936, subd. (n)(1)(i)-(iii).)

FISCAL EFFECT:

Unknown

COMMENTS:

1. Author's Statement: According to the author, “In February, a San Francisco rental van company owner spotted one of his past-due vans and was not able to obtain assistance from law enforcement to recover his vehicle, so he had to recover it on his own. With the increase in rental car thefts in California, current law is insufficient in assisting rental car companies to recover their vehicles. AB 2620 would shorten the process of reporting a rental car as embezzled to ease the process of recovering stolen vehicles for rental car companies.”
   
2. Inconsistency with Other Laws: California prohibits rental car companies from tracking vehicles with global positioning technology (GPS) devices, except in a few narrowly defined situations. Current law prohibits GPS information from being accessed without the customer’s consent unless the vehicle is missing, abandoned, or stolen, or the customer fails to return the vehicle within one week of the contracted return date. In contrast, under current law the vehicle can be presumed to be embezzled after five days, two days less than when the GPS device can be activated.
   
   Notably, AB 2051 (O’Donnell), Chapter 183, Statutes of 2016, would have allowed rental car companies to track missing cars with global positioning technology (GPS) after three days, but that provision was deleted from the bill. And yet this bill shortens the time for the presumption of embezzlement to 48 hours, thereby increasing the time difference between the two. It raises the question of whether these two time limits should be reconciled.
   
3. Argument in Support: None submitted.
   
4. Argument in Opposition: According to the California Public Defenders Association, “California Vehicle Code section 10500 currently compels law enforcement officers to report a rental vehicle as stolen if it is not returned to the rental agency within five days of a written demand by the agency after the rental agreement has expired. AB 2620 modifies California Vehicle Code section 10500 so that the rental vehicle must be reported stolen where the vehicle is not returned within three days of the written demand by the rental agency.
   
   “Five days, as opposed to three days, allows more time for an individual to remedy an honest mistake. Allowing for an individual to remedy a mistake, or correct his or her misbehavior, is more advantageous than prosecution or bureaucratic documentation.”
   
5. Related Legislation:
   
   1. AB 1185 (O’Donnell) would allow rental car companies to trigger GPS if the car has not been returned within three days of its return date. AB 1185 is pending in the Senate Judiciary Committee.
      
   2. AB 2169 (Voepel) would decrease the five-day period following the expiration of an auto-rental agreement or lease for the presumption of embezzlement to apply to 48 hours. AB 2169 is pending a vote on the Assembly Floor.
      
6. Prior Legislation:
   
   1. AB 495 (Voepel), of the 2017-2018 Legislative Session, would have made it a felony for a person, without consent, to rent a vehicle using another person’s personal identifying information or another person’s access card or access card account information. AB 495 was referred to the Assembly Public Safety Committee and its hearing was canceled at the request of author.
      
   2. AB 2051 (O'Donnell), Chapter 183, Statutes of 2016, reorganized the statute regulating rental car agreements and modifies certain regulations that no longer reflect prevailing practices in consumer and industry behavior. AB 2051 would have allowed rental car companies to track missing cars after three days, but that provision was deleted from the bill.
      
   3. AB 2804 (Corbett), Chapter 317, Statutes of 2004, prohibits a rental car company from using, accessing or obtaining information relating to the renter's use of the rental vehicle that was obtained using GPS technology except in specified circumstances, including, among others, when the vehicle is stolen.

REGISTERED SUPPORT / OPPOSITION:

Support

None

Opposition

California Public Defenders Association

Analysis Prepared by:

Sandy Uribe / PUB. S. / (916) 319-3744