AB 893: Personal vehicle sharing programs.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2023-10-08
Current Status:
Passed
(2023-10-08: Chaptered by Secretary of State - Chapter 547, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
The bill treats peer‑to‑peer carsharing platforms (services that let people rent their personal cars) like rental car companies for certain airport and tax rules. It requires those platforms to get written permission from airport operators, collect airport customer facility charges that match the services used, and pay the same tourism assessment on rentals that start at airports. It also forbids listing a car for rent unless the platform certifies the vehicle’s tax status (sales/use tax paid, taxes to be collected on rental receipts, or a legal exemption).
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including specified certifications regarding tax-related matters pertaining to the motor vehicle.
(2)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined, and require that any customer facility charges collected be proportionate to the services and infrastructure utilized. The bill, beginning on July 1, 2024, would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(3)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, administration, and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including specified certifications regarding tax-related matters pertaining to the motor vehicle.
(2)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined, and require that any customer facility charges collected be proportionate to the services and infrastructure utilized. The bill, beginning on July 1, 2024, would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(3)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, administration, and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including specified certifications regarding tax-related matters pertaining to the motor vehicle.
(2)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined, and require that any fees customer facility charges collected be proportionate to the services and infrastructure utilized. The bill, beginning on July 1, 2024, would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(3)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, and administration and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including specified certifications regarding tax-related matters pertaining to the motor vehicle.
(2)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined. The bill defined, and require that any fees collected be proportionate to the services and infrastructure utilized. The bill, beginning on July 1, 2024, would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(3)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, and administration and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including specified certifications regarding tax-related matters pertaining to the motor vehicle.
(2)Existing law prohibits a rental company from charging in addition to the rental rate certain charges and fees, including, among others, a mileage charge, as specified. Existing law requires a rental company, among other things, if additional mandatory charges are imposed, to provide a good faith estimate of the total charges for the entire rental, as prescribed. Existing law limits the items and service for which it may impose an additional charge.This bill would make these provisions applicable to a personal vehicle sharing program.(3)(2)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined. The bill would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company. terms, standards, regulations, procedures, fees, and access requirements for the activity.
(4)(3)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, and administration and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including that the personal vehicle sharing program requests certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle, or elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle. specified certifications regarding tax-related matters pertaining to the motor vehicle.
(2)Existing law prohibits a rental company from charging in addition to the rental rate certain charges and fees, including, among others, a mileage charge, as specified. Existing law requires a rental company, among other things, if additional mandatory charges are imposed, to provide a good faith estimate of the total charges for the entire rental, as prescribed. Existing law limits the items and service for which it may impose an additional charge.
This bill would make these provisions applicable to a personal vehicle sharing program.
(3)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined. The bill would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company.
(4)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, and administration and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including that the personal vehicle sharing program requests an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle, or elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle. The bill would authorize the California Department of Tax and Fee Administration to promulgate regulations regarding personal vehicle sharing programs and related sales and use tax matters, as specified.
(2)Existing law prohibits a rental company from charging in addition to the rental rate certain charges and fees, including, among others, a mileage charge, as specified. Existing law requires a rental company, among other things, if additional mandatory charges are imposed, to provide a good faith estimate of the total charges for the entire rental, as prescribed. Existing law limits the items and service for which it may impose an additional charge.
This bill would make these provisions applicable to a personal vehicle sharing program.
(3)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined. The bill would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company.
(4)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, and administration and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
(1)Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. Existing law defines rental company, among other terms, for purposes of those provisions.
This bill would define the term personal vehicle sharing program for purposes of these provisions as a person or entity that, for monetary compensation, facilitates the rental of passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform, that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, as specified.
This bill would, on and after July 1, 2024, prohibit a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless certain conditions are satisfied, including that the personal vehicle sharing program requests an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle, or elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle. The bill would authorize the California Department of Tax and Fee Administration to promulgate regulations regarding personal vehicle sharing programs and related sales and use tax matters, as specified.
(2)Existing law prohibits a rental company from charging in addition to the rental rate certain charges and fees, including, among others, a mileage charge, as specified. Existing law requires a rental company, among other things, if additional mandatory charges are imposed, to provide a good faith estimate of the total charges for the entire rental, as prescribed. Existing law limits the items and service for which it may impose an additional charge.
This bill would make these provisions applicable to a personal vehicle sharing program.
(3)Existing law authorizes an airport operated by a city and county to require a rental car company to collect a customer facility charge from its customers on behalf of the airport for the use of airport-mandated common use facilities, as specified.
This bill would make those provisions applicable to a personal vehicle sharing program, as defined. The bill would require that before facilitating sharing or renting of vehicles, any program, person, or entity that is a personal vehicle sharing program obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company.
(4)Existing law, the California Tourism Marketing Act, authorizes the California Travel and Tourism Commission to require businesses to pay an assessment for the purpose of increasing the number of persons traveling to and within California, implementing a tourism marketing plan, and administration and collecting assessments, as specified. Existing law provides that for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as specified.
This bill would specify that these provisions apply to a personal vehicle sharing program in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers. This bill would state the intent of the Legislature to enact legislation that would ensure that consumers, state and local governments, airports, and Californias tourism industry receive equal benefits and protections regardless of how consumers elect to rent vehicles and how vehicle rental businesses source rental vehicles for consumers.Existing law generally governs the transactions between a rental car company, also referred to as a rental company, and its customers, including, among other provisions, required disclosures by a rental company, mandatory contract provisions for a vehicle rental agreement, restrictions on a rental companys use of electronic surveillance technology, and authorization for a rental company to collect specific types of fees and charges from its customers.
This bill would state the intent of the Legislature to enact legislation that would ensure that consumers, state and local governments, airports, and Californias tourism industry receive equal benefits and protections regardless of how consumers elect to rent vehicles and how vehicle rental businesses source rental vehicles for consumers.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to do any of the following:
(1)Regulate access to an airport it owns or operates.
(2)Enter into written agreements.
(3)Set access fees or permit requirements.
(4)Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
(d)This section shall become operative on July 1, 2024.
SEC. 3.Section 1939.39 is added to the Civil Code, to read:1939.39.On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the certification described in subdivision (a) or (b), as applicable, is fulfilled:
(a)If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)All sales and use taxes were paid on the purchase price of the motor vehicle.
(2)The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle.
(3)The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
(b)If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)Applicable taxes were paid on the purchase price of the vehicle.
(2)Applicable taxes were not paid on the purchase price of the vehicle.
SEC. 4.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 5.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company and any customer facility charges collected shall be proportionate to the services and infrastructure utilized:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to do any of the following:
(1)Regulate access to an airport it owns or operates.
(2)Enter into written agreements.
(3)Set access fees or permit requirements.
(4)Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
(d)This section shall become operative on July 1, 2024.
SEC. 3.Section 1939.39 is added to the Civil Code, to read:1939.39.On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the certification described in subdivision (a) or (b), as applicable, is fulfilled:
(a)If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)All sales and use taxes were paid on the purchase price of the motor vehicle.
(2)The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle.
(3)The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
(b)If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)Applicable taxes were paid on the purchase price of the vehicle.
(2)Applicable taxes were not paid on the purchase price of the vehicle.
SEC. 4.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 5.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company and any customer facility charges collected shall be proportionate to the services and infrastructure utilized:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to do any of the following:
(1)Regulate access to an airport it owns or operates.
(2)Enter into written agreements.
(3)Set access fees or permit requirements.
(4)Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
(d)This section shall become operative on July 1, 2024.
SEC. 3.Section 1939.39 is added to the Civil Code, to read:1939.39.On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the certification described in subdivision (a) or (b), as applicable, is fulfilled:
(a)If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)All sales and use taxes were paid on the purchase price of the motor vehicle.
(2)The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle.
(3)The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
(b)If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)Applicable taxes were paid on the purchase price of the vehicle.
(2)Applicable taxes were not paid on the purchase price of the vehicle.
SEC. 4.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 5.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company and any fees customer facility charges collected shall be proportionate to the services and infrastructure utilized:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to do any of the following:
(1)Regulate access to an airport it owns or operates.
(2)Enter into written agreements.
(3)Set access fees or permit requirements.
(4)Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
(d)This section shall become operative on July 1, 2024.
SEC. 3.Section 1939.39 is added to the Civil Code, to read:1939.39.On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the certification described in subdivision (a) or (b), as applicable, is fulfilled:
(a)If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)All sales and use taxes were paid on the purchase price of the motor vehicle.
(2)The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle.
(3)The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
(b)If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)Applicable taxes were paid on the purchase price of the vehicle.
(2)Applicable taxes were not paid on the purchase price of the vehicle.
SEC. 4.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 5.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company: company and any fees collected shall be proportionate to the services and infrastructure utilized:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.19 of the Civil Code is amended to read:1939.19.(a)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. A rental company shall not charge in addition to the rental rate, additional mandatory charges, or a mileage charge, as those may be applicable, any other fee that is required to be paid by the renter as a condition of hiring or leasing the vehicle.(b)If additional mandatory charges are imposed, the rental company shall do each of the following:(1)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 website 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 a link directly from 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.(2)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 and 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 paragraph 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.(3)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 paragraph (1).(c)In addition to the rental rate, taxes, 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 renters 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.(d)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 in the same manner as a business in the passenger rental car category for each sharing or rental transaction. (e)A rental company may charge a fee for an authorized driver, in addition to the rental charge for an individual renter, unless the authorized driver is either of the following:(1)The renters spouse, as described in paragraph (2) of subdivision (e) of Section 1939.01, the renters child or person for whom the renter is a legal guardian, the renters sibling, or the renters parent or grandparent.(2)The renters employer or coworker, as described in paragraph (3) of subdivision (e) of Section 1939.01.(f)In the event that a rental company learns that an additional driver who was not previously authorized in the rental agreement has driven the rental car, the rental company may charge up to twice the authorized driver fee.(g)If a rental company states a rental rate in print advertisement or in a 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.(h)All rate advertisements shall include a disclaimer, which shall be prominently displayed, providing that additional mandatory charges may be imposed, including, but not limited to, airport fees, tourism fees, vehicle license recovery fees, or other government imposed taxes or fees, and indicating that this information, including an estimate of the total rental cost, is displayed on the rental companys internet website. All rate advertisements shall also include a statement that additional charges may apply if an optional good or service, such as a damage waiver, is purchased.(i)If any person or entity other than a rental company, including a passenger carrier or a seller of travel services, advertises a rental rate for a vehicle rental that includes additional mandatory charges, that person or entity shall clearly disclose the existence and amount of the charges. If a rental company provides the person or entity with rental rate and additional mandatory charges information, the rental car company is not responsible for the failure of that person or entity to comply with this subdivision.(j)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.(k)Except as otherwise permitted pursuant to the customer facility charge, a rental company shall not separately charge, in addition to the rental rate, a fee for transporting the renter to a location where the rented vehicle will be delivered to the renter.SEC. 3. SEC. 2.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company. terms, standards, regulations, procedures, fees, and access requirements for the activity.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to do any of the following:
(1)Regulate access to an airport it owns or operates.
(2)Enter into written agreements.
(3)Set access fees or permit requirements.
(4)Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
SEC. 4. SEC. 3.Section 1939.39 is added to the Civil Code, to read:1939.39.On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the certification described in subdivision (a) or (b), as applicable, is fulfilled:
(a)If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)All sales and use taxes were paid on the purchase price of the motor vehicle.
(2)The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle.
(3)The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
(b)If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)Applicable taxes were paid on the purchase price of the vehicle.
(2)Applicable taxes were not paid on the purchase price of the vehicle.
SEC. 5. SEC. 4.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 6. SEC. 5.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.19 of the Civil Code is amended to read:1939.19.(a)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. A rental company shall not charge in addition to the rental rate, additional mandatory charges, or a mileage charge, as those may be applicable, any other fee that is required to be paid by the renter as a condition of hiring or leasing the vehicle.
(b)If additional mandatory charges are imposed, the rental company shall do each of the following:
(1)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 website 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 a link directly from 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.
(2)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 and 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 paragraph 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.
(3)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 paragraph (1).
(c)In addition to the rental rate, taxes, 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 renters 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.
(d)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 in the same manner as a business in the passenger rental car category for each sharing or rental transaction.
(e)A rental company may charge a fee for an authorized driver, in addition to the rental charge for an individual renter, unless the authorized driver is either of the following:
(1)The renters spouse, as described in paragraph (2) of subdivision (e) of Section 1939.01, the renters child or person for whom the renter is a legal guardian, the renters sibling, or the renters parent or grandparent.
(2)The renters employer or coworker, as described in paragraph (3) of subdivision (e) of Section 1939.01.
(f)In the event that a rental company learns that an additional driver who was not previously authorized in the rental agreement has driven the rental car, the rental company may charge up to twice the authorized driver fee.
(g)If a rental company states a rental rate in print advertisement or in a 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.
(h)All rate advertisements shall include a disclaimer, which shall be prominently displayed, providing that additional mandatory charges may be imposed, including, but not limited to, airport fees, tourism fees, vehicle license recovery fees, or other government imposed taxes or fees, and indicating that this information, including an estimate of the total rental cost, is displayed on the rental companys internet website. All rate advertisements shall also include a statement that additional charges may apply if an optional good or service, such as a damage waiver, is purchased.
(i)If any person or entity other than a rental company, including a passenger carrier or a seller of travel services, advertises a rental rate for a vehicle rental that includes additional mandatory charges, that person or entity shall clearly disclose the existence and amount of the charges. If a rental company provides the person or entity with rental rate and additional mandatory charges information, the rental car company is not responsible for the failure of that person or entity to comply with this subdivision.
(j)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.
(k)Except as otherwise permitted pursuant to the customer facility charge, a rental company shall not separately charge, in addition to the rental rate, a fee for transporting the renter to a location where the rented vehicle will be delivered to the renter.
SEC. 3.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to regulate access to an airport it owns or operates and to set access fees or requirements. do any of the following:
(1)Regulate access to an airport it owns or operates.
(2)Enter into written agreements.
(3)Set access fees or permit requirements.
(4)Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
SEC. 4.Section 1939.39 is added to the Civil Code, to read:1939.39.On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the personal vehicle sharing program first requests certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle. the certification described in subdivision (a) or (b), as applicable, is fulfilled:
(a)If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)All sales and use taxes were paid on the purchase price of the motor vehicle.
(2)The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle.
(3)The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
(b)If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
(1)Applicable taxes were paid on the purchase price of the vehicle.
(2)Applicable taxes were not paid on the purchase price of the vehicle.
SEC. 5.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 6.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(o)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.
(p)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).
(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.19 of the Civil Code is amended to read:1939.19.(a)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. A rental company shall not charge in addition to the rental rate, additional mandatory charges, or a mileage charge, as those may be applicable, any other fee that is required to be paid by the renter as a condition of hiring or leasing the vehicle.
(b)If additional mandatory charges are imposed, the rental company shall do each of the following:
(1)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 website 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 a link directly from 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.
(2)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 and 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 paragraph 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.
(3)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 paragraph (1).
(c)In addition to the rental rate, taxes, 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 renters 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.
(d)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 in the same manner as a business in the passenger rental car category for each sharing or rental transaction.
(e)A rental company may charge a fee for an authorized driver, in addition to the rental charge for an individual renter, unless the authorized driver is either of the following:
(1)The renters spouse, as described in paragraph (2) of subdivision (e) of Section 1939.01, the renters child or person for whom the renter is a legal guardian, the renters sibling, or the renters parent or grandparent.
(2)The renters employer or coworker, as described in paragraph (3) of subdivision (e) of Section 1939.01.
(f)In the event that a rental company learns that an additional driver who was not previously authorized in the rental agreement has driven the rental car, the rental company may charge up to twice the authorized driver fee.
(g)If a rental company states a rental rate in print advertisement or in a 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.
(h)All rate advertisements shall include a disclaimer, which shall be prominently displayed, providing that additional mandatory charges may be imposed, including, but not limited to, airport fees, tourism fees, vehicle license recovery fees, or other government imposed taxes or fees, and indicating that this information, including an estimate of the total rental cost, is displayed on the rental companys internet website. All rate advertisements shall also include a statement that additional charges may apply if an optional good or service, such as a damage waiver, is purchased.
(i)If any person or entity other than a rental company, including a passenger carrier or a seller of travel services, advertises a rental rate for a vehicle rental that includes additional mandatory charges, that person or entity shall clearly disclose the existence and amount of the charges. If a rental company provides the person or entity with rental rate and additional mandatory charges information, the rental car company is not responsible for the failure of that person or entity to comply with this subdivision.
(j)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.
(k)Except as otherwise permitted pursuant to the customer facility charge, a rental company shall not separately charge, in addition to the rental rate, a fee for transporting the renter to a location where the rented vehicle will be delivered to the renter.
SEC. 3.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to regulate access to an airport it owns or operates and to set access fees or requirements.
SEC. 4.Section 1939.39 is added to the Civil Code, to read:1939.39.(a)On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the personal vehicle sharing program first requests an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
(b)The California Department of Tax and Fee Administration may prescribe by regulation the method by which a personal vehicle sharing program shall obtain an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.SEC. 5.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 6.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
For the purpose of this chapter, the following definitions shall apply:
(a)Rental company means a person or entity in the business of renting passenger vehicles to the public.
(b)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.
(c)Additional mandatory charges means any separately stated charges that the rental company requires the renter to pay to hire or lease the vehicle for the period of time to which the rental rate applies, which are imposed by a governmental entity and specifically relate to the operation of a rental vehicle business, 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.
(d)Airport concession fee means a charge collected by a rental company from a renter that is the renters 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 airports premises.
(e)Authorized driver means all of the following:
(1)The renter.
(2)The renters spouse, if that person is a licensed driver and satisfies the rental companys minimum age requirement.
(3)The renters employer or coworker, if he or she the employer or coworker is engaged in business activity with the renter, is a licensed driver, and satisfies the rental companys minimum age requirement.
(4)A person expressly listed by the rental company on that renters contract as an authorized driver.
(f)Customer facility charge means any fee, including an alternative fee, required by an airport to be collected by a rental company from a renter pursuant to Section 50474.21 of the Government Code.
(g)Damage waiver means a rental companys 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.
(h)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:
(1)For the purpose of identifying, diagnosing, or monitoring functions related to the potential need to repair, service, or perform maintenance on the rental vehicle.
(2)As part of the vehicles 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.
(i)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.
(j)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.
(k)Membership program means a service offered by a rental company that permits customers to bypass the rental counter and go directly to the vehicle previously reserved or select an alternate vehicle. A membership program shall meet all of the following requirements:
(1)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.
(2)The rental company fully discloses, prior to the enrollees first rental as a participant in the program, all terms and conditions of the rental agreement as well as all required disclosures.
(3)The renter may terminate enrollment at any time.
(4)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.
(5)An employee is available at the lot where the renter takes possession of the vehicle, to receive any change in the rental agreement from the renter.
(l)Passenger vehicle or vehicle means a passenger vehicle as defined in Section 465 of the Vehicle Code.
(m)Personal vehicle sharing program means a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
(m)(n)Quote means an estimated cost of rental provided by a rental company or a third party to a potential customer that is based on information provided by the potential customer and used to generate an estimated cost of rental, including, but not limited to, potential dates of rental, locations, or classes of vehicle.
(n)(o)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.
(o)(p)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).
(p)(q)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 or any other law that imposes a fee upon the registration of vehicles in this state.
(q)(r)Vehicle license recovery fee means a charge that seeks to recover the amount of any vehicle license fee and vehicle registration fee paid by a rental company for the particular class of vehicle being rented. If imposed, the vehicle license recovery fee shall be separately stated as a single charge in the quote and rental contract.
SEC. 2.Section 1939.19 of the Civil Code is amended to read:1939.19.(a)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. A rental company shall not charge in addition to the rental rate, additional mandatory charges, or a mileage charge, as those may be applicable, any other fee that is required to be paid by the renter as a condition of hiring or leasing the vehicle.
(b)If additional mandatory charges are imposed, the rental company shall do each of the following:
(1)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 website 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 a link directly from 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.
(2)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 and 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 paragraph 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.
(3)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 paragraph (1).
(c)In addition to the rental rate, taxes, 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 renters 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.
(d)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 in the same manner as a business in the passenger rental car category for each sharing or rental transaction.
(d)(e)A rental company may charge a fee for an authorized driver, in addition to the rental charge for an individual renter, unless the authorized driver is either of the following:
(1)The renters spouse, as described in paragraph (2) of subdivision (e) of Section 1939.01, the renters child or person for whom the renter is a legal guardian, the renters sibling, or the renters parent or grandparent.
(2)The renters employer or coworker, as described in paragraph (3) of subdivision (e) of Section 1939.01.
(e)(f)In the event that a rental company learns that an additional driver who was not previously authorized in the rental agreement has driven the rental car, the rental company may charge up to twice the authorized driver fee.
(f)(g)If a rental company states a rental rate in print advertisement or in a 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.
(g)(h)All rate advertisements shall include a disclaimer, which shall be prominently displayed, providing that additional mandatory charges may be imposed, including, but not limited to, airport fees, tourism fees, vehicle license recovery fees, or other government imposed taxes or fees, and indicating that this information, including an estimate of the total rental cost, is displayed on the rental companys internet website. All rate advertisements shall also include a statement that additional charges may apply if an optional good or service, such as a damage waiver, is purchased.
(h)(i)If any person or entity other than a rental company, including a passenger carrier or a seller of travel services, advertises a rental rate for a vehicle rental that includes additional mandatory charges, that person or entity shall clearly disclose the existence and amount of the charges. If a rental company provides the person or entity with rental rate and additional mandatory charges information, the rental car company is not responsible for the failure of that person or entity to comply with this subdivision.
(i)(j)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.
(j)(k)Except as otherwise permitted pursuant to the customer facility charge, a rental company shall not separately charge, in addition to the rental rate, a fee for transporting the renter to a location where the rented vehicle will be delivered to the renter.
SEC. 3.Section 1939.38 is added to the Civil Code, immediately following Section 1939.37, to read:1939.38.(a)Notwithstanding any other law, a commercial airport facility may regulate access to an airport and require any person or entity described in subdivision (m) of Section 1939.01 to collect a customer facility charge pursuant to Section 50474.21 of the Government Code.
(b)(1)Before facilitating the sharing or renting of vehicles, any program, person, or entity described in subdivision (m) of Section 1939.01 shall obtain a permit or other written authorization from the airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company.
(2)For purposes of paragraph (1), facilitating the sharing or renting of vehicles includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
(c)This section shall not affect the authority of any political subdivision or the state to regulate access to an airport it owns or operates and to set access fees or requirements.
SEC. 4.Section 1939.39 is added to the Civil Code, to read:1939.39.(a)On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the personal vehicle sharing program first requests an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
(b)The California Department of Tax and Fee Administration may prescribe by regulation the method by which a personal vehicle sharing program shall obtain an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
SEC. 5.Section 13995.65.5 of the Government Code is amended to read:13995.65.5.(a)Notwithstanding Section 13995.65 or any other provision of this chapter, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax as described in Section 7280 of the Revenue and Taxation Code. A transaction commencing at an airport or hotel or other overnight lodging subject to a transient occupancy tax as described in Section 7280 of the Revenue and Taxation Code, including those that commence at a location that might otherwise by regulation be exempt from assessment, shall be subject to the assessment. The assessment shall always be expressed as a fixed percentage of the amount of the rental transaction.
(b)This section shall apply to any person or entity described in subdivision (m) of Section 1939.01 of the Civil Code in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
SEC. 6.Section 50474.20 is added to the Government Code, to read:50474.20.This article shall apply to both of the following in the same manner as it applies to a rental car company:
(a)A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b)Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
SECTION 1.It is the intent of the Legislature to enact legislation that would ensure that consumers, state and local governments, airports, and Californias tourism industry receive equal benefits and protections regardless of how consumers elect to rent vehicles and how vehicle rental businesses source rental vehicles for consumers.It is the intent of the Legislature to enact legislation that would ensure that consumers, state and local governments, airports, and Californias tourism industry receive equal benefits and protections regardless of how consumers elect to rent vehicles and how vehicle rental businesses source rental vehicles for consumers.
|
Date
|
Status
|
|---|---|
| Oct 8, 2023 | Chaptered by Secretary of State - Chapter 547, Statutes of 2023. |
| Oct 8, 2023 | Approved by the Governor. |
| Sep 14, 2023 | Enrolled and presented to the Governor at 4:30 p.m. |
| Sep 8, 2023 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 62. Noes 0. Page 3125.). |
| Sep 7, 2023 | Assembly Rule 77 suspended. (Page 3011.) |
| Sep 6, 2023 | In Assembly. Concurrence in Senate amendments pending. May be considered on or after September 8 pursuant to Assembly Rule 77. |
| Sep 6, 2023 | Read third time. Passed. Ordered to the Assembly. (Ayes 35. Noes 0. Page 2398.). |
| Aug 29, 2023 | Read second time. Ordered to third reading. |
| Aug 28, 2023 | From committee: Be ordered to second reading pursuant to Senate Rule 28.8. |
| Aug 17, 2023 | In committee: Hearing postponed by committee. |
| Aug 15, 2023 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on APPR. |
| Jul 6, 2023 | Read second time and amended. Re-referred to Com. on APPR. |
| Jul 5, 2023 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 12. Noes 0.) (July 3). |
| Jun 28, 2023 | From committee: Do pass and re-refer to Com. on B., P. & E. D. (Ayes 11. Noes 0.) (June 27). Re-referred to Com. on B., P. & E. D. |
| Jun 12, 2023 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD. |
| Jun 7, 2023 | Referred to Coms. on JUD. and B., P. & E. D. |
| May 31, 2023 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 30, 2023 | Read third time. Passed. Ordered to the Senate. (Ayes 60. Noes 0. Page 1917.) |
| May 22, 2023 | Read third time and amended. Ordered to third reading. (Page 1684.) |
| May 18, 2023 | Read second time. Ordered to third reading. |
| May 17, 2023 | From committee: Do pass. (Ayes 14. Noes 0.) (May 17). |
| May 10, 2023 | In committee: Hearing postponed by committee. |
| May 3, 2023 | In committee: Hearing postponed by committee. |
| Apr 26, 2023 | In committee: Hearing postponed by committee. |
| Apr 17, 2023 | Re-referred to Com. on APPR. |
| Apr 12, 2023 | Read second time and amended. |
| Apr 11, 2023 | From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 9. Noes 0.) (April 11). |
| Mar 27, 2023 | Re-referred to Com. on JUD. |
| Mar 23, 2023 | Referred to Com. on JUD. |
| Mar 23, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on JUD. Read second time and amended. |
| Feb 15, 2023 | From printer. May be heard in committee March 17. |
| Feb 14, 2023 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 8, 2023 | AB 893 Papan Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 6, 2023 | Assembly 3rd Reading AB893 Papan By Umberg | Senate Floor |
Passed |
|
| Jul 3, 2023 | Do pass as amended, but first amend, and re-refer to the Committee on [Appropriations] | Senate Standing Committee on Business, Professions and Economic Development |
Passed |
|
| Jun 27, 2023 | Do pass, but first be re-referred to the Committee on [Business, Professions and Economic Development] | Senate Standing Committee on Judiciary |
Passed |
|
| May 30, 2023 | AB 893 Papan Assembly Third Reading | Assembly Floor |
Passed |
|
| May 17, 2023 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 11, 2023 | Do pass as amended and be re-referred to the Committee on [Appropriations] | Assembly Standing Committee on Judiciary |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| American Car Rental Association | ** Support | |
| Black Chamber of Orange County | ** Against | |
| California Airports Council | ** Support | |
| California Labor Federation, Afl-Cio | ** Support | |
| California Teamsters Public Affairs Council | ** Support | |
| California Travel Association | ** Support | |
| Chamber Of Progress | ** Against | |
| City Of Lincoln | * Against | Apr 11, 2023 |
| City Of Sacramento | * Against | Apr 11, 2023 |
| City of San Francisco | * Against | Apr 11, 2023 |
| City of Walnut Creek | * Against | Apr 11, 2023 |
| Enterprise | * Support | Jul 3, 2023 |
| Enterprise Holdings | ** Support | |
| Getaround | * Against | Apr 11, 2023 |
| Getaround | ** Support | |
| Getaround, Inc. | ** Against | |
| Hollywood Burbank Airport | * Support | May 17, 2023 |
| Orange County Asian and Pacific Islander Community Alliance, INC. | ** Against | |
| Orange County Coalition of Police and Sheriffs | ** Against | |
| Pecnet | * Neutral | Jul 3, 2023 |
| Relay Rides d.b.a. Turo | ** Against | |
| San Diego Airport | * Support | Jul 3, 2023 |
| San Diego County Regional Airport Authority | * Support | Jun 27, 2023 |
| Streets for All | ** Against | |
| Technet | ** Against | |
| Turo | ** Against | |
| Viet Rainbow of Orange County | ** Against | |
| Vietnamese American Artists & Media Association | ** Against | |
| vietnamese american chamber of commerce | ** Against | |
| Vietnamese Language Access | ** Against |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 893
Author:(Papan)
As Amended Ver:August 15, 2023
Majority vote
SUMMARY
Clarifies the duties and obligations imposed upon personal vehicle sharing programs.
Major Provisions
- Defines, for the purpose of the law governing the interaction between rental companies and consumers, "personal vehicle sharing program" to mean a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in the Insurance Code.
- Permits a commercial airport facility to require personal vehicle sharing programs to collect customer facility charges.
- Requires that if a customer facility charge is collected by an airport, that personal vehicle sharing programs must be treated in a manner consistent with other terms, standards, regulations, procedures, fees, and access requirements for the activity.
- Requires a personal vehicle sharing program to obtain a permit or other written authorization from an airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company prior to facilitating the sharing or renting of vehicles.
- Provides that, for the purpose of 4), above, "facilitating the sharing or renting of vehicles" includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
- Provides that nothing in 4), above, limits the authority of any political subdivision or the state to regulate any of the following:
- Regulating access to an airport it owns and operates;
- Entering into written agreements;
- Setting access or permit requirements for airports; or
- Regulating existing access permits granted by an airport to a personal vehicle sharing program.
- Prohibits, commencing July 1, 2024, a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program unless the personal vehicle sharing program first requests a certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle, as specified.
- Requires a personal vehicle sharing program to be treated as a business in the passenger rental car category for the purposes of collecting assessments for promoting tourism pursuant to the California Tourism Marketing Act.
Senate Amendments
- Delete provisions regarding specified disclosures that must be made by personal vehicle sharing programs.
- Delay implementation of the certification aspects of the bill until July 1, 2024.
- Clarify that the collection of consumer facility charges is to be proportionate to the services and infrastructure utilized.
COMMENTS
As it has done for both the lodging and taxi industry, technology is seeking to change the car rental industry through the creation of "personal vehicle sharing programs." These personal vehicle sharing programs assert that they function by linking a "guest," frequently an out-of-town visitor, with a local "host" who will share their vehicle with the "guest." Essentially, these programs seek to become the Airbnb or Uber of the rental car industry. Understandably, this has created significant consternation in the car rental industry as many of these programs are avoiding the rigorous regulation and fee collection regimes imposed on rental car companies. The personal vehicle sharing program model is premised on the concept of individual vehicle owners, known as "hosts," allowing other persons, known as "guests", who they may or may not know, to use their vehicles for a fee. They are allowed to do so under existing law, as long as they have a special type of auto insurance that provides commercial coverage during the period when the guest is using the vehicle. If this sounds similar to renting a car, that is because it is. The only primary difference between rental car companies and a personal vehicle sharing program is that rental car companies own their own vehicles and utilize centralized pick-up and drop-off locations, whereas personal vehicle sharing programs utilize cars owned by private individuals and opt for a decentralized method getting the car from the host to the guest.
Although innovative, the decentralized nature of personal vehicle sharing programs inevitably has led to conflict. In particular, the San Francisco International Airport experienced significant congestion and a loss of critical infrastructure revenue after Turo, one of the leading personal vehicle sharing programs and opponent of this bill, began operating at the airport without a permit. Commenting on a lawsuit filed against the company on the city-owned airport's behalf, the then-City Attorney of San Francisco noted, "[Turo executives] seem to think traffic congestion is someone else's problem and that their company doesn't need to pay its fair share for the public facilities it is profiting off of…You don't get special treatment just because you claim to be a disruptor." (Carolyn Said, SF sues Turo for not having airport permits, S.F. Chronicle, Jan. 24, 2018.) Although the Legislature never definitively decided on the status of personal vehicle sharing programs, the Court of Appeal did. In 2022, the First District Court of Appeal held that personal vehicle sharing programs are not rental car companies under existing statutory law. (Turo Inc. v. Superior Court (2022) 80 Cal. App. 5th 517.) The case largely turned on various definitions of "rental company" provided in existing law, including the Civil Code provision implicated by this bill, and thus the Legislature retains authority to define, classify, and apply regulations to personal vehicle sharing programs as it sees fit. Notably, although Turo and San Francisco International Airport remain in negotiations regarding the company's status at the airport, there are no issues currently before a court related to the provisions of this bill now that the definitional issue has been settled. Despite the contentions of one stakeholder involved with this measure, there are no issues raised by this bill that, at this time, would cause legislative policy in this area to directly interfere with judicial decision-making. This measure would apply several existing rental company related consumer notice rules to personal vehicle sharing programs; make the programs register with an airport if they wish to operate there (similar to rules governing ride share companies); and require personal vehicle sharing programs to collect several government imposed fees and assessments, including those related to airport infrastructure and the promotion of tourism.
According to Visit California, the state's tourism economy is slated to generate $154.4 billion in 2023. To support and grow the tourism economy in the late 1990s, the industry worked with state government to enact the California Tourism Marketing Act, which created the California Travel and Tourism Commission. The Commission runs the "California Welcome Centers," found along major highways at the state border, and provides major funding for Visit California, which creates media campaigns to promote the state. To support these efforts, the Commission is authorized to collect an assessment from various actors in the tourism industry, including rental car companies, hotels, and transportation companies, such as cabs, and ride sharing companies, such as Uber and Lyft. Depending on the nature of one's business, there are different assessment levels, generally tied to the level of involvement in the tourism industry. As a result, because Californians are more likely to use transportation companies locally, the fees imposed on rental car companies are slightly higher than transportation companies as rental car operators generally have a greater reliance on tourism. However, Turo objects to being subject to these assessments.
The bill also imposes customer facility charges on personal vehicle sharing programs. These charges are collected to pay for the use of an airport-mandated common use bus or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility. The fees typically pay off the bonded indebtedness incurred by the airport for the construction of the facility. The proponents of the measure note that every airport and its level of infrastructure needed to support personal vehicle sharing programs at a given facility is different, thus the bill now permits the charges to vary by the level of service provided to a personal vehicle sharing program. For example, just because a personal vehicle sharing program may be able to utilize a regular parking lot at one airport, they may need to use rental car facilities at another. Furthermore, the wear-and-tear on airport property would appear to warrant airports collecting some revenue from the personal vehicle sharing programs. This would be especially true given that taxpayers, who backstop all debts at California's government-owned airports, are ultimately responsible for any bond payments for which the customer facility charges are insufficient to meet the payment.
According to the Author
Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic enabling technology. Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation. Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or "personal vehicle sharing programs" (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end.
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business. This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State. AB 893 ensures that the California Legislature is not picking winners and losers in an industry by applying regulations to one business and not another.
Arguments in Support
This measure is supported by Enterprise Holdings. In support of this bill they write:
Like many other industries, the rental car industry has greatly evolved in the last decade due to increasing changes in technology and a shift in the way businesses interact with consumers. Though the industry has changed, the law regulating the industry has yet to change with it. Rental car companies are highly, and increasingly, regulated by the rental car laws in California which dictate things like taxes, airport requirements, and tourism assessments for the benefit of California consumers. However, peer-to-peer platforms, often referred to as personal vehicle sharing platforms, which rent cars to consumers but are not defined in state law as rental car companies, are not currently regulated under California law. This lack of regulation creates an unequal marketplace, which is reflected in the consumer market. AB 893 aims to level the playing field in the rental car market and ensure that all rental must adhere to the same requirements under California law.
Arguments in Opposition
In strident opposition to this measure, Turo claims:
Today California properly and carefully distinguishes personal vehicle sharing programs and rental car in myriad ways – providing different insurance requirements, acknowledging that personal vehicle sharing programs involve a three-party transaction in which the platform does not own the car, and recognizing that rental car companies own fleets of vehicles that engage in two-party transactions. This bill would needlessly create ambiguity and chaos by conflating two very distinct industries.
AB 893 negatively impacts the peer-to-peer car sharing industry, limiting consumer choice and reinforcing the monopoly of traditional rental companies. The bill does not adequately distinguish between the two industries, impairing our ability to offer enhanced mobility options to Californians and those traveling to our state.
FISCAL COMMENTS
According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.
VOTES:
ASM JUDICIARY: 9-0-2
YES: Maienschein, Connolly, Haney, Kalra, Pacheco, Papan, Reyes, Robert Rivas, Sanchez
ABS, ABST OR NV: Essayli, Dixon
ASM APPROPRIATIONS: 14-0-2
YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Ortega
ABS, ABST OR NV: Megan Dahle, Dixon
ASSEMBLY FLOOR: 60-0-20
YES: Addis, Aguiar-Curry, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Ortega, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Sanchez, Santiago, Schiavo, Soria, Ting, Valencia, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon
ABS, ABST OR NV: Alanis, Alvarez, Bains, Calderon, Juan Carrillo, Megan Dahle, Flora, Vince Fong, Gallagher, Hoover, Lee, Low, Stephanie Nguyen, Pacheco, Jim Patterson, Rodriguez, Blanca Rubio, Ta, Villapudua, Wallis
SENATE FLOOR: 35-0-5
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Caballero, Cortese, Dahle, Dodd, Durazo, Eggman, Gonzalez, Hurtado, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Padilla, Portantino, Roth, Rubio, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
ABS, ABST OR NV: Glazer, Grove, Jones, Ochoa Bogh, Seyarto
UPDATED
VERSION: August 15, 2023
CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0001419
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 893 |
THIRD READING
Bill No: AB 893
Author: Papan (D)
Amended: 8/15/23 in Senate
Vote: 21
SENATE JUDICIARY COMMITTEE: 11-0, 6/27/23
AYES: Umberg, Wilk, Allen, Ashby, Caballero, Durazo, Laird, Min, Niello, Stern, Wiener
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 12-0, 7/3/23
AYES: Roth, Nguyen, Alvarado-Gil, Archuleta, Ashby, Becker, Eggman, Glazer, Niello, Smallwood-Cuevas, Wahab, Wilk
NO VOTE RECORDED: Dodd
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 60-0, 5/30/23 - See last page for vote
SUBJECT: Personal vehicle sharing programs
SOURCE: Enterprise Holdings
DIGEST:
This bill applies various existing regulatory provisions governing rental vehicle companies to personal vehicle sharing programs, including the ability of airports to regulate the operation of such programs at California airports.
ANALYSIS:
Existing law:
- Defines “customer facility charge” (CFC) to mean 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:
- To finance, design, and construct consolidated airport vehicle rental facilities;
- To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system; and
- To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise 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. (Gov. Code § 50474.21(a).)
- Permits any airport to require rental companies to collect a CFC or an alternative-CFC to finance projects, as specified above, under specified conditions. (Gov. Code § 50474.3.)
- Establishes the California Tourism Marketing Act, which, in relevant part, requires special assessments to be collected on rental transactions commenced at airports. (Gov. Code § 13995.65.5.)
- Defines “personal vehicle sharing program” (PVSP) as a legal entity qualified to do business in the State of California engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state. (Ins. Code § 11580.24(b).)
- Provides that a private passenger motor vehicle insured by its owner pursuant to a specified policy of insurance shall not be classified as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely because its owner allows it to be used for personal vehicle sharing as long as specified circumstances apply, including that the personal vehicle sharing is conducted pursuant to a personal vehicle sharing program. (Ins. Code § 11580.24(a).)
This bill:
- Defines “personal vehicle sharing program” as a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
- Authorizes a commercial airport facility to regulate access to an airport and require a PVSP to collect a CFC pursuant to Section 50474.21 of the Government Code. Applies the CFC provisions to PVSPs and any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
- Requires any CFCs collected to be proportionate to the services and infrastructure utilized.
- Requires a PVSP, before facilitating the sharing or renting of vehicles, to obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity. Defines “facilitating the sharing or renting of vehicles” to include listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
- Provides that the above provisions do not affect the authority of any political subdivision or the state to do any of the following:
- Regulate access to an airport it owns or operates;
- Enter into written agreements;
- Set access fees or permit requirements; or
- Regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
- Prohibits a PVSP, on and after July 1, 2024, from allowing a vehicle to be placed on a digital network or software application of the PVSP for the purpose of making the vehicle available for rental unless one of the following certifications, as applicable, is fulfilled:
- If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
- All sales and use taxes were paid on the purchase price of the motor vehicle;
- The purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle; or
- The purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
- If the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
- Applicable taxes were paid on the purchase price of the vehicle; or
- Applicable taxes were not paid on the purchase price of the vehicle.
- If the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
- Applies the tourism assessment established in Government Code Section 13995.65.5 to a PVSP in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
Background
Existing law provides a regulatory structure for rental passenger vehicle transactions. This includes specific obligations on rental companies regarding pricing and the charging of mandatory fees and fees for optional items and services, as provided. Existing law also authorizes airports to require rental companies to charge CFC that are used to finance consolidated rental car facilities and internal transportation systems. They may also require fees to be charged for the use of certain airport transportation systems. The California Tourism Marketing Act also requires special assessments to be collected on rental transactions commenced at airports.
Outside of the traditional rental car industry have emerged peer-to-peer vehicle sharing services facilitated through applications or online. Companies facilitate the booking of third parties’ vehicles for short-term rentals. This bill refers to them as “personal vehicle sharing programs.”
This bill applies portions of the above regulatory structure, as specified, to PVSPs to a similar extent as rental car companies. This includes authorization for airports to regulate access and require sharing programs to charge CFCs and obtain permits before facilitating the sharing or renting of vehicles, including advertising vehicles for pickup at such airports. CFCs charged must be proportionate to the services and infrastructure utilized. Sharing programs are required to certify the payment of specified sales and use taxes on vehicles before those vehicles are made available for sharing or rent. This bill is sponsored by Enterprise Holdings. It is supported by a variety of organizations, including the California Airports Council and the American Car Rental Association. It is opposed by Turo and TechNet, among others.
[NOTE: For a more thorough discussion, please see the Senate Judiciary Committee analysis of this bill, which is incorporated here by reference.]
Comments
According to the author:
Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic technology.
Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation.
Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or “personal vehicle sharing programs” (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end.
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business.
Assembly Bill 893 will ensure that vehicles rented through third party platforms pay local and state fees that support public services, bringing peer to peer platforms into compliance with airport regulations. Most car rentals occur at or around publicly owned airports using airport property. While all other commercial operators pay permit fees, peer-to-peer operators are able to skirt these. This represents a loss of several million dollars annually to local and state agencies and undermines the state’s tourism marketing efforts.
This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State.
Customer facility charges
Many airports have adopted the practice of locating rental car services in consolidated facilities that house all car rental companies in one location. Common-use transportation systems, including shuttle bus systems and automated trains, are often used to transport rental car customers to and from terminals and the consolidated rental car facility. These facilities and their associated transport systems are financed largely via CFCs collected from rental car patrons who choose to rent a vehicle from a company housed in the consolidated rental facility.
Regulating PVSPs at the airport
One of the focal points of the regulatory feud between the PVSPs and the rental car companies and local jurisdictions is operation at the airport. This bill makes clear that commercial airport facilities are authorized to regulate access to an airport and provides them authority to charge PVSPs a CFC. This bill further requires PVSPs to obtain a permit or other authorization from the airport before “facilitating the sharing or renting of vehicles.” That term includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities. The permit must set forth the terms, standards, regulations, procedures, fees, and access requirements for the activity. In response to concerns of Turo, amendments have been taken to delay implementation and to require the CFCs to be proportionate to the services and infrastructure utilized.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No
SUPPORT: (Verified 8/28/23)
Enterprise Holdings (source)
American Car Rental Association
California Airports Council
California Labor Federation, AFL-CIO
California Teamsters Public Affairs Council
California Travel Association
Getaround
OPPOSITION: (Verified 8/28/23)
Black Chamber of Orange County
Chamber of Progress
Orange County Asian and Pacific Islander Community Alliance, Inc.
Orange County Coalition of Police and Sheriffs
Streets for All
TechNet
Turo
Viet Rainbow of Orange County
Vietnamese American Artists & Media Association
Vietnamese American Chamber of Commerce
Vietnamese Language Access
ARGUMENTS IN SUPPORT: The California Airports Council (CAC) writes:
Specifically, the CAC supports Section 3 of AB 893. Car share services, like any other vendor or for-profit company seeking to do business at a California airport, must have an agreement and permit from the airport in order to profit from California commercial airport activity. With car sharing services, this is not consistently the case. For example, the San Diego International Airport (SAN) was among several airports that issued cease and desist letters to the car sharing service Turo until such time as an airport operating permit was issued. The SAN letter was issued on September 14, 2017. To date, this letter has not been honored and Turo continues to offer their services specifically at SAN and various other airports where permits have not been issued.
ARGUMENTS IN OPPOSITION: Turo argues:
Several California airports have successfully implemented permits for peer-to-peer car sharing, with clear drop-off locations and tailored insurance requirements. When permitted, this industry operates effectively. However, AB 893 imposes an unprecedented statewide ban on Turo at airports where the industry is not yet permitted. These permits often involve lengthy drafting and execution processes for airports.
Another concerning aspect of AB 893 is the provision (sec. 6) that mandates airports to enforce rental car facility charges, regardless of whether the peer-to-peer car sharing company and its customers utilize that specific area of the airport under a permit. This provision unfairly favors traditional rental car companies and hinders the proper permitting process for peer-to-peer car sharing companies. We strongly believe that each airport should have the authority to make this decision independently.
This poorly thought-out proposal would limit customer choice, stifle competition, and provide undue preference to large conglomerates, favoring entrenched special interests at the expense of consumers and taxpayers.
ASSEMBLY FLOOR: 60-0, 5/30/23
AYES: Addis, Aguiar-Curry, Arambula, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Wendy Carrillo, Cervantes, Chen, Connolly, Davies, Dixon, Essayli, Mike Fong, Friedman, Gabriel, Garcia, Gipson, Grayson, Haney, Hart, Holden, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lowenthal, Maienschein, Mathis, McCarty, McKinnor, Muratsuchi, Ortega, Papan, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Sanchez, Santiago, Schiavo, Soria, Ting, Valencia, Waldron, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon
NO VOTE RECORDED: Alanis, Alvarez, Bains, Calderon, Juan Carrillo, Megan Dahle, Flora, Vince Fong, Gallagher, Hoover, Lee, Low, Stephanie Nguyen, Pacheco, Jim Patterson, Rodriguez, Blanca Rubio, Ta, Villapudua, Wallis
Prepared by: Christian Kurpiewski / JUD. / (916) 651-4113
8/31/23 11:06:41
**** END ****
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Richard Roth, Chair
2023 - 2024 Regular
Bill No: AB 893 Hearing Date: July 3, 2023
Author: | Papan | ||
Version: |
| ||
Urgency: | Fiscal: | ||
Consultant: | |||
Subject: Personal vehicle sharing programs
SUMMARY:
- Makes various changes to the regulation of personal vehicle sharing
programs.
NOTE:
This bill was heard in the Senate Judiciary Committee on June 27, 2023 and passed on an 11-0 vote.
Existing law:
- Establishes the Governor’s Office of Business and Economic Development (GO-Biz) within the Governor's Office for the purpose of serving as the lead state entity for economic strategy and marketing of California on issues relating to business development, private sector investment and economic growth. (Government Code (GC) § 12096 et. seq)
- Establishes the California Tourism Marketing Act (The Marketing Act). (GC § 13995 et seq.)
- Makes findings and declarations that an industry-approved assessment provides a private-sector financing mechanism that, in partnership with state funding, will provide the amount of marketing necessary to increase tourism marketing expenditures by California and that the goal of the assessments is to assess the least amount per business, in the least intrusive manner, spread across the greatest practical number of tourism industry segments. (GC § 13995.1)
- Requires the Office of Tourism within GO-Biz to establish a non-profit Commission consisting of 37 members, including representatives of the tourism industry and travel agencies or tour operators, whose mission is to increase the number of persons traveling to and within California. Provides that the Commission be administered by an executive director who shall be a tourism industry marketing professional, recommended by a vote of the commissioners and approved by the Governor. (GC §§ 13995.40, 13995.41 and 13995.43)
- Specifies that funding for the Commission is a cooperative venture and establishes Legislative intent that the state shall be responsible for appropriating a minimum of $7.3 million each fiscal year for travel and tourism. Requires the assessment level to ultimately reach at least $25 million and authorizes the industry to terminate the Commission by referendum at any time if the state fails to appropriate $7.3 million in any fiscal year and provides that the state may decide not to appropriate funding in the event that the Commission fails in any fiscal year to target its annual assessment level at or above the level set for the initial referendum. (GC § 13995.70)
- Specifies that, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be expressed as a fixed percentage of the amount of the rental transaction, collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax. (GC § 13995.65.5)
- Defines “customer facility charge” (CFC) as 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:
- to finance, design, and construct consolidated airport vehicle rental facilities;
- to finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system;
- to finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise 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. (GC § 50474.21(a))
- Permits any airport to require rental companies to collect a CFC or an alternative-CFC to finance projects, as specified. (GC § 50474.3)
- Provides that 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 for the vehicle for the rental period. States a rental company is prohibited from charging any other fee that is required to be paid by the renter as a condition of hiring or leasing the vehicle. States that if additional mandatory charges are imposed, the rental company must make certain disclosures to the consumer. States that fees for optional items and services can be charged as provided. (Civil Code (CC) § 1939.19)
- Defines “personal vehicle sharing program” (PVSP) as a legal entity qualified to do business in the State of California engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state. (Insurance Code (IC) § 11580.24(b))
- Provides that a private passenger motor vehicle insured by its owner via a specified policy of insurance will not be classified as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely because its owner allows it to be used for personal vehicle sharing as long as all of the following circumstances apply:
- the personal vehicle sharing is conducted pursuant to a personal vehicle sharing program;
- the annual revenue received by the vehicle’s owner which was generated by the personal vehicle sharing of the vehicle does not exceed the annual expenses of owning and operating the vehicle, including depreciation, interest, lease payments, auto loan payments, insurance, maintenance, parking, fuel, cleaning, automobile repair, and costs associated with personal vehicle sharing, including the installation, operation, and maintenance of computer hardware and software, signage identifying the vehicle as a personal sharing vehicle, and any fees charged by a personal vehicle sharing program; and
- the owner of the private passenger motor vehicle does not knowingly place the vehicle into commercial use, as defined, by a personal vehicle sharing user while engaged in personal vehicle sharing. (IC § 11580.24(a))
This bill:
- Defines “personal vehicle sharing program” (PVSP) as a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program, as defined.
- States a commercial airport facility may regulate access to an airport and require a PVSP to collect a customer facility charge (CFC). Requires a PVSP, before facilitating the sharing or renting of vehicles, must obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity. States that “facilitating the sharing or renting of vehicles” includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities. Clarifies that these requirements do not affect the authority of any political subdivision or the state to regulate access to an airport it owns or operates, to enter into written agreements, to set access fees or permit requirements, or to regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
- Prohibits a PVSP, on and after July 1, 2024, from allowing a vehicle to be placed on a digital network or software application for the purpose of making the vehicle available for rental through the PVSP unless it certifies, for vehicles purchased in California, that all sales and use taxes were paid on the purchase price of the motor vehicle, that the purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle, and that the purchase of the motor vehicle was not subject to taxation due to an exemption available under law. For a request to list a vehicle that was not purchased in California, it is certified that all applicable taxes were paid on the purchase price of the vehicle or that applicable taxes were not paid on the purchase price of the vehicle.
- Specifies that provisions specifying how an assessment is collected by a business within the passenger car rental category apply in the same manner to a PVSP for each sharing or rental transaction that begins at an airport.
- Specifies that provisions specifying the collection of a CFC as they apply to a rental car company apply to a PVSP and apply to any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
FISCAL EFFECT:
This bill is keyed fiscal by Legislative Counsel. According to the Assembly Committee on Appropriations, the bill will not result in any significant state costs. The Office of Tourism estimates that it would collect approximately $4 million annually in tourism assessments resulting from this bill, which would be remitted to Visit California. Proceeds from airport facility charges to PVSPs would be remitted to each airport that imposes such a charge.
COMMENTS:
- Purpose. Enterprise is the Sponsor of this bill. According to the Author, “With a growing number of transactions occurring online, there is an increasing need for California to look at gaps in the law that don’t address emerging technology and businesses. In the rental vehicle space, personal vehicle sharing programs (peer-to-peer and ride sharing platforms) have become an avenue for private individuals to rent vehicles to consumers in the state of California. However, California law currently does not regulate personal vehicle sharing programs in the same manner it regulates rental car companies. There are three areas where this is most prevalent:
- Personal vehicle sharing companies are not currently required to collect and remit state sales tax on a rental transaction in the same manner as rental car companies.
- Personal vehicle sharing programs benefit from the California tourism marketing program, but they do not pay into the program, while rental car companies are required to do so.
Personal vehicle sharing programs challenge airports’ authority to regulate operations on airport property, leading to unequal treatment of vehicle rentals that originate with airport customers.”
The Author states that “Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic technology. Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation. Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or “personal vehicle sharing programs” (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end. Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business.”
According to the Author, “Assembly Bill 893 will ensure that vehicles rented through third party platforms pay local and state fees that support public services, bringing peer to peer platforms into compliance with airport regulations. Most car rentals occur at or around publicly owned airports using airport property. While all other commercial operators pay permit fees, peer-to-peer operators are able to skirt these. This represents a loss of several million dollars annually to local and state agencies and undermines the state’s tourism marketing efforts. This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State.”
- Background.
Visit California. The California Tourism Marketing Act (the Marketing Act) grew out of efforts to reverse a multi-year decline in California’s tourism industry. During the 1970s, Governor Brown closed the Office of Tourism and withdrew funding from many tourism promotion efforts. During Governor Deukmejian’s tenure, the Office of Tourism was reactivated. In February 1993, Governor Wilson created the Governor’s Task Force on Tourism Funding (Executive Order W-41-93) for the purpose of “investigating various tourism funding methods and making policy recommendations regarding a new, ‘non-tax’ method of providing stable financing for statewide tourism promotion.” The Task Force, which was composed of representatives from various California businesses, developed the concept that was ultimately enacted by SB 256 (Johnston, Chapter 871, Statutes of 1995) as the Marketing Act.
The Marketing Act authorized the establishment of a non-profit, public benefit corporation, Visit California, to oversee the promotion of California as a premier travel destination. The statute became operative upon industry wide approval in 1997 and the assessment program was initiated in 1998. In 2001, the program was renewed by industry referendum with an 84 percent margin, while in 2007 it was renewed by a 91 percent margin. The first full year of assessment funding occurred during Fiscal Year 1998-1999. Between 1998 to 2002, the marketing budget was fully funded by the Commission and the state at approximately $14 million annually.
Visit California is comprised of 37 Commission members, representing each industry segment (Accommodations, Restaurants and Retail, Attractions and Recreation, Transportation and Travel Services, and Passenger Car Rental). The Commission meets three times per year. It directs and approves the marketing plan, expenditures, and the overall strategic course for California tourism. The Office of Tourism, housed within GO-Biz, administers the Tourism Assessment Program.
According to Visit California, since its inception more than two decades ago, it has become one of the nation’s premier state marketing agencies – promoting the California brand and helping to increase tourism and travel-related spending. Visit California states that as an industry-led, public-private partnership, it is leading successful marketing campaigns that are having a profound effect. Its website states that in 2019, travel-related spending grossed $144.9 billion; state and local taxes grossed $12.2 billion; and total employment went up by 13,000+ new jobs to 1.2 million employed in the space.
The Current Regulatory Landscape, Traditional Rental Car Services, and PSVPs. Current law permits any airport to require rental companies to collect a CFC or an alternative-CFC to finance projects at the airport, including to finance, design, and construct consolidated airport vehicle rental facilities; finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system; and to finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. These fees, provided ultimately by the customer, are solely for the customer’s ease of use of the airport vehicle rental facilities and common-use transportation systems. Typically, these companies are also subject to tourism assessment fees that fund Visit California efforts.
PVSPs, which provide a way for individuals to provide their private vehicle to customers for a fee, are newer entities in the marketplace. In this business model, an individual and customer communicate via a third-party platform, such as an app, rather than transact exclusively between a consumer and a business. PVSPs are not currently regulated in the same way as rental car companies, thus may not always be required, depending on the permit issued by an airport, to support the upkeep and use of airport vehicle rental facilities and common-use transportation systems the way traditional rental car companies are.
PVSPs have currently undertaken the permitting process at a number of airports. The process varies in terms of timeframes for completion but currently, six California airports have awarded a permit, while one has agreed to terms (pending final approval from the governing body) and ten are additionally in permit negotiations. One airport has agreed to terms with a peer-to-peer car sharing platform and are awaiting approval from a governing body. Ten additional airports in California are in negotiations regarding a peer-to-peer sharing platform.
In Turo Inc. v. Superior Court (2022) 90 Cal. App. 5th 517, a California Court of Appeal ruled that Turo, a PVSP, was not a rental car company as it is defined in California statutes after the City Attorney of San Francisco brought suit against Turo, alleging that Turo was unlawfully and unfairly operating a rental car business at the San Francisco International Airport (SFO) without obtaining proper permitting.
Proponents of this bill argue that, while PVSPs may not have a designated place at the airport where cars can be picked up, cars are still often being exchanged at the airport. Yet these companies are not required to support its facilities, common use areas, or the tourism industry the way traditional rental car businesses are. The Author further says that “personal vehicle sharing companies are not currently required to collect and remit state sales tax on a rental transaction in the same manner as rental car companies,” and that “personal vehicle sharing programs benefit from the California tourism marketing program, but they do not pay into the program, while rental car companies are required to do so.”
It should be noted that, as described above, rental car companies are required to collect a charge from consumers, should the airport choose, to cover these costs. This bill suggests the same approach for PVSPs.
- Delayed Implementation Provisions Discussed in Senate Judiciary. This bill was previously considered by the Senate Judiciary Committee. In that committee, the Author accepted amendments to delay implementation of provisions regarding authority for a commercial airport facility to regulate access to an airport and require a PSVP to collect a CFC until July 1, 2024.
- Arguments in Support. Enterprise, the Sponsor of this bill, The American Car Rental Association , the California Teamsters Public Affairs Council, writes in support: “Like many other industries, the rental car industry has greatly evolved in the last decade due to increasing changes in technology and a shift in the way businesses interact with consumers. Though the industry has changed, the law regulating the industry has yet to change with it. Rental car companies are highly, and increasingly, regulated by the rental car laws in California which dictate things like taxes, airport requirements, and tourism assessments for the benefit of California consumers. However, peer-to-peer platforms, often referred to as personal vehicle sharing platforms, which rent cars to consumers but are not defined in state law as rental car companies, are not currently regulated under California law. This lack of regulation creates an unequal marketplace, which is reflected then reflected in the consumer market. AB 893 aims to level the playing field in the rental car market and ensure that all rental transactions must adhere to the same consumer protection requirements under California law.”
California Airports Council writes in support: “Car share services, like any other vendor or for-profit company seeking to do business at a California airport, must have an agreement and permit from the airport in order to profit from California commercial airport activity. With car sharing services, this is not consistently the case. For example, the San Diego International Airport (SAN) was among several airports that issued cease and desist letters to the car sharing service Turo until such time as an airport operating permit was issued. The SAN letter was issued on September 14, 2017. To date, this letter has not been honored and Turo continues to offer their services specifically at SAN and various other airports where permits have not been issued.”
The California Labor Federation writes in support: “…personal vehicle sharing platforms have also evaded regulations and laws that apply to their rental car company competitors. That gives sharing companies an unfair competitive advantage against companies that follow the law and provide good union jobs to workers. Personal vehicle sharing platforms that rent cars to consumers are not defined in state law as rental car companies and are not currently regulated under California law. This not only puts rental car companies and their workers at a disadvantage, but it deprives renters of important consumer protections. AB 893 aims to level the playing field in the rental car market by requiring that all rental transactions, regardless of whether brick and mortar or a platform, must adhere to the same requirements under California law.”
The California Travel Association writes in support: “Given that personal vehicle sharing services conduct business on airport property, they benefit from tourism and other visitors to the state. Visit California’s media promotion is set to bring in 279.1 million visitors in 2023. Last year, travel-related spending reached $135 billion and brought in $12 billion in state and local tax revenue. If California stopped advertising its status as a premier tourist destination, the amount of people needing personal vehicle sharing services at the airport would decrease. Since the California tourism assessment directly benefits these car share companies, paying into the assessment is the right thing to do. CalTravel is supportive of any legislation that will level the playing field so that all businesses benefitting from Visit California’s marketing promotions pay into the assessment. AB 893 strikes a fair balance between having personal vehicle sharing services pay their fair share of assessments and infrastructure fees, while leaving them the flexibility to operate as unique and separate from traditional rental car companies. For these reasons, CalTravel respectfully requests your support of AB 893.”
Getaround writes in support: “Getaround supports AB 893 in its current form, which reflects work among Assemblymember Papan and her staff, and other stakeholders, to amend the original bill language. The changes to the bill have alleviated our chief concerns: (1) that Getaround would no longer be able to impose driver eligibility requirements designed to help ensure the safety of those on the roads and reduce the risks of loss and damage to shared vehicles, e.g., limits on the number of driving violations and alcohol/drug-related incidents, and (2) that airports would be required to apply the same or similar standards on PVSPs as rental car companies, without regard to the nature of the particular PVSPs’ proposed operations at the airport.”
- Arguments in Opposition. The Black Chamber of Orange County, Orange County Asian Pacific Islander Community Alliance, Viet Rainbow of Orange County, Vietnamese American Artists & Media Association, Vietnamese American Chamber of Commerce, Vietnamese Language Access writes in opposition: “For many Californians, owning a car is a key part of everyday life, whether that be for commuting to and from work, transporting kids to school or weekly grocery runs. For most, it’s not a luxury to own a car, it’s a necessity and, oftentimes, a car is an individual and family’s highest valued asset. Yet, car ownership is often not an option for average Californians who are trying to keep up with the high cost of living in California, especially in places like Orange County and the 34th Senate District.
As an example, Turo is a peer-to-peer car sharing community where car owners can connect with travelers and that empowers hosts to generate income from their vehicles. In California alone, there are 19,000 car owners who serve as hosts and average approximately $800 of earnings per month. These earnings directly benefit Californians, which means local dollars are staying in the hands of locals and not going out-of-state to benefit major car rental corporations. In fact, if AB 893 was truly about leveling the playing field then it would include remove restrictions to allow for hosts to generate income beyond the cost of owning their vehicle. According to a survey conducted by Turo of California community demographics, 60% of survey respondents identify as being from ethnically diverse communities and 20% as an immigrant or refugee.
Given Orange County’s rich ethnic and immigrant/refugee diversity, this is a matter that hits close to home where more and more Orange County residents are seeking creative and innovative sources of income to make ends meet. As community leaders and organizations, we hear the direct stories from those who are working multiple jobs to pay bills and know that there are very few opportunities to earn a passive income for our most disinvested communities. Peer-to-peer car rental services offer a way to earn additional income to offset the cost of owning a car without requiring a significant amount of time that would take away from time with family and friends and time to rest.
If passed, AB 893 would directly lead to decreased earnings of hosts who allow the use of their car through peer-to-peer car sharing services and, thus, have a harder time paying down their car loan and lease payments, covering primary expenses like car insurance and maintenance of the vehicle. This could have a serious unintended ripple effect in our local community in the name of “leveling a playing field” that major car rental corporations see as being unfair and are trying to dictate the rules of the industry in their own interest.”
Chamber of Progress writes in opposition: “Studies show cars sit idle about 95% of the time nationwide. Peer-to-peer car sharing services put privately-owned vehicles to more efficient use by repurposing underutilized cars and cutting down on the need for individual car ownership, garages, and storage…. Peer-to-peer car sharing allows car owners to earn money they need to survive by providing access to their vehicle…. Unfortunately, the proposed bill negatively impacts peer-to-peer car sharing and threatens its many benefits. AB 893 would update the insurance code to include the new definition of personal vehicle sharing programs, while the original definition of personal vehicle sharing programs would remain intact in the civil code, resulting in two different definitions of the same program within California law.
AB 893 would not only unravel existing established agreements that peer-to-peer car sharing operators have with California airport authorities, but also force peer-to-peer programs to pay more than their fair share. Consequently, this legislation benefits traditional rental car companies at the expense of Californians who are looking for a way to earn some extra money by sharing their existing vehicles. By applying an overbroad definition for personal vehicle sharing program, AB 893 would create compliance burdens on vehicle owners by requiring them to recertify that they had paid all required sales taxes.”
Turo and Streets For All write in opposition: “AB 893 imposes an unprecedented statewide ban on Turo at airports where the industry is not yet permitted. These permits often involve lengthy drafting and execution processes for airports. Moreover this bill inaccurately groups [PVSPs] with traditional rental car companies, causing confusion and chaos by conflating two distinct industries and passing on burdens without the accompanying benefits. California currently distinguishes PVSPs and rental car companies through various measures, including insurance requirements and transaction nature. The bill's primary definition creates an unclear and problematic distinction between "personal vehicle sharing programs" under the Civil Code and the Insurance Code, resulting in confusion and the establishment of two separate classes of vehicle sharing programs. This poorly thought-out proposal would limit customer choice, stifle competition, and provide undue preference to large conglomerates, favoring entrenched special interests at the expense of consumers and taxpayers. AB 893 has a negative impact on the peer-to-peer car sharing industry, restricting consumer choice and reinforcing the monopoly held by traditional rental companies. It fails to adequately differentiate between the two industries, hindering companies’ ability to offer enhanced mobility options to Californians and visitors.
Streets for All specifically states “Considering these concerns, we strongly oppose AB 893 in its current form and urge the removal of Section 2 and Section 5.”
Turo specifically states “Another concerning aspect of AB 893 is the provision (sec. 6) that mandates airports to enforce rental car facility charges, regardless of whether the peer-to-peer car sharing company and its customers utilize that specific area of the airport under a permit. This provision unfairly favors traditional rental car companies and hinders the proper permitting process for peer-to-peer car sharing companies. We strongly believe that each airport should have the authority to make this decision independently.”
- Policy Questions and Suggested Amendments.
What Fees Should Apply? Airports may require a rental car company to collect a CFC to support airport-related costs related to rental cars. These may be utilized to finance, design, and construct consolidated airport vehicle rental facilities; to finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities and; to finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. While a permit from an airport would delineate the appropriate access, specific usage, and necessary fees for a PVSP, and would specify whether the PVSP-related usage should be subject to the CFC, in order to clarify that these should be commensurate with the actual use by a PVSP, the bill should be amended according to the following:
On page 10, in line 40, after “company”, insert “and any fees collected shall be proportionate to the services and infrastructure utilized”
SEC. 5. Section 50474.20 is added to the Government Code, to read:
50474.20. This article shall apply to both of the following in the same manner as it applies to a rental car company and any fees collected shall be proportionate to the services and infrastructure utilized:
(a) A personal vehicle sharing program as defined in subdivision (m) of Section 1939.01 of the Civil Code.
(b) Any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
Certification of Sales and Use Tax. The mandate in the bill for a PVSP to certify that proper sales and use taxes have been paid on the vehicle may not be necessary and may disincentivize users from participating in the marketplace if they do not know whether taxes were paid based on the means by which they came into possession of the vehicle. The language in the bill governing this requirement, by prohibiting a vehicle from being placed on a digital network or software application unless “certification” that taxes were paid has occurred may further create implementation challenges and confusion. If concerns exist about individuals operating on a PVSP more like an actual rental car company, with a fleet of vehicles, language could be added to distinguish those types of users from true individuals in terms of how sales and use tax information is captured by a PVSP. In order to address the challenges with this provision, the Author may wish to consider striking Section 3 of the bill.
SUPPORT AND OPPOSITION:
Support:
Enterprise Holdings (Sponsor)
American Car Rental Association
California Airports Council
California Labor Federation AFL-CIO
California Teamsters Public Affairs Council
California Travel Association
Getaround
Opposition:
Black Chamber of Orange County
Chamber of Progress
Orange County Asian and Pacific Islander Community Alliance, Inc.
Streets for All
Turo
Viet Rainbow of Orange County
Vietnamese American Artists & Media Association
Vietnamese American Chamber of Commerce
Vietnamese Language Access
-- END --
Senator Thomas Umberg, Chair
2023-2024 Regular Session
Bill No: AB 893 (Author:Papan)
Version: June 12, 2023
Hearing Date: June 27, 2023
Fiscal: Yes
Urgency: No
Consultant: CK
SUBJECT
Personal vehicle sharing programs
DIGEST
This bill applies existing regulatory provisions governing rental vehicle companies to personal vehicle sharing programs, including the ability of airports to regulate the operation of such programs at airports in California.
EXECUTIVE SUMMARY
Existing law provides a regulatory structure for rental passenger vehicle transactions. This includes specific obligations on rental companies regarding pricing and the charging of mandatory fees and fees for optional items and services, as provided. Existing law also authorizes airports to require rental companies to charge customer facility charges (CFC) that are used to finance consolidated rental car facilities and internal transportation systems. They may also require fees to be charged for the use of certain airport transportation systems. The California Tourism Marketing Act also requires special assessments to be collected on rental transactions commenced at airports.
Outside of the traditional rental car industry have emerged peer-to-peer vehicle sharing services facilitated through applications or online. Companies facilitate the booking of third parties’ vehicles for short-term rentals. This bill refers to them as “personal vehicle sharing programs.”
This bill applies portions of the above regulatory structure, as specified, to personal vehicle sharing programs to a similar extent as rental car companies. This includes authorization for airports to regulate access and require sharing programs to charge CFCs and obtain permits before facilitating the sharing or renting of vehicles, including advertising vehicles for pickup at such airports. Sharing programs are required to certify the payment of specified sales and use taxes on vehicles before those vehicles are made available for sharing or rent.
The bill is sponsored by Enterprise. It is supported by a variety of organizations, including the California Airports Council and the American Car Rental Association. It is opposed by Turo and TechNet.
PROPOSED CHANGES TO THE LAW
Existing law:
- Defines “customer facility charge” (CFC) to mean 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:
- to finance, design, and construct consolidated airport vehicle rental facilities;
- to finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system;
- to finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems. The fees designated as a customer facility charge shall not otherwise 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. (Gov. Code § 50474.21(a).)
- Permits any airport to require rental companies to collect a CFC or an alternative-CFC to finance projects, as specified above, under specified conditions. (Gov. Code § 50474.3.)
- Provides that 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 for the vehicle for the rental period. A rental company is prohibited from charging any other fee that is required to be paid by the renter as a condition of hiring or leasing the vehicle. If additional mandatory charges are imposed, the rental company must make certain disclosures to the consumer. Fees for optional items and services can be charged as provided. (Civ. Code § 1939.19.)
- Establishes the California Tourism Marketing Act, which, in relevant part, requires special assessments to be collected on rental transactions commenced at airports. (Gov. Code § 13995.65.5.)
- Defines “personal vehicle sharing program”(PVSP) as a legal entity qualified to do business in the State of California engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state. (Ins. Code § 11580.24(b).)
- Provides that a private passenger motor vehicle insured by its owner pursuant to a specified policy of insurance shall not be classified as a commercial vehicle, for-hire vehicle, permissive use vehicle, or livery solely because its owner allows it to be used for personal vehicle sharing as long as all of the following circumstances apply:
- the personal vehicle sharing is conducted pursuant to a personal vehicle sharing program;
- the annual revenue received by the vehicle’s owner which was generated by the personal vehicle sharing of the vehicle does not exceed the annual expenses of owning and operating the vehicle, including depreciation, interest, lease payments, auto loan payments, insurance, maintenance, parking, fuel, cleaning, automobile repair, and costs associated with personal vehicle sharing, including the installation, operation, and maintenance of computer hardware and software, signage identifying the vehicle as a personal sharing vehicle, and any fees charged by a personal vehicle sharing program; and
- the owner of the private passenger motor vehicle does not knowingly place the vehicle into commercial use, as defined, by a personal vehicle sharing user while engaged in personal vehicle sharing. (Ins. Code § 11580.24(a).)
This bill:
- Defines “personal vehicle sharing program” as a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
- Authorizes a commercial airport facility to regulate access to an airport and require a PVSP to collect a CFC pursuant to Section 50474.21 of the Government Code. Applies the CFC provisions to PVSPs and any person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration.
- Requires a PVSP, before facilitating the sharing or renting of vehicles, to obtain a permit or other written authorization from the airport operator that sets forth the terms, standards, regulations, procedures, fees, and access requirements for the activity. Defines “facilitating the sharing or renting of vehicles” to include listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
- Provides that the above provisions do not affect the authority of any political subdivision or the state to do any of the following:
- regulate access to an airport it owns or operates;
- enter into written agreements;
- set access fees or permit requirements; or
- regulate existing airport access permits granted by an airport to personal vehicle sharing programs.
- Prohibits a PVSP, on and after July 1, 2024, from allowing a vehicle to be placed on a digital network or software application of the PVSP for the purpose of making the vehicle available for rental unless one of the following certifications, as applicable, is fulfilled:
- if the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
- all sales and use taxes were paid on the purchase price of the motor vehicle;
- the purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle; or
- the purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
- if the request is to list a motor vehicle that was not purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
- applicable taxes were paid on the purchase price of the vehicle; or
- applicable taxes were not paid on the purchase price of the vehicle.
- if the request is to list a motor vehicle that was purchased in California, and that motor vehicle would first be made available for sharing on or after July 1, 2024, certification that one of the following occurred:
- Applies the tourism assessment established in Government Code Section 13995.65.5 to a PVSP in the same manner as a business in the passenger car rental category for each sharing or rental transaction that begins at an airport.
COMMENTS
- Background
For insight on exactly what personal vehicle sharing programs (PVSP) are, Turo, a leading PVSP describes itself as:
Turo is the world’s largest car sharing marketplace where you can book any car you want, wherever you want it, from a vibrant community of trusted hosts across the US, Canada, and the UK. Whether you're flying in from afar or looking for a car down the street, searching for a rugged truck or something smooth and swanky, guests can take the wheel of the perfect car for any occasion, while hosts can take the wheel of their futures by building an accessible, flexible, and scalable car sharing business from the ground up.[1]
Behind the plain language of this bill is an ongoing legal fight over whether PVSPs, such as Turo and Getaround, should be regulated solely as PVSPs or as rental car companies. Various stakeholders, including local governments, rental car companies, and labor groups, believe that they should be classified as rental car companies, or at the very least should have to play by the same set of rules. Turo, a PVSP, and other technology groups, fight such a classification, and the attendant regulations.
It came to a head when the City Attorney of San Francisco brought suit against Turo on behalf of the People of the State of California. The suit, in relevant part, alleged that Turo is unlawfully and unfairly operating a rental car business at the San Francisco International Airport without obtaining the proper permits. Turo vehemently disagrees with being categorized as a rental car company and argued it is a PVSP that should not be subject to laws in the state regulating rental car companies. It cross-complained seeking a declaratory judgment that it is not a rental car company under California law. The superior court ruled in the City’s favor on Turo’s claim, and Turo appealed. The California Court of Appeal concluded that Turo was not a rental car company as that term is defined in California statutes.[2]
This bill seeks to apply a number of provisions of existing law to PVSPs that ensure it is paying its fair share, similar to rental car companies, with regard to airport infrastructure, tourism assessments, and use and sales taxes. It defines a PVSP as a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
- PVSPs at the airport
- Customer facility charges
Many airports have adopted the practice of locating rental car services in consolidated facilities that house all car rental companies in one location. Common-use transportation systems, including shuttle bus systems and automated trains, are often used to transport rental car customers to and from terminals and the consolidated rental car facility. These facilities and their associated transport systems are financed largely via customer facility charges (CFCs) collected from rental car patrons who choose to rent a vehicle from a company housed in the consolidated rental facility.
Initial authority allowed public airports in California to collect a $10 fee per contract to finance, design, and construct consolidated rental car facilities. In 2010, the Legislature revised the CFC fee structure in response to feedback from the airports that the existing $10 per contract fee was inadequate to fund some proposed consolidated rental car facilities. SB 1192 (Oropeza, Ch. 642, Stats. 2010) permitted airports to impose a CFC calculated on an alternative basis. The alternative-CFC fee structure allowed an airport to charge a daily fee for up to five days for each individual rental car contract. The maximum daily fee started at $6 per day and increased according to a statutory schedule. Currently, the maximum amount of the daily fee that can be charged is $9 per day for a maximum of five days per rental contract for a maximum charge of $45. SB 1192 also expanded the range of uses for which CFC revenue could be spent, including purchasing vehicles for a common-use transport system and for terminal modifications undertaken to provide access to a common-use transport system.
- Regulating PVSPs at the airport
One of the focal points of the regulatory feud between the PVSPs and the rental car companies and local jurisdictions is operation at the airport. As described, it is at the center of the litigation between Turo and San Francisco. This bill makes clear that commercial airport facilities are authorized to regulate access to an airport and provides them authority to charge PVSPs a CFC. The bill further requires PVSPs to obtain a permit or other authorization from the airport before “facilitating the sharing or renting of vehicles.” That term includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities. The permit must set forth the terms, standards, regulations, procedures, fees, and access requirements for the activity.
There are already a number of airports that have contractual arrangements with PVSPs that scope out the relationship between the parties and ensure that the PVSP is abiding by rules and regulations and properly compensating said airports for their impact on airport infrastructure and operations. With recent amendments, including a modification to this section, Getaround, a PVSP, has withdrawn their opposition and moved to a support position.
Turo continues to oppose the measure and specifically asks for a delayed implementation of this section of the bill. In response, the author has agreed to an amendment that will delay the effective date of this provision to July 1, 2024.
- Industry assessments to support California tourism
The California Tourism Marketing Act was enacted in order to retain and expand the tourism industry in California. (Gov. Code § 13995 et seq.) The Act was deemed necessary to market travel to and within California by requiring a series of assessments imposed on businesses across the state in the various tourism industry segments. The California Travel and Tourism Commission, established by the Act, is tasked with targeting an amount determined to be sufficient to market effectively travel and tourism to and within the state.
The Act provides that, for purposes of calculating the assessment for a business within the passenger car rental category, the assessment shall be collected only on each rental transaction that commences at either an airport or at a hotel or other overnight lodging with respect to which a city, city and county, or county is authorized to levy a tax, as provided. (Gov. Code § 13995.65.5.)
This bill simply applies this assessment to PVSPs in the same manner as a rental car company but only for sharing or rental transactions that begin at the airport. As PVSPs obviously gain a benefit from increased tourism in California, with visitors needing the use of a vehicle while on vacation, the provision arguably ensures these companies pay their fair share.
- Certification of tax payments
Concerns have arisen about the practices some operators using PVSPs are deploying in connection with the payment of use and sales taxes. In order to provide greater transparency and ensure taxes are properly paid, the bill, starting July 1, 2024, requires one of two certifications be made by users before the PVSP can allow them to place a vehicle on a digital network or software application of the PVSP for the purpose of making the vehicle available for rental or sharing.
If the request is to list a motor vehicle that was purchased in California, the user must certify that one of the following occurred: (1) all sales and use taxes were paid on the purchase price of the motor vehicle; (2) the purchaser elected to have sales and use taxes collected on receipts from renting the motor vehicle in lieu of paying applicable taxes on the purchase price of the motor vehicle; or (3) the purchase of the motor vehicle was not subject to taxation due to an exemption available under law.
If the request is to list a motor vehicle that was not purchased in California, the user must certify that one of the following occurred: (1) applicable taxes were paid on the purchase price of the vehicle; or (2) applicable taxes were not paid on the purchase price of the vehicle.
This is a straightforward provision that represents a significant narrowing from the original version of the bill.
- Stakeholder positions
According to the author:
Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic technology.
Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation.
Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or “personal vehicle sharing programs” (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end.
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business.
Assembly Bill 893 will ensure that vehicles rented through third party platforms pay local and state fees that support public services, bringing peer to peer platforms into compliance with airport regulations. Most car rentals occur at or around publicly owned airports using airport property. While all other commercial operators pay permit fees, peer-to-peer operators are able to skirt these. This represents a loss of several million dollars annually to local and state agencies and undermines the state’s tourism marketing efforts.
This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State.
The California Airports Council (CAC) writes in specific support of the provisions of the bill authorizing the charging of CFCs:
Specifically, the CAC supports Section 3 of AB 893. Car share services, like any other vendor or for-profit company seeking to do business at a California airport, must have an agreement and permit from the airport in order to profit from California commercial airport activity. With car sharing services, this is not consistently the case. For example, the San Diego International Airport (SAN) was among several airports that issued cease and desist letters to the car sharing service Turo until such time as an airport operating permit was issued. The SAN letter was issued on September 14, 2017. To date, this letter has not been honored and Turo continues to offer their services specifically at SAN and various other airports where permits have not been issued.
Writing in opposition, Turo argues:
Several California airports have successfully implemented permits for peer-to-peer car sharing, with clear drop-off locations and tailored insurance requirements. When permitted, this industry operates effectively. However, AB 893 imposes an unprecedented statewide ban on Turo at airports where the industry is not yet permitted. These permits often involve lengthy drafting and execution processes for airports.
Another concerning aspect of AB 893 is the provision (sec. 6) that mandates airports to enforce rental car facility charges, regardless of whether the peer-to-peer car sharing company and its customers utilize that specific area of the airport under a permit. This provision unfairly favors traditional rental car companies and hinders the proper permitting process for peer-to-peer car sharing companies. We strongly believe that each airport should have the authority to make this decision independently.
This poorly thought-out proposal would limit customer choice, stifle competition, and provide undue preference to large conglomerates, favoring entrenched special interests at the expense of consumers and taxpayers.
TechNet writes in an oppose-unless-amended position:
TechNet greatly appreciates the amendments to AB 893 that allow personal vehicle sharing programs to impose driver eligibility requirements that are designed to help ensure the safety of those on the road and reduce the risk of loss and damage to shared vehicles.
We respectfully request that the bill provides additional clarification to the definition of “personal vehicle sharing program” in Section 1939.01 (m) by removing “or renting” from the description. This would provide clarification that these companies do not operate in the same manner as a rental company and would align the definition more closely with what is described in Section 11580.24 of the Insurance Code. Similarly, we are concerned that the wording in Section 5 of the bill may also conflate personal vehicle sharing programs with rental car companies and require requirements on these two industries to be applied in the same manner that may not reflect the important distinctions between them.
Writing in support, the California Labor Federation argues:
In the last decade, peer-to-peer platforms, often referred to as personal vehicle sharing platforms, have entered the market. These companies follow the model of Uber and AirBnB in “disrupting” established markets by shifting the burden of operating and staffing a fleet or hotel onto individuals. Similarly, personal vehicle sharing platforms have also evaded regulations and laws that apply to their rental car company competitors. That gives sharing companies an unfair competitive advantage against companies that follow the law and provide good union jobs to workers.
Personal vehicle sharing platforms that rent cars to consumers are not defined in state law as rental car companies and are not currently regulated under California law. This not only puts rental car companies and their workers at a disadvantage, but it deprives renters of important consumer protections.
AB 893 aims to level the playing field in the rental car market by requiring that all rental transactions, regardless of whether brick and mortar or a platform, must adhere to the same requirements under California law.
SUPPORT
American Car Rental Association (ACRA)
California Airports Council
California Labor Federation, AFL-CIO
California Teamsters Public Affairs Council
California Travel Association (CALTRAVEL)
Enterprise Holdings
Getaround
OPPOSITION
Orange County Coalition of Police and Sheriffs
TechNet
Relay Rides d.b.a. Turo
RELATED LEGISLATION
Pending Legislation: AB 534 (McCarty, 2023) eliminates the deadline by which airports must initiate the process for obtaining the authority to require or increase an alternative CFC and removes provisions that end authority to charge a CFC when the bonds, or other forms of indebtedness, used for financing are paid. AB 534 is currently on the Senate Floor.
Prior Legislation:
AB 2873 (Low, Ch. 591, Stats. 2018) prohibits PVSPs from facilitating or otherwise arranging for transportation with a recalled vehicle, as soon as practicable but not more than 48 hours after a vehicle is subject to a recall, or not more than 48 hours after receiving notification of a recall by a third party.
SB 1192 (Oropeza, Ch. 642, Stats. 2010) See Comment 2.
PRIOR VOTES:
Assembly Floor (Ayes 60, Noes 0)
Assembly Appropriations Committee (Ayes 14, Noes 0)
Assembly Judiciary Committee (Ayes 9, Noes 0)
**************
About Turo, Turo, https://turo.com/us/en/about. All internet citations are current as of June 16, 2023. ↑
Turo Inc. v. Superior Court (2022) 80 Cal. App. 5th 517. ↑
ASSEMBLY THIRD READING
ATR Bill Id:AB 893
Author:(Papan)
As Amended Ver:May 22, 2023
Majority vote
SUMMARY
Clarifies the duties and obligations imposed upon personal vehicle sharing programs.
Major Provisions
- Defines, for the purpose of the law governing the interaction between rental companies and consumers, "personal vehicle sharing program" to mean a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
- Requires personal vehicle sharing programs to comply with mandatory disclosures imposed on rental companies related to mandatory charges imposed on rentals, including mileage charges and other mandatory fees.
- Permits a commercial airport facility to require personal vehicle sharing programs to collect customer facility charges.
- Requires that if a customer facility charge is collected by an airport, that personal vehicle sharing programs must be treated in the same manner as rental companies.
- Requires a personal vehicle sharing program to obtain a permit or other written authorization from an airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company prior to facilitating the sharing or renting of vehicles.
- Provides that, for the purpose of 5), above, "facilitating the sharing or renting of vehicles" includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
- Provides that nothing in 5), above, limits the authority of any political subdivision or the state to regulate any of the following:
- Regulating access to an airport it owns and operates;
- Entering into written agreements;
- Setting access or permit requirements for airports; or
- Regulating existing access permits granted by an airport to a personal vehicle sharing program.
- Prohibits, commencing July 1, 2024, a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program unless the personal vehicle sharing program first requests a certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle, as specified.
- Requires a personal vehicle sharing program to be treated as a business in the passenger rental car category for the purposes of collecting assessments for promoting tourism pursuant to the California Tourism Marketing Act.
COMMENTS
As it has done for both the lodging and taxi industry, technology is seeking to change the car rental industry through the creation of "personal vehicle sharing programs." These personal vehicle sharing programs assert that they function by linking a "guest," frequently an out-of-town visitor, with a local "host" who will share their vehicle with the "guest." Essentially, these programs seek to become the Airbnb or Uber of the rental car industry. Understandably, this has created significant consternation in the car rental industry as many of these programs are avoiding the rigorous regulation and fee collection regimes imposed on rental car companies. The personal vehicle sharing program model is premised on the concept of individual vehicle owners, known as "hosts," allowing other persons, known as "guests", who they may or may not know, to use their vehicles for a fee. They are allowed to do so under existing law, as long as they have a special type of auto insurance that provides commercial coverage during the period when the guest is using the vehicle. If this sounds similar to renting a car, that is because it is. The only primary difference between rental car companies and a personal vehicle sharing program is that rental car companies own their own vehicles and utilize centralized pick-up and drop-off locations, whereas personal vehicle sharing programs utilize cars owned by private individuals and opt for a decentralized method getting the car from the host to the guest.
Although innovative, the decentralized nature of personal vehicle sharing programs inevitably has led to conflict. In particular, the San Francisco International Airport experienced significant congestion and a loss of critical infrastructure revenue after Turo, one of the leading personal vehicle sharing programs and opponent of this bill, began operating at the airport without a permit. Commenting on a lawsuit filed against the company on the city-owned airport's behalf, the then-City Attorney of San Francisco noted, "[Turo executives] seem to think traffic congestion is someone else's problem and that their company doesn't need to pay its fair share for the public facilities it is profiting off of…You don't get special treatment just because you claim to be a disruptor." (Carolyn Said, SF sues Turo for not having airport permits, S.F. Chronicle, Jan. 24, 2018.) Although the Legislature never definitively decided on the status of personal vehicle sharing programs, the Court of Appeal did. In 2022, the First District Court of Appeal held that personal vehicle sharing programs are not rental car companies under existing statutory law. (Turo Inc. v. Superior Court (2022) 80 Cal. App. 5th 517.) The case largely turned on various definitions of "rental company" provided in existing law, including the Civil Code provision implicated by this bill, and thus the Legislature retains authority to define, classify, and apply regulations to personal vehicle sharing programs as it sees fit. Notably, although Turo and San Francisco International Airport remain in negotiations regarding the company's status at the airport, there are no issues currently before a court related to the provisions of this bill now that the definitional issue has been settled. Despite the contentions of one stakeholder involved with this measure, there are no issues raised by this bill that, at this time, would cause legislative policy in this area to directly interfere with judicial decision-making. This measure would apply several existing rental company related consumer notice rules to personal vehicle sharing programs; make the programs register with an airport if they wish to operate there (similar to rules governing ride share companies); and require personal vehicle sharing programs to collect several government imposed fees and assessments, including those related to airport infrastructure and the promotion of tourism.
According to Visit California, the state's tourism economy is slated to generate $154.4 billion in 2023. To support and grow the tourism economy in the late 1990s, the industry worked with state government to enact the California Tourism Marketing Act, which created the California Travel and Tourism Commission. The Commission runs the "California Welcome Centers," found along major highways at the state border, and provides major funding for Visit California, which creates media campaigns to promote the state. To support these efforts, the Commission is authorized to collect an assessment from various actors in the tourism industry, including rental car companies, hotels, and transportation companies, such as cabs, and ride sharing companies, such as Uber and Lyft. Depending on the nature of one's business, there are different assessment levels, generally tied to the level of involvement in the tourism industry. As a result, because Californians are more likely to use transportation companies locally, the fees imposed on rental car companies are slightly higher than transportation companies as rental car operators generally have a greater reliance on tourism. However, Turo objects to being subject to these assessments.
The opposition also objects to the imposition of customer facility charges on personal vehicle sharing programs. These charges are collected to pay for the use of an airport-mandated common use bus or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility. The fees typically pay off the bonded indebtedness incurred by the airport for the construction of the facility. The opposition contends that they are far less infrastructure intensive and thus should not be forced to collect the fee from its customers. The proponents of the measure counter that every airport and its level of infrastructure needed to support personal vehicle sharing programs at a given facility is different. For example, just because a personal vehicle sharing program may be able to utilize a regular parking lot at one airport, they may need to use rental car facilities at another. Furthermore, the wear-and-tear on airport property would appear to warrant airports collecting some revenue from the personal vehicle sharing programs. This would be especially true given that taxpayers, who backstop all debts at California's government-owned airports, are ultimately responsible for any bond payments for which the customer facility charges are insufficient to meet the payment.
According to the Author
Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic enabling technology. Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation. Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or "personal vehicle sharing programs" (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end.
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business. This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State. AB 893 ensures that the California Legislature is not picking winners and losers in an industry by applying regulations to one business and not another.
Arguments in Support
This measure is supported by Enterprise Holdings. In support of this bill they write:
Like many other industries, the rental car industry has greatly evolved in the last decade due to increasing changes in technology and a shift in the way businesses interact with consumers. Though the industry has changed, the law regulating the industry has yet to change with it. Rental car companies are highly, and increasingly, regulated by the rental car laws in California which dictate things like taxes, airport requirements, and tourism assessments for the benefit of California consumers. However, peer-to-peer platforms, often referred to as personal vehicle sharing platforms, which rent cars to consumers but are not defined in state law as rental car companies, are not currently regulated under California law. This lack of regulation creates an unequal marketplace, which is reflected in the consumer market. AB 893 aims to level the playing field in the rental car market and ensure that all rental must adhere to the same requirements under California law.
Arguments in Opposition
In strident opposition to this measure, Turo claims:
Today California properly and carefully distinguishes personal vehicle sharing programs and rental car in myriad ways – providing different insurance requirements, acknowledging that personal vehicle sharing programs involve a three-party transaction in which the platform does not own the car, and recognizing that rental car companies own fleets of vehicles that engage in two-party transactions. This bill would needlessly create ambiguity and chaos by conflating two very distinct industries.
AB 893 negatively impacts the peer-to-peer car sharing industry, limiting consumer choice and reinforcing the monopoly of traditional rental companies. The bill does not adequately distinguish between the two industries, impairing our ability to offer enhanced mobility options to Californians and those traveling to our state.
FISCAL COMMENTS
According to the Assembly Appropriations Committee, no significant state costs. The Department of Insurance and Department of Tax and Fee Administration report no costs. The Office of Tourism estimates that it would collect approximately $4 million annually in tourism assessments resulting from this bill, which would be remitted to Visit California, an independent nonprofit mutual benefit corporation that promotes California's tourism interests. Proceeds from airport facility charges to PVSPs would be remitted to each airport that imposes such a charge.
VOTES
ASM JUDICIARY: 9-0-2
YES: Maienschein, Connolly, Haney, Kalra, Pacheco, Papan, Reyes, Robert Rivas, Sanchez
ABS, ABST OR NV: Essayli, Dixon
ASM APPROPRIATIONS: 14-0-2
YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Ortega
ABS, ABST OR NV: Megan Dahle, Dixon
UPDATED
VERSION: May 22, 2023
CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0000933
ASSEMBLY THIRD READING
ATR Bill Id:AB 893
Author:(Papan)
As Amended Ver:April 12, 2023
Majority vote
SUMMARY
Clarifies the duties and obligations imposed upon personal vehicle sharing programs.
Major Provisions
- Defines, for the purpose of the law governing the interaction between rental companies and consumers, "personal vehicle sharing program" to mean a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
- Requires personal vehicle sharing programs to comply with mandatory disclosures imposed on rental companies related to mandatory charges imposed on rentals, including mileage charges and other mandatory fees.
- Permits a commercial airport facility to require personal vehicle sharing programs to collect customer facility charges.
- Requires that if a customer facility charge is collected by an airport, that personal vehicle sharing programs must be treated in the same manner as rental companies.
- Requires a personal vehicle sharing program to obtain a permit or other written authorization from an airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company prior to facilitating the sharing or renting of vehicles.
- Provides that, for the purpose of 5), above, "facilitating the sharing or renting of vehicles" includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
- Provides that nothing in 5), above, limits the authority of any political subdivision or the state to regulate access to an airport it owns or operates and to set access fees or requirements.
- Prohibits, commencing July 1, 2024, a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program unless the personal vehicle sharing program first requests a certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
- Requires a personal vehicle sharing program to be treated as a business in the passenger rental car category for the purposes of collecting assessments for promoting tourism pursuant to the California Tourism Marketing Act.
COMMENTS
As it has done for both the lodging and taxi industry, technology is seeking to change the car rental industry through the creation of "personal vehicle sharing programs." These personal vehicle sharing programs assert that they function by linking a "guest," frequently an out-of-town visitor, with a local "host" who will share their vehicle with the "guest." Essentially, these programs seek to become the Airbnb or Uber of the rental car industry. Understandably, this has created significant consternation in the car rental industry as many of these programs are avoiding the rigorous regulation and fee collection regimes imposed on rental car companies. The personal vehicle sharing program model is premised on the concept of individual vehicle owners, known as "hosts," allowing other persons, known as "guests", who they may or may not know, to use their vehicles for a fee. They are allowed to do so under existing law, as long as they have a special type of auto insurance that provides commercial coverage during the period when the guest is using the vehicle. If this sounds similar to renting a car, that is because it is. The only primary difference between rental car companies and a personal vehicle sharing program is that rental car companies own their own vehicles and utilize centralized pick-up and drop-off locations, whereas personal vehicle sharing programs utilize cars owned by private individuals and opt for a decentralized method getting the car from the host to the guest.
Although innovative, the decentralized nature of personal vehicle sharing programs inevitably has led to conflict. In particular, the San Francisco International Airport experienced significant congestion and a loss of critical infrastructure revenue after Turo, one of the leading personal vehicle sharing programs and opponent of this bill, began operating at the airport without a permit. Commenting on a lawsuit filed against the company on the city-owned airport's behalf, the then-City Attorney of San Francisco noted, "[Turo executives] seem to think traffic congestion is someone else's problem and that their company doesn't need to pay its fair share for the public facilities it is profiting off of…You don't get special treatment just because you claim to be a disruptor." (Carolyn Said, SF sues Turo for not having airport permits, S.F. Chronicle, Jan. 24, 2018.) Although the Legislature never definitively decided on the status of personal vehicle sharing programs, the Court of Appeal did. In 2022, the First District Court of Appeal held that personal vehicle sharing programs are not rental car companies under existing statutory law. (Turo Inc. v. Superior Court (2022) 80 Cal. App. 5th 517.) The case largely turned on various definitions of "rental company" provided in existing law, including the Civil Code provision implicated by this bill, and thus the Legislature retains authority to define, classify, and apply regulations to personal vehicle sharing programs as it sees fit. Notably, although Turo and San Francisco International Airport remain in negotiations regarding the company's status at the airport, there are no issues currently before a court related to the provisions of this bill now that the definitional issue has been settled. Despite the contentions of one stakeholder involved with this measure, there are no issues raised by this bill that, at this time, would cause legislative policy in this area to directly interfere with judicial decision-making. This measure would apply several existing rental company related consumer notice rules to personal vehicle sharing programs; make the programs register with an airport if they wish to operate there (similar to rules governing ride share companies); and require personal vehicle sharing programs to collect several government imposed fees and assessments, including those related to airport infrastructure and the promotion of tourism.
According to Visit California, the state's tourism economy is slated to generate $154.4 billion in 2023. To support and grow the tourism economy in the late 1990s, the industry worked with state government to enact the California Tourism Marketing Act, which created the California Travel and Tourism Commission. The Commission runs the "California Welcome Centers," found along major highways at the state border, and provides major funding for Visit California, which creates media campaigns to promote the state. To support these efforts, the Commission is authorized to collect an assessment from various actors in the tourism industry, including rental car companies, hotels, and transportation companies, such as cabs, and ride sharing companies, such as Uber and Lyft. Depending on the nature of one's business, there are different assessment levels, generally tied to the level of involvement in the tourism industry. As a result, because Californians are more likely to use transportation companies locally, the fees imposed on rental car companies are slightly higher than transportation companies as rental car operators generally have a greater reliance on tourism. However, Turo objects to being subject to these assessments.
In opposition to the measure, and regarding the assessment, Turo claims, "without question, and without any clear rationale, this provision is a new tax. At a time of great uncertainty, the last thing that California needs is to erect economic barriers to new businesses and consumers." This view of what is a tax appears to misunderstand basic California tax law, most notably the modifications made by Proposition 26 in 2010. Indeed, a prominent anti-tax organization,
"Cal-Tax," notes that there is a distinction between taxes and other fees or assessments that are imposed for a "specific benefit or privilege." The group notes, "A charge imposed for a specific benefit or privilege that specifically improves the payer's well-being or provides assistance to the payer," is, in fact, not a tax. (CalTax, Understanding Proposition 26, (Aug. 2011), at p. 7, available at: https://www.caltax.org/documents/UnderstandingProposition26.pdf.) It would appear that Turo benefits from tourism and other visitors to the state, hence the need to be able to function at airports. One would then surmise, if California stopped advertising its status as a premier tourist destination, the amount of people needing Turo's services at the airport would decrease. Accordingly, paying the assessment seems to directly benefit Turo, because if it takes any financial benefit from facilitating the "sharing" of vehicles, while a drop in "sharing" would presumably hurt Turo's bottom line. Rather, the lengthy discussion of taxes in Turo's letter of opposition appears to be less a legal argument but a lengthy plea to avoid paying the same assessment to benefit tourism for the State of California that their peers, including other "disruptive" travel and technology companies, do without significant issue.
The opposition also objects to the imposition of customer facility charges on personal vehicle sharing programs. These charges are collected to pay for the use of an airport-mandated common use bus or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility. The fees typically pay off the bonded indebtedness incurred by the airport for the construction of the facility. The opposition contends that they are far less infrastructure intensive and thus should not be forced to collect the fee from its customers. The proponents of the measure counter that every airport and its level of infrastructure needed to support personal vehicle sharing programs at a given facility is different. For example, just because a personal vehicle sharing program may be able to utilize a regular parking lot at one airport, they may need to use rental car facilities at another. Furthermore, the wear-and-tear on airport property would appear to warrant airports collecting some revenue from the personal vehicle sharing programs. This would be especially true given that taxpayers, who backstop all debts at California's government-owned airports, are ultimately responsible for any bond payments for which the customer facility charges are insufficient to meet the payment.
According to the Author
Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic enabling technology. Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation. Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or "personal vehicle sharing programs" (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end.
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business. This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State. AB 893 ensures that the California Legislature is not picking winners and losers in an industry by applying regulations to one business and not another.
Arguments in Support
This measure is supported by Enterprise Holdings. In support of this bill they write:
Like many other industries, the rental car industry has greatly evolved in the last decade due to increasing changes in technology and a shift in the way businesses interact with consumers. Though the industry has changed, the law regulating the industry has yet to change with it. Rental car companies are highly, and increasingly, regulated by the rental car laws in California which dictate things like taxes, airport requirements, and tourism assessments for the benefit of California consumers. However, peer-to-peer platforms, often referred to as personal vehicle sharing platforms, which rent cars to consumers but are not defined in state law as rental car companies, are not currently regulated under California law. This lack of regulation creates an unequal marketplace, which is reflected in the consumer market. AB 893 aims to level the playing field in the rental car market and ensure that all rental must adhere to the same requirements under California law.
Arguments in Opposition
In strident opposition to this measure, Turo claims:
Today California properly and carefully distinguishes personal vehicle sharing programs and rental car in myriad ways – providing different insurance requirements, acknowledging that personal vehicle sharing programs involve a three-party transaction in which the platform does not own the car, and recognizing that rental car companies own fleets of vehicles that engage in two-party transactions. This bill would needlessly create ambiguity and chaos by conflating two very distinct industries.
AB 893 negatively impacts the peer-to-peer car sharing industry, limiting consumer choice and reinforcing the monopoly of traditional rental companies. The bill does not adequately distinguish between the two industries, impairing our ability to offer enhanced mobility options to Californians and those traveling to our state.
FISCAL COMMENTS
According to the Assembly Appropriations Committee, no significant state costs. The Department of Insurance and Department of Tax and Fee Administration report no costs. The Office of Tourism estimates that it would collect approximately $4 million annually in tourism assessments resulting from this bill, which would be remitted to Visit California, an independent nonprofit mutual benefit corporation that promotes California's tourism interests. Proceeds from airport facility charges to PVSPs would be remitted to each airport that imposes such a charge.
VOTES
ASM JUDICIARY: 9-0-2
YES: Maienschein, Connolly, Haney, Kalra, Pacheco, Papan, Reyes, Robert Rivas, Sanchez
ABS, ABST OR NV: Essayli, Dixon
ASM APPROPRIATIONS: 14-0-2
YES: Holden, Bryan, Calderon, Wendy Carrillo, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Robert Rivas, Sanchez, Weber, Ortega
ABS, ABST OR NV: Megan Dahle, Dixon
UPDATED
VERSION: April 12, 2023
CONSULTANT: Nicholas Liedtke / JUD. / (916) 319-2334 FN: 0000398
Date of Hearing: May 17, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 893
Author:(Papan) – As Amended Ver:April 12, 2023
Policy Committee: | Judiciary | Vote: | 9 - 0 |
|
| ||
|
|
Urgency: No State Mandated Local Program: No Reimbursable: No
SUMMARY:
This bill would subject personal vehicle sharing programs (PVSPs), including peer-to-peer vehicle sharing applications, to certain laws that govern traditional rental car companies for the purpose of required consumer disclosures, collection of tourism assessments, and airport facility fees and regulations.
Specifically, this bill:
- Defines, for the purpose of the law governing the interaction between rental companies and consumers, “personal vehicle sharing program” to mean a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website or application.
- Requires PVSPs to comply with mandatory disclosures imposed on rental companies related to mandatory charges imposed on rentals, including mileage charges and other mandatory fees.
- Permits a commercial airport facility to require PVSPs to collect customer facility charges.
- Requires that if a customer facility charge is collected by an airport, that PVSP must be treated in the same manner as rental companies.
- Requires a PVSP to obtain a permit or other written authorization from an airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements applicable to a rental company prior to facilitating the sharing or renting of vehicles.
- Requires a PVSP to request a certification from a vehicle owner regarding the vehicle’s sales and use taxes before the PVSP may place the vehicle on a digital network or software application.
- Requires a PVSP to be treated as a business in the passenger rental car category for the purposes of collecting assessments for promoting tourism pursuant to the California Tourism Marketing Act.
FISCAL EFFECT:
No significant state costs. The Department of Insurance and Department of Tax and Fee Administration report no costs. The Office of Tourism estimates that it would collect approximately $4 million annually in tourism assessments resulting from this bill, which would be remitted to Visit California, an independent nonprofit mutual benefit corporation that promotes California’s tourism interests. Proceeds from airport facility charges to PVSPs would be remitted to each airport that imposes such a charge.
COMMENTS:
- Author’s Statement. According to the author:
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business.
This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State. AB 893 ensures that the California Legislature is not picking winners and losers in an industry by applying regulations to one business and not another.
- Background. PVSPs are peer-to-peer rental platforms that allow an individual to rent a car from a private vehicle owner for a set period of time, instead of renting a car from a traditional rental car company. PVSP platforms are similar to other forms of peer-to-peer services that have become ubiquitous – like renting an Airbnb instead of staying at a hotel, or taking a Lyft instead of a taxi. As detailed in the analysis of this bill by the Assembly Committee on Judiciary, the emerging PVSP industry has led to some conflict as it “disrupts” the traditional rental car company model.
This bill subjects PVSPs to additional fees and operating requirements. Although it does not define a PVSP as the same as a rental car company, the bill requires PVSPs to make the same mandatory consumer disclosures required of rental car companies, subjects PVSPs to airport customer facility charges and authorizations, and requires PVSPs to check whether a vehicle owner has paid taxes on their vehicle before it may be made available through the PVSP. Finally, the bill allows the Office of Tourism to collect a tourism assessment from PVSPs.
Analysis Prepared by: Annika Carlson / APPR. / (916) 319-2081
Date of Hearing: April 11, 2023
ASSEMBLY COMMITTEE ON JUDICIARY
Brian Maienschein, Chair
ABPCA Bill Id:AB 893
Author:(Papan) – As Amended Ver:March 23, 2023
As Proposed to be Amended
SUBJECT: Personal vehicle sharing programs
KEY ISSUES:
- Should personal vehicle sharing programs be required to make specified disclosures related to costs and fees available to customers prior to sharing a vehicle in a manner similar to rental companies disclosing costs and feeS prior to renting a passenger vehicle?
- Should personal vehicle sharing programs be required to collect specific tourism and airport infrastructure-related fees currently required to be collected by rental companies?
SYNOPSIS
This bill is the latest of a series of measures to come before the Legislature, seeking to clarify the rules and regulations that govern the operation of personal vehicle sharing programs. These vehicle sharing programs allows a person, known as a “host,” to post a personal vehicle on a program’s platform when it is not in use and permit it to be used for a fee by another person known as a “guest.” With the exception that the vehicle itself is not owned by the personal vehicle sharing program, this system is quite similar to renting a car. When these vehicles are “shared” at airports, issues have arisen including vehicles left abandoned or waiting at terminal areas for lengthy periods of time, increased congestion, increased use of parking designed for travelers departing the airport, and the loss of revenues critical to ensure that government run airports are not a drain on taxpayers. In fact, the issues reached such a level that one personal vehicle sharing program was sued by San Francisco Airport in 2018. Although the court ruled that these programs are not technically rental car companies within the definition of existing law, the court did not forestall the Legislature for redefining rental company or simply picking what regulations imposed on rental companies would also be beneficial to impose on personal vehicle sharing programs.
To that end, this bill would apply several consumer protection and revenue collection provisions of existing law to personal vehicle sharing programs. First, just as the law does for rental companies, this bill would require personal vehicle sharing programs to disclose all mandatory fees and charges to customers up front, thus avoiding consumers facing unexpected, and potentially large, fees after agreeing to “share” a vehicle. Secondly, ensuring that personal vehicle sharing programs are contributing to the California’s tourism marketing programs, from which they ostensibly benefit, this bill would impose the same assessment on personal vehicle sharing programs that rental companies pay to promote California to tourists around the country and around the world. Additionally, to compensate California’s government run airports for infrastructure impacts, this bill would require personal vehicle sharing programs to collect the same facility charges collected by rental companies that are used to pay off the government debt associated with airport infrastructure. Finally, as proposed to be amended, this bill imposes a modest requirement whereby potential “hosts” must disclose to a personal vehicle sharing program whether or not they properly paid all sales and use taxes on their vehicle.
This bill is supported by Enterprise Holdings and the California Teamsters Public Affairs Council, who contend that the personal vehicle sharing programs are harming consumers and undermining critical revenues for airports, thus using taxpayers to subsidize their operations. The California Airports Council is also supportive of the portion of the bill requiring personal vehicle sharing programs to register before operating at airports but also wants to ensure that this bill does not supersede any existing agreements. This measure is opposed by Turo and Getaround, Inc., two personal vehicle sharing programs who argue that this bill ignores legal precedent while simultaneously, and erroneously, stating that the bill interferes with ongoing litigation, and that the bill unfairly seeks to treat them as rental companies despite their apparently innovative approach to “sharing” vehicles. Although the opposition correctly highlights their prior victory in court, holding that they were not rental companies under existing law, as noted, nothing in that decision precludes the Legislature from making statutory modifications in light of that decision. This measure is also opposed by Chamber of Progress, a technology industry organization.
SUMMARY: Clarifies the duties and obligations imposed upon personal vehicle sharing programs to ensure consumer protection and proper collection of specified government fees and assessments. Specifically, this bill:
- Defines, for the purpose of the law governing the interaction between rental companies and consumers, “personal vehicle sharing program” to mean a person or entity that for monetary compensation facilitates sharing or renting passenger vehicles to the public, including via a peer-to-peer internet website, application, or other platform that connects a vehicle owner with a vehicle driver to facilitate sharing or renting a vehicle for consideration, and includes a personal vehicle sharing program as defined in Section 11580.24 of the Insurance Code.
- Requires personal vehicle sharing programs to comply with mandatory disclosures imposed on rental companies related to mandatory charges imposed on rentals, including mileage charges and other mandatory fees.
- Permits a commercial airport facility to require personal vehicle sharing programs to collect customer facility charges.
- Requires that if a customer facility charge is collected by an airport, that personal vehicle sharing programs must be treated in the same manner as rental companies.
- Requires a personal vehicle sharing program to obtain a permit or other written authorization from an airport operator that sets forth the same or reasonably similar standards, regulations, procedures, fees, and access requirements, applicable to a rental company prior to facilitating the sharing or renting of vehicles.
- Provides that, for the purpose of 5), “facilitating the sharing or renting of vehicles” includes listing, publishing, or advertising vehicles or motor vehicles parked on airport property or at airport facilities.
- Provides that nothing in 5) limits the authority of any political subdivision or the state to regulate access to an airport it owns or operates and to set access fees or requirements.
- Prohibits, commencing July 1, 2024, a personal vehicle sharing program from allowing a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the personal vehicle sharing program first requests a certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
- Requires a personal vehicle sharing program to be treated as a business in the passenger rental car category for the purposes of collecting assessments for promoting tourism pursuant to the California Tourism Marketing Act.
EXISTING LAW:
- Permits a rental company, when providing a quote or imposing charges for a rental, 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. (Civil Code Section 1939.19 (a).)
- Requires, if additional mandatory charges are imposed pursuant to 1), the rental company to do each of the following:
- 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, as specified;
- 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 and additional mandatory charges, for the entire rental, exclusive of charges that cannot be determined at the time the rental commences; and
- 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. (Civil Code Section 1939.19 (b).)
- Provides that, in addition to the rental rate, taxes, additional mandatory charges, and mileage charges, 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. (Civil Code Section 1939.189 (c).)
- Requires if a rental company states a rental rate in print advertisement or in a quotation, the rental company to 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. (Civil Code Section 1939.19 (f).)
- Establishes, pursuant to the California Tourism Marketing Act, the California Travel and Tourism Commission and authorizes the Commission to impose an assessment on various tourism related businesses for the purpose of funding travel and tourism marketing activities and objectives to boost tourism to California. (Government Code Section 13995 et seq.)
- Provides that an airport operated by a city and county may require a rental car company, in writing, to collect a fee from its customers on behalf of the airport for the use of an airport-mandated common use busing system or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility. (Government Code Section 50474.1 (a).)
- Defines the “customer facility charge” to mean any fee, required by an airport to be collected by a rental company from a renter for any of the following purposes:
- To finance, design, and construct consolidated airport vehicle rental facilities;
- To finance, design, construct, and operate common-use transportation systems that move passengers between airport terminals and those consolidated vehicle rental facilities, and acquire vehicles for use in that system; or
- To finance, design, and construct terminal modifications solely to accommodate and provide customer access to common-use transportation systems, as specified. (Government Code Section 50474.21.)
- Defines “rental company” to mean a person or entity in the business of renting passenger vehicles to the public. (Civil Code Section 1939.01 (a).)
- Defines “renter” to mean 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. (Civil Code Section 1939.01 (b).)
- Defines “personal vehicle sharing program” to mean a legal entity qualified to do business in the State of California engaged in the business of facilitating the sharing of private passenger vehicles for noncommercial use by individuals within the state. (Insurance Code Section 11580.24 (b)(1).)
FISCAL EFFECT: As currently in print this bill is keyed fiscal.
COMMENTS: As it has done for both the lodging and taxi industry, technology is seeking to change the car rental industry through the creation of “personal vehicle sharing programs.” These personal vehicle sharing programs assert that they function by linking a “guest,” frequently an out-of-town visitor, with a local “host” who will share their vehicle with the “guest.” Essentially, these programs seek to become the Airbnb or Uber of the rental car industry. Understandably, this has created significant consternation in the car rental industry as many of these programs are avoiding the rigorous regulation and fee collection regimes imposed on rental car companies. After several years of debate between personal vehicle sharing program companies and rental car companies, this measure concedes that personal vehicle sharing programs are not rental car companies. However, this measure seeks to treat the two entities with parody as it relates to specified consumer notices and the collection of various fees and assessments required by state and local law. In support of this bill, the author states:
Over the past 15 years, the business landscape has seen many new innovations flowing from dynamic enabling technology. Many new businesses emerged as disruptors within traditional business sectors forcing change and adaptation.
Such a challenge has now emerged in the car rental space in that of the peer-to-peer rental platforms or “personal vehicle sharing programs” (PVSPs) – an avenue for individuals to rent their private vehicles to consumers. Unlike traditional car rental enterprises, PVSPs are commercial exchanges between individuals facilitated by a third party platform rather than a transaction between a consumer and a business exclusively. While the transactions are somewhat different, the end result is the same – a consumer rents a car. That is, however, where the similarities end.
Unlike traditional car rental services, PSVPs are, as yet, not operating under a similar regulatory structure nor are they obligated to support local and state services through fees that traditional enterprises pay. This is despite the fact the impacts of peer-to-peer operations are similar to traditional car rental services yet they do not contribute to supporting the public and private infrastructure that supports, for example, the tourism industry that very much drives car rental business.
This bill simply addresses gaps in current law by clarifying that persons or entities that meet the definition of a PSVP must follow existing regulations and, further, participate in the virtuous cycle of both serving and promoting industry in the State. AB 893 ensures that the California Legislature is not picking winners and losers in an industry by applying regulations to one business and not another.
The history and background of vehicle sharing programs. The personal vehicle sharing program model is premised on the concept of individual vehicle owners, known as “hosts,” allowing other persons, known as “guests”, who they may or may not know, to use their vehicles for a fee. They are allowed to do so under existing law, as long as they have a special type of auto insurance that provides commercial coverage during the period when the guest is using the vehicle. If this sounds similar to renting a car, that is because it is. The only primary difference between rental car companies and a personal vehicle sharing program is that rental car companies own their own vehicles and utilize centralized pick-up and drop-off locations, whereas personal vehicle sharing programs utilize cars owned by private individuals (or small fleet owners) and opt for a decentralized method getting the car from the host to the guest.
Although innovative, the decentralized nature of personal vehicle sharing programs inevitably has led to conflict. In particular, the San Francisco International Airport experienced significant congestion and a loss of critical infrastructure revenue after Turo, one of the leading personal vehicle sharing programs and opponent of this bill, began operating at the airport without a permit. Commenting on a lawsuit filed against the company on the city-owned airport’s behalf, the then-City Attorney of San Francisco noted, “[Turo executives] seem to think traffic congestion is someone else’s problem and that their company doesn’t need to pay its fair share for the public facilities it is profiting off of…You don’t get special treatment just because you claim to be a disruptor.” (Carolyn Said, SF sues Turo for not having airport permits, S.F. Chronicle, Jan. 24, 2018.) The conflict continued when the dispute spilled into the Legislature in 2018. That year, this Committee was asked to evaluate two competing bills seeking to clarify whether or not personal vehicle sharing programs should be treated as rental car companies under the law. Although both of those bills were eventually amended to address other topics, they triggered the introduction of a series of measures seeking to resolve the status of the personal vehicle sharing program companies.
Although the Legislature never definitively decided on the status of personal vehicle sharing programs, the Court of Appeal did. In 2022, the First District Court of Appeal held that personal vehicle sharing programs are not rental car companies under existing statutory law. (Turo Inc. v. Superior Court (2022) 80 Cal. App. 5th 517.) The case largely turned on various definitions of “rental company” provided in existing law, including the Civil Code provision implicated by this bill, and thus the Legislature retains authority to define, classify, and apply regulations to personal vehicle sharing programs as it sees fit. However, legislation in states outside of California have largely moved away from trying to define personal vehicle sharing programs as rental car companies and instead have focused on which elements of existing law should apply to these programs and the companies that run them. It should also be noted that although Turo and San Francisco International Airport remain in negotiations regarding the company’s status at the airport, there are no issues currently before a court related to the provisions of this bill now that the definitional issue has been settled. Despite the contentions of one stakeholder involved with this measure, there are no issues raised by this bill that, at this time, would cause legislative policy in this area to directly interfere with judicial decision-making.
This bill. Unlike prior legislation, this bill abandons any attempt to legally define personal vehicle sharing programs as rental car companies and instead adopts an existing definition of the programs utilized for the purpose of insurance. This measure would apply several existing rental company related consumer notice rules to personal vehicle sharing programs; make the programs register with an airport if they wish to operate there (similar to rules governing ride share companies); and require personal vehicle sharing programs to collect several government imposed fees and assessments, including those related to airport infrastructure and the promotion of tourism. By avoiding the definitional fights of prior bills, this bill simply places personal vehicle sharing programs and rental car companies on an even legal footing as it relates to the above described provisions of existing law. It should be noted that this bill avoids subjecting personal vehicle sharing programs to many of the stricter consumer protection rules that are, appropriately, still placed on rental car companies.
Tourism marketing assessments benefit California’s critical tourism industries. Given California’s stunning natural beauty, rich cultural history, and dynamic economic metropolises, it is no surprise that California is a mecca for tourism. According to Visit California, the state’s tourism economy is slated to generate $154.4 billion in 2023. To support and grow the tourism economy in the late 1990s, the industry worked with state government to enact the California Tourism Marketing Act, which created the California Travel and Tourism Commission. The Commission runs the “California Welcome Centers,” found along major highways at the state border, and provides major funding for Visit California, which creates media campaigns to promote the state. To support these efforts, the Commission is authorized to collect an assessment from various actors in the tourism industry, including rental car companies, hotels, and transportation companies, such as cabs, and ride sharing companies, such as Uber and Lyft. Depending on the nature of one’s business, there are different assessment levels, generally tied to the level of involvement in the tourism industry. As a result, because Californians are more likely to use transportation companies locally, the fees imposed on rental car companies are slightly higher than transportation companies as rental car operators generally have a greater reliance on tourism. However, Turo objects to being subject to these assessments.
In opposition to the measure, and regarding the assessment, Turo claims, “without question, and without any clear rationale, this provision is a new tax. At a time of great uncertainty, the last thing that California needs is to erect economic barriers to new businesses and consumers.”
This view of what is a tax appears to misunderstand basic California tax law, most notably the modifications made by Proposition 26 in 2010. Indeed, a prominent anti-tax organization,
“Cal-Tax,” notes that there is a distinction between taxes and other fees or assessments that are imposed for a “specific benefit or privilege.” The group notes, “A charge imposed for a specific benefit or privilege that specifically improves the payer’s well-being or provides assistance to the payer,” is, in fact, not a tax. (CalTax, Understanding Proposition 26, (Aug. 2011), at p. 7, available at: https://www.caltax.org/documents/UnderstandingProposition26.pdf.) It would appear that Turo benefits from tourism and other visitors to the state, hence the need to be able to function at airports. One would then surmise, if California stopped advertising its status as a premier tourist destination, the amount of people needing Turo’s services at the airport would decrease. Accordingly, paying the assessment seems to directly benefit Turo, because if it takes any financial benefit from facilitating the “sharing” of vehicles, while a drop in “sharing” would presumably hurt Turo’s bottom line. Rather, the lengthy discussion of taxes in Turo’s letter of opposition appears to be less a legal argument but a lengthy plea to avoid paying the same assessment to benefit tourism for the State of California that their peers, including other “disruptive” travel and technology companies, do without significant issue.
Customer facility charges help pay for airport infrastructure and prevent taxpayers from being required to pay for infrastructure largely benefitting visitors to California. The opposition also objects to the imposition of customer facility charges on personal vehicle sharing programs. These charges are collected to pay for the use of an airport-mandated common use bus or light rail transit system operated for the movement of passengers between the terminal and a consolidated on-airport rental car facility. The fees typically pay off the bonded indebtedness incurred by the airport for the construction of the facility. The opposition contends that they are far less infrastructure intensive and thus should not be forced to collect the fee from its customers.
The proponents of the measure counter that every airport and its level of infrastructure needed to support personal vehicle sharing programs at a given facility is different. For example, just because a personal vehicle sharing program may be able to utilize a regular parking lot at one airport, they may need to use rental car facilities at another. Furthermore, the wear-and tear on airport property would appear to warrant airports collecting some revenue from the personal vehicle sharing programs. This would be especially true given that taxpayers, who backstop all debts at California’s government-owned airports, are ultimately responsible for any bond payments for which the customer facility charges are insufficient to meet the payment. While all stakeholders may wish to continue discussions as to whether the customer facility fee is the appropriate vehicle for airports to recover the costs associated with personal vehicle sharing programs, and discussions may be helpful to ensure this bill does not impact any working agreements between sharing programs and airports, given the potential impact to taxpayers, it appears prudent to ensure some statutorily required cost recovery from personal vehicle sharing programs. Absent any serious proposal to address the infrastructure cost issue from the opposition, this Committee sees no reason that collection of a customer facility charge by personal vehicle sharing programs is inappropriate.
This bill continues the Legislature’s preference for strong consumer disclosures and protections related to the cost of renting or “sharing” a vehicle. In addition to mandating the collection of various assessments and fees, this bill also imposes some of the same consumer disclosures on personal vehicle sharing programs that the existing law imposes on rental car companies. Specifically, this bill would require the disclosure of all mandatory charges imposed on rentals (or potentially in this case “shares”), including mileage charges and other mandatory fees. This appears prudent as many users of some home sharing sites complain about the hidden fees associated with parking, facility fees, or cleaning. These provisions simply require personal vehicle sharing programs to inform “guests” of the total cost of the transaction. This basic transparency measure supports consumers and ensures that vacationers’ and business travelers’ experience in California is not ruined by excessive, hidden costs and fees.
Technical amendments should address concerns raised by the opposition that the tax certification provisions would deter participation in sharing programs. The opposition objects to the provisions of the bill in print that require disclosures regarding the payment of sales and use taxes for vehicles posted to a personal vehicle sharing program. As currently in print, this bill envisions a certification system developed by the Department of Tax and Fee Administration. In addition to complaining that this system would be “duplicative,” without stating what program it would duplicate, the opposition also argues it, “indefensibly…discriminates arbitrarily against personal vehicle sharing programs owners by in effect banning from vehicle sharing in California large groups of people and vehicles.”
While this language is not discriminatory, and although it is imperative that “hosts” properly pay all taxes and fees required by law, the development of a new certification program may be costly to the state and potentially difficult for hosts to comply with. Seeking to strike a balance between properly ensuring that all taxes are paid and enabling “hosts” to use car sharing platforms, the author is proposing amendments to delete the involvement of the Department of Tax and Fee Administration and instead adopt a self-certification requriement for “hosts” in order to streamline the certification process. Accordingly, as proposed to be amended, Civil Code Section 1939.39 will now read as follows:
(a) On and after July 1, 2024, a personal vehicle sharing program shall not allow a vehicle to be placed on a digital network or software application of the personal vehicle sharing program for the purpose of making the vehicle available for rental through the personal vehicle sharing program unless the personal vehicle sharing program first requests an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase price of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
(b) The California Department of Tax and Fee Administration may prescribe by regulation the method by which a personal vehicle sharing program shall obtain an electronic certification from the vehicle owner as to whether the vehicle owner paid all sales and use taxes due on the purchase of the vehicle or has elected to collect sales and use taxes measured by the gross charges for the rental of the vehicle.
ARGUMENTS IN SUPPORT: This measure is supported by Enterprise Holdings who argue that lack of regulation of personal vehicle sharing programs is harming consumers, needed government revenues, and distorting markets. In support of this bill they write:
Like many other industries, the rental car industry has greatly evolved in the last decade due to increasing changes in technology and a shift in the way businesses interact with consumers. Though the industry has changed, the law regulating the industry has yet to change with it. Rental car companies are highly, and increasingly, regulated by the rental car laws in California which dictate things like taxes, airport requirements, and tourism assessments for the benefit of California consumers.
However, peer-to-peer platforms, often referred to as personal vehicle sharing platforms, which rent cars to consumers but are not defined in state law as rental car companies, are not currently regulated under California law. This lack of regulation creates an unequal marketplace, which is reflected in the consumer market.
AB 893 aims to level the playing field in the rental car market and ensure that all rental must adhere to the same requirements under California law.
Additionally, the California Airports Council, the voice of California’s municipally owned airports, argues for the need for proper permitting for any on-airport vendor and highlights its member’s prior experience with Turo. The Council writes in support:
Specifically, the California Airports Council supports Section 3 of AB 893. Car share services, like any other vendor or for-profit company seeking to do business at a California airport, must have an agreement and permit from the airport in order to profit from California commercial airport activity. With car sharing services, this is not consistently the case. For example, the San Diego International Airport (SAN) was among several airports that issued cease and desist letters to the car sharing service Turo until such time as an airport operating permit was issued. The SAN letter was issued on September 14, 2017. To date, this letter has not been honored and Turo continues to offer their services specifically at SAN and various other airports where permits have not been issued.
ARGUMENTS IN OPPOSITION: As discussed this bill is strongly opposed by Turo, fellow personal vehicle sharing program Getaround, Inc., as well as Chamber of Progress, a self-described “tech industry coalition promoting technology’s progressive future.” In strident opposition to this measure, Turo claims:
Today California properly and carefully distinguishes personal vehicle sharing programs and rental car in myriad ways – providing different insurance requirements, acknowledging that personal vehicle sharing programs involve a three-party transaction in which the platform does not own the car, and recognizing that rental car companies own fleets of vehicles that engage in two-party transactions. This bill would needlessly create ambiguity and chaos by conflating two very distinct industries.
This dual system of personal vehicle sharing programs would result in a number of legal gray areas that would make it easy for bad actors to skirt consumer protections and regulatory oversight by agencies like the Department of Insurance and the Department of Justice. A car sharing or rental company could claim that they meet the definition of a personal vehicle sharing program under the Civil Code but not the Insurance Code, and, therefore, they do not need to follow the numerous existing insurance and consumer protection requirements that currently apply to personal vehicle sharing programs under the Insurance Code and, at the same time, avoid any of the consumer protection and regulatory obligations that apply to traditional rental car companies. Without any agency with ultimate responsibility for this new class of personal vehicle sharing programs, California residents and visitors would be put at risk for predatory and harmful practices by bad actors seeking to evade existing regulations that prohibit and punish such behavior.
Furthermore, the carefully constructed statutory framework and jurisprudence that has developed delineating the rental car and vehicle sharing industries would be irreparably harmed, to the disadvantage of the state, companies, and consumers, by the introduction of this new, ill-defined class of vehicles.
AB 893 negatively impacts the peer-to-peer car sharing industry, limiting consumer choice and reinforcing the monopoly of traditional rental companies. The bill does not adequately distinguish between the two industries, impairing our ability to offer enhanced mobility options to Californians and those traveling to our state.
REGISTERED SUPPORT / OPPOSITION:
Support
California Airports Council
California Teamsters Public Affairs Council
Enterprise Holdings
Opposition
Chamber of Progress
Getaround, Inc. (unless amended)
Turo
Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334
Discussed in Hearing
3MIN
Assembly Floor
7MIN
Senate Floor
9MIN
Senate Standing Committee on Business, Professions and Economic Development
21MIN
Senate Standing Committee on Judiciary
4MIN
Assembly Floor
48SEC
Assembly Floor
12MIN
Assembly Standing Committee on Appropriations
20MIN
Assembly Standing Committee on Judiciary
Bill Author
Bill Co-Author(s):