With the holiday season right around the corner…that also means that state legislators will be heading back to their respective Capitols very soon. Most states convene in early January and work through May or June. There are a handful of states that are in and out of sessions throughout the calendar year, but those are the rare exceptions. Typically by June of each year we have a good sense of how poorly or well our industry has fared in the legislative arena. The past few years have been productive for the rental car industry as we have shared on these pages before. The industry scored a number of key successes and we hope to build on those as we look forward to 2012. Below are just a few examples of issues on which the American Car Rental Association will be working on behalf of its membership.
The California legislation (AB 753) is currently stalled in the legislature, but we anticipate it will come back when legislators reconvene in Sacramento. Through the efforts of several ACRA members, the legislation is drastically different than the original version, which would severely disrupt operations, the industry is still opposing the bill. The legislation has already passed the Assembly and is pending in the Senate, which we anticipate will take action next year. Given the safety track record of our industry and recognizing that our practices and decisions are based upon keeping the safety of our customers paramount, the legislation, in our opinion, is completely unnecessary.
At the federal level, the legislation introduced by Sen. Chuck Schumer (D-NY) and others would impose unprecedented regulations on car rental companies and used car dealers – even more so than the California legislation. As in California, we believe our industry is being unfairly singled out for unnecessary, burdensome regulations. The bill is currently in the Senate Commerce Committee, which could take action on the legislation in early December.
ACRA position on recalls is posted on its website. Many members are signing on to underscore our industry’s solid commitment to safety and to repairing our vehicles in a timely manner.
Our industry continues to be a target of state and local governments’ efforts to add or raise excise taxes on our customers in order to deal with budget shortfalls or pay civic projects such as sports stadiums. ACRA successfully fought a number of these taxes last year, but we anticipate several more to come this upcoming year. In Minnesota, the funding question for the a Vikings stadium has not been resolved and rental car taxes have been mentioned there. There will be others.
ACRA is pursuing a federal solution to this local tax problem. H.R. 2469 was introduced by Rep. Steve Cohen (D-TN) and Rep. Sam Graves (R-MO), along with other co-sponsors of both parties. This bill would prohibit future discriminatory taxes imposed upon car rental customers by state and local governments. The principles of the legislation are similar to other federal laws that protect the railroad, airline, commercial bus and commercial trucking industries from state and local discriminatory taxes. The bill has been referred to the House Judiciary Committee and we anticipate a hearing early in 2012.
ACRA will once again engage legislators in Arizona, Maryland and New York to pass legislation that will re-order the priority of payment of third party claims. Currently the rental company is first in line to pay such claims. As we reported earlier, the industry undertook efforts last year to change the law in this area and came up a bit short. The insurance lobby weighed in heavily against the legislation, which led to its ultimate defeat. But, we believe with continued education of lawmakers, we can ultimately prevail on the issue. The fact remains that these states are in the severe minority of states that require the rental company to pay out first, if there is other valid insurance from the renter available.
FAILURE TO RETURN
In Florida, there are conflicting and confusing statutes governing when a rental car company can report a vehicle stolen and when law enforcement adds those vehicles to the “Hot Sheet”. Adding to the confusion is that there are some local jurisdictions that create additional conditions that rental companies must meet before law enforcement will consider a vehicle stolen. This takes time – and the more time it takes for a vehicle to be put on the Hot Sheet, the less likely we are to recover our vehicles. There will likely be ACRA-supported legislation in Florida to modify the law to create one statewide standard of when law enforcement should consider a rental vehicle stolen.
MINI TORT REFORM
In Michigan, there is an effort underway to re-examine the state’s mini tort system. Among other changes, some are wondering whether the current system results in a particular injustice to those involved in auto accidents that are not at fault. Michigan is one of the few “no-fault” states remaining in the country. That said, there is at least some accounting for fault in the state mini-tort provisions, which serve as a vehicle for the injured party to recover the amount of a deductible from the wrongdoer. Such a provision is necessary because both parties to an accident file claims with their own respective carriers in a “no fault” scheme. Because of the way the current statute is written, the injured party is not entitled to loss of use – only deductible reimbursement. Some believe that amending the law to allow for loss of use compensation and deductible reimbursement is only fair given society’s reliance upon the automobile. Never mind the fact that the auto capital of the world doesn’t recognize this basic right that is taken for granted in other states, the fact is that it may be time, and if the rental car industry could stand to put a few more cars on the road as a result, we should consider participating in the policy debate.
LOSS OF USE
In Wisconsin, the Wisconsin Car Rental Alliance “WICRA” is considering a reform of the statutory rules that govern the circumstances under which a rental car company may be entitled to “loss of use” from a renter who damages a car while on rent. WICRA may seek to pass a bill with language similar to the following:
“In addition to the customer’s responsibility for damage to the vehicle (as defined in the state statute) the renter is also responsible for loss of use. Loss of use shall be the total labor hours (body, paint and mechanical) from the repair estimate divided by 4 hours to determine the number of days out of service. The days are then multiplied by the daily rental rate on the customer’s rental agreement excluding any optional products or accessories.”