ACRA: Where Would Your Company Be If These Bills Became Law?

Every year erroneous bills that could negatively impact your car rental business are proposed by various state legislators. Thankfully, many of the bills are fought off by ACRA and never become law.

Every legislative session brings another host of rules, regulations, laws and bills that would adversely affect the car rental industry. The challenges are numerous, at times onerous, and present a daily need for the American Car Rental Association (ACRA) to be aware and diligent in its review of all legislative offerings.

Bills presented by legislators often come by way of a complaint from one of their constituents. These proposed bills range from refueling fee requirements, prohibiting the use of credit checks and other detail-specific legislation.

For example, in every legislative session since auto manufacturers decided that compact spare tires (“donuts”) were safe and appropriate, the state of New York has presented a bill that would require rental vehicles to be equipped with a full-size spare tire upon the request of a renter. This would necessitate that the rental office keep many kinds of spare tires to be available for any time a renter decides a compact spare tire just won’t do. Every year this bill is debated and ultimately defeated with the help of ACRA.

Since Aug. 10, 2005, the Graves Amendment has provided vehicle lessors and renters with a statutory basis for dismissing non-negligent vicarious claims in motor vehicle accident lawsuits. Since its passage, the amendment continues to be challenged in courts and through legislative bodies.

Rep. Bruce Braley (D-IA), the former president of the Iowa Trial Lawyers Association, has repeatedly attempted to pass the Braley Amendment to the Motor Vehicle Safety Act, which would force rental and leasing companies to be held responsible for the acts of their customers — even if the rental company or leasing company was not negligent. This amendment was not heard by the House Energy & Commerce Committee because ACRA, along with others, loudly and clearly decried this proposal.

Legislators in various states have proposed a bill prohibiting rental car companies from imposing a premium charge for renters aged 18 to 25 years old — even if the rental car company’s insurance provider requires an increase in premium when people in this age bracket are allowed to rent. These bills also come up in every legislative session.

Another consistently proposed piece of legislation would require rental car companies that use GPS to track vehicles to disclose its use through window stickers, owner’s manuals and rental agreements. Some would require a separate rental agreement altogether.

Needless to say, outlandish bills do sometimes become laws. In California, for example, it is illegal to wipe one’s car with used underwear. In Colorado, car dealers may not show cars on Sundays, nor can black cars be driven on Sundays. In the state of Georgia, members of the state assembly cannot be ticketed for speeding while the state assembly is in session. One law in Massachusetts states that gorillas are not allowed in the back seat of any car!

Bad legislation can devastate an industry. Consider the passage of 396Z in the state of New York in 1988: This bill forced more than 300 rental car companies to close their doors because it banned the sale of collision damage waivers and limited the renter’s liability to $100 in damage costs per occurrence. Copycats of this legislation enacted a similar law in Illinois with a $200 cap. These laws were eventually overturned, but it took a terrible toll on rental car companies in those states.

Think of all the taxes, fees and surcharges introduced against the car rental industry in every session in every state of the union. The car rental industry has become a target to fund the arts and stadiums, and also to simply provide general fund revenue. Some surcharges have been deemed “special taxes” with sunset or expiration dates, but all too often the sunset date is abused and ACRA has to make efforts to see that the discriminatory tax is abolished or decreased.

Rental operators may not always be aware of the gorilla in the back seat, but ACRA is going to be ever diligent to let you know when and if an erroneous bill is heading your way — and will fight to make sure that bills aren’t more damaging than good.

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