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Committee advances rental-car bill to allow limited geofencing, tighten 'keys' rule
Summary
Assemblymember Calderon’s AB 1197 would modernize rental-car law to discourage organized theft by permitting geofencing in narrow circumstances and by clarifying a 'keys' presumption. Support from major rental companies; consumer groups asked for consumer protections.
Assemblymember Calderon presented AB 1197, a bill that the committee advanced to modernize rental-car law and discourage organized theft and fraudulent schemes that target rental vehicles.
Why it matters: Witnesses said rental cars are frequent targets for theft and that current law contains loopholes that encourage bad actors. The bill would allow limited use of location-based technology (geofencing) in narrowly defined scenarios and would revise a ‘‘keys’’ presumption that affects renter liability.
Calderon told the committee that each year 400 to 500 rental cars are reported stolen and that current law, as written, can leave rental companies unable to recover losses. She said committee amendments narrow location-based tracking to geofencing and limit its use to specific scenarios such as detecting unauthorized cross-border movement or when a vehicle has been abandoned in a tow yard for more than 24 hours.
John Moffitt, testifying for Enterprise Mobility, described problems the industry faces and argued the bill would allow recovery and reduce fees incurred while vehicles sit in tow yards. Moffitt said current law gives certain renters a de facto shield if they claim they returned a key; AB 1197 ties the presumption to the actual return of a key and a police report so companies can better distinguish genuine renters from organized theft rings. Moffitt also described an average loss rate of about two cars per day in the state under current practice.
Supporters in the room included Enterprise, Hertz and Avis Budget Group. The Consumer Federation of California’s Robert Hurrell expressed guarded support for the intent and amendments but warned of potential unintended consequences, such as rental companies geofencing many impound lots or the presumption shifting unfairly when consumers’ property (for example, a purse containing keys) is stolen.
Committee members probed the geofencing and keys provisions. Members asked whether companies could geofence every tow yard; Moffitt said geofencing would be narrowly targeted and that in practice rental companies would not (and likely could not) geofence every facility. The author and witnesses emphasized that the bill’s amendments attempted to balance consumer privacy with the need to recover stolen assets and limit predatory tow-yard practices.
Action: The committee voted to pass AB 1197 as amended. The roll call recorded later in the hearing shows the bill passed the committee (recorded at 14 yes, 0 no in the summary roll call).
Ending: AB 1197 moves forward with amendments intended to permit limited geofencing and to revise the keys presumption while preserving consumer safeguards; the author committed to continue working with stakeholders on narrowly tailoring privacy protections.
