S. 1445 - The Safe Rental Car Act of 2011
Friday, October 5, 2012

Section: Federal Issues

Senator Chuck Schumer (D-NY) introduced Senate Bill 1445 on July 28th that would prohibit any rented or leased vehicles with a GVWR of up to 26,000 pounds currently under a recall from being utilized until that recall is completed.  The bill also includes a number of unworkable provisions regarding the immediate notification of lessees and renters and absolute guarantees of replacement vehicles.  At a minimum, the legislation facilitates and encourages more litigation against companies and adds excessive layers of unnecessary and burdensome regulation and cost to the recall process.

Some Senators on the Commerce, Science and Transportation Committee have indicated an interest in attaching the S. 1445 to the pending congressional highway reauthorization bill under provisions dealing with the National Highway Traffic Safety Administration (NHTSA).  While there has never been a study completed or data collected from renting or leasing companies so that Congress can truly ascertain whether or not there is a problem with existing laws covering recalls, the Senate Commerce Committee may act on the NHTSA provisions of the highway bill as early as September and potentially vote on a rental recall amendment then.  You can see a summary of TRALA's talking points that illustrate the industry's concerns with the legislation by clicking here.

TRALA is actively involved in working to defeat what is being called "rental-recall" legislation.  TRALA, along with allies in the vehicle renting and leasing industry, met with key leaders on both the majority and minority staff for the Senate Commerce Committee on August 24, 2011 to discuss concerns with S. 1445.  TRALA is also engaged in an aggressive campaign to educate lawmakers on the Committee about the truck renting and leasing industry's current practices and the effectiveness of existing law addressing vehicle recalls.  As of February 24, 2012, S. 1445 only has 4 cosponsors.

TRALA members met with Congressman Mark Pryor (D-AR), Chairman of the Subcommittee on Consumer Protection, Product Safety, and Insurance within the Senate Commerce Committee on November 28, 2011 in Little Rock, AR.  Senator Barbara Boxer (D-CA) announced that she planned to introduce an amendment to S. 1449 – the Auto Safety Bill – on December 14, 2011 as part of the Senate Commerce Committee’s mark-up of the National Highway Traffic Safety Administration (NHTSA).  The amendment was very similar in language to Senator Schumer’s bill and would have forced 24 hour notification requirements and unworkable demands onto the light-duty (under 26,000 pounds) rental industry.

TRALA aggressively organized a lobbying effort directed toward members of the Commerce Committee, personal staff and committee staff in the week leading up to the mark-up.  Others in the TRALA coalition were also strongly engaged in the effort to stop Senator Boxer from introducing this amendment.   Subsequently, Senator Boxer withdrew her proposal during the mark-up.  While it is still possible that the issue can be re-introduced during Senate floor debate and discussions, TRALA is satisfied with this significant legislative victory.  TRALA will remain engaged moving forward that any other effort on rental recall is not successful.

Upon hearing that Senator Boxer still intends to move forward with some form of rental recall language in Congress this year, TRALA participated in congressional Hill visits the week of January 9 with multiple TRALA members.  TRALA will continue to lobby and educate Congress as to the inherent problems that exist in the current draft legislation that is still being considered behind closed doors on Capitol Hill.  TRALA will also attempt to sit down with Senator Boxer’s staff once again to try and reach consensus on the issue.

TRALA participated in an industry conference call on February 9 to discuss the latest developments on Capitol Hill regarding the rental recall efforts by Senator Boxer and others in Congress.  TRALA agreed to continue lobbying Members of Congress and staff not to support any amendments on the Senate floor during deliberations of a final highway reauthorization bill that involve rental recall language.

Recently, several rental car companies have announced their intentions to support some form of federal rental recall legislation.  One of these agreements was outlined in a front-page story in the February 21 edition of the newspaper USA Today.

TRALA continues to oppose S. 1445 as introduced by Senator Schumer.  In discussions on Capitol Hill, TRALA has been assured that several key Senators remain opposed to rental recall legislation that puts significant and unreasonable burdens on industry.  TRALA will continue to lobby Congress in opposition to rental recall but if a compromise solution begins to coalesce on Capitol Hill, TRALA will lobby strenuously that any rental recall legislation should not include new provisions impacting commercial leases and that the weight limit of vehicles subject to new provisions is reduced to 10,000 pounds from 26,000 pounds, which is the weight limit currently being considered.

Senator Boxer is attempting to help Senator Schumer's legislation – S. 1445 – by announcing that she is asking for a voluntary pledge from all rental car companies in a letter demanding that those companies no longer rent vehicles subject to a safety recall.  The letter, which was sent out the week of May 7, asks each company to state unequivocally, "Effective immediately, our company is making a permanent commitment to not rent out or sell any vehicles under safety recall until the defect has been remedied."

Hertz has already agreed to sign such a pledge and Senator Boxer has stated that she is giving Enterprise, Avis and Dollar/Thrifty 30 days to respond.  After those 30 days, Boxer writes, she "will announce at that time which companies have agreed to make this pledge and which companies have instead chosen to continue putting their customers' lives at risk."

While this public relations move by Senator Boxer is sure to bring more attention to the issue of rental recall, TRALA remains committed that any changes in rental recall legislation or proposals being considered must contain a lower weight threshold (from 26,000 pound to 10,000 pounds) and must not include commercial leases.

Several rental car companies have responded to the safety advocacy group CARS as well as Senator Boxer’s recent letter in which she demanded that all rental car companies voluntarily halt any and all car rentals when the vehicle is under a recall.  In the letter signed by all the major car rental companies except Hertz, inaccuracies by CARS were pointed out and clarified and the letter firmly agreed with the concept of suspending the rental of cars subject to safety recalls.  However, the letter described that there were real-world and honest exceptions and clarifications that need to be included in any commitment so that car companies could realistically continue to operate their business while keeping their customers safe.

In response to TRALA’s urging, the latest legislative offers from CARS, as well as that offered by the large independent car rental companies, both include a change to S. 1445 that would limit the application of the new rules to vehicles weighing less than 10,000 pounds.  This change was sought by TRALA due to the commercial nature of rented trucks in the marketplace.  In addition, TRALA has succeeded in securing the removal of references to leased vehicles in current legislative proposals, further limiting the number of TRALA members impacted by any new law.

TRALA and its Executive Committee broached the subject of rental recall during its congressional visits on June 20 to educate Members of Congress on the need to lower the weight threshold and remove leasing now that all sides have accepted TRALA’s position.

On July 13, TRALA met with Congresswoman Lois Capps’ staff to discuss her recent decision to introduce a House version of the rental recall bill which was introduced the week of July 9.  In that meeting, TRALA stressed the need to alter the Capps legislative language to reflect the growing consensus among car rental companies and the safety groups that the weight threshold should be lowered and leasing not included in any kind of final rental recall legislation because of the commercial nature of the truck renting and leasing industry.  The staff agreed to work with TRALA and admitted that the Capps legislation was simply a “starting point” and that they were open to compromise.

Latest Action:  During the week of September 10-14, the car rental companies and the safety group CARS agreed in principle with Senate negotiators on a new bill that was to be introduced the week of September 17-21.  The new rental recall language addressed many of the concerns both the car and truck rental industries had on this issue with major concessions finally made by the safety groups and Senators Boxer and Schumer.  Industry was successful in reducing much of the burdensome aspects of the original legislation that now includes the following provisions:

  • The bill would allow for a 24-48 hour window for notification
  • The bill would allow rented vehicles already out on rent to remain out without a grounding
  • The bill would permit intermediate steps to be taken if it would safely allow the vehicle to be fixed at a later date
  • Vehicles under lease agreements of more than 4 months have been removed from the scope of the new provisions 

The major issue of contention for TRALA was that the proposed compromise bill applied to all vehicles up to f 26,000 pounds which TRALA has maintained for nearly a year is completely unacceptable to our industry.  As had been discussed in multiple conference calls with the Light Truck Rental Council, TRALA had voiced the idea of a compromise if – and only if – it became evident that legislation had a very strong likelihood of moving in Congress.  That agreed upon compromise was to make sure leased vehicles were removed from the bill and that the weight threshold would be set at 10,000 pounds which is the defined weight of a “commercial vehicles” in federal statute.  With the bill having the support of the car rental industry, the AAA, and the safety advocates as well as Senators Boxer, Schumer and McCaskill, that time had arrived and so TRALA asked for meetings with all the relevant congressional offices on September 17 to make the case for changing the weight threshold.

Although much of the deliberation on September 17-18 was contentious, there were also serious constructive discussions about the differences between the car and truck rental industries.  In this process, multiple TRALA members provided general data on the lack of diversity in the rental truck market from a make and model perspective.  This information, along with TRALA’s steadfast refusal to support any legislation that had a weight limit of more than 10,000 pounds, led Senate leaders to accept TRALA’s demands and so the bill will be introduced with leasing removed and a weight limit of 10,000 pounds in a significant victory for the majority of TRALA’s membership.

While TRALA still believes strongly that this regulatory change is unnecessary and burdensome, the compromise reached was the best outcome given the uncertainty of a lame duck session of Congress fast approaching and TRALA was unwilling to roll the dice with such a large number of members potentially at risk for falling under this potential new law’s parameters.  It remains to be seen if the law will pass the Senate and the House in either the lame duck session of Congress or in early 2013 but clearly momentum has gained for that to be a distinct possibility.  Still, obstacles for passage of this legislation remain – namely the opposition from several manufacturers that TRALA works with on a regular basis.  These manufacturers could potentially convince the Senate to alter the language one last time to address some of their concerns but that remains to be seen.

While the official bill has not yet been introduced, you may view the current legislative language here.

As part of the compromise deal, TRALA agreed to write a letter in support of the new legislation to the Chairman and Ranking Member of the Senate Commerce Committee.  You may view that letter here.

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