Rental passenger vehicles: electronic surveillance technology: renter liability for loss due to theft.

In Section 1939.23(a)(3)(B), a duplicated word was corrected: 'for 24 hours, hours after the notification' was changed to 'for 24 hours after the notification.' This is a drafting error fix with no substantive policy impact.

The bill header was updated from showing amendment history dates to showing passage dates (Passed the Assembly September 10, 2025; Passed the Senate September 9, 2025) and adding a line for the Governor's receipt date, consistent with standard enrolled bill formatting.

Line numbers, page number references (changed from 94 to 93), and the fiscal note line ('Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.') were removed as part of standard enrolled bill formatting.

Header changed from enrolled bill format to authenticated electronic legal material format with 'STATE OF CALIFORNIA AUTHENTICATED ELECTRONIC LEGAL MATERIAL' added.

Chapter number 449 was assigned and the governor's approval date (October 7, 2025) and filing date were inserted.

Page numbering and formatting changed from enrolled bill style to chaptered law style throughout the document.

Rental companies must now notify the renter when their vehicle is detected within an impound or tow yard. The 24-hour period before the vehicle is deemed abandoned by the renter now begins after the notification rather than immediately upon detection.

The term 'location-based geofence technology' was simplified to just 'geofence technology,' and the redundant operative language 'location-based technology, including, but not limited to, a geofence or other virtual perimeter, geofence technology' was replaced with simply 'geofence technology.'

The bill now amends Civil Code Section 1939.03 (rental passenger vehicles) in addition to its original nonsubstantive change to Section 1760 (Consumer Legal Remedies Act). This dramatically expands the bill from a technical fix to substantive consumer protection policy.

The presumption that a renter has no liability for loss due to theft is narrowed. Previously it applied if an authorized driver had possession of the ignition key or established the key was not in the vehicle at the time of theft. Now it requires BOTH that the authorized driver returns the key to the rental company AND files an official police report within 24 hours of learning of the theft and reasonably cooperates with law enforcement.

A new provision requires that if a renter or authorized driver failed to exercise ordinary care, the rental company must limit any recovery for loss due to theft to the limits of the renter's or authorized driver's applicable insurance coverage. This caps what a rental company can collect beyond what insurance already covers.

The bill now amends three sections (1939.01, 1939.03, and 1939.23) instead of two (1760 and 1939.03). The Consumer Legal Remedies Act amendment (Section 1760) is removed entirely.

Rental companies may now use location-based technology (geofence or virtual perimeter) to detect when a rental vehicle is moved outside the country without authorization or moved into an impound/tow yard. A vehicle in an impound yard for 24 hours is deemed abandoned by the renter.

A new Section 1 adds approximately 18 definitions to Civil Code Section 1939.01, including 'electronic surveillance technology,' 'membership program,' 'personal vehicle sharing program,' 'damage waiver,' and various fee-related terms like 'airport concession fee' and 'vehicle license recovery fee.'

New Section 1939.23 creates a general prohibition on rental companies using electronic surveillance technology to obtain information about a renter's use of the vehicle, with specific exceptions for locating stolen/abandoned vehicles, law enforcement requests, and location-based movement detection.

The standard for a rental company to establish renter liability for theft is lowered from 'clear and convincing evidence' that the renter failed to exercise ordinary care to simply 'establishes' that failure. This makes it easier for rental companies to hold renters financially responsible for stolen vehicles.

A new exemption is created from the electronic surveillance prohibition: systems used for maintaining, managing, and protecting the rental fleet or improving customer experience are excluded from the definition of 'electronic surveillance technology' if the purpose is disclosed in the rental agreement, use complies with CCPA, and personally identifiable information is not retained after the rental concludes.

The presumption that a renter has no liability for theft is narrowed. Previously it applied if an authorized driver had possession of the ignition key OR established the key was not in the vehicle at the time of theft. Now it only applies if an authorized driver returns the ignition key to the rental company.

Rental companies must maintain records (for at least 12 months) when electronic surveillance technology is activated, including the rental agreement, activation date/time, and relevant communications. Records must be made available upon renter request. A new prohibition bars using electronic surveillance to track a renter in order to impose fines or surcharges.

The entire amendment to Section 1939.01 was deleted. This section had added a new exclusion from the definition of 'electronic surveillance technology' for systems used to maintain, manage, and protect rental car fleets or improve customer experience, subject to conditions including disclosure in the rental agreement, compliance with the California Consumer Privacy Act, and no retention of personally identifiable information after the rental ends. Removing this means rental companies can no longer rely on a blanket fleet-management exemption from the electronic surveillance prohibition.

The legislative counsel's digest was corrected to remove the statement that the bill 'would delete the requirement that the rental company establish the renter's or authorized driver's failure to exercise ordinary care by clear and convincing evidence standard.' The operative text of Section 1939.03 still contains that standard in both versions, so the prior digest was inaccurate.

In Section 1939.23(a)(3), the phrase 'geofence technology' was redundantly inserted after 'a geofence or other virtual perimeter,' creating a drafting error: 'including, but not limited to, a geofence or other virtual perimeter, geofence technology to detect...'

Restored the 'clear and convincing evidence' standard in Section 1939.03(b)(1). Rental companies must now meet this higher burden of proof to establish that a renter or authorized driver failed to exercise ordinary care when a vehicle is stolen, rather than just showing it by a preponderance of the evidence.

Deleted former Section 1939.03(b)(3), which would have required rental companies to limit any recovery for loss due to theft to the limits of protection extended by the renter's or authorized driver's applicable insurance coverage. Without this cap, a rental company that meets the clear and convincing evidence standard could potentially recover up to the vehicle's full fair market value regardless of the renter's insurance limits.