SENATE, No. 83

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Senator BASSANO

An Act concerning the rental of automobiles and supplementing chapter 3 of Title 39 of the Revised Statutes.

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

    1. As used in this act:

    "Person" means an individual, firm, corporation or other legal entity.

    "Rental agreement" means a written agreement stating the terms and conditions governing the use of a motor rental vehicle provided by a rental company.

    "Rental company" means a person engaged in the business of renting motor vehicles.

    "Rental vehicle" means a passenger automobile, truck or semitrailer that is rented without a driver and used in the transportation of property other than commercial freight.

    "Renter" means a person who obtains the use of a motor rental vehicle under the terms of a rental agreement for a period of 31 days or less.

    2. a. A rental company doing business in this State may impose a surcharge, calculated pursuant to section 3 of this act, on each vehicle rental of 31 days or less. The purpose of this surcharge shall be to reimburse the rental company for the prorata cost of titling and registering rental vehicles in this State during the previous year.

    b. A rental agreement shall contain an explanation of the purpose of the surcharge and the method of its calculation. The surcharge shall be displayed in a separate line in the rental vehicle bill and labeled "Reimbursement for Title and Registration."

    c. Any rental company imposing a surcharge under this section shall impose that surcharge on all customers, except those customers that are exempt from taxes imposed under the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.).

    3. a. The rental surcharge rate (SR) shall be calculated as follows:

    SR = TR divided by RD, where:

    TR equals the sum of titling and registration fees paid by the rental company to the State for all rental vehicles in the previous calender year, including any surcharges imposed pursuant to section 68 of P.L.1990, c.8 (C.17:33B-63); and

    RD equals cumulative rental days for all of a company's rental vehicles in the previous calendar year.

    b. The rental surcharge shall be calculated by multiplying the rental surcharge rate by the number of days for which a vehicle is rented. This amount shall be entered on the rental car bill on the line labeled "Reimbursement for Title and Registration."

    c. A rental company shall calculate the rental surcharge rate and begin collecting the rental surcharge no later than January 15 of the year in which the surcharge applies. The rental company shall continue to collect the surcharge until the company recovers the total amount of its titling and registration fees for the previous calendar year or until the next rental surcharge rate is calculated, whichever comes first.

    4. a. A rental company which collects rental surcharges in excess of the total amount of its titling and registration fees in the previous year shall deduct the excess amount from the amount it is entitled to collect in the next year.

    b. A rental company which collects less in rental surcharge payments than the total of its registration and titling fees in the previous year shall not recover the shortfall in any succeeding year.

    5. The Division of Motor Vehicles shall annually publish the amount of titling and registration fees that are subject to the provisions of this act paid by rental companies in the previous year. If the total amount of fees used by a rental company (TR) in calculating the rental surcharge rate (SR) pursuant to section 3 of this act exceed the amount published by the division, the division's figure shall be used to recalculate the rental surcharge rate and the company's reimbursements shall be adjusted accordingly. The director, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), may promulgate all regulations necessary to carry out the purposes of this act.

    6. A rental company that violates this act shall be subject to a civil penalty of not less than $500 or more than $1,000 for each violation or each day of a continuing violation. The Attorney General may sue to recover the civil penalty, enjoin a violation of this act, or both.

    7. This act shall take effect on the first day of the fourth month following enactment, but the director, pursuant to section 5, may take such preparatory action as may be necessary.

STATEMENT

    This bill establishes a surcharge on the rental of motor vehicles in this State to defray costs to the rental company for titling and registering those vehicles. The surcharge would be applicable to vehicles rented for 31 days or less and be displayed as a separate line on the renter's bill.

    Car rental businesses contend that the cost of titling and registration, which averages approximately $110 per vehicle, discourages them from titling and registering vehicles in this State. By passing this cost along directly to the renter, this bill is expected to increase the number and type of rental vehicles available in New Jersey. If this occurs, the State would experience an increase in motor vehicle revenues.

    The surcharge would be calculated based on a rental company's average cost per rental day of titling and registering vehicles in the previous year. This charge would be assessed per day on rentals in the current year. The bill directs the Director of the Division of Motor Vehicles to annually publish the total titling and registration fees paid by rental companies in the previous year. A company would not be permitted to receive reimbursement through surcharges for a greater amount.

Imposes surcharge on rental cars to defray registration cost.