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Four senators reintroduce rental car recall bill

David Shepardson
Detroit News Washington Bureau

Washington — Four U.S. senators on Friday reintroduced legislation that would bar rental car companies from leasing unrepaired recalled vehicles — the third straight year they have proposed the plan.

Sens. Charles E. Schumer, D-N.Y., Barbara Boxer, D-Calif., Claire McCaskill, D-Mo., and Bill Nelson, D-Fla., would require rental companies to follow the same rules that currently apply to new car dealers, who can't sell a unrepaired recalled vehicle. The bill is backed by the Obama administration and Transportation Secretary Anthony Foxx.

Reps. Lois Capps, D-Calif., Walter B. Jones, R-N.C., G.K. Butterfield, D-N.C. and Jan Schakowsky, D-Ill., also introduced an identical bill in the House.

"Whether they come from the renter's lot or a dealership, cars under recall should be not be on the road until their defect is repaired," Schumer said. "This common sense legislation closes the dangerous loophole and holds rental companies to the same standard as auto dealers."

General Motors Co. and major rental car companies have endorsed the bill.

"The millions of Americans who get behind the wheel of a rental car each year have a right to the peace of mind that the car they're driving is safe," said McCaskill. "This bill aims to keep dangerous vehicles off the road with the requirement that rental cars subject to a recall must be fixed before they can be rented to a customer."

Advocates say it is long past time.

"The American public is overwhelmingly in favor of ensuring that rental cars are safe and free from lethal safety defects," said Rosemary Shahan, President of Consumers for Auto Reliability and Safety. "About 95 percent of the rental car industry is also in favor. This is a common-sense bill that should be passing unanimously. The president is eager to sign it. It's time for Congress to get off the dime."

The bill would allow rental companies to sell a damaged vehicle subject to recall for parts or scrap with a junk title. Vehicles under a safety recall would be grounded as soon as possible but no later than 24 hours after the rental company gets the safety recall notice. Rental companies will have up to 48 hours for recalls that include more than 5,000 vehicles in their fleet.

The bill would allow if a manufacturer's recall notice specifies steps that can be taken to eliminate the safety risk until parts are available, a rental company may continue to rent the vehicle if those measures are put in place but must ground and repair the vehicle once parts become available.

The bill ensures that auto manufacturers are not subject to new or increased liability as a result of the new requirements the bill imposes on rental companies. Some automakers had worried that rental car companies could have sought damages if they were unable to rent out recalled vehicles because of parts delays.

The legislation is named after two sisters from Santa Cruz, Calif., Raechel and Jacqueline Houck, who were killed in 2004 when a recalled PT Cruiser they had rented from Enterprise caught fire and hit a truck.

"It's been over ten years since my beautiful, precious daughters Raechel and Jacqueline were killed by an unsafe, recalled rental car," said Carol "Cally" Houck. "It's time for Congress to act, to protect all families from suffering our devastating loss."

Rental cars make up 1 percent of all U.S. vehicles. Rental car companies have noted that taxis, limousines and car services aren't covered by the legislation.

Last month, the head of the National Highway Traffic Safety Administration wants the nation's automakers and more than 17,000 new-car dealers to do more to ensure unsafe vehicles are repaired.

Under federal law, new-car dealers are required to complete repairs only for recalled new cars — not for recalled used cars.

The Obama administration in April unveiled a legislative proposal that would require dealers of used cars and rental car agencies to fix any recalls on a vehicle before they can sell or rent the vehicle.

"The standard needs to be that every time a rental car agency or a used car dealer hands the keys to a consumer, that car is free of safety defects. Every time," NHTSA Administrator Mark Rosekind said in April.

The National Automobile Dealers Association has raised concerns about requiring all used cars to be repaired before being sold. Its president, Peter Welch, met in March with Rosekind and asked NHTSA to make data available to dealers to make it easier to check for open recalls.

But NHTSA told NADA it didn't have the money to do so.

Welch thinks dealers should focus on ensuring used vehicles with the most serious issues have recalls completed before being sold, rather than a blanket rule.

"You have to use some common sense," Welch said last week. "We want to work toward a workable solution — a sensible solution. ... We can't clog up used-car commerce."

Rosekind's comments came after automakers recalled a record-setting nearly 64 million vehicles in more than 800 campaigns last year.

Those callbacks came amid intense scrutiny by Congress after General Motors Co.'s recall of 2.6 million vehicles for ignition defects linked to at least 80 deaths and recalls of millions of vehicles for Takata air bags by 10 automakers linked to at least six deaths.

The Obama administration would require new dealers to check for open recalls every time a vehicle from that manufacturer is brought in for service, and notify the owner. The agency also wants funding from Congress to create a pilot program to ensure that motorists learn when they register their car or renew their license plates if recalled vehicles have been fixed.