California Bill Forces Rental Firms to Pull Recalled Vehicles

California lawmakers this week took a step toward enacting what would be the nation’s first law forcing rental car companies to pull recalled vehicles off the road, encouraged by a mother who testified that such a rule could have saved the lives of her two daughters.

A state Assembly committee voted 6-2 in favor of a bill named for Carol Houck’s daughters, who died in 2004 while driving a rented car that was the subject of a safety recall.

“Consumers need to know that when they rent these cars, that these cars are safe,” said Assemblyman Bill Monning, D-Monterey, who presented AB753 to the committee.

Auto dealers are not allowed to sell or lease cars that have been recalled, Monning said. His bill would close a loophole that allows rental car companies to continue doing so.

Representatives of several rental car companies said they repair 90 percent of vehicles within 30 days of receiving a recall notice and that their safety policies make the bill unnecessary. They also said that adopting such a law in California could prompt other states to do the same, creating a patchwork of laws that would be difficult for them to follow.

They said the bill targets their industry unfairly and ignores other vehicle fleets, such as those operated by taxi, limousine and shuttle bus services, private companies and governments.

“If something needs to be done — and there are different opinions about that — we think it needs to be done at the federal level,” said Thomas Laffey, general counsel for Enterprise Holdings, after the hearing.

Enterprise is the largest U.S. car rental company, with $12 billion in annual revenue and 1.1 million vehicles in its fleet. It includes the Alamo, Enterprise and National brands.

Houck’s daughters — Raechel, 24, and Jacqueline, 20 — were killed in 2004 when the steering failed on a Chrysler PT Cruiser they had rented from Enterprise in central California. The car crashed into a truck and caught fire. The company had received a recall notice for the vehicle about a month earlier.

“The PT Cruiser my daughters were killed in was rented out three times after they received the notice,” said Carol Houck, of Ojai.

Investigators hired by the Houck family said the power steering fluid line that was the subject of the recall leaked and caused the steering to fail. Enterprise fought a wrongful death case brought by the family for five years before admitting negligence. Last year, a jury awarded the parents $15 million.

Laffey testified that Enterprise has had 3 billion car rental-days since the Houck accident without a single similar incident.