BILL ANALYSIS
SB 1004
Page 1
Date of Hearing: June 30, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
SB 1004 (Huff) - As Amended: May 28, 2010
Policy Committee:
TransportationVote:11-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill updates statutes regarding motor vehicle dealer
salespersons licenses. Specifically, this bill:
1)Allows motor vehicle dealers and salespersons to post exact
copies of their licenses, in lieu of the actual licenses, at
the dealer's place of business.
2)Allows a salesperson to work for more than one dealer if all
of the dealers for whom he or she works have common
controlling ownership, which is defined as more than 50% of
the ownership interests in each dealer being held by the same
person or persons, either directly or through wholly owned
subsidiary entities.
3)Requires the salesperson's license, or license copy, to be
posted at each dealership where he or she is employed.
4)Requires any copy of the salesperson's license to be destroyed
by the dealer upon termination of the salesperson's employment
with that dealer.
5)Allows the Department of Motor Vehicles (DMV) to refund a
dealer's cash deposit that has been submitted in lieu of a
dealer bond after five years from the date a bond is secured
and maintained, if the DMV is satisfied there are no
outstanding claims against that deposit.
FISCAL EFFECT
1)Negligible costs to DMV.
SB 1004
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2)Local enforcement costs, if any, not reimbursable.
COMMENTS
Rationale . The purpose of this bill is to update the vehicle
code to reflect changes in the operation and structure of
companies selling motor vehicles. The sponsor, the California
New Car Dealers Association, asserts that so long as the
controlling owner is the same, a salesperson should be able to
move from one dealer to another without being forced to resign
and be rehired at the second place of business. For large dealer
groups, including publicly traded companies, current law
restrictions place serious impediments to the effective
utilization of sales staff, for no identifiable purpose.
The provision allowing DMV to refund a cash deposit addresses
the situations that can arise when a dealer initially posts with
DMV a cash deposit in lieu of the $50,000 bond that is required
to protect against fraud and monetary loss to a purchaser,
seller, financing agency, or government agency. If such a
dealer subsequently obtains a bond, its owner can only have the
deposit refunded by waiting for three years after having ceased
to do business. The bill allows a refund of the deposit five
years after the dealer has secured and maintained a bond,
provided DMV is satisfied that there are no outstanding claims
against the deposit.
Analysis Prepared by : Brad Williams / APPR. / (916) 319-2081