BILL NUMBER: AB 238	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 2, 2011
	AMENDED IN SENATE  AUGUST 29, 2011
	AMENDED IN ASSEMBLY  APRIL 4, 2011

INTRODUCED BY   Assembly Member Huber
   (Coauthor: Senator Fuller)

                        FEBRUARY 3, 2011

   An act to amend Sections 2983 and 2983.1 of the Civil Code,
relating to motor vehicle sales, and declaring the urgency thereof,
to take effect immediately.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 238, as amended, Huber. Motor vehicle conditional sale
contracts.
   The Rees-Levering Motor Vehicle Sales and Finance Act regulates
motor vehicle conditional sale contracts, and, among other things,
requires a person selling or leasing a motor vehicle under a
conditional sale contract to disclose certain information to a buyer.
A violation of those disclosure requirements makes a conditional
sale contract unenforceable, except as specified.
   This bill would provide that a conditional sale contract shall not
be made unenforceable  solely  for a violation of specified
disclosure requirements, relating to the amount financed, regarding
the amount of governmental fees, including vehicle license fees,
registration fees, and California tire fees.
   This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: no. Fiscal committee:  yes
  no  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  The Legislature finds and declares as follows:
   (a) The Rees-Levering Motor Vehicle Sales and Finance Act (Chapter
2b (commencing with Section 2981) of Title 14 of Part 4 of Division
3 of the Civil Code) sets forth a statutory scheme to regulate the
retail sale and financing of motor vehicles. The act contains
detailed disclosure requirements intended to protect the consuming
public and includes provisions that render a conditional sale
contract unenforceable if any of those disclosure requirements are
violated, regardless of the nature of the disclosure violation or any
consumer harm.
   (b) It is the intent of the Legislature in enacting this act to
limit the contract unenforceability remedies of the Rees-Levering
Motor Vehicle Sales and Finance Act for certain disclosure violations
that involve fees paid by a vehicle purchaser to the state. It is
not the intent of the Legislature in enacting this act to relieve a
seller from making full and accurate contract disclosures, or to
limit other consumer remedies for any disclosure violation.
  SEC. 2.  Section 2983 of the Civil Code is amended to read:
   2983.  (a) Except as provided in subdivision (b), if the seller,
except as the result of an accidental or bona fide error in
computation, violates any provision of Section 2981.9, or of
subdivision (a), (j), or (k) of Section 2982, the conditional sale
contract shall not be enforceable, except by a bona fide purchaser,
assignee or pledgee for value or until after the violation is
corrected as provided in Section 2984, and, if the violation is not
corrected, the buyer may recover from the seller the total amount
paid, pursuant to the terms of the contract, by the buyer to the
seller or his assignee. The amount recoverable for property traded in
as all or part of the downpayment shall be equal to the agreed cash
value of such property as the value appears on the conditional sale
contract or the fair market value of such property as of the time the
contract is made, whichever is greater.
   (b) A conditional sale contract executed or entered into on or
after January 1, 2012, shall not be made unenforceable solely because
of a violation by the seller of paragraph (2) or (5) of subdivision
(a) of Section 2982. In addition to any other remedies that may be
available, the buyer is entitled to any actual damages sustained as a
result of a violation of those provisions. Nothing in this
subdivision affects any legal rights, claims, or remedies otherwise
available under law.
  SEC. 3.  Section 2983.1 of the Civil Code is amended to read:
   2983.1.  (a)  Except as provided in subdivision (e), if
  If  the seller or holder of a conditional sale
contract, except as the result of an accidental or bona fide error of
computation, violates any provision of subdivision (l) of Section
2982, the buyer may recover from the person three times the amount of
any finance charge paid to that person.
   (b)  If   Except as provided in subdivision
(e), if  a holder acquires a conditional sale contract without
actual knowledge of the violation by the seller of Section 2981.9, or
of subdivision (a), (j), or (k) of Section 2982, the contract shall
be valid and enforceable by the holder except the buyer is excused
from payment of the unpaid finance charge, unless the violation is
corrected as provided in Section 2984.
   (c)  If   Except as provided in subdivision
(e), if  a holder acquires a conditional sale contract with
knowledge of a violation of Section 2981.9, or of subdivision (a),
(j), or (k) of Section 2982, the conditional sale contract shall not
be enforceable except by a bona fide purchaser, assignee, or pledgee
for value, or unless the violation is corrected as provided in
Section 2984, and, if the violation is not corrected, the buyer may
recover the amounts specified in Section 2983 from the person to whom
payment was made.
   (d) When a conditional sale contract is not enforceable under
Section 2983 or  2983. 1   this section  ,
the buyer may elect to retain the motor vehicle and continue the
contract in force, or may, with reasonable diligence, elect to
rescind the contract and return the motor vehicle. The value of the
motor vehicle returned shall be credited as restitution by the buyer
without any decrease that results from the passage of time in the
cash price of the motor vehicle as the price appears on the
conditional sale contract.
   (e) A conditional sale contract executed or entered into on or
after January 1, 2012, shall not be made unenforceable, and the buyer
shall not be excused from payment of any finance charge, solely
because of a violation by the seller of paragraph (2) or (5) of
subdivision (a) of Section 2982. In addition to any other remedies
that may be available, the buyer is entitled to any actual damages
sustained as a result of a violation of those provisions. Nothing in
this subdivision affects any legal rights, claims, or remedies
otherwise available under law.
  SEC. 4.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to provide, as soon as possible, that the contract
unenforceability remedies in the Rees-Levering Motor Vehicle Sales
and Finance Act should not apply to fees paid by a vehicle purchaser
to the state, while preserving all other available remedies, it is
necessary that this act take effect immediately.