BILL ANALYSIS �
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: ab 501
SENATOR MARK DESAULNIER, CHAIRMAN AUTHOR: nazarian
VERSION: 6/11/13
Analysis by: Mark Stivers FISCAL: yes
Hearing date: June 18, 2013
SUBJECT:
Motor vehicle dealers
DESCRIPTION:
This bill makes changes to various laws relating to motor
vehicle dealers.
ANALYSIS:
Current law prohibits the sale in California of motor vehicle
brake friction materials containing specified constituents in an
amount that exceeds specified concentrations. Motor vehicle
manufacturers and distributors, wholesalers, or retailers of
replacement brake friction materials may continue to sell brake
friction materials non-certified materials "for the purpose of
depletion of inventories" until December 31, 2023. This bill
allows motor vehicle dealers to continue to sell non-certified
brake friction material installed on a vehicle before the
vehicle was acquired by the dealer.
Current law requires every person who engages in the
transportation of waste or used tires to hold a valid waste and
used tire hauler registration. The law defines a "tire broker"
as a person that arranges for the shipment of used or waste
tires to or from a site located within the state, or through the
state. This bill provides that a "tire broker" does not include
a tire retailer primarily engaged in the retail sale, service,
and installation of tires on customer vehicles, or a vehicle
dealer.
Current law requires motor vehicle dealers to maintain a
non-profit corporation known as the Consumer Motor Vehicle
Recovery Corporation (CMVRC) for the purpose of providing
payments to consumers for unsatisfied claims for economic loss
as a result of a licensed dealer's failure to:
AB 501 (NAZARIAN) Page 2
Remit license or registration fees the dealer has received or
committed to pay to the Department of Motor Vehicles (DMV).
Pay off the loan on a vehicle taken as a trade-in.
Make agreed to payments to the lessor of a vehicle taken as a
trade-in.
Make good on a consignment agreement after the sale of a
consigned vehicle.
Motor vehicle dealers support the CMVRC by contributing $1 per
vehicle sold, up to $2,500 per year through the DMV. DMV ceases
to collect the fee if the balance of the recovery fund exceeds
$5 million and reinstates the fee when the fund balance falls
below $2 million. This bill allows consumers to qualify for
restitution from the CMVRC for two additional dealer omissions:
1) failure to provide a consumer with a clean title on a
purchased vehicle, unless clearly and conspicuously agreed to
otherwise; and 2) failure to remit funds the dealer has received
or committed to pay to third parties for insurance, service
contracts, or other goods or services.
Current law, the Motor Carriers of Property Permit Act, requires
a motor carrier of property to hold a valid motor carrier permit
issued by the Department of Motor Vehicles. Current law defines
a "motor carrier of property" subject to the act as any person
who operates a specified commercial motor vehicle, including a
motortruck of two or more axles that is more than 10,000 pounds
gross vehicle weight rating and any other motor vehicle used to
transport property for compensation. Current law exempts
certain types of vehicles from the act, including motortrucks or
two-axle truck tractors with a gross vehicle weight rating of
less than 26,001 pounds when operated solely to tow a camp
trailer, trailer coach, fifth-wheel travel trailer, or utility
trailer. This bill further exempts motortrucks or two-axle
truck tractors with a gross vehicle weight rating of less than
26,001 pounds when operated solely to tow a trailer designed to
transport watercraft and motortrucks or two-axle truck tractors
with a gross vehicle weight rating of less than 16,001 pounds
operated singly in noncommercial use.
COMMENTS:
1.Purpose of the bill . According to the author, this bill is
intended to make several changes to laws relating to car
dealerships and the sale of vehicles. The author believes
that the provision exempting larger trucks from the Motor
Carriers of Property Permit Act is necessary because larger
AB 501 (NAZARIAN) Page 3
model pickups now exceed the weight threshold and are subject
to California Highway Patrol enforcement actions, which
creates problems for both the consumer and the dealer selling
the vehicle. The author further believes that by expanding
eligible claims from the CMVRC, consumers will be able to
recover the money they are entitled to but are not now able to
receive.
2.Chaptering conflicts . Both this bill and AB 529 (Lowenthal)
amend Vehicle Code Section 34601 relating to motor carrier
weight thresholds in similar but different manners. The
author will need to resolve these substantive and chaptering
conflicts.
3.Double referral . The Senate Rules Committee has referred this
bill to both this committee and the Committee on Environmental
Quality. The provisions of the bill relating to brake pads
and tire dealers fall within the jurisdiction of the
Environmental Quality Committee and therefore are not analyzed
in depth here.
Assembly Votes:
Floor: 70-0
Appr: 17-0
Trans: 16-0
POSITIONS: (Communicated to the committee before noon on
Wednesday, June 12,
2013.)
SUPPORT: California New Car Dealers Association (sponsor)
OPPOSED: None received.