Amended in Assembly May 20, 2013

Amended in Assembly May 6, 2013

Amended in Assembly April 25, 2013

Amended in Assembly April 15, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 964

Introduced by Assembly Member Bonta

February 22, 2013

An act to amend begin delete Section end delete begin insert Sections 11713.1 and end insert 11713.18 of the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 964, as amended, Bonta. Vehicles: dealers.

Existing law makes it unlawful and provides that it constitutes an infraction for any person to violate, or fail to comply with, any provision of the Vehicle Code, or any local ordinance adopted pursuant to this code. Existing law also makes it a violation of the Vehicle Code for the holder of any specified dealer’s license to advertise for sale or sell a used vehicle as “certified” or use any similar descriptive term in the advertisement or the sale of a used vehicle that implies that the vehicle has been certified to meet the terms of a used vehicle certification program if any of several specified conditions apply. Under existing law, those specified conditions include, but are not limited to, when the vehicle has sustained damage in an impact, fire, or flood, that after repair prior to sale substantially impairs the use or safety of the vehicle, when the dealer knows or should have known that the vehicle has sustained frame damage, or when the dealer, prior to sale, fails to provide a completed inspection report, as specified.

This bill, 180 days after the enactment of regulations pursuant to portions of the federal Moving Ahead for Progress in the 21st Century Act (MAP-21), begin insert would prohibit the holder of any dealer’s license from advertising for sale or selling a used vehicle that the dealer knows or should have known is subject to a manufacturer’s safety recall. The bill end insert would prohibit the holder of any dealer’s license from selling a used vehicle as part of a used vehicle certification program if the dealer knows or should have known that the vehicle is the subject of a manufacturer’s safety recall. The bill would also begin insert generally end insert prohibit the holder of any dealer’s license from selling any used vehicle begin insert at retail end insert without providing a written disclosure, in certain languages, indicating which, if any, of several specified conditions are present.

By creating new crimes, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 11713.1 of the end insert begin insert Vehicle Code end insert begin insert is amended
to read: end insert

11713.1.  

It is a violation of this code for the holder of a dealer’s
license issued under this article to do any of the following:

(a) Advertise a specific vehicle for sale without identifying the
vehicle by its model, model-year, and either its license number or
that portion of the vehicle identification number that distinguishes
the vehicle from all other vehicles of the same make, model, and
model-year. Model-year is not required to be advertised for current
model-year vehicles. Year models are no longer current when
ensuing year models are available for purchase at retail in
California. An advertisement that offers for sale a class of new
vehicles in a dealer’s inventory, consisting of five or more vehicles,
that are all of the same make, model, and model-year is not required
to include in the advertisement the vehicle identification numbers
or license numbers of those vehicles.

(b) Advertise the total price of a vehicle without including all
costs to the purchaser at time of sale, except taxes, vehicle
registration fees, the California tire fee, as defined in Section 42885
of the Public Resources Code, emission testing charges not
exceeding fifty dollars ($50), actual fees charged for certificates
pursuant to Section 44060 of the Health and Safety Code, finance
charges, and any dealer document processing charge or charge to
electronically register or transfer the vehicle.

(c) (1) Exclude from an advertisement of a vehicle for sale that
there will be added to the advertised total price at the time of sale,
charges for sales tax, vehicle registration fees, the California tire
fee, the fee charged by the state for the issuance of a certificate of
compliance or noncompliance pursuant to a statute, finance
charges, a charge to electronically register or transfer the vehicle,
and a dealer document processing charge.

(2) The obligations imposed by paragraph (1) are satisfied by
adding to the advertisement a statement containing no abbreviations
and that is worded in substantially the following form: “Plus
government fees and taxes, any finance charges, any dealer
document processing charge, any electronic filing charge, and any
emission testing charge.”

(3) For purposes of paragraph (1), “advertisement” means an
advertisement in a newspaper, magazine, or direct mail publication
that is two or more columns in width or one column in width and
more than seven inches in length, or on a Web page of a dealer’s
Internet Web site that displays the price of a vehicle offered for
sale on the Internet, as that term is defined in paragraph (6) of
subdivision (f) of Section 17538 of the Business and Professions
Code.

(d) Represent the dealer document processing charge, electronic
registration or transfer charge, or emission testing charge, as a
governmental fee.

(e) Fail to sell a vehicle to a person at the advertised total price,
exclusive of taxes, vehicle registration fees, the California tire fee,
the fee charged by the state for the issuance of a certificate of
compliance or noncompliance pursuant to a statute, finance
charges, mobilehome escrow fees, the amount of a city, county,
or city and county imposed fee or tax for a mobilehome, a dealer
document processing charge, an electronic registration or transfer
charge, and a charge for emission testing not to exceed fifty dollars
($50) plus the actual fees charged for certificates pursuant to
Section 44060 of the Health and Safety Code, while the vehicle
remains unsold, unless the advertisement states the advertised total
price is good only for a specified time and the time has elapsed.
Advertised vehicles shall be sold at or below the advertised total
price, with statutorily permitted exclusions, regardless of whether
the purchaser has knowledge of the advertised total price.

(f) (1) Advertise for sale, sell, or purchase for resale a new
vehicle of a line-make for which the dealer does not hold a
franchise.

(2) This subdivision does not apply to a transaction involving
the following:

(A) A mobilehome.

(B) A recreational vehicle as defined in Section 18010 of the
Health and Safety Code.

(C) A commercial coach, as defined in Section 18001.8 of the
Health and Safety Code.

(D) An off-highway motor vehicle subject to identification as
defined in Section 38012.

(E) A manufactured home.

(F) A new vehicle that will be substantially altered or modified
by a converter prior to resale.

(G) A commercial vehicle with a gross vehicle weight rating of
more than 10,000 pounds.

(H) A vehicle purchased for export and exported outside the
territorial limits of the United States without being registered with
the department.

(I) A vehicle acquired in the ordinary course of business as a
new vehicle by a dealer franchised to sell that vehicle, if all of the
following apply:

(i) The manufacturer or distributor of the vehicle files a
bankruptcy petition.

(ii) The franchise agreement of the dealer is terminated,
canceled, or rejected by the manufacturer or distributor as part of
the bankruptcy proceedings and the termination, cancellation, or
rejection is not a result of the revocation by the department of the
dealer’s license or the dealer’s conviction of a crime.

(iii) The vehicle is held in the inventory of the dealer on the
date the bankruptcy petition is filed.

(iv) The vehicle is sold by the dealer within six months of the
date the bankruptcy petition is filed.

(3) Subparagraph (I) of paragraph (2) does not entitle a dealer
whose franchise agreement has been terminated, canceled, or
rejected to continue to perform warranty service repairs or continue
to be eligible to offer or receive consumer or dealer incentives
offered by the manufacturer or distributor.

(g) Sell a park trailer, as specified in Section 18009.3 of the
Health and Safety Code, without disclosing in writing to the
purchaser that a park trailer is required to be moved by a transporter
or a licensed manufacturer or dealer under a permit issued by the
Department of Transportation or a local authority with respect to
highways under their respective jurisdictions.

(h) Advertise free merchandise, gifts, or services provided by
a dealer contingent on the purchase of a vehicle. “Free” includes
merchandise or services offered for sale at a price less than the
seller’s cost of the merchandise or services.

(i) (1) Advertise vehicles, and related goods or services, at a
specified dealer price, with the intent not to supply reasonably
expectable demand, unless the advertisement discloses the number
of vehicles in stock at the advertised price. In addition, whether
or not there are sufficient vehicles in stock to supply a reasonably
expectable demand, when phrases such as “starting at,” “from,”
“beginning as low as,” or words of similar import are used in
reference to an advertised price, the advertisement shall disclose
the number of vehicles available at that advertised price.

(2) For purposes of this subdivision, in a newspaper
advertisement for a vehicle that is two model-years old or newer,
the actual phrase that states the number of vehicles in stock at the
advertised price shall be printed in a type size that is at least equal
to one-quarter of the type size, and in the same style and color of
type, used for the advertised price. However, in no case shall the
phrase be printed in less than 8-point type size, and the phrase
shall be disclosed immediately above, below, or beside the
advertised price without intervening words, pictures, marks, or
symbols.

(3) The disclosure required by this subdivision is in addition to
any other disclosure required by this code or any regulation
regarding identifying vehicles advertised for sale.

(j) Use “rebate” or similar words, including, but not limited to,
“cash back,” in advertising the sale of a vehicle unless the rebate
is expressed in a specific dollar amount and is in fact a rebate
offered by the vehicle manufacturer or distributor directly to the
retail purchaser of the vehicle or to the assignee of the retail
purchaser.

(k) Require a person to pay a higher price for a vehicle and
related goods or services for receiving advertised credit terms than
the cash price the same person would have to pay to purchase the
same vehicle and related goods or services. For the purpose of this
subdivision, “cash price” has the meaning as defined in subdivision
(e) of Section 2981 of the Civil Code.

(l) Advertise a guaranteed trade-in allowance.

(m) Misrepresent the authority of a salesperson, representative,
or agent to negotiate the final terms of a transaction.

(n) (1) Use “invoice,” “dealer’s invoice,” “wholesale price,”
or similar terms that refer to a dealer’s cost for a vehicle in an
advertisement for the sale of a vehicle or advertise that the selling
price of a vehicle is above, below, or at either of the following:

(A) The manufacturer’s or distributor’s invoice price to a dealer.

(B) A dealer’s cost.

(2) This subdivision does not apply to either of the following:

(A) A communication occurring during face-to-face negotiations
for the purchase of a specific vehicle if the prospective purchaser
initiates a discussion of the vehicle’s invoice price or the dealer’s
cost for that vehicle.

(B) A communication between a dealer and a prospective
commercial purchaser that is not disseminated to the general public.
For purposes of this subparagraph, a “commercial purchaser”
means a dealer, lessor, lessor-retailer, manufacturer,
remanufacturer, distributor, financial institution, governmental
entity, or person who purchases 10 or more vehicles during a year.

(o) Violate a law prohibiting bait and switch advertising,
including, but not limited to, the guides against bait advertising
set forth in Part 238 (commencing with Section 238) of Title 16
of the Code of Federal Regulations, as those regulations read on
January 1, 1988.

(p) Make an untrue or misleading statement indicating that a
vehicle is equipped with all the factory-installed optional equipment
the manufacturer offers, including, but not limited to, a false
statement that a vehicle is “fully factory equipped.”

(q) Affix on a new vehicle a supplemental price sticker
containing a price that represents the dealer’s asking price that
exceeds the manufacturer’s suggested retail price unless all of the
following occur:

(1) The supplemental sticker clearly and conspicuously discloses
in the largest print appearing on the sticker, other than the print
size used for the dealer’s name, that the supplemental sticker price
is the dealer’s asking price, or words of similar import, and that it
is not the manufacturer’s suggested retail price.

(2) The supplemental sticker clearly and conspicuously discloses
the manufacturer’s suggested retail price.

(3) The supplemental sticker lists each item that is not included
in the manufacturer’s suggested retail price, and discloses the
additional price of each item. If the supplemental sticker price is
greater than the sum of the manufacturer’s suggested retail price
and the price of the items added by the dealer, the supplemental
sticker price shall set forth that difference and describe it as “added
mark-up.”

(r) Advertise an underselling claim, including, but not limited
to, “we have the lowest prices” or “we will beat any dealer’s price,”
unless the dealer has conducted a recent survey showing that the
dealer sells its vehicles at lower prices than another licensee in its
trade area and maintains records to adequately substantiate the
claims. The substantiating records shall be made available to the
department upon request.

(s) (1) Advertise an incentive offered by the manufacturer or
distributor if the dealer is required to contribute to the cost of the
incentive as a condition of participating in the incentive program,
unless the dealer discloses in a clear and conspicuous manner that
dealer participation may affect consumer cost.

(2) For purposes of this subdivision, “incentive” means anything
of value offered to induce people to purchase a vehicle, including,
but not limited to, discounts, savings claims, rebates, below-market
finance rates, and free merchandise or services.

(t) Display or offer for sale a used vehicle unless there is affixed
to the vehicle the Federal Trade Commission’s Buyer’s Guide as
required by Part 455 of Title 16 of the Code of Federal Regulations.

(u) Fail to disclose in writing to the franchisor of a new motor
vehicle dealer the name of the purchaser, date of sale, and the
vehicle identification number of each new motor vehicle sold of
the line-make of that franchisor, or intentionally submit to that
franchisor a false name for the purchaser or false date for the date
of sale.

(v) Enter into a contract for the retail sale of a motor vehicle
unless the contract clearly and conspicuously discloses whether
the vehicle is being sold as a new vehicle or a used vehicle, as
defined in this code.

(w) Use a simulated check, as defined in subdivision (a) of
Section 22433 of the Business and Professions Code, in an
advertisement for the sale or lease of a vehicle.

(x) Fail to disclose, in a clear and conspicuous manner in at
least 10-point boldface type on the face of a contract for the retail
sale of a new motor vehicle that this transaction is, or is not, subject
to a fee received by an autobroker from the selling new motor
vehicle dealer, and the name of the autobroker, if applicable.

(y) Sell or lease a new motor vehicle after October 1, 2012,
unless the dealer has a contractual agreement with the department
to be a private industry partner pursuant to Section 1685. This
subdivision does not apply to the sale or lease of a motorcycle or
off-highway motor vehicle subject to identification under Section
38010 or a recreational vehicle as defined in Section 18010 of the
Health and Safety Code.

begin insert

(z) Advertise for sale or sell a used vehicle that the dealer knows
or should have known is subject to a manufacturer’s safety recall.
This subdivision shall become operative 180 days after the
adoption of regulations pursuant to Section 31301 of the federal
Moving Ahead for Progress in the 21st Century Act (MAP-21;
Public Law 112-141).

end insert begin delete

(z)

end delete

begin insert (aa) end insert  As used in this section, “make” and “model” have the same
meaning as is provided in Section 565.3 of Title 49 of the Code
of Federal Regulations.

begin delete

(aa) This section shall become operative on July 1, 2012.

end delete

begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 11713.18 of the Vehicle Code is amended to
read:

11713.18.  

(a) It is a violation of this code for the holder of
any dealer’s license issued under this article to advertise for sale
or sell a used vehicle as “certified” or use any similar descriptive
term in the advertisement or the sale of a used vehicle that implies
the vehicle has been certified to meet the terms of a used vehicle
certification program if any of the following apply:

(1) The dealer knows or should have known that the odometer
on the vehicle does not indicate actual mileage, has been rolled
back or otherwise altered to show fewer miles, or replaced with
an odometer showing fewer miles than actually driven.

(2) The dealer knows or should have known that the vehicle
was reacquired by the vehicle’s manufacturer or a dealer pursuant
to state or federal warranty laws.

(3) The title to the vehicle has been inscribed with the notation
“Lemon Law Buyback,” “manufacturer repurchase,” “salvage,”
“junk,” “nonrepairable,” “flood,” or similar title designation
required by this state or another state.

(4) The vehicle has sustained damage in an impact, fire, or flood,
that after repair and prior to sale substantially impairs the use or
safety of the vehicle.

(5) The dealer knows or should have known that the vehicle has
sustained frame damage.

(6) Prior to sale, the dealer fails to provide the buyer with a
completed inspection report indicating all the components
inspected.

(7) The dealer disclaims any warranties of merchantability on
the vehicle.

(8) The vehicle is sold “AS IS.”

(9) The term “certified” or any similar descriptive term is used
in any manner that is untrue or misleading or that would cause any
advertisement to be in violation of subdivision (a) of Section 11713
of this code or Section 17200 or 17500 of the Business and
Professions Code.

(10)  The dealer knows or should have known that the vehicle
is subject to a manufacturer’s safety recall.

(b) It is a violation of this code for the holder of any dealer’s
license issued under this article to sell a used vehicle begin insert at retail end insert
without providing the buyer written disclosure, in English or in
the languages specified in subdivision (b) of Section 1632 of the
Civil Code, identifying which, if any, of the following conditions
are present, if the dealer knows or should know of its presence:

(1) The odometer on the vehicle does not indicate actual
mileage, has been rolled back or otherwise altered to show fewer
miles, or replaced with an odometer showing fewer miles than
actually driven.

(2) The vehicle was reacquired by the vehicle’s manufacturer
or a dealer pursuant to state or federal warranty laws.

(3) The title to the vehicle has been inscribed with the notation
“Lemon Law Buyback,” “manufacturer repurchase,” “salvage,”
“junk,” “nonrepairable,” “flood,” or similar title designation
required by this state or another state.

(4) The vehicle has sustained damage in an impact, fire, or flood,
that after repair and prior to sale substantially impairs the use or
safety of the vehicle.

(5) The vehicle has sustained frame damage.

(6) The dealer disclaims any warranties of merchantability on
the vehicle.

(7) The vehicle is sold “AS IS.”

(8) The vehicle is subject to a manufacturer’s safety recall.

(c) (1) A violation of this section is actionable under the
Consumers Legal Remedies Act (Title 1.5 (commencing with
Section 1750) of Part 4 of Division 3 of the Civil Code), the Unfair
Competition Law (Chapter 5 (commencing with Section 17200)
of Part 2 of Division 7 of the Business and Professions Code),
Section 17500 of the Business and Professions Code, or any other
applicable state or federal law. The rights and remedies provided
by this section are cumulative and shall not be construed as
restricting any right or remedy that is otherwise available.

(2) The rights, remedies, and procedures provided for in this
section are in addition to, and independent of, any other rights,
remedies, or procedures available under any other law. Nothing
in this section shall be construed to alter, limit, or negate any other
rights, remedies, or procedures provided for by law.

(d) This section does not abrogate or limit any disclosure
obligation imposed by any other law.

(e) This section does not apply to the advertisement or sale of
a used motorcycle or a used off-highway motor vehicle subject to
identification under Section 38010.

begin insert

(f) This section does not apply to the sale of a used vehicle for
which the evidence of ownership is a salvage certificate, a
nonrepairable vehicle certificate issued by this state, an acquisition
bill of sale as described in Section 11519, or an ownership
document similar to those listed in this subdivision that is issued
by another state, or to any vehicles sold by or through a salvage
pool.

end insert

begin delete SEC. 2. end delete
begin insert SEC. 3. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

begin delete

SEC. 3.  

This bill shall become operative 180 days after the
adoption of regulations pursuant to Section 31301 of the federal
Moving Ahead for Progress in the 21st Century Act (MAP-21;
Public Law 112-141).

end delete