BILL ANALYSIS Ó SENATE JUDICIARY COMMITTEE Senator Noreen Evans, Chair 2013-2014 Regular Session SB 155 (Padilla) As Amended April 22, 2013 Hearing Date: April 30, 2013 Fiscal: Yes Urgency: No BCP SUBJECT Vehicles: Motor Vehicle Manufacturers and Distributors DESCRIPTION Existing law prohibits motor vehicle manufacturers and distributors from engaging in specified actions with the dealers of those vehicles. This bill would make various changes to those prohibitions by, among other things: allowing the use of a nationally recognized flat-rate labor guide as the basis for the amount of time necessary for a warranty repair; prohibiting manufacturers from establishing a performance standard unless it is reasonable, as specified, and the manufacturer provides all information about the standard within 20 days of the dealer's request; revising existing prohibitions regarding audits, warranty and incentive claims, and the dealer's protest rights; stating that it is unreasonable to require a dealer to purchase goods or services from a specific vendor for the facility when substantially similar goods are available from another vendor; and prohibiting a manufacturer from taking adverse action against a dealer if a car is sold or leased to a customer who exported the vehicle out of the country, as specified. This bill would make other clarifying changes, and, include findings and declarations about the perceived practices of manufacturers. (more) SB 155 (Padilla) Page 2 of ? BACKGROUND The New Motor Vehicle Board (NMVB) is a program within the Department of Motor Vehicles (DMV) which operates in a quasi-judicial capacity to resolve disputes between franchise dealers and manufacturers/distributors of new motor vehicles and specified motorsports vehicles. Under existing law, the NMVB may only take action on disputes when "a protest is presented to the Board by a franchisee." (Veh. Code Sec. 3050.) This bill, sponsored by the California New Car Dealers Association, seeks to modify the relationship between dealers and manufacturers by, among other things, making changes regarding the use of flat-rate time schedules for warranty reimbursement, warranty and incentive claims, audits, protest rights, export policies, performance standards, and facility improvements. CHANGES TO EXISTING LAW 1. Existing law charges the Department of Motor Vehicles (DMV) with licensing and regulating dealers, manufacturers, and distributors of motor vehicles who conduct business in California. (Veh. Code Sec. 3000 et seq.) Existing law requires every franchisor (manufacturer) to fulfill every warranty agreement and adequately and fairly compensate each franchisee (dealer) for labor and parts used to fulfill the warranty. A copy of the warranty reimbursement schedule or formula must be filed with the New Motor Vehicle Board (NMVB), and, the schedule or formula is required to be reasonable with respect to the time and compensation. The reasonableness of the warranty reimbursement schedule or formula shall be determined by NMVB if a franchisee files a notice of protest with NMVB. (Veh. Code Sec. 3065(a).) Existing law requires all claims made by franchisees to be either approved or disapproved within 30 days after receipt by the franchiser. When any claim is disapproved, the franchisee who submits it shall be notified in writing, and, each notice shall state the specific grounds upon which the disapproval is based. (Veh. Code Sec. 3065(d).) Existing law allows for the audit of franchisee warranty records to be conducted by the franchisor on a reasonable basis and for a period of 12 months after a claim is paid or SB 155 (Padilla) Page 3 of ? credit issued. Franchisee claims for warranty compensation shall not be disapproved except for good cause, as specified. (Veh. Code Sec. 3065(e).) This bill would additionally apply the above warranty provisions to diagnostics and servicing, and provide that if the warranty reimbursement schedule or formula provides compensation for franchisee labor on a flat-rate basis, the franchisor shall allow the franchisee to use a published, nationally recognized, flat-rate labor time guide as the basis for determining the amount of time allocable for warranty repairs if the franchisee primarily uses the time guide to compute technician flat-rate compensation and charges for nonwarranty labor. This bill would revise the above provisions regarding disapproval of claims to, instead, provide: a franchisor is prohibited from disapproving a claim unless it is false or fraudulent, repairs were not properly made, repairs were inappropriate, or for material noncompliance with a documentation and claims submission requirements, as specified, and a franchisor is prohibited from disapproving a claim based upon an extrapolation from a sample of claims; when a claim is disapproved, the franchisee must be notified in writing, and each notice must state the specific grounds of disapproval. The franchisor must provide a reasonable appeal process allowing the franchisee at least 30 days after receipt of the disapproval to provide additional information. If disapproval is based on noncompliance with documentation or submission requirements, the franchisee would have 30 days to cure noncompliance. If the disapproval is rebutted, or noncompliance is cured, the franchisor must approve the claim; if the franchisee provides additional information purporting to rebut the disapproval, attempts to cure noncompliance, or otherwise invokes the appeal process, and the franchisor continues to deny the claim, the franchisor is required to provide the franchisee with a notification of final denial, as specified; and within six months after receipt of the written notice, as specified, a franchisee may file a protest with NMVB for determination of whether the franchisor complied with the above requirements. In any protest, the franchisor would have the burden of proof. SB 155 (Padilla) Page 4 of ? This bill would revise the above audit provisions to, instead, provide: audits of franchisee warranty records may be conducted on a reasonable basis for a period of nine months after a claim is paid or a credit is issued, and only if the franchisor has substantial evidence of a pattern of improper warranty claims, as specified. A franchisor would be prohibited from disapproving or charging back a previously approved claim unless the claim is false or fraudulent, repairs were inappropriate, or there was material noncompliance; if a franchisor disapproves of a previously approved claim following an audit, the franchisor must provide the franchisee with a written disapproval notice stating the specific grounds upon which the claim is disapproved. The franchisor must provide a reasonable appeal process, and, if the franchisee rebuts the disapproval or cures noncompliance, the franchisor would be prohibited from charging that claim back to the franchisee. If the franchisee provides additional supporting documentation or information purporting to rebut the disapproval or attempts to cure noncompliance and the franchisor continues to deny the claim, the franchisor must provide written notification of the final denial, which must contain a specified statutory notice about the right to file a protest with NMVB; the franchisor would be prohibited from placing a chargeback to the franchisee until 45 days of receipt of the written notice, as specified, following an audit. Any chargeback to a franchisee for warranty parts or service must be made within 90 days of receipt of that notice, and, if the franchisee files a protest, the franchisor must collect the chargeback until NMVB issues a final order on the protest. If NMVB sustains the chargeback or the protest is dismissed with prejudice, the franchisor would have 90 days following issuance of the final order or the dismissal with prejudice to make the chargeback, as specified; and within six months after receipt of the written disapproval notice or completion of the franchisor's appeal process, a franchisee may file a protest with NMVB for determination of whether the franchisor complied with the above requirements. In any protest, the franchisor would have the burden of proof. SB 155 (Padilla) Page 5 of ? 2. Existing law requires all claims made by a franchisee for payment under the terms of a franchisor incentive program to be either approved or disapproved within 30 days after receipt by the franchisor. When any claim is disapproved, the franchisee who submits it must be notified in writing of its disapproval within the required period, and each notice must state the specific grounds upon which the disapproval is based. Following disapproval, a franchisee has one year from receipt of the notice in which to appeal the disapproval to the franchisor and file a protest with NMVB, as specified. All claims must be paid within 30 days following approval. (Veh. Code Sec. 3065.1(a).) This bill would revise the above disapproval provision by, instead, providing that: franchisee claims for incentive program compensation could not be disapproved unless the claim is false or fraudulent, the claim is ineligible under the terms of the incentive program, as specified, or for material noncompliance with documentation and submission requirements. A franchisor would be prohibited from disapproving a claim based upon an extrapolation from a sample of claims; and providing appeal, notice, and audit requirements similar to the above warranty reimbursement requirements. 3. Existing law makes it unlawful for a vehicle manufacturer or distributor to take specified actions against a vehicle dealer or franchisee. (Veh. Code Secs. 11713.3, 11713.13.) This bill would additionally prohibit a manufacturer or distributor from taking or threatening to take any adverse action against a dealer pursuant to a published export or sale-for-resale prohibition because the dealer sold or leased a vehicle to a consumer who either exported the vehicle to a foreign country or resold the vehicle in violation of the prohibition, unless the dealer knew or reasonably should have known of the customer's intent to export or resell the vehicle in violation of the prohibition at the time of sale or lease. If the dealer causes the vehicle to be registered in this or any other state, and collects or causes to be collected any applicable sales or use tax due to this state, there would be a rebuttable presumption that the dealer did not have reason to know of the customer's intent to export or resell the vehicle. SB 155 (Padilla) Page 6 of ? This bill would additionally prohibit a manufacturer or distributor from establishing or maintaining a performance standard, sales objective, or program for measuring a dealer's sales, service, or customer service performance that may materially affect the dealer, including, but not limited to, the dealer's right to payment under any incentive or reimbursement program or establishment of working capital requirements, unless both of the following requirements are satisfied: the performance standard, sales objective, or program for measuring dealership sales, service, or customer service performance is reasonable in light of all existing conditions, including, but not limited to demographics, geographical and market characteristics, availability and allocation of vehicles and parts, economic circumstances, and historical performance, as specified; and the manufacturer, distributor, or affiliate provides all information used in establishing the performance standard, sales objective, or program for measuring dealership sales or service within 20 days of a request for information. This bill would provide that in any proceeding in which the reasonableness of a performance standard, sales objective, or program for measuring dealership sales, service, or customer service performance is an issue, the manufacture, distributor, or affiliate would have the burden of proof. A performance standard that requires a dealer to achieve a minimum performance level based on average, median, or ranked metrics achieved by all or a comparative group of dealers with respect to sales, service, or customer service would be presumed to be unreasonable. 4. Existing law makes it unlawful for a manufacturer or distributor to require, by contract or otherwise, a dealer to make a material alteration, expansion, or addition to any dealership facility, unless the required alteration, expansion, or addition is reasonable in light of all existing circumstances. In any proceeding in which a required facility alteration, expansion, or addition is an issue, the manufacturer or distributor would have the burden of proving the reasonableness of the requirement. (Veh. Code Sec. 11713.13 (c).) This bill would additionally provide that a required alteration, expansion, or addition shall not be deemed reasonable if it requires that the dealer purchase goods or SB 155 (Padilla) Page 7 of ? services from a specific vendor when substantially similar goods or services are available from another vendor. This provision would not authorize a dealer to impair or eliminate the intellectual property rights of the manufacturer or distributor, or, permit a dealer to erect or maintain signs that do not conform to the intellectual property usage guidelines of the manufacturer or distributor. This provision would not apply to a specific good or service if the manufacturer or distributor provides the dealer with a lump-sump payment of a substantial portion of the cost of the good or service. 5. This bill would make other substantive, clarifying, and technical changes relating to NMVB, and include findings and declarations about the perceived practices of franchisors. COMMENT 1. Stated need for the bill According to the author: The sale and service of motor vehicles is important to California's economy. California motor vehicle franchises employ over 110,000 people and in 2011, motor vehicle sales and service resulted in over $60 billion in economic activity. To protect such an important industry, California, like every other state, has enacted motor vehicle franchise laws. In addition to preserving a well-organized and cost-effective distribution system of motor vehicles, franchise laws seek to address the disparity in bargaining power between multi-national auto manufacturers and California's motor vehicle franchises that are primarily owned and operated as family businesses. California's motor vehicle franchise protection laws however, did not anticipate certain punitive practices taken by automobile manufacturers, which have become a growing concern. The punitive actions include: Undercompensating California motor vehicle franchises by unilaterally reducing the flat-rate time schedules for factory warranty repairs, even when a franchise is using a nationally recognized flat rate schedule for non-warranty SB 155 (Padilla) Page 8 of ? repair work. Disapproving California motor vehicle franchise warranty and incentive program claims for technical reasons, such as disapproving a claim based on an improper signature. Some manufacturers do not offer an appeals process to correct the simple, technical mistake. Auditing samples of California motor vehicle franchise warranty claims and then extrapolating the number of disapproved claims from the sample to arrive at a final disapproval rate. Holding California motor vehicle franchises strictly liable for exported vehicles, even if the export occurred unbeknownst to the franchise. Implementing unreasonable performance standards for California motor vehicle franchises based upon statewide data that do not take into account differences in local markets. Requiring that California motor vehicle franchises use factory-mandated vendors for dealer facility improvements, even when similar goods or services are available for a better price from local California vendors. . . . [SB 155] would strengthen California's dealer franchise protection laws by implementing various provisions to protect California motor vehicle franchises from punitive actions taken by manufacturers 2. Flat rate time allowances Under existing law, manufacturers are required to reimburse dealers for the cost of warranty repairs made to their vehicles. Those reimbursements generally occur on a "flat rate" basis pursuant to the manufacturers' flat-rate time schedule. In other words, for each warranty repair, the manufacturer has a warranty reimbursement schedule (which must be filed with the New Motor Vehicle Board (NMVB), and the dealer is compensated based upon that schedule. This bill would, instead, provide that if the warranty reimbursement schedule provides compensation on a flat-rate basis, the manufacturer must allow the dealer to use a published, nationally recognized flat-rate labor time guide as the basis for determining the amount of time allocable for warranty repairs if the franchisee primarily uses that guide to compute technician flat-rate compensation and charges for nonwarranty labor. SB 155 (Padilla) Page 9 of ? To demonstrate the problem faced by dealers using the manufacturer's flat-rate time schedule, the author's office provided several examples of the schedule for a particular repair being reduced over time by the manufacturer. In both of the examples provided, the third-party time guide (such as Alldata) allowed for a greater amount of time to make the repair. Staff notes that, as a practical matter, the amount of time is important to dealers because it reflects the amount of reimbursement they receive from the manufacturer for the repair. While third-party time guides may, in fact, allot more time for a repair, it is unclear whether those time allotments are appropriate given that it is assumed that dealer technicians have specialized training and tools from the manufacturer to complete the job. The Association of Global Automakers (Global Automakers) and the Alliance of Automobile Manufacturers (Alliance), in opposition, assert that "[original equipment manufacturers (OEMs)] conduct extensive internal time studies to ensure dealers are fairly compensated for work performed. The 'option' to use a flat-rate time schedule would in fact become the de-facto choice for dealers and would create an artificially inflated industry standard that is not reflective of actual reimbursement rates spread across all manufacturers." The California New Car Dealers Association (CNCDA), sponsor, asserts that the allowance for third party flat-rate time schedules would resolve recent problems where manufacturers have "significantly and unrealistically reduced their time allowances for repairs and diagnostics - thereby reducing the amount of warranty reimbursement without affecting hourly compensation rates." In response to the opposition's expressed concerns, and in an effort to reach a compromise, the author offers an amendment to, instead, prohibit a manufacturer from imposing a general reduction in time or compensation for warranty repairs, but, allow a manufacturer to reduce the time and compensation allowed under a warranty reimbursement schedule with respect to specific parts or labor operations if there is a 30-day written notice to the dealer. The amendment would further provide that the manufacturer would have the burden of proof in any protest filed by a dealer with respect to a reduction in time and compensation, and that a published nationally-recognized flat rate labor time guide would be relevant in determining the adequacy and fairness of compensation. Staff further notes that the amendment would appear to directly address the problem identified by the dealers, and arguably strikes a balance between the ability for a manufacturer to reduce the time under appropriate circumstances, while preserving the ability for a SB 155 (Padilla) Page 10 of ? dealer to have notice and object to any reduction. Author's amendment : On page 13, line 13, strike out "If the warranty reimbursement" and lines 14 through 26, inclusive, and insert: The reasonableness of the warranty reimbursement schedule or formula shall be determined by the board if a franchisee files a protest with the board. A franchisor shall not replace, modify, or supplement the warranty reimbursement schedule to impose a fixed percentage or other general reduction in the time and compensation allowed to the franchisee for labor or parts. A franchisor may reduce the allowed time and compensation applicable to specific parts or labor operations only upon 30 days prior written notice to the franchisee. In any protest challenging a reduction in time and compensation applicable to specific parts or labor operations and filed within one year following the franchisee's receipt of notice of the reduction, the franchisor shall have the burden of establishing the reasonableness of the reduction and adequacy and fairness of the resulting compensation. (b) In determining the adequacy and fairness of the compensation, published, nationally-recognized flat-rate labor time guides and the franchisee's effective labor rate charged to its various retail customers may be considered together with other relevant criteria. If in a protest permitted by this section filed by any franchisee the board determines that the warranty reimbursement schedule or formula fails in any manner to provide adequate and fair compensation or fails in whole or in part to conform with the other requirements of this section, within 30 days after receipt of the board's order the franchisor shall correct the failure by amending or replacing the warranty reimbursement schedule or formula and implementing the correction as to all franchisees of the franchisor. 3. Performance standards This bill would also prohibit manufacturers and distributors from establishing a performance standard that may materially affect a dealer unless: (1) the performance standard is reasonable in light of all existing circumstances, as specified; and (2) the manufacturer or distributor provides all information SB 155 (Padilla) Page 11 of ? used in establishing the performance standard within 20 days upon request by a dealer. In a proceeding in which the reasonableness of the standard is at issue, the manufacturer or distributor would have the burden of proof, and, a performance standard based upon an average, median, or ranked metrics would be presumed to be unreasonable. CNCDA, in support, asserts that "[m]anufacturers measure dealer performance under a franchise agreement or incentive program based upon standards established solely by the manufacturer that are based upon statewide or regional performance metrics. They often fail to account for crucial differences in local market conditions and the failure to meet 'average' standard can lead to negative consequences ranging from disqualification for incentives to franchise termination." The Global Automakers and the Alliance, in opposition, object to the requirement that OEMs provide "all information" used in establishing a particular performance standard to a requesting dealer within 20 days due to the contention that the provision "would put OEMs in the impossible position of attempting to meet a standard that is over-broad and burdensome given the various programs and metrics . . . ." The opposition further contends that to be of any value, such a disclosure would include production of information about other dealers that is confidential, and objects to the requirement to consider the local, statewide, and national economic circumstances, and, oppose the "effort to eliminate the industry-wide practice of using a performance standard that requires a dealer to achieve a certain performance level as measured against the average of a comparative group of dealers." Staff notes that, as a practical matter, performance standards arguably act to encourage a dealership to excel in various ways (including customer service) that may actually result in a better experience for consumers. If a dealer actually knows the standards that are used, it may help the dealer meet the expectations of the manufacturer and improve the customer's experience. Furthermore, given that vehicle preference and socio-economic conditions vary throughout the state, arguably, any fair performance standard should take into account all the relevant circumstances faced by a dealer - for example, a dealer in the mountains may sell a lot of four-wheel drive vehicles due to the snow, while a dealer in the Central Valley may have difficulty moving those same vehicles due to lack of demand. It should also be noted that, as a practical matter, providing a SB 155 (Padilla) Page 12 of ? presumption that a performance standard is unreasonable if it requires a dealer to achieve a minimum performance level based on an average, median, or ranked metrics would essentially remove the ability to compare a dealer to any other dealer - absent the ability to make that comparison, it is unclear how a manufacturer could create a reasonable standard that takes into account the current real-world conditions. In response to the opposition's concerns, the author offers an amendment to strike the proposed presumption, and, increase the time in which a manufacturer must respond to a request for information about a performance standard. Staff notes that the author's amendment further clarifies the data that must be provided with respect to a performance standard, and, that the author and sponsor should continue to work with the opposition regarding any remaining concerns about the language. Author's amendments : 1. On page 39, strike out lines 1 through 5, inclusive and insert: (B) Within 30 days after request by the dealer, the manufacturer, manufacturer branch, distributor, distributor branch, or affiliate provides a written summary of the methodology and all studies, reports, minutes and other data used or considered in establishing the performance standard, sales objective, or program for measuring dealership sales or service performance. The summary shall be in detail sufficient to permit the dealer to determine how the standard was established. 2. On page 39, line 11, strike out "A performance standard that requires a dealer to" and lines 12 through 15, inclusive. 4. Warranty and incentive claims This bill would also revise existing provisions that cover the disapproval of warranty and incentive claims, audits, and chargebacks. Specifically, this bill would prohibit a franchisor from disapproving a claim unless false or fraudulent, repairs were not properly made, repairs were inappropriate, or if there was material noncompliance. If a claim is disapproved, the dealer must be notified in writing, the manufacturer must provide an appeal process, allow a dealer to cure noncompliance SB 155 (Padilla) Page 13 of ? with submission requirements, and the manufacturer must provide a final notice of denial which includes a notice that the dealer may file a protest with NMVB. Similarly, audits of warranty and incentive claims may occur within nine months after a claim is paid, and previously approved claims shall not be disapproved or charged back except under certain circumstances, including where the claim was false or fraudulent. If a claim is ultimately disapproved after an audit (following any appeal and attempt to cure noncompliance), the manufacturer must provide a notice of final denial that informs the dealer of their right to file a protest with NMVB. The bill would also prohibit a manufacturer from disapproving a claim based upon an extrapolation from a sample of claims, as specified. CNCDA, in support, asserts that "[m]anufacturers often disapprove (pre- or post- audit) warranty claims for very technical reasons and some do not offer an opportunity to correct mistakes - costing the dealer tens to hundreds of thousands of dollars in reimbursement for work already performed. Growing numbers of manufacturers are auditing samples of claims, and extrapolating the result to arrive on a final chargeback amount." The Global Automakers and Alliance oppose the bill's provisions that would allow audits within nine months after a claim is paid (existing law allows one year) and contends that the provision would negatively impact programs and payouts to dealers that currently run for an entire year. The opposition further opposes the "novel language" that would prohibit a disapproval based upon an extrapolation of data and contends that "[t]his requested change flies in the face of evidentiary laws in many states, including California, that permit extrapolation when the amount of subject data is voluminous or the trier of fact would be assisted with such an analysis. To prove each and every claim submission individually would place an administrative burden on the manufacturer that is both unnecessary and punitive." Staff notes that the case cited by the opposition in support of the need to use extrapolation for audits dealt with audits by public agencies, not manufacturers. Regarding the use of extrapolation, the Ninth Circuit Court of Appeals held that: "We now join other circuits in approving the use of sampling and extrapolation as part of audits in connection with Medicare and other similar programs, provided the aggrieved party has an opportunity to rebut such evidence. To deny public agencies the use of statistical and mathematical audit methods would be to deny them an effective means of detecting abuses in the use of public funds. Public SB 155 (Padilla) Page 14 of ? officials are responsible for overseeing the expenditure of our increasingly scarce public resources and we must give them appropriate tools to carry out that charge." (Ratanasen v. Cal. Dept. of Health Servs. (1993) 11 F.3d 1467, 1471.) It should be noted that, as introduced, this bill would have required audits to be performed within six months after a claim is paid and that recent amendments extended that time period to nine months. Similarly, the introduced bill would have allowed dealers to file protests within one year of a denial of a claim by a manufacturer - recent amendments reduced that time frame to six months. Accordingly, the author and sponsor should continue to work with the opposition to see if consensus can be reached with respect to warranty and incentive claims. 5. Facilities Under existing law, a manufacturer cannot require a dealer to make a material alteration, expansion, or addition to any dealership facility unless it is reasonable in light of all existing circumstances. This bill would provide that a required facility alteration, expansion, or audition would not be reasonable if it requires the dealer to purchase goods or services from a specific vendor when substantially similar goods are available from another vendor. CNCDA, in support, asserts that "SB 155 implements a 'Buy California' provision specifying that a facility-related requirement providing that the dealer must purchase goods or services from a specific vendor is unreasonable if substantially similar goods or services are available from another vendor." The opposition expresses concern given the importance of signage and trademark bearing material in dealerships. The opposition also expresses concern that there is little guidance as to what constitutes substantially similar goods or services and that there is no protest opportunity. On the other hand, the opposition states that it is understandable why CNCDA seeks flexibility, but signage and trademark bearing materials should not be included in any measure of "substantially similar." Staff notes that, in an attempt to respond to the opposition's concerns, the bill was recently amended to include language stating that the provision does not authorize a dealer to impair or eliminate the intellectual property rights of the manufacturer or distributor, or, permit a dealer to erect or maintain signs that do not conform to the intellectual property usage guidelines of the manufacturer or distributor. SB 155 (Padilla) Page 15 of ? Accordingly, the author and sponsor should continue to work with the opposition to see if there can be consensus on the issue of allowing dealers to pick a vendor, provided that the use of the vendor does not infringe upon the intellectual property of the manufacturer, and that the goods and services are truly "substantially similar." 6. Adverse actions by a manufacturer regarding exported vehicles This bill would additionally prohibit a manufacturer from taking or threatening to take any adverse action against a dealer pursuant to a published export or sale-for-resale prohibition because the dealer sold or leased a vehicle to a customer who either exported the vehicle to a foreign country or resold the vehicle in violation of the prohibition. Staff notes that recent amendments added language allowing a manufacturer to take such an action if the "dealer knew or reasonably should have known of the customer's intent to export or resell the vehicle in violation of the prohibition at the time of the sale or lease." Regarding the need for the prohibition, CNCDA asserts that "[g]iven vehicle allocation limits to high-demand countries like China and Korea, a large number of 'straw purchaser' rings acquire new vehicles from California dealers for export. All manufacturers have policies prohibiting dealers from selling vehicles for export - mostly on a 'strict liability' basis where the dealer knowledge of the planned exportation is irrelevant." Accordingly, this bill seeks to address concerns relating to those policies by essentially protecting a dealer in cases where the dealer did not know, or reasonably could have known, that the vehicle was going to be exported. Support : California Motorcycle Dealers Association Opposition : Alliance of Automobile Manufacturers; Association of Global Automakers HISTORY Source : California New Car Dealers Association Related Pending Legislation : None Known SB 155 (Padilla) Page 16 of ? Prior Legislation : SB 642 (Padilla, Chapter 342, Statutes of 2011) modified and expanded the existing statutory framework regulating the relationship between vehicle manufacturers and their franchised dealers. SB 424 (Padilla, Chapter 12, Statutes of 2009) regulates actions that vehicle manufacturers may take with regard to their franchised dealers, and allows franchisees that have contracts terminated because of a manufacturer's or distributor's bankruptcy to continue to sell new cars in their inventory for up to six months. **************