Amended in Senate April 1, 2013

Senate Bill No. 686

Introduced by Senator Jackson

February 22, 2013

An act to begin insert amend Section 11713.18 of, and to end insert add Section 11713.27 to begin insert , end insert the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

SB 686, as amended, Jackson. begin delete Vehicle dealers: safety recalls. end delete begin insert Vehicles: vehicle dealers. end insert

begin delete

Existing

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(1) Existing law provides that it is a violation of the Vehicle Code for the holder of any dealer’s license issued as specified 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 specified provisions apply, including, but not limited to, the dealer knows or should have known that the vehicle has sustained frame damage, and the dealer disclaims any warranties of merchantability on the vehicle. Under existing law, a violation of these provisions is a crime.

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The bill would additionally require that if the dealer knows or should have known that the vehicle is subject to a manufacturer’s safety recall, it would be a violation of the Vehicle Code.

end insert

begin insert (2) end insert begin insert   end insert begin insert Existing end insert law provides that it is unlawful for a lessor-retailer to sell a vehicle without a vehicle dealer license or temporary permit. Existing law prohibits a licensed dealer from engaging in certain practices, including, among others, making an untrue or misleading statement indicating that a vehicle is equipped with all the factory-installed optional equipment the manufacturer offers. Under existing law, a violation of these provisions is a crime.

This bill would additionally prohibit a motor vehicle dealer from selling, leasing, displaying, renting, begin insert loaning, end insert or offering for sale at retail a new or used vehicle, as specified, if the vehicle has a defect that is subject to a manufacturer’s begin insert safety end insert recall, unless the repairs required to correct the defect have been performed on the vehicle. By expanding the scope of a crime, this bill would impose a state-mandated local program. The bill would also make a violation of these provisions actionable under the Consumers Legal Remedies Act and the Unfair Competition Law, and as false advertising.

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 11713.18 of the end insert begin insert Vehicle Code end insert begin insert is amended
to read: end insert

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 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.

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

end insert

(b) 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.

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

(d) 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 delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 11713.27 is added to the Vehicle Code, to
read:

11713.27.  

(a) A dealer issued a license under this article shall
not sell, lease, display, rent, begin insert loan, end insert or offer for sale at retail a new
vehicle, as defined in Section 430 and subject to registration under
this code, or a used vehicle, as defined in Section 655 and subject
to registration under this code, if the vehicle has a defect that is
subject to a manufacturer’s begin insert safety end insert recall, unless the repairs required
to correct the defect have been performed on the vehicle.

(b) 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.

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.