Amended in Senate April 22, 2013

Amended in Senate April 1, 2013

Senate Bill No. 686

Introduced by Senator Jackson

February 22, 2013

An act to amend Section 11713.18 of, and to add begin delete Section end delete begin insert Sections end insert 11713.27 begin insert and 11713.28 end insert to, the Vehicle Code, relating to vehicles.

LEGISLATIVE COUNSEL’S DIGEST

SB 686, as amended, Jackson. Vehicles: vehicle dealers.

begin delete

(1) Existing

end delete

begin insert Existing end insert 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.

The bill would begin delete additionally require that end delete begin insert also prohibit that representation from being made end insert if the dealer knows or should have known that the vehicle is subject to a manufacturer’s safety begin delete recall, it would be a violation of the Vehicle Code. end delete begin insert recall. By creating a new crime, the bill would impose a state-mandated local program. end insert

begin delete

(2) Existing

end delete

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 begin delete motor vehicle end delete dealer from selling, begin delete leasing, displaying, end delete begin insert leasing for an initial term of less than 4 months, end insert renting, loaning, or begin delete offering for sale end delete begin insert otherwise transferring ownership end insert at retail begin insert of end insert a begin delete new or end delete used vehicle, as specified, if the begin delete vehicle has a defect that is end delete begin insert dealer knows or should have known that the vehicle is end insert subject to a manufacturer’s safety recall, unless the repairs required to correct the defect have been performed on the vehicle. begin insert The bill would additionally prohibit a rental company that is also a dealer from selling or otherwise transferring ownership at retail of a used vehicle, if the rental company knows or should have known that the vehicle is subject to a manufacturer’s safety recall, unless the repairs required to correct the defect have been performed on the vehicle. The bill would require a dealer to obtain information about a used vehicle’s safety recall status as specified. end insert By begin delete expanding the scope of end delete begin insert creating end insert a begin insert new end insert 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:

SECTION 1.  

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 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) 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 insert

begin insert SEC. end insert begin insert 2. end insert   

end insert

begin insert Section 11713.27 is added to the end insert begin insert Vehicle Code end insert begin insert , to
read: end insert

begin insert

begin insert 11713.27. end insert   

(a) Except for a rental company, as defined in
Section 1936 of the Civil Code, a dealer issued a license under
this article shall not sell, lease for an initial term of less than four
months, rent, loan, or otherwise transfer ownership at retail of a
used vehicle, as defined in Section 665 and subject to registration
under this code, if the dealer knows or should have known that the
vehicle is subject to a manufacturer’s safety recall, unless the
repairs required to correct the defect have been performed on the
vehicle.

(b) For purposes of this section, a dealer is deemed to have
knowledge of a manufacturer’s safety recall if either of the
following applies:

(1) The dealer receives notification from the manufacturer.

(2) The dealer is a franchisee of the manufacturer.

(c) In the absence of knowledge pursuant to subdivision (b),
and until auto manufacturers are required to provide vehicle safety
recall data on a publicly accessible Internet Web site pursuant to
Section 31301 of Title 49 of the United States Code, a dealer shall
obtain information about a vehicle’s safety recall status prior to
completing a transaction subject to this section from at least one
of the following sources of information:

(1) The Internet Web site of the manufacturer, provided that the
safety recall status of the vehicle is made available by the
manufacturer.

(2) A toll-free telephone number, provided that the manufacturer
has made the safety recall status of the vehicle available at that
number.

(3) Another dealer that is a franchisee of the manufacturer.

(4) A commonly available vehicle history report, provided that
the safety recall status of the vehicle is available.

(d) When auto manufacturers are required to provide vehicle
safety recall data on a publicly accessible Internet Web site
pursuant to Section 31301 of Title 49 of the United States Code,
a dealer shall obtain information about a used vehicle’s safety
recall status from that database.

(e) 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, and 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.

end insert

begin insert

begin insert SEC. end insert begin insert 3. end insert   

end insert

begin insert Section 11713.28 is added to the end insert begin insert Vehicle Code end insert begin insert , to
read: end insert

begin insert

begin insert 11713.28. end insert   

(a) A rental company, as defined in Section 1936
of the Civil Code, that is also a dealer licensed under this article
shall not sell or otherwise transfer ownership at retail, of a used
vehicle, as defined in Section 665 and subject to registration under
this code, if the rental company knows or should have known that
the vehicle is subject to a manufacturer’s safety recall, unless the
repairs required to correct the defect have been performed on the
vehicle.

(b) For purposes of this section, a rental company is deemed
to have knowledge of a manufacturer’s safety recall when the
rental company receives notification of the manufacturer’s safety
recall pursuant to subdivision (b) or (c) of Section 30118 or Section
30119 of Title 49 of the United States Code.

(c) In the absence of knowledge pursuant to subdivision (b) of
this section, and until auto manufacturers are required to provide
vehicle safety recall data on a publicly accessible Internet Web
site pursuant to Section 31301 of Title 49 of the United States
Code, a rental company shall obtain information about a vehicle’s
safety recall status prior to completing a transaction subject to
this section from at least one of the following sources of
information:

(1) The Internet Web site of the manufacturer, provided that the
safety recall status of the vehicle is made available by the
manufacturer.

(2) A toll-free telephone number, provided that the manufacturer
has made the safety recall status of the vehicle available at that
number.

(3) Another dealer that is a franchisee of the manufacturer.

(4) A commonly available vehicle history report, provided that
the safety recall status of the vehicle is available.

(d) When auto manufacturers are required to provide vehicle
safety recall data on a publicly accessible Internet Web site
pursuant to Section 33101 of Title 49 of the United States Code,
rental car companies shall obtain information about a used
vehicle’s safety recall status from that database.

(e) 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, and 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.

end insert

begin delete

SEC. 2.  

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, loan, 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 safety 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.

end delete

begin delete SEC. 3. end delete
begin insert SEC. 4. 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.