BILL NUMBER: AB 287 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 28, 2015
AMENDED IN ASSEMBLY MAY 4, 2015
AMENDED IN ASSEMBLY MARCH 23, 2015
INTRODUCED BY Assembly Members Gordon, Eggman, and Mark Stone
(Principal coauthor: Assembly Member Wilk)
(Coauthors: Assembly Members Dababneh, Dodd, Jones, and Lackey)
FEBRUARY 11, 2015
An act to amend Sections 3050, 3066, 4751,
4451, and 11713.3 of, to add Section 3065.2 to, and to add
Article 1.1 (commencing with Section 11750) to Chapter 4 of Division
5 of, the Vehicle Code, relating to vehicle safety.
LEGISLATIVE COUNSEL'S DIGEST
AB 287, as amended, Gordon. Vehicle safety: recalls.
Existing law generally regulates the transfer and registration of
motor vehicles. Existing federal law requires a motor vehicle
manufacturer to notify the owner or purchaser of a motor vehicle when
the manufacturer determines that the vehicle contains a
safety-related defect or when the manufacturer is ordered by the
federal Secretary of Transportation to notify vehicle owners and
purchasers that a vehicle has a safety-related defect. Existing
federal law also prohibits a motor vehicle dealer from selling a
vehicle if it has been notified of a safety-related defect by the
manufacturer, except as specified.
This bill would enact the Consumer Automotive Recall Safety Act,
which would be operative on and after July 1, 2016. The act would
require a vehicle manufacturer to display notifications of Stop Sale
- Stop Drive recalls, as defined, on the manufacturer's Internet Web
site. The act would require a vehicle manufacturer to provide a
rental or loaner car for a consumer who seeks to have a vehicle
repaired because of a recall but the parts or procedures are not yet
available to perform the repair. The act would also require a vehicle
manufacturer to compensate its franchisees, as specified, for costs
incurred in providing a loaner or rental car and storing a consumer's
vehicle that is subject to recall if the parts or procedures are not
yet available to perform the repair.
The act would prohibit a vehicle dealer from displaying or
offering for sale at retail a used vehicle, unless the dealer has
obtained a recall database report within 30 days of the display or
offer. The act would prohibit a vehicle dealer from selling or
leasing a vehicle at retail if the used vehicle is subject to a Stop
Sale - Stop Drive recall, until the recalled vehicle has been
repaired, subject to exception. The act would prohibit a rental car
company from renting a vehicle that is subject to a recall, until the
recalled vehicle has been repaired, as specified. By creating new
prohibitions, the violation of which would be a crime under existing
law, this bill would impose a state-mandated local program.
Existing law establishes the New Motor Vehicle Board in the
Department of Motor Vehicles, and requires the board to hear and
decide certain protests presented by a motor vehicle franchisee in
regard to a dispute with the vehicle manufacturer.
This bill would, commencing July 1, 2016, authorize the board to
hear and decide protests by franchisees regarding payments for
providing a loaner or rental car and storing a consumer's vehicle
subject to recall if the parts or procedures are not yet available to
perform the repair. The bill would make additional conforming
changes.
Existing law prescribes certain instances when the Department of
Motor Vehicles may refuse registration, or renewal or transfer of
registration, of a vehicle, including, among others, if the applicant
has failed to furnish the department with an odometer disclosure
statement, as specified.
This bill would additionally authorize the department, commencing
July 1, 2016, to refuse registration, or renewal or transfer of
registration, of a vehicle if the applicant has failed to furnish the
department with a recall disclosure statement, as defined.
Existing law requires the Department of Motor Vehicles to issue a
certificate of ownership to the legal owner of a vehicle upon
registering a vehicle, and requires the certificate of ownership to
contain specified information, including the information required
upon the face of the registration card.
This bill would additionally require the certificate of ownership
to contain a provision for a recall disclosure statement, as
specified.
Under existing law, a vehicle manufacturer, manufacturer branch,
distributor, and distributor branch are prohibited from engaging in
specified practices. Existing law makes a violation of these
prohibitions a crime.
This bill would, commencing July 1, 2016, include within those
prohibited practices, unfairly discriminating among franchisees with
respect to reimbursement for costs incurred in providing a loaner or
rental car and storing a consumer's vehicle that is subject to recall
if the parts or procedures are not yet available to perform the
repair. By expanding the scope of an existing crime, this bill would
impose a state-mandated local program.
The bill would state findings and declarations of the Legislature
relative to vehicle recalls.
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. (a) The Legislature finds and declares all of the
following:
(1) Over the past one-half decade, automakers and the National
Highway Traffic Safety Administration have issued more recalls on new
and used motor vehicles than ever before. The year 2014 set the
record for the most recalls on vehicles in United States history with
over 63.8 million vehicles recalled. The rate of vehicle recalls has
exponentially grown over this past one-half decade as 22 million
recalls were issued in 2013 and 16.2 million were issued in 2012. The
increase of recalls in 2014 is a 190 percent increase from 2013 and
a 293.8 percent increase from 2012.
(2) While federal motor vehicle safety standards are more
demanding now than at any other point in time and new vehicles sold
today are the safest in history, the exponential growth of recalls
issued on motor vehicles has caused confusion and apathy for far too
many Californians. According to the National Highway Traffic Safety
Administration and others, about one-third of all recalled vehicles
are never repaired by the vehicle's owner.
(3) Federal regulations now require most vehicle manufacturers to
provide motor vehicle safety recall information applicable to the
vehicles they manufacture on the Internet and to the public. Dealers,
rental car companies, and private parties offering vehicles for sale
or rent now have greater access to recall information than ever
before.
(4) Federal law imposes a requirement not to sell a new vehicle
subject to a recall, but neither federal nor California law addresses
used vehicles subject to a recall. It is the intent of this act to
address used vehicles subject to a recall that are not yet repaired.
(b) Accordingly, it is the intent of the Legislature in enacting
this act to increase consumer awareness of recalls in the car
purchasing and rental process, to ensure that consumers have access
to loaner and rental vehicles while their recalled vehicles are being
repaired at a new motor vehicle dealer, and to ensure that a
recalled vehicle that poses a risk of imminent harm is not sold or
rented to Californians until the risk is removed and the vehicle is
repaired.
(c) The Legislature further finds and declares all of the
following:
(1) The distribution, sale, and service of new motor vehicles in
the State of California vitally affects the general economy of this
state and the public welfare.
(2) The new motor vehicle franchise system, which operates within
a strictly defined and highly regulated statutory scheme, assures the
consuming public of a well-organized distribution system for the
availability and sale of new motor vehicles throughout the state,
provides a network of quality warranty, recall, and repair facilities
to maintain those vehicles, and creates a cost-effective method for
the state to police those systems through the licensing and
regulation of private sector franchisors and franchisees.
(3) Franchisors sometimes establish programs to reimburse
franchisees for loaner or rental cars given to consumers whose
vehicles have been recalled, but California franchise laws fail to
establish guidelines for rental or loaner vehicle reimbursement.
(4) California franchise laws require manufacturers to provide
reasonable reimbursement to dealers for warranty and recall work, but
fails to establish guidelines for compensating franchisee costs
associated with recalled vehicles that cannot be repaired and remain
in the franchisee's possession.
(d) Accordingly, it is the intent of the Legislature in enacting
this act to ensure that new motor vehicle dealer franchisees are
treated fairly by their franchisors, that new motor vehicle dealer
franchisees are reasonably reimbursed for providing loaner or rental
vehicles to consumers who have recalled vehicles when the parts or
procedures to make the recall repair are not available, and that new
motor vehicle dealer franchisees are reasonably compensated for
recalled vehicles at their dealerships that cannot immediately be
repaired and must be stored by the franchisee at the dealership.
SEC. 2. Section 3050 of the Vehicle Code is amended to read:
3050. The board shall do all of the following:
(a) Adopt rules and regulations in accordance with Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code governing those matters that are specifically
committed to its jurisdiction.
(b) Hear and determine, within the limitations and in accordance
with the procedure provided, an appeal presented by an applicant for,
or holder of, a license as a new motor vehicle dealer, manufacturer,
manufacturer branch, distributor, distributor branch, or
representative when the applicant or licensee submits an appeal
provided for in this chapter from a decision arising out of the
department.
(c) Consider any matter concerning the activities or practices of
any person applying for or holding a license as a new motor vehicle
dealer, manufacturer, manufacturer branch, distributor, distributor
branch, or representative pursuant to Chapter 4 (commencing with
Section 11700) of Division 5 submitted by any person. A member of the
board who is a new motor vehicle dealer may not participate in,
hear, comment, advise other members upon, or decide any matter
considered by the board pursuant to this subdivision that involves a
dispute between a franchisee and franchisor. After that
consideration, the board may do any one or any combination of the
following:
(1) Direct the department to conduct investigation of matters that
the board deems reasonable, and make a written report on the results
of the investigation to the board within the time specified by the
board.
(2) Undertake to mediate, arbitrate, or otherwise resolve any
honest difference of opinion or viewpoint existing between any member
of the public and any new motor vehicle dealer, manufacturer,
manufacturer branch, distributor, distributor branch, or
representative.
(3) Order the department to exercise any and all authority or
power that the department may have with respect to the issuance,
renewal, refusal to renew, suspension, or revocation of the license
of any new motor vehicle dealer, manufacturer, manufacturer branch,
distributor, distributor branch, or representative as that license is
required under Chapter 4 (commencing with Section 11700) of Division
5.
(d) Hear and decide, within the limitations and in accordance with
the procedure provided, a protest presented by a franchisee pursuant
to Section 3060, 3062, 3064, 3065, 3065.1, 3065.2, 3070, 3072, 3074,
3075, or 3076. A member of the board who is a new motor vehicle
dealer may not participate in, hear, comment, advise other members
upon, or decide, any matter involving a protest filed pursuant to
Article 4 (commencing with Section 3060), unless all parties to the
protest stipulate otherwise.
(e) Notwithstanding subdivisions (c) and (d), the courts have
jurisdiction over all common law and statutory claims originally
cognizable in the courts. For those claims, a party may initiate an
action directly in any court of competent jurisdiction.
SEC. 3. Section 3065.2 is added to the Vehicle Code, to read:
3065.2. (a) A claim made by a franchisee for payment under
Section 11760 shall be either approved or disapproved within 30 days
after receipt by the franchisor. When a claim is disapproved, the
franchisee who submits it shall be notified in writing of its
disapproval within the required period, and each notice shall state
the specific grounds upon which the disapproval is based. Any claim
not specifically disapproved in writing within 30 days from receipt
shall be deemed approved on the 30th day.
(b) Franchisee claims for compensation under Section 11760 shall
not be disapproved unless the claim is false or fraudulent, the claim
is ineligible under the statute, or for material noncompliance with
reasonable and nondiscriminatory requirements of the franchisor,
including documentation and administrative claims submission
requirements.
(c) The franchisor shall provide a reasonable appeal process
allowing the franchisee at least 30 days after receipt of the written
disapproval notice to respond to any disapproval with additional
supporting documentation or information rebutting the disapproval. If
disapproval is based upon noncompliance with documentation or
administrative claims submission requirements, the franchisor shall
allow the franchisee at least 30 days from the date of receipt of the
written disapproval notice to cure any material noncompliance. If
the disapproval is rebutted, and material noncompliance is cured
before the applicable deadline, the franchisor shall approve the
claim.
(d) If the franchisee provides additional supporting documentation
or information purporting to rebut the disapproval, attempts to cure
noncompliance relating to the claim, or otherwise appeals denial of
the claim, and the franchisor continues to deny the claim, the
franchisor shall provide the franchisee with a written notification
of the final denial within 30 days of completion of the appeal
process, which shall conspicuously state "Final Denial" on the first
page.
(e) Following the disapproval of a claim, a franchisee shall have
six months from receipt of the written notice described in either
subdivision (a) or (d), whichever is later, to file a protest with
the board for determination of whether the franchisor complied with
subdivisions (a), (b), (c), and (d). In any hearing pursuant to this
subdivision or subdivision (a), (b), (c), or (d), the franchisor
shall have the burden of proof.
(f) A claim made by franchisees under this section shall be paid
within 30 days following approval. Failure to approve or pay within
the time limits specified in this section, in individual instances
for reasons beyond the reasonable control of the franchisor, is not a
violation of this section.
(g) (1) Audits of franchisee records for payment under Section
11760 may be conducted by the franchisor on a reasonable basis, and
for a period of nine months after a claim is paid or credit issued. A
franchisor shall not select a franchisee for an audit, or perform an
audit, in a punitive, retaliatory, or unfairly discriminatory
manner. A franchisor may conduct no more than one random audit of a
franchisee in a nine-month period. The franchisor's notification to
the franchisee of any additional audit within a nine-month period
shall be accompanied by written disclosure of the basis for that
additional audit.
(2) Previously approved claims shall not be disapproved and
charged back unless the claim is false or fraudulent, the claim is
ineligible under the statute, or for material noncompliance with
reasonable and nondiscriminatory requirements of the franchisor,
including documentation and administrative claims submission
requirements. A franchisor shall not disapprove a claim or
charge back chargeback a claim based upon an
extrapolation from a sample of claims, unless the sample of claims is
selected randomly and the extrapolation is performed in a reasonable
and statistically valid manner.
(3) If the franchisor disapproves of a previously approved claim
following an audit, the franchisor shall provide to the franchisee,
within 30 days after the audit, a written disapproval notice stating
the specific grounds upon which the claim is disapproved. The
franchisor shall provide a reasonable appeal process allowing the
franchisee a reasonable period of not less than 30 days after receipt
of the written disapproval notice to respond to any disapproval with
additional supporting documentation or information rebutting the
disapproval and to cure any material noncompliance, with the period
to be commensurate with the volume of claims under consideration. If
the franchisee rebuts any disapproval and cures any material
noncompliance relating to a claim before the applicable deadline, the
franchisor shall not charge back chargeback
the franchisee for that claim.
(4) If the franchisee provides additional supporting documentation
or information purporting to rebut the disapproval, attempts to cure
noncompliance relating to the claim, or otherwise appeals denial of
the claim, and the franchisor continues to deny the claim, the
franchisor shall provide the franchisee with a written notification
of the final denial within 30 days of completion of the appeal
process, which shall conspicuously state "Final Denial" on the first
page.
(5) The franchisor shall not charge back
chargeback the franchisee until 45 days after the franchisee
receives the written notice described in paragraph (3) or (4),
whichever is later. If the franchisee cures any material
noncompliance relating to a claim, the franchisor shall not
charge back chargeback the dealer for that
claim. Any chargeback to a franchisee under Section 11760 shall be
made within 90 days after the franchisee receives that written
notice. If the board sustains the chargeback or the protest is
dismissed, the franchisor shall have 90 days following issuance of
the final order or the dismissal to make the chargeback, unless
otherwise provided in a settlement agreement.
(6) Within six months after receipt of the written notice
described in either paragraph (3) or (4), a franchisee may file a
protest with the board for determination of whether the franchisor
complied with this subdivision. If the franchisee files a protest
pursuant to this subdivision prior to the franchisor's chargeback for
denied claims, the franchisor shall not offset or otherwise
undertake to collect the chargeback until the board issues a final
order on the protest. In any protest pursuant to this subdivision,
the franchisor shall have the burden of proof.
(h) If a false claim was submitted by a franchisee with the intent
to defraud the franchisor, a longer period for audit and any
resulting chargeback may be permitted if the franchisor obtains an
order from the board.
(i) This section shall become operative on July 1, 2016.
SEC. 4. Section 3066 of the Vehicle Code is amended to read:
3066. (a) Upon receiving a protest pursuant to Section 3060,
3062, 3064, 3065, 3065.1, 3065.2, 3070, 3072, 3074, 3075, or 3076,
the board shall fix a time within 60 days of the order, and place of
hearing, and shall send by registered mail a copy of the order to the
franchisor, the protesting franchisee, and all individuals and
groups that have requested notification by the board of protests and
decisions of the board. Except in a case involving a franchisee who
deals exclusively in motorcycles, the board or its executive director
may, upon a showing of good cause, accelerate or postpone the date
initially established for a hearing, but the hearing may not be
rescheduled more than 90 days after the board's initial order. For
the purpose of accelerating or postponing a hearing date, "good cause"
includes, but is not limited to, the effects upon, and any
irreparable harm to, the parties or interested persons or groups if
the request for a change in hearing date is not granted. The board or
an administrative law judge designated by the board shall hear and
consider the oral and documented evidence introduced by the parties
and other interested individuals and groups, and the board shall make
its decision solely on the record so made. Chapter 4.5 (commencing
with Section 11400) of Part 1 of Division 3 of Title 2 of the
Government Code and Sections 11507.3, 11507.6, 11507.7, 11511,
11511.5, 11513, 11514, 11515, and 11517 of the Government Code apply
to these proceedings.
(b) In a hearing on a protest filed pursuant to Section 3060,
3062, 3070, or 3072, the franchisor shall have the burden of proof to
establish that there is good cause to modify, replace, terminate, or
refuse to continue a franchise. The franchisee shall have the burden
of proof to establish that there is good cause not to enter into a
franchise establishing or relocating an additional motor vehicle
dealership.
(c) Except as otherwise provided in this chapter, in a hearing on
a protest alleging a violation of, or filed pursuant to, Section
3064, 3065, 3065.1, 3065.2, 3074, 3075, or 3076, the franchisee shall
have the burden of proof, but the franchisor has the burden of proof
to establish that a franchisee acted with intent to defraud the
franchisor when that issue is material to a protest filed pursuant to
Section 3065, 3065.1, 3065.2, 3075, or 3076.
(d) A member of the board who is a new motor vehicle dealer may
not participate in, hear, comment, or advise other members upon, or
decide, a matter involving a protest filed pursuant to this article
unless all parties to the protest stipulate otherwise.
SEC. 5. Section 4751 of the Vehicle Code is
amended to read:
4751. The department may refuse registration, or the renewal or
transfer of registration, of a vehicle in any of the following
events:
(a) If the department is not satisfied that the applicant is
entitled thereto under this code.
(b) If the applicant has failed to furnish the department with
information required in the application or reasonable additional
information required by the department.
(c) If the department determines that the applicant has made or
permitted unlawful use of any registration certificate, certificate
of ownership, or license plates.
(d) If the vehicle is mechanically unfit or unsafe to be operated
or moved on the highways.
(e) If the department determines that a manufacturer or dealer has
failed during the current or previous year to comply with the
provisions of this code relating to the giving of notice to the
department of the transfer of a vehicle during the current or
previous year.
(f) If the department determines that a lien exists, pursuant to
Section 9800, against one or more other vehicles in which the
applicant has an ownership interest.
(g) If the applicant has failed to furnish the department with an
odometer disclosure statement pursuant to subsection (a) of Section
32705 of Title 49 of the United States Code.
(h) Commencing July 1, 2016, if the applicant has failed to
furnish the department with a recall disclosure statement pursuant to
Section 11758.
SEC. 5. Section 4451 of the Vehicle
Code is amended to read:
4451. (a) The certificate of ownership
shall contain all of the following:
(a)
(1) Not less than the information required upon the
face of the registration card.
(b)
(2) Provision for notice to the department of a
transfer of the title or interest of the owner or legal owner.
(c)
(3) Provision for application for transfer of
registration by the transferee.
(d)
(4) Provision for an odometer disclosure statement
pursuant to subsection (a) of Section 32705 of Title 49 of the United
States Code.
(5) Commencing July 1, 2016, or as soon thereafter as the
department exhausts its supply of existing certificate of ownership
forms, provision for a recall disclosure statement pursuant to
Section 11758.
(b) Notwithstanding paragraph (5) of subdivision (a), a
certificate of ownership previously issued by the department prior to
July 1, 2016, and in the possession of a registered owner remains
valid for the transfer of registration of a vehicle.
SEC. 6. Section 11713.3 of the Vehicle Code is amended to read:
11713.3. It is unlawful and a violation of this code for a
manufacturer, manufacturer branch, distributor, or distributor branch
licensed pursuant to this code to do, directly or indirectly through
an affiliate, any of the following:
(a) To refuse or fail to deliver in reasonable quantities and
within a reasonable time after receipt of an order from a dealer
having a franchise for the retail sale of a new vehicle sold or
distributed by the manufacturer or distributor, a new vehicle or
parts or accessories to new vehicles as are covered by the franchise,
if the vehicle, parts, or accessories are publicly advertised as
being available for delivery or actually being delivered. This
subdivision is not violated, however, if the failure is caused by
acts or causes beyond the control of the manufacturer, manufacturer
branch, distributor, or distributor branch.
(b) To prevent or require, or attempt to prevent or require, by
contract or otherwise, a change in the capital structure of a
dealership or the means by or through which the dealer finances the
operation of the dealership, if the dealer at all times meets
reasonable capital standards agreed to by the dealer and the
manufacturer or distributor, and if a change in capital structure
does not cause a change in the principal management or have the
effect of a sale of the franchise without the consent of the
manufacturer or distributor.
(c) To prevent or require, or attempt to prevent or require, a
dealer to change the executive management of a dealership, other than
the principal dealership operator or operators, if the franchise was
granted to the dealer in reliance upon the personal qualifications
of that person.
(d) (1) Except as provided in subdivision (t), to prevent or
require, or attempt to prevent or require, by contract or otherwise,
a dealer, or an officer, partner, or stockholder of a dealership, the
sale or transfer of a part of the interest of any of them to another
person. A dealer, officer, partner, or stockholder shall not,
however, have the right to sell, transfer, or assign the franchise,
or a right thereunder, without the consent of the manufacturer or
distributor except that the consent shall not be unreasonably
withheld.
(2) (A) For the transferring franchisee to fail, prior to the
sale, transfer, or assignment of a franchisee or the sale,
assignment, or transfer of all, or substantially all, of the assets
of the franchised business or a controlling interest in the
franchised business to another person, to notify the manufacturer or
distributor of the franchisee's decision to sell, transfer, or assign
the franchise. The notice shall be in writing and shall include all
of the following:
(i) The proposed transferee's name and address.
(ii) A copy of all of the agreements relating to the sale,
assignment, or transfer of the franchised business or its assets.
(iii) The proposed transferee's application for approval to become
the successor franchisee. The application shall include forms and
related information generally utilized by the manufacturer or
distributor in reviewing prospective franchisees, if those forms are
readily made available to existing franchisees. As soon as
practicable after receipt of the proposed transferee's application,
the manufacturer or distributor shall notify the franchisee and the
proposed transferee of information needed to make the application
complete.
(B) For the manufacturer or distributor, to fail, on or before 60
days after the receipt of all of the information required pursuant to
subparagraph (A), or as extended by a written agreement between the
manufacturer or distributor and the franchisee, to notify the
franchisee of the approval or the disapproval of the sale, transfer,
or assignment of the franchise. The notice shall be in writing and
shall be personally served or sent by certified mail, return receipt
requested, or by guaranteed overnight delivery service that provides
verification of delivery and shall be directed to the franchisee. A
proposed sale, assignment, or transfer shall be deemed approved,
unless disapproved by the franchisor in the manner provided by this
subdivision. If the proposed sale, assignment, or transfer is
disapproved, the franchisor shall include in the notice of
disapproval a statement setting forth the reasons for the
disapproval.
(3) In an action in which the manufacturer's or distributor's
withholding of consent under this subdivision or subdivision (e) is
an issue, whether the withholding of consent was unreasonable is a
question of fact requiring consideration of all the existing
circumstances.
(e) To prevent, or attempt to prevent, a dealer from receiving
fair and reasonable compensation for the value of the franchised
business. There shall not be a transfer or assignment of the dealer's
franchise without the consent of the manufacturer or distributor,
which consent shall not be unreasonably withheld or conditioned upon
the release, assignment, novation, waiver, estoppel, or modification
of a claim or defense by the dealer.
(f) To obtain money, goods, services, or another benefit from a
person with whom the dealer does business, on account of, or in
relation to, the transaction between the dealer and that other
person, other than for compensation for services rendered, unless the
benefit is promptly accounted for, and transmitted to, the dealer.
(g) (1) Except as provided in paragraph (3), to obtain from a
dealer or enforce against a dealer an agreement, provision, release,
assignment, novation, waiver, or estoppel that does any of the
following:
(A) Modifies or disclaims a duty or obligation of a manufacturer,
manufacturer branch, distributor, distributor branch, or
representative, or a right or privilege of a dealer, pursuant to
Chapter 4 (commencing with Section 11700) of Division 5 or Chapter 6
(commencing with Section 3000) of Division 2.
(B) Limits or constrains the right of a dealer to file, pursue, or
submit evidence in connection with a protest before the board.
(C) Requires a dealer to terminate a franchise.
(D) Requires a controversy between a manufacturer, manufacturer
branch, distributor, distributor branch, or representative and a
dealer to be referred to a person for a binding determination.
However, this subparagraph does not prohibit arbitration before an
independent arbitrator, provided that whenever a motor vehicle
franchise contract provides for the use of arbitration to resolve a
controversy arising out of, or relating to, that contract,
arbitration may be used to settle the controversy only if, after the
controversy arises, all parties to the controversy consent in writing
to use arbitration to settle the controversy. For the purpose of
this subparagraph, the terms "motor vehicle" and "motor vehicle
franchise contract" shall have the same meaning as defined in Section
1226 of Title 15 of the United States Code. If arbitration is
elected to settle a dispute under a motor vehicle franchise contract,
the arbitrator shall provide the parties to the arbitration with a
written explanation of
the factual and legal basis for the award.
(2) An agreement, provision, release, assignment, novation,
waiver, or estoppel prohibited by this subdivision shall be
unenforceable and void.
(3) This subdivision does not do any of the following:
(A) Limit or restrict the terms upon which parties to a protest
before the board, civil action, or other proceeding can settle or
resolve, or stipulate to evidentiary or procedural matters during the
course of, a protest, civil action, or other proceeding.
(B) Affect the enforceability of any stipulated order or other
order entered by the board.
(C) Affect the enforceability of any provision in a contract if
the provision is not prohibited under this subdivision or any other
law.
(D) Affect the enforceability of a provision in any contract
entered into on or before December 31, 2011.
(E) Prohibit a dealer from waiving its right to file a protest
pursuant to Section 3065.1 if the waiver agreement is entered into
after a franchisor incentive program claim has been disapproved by
the franchisor and the waiver is voluntarily given as part of an
agreement to settle that claim.
(F) Prohibit a voluntary agreement supported by valuable
consideration, other than granting or renewing a franchise, that does
both of the following:
(i) Provides that a dealer establish or maintain exclusive
facilities, personnel, or display space or provides that a dealer
make a material alteration, expansion, or addition to a dealership
facility.
(ii) Contains no waiver or other provision prohibited by
subparagraph (A), (B), (C), or (D) of paragraph (1).
(G) Prohibit an agreement separate from the franchise agreement
that implements a dealer's election to terminate the franchise if the
agreement is conditioned only on a specified time for termination or
payment of consideration to the dealer.
(H) (i) Prohibit a voluntary waiver agreement, supported by
valuable consideration, other than the consideration of renewing a
franchise, to waive the right of a dealer to file a protest under
Section 3062 for the proposed establishment or relocation of a
specific proposed dealership, if the waiver agreement provides all of
the following:
(I) The approximate address at which the proposed dealership will
be located.
(II) The planning potential used to establish the proposed
dealership's facility, personnel, and capital requirements.
(III) An approximation of projected vehicle and parts sales, and
number of vehicles to be serviced at the proposed dealership.
(IV) Whether the franchisor or affiliate will hold an ownership
interest in the proposed dealership or real property of the proposed
dealership, and the approximate percentage of any franchisor or
affiliate ownership interest in the proposed dealership.
(V) The line-makes to be operated at the proposed dealership.
(VI) If known at the time the waiver agreement is executed, the
identity of the dealer who will operate the proposed dealership.
(VII) The date the waiver agreement is to expire, which may not be
more than 30 months after the date of execution of the waiver
agreement.
(ii) Notwithstanding the provisions of a waiver agreement entered
into pursuant to the provisions of this subparagraph, a dealer may
file a protest under Section 3062 if any of the information provided
pursuant to clause (i) has become materially inaccurate since the
waiver agreement was executed. Any determination of the
enforceability of a waiver agreement shall be determined by the board
and the franchisor shall have the burden of proof.
(h) To increase prices of motor vehicles that the dealer had
ordered for private retail consumers prior to the dealer's receipt of
the written official price increase notification. A sales contract
signed by a private retail consumer is evidence of the order. In the
event of manufacturer price reductions, the amount of the reduction
received by a dealer shall be passed on to the private retail
consumer by the dealer if the retail price was negotiated on the
basis of the previous higher price to the dealer. Price reductions
apply to all vehicles in the dealer's inventory that were subject to
the price reduction. Price differences applicable to new model or
series motor vehicles at the time of the introduction of new models
or series shall not be considered a price increase or price decrease.
This subdivision does not apply to price changes caused by either of
the following:
(1) The addition to a motor vehicle of required or optional
equipment pursuant to state or federal law.
(2) Revaluation of the United States dollar in the case of a
foreign-make vehicle.
(i) To fail to pay to a dealer, within a reasonable time following
receipt of a valid claim by a dealer thereof, a payment agreed to be
made by the manufacturer or distributor to the dealer by reason of
the fact that a new vehicle of a prior year model is in the dealer's
inventory at the time of introduction of new model vehicles.
(j) To deny the widow, widower, or heirs designated by a deceased
owner of a dealership the opportunity to participate in the ownership
of the dealership or successor dealership under a valid franchise
for a reasonable time after the death of the owner.
(k) To offer refunds or other types of inducements to a person for
the purchase of new motor vehicles of a certain line-make to be sold
to the state or a political subdivision of the state without making
the same offer to all other dealers in the same line-make within the
relevant market area.
( l ) To modify, replace, enter into, relocate,
terminate, or refuse to renew a franchise in violation of Article 4
(commencing with Section 3060) of Chapter 6 of Division 2.
(m) To employ a person as a representative who has not been
licensed pursuant to Article 3 (commencing with Section 11900) of
Chapter 4 of Division 5.
(n) To deny a dealer the right of free association with another
dealer for a lawful purpose.
(o) (1) To compete with a dealer in the same line-make operating
under an agreement or franchise from a manufacturer or distributor in
the relevant market area.
(2) A manufacturer, branch, or distributor or an entity that
controls or is controlled by, a manufacturer, branch, or distributor,
shall not, however, be deemed to be competing in the following
limited circumstances:
(A) Owning or operating a dealership for a temporary period, not
to exceed one year at the location of a former dealership of the same
line-make that has been out of operation for less than six months.
However, after a showing of good cause by a manufacturer, branch, or
distributor that it needs additional time to operate a dealership in
preparation for sale to a successor independent franchisee, the board
may extend the time period.
(B) Owning an interest in a dealer as part of a bona fide dealer
development program that satisfies all of the following requirements:
(i) The sole purpose of the program is to make franchises
available to persons lacking capital, training, business experience,
or other qualities ordinarily required of prospective franchisees and
the dealer development candidate is an individual who is unable to
acquire the franchise without assistance of the program.
(ii) The dealer development candidate has made a significant
investment subject to loss in the franchised business of the dealer.
(iii) The program requires the dealer development candidate to
manage the day-to-day operations and business affairs of the dealer
and to acquire, within a reasonable time and on reasonable terms and
conditions, beneficial ownership and control of a majority interest
in the dealer and disassociation of any direct or indirect ownership
or control by the manufacturer, branch, or distributor.
(C) Owning a wholly owned subsidiary corporation of a distributor
that sells motor vehicles at retail, if, for at least three years
prior to January 1, 1973, the subsidiary corporation has been a
wholly owned subsidiary of the distributor and engaged in the sale of
vehicles at retail.
(3) (A) A manufacturer, branch, and distributor that owns or
operates a dealership in the manner described in subparagraph (A) of
paragraph (2) shall give written notice to the board, within 10 days,
each time it commences or terminates operation of a dealership and
each time it acquires, changes, or divests itself of an ownership
interest.
(B) A manufacturer, branch, and distributor that owns an interest
in a dealer in the manner described in subparagraph (B) of paragraph
(2) shall give written notice to the board, annually, of the name and
location of each dealer in which it has an ownership interest, the
name of the bona fide dealer development owner or owners, and the
ownership interests of each owner expressed as a percentage.
(p) To unfairly discriminate among its franchisees with respect to
warranty reimbursement or authority granted to its franchisees to
make warranty adjustments with retail customers.
(q) To sell vehicles to a person not licensed pursuant to this
chapter for resale.
(r) To fail to affix an identification number to a park trailer,
as described in Section 18009.3 of the Health and Safety Code, that
is manufactured on or after January 1, 1987, and that does not
clearly identify the unit as a park trailer to the department. The
configuration of the identification number shall be approved by the
department.
(s) To dishonor a warranty, rebate, or other incentive offered to
the public or a dealer in connection with the retail sale of a new
motor vehicle, based solely upon the fact that an autobroker arranged
or negotiated the sale. This subdivision shall not prohibit the
disallowance of that rebate or incentive if the purchaser or dealer
is ineligible to receive the rebate or incentive pursuant to any
other term or condition of a rebate or incentive program.
(t) To exercise a right of first refusal or other right requiring
a franchisee or an owner of the franchise to sell, transfer, or
assign to the franchisor, or to a nominee of the franchisor, all or a
material part of the franchised business or of the assets of the
franchised business unless all of the following requirements are met:
(1) The franchise authorizes the franchisor to exercise a right of
first refusal to acquire the franchised business or assets of the
franchised business in the event of a proposed sale, transfer, or
assignment.
(2) The franchisor gives written notice of its exercise of the
right of first refusal no later than 45 days after the franchisor
receives all of the information required pursuant to subparagraph (A)
of paragraph (2) of subdivision (d).
(3) The sale, transfer, or assignment being proposed relates to
not less than all or substantially all of the assets of the
franchised business or to a controlling interest in the franchised
business.
(4) The proposed transferee is neither a family member of an owner
of the franchised business, nor a managerial employee of the
franchisee owning 15 percent or more of the franchised business, nor
a corporation, partnership, or other legal entity owned by the
existing owners of the franchised business. For purposes of this
paragraph, a "family member" means the spouse of an owner of the
franchised business, the child, grandchild, brother, sister, or
parent of an owner, or a spouse of one of those family members. This
paragraph does not limit the rights of the franchisor to disapprove a
proposed transferee as provided in subdivision (d).
(5) Upon the franchisor's exercise of the right of first refusal,
the consideration paid by the franchisor to the franchisee and owners
of the franchised business shall equal or exceed all consideration
that each of them were to have received under the terms of, or in
connection with, the proposed sale, assignment, or transfer, and the
franchisor shall comply with all the terms and conditions of the
agreement or agreements to sell, transfer, or assign the franchised
business.
(6) The franchisor shall reimburse the proposed transferee for
expenses paid or incurred by the proposed transferee in evaluating,
investigating, and negotiating the proposed transfer to the extent
those expenses do not exceed the usual, customary, and reasonable
fees charged for similar work done in the area in which the
franchised business is located. These expenses include, but are not
limited to, legal and accounting expenses, and expenses incurred for
title reports and environmental or other investigations of real
property on which the franchisee's operations are conducted. The
proposed transferee shall provide the franchisor a written
itemization of those expenses, and a copy of all nonprivileged
reports and studies for which expenses were incurred, if any, within
30 days of the proposed transferee's receipt of a written request
from the franchisor for that accounting. The franchisor shall make
payment within 30 days of exercising the right of first refusal.
(u) (1) To unfairly discriminate in favor of a dealership owned or
controlled, in whole or in part, by a manufacturer or distributor or
an entity that controls or is controlled by the manufacturer or
distributor. Unfair discrimination includes, but is not limited to,
the following:
(A) The furnishing to a franchisee or dealer that is owned or
controlled, in whole or in part, by a manufacturer, branch, or
distributor of any of the following:
(i) A vehicle that is not made available to each franchisee
pursuant to a reasonable allocation formula that is applied
uniformly, and a part or accessory that is not made available to all
franchisees on an equal basis when there is no reasonable allocation
formula that is applied uniformly.
(ii) A vehicle, part, or accessory that is not made available to
each franchisee on comparable delivery terms, including the time of
delivery after the placement of an order. Differences in delivery
terms due to geographic distances or other factors beyond the control
of the manufacturer, branch, or distributor shall not constitute
unfair competition.
(iii) Information obtained from a franchisee by the manufacturer,
branch, or distributor concerning the business affairs or operations
of a franchisee in which the manufacturer, branch, or distributor
does not have an ownership interest. The information includes, but is
not limited to, information contained in financial statements and
operating reports, the name, address, or other personal information
or buying, leasing, or service behavior of a dealer customer, and
other information that, if provided to a franchisee or dealer owned
or controlled by a manufacturer or distributor, would give that
franchisee or dealer a competitive advantage. This clause does not
apply if the information is provided pursuant to a subpoena or court
order, or to aggregated information made available to all
franchisees.
(iv) Sales or service incentives, discounts, or promotional
programs that are not made available to all California franchises of
the same line-make on an equal basis.
(B) Referring a prospective purchaser or lessee to a dealer in
which a manufacturer, branch, or distributor has an ownership
interest, unless the prospective purchaser or lessee resides in the
area of responsibility assigned to that dealer or the prospective
purchaser or lessee requests to be referred to that dealer.
For purposes of this subparagraph, the term "area of responsibility"
means a geographic area specified in a franchise that is used by the
franchisor for the purpose of evaluating the franchisee's performance
of its sales and service obligations.
(2) This subdivision does not prohibit a franchisor from granting
a franchise to prospective franchisees or assisting those franchisees
during the course of the franchise relationship as part of a program
or programs to make franchises available to persons lacking capital,
training, business experience, or other qualifications ordinarily
required of prospective franchisees.
(v) (1) To access, modify, or extract information from a
confidential dealer computer record, as defined in Section 11713.25,
without obtaining the prior written consent of the dealer and without
maintaining administrative, technical, and physical safeguards to
protect the security, confidentiality, and integrity of the
information.
(2) Paragraph (1) does not limit a duty that a dealer may have to
safeguard the security and privacy of records maintained by the
dealer.
(w) (1) To use electronic, contractual, or other means to prevent
or interfere with any of the following:
(A) The lawful efforts of a dealer to comply with federal and
state data security and privacy laws.
(B) The ability of a dealer to do either of the following:
(i) Ensure that specific data accessed from the dealer's computer
system is within the scope of consent specified in subdivision (v).
(ii) Monitor specific data accessed from or written to the dealer'
s computer system.
(2) Paragraph (1) does not limit a duty that a dealer may have to
safeguard the security and privacy of records maintained by the
dealer.
(x) (1) To unfairly discriminate against a franchisee selling a
service contract, debt cancellation agreement, maintenance agreement,
or similar product not approved, endorsed, sponsored, or offered by
the manufacturer, manufacturer branch, distributor, or distributor
branch or affiliate. For purposes of this subdivision, unfair
discrimination includes, but is not limited to, any of the following:
(A) Express or implied statements that the dealer is under an
obligation to exclusively sell or offer to sell service contracts,
debt cancellation agreements, or similar products approved, endorsed,
sponsored, or offered by the manufacturer, manufacturer branch,
distributor, or distributor branch or affiliate.
(B) Express or implied statements that selling or offering to sell
service contracts, debt cancellation agreements, maintenance
agreements, or similar products not approved, endorsed, sponsored, or
offered by the manufacturer, manufacturer branch, distributor, or
distributor branch or affiliate, or the failure to sell or offer to
sell service contracts, debt cancellation agreements, maintenance
agreements, or similar products approved, endorsed, sponsored, or
offered by the manufacturer, manufacturer branch, distributor, or
distributor branch or affiliate will have any negative consequences
for the dealer.
(C) Measuring a dealer's performance under a franchise agreement
based upon the sale of service contracts, debt cancellation
agreements, or similar products approved, endorsed, sponsored, or
offered by the manufacturer, manufacturer branch, distributor, or
distributor branch or affiliate.
(D) Requiring a dealer to actively promote the sale of service
contracts, debt cancellation agreements, or similar products
approved, endorsed, sponsored, or offered by the manufacturer,
manufacturer branch, distributor, or distributor branch or affiliate.
(E) Conditioning access to vehicles or parts, or vehicle sales or
service incentives upon the sale of service contracts, debt
cancellation agreements, or similar products approved, endorsed,
sponsored, or offered by the manufacturer, manufacturer branch,
distributor, or distributor branch or affiliate.
(2) Unfair discrimination does not include, and nothing shall
prohibit a manufacturer from, offering an incentive program to
vehicle dealers who voluntarily sell or offer to sell service
contracts, debt cancellation agreements, or similar products
approved, endorsed, sponsored, or offered by the manufacturer,
manufacturer branch, distributor, or distributor branch or affiliate,
if the program does not provide vehicle sales or service incentives.
(3) This subdivision does not prohibit a manufacturer,
manufacturer branch, distributor, or distributor branch from
requiring a franchisee that sells a used vehicle as "certified" under
a certified used vehicle program established by the manufacturer,
manufacturer branch, distributor, or distributor branch to provide a
service contract approved, endorsed, sponsored, or offered by the
manufacturer, manufacturer branch, distributor, or distributor
branch.
(4) Unfair discrimination does not include, and nothing shall
prohibit a franchisor from requiring a franchisee to provide, the
following notice prior to the sale of the service contract if the
service contract is not provided or backed by the franchisor and the
vehicle is of the franchised line-make:
"Service Contract Disclosure
The service contract you are purchasing is not provided or backed by
the manufacturer of the vehicle you are purchasing. The manufacturer
of the vehicle is not responsible for claims or repairs under this
service contract.
_____________________
Signature of Purchaser"
(y) To take or threaten to take any adverse action against a
dealer pursuant to an 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, unless the export or sale-for-resale prohibition
policy was provided to the dealer in writing prior to the sale or
lease, and 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, a rebuttable presumption is established that the dealer did
not have reason to know of the customer's intent to export or resell
the vehicle.
(z) For purposes of this section, the term "area of responsibility"
means a geographic area specified in a franchise that is used by the
franchisor for the purpose of evaluating the franchisee's
performance of its sales and service obligations.
(z)
(aa) Commencing July 1, 2016, to unfairly discriminate
among its franchisees with respect to reimbursement or authority
granted to its franchisees pursuant to subdivision (c) or (d) of
Section 11760.
SEC. 7. Article 1.1 (commencing with Section 11750) is added to
Chapter 4 of Division 5 of the Vehicle Code, to read:
Article 1.1. Consumer Automotive Recall Safety Act
11750. This article shall be known, and may be cited, as the
Consumer Automotive Recall Safety Act (CARS Act).
11752. As used in this article, the following definitions apply:
(a) The term "dealer" has the same meaning as in Section 285.
(b) (1) A "manufacturer's recall" is a recall conducted pursuant
to Sections 30118 to 30120, inclusive, of Title 49 of the United
States Code, the National Highway Traffic and Motor Vehicle Safety
Act (49 U.S.C. Sec. 30101, et seq.).
(2) A manufacturer's recall does not include a service campaign or
emission recall when the vehicle manufacturer or the National
Highway Traffic Safety Administration has not issued a recall notice
to owners of affected vehicles, pursuant to Section 30118 of Title 49
of the United States Code, the National Highway Traffic and Motor
Vehicle Safety Act (49 U.S.C. Sec. 30101, et seq.). A manufacturer's
recall does not include a Stop Sale - Stop Drive recall.
(c) The term "new motor vehicle dealer" has the same meaning as in
Section 426.
(d) A "recall database" is a database from which an individual may
obtain vehicle identification number (VIN) specific Stop Sale - Stop
Drive recall and manufacturer's recall information relevant to a
specific vehicle.
(1) For a vehicle manufacturer that is not subject to the
regulations adopted pursuant to Section 31301 of the federal Moving
Ahead for Progress in the 21st Century Act (Public Law 112-141), a
recall database is one of the following:
(A) The recall data on a vehicle manufacturer's Internet Web site
for a specific vehicle's line-make.
(B) The recall data in a vehicle manufacturer's internal system
that provides information to its franchisees on vehicles subject to
recall.
(C) The recall data in subparagraph (A) or (B) that is contained
in a commercially available vehicle history system.
(2) For a vehicle manufacturer that is subject to the regulations
adopted pursuant to Section 31301 of the federal Moving Ahead for
Progress in the 21st Century Act (Public Law 112-141), a recall
database shall include, at a minimum, the recall information required
pursuant to Section 573.15 of Title 49 of the Code of Federal
Regulations.
(e) A "recall database report" is a report, specific to a vehicle
that is identified by its VIN, containing information obtained from a
recall database.
(f) A "rental car company" is a person or entity in the business
of renting passenger vehicles to the public in California.
(g) A "Stop Sale - Stop Drive recall" is a recall notice provided
to owners of affected vehicles, pursuant to Sections 30118 to 30120,
inclusive, of Title 49 of the United States Code, the National
Highway Traffic and Motor Vehicle Safety Act (49 U.S.C. Sec. 30101,
et seq.), when the vehicle manufacturer or the National Highway
Traffic Safety Administration informs the dealer to stop the sale of
the vehicle or contains preremedy any
precaution advice to the owner to stop operating the vehicle.
(h) A "vehicle manufacturer" is a person who manufactures,
assembles, or distributes new motor vehicles, sold or leased, that
are subject to registration under this code.
11754. (a) A dealer shall not display or offer for sale at retail
a used vehicle, as defined in Section 665, that is subject to
registration under this code, unless the dealer has obtained a recall
database report within 30 days of the display or offer.
(b) If a recall database report obtained by a dealer indicates
that a used vehicle is subject to a Stop Sale - Stop Drive recall,
the dealer shall not sell or lease that vehicle at retail until the
recall repair has been made.
(c) If a recall database report obtained by a dealer indicates
that a used vehicle is subject to a manufacturer's recall and the
used vehicle is of the same line-make as the franchise of the new
motor vehicle dealer, the dealer shall not sell or lease that vehicle
at retail until the recall repair has been made.
(d) If a recall database report obtained by a dealer indicates
that a used vehicle is subject to a manufacturer's recall and the
used vehicle is not of the same line-make as the franchise of the new
motor vehicle dealer or the dealer does not have a franchise, the
dealer may sell or lease the vehicle at retail if all of the
following are satisfied:
(1) The dealer discloses the manufacturer's recall by
providing a copy of the recall database report to the consumer prior
to sale or lease.
(2) The consumer signs the disclosure acknowledging that the
vehicle has a manufacturer's recall and that the consumer can get the
recall repaired at no cost to the consumer at a new motor vehicle
dealer of the vehicle's line-make.
(e) To comply with subdivision (d), and notwithstanding Section
2981.9 of the Civil Code, a recall database report, that indicates
the vehicle is subject to a manufacturer's recall and the recall
repair has not been made, shall be disclosed and the disclosure
signed by the consumer in a document separate from the conditional
sales contract or other vehicle purchase agreement.
(f) The disclosure by a dealer, and receipt and acknowledgment by
the consumer, of the information specified in subdivisions (d) and
(e) has no legal effect other than to demonstrate compliance by the
dealer with the requirements prescribed in those subdivisions.
Nothing in this article shall be interpreted to place consumers in a
less advantageous legal position for having received or signed the
disclosures provided pursuant to this article than if no disclosure
had been made.
11756. (a) No later than 48 hours after receiving a notice of a
recall conducted pursuant to Sections 30118 to 30120, inclusive, of
Title 49 of the United States Code, the National Highway Traffic and
Motor Vehicle Safety Act (49 U.S.C. Sec. 30101, et seq.), or sooner
if practicable, a rental car company is prohibited from renting or
offering for rent any vehicle subject to that recall.
(b) If a recall notification indicates that the remedy for the
recall is not immediately available and specifies actions to
temporarily repair the vehicle in a manner to eliminate the safety
risk that prompted the recall, the rental car company, after having
the repairs completed, may rent the vehicle. Once the remedy for the
rental vehicle becomes available to the rental car company, the
rental car company may not rent the vehicle until the vehicle has
been repaired.
11758. (a) The department may refuse transfer of registration of
a motor vehicle under this code unless the transferee, in submitting
an application to the department for title, includes with the
application a statement signed and dated by the transferor
acknowledging that all Stop Sale - Stop Drive recalls and
manufacturer's recalls were disclosed to the transferee as provided
in subdivision (c).
(b) If the title to a motor vehicle issued to a transferor is in
the possession of a lienholder when the transferor transfers
ownership of the vehicle, the transferor may use a written power of
attorney in making the recall disclosure required under subdivision
(c).
(c) A transferor transferring registration of a motor vehicle
shall disclose, in writing, to the transferee all Stop Sale - Stop
Drive recalls and manufacturer's recalls. A person acquiring the
vehicle shall not accept a vehicle transfer and reassignment document
unless it is complete.
(d) Subdivisions (a), (b), and (c) do not apply to the transfer of
a motor vehicle to a dealer or wholesaler.
11758. Commencing July 1, 2016, or as soon thereafter as the
department exhausts its supply of existing certificate of ownership
forms, the department shall include the following recall disclosure
statement on the certificate of ownership and bill of sale form for
private transactions:
"This vehicle may have an unrepaired manufacturer's recall. Please
ask the seller if there is an unrepaired manufacturer's recall on
this vehicle. You can check for any recalls and how to get the recall
repaired at the National Highway Traffic Safety Administration's
website."
11760. (a) A vehicle manufacturer shall clearly and conspicuously
display on its Internet Web site and in all recall notifications
pursuant to Section 30118 of Title 49 of the United States Code, the
National Highway Traffic and Motor Vehicle Safety Act (49 U.S.C. Sec.
30101, et seq.), whether a vehicle is subject to a Stop Sale - Stop
Drive recall.
(b) When a consumer seeks to repair a vehicle subject to a Stop
Sale - Stop Drive recall or manufacturer's recall as identified in a
recall database report and the parts or procedures for the repair are
not yet available, the vehicle manufacturer shall, upon request by
the consumer, provide a rental or loaner vehicle to the consumer at
no cost to the consumer until the recall repair has been made. The
consumer shall not be provided with a rental or loaner vehicle that
is subject to a Stop Sale - Stop Drive recall or a manufacturer's
recall.
(c) If a vehicle manufacturer requires a franchisee to provide a
rental or loaner vehicle to a consumer under subdivision (b), the
vehicle manufacturer shall adequately and fairly compensate the
franchisee for all costs incurred in providing a loaner or rental
vehicle to a consumer. For purposes of this paragraph, adequate and
fair compensation shall be the average daily rental amount of____
dollars ($____) for each day a consumer uses a loaner or rental
vehicle.
(d) A vehicle manufacturer shall adequately and fairly compensate
each of its franchisees for all costs incurred in storing vehicles
with a Stop Sale - Stop Drive recall or manufacturer's recall in the
franchisee's possession if the parts or procedures are not yet
available to repair the recall of the vehicle. For purposes of this
paragraph, adequate and fair compensation shall be the average daily
amount of ____ dollars ($_____) for each day a vehicle subject to a
Stop Sale - Stop Drive recall or manufacturer's recall is in the
franchisee's possession, the parts or procedures are not yet
available to repair the recall of the vehicle, and the recall repair
has not been made.
11762. (a) This article shall not create any legal duty upon the
dealer, franchisee, rental car company, or private seller related to
the accuracy, errors, or omissions contained in a recall database
report or any legal duty to provide information added to a recall
database after the dealer, franchisee, rental car company, or private
seller obtained the recall database report pursuant to Sections
11754, 11756, and 11758. Nothing in this article shall affect any
legal rights, claims, or remedies otherwise available under law.
(b) The provisions of this article are severable. If any provision
of this article or its application is held invalid, that invalidity
shall not affect other provisions or applications that can be given
effect without the invalid provision or application.
(c) This article does not apply to the sale of a recreational
vehicle, a motorcycle, an off-highway motor vehicle subject to
identification under Section 38010, a vehicle sold by a dismantler
after being reported for dismantling pursuant to Section 11520, or a
vehicle sold by a salvage pool after obtaining a salvage pool
certificate pursuant to Section 11515 or a nonrepairable vehicle
certificate issued pursuant to Section 11515.2.
(d) This article shall become operative on July 1, 2016.
SEC. 8. 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.