BILL ANALYSIS Ó
AB 287
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Date of Hearing: May 20, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
287 (Gordon) - As Amended May 4, 2015
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|Policy |Transportation |Vote:|16 - 0 |
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| |Privacy and Consumer | |11 - 0 |
| |Protection | | |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill enacts the Consumer Automotive Recall Safety Act
(Act), effective July 1, 2016, which establishes specified
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prohibitions and conditions, on the sale or lease of used
vehicles and on vehicle rentals, with regard to vehicles subject
to manufacturer recall. This bill also:
1)Prohibits a dealer from selling or leasing a used vehicle-if
the recall database report indicates the vehicle is subject to
a "Stop Sale-Stop Drive" recall or the vehicle is subject to a
manufacturer's recall and the line-make is the same as the
franchise of the dealer-until the recall repair has been made.
2)Requires, if a vehicle subject to a recall is not the same
line-make as the dealer's franchise, the dealer may sell the
vehicle if the dealer discloses the recall to the buyer prior
to the sale and the buyer signs a disclosure acknowledging
that the vehicle is subject to the recall.
3)Prohibits the renting of a vehicle subject to a safety-related
recall until the vehicle is repaired. If the remedy for the
recall is not immediately available, but the recall notice
provides for a temporary repair to eliminate the
safety-related issue, the vehicle can be rented once this
repair is accomplished.
4)Requires a private party selling a motor vehicle to disclose
in writing to the buyer all Stop Sale-Stop Drive recall and
manufacturer recalls, prohibits a buyer from accepting the
vehicle transfer document without this disclosure, and
authorizes the DMV to refuse transfer of title if the buyer
does not also submit his or her written acknowledgement of
receiving the seller's disclosure.
5)Requires a vehicle manufacturer to clearly and conspicuously
display all recall notifications on its website, to provide,
upon request from a consumer seeking to repair a recalled
vehicle, a rental or loaner vehicle at no cost until the parts
and/or procedures become available, and to adequately and
fairly compensate a dealer for costs associated with providing
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a rental or loaner vehicle and storing a recalled vehicle
waiting to be repaired.
6)Directs the DMV's New Motor Vehicle Board (Board) to hear and
decide on disputes between vehicle dealers and manufacturers
related to the Act's payment requirements and obligations.
7)Stipulates that nothing in the Act shall effect any legal
rights, claims, or remedies otherwise available under law.
FISCAL EFFECT:
The DMV will incur additional costs associated with verifying
the inclusion of the recall disclosure and suspending
registration transfer on those transactions that do not contain
the disclosure pending resolution of such cases. Given the
number of transactions involved, costs could be up to several
hundred thousand dollars annually. [Motor Vehicle Account]
COMMENTS:
1)Purpose. This bill is intended to provide a comprehensive
solution to the dangers of recalled automobiles by requiring
used car dealers to check for outstanding recalls, and then
either repair the car before transfer, if the car is the same
line make as the dealer or if the defect is particularly
dangerous, or allow the consumer to provide informed consent
and take the unrepaired car if it is a different line make.
Supporters generally argue that this bill improves consumer
protection by taking the most dangerous cars off the road
while increasing consumer awareness, while opponents claim the
bill misleads consumers about the dangers of the remaining
automobiles while shifting other burdens and risks onto the
consumer. AB 287 is sponsored by the California New Car
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Dealers Association.
According to the author, "Federal regulations now require most
vehicle manufacturers to provide recall information applicable
to the vehicles they manufacture on the Internet and available
to the public. While federal law prohibits the sale of a new
vehicle subject to a recall, neither federal nor California
law addresses used vehicles subject to a recall.
Unfortunately, studies have shown that about one-third of all
recalled vehicles are never repaired by the vehicle's owner?AB
287, the Consumer Automotive Recall Safety Act (CARS Act)
would help address problems related to the sale, lease or
rental of used cars subject to recall.
2)Opposition. Consumers for Auto Reliability and Safety (CARS)
in part argues that the distinction between manufacturer
recalls and Stop Sale-Stop Drive recalls would lead to bad
outcomes: "[T]his bill would create a new, unprecedented,
dangerous and misleading distinction among auto safety recalls
- based not on science, or any federally-established standard,
or on any other objective criteria?.Instead, it would
expressly allow dealers to sell any used vehicle, no matter
how imminent the threat to public safety, or how many deaths
and injuries the safety defect has caused, or will cause,
unless the auto manufacturer - in its sole, subjective
discretion - has chosen to designate the recall as a "Stop
Sale-Stop Drive" recall. This would create the false,
misleading, and dangerous impression that only "Stop Sale -
Stop Drive" safety recalls need to be addressed promptly."
The Association of Global Automakers argues that recalls are
an issue that should be addressed at the federal level, and
notes that the National Highway Traffic Safety Administration
is current reviewing federal regulations in this regard.
3)Prior Legislation. In 2014, SB 686 (Jackson), which would have
prohibited a vehicle dealer from selling a used vehicle if the
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dealer knew or should have known that the vehicle is subject
to a manufacturer's safety recall and failed to correct the
defect, failed passage in the Assembly Business, Professions,
and Consumer Protection Committee.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081