BILL ANALYSIS Ó AB 287 Page 1 ASSEMBLY THIRD READING AB 287 (Gordon, et al.) As Amended May 28, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+--------------------+----------------------| |Transportation |16-0 |Frazier, Achadjian, | | | | |Baker, Bloom, | | | | |Campos, Chu, Daly, | | | | |Dodd, Eduardo | | | | |Garcia, Gomez, Kim, | | | | |Linder, Medina, | | | | |Melendez, Nazarian, | | | | |O'Donnell | | | | | | | |----------------+------+--------------------+----------------------| |Privacy |11-0 |Gatto, Wilk, Baker, | | | | |Calderon, Chang, | | | | |Chau, Cooper, | | | | |Dababneh, Dahle, | | | | |Gordon, Low | | | | | | | |----------------+------+--------------------+----------------------| |Appropriations |16-0 |Gomez, Bigelow, | | | | |Calderon, Chang, | | | | |Daly, Eggman, | | | | |Gallagher, Eduardo | | AB 287 Page 2 | | |Garcia, Gordon, | | | | |Holden, Jones, | | | | |Quirk, Rendon, | | | | |Wagner, Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Enacts the Consumer Automotive Recall Safety Act (Act) which requires a motor vehicle dealer to obtain a recall database report within 30 days before sale or offer of a used car, generally requires a used car to be repaired prior to transfer or accepted by the consumer unrepaired after providing informed consent, and prohibits the rental of vehicles subject to a recall. Specifically, this bill: 1) Prohibits a dealer from displaying or offering for sale a used vehicle unless the dealer has obtained a recall database report within 30 days of the display of offer. 2) 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 until the recall repair has been made. 3) Prohibits a dealer from selling or leasing a used vehicle if the recall database report indicates 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. 4) Allows a dealer to sell or lease a used vehicle that is subject to a manufacturer's recall, as specified, if the vehicle is not the same line-make as the franchise of the dealer if the following conditions are satisfied: AB 287 Page 3 a) The dealer provides the recall database report to the consumer disclosing the manufacturer's recall prior to sale or lease; and, b) The consumer signs a disclosure agreement acknowledging the 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. 5) Clarifies that the disclosure by a dealer and acknowledgment by the consumer has no legal effect other than to demonstrate compliance with the law by the dealer, and should not be interpreted to place consumers in a less advantageous legal position than if no disclosure had been made. 6) Specifies that a recall database report and the disclosure agreement signed by the consumer must be provided separate from the conditional sales contract or other purchase agreement. 7) Prohibits a rental car company from renting a vehicle subject to a recall no later than 48 hours after receiving a notice of a recall, or sooner if practicable. 8) Allows a rental car company, 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, to rent the vehicle after having the interim repairs completed. 9) Specifies that once the remedy for the rental vehicle subject to recall becomes available to the rental car company, the rental car company may not rent the vehicle AB 287 Page 4 until repaired. 10) Requires the seller of a motor vehicle, including private party sales, to disclose all recalls related to the vehicle being sold and requires the buyer to provide an acknowledgment form to the Department of Motor Vehicles (DMV) indicating the buyer has received all recall information in order to transfer vehicle registration, as specified, and authorizes the DMV to refuse transfer or registration without that acknowledgment. 11) Requires a vehicle manufacturer to clearly and conspicuously display all recall notifications on its Web site. 12) Requires a vehicle manufacturer to provide, upon request, a consumer seeking to repair a recalled vehicle a rental or loaner vehicle at no cost until the parts and/or procedures become available, as specified. 13) Requires a vehicle manufacturer to adequately and fairly compensate a dealer for costs associated with providing a rental or loaner vehicle and storing a recalled vehicle waiting to be repaired, as specified. 14) Specifies that a vehicle manufacturer shall not provide a consumer with a rental or loaner vehicle that is subject to a Stop Sale- Stop Drive recall or a manufacturer's recall. 15) Provides that a dealer, rental car company, or private seller are not legally responsible for any errors, inaccuracies or omissions contained in the recall database report, nor do such parties have any legal duty to provide information added to a recall database after the dealer, franchisee, rental car company, or private seller obtained AB 287 Page 5 the required recall database report. 16) Further provides that nothing in this bill shall affect any legal rights, claims, or remedies otherwise available under law. 17) Establishes a claims and appeals process, as specified, between vehicle dealers and manufacturers regarding payment requirements and obligations identified in the Act. 18) Directs the DMV's New Motor Vehicle Board (Board) to hear and decide disputes between vehicle dealers and manufacturers related to the Act's payment requirements and obligations. 19) Requires the certificate of ownership for an automobile to contain a provision for a recall disclosure, as specified, as of July 1, 2016, or as soon as the DMV exhausts its existing supply of certificate of ownership forms. 20) Proclaims that it is unlawful and a misdemeanor violation for a manufacturer, as specified, to unfairly discriminate against a dealer based on certain provisions specified in the Act. 21) Excludes recreational vehicles, motorcycles, off-highway motor vehicles, vehicles sold by a salvage pool, and non-repairable vehicles as excluded from the provisions of this bill. 22) Defines the term "area of responsibility" as it pertains to dealer franchise agreements. 23) Declares that the consumer-related provisions of this bill AB 287 Page 6 shall become operable as of July 1, 2016, as specified. FISCAL EFFECT: According to the Assembly Appropriations Committee, minor absorbable cost for the DMV to include the disclosure statement on new certificates of ownership and bills of sale. [Motor Vehicle Account] COMMENTS: 1)Purpose of this bill. 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. Rental car companies would be prohibited from renting a vehicle if they received notice of the recall at least 48 hours in advance. This bill is sponsored by the California New Car Dealers Association. 2)Substantial number of recalls announced annually. According to the author, "[w]hile vehicles have become safer, the number of vehicles subject to a recall has grown dramatically.?2014 saw a new record number of recalls in the United States with more than 63.8 million recalls. This number of recalls is more than twice as many recalls as any previous year and is equivalent to roughly 25% of the vehicles on the road today. Officials predict that 2015 could see another record year, as manufacturers face potential fines from federal regulators, threats of increased litigation, and as the issue receives greater coverage in mainstream media." Analysis Prepared by: AB 287 Page 7 Hank Dempsey / P. & C.P. / (916) 319-2200 FN: 0000825