BILL ANALYSIS Ó
SENATE COMMITTEE ON TRANSPORTATION AND HOUSING
Senator Jim Beall, Chair
2015 - 2016 Regular
Bill No: AB 287 Hearing Date: 6/21/2016
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|Author: |Gordon |
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|Version: |6/13/2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant|Randy Chinn |
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SUBJECT: Vehicle safety: recalls
DIGEST: This bill establishes various consumer and car dealer
protections for recalled vehicles.
ANALYSIS:
Existing law:
1)Sets forth in federal regulations the requirements for when
manufacturers must notify vehicle owners, dealers, and
distributors about a defect that relates to motor vehicle
safety or noncompliance with a federal motor vehicle safety
standard.
2)Establishes restrictions on when used vehicles may be
advertised as "certified."
3)Requires manufacturers to properly fulfill every warranty
agreement and fairly compensate their dealers for the
diagnostics, repair, servicing and all other conditions of
that obligation.
4)Federal law prohibits a motor vehicle dealer from selling a
new vehicle subject to a recall, as specified, unless and
until the defect is repaired. Federal law does not afford
similar prohibitions to used vehicles.
5)Federal law requires motor vehicle safety recall information
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to be publicly available online and searchable by vehicle
make, model, and vehicle identification number (VIN).
6)Federal law prohibits vehicles which are subject to recall
from being rented, provided the company renting the cars has a
fleet of at least 35 vehicles.
This bill:
1)Includes the cost of disposing of hazardous materials in the
compensation required of the manufacturer to the dealer.
2)Prohibits the advertising of a vehicle subject to a
manufacturer's recall as being "certified."
3)Prohibits the renting or loaning of a vehicle subject to a
manufacturer's recall.
4)Requires the California Department of Motor Vehicles ( DMV),
when mailing a notice of registration renewal, to notify a
vehicle owner if their vehicle is subject to recall.
5)Becomes effective July 1, 2017, with the exception that the
DMV notification requirement becomes effective when the DMV
director declares that the DMV has access to the necessary
recall databases and has available funding to include the
recall disclosure statement in the notice of registration
renewal.
6)Exempts recreational vehicles, motorcycles, and off-highway
motor vehicles from the provisions regarding the use of
"certified" in advertising, the renting or loaning
prohibitions, and the DMV notification provisions.
COMMENTS:
1)Purpose. According to the author, California already has the
strongest consumer protection laws in the country for car
buyers. While federal law prohibits the sale of a new vehicle
with an unrepaired recall, neither federal nor California law
specifically requires the disclosure or repair of a used
vehicle subject to a recall. This bill would further enhance
those protections by ensuring that automobile dealers, rental
car companies, automobile manufacturers, and the government
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all have a role in improving the auto recall and repair
process.
2)Recalls increasing, millions affected. From 1995 to 2015, the
number of vehicle recalls has almost tripled, from 348 to 973,
with more than 87 million vehicles affected in 2015. The
recall of Takata airbags impacts as many as 68.8 million
airbags in what the National Highway Traffic Safety
Administration (NHTSA) called the largest and most complex
safety recall in history.
3)Reimbursing dealers. Current law requires auto manufacturers
to reimburse their dealers for the diagnostics, repair,
servicing and all other conditions of that obligation.
Airbags are considered hazardous waste because of the
inflation mechanism. This bill specifically identifies the
cost of disposing of hazardous waste as a cost the
manufacturers must reimburse to the dealers.
4)Certified, or not? Current law prohibits the use of the term
"certified" in the sale of used vehicles under certain
conditions, including the following:
a) The dealer knows or should have known the odometer
reading is incorrect, the vehicle was reacquired pursuant
to federal or state warranty laws, or the vehicle has frame
damage
b) The vehicle title is noted as salvage, flood, or
unrepairable
This bill also prohibits using the term "certified" to
describe a vehicle with an unremedied manufacturer's recall.
This bill does not prohibit the sale of vehicles subject to
recall.
1)Fixing rentals and loaners. New federal law prohibits rental
car companies and dealers with 35 or more available vehicles
from renting or loaning cars with an unremedied manufacturer's
recall. This bill extends that prohibition to all rental car
companies and dealers, regardless of how many vehicles they
have available. While the bill is silent on an enforcement
mechanism for this provision, the author intends to allow the
DMV to impair the dealer's license as the penalty, as is the
case with similar provisions of the Vehicle Code.
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2)DMV recall notice. The track record for fixing recalled
vehicles is mediocre. NHTSA has estimated that only 70% of
recalled vehicles are repaired. To improve that record, the
NHTSA established a website where the public can determine
whether a vehicle is subject to recall: www.safercar.gov .
This bill tries to improve on that record by requiring the DMV
to indicate on the annual registration renewal notice when a
car is subject to recall. This provision shall be effective
when the DMV director certifies that the department has
adequate funding and access to the appropriate database. The
author's intent is for California to participate in a recently
established federal grant program to fund pilot projects for
state notification to consumers of vehicle recalls.
Implementing this provision may take a while because the DMV
is currently working on a number of IT projects. However,
there is precedent for doing this, as the DMV has an ongoing
program of notifying owners when their vehicle is subject to
an air emissions-related recall and withholding registration
renewal until the equipment is repaired.
3)Double-referral. This bill has also been referred to the
Senate Judiciary Committee. Any amendments will need to be
adopted in that committee.
Related Legislation:
SB 686 (Jackson of 2014) - would have prohibited a vehicle
dealer from selling a used vehicle if the dealer knew or should
have known that the vehicle is subject to a manufacturer's
safety recall and failed to correct the defect. SB 686 failed in
the Assembly Business, Professions, and Consumer Protection
Committee.
AB 753 (Monning of 2011) - would have prohibited rental car
companies from renting a vehicle that is subject to a federal
safety recall unless specific conditions are met. AB 753 would
have also prohibited a rental car company from selling a vehicle
subject to a federal safety recall. This bill failed in the
Senate Appropriations Committee.
Assembly Votes:
Floor: 76-0
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Appr: 16-0
P&CP: 11-0
Trans: 16-0
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes
Local: Yes
POSITIONS: (Communicated to the committee before noon on
Wednesday,
June 15, 2016.)
SUPPORT:
California New Car Dealers Association
Independent Automobile Dealers Association of California
OPPOSITION:
(all prior version)
Consumer Action
California Rural Legal Assistance Foundation
Calpirg
Consumer Watchdog
Courage Campaign
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