Amended in Senate September 4, 2015

Amended in Senate August 31, 2015

Amended in Assembly March 26, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 759


Introduced by Assembly Member Linder

February 25, 2015


An act to amend Sections 3010, 3050.7, 3066, 3067, 3068,begin insert 3070,end insert 3072, 3072.5, 3073, 3074, 3078, 3079, 11705, 11713.1, 11713.3, and 11713.23 of, and to add Sections 3080, 3081, and 3082 to, the Vehicle Code, relating to recreational vehicles.

LEGISLATIVE COUNSEL’S DIGEST

AB 759, as amended, Linder. Recreational vehicles.

(1) Existing law establishes a New Motor Vehicle Board that regulates the activities or practices of a new motor vehicle dealer, manufacturer, manufacturer branch, distributor, distributor branch, or representative, as specified. Existing law regulates the terms and enforcement of recreational vehicle franchise agreements. Existing law requires a franchisor seeking to enter into a franchise establishing an additional motor vehicle dealership within a relevant market area where the same recreational vehicle line-make is represented, or seeking to relocate an existing motor vehicle dealership, to notify the board of that intention. Existing law allows franchisees in that recreational vehicle line-make in the relevant market area to file with the board a protest to establishing or relocating the dealership.

This bill would revise these provisions and would clarify that the above provisions apply to a franchisor seeking to enter into a franchise establishing an additional recreational vehicle dealership, or seeking to relocate an existing recreational vehicle dealership, that has a relevant market area within which the same recreation vehicle line-make is represented.

(2) Existing law generally requires a manufacturer, manufacturer branch, remanufacturer, remanufacturer branch, distributor, distributor branch, transporter, or dealer of vehicles to be licensed by the Department of Motor Vehicles. Existing law allows the department to suspend or revoke a license issued to a dealer upon determining that the person to whom the license was issued has willfully violated specified requirements imposed on new motor vehicle franchisors relating to providing specified information and compensation to franchisees.

This bill would make the above provisions applicable to a recreational vehicle franchisor.

(3) Existing law makes it a violation, punishable as an infraction, for the holder of a dealer’s license to, among other things, advertise or sell a new vehicle of a line-make for which the dealer does not hold a franchise. Under existing law, this prohibition does not apply to a recreational vehicle, as defined.

This bill would make the above prohibitions applicable to recreational vehicles. By increasing the scope of a crime, this bill would impose a state-mandated local program.

(4) Existing law makes it a violation, punishable as an infraction, for a licensed manufacturer or distributor to modify, replace, enter into, relocate, terminate, or refuse to renew a franchise in violation of specified provisions of law.

This bill would make this prohibition subject to additional provisions of law relating to recreational vehicle manufacturers and distributors. By expanding the scope of a crime, this bill would impose a state-mandated local program.

(5) Existing law prohibits a recreational vehicle manufacturer or distributor from selling a new recreational vehicle through a recreational vehicle dealer without having first entered into a written recreational vehicle franchise.

This bill would, following the termination, cancellation, or non-renewal of a recreational vehicle franchise, allow the sale of any new recreational vehicle inventory that was purchased by the recreational vehicle dealer, or shipped by a manufacturer or distributor, during the period that the written recreational vehicle franchise was in effect.

begin insert

(6) This bill would incorporate additional changes to Sections 3050.7 and 11713.3 of the Vehicle Code made by this bill and AB 1178 to take effect if both bills are chaptered and this bill is chaptered last.

end insert
begin delete

(6)

end delete

begin insert(7)end insert 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:

P3    1

SECTION 1.  

Section 3010 of the Vehicle Code is amended to
2read:

3

3010.  

Five members of the board shall constitute a quorum for
4the transaction of business, for the performance of any duty or the
5exercise of any power or authority of the board, except that three
6members of the board, who are not new motor vehicle dealers,
7shall constitute a quorum for the purposes of Article 4
8(commencing with Section 3060)begin delete and Article 5 (commencing with
9Section 3070)end delete
and the consideration of a petition pursuant to
10subdivision (c) of Section 3050 that involves a dispute between a
11franchisee and franchisor.

12

SEC. 2.  

Section 3050.7 of the Vehicle Code is amended to
13read:

14

3050.7.  

(a) The board may adopt stipulated decisions and
15orders, without a hearing pursuant to Section 3066 or 3080, to
16resolve one or more issues raised by a protest or petition filed with
17the board. Whenever the parties to a protest or petition submit a
18proposed stipulated decision and order of the board, a copy of the
19proposed stipulated decision and order shall be transmitted by the
20executive director of the board to each member of the board. The
21proposed stipulated decision and order shall be deemed to be
22adopted by the board unless a member of the board notifies the
23executive director of the board of an objection thereto within 10
P4    1days after that board member has received a copy of the proposed
2stipulated decision and order.

3(b) If the board adopts a stipulated decision and order to resolve
4a protest filed pursuant to Section 3060 or 3070 in which the parties
5stipulate that good cause exists for the termination of the franchise
6of the protestant, and the order provides for a conditional or
7unconditional termination of the franchise of the protestant,
8paragraph (2) of subdivision (a) of Section 3060 and paragraph
9(2) of subdivision (a) of Section 3070, which require a hearing to
10determine whether good cause exists for termination of the
11franchise, is inapplicable to the proceedings. If the stipulated
12decision and order provides for an unconditional termination of
13the franchise, the franchise may be terminated without further
14proceedings by the board. If the stipulated decision and order
15provides for the termination of the franchise, conditioned upon the
16failure of a party to comply with specified conditions, the franchise
17may be terminated upon a determination, according to the terms
18of the stipulated decision and order, that the conditions have not
19been met. If the stipulated decision and order provides for the
20termination of the franchise conditioned upon the occurrence of
21specified conditions, the franchise may be terminated upon a
22determination, according to the terms of the stipulated decision
23and order, that the stipulated conditions have occurred.

24begin insert

begin insertSEC. 2.1.end insert  

end insert

begin insertSection 3050.7 of the end insertbegin insertVehicle Codeend insertbegin insert is amended to
25read:end insert

26

3050.7.  

(a) The board may adopt stipulated decisions and
27orders, without a hearing pursuant to Section 3066,begin insert 3080, or 3085.2end insert
28 to resolve one or more issues raised by a protest or petition filed
29with the board. Whenever the parties to a protest or petition submit
30a proposed stipulated decision and order of the board, a copy of
31the proposed stipulated decision and order shall be transmitted by
32the executive director of the board to each member of the board.
33The proposed stipulated decision and order shall be deemed to be
34adopted by the board unless a member of the board notifies the
35executive director of the board of an objection thereto within 10
36days after that board member has received a copy of the proposed
37stipulated decision and order.

38(b) If the board adopts a stipulated decision and order to resolve
39a protest filed pursuant to Section 3060 or 3070 in which the parties
40stipulate that good cause exists for the termination of the franchise
P5    1of the protestant, and the order provides for a conditional or
2unconditional termination of the franchise of the protestant,
3paragraph (2) of subdivision (a) of Section 3060 and paragraph
4(2) of subdivision (a) of Section 3070, which require a hearing to
5determine whether good cause exists for termination of the
6franchise, is inapplicable to the proceedings. If the stipulated
7decision and order provides for an unconditional termination of
8the franchise, the franchise may be terminated without further
9proceedings by the board. If the stipulated decision and order
10provides for the termination of the franchise, conditioned upon the
11failure of a party to comply with specified conditions, the franchise
12may be terminated upon a determination, according to the terms
13of the stipulated decision and order, that the conditions have not
14been met. If the stipulated decision and order provides for the
15termination of the franchise conditioned upon the occurrence of
16specified conditions, the franchise may be terminated upon a
17determination, according to the terms of the stipulated decision
18and order, that the stipulated conditions have occurred.

begin insert

19(c) This section shall remain in effect only until January 1, 2019,
20and as of that date is repealed, unless a later enacted statute, that
21is enacted before January 1, 2019, deletes or extends that date.

end insert
22begin insert

begin insertSEC. 2.5.end insert  

end insert

begin insertSection 3050.7 is added to the end insertbegin insertVehicle Codeend insertbegin insert, to read:end insert

begin insert
23

begin insert3050.7.end insert  

(a) The board may adopt stipulated decisions and
24orders, without a hearing pursuant to Section 3066 or 3080, to
25resolve one or more issues raised by a protest or petition filed with
26the board. Whenever the parties to a protest or petition submit a
27proposed stipulated decision and order of the board, a copy of the
28proposed stipulated decision and order shall be transmitted by the
29executive director of the board to each member of the board. The
30proposed stipulated decision and order shall be deemed to be
31adopted by the board unless a member of the board notifies the
32executive director of the board of an objection thereto within 10
33days after that board member has received a copy of the proposed
34stipulated decision and order.

35(b) If the board adopts a stipulated decision and order to resolve
36a protest filed pursuant to Section 3060 or 3070 in which the
37parties stipulate that good cause exists for the termination of the
38franchise of the protestant, and the order provides for a conditional
39or unconditional termination of the franchise of the protestant,
40paragraph (2) of subdivision (a) of Section 3060 and paragraph
P6    1(2) of subdivision (a) of Section 3070, which require a hearing to
2determine whether good cause exists for termination of the
3franchise, is inapplicable to the proceedings. If the stipulated
4decision and order provides for an unconditional termination of
5the franchise, the franchise may be terminated without further
6proceedings by the board. If the stipulated decision and order
7provides for the termination of the franchise, conditioned upon
8the failure of a party to comply with specified conditions, the
9franchise may be terminated upon a determination, according to
10the terms of the stipulated decision and order, that the conditions
11have not been met. If the stipulated decision and order provides
12for the termination of the franchise conditioned upon the
13occurrence of specified conditions, the franchise may be terminated
14upon a determination, according to the terms of the stipulated
15decision and order, that the stipulated conditions have occurred.

16(c) This section shall become operative on January 1, 2019.

end insert
17

SEC. 3.  

Section 3066 of the Vehicle Code is amended to read:

18

3066.  

(a) Upon receiving a protest pursuant to Section 3060,
193062, 3064, 3065, or 3065.1, the board shall fix a time within 60
20days of the order, and place of hearing, and shall send by certified
21mail a copy of the order to the franchisor, the protesting franchisee,
22and all individuals and groups that have requested notification by
23the board of protests and decisions of the board. Except in a case
24involving a franchisee who deals exclusively in motorcycles, the
25board or its executive director may, upon a showing of good cause,
26accelerate or postpone the date initially established for a hearing,
27but the hearing shall not be rescheduled more than 90 days after
28the board’s initial order. For the purpose of accelerating or
29postponing a hearing date, “good cause” includes, but is not limited
30to, the effects upon, and any irreparable harm to, the parties or
31interested persons or groups if the request for a change in hearing
32date is not granted. The board or an administrative law judge
33designated by the board shall hear and consider the oral and
34documented evidence introduced by the parties and other interested
35individuals and groups, and the board shall make its decision solely
36on the record so made. Chapter 4.5 (commencing with Section
3711400) of Part 1 of Division 3 of Title 2 of the Government Code
38and Sections 11507.3, 11507.6, 11507.7, 11511, 11511.5, 11513,
3911514, 11515, and 11517 of the Government Code apply to these
40proceedings.

P7    1(b) In a hearing on a protest filed pursuant to Section 3060 or
23062 the franchisor shall have the burden of proof to establish that
3there is good cause to modify, replace, terminate, or refuse to
4continue a franchise. The franchisee shall have the burden of proof
5to establish that there is good cause not to enter into a franchise
6establishing an additional motor vehicle dealership or relocating
7an existing motor vehicle dealership.

8(c) Except as otherwise provided in this chapter, in a hearing
9on a protest alleging a violation of, or filed pursuant to, Section
103064, 3065, or 3065.1, the franchisee shall have the burden of
11proof, but the franchisor has the burden of proof to establish that
12a franchisee acted with intent to defraud the franchisor when that
13issue is material to a protest filed pursuant to Section 3065 or
143065.1.

15(d) A member of the board who is a new motor vehicle dealer
16may not participate in, hear, comment, or advise other members
17upon, or decide, a matter involving a protest filed pursuant to this
18article unless all parties to the protest stipulate otherwise.

19

SEC. 4.  

Section 3067 of the Vehicle Code is amended to read:

20

3067.  

(a) The decision of the board shall be in writing and
21shall contain findings of fact and a determination of the issues
22presented. The decision shall sustain, conditionally sustain,
23overrule, or conditionally overrule the protest. Conditions imposed
24by the board shall be for the purpose of assuring performance of
25binding contractual agreements between franchisees and franchisors
26or otherwise serving the purposes of this article. If the board fails
27to act within 30 days after the hearing, within 30 days after the
28board receives a proposed decision when the case is heard before
29an administrative law judge alone, or within a period necessitated
30by Section 11517 of the Government Code, or as may be mutually
31agreed upon by the parties, then the proposed action shall be
32deemed to be approved. Copies of the board’s decision shall be
33delivered to the parties personally or sent to them by certified mail,
34as well as to all individuals and groups that have requested
35notification by the board of protests and decisions by the board.
36The board’s decision shall be final upon its delivery or mailing
37and a reconsideration or rehearing is not permitted.

38(b) Notwithstanding subdivision (c) of Section 11517 of the
39Government Code, if a protest is heard by an administrative law
40judge alone, 10 days after receipt by the board of the administrative
P8    1law judge’s proposed decision, a copy of the proposed decision
2shall be filed by the board as a public record and a copy shall be
3served by the board on each party and his or her attorney.

4

SEC. 5.  

Section 3068 of the Vehicle Code is amended to read:

5

3068.  

Either party may seek judicial review of final decisions
6of the board. Time for filing for the review shall not be more than
745 days from the date on which the final order of the board is made
8public and is delivered to the parties personally or is sent to them
9by certified mail.

10begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 3070 of the end insertbegin insertVehicle Codeend insertbegin insert is amended to read:end insert

11

3070.  

(a) Notwithstanding Section 20999.1 of the Business
12and Professions Code or the terms of any franchise, a franchisor
13of a dealer of new recreational vehicles, as defined in subdivision
14(a) of Section 18010 of the Health and Safety Code, except a dealer
15who deals exclusively in truck campers, may not terminate or
16refuse to continue a franchise unless all of the following conditions
17are met:

18(1) The franchisee and the board have received written notice
19from the franchisor as follows:

20(A) Sixty days before the effective date thereof setting forth the
21specific grounds for termination or refusal to continue.

22(B) Fifteen days before the effective date thereof setting forth
23the specific grounds with respect to any of the following:

24(i) Transfer of any ownership or interest in the franchise without
25the consent of the franchisor, which consent may not be
26unreasonably withheld.

27(ii) Misrepresentation by the franchisee in applying for the
28franchise.

29(iii) Insolvency of the franchisee, or filing of any petition by or
30against the franchisee under any bankruptcy or receivership law.

31(iv) Any unfair business practice after written warning thereof.

32(v) Failure of the dealer to conduct its customary sales and
33service operations during its customary hours of business for seven
34consecutive business days, giving rise to a good faith belief on the
35part of the franchisor that the recreational vehicle dealer is in fact
36going out of business, except for circumstances beyond the direct
37control of the recreational vehicle dealer or by order of the
38department.

39(C) The written notice shall contain, on the first page thereof
40in at least 12-point bold type and circumscribed by a line to
P9    1segregate it from the rest of the text, one of the following
2statements, whichever is applicable:

3(i) To be inserted when a 60-day notice of termination is given:

4“NOTICE TO DEALER: You have the right to file a protest
5with the NEW MOTOR VEHICLE BOARD in Sacramento and
6have a hearing in which you may protest the termination of your
7franchise under provisions of the California Vehicle Code. You
8must file your protest with the board within 30 calendar days after
9receiving this notice or within 30 days after the end of any appeal
10procedure provided by the franchisor or your protest right will be
11waived.”

12(ii) To be inserted when a 15-day notice of termination is given:

13“NOTICE TO DEALER: You have the right to file a protest
14with the NEW MOTOR VEHICLE BOARD in Sacramento and
15have a hearing in which you may protest the termination of your
16franchise under provisions of the California Vehicle Code. You
17must file your protest with the board within 10 calendar days after
18receiving this notice or within 10 days after the end of any appeal
19procedure provided by the franchisor or your protest right will be
20waived.”

21(2) Except as provided in Section 3050.7, the board finds that
22there is good cause for termination or refusal to continue, following
23a hearing called pursuant to Sectionbegin delete 3066.end deletebegin insert 3080.end insert The franchisee
24may file a protest with the board within 30 days after receiving a
2560-day notice, satisfying the requirements of this section, or within
2630 days after the end of any appeal procedure provided by the
27franchisor, or within 10 days after receiving a 15-day notice,
28satisfying the requirements of this section, or within 10 days after
29the end of any appeal procedure provided by the franchisor. When
30a protest is filed, the board shall advise the franchisor that a timely
31protest has been filed, that a hearing is required pursuant to Section
32begin delete 3066,end deletebegin insert 3080,end insert and that the franchisor may not terminate or refuse to
33continue until the board makes its findings.

34(3) The franchisor has received the written consent of the
35franchisee, or the appropriate period for filing a protest has elapsed.

36(b) (1) Notwithstanding Section 20999.1 of the Business and
37Professions Code or the terms of any franchise, a franchisor of a
38dealer of recreational vehicles may not modify or replace a
39franchise with a succeeding franchise if the modification or
40replacement would substantially affect the franchisee’s sales or
P10   1service obligations or investment, unless the franchisor has first
2given the board and each affected franchisee written notice thereof
3at least 60 days in advance of the modification or replacement.
4Within 30 days of receipt of a notice satisfying the requirements
5of this section, or within 30 days after the end of any appeal
6procedure provided by the franchisor, a franchisee may file a
7protest with the board and the modification or replacement does
8not become effective until there is a finding by the board that there
9is good cause for the modification or replacement. If, however, a
10replacement franchise is the successor franchise to an expiring or
11expired term franchise, the prior franchise shall continue in effect
12until resolution of the protest by the board. In the event of multiple
13protests, hearings shall be consolidated to expedite the disposition
14of the issue.

15(2) The written notice shall contain, on the first page thereof in
16at least 12-point bold type and circumscribed by a line to segregate
17it from the rest of the text, the following statement:

18“NOTICE TO DEALER: Your franchise agreement is being
19modified or replaced. If the modification or replacement will
20substantially affect your sales or service obligations or investment,
21you have the right to file a protest with the NEW MOTOR
22VEHICLE BOARD in Sacramento and have a hearing in which
23you may protest the proposed modification or replacement of your
24franchise under provisions of the California Vehicle Code. You
25must file your protest with the board within 30 calendar days of
26your receipt of this notice or within 30 days after the end of any
27appeal procedure provided by thebegin delete franchiserend deletebegin insert franchisorend insert or your
28protest rights will be waived.”

29

begin deleteSEC. 6.end delete
30begin insertSEC. 7.end insert  

Section 3072 of the Vehicle Code is amended to read:

31

3072.  

(a) (1) Except as otherwise provided in subdivision (b),
32if a franchisor seeks to enter into a franchise establishing an
33additional recreational vehicle dealership, or seeks to relocate an
34existing recreational vehicle dealership, that has a relevant market
35area in which the same recreational vehicle line-make is
36represented, the franchisor shall, in writing, first notify the board
37and each franchisee in that recreational vehicle line-make in the
38relevant market area of the franchisor’s intention to establish an
39additional dealership or to relocate an existing dealership. Within
4020 days of receiving the notice, satisfying the requirements of this
P11   1section, or within 20 days after the end of any appeal procedure
2provided by the franchisor, any franchisee required to be given
3the notice may file with the board a protest to the proposed
4dealership establishment or relocation described in the franchisor’s
5notice. If, within this time, a franchisee files with the board a
6request for additional time to file a protest, the board or its
7executive director, upon a showing of good cause, may grant an
8additional 10 days to file the protest. When a protest is filed, the
9board shall inform the franchisor that a timely protest has been
10filed, that a hearing is required pursuant to Section 3080, and that
11the franchisor shall not establish the proposed dealership or relocate
12the existing dealership until the board has held a hearing as
13provided in Section 3080, nor thereafter, if the board has
14determined that there is good cause for not permitting the
15establishment of the proposed recreational vehicle dealership or
16relocation of the existing recreational vehicle dealership. In the
17event of multiple protests, hearings may be consolidated to expedite
18the disposition of the issue.

19(2) The written notice shall contain, on the first page thereof in
20at least 12-point bold type and circumscribed by a line to segregate
21it from the rest of the text, the following statement:

22“NOTICE TO DEALER: You have the right to file a protest
23with the NEW MOTOR VEHICLE BOARD in Sacramento and
24have a hearing on your protest under the terms of the California
25Vehicle Code if you oppose this action. You must file your protest
26with the board within 20 days of your receipt of this notice, or
27within 20 days after the end of any appeal procedure that is
28provided by us to you. If, within this time, you file with the board
29a request for additional time to file a protest, the board or its
30executive director, upon a showing of good cause, may grant you
31an additional 10 days to file the protest.”

32(b) Subdivision (a) does not apply to any of the following:

33(1) The relocation of an existing dealership to any location that
34is both within the same city as, and within one mile of, the existing
35dealership location.

36(2) The establishment at any location that is both within the
37same city as, and within one-quarter mile of, the location of a
38dealership of the same recreational vehicle line-make that has been
39out of operation for less than 90 days.

P12   1(3) A display of vehicles at a fair, exposition, or similar exhibit
2if no actual sales are made at the event and the display does not
3exceed 30 days. This paragraph may not be construed to prohibit
4a new vehicle dealer from establishing a branch office for the
5purpose of selling vehicles at the fair, exposition, or similar exhibit,
6even though that event is sponsored by a financial institution, as
7defined in Section 31041 of the Financial Code, or by a financial
8institution and a licensed dealer. The establishment of these branch
9offices, however, shall be in accordance with subdivision (a) where
10applicable.

11(4) An annual show sponsored by a national trade association
12of recreational vehicle manufacturers that complies with all of the
13requirements of subdivision (d) of Section 11713.15.

14(c) For the purposes of this section, the reopening of a dealership
15that has not been in operation for one year or more shall be deemed
16the establishment of an additional recreational vehicle dealership.

17(d) For the purposes of this section and Section 3073, a
18“recreational vehicle dealership” or “dealership” is any authorized
19facility at which a franchisee offers for sale or lease, displays for
20sale or lease, or sells or leases new recreational vehicles, as defined
21in subdivision (a) of Section 18010 of the Health and Safety Code.
22A “recreational vehicle dealership” or “dealership” does not include
23a dealer who deals exclusively in truck campers.

24

begin deleteSEC. 7.end delete
25begin insertSEC. 8.end insert  

Section 3072.5 of the Vehicle Code is amended to
26read:

27

3072.5.  

For the purposes of this article, a “recreational vehicle
28line-make” is a group or groups of recreational vehicles defined
29by the terms of a written agreement that complies with Section
30331.3.

31

begin deleteSEC. 8.end delete
32begin insertSEC. 9.end insert  

Section 3073 of the Vehicle Code is amended to read:

33

3073.  

In determining whether good cause has been established
34for not entering into a recreational vehicle franchise or relocating
35an existing dealership of the same recreational vehicle line-make,
36the board shall take into consideration the existing circumstances,
37including, but not limited to, all of the following:

38(a) The permanency of the investment.

39(b) The effect on the retail recreational vehicle business and the
40consuming public in the relevant market area.

P13   1(c) Whether it is injurious to the public welfare for an additional
2recreational vehicle franchise to be established or an existing
3dealership be relocated.

4(d) Whether the franchisees of the same recreational vehicle
5line-make in the relevant market area are providing adequate
6competition and convenient consumer care for the motor vehicles
7of the recreational vehicle line-make in the market area. In making
8this determination, the board shall consider the adequacy of
9recreational vehicle sales and, if required by the franchise, service
10facilities, equipment, supply of vehicle parts, and qualified service
11personnel.

12(e) Whether the establishment of an additional franchise would
13increase competition and therefore be in the public interest.

14

begin deleteSEC. 9.end delete
15begin insertSEC. 10.end insert  

Section 3074 of the Vehicle Code is amended to read:

16

3074.  

(a) A franchisor shall specify to its franchisees the
17delivery and preparation obligations of the franchisees prior to
18delivery of new recreational vehicles to retail buyers. A copy of
19the delivery and preparation obligations, which shall constitute
20the franchisee’s only responsibility for product liability between
21the franchisee and the franchisor but which shall not in any way
22affect the franchisee’s responsibility for product liability between
23the purchaser and either the franchisee or the franchisor, and a
24schedule of compensation to be paid franchisees for the work and
25services they shall be required to perform in connection with the
26delivery and preparation obligations shall be filed with the board
27by franchisors, and shall constitute the compensation as set forth
28on the schedule. The schedule of compensation shall be reasonable,
29with the reasonableness thereof being subject to the approval of
30the board, if a franchisee files a notice of protest with the board.
31In determining the reasonableness of the schedules, the board shall
32consider all relevant circumstances, including, but not limited to,
33the time required to perform each function that the dealer is
34obligated to perform and the appropriate labor rate.

35(b) Upon delivery of the vehicle, the franchisee shall give a
36copy of the delivery and preparation obligations to the purchaser
37and a written certification that the franchisee has fulfilled these
38obligations.

39

begin deleteSEC. 10.end delete
40begin insertSEC. 11.end insert  

Section 3078 of the Vehicle Code is amended to read:

P14   1

3078.  

(a) If the board receives a complaint from a member of
2the public seeking a refund involving the sale or lease of, or a
3replacement of, a recreational vehicle, as defined in subdivision
4(a) of Section 18010 of the Health and Safety Code, from a
5recreational vehicle dealership, as defined in subdivision (d) of
6Section 3072, the board shall recommend that the complainant
7consult with the Department of Consumer Affairs.

8(b) This chapter does not affect a person’s rights regarding a
9transaction involving a recreational vehicle as defined in
10subdivision (a), to maintain an action under any other statute,
11including, but not limited to, applicable provisions of Title 1.7
12(commencing with Section 1790) of Part 4 of Division 3 of the
13Civil Code.

14

begin deleteSEC. 11.end delete
15begin insertSEC. 12.end insert  

Section 3079 of the Vehicle Code is amended to read:

16

3079.  

This article applies only to a recreational vehicle
17franchise entered into or renewed on or after January 1, 2004.

18

begin deleteSEC. 12.end delete
19begin insertSEC. 13.end insert  

Section 3080 is added to the Vehicle Code, to read:

20

3080.  

(a) Upon receiving a protest pursuant to Section 3070,
213072, 3074, 3075, or 3076, the board shall fix a time and place of
22hearing within 60 days of the order, and shall send by certified
23mail a copy of the order to the franchisor, the protesting franchisee,
24and all individuals and groups that have requested notification by
25the board of protests and decisions of the board. The board or its
26executive director may, upon a showing of good cause, accelerate
27or postpone the date initially established for a hearing, but the
28hearing shall not be rescheduled more than 90 days after the board’s
29initial order. For the purpose of accelerating or postponing a
30hearing date, “good cause” includes, but is not limited to, the
31effects upon, and any irreparable harm to, the parties or interested
32persons or groups if the request for a change in hearing date is not
33granted. The board or an administrative law judge designated by
34the board shall hear and consider the oral and documented evidence
35introduced by the parties and other interested individuals and
36groups, and the board shall make its decision solely on the record
37so made. Chapter 4.5 (commencing with Section 11400) of Part
381 of Division 3 of Title 2 of the Government Code and Sections
3911507.3, 11507.6, 11507.7, 11511, 11511.5, 11513, 11514, 11515,
40and 11517 of the Government Code apply to these proceedings.

P15   1(b) In a hearing on a protest filed pursuant to Section 3070 or
23072, the franchisor shall have the burden of proof to establish
3that there is good cause to modify, replace, terminate, or refuse to
4continue a franchise. The franchisee shall have the burden of proof
5to establish that there is good cause not to enter into a franchise
6establishing an additional recreational vehicle dealership or
7relocating an existing recreational vehicle dealership.

8(c) Except as otherwise provided in this chapter, in a hearing
9on a protest alleging a violation of, or filed pursuant to, Section
103074, 3075, or 3076, the franchisee shall have the burden of proof,
11but the franchisor has the burden of proof to establish that a
12franchisee acted with intent to defraud the franchisor when that
13issue is material to a protest filed pursuant to Section 3075 or 3076.

14

begin deleteSEC. 13.end delete
15begin insertSEC. 14.end insert  

Section 3081 is added to the Vehicle Code, to read:

16

3081.  

(a) The decision of the board shall be in writing and
17shall contain findings of fact and a determination of the issues
18presented. The decision shall sustain, conditionally sustain,
19overrule, or conditionally overrule the protest. Conditions imposed
20by the board shall be for the purpose of assuring performance of
21binding contractual agreements between franchisees and franchisors
22or otherwise serving the purposes of this article. If the board fails
23to act within 30 days after the hearing, within 30 days after the
24board receives a proposed decision when the case is heard before
25an administrative law judge alone, or within a period necessitated
26by Section 11517 of the Government Code, or as may be mutually
27agreed upon by the parties, then the proposed action shall be
28deemed to be approved. Copies of the board’s decision shall be
29delivered to the parties personally or sent to them by certified mail,
30as well as to all individuals and groups that have requested
31notification by the board of protests and decisions by the board.
32The board’s decision shall be final upon its delivery or mailing
33and a reconsideration or rehearing is not permitted.

34(b) Notwithstanding subdivision (c) of Section 11517 of the
35Government Code, if a protest is heard by an administrative law
36judge alone, 10 days after receipt by the board of the administrative
37law judge’s proposed decision, a copy of the proposed decision
38shall be filed by the board as a public record and a copy shall be
39served by the board on each party and his or her attorney.

P16   1

begin deleteSEC. 14.end delete
2begin insertSEC. 15.end insert  

Section 3082 is added to the Vehicle Code, to read:

3

3082.  

Either party may seek judicial review of final decisions
4of the board. Time for filing for the review shall not be more than
545 days from the date on which the final order of the board is made
6public and is delivered to the parties personally or is sent to them
7by certified mail.

8

begin deleteSEC. 15.end delete
9begin insertSEC. 16.end insert  

Section 11705 of the Vehicle Code is amended to
10read:

11

11705.  

(a) The department, after notice and hearing, may
12suspend or revoke the license issued to a dealer, transporter,
13manufacturer, manufacturer branch, remanufacturer,
14remanufacturer branch, distributor, or distributor branch upon
15determining that the person to whom the license was issued is not
16lawfully entitled thereto, or has done any of the following:

17(1) Filed an application for the license using a false or fictitious
18name not registered with the proper authorities, or knowingly made
19a false statement or knowingly concealed a material fact, in the
20application for the license.

21(2) Made, or knowingly or negligently permitted, an illegal use
22of the special plates issued to the licensee.

23(3) Used a false or fictitious name, knowingly made a false
24statement, or knowingly concealed a material fact, in an application
25for the registration of a vehicle, or otherwise committed a fraud
26in the application.

27(4) Failed to deliver to a transferee lawfully entitled thereto a
28properly endorsed certificate of ownership.

29(5) Knowingly purchased, sold, or otherwise acquired or
30disposed of a stolen motor vehicle.

31(6) Failed to provide and maintain a clear physical division
32between the type of business licensed pursuant to this chapter and
33any other type of business conducted at the established place of
34business.

35(7) Willfully violated Section 3064, 3065, 3074, or 3075 or any
36rule or regulation adopted pursuant thereto.

37(8) Violated any provision of Division 3 (commencing with
38Section 4000) or any rule or regulation adopted pursuant thereto,
39or subdivision (a) of Section 38200.

P17   1(9) Violated any provision of Division 4 (commencing with
2Section 10500) or any rule or regulation adopted pursuant thereto.

3(10) Violated any provision of Article 1 (commencing with
4Section 11700) of Chapter 4 of Division 5 or any rule or regulation
5adopted pursuant thereto.

6(11) Violated any provision of Part 5 (commencing with Section
710701) of Division 2 of the Revenue and Taxation Code or any
8rule or regulation adopted pursuant thereto.

9(12) Violated any provision of Chapter 2b (commencing with
10Section 2981) of Title 14 of Part 4 of Division 3 of the Civil Code
11or any rule or regulation adopted pursuant thereto.

12(13) Submitted a check, draft, or money order to the department
13for any obligation or fee due the state which was dishonored or
14refused payment upon presentation.

15(14) Has caused any person to suffer any loss or damage by
16reason of any fraud or deceit practiced on that person or fraudulent
17representations made to that person in the course of the licensed
18activity.

19For purposes of this paragraph, “fraud” includes any act or
20omission which is included within the definition of either “actual
21fraud” or “constructive fraud” as defined in Sections 1572 and
221573 of the Civil Code, and “deceit” has the same meaning as
23defined in Section 1710 of the Civil Code. In addition, “fraud”
24and “deceit” include, but are not limited to, a misrepresentation in
25any manner, whether intentionally false or due to gross negligence,
26of a material fact; a promise or representation not made honestly
27and in good faith; an intentional failure to disclose a material fact;
28and any act within Section 484 of the Penal Code.

29For purposes of this paragraph, “person” also includes a
30governmental entity.

31(15) Failed to meet the terms and conditions of an agreement
32entered into pursuant to Section 11707.

33(16) Violated Section 43151, 43152, or 43153 of, or subdivision
34(b) of Section 44072.10 of, the Health and Safety Code.

35(17) Failed to repay a claim paid by the Consumer Motor
36Vehicle Recovery Corporation as provided in subdivision (i) of
37Section 11703.

38(18) As a buy-here-pay-here dealer, violated any provision of
39Chapter 11 (commencing with Section 7500) of Division 3 of the
P18   1Business and Professions Code or any rule or regulation adopted
2pursuant to those provisions.

3(b) Any of the causes specified in this chapter as a cause for
4refusal to issue a license to a transporter, manufacturer,
5manufacturer branch, remanufacturer, remanufacturer branch,
6distributor, distributor branch, or dealer applicant is cause to
7suspend or revoke a license issued to a transporter, manufacturer,
8manufacturer branch, remanufacturer, remanufacturer branch,
9distributor, distributor branch, or dealer.

10(c) Except as provided in Section 11707, every hearing provided
11for in this section shall be conducted pursuant to Chapter 5
12(commencing with Section 11500) of Part 1 of Division 3 of Title
132 of the Government Code.

14

begin deleteSEC. 16.end delete
15begin insertSEC. 17.end insert  

Section 11713.1 of the Vehicle Code is amended to
16read:

17

11713.1.  

It is a violation of this code for the holder of a dealer’s
18license issued under this article to do any of the following:

19(a) Advertise a specific vehicle for sale without identifying the
20vehicle by its model, model-year, and either its license number or
21that portion of the vehicle identification number that distinguishes
22the vehicle from all other vehicles of the same make, model, and
23model-year. Model-year is not required to be advertised for current
24model-year vehicles. Year models are no longer current when
25ensuing year models are available for purchase at retail in
26California. An advertisement that offers for sale a class of new
27vehicles in a dealer’s inventory, consisting of five or more vehicles,
28that are all of the same make, model, and model-year is not required
29to include in the advertisement the vehicle identification numbers
30or license numbers of those vehicles.

31(b) Advertise the total price of a vehicle without including all
32costs to the purchaser at time of sale, except taxes, vehicle
33registration fees, the California tire fee, as defined in Section 42885
34of the Public Resources Code, emission testing charges not
35exceeding fifty dollars ($50), actual fees charged for certificates
36pursuant to Section 44060 of the Health and Safety Code, finance
37charges, and any dealer document processing charge or charge to
38electronically register or transfer the vehicle.

39(c) (1) Exclude from an advertisement of a vehicle for sale that
40there will be added to the advertised total price at the time of sale,
P19   1charges for sales tax, vehicle registration fees, the California tire
2fee, the fee charged by the state for the issuance of a certificate of
3 compliance or noncompliance pursuant to a statute, finance
4charges, a charge to electronically register or transfer the vehicle,
5and a dealer document processing charge.

6(2) The obligations imposed by paragraph (1) are satisfied by
7adding to the advertisement a statement containing no abbreviations
8and that is worded in substantially the following form: “Plus
9government fees and taxes, any finance charges, any dealer
10document processing charge, any electronic filing charge, and any
11emission testing charge.”

12(3) For purposes of paragraph (1), “advertisement” means an
13advertisement in a newspaper, magazine, or direct mail publication
14that is two or more columns in width or one column in width and
15more than seven inches in length, or on a Web page of a dealer’s
16Internet Web site that displays the price of a vehicle offered for
17sale on the Internet, as that term is defined in paragraph (6) of
18subdivision (f) of Section 17538 of the Business and Professions
19Code.

20(d) Represent the dealer document processing charge, electronic
21registration or transfer charge, or emission testing charge, as a
22governmental fee.

23(e) Fail to sell a vehicle to a person at the advertised total price,
24exclusive of taxes, vehicle registration fees, the California tire fee,
25the fee charged by the state for the issuance of a certificate of
26compliance or noncompliance pursuant to a statute, finance
27charges, mobilehome escrow fees, the amount of a city, county,
28or city and county imposed fee or tax for a mobilehome, a dealer
29document processing charge, an electronic registration or transfer
30charge, and a charge for emission testing not to exceed fifty dollars
31($50) plus the actual fees charged for certificates pursuant to
32Section 44060 of the Health and Safety Code, while the vehicle
33remains unsold, unless the advertisement states the advertised total
34price is good only for a specified time and the time has elapsed.
35Advertised vehicles shall be sold at or below the advertised total
36price, with statutorily permitted exclusions, regardless of whether
37the purchaser has knowledge of the advertised total price.

38(f) (1) Advertise for sale, sell, or purchase for resale a new
39vehicle of a line-make for which the dealer does not hold a
40franchise.

P20   1(2) This subdivision does not apply to a transaction involving
2the following:

3(A) A mobilehome.

4(B) A commercial coach, as defined in Section 18001.8 of the
5Health and Safety Code.

6(C) An off-highway motor vehicle subject to identification as
7defined in Section 38012.

8(D) A manufactured home.

9(E) A new vehicle that will be substantially altered or modified
10by a converter prior to resale.

11(F) A commercial vehicle with a gross vehicle weight rating of
12more than 10,000 pounds.

13(G) A vehicle purchased for export and exported outside the
14territorial limits of the United States without being registered with
15the department.

16(H) A vehicle acquired in the ordinary course of business as a
17new vehicle by a dealer franchised to sell that vehicle, if all of the
18following apply:

19(i) The manufacturer or distributor of the vehicle files a
20bankruptcy petition.

21(ii) The franchise agreement of the dealer is terminated,
22canceled, or rejected by the manufacturer or distributor as part of
23the bankruptcy proceedings and the termination, cancellation, or
24rejection is not a result of the revocation by the department of the
25dealer’s license or the dealer’s conviction of a crime.

26(iii) The vehicle is held in the inventory of the dealer on the
27date the bankruptcy petition is filed.

28(iv) The vehicle is sold by the dealer within six months of the
29date the bankruptcy petition is filed.

30(3) Subparagraph (H) of paragraph (2) does not entitle a dealer
31whose franchise agreement has been terminated, canceled, or
32rejected to continue to perform warranty service repairs or continue
33to be eligible to offer or receive consumer or dealer incentives
34offered by the manufacturer or distributor.

35(g) Sell a park trailer, as specified in Section 18009.3 of the
36Health and Safety Code, without disclosing in writing to the
37purchaser that a park trailer is required to be moved by a transporter
38or a licensed manufacturer or dealer under a permit issued by the
39Department of Transportation or a local authority with respect to
40highways under their respective jurisdictions.

P21   1(h) Advertise free merchandise, gifts, or services provided by
2a dealer contingent on the purchase of a vehicle. “Free” includes
3merchandise or services offered for sale at a price less than the
4seller’s cost of the merchandise or services.

5(i) (1) Advertise vehicles, and related goods or services, at a
6specified dealer price, with the intent not to supply reasonably
7expectable demand, unless the advertisement discloses the number
8of vehicles in stock at the advertised price. In addition, whether
9or not there are sufficient vehicles in stock to supply a reasonably
10expectable demand, when phrases such as “starting at,” “from,”
11“beginning as low as,” or words of similar import are used in
12reference to an advertised price, the advertisement shall disclose
13the number of vehicles available at that advertised price.

14(2) For purposes of this subdivision, in a newspaper
15advertisement for a vehicle that is two model-years old or newer,
16the actual phrase that states the number of vehicles in stock at the
17advertised price shall be printed in a type size that is at least equal
18to one-quarter of the type size, and in the same style and color of
19type, used for the advertised price. However, in no case shall the
20phrase be printed in less than 8-point type size, and the phrase
21shall be disclosed immediately above, below, or beside the
22advertised price without intervening words, pictures, marks, or
23symbols.

24(3) The disclosure required by this subdivision is in addition to
25any other disclosure required by this code or any regulation
26regarding identifying vehicles advertised for sale.

27(j) Use “rebate” or similar words, including, but not limited to,
28“cash back,” in advertising the sale of a vehicle unless the rebate
29is expressed in a specific dollar amount and is in fact a rebate
30offered by the vehicle manufacturer or distributor, a finance
31company affiliated with a vehicle manufacturer or distributor, a
32regulated utility, or a governmental entity directly to the retail
33purchaser of the vehicle or to the assignee of the retail purchaser.

34(k) Require a person to pay a higher price for a vehicle and
35related goods or services for receiving advertised credit terms than
36the cash price the same person would have to pay to purchase the
37same vehicle and related goods or services. For the purpose of this
38subdivision, “cash price” has the same meaning as defined in
39subdivision (e) of Section 2981 of the Civil Code.

40(l) Advertise a guaranteed trade-in allowance.

P22   1(m) Misrepresent the authority of a salesperson, representative,
2or agent to negotiate the final terms of a transaction.

3(n) (1) Use “invoice,” “dealer’s invoice,” “wholesale price,”
4or similar terms that refer to a dealer’s cost for a vehicle in an
5advertisement for the sale of a vehicle or advertise that the selling
6 price of a vehicle is above, below, or at either of the following:

7(A) The manufacturer’s or distributor’s invoice price to a dealer.

8(B) A dealer’s cost.

9(2) This subdivision does not apply to either of the following:

10(A) A communication occurring during face-to-face negotiations
11for the purchase of a specific vehicle if the prospective purchaser
12initiates a discussion of the vehicle’s invoice price or the dealer’s
13cost for that vehicle.

14(B) A communication between a dealer and a prospective
15commercial purchaser that is not disseminated to the general public.
16For purposes of this subparagraph, a “commercial purchaser”
17means a dealer, lessor, lessor-retailer, manufacturer,
18remanufacturer, distributor, financial institution, governmental
19entity, or person who purchases 10 or more vehicles during a year.

20(o) Violate a law prohibiting bait and switch advertising,
21including, but not limited to, the guides against bait advertising
22set forth in Part 238 (commencing with Section 238) of Title 16
23of the Code of Federal Regulations, as those regulations read on
24January 1, 1988.

25(p) Make an untrue or misleading statement indicating that a
26vehicle is equipped with all the factory-installed optional equipment
27the manufacturer offers, including, but not limited to, a false
28statement that a vehicle is “fully factory equipped.”

29(q) Affix on a new vehicle a supplemental price sticker
30containing a price that represents the dealer’s asking price that
31exceeds the manufacturer’s suggested retail price unless all of the
32 following occur:

33(1) The supplemental sticker clearly and conspicuously discloses
34in the largest print appearing on the sticker, other than the print
35size used for the dealer’s name, that the supplemental sticker price
36is the dealer’s asking price, or words of similar import, and that it
37is not the manufacturer’s suggested retail price.

38(2) The supplemental sticker clearly and conspicuously discloses
39the manufacturer’s suggested retail price.

P23   1(3) The supplemental sticker lists each item that is not included
2in the manufacturer’s suggested retail price, and discloses the
3additional price of each item. If the supplemental sticker price is
4greater than the sum of the manufacturer’s suggested retail price
5and the price of the items added by the dealer, the supplemental
6sticker price shall set forth that difference and describe it as “added
7mark-up.”

8(r) Advertise an underselling claim, including, but not limited
9to, “we have the lowest prices” or “we will beat any dealer’s price,”
10unless the dealer has conducted a recent survey showing that the
11dealer sells its vehicles at lower prices than another licensee in its
12trade area and maintains records to adequately substantiate the
13claims. The substantiating records shall be made available to the
14department upon request.

15(s) (1) Advertise an incentive offered by the manufacturer or
16distributor if the dealer is required to contribute to the cost of the
17incentive as a condition of participating in the incentive program,
18 unless the dealer discloses in a clear and conspicuous manner that
19dealer participation may affect consumer cost.

20(2) For purposes of this subdivision, “incentive” means anything
21of value offered to induce people to purchase a vehicle, including,
22but not limited to, discounts, savings claims, rebates, below-market
23finance rates, and free merchandise or services.

24(t) Display or offer for sale a used vehicle unless there is affixed
25to the vehicle the Federal Trade Commission’s Buyer’s Guide as
26required by Part 455 of Title 16 of the Code of Federal Regulations.

27(u) Fail to disclose in writing to the franchisor of a new motor
28vehicle dealer the name of the purchaser, date of sale, and the
29vehicle identification number of each new motor vehicle sold of
30the line-make of that franchisor, or intentionally submit to that
31franchisor a false name for the purchaser or false date for the date
32of sale.

33(v) Enter into a contract for the retail sale of a motor vehicle
34 unless the contract clearly and conspicuously discloses whether
35the vehicle is being sold as a new vehicle or a used vehicle, as
36defined in this code.

37(w) Use a simulated check, as defined in subdivision (a) of
38Section 22433 of the Business and Professions Code, in an
39advertisement for the sale or lease of a vehicle.

P24   1(x) Fail to disclose, in a clear and conspicuous manner in at
2least 10-point boldface type on the face of a contract for the retail
3sale of a new motor vehicle that this transaction is, or is not, subject
4to a fee received by an autobroker from the selling new motor
5vehicle dealer, and the name of the autobroker, if applicable.

6(y) Sell or lease a new motor vehicle after October 1, 2012,
7unless the dealer has a contractual agreement with the department
8to be a private industry partner pursuant to Section 1685. This
9subdivision does not apply to the sale or lease of a motorcycle or
10off-highway motor vehicle subject to identification under Section
1138010 or a recreational vehicle as defined in Section 18010 of the
12Health and Safety Code.

13(z) As used in this section, “make” and “model” have the same
14meaning as is provided in Section 565.12 of Title 49 of the Code
15of Federal Regulations.

16

begin deleteSEC. 17.end delete
17begin insertSEC. 18.end insert  

Section 11713.3 of the Vehicle Code is amended to
18read:

19

11713.3.  

It is unlawful and a violation of this code for a
20manufacturer, manufacturer branch, distributor, or distributor
21branch licensed pursuant to this code to do, directly or indirectly
22through an affiliate, any of the following:

23(a) To refuse or fail to deliver in reasonable quantities and within
24a reasonable time after receipt of an order from a dealer having a
25franchise for the retail sale of a new vehicle sold or distributed by
26the manufacturer or distributor, a new vehicle or parts or
27accessories to new vehicles as are covered by the franchise, if the
28vehicle, parts, or accessories are publicly advertised as being
29available for delivery or actually being delivered. This subdivision
30is not violated, however, if the failure is caused by acts or causes
31beyond the control of the manufacturer, manufacturer branch,
32distributor, or distributor branch.

33(b) To prevent or require, or attempt to prevent or require, by
34contract or otherwise, a change in the capital structure of a
35dealership or the means by or through which the dealer finances
36the operation of the dealership, if the dealer at all times meets
37reasonable capital standards agreed to by the dealer and the
38manufacturer or distributor, and if a change in capital structure
39does not cause a change in the principal management or have the
P25   1effect of a sale of the franchise without the consent of the
2manufacturer or distributor.

3(c) To prevent or require, or attempt to prevent or require, a
4dealer to change the executive management of a dealership, other
5than the principal dealership operator or operators, if the franchise
6was granted to the dealer in reliance upon the personal
7qualifications of that person.

8(d) (1) Except as provided in subdivision (t), to prevent or
9require, or attempt to prevent or require, by contract or otherwise,
10a dealer, or an officer, partner, or stockholder of a dealership, the
11sale or transfer of a part of the interest of any of them to another
12person. A dealer, officer, partner, or stockholder shall not, however,
13have the right to sell, transfer, or assign the franchise, or a right
14thereunder, without the consent of the manufacturer or distributor
15except that the consent shall not be unreasonably withheld.

16(2) (A) For the transferring franchisee to fail, prior to the sale,
17transfer, or assignment of a franchisee or the sale, assignment, or
18transfer of all, or substantially all, of the assets of the franchised
19business or a controlling interest in the franchised business to
20another person, to notify the manufacturer or distributor of the
21franchisee’s decision to sell, transfer, or assign the franchise. The
22notice shall be in writing and shall include all of the following:

23(i) The proposed transferee’s name and address.

24(ii) A copy of all of the agreements relating to the sale,
25assignment, or transfer of the franchised business or its assets.

26(iii) The proposed transferee’s application for approval to
27become the successor franchisee. The application shall include
28forms and related information generally utilized by the
29manufacturer or distributor in reviewing prospective franchisees,
30if those forms are readily made available to existing franchisees.
31As soon as practicable after receipt of the proposed transferee’s
32application, the manufacturer or distributor shall notify the
33franchisee and the proposed transferee of information needed to
34make the application complete.

35(B) For the manufacturer or distributor, to fail, on or before 60
36days after the receipt of all of the information required pursuant
37to subparagraph (A), or as extended by a written agreement
38between the manufacturer or distributor and the franchisee, to
39notify the franchisee of the approval or the disapproval of the sale,
40transfer, or assignment of the franchise. The notice shall be in
P26   1writing and shall be personally served or sent by certified mail,
2return receipt requested, or by guaranteed overnight delivery
3service that provides verification of delivery and shall be directed
4to the franchisee. A proposed sale, assignment, or transfer shall
5be deemed approved, unless disapproved by the franchisor in the
6manner provided by this subdivision. If the proposed sale,
7assignment, or transfer is disapproved, the franchisor shall include
8in the notice of disapproval a statement setting forth the reasons
9for the disapproval.

10(3) In an action in which the manufacturer’s or distributor’s
11withholding of consent under this subdivision or subdivision (e)
12is an issue, whether the withholding of consent was unreasonable
13is a question of fact requiring consideration of all the existing
14circumstances.

15(e) To prevent, or attempt to prevent, a dealer from receiving
16fair and reasonable compensation for the value of the franchised
17business. There shall not be a transfer or assignment of the dealer’s
18franchise without the consent of the manufacturer or distributor,
19which consent shall not be unreasonably withheld or conditioned
20upon the release, assignment, novation, waiver, estoppel, or
21modification of a claim or defense by the dealer.

22(f) To obtain money, goods, services, or another benefit from
23a person with whom the dealer does business, on account of, or in
24relation to, the transaction between the dealer and that other person,
25other than for compensation for services rendered, unless the
26benefit is promptly accounted for, and transmitted to, the dealer.

27(g) (1) Except as provided in paragraph (3), to obtain from a
28dealer or enforce against a dealer an agreement, provision, release,
29assignment, novation, waiver, or estoppel that does any of the
30following:

31(A) Modifies or disclaims a duty or obligation of a manufacturer,
32manufacturer branch, distributor, distributor branch, or
33representative, or a right or privilege of a dealer, pursuant to
34Chapter 4 (commencing with Section 11700) of Division 5 or
35Chapter 6 (commencing with Section 3000) of Division 2.

36(B) Limits or constrains the right of a dealer to file, pursue, or
37submit evidence in connection with a protest before the board.

38(C) Requires a dealer to terminate a franchise.

39(D) Requires a controversy between a manufacturer,
40manufacturer branch, distributor, distributor branch, or
P27   1representative and a dealer to be referred to a person for a binding
2determination. However, this subparagraph does not prohibit
3arbitration before an independent arbitrator, provided that whenever
4a motor vehicle franchise contract provides for the use of arbitration
5to resolve a controversy arising out of, or relating to, that contract,
6arbitration may be used to settle the controversy only if, after the
7controversy arises, all parties to the controversy consent in writing
8to use arbitration to settle the controversy. For the purpose of this
9subparagraph, the terms “motor vehicle” and “motor vehicle
10franchise contract” shall have the same meaning as defined in
11Section 1226 of Title 15 of the United States Code. If arbitration
12is elected to settle a dispute under a motor vehicle franchise
13contract, the arbitrator shall provide the parties to the arbitration
14with a written explanation of the factual and legal basis for the
15award.

16(2) An agreement, provision, release, assignment, novation,
17waiver, or estoppel prohibited by this subdivision shall be
18unenforceable and void.

19(3) This subdivision does not do any of the following:

20(A) Limit or restrict the terms upon which parties to a protest
21before the board, civil action, or other proceeding can settle or
22resolve, or stipulate to evidentiary or procedural matters during
23the course of, a protest, civil action, or other proceeding.

24(B) Affect the enforceability of any stipulated order or other
25order entered by the board.

26(C) Affect the enforceability of any provision in a contract if
27the provision is not prohibited under this subdivision or any other
28law.

29(D) Affect the enforceability of a provision in any contract
30entered into on or before December 31, 2011.

31(E) Prohibit a dealer from waiving its right to file a protest
32pursuant to Section 3065.1 if the waiver agreement is entered into
33after a franchisor incentive program claim has been disapproved
34by the franchisor and the waiver is voluntarily given as part of an
35agreement to settle that claim.

36(F) Prohibit a voluntary agreement supported by valuable
37consideration, other than granting or renewing a franchise, that
38does both of the following:

39(i) Provides that a dealer establish or maintain exclusive
40facilities, personnel, or display space or provides that a dealer
P28   1make a material alteration, expansion, or addition to a dealership
2facility.

3(ii) Contains no waiver or other provision prohibited by
4subparagraph (A), (B), (C), or (D) of paragraph (1).

5(G) Prohibit an agreement separate from the franchise agreement
6that implements a dealer’s election to terminate the franchise if
7the agreement is conditioned only on a specified time for
8termination or payment of consideration to the dealer.

9(H) (i) Prohibit a voluntary waiver agreement, supported by
10valuable consideration, other than the consideration of renewing
11a franchise, to waive the right of a dealer to file a protest under
12Section 3062 for the proposed establishment or relocation of a
13specific proposed dealership, if the waiver agreement provides all
14of the following:

15(I) The approximate address at which the proposed dealership
16will be located.

17(II) The planning potential used to establish the proposed
18dealership’s facility, personnel, and capital requirements.

19(III) An approximation of projected vehicle and parts sales, and
20number of vehicles to be serviced at the proposed dealership.

21(IV) Whether the franchisor or affiliate will hold an ownership
22interest in the proposed dealership or real property of the proposed
23dealership, and the approximate percentage of any franchisor or
24affiliate ownership interest in the proposed dealership.

25(V) The line-makes to be operated at the proposed dealership.

26(VI) If known at the time the waiver agreement is executed, the
27identity of the dealer who will operate the proposed dealership.

28(VII) The date the waiver agreement is to expire, which may
29not be more than 30 months after the date of execution of the
30waiver agreement.

31(ii) Notwithstanding the provisions of a waiver agreement
32entered into pursuant to the provisions of this subparagraph, a
33dealer may file a protest under Section 3062 if any of the
34information provided pursuant to clause (i) has become materially
35inaccurate since the waiver agreement was executed. Any
36determination of the enforceability of a waiver agreement shall be
37determined by the board and the franchisor shall have the burden
38 of proof.

39(h) To increase prices of motor vehicles that the dealer had
40ordered for private retail consumers prior to the dealer’s receipt
P29   1of the written official price increase notification. A sales contract
2signed by a private retail consumer is evidence of the order. In the
3event of manufacturer price reductions, the amount of the reduction
4received by a dealer shall be passed on to the private retail
5consumer by the dealer if the retail price was negotiated on the
6basis of the previous higher price to the dealer. Price reductions
7apply to all vehicles in the dealer’s inventory that were subject to
8the price reduction. Price differences applicable to new model or
9series motor vehicles at the time of the introduction of new models
10or series shall not be considered a price increase or price decrease.
11This subdivision does not apply to price changes caused by either
12of the following:

13(1) The addition to a motor vehicle of required or optional
14equipment pursuant to state or federal law.

15(2) Revaluation of the United States dollar in the case of a
16foreign-make vehicle.

17(i) To fail to pay to a dealer, within a reasonable time following
18receipt of a valid claim by a dealer thereof, a payment agreed to
19be made by the manufacturer or distributor to the dealer by reason
20of the fact that a new vehicle of a prior year model is in the dealer’s
21inventory at the time of introduction of new model vehicles.

22(j) To deny the widow, widower, or heirs designated by a
23deceased owner of a dealership the opportunity to participate in
24the ownership of the dealership or successor dealership under a
25valid franchise for a reasonable time after the death of the owner.

26(k) To offer refunds or other types of inducements to a person
27for the purchase of new motor vehicles of a certain line-make to
28be sold to the state or a political subdivision of the state without
29making the same offer to all other dealers in the same line-make
30within the relevant market area.

31(l) To modify, replace, enter into, relocate, terminate, or refuse
32to renew a franchise in violation of Article 4 (commencing with
33Section 3060) or Article 5 (commencing with Section 3070) of
34Chapter 6 of Division 2.

35(m) To employ a person as a representative who has not been
36licensed pursuant to Article 3 (commencing with Section 11900)
37of Chapter 4 of Division 5.

38(n) To deny a dealer the right of free association with another
39dealer for a lawful purpose.

P30   1(o) (1) To compete with a dealer in the same line-make
2operating under an agreement or franchise from a manufacturer
3or distributor in the relevant market area.

4(2) A manufacturer, branch, orbegin delete distributor,end deletebegin insert distributorend insert or an
5entity thatbegin delete controls,end deletebegin insert controlsend insert or is controlledbegin delete by,end deletebegin insert byend insert a manufacturer,
6branch, or distributor, shall not, however, be deemed to be
7competing in the following limited circumstances:

8(A) Owning or operating a dealership for a temporary period,
9not to exceed one year at the location of a former dealership of the
10same line-make that has been out of operation for less than six
11months. However, after a showing of good cause by a
12manufacturer, branch, or distributor that it needs additional time
13to operate a dealership in preparation for sale to a successor
14independent franchisee, the board may extend the time period.

15(B) Owning an interest in a dealer as part of a bona fide dealer
16development program that satisfies all of the following
17requirements:

18(i) The sole purpose of the program is to make franchises
19available to persons lacking capital, training, business experience,
20or other qualities ordinarily required of prospective franchisees
21and the dealer development candidate is an individual who is
22unable to acquire the franchise without assistance of the program.

23(ii) The dealer development candidate has made a significant
24investment subject to loss in the franchised business of the dealer.

25(iii) The program requires the dealer development candidate to
26manage the day-to-day operations and business affairs of the dealer
27and to acquire, within a reasonable time and on reasonable terms
28and conditions, beneficial ownership and control of a majority
29interest in the dealer and disassociation of any direct or indirect
30ownership or control by the manufacturer, branch, or distributor.

31(C) Owning a wholly owned subsidiary corporation of a
32distributor that sells motor vehicles at retail, if, for at least three
33years prior to January 1, 1973, the subsidiary corporation has been
34a wholly owned subsidiary of the distributor and engaged in the
35sale of vehicles at retail.

36(3) (A) A manufacturer, branch, and distributor that owns or
37operates a dealership in the manner described in subparagraph (A)
38of paragraph (2) shall give written notice to the board, within 10
39days, each time it commences or terminates operation of a
P31   1dealership and each time it acquires, changes, or divests itself of
2an ownership interest.

3(B) A manufacturer, branch, and distributor that owns an interest
4in a dealer in the manner described in subparagraph (B) of
5paragraph (2) shall give written notice to the board, annually, of
6the name and location of each dealer in which it has an ownership
7interest, the name of the bona fide dealer development owner or
8owners, and the ownership interests of each owner expressed as a
9percentage.

10(p) To unfairly discriminate among its franchisees with respect
11to warranty reimbursement or authority granted to its franchisees
12to make warranty adjustments with retail customers.

13(q) To sell vehicles to a person not licensed pursuant to this
14chapter for resale.

15(r) To fail to affix an identification number to a park trailer, as
16described in Section 18009.3 of the Health and Safety Code, that
17is manufactured on or after January 1, 1987, and that does not
18clearly identify the unit as a park trailer to the department. The
19configuration of the identification number shall be approved by
20the department.

21(s) To dishonor a warranty, rebate, or other incentive offered
22to the public or a dealer in connection with the retail sale of a new
23motor vehicle, based solely upon the fact that an autobroker
24arranged or negotiated the sale. This subdivision shall not prohibit
25the disallowance of that rebate or incentive if the purchaser or
26dealer is ineligible to receive the rebate or incentive pursuant to
27any other term or condition of a rebate or incentive program.

28(t) To exercise a right of first refusal or other right requiring a
29franchisee or an owner of the franchise to sell, transfer, or assign
30to the franchisor, or to a nominee of the franchisor, all or a material
31part of the franchised business or of the assets of the franchised
32business unless all of the following requirements are met:

33(1) The franchise authorizes the franchisor to exercise a right
34of first refusal to acquire the franchised business or assets of the
35franchised business in the event of a proposed sale, transfer, or
36assignment.

37(2) The franchisor gives written notice of its exercise of the
38right of first refusal no later than 45 days after the franchisor
39receives all of the information required pursuant to subparagraph
40(A) of paragraph (2) of subdivision (d).

P32   1(3) The sale, transfer, or assignment being proposed relates to
2not less than all or substantially all of the assets of the franchised
3business or to a controlling interest in the franchised business.

4(4) The proposed transferee is neither a family member of an
5owner of the franchised business, nor a managerial employee of
6the franchisee owning 15 percent or more of the franchised
7business, nor a corporation, partnership, or other legal entity owned
8by the existing owners of the franchised business. For purposes of
9this paragraph, a “family member” means the spouse of an owner
10of the franchised business, the child, grandchild, brother, sister,
11or parent of an owner, or a spouse of one of those family members.
12This paragraph does not limit the rights of the franchisor to
13disapprove a proposed transferee as provided in subdivision (d).

14(5) Upon the franchisor’s exercise of the right of first refusal,
15the consideration paid by the franchisor to the franchisee and
16owners of the franchised business shall equal or exceed all
17consideration that each of them were to have received under the
18terms of, or in connection with, the proposed sale, assignment, or
19transfer, and the franchisor shall comply with all the terms and
20conditions of the agreement or agreements to sell, transfer, or
21assign the franchised business.

22(6) The franchisor shall reimburse the proposed transferee for
23expenses paid or incurred by the proposed transferee in evaluating,
24investigating, and negotiating the proposed transfer to the extent
25those expenses do not exceed the usual, customary, and reasonable
26fees charged for similar work done in the area in which the
27 franchised business is located. These expenses include, but are not
28limited to, legal and accounting expenses, and expenses incurred
29for title reports and environmental or other investigations of real
30property on which the franchisee’s operations are conducted. The
31proposed transferee shall provide the franchisor a written
32itemization of those expenses, and a copy of all nonprivileged
33reports and studies for which expenses were incurred, if any, within
3430 days of the proposed transferee’s receipt of a written request
35from the franchisor for that accounting. The franchisor shall make
36payment within 30 days of exercising the right of first refusal.

37(u) (1) To unfairly discriminate in favor of a dealership owned
38or controlled, in whole or in part, by a manufacturer or distributor
39or an entity that controls or is controlled by the manufacturer or
P33   1distributor. Unfair discrimination includes, but is not limited to,
2the following:

3(A) The furnishing to a franchisee or dealer that is owned or
4controlled, in whole or in part, by a manufacturer, branch, or
5distributor of any of the following:

6(i) A vehicle that is not made available to each franchisee
7pursuant to a reasonable allocation formula that is applied
8uniformly, and a part or accessory that is not made available to all
9franchisees on an equal basis when there is no reasonable allocation
10formula that is applied uniformly.

11(ii) A vehicle, part, or accessory that is not made available to
12each franchisee on comparable delivery terms, including the time
13of delivery after the placement of an order. Differences in delivery
14terms due to geographic distances or other factors beyond the
15control of the manufacturer, branch, or distributor shall not
16constitute unfair competition.

17(iii) Information obtained from a franchisee by the manufacturer,
18branch, or distributor concerning the business affairs or operations
19of a franchisee in which the manufacturer, branch, or distributor
20does not have an ownership interest. The information includes,
21but is not limited to, information contained in financial statements
22and operating reports, the name, address, or other personal
23information or buying, leasing, or service behavior of a dealer
24customer, and other information that, if provided to a franchisee
25or dealer owned or controlled by a manufacturer or distributor,
26would give that franchisee or dealer a competitive advantage. This
27clause does not apply if the information is provided pursuant to a
28subpoena or court order, or to aggregated information made
29available to all franchisees.

30(iv) Sales or service incentives, discounts, or promotional
31programs that are not made available to all California franchises
32of the same line-make on an equal basis.

33(B) Referring a prospective purchaser or lessee to a dealer in
34which a manufacturer, branch, or distributor has an ownership
35interest, unless the prospective purchaser or lessee resides in the
36area of responsibility assigned to that dealer or the prospective
37purchaser or lessee requests to be referred to that dealer.

38(2) This subdivision does not prohibit a franchisor from granting
39a franchise to prospective franchisees or assisting those franchisees
40during the course of the franchise relationship as part of a program
P34   1or programs to make franchises available to persons lacking capital,
2training, business experience, or other qualifications ordinarily
3required of prospective franchisees.

4(v) (1) To access, modify, or extract information from a
5confidential dealer computer record, as defined in Section
611713.25, without obtaining the prior written consent of the dealer
7and without maintaining administrative, technical, and physical
8safeguards to protect the security, confidentiality, and integrity of
9the information.

10(2) Paragraph (1) does not limit a duty that a dealer may have
11to safeguard the security and privacy of records maintained by the
12dealer.

13(w) (1) To use electronic, contractual, or other means to prevent
14or interfere with any of the following:

15(A) The lawful efforts of a dealer to comply with federal and
16state data security and privacy laws.

17(B) The ability of a dealer to do either of the following:

18(i) Ensure that specific data accessed from the dealer’s computer
19system is within the scope of consent specified in subdivision (v).

20(ii) Monitor specific data accessed from or written to the dealer’s
21computer system.

22(2) Paragraph (1) does not limit a duty that a dealer may have
23to safeguard the security and privacy of records maintained by the
24dealer.

25(x) (1) To unfairly discriminate against a franchisee selling a
26service contract, debt cancellation agreement, maintenance
27agreement, or similar product not approved, endorsed, sponsored,
28or offered by the manufacturer, manufacturer branch, distributor,
29or distributor branch or affiliate. For purposes of this subdivision,
30unfair discrimination includes, but is not limited to, any of the
31following:

32(A) Express or implied statements that the dealer is under an
33obligation to exclusively sell or offer to sell service contracts, debt
34cancellation agreements, or similar products approved, endorsed,
35sponsored, or offered by the manufacturer, manufacturer branch,
36distributor, or distributor branch or affiliate.

37(B) Express or implied statements that selling or offering to sell
38service contracts, debt cancellation agreements, maintenance
39agreements, or similar products not approved, endorsed, sponsored,
40or offered by the manufacturer, manufacturer branch, distributor,
P35   1or distributor branch or affiliate, or the failure to sell or offer to
2sell service contracts, debt cancellation agreements, maintenance
3agreements, or similar products approved, endorsed, sponsored,
4or offered by the manufacturer, manufacturer branch, distributor,
5or distributor branch or affiliate will have any negative
6consequences for the dealer.

7(C) Measuring a dealer’s performance under a franchise
8agreement based upon the sale of service contracts, debt
9cancellation agreements, or similar products approved, endorsed,
10sponsored, or offered by the manufacturer, manufacturer branch,
11distributor, or distributor branch or affiliate.

12(D) Requiring a dealer to actively promote the sale of service
13contracts, debt cancellation agreements, or similar products
14approved, endorsed, sponsored, or offered by the manufacturer,
15manufacturer branch, distributor, or distributor branch or affiliate.

16(E) Conditioning access to vehicles or parts, or vehicle sales or
17service incentives upon the sale of service contracts, debt
18cancellation agreements, or similar products approved, endorsed,
19sponsored, or offered by the manufacturer, manufacturer branch,
20distributor, or distributor branch or affiliate.

21(2) Unfair discrimination does not include, and nothing shall
22prohibit a manufacturer from, offering an incentive program to
23vehicle dealers who voluntarily sell or offer to sell service
24contracts, debt cancellation agreements, or similar products
25approved, endorsed, sponsored, or offered by the manufacturer,
26manufacturer branch, distributor, or distributor branch or affiliate,
27if the program does not provide vehicle sales or service incentives.

28(3) This subdivision does not prohibit a manufacturer,
29manufacturer branch, distributor, or distributor branch from
30requiring a franchisee that sells a used vehicle as “certified” under
31a certified used vehicle program established by the manufacturer,
32manufacturer branch, distributor, or distributor branch to provide
33a service contract approved, endorsed, sponsored, or offered by
34the manufacturer, manufacturer branch, distributor, or distributor
35branch.

36(4) Unfair discrimination does not include, and nothing shall
37prohibit a franchisor from requiring a franchisee to provide, the
38following notice prior to the sale of the service contract if the
39service contract is not provided or backed by the franchisor and
40the vehicle is of the franchised line-make:

P36   1
2“Service Contract Disclosure
3The service contract you are purchasing is not provided or backed
4by the manufacturer of the vehicle you are purchasing. The
5manufacturer of the vehicle is not responsible for claims or repairs
6under this service contract.
7_____________________
8Signature of Purchaser”


10(y) To take or threaten to take any adverse action against a dealer
11pursuant to an export or sale-for-resale prohibition because the
12dealer sold or leased a vehicle to a customer who either exported
13the vehicle to a foreign country or resold the vehicle in violation
14of the prohibition, unless the export or sale-for-resale prohibition
15policy was provided to the dealer in writing prior to the sale or
16lease, and the dealer knew or reasonably should have known of
17the customer’s intent to export or resell the vehicle in violation of
18the prohibition at the time of sale or lease. If the dealer causes the
19vehicle to be registered in this or any other state, and collects or
20causes to be collected any applicable sales or use tax due to this
21state, a rebuttable presumption is established that the dealer did
22not have reason to know of the customer’s intent to export or resell
23the vehicle.

24(z) As used in this section, “area of responsibility” is a
25geographic area specified in a franchise that is used by the
26franchisor for the purpose of evaluating the franchisee’s
27performance of its sales and service obligations.

28begin insert

begin insertSEC. 18.1.end insert  

end insert

begin insertSection 11713.3 of the end insertbegin insertVehicle Codeend insertbegin insert is amended to
29read:end insert

30

11713.3.  

It is unlawful and a violation of this code for a
31manufacturer, manufacturer branch, distributor, or distributor
32branch licensed pursuant to this code to do, directly or indirectly
33through an affiliate, any of the following:

34(a) To refuse or fail to deliver in reasonable quantities and within
35a reasonable time after receipt of an order from a dealer having a
36franchise for the retail sale of a new vehicle sold or distributed by
37the manufacturer or distributor, a new vehicle or parts or
38accessories to new vehicles as are covered by the franchise, if the
39vehicle, parts, or accessories are publicly advertised as being
40available for delivery or actually being delivered. This subdivision
P37   1is not violated, however, if the failure is caused by acts or causes
2beyond the control of the manufacturer, manufacturer branch,
3distributor, or distributor branch.

4(b) To prevent or require, or attempt to prevent or require, by
5contract or otherwise, a change in the capital structure of a
6dealership or the means by or through which the dealer finances
7the operation of the dealership, if the dealer at all times meets
8reasonable capital standards agreed to by the dealer and the
9manufacturer or distributor, and if a change in capital structure
10does not cause a change in the principal management or have the
11effect of a sale of the franchise without the consent of the
12manufacturer or distributor.

13(c) To prevent or require, or attempt to prevent or require, a
14dealer to change the executive management of a dealership, other
15than the principal dealership operator or operators, if the franchise
16was granted to the dealer in reliance upon the personal
17qualifications of that person.

18(d) (1) Except as provided in subdivision (t), to prevent or
19require, or attempt to prevent or require, by contract or otherwise,
20a dealer, or an officer, partner, or stockholder of a dealership, the
21sale or transfer of a part of the interest of any of them to another
22person. A dealer, officer, partner, or stockholder shall not, however,
23have the right to sell, transfer, or assign the franchise, or a right
24thereunder, without the consent of the manufacturer or distributor
25except that the consent shall not be unreasonably withheld.

26(2) (A) For the transferring franchisee to fail, prior to the sale,
27transfer, or assignment of a franchisee or the sale, assignment, or
28transfer of all, or substantially all, of the assets of the franchised
29business or a controlling interest in the franchised business to
30another person, to notify the manufacturer or distributor of the
31franchisee’s decision to sell, transfer, or assign the franchise. The
32notice shall be in writing and shall include all of the following:

33(i) The proposed transferee’s name and address.

34(ii) A copy of all of the agreements relating to the sale,
35assignment, or transfer of the franchised business or its assets.

36(iii) The proposed transferee’s application for approval to
37become the successor franchisee. The application shall include
38forms and related information generally utilized by the
39manufacturer or distributor in reviewing prospective franchisees,
40if those forms are readily made available to existing franchisees.
P38   1As soon as practicable after receipt of the proposed transferee’s
2application, the manufacturer or distributor shall notify the
3franchisee and the proposed transferee of information needed to
4make the application complete.

5(B) For the manufacturer or distributor, to fail, on or before 60
6days after the receipt of all of the information required pursuant
7to subparagraph (A), or as extended by a written agreement
8between the manufacturer or distributor and the franchisee, to
9notify the franchisee of the approval or the disapproval of the sale,
10transfer, or assignment of the franchise. The notice shall be in
11writing and shall be personally served or sent by certified mail,
12return receipt requested, or by guaranteed overnight delivery
13service that provides verification of delivery and shall be directed
14to the franchisee. A proposed sale, assignment, or transfer shall
15be deemed approved, unless disapproved by the franchisor in the
16manner provided by this subdivision. If the proposed sale,
17assignment, or transfer is disapproved, the franchisor shall include
18in the notice of disapproval a statement setting forth the reasons
19for the disapproval.

20(3) In an action in which the manufacturer’s or distributor’s
21withholding of consent under this subdivision or subdivision (e)
22is an issue, whether the withholding of consent was unreasonable
23is a question of fact requiring consideration of all the existing
24circumstances.

25(e) To prevent, or attempt to prevent, a dealer from receiving
26fair and reasonable compensation for the value of the franchised
27business. There shall not be a transfer or assignment of the dealer’s
28franchise without the consent of the manufacturer orbegin delete distributor,
29which consentend delete
begin insert distributor. The manufacturer or distributorend insert shall
30notbegin delete beend delete unreasonablybegin delete withheld or conditionedend deletebegin insert withhold consent or
31condition consentend insert
upon the release, assignment, novation, waiver,
32estoppel, or modification of a claim or defense by the dealer.

33(f) To obtain money, goods, services, or another benefit from
34a person with whom the dealer does business, on account of, or in
35relation to, the transaction between the dealer and that other person,
36other than for compensation for services rendered, unless the
37benefit is promptly accounted for, and transmitted to, the dealer.

38(g) (1) Except as provided in paragraph (3), to obtain from a
39dealer or enforce against a dealer an agreement, provision, release,
P39   1assignment, novation, waiver, or estoppel that does any of the
2following:

3(A) Modifies or disclaims a duty or obligation of a manufacturer,
4manufacturer branch, distributor, distributor branch, or
5representative, or a right or privilege of a dealer, pursuant to
6Chapter 4 (commencing with Section 11700) of Division 5 or
7Chapter 6 (commencing with Section 3000) of Division 2.

8(B) Limits or constrains the right of a dealer to file, pursue, or
9submit evidence in connection with a protest before the board.

10(C) Requires a dealer to terminate a franchise.

11(D) Requires a controversy between a manufacturer,
12manufacturer branch, distributor, distributor branch, or
13representative and a dealer to be referred to a person for a binding
14determination. However, this subparagraph does not prohibit
15arbitration before an independent arbitrator, provided that whenever
16a motor vehicle franchise contract provides for the use of arbitration
17to resolve a controversy arising out of, or relating to, that contract,
18arbitration may be used to settle the controversy only if, after the
19controversy arises, all parties to the controversy consent in writing
20to use arbitration to settle the controversy. For the purpose of this
21subparagraph, the terms “motor vehicle” and “motor vehicle
22franchise contract” shall have the same meaning as defined in
23Section 1226 of Title 15 of the United States Code. If arbitration
24is elected to settle a dispute under a motor vehicle franchise
25contract, the arbitrator shall provide the parties to the arbitration
26with a written explanation of the factual and legal basis for the
27award.

28(2) An agreement, provision, release, assignment, novation,
29waiver, or estoppel prohibited by this subdivision shall be
30 unenforceable and void.

31(3) This subdivision does not do any of the following:

32(A) Limit or restrict the terms upon which parties to a protest
33before the board, civil action, or other proceeding can settle or
34resolve, or stipulate to evidentiary or procedural matters during
35the course of, a protest, civil action, or other proceeding.

36(B) Affect the enforceability of any stipulated order or other
37order entered by the board.

38(C) Affect the enforceability of any provision in a contract if
39the provision is not prohibited under this subdivision or any other
40law.

P40   1(D) Affect the enforceability of a provision in any contract
2entered into on or before December 31, 2011.

3(E) Prohibit a dealer from waiving its right to file a protest
4pursuant to Section 3065.1 if the waiver agreement is entered into
5after a franchisor incentive program claim has been disapproved
6by the franchisor and the waiver is voluntarily given as part of an
7agreement to settle that claim.

8(F) Prohibit a voluntary agreement supported by valuable
9consideration, other than granting or renewing a franchise, that
10does both of the following:

11(i) Provides that a dealer establish or maintain exclusive
12facilities, personnel, or display space or provides that a dealer
13make a material alteration, expansion, or addition to a dealership
14facility.

15(ii) Contains no waiver or other provision prohibited by
16subparagraph (A), (B), (C), or (D) of paragraph (1).

17(G) Prohibit an agreement separate from the franchise agreement
18that implements a dealer’s election to terminate the franchise if
19the agreement is conditioned only on a specified time for
20termination or payment of consideration to the dealer.

21(H) (i) Prohibit a voluntary waiver agreement, supported by
22valuable consideration, other than the consideration of renewing
23a franchise, to waive the right of a dealer to file a protest under
24Section 3062 for the proposed establishment or relocation of a
25specific proposed dealership, if the waiver agreement provides all
26of the following:

27(I) The approximate address at which the proposed dealership
28will be located.

29(II) The planning potential used to establish the proposed
30dealership’s facility, personnel, and capital requirements.

31(III) An approximation of projected vehicle and parts sales, and
32number of vehicles to be serviced at the proposed dealership.

33(IV) Whether the franchisor or affiliate will hold an ownership
34interest in the proposed dealership or real property of the proposed
35dealership, and the approximate percentage of any franchisor or
36affiliate ownership interest in the proposed dealership.

37(V) The line-makes to be operated at the proposed dealership.

38(VI) If known at the time the waiver agreement is executed, the
39identity of the dealer who will operate the proposed dealership.

P41   1(VII) The date the waiver agreement is to expire, which may
2not be more than 30 months after the date of execution of the
3waiver agreement.

4(ii) Notwithstanding the provisions of a waiver agreement
5entered into pursuant to the provisions of this subparagraph, a
6dealer may file a protest under Section 3062 if any of the
7information provided pursuant to clause (i) has become materially
8inaccurate since the waiver agreement was executed. Any
9determination of the enforceability of a waiver agreement shall be
10determined by the board and the franchisor shall have the burden
11of proof.

12(h) To increase prices of motor vehicles that the dealer had
13ordered for private retail consumers prior to the dealer’s receipt
14of the written official price increase notification. A sales contract
15signed by a private retail consumer is evidence of the order. In the
16event of manufacturer price reductions, the amount of the reduction
17received by a dealer shall be passed on to the private retail
18consumer by the dealer if the retail price was negotiated on the
19basis of the previous higher price to the dealer. Price reductions
20apply to all vehicles in the dealer’s inventory that were subject to
21the price reduction. Price differences applicable to new model or
22series motor vehicles at the time of the introduction of new models
23or series shall not be considered a price increase or price decrease.
24This subdivision does not apply to price changes caused by either
25of the following:

26(1) The addition to a motor vehicle of required or optional
27equipment pursuant to state or federal law.

28(2) Revaluation of the United States dollar in the case of a
29foreign-make vehicle.

30(i) To fail to pay to a dealer, within a reasonable time following
31receipt of a valid claim by a dealer thereof, a payment agreed to
32be made by the manufacturer or distributor to the dealer by reason
33of the fact that a new vehicle of a prior year model is in the dealer’s
34inventory at the time of introduction of new model vehicles.

35(j) To deny the widow, widower, or heirs designated by a
36deceased owner of a dealership the opportunity to participate in
37the ownership of the dealership or successor dealership under a
38valid franchise for a reasonable time after the death of the owner.

39(k) To offer refunds or other types of inducements to a person
40for the purchase of new motor vehicles of a certain line-make to
P42   1be sold to the state or a political subdivision of the state without
2making the same offer to all other dealers in the same line-make
3within the relevant market area.

4(l) To modify, replace, enter into, relocate, terminate, or refuse
5to renew a franchise in violation of Article 4 (commencing with
6Section 3060)begin insert or Article 5 (commencing with Section 3070)end insert of
7Chapter 6 of Division 2.

8(m) To employ a person as a representative who has not been
9licensed pursuant to Article 3 (commencing with Section 11900)
10of Chapter 4 of Division 5.

11(n) To deny a dealer the right of free association with another
12dealer for a lawful purpose.

13(o) (1) To compete with a dealer in the same line-make
14operating under an agreement or franchise from a manufacturer
15or distributor in the relevant market area.

16(2) A manufacturer, branch, orbegin delete distributorend deletebegin insert distributor,end insert or an
17entity that controls or is controlledbegin delete by,end deletebegin insert byend insert a manufacturer, branch,
18or distributor, shall not, however, be deemed to be competing in
19the following limited circumstances:

20(A) Owning or operating a dealership for a temporary period,
21not to exceed one year at the location of a former dealership of the
22same line-make that has been out of operation for less than six
23months. However, after a showing of good cause by a
24manufacturer, branch, or distributor that it needs additional time
25to operate a dealership in preparation for sale to a successor
26independent franchisee, the board may extend the time period.

27(B) Owning an interest in a dealer as part of a bona fide dealer
28development program that satisfies all of the following
29requirements:

30(i) The sole purpose of the program is to make franchises
31available to persons lacking capital, training, business experience,
32or other qualities ordinarily required of prospective franchisees
33and the dealer development candidate is an individual who is
34unable to acquire the franchise without assistance of the program.

35(ii) The dealer development candidate has made a significant
36investment subject to loss in the franchised business of the dealer.

37(iii) The program requires the dealer development candidate to
38manage the day-to-day operations and business affairs of the dealer
39and to acquire, within a reasonable time and on reasonable terms
40and conditions, beneficial ownership and control of a majority
P43   1interest in the dealer and disassociation of any direct or indirect
2ownership or control by the manufacturer, branch, or distributor.

3(C) Owning a wholly owned subsidiary corporation of a
4 distributor that sells motor vehicles at retail, if, for at least three
5years prior to January 1, 1973, the subsidiary corporation has been
6a wholly owned subsidiary of the distributor and engaged in the
7sale of vehicles at retail.

8(3) (A) A manufacturer, branch, and distributor that owns or
9operates a dealership in the manner described in subparagraph (A)
10of paragraph (2) shall give written notice to the board, within 10
11days, each time it commences or terminates operation of a
12dealership and each time it acquires, changes, or divests itself of
13an ownership interest.

14(B) A manufacturer, branch, and distributor that owns an interest
15in a dealer in the manner described in subparagraph (B) of
16paragraph (2) shall give written notice to the board, annually, of
17the name and location of each dealer in which it has an ownership
18interest, the name of the bona fide dealer development owner or
19owners, and the ownership interests of each owner expressed as a
20percentage.

21(p) To unfairly discriminate among its franchisees with respect
22to warranty reimbursement or authority granted to its franchisees
23to make warranty adjustments with retail customers.

24(q) To sell vehicles to a person not licensed pursuant to this
25chapter for resale.

26(r) To fail to affix an identification number to a park trailer, as
27described in Section 18009.3 of the Health and Safety Code, that
28is manufactured on or after January 1, 1987, and that does not
29clearly identify the unit as a park trailer to the department. The
30configuration of the identification number shall be approved by
31the department.

32(s) To dishonor a warranty, rebate, or other incentive offered
33 to the public or a dealer in connection with the retail sale of a new
34motor vehicle, based solely upon the fact that an autobroker
35arranged or negotiated the sale. This subdivision shall not prohibit
36the disallowance of that rebate or incentive if the purchaser or
37dealer is ineligible to receive the rebate or incentive pursuant to
38any other term or condition of a rebate or incentive program.

39(t) To exercise a right of first refusal or other right requiring a
40franchisee or an owner of the franchise to sell, transfer, or assign
P44   1to the franchisor, or to a nominee of the franchisor, all or a material
2part of the franchised business or of the assets of the franchised
3business unless all of the following requirements are met:

4(1) The franchise authorizes the franchisor to exercise a right
5of first refusal to acquire the franchised business or assets of the
6franchised business in the event of a proposed sale, transfer, or
7assignment.

8(2) The franchisor gives written notice of its exercise of the
9right of first refusal no later than 45 days after the franchisor
10receives all of the information required pursuant to subparagraph
11(A) of paragraph (2) of subdivision (d).

12(3) The sale, transfer, or assignment being proposed relates to
13not less than all or substantially all of the assets of the franchised
14business or to a controlling interest in the franchised business.

15(4) The proposed transferee is neither a family member of an
16owner of the franchised business, nor a managerial employee of
17the franchisee owning 15 percent or more of the franchised
18business, nor a corporation, partnership, or other legal entity owned
19by the existing owners of the franchised business. For purposes of
20this paragraph, a “family member” means the spouse of an owner
21of the franchised business, the child, grandchild, brother, sister,
22or parent of an owner, or a spouse of one of those family members.
23This paragraph does not limit the rights of the franchisor to
24disapprove a proposed transferee as provided in subdivision (d).

25(5) Upon the franchisor’s exercise of the right of first refusal,
26the consideration paid by the franchisor to the franchisee and
27owners of the franchised business shall equal or exceed all
28consideration that each of them were to have received under the
29terms of, or in connection with, the proposed sale, assignment, or
30transfer, and the franchisor shall comply with all the terms and
31conditions of the agreement or agreements to sell, transfer, or
32assign the franchised business.

33(6) The franchisor shall reimburse the proposed transferee for
34expenses paid or incurred by the proposed transferee in evaluating,
35investigating, and negotiating the proposed transfer to the extent
36those expenses do not exceed the usual, customary, and reasonable
37fees charged for similar work done in the area in which the
38franchised business is located. These expenses include, but are not
39limited to, legal and accounting expenses, and expenses incurred
40for title reports and environmental or other investigations of real
P45   1property on which the franchisee’s operations are conducted. The
2proposed transferee shall provide the franchisor a written
3itemization of those expenses, and a copy of all nonprivileged
4reports and studies for which expenses were incurred, if any, within
530 days of the proposed transferee’s receipt of a written request
6from the franchisor for that accounting. The franchisor shall make
7payment within 30 days of exercising the right of first refusal.

8(u) (1) To unfairly discriminate in favor of a dealership owned
9or controlled, in whole or in part, by a manufacturer or distributor
10or an entity that controls or is controlled by the manufacturer or
11distributor. Unfair discrimination includes, but is not limited to,
12the following:

13(A) The furnishing to a franchisee or dealer that is owned or
14controlled, in whole or in part, by a manufacturer, branch, or
15distributor of any of the following:

16(i) A vehicle that is not made available to each franchisee
17pursuant to a reasonable allocation formula that is applied
18uniformly, and a part or accessory that is not made available to all
19franchisees on an equal basis when there is no reasonable allocation
20formula that is applied uniformly.

21(ii) A vehicle, part, or accessory that is not made available to
22each franchisee on comparable delivery terms, including the time
23of delivery after the placement of an order. Differences in delivery
24terms due to geographic distances or other factors beyond the
25control of the manufacturer, branch, or distributor shall not
26constitute unfair competition.

27(iii) Information obtained from a franchisee by the manufacturer,
28branch, or distributor concerning the business affairs or operations
29of a franchisee in which the manufacturer, branch, or distributor
30does not have an ownership interest. The information includes,
31but is not limited to, information contained in financial statements
32and operating reports, the name, address, or other personal
33information or buying, leasing, or service behavior of a dealer
34customer, and other information that, if provided to a franchisee
35or dealer owned or controlled by a manufacturer or distributor,
36would give that franchisee or dealer a competitive advantage. This
37clause does not apply if the information is provided pursuant to a
38subpoena or court order, or to aggregated information made
39available to all franchisees.

P46   1(iv) Sales or service incentives, discounts, or promotional
2programs that are not made available to all California franchises
3of the same line-make on an equal basis.

4(B) Referring a prospective purchaser or lessee to a dealer in
5which a manufacturer, branch, or distributor has an ownership
6interest, unless the prospective purchaser or lessee resides in the
7area of responsibility assigned to that dealer or the prospective
8purchaser or lessee requests to be referred to that dealer.

9(2) This subdivision does not prohibit a franchisor from granting
10a franchise to prospective franchisees or assisting those franchisees
11during the course of the franchise relationship as part of a program
12or programs to make franchises available to persons lacking capital,
13training, business experience, or other qualifications ordinarily
14required of prospective franchisees.

15(v) (1) To access, modify, or extract information from a
16confidential dealer computer record, as defined in Section
1711713.25, without obtaining the prior written consent of the dealer
18and without maintaining administrative, technical, and physical
19safeguards to protect the security, confidentiality, and integrity of
20the information.

21(2) Paragraph (1) does not limit a duty that a dealer may have
22to safeguard the security and privacy of records maintained by the
23dealer.

24(w) (1) To use electronic, contractual, or other means to prevent
25or interfere with any of the following:

26(A) The lawful efforts of a dealer to comply with federal and
27state data security and privacy laws.

28(B) The ability of a dealer to do either of the following:

29(i) Ensure that specific data accessed from the dealer’s computer
30system is within the scope of consent specified in subdivision (v).

31(ii) Monitor specific data accessed from or written to the dealer’s
32computer system.

33(2) Paragraph (1) does not limit a duty that a dealer may have
34to safeguard the security and privacy of records maintained by the
35dealer.

36(x) (1) To unfairly discriminate against a franchisee selling a
37service contract, debt cancellation agreement, maintenance
38agreement, or similar product not approved, endorsed, sponsored,
39 or offered by the manufacturer, manufacturer branch, distributor,
40or distributor branch or affiliate. For purposes of this subdivision,
P47   1unfair discrimination includes, but is not limited to, any of the
2following:

3(A) Express or implied statements that the dealer is under an
4obligation to exclusively sell or offer to sell service contracts, debt
5cancellation agreements, or similar products approved, endorsed,
6sponsored, or offered by the manufacturer, manufacturer branch,
7distributor, or distributor branch or affiliate.

8(B) Express or implied statements that selling or offering to sell
9service contracts, debt cancellation agreements, maintenance
10agreements, or similar products not approved, endorsed, sponsored,
11or offered by the manufacturer, manufacturer branch, distributor,
12or distributor branch or affiliate, or the failure to sell or offer to
13sell service contracts, debt cancellation agreements, maintenance
14agreements, or similar products approved, endorsed, sponsored,
15or offered by the manufacturer, manufacturer branch, distributor,
16or distributor branch or affiliate will have any negative
17consequences for the dealer.

18(C) Measuring a dealer’s performance under a franchise
19agreement based upon the sale of service contracts, debt
20cancellation agreements, or similar products approved, endorsed,
21sponsored, or offered by the manufacturer, manufacturer branch,
22distributor, or distributor branch or affiliate.

23(D) Requiring a dealer to actively promote the sale of service
24contracts, debt cancellation agreements, or similar products
25approved, endorsed, sponsored, or offered by the manufacturer,
26manufacturer branch, distributor, or distributor branch or affiliate.

27(E) Conditioning access to vehicles or parts, or vehicle sales or
28service incentives upon the sale of service contracts, debt
29cancellation agreements, or similar products approved, endorsed,
30sponsored, or offered by the manufacturer, manufacturer branch,
31distributor, or distributor branch or affiliate.

32(2) Unfair discrimination does not include, and nothing shall
33prohibit a manufacturer from, offering an incentive program to
34vehicle dealers who voluntarily sell or offer to sell service
35contracts, debt cancellation agreements, or similar products
36approved, endorsed, sponsored, or offered by the manufacturer,
37manufacturer branch, distributor, or distributor branch or affiliate,
38if the program does not provide vehicle sales or service incentives.

39(3) This subdivision does not prohibit a manufacturer,
40manufacturer branch, distributor, or distributor branch from
P48   1requiring a franchisee that sells a used vehicle as “certified” under
2a certified used vehicle program established by the manufacturer,
3manufacturer branch, distributor, or distributor branch to provide
4a service contract approved, endorsed, sponsored, or offered by
5the manufacturer, manufacturer branch, distributor, or distributor
6branch.

7(4) Unfair discrimination does not include, and nothing shall
8prohibit a franchisor from requiring a franchisee to provide, the
9following notice prior to the sale of the service contract if the
10service contract is not provided or backed by the franchisor and
11the vehicle is of the franchised line-make:
12
13“Service Contract Disclosure
14The service contract you are purchasing is not provided or backed
15by the manufacturer of the vehicle you are purchasing. The
16manufacturer of the vehicle is not responsible for claims or repairs
17under this service contract.
18_____________________
19Signature of Purchaser”


21(y) begin insert(1)end insertbegin insertend insertTo take or threaten to take any adverse action against a
22dealer pursuant to an export or sale-for-resale prohibition because
23the dealer sold or leased a vehicle to a customer who either
24exported the vehicle to a foreign country or resold the vehicle in
25violation of the prohibition, unless the export or sale-for-resale
26prohibition policy was provided to the dealer in writingbegin delete prior toend delete
27begin insert at least 48 hours beforeend insert the sale orbegin delete lease,end deletebegin insert lease of the vehicle,end insert and
28the dealer knew or reasonably should have known of the customer’s
29intent to export or resell the vehicle in violation of thebegin delete prohibition
30at the time of sale or lease.end delete
begin insert prohibition.end insert If the dealer causes the
31vehicle to be registered in this or any other state, and collects or
32causes to be collected any applicable sales or use tax due to this
33state, a rebuttable presumption is established that the dealer did
34not have reason to know of the customer’s intent to export or resell
35the vehicle.begin insert In a proceeding in which a challenge to an adverse
36action is at issue, the manufacturer, manufacturer branch,
37distributor, or distributor branch shall have the burden of proof
38by a preponderance of the evidence to show that the vehicle was
39exported or resold in violation of an export or sale-for-resale
40prohibition policy, that the prohibition policy was provided to the
P49   1dealer in writing at least 48 hours prior to the sale or lease, and
2that the dealer knew or reasonably should have known of the
3customer’s intent to export the vehicle to a foreign country at the
4time of the sale or lease.end insert

begin insert

5(2) An export or sale-for-resale prohibition policy shall not
6include a provision that expressly or implicitly requires a dealer
7to make further inquiries into a customer’s intent, identity, or
8financial ability to purchase or lease a vehicle based on any of the
9customer’s characteristics listed or defined in Section 51 of the
10Civil Code. A policy that is in violation of this paragraph is void
11and unenforceable.

end insert
begin insert

12(3) An export or sale-for-resale prohibition policy shall
13expressly include a provision stating the dealer’s rebuttable
14presumption if the dealer causes the vehicle to be registered in
15this or any other state and collects or causes to be collected any
16applicable sales or use tax. A policy that is in violation of this
17paragraph is void and unenforceable.

end insert

18(z) As used in this section, “area of responsibility”begin delete isend deletebegin insert meansend insert a
19geographic area specified in a franchise that is used by the
20franchisor for the purpose of evaluating the franchisee’s
21performance of its sales and service obligations.

22

begin deleteSEC. 18.end delete
23begin insertSEC. 19.end insert  

Section 11713.23 of the Vehicle Code is amended to
24read:

25

11713.23.  

(a) A recreational vehicle manufacturer,
26manufacturer branch, distributor, or distributor branch licensed
27under this code shall not sell a new recreational vehicle in this
28state to or through a recreational vehicle dealer without having
29first entered into a written recreational vehicle franchise with that
30recreational vehicle dealer, that complies with the requirements
31of Section 331.3 and that has been signed by both parties.

32(b) A recreational vehicle dealer shall not sell a new recreational
33vehicle in this state without having first entered into a written
34recreational vehicle franchise, that complies with the requirements
35of Section 331.3, with a recreational vehicle manufacturer,
36manufacturer branch, distributor, or distributor branch licensed
37under this code, that has been signed by both parties.

38(c) (1) A recreational vehicle manufacturer, manufacturer
39branch, distributor, or distributor branch shall not ship a new
40recreational vehicle to a recreational dealer on or after January 1,
P50   12009, without a recreational vehicle franchise that has been signed
2by both parties.

3(2) A recreational vehicle dealer shall not receive a new
4recreational vehicle from a recreational vehicle manufacturer,
5manufacturer branch, distributor, or distributor branch on or after
6January 1, 2009, without a recreational vehicle franchise that has
7been signed by both parties.

8(d) Any new recreational vehicle inventory that has been
9purchased by a recreational vehicle dealer, or shipped by a
10manufacturer, manufacturer branch, distributor, or distributor
11branch, before January 1, 2009, may be sold at any time without
12a recreational vehicle franchise.

13(e) Following the termination, cancellation, or nonrenewal of
14a recreational vehicle franchise, any new recreational vehicle
15inventory that was purchased by the recreational vehicle dealer,
16or shipped by a manufacturer, manufacturer branch, distributor,
17or distributor branch, during the period that the written recreational
18vehicle franchise was in effect, may be sold by that recreational
19vehicle dealer at any time.

20(f) This section applies only to a dealer and manufacturer
21agreement involving recreational vehicles, as defined in subdivision
22(a) of Section 18010 of the Health and Safety Code, but does not
23include an agreement with a dealer who deals exclusively in truck
24campers.

25begin insert

begin insertSEC. 20.end insert  

end insert
begin insert

Sections 2.1 and 2.5 of this bill incorporate
26amendments to Section 3050.7 of the Vehicle Code proposed by
27both this bill and Assembly Bill 1178. They shall only become
28operative if (1) both bills are enacted and become effective on or
29before January 1, 2016, (2) each bill amends Section 3050.7 of
30the Vehicle Code, and (3) this bill is enacted after Assembly Bill
311178, in which case Section 2 of this bill shall not become
32operative.

end insert
33begin insert

begin insertSEC. 21.end insert  

end insert
begin insert

Section 18.1 of this bill incorporates amendments to
34Section 11713.3 of the Vehicle Code proposed by both this bill
35and Assembly Bill 1178. It shall only become operative if (1) both
36bills are enacted and become effective on or before January 1,
372016, (2) each bill amends Section 11713.3 of the Vehicle Code,
38and (3) this bill is enacted after Assembly Bill 1178, in which case
39Section 18 of this bill shall not become operative.

end insert
P51   1

begin deleteSEC. 19.end delete
2begin insertSEC. 22.end insert  

No reimbursement is required by this act pursuant to
3Section 6 of Article XIII B of the California Constitution because
4the only costs that may be incurred by a local agency or school
5district will be incurred because this act creates a new crime or
6infraction, eliminates a crime or infraction, or changes the penalty
7for a crime or infraction, within the meaning of Section 17556 of
8the Government Code, or changes the definition of a crime within
9the meaning of Section 6 of Article XIII B of the California
10Constitution.



O

    96