BILL ANALYSIS Ó
AB 759
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
759 (Linder) - As Amended March 26, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill:
AB 759
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1)Makes several, mostly technical changes to statutes regarding
oversight of RV dealers by the New Motor Vehicle Board
(Board), including creating separate and distinct code
sections for Board oversight procedures of automobile
franchises and RV franchises.
2)Authorizes RV dealers to sell remaining inventory after a
franchise agreement ends.
FISCAL EFFECT:
Minor absorbable costs to the Board.
COMMENTS:
Background and Purpose. The Board was created in 1967 as the New
Car Dealers Policy and Appeals Board. At the time of its
inception, the Board's functions were limited to hearing appeals
that arose from final decisions made by the DMV. In 1973, the
California Automobile Franchise Act gave the Board its present
name and tasked it with regulating and settling disputes in the
new motor vehicle industry. The Board's current mission is to
enhance relations between dealers and manufactures of
automobiles, RV's, and motorcycles by resolving disputes in the
industry in an efficient, fair, and cost-effective manner.
AB 759
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According to the author, existing law contains extensive
provisions relating to the Board's role in resolving franchise
disputes between auto manufacturers and dealers. He notes that
over time, provisions have been added and amendments have been
made to include reference to RV's along with automobiles. The
author notes, however, that inclusion of RV references have been
"spotty" and inconsistent. The author, along with the sponsors,
the Recreational Vehicle Industry Association (RVIA) and the
California Recreational Vehicle Dealers Association (CalRVDA),
contend that separating provisions relating to automobiles from
those relating to RVs with respect to Board oversight is needed
to provide clarity and consistency.
In addition to the technical changes described above, the bill
provides new authority to RV franchises with the respect to sale
of inventory after a franchise agreement is ended. Unlike for
automobiles-where the dealer holds the inventory but it is owned
by the manufacturer, and when an automobile franchise agreement
is ended, the vehicles are simply returned to the
manufacturer-for RVs, the dealer purchases inventory outright
from the manufacturer, thus with termination of a franchise
agreement, the dealer owns the inventory and it is not possible
for them to return unsold RVs to the manufacturer. Instead, the
RV dealer must sell a new RV to recoup their costs. Without the
express authorization, the RV dealer would be required to sell
remaining inventory as "used" since they are technically listed
as the owner. Since there is substantial depreciation on RVs,
this would represent a significant loss to an RV dealer. This
bill therefore codifies the existing practice of RV dealers
being allowed to sell the remaining inventory after a franchise
agreement ends.
AB 759
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Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081