BILL ANALYSIS                                                                                                                                                                                                    



                                                                     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. 












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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