BILL ANALYSIS Ó
AB 1178
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1178 (Achadjian) - As Amended March 26, 2015
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill provides that a vehicle manufacturer, manufacturer
branch, distributor, or distributor branch cannot take any
adverse action against a dealer, relative to an export or
AB 1178
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sale-for-resale prohibition, if the dealer causes the vehicle to
be registered in a state and collects any applicable sale or use
tax due to the state.
FISCAL EFFECT:
Any costs to the New Motor Vehicle Board (NMVB) would be
absorbable with the board's normal operations. (NMVB is a
program within DMV which operates in a quasi-judicial capacity
to resolve disputes between franchise vehicle dealers and
manufacturers/distributors of new motor vehicles and specified
motorsports vehicles.)
COMMENTS:
Background and Purpose. SB 155 (Padilla), Chapter 512, Statutes
of 2013, made a number of changes to the statutory framework
regulating the relationship between vehicle manufacturers and
dealers, including changes to their claims and appeals process,
performance standards, and vehicle export polices.
According to the sponsor, last year a specific manufacturer
adopted several export-dealer policies and sent updated
notifications to franchise dealers of those policy changes.
Both policies established strict liability provisions for
dealers who sold these particular types of vehicles that were
ultimately exported. These franchise dealers could be subject to
penalties if a vehicle was exported even if the franchise dealer
processed the vehicle's registration and collected relevant
taxes.
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AB 1178 is the latest attempt to address issues between vehicle
manufacturers and franchise dealers related to vehicle export
and resale policies by clarifying that a vehicle manufacturer is
prohibited from taking any adverse action against a dealer once
the vehicle's registration and relevant taxes are processed.
Analysis Prepared by:Chuck Nicol / APPR. / (916)
319-2081