BILL ANALYSIS Ó
AB 1178
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ASSEMBLY THIRD READING
AB
1178 (Achadjian)
As Amended March 26, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
|----------------+------+-----------------------+--------------------|
|Transportation |16-0 |Frazier, Achadjian, | |
| | |Baker, Bloom, Chu, | |
| | |Daly, Dodd, Eduardo | |
| | |Garcia, Gomez, Kim, | |
| | |Linder, Medina, | |
| | |Melendez, Nazarian, | |
| | |O'Donnell, Santiago | |
| | | | |
|----------------+------+-----------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, Bloom, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, Eduardo | |
| | |Garcia, Holden, Jones, | |
| | |Quirk, Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Provides that a vehicle manufacturer, manufacturer
branch, distributor, or distributor branch cannot take any adverse
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action against a dealer relative to an export or sale-for-resale
prohibition if the dealer causes the vehicle to be registered in a
state and collects or causes to be collected any applicable sale
or use tax due to the state, as specified.
EXISTING LAW:
1)Charges the Department of Motor Vehicles (DMV) with licensing
and regulating dealers, manufacturers, and distributors of motor
vehicles who conduct business in California.
2)Makes it unlawful for a vehicle manufacturer or distributor to
take specified actions against a vehicle dealer or franchisee.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, 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: 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. Specifically, SB 155 added
provisions that prohibited a vehicle manufacturer or distributor
from taking or threatening to take any adverse action against a
dealer who sold a vehicle to a buyer who then either exported the
vehicle to another country or resold the vehicle unless the
manufacturer's export or sale-for-resale prohibition policy was
provided to the dealer in writing prior to the sale or lease and
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the dealer knew or reasonably should have known of the customer's
intent to export or resell the vehicle. SB 155 further specified
that the dealer processing a vehicle's registration or collecting
taxes on the sold vehicle creates a rebuttable presumption that
the dealer did not have reason to know of the consumer's intent.
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. Additionally these policies excluded the rebuttable
presumption provisions established under SB 155. Thus, 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.
This bill 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. The
author notes that this bill will "strengthen California's law by
prohibiting manufacturers from taking negative actions against a
dealer when a vehicle is exported or resold if the dealer collects
sales tax and registers the vehicle in California."
Analysis Prepared by:
Manny Leon / TRANS. / (916) 319-2093 FN: 0000368
AB 1178
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