BILL ANALYSIS Ó
AB 1178
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
1178 (Achadjian)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: |80-0 |(June 4, 2015) |SENATE: |40-0 |(September 9, |
| | | | | |2015) |
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Original Committee Reference: TRANS.
SUMMARY: Provides that a vehicle manufacturer, manufacturer
branch, distributor, or distributor branch cannot take any
adverse 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.
The Senate amendments:
1)Make declarations and findings related to motor vehicle
franchisor and franchisee relationships.
2)Provide that a manufacturer, as specified, is prohibited from
taking adverse action against a dealer if the manufacturer
fails to provide a dealer with their export or sale-for-resale
AB 1178
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prohibition policy in writing at least 48 hours prior to the
vehicle being sold.
3)Change the required notification period that a manufacturer,
as specified, must provide a dealer with an exporter list from
five days to 48 hours.
4)Establish procedures for the New Motor Vehicle Board (Board)
to hear export and sale-for-resale prohibition hearings
presented by an association, as specified. Provides a sunset
of January 1, 2019 for the Board's authority to hear protests
presented by an association.
5)Provide that in any proceeding where adverse action is being
challenged, the manufacturer, as specified, is required to
have the burden of proof that a dealer was in violation of an
export or sale-for-resale prohibition policy, as specified.
6)Specify that a manufacturer's export or sale-for-resale policy
is prohibited from including provisions that require a dealer
from asking a customer questions pertaining to the customer's
intent, identity, or financial ability to purchase the
vehicle, as specified. Further specifies that the policy is
required to include a provision stating the dealer's
rebuttable presumption if the dealer submits the proper
documentation to register the vehicle and collects applicable
taxes, as specified.
7)Double-joins this bill with AB 759 (Linder) of the current
legislative session to avoid chaptering out conflicts.
8)Make technical, nonsubstantive conforming changes.
EXISTING LAW:
AB 1178
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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 Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
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 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
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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 unless certain conditions are met. 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:
0002293