BILL ANALYSIS Ó
AB 1743
Page 1
ASSEMBLY THIRD READING
AB
1743 (Dababneh)
As Amended May 4, 2016
Majority vote
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Privacy |11-0 |Chau, Wilk, Baker, | |
| | |Calderon, Chang, | |
| | |Cooper, Dababneh, | |
| | |Gatto, Gordon, Low, | |
| | |Olsen | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Judiciary |10-0 |Mark Stone, Wagner, | |
| | |Alejo, Chau, Chiu, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Cristina Garcia, | |
| | |Holden, Maienschein, | |
| | |Ting | |
| | | | |
| | | | |
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AB 1743
Page 2
SUMMARY: Allows motor vehicle sales transactions to be
conducted electronically. Specifically, this bill:
1)Removes the Automobile Sales Finance Act and California
Vehicle Leasing Act from the exclusion clauses of the Uniform
Electronic Transactions Act (UETA) and applies all UETA
requirements to motor vehicle sales transactions.
2)In addition, requires car dealers to:
a) Obtain opt-in consent from the consumer to transact
business electronically and to gather that consent either
on the initial application or in a separate document with
the consent language bolded or otherwise made conspicuous.
b) Allow consumers to opt out of using the electronic
process at any time and create a process or system for the
person to opt out.
c) Neither charge a person who declines to opt in to an
electronic transaction nor provide a discount or incentive
to any person to opt in to an electronic transaction.
3)Provides that in the event of a dispute over a discrepancy
between an electronic copy of the executed contract in the
possession of the seller and a copy of the executed contract
provided to the buyer, there shall be no presumption that
either the seller's copy or the buyer's copy is the accurate
or prevailing copy for purposes of determining the buyer's
obligations. Any provision in a contract that purports to
provide otherwise is void.
4)Clarifies that a vehicle sales transaction using electronic
signatures, as permitted under this bill, must completed and
AB 1743
Page 3
signed electronically at the car dealer's established place of
business.
FISCAL EFFECT: None. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS:
1)Purpose of this bill. This bill is intended to streamline the
vehicle sales process for consumers and car dealerships by
permitting consumers to choose to sign vehicle purchase and
lease contracts electronically. This measure is sponsored by
the California New Car Dealers Association.
2)Electronic transactions. While UETA prohibits the use of
electronic contracts and signatures on automobile sales and
lease contracts, federal law (E-SIGN) permits car sales to be
conducted electronically. In other states, the automotive
financing industry and new car dealers have begun to move to
electronic contracts as a way to modernize the car buying
process, improve sales record retention, and help expedite the
vehicle financing process.
Electronic transactions have a number of significant
advantages including faster service and consumer choice. Many
consumers prefer to conduct transactions small and large
electronically, yet the law prohibits car purchase
transactions from being completed electronically. The author
contends the car buying experience would be a faster, more
convenient experience for consumers if the transaction itself
could be conducted using computers or tablets rather than
stacks of paper.
3)Existing consumer protections, such as a right to cancel,
would be left intact. UETA requires that if notice of a right
AB 1743
Page 4
to cancel has to be provided or sent to a consumer, then doing
so is only permissible electronically if the consumer is
allowed to exercise his or her right to cancel by electronic
means as well. Under current law, consumers are given certain
rights to cancel car sales contracts, and this bill would not
change or limit those rights. In fact, it would keep
consumers on the same playing field as car dealers by allowing
consumers to cancel by electronic means if the car dealer had
chosen to provide them notice of their right to cancel
electronically.
This bill would also not change other consumer protections in
current law, such as the right to a single contract document
containing detailed and itemized costs for the purchase of the
car an any additional products or services, and the federal
law requirement to give the buyer the original Buyers Guide
displayed on the vehicle or an accurate copy that contains all
of the required disclosures and reflects the final warranty
terms between the buyer and seller.
Analysis Prepared by:
Jennie Bretschneider / P. & C.P. / (916)
319-2200
FN: 0002876