BILL NUMBER: SB 95 ENROLLED
BILL TEXT
PASSED THE SENATE SEPTEMBER 2, 2009
PASSED THE ASSEMBLY AUGUST 20, 2009
AMENDED IN ASSEMBLY JULY 1, 2009
AMENDED IN SENATE MAY 28, 2009
AMENDED IN SENATE MAY 4, 2009
AMENDED IN SENATE APRIL 14, 2009
AMENDED IN SENATE MARCH 16, 2009
INTRODUCED BY Senator Corbett
JANUARY 22, 2009
An act to amend Sections 9262 and 9262.5 of, and to add Section
11709.4 to, the Vehicle Code, relating to vehicles.
LEGISLATIVE COUNSEL'S DIGEST
SB 95, Corbett. California Car Buyers' Protection Act of 2009.
Existing law provides for the issuance of dealer's licenses, and
sets the fees for an original license at $150 and for an annual
renewal at $100. Existing law sets the fees for an original
autobroker's endorsement at $50 and for the annual renewal at $25.
This bill would enact the California Car Buyers' Protection Act of
2009. The bill would impose certain requirements when a dealer
purchases or obtains a vehicle in trade in a retail sale or lease
transaction and the vehicle is subject to a prior credit or lease
balance, relating to the discharge of the credit or balance. The bill
would increase dealer's license and renewal fees to $175 and $125,
respectively. The bill would increase autobroker's endorsement and
renewal fees to $100 and $75, respectively.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known and may be cited as the
California Car Buyers' Protection Act of 2009.
SEC. 2. The Legislature finds and declares all of the following:
(a) Many car buyers have lost confidence in the automotive
marketplace, resulting in a reduction of revenues for sellers, local
and county governments, and the state, contributing to job losses and
the state's overall economic downturn.
(b) During the past year at least 480 new and used licensed auto
dealerships have gone out of business in California, far more than in
any other state, and it is projected that the numbers will continue
to accelerate for the foreseeable future.
(c) When consumers choose to purchase vehicles from auto
dealerships that are licensed by the Department of Motor Vehicles,
they have a reasonable expectation that the dealerships have
sufficient resources to honor their contractual commitments.
(d) Car buyers have no reliable way to know in advance whether an
auto dealer is on the brink of insolvency or is on a sound financial
footing.
(e) When licensed auto dealerships go out of business they often
fail to pay off liens, as agreed, and also fail to honor warranties,
service contracts, and other services for which car buyers have paid
in advance, costing thousands of car buyers millions of dollars in
losses.
(f) The current federal assistance fails to provide any relief for
car buyers, while providing taxpayer dollars to assist the auto
manufacturers, dealers, and workers who are seeking assistance from
the American public; yet it is ultimately car buyers who will
determine the fate of our domestic auto industry by buying cars.
(g) When licensed auto dealerships go out of business without
honoring their obligations, car buyers often face ruinous
consequences, through no fault of their own, resulting in harm to
their credit, repossessions that remain on their credit reports for
seven to 10 years, job losses due to a lack of transportation, home
foreclosures, and bankruptcy.
(h) The Department of Motor Vehicles projects that the current
funding available for the Consumer Recovery Fund (CRF) established by
enactment of Senate Bill 729 of the 2007-08 Regular Session will not
be sufficient to meet all the demands made upon the CRF by car
buyers with legitimate complaints. Even if sufficient funds were
available, there is no authority to provide restitution from the CRF
for losses incurred involving prepaid products, warranties, or
services or to restore the credit of consumers whose credit is harmed
by dealer insolvencies, lost jobs, lost income, or other damages
consumers suffer due to a lack of transportation when vehicles are
repossessed because auto dealers failed to pay off liens as promised.
(i) Honest dealers are also adversely impacted when unscrupulous
auto dealers siphon off business and then harm the credit of their
customers by going out of business without paying liens, as promised,
shrinking the automotive market at precisely the time when it is
sound public policy to expand the market and accelerate sales of
newer, safer, cleaner motor vehicles.
SEC. 3. Section 9262 of the Vehicle Code is amended to read:
9262. (a) The fee for a license issued to dealers and
lessor-retailers is as follows:
(1) For the original license, or an ownership change which
requires a new application, except as provided by Section 42231, a
nonrefundable fee of one hundred seventy-five dollars ($175).
(2) For the annual renewal of a license, a fee of one hundred
twenty-five dollars ($125).
(3) If an alteration of an existing license is caused by a firm
name change, address change, change in the corporate officer
structure, or the addition of a branch location, a fee of seventy
dollars ($70).
(b) The fee for a license issued to dismantlers, manufacturers,
manufacturer branches, remanufacturers, remanufacturer branches,
transporters, distributors, and distributor branches is as follows:
(1) For the original license, or an ownership change which
requires a new application, except as provided by Section 42231, a
nonrefundable fee of one hundred dollars ($100).
(2) For the annual renewal of a license, a fee of eighty-five
dollars ($85).
(3) If an alteration of an existing license is caused by a firm
name change, address change, or the addition of a branch location, a
fee of fifty dollars ($50).
(4) If an alteration of an existing license is caused by a change
in the corporate officer structure, a fee of seventy dollars ($70).
(c) The fee for a license issued to representatives is as follows:
(1) For the original license, or an ownership change which
requires a new application, except as provided by Section 42231, a
nonrefundable fee of fifty dollars ($50).
(2) For the annual renewal of a license, a fee of eighty-five
dollars ($85).
(d) The fee for an autobroker's endorsement to a dealer's license
is as follows:
(1) For the original endorsement, a nonrefundable fee of one
hundred dollars ($100).
(2) For the annual renewal of the endorsement, a fee of
seventy-five dollars ($75).
(e) When the holder of a license for which a fee is provided in
this section applies for special plates as provided in subdivision
(b) of Section 11505 or subdivision (b) of Section 11714, the fee for
the plates and the annual renewal of the plates is the prevailing
vehicle registration fee as set forth in Section 9250 for the period
for which the special plates are issued or renewed.
SEC. 4. Section 9262.5 of the Vehicle Code is amended to read:
9262.5. It is the intent of the Legislature, in amending Section
9262 in 2009 to increase the fee for the annual renewal of the
license of a dealer and of a lessor-retailer to one hundred
twenty-five dollars ($125), that forty dollars ($40) of that fee
shall, when appropriated, be utilized by the department for the
investigation of those dealers and lessor-retailers who demonstrate
the greatest potential for causing losses to consumers as shown by
repeated consumer complaints, habitual violations of the requirements
of their licenses, the issuance of a probationary license by the
department, or a violation of other standards and criteria
established by the department for these purposes.
SEC. 5. Section 11709.4 is added to the Vehicle Code, to read:
11709.4. (a) When a dealer purchases or obtains a vehicle in
trade in a retail sale or lease transaction and the vehicle is
subject to a prior credit or lease balance, all of the following
apply:
(1) If the dealer agreed to pay a specified amount on the prior
credit or lease balance owing on the vehicle purchased or obtained in
trade, and the agreement to pay the specified amount is contained in
a written agreement documenting the transaction, the dealer shall
tender the agreed upon amount as provided in the written agreement to
the lessor registered in accordance with Section 4453.5, or to the
legal owner reflected on the ownership certificate, or to the
designee of that lessor or legal owner of the vehicle purchased or
obtained in trade within 21 calendar days of purchasing or obtaining
the vehicle in trade.
(2) If the dealer did not set forth an agreement regarding payment
of a prior credit or lease balance owed on the vehicle purchased or
obtained in trade, in a written agreement documenting the
transaction, the dealer shall tender to the lessor registered in
accordance with Section 4453.5, or to the legal owner reflected on
the ownership certificate, or to the designee of that lessor or legal
owner of the vehicle purchased or obtained in trade, an amount
necessary to discharge the prior credit or lease balance owing on the
vehicle purchased or obtained in trade within 21 calendar days of
purchasing or obtaining the vehicle in trade.
(3) The time period specified in paragraphs (1) or (2) may be
shortened if the dealer and consumer agree, in writing, to a shorter
time period.
(4) A dealer shall not sell, consign for sale, or transfer any
ownership interest in the vehicle purchased or obtained in trade
until an amount necessary to discharge the prior credit or lease
balance owing on the vehicle has been tendered to the lessor
registered in accordance with Section 4453.5, or to the legal owner
reflected on the ownership certificate, or to the designee of that
lessor or legal owner of the vehicle purchased or obtained in trade.
(b) A dealer does not violate this section if the dealer
reasonably and in good faith gives notice of rescission of the
contract promptly, but no later than 21 days after the date on which
the vehicle was purchased or obtained in trade, and the contract is
thereafter rescinded on any of the grounds in Section 1689 of the
Civil Code.
SEC. 6. Nothing in this act shall be construed to limit, in any
way, the existing rights, remedies, or recourses available to any
person who purchases or leases vehicles at retail.
SEC. 7. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.