BILL ANALYSIS
SENATE TRANSPORTATION & HOUSING COMMITTEE BILL NO: SB 1004
SENATOR ALAN LOWENTHAL, CHAIRMAN AUTHOR: Huff
VERSION: 3/16/10
Analysis by: Carrie Cornwell FISCAL: yes
Hearing date: March 23, 2010
SUBJECT:
Vehicles: licensed dealers and salespersons
DESCRIPTION:
This bill allows a vehicle dealer to post copies of occupational
licenses, rather than the original licenses, for the dealer and
the salespersons the dealer employs. It also allows a vehicle
salesperson to work for multiple dealerships, provided that
those dealerships share a common controlling ownership.
ANALYSIS:
Existing law charges the Department of Motor Vehicles (DMV) with
licensing and regulating motor vehicle dealers and salespersons
who conduct business in California.
State law requires that vehicle dealers post in a conspicuous,
public place in each and every location where the dealer does
business the dealer's DMV-issued dealer's license plus the
DMV-issued license of each salesperson employed by that dealer
at that location. Each licensed sales person employed by a
dealer must provide that dealer with his or her salesperson
license for posting. In addition, existing law precludes a
salesperson from working for more than one dealer, although he
or she can work at different locations of a single dealer,
provided each location has identical ownership and structure.
Existing law permits DMV to refuse to issue or to revoke or
suspend a vehicle salesperson's license if, among other things,
the salesperson has acted as a salesperson for more than one
licensed dealer. State law also makes it illegal for a person to
duplicate a vehicle salesperson's license in such a way that it
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could be mistaken for a valid license.
This bill :
1.Allows a vehicle dealer to post a copy, rather than the
original, of the dealer's and each salesperson's DMV-issued
occupational license.
2.Makes it legal to duplicate a vehicle salesperson's license
for purposes of displaying that license at the dealership or
dealerships where the salesperson works.
3.Makes it legal for a vehicle salesperson to work for more than
one dealer, provided that all of the dealers for whom the
salesperson works share a common controlling ownership, which
the bill defines as a structure in which more than 50 percent
of the ownership interests in each dealer are held by the same
person or persons, either directly or through one or more
wholly owned subsidiary entities.
COMMENTS:
1.Purpose . The author introduced this bill to update California
law governing motor vehicle dealers and salespersons to
reflect changes in the operation and structure of companies
selling motor vehicles. This bill specifically recognizes that
dealerships today are organized in a wide variety of
structures from sole proprietorships to publicly traded
corporations. State law governing dealers' employment of
salespersons dates from a bygone era. This bill changes that
law to allow dealers to post copies, rather than originals, of
occupational licenses. It also allows a salesperson to work
for multiple dealerships so long as 50 percent the ownership
of each dealership is the same.
2.History . It is unclear why existing law precludes a
salesperson from working for more than one vehicle dealer.
This provision dates from at least the 1950s. DMV staff
speculate that the prohibition was put into the law to avoid a
salesperson having conflicting allegiances and thus being
tempted to steer business one way or another between competing
dealers for whom the salesperson worked. The author or
committee may wish to consider whether it is appropriate to
repeal this prohibition entirely.
3.Moving the license with the salesperson . An alternative to
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allowing the posting of duplicates of a salesperson's license
would be to have the salesperson take the license down and
with him or her when going to work at another location or
dealer. The sponsor, the California New Car Dealers
Association, explains that the salespersons' licenses are
frequently kept under a locked glass cover and that moving
licenses could create needless problems, including licenses
getting left behind at the wrong location upon occasion.
POSITIONS: (Communicated to the Committee before noon on
Wednesday,
March 17, 2010)
SUPPORT: California New Car Dealers Association (sponsor)
OPPOSED: None received.