BILL ANALYSIS �
AB 1992
Page 1
Date of Hearing: April 10, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1992 (Huber) - As Introduced: February 23, 2012
SUBJECT : New Motor Vehicle Board: repeal.
SUMMARY : Abolishes the New Motor Vehicle Board (NMVB) and its
duties and responsibilities on January 1, 2022.
EXISTING LAW :
1)Establishes the NMVB in the Department of Motor Vehicles
(DMV).
2)Requires NMVB to collect fees for the administration of the
certification of third party dispute resolution processes for
new motor vehicles, as specified, resolve issues raised by
protests or petitions filed with the NMVB pursuant to an
appeal from a decision of the DMV, and, regulate franchises
subject to the Vehicle Code.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "This measure
seeks to add a sunset date to the NMVB-Jan. 1, 2022, as written.
The goal is not to eliminate NMVB, but to put in place a
process by which its activities and goals may be periodically
examined. This, in turn, can provide an impetus to policy
committees and affected parties to engage in a process that
could result in an updating of NMVB policies and procedures-or,
perhaps at some future date, if NMVB is deemed to no longer be
needed-to eliminate it. The sunset process is a normal and
necessary part of government, to ensure the relevance and
appropriate function of government bodies and laws.
"California is a complex and dynamic state that needs support of
a responsive government. It is imperative that entities no
longer of use to the people are removed from statute to ensure
that government is streamlined, efficient, and effective."
AB 1992
Page 2
Background . The policy of establishing sunset dates is intended
to provide the Legislature an opportunity to conduct a regular
systematic performance review and evaluation of governmental
bodies, commonly referred to as the "Sunset Review" process.
Prompted by an impending sunset date, the Legislature may choose
to extend the sunset to a later date or instead terminate or
"sunset" the governmental body in question. Regardless of
whether a governmental body has a sunset or not, the Legislature
may still conduct a review at any time.
Each year, the Legislature enacts legislation extending sunset
dates and simultaneously making substantive policy changes.
This can be concerning if the Legislature and Administration are
unable to reach consensus related to the new policies prior to
the sunset date. This most notably occurred regarding the
Bureau for Private Postsecondary Education (BPPE). The Governor
vetoed a bill both revising the functions of the BPPE and
extending its sunset and the BPPE became inoperative July of
2007, and remained inoperative, until early 2010. The inability
to extend the sunset of the BPPE caused a significant lapse in
the regulation of private postsecondary education and a failure
to provide for the protection and interests of students and
institutions.
Similarly, the Governor vetoed a bill extending the sunset for
four boards (Speech-Language Pathology and Audiology Board,
Board of Vocational Nursing and Psychiatric Technicians, Board
of Barbering and Cosmetology, and the Dental Board of
California) in 2007 for reasons unrelated to the extension of
their respective sunset dates. Legislation was enacted to
resurrect these boards six months after they were made
inoperative. Likewise, in 2011, a bill to extend the sunset of
the Board of Registered Nursing (BRN) was vetoed by the
Governor. BRN was reconstituted by way of budget trailer bill
legislation in February of 2012, two months after it was made
inoperative.
NMVB . NMVB is a program within DMV with oversight provided by
Business, Transportation and Housing Agency.
Created in 1967 as the New Car Dealers Policy and Appeals Board,
NMVB's function was limited to hearing appeals from final
decisions of the Director of the DMV which were adverse to the
occupational license of a new motor vehicle dealer,
manufacturer, distributor, or representative.
AB 1992
Page 3
In 1973, the Legislature passed the California Automobile
Franchise Act giving NMVB its present name and creating a broad
statutory framework and forum for regulating and settling
disputes in the new vehicle industry.
Within NMVB, there is a legal department which operates in a
quasi-judicial capacity to resolve disputes between franchised
dealers and manufacturers/distributors of new motor vehicles
(including motorcycles, and recreational vehicles). There is
also a Consumer Mediation Services Program which attempts
through informal mediation to resolve disputes between consumers
and new motor vehicle dealers and/or manufacturers or
distributors.
Opposition . The California New Car Dealers Association writes
in opposition, "The NMVB fulfills a crucial role. No dealer has
the wherewithal to stand on equal ground with multinational
automobile manufacturers in negotiating the terms of a franchise
relationship. Franchise laws, overseen by the NMVB, level this
playing field by allowing dealers to file a protest for a fair
hearing. The most important franchise laws are those that
provide dealers with a last line of defense against abusive
franchise activity.
"The NMVB is wholly supported by dealer/manufacturer fees. The
NMVB is one of the most cost-effective agencies in California
government. Paid for by manufacturer and dealer fees, the NMVB
reduces pressure on the judicial system to resolve industry
disputes.
"The NMVB provides free consumer mediation. California law
provides the NMVB with the ability to mediate consumer disputes
with dealers or manufacturers. This longstanding program has
very high settlement rates and has received positive reviews by
both consumers and dealers. This free program is an efficient
way to resolve disputes instead of resorting to costly
litigation."
Double referred . This bill is double-referred to Assembly
Transportation Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
AB 1992
Page 4
None on file.
Opposition
B&B Cycles
Barger Harley-Davidson
Bellflower Motorsports
California Motorcycle Dealers Association
California New Car Dealers Association
California Recreation vehicle Dealers Association
Dudley Perkins Co.
IRV Seaver Motorcycles
Powersports of Vallejo
Southbay Motorsports
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301