BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 1732
                                                                  Page  1

          Date of Hearing:   April 30, 2014

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    AB 1732 (Stone) - As Amended:  April 10, 2014 

          Policy Committee:                              B & PVote:14-0  
          (Consent)

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  

          This bill makes minor modifications to provisions governing the  
          advertising of motor vehicle sales. Specifically, this bill:

          1)Prohibits a licensed vehicle manufacturer, transporter or  
            dealer from advertising a vehicle's prior use or ownership  
            history in an inaccurate manner. 

          2)Allows a licensed dealer to use the word "rebate" or similar  
            words in advertising the sale of a vehicle if the rebate is  
            offered to the retail purchaser by a finance company  
            affiliated with a vehicle manufacturer or distributor, a  
            regulated utility, or a government entity.

          3)Prohibits a licensed dealer from advertising a rebate  
            deduction that conflicts with another advertised rebate  
            deduction.

           FISCAL EFFECT  

          Any costs to DMV would minor and absorbable.

           COMMENTS  

           Purpose  . According to the sponsor, the California New Car  
          Dealers Association, this bill makes three changes in vehicle  
          advertising law.

          First, the limitation that dealers can only advertise rebates  
          offered by vehicle manufacturers or distributor would be  
          expanded to allow dealers to advertise rebates offered by a  








                                                                  AB 1732
                                                                  Page  2

          finance company affiliated with the manufacturer or distributor,  
          a regulated utility or a government entity.  This change is  
          intended to permit dealers to advertise other rebate programs  
          such as the 'Clean Vehicle Rebate Program' or 'Cash for  
          Clunkers'.

          Second, the bill codifies existing regulations requiring that  
          express advertisements of a vehicle's prior use or ownership  
          history must be accurate. The sponsor states that this  
          particular regulation is largely unknown and that its  
          codification would help ensure compliance. 





          Third, the bill clarifies that a dealer may not advertise a  
          rebate deduction if it conflicts with another advertised  
          deduction. The sponsor states that this change is necessary  
          because of confusion among dealers and law enforcement as to how  
          a conflicting rebate would be enforced.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081