BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 234| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 234 Author: Corbett (D) Amended: 4/10/07 Vote: 21 SENATE JUDICIARY COMMITTEE : 5-0, 3/27/07 AYES: Corbett, Harman, Ackerman, Kuehl, Steinberg SUBJECT : Motor vehicle consumer warranties: members of the Armed Forces SOURCE : Consumers for Auto Reliability and Safety DIGEST : This bill provides that Californias Lemon Law cover a motor vehicle purchased by a member of the Armed Forces in the United States with a manufacturer's express warranty regardless of the state of purchase or registration, if both of the following apply: (1) the member purchased the motor vehicle, as defined, from a manufacturer who sells vehicles in California, and (2) the member was stationed in or a resident of California at the time he or she purchased the vehicle or at the time he or she filed an action pursuant to California's Lemon Law. This bill defines "Member of the Armed Forces" for purposes of California's Lemon Law as a person on full-time active duty in the Army, Navy, Marine Corps, Air Force, National Guard, or Coast Guard, and provides that full-time active duty also include active military service at a designated CONTINUED SB 234 Page 2 military service school. ANALYSIS : Existing law, the Song-Beverly Consumer Warranty Act, establishes a number of protections for new and used motor vehicles covered by a manufacturer's express warranty. [Civil Code Section 1780 et seq.] Existing case law holds that Song-Beverly only applies to a motor vehicle sold in California, even if the buyer is a resident of California, the manufacturer sells such vehicles in California, and its authorized repair facilities in California failed to repair the vehicle after a reasonable number of attempts. [ Cummins, Inc. v. Superior Court of Riverside County (2005) 36 Cal.4th 478.] Existing case law holds that a used motor vehicle sold or leased with a balance of the manufacturer's original warranty is a "new motor vehicle" for purposes of California's Lemon Law. [ Jensen v. BMW of North America, Inc. (1995) 35 Cal.App.4th 112.] This bill provides that California's "Lemon Law" cover a motor vehicle purchased by a member of the Armed Forces in the United States with a manufacturer's express warranty regardless of the state of purchase or registration, if both of the following apply: (1) the member purchased the motor vehicle, as defined, from a manufacturer, or from an agent or representative of that manufacturer, who sells vehicles in California and (2) the member was stationed in or a resident of California at the time he or she purchased the vehicle or at the time he or she filed an action pursuant to California's Lemon Law. Existing law defines "express warranty" as a written statement arising out of a sale to the consumer of a consumer good pursuant to which the manufacturer, distributor, or retailer undertakes to preserve or maintain the utility or performance of the consumer good or provide compensation if there is a failure in utility or performance. [Civil Code Section 1791.2.] Existing law defines, among other things, "consumer goods," "buyer," "distributor," "independent repair or service facility" and "manufacturer." (Civil Code Section 1791.] SB 234 Page 3 This bill, for purposes of the Lemon Law, defines "Member of the Armed Services" to mean a person on full-time active duty in the Army, Navy, Marine Corps, Air Force, National Guard, or Coast Guard and provides that full-time active duty also include active military service at a designated military service school. FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local: No SUPPORT : (Verified 4/10/07) Consumers for Auto Reliability and Safety (source) Consumer Action Consumer Attorneys of California Consumer Federation of California Navy Federal Credit Union Major General Lehnert - Commanding General of Marine Corps Installation West, Camp Pendleton, California California State Commanders Veterans Council Charles S. Cooper - Major General, USAF, Retired Steve Lynch - Lt. Col., USAF, Retired ARGUMENTS IN SUPPORT : The author's office and sponsor state, "Existing law requires car buyers to purchase their vehicles in California in order to benefit from the protections under California's auto lemon law. In some cases, that results in service members and their families suffering major hardships when they are saddled with unsafe and/or inoperable vehicles, purchased in another state. This can cause our troops additional stress, loss of income, lack of transportation, and other financial and service-related hardships and can distract them from their important mission of protecting our nation. "Due to varying provisions of state lemon laws, in some cases, troops may lack protection under the lemon laws of ANY state. "In one case, a Lieutenant testified live form Iraq, while on deployment from a base in Southern California, the auto manufacturers acknowledged his new truck was a lemon, and told him that if he were protected by California's lemon SB 234 Page 4 law the manufacturer would promptly repurchase the lemon, but since he lacked that protection, they refused to buy it back. Eventually, that case was resolved, but he lieutenant had to accept a large deduction and took a hefty loss, instead of obtaining a complete refund. (Testimony was delivered live via telephone, before the Joint Committee on Boards, Commissions, and Consumer Protection, held May 23, 2006.) In addition, the manufacturer has attempted to have the vehicle retitled as a VOLUNTARY BUYBACK, as opposed to a lemon law buyback. This could mean that some unsuspecting consumer may get saddled with a lemon." Proponents assert that this bill is narrowly tailored to protect a particularly vulnerable population, Armed Forces members stationed in or residents of California who are subject to deployment on short notice, and who do not have any choice of where they are stationed or deployed. RJG:cm 4/9/07 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****