BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 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





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          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.]







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          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  







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          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

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