as amended, Gordon.
begin deleteVehicles: safety recalls. end delete
Existing law generally regulates the transfer and registration of motor vehicles. Existing federal law requires a motor vehicle manufacturer to notify the owner or purchaser of a motor vehicle when the manufacturer determines that the vehicle contains a safety-related defect or when the manufacturer is ordered by the federal Secretary of Transportation to notify vehicle owners and purchasers that a vehicle has a safety-related defect.end delete
This bill would state the intent of the Legislature to enact the Consumer Automotive Recall Safety Act to provide comprehensive consumer protections that address the low recall repair completion rate and consumer confusion regarding automotive recalls in California.end delete
begin deleteno end delete.
State-mandated local program: begin deleteno end delete.
The people of the State of California do enact as follows:
The board shall do all of the following:
27(a) Adopt rules and regulations in accordance with Chapter 3.5
28(commencing with Section 11340) of Part 1 of Division 3 of Title
292 of the Government Code governing those matters that are
30specifically committed to its jurisdiction.
31(b) Hear and determine, within the limitations and in accordance
32with the procedure provided, an appeal presented by an applicant
33for, or holder of, a license as a new motor vehicle dealer,
34manufacturer, manufacturer branch, distributor, distributor branch,
35or representative when the applicant or licensee submits an appeal
36provided for in this chapter from a decision arising out of the
38(c) Consider any matter concerning the activities or practices
39of any person applying for or holding a license as a new motor
40vehicle dealer, manufacturer, manufacturer branch, distributor,
P6 1distributor branch, or representative pursuant to Chapter 4
2(commencing with Section 11700) of Division 5 submitted by any
3person. A member of the board who is a new motor vehicle dealer
4may not participate in, hear, comment, advise other members upon,
5or decide any matter considered by the board pursuant to this
6subdivision that involves a dispute between a franchisee and
7franchisor. After that consideration, the board may do any one or
8any combination of the following:
9(1) Direct the department to conduct investigation of matters
10that the board deems reasonable, and make a written report on the
11results of the investigation to the board within the time specified
12by the board.
13(2) Undertake to mediate, arbitrate, or otherwise resolve any
14honest difference of opinion or viewpoint existing between any
15member of the public and any new motor vehicle dealer,
16manufacturer, manufacturer branch, distributor, distributor branch,
18(3) Order the department to exercise any and all authority or
19power that the department may have with respect to the issuance,
20renewal, refusal to renew, suspension, or revocation of the license
21of any new motor vehicle dealer, manufacturer, manufacturer
22branch, distributor, distributor branch, or representative as that
23license is required under Chapter 4 (commencing with Section
2411700) of Division 5.
25(d) Hear and decide, within the limitations and in accordance
26with the procedure provided, a protest presented by a franchisee
27pursuant to Section 3060, 3062, 3064, 3065, 3065.1, 3070,
283072, 3074, 3075, or 3076. A member of the board who is a new
29motor vehicle dealer may not participate in, hear, comment, advise
30other members upon, or decide, any matter involving a protest
31filed pursuant to Article 4 (commencing with Section 3060), unless
32all parties to the protest stipulate otherwise.
33(e) Notwithstanding subdivisions (c) and (d), the courts have
34jurisdiction over all common law and statutory claims originally
35cognizable in the courts. For those claims, a party may initiate an
36action directly in any court of competent jurisdiction.
(a) Upon receiving a protest pursuant to Section 3060,
323062, 3064, 3065, 3065.1, 3070, 3072, 3074, 3075, or
333076, the board shall fix a time within 60 days of the order, and
34place of hearing, and shall send by registered mail a copy of the
35order to the franchisor, the protesting franchisee, and all individuals
36and groups that have requested notification by the board of protests
37and decisions of the board. Except in a case involving a franchisee
38who deals exclusively in motorcycles, the board or its executive
39director may, upon a showing of good cause, accelerate or postpone
40the date initially established for a hearing, but the hearing may not
P10 1be rescheduled more than 90 days after the board’s initial order.
2For the purpose of accelerating or postponing a hearing date, “good
3cause” includes, but is not limited to, the effects upon, and any
4irreparable harm to, the parties or interested persons or groups if
5the request for a change in hearing date is not granted. The board
6or an administrative law judge designated by the board shall hear
7and consider the oral and documented evidence introduced by the
8parties and other interested individuals and groups, and the board
9shall make its decision solely on the record so made. Chapter 4.5
10(commencing with Section 11400) of Part 1 of Division 3 of Title
112 of the Government Code and Sections 11507.3, 11507.6, 11507.7,
1211511, 11511.5, 11513, 11514, 11515, and 11517 of the
13Government Code apply to these proceedings.
14(b) In a hearing on a protest filed pursuant to Section 3060,
153062, 3070, or 3072, the franchisor shall have the burden of proof
16to establish that there is good cause to modify, replace, terminate,
17or refuse to continue a franchise. The franchisee shall have the
18burden of proof to establish that there is good cause not to enter
19into a franchise establishing or relocating an additional motor
21(c) Except as otherwise provided in this chapter, in a hearing
22on a protest alleging a violation of, or filed pursuant to, Section
233064, 3065, 3065.1, 3074, 3075, or 3076, the franchisee
24shall have the burden of proof, but the franchisor has the burden
25of proof to establish that a franchisee acted with intent to defraud
begin delete whereend delete that issue is material to a protest filed
27pursuant to Section 3065, 3065.1, 3075, or 3076.
28(d) A member of the board who is a new motor vehicle dealer
29may not participate in, hear, comment, or advise other members
30upon, or decide, a matter involving a protest filed pursuant to this
31article unless all parties to the protest stipulate otherwise.
The department may refuse
begin delete registrationend delete or
34the renewal or transfer of
begin delete registrationend delete of a vehicle in
35any of the following events:
36(a) If the department is not satisfied that the applicant is entitled
37thereto under this code.
38(b) If the applicant has failed to furnish the department with
39information required in the application or reasonable additional
40information required by the department.
P11 1(c) If the department determines that the applicant has made or
2permitted unlawful use of any registration certificate, certificate
3of ownership, or license plates.
4(d) If the vehicle is mechanically unfit or unsafe to be operated
5or moved on the highways.
6(e) If the department determines that a manufacturer or dealer
7has failed during the current or previous year to comply with the
8provisions of this code relating to the giving of notice to the
9department of the transfer of a vehicle during the current or
11(f) If the department determines that a lien exists, pursuant to
12Section 9800, against one or more other vehicles in which the
13applicant has an ownership interest.
14(g) If the applicant has failed to furnish the department with an
15odometer disclosure statement pursuant to subsection (a) of Section
1632705 of Title 49 of the United States Code.
It is unlawful and a violation of this code for a
23manufacturer, manufacturer branch, distributor, or distributor
24branch licensed pursuant to this code to do, directly or indirectly
25through an affiliate, any of the following:
26(a) To refuse or fail to deliver in reasonable quantities and within
27a reasonable time after receipt of an order from a dealer having a
28franchise for the retail sale of a new vehicle sold or distributed by
29the manufacturer or distributor, a new vehicle or parts or
30accessories to new vehicles as are covered by the franchise, if the
31vehicle, parts, or accessories are publicly advertised as being
32available for delivery or actually being delivered. This subdivision
33is not violated, however, if the failure is caused by acts or causes
34beyond the control of the manufacturer, manufacturer branch,
35distributor, or distributor branch.
36(b) To prevent or require, or attempt to prevent or require, by
37contract or otherwise, a change in the capital structure of a
38dealership or the means by or through which the dealer finances
39the operation of the dealership, if the dealer at all times meets
40reasonable capital standards agreed to by the dealer and the
P12 1manufacturer or distributor, and if a change in capital structure
2does not cause a change in the principal management or have the
3effect of a sale of the franchise without the consent of the
4manufacturer or distributor.
5(c) To prevent or require, or attempt to prevent or require, a
6dealer to change the executive management of a dealership, other
7than the principal dealership operator or operators, if the franchise
8was granted to the dealer in reliance upon the personal
9qualifications of that person.
10(d) (1) Except as provided in subdivision (t), to prevent or
11require, or attempt to prevent or require, by contract or otherwise,
12a dealer, or an officer, partner, or stockholder of a dealership, the
13sale or transfer of a part of the interest of any of them to another
14person. A dealer, officer, partner, or stockholder shall not, however,
15have the right to sell, transfer, or assign the franchise, or a right
16thereunder, without the consent of the manufacturer or distributor
17except that the consent shall not be unreasonably withheld.
18(2) (A) For the transferring franchisee to fail, prior to the sale,
19transfer, or assignment of a franchisee or the sale, assignment, or
20transfer of all, or substantially all, of the assets of the franchised
21business or a controlling interest in the franchised business to
22another person, to notify the manufacturer or distributor of the
23franchisee’s decision to sell, transfer, or assign the franchise. The
24notice shall be in writing and shall include all of the following:
25(i) The proposed transferee’s name and address.
26(ii) A copy of all of the agreements relating to the sale,
27assignment, or transfer of the franchised business or its assets.
28(iii) The proposed transferee’s application for approval to
29become the successor franchisee. The application shall include
30forms and related information generally utilized by the
31manufacturer or distributor in reviewing prospective franchisees,
32if those forms are readily made available to existing franchisees.
33As soon as practicable after receipt of the proposed transferee’s
34application, the manufacturer or distributor shall notify the
35franchisee and the proposed transferee of information needed to
36make the application complete.
37(B) For the manufacturer or distributor, to fail, on or before 60
38days after the receipt of all of the information required pursuant
39to subparagraph (A), or as extended by a written agreement
40between the manufacturer or distributor and the franchisee, to
P13 1notify the franchisee of the approval or the disapproval of the sale,
2transfer, or assignment of the franchise. The notice shall be in
3writing and shall be personally served or sent by certified mail,
4return receipt requested, or by guaranteed overnight delivery
5service that provides verification of delivery and shall be directed
6to the franchisee. A proposed sale, assignment, or transfer shall
7be deemed approved, unless disapproved by the franchisor in the
8manner provided by this subdivision. If the proposed sale,
9assignment, or transfer is disapproved, the franchisor shall include
10in the notice of disapproval a statement setting forth the reasons
11for the disapproval.
12(3) In an action in which the manufacturer’s or distributor’s
13withholding of consent under this subdivision or subdivision (e)
14is an issue, whether the withholding of consent was unreasonable
15is a question of fact requiring consideration of all the existing
17(e) To prevent, or attempt to prevent, a dealer from receiving
18fair and reasonable compensation for the value of the franchised
19business. There shall not be a transfer or assignment of the dealer’s
20franchise without the consent of the manufacturer or distributor,
21which consent shall not be unreasonably withheld or conditioned
22upon the release, assignment, novation, waiver, estoppel, or
23modification of a claim or defense by the dealer.
24(f) To obtain money, goods, services, or another benefit from
25a person with whom the dealer does business, on account of, or in
26relation to, the transaction between the dealer and that other person,
27other than for compensation for services rendered, unless the
28benefit is promptly accounted for, and transmitted to, the dealer.
29(g) (1) Except as provided in paragraph (3), to obtain from a
30dealer or enforce against a dealer an agreement, provision, release,
31assignment, novation, waiver, or estoppel that does any of the
33(A) Modifies or disclaims a duty or obligation of a manufacturer,
34manufacturer branch, distributor, distributor branch, or
35representative, or a right or privilege of a dealer, pursuant to
36Chapter 4 (commencing with Section 11700) of Division 5 or
37Chapter 6 (commencing with Section 3000) of Division 2.
38(B) Limits or constrains the right of a dealer to file,
39submit evidence in connection with a protest before the board.
40(C) Requires a dealer to terminate a franchise.
P14 1(D) Requires a controversy between a manufacturer,
2manufacturer branch, distributor, distributor branch, or
3representative and a dealer to be referred to a person for a binding
4determination. However, this subparagraph does not prohibit
5arbitration before an independent arbitrator, provided that whenever
6a motor vehicle franchise contract provides for the use of arbitration
7to resolve a controversy arising out of, or relating to, that contract,
8arbitration may be used to settle the controversy only if, after the
9controversy arises, all parties to the controversy consent in writing
10to use arbitration to settle the controversy. For the purpose of this
11subparagraph, the terms “motor vehicle” and “motor vehicle
12franchise contract” shall have the same meaning as defined in
13Section 1226 of Title 15 of the United States Code. If arbitration
14is elected to settle a dispute under a motor vehicle franchise
15contract, the arbitrator shall provide the parties to the arbitration
16with a written explanation of the factual and legal basis for the
18(2) An agreement, provision, release, assignment, novation,
19waiver, or estoppel prohibited by this subdivision shall be
20unenforceable and void.
21(3) This subdivision does not do any of the following:
22(A) Limit or restrict the terms upon which parties to a protest
23before the board, civil action, or other proceeding can settle or
24resolve, or stipulate to evidentiary or procedural matters during
25the course of, a protest, civil action, or other proceeding.
26(B) Affect the
enforceability of any stipulated order or other
27order entered by the board.
28(C) Affect the enforceability of any provision in a contract if
29the provision is not prohibited under this subdivision or any other
31(D) Affect the enforceability of a provision in any contract
32entered into on or before December 31, 2011.
33(E) Prohibit a dealer from waiving its right to file a protest
34pursuant to Section 3065.1 if the waiver agreement is entered into
35after a franchisor incentive program claim has been disapproved
36by the franchisor and the waiver is voluntarily given as part of an
37agreement to settle that claim.
38(F) Prohibit a voluntary agreement supported by valuable
39consideration, other than granting or renewing a franchise, that
40does both of the following:
P15 1(i) Provides that a dealer establish or maintain exclusive
2facilities, personnel, or display space or provides that a dealer
3make a material alteration, expansion, or addition to a dealership
5(ii) Contains no waiver or other provision prohibited by
6subparagraph (A), (B), (C), or (D) of paragraph (1).
7(G) Prohibit an agreement separate from the franchise agreement
8that implements a dealer’s election to terminate the franchise if
9the agreement is conditioned only on a specified time for
10termination or payment of consideration to the dealer.
11(H) (i) Prohibit a voluntary waiver agreement, supported by
12valuable consideration, other than the consideration of renewing
13a franchise, to waive the right of a dealer to file a protest under
14Section 3062 for the proposed establishment or relocation of a
15specific proposed dealership, if the waiver agreement provides all
16of the following:
17(I) The approximate address at which the proposed dealership
18will be located.
19(II) The planning potential used to establish the proposed
20dealership’s facility, personnel, and capital requirements.
21(III) An approximation of projected vehicle and parts sales, and
22number of vehicles to be serviced at the proposed dealership.
23(IV) Whether the franchisor or affiliate will hold an ownership
24interest in the proposed dealership or real property of the proposed
25dealership, and the approximate percentage of any franchisor or
26affiliate ownership interest in the proposed dealership.
27(V) The line-makes to be operated at the proposed dealership.
28(VI) If known at the time the waiver agreement is executed, the
29identity of the dealer who will operate the proposed dealership.
30(VII) The date the waiver agreement is to expire, which may
31not be more than 30 months after the date of execution of the
33(ii) Notwithstanding the provisions of a waiver agreement
34entered into pursuant to the provisions of this subparagraph, a
35dealer may file a protest under Section 3062 if any of the
36information provided pursuant to clause (i) has become materially
37inaccurate since the waiver agreement was executed. Any
38determination of the enforceability of a waiver agreement shall be
39determined by the board and the franchisor shall have the burden
40 of proof.
P16 1(h) To increase prices of motor vehicles that the dealer had
2ordered for private retail consumers prior to the dealer’s receipt
3of the written official price increase notification. A sales contract
4signed by a private retail consumer is evidence of the order. In the
5event of manufacturer price reductions, the amount of the reduction
6received by a dealer shall be passed on to the private retail
7consumer by the dealer if the retail price was negotiated on the
8basis of the previous higher price to the dealer. Price reductions
9apply to all vehicles in the dealer’s inventory that were subject to
10the price reduction. Price differences applicable to new model or
11series motor vehicles at the time of the introduction of new models
12or series shall not be considered a price increase or price decrease.
13This subdivision does not apply to price changes caused by either
14of the following:
15(1) The addition to a motor vehicle of required or optional
16equipment pursuant to state or federal law.
17(2) Revaluation of the United States dollar in the case of a
19(i) To fail to pay to a dealer, within a reasonable time following
20receipt of a valid claim by a dealer thereof, a payment agreed to
21be made by the manufacturer or distributor to the dealer by reason
22of the fact that a new vehicle of a prior year model is in the dealer’s
23inventory at the time of introduction of new model vehicles.
24(j) To deny the widow, widower, or heirs designated by a
25deceased owner of a dealership the opportunity to participate in
26the ownership of the dealership or successor dealership under a
27valid franchise for a reasonable time after the death of the owner.
28(k) To offer refunds or other types of inducements to a person
29for the purchase of new motor vehicles of a certain line-make to
30be sold to the state or a political subdivision of the state without
31making the same offer to all other dealers in the same line-make
32within the relevant market area.
33(l) To modify, replace, enter into, relocate, terminate, or refuse
34to renew a franchise in violation of Article 4 (commencing with
35Section 3060) of Chapter 6 of Division 2.
36(m) To employ a person as a representative who has not been
37licensed pursuant to Article 3 (commencing with Section 11900)
38of Chapter 4 of Division 5.
39(n) To deny a dealer the right of free association with another
40dealer for a lawful purpose.
P17 1(o) (1) To compete with a dealer in the same line-make
2operating under an agreement or franchise from a manufacturer
3or distributor in the relevant market area.
4(2) A manufacturer, branch, or distributor or an entity that
5controls or is controlled by, a manufacturer, branch, or distributor,
6shall not, however, be deemed to be competing in the following
8(A) Owning or operating a dealership for a temporary period,
9not to exceed one year at the location of a former dealership of the
10same line-make that has been out of operation for less than six
11months. However, after a showing of good cause by a
12manufacturer, branch, or distributor that it needs additional time
13to operate a dealership in preparation for sale to a successor
14independent franchisee, the board may extend the time period.
15(B) Owning an interest in a dealer as part of a bona fide dealer
16development program that satisfies all of the following
18(i) The sole purpose of the program is to make franchises
19available to persons lacking capital, training, business experience,
20or other qualities ordinarily required of prospective franchisees
21and the dealer development candidate is an individual who is
22unable to acquire the franchise without assistance of the program.
23(ii) The dealer development candidate has made a significant
24investment subject to loss in the franchised business of the dealer.
25(iii) The program requires the dealer development candidate to
26manage the day-to-day operations and business affairs of the dealer
27and to acquire, within a reasonable time and on reasonable terms
28and conditions, beneficial ownership and control of a majority
29interest in the dealer and disassociation of any direct or indirect
30ownership or control by the manufacturer, branch, or distributor.
31(C) Owning a wholly owned subsidiary corporation of a
32distributor that sells motor vehicles at retail, if, for at least three
33years prior to January 1, 1973, the subsidiary corporation has been
34a wholly owned subsidiary of the distributor and engaged in the
35sale of vehicles at retail.
36(3) (A) A manufacturer, branch, and distributor that owns or
37operates a dealership in the manner described in subparagraph (A)
38of paragraph (2) shall give written notice to the board, within 10
39days, each time it commences or terminates operation of a
P18 1dealership and each time it acquires, changes, or divests itself of
2an ownership interest.
3(B) A manufacturer, branch, and distributor that owns an interest
4in a dealer in the manner described in subparagraph (B) of
5paragraph (2) shall give written notice to the board, annually, of
6the name and location of each dealer in which it has an ownership
7interest, the name of the bona fide dealer development owner or
8owners, and the ownership interests of each owner expressed as a
10(p) To unfairly discriminate among its franchisees with respect
11to warranty reimbursement or authority granted to its franchisees
12to make warranty adjustments with retail customers.
13(q) To sell vehicles to a person not licensed pursuant to this
14chapter for resale.
15(r) To fail to affix an identification number to a park trailer, as
16described in Section 18009.3 of the Health and Safety Code, that
17is manufactured on or after January 1, 1987, and that does not
18clearly identify the unit as a park trailer to the department. The
19configuration of the identification number shall be approved by
21(s) To dishonor a warranty, rebate, or other incentive offered
22to the public or a dealer in connection with the retail sale of a new
23motor vehicle, based solely upon the fact that an autobroker
24arranged or negotiated the sale. This subdivision shall not prohibit
25the disallowance of that rebate or incentive if the purchaser or
26dealer is ineligible to receive the rebate or incentive pursuant to
27any other term or condition of a rebate or incentive program.
28(t) To exercise a right of first refusal or other right requiring a
29franchisee or an owner of the franchise to sell, transfer, or assign
30to the franchisor, or to a nominee of the franchisor, all or a material
31part of the franchised business or of the assets of the franchised
32business unless all of the following requirements are met:
33(1) The franchise authorizes the franchisor to exercise a right
34of first refusal to acquire the franchised business or assets of the
35franchised business in the event of a proposed sale, transfer, or
37(2) The franchisor gives written notice of its exercise of the
38right of first refusal no later than 45 days after the franchisor
39receives all of the information required pursuant to subparagraph
40(A) of paragraph (2) of subdivision (d).
P19 1(3) The sale, transfer, or assignment being proposed relates to
2not less than all or substantially all of the assets of the franchised
3business or to a controlling interest in the franchised business.
4(4) The proposed transferee is neither a family member of an
5owner of the franchised business, nor a managerial employee of
6the franchisee owning 15 percent or more of the franchised
7business, nor a corporation, partnership, or other legal entity owned
8by the existing owners of the franchised business. For purposes of
9this paragraph, a “family member” means the spouse of an owner
10of the franchised business, the child, grandchild, brother, sister,
11or parent of an owner, or a spouse of one of those family members.
12This paragraph does not limit the rights of the franchisor to
13disapprove a proposed transferee as provided in subdivision (d).
14(5) Upon the franchisor’s exercise of the right of first refusal,
15the consideration paid by the franchisor to the franchisee and
16owners of the franchised business shall equal or exceed all
17consideration that each of them were to have received under the
18terms of, or in connection with, the proposed sale, assignment, or
19transfer, and the franchisor shall comply with all the terms and
20conditions of the agreement or agreements to sell, transfer, or
21assign the franchised business.
22(6) The franchisor shall reimburse the proposed transferee for
23expenses paid or incurred by the proposed transferee in evaluating,
24investigating, and negotiating the proposed transfer to the extent
25those expenses do not exceed the usual, customary, and reasonable
26fees charged for similar work done in the area in which the
27franchised business is located. These expenses include, but are not
28limited to, legal and accounting expenses, and expenses incurred
29for title reports and environmental or other investigations of real
30property on which the franchisee’s operations are conducted. The
31proposed transferee shall provide the franchisor a written
32itemization of those expenses, and a copy of all nonprivileged
33reports and studies for which expenses were incurred, if any, within
3430 days of the proposed transferee’s receipt of a written request
35from the franchisor for that accounting. The franchisor shall make
36payment within 30 days of exercising the right of first refusal.
37(u) (1) To unfairly discriminate in favor of a dealership owned
38or controlled, in whole or in part, by a manufacturer or distributor
39or an entity that controls or is controlled by the manufacturer or
P20 1distributor. Unfair discrimination includes, but is not limited to,
3(A) The furnishing to a franchisee or dealer that is owned or
4controlled, in whole or in part, by a manufacturer, branch, or
5distributor of any of the following:
6(i) A vehicle that is not made available to each franchisee
7pursuant to a reasonable allocation formula that is applied
8uniformly, and a part or accessory that is not made available to all
9franchisees on an equal basis when there is no reasonable allocation
10formula that is applied uniformly.
11(ii) A vehicle, part, or accessory that is not made available to
12each franchisee on comparable delivery terms, including the time
13of delivery after the placement of an order. Differences in delivery
14terms due to geographic distances or other factors beyond the
15control of the manufacturer, branch, or distributor shall not
16constitute unfair competition.
17(iii) Information obtained from a franchisee by the manufacturer,
18branch, or distributor concerning the business affairs or operations
19of a franchisee in which the manufacturer, branch, or distributor
20does not have an ownership interest. The information includes,
21but is not limited to, information contained in financial statements
22and operating reports, the name, address, or other personal
23information or buying, leasing, or service behavior of a dealer
24customer, and other information that, if provided to a franchisee
25or dealer owned or controlled by a manufacturer or distributor,
26would give that franchisee or dealer a competitive advantage. This
27clause does not apply if the information is provided pursuant to a
28subpoena or court order, or to aggregated information made
29available to all franchisees.
30(iv) Sales or service incentives, discounts, or promotional
31programs that are not made available to all California franchises
32of the same line-make on an equal basis.
33(B) Referring a prospective purchaser or lessee to a dealer in
34which a manufacturer, branch, or distributor has an ownership
35interest, unless the prospective purchaser or lessee resides in the
36area of responsibility assigned to that dealer or the prospective
37 purchaser or lessee requests to be referred to that dealer.
3(2) This subdivision does not prohibit a franchisor from granting
4a franchise to prospective franchisees or assisting those franchisees
5during the course of the franchise relationship as part of a program
6or programs to make franchises available to persons lacking capital,
7training, business experience, or other qualifications ordinarily
8required of prospective franchisees.
9(v) (1) To access, modify, or extract information from a
10confidential dealer computer record, as defined in Section
1111713.25, without obtaining the prior written consent of the dealer
12and without maintaining administrative, technical, and physical
13safeguards to protect the security, confidentiality, and integrity of
15(2) Paragraph (1) does not limit a duty that a dealer may have
16to safeguard the security and privacy of records maintained by the
18(w) (1) To use electronic, contractual, or other means to prevent
19or interfere with any of the following:
20(A) The lawful efforts of a dealer to comply with federal and
21state data security and privacy laws.
22(B) The ability of a dealer to do either of the following:
23(i) Ensure that
specific data accessed from the dealer’s computer
24system is within the scope of consent specified in subdivision (v).
25(ii) Monitor specific data accessed from or written to the dealer’s
27(2) Paragraph (1) does not limit a duty that a dealer may have
28to safeguard the security and privacy of records maintained by the
30(x) (1) To unfairly discriminate against a franchisee selling a
31service contract, debt cancellation agreement, maintenance
32agreement, or similar product not approved, endorsed, sponsored,
33or offered by the manufacturer, manufacturer branch, distributor,
34or distributor branch or affiliate. For purposes of this subdivision,
35unfair discrimination includes, but is not limited to, any of the
37(A) Express or implied statements that the dealer is under an
38obligation to exclusively sell or offer to sell service contracts, debt
39cancellation agreements, or similar products approved, endorsed,
P22 1sponsored, or offered by the manufacturer, manufacturer branch,
2distributor, or distributor branch or affiliate.
3(B) Express or implied statements that selling or offering to sell
4service contracts, debt cancellation agreements, maintenance
5agreements, or similar products not approved, endorsed, sponsored,
6or offered by the manufacturer, manufacturer branch, distributor,
7or distributor branch or affiliate, or the failure to sell or offer to
8sell service contracts, debt cancellation agreements, maintenance
9agreements, or similar products approved, endorsed, sponsored,
10or offered by the manufacturer, manufacturer branch, distributor,
11or distributor branch or affiliate will have any negative
12consequences for the dealer.
13(C) Measuring a dealer’s performance under a franchise
14agreement based upon the sale of service contracts, debt
15cancellation agreements, or similar products approved, endorsed,
16sponsored, or offered by the manufacturer, manufacturer branch,
17distributor, or distributor branch or affiliate.
18(D) Requiring a dealer to actively promote the sale of service
19contracts, debt cancellation agreements, or similar products
20approved, endorsed, sponsored, or offered by the manufacturer,
21manufacturer branch, distributor, or distributor branch or affiliate.
22(E) Conditioning access to vehicles or parts, or vehicle sales or
23service incentives upon the sale of service contracts, debt
24cancellation agreements, or similar products approved, endorsed,
25sponsored, or offered by the manufacturer, manufacturer branch,
26distributor, or distributor branch or affiliate.
27(2) Unfair discrimination does not include, and nothing shall
28prohibit a manufacturer from, offering an incentive program to
29vehicle dealers who voluntarily sell or offer to sell service
30contracts, debt cancellation agreements, or similar products
31approved, endorsed, sponsored, or offered by the manufacturer,
32manufacturer branch, distributor, or distributor branch or affiliate,
33if the program does not provide vehicle sales or service incentives.
34(3) This subdivision does not prohibit a manufacturer,
35manufacturer branch, distributor, or distributor branch from
36requiring a franchisee that sells a used vehicle as “certified” under
37a certified used vehicle program established by the manufacturer,
38manufacturer branch, distributor, or distributor branch to provide
39a service contract approved, endorsed, sponsored, or offered by
P23 1the manufacturer, manufacturer branch, distributor, or distributor
3(4) Unfair discrimination does not include, and nothing shall
4prohibit a franchisor from requiring a franchisee to provide, the
5following notice prior to the sale of the service contract if the
6service contract is not provided or backed by the franchisor and
7the vehicle is of the franchised line-make:
9“Service Contract Disclosure
10The service contract you are purchasing is not provided or backed
11by the manufacturer of the vehicle you are purchasing. The
12manufacturer of the vehicle is not responsible for claims or repairs
13under this service contract.
15Signature of Purchaser”
17(y) To take or threaten to take any adverse action against a dealer
18pursuant to an export or sale-for-resale prohibition because the
19dealer sold or leased a vehicle to a customer who either exported
20the vehicle to a foreign country or resold the vehicle in violation
21of the prohibition, unless the export or sale-for-resale prohibition
22policy was provided to the dealer in writing prior to the sale or
23lease, and the dealer knew or reasonably should have known of
24the customer’s intent to export or resell the vehicle in violation of
25the prohibition at the time of sale or lease. If the dealer causes the
26vehicle to be registered in this or any other state, and collects or
27causes to be collected any applicable sales or use tax due to this
28state, a rebuttable presumption is established that the dealer did
29not have reason to know of the customer’s intent to export or resell
31(z) As used in this section, “area of responsibility” is a
32geographic area specified in a franchise that is used by the
33franchisor for the purpose of evaluating the franchisee’s
34performance of its sales and service obligations.
It is the intent of the Legislature to enact the
25Consumer Automotive Recall Safety Act to provide comprehensive
26consumer protections that address the low recall repair completion
27rate and consumer confusion regarding automotive recalls in