BILL ANALYSIS                                                                                                                                                                                                    



                                                                       AB 287


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          ASSEMBLY THIRD READING


          AB  
          287 (Gordon, et al.)


          As Amended  May 28, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                  |
          |                |      |                    |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Transportation  |16-0  |Frazier, Achadjian, |                      |
          |                |      |Baker, Bloom,       |                      |
          |                |      |Campos, Chu, Daly,  |                      |
          |                |      |Dodd, Eduardo       |                      |
          |                |      |Garcia, Gomez, Kim, |                      |
          |                |      |Linder, Medina,     |                      |
          |                |      |Melendez, Nazarian, |                      |
          |                |      |O'Donnell           |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Privacy         |11-0  |Gatto, Wilk, Baker, |                      |
          |                |      |Calderon, Chang,    |                      |
          |                |      |Chau, Cooper,       |                      |
          |                |      |Dababneh, Dahle,    |                      |
          |                |      |Gordon, Low         |                      |
          |                |      |                    |                      |
          |----------------+------+--------------------+----------------------|
          |Appropriations  |16-0  |Gomez, Bigelow,     |                      |
          |                |      |Calderon, Chang,    |                      |
          |                |      |Daly, Eggman,       |                      |
          |                |      |Gallagher, Eduardo  |                      |








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          |                |      |Garcia, Gordon,     |                      |
          |                |      |Holden, Jones,      |                      |
          |                |      |Quirk, Rendon,      |                      |
          |                |      |Wagner, Weber, Wood |                      |
          |                |      |                    |                      |
          |                |      |                    |                      |
           ------------------------------------------------------------------- 


          SUMMARY:  Enacts the Consumer Automotive Recall Safety Act (Act)  
          which requires a motor vehicle dealer to obtain a recall database  
          report within 30 days before sale or offer of a used car,  
          generally requires a used car to be repaired prior to transfer or  
          accepted by the consumer unrepaired after providing informed  
          consent, and prohibits the rental of vehicles subject to a recall.  
           Specifically, this bill:  


             1)   Prohibits a dealer from displaying or offering for sale a  
               used vehicle unless the dealer has obtained a recall database  
               report within 30 days of the display of offer.  
             2)   Prohibits a dealer from selling or leasing a used vehicle  
               if the recall database report indicates the vehicle is  
               subject to a "Stop Sale-Stop Drive" recall until the recall  
               repair has been made.  


             3)   Prohibits a dealer from selling or leasing a used vehicle  
               if the recall database report indicates the vehicle is  
               subject to a manufacturer's recall and the line-make is the  
               same as the franchise of the dealer, until the recall repair  
               has been made. 


             4)   Allows a dealer to sell or lease a used vehicle that is  
               subject to a manufacturer's recall, as specified, if the  
               vehicle is not the same line-make as the franchise of the  
               dealer if the following conditions are satisfied: 









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               a)     The dealer provides the recall database report to the  
                 consumer disclosing the manufacturer's  recall prior to  
                 sale or lease; and,
               b)     The consumer signs a disclosure agreement  
                 acknowledging the manufacturer's recall, and that the  
                 consumer can get the recall repaired at no cost to the  
                 consumer at a new motor vehicle dealer of the vehicle's  
                 line-make. 


             5)   Clarifies that the disclosure by a dealer and  
               acknowledgment by the consumer has no legal effect other than  
               to demonstrate compliance with the law by the dealer, and  
               should not be interpreted to place consumers in a less  
               advantageous legal position than if no disclosure had been  
               made. 
             6)   Specifies that a recall database report and the disclosure  
               agreement signed by the consumer must be provided separate  
               from the conditional sales contract or other purchase  
               agreement.  


             7)   Prohibits a rental car company from renting a vehicle  
               subject to a recall no later than 48 hours after receiving a  
               notice of a recall, or sooner if practicable.  


             8)   Allows a rental car company, if a recall notification  
               indicates that the remedy for the recall is not immediately  
               available and specifies actions to temporarily repair the  
               vehicle in a manner to eliminate the safety risk that  
               prompted the recall, to rent the vehicle after having the  
               interim repairs completed. 


             9)   Specifies that once the remedy for the rental vehicle  
               subject to recall becomes available to the rental car  
               company, the rental car company may not rent the vehicle  








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               until repaired.


             10)  Requires the seller of a motor vehicle, including private  
               party sales, to disclose all recalls related to the vehicle  
               being sold and requires the buyer to provide an  
               acknowledgment form to the Department of Motor Vehicles (DMV)  
               indicating the buyer has received all recall information in  
               order to transfer vehicle registration, as specified, and  
               authorizes the DMV to refuse transfer or registration without  
               that acknowledgment. 
             11)  Requires a vehicle manufacturer to clearly and  
               conspicuously display all recall notifications on its Web  
               site.  


             12)  Requires a vehicle manufacturer to provide, upon request,  
               a consumer seeking to repair a recalled vehicle a rental or  
               loaner vehicle at no cost until the parts and/or procedures  
               become available, as specified.  


             13)  Requires a vehicle manufacturer to adequately and fairly  
               compensate a dealer for costs associated with providing a  
               rental or loaner vehicle and storing a recalled vehicle  
               waiting to be repaired, as specified.  


             14)  Specifies that a vehicle manufacturer shall not provide a  
               consumer with a rental or loaner vehicle that is subject to a  
               Stop Sale- Stop Drive recall or a manufacturer's recall.


             15)  Provides that a dealer, rental car company, or private  
               seller are not legally responsible for any errors,  
               inaccuracies or omissions contained in the recall database  
               report, nor do such parties have any legal duty to provide  
               information added to a recall database after the dealer,  
               franchisee, rental car company, or private seller obtained  








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               the required recall database report.
             16)  Further provides that nothing in this bill shall affect  
               any legal rights, claims, or remedies otherwise available  
               under law.


             17)  Establishes a claims and appeals process, as specified,  
               between vehicle dealers and manufacturers regarding payment  
               requirements and obligations identified in the Act.   


             18)  Directs the DMV's New Motor Vehicle Board (Board) to hear  
               and decide disputes between vehicle dealers and manufacturers  
               related to the Act's payment requirements and obligations. 


             19)  Requires the certificate of ownership for an automobile to  
               contain a provision for a recall disclosure, as specified, as  
               of July 1, 2016, or as soon as the DMV exhausts its existing  
               supply of certificate of ownership forms. 


             20)  Proclaims that it is unlawful and a misdemeanor violation  
               for a manufacturer, as specified, to unfairly discriminate  
               against a dealer based on certain provisions specified in the  
               Act.  


             21)  Excludes recreational vehicles, motorcycles, off-highway  
               motor vehicles, vehicles sold by a salvage pool, and  
               non-repairable vehicles as excluded from the provisions of  
               this bill. 


             22)  Defines the term "area of responsibility" as it pertains  
               to dealer franchise agreements. 


             23)  Declares that the consumer-related provisions of this bill  








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               shall become operable as of July 1, 2016, as specified. 


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, minor absorbable cost for the DMV to include the  
          disclosure statement on new certificates of ownership and bills of  
          sale.  [Motor Vehicle Account]


          COMMENTS:  


          1)Purpose of this bill.  This bill is intended to provide a  
            comprehensive solution to the dangers of recalled automobiles by  
            requiring used car dealers to check for outstanding recalls, and  
            then either repair the car before transfer, if the car is the  
            same line-make as the dealer or if the defect is particularly  
            dangerous, or allow the consumer to provide informed consent and  
            take the unrepaired car if it is a different line-make.  Rental  
            car companies would be prohibited from renting a vehicle if they  
            received notice of the recall at least 48 hours in advance.   
            This bill is sponsored by the California New Car Dealers  
            Association. 
          2)Substantial number of recalls announced annually.  According to  
            the author, "[w]hile vehicles have become safer, the number of  
            vehicles subject to a recall has grown dramatically.?2014 saw a  
            new record number of recalls in the United States with more than  
            63.8 million recalls.  This number of recalls is more than twice  
            as many recalls as any previous year and is equivalent to  
            roughly 25% of the vehicles on the road today.  Officials  
            predict that 2015 could see another record year, as  
            manufacturers face potential fines from federal regulators,  
            threats of increased litigation, and as the issue receives  
            greater coverage in mainstream media."




          Analysis Prepared by:                                               








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                          Hank Dempsey / P. & C.P. / (916) 319-2200  FN:  
          0000825