BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 287 (Gordon) - Vehicle safety: recalls ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 2, 2016 |Policy Vote: T. & H. 11 - 0, | | | JUD. 7 - 0 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 8, 2016 |Consultant: Mark McKenzie | | | | ----------------------------------------------------------------- This bill meets the criteria for referral to the Suspense File. Bill Summary: AB 287 would require the Department of Motor Vehicles (DMV) to notify vehicle owners on their registration renewal notice if a vehicle is subject to a manufacturer's recall, as specified. The bill would also prohibit a dealer or rental car company from loaning or renting a vehicle is subject to a recall until the repair has been made. Fiscal Impact: Unknown one-time DMV costs, potentially in the range of $75,000 to $150,000, to contract with an outside entity to provide vehicle recall database reports for vehicles subject to registration renewal. (Motor Vehicle Account) One-time DMV programming costs of approximately $125,000 to make IT changes to the vehicle registration database systems AB 287 (Gordon) Page 1 of ? to provide for the vehicle recall disclosure. Timing of the programming would depend upon when the DMV declares that it has access to a recall database and funding available to provide the disclosure on vehicle registration renewals. (Motor Vehicle Account) Ongoing DMV costs of approximately $580,000 for field office and call center staff time to respond to inquiries about the recall notices, assuming a small percentage of the 4.5 - 5 million registration renewal customers request additional information. Potential DMV costs beginning in 2017-18 for ongoing dealership inspections and enforcement activities. Staff estimates any additional activities would result in minor costs. (Motor Vehicle Account) Background: Vehicle safety recalls are necessary when a motor vehicle or item of vehicle equipment does not comply with a Federal Motor Vehicle Safety Standard, or when there is a safety-related defect in the vehicle or equipment. The National Highway Traffic Safety Administration (NHTSA) has the authority under federal law to require manufacturers to recall vehicles that have safety defects or do not meet safety standards. If a safety defect is identified, manufacturers are required to notify the NHTSA, owners, dealers and distributors, and, correct the defect at no change (unless the vehicle is more than 10 years old), and vehicle dealers are prohibited from selling a new vehicle subject to a recall, unless the defect is repaired. Federal law requires motor vehicle safety information to be publicly available online and searchable by vehicle make, model, and vehicle identification number (VIN). Federal law also prohibits rental car companies and vehicle dealers with 35 or more available vehicles from renting or loaning vehicles that are subject to a safety recall. From 1995 to 2015, the number of vehicle recalls has almost tripled, from 348 to 973, with more than 87 million vehicles affected in 2015. The recall of Takata airbags impacts as many as 68.8 million airbags in what NHTSA called the largest and most complex safety recall in history. Despite the large number of affected vehicles, NHTSA has estimated that only 70% of recalled vehicles are repaired. To improve that record, the NHTSA established a website where the public can determine AB 287 (Gordon) Page 2 of ? whether a vehicle is subject to recall: www.safercar.gov . Proposed Law: AB 287 would prohibit the renting or loaning of vehicles subject to a recall, and require DMV to notify vehicle owners on registration renewal documents if their vehicle is subject to a recall. Specifically, this bill would: Prohibit a dealer or rental car company from loaning or renting a vehicle subject to a recall until the recall repair is performed. If a remedy is not immediately available but a temporary repair is available to eliminate the safety risk, the dealer or rental company may rent or loan a vehicle after the repair is made, but must make the recall repair when the remedy is available. Require DMV to include a specified recall disclosure statement on the notice of registration renewal for a vehicle subject to a manufacturer's recall. Require DMV to obtain a recall database report before mailing a notice of registration renewal, and require DMV to notify the registered owner if a vehicle is subject to a recall by checking a box next to the recall disclosure statement. Specify that the DMV recall disclosure requirements are operative on the date the director of DMV executes a declaration certifying that DMV has appropriate access to the necessary data within a recall database and available funding to include a recall disclosure statement on registration renewal documents. The declaration must be posted on the DMV website and sent to the Legislature. Clarify that automobile manufacturers are liable for costs associated with the disposal of hazardous materials associated with a recall through a specified reimbursement of dealer costs to make the recall repair. Specify that the bill would become operative on July 1, 2017, except as specified. Related Legislation: SB 686 (Jackson) would have prohibited a vehicle dealer from selling, leasing, or loaning a used vehicle if the dealer knows or should have known that the vehicle is subject to a manufacturer's safety recall, unless repairs are made to AB 287 (Gordon) Page 3 of ? correct the defect have been performed. This bill failed passage in the Assembly Business, Professions, and Consumer Protection Committee in 2014. AB 753 (Monning) would have expressly prohibited a rental car company from renting a vehicle that is subject to a recall notice unless the vehicle has been repaired as specified in the notice. This bill was held without a hearing in this committee in 2011 at the request of the author. -- END --