BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 287|
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THIRD READING
Bill No: AB 287
Author: Gordon (D), Eggman (D) and Mark Stone (D), et al.
Amended: 8/15/16 in Senate
Vote: 21
SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/21/16
AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva,
McGuire, Mendoza, Roth, Wieckowski
SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16
AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning,
Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 76-0, 6/2/15 - See last page for vote
SUBJECT: Vehicle safety: recalls
SOURCE: Author
DIGEST: This bill establishes various consumer and car dealer
protections for recalled vehicles.
ANALYSIS:
Existing federal law:
1)Sets forth in federal regulations the requirements for when
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manufacturers must notify vehicle owners, dealers, and
distributors about a defect that relates to motor vehicle
safety or noncompliance with a federal motor vehicle safety
standard.
2)Prohibits a motor vehicle dealer from selling a new vehicle
subject to a recall, as specified, unless and until the defect
is repaired. Federal law does not afford similar prohibitions
to used vehicles.
3)Requires motor vehicle safety recall information to be
publicly available online and searchable by vehicle make,
model, and vehicle identification number (VIN).
4)Prohibits vehicles which are subject to recall from being
rented, provided the company renting the cars has a fleet of
at least 35 vehicles.
Existing state law requires manufacturers to properly fulfill
every warranty agreement and fairly compensate their dealers for
the diagnostics, repair, servicing and all other conditions of
that obligation.
This bill:
1)Includes the cost of disposing of hazardous materials in the
compensation required of the manufacturer to the dealer.
2)Prohibits the renting or loaning of a vehicle subject to a
manufacturer's recall.
3)Requires the California Department of Motor Vehicles ( DMV),
when mailing a notice of registration renewal, to notify a
vehicle owner if their vehicle is subject to recall. This
provision shall become operative when the DMV has access to a
recall database and sufficient funding.
Comments
1)Purpose. According to the author, California already has the
strongest consumer protection laws in the country for car
buyers. While federal law prohibits the sale of a new vehicle
with an unrepaired recall, neither federal nor California law
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specifically requires the disclosure or repair of a used
vehicle subject to a recall. This bill would further enhance
those protections by ensuring that automobile dealers, rental
car companies, automobile manufacturers, and the government
all have a role in improving the auto recall and repair
process.
2)Recalls increasing, millions affected. 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 the National Highway Traffic Safety
Administration (NHTSA) called the largest and most complex
safety recall in history.
3)Reimbursing dealers. Existing law requires auto manufacturers
to reimburse their dealers for the diagnostics, repair,
servicing and all other conditions of that obligation.
Airbags are considered hazardous waste because of the
inflation mechanism. This bill specifically identifies the
cost of disposing of hazardous waste as a cost the
manufacturers must reimburse to the dealers.
4)Fixing rentals and loaners. New federal law prohibits rental
car companies and dealers with 35 or more available vehicles
from renting or loaning cars with an unremedied manufacturer's
recall. This bill extends that prohibition to all rental car
companies and dealers, regardless of how many vehicles they
have available. While the bill is silent on an enforcement
mechanism for this provision, the author intends to allow the
DMV to impair the dealer's license as the penalty, as is the
case with similar provisions of the Vehicle Code.
5)DMV recall notice. The track record for fixing recalled
vehicles is mediocre. 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
whether a vehicle is subject to recall: www.safercar.gov.
This bill tries to improve on that record by requiring the DMV
to indicate on the annual registration renewal notice when a
car is subject to recall. This provision shall be effective
when the DMV director certifies that the department has
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adequate funding and access to the appropriate database. The
author's intent is for California to participate in a recently
established federal grant program to fund pilot projects for
state notification to consumers of vehicle recalls.
Implementing this provision may take a while because the DMV
is currently working on a number of IT projects. However,
there is precedent for doing this, as the DMV has an ongoing
program of notifying owners when their vehicle is subject to
an air emissions-related recall and withholding registration
renewal until the equipment is repaired.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee:
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
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)
SUPPORT: (Verified8/16/16)
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California New Car Dealers Association
Independent Automobile Dealers Association of California
OPPOSITION: (Verified8/16/16)
None received
ASSEMBLY FLOOR: 76-0, 6/2/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Brough, Brown, Burke, Calderon, Campos, Chang, Chau,
Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago,
Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber,
Wilk, Wood, Atkins
NO VOTE RECORDED: Bonta, Chávez, Grove, Williams
Prepared by:Randy Chinn / T. & H. / (916) 651-4121
8/16/16 17:21:26
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