BILL ANALYSIS Ó SENATE COMMITTEE ON TRANSPORTATION AND HOUSING Senator Jim Beall, Chair 2015 - 2016 Regular Bill No: AB 759 Hearing Date: 7/14/2015 ----------------------------------------------------------------- |Author: |Linder | |----------+------------------------------------------------------| |Version: |3/26/2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant|Randy Chinn | |: | | ----------------------------------------------------------------- SUBJECT: Recreational vehicles DIGEST: This bill authorizes RV dealers whose franchises have been terminated to continue to sell any new RV inventory that was purchased by the dealer prior to the termination. ANALYSIS: Existing law: 1)Establishes the New Motor Vehicle Board (NMVB), which is responsible for resolving disputes between franchised dealers and manufacturers of new motor vehicles, including motorcycles and recreational vehicles (RVs). 2)Prohibits RV dealers from selling new RVs without a franchise from the RV manufacturer. This bill: 1)Makes a number of technical changes to the statutes dealing with the NMVB, including the creation of separate parallel and nearly identical code sections for RV dealers and auto dealers. 2)Authorizes RV dealers whose franchises have been terminated to continue to sell any new RV inventory that was purchased by the dealer prior to the termination. AB 759 (Linder) Page 2 of ? COMMENTS: 1)Purpose of the bill. According to the author, inconsistent and misleading language has crept into the NMVB code sections over the years. This bill is intended to provide technical and clarifying changes to the statutes. In addition, the bill authorizes RV dealers to sell their remaining inventory after a franchise agreement has ended, a common industry practice. The bill is sponsored by the Recreational Vehicle Industry Association and the California Recreational Vehicle Dealers Association. Many of the technical amendments were proposed by the NMVB. 2)Background. The NMVB is a small organization with 13 positions proposed for FY 2015-2016. Contrary to its name, the NMVB deals primarily with franchise dealer/manufacturer disputes, though as a secondary duty they offer a non-binding mediation service between consumers and new-car dealers and manufacturers. The NMVB does not have the authority to enforce California's lemon law. 3)What's new? The one substantial provision in the bill authorizes RV dealers who have lost their franchises to sell any new RVs in their inventory as new. Because RV dealers own their inventory, if their franchises are lost that inventory would have to be sold as used, resulting in a loss to the dealers, according to the sponsors. Current law is apparently more honored in the breach than the observance under current practice. This bill legitimizes that practice. Assembly Votes Floor: 77-0 Appr: 17-0 Trans: 15-0 FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes POSITIONS: (Communicated to the committee before noon on Wednesday, July 8, 2015.) SUPPORT: AB 759 (Linder) Page 3 of ? California Recreational Vehicle Dealers Association (co-sponsor) Recreational Vehicle Industry Association (co-sponsor) OPPOSITION: None received -- END --