BILL ANALYSIS Ó AB 1178 Page 1 Date of Hearing: May 6, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1178 (Achadjian) - As Amended March 26, 2015 ----------------------------------------------------------------- |Policy |Transportation |Vote:|16 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill provides that a vehicle manufacturer, manufacturer branch, distributor, or distributor branch cannot take any adverse action against a dealer, relative to an export or AB 1178 Page 2 sale-for-resale prohibition, if the dealer causes the vehicle to be registered in a state and collects any applicable sale or use tax due to the state. FISCAL EFFECT: Any costs to the New Motor Vehicle Board (NMVB) would be absorbable with the board's normal operations. (NMVB is a program within DMV which operates in a quasi-judicial capacity to resolve disputes between franchise vehicle dealers and manufacturers/distributors of new motor vehicles and specified motorsports vehicles.) COMMENTS: Background and Purpose. SB 155 (Padilla), Chapter 512, Statutes of 2013, made a number of changes to the statutory framework regulating the relationship between vehicle manufacturers and dealers, including changes to their claims and appeals process, performance standards, and vehicle export polices. According to the sponsor, last year a specific manufacturer adopted several export-dealer policies and sent updated notifications to franchise dealers of those policy changes. Both policies established strict liability provisions for dealers who sold these particular types of vehicles that were ultimately exported. These franchise dealers could be subject to penalties if a vehicle was exported even if the franchise dealer processed the vehicle's registration and collected relevant taxes. AB 1178 Page 3 AB 1178 is the latest attempt to address issues between vehicle manufacturers and franchise dealers related to vehicle export and resale policies by clarifying that a vehicle manufacturer is prohibited from taking any adverse action against a dealer once the vehicle's registration and relevant taxes are processed. Analysis Prepared by:Chuck Nicol / APPR. / (916) 319-2081