BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1178


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          Date of Hearing:  May 6, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1178 (Achadjian) - As Amended March 26, 2015


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          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


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          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


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          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