BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      AB 1178


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          ASSEMBLY THIRD READING


          AB  
          1178 (Achadjian)


          As Amended  June 2, 2015


          Majority vote


           ------------------------------------------------------------------- 
          |Committee       |Votes |Ayes                 |Noes                 |
          |                |      |                     |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Transportation  |16-0  |Frazier, Achadjian,  |                     |
          |                |      |Baker, Bloom, Chu,   |                     |
          |                |      |Daly, Dodd, Eduardo  |                     |
          |                |      |Garcia, Gomez, Kim,  |                     |
          |                |      |Linder, Medina,      |                     |
          |                |      |Melendez, Nazarian,  |                     |
          |                |      |O'Donnell, Santiago  |                     |
          |                |      |                     |                     |
          |----------------+------+---------------------+---------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,      |                     |
          |                |      |Bloom, Bonta,        |                     |
          |                |      |Calderon, Chang,     |                     |
          |                |      |Daly, Eggman,        |                     |
          |                |      |Gallagher, Eduardo   |                     |
          |                |      |Garcia, Holden,      |                     |
          |                |      |Jones, Quirk,        |                     |
          |                |      |Rendon, Wagner,      |                     |
          |                |      |Weber, Wood          |                     |
          |                |      |                     |                     |
          |                |      |                     |                     |
           ------------------------------------------------------------------- 








                                                                      AB 1178


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          SUMMARY:  Provides that a vehicle manufacturer, manufacturer  
          branch, distributor, or distributor branch cannot take any adverse  
          action against a dealer relative to an export or sale-for-resale  
          prohibition if the dealer causes the vehicle to be registered in a  
          state and collects or causes to be collected any applicable sale  
          or use tax due to the state, as specified.


          EXISTING LAW:  


          1)Charges the Department of Motor Vehicles (DMV) with licensing  
            and regulating dealers, manufacturers, and distributors of motor  
            vehicles who conduct business in California. 


          2)Makes it unlawful for a vehicle manufacturer or distributor to  
            take specified actions against a vehicle dealer or franchisee.    



          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, 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:  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. Specifically, SB 155 added  
          provisions that prohibited a vehicle manufacturer or distributor  
          from taking or threatening to take any adverse action against a  








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          dealer who sold a vehicle to a buyer who then either exported the  
          vehicle to another country or resold the vehicle unless the  
          manufacturer's export or sale-for-resale prohibition policy was  
          provided to the dealer in writing prior to the sale or lease and  
          the dealer knew or reasonably should have known of the customer's  
          intent to export or resell the vehicle.  SB 155 further specified  
          that the dealer processing a vehicle's registration or collecting  
          taxes on the sold vehicle creates a rebuttable presumption that  
          the dealer did not have reason to know of the consumer's intent.


          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.  Additionally these policies excluded the rebuttable  
          presumption provisions established under SB 155.  Thus, 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.


          This bill 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 unless  
          certain conditions are met.  The author notes that this bill will  
          "strengthen California's law by prohibiting manufacturers from  
          taking negative actions against a dealer when a vehicle is  
          exported or resold if the dealer collects sales tax and registers  
          the vehicle in California."




          Analysis Prepared by:                                               
          Manny Leon / TRANS. / (916) 319-2093  FN: 0000872








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