Amended in Assembly April 25, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1743

Introduced by Assembly Member Dababneh

begin insert

(Coauthor: Assembly Member Wilk)

end insert

February 1, 2016

An act to amend Section 1633.3 begin delete of end delete begin insert of, and to add Sections 2984.7, 2984.8, 2986, and 2986.1 to, end insert the Civil Code, relating to electronic transactions.

LEGISLATIVE COUNSEL’S DIGEST

AB 1743, as amended, Dababneh. Electronic transactions: motor vehicle finance.

Existing law, the Uniform Electronic Transactions Act (UETA), generally allows parties to contract to conduct transactions by electronic means, imposes specified requirements on electronic transactions in order to comply with the act, and provides specified protections for electronic transactions conducted pursuant to the act. begin delete UETA does not apply to certain transactions, including, among others, those related to conditional sale contracts, as defined, and lease contracts, as defined, for motor vehicles. end delete begin insert Existing law defines and regulates the form and content of conditional sale contracts and lease contracts for motor vehicles and excepts these contracts from the application of the UETA. end insert

This bill would delete begin delete that end delete begin insert the end insert exemption from the UETA for conditional sale and lease contracts for motor vehicles. begin insert The bill would require sellers and lessors to offer buyers and lessees the option of signing their respective contracts and agreements electronically. The bill would require certain disclosures to be made in this regard and to be in a document separate from a conditional sale contract or lease contract. The bill would prohibit a seller or lessor from charging a buyer or lessee for a decision not to sign electronically and would prohibit charging more or less for vehicles based on the decision to sign electronically. The bill would require that the disclosures described here be signed at the seller’s or lessor’s place of business. end insert

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 1633.3 of the Civil Code, as amended
by begin insert Section 1.5 of end insert Chapter 638 of the Statutes of 2015, is amended
to read:

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
and (c), this title applies to electronic records and electronic
signatures relating to a transaction.

(b) This title does not apply to transactions subject to the
following laws:

(1) A law governing the creation and execution of wills, codicils,
or testamentary trusts.

(2) Division 1 (commencing with Section 1101) of the Uniform
Commercial Code, except Sections 1206 and 1306.

(3) Divisions 3 (commencing with Section 3101), 4
(commencing with Section 4101), 5 (commencing with Section
5101), 8 (commencing with Section 8101), 9 (commencing with
Section 9101), and 11 (commencing with Section 11101) of the
Uniform Commercial Code.

(4) A law that requires that specifically identifiable text or
disclosures in a record or a portion of a record be separately signed,
including initialed, from the record. However, this paragraph does
not apply to Section 1677 or 1678 of this code or Section 1298 of
the Code of Civil Procedure.

(c) This title does not apply to any specific transaction described
in Section 17511.5 of the Business and Professions Code, Section
56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
1789.16, or 1793.23 of, Chapter 1 (commencing with Section
1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
2954.5 or 2963 of, Section 3071.5 of, Part 5 (commencing with
Section 4000) of Division 4 of, or Part 5.3 (commencing with
Section 6500) of Division 4 of this code, subdivision (b) of Section
18608 or Section 22328 of the Financial Code, Section 1358.15,
1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety
Code, Section 662, paragraph (2) of subdivision (a) of Section
663, 664, 667.5, 673, 677, paragraph (2) of subdivision (a) of
Section 678, subdivisions (a) and (b) of Section 678.1, Section
786 as it applies to individual and group disability policies, Section
10192.18, 10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or
11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482
of the Public Utilities Code, or Section 9975 or 11738 of the
Vehicle Code. An electronic record may not be substituted for any
notice that is required to be sent pursuant to Section 1162 of the
Code of Civil Procedure. Nothing in this subdivision shall be
construed to prohibit the recordation of any document with a county
recorder by electronic means.

(d) This title applies to an electronic record or electronic
signature otherwise excluded from the application of this title under
subdivision (b) when used for a transaction subject to a law other
than those specified in subdivision (b).

(e) A transaction subject to this title is also subject to other
applicable substantive law.

(f) The exclusion of a transaction from the application of this
title under subdivision (b) or (c) shall be construed only to exclude
the transaction from the application of this title, but shall not be
construed to prohibit the transaction from being conducted by
electronic means if the transaction may be conducted by electronic
means under any other applicable law.

(g) Notwithstanding subdivisions (b) and (c), this title shall
apply to electronic records and electronic signatures relating to
transactions conducted by a person licensed, certified, or registered
pursuant to the Alarm Company Act (Chapter 11.6 (commencing
with Section 7590) of Division 3 of the Business and Professions
Code) for purposes of activities authorized by Section 7599.54 of
the Business and Professions Code.

(h) This section shall remain in effect only until January 1, 2019,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2019, deletes or extends that date.

SEC. 2.  

Section 1633.3 of the Civil Code, as amended by
begin insert Section 2.5 of end insert Chapter 638 of the Statutes of 2015, is amended to
read:

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
and (c), this title applies to electronic records and electronic
signatures relating to a transaction.

(b) This title does not apply to transactions subject to the
following laws:

(1) A law governing the creation and execution of wills, codicils,
or testamentary trusts.

(2) Division 1 (commencing with Section 1101) of the Uniform
Commercial Code, except Sections 1206 and 1306.

(3) Divisions 3 (commencing with Section 3101), 4
(commencing with Section 4101), 5 (commencing with Section
5101), 8 (commencing with Section 8101), 9 (commencing with
Section 9101), and 11 (commencing with Section 11101) of the
Uniform Commercial Code.

(4) A law that requires that specifically identifiable text or
disclosures in a record or a portion of a record be separately signed,
including initialed, from the record. However, this paragraph does
not apply to Section 1677 or 1678 of this code or Section 1298 of
the Code of Civil Procedure.

(c) This title does not apply to any specific transaction described
in Section 17511.5 of the Business and Professions Code, Section
56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
1789.16, or 1793.23 of, Chapter 1 (commencing with Section
1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
2954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with
Section 4000) of Division 4 of, or Part 5.3 (commencing with
Section 6500) of Division 4 of this code, subdivision (b) of Section
18608 or Section 22328 of the Financial Code, Section 1358.15,
1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety
Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786 as
it applies to individual and group disability policies, 10192.18,
10199.44, 10199.46, 10235.16, 10235.40, 11624.09, or 11624.1
of the Insurance Code, Section 779.1, 10010.1, or 16482 of the
Public Utilities Code, or Section 9975 or 11738 of the Vehicle
Code. An electronic record may not be substituted for any notice
that is required to be sent pursuant to Section 1162 of the Code of
Civil Procedure. Nothing in this subdivision shall be construed to
prohibit the recordation of any document with a county recorder
by electronic means.

(d) This title applies to an electronic record or electronic
signature otherwise excluded from the application of this title under
subdivision (b) when used for a transaction subject to a law other
than those specified in subdivision (b).

(e) A transaction subject to this title is also subject to other
applicable substantive law.

(f) The exclusion of a transaction from the application of this
title under subdivision (b) or (c) shall be construed only to exclude
the transaction from the application of this title, but shall not be
construed to prohibit the transaction from being conducted by
electronic means if the transaction may be conducted by electronic
means under any other applicable law.

(g) Notwithstanding subdivisions (b) and (c), this title shall
apply to electronic records and electronic signatures relating to
transactions conducted by a person licensed, certified, or registered
pursuant to the Alarm Company Act (Chapter 11.6 (commencing
with Section 7590) of Division 3 of the Business and Professions
Code) for purposes of activities authorized by Section 7599.54 of
the Business and Professions Code.

(h) This section shall become operative on January 1, 2019.

(i) This section shall remain in effect only until January 1, 2021,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2021, deletes or extends that date.

SEC. 3.  

Section 1633.3 of the Civil Code, as added by begin insert Section
3.5 of end insert Chapter 638 of the Statutes of 2015, is amended to read:

1633.3.  

(a) Except as otherwise provided in subdivisions (b)
and (c), this title applies to electronic records and electronic
signatures relating to a transaction.

(b) This title does not apply to transactions subject to the
following laws:

(1) A law governing the creation and execution of wills, codicils,
or testamentary trusts.

(2) Division 1 (commencing with Section 1101) of the Uniform
Commercial Code, except Sections 1206 and 1306.

(3) Divisions 3 (commencing with Section 3101), 4
(commencing with Section 4101), 5 (commencing with Section
5101), 8 (commencing with Section 8101), 9 (commencing with
Section 9101), and 11 (commencing with Section 11101) of the
Uniform Commercial Code.

(4) A law that requires that specifically identifiable text or
disclosures in a record or a portion of a record be separately signed,
including initialed, from the record. However, this paragraph does
not apply to Section 1677 or 1678 of this code or Section 1298 of
the Code of Civil Procedure.

(c) This title does not apply to any specific transaction described
in Section 17511.5 of the Business and Professions Code, Section
56.11, 56.17, 798.14, 1133, or 1134 of, Section 1689.6, 1689.7,
or 1689.13 of, Chapter 2.5 (commencing with Section 1695) of
Title 5 of Part 2 of Division 3 of, Section 1720, 1785.15, 1789.14,
1789.16, or 1793.23 of, Chapter 1 (commencing with Section
1801) of Title 2 of Part 4 of Division 3 of, Section 1861.24, 1862.5,
1917.712, 1917.713, 1950.6, 1983, 2924b, 2924c, 2924f, 2924i,
2924j, 2924.3, or 2937 of, Article 1.5 (commencing with Section
2945) of Chapter 2 of Title 14 of Part 4 of Division 3 of, Section
2954.5 or 2963 of, Section 3071.5 of Part 5 (commencing with
Section 4000) of Division 4 of, or Part 5.3 (commencing with
Section 6500) of Division 4 of this code, subdivision (b) of Section
18608 or Section 22328 of the Financial Code, Section 1358.15,
1365, 1368.01, 1368.1, 1371, or 18035.5 of the Health and Safety
Code, Section 662, 663, 664, 667.5, 673, 677, 678, 678.1, 786,
10086, 10113.7, 10127.7, 10127.9, 10127.10, 10192.18, 10199.44,
10199.46, 10235.16, 10235.40, 10509.4, 10509.7, 11624.09, or
11624.1 of the Insurance Code, Section 779.1, 10010.1, or 16482
of the Public Utilities Code, or Section 9975 or 11738 of the
Vehicle Code. An electronic record may not be substituted for any
notice that is required to be sent pursuant to Section 1162 of the
Code of Civil Procedure. Nothing in this subdivision shall be
construed to prohibit the recordation of any document with a county
recorder by electronic means.

(d) This title applies to an electronic record or electronic
signature otherwise excluded from the application of this title under
subdivision (b) when used for a transaction subject to a law other
than those specified in subdivision (b).

(e) A transaction subject to this title is also subject to other
applicable substantive law.

(f) The exclusion of a transaction from the application of this
title under subdivision (b) or (c) shall be construed only to exclude
the transaction from the application of this title, but shall not be
construed to prohibit the transaction from being conducted by
electronic means if the transaction may be conducted by electronic
means under any other applicable law.

(g) Notwithstanding subdivisions (b) and (c), this title shall
apply to electronic records and electronic signatures relating to
transactions conducted by a person licensed, certified, or registered
pursuant to the Alarm Company Act (Chapter 11.6 (commencing
with Section 7590) of Division 3 of the Business and Professions
Code) for purposes of activities authorized by Section 7599.54 of
the Business and Professions Code.

(h) This section shall become operative on January 1, 2021.

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 2984.7 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 2984.7. end insert   

(a) (1) Prior to the execution of a conditional sale
contract to which Section 1633.3 may apply, the seller shall offer
the buyer the option of signing electronically the conditional sale
contract and agreements as part of the transaction of the vehicle.
A person’s consent to opt in to signing electronically may be
acquired in writing or electronically. The consent form for opting
in shall disclose, in writing or electronically, all of the following:

(A) The election to sign electronically the conditional sale
contract and other agreements as part of the transaction of the
vehicle is voluntary.

(B) The buyer may opt out at any time.

(2) The buyer’s signature, in writing or electronically, shall be
set forth immediately below the opt-in consent disclosure.

(b) (1) The seller shall not charge a buyer for the decision not
to sign a conditional sale contract electronically.

(2) The seller shall not charge more or less for the purchase of
a vehicle to a buyer opting to sign a conditional sale contract
electronically.

(c) Notwithstanding Section 2981.9, the disclosure of the option
to sign electronically and the buyer’s consent to it, if applicable,
as described in subdivision (a), shall be in a document separate
from the conditional sale contract.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 2984.8 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 2984.8. end insert   

A conditional sale contract to which Section 1633.3
applies shall be signed at the seller’s place of business.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 2986 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 2986. end insert   

(a) (1) Prior to the execution of a lease contract to
which Section 1633.3 may apply, the lessor shall offer the lessee
the option of signing electronically the lease contract and
agreements as part of the transaction of the vehicle. A person’s
consent to opt in to signing electronically may be acquired in
writing or electronically. The consent form for opting in shall
disclose, in writing or electronically, all of the following:

(A) The election to sign electronically the lease contract and
other agreements as part of the transaction of the vehicle is
voluntary.

(B) The lessee may opt out at any time.

(2) The lessee’s signature, in writing or electronically, shall be
set forth immediately below the opt-in consent disclosure.

(b) (1) The lessor shall not charge a lessee for the decision not
to sign a lease contract electronically.

(2) The lessor shall not charge more or less for the lease of a
vehicle to a lessee opting to sign a lease contract electronically.

(c) Notwithstanding Section 2985.8, the disclosure of the option
to sign electronically and the lessee’s consent to it, if applicable,
as described in subdivision (a), shall be in a document separate
from the lease contract.

end insert

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 2986.1 is added to the end insert begin insert Civil Code end insert begin insert , to read: end insert

begin insert

begin insert 2986.1. end insert   

A lease contract to which Section 1633.3 applies shall
be signed at the lessor’s place of business.

end insert