BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1743


                                                                    Page  1





          ASSEMBLY THIRD READING


          AB  
          1743 (Dababneh)


          As Amended  May 4, 2016


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                  |Noes                |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Privacy         |11-0 |Chau, Wilk, Baker,    |                    |
          |                |     |Calderon, Chang,      |                    |
          |                |     |Cooper, Dababneh,     |                    |
          |                |     |Gatto, Gordon, Low,   |                    |
          |                |     |Olsen                 |                    |
          |                |     |                      |                    |
          |----------------+-----+----------------------+--------------------|
          |Judiciary       |10-0 |Mark Stone, Wagner,   |                    |
          |                |     |Alejo, Chau, Chiu,    |                    |
          |                |     |Gallagher,            |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
          |                |     |Cristina Garcia,      |                    |
          |                |     |Holden, Maienschein,  |                    |
          |                |     |Ting                  |                    |
          |                |     |                      |                    |
          |                |     |                      |                    |
           ------------------------------------------------------------------ 










                                                                    AB 1743


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          SUMMARY:  Allows motor vehicle sales transactions to be  
          conducted electronically. Specifically, this bill:  


          1)Removes the Automobile Sales Finance Act and California  
            Vehicle Leasing Act from the exclusion clauses of the Uniform  
            Electronic Transactions Act (UETA) and applies all UETA  
            requirements to motor vehicle sales transactions. 


          2)In addition, requires car dealers to: 


             a)   Obtain opt-in consent from the consumer to transact  
               business electronically and to gather that consent either  
               on the initial application or in a separate document with  
               the consent language bolded or otherwise made conspicuous.
             b)   Allow consumers to opt out of using the electronic  
               process at any time and create a process or system for the  
               person to opt out.


             c)   Neither charge a person who declines to opt in to an  
               electronic transaction nor provide a discount or incentive  
               to any person to opt in to an electronic transaction.  


          3)Provides that in the event of a dispute over a discrepancy  
            between an electronic copy of the executed contract in the  
            possession of the seller and a copy of the executed contract  
            provided to the buyer, there shall be no presumption that  
            either the seller's copy or the buyer's copy is the accurate  
            or prevailing copy for purposes of determining the buyer's  
            obligations.  Any provision in a contract that purports to  
            provide otherwise is void.  


          4)Clarifies that a vehicle sales transaction using electronic  
            signatures, as permitted under this bill, must completed and  








                                                                    AB 1743


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            signed electronically at the car dealer's established place of  
            business.


          FISCAL EFFECT:  None.  This bill is keyed non-fiscal by the  
          Legislative Counsel.


          COMMENTS:  


          1)Purpose of this bill.  This bill is intended to streamline the  
            vehicle sales process for consumers and car dealerships by  
            permitting consumers to choose to sign vehicle purchase and  
            lease contracts electronically.  This measure is sponsored by  
            the California New Car Dealers Association.   
          2)Electronic transactions.  While UETA prohibits the use of  
            electronic contracts and signatures on automobile sales and  
            lease contracts, federal law (E-SIGN) permits car sales to be  
            conducted electronically.  In other states, the automotive  
            financing industry and new car dealers have begun to move to  
            electronic contracts as a way to modernize the car buying  
            process, improve sales record retention, and help expedite the  
            vehicle financing process.  


            Electronic transactions have a number of significant  
            advantages including faster service and consumer choice.  Many  
            consumers prefer to conduct transactions small and large  
            electronically, yet the law prohibits car purchase  
            transactions from being completed electronically.  The author  
            contends the car buying experience would be a faster, more  
            convenient experience for consumers if the transaction itself  
            could be conducted using computers or tablets rather than  
            stacks of paper. 


          3)Existing consumer protections, such as a right to cancel,  
            would be left intact.  UETA requires that if notice of a right  








                                                                    AB 1743


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            to cancel has to be provided or sent to a consumer, then doing  
            so is only permissible electronically if the consumer is  
            allowed to exercise his or her right to cancel by electronic  
            means as well.  Under current law, consumers are given certain  
            rights to cancel car sales contracts, and this bill would not  
            change or limit those rights.  In fact, it would keep  
            consumers on the same playing field as car dealers by allowing  
            consumers to cancel by electronic means if the car dealer had  
            chosen to provide them notice of their right to cancel  
            electronically.   
            This bill would also not change other consumer protections in  
            current law, such as the right to a single contract document  
            containing detailed and itemized costs for the purchase of the  
            car an any additional products or services, and the federal  
            law requirement to give the buyer the original Buyers Guide  
            displayed on the vehicle or an accurate copy that contains all  
            of the required disclosures and reflects the final warranty  
            terms between the buyer and seller.




          Analysis Prepared by:                                             
                          Jennie Bretschneider / P. & C.P. / (916)  
                          319-2200                                         
          FN: 0002876