Pub. 1 2019-2020 Issue 2

18 CNCDAPrioritizes Franchise and Privacy Issues for 2019 Legislative Session Cliff Costa, Director of Government Affairs and Jenny Dudikoff McLaughlin, Director of Public Affairs W ith the 2019 California legislative session in full swing and nearly 3,000 bills introduced, CNCDA has nar- rowed down our top three prior- ity bills for the year, two of which are CNCDA sponsored pieces of legislation. AB 179 (Reyes) Protecting the New Motor Vehicle Franchise System CNCDA has reintroduced a com- prehensive franchise bill, AB 179, which seeks to continue to protect California’s new motor vehicle fran- chise system and California’s new car buyers by: 1. STRENGHTENING California’s franchise laws 2. ADDRESSING inappropri- ate treatment of dealers by manufacturers 3. ENFORCING manufacturer ac- countability for unlawful actions against dealers 4. CONFORMING California fran- chise laws to recent actions in other states CNCDA’s 2019 franchise bill starts where last year's AB 2107 left off, with topics including retail warranty reimbursement, factory-mandated facility upgrades and digital service vendors, brand spin-off require- ment, protests at the New Motor Vehicle Board and other franchise protections. From time to time the Legislature evaluates the rules and regula- tions that effect the new motor vehicle market in our state. Given the difference in bargaining power between huge multinational vehicle manufacturers and local indepen- dently-owned franchise dealerships, the Legislature regularly updates franchise laws to address the “lat- est flavor” of manufacturer abuses against franchised dealers and the public. Today’s dealers are facing an unprecedented level of competition from their own franchisors – the vehicle manufacturers and cost- shifting by manufacturers related to warranty reimbursement and upgrading facilities. CNCDA is the sponsor of AB 179, which does all of the following: • Responds to manufacturers' com- plete failure to consider customer retail rates for warranty reimburse- ment law by clarifying “reasonable- ness” to include the customer retail rates for parts and labor through a specified methodology – follow- ing over 40 states that provide for retail reimbursement. • Introduces an adjusted labor rate to account for the automaker’s