Senate Standing Committee on Business, Professions and Economic Development

Let's go ahead and get started with the Senate Committee on Business, Professions and Economic Development. We're going to come to order. Good afternoon, everyone. We just have one Bill on the agenda today, so we can probably make quick work of this. Senator Umberg, you are now on this Committee. Congratulations to joining the great Committee. And as Senator Grayson enters the room, we now have a quorum. So I think we'll start with establishing that quorum by calling the roll.

[Roll Call]

Great. Thank you, Members, for getting here in timely fashion. For other BPED Members who are in the building, please make your way down quickly. I don't anticipate that this will be a lengthy meeting. Our first order of business, as this is the first meeting of the new session, is to adopt the Committee rules.

So without objection, the Committee rules are adopted. Any objections to that? Pretty good. Good. Senator Umberg. Okay. All right, then, Senator Ember, we're going to let you get started, and we will consider SB 26.

Thank you very much. SB 26 is a cleanup of the Lemon Law from last year, AB 1755, authored by Assemblymember Kalra and myself. The purpose of the lemon law reform was to expedite redress, in particular for those who are impacted with a vehicle that basically is resistant to repair.

The amendments to or the cleanup Bill simply clarifies that there is an opt out provision should manufacturers decide that they want to opt out and revert to the law as it existed before. I understand that the Chair has proposed several amendments. Those are all acceptable to us. With me here to testify is Ms. Savina Takar from the California Consumer Attorneys of California and Mr. Matthew Clavenstein from Volkswagen.

Would you like to hear from your witnesses now?

I would.

Okay. Great.

Good morning, Madam Chair, Members. Saveena Takhar with the Consumer Attorneys of California here in support of SB 26. CAoC was a proponent of AB 1755 last year to enact procedural reforms. We believe the Bill will help consumers get redressed faster for defective vehicles.

We thank the chair and the Committee consultant for the amendments in this Bill and would appreciate an aye vote.

Thanks for being here.

Good afternoon, Chair, Members of the Committee, Matt Klopfenstein from Summit Advocacy on behalf of Volkswagen Group of America. We are here also in strong support of this Bill and speaking on behalf of a coalition of automakers that were not part of the negotiation last year on AB 1755. And we had serious concerns with that Bill last year.

We're very grateful to the author, to Senator Umberg, as well as the governor's office for agreeing to put forward this Bill this year that creates an opt in option for AB 1755. We think that that will best allow different automakers to decide what is the best process that fits within their customer relations operations.

Want to especially thank the chair and the, especially the Committee consultant for all their work in making sure that the definitions and language in this Bill properly aligns with 1755 and the rest of Lemon Law and ensuring that there is good oversight over Lemon Law into the future. So with that, respectfully ask for an aye vote.

Thank you so much. All right, Senator Umberg, you ready to hear from folks in support and opposition of the Bill?

Indeed.

Okay. All right, if you are here to support Senate Bill 26. Actually, let me just make sure. Is there opposition to Senate Bill 26? Lead opposition that wants to. Okay, let's, let's take that first. Come on forward and then. Sorry, I missed her there. Let's hear from the lead opposition.

So you'll have two minutes to share with us your concerns and then we'll go to the folks in the room in supporting and opposition. Thanks for being here.

Thank you.

When you're ready.

Madam Chair and Members. I'm Rosemary Shahan, President of Consumers for Auto Reliability and Safety. And we're here in opposition mostly to get our concerns on the record because we don't see this Bill.

We appreciate the amendments that are being proposed in this Committee and believe that they will help mitigate the harm caused by AB 1755, but they don't go far enough. And I understand because of the situation we were in last year, the process has been anything but normal.

And we're not asking for a no vote, but we want to make it known on the record. We're still concerned about the takeaways that reduce protection from for lemon owners in California that reduce the time they have to bring a lemon case and the amount that they can get as a refund.

The amount they can get is being reduced under 1755 by the amount of negative equities that they have. And on average that's about $6,000. So if you can't pay $6,000 out of pocket, even if your car is definitely a lemon, you can't get a refund.

So a lot of people are being trapped with cars that are very often really defective and unsafe. And we're also concerned about an issue that you raised last year. We really appreciate, and that is whether consumers are even going to know that they have to give a formal written notice to a particular email address or mailing address.

And especially since most lemon owners never even talk to an attorney. They just want to get their car fixed. And we're concerned that they won't have the same level of compliance with their warranties.

Sounds like a good place to wrap up. But do you have one more point you want to make? Are you good?

Just one more quick point. We're very concerned about the Rodriguez decision and the impact on used car buyers who buy cars with a warranty but aren't able to use our lemon law anymore.

Okay, great. Thank you for being here and. And for sharing your concerns with us. And just note for folks who just walked in the room that they're not urging a no vote, but rather just wanting to voice their concerns for the future. So you don't really have a lead, no side in the room that I'm aware of.

So now we will take those in support who are here for me too. Testimony. So your name, the organization that you represent, your position on the Bill will start with the supporters and then we'll move to any opposition that might be.

Thank you. Pardon me. Thank you, Madam Chair. Members, Mike Belote on behalf of General Motors, we appreciate the Committee and the Committee consultants work on this.

Hello. Chloe King with Political Solutions on behalf of Honda in support. Thank you.

Good afternoon. Lizzie Cootsona. Here on behalf of Tesla in support. Thank you.

Good afternoon. Graciela Castillo-Krings, on behalf of Toyota. Thank you.

Good afternoon, Chair, members. Usha Mutschler on behalf of Stellantis. Thank you.

Good afternoon, Madam Chair and Members. Meegen Murray with the Weideman Group on behalf of Lucid and support. Thank you.

Great. Anyone in the room in opposition who'd like to share your name, organization and position on the Bill? Okay, seeing no one.

We will come back to the dais for comments from colleagues before turning it back over to Senator Umberg. Senator Niello.

Thank you, Madam Chair. We heard this Bill in the Judiciary Committee before and I won't make all of the comments that I made then. I just point out that I was opposed to the Bill last fall because of it being a gut and amendment at the last minute, and I kind of don't like that.

No, let me rephrase that. I can't stand that process, frankly. And I disagreed with the policy issue also. And my understanding was that there was going to be a meeting of all parties and see if that policy should be changed. And what we've done is we've brought forward basically a choice.

Manufacturers can choose to be ruled under that which was passed last fall or that which existed prior to that. So I opposed the Bill last fall. I don't like what's going on, but if I vote no for this, then I'm essentially voting in favor of what I voted against last fall.

As I said, I feel like I'm in Alice in Wonderland. What's up is down and what down is up. But that point aside, for that reason, I will support this Bill. But it's just an example of what happens when we do things kind of at the last minute of a concluding session.

All right. I don't see any other comments from my colleagues. Give one last look, and then I have a few comments for you. Senator Umberg, the. The Senators from the Greater Sacramento region are of one mind on this issue. So Senator Niello and I are both.

We have both struggled a bit with not only the previous Bill, but how to support SB 26 or get to a place where we can so that we can use it as the best vessel possible to make sure that 1755 lands, which has been my goal. I'm sure you were thrilled to get double referred to BPED as well as Judiciary.

Only thing better than that is triple referred.

Yeah, I can only imagine the excitement you had.

Yes.

All right, so we did make a few amendments here. All credit to the amazing staff to my right here, who worked her tail off to bring everyone together. But I know everyone in this room knows that.

Just worth repeating that the State of California is quite lucky to have the lead consultant on this Committee that we have on not just this issue, but every issue. One of my reasons why I really wanted to stay here and be a chair of this Committee again in this session because we are so fortunate.

I'm so lucky to get to work with you. So, Sarah, thank you for putting your. Your amazing brain to work on this Bill. I think California is better off for it. Senator Umberg, I appreciate you giving me the opportunity to take a look at it, and you have been very kind.

It's worth noting from the beginning of the appoint of... it being sent to this Committee, he told me, do what you think you need to do. And I appreciate that. That's the best kind of colleague that we can have to try to serve our constituency. The framework of 1755 gave me pause. I was vocal about it.

Believe I was the lone no vote in the California State Legislature. Hence the excitement for landing in this Committee with the cleanup Bill. But, you know, I think at the end of the day, the goal here is does 1755, and then also this Bill on top of that, make life better for consumers in California?

And that is our main goal. That's everyone involved's goal, and it should be our goal. And so what I want to know is, do we have a shot to make sure that that in fact does happen?

And I appreciate that the amendments that you're taking here in the business professions, an economic development Committee, will at least allow us in short order to take another look and see if that has happened. Have we helped consumers? Do they understand the process?

Are manufacturers being able to do what they want to do on the opt in or opt out process? How is that working? Are they opting in? Are they opting out? And most importantly, are people able to get to and from work with reliable transportation? And are we taking lemons off of our streets?

That's what we're here for at the end of the day. And so adding the component that gives us a look at that pretty quickly, I think is critically important.

I still have some serious concerns about the structure of the Bill and the implementation of the Bill, but I am going to support it today, get out of my own way and make sure that we have another look back where we can talk about whether or not moms who have reported their vehicle who then have to hold onto it for 30 days are able to safely get their kids to school.

If parents who need to get to work are able to do so, even if they had to wait 60 days on a report back period and hold onto a vehicle, do they have what they need, or do we need to modify some of those components?

We've also fixed a couple of the things that came up in judiciary that the author himself agreed to. A couple of the definitions are now concurrent with other law that use the same definitions in other places. We think that's really important.

And then we have set some better and I think more reasonable implementation components in terms of timing. And I greatly appreciate everyone in this room who's been a party to those conversations and allowed us to move that forward.

I feel like coming off of this Committee, we'll be sending a product forward to the Assembly and, and ultimately to the Administration. That gives us another chance at a time down the road to make sure it's as effective for people as the good reputation that California has always had around lemon law.

We want to Maintain that or improve it if possible. I think this gives us that opportunity. So I will be urging an I vote and would entertain a motion. Senator Umberg, would you like to close?

I'll move the Bill. And I'll also close if I'm allowed to move my own Bill.

I think so.

So let me. Let me echo your comments concerning staff. We're all, especially me, only as good as our staff. And I'm blessed with excellent staff, as are you, Madam Chair, number one. Number two, yes, I do believe this is better for consumers. I think this expedites. I think this expedites the resolution of Lemon law challenges.

And so I think it also clarifies notice. I think it also cuts down on the costs of Lemon law litigation. And for those reasons, I've authored. Jointly authored 1755 and authored SB 26. And with that, I'd urge an aye vote.

Speaking of great staff, the recommendation here is that we let Senator Archuleta make the motion, if he so will.

Oh, I'm sorry. Okay. All right, we're going to. I withdraw my motion.

We'll have Senator Archuletta motion for the record. Keep him off the hot seat. Thank you, Senator Archuletta. We appreciate that. He gets himself on the hot seat enough. He probably. We don't need to add to it, right?

Indeed. Thank you.

All right. But it's an aye vote from you, right? Senator Umberg, that's an urged aye vote. Great. Let's call the roll. Thanks Colleagues.

[Roll Call]

That's eight. It is. Through. I'm going to sit here for just a couple minutes and make sure there's not somebody running down the hallway to get to us to leave it open. That is our only item of business today. It is do pass to appropriations. And thank you all for being here.

Hey, Roger. So CalMatters is doing a story on your Bill.

Well, yeah. About bipartisan collaboration.

Yeah. And with the underpinning of, you know, why is it that this needs to be changed so.

Well, there's that, and there's also my. Right to cure bill.

Okay, that reporter just burned me on this Lemon law bill. In fact, my initial reaction was I don't need to talk to them...

Okay, we're going to go ahead and close out the Business, Professions and Economic Development Committee. Thanks everyone for participating today.

That's good to know. Maybe he'll bring it up and I'll try to solve it.