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New Laws and Regulations 2022

Robert Ebin /

I feel like I have been saying this for the past few years now, but it is safe to say that 2021 has truly been a year like no other for dealers.  With COVID, labor issues, supply chain issues, and so on, dealers have constantly had a full plate of obstacles to navigate around. Many new laws going into effect in 2022 center on the subjects of employment and HR.  Although a discussion of these laws is beyond the scope of this article, KPA has provided extensive discussion about these laws here.

Thankfully, as there was last year, there are not as many new laws/regulations going into effect that will affect dealer operations that perhaps one would have anticipated in a “normal” year. Provided below are summaries of new laws and regulations that may impact dealer operations in 2022 (unless otherwise noted).

This list is meant for instructional use only, and KPA makes no guarantees that this list is exhaustive of all laws for the upcoming 2022 year. Please also note that the list DOES NOT cover labor and employment (including wage and hour) laws, nor does it cover (except where stated) environmental, health, or safety laws. While this publication should serve as a helpful tool, dealers should be sure to work with their legal counsel to ensure the new laws are properly understood and implemented. As always, KPA Hotline clients may call with any questions.

OSHA

Expanded OSHA Authority Over Employers with Multiple Worksites

Summary: This new law substantially expands Cal/OSHA’s enforcement authority and increases penalty amounts.

Degree of Impact: High.

Effective: January 1, 2022

Description: Although this article’s main focus is not on OSHA and EHS matters, this one was important enough that it deserved a mention.  SB 606, effective January 1, 2022, gives Cal/OSHA the authority to issue a citation that encompasses an entire business if it finds that:

  • One worksite has a written policy or procedure that isn’t compliant with a Section 25910 health safety code, rule, standard, order of regulation; or
  • A business has a pattern of violations involving multiple worksites

This new law also creates an “egregious violations” category, which allows for expanded fines and penalties.

Please refer to the link here for an in-depth discussion about SB 606.  Also, remember that KPA EHS customers can always contact their EHS consultant for further discussion on this or any other EHS topic.

Citations: Labor Code §§ 6317, 6317.8, 6317.9, 6323, 6324, 6429, 6602; SB 606 (Gonzalez)

Debt Collection

Debt Collector Licensure Requirement Update

Summary: SB 908, enacted in 2020 required that businesses “engaging in the business of debt collection” be subject to licensure.

Degree of Impact: Low.

Effective: January 1, 2022

Description: Although this law is not new, given that the licensure requirement started on January 1, 2022, this is a good time to bring up this topic again, especially since we have received a number of calls on the Hotline about this topic.  We, along with many others in California, believe that it is unlikely that new car dealers will be considered to be “engaging in the business of debt collection,” and therefore would not be subject to the licensure requirement. Currently, we are informed that the Department of Financial Protection and Innovation (DFPI) has been prompted to provide clarity on this topic, but has yet to issue and response.  We will, of course, keep you updated once more information is available.

Citations: SB 908 (Wieckowski)

Debt Collection—Use of FTC Identity Theft Report

Summary: This law expands the triggering of certain debt collection protections if the customer provides a copy of an FTC identity theft report and a written statement.

Degree of Impact: Low.

Effective: January 1, 2022

Description: Existing law requires a debt collector to cease collection activities if it receives a copy of a police report alleging that the debtor was a victim of identity theft.  AB 430, among other things, expands this protection where debt collection activities must also cease when the debtor provides a copy of an FTC identity theft report.  Dealers who are attempting to collect a debt should take this new little wrinkle into consideration.

Citations: Civil Code §§ 1788.18, 1788.61, 1798.92, 1798.93; Penal Code § 530.8; AB 430 (Grayson)

Consumer Protections

Curing Default Under ASFA

Summary: In order to cure a default under the Automobile Sales Finance Act (ASFA), this new law clarifies that the buyer is required to reimburse the seller or holder for all reasonable and necessary collection and repossession costs and fees actually paid.

Degree of Impact: Low.

Effective: January 1, 2022

Description: Existing language in ASFA states that in order to cure a default, the buyer must reimburse the seller (or holder) for all reasonable and necessary collection and repossession costs and fees “incurred.” Among the many technical changes to various laws that the Judicial Omnibus Bill, AB 1578, did was to clarify/establish that a buyer that seeks to reclaim a repossessed automobile in a dispute governed by ASFA is only liable for costs “actually paid” by a seller in the process of retaking, storing, and reselling the vehicle. The purpose behind this technical change was to require more precise accounting of the costs related to the repossession, which potentially could make it easier for lower-income Californians to regain access to their vehicles.

Dealers are advised to therefore take greater care to make sure they are exact in their accounting of costs related to vehicle repossessions.  Dealers also should seek the advice of knowledgeable counsel when dealing with repossessions.

Citations: Civil Code § 2983.3; AB 1578 (Committee on Judiciary)

Contracting with Minors

Summary: This new law clarifies what is not considered consent when entering into a contract with a minor.

Degree of Impact: Low.

Effective: January 1, 2022

Description: AB 891 affirmatively provides that consent is not established by a representation by a minor that their parent/guardian consented for them to enter into a contract.

This law should not be of great impact for dealers, as we have always recommended that dealers do not enter into contracts with minors.  However, it can serve as a reminder to dealers that contracting with a minor (regardless of whether the minor seeks financing or has paid in cash) will give the minor the right to disaffirm the contract until the minor reaches the age of majority (or a reasonable time thereafter).  If the minor is adamant about participating in the sale, a co-buyer who is an adult should be on the contract as well (which will more often than not be the minor’s parent/guardian).

Citations: Civil Code § 1568.5; AB 891 (Cunningham)

Unlawfully Obtained Data

Summary: This new law makes it unlawful for a person to sell data obtained unlawfully or to purchase or use data that one knows or reasonably should know was obtained through commission of a crime.

Degree of Impact: Medium.

Effective: January 1, 2022

Description: AB 1391 adds another layer to the consumer data protection web being created in California over the past several years.  It codifies specifically that it is unlawful for a person to sell data, or access thereto, that the person has acquired illegally.  It also makes it unlawful for a person to obtain data from a source that the person knows or reasonably should know has obtained that data illegally. Dealers are advised to make sure any consumer data obtained from third parties comes from a vetted, legitimate source.  Although this may already be a part of dealers’ CCPA processes, dealers are reminded to also ensure that any data/customer information transmitted to third parties be secure, and that relationships with these third parties be compliant with CCPA regulations.

Citations: Civil Code § 1724; AB 1391 (Chau)

Amendments to Safeguards Rule

Summary:

Degree of Impact: High.

Effective: January 10, 2022, with some requirements having delayed effective date of December 9, 2022.

Description: On October 27, 2021, the Federal Trade Commission (FTC), citing the need to better protect the public from breaches and cyberattacks that lead to identity theft and financial loss, announced updates to the Safeguards Rule.  These updates come after a years-long process of comments and proposed rulemaking.

As you may recall, the Gramm-Leach-Bliley Act (GLBA), enacted in 1999, requires that financial institutions (which includes dealerships that extend credit and lease terms) protect the security and confidentiality of personal information collected from customers.  Pursuant to the directive in the GLBA, the FTC created the Safeguards Rule, which became effective in 2003. The Safeguards Rule requires financial institutions to develop and implement an appropriate written information security program designed to protect customer information.  The requirements of the program include developing, implementing, and maintaining procedures to safeguard against risk to the security, confidentiality, and integrity of non-public customer information.

We wrote an article recently about the amendments to the Safeguards Rule, and so rather than rehashing it, please click here access to the full article.

Rental Passenger Vehicle Transactions

Summary: This law creates various changes to consumer protections related to rental cars.

Degree of Impact: Low.

Effective: January 1, 2022.

Description:  The existing law allows rental companies to sell damage waivers and imposes rate limitations based on vehicle category.  AB 901 sets the damage waiver rate limitation for specified vehicle categories to $25, with adjustments to be made starting January 1, 2023 based on the Consumer Price Index.  AB 901 also allows a rental company to charge a fee for an authorized driver in addition to the rental charge for an individual renter, unless the authorized driver is a family member, coworker, or employer of the individual renter.  AB 901 also deletes from existing law the mirror hang tag requirement and the requirement that an employee be present when the renter takes possession of the rental vehicle.  Dealers who fall within these laws should take note of the new requirements.

Citations:  Civil Code §§ 1939.09, 1939.19, 1939.31; AB 901 (Calderon)

Electric/Autonomous Vehicles and Related Infrastructure

Various Electric/Autonomous Laws

Summary: Various laws were passed related to the EV/Autonomous vehicle world this past legislative session, showing yet again California’s commitment towards EV.

Degree of Impact: Low.

Effective: January 1, 2022

Description:

AB 970:  Clarifies, expedites, and streamlines the processes for applications and obtaining permits for installing EV charging stations.

SB 68: Requires the Energy Commission to develop and publish guidance and best practices to help overcome barriers to the electrification of buildings and installation of EV charging equipment.  The bill also authorizes the Energy Commission to award money for projects that it deems beneficial to electricity ratepayers and that lead to technological advancements to reduce costs of building electrification.

SB 643: Requires the Energy Commission to prepare a statewide assessment of the fuel cell electric vehicle fueling infrastructure and fuel production needed to support the adoption of zero-emission trucks, buses, and off-road vehicles at levels necessary for the state to meet specified goals and requirements relating to vehicular air pollution.  The first assessment must be completed by the end of 2023 and the Energy Commission must update it every three years.

SB 500:  Prohibits, after January 1, 2030, the use of certain new autonomous vehicles (Level 3, 4, and 5 with a GVWR of 8,500 or less) that are not ZEVs on California roads.

Citations:  Government Code §§ 65850.7, 65850.71; Public Resources Code §§ 25233.5, 25711.5; Health and Safety Code § 43871; Vehicle Code § 38750; AB 970 (McCarthy); SB 68 (Becker); SB 643 (Archuleta); SB 500

Reminder—Decrease in California Clean Fuel Reward Amount

Summary: The Clean Fuel Reward rebate amount for new zero-emissions vehicles has decreased from $1,500 to $750.

Degree of Impact: Low to Medium.

Effective: November 2, 2022

Description: Since the Clean Fuel Reward program rolled out in 2020, this is not really a surprise, but rather a reminder that the amount of the rebate has decreased to $750.  Accordingly, dealers should ensure that this new amount is properly reflected on all new contracts for eligible vehicles.  As another reminder, the Clean Fuel Reward should be itemized on line 6.F. (i.e., the “Other” line) on the LAW-553 Retail Installment Sale Contract.

Service Drive

Bureau of Automotive Repair—Informal Citation Process

Summary: Creates an informal citation process to be installed on or after July 1, 2023.

Degree of Impact: Low to Medium.

Effective: January 1, 2022 (process to be installed on or after July 1, 2023)

Description: AB 471 will allow the Bureau of Automotive Repair (BAR) to install an informal citation review process in addition to their current formal review process. This informal review process will include an establishment of an informal citation conference.  Also included in this bill is the authority for the BAR to establish a remedial training process, whereupon completion of which, a licensed ARD can prevent disclosure of the citation on the internet (except in instances of fraud).

This new law also emphasizes unlicensed ARDs will not be able to claim the benefit of any labor lien, including storage fees.

Citations:  Various Business & Professions Code sections; AB 471 (Low)

DMV

Miscellaneous DMV Fee Increases

Summary: Various miscellaneous fee increases.

Degree of Impact: Low to Medium.

Effective: January 1, 2022

Description: On December 28, 2021, the DMV issued a memorandum outlining annual miscellaneous fee increases for 2022 year. Additionally, on January 4, 2022, the DMV issued a memorandum announcing various county fee increases for Orange, Riverside, and Contra Costs counties.  Dealers should ensure that these fee increases are being utilized after the first of the year.

Citations:  Various Vehicle Code sections; VIN 2021-11; VIN 2022-1

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