Debate Grows Over Lemon-Law Changes
An attempt to strengthen California’s automobile lemon law is leaving a sour taste in the mouths of car makers fighting efforts to double the length of time covered and, for the first time, include cars owned by small businesses.
In 1982, California passed landmark legislation safeguarding consumers against problem cars in the first year of operation, including setting up an arbitration process to settle disputes between car buyers and manufacturers.
Auto makers, including General Motors, Ford and Nissan, say they will oppose expanding the lemon law unless it requires consumers to abide by arbitration rulings.
Under existing law, “if [consumers] don’t like the result, then they get their second bite at the apple in court,” said Melanie Wiegner, Ford’s regional manager for California governmental affairs. Auto makers, she said, are forced to abide by the arbitration rulings. Sen. Charles Calderon (D-Whittier) has introduced SB 289, which would expand the period covered by the lemon law, from one year or 12,000 miles to two years or 24,000 miles. Consumers could still seek a refund or a replacement if their car required four or more repairs for the same problem within that period.
The bill also would include small businesses with up to five vehicles. Self-employed workers, such as real estate agents, landscapers and private contractors, also would enjoy protections for the first time. Auto makers don’t want to include businesses because, they say, company vehicles are worked harder and maintained less frequently than cars for personal use.
SB 289 was the subject of a lengthy debate this week in the Assembly Committee on Consumer Protection. A vote was delayed until July 8 to give Calderon and the auto industry time to work on possible amendments.
Contraceptive Update: Health insurers have dropped their opposition to legislation that would include contraceptives in the list of prescription drugs they pay for. Insurers removed their opposition to AB 160, introduced by Assemblyman Bob Hertzberg (D-Sherman Oaks), after the Senate Insurance Committee dropped a requirement that coverage be provided in individual policies.
Business interests still oppose the bill, arguing that covering the cost of contraceptives would mean that they must pass along higher costs to employees in the form of health insurance premium hikes.
AB 160 was approved by the Senate Insurance Committee last week and is expected to come up for a vote on the Senate floor in July. Gov. Pete Wilson vetoed similar legislation last year.
ATM Reversal: Bowing to pressure, the state Board of Equalization on Thursday reversed its decision to exempt bank-owned automated teller machines from property tax assessments. Banks, which are not subject to personal property taxes, had argued that ATMs, even those bolted to a building wall, were comparable to other personal bank property such as chairs and desks. In February, the board formally agreed, quietly voting to classify the more than 10,000 ATMs in the state as personal property rather than as building fixtures, which are taxable. County tax assessors objected to the reclassification, arguing that they would lose millions in tax revenues. Thursday’s vote was 3-2 in favor of the reversal.
* Small Business Overseas
Bottom Line: World trade agreements recently ended preferential treatment for home country businesses and spurred this effort to set up a state program to help small- and medium-sized businesses enter newly accessible foreign markets.
Chances: Trade and Commerce Agency officials asked for $150,000 to pay for the new program. They got an allocation for $100,000 amended to the bill at a hearing on Wednesday.
Next Step: Senate Appropriations Committee, no date set.
Details: AB 896 author Assemblywoman Grace Napolitano (D-Norwalk) can be reached at (916) 445-0965.
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