BILL ANALYSIS
AB 1483
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Date of Hearing: April 17, 2007
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mike Eng, Chair
AB 1483 (Carter) - As Amended: April 9, 2007
SUBJECT : Automotive repair: crash parts.
SUMMARY : Requires an automotive repair dealer, once repairs
are completed, to provide a written certification to the
customer that the crash parts identified on the written estimate
are the crash parts that were installed on the vehicle during
repair, and permits the Bureau of Automotive Repair (BAR) to
draft regulations to specify the form of the certification.
EXISTING LAW:
1)Establishes BAR within the Department of Consumer Affairs for
the purpose of licensing and regulating automotive repair
dealers.
2)Requires an automotive repair dealer to provide a customer
with an itemized written estimate for parts and labor before
performing any work on the customer's vehicle.
3)Prohibits an automotive repair dealer from charging a customer
for work done or parts supplied in excess of the written
estimate without obtaining a customer's oral or written
authorization.
4)Requires an automotive repair dealer that is performing auto
body or collision repair work to identify whether each part is
new, used, rebuilt, or reconditioned on the written estimate.
The written estimate shall also identify whether a crash part
is an original equipment manufacturer (OEM) or non-original
equipment (non-OEM) manufacturer crash part.
FISCAL EFFECT : Unknown
COMMENTS :
Background . "Crash parts," or body parts, are parts generally
made of sheet metal, plastic, or glass that constitute the
exterior of a motor vehicle and tend to serve a cosmetic
function. Examples of crash parts include bumper reinforcements
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and absorbers, hoods, fenders, door shells, rear outer panels,
deck and trunk lids, quarter panels, truck beds and box sides,
body side panels, tailgates, and lift gates.
OEM crash parts are made by the manufacturer of a given motor
vehicle for use on that vehicle (e.g., a hood made by Ford for a
Ford vehicle). Non-OEM parts, on the other hand, are imitation
auto parts made by an independent manufacturer that is generally
not affiliated with the manufacturer of the motor vehicle for
which the part is intended. Non-OEM manufacturers must
"reverse-engineer" the replacement parts because they do not
have access to the OEM manufacturer's specifications for a given
part (because this information is proprietary). Non-OEM crash
parts are typically 20% to 65% less expensive than OEM crash
parts.
Purpose of this bill . According to the author, existing law
requires automotive repair dealers to give customers written
estimates, but it does not require them to certify that the
parts the customer is paying for were actually installed on the
vehicle. The author maintains that this situation provides an
opportunity for a common practice known as "parts switching,"
whereby an automotive repairer writes an estimate for repair
based on the cost of an OEM crash part, but then uses a less
expensive (non-OEM) crash part for the repair, without passing
the cost savings on to the customer or his or her insurer.
Support . The sponsor of this bill, the Center for Auto Safety
(CAS), argues that this bill will rectify a missing element in
California law and provide "authorities with a full complement
of tools to stamp out auto body repair fraud and other forms of
insurance fraud." CAS points out that when the Bureau inspected
the auto repairs of 1,315 automobiles for a study released in
September 2003, 551 (42%) had parts or labor on the invoice that
were not actually supplied or performed. CAS argues that "fraud
levels of 42% are simply unacceptable. Such fraud causes great
economic harm and personal suffering to California consumers.
Losses due to auto body fraud in the state could be as much as
$320,000,000 per year."
Opposition . The California Autobody Association (CAA) opposes
this bill arguing that it is unnecessary because existing law is
sufficient and already requires automotive repair dealers to
disclose to a customer what parts will be used to repair the
customer's vehicle two times, on the written estimate and on the
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final invoice. CAA asserts that "if an automotive repair dealer
makes any false written statement on the estimate or invoice it
is considered fraud" and that this bill "will only create
another layer of unnecessary administrative paper work for the
automotive repair dealer and frustration and confusion to the
customer."
The California Motor Car Dealers Association (CMDA) opposes this
bill and maintains that it "is another in a long series of
proposed legislation, including AB 1163 (Yee) of 2005 and AB
1852 (Yee) of 2006, in which the aftermarket parts certification
industry has attempted to force or influence consumers directly
or indirectly into accepting non-original equipment manufacturer
(OEM) parts. Although this bill is less ambitious than these
prior effects, it still suffers from the same congenital defect:
requiring automotive repair dealers to duplicate work already
required by statute." In addition, CMDA contends that requiring
an automotive repair dealer to state three times what parts he
or she will put on a customer's vehicle (estimate, invoice, and
certification) will increase consumer confusion and will hinder
consumers' efforts to understand how their car is going to be
fixed.
The Collision Repair Association of California (CRA) opposes
this bill arguing that its provisions requiring BAR to adopt
regulations are vague and could lead BAR "to give legal standing
to some entity or process outside of the contract between the
repairer and the vehicle owner. For example, certification
might include obtaining proof or approval from a third party
regarding the origin of a part." Further, CRA asserts that this
bill will not curtail illegal conduct, only vigorous enforcement
of the existing law will drive unscrupulous automotive repair
dealers out of business.
REGISTERED SUPPORT / OPPOSITION :
Support
Center for Auto Safety (sponsor)
Opposition
California Autobody Association
California Motor Car Dealers Association
Collision Repair Association of California
AB 1483
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Analysis Prepared by : Pablo Garza / B. & P. / (916) 319-3301