BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 427|
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THIRD READING
Bill No: SB 427
Author: Negrete McLeod (D)
Amended: 4/23/09
Vote: 21
SENATE BUS., PROF. & ECON. DEVL. COMMITTEE : 7-2, 4/20/09
AYES: Negrete McLeod, Corbett, Correa, Florez, Oropeza,
Romero, Yee
NOES: Aanestad, Walters
NO VOTE RECORDED: Wyland
SENATE BUS., PROF. & ECON. DEVEL.. COMMIT. : 5-3 (Fail),
4/13/09
AYES: Negrete McLeod, Corbett, Oropeza, Romero, Yee
NOES: Wyland, Aanestad, Walters
NO VOTE RECORDED: Correa, Florez
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Automotive repair: crash parts
SOURCE : Center for Auto Safety
DIGEST : This bill requires an automotive repair dealer
performing auto body or collision repair to place a notice
on the written estimate and final invoice stating that
installing parts, other than those described on the
estimate, without the customer's prior approval is unlawful
and that the consumer may contact the Bureau of Automotive
Repair if fraud is suspected; requires an automotive repair
CONTINUED
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dealer to provide a customer copies of invoices of any
airbags that were installed; establishes misdemeanor
penalties; defines "crash part" and "aftermarket crash
part;" becomes effective January 1, 2011.
ANALYSIS :
Existing law:
1. Licenses and regulates more than 35,000 automotive
repair dealers (ARDs) under the Automotive Repair Act
(Act) by the Bureau of Automotive Repair (BAR) within
the Department of Consumer Affairs (DCA).
2. Requires an ARD 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 ARD from charging a customer for work done
or parts supplied in excess of the written estimate
without first obtaining a customer's oral or written
authorization.
4. Requires an ARD 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 must also identify whether a crash part
is an original equipment manufacturer (OEM) or
non-original equipment (non-OEM) manufacturer crash
part.
5. Requires the ARD to obtain authorization from the
customer before performing work and imposing charges.
6. Requires all work done by an ARD to be recorded on an
itemized invoice that describes all service work done
and parts supplied, and requires the invoice to contain
specified information.
7. Establishes a misdemeanor (crime) penalty of up to six
months in jail or a $1,000 fine (or both), for any
person who fails to comply with the provisions of the
Act.
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8. Defines various terms for purposes of the motor vehicle
replacement parts provisions of the Business and
Professions Code.
Existing law (Vehicle Code) . Establishes a misdemeanor
(crime) penalty of up to one year in jail or a $5,000 fine
(or both), for any person who installs or reinstalls for
compensation, distributes or sells a previously deployed
air bag in a vehicle, if the person knows that the air bag
has been previously deployed.
This bill:
1. Defines the following terms:
(1) "Crash part" to mean any of the non-mechanical
sheet metal or plastic parts which generally
constitute the exterior of a motor vehicle,
including inner and out panels and exterior
lighting and includes the airbag in a motor
vehicle's inflatable restraint system.
(2) "Aftermarket crash part" to mean a replacement
for any crash part.
2. Requires an ARD to provide a customer, copies of
invoices of any airbags installed as part of an
inflatable restraint system.
3. Establishes a misdemeanor (crime) penalty of up to one
year in jail or a $5,000 fine (or both), for an
automotive repair dealer who prepares a written estimate
that includes replacement of a deployed airbag and who
fails to repair and fully restore the airbag to original
operating condition.
4. Requires the first page of the itemized written estimate
and the first page of the final invoice, to contain a
statement in at least 12 point bold face type in a box:
"INSTALLING A PART, OTHER THAN A PART DESCRIBED ON THE
WRITTEN ESTIMATE, WITHOUT PRIOR APPROVAL FROM THE
CUSTOMER IS UNLAWFUL. IF YOU SUSPECT THE ILLEGAL
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INSTALLATION OF OR ARE CONCERNED ABOUT THE REPAIR OF
YOUR VEHICLE BY AN AUTOMOTIVE REPAIR DEALER, CALL THE
BUREAU OF AUTOMOTIVE REPAIR IN THE CALIFORNIA
DEPARTMENT OF CONSUMER AFFAIRS TOLL FREE AT (800)
952-5210."
5. Becomes operative on January 1, 2011.
6. Deletes reference to a repealed provision of law and
makes conforming and technical changes.
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 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 typically cost 20
percent to 65 percent less than OEM crash parts.
Related legislation
AB 2825 (Carter), of 2008 would have authorized a customer
to receive copies of invoices from the distributor, dealer
or manufacturer for all crash parts installed in excess of
$50; required the written estimate and the final invoice to
include a notice stating that installing parts other than
those described on the estimate without the customer's
prior approval is unlawful; and required copies of crash
part invoices, if requested by the consumer, to be attached
to the final invoice. That bill was vetoed by the
Governor, citing that the bill as duplicative of existing
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law and therefore unnecessary.
AB 1483 (Carter), of 2007 would have required an ARD, once
repairs are completed, to provide a written affirmation to
the customer on the first page of the final invoice that
the parts identified on the estimate are the parts that
were installed on the vehicle during repair. That bill was
vetoed by the Governor, citing that it was duplicative of
existing law and therefore unnecessary and that the
provisions may lead to increased expenses and decreased
efficiency at automotive repair dealers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 5/4/09)
Center for Auto Safety (source)
American Federation of State, County and Municipal
Employees AFL-CIO
Consumer Federation of California
Consumers for Auto Reliability and Safety
Personal Insurance Federation of California
Public Citizen
OPPOSITION : (Verified 5/4/09)
Automotive Service Councils of California
California Autobody Association
California New Car Dealers Association
Collision Repair Association of California
Fender Mender, Inc.
International Union, United Automobile, Aerospace and
Agricultural
Implement Workers of America
ARGUMENTS IN SUPPORT : The Center for Auto Safety (CAS)
states: "While the majority of autobody repair shops
comply with the law, the problem of "parts switching" or
billing the consumer for a more expensive OEM part, but
installing a less-expensive aftermarket part - remains a
common area of fraud in the autobody repair industry." CAS
indicates that each year auto crash repair fraud victimizes
hundreds of thousands of California motorists at a cost of
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over $350 million. Where the repairer fails to install a
replacement airbag, consumers can even be killed in a
crash. This bill would strengthen current law by requiring
the parts invoice for any replacement airbag installed as
part of the vehicle repair to be attached to the final
repair invoice given to a consumer. The US Department of
Transportation has found that 20 percent of all deaths in
crashes caused by an airbag failing to deploy are due to
the airbag not having been installed in a repair prior to
the crash.
CAS also argues that putting the toll free phone number of
BAR on both the repair estimate and invoice is essential,
since consumers normally have problems with vehicle repairs
after they leave the shop and the pamphlets and displays at
the repair shop do not inadequately inform consumers who to
call.
CAS believes that repair fraud continues to be a problem
stating that thirty years ago the U.S. Department of
Transportation documented that 53 cents out of every dollar
consumers spend on auto repair in general was wasted, and
in 2003 the BAR's study of auto body collision repairs
showed that 42 percent of the vehicles inspected had parts
or labor listed on the invoice that were not actually
supplied or performed.
CAS also asserts that this bill is completely different
from prior bills in that the bill deals with airbags which
were not replaced in crash repairs, and requires the BAR's
toll free number on the repair estimate and final invoice
which neither of the previous bills did.
ARGUMENTS IN OPPOSITION : California New Car Dealers
Association (CNCDA) is opposed and contends that the bill
requires automotive repair dealers to duplicate work
already required by statute. It is already fraud
(intentional misrepresentation) to disclose on an estimate
that the repair dealer will put OEM parts on a car, not do
so, and then itemize that he or she did so on the invoice.
CNCDA suggests instead that zealous prosecution of existing
law by the BAR would accomplish that objective without the
unnecessary paperwork this bill would require.
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The California Autobody Association is also opposed and
believes the bill only creates another layer of unnecessary
administrative paper work for the automotive repair dealer
and frustration and confusion to the consumer. CAA argues
the bill duplicates existing law which requires written
disclosures and certifications on both the estimate and the
final invoice for all parts, including airbags;
furthermore, repair shops must already post signs listing
consumer rights and the BAR's toll free telephone number.
JJA:do 5/5/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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