BILL ANALYSIS
SB 427
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Date of Hearing: June 22, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
SB 427 (Negrete McLeod) - As Amended: May 20, 2010
SENATE VOTE : 25-10
SUBJECT : Automotive repair: crash parts.
SUMMARY : Increases the penalty from $1,000 to $5,000 under the
Automotive Repair Act (Act) for failing to repair an air bag,
requires a consumer disclosure regarding auto repair fraud, and
makes minor technical amendments. Specifically, this bill :
1)Makes it a misdemeanor under the Act for an automotive repair
dealer (ARD) who prepares a written estimate for repairs that
includes replacement of a deployed airbag and who fails to
repair and fully restore the airbag to original operating
condition. This is punishable by a fine of $5,000,
imprisonment in the county jail for up to one year, or by both
that fine and imprisonment.
2)Replaces references to parts "supplied" with parts
"installed."
3)Specifies use of a "final repair invoice," rather than an
"invoice."
4)Requires, beginning January 1, 2012, the signature page of the
final repair invoice to contain the following statement in at
least 12-point boldface type enclosed in a box: "INSTALLING A
PART, OTHER THAN THE TYPE OF PART DESCRIBED ON THE WRITTEN
ESTIMATE, WITHOUT PRIOR APPROVAL FROM THE CUSTOMER, IS
UNLAWFUL. FOR ADDITIONAL INFORMATION, CONTACT THE BUREAU OF
AUTOMOTIVE REPAIR AT www.autorepair.ca.gov OR CALL (800)
952-5200."
5)Clarifies that no service shall be done by anyone other than
the ARD or his or her employees without the consent of the
customer, unless the customer cannot reasonably be notified.
6)Redefines "aftermarket crash part" to mean a replacement for
any crash part.
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7)Defines "crash part" as any of the nonmechanical sheet metal
or plastic parts which generally constitute the exterior of a
motor vehicle, including inner and outer panels and exterior
lighting, and shall also include the airbag in a motor
vehicle's inflatable restraint system.
EXISTING LAW :
1)Licenses and regulates more than 35,000 ARDs under the
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, and to obtain
authorization from the customer 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 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.
6)Establishes a misdemeanor penalty of up to six months in
jail, a $1,000 fine, or both, for any person who fails to
comply with the provisions of the Act.
7)Establishes, in the vehicle code, a misdemeanor penalty
of up to one year in jail, 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.
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FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "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.
"This bill ensures consumers are made aware of the prohibition
against parts switching, and provides consumers with the means
to protect themselves against this type of fraud by providing
them contact information for BAR if they suspect anything wrong
with the repair of their car.
"Additionally, this bill clarifies that airbags are required to
be repaired to their 'original operating condition' to ensure
that those repair shops that intentionally skirt the law are
easily prosecuted for their crime."
Background . "Crash parts," or "body parts," constitute the
exterior of a motor vehicle, and are generally made of sheet
metal, plastic, or glass and 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. Non-OEM parts are auto parts
made by an independent manufacturer, 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
proprietary engineering specifications. Non-OEM crash parts
typically cost 20% to 65% less than OEM crash parts.
BAR reestablished the Auto Body Inspection Program (program) in
January 2007, which allows qualified consumers to receive free
inspections to verify the collision repair work done on their
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cars. DCA's 2008-09 Annual Report states that the BAR conducted
209 inspections through the program that resulted in more than
61 consumer complaints for poor workmanship and/or billing for
parts and services not performed.
Previous 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. AB 2825 was vetoed by the
Governor, citing that the bill was duplicative of existing law
and therefore unnecessary.
AB 1483 (Carter) of 2007 would have required an auto repair
dealer, 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 ARDs.
Arguments in support . The Center for Auto Safety writes, "[This
bill] would strengthen current law by requiring auto repairers
to repair and restore a deployed airbag to fully operational
condition where replacement is included in the repair estimate.
The United States Department of Transportation has found that
20% 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.
"[This bill] also requires printing on the signature page of the
final invoice that installing a part other than the one
specified on the estimate is unlawful and the toll free number
and Internet Website of BAR to contact for more information.
Having the phone number and Website on the final invoice is
essential. Consumers have problems with vehicle repairs after
they leave the shop, so pamphlets and displays at the repair
dealer are inadequate to inform consumers who to call.
Including the consumer statement will impose no cost on
repairers, as the estimating companies provide free updates for
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government requirements."
Arguments in opposition . The California New Car Dealers
Association writes, "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. If the proponents of this
bill are truly concerned with preventing fraud and curtailing
the practice of part switching, zealous prosecution of existing
law by BAR would accomplish that objective without the
unnecessary paperwork this bill would require. The bill's flaws
are compounded by requiring a new notice on the signature page
of a final repair invoice.
Repair dealers already have signs posted in their facilities
listing the 800 number of BAR; repeating that fact in a special
notice on the invoice adds little but cost to the repair dealer.
Moreover, a statement "installing a part, other than the type
of part described on the written estimate, is unlawful" by its
very terms presupposes problems with the repair that could be
faced by the customer at this repair dealer. The negative
inference diminishes the reputation of the vast majority of
law-abiding and honest repair facilities. The disclosure in 12
point font surrounded by a box, even if improved in tone, will
do little to educate consumers about the practice of part
switching. Working with BAR to spread the word about this
nefarious practice, including dissemination of more information
about the free Auto Body Inspection Program other than on the
repair invoice itself when it is potentially too late, would be
a much more effective strategy than adding duplicative and
unnecessary disclosures."
REGISTERED SUPPORT / OPPOSITION :
Support
Advocates for Highway and Auto Safety
Center for Auto Safety
Consumers Union
Personal Insurance Federation of California
Public Citizen
Opposition
California Autobody Association
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The California New Car Dealers Association
Analysis Prepared by : Sarah Weaver / B.,P. & C.P. / (916)
319-3301