BILL ANALYSIS Ó
SB 750
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Date of Hearing: June 18, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 750 (Hernandez) - As Introduced: February 18, 2011
SENATE VOTE : 32-7
SUBJECT : Vehicles: key information access
SUMMARY : Permanently exempts certain vehicle manufacturers from
the requirement to provide locksmiths with electronic key code
information and makes permanent the requirement that BMW operate
a request line whereby BMW owners can obtain a replacement key
within one day of the request or via overnight delivery.
EXISTING LAW :
1)Requires car manufacturers, with certain exceptions, to be
available 24 hours a day seven days a week (24/7) to provide
electronic key code information to registered locksmiths for
certain vehicles manufactured on or after January 1, 2008.
2)Requires a registered locksmith to verify that the person
requesting the key code information is the registered owner of
the vehicle, or family member of the registered owner.
3)Requires a registered locksmith to give the key code
information to the registered owner after producing a key and
immediately thereafter destroy the key code information in his
or her possession.
4)Specifies that, except in cases of fraud, the registered
locksmith and vehicle manufacturer will not be held liable for
theft if all specified procedures for owner verification have
been followed.
5)Requires a manufacturer to make key code information available
to a registered locksmith for at least 25 years from the date
of vehicle manufacture.
6)Exempts car manufactures, until January 1, 2013, from
complying with the requirements of this bill if, on January 1,
2006, the manufacturer operates a telephone or electronic
request line 24/7 where the owner, or family member of the
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owner, can obtain a replacement key at a reasonable cost
within one day of the request.
7)Exempts the following from the requirements of this bill:
a) A manufacturer of a make of vehicles that sold less than
2,500 vehicles in California in the prior calendar year.
This includes Rolls Royce, Maserati, Ferrari, and over a
dozen other makes of automobiles.
b) Until January 1, 2013, a vehicle line of a motor vehicle
manufacturer that sold between 2,500 and 5,000 vehicles
(i.e., Saab).
c) Until January 1, 2013, a vehicle line of a motor vehicle
manufacturer that on January 1, 2006, did not provide for
the production of replacement keys or similar devices by
anyone other than the vehicle manufacturer itself, provided
that the manufacturer operates a request line available at
all times through which a replacement key could be
furnished within one day or via the next overnight delivery
at the request of a registered owner or registered owner's
family member.
1)Defines related terms.
FISCAL EFFECT : Unknown
COMMENTS : SB 1542 (Migden), Chapter 433, Statutes of 2006, was
jointly sponsored by the California State Automobile Association
and the Automobile Club of Southern California (Auto Clubs). At
that time, the sponsors reported that the intent of the
legislation was to provide vehicle owners an effective means of
obtaining replacement ignition keys in a secure and convenient
manner, given that more and more vehicles were being designed
with "smart keys" that made key duplication by a locksmith
impossible if the necessary key code information from the
vehicle manufacturer was unavailable. In support of SB 1542,
the Auto Clubs presented a number of examples where consumers
were greatly inconvenienced when locksmiths were unable to
create keys because vehicle manufacturers refused to provide
them with key code information. Some of the more poignant
examples included situations where vehicle owners were left
stranded in unsafe situations, were forced to have their
vehicles towed to dealerships (sometimes over great distances
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and at great expense), and were charged between $100 to $3,000
by dealerships for replacement keys (exclusive of towing
charges). In many of these examples, vehicle owners reported
being required to wait for long periods of time for the
replacement key to be created by dealerships as well as being
forced to pay exceptionally high dealer prices.
According to the Auto Clubs, BMW sought a provision in SB 1542
to exempt auto manufacturers, until January 1, 2013, from the
requirement to provide key code information to locksmiths, as
long as the vehicle manufacturers provided a 24/7 telephone or
electronic request line where the registered owner, or family
member of the registered owner, could obtain a replacement key
within one day of the request or via the next overnight
delivery. At that time, manufactures that qualified for the
exemption included BMW, Mercedes Benz, Jaguar, Land Rover, and
Porsche. Today the Auto Clubs note that the manufacturers that
do not currently provide key code information to locksmiths
include BMW, Jaguar, Land Rover, and Fiat. The Auto Clubs point
out of these manufacturers, only BMW is actively supporting
elimination of the sunset.
There has been much debate as to whether or not the expectation
was that BMW would come into compliance with the system provided
for in SB 1542. The Auto Clubs assert that the exemption was
intended to provide BMW with the time necessary to come into
compliance. The sponsor, on the other hand, contends that the
sunset was intended to allow BMW to continue their existing
practice meanwhile determining if additional technology could be
developed whereby they could comply while maintaining their
desired level of security. BMW asserts that upon review, they
believe their existing process adequately meets customer need
and therefore there was no need to take the additional steps to
necessary to comply with the requirements of AB 1542.
The Senate Judiciary Committee analyses prepared for SB 1542
indicates that the exemption and sunset provisions were included
in the bill to allow automakers, namely BMW, with the time come
into compliance with the bill's requirements. In their analysis
of SB 1542, the Senate Judiciary Committee wrote, "the bill
would also sunset this exemption in five years, thus requiring
any automaker selling vehicles in California after January 1,
2013 to have a key system that allows for the reproduction of a
replacement key by others, such as a registered locksmith."
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BMW reports that since the effective date of SB 1542, they have
replaced thousands of keys and in only one instance was key not
delivered to the owner consistent with the provisions of the
bill. Therefore, the sponsor concludes that operation of the
24/7 key replacement request line is as a suitable alternative
to providing key code information to registered locksmiths and
that this alternative means of providing key code information
should be allowed to continue indefinitely. BMW has also cited
the incidence of a recently discovered theft ring in New York
where luxury cars were being stolen using key codes supplied by
key code "brokers" including locksmiths and dealership
employees. BMW points to this example as the primary reason for
their preference to continue the 24/7 key replacement request
line rather than provide key code information to locksmiths.
BMW also contends that very few locksmiths possess the
sophisticated equipment necessary to create electronic keys for
BMWs and other high-end vehicles and therefore, most BMW owners
would need to use the 24/7 key replacement request line
regardless.
Arguing in opposition, the Auto Clubs contend that this bill
would benefit only a narrow group of foreign car manufacturers
and weaken the consumer protection laws set forth in AB 1542.
The Auto Clubs refer to AB 1542 as a landmark, bi-partisan
consumer protection legislation that was approved by the
California Legislature and supported by consumer groups, police
and fire departments, cities, insurance companies, and other
civic, taxpayer, and business organizations.
The Auto Clubs also contend that the exemption and sunset clause
included in SB 1542 was provided to give sufficient lead time
for auto manufactures to comply. They note that even though
they were given this lead time, the sponsor has failed come into
compliance, despite the fact that 90% of other auto
manufacturers have done so.
Arguing in opposition, the California Locksmiths Association
(CLA) refutes claims by BMW that very few locksmiths possess the
equipment necessary to create keys for high-end vehicles such as
BMWs. In fact, CLA contends that a large number of locksmiths
(particularly in metropolitan areas) possess the appropriate
equipment and can provide replacement keys or similar devices
for high-end vehicles within 1-2 hours at a cost ranging from
$100 to $400. These costs are contrasted with the costs BMW
owners must bear when having their vehicle towed to the
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dealership in addition to the cost of creating the replacement
key which can range from $300-500. The CLA also notes that
locksmiths carry a $1 million liability bond along with other
insurance and that for some vehicles, such as Volvo and Lexus,
the transfer of key code data is done wirelessly in such a way
that the locksmith is not able to view or have access to the key
code information at any time. CLA also notes that transmittal
of key code data is tracked, so if a code were to be used by an
unscrupulous locksmith to create a duplicate key in order to
steal the vehicle, such activity would be easily traced and the
perpetrator readily identified.
Automotive wholesalers and the automotive after-market industry,
also arguing in opposition to the bill, contend that in some
cases key code information is utilized to affect vehicle repair
since information contained in electronic keys are often used to
communicate with a vehicle's on-board diagnostic system. These
groups claim that if the key code information is faulty or
missing, technicians must create a new key or similar device to
properly diagnose problems and perform repairs. They argue that
currently, this process cannot be accomplished for BMWs because
the key code information is not released by the manufacturer.
Therefore, opponents of this bill contend that by withholding
key code information, car owners will be forced to have their
vehicles serviced at dealerships, thereby eliminating the option
for consumers to have their cars serviced at independent repair
shops. The automotive repair industry claims that this practice
violates existing law, SB 1146 (Burton), Chapter 1077, Statutes
of 2000, that ensures essential service, repair information,
parts, and tools are made available by vehicle manufacturers so
that vehicle owners have continued access to a competitive
marketplace for automotive service needs. The automotive repair
industry has also expressed concerns that if this bill passes,
other vehicle manufacturers may choose to operate 24/7 key
replacement request lines, thereby broadening the exemption to
potentially include other manufacturers, to the detriment of
consumers and the automotive industry.
Related legislation : SB 1542 (Migden) Chapter 433, Statutes of
2006, established the process whereby a motor vehicle owner or
family member could, through the use of a registered locksmith,
access the needed information from the motor vehicle
manufacturer to enable the locksmith to reproduce a replacement
key that would allow the vehicle owner to enter, start and
operate the motor vehicle.
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AB 714 (Ridley-Thomas, 2005) would have required motor vehicle
manufacturers to provide sufficient information for registered
vehicle owners to reproduce the vehicle's key. That bill died in
the Assembly Business & Professions Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
BMW (Sponsor)
California New Car Dealers Association
Long Beach BMW-Mini
Teamsters
Opposition
Associated Locksmiths of America, Inc.
Automotive Aftermarket Industry Association
Automobile Club of Southern California
AAA Northern California, Nevada and Utah
Automotive Service Councils of California
Automotive Wholesalers' Association
Beckmann Technologies, Inc.
Blue Link Diagnostic Solutions Inc.
California Automotive Business Coalition
California Locksmiths Association
California State Automobile Association
Camara Auto Services Inc.
Coalition for Auto Repair Equality
Consumer Federation of California
Greg's Automotive Service
Independent Automotive Professionals Association
James Automotive Service
Larry's 8-Day Auto Parts
Lock-Man Locksmith
Napa Auto Parts Orinda Motors Inc.
PIAA Corporation, USA
1 Individual
Analysis Prepared by : Victoria Alvarez / TRANS. / (916) 319-
2093
SB 750
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