BILL ANALYSIS �
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|Hearing Date:April 8, 2013 |Bill No:SB |
| |202 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: SB 202Author:Galgiani
As Introduced: February 7, 2013Fiscal:Yes
SUBJECT: Automotive repair.
SUMMARY: Deletes "repairing tires" and "changing tires" from the list
of repair services exempt from registration as an automotive repair
dealer under the Bureau of Automotive Repair.
Existing law:
1)Registers 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). (Business and Professions Code (BPC) � 9882)
2)Defines certain terms in the Act, including:
a) "Automotive repair dealer" to mean a person who, for
compensation, engages in the business of repairing or diagnosing
malfunctions of motor vehicles. (BPC � 9880.1 (a))
b) "Repair of motor vehicles" to mean maintenance of and repairs
to motor vehicles performed by an automotive repair dealer
including automotive body repair work, and excludes from the
definition: (BPC � 9880.1 (e))
i) Repairs made under a commercial business agreement.
ii) Repairing tires and changing tires.
iii) Lubricating vehicles.
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iv) Installing light bulbs, batteries, windshield wiper blades
and other minor accessories.
v) Cleaning, adjusting, and replacing spark plugs, fan belts,
oil, and air filters.
vi) Other minor services customarily performed by gasoline
service stations.
c) "Automotive technician" to mean an employee of an automotive
dealer (or the dealer itself) who performs maintenance,
diagnostics, repair, removal, or installation of any integral
component parts of an engine, driveline, chassis or body of any
vehicle, and excludes from the definition: (BPC � 9880.1 (g))
i) Repairing and changing tires.
ii) Lubricating vehicles.
iii) Installing light bulbs, batteries, windshield wiper
blades, and other minor accessories.
iv) Cleaning, replacing fan belts, oil and air filters.
v) Other minor services customarily performed by gasoline
service stations.
3)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. (BPC �
9884.8)
4)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 work or charging for any work on the
customer's vehicle. (BPC � 9884.9)
5)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. (BPC � 9884.9 (a))
6)Establishes the following fees for an ARD registration: (BPC �
9886.3)
a) Initial registration fee of not more than $200 for each place
of business.
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b) Annual renewal fee of not more than $200 for each place of
business.
c) Delinquent renewal fee of 1 1/2 times the renewal fee, but not
more than the renewal fee plus $50.
This bill:
1)Removes the exemption for tire repair and tire changing from the
definitions of "repair of motor vehicles" and "automotive
technician."
2)Exempts from the definitions of "repair of motor vehicles" and
"automotive technician" tire services provided by or on behalf of
either of the following:
a) A motor vehicle club holding a certificate of authority under
the Insurance Code.
b) A tow truck operator possessing a valid motor carrier permit
under the Vehicle Code.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This bill is sponsored by Les Schwab Tire Centers
(Sponsor). According to the Author, there are retail operations
that only sell and install tires and are exempted from registration
as an ARD and thus from enforcement jurisdiction of the BAR. The
Author indicates that a number of incidents have occurred where
these "tire sales only" shops advertise tires for a certain price,
and then after the tires are mounted present the customer with a
final price that is grossly higher than the advertised price. If
the customer refuses to pay this final price, then these "tire sales
only" shops keep possession of the vehicle until the customer pays,
according to the Author.
The Author further states: "Even though California's Unfair
Competition Laws prohibit these types of fraudulent activities, and
the Attorney General, or any district attorney, county counsel or
city attorney could seek injunctive relief or civil remedies,
customers rarely seek these avenues of recourse." SB 202 would
delete the exemption for "tire sales only" shops and place them
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under the jurisdiction of the BAR, which would then be able to
regulate these retailers. The BAR has the authority to, among other
things, suspend or revoke their business licenses for such
fraudulent practices, according to the Author. As stated by the
Author, this is a consumer protection bill that ensures fairness
among competitors in the marketplace.
2.Background. This bill arose from a Sacramento area television news
station's consumer investigation on tire sales businesses for false
and misleading advertisement for tire changing and repair services.
The report revealed that certain tire sales businesses were
advertising low prices online, but charging consumers more than the
advertised price once services were already performed without prior
notice or consent. When some consumers disputed the amount or
services, the tire store threatened to withhold the consumer's car
until payment was received.
Under existing law, consumers may file a complaint with the Better
Business Bureau or seek monetary relief by pursuing a civil action
in a small claims court. An individual may also request that the
AG, DA, county counsel, or city counsel pursue legal action against
the business under BPC � 17500, which makes false advertisement a
misdemeanor punishable by imprisonment in the county jail not
exceeding six months, or by a fine not exceeding $2,500, or by both
that imprisonment and fine.
3.Motor Club and Tow Truck Exemptions. By removing the exemption for
repairing tires and changing tires from the definitions of vehicle
repair and repair technician, the bill takes away the exemption
which allows a tire shop to not have to register with the BAR as an
ARD. However, the bill adds a new exemption for tire services
provided by or on behalf of: (1) A motor vehicle club holding a
certificate of authority under the Insurance Code; or (2) A tow
truck operator possessing a valid motor carrier permit under the
Vehicle Code.
Motor Clubs, such as the American Automobile Association of Northern
California, Nevada & Utah (AAA) or the Allstate Motor Club, engage
in rendering, procuring, or reimbursing in connection with the
ownership, operation, use, or maintenance of a motor vehicle. A
motor club must obtain a certificate of authority to act as a motor
club from the Department of Insurance. Motor clubs often will
provide emergency flat repair, tire changing or tire services to
their members. By including an exemption for tire services by or on
behalf of a motor club in the definition of motor vehicle repair,
this bill would not require a motor club to register as an ARD.
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Tow truck operators must obtain a motor carrier permit as specified
under the Vehicle Code. A tow truck operator often will provide
emergency tire change, flat repair or tire services to vehicle
owners or operators. By including an exemption for tire services by
a tow truck operator, this bill would not require a tow truck
operator to register as an ARD.
4. Tire Complaints. According to the Bureau of Automotive Repair, it
receives a number of "tire and wheel complaints." The chart below
reflects complaints received by BAR from March 2009 to the present.
Jurisdictional complaints represent complaints against licensees,
while non-jurisdictional are shops that are not required to be
licensed with BAR.
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| Date | Type of Complaint | Number of |
| | | Complaints |
|-----------+---------------------+--------------------|
| 3/1/09 - | Jurisdictional | 339|
| 2/28/10 | | |
|-----------+---------------------+--------------------|
| | Non-jurisdictional | 185|
|-----------+---------------------+--------------------|
| 3/1/10 - | Jurisdictional | 393|
| 2/28/11 | | |
|-----------+---------------------+--------------------|
| | Non-Jurisdictional | 156|
|-----------+---------------------+--------------------|
| 3/1/11 - | Jurisdictional | 331|
| 2/29/12 | | |
|-----------+---------------------+--------------------|
| | Non-Jurisdictional | 30|
|-----------+---------------------+--------------------|
| 3/1/12 - | Jurisdictional | 307|
| 2/28/13 | | |
|-----------+---------------------+--------------------|
| | Non-jurisdictional |60 |
| | | |
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5.Prior Legislation. This bill is essentially identical to last year's
AB 2065 (Galgiani) which was also sponsored by Les Schwab Tire
Centers. That bill was held on the suspense file in the Assembly
Appropriations Committee.
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6.Arguments in Support. In sponsoring the bill, Les Schwab Tire
Centers (Sponsor) argues the bill provides a long-needed remedy to
the reported instances where "tire sales only" stores have allegedly
preyed on customers by quoting a price for a replacement set of
tires but charging an inflated amount after the tires have been
installed. The Sponsor additionally states: "Although these unfair
practices are currently prohibited by law, it was discovered that
customers in these matters seldom seek the assistance of the city or
district attorneys for recourse . . . it is time for all entities in
this specific tire sales only sector to be placed under BAR's
licensing and enforcement authority - an authority which includes,
among other things, the ability to suspend or revoke business
licenses when appropriate." Under BAR's regulation a tire company
will not only be required to provide customers with written
estimates for parts and labor, but no additional charges can accrue
without the customers prior authorization, according to the Sponsor.
California Tire Dealers Association supports the bill stating:
This consumer protection bill would remedy deceptive practices
some of these shops engage in, whereby they advertise a
"discounted" price for a set of tires and then add on various
hidden fees and services to the customer. If a customer refuses
payment, the shop then threatens to keep possession of the
vehicle until the bill is paid in full. Few customers are aware
that such practices are illegal. This is not only unfair to the
unwary consumer, but also provides unfair cost competition to
tire retailers in California that are licensed under BAR because
they provide other repair services.
The California New Car Dealers Association (CNCDA) states that the
bill would result in several benefits to car dealers and to
consumers. According to CNCDA, in California there is the
widespread potential for fraud among "tire sales only" shops preying
on customers by quoting one price for replacing tires, but charging
an inflated amount after the tires have been installed. CNCDA
states that SB 202 levels the playing field for our dealer members,
and creates a fairer business environment and protects consumers.
SUPPORT AND OPPOSITION:
Support:
Les Schwab Tire Centers (Sponsor)
California Tire Dealers Association
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California New Car Dealers Association
Opposition:
None received as of April 2, 2013
Consultant:G. V. Ayers