BILL ANALYSIS �
SB 202
Page 1
Date of Hearing: June 11, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Richard S. Gordon, Chair
SB 202 (Galgiani) - As Introduced: February 7, 2013
SENATE VOTE : 34-0
SUBJECT : Automotive repair.
SUMMARY : Authorizes the Bureau of Automotive Repair (BAR) to
regulate businesses that change and repair tires as an
automotive repair dealer (ARD). Specifically, this bill :
1)Deletes tire changing and tire repair from the list of
services that are excluded from the definitions of the "repair
of motor vehicles" and "automotive technician" and exempt from
BAR regulation.
2)Exempts tires service provided by or on behalf of a motor
vehicle club or a tow truck operator possessing a valid motor
carrier permit, as specified, from the definitions of the
"repair of motor vehicles" and the duties of an "automotive
technician".
3)States that no reimbursement is required by this bill pursuant
to Section 6 of Article XIIIB of the California Constitution
because the only costs that may be incurred by a local agency
or a school district will be incurred because this bill
creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction
within the meaning of Section 17556 of the Government Code, or
changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
EXISTING LAW :
1)Provides for the licensing and regulation of ARDs by the BAR
under the Department of Consumer Affairs pursuant to the
Automotive Repair Act (Act). (Business and Professions Code
(BPC) Section 9880 et seq.)
2)Makes it unlawful for any person intending to sell real or
personal property or performing services to induce the public
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to enter into any obligation or disseminate untrue or
misleading information. Makes it unlawful for any person to
disseminate any statement as part of a scheme not to sell that
personal property or those services at the advertised price.
Makes any violation a misdemeanor punishable by imprisonment
in a county jail not exceeding six months, or by a fine not
exceeding $2,500, or both. (BPC 17500)
3)Provides that the fees for an ARD license are as follows:
a) The ARD registration fee shall not be more than $200 for
each place of business in this state;
b) The annual renewal fee for an ARD registration shall not
be more than $200 for each place of business in this state,
if renewed prior to its expiration date; and,
c) The renewal fee for a registration that is not renewed
prior to its expiration date shall be 1 1/2 times the
renewal fee required for a registration renewal prior to
its expiration date, but not more than the renewal fee plus
$50. (BPC 9886.3)
4)Defines the following terms:
a) "Unfair competition" to mean and include any unlawful,
unfair or fraudulent business act or practice; unfair,
deceptive, untrue or misleading advertising; and, any act
prohibited by law as specified. (BPC 17200 et seq.)
b) "Repair of motor vehicles" to mean all maintenance of
and repairs to motor vehicles performed by an ARD,
including automotive body repair work, but excluding
repairing tires, changing tires, lubricating vehicles,
installing light bulbs, batteries, windshield wiper blades
and other minor accessories, cleaning, adjusting, and
replacing spark plugs, replacing fan belts, oil, and air
filters, and other minor services which the director of
BAR, by regulation, determines are customarily performed by
a gasoline service station; (BPC 9880.1(e)) and,
c) "Automotive technician" to mean an ARD or ARD's
employee, who for salary or wage, repairs motor vehicles
and performs maintenance, diagnostics, repair, removal, or
installation of any integral component parts of an engine,
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driveline, chassis, or body of any vehicle, but excluding:
repairing tires, changing tires, lubricating vehicles,
installing light bulbs, batteries, windshield wiper blades,
and other minor accessories; cleaning, replacing fan belts,
oil, and air filters, and other minor services which the
director of the BAR, by regulation, determines are
customarily performed by a gasoline service station. (BPC
9880.1(g))
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of this bill . This bill would require BAR to regulate
and license as ARDs businesses that change or repair tires,
with exceptions for motor clubs and towing services as
specified. Under current law, BAR does not license or
regulate companies engaged solely in tire changing or repair.
This bill is intended to curb the practice of unscrupulous
tire shops charging consumers a higher price than advertised
and then threatening to keep the customer's car until he or
she pays the price demanded. BAR contends that legal recourse
under existing law is insufficient because of the amounts in
dispute are so low, and that regulation would be more
effective. This bill is sponsored by the Les Schwab Tire
Centers.
2)Author's statement . According to the author, "Shops only
selling tires are outside the jurisdiction of BAR. A number
of incidents have occurred where these shops advertise low
tire prices, but end up charging more at the end. The
district attorney or city attorney can fine [the shop dealers]
under the BPC, but ripped-off customers seldom seek these
avenues of recourse. This bill would place 'tire sales only'
stores under BAR's jurisdiction. BAR has authority to, among
other things, suspend or revoke their business licenses. The
customer would still be able to seek civil remedy."
3)Unscrupulous tire sales . This bill arose from a May 2011
investigation by the news station, CBS Sacramento, into false
and misleading advertisements for tire changing and repair
services. The news station report revealed that certain tire
sales businesses were advertising low prices online, but
charging consumers more than the advertised price without
prior notice or consent once services were performed. When
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some consumers disputed the amount or services, some tires
sales stores threatened to withhold a consumer's car until
payment was received.
Under current law, consumers may file a complaint with the
Better Business Bureau or seek monetary relief by pursuing a
civil action in small claims court. According to BAR, it has
received an average of over 300 tire complaints annually since
2009 that fall within its jurisdiction because the services
are performed by a licensed ARD regulated by BAR. BAR also
receives anywhere from 30 to 185 complaints annually that are
outside of their jurisdiction because they are performed by
shops that only offer tire changing and repair services and
are therefore exempt from BAR licensure and regulation.
Under existing law, an individual may request that the
Attorney General, District Attorney (DA), county counsel, or
city attorney pursue legal action against the business for
making false advertisements, which is a misdemeanor punishable
by imprisonment in the county jail not exceeding six months,
or by a fine not exceeding $2,500, or both. However, the
sponsor, Les Schwab Tire Centers, contends that "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 DA for recourse?"
4)Proposed oversight by BAR . This bill would include tire
repair and changing in the list of services performed by an
ARD and automotive technician, thereby requiring that tire
repair and changing services generally be licensed and
regulated under BAR. The annual fee for an ARD license is
$200. Under this bill, individuals offering tire changing and
repair services would have to provide customers with a written
estimate prior to commencement of work and seek customer
approval for additional work or costs, similar to what ARDs
are currently required to do for all other auto repair
services under the Act. This bill would authorize BAR to
investigate complaints related to tire services and take
disciplinary action through issuing a citation, or suspension
or revocation of an ARD license.
5)Motor Club and Tow Truck Exemptions . This bill exempts tire
services provided by a motor vehicle club holding a
certificate of authority under the Insurance Code and a tow
truck operator possessing a valid motor carrier permit under
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the Vehicle Code from licensure as an ARD.
Motor Clubs, such as the American Automobile Association of
Northern California, Nevada & Utah or the Allstate Motor Club,
and tow truck operators often provide emergency flat repair,
tire changing or other tire services to their members and
vehicle owners. These motor vehicle clubs and tow truck
operators were not involved in the news stories relating to
unscrupulous tire sales practices, and are already regulated
under current law. .
6)Arguments in Support . According to the sponsor, "This bill
should bring a long-needed remedy to the reported instances
where 'tire sales only' stores have allegedly been preying on
customers by quoting a price for a replacement set of tires,
but charging an inflated amount after the tires have been
installed? 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 shops only sector to be place under
BAR's licensing and enforcement authority - an authority which
includes, among other things, the ability to suspend or revoke
business licenses when appropriate? By having to register
with BAR, these shops will not only be required to provide
customers with written estimates for parts and labor, but no
additional charges can accrue without the customer's prior
authorization."
According to the California Tire Dealers Association, "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."
7)Previous legislation . AB 2065 (Galgiani) of 2012 would have
deleted tire repair and changing from the list of services
exempt from licensure as an ARD under BAR, as specified. AB
2065 was held in the Assembly Appropriations Committee.
REGISTERED SUPPORT / OPPOSITION :
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Support
Les Schwab Tire Centers (sponsor)
California New Car Dealers Association
California Tire Dealers Association
Consumers for Auto Reliability and Safety
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301