BILL ANALYSIS Ó
AB 873
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Susan Bonilla, Chair
AB 873
(Jones) - As Amended April 13, 2015
SUBJECT: Automotive repair.
SUMMARY: Deletes the current list of minor repairs exempted
from registration with the Bureau of Automotive Repair (BAR),
effective January 1, 2017, and requires the director of the
Department of Consumer Affairs (DCA), prior to January 1, 2017,
to adopt regulations defining a new list.
EXISTING LAW:
1)Establishes the BAR under the supervision and control of the
director of DCA (Business and Professions Code (BPC) § 9882)
2)Regulates the business of automotive repair and makes it
unlawful for any person to be an automotive repair dealer
unless registered with the BAR. (BPC § 9880-9889.68)
Defines the "repair of motor vehicles" to mean all maintenance
of, and repairs to, motor vehicles, except the following
services: (BPC § 9880.1(e))
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a) Repairing tires;
b) Changing tires;
c) Lubricating vehicles;
d) Installing light bulbs, batteries, windshield wiper
blades and other minor accessories;
e) Cleaning, adjusting and replacing spark plugs;
f) Replacing fan belts, oil and air filters; and
g) Other minor services the director determines to be
customarily performed by a gasoline service station.
3)States that the director shall not designate a service as
minor if the director finds that performance of the service
requires mechanical expertise, has given rise to a high
incidence of fraud or deceptive practices or involves a part
of the vehicle essential to its safe operation. (BPC §
9880.1(e))
4)Defines an "automotive repair dealer" as a person who engages
in the business of repairing or diagnosing malfunctions of
motor vehicles for compensation. (BPC § 9880.1(a))
5)Defines "automotive technician" as a dealer, or a person
employed by a dealer, who performs maintenance, diagnostics,
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repair, removal or installation of specified integral
automotive components, excluding the services excluded from
repair of motor vehicles. (BPC § 9880.1(g))
6)Regulates motor clubs and makes it unlawful to provide motor
club services, including emergency road services, without a
certificate of authority from the insurance commissioner.
(Insurance Code (INS) § 12140-12159)
7)Defines "emergency road service" as the adjustment, repair or
replacement by a motor club of the equipment, tires, or
mechanical parts of a motor vehicle so that it may be operated
under its own power. (INS § 12146)
THIS BILL:
1)Adds a new subsection that requires the director to adopt
regulations prior to January 1, 2017 defining "minor services"
as used in the definition of automotive repair.
2)Adds a new subsection that repeals BPC § 9880.1 on January 1,
2017.
3)Adds a new BPC § 9880.1 that becomes operative on January 1,
2017. It is identical to the old section, except that it:
a) Recasts the definition of "repair of motor vehicles" to
delete the list of excluded services and instead exclude
minor services as defined by the director and roadside
services;
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b) Recasts the definition of "automotive technician" to
delete the list of excluded services and the provisions
describing the specific work an automotive technician
performs;
c) Defines "roadside services" as the services performed
upon a motor vehicle for the purpose of transporting the
vehicle or to permit it to be operated under its own power,
by or on behalf of a motor club holding a certificate of
authority issued by the insurance commissioner; and
d) Declares that the regulations adopted by the director
that define "minor services" continue in effect on and
after January 1, 2017 and allows the director to amend or
repeal the regulations, consistent with the chapter.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
1)Purpose. This bill is sponsored by the author. According to
the author, this bill "will require the [BAR], within the
[DCA], to determine through regulation which automotive
services are minor and which necessitate oversight.
The Automotive Repair Act of 1971 has not been significantly
update[d] since it was enacted. Existing law should be
updated and a determination of what constitutes minor repair
work and major repair should be developed through the formal
rulemaking process so that:
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1. The [BAR] takes a comprehensive technical approach to
determine what business practices necessitate registration
as an automotive repair dealer; and
2. This determination can be periodically updated through
the rulemaking process, as the automotive industry
continues to evolve. This approach allows the industry to
participate through the rulemaking process to help
determine which services are minor and should be excluded
from registration and which services are major and require
registration."
2)Background. In 2014, the Assembly Committee on Business,
Professions and Consumer Protection and the Senate Committee
on Business, Professions and Economic Development (Committees)
conducted joint oversight hearings to review the BAR and eight
other regulatory entities. As a part of the review, staff of
the Committees made recommendations for each agency and
program reviewed by the Committees.
In its Sunset Report to the Committees, the BAR raised the
issue of ancillary services which have typically been seen as
simple enough to be considered exempt areas of practice, and
therefore not subject to regulation and registration, such as
replacing spark plugs, batteries and fan belts. The BAR noted
that, because of advances in automotive technology, many of
the services require specialized repair skills and may require
the removal of automotive systems, engine components, shrouds
or other electrical equipment.
One of the examples cited by the BAR was tire services. The
federal Transportation Recall Enhancement, Accountability and
Documentation (TREAD) Act requires that, beginning with the
2006 model year, every new vehicle of less than 10,000 pounds
gross vehicle weight rating be equipped with a Tire Pressure
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Monitoring System (TPMS) (Title 49 of the United States Code
§§ 30101-30170).
As a result, many modern vehicles are equipped with a TPMS
that may require the technician to update the vehicle's
on-board diagnostic system when serviced. A malfunctioning
TPMS can lead to tire blowouts, undetected slow leaks and
other dangerous conditions.
Another example is spark plugs. According to the BAR, some
vehicle manufacturers have made spark plugs inaccessible
without removal of other major systems, even the removal of
motor mounts and, in a few cases, the entire engine. Because
these examples can lead to dangerous situations for consumers,
BAR still believes that an automotive repair dealer
registration should be required for those performing those
types of repairs. By requiring the director to determine a
new list of exclusions that can change to keep up with
technology, this bill seeks to ensure the regulation of
complicated repairs and maintenance.
Motor Club Exemption. In California, motor clubs that provide
automotive benefits and discounts to their members are
regulated by the Department of Insurance. All motor clubs are
required to apply for a certificate of authority (INS §
12160). In order to qualify for a certificate of authority,
motor clubs must meet minimum financial requirements
($100,000) and provide supporting documents (INS §12162).
They are not required to meet any personnel or training
standards. According to the department's website, there are
currently 23 certified motor clubs.
Certified motor clubs are permitted to provide emergency road
services, such as the repair or replacement of the equipment,
tires, or mechanical parts of a motor vehicle (INS § 12146).
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Current law specifically exempts some of the motor club
emergency roadside services from registration with the BAR,
such as tire repair and battery installation (BPC §
9880.1(e)).
This bill will delete the list of exempted services that
normally exempt motor clubs from registration with the BAR.
However, it will also add language specifically exempting
motor club emergency roadside services. The new exemption
appears to be broader than current law-it will exempt
emergency roadside service on all mechanical parts, not just
tires, batteries, or windshield wipers.
Stakeholder Input. Last year, AB 1665 (Jones) of 2014, would
have deleted repairing and changing tires from the list of
excluded minor services. The bill was vetoed by Governor
Brown to give the BAR the opportunity to include more
stakeholder input.
To address the concerns of the veto, the BAR plans to hold
industry stakeholder workshops following its quarterly BAR
Advisory Group meetings. The first is scheduled for April 22,
2015. The Advisory Group is composed of a range of industry
professionals. The decision to have the industry stakeholder
workshops was decided before this bill was introduced.
3)Previous Related Legislation. AB 1665 (Jones) of 2014, would
have deleted "repairing tires" and "changing tires" from the
list of repair services exempt from registration as an
automotive repair dealer under the BAR. It would have also
required an automotive repair dealer to be capable of
diagnosing and servicing TPMS, as specified. NOTE: This bill
was vetoed Governor Brown. He stated in his veto message that
further review and input from stakeholders was needed.
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SB 202 (Galgiani) of 2013, would have deleted repairing and
changing tires from those exclusion lists. It would have also
excluded tire services provided by or on behalf of a motor
club holding a specified certificate of authority or an
operator of a tow truck owned or operated by a person or
entity possessing a valid motor carrier permit from the
definitions of "repair of motor vehicles" and "automotive
technician." NOTE: This bill was held on the Assembly
Appropriations Suspense File.
AB 2065 (Galgiani) of 2012 was essentially the same as SB 202.
NOTE: This bill was held on the Assembly Appropriations
Committee Suspense File.
ARGUMENTS IN SUPPORT:
The Automotive Service Councils of California writes in support,
"Current law (more than 40 years old) declares certain minor
services such as: repairing and changing tires, lubricating
vehicles, installing light bulbs, batteries, windshield wiper
blades, replacing spark plugs, replacing fan belts, oil and air
filters are exempt from BAR oversight. Because of the advances
in automotive technologies many of these minor services now
require more specialized training and skills and may necessitate
the removal of engine components and other electrical and
computer equipment.
There also is an unfair playing field for those businesses that
are currently registered/licensed by BAR who must compete with
repair facilities that provide the same repair services but are
not registered or licensed."
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The California Autobody Association writes in support, "Existing
law does not adequately address the current market realities
regarding services provided by auto repair businesses. Certain
automotive services were designated minor in [the] early 1970's
and did not require oversight by the BAR. However, automotive
technology has advanced significantly since then, which requires
much more specialized training and equipment to properly repair
vehicles."
ARGUMENTS IN OPPOSITION:
None on file.
IMPLEMENTATION ISSUE:
The bill will require the director to adopt regulations defining
"minor services," but it does not specify how detailed the
regulations must be. Similarly, if the director is not able to
adopt regulations by January 1, 2017, there could be a period of
time where there are no exclusions.
However, as noted above, BAR has been working to resolve
Governor Brown's veto concerns and has taken steps to reach out
to stakeholders. It also plans to hold additional stakeholder
workshops to specifically address industry concerns.
REGISTERED SUPPORT:
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Automotive Service Councils of California
California Autobody Association
California Tire Dealers Association
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301