BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 873|
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THIRD READING
Bill No: AB 873
Author: Jones (R), et al.
Amended: 8/19/16 in Senate
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/27/16
AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez,
Jackson, Mendoza, Wieckowski
SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16
AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen
ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for
vote
SUBJECT: Automotive repair
SOURCE: Author
DIGEST: This bill deletes the current list of minor repairs
exempted from registration with the Bureau of Automotive Repair
(BAR), effective January 1, 2018, and requires the Director of
the Department of Consumer Affairs (DCA), prior to January 1,
2018, to adopt regulations defining a new list; excludes
propulsive batteries from the current list of minor services;
excludes motor clubs and operators of tow trucks from the
definition of roadside services; and adds a contingent enactment
provision with SB 778 (Allen).
Senate Floor Amendments of 8/19/16 add a contingent enactment
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provision with SB 778 (Allen).
ANALYSIS:
Existing law:
1)Establishes 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)
3)Defines the "repair of motor vehicles" to mean all maintenance
of, and repairs to, motor vehicles, except the following
services: (BPC § 9880.1(e))
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
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g) Other minor services the Director determines to be
customarily performed by a gasoline service station.
4)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))
5)Defines an "automotive repair dealer" (ARD) as a person who
engages in the business of repairing or diagnosing
malfunctions of motor vehicles for compensation. (BPC §
9880.1(a))
6)Defines "automotive technician" as a dealer or a person
employed by a dealer who performs maintenance, diagnostics,
repair, removal or installation of specified integral
automotive components, excluding the services excluded from
repair of motor vehicles. (BPC § 9880.1(g))
7)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)
8)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)Excludes propulsive batteries from the current list of minor
services.
2)Requires the Director of DCA, prior to January 1, 2018, to
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adopt comprehensive regulations defining "minor services".
3)Prohibits the changing of "propulsive batteries" from being
categorized as minor services.
4)Repeals BPC § 9880.1 and adds an identical section that
becomes operative January 1, 2018. 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;
b) Recasts the definition of "automotive technician" as an
employee of an automotive repair dealer or is that dealer,
who for salary or wage repairs motor vehicles as set forth
in the new definition of "repair of motor vehicles";
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, or by an
operator of a tow truck that is owned or operated by a
person or entity who possesses a valid motor carrier permit
and is enrolled in the Basic Inspection of Terminals
program, as specified.
d) Declares that the regulations adopted by the Director
that defines "minor services" continue in effect on and
after January 1, 2018 and allows the director to amend or
repeal the regulations, consistent with the chapter.
5)Adds a contingent enactment provision with SB 778 (Allen).
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Background
Over the interim and beginning of this year, Legislative policy
committee staff, BAR, DCA, Author's staff, and other industry
stakeholders sat down and discussed the main issue with this
bill - the definition of roadside services.
Since this bill seeks to amend provisions related to the
Automotive Repair Act and BAR's regulatory duties, concerns were
raised that the new term "roadside services" within the
definition of "repair of motor vehicles" might require motor
clubs and other tow truck operators to register with BAR. While
BAR does receive input or complaints from the public regarding
the towing industry, they do not directly regulate or license
tow truck operators.
After discussions, industry representatives have argued and
highlighted that there are other mechanisms in place that
provide proper consumer protection. In addition to contractual
obligations and remedies with law enforcement and motor clubs,
tow companies/emergency roadside service operators currently
must hold a motor carrier permit (MCP), administered by the
Department of Motor Vehicles (DMV), post/provide a copy of the
Towing Fees and Access Notice (Notice) to consumers, and be
enrolled in the Basic Inspection of Terminals (BIT) Program.
Currently, all tow companies must obtain a MCP from the DMV in
order to operate a commercial vehicle. In order to obtain an
MCP, a tow company must produce: proof of financial
responsibility (generally no more than $750,000), proof of
workers' compensation insurance, a Carrier Identification number
(CA#) issued by the California Highway Patrol (CHP), payment of
fees, and enrollment in the BIT program.
Starting in 2016, all tow companies are subject to the CHP's BIT
program due to the enactment of AB 529 (Lowenthal, Chapter 500,
Statutes of 2013). Under the BIT program, after payment of
fees, the CHP conducts a rigorous inspection of a towing company
that includes the safety of the vehicles as well as compliance
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with a wide variety of laws related to drivers and commercial
motor carrier businesses.
Additionally, consumers have rights under law in the event they
are unsatisfied with a towing/emergency roadside service
company, as detailed in the Notice in Vehicle Code § 22651.07,
enacted by AB 519 (Solorio, Chapter 566, Statutes of 2010). A
tow company's office must post the Notice and provide a copy,
upon request, to the consumer. The Notice answers questions a
consumer may have related to charges, complaints, liability, and
remedies if anything on the Notice is violated. AB 519 also
mandated that each consumer receive a detailed written itemized
invoice of actual charges and imposes civil penalties of up to
two times the amount charged, not to exceed $500, for any
violation of the section.
Finally, from a business standpoint, industry members have
underscored that economically it would be extremely difficult,
if not impossible, to survive in the industry without towing for
at least one of the 23 motor clubs certified by the Department
of Insurance, or at least one of the hundreds of local police
and sheriff departments or CHP. If a tow company exclusively
performed private property tows (which are not dispatched by law
enforcement or motor clubs) it would be extraordinarily rare and
such a company would be subject to the extensive, rigorous
requirements of Vehicle Code § 22658 which permit a consumer to
obtain four times the amount of the towing and storage charges
in the event a violation occurs. Nevertheless, such a company,
if it exists, would only be removing a vehicle from private
property, not performing any type of minor automotive repair
services that are the subject of AB 873.
While the Legislature has kept a close eye on tow truck
operators, this bill's goal was not to directly license tow
truck operators/motor clubs. Representatives have argued that
tow truck operators and motor clubs are there to help move a
vehicle off the road and into a safe and secure area. This
activity has never been regulated by BAR. While there is an
exemption for these groups under the definition of "roadside
services", by no means does it exempt them from BAR jurisdiction
if they perform activities regulated by a license.
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FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee analysis dated
on August 1, 2016, this bill will incur one-time costs to
develop regulations and ongoing costs that would regulate new
businesses that are required to register with the Bureau of
Automotive Repair.
SUPPORT: (Verified8/22/16)
Automotive Service Councils of California
California Autobody Association
California Automotive Business Coalition
California Tire Dealers Association
Les Schwab Tire Centers
OPPOSITION: (Verified8/22/16)
None received
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.
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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."
ASSEMBLY FLOOR: 77-0, 5/7/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Chang, Chau,
Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly,
Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina
Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez,
Gordon, Gray, Grove, Hadley, Harper, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low,
Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin,
Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea,
Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
NO VOTE RECORDED: Campos, Roger Hernández, Steinorth
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
8/23/16 9:43:24
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