BILL ANALYSIS Ó AB 873 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 873 (Jones) As Amended August 19, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |77-0 |(May 7, 2015) |SENATE: |39-0 |(August 24, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: B. & P. SUMMARY: Requires the Bureau of Automotive Repair (BAR) to adopt regulations defining minor services that may be performed on an automobile without registration; deletes, commencing January 1, 2018, the current list of minor automotive services and specifies that, at the time, the BAR's prior regulations will remain in effect but may be amended as necessary; and makes conforming changes. The Senate amendments add chaptering language that makes this bill contingent on the enactment of SB 778 (Allen) of the current Legislative Session. FISCAL EFFECT: According to the Senate Appropriations Committee: AB 873 Page 2 1)One-time costs less than $150,000 for the BAR (under the Director of Consumer Affairs) to develop and adopt regulations defining minor repairs (Vehicle Inspection and Repair Fund). 2)Ongoing costs of about $200,000 per year to register and regulate about 1,000 additional businesses that would be required to register under a new definition of minor repairs (Vehicle Inspection and Repair Fund). According to the Bureau, a revised definition of minor repairs would not likely continue to exempt tire dealers and oil change shops. According to the Bureau, there are about 1,000 such businesses in the state that are not already registered with the Bureau. The costs to register and take any necessary enforcement actions against the newly registered businesses would be offset by the current $200 annual registration fee imposed by the Bureau. COMMENTS: Purpose. This bill is sponsored by the author. According to the author, this bill "will require the [BAR], within the [Department of Consumer Affairs], 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: 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 AB 873 Page 3 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." Background. The Automotive Repair Act requires automotive repair dealers who engage in the business of repairing or diagnosing malfunctions of motor vehicles to be licensed and registered with the BAR. It also defines "repair of motor vehicles" as any maintenance and repair work performed by an automotive repair dealer, including body repair work, but as excluding: 1) repairs made under a commercial business agreement; 2) repairing tires and changing tires; 3) lubricating vehicles; 4) installing light bulbs, batteries, windshield wiper blades and other minor accessories; 5) cleaning, adjusting, and replacing spark plugs; 6) replacing fan belts, oil, and air filters; and 7) other minor services customarily performed by gasoline service stations. Minor Services. During the BAR's 2014 sunset review oversight hearing, the BAR raised the issue of whether certain ancillary services that are not subject to registration should be. Historically, these services were viewed as simple services that were often performed at gasoline service stations and carried a lower risk of consumer harm. However, 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 new vehicles of a specified weight be equipped with a Tire Pressure Monitoring System (TPMS). When a vehicle with a TPMS is serviced, the technician may need specialized training, such as on how to update the vehicle's on-board diagnostic system. A malfunctioning TPMS can lead to tire blowouts, undetected slow AB 873 Page 4 leaks, and other dangerous conditions. Another example was spark plugs. According to the BAR, some vehicle manufacturers have made spark plugs inaccessible without removal of other major systems, such as the removal of motor mounts or parts of entire engine. Because failure to perform these services correctly can result in serious harm to consumers, the BAR believes that an automotive repair dealer registration should be required to perform those types of repairs. This bill would authorize the BAR to update the list of minor services through regulations. Propulsive Batteries. According to stakeholders, propulsive batteries are batteries that power or fuel a vehicle's movement, such as in an electric automobile. Ordinary car batteries only power various electronics within a vehicle, such as the starter and interior or exterior lights. Because a propulsive battery requires specialized training, this bill excludes propulsive batteries from the list of minor services. Analysis Prepared by: Vincent Chee / B. & P. / (916) 319-3301 FN: 0004862