BILL ANALYSIS Ó AB 1174 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1174 (Bonilla) As Amended August 2, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(January 27, |SENATE: |36-0 |(August 18, | | | |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- (vote not relevant) Original Committee Reference: B. & P. SUMMARY: Requires the Bureau of Automotive Repair (BAR) to adopt regulations regarding its policies and procedures for handling complaints, investigations, and all the BAR's methods of resolution, as specified; requires BAR to post the policies and procedures on its website; requires BAR to track and retain data on every method of resolution attempted and completed for each automotive repair dealer (ARD); requires BAR to submit a report to the Legislature, by January 1, 2018, that details BAR's resolution efforts, as specified. The Senate amendments delete the Assembly version of this bill, and instead: AB 1174 Page 2 1)Requires BAR to adopt regulations regarding its policies and procedures for handling complaints, investigations, and all the BAR's methods of resolution, including, but not limited to, education, training, conferences, and mediation. The regulations include, but are not limited to, the following: a) How a complaint is to be filed with BAR; b) How a complaint is to be investigated by BAR; and, c) How mediation is used by BAR. Requires the regulations regarding mediation clearly identify when mediation is used, how mediation is implemented by BAR, and how mediation data is collected and reported by BAR. 2)Requires BAR to post on its website the policies and procedures mentioned in 1) above. 3)Requires BAR to track and retain data on every method of resolution attempted and completed for each ARD, including, but not limited to, the following: a) The type of complaint being resolved; b) The remedy or remedies sought and obtained in resolution, including, but not limited to, restitution, refund, work to be redone at no charge, bill adjustments, returns or exchanges, and the dollar amount of any remedy, if applicable; and, c) The number of complaints where resolution was attempted but where no remedy was reached and the number of complaints where mediation was successful. AB 1174 Page 3 4)Requires BAR to submit a report to the Legislature, by January 1, 2018, that details BAR's resolution efforts. Requires BAR to report the data collected in Item 3) above. 5)Defines "method of resolution" to include, but not be limited to, education, training, conferences, and mediation. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, this bill will result in negligible state costs. COMMENTS: Purpose. This bill is sponsored by the author. According to the author, "[The] BAR receives approximately 15,000 consumer complaints involving automotive repair dealers each year. While every complaint results in some form of action by BAR, over 95% of them never result in disciplinary action, such as a citation or fine, and thus are not subject to public disclosure. BAR posts complaints and findings to their website, but only if disciplinary action is taken. "[This bill] will improve consumer protection and increase the transparency of businesses and state agency by requiring BAR to adopt, and post to their website, regulations regarding the bureau's policies and procedures for handling complaints, investigations and all methods of resolution. In addition, it requires BAR to track and retain data on all attempted and completed resolution efforts for each auto repair dealer and to annually report the data to the Legislature. Lastly, [this bill] clarifies the existing authority of the Director of the Department of Consumer Affairs to expand BAR's citation and fining capabilities, to eliminate bad business practices and create a higher standard in the auto repair industry." AB 1174 Page 4 Background. The Bureau of Automotive Repair. The BAR was created by SB 51 (Beilenson), Chapter 1578, Statutes of 1971, which established the BAR within the DCA and codified the Automotive Repair Act (Act). California became the first state in the nation to implement a comprehensive program for the regulation of the automotive repair industry, and creation of the Act was supported by consumers and many organizations in the industry. The primary purpose of the Act was to protect consumers from unethical and illegal behavior by the automotive repair industry, and achieve consumer confidence in the California auto repair industry. The Act mandated a statewide automotive repair consumer protection program, including the requirement that ARDs be registered and regulated by BAR. The Act also gives BAR the authority to license and regulate official stations and mechanics in the areas of lamp and brake replacement and repair, and smog device inspection and repair. The Act protects consumers by requiring all ARD's, including lamp, brake, and smog stations to: 1) provide written estimates that detail the parts and labor to be provided; 2) obtain authorization from their customers prior to commencing any repair services; 3) provide customers with itemized invoices that detail the parts provided and the labor performed. The Act further requires BAR to mediate complaints, investigate violations, and take action against ARDs and licensed technicians that fail to comply with the Act or regulations adopted under the Act. BAR has authority to pursue these same consumer protections against both licensed and unlicensed individuals. BAR licenses and regulates more than 36,000 ARDs, 5,310 Smog Check Test and Repair Stations, 2,140 Smog Check Test Only Stations, 42 Smog Check Repair Only Stations, 4,600 STAR Certified Stations, and 2,104 Brake and Lamp Stations. Individually, BAR licenses some 15,582 Smog Check Inspectors, 9,997 Smog Check Repair Technicians, and 3,125 Brake and Lamp Adjusters. AB 1174 Page 5 NBC Bay Area Investigation. In February 2016, the NBC Bay Area Investigative Unit ran a report highlighting how a San Jose Midas covered up damage to an SUV that fell from a mechanical lift. While repairing the car, the car crashed on its side, breaking the right window and piercing the bottom of the vehicle. After returning the vehicle, the family noticed several issues with the car and reported them to the shop. However, discussions with both the Midas and BAR led to no resolution or remedies for the family. Because the BAR did not take swift action against the ARD, questions were raised about its consumer protection "mission" and ability to discipline a licensee. The Investigative Unit discovered that, "fewer than three percent of the complaints pertaining to auto repairs result in any kind of enforcement action. That's because under state law the BAR has limited authority to issue penalties for violations." Currently, BAR only has citation and fine authority over unlicensed activity and when an ARD is in violation of the state's Smog Check Program. All other complaints are required to go through the typical procedure for handling complaints. This bill has been introduced to bring more transparency to the public about how BAR handles its complaint and disciplinary proceedings. Additionally, this bill will require BAR to track and retain data on every method of resolution attempted and completed by BAR for each ARD. This bill was substantially amended in the Senate and the Assembly-approved version of this bill was deleted. This bill, as amended in the Senate, is inconsistent with the Assembly actions and the provisions of this bill, as amended in the Senate, have not been head in an Assembly policy committee. Analysis Prepared by: Vincent Chee / Gabby Nepomuceno / B. & P. / AB 1174 Page 6 (916) 319-3301 FN: 0004749