BILL ANALYSIS Ó
AB 1174
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Date of Hearing: August 24, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 1174
(Bonilla) - As Amended August 2, 2016
SUBJECT: Automotive Repair Act: violations: regulations:
reports.
SUMMARY: Requires the Bureau of Automotive Repair (BAR) to
adopt regulations regarding its policies and procedures for
handling specified enforcement actions, requires the BAR to
track and retain data on every method of resolution, and
requires the BAR to submit a report that details the BAR's
resolution efforts to the Legislature by January 1, 2018, and
annually thereafter.
EXISTING LAW:
1)Regulates the business of automotive repair under the
Automotive Repair Act (Act). (BPC §§ 9880-9889.68)
2)Establishes the BAR within the Department of Consumer Affairs
(DCA), places the BAR under the supervision and control of the
director of the DCA, and vests the duty of enforcing and
administering the Act in the BAR's bureau chief. (Business
and Professions Code (BPC) § 9882)
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3)Defines "automotive repair dealer" (ARD) as a person who, for
compensation, engages in the business of repairing or
diagnosing malfunctions of motor vehicles.
4)Makes it unlawful for any person to be an ARD unless that
person is currently registered with the BAR. (BPC § 9884.6)
5)Authorizes the BAR to deny, suspend, revoke, or place on
probation an ARD's registration for specified acts or
omissions, including failure to comply with the Act,
negligence, and fraudulent conduct. (BPC § 9884.7)
6)Requires all denial, revocation, and enforcement proceedings
to comply with specified due process requirements, including
the right to a formal hearing. (BPC §§ 9884.12, 9884.22,
9889.1 - 9889.10)
7)Requires the BAR to design and approve a sign that contains
specified consumer notices, including the BAR's website, and
must be placed in all ARD locations in a place and manner
conspicuous to the public. (BPC § 9884.17)
8)Authorizes the BAR to investigate violations of the Act,
requires the BAR to establish procedures for accepting
complaints from the public, and authorizes the BAR to mediate
complaints between consumers and ARDs. (BPC § 9882.5)
9)Makes any person who fails to comply with the provisions of
the Act guilty of a misdemeanor and punishable by a fine not
exceeding one thousand dollars ($1,000), or by imprisonment
not exceeding six months, or by both that fine and
imprisonment, except as specified. (BPC § 9889.21)
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10)Authorizes the BAR to file charges with the district attorney
or city attorney against an ARD who violates the provisions of
the Act or the BAR's regulations. (BPC § 9884.15)
THIS BILL:
11)Requires the BAR to adopt regulations regarding its policies
and procedures for handling complaints, investigations, and
all methods of resolution, including, education, training,
conferences, and mediation. The regulations must include, at
a minimum:
a) How to file a complaint with the BAR;
b) How the BAR investigates a complaint; and,
c) How the BAR uses mediation, as specified.
12)Specifies that "policies and procedures" do not include the
BAR's policies and procedures for conducting undercover
investigations.
13)Requires the BAR to post the regulations regarding its
policies and procedures on its website.
14)Requires the BAR to track and retain data on every method of
resolution attempted and completed for each ARD which must
include, at a minimum:
a) The type of complaint being resolved;
b) The remedy or remedies sought and obtained in
resolution, as specified; and,
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c) The number of complaints where resolution was attempted
but where no remedy was reached and the number of
complaints where mediation was successful.
15)Requires the BAR to submit a report to the Legislature, by
January 1, 2018, and annually thereafter, that details BAR's
resolution efforts.
16)Specifies that "method of resolution" includes, but is not
limited to, education, training, conferences, and mediation.
FISCAL EFFECT: According to the Senate Committee on
Appropriations, 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 is tasked with overseeing the state's ARDs
and protecting California consumers, but it is unclear what
policies and procedures they have in place for handling consumer
complaints and their subsequent investigations and resolutions.
[This bill] will enhance the transparency of [ARDs] and BAR,
improve consumer protection by requiring BAR to adopt
regulations, and develop a clear process for handling
complaints, investigations and all methods of resolution. In
addition, this bill will help ensure a higher standard of
business practices in the auto repair industry by requiring BAR
to track and retain data on every resolution to a consumer
complaint, attempted and completed by BAR."
Background. In February 2016, the National Broadcasting Company
(NBC) Bay Area Investigative Unit ran a report which
investigated a situation in which a San Jose Midas automobile
repair shop covered up damage to a SUV that fell from a
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mechanical lift. While the vehicle was elevated by a mechanical
lift, the vehicle fell on its side and was significantly
damaged. After the shop returned the vehicle, the family
noticed several issues and reported the issues to the shop.
According to the NBC report, the shop initially denied that
there were any issues. Eventually, whistleblower employees
contacted the family and explained that the district manager
ordered them to repair the vehicle without informing the family
of what happened. The NBC report states that the district
manager "confirmed 'the lift malfunctioned' and in a memo to the
[family] admitted, there was a 'cover-up,' but [the district
manager] denied any involvement and blamed it all on [the]
employees."
According to the NBC report, the family filed a complaint with
the BAR. However, at the time, discussions with both Midas and
the BAR led to no resolution for the family and the family
considered suing.
Bureau of Automotive Repair. The BAR is the state agency tasked
with enforcing the Automotive Repair Act. Both the Automotive
Repair Act and the BAR were established by SB 51 (Beilenson),
Chapter 1578, Statutes of 1971. The purpose of the Act is to
provide an additional layer of consumer protection from unsafe
and unethical automotive repair practices and improve consumer
confidence.
The Act protects consumers by establishing various notice and
technician competency requirements that ARDs must follow. Those
who wish to perform automotive repairs for a fee must register
with the BAR and comply with the requirements, which include
providing various notices and prohibit incompetent, negligent,
and fraudulent practices. The Act makes it a crime, usually a
misdemeanor, for failing to register or otherwise fail to comply
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with the requirements if performing repairs as defined by the
Act.
The Act authorizes the BAR to mediate complaints, investigate
violations, and take disciplinary action against ARDs and
technicians that fail to comply with the Act or the BAR's
regulations. The BAR can be viewed as a first line of defense
against unfair, deceptive, and harmful practices. The BAR's
broad investigatory authority includes the ability to perform
interviews, inspect premises, and utilize sting operations.
However, the BAR is an administrative and regulatory agency, not
a law enforcement agency. The BAR's statutory authority is
limited to administrative fines and various actions related to
an ARD's registration. Further, as a state agency, it is
required to comply with the due process rights of its
registrants, and all registrants are entitled to notice and a
hearing when being deprived of a registration.
Still, operating without a registration when required by the Act
is a crime. If the BAR finds an egregious case, it is
authorized to refer the case to a district attorney or city
attorney for prosecution. In addition, consumers may sue for
damages.
ARGUMENTS IN SUPPORT:
The Allstate Insurance Company , Personal Insurance Federation of
California , and the Association of California Insurance
Companies similarly write in support that this bill will enhance
transparency and improve consumer protections.
ARGUMENTS IN OPPOSITION:
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None on file.
REGISTERED SUPPORT:
Allstate Insurance Company
The Association of California Insurance Companies
The Personal Insurance Federation of California
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301