BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            SB 778          Hearing Date:     January  
          11, 2016
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          |Author:   |Allen                                                 |
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          |Version:  |January 4, 2016                                       |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Mark Mendoza                                          |
          |:         |                                                      |
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              Subject:  Automotive repair: oil changes: notification to  
                                     customers.


          SUMMARY: Requires that, when an automotive repair dealer recommends the  
          date or mileage for the next oil change, the automotive repair  
          dealer follow the oil drain interval specified in the  
          maintenance schedule of the vehicle's owner's manual when making  
          that recommendation to the customer verbally, in the form of a  
          window sticker, through settings in a vehicle's oil sensor, or  
          any other means, as specified.
          
          Existing law:
          
          1) Establishes the Automotive Repair Act and the Bureau of  
             Automotive Repair (BAR) under the supervision and control of  
             the Director of the Department of Consumer Affairs (DCA).  
             (Business and Professions Code (BPC)  9880 et seq.)


          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))








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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 of DCA determines to  
               be customarily performed by a gasoline service station. 


          1) 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))
          2) States that the Director shall not designate a service as  
             minor if the Director of DCA 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))


          3) Pursuant to The California Oil Recycling Enhancement Act: 
          (Public Resources Code  48600 et seq.):

             a)   Establishes a program to encourage the recycling of used  
               oil.









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             b)   Authorizes the Department of Resources Recycling and  
               Recovery (CalRecycle) to award grants to and work with  
               local governments, non-profit entities, and private  
               companies in order to develop and advance certain  
               developments in lubricating oil, such as oil recycling,  
               collection, research, testing, and re-refining.

             c)   Charges a fee on all oil sold in California to fund  
               local curbside oil pickup programs, local collection  
               facilities, and rebates to oil manufacturers.

             d)   Provides that a person convicted of violating the  
               California Oil Recycling Enhancement Act is guilty of an  
               infraction, which is punishable by a fine of not more than  
               $100/day for each day the violation occurs.

          This bill:

          1) Makes numerous findings and declarations regarding the use of  
             automotive oil in California, the development of oil quality  
             and engine technology, and the goal of reducing the use of  
             automotive oil in California. 

          2) Requires, prior to performing any work, an automotive repair  
             dealer to notify a customer purchasing an oil change of the  
             recommended oil drain interval, oil grade, and viscosity  
             specified in the maintenance schedule of the vehicle's  
             owner's manual. 

          3) Requires that, if an automotive repair dealer recommends the  
             date or mileage for the next oil change, the automotive  
             repair dealer will follow the oil drain interval specified in  
             the maintenance schedule of the vehicle's owner's manual when  
             making that recommendation to the customer verbally, in the  
             form of a window sticker, through settings in a vehicle's oil  
             sensor, or any other means, as specified.

          4) Authorizes a customer to choose a different drain interval  
             used for purposes of 
          Item #3, above, if a customer purchases oil for the oil change  
             that has a recommended drain interval different from the oil  
             drain interval specified in the maintenance schedule of the  
             vehicle's owner manual.









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          FISCAL  
          EFFECT:  Unknown.  This bill has been keyed fiscal by  
          Legislative Counsel. 

          


          COMMENTS:
          
          1. Purpose.  The  Californians Against Waste  is the  Sponsor  of  
             the bill.  According to the Author, "Oil chemistry and engine  
             technology have evolved over the past 5 decades, with  
             lubricants that can last up to 15,000 miles.  In fact, most  
             cars today call for an oil change at 7,500 or more miles.  
             However, a 2012 survey by CalRecycle shows that almost 10  
             million Californians change their motor oil every 3,000 miles  
             or less.  This is partly because of the ingrained myth that  
             all vehicles must have their oil changed every 3000 miles,  
             but it is also because some automotive repair shops still  
             recommend, through window stickers and other means, that  
             drivers have their oil changed every 3,000 miles.  Ensuring  
             that auto repair dealers follow the manufacturer's  
             recommendations when listing the date or mileage for the  
             customer's next oil change will reduce the amount of oil  
             waste generated and save consumers dollars."

          2. Types of Oil.  Oil comes in a variety of types - conventional  
             motor oil, premium conventional oil, semi-synthetic,  
             full-synthetic, or high-mileage.  

              Conventional oil.   This is the oil used in bulk at  
             dealerships and is the cheapest at auto stores.  It is fossil  
             fuel oil.  Conventional oil tends to break down and separate  
             more quickly than synthetic oil [due to heat and elements].  

              Full-synthetic oil.   This oil is made for high-tech engines.   
             If these oils pass stringent special tests, it means they  
             have superior, longer-lasting performance in critical areas,  
             such as viscosity index and protection against engine  
             deposits.  They flow better at low temperatures and maintain  
             peak lubrication at high temperatures.  Although it is  
             considered an excellent quality oil, synthetics are about  
             three times as expensive as conventional oil and not always  








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             necessary for some engines.  However, some engines call for  
             synthetic only such as Corvette, BMW and Mercedes-Benz.

             According to Popular Mechanics, petroleum-type engine oil  
             contains a mixture of several different types of base oil.   
             Oil companies typically pick from a selection of five groups,  
             each of which is produced in a different way and in different  
             viscosities.  The more expensive groups are more highly  
             processed, in some cases with methods that produce a  
             lubricant that can be classified as a synthetic.  The full  
             synthetics contain chemicals that may be derived from  
             petroleum, but are altered so much that they are not  
             considered natural oil anymore.

             In general, synthetic oils have a lower environmental impact,  
             higher vehicle performance, and can extend the time between  
             oil changes.

              Synthetic Blend Oil.   This oil is a mix of synthetic and  
             conventional oils, which is formulated to provide protection  
             for heavier loads and high temperatures.  This generally  
             means they are less volatile and evaporate less, which  
             reduces oil loss.  They are less expensive than  
             full-synthetic oils.

              High-Mileage Oil.   This oil is formulated for vehicles with  
             higher mileage.  They may have higher viscosities, higher  
             dose of anti-wear additives, and are formulated with seal  
             conditioners that flow into the pores of the seals to restore  
             their shape and increase their flexibility.  High-mileage  
             oils have ingredients to take care of older engines, like  
             conditioners, seal swells, antioxidants, detergents and wear  
             or friction additives.  Typically they use a viscosity  
             modifier that is durable and will not lose viscosity very  
             easily.  These oils need to stay thicker longer to protect  
             engine parts.  

          3. Extended-Life Oils.  Many oil companies are releasing  
             extended-life oils that are guaranteed for specific mileage  
             listed on the bottle.  For example, Mobil's most advanced  
             fully synthetic product is guaranteed for 15,000 miles.  The  
             company recommends it for vehicles that are beyond their  
             warranty period because many automakers will void the  
             warranty if the owner does not follow the manufacturer's  








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             recommended service intervals.

          4. Automotive Oil Changes.  Changing the oil in a motor vehicle  
             is necessary to protect the engine, keeping vital engine  
             parts well lubricated so that they do not overheat.  An  
             engine cannot function without it and going too long between  
             oil changes can cause permanent damage to an engine over  
             time.

          Depending on the vehicle, the intervals for required oil changes  
             vary.  For example, many newer models require an oil change  
             at least every 5,000 miles; some require every 15,000 miles.

          Oil change information is located in a vehicle owner's manual  
             and many automakers post their manuals online.  Automaker oil  
             change recommendations differ depending on driving conditions  
             as well as car make, model and year.  According to car  
             manufacturers, for driving conditions considered "severe"  
             (e.g. extensive idling or stop and go traffic; extreme  
             weather or humidity; repeated short-distance trips of less  
             than five miles; or towing a trailer or hauling heavy  
             materials), the oil should be changed more frequently or at  
             shorter mileage intervals than for conditions considered  
             normal.

          In addition, some automakers have installed oil life monitors in  
             their vehicles with varying capabilities - the basic versions  
             are maintenance reminders based on mileage while the more  
             advanced systems take information from various sensors  
             throughout the vehicle and use an algorithm to predict the  
             life of the oil.  These systems are calibrated to work with  
             the factory-recommended oil.  Although these systems take the  
             guess work out of knowing when the next oil service should  
             be, many people have preconceived notions about oil change  
             intervals such as all cars need the oil changed every 3,000  
             miles.

          5. Used Oil.   Used Oil in California.   According to CalRecycle,  
             in 2005, the latest year for which statistics are available,  
             approximately 153.5 million gallons of used oil is generated  
             annually.  59 percent of that oil was recycled.

              Used Oil Can Harm the Environment.   According to CalRecycle,  
             used oil can contain such contaminants as lead, magnesium,  








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             copper, zinc, chromium, arsenic, chloride, cadmium, and  
             chlorinated compounds.  Used motor oil poses a great risk to  
             the environment - oil poured down drains or onto the ground  
             can work its way into ground and surface waters causing  
             serious pollution because it is insoluble, persistent and  
             contains heavy metal and toxic chemicals.  Used oil that is  
             not recycled often finds its way into California's waterways  
             - lakes, streams, and ocean - via the stormwater system.   
             Used oil in waterways threatens fish, waterfowl, insects, and  
             aquatic life.  One gallon of used oil can foul the taste of 1  
             million gallons of water.  Federal reports indicate that used  
             motor oil accounts for more than 40 percent of the total oil  
             pollution in the nation's harbors and waterways.

          6. Educating the Vehicle Owner.  Oil change information is in  
             the maintenance section of a vehicle owner's manual.  Also,  
             many automakers have put their manuals online.  In addition,  
             CalRecycle has an easily accessible, interactive webpage to  
             see how often one should change the oil for a car based on  
             the make, model, and year of the car.

          Many cars today require a minimum oil change of every 5,000 or  
             7,500 miles.  Ford Motor Company recommends oil changes for  
             many of its new vehicles at 10,000 miles.  Some cars commonly  
             seen on the road require an oil change every 15,000 miles.  

          According to CalRecycle, "[c]hanging motor oil according to the  
             manufacturer specifications would reduce motor-oil demand in  
             California by about 10 million gallons a year."  (Jerry  
             Hirsch, "State hopes to break car owners' habit of changing  
             oil too often," Los Angeles Times, December 15, 2011).  

             Prior to the January 4, 2016 amendments, this bill faced a  
             policy concern in the Senate Committee on Environmental  
             Quality about whether educating the vehicle owner was a more  
             effective way to reduce oil waste.  With the new amendments,  
             the bill addresses the concerns and explicitly requires the  
             automotive repair dealer to notify the customer of the  
             recommended oil change interval listed in the vehicle's  
             owner's manual and change the oil at that interval, unless  
             otherwise specified. 

          7. Ongoing Litigation.  Currently, the California Attorney  
             General, on behalf of BAR, filed an accusation against  








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             numerous Jiffy Lube stations across the state.  The  
             accusation lists various causes for discipline including  
             failure to provide a copy of the signed estimate, departure  
             from trade standards, fraud, false and misleading records,  
             unfair competition, and untrue and misleading statements.  

          8. Prior Legislation.   SB 916  (Correa, 2014) would have  
             specified that synthetic oil included oil composed of  
             biobased feedstock for the purposes of regulating disposal  
             and recycling of used oil; would have prohibited on and after  
             January 1, 2017, the sale of lubricating oil in the state  
             unless the lubricating oil met certain requirements,  
             including meeting or exceeding minimal standards for  
             biodegradability.  
          (  Status  : This bill was amended to address firearms). 

              SB 546  (Lowenthal, Chapter 353, Statutes of 2009) made broad  
             changes to the California Oil Recycling Enhancement Act to  
             encourage the best re-use of used oil and reduce air  
             pollution from the use of used oil, including:  raising the  
             fee paid by lubricating oil manufacturers from $0.16 to $0.26  
             per gallon; increasing the incentives paid for recycling used  
             oil; increasing the testing requirements for used oil  
             transporters; and, requiring a life-cycle analysis of used  
             oil.


           9. Policy Issue  :  Should all facilities that provide oil changes  
             be included in this bill?  As amended, the bill only covers  
              licensed  automotive repair dealers (e.g. Jiffy Lube) and not  
             quick lube/oil shops (e.g. such as Oil Changer) that solely  
             provide oil changes.  

             Current law exempts independent shops from registering with  
             BAR because an oil change service is considered a minor  
             service, as are tires and battery services (BPC  9880.1(e)).  
              Namely, these quick lube/oil businesses will not be impacted  
             because they are not regulated by BAR.  If the bill is  
             attempting to reduce the use of automotive oil, and make  
             customers more aware of when an oil change should be made,  
             the Author may wish to revise some of the language used in  
             Section 2 of the bill.  

             However, it should be noted that AB 873 (Jones), which is  








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             currently in this Committee, may achieve the goal of  
             including all oil change services under BAR oversight if  
             passed by the Legislature and signed by the Governor.  AB 873  
             is sponsored by the Department of Consumer Affairs and seeks  
             to update what is considered a major and minor service under  
             BAR.  If AB 873 is passed, it is possible that oil changes  
             may be considered a major service since performance of the  
             service has given rise to a high incidence of fraud or  
             deceptive practices (e.g. ongoing litigation with Attorney  
             General and Jiffy Lube).  By re-categorizing oil changes as a  
             major repair, BAR would be able to take action against  all   
             facilities that oversell oil services.  
          
          10.Arguments in Support.  According to  CALPIRG  , "bringing oil  
             change shop recommendations in line with automaker  
             recommendations for oil change intervals would protect  
             consumers from this [unnecessary and costly oil changes]  
             deceptive and misleading practice."
          

          SUPPORT AND OPPOSITION:
          
           Support:  

          Californians Against Waste (Sponsor)
          CALPIRG 

           Opposition:  

          None on file as of January 6, 2016.

                                      -- END --