BILL ANALYSIS Ó
SB 778
Page 1
Date of Hearing: June 28, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
SB 778(Allen) - As Amended June 23, 2016
SENATE VOTE: 22-12
NOTE: This bill is double-referred, having been previously heard
by the Assembly Committee on Privacy and Consumer Protection on
June 14, 2016 and approved on a 8-0 vote.
SUBJECT: Automotive repair: oil changes: notification to
customers
SUMMARY: Requires an automotive repair dealer (ARD) who
performs oil change services to use the manufacturer's published
oil drain schedule, except as specified, when recommending an
oil change to a customer; establishes a new registration type
under the Bureau of Automotive Repair (BAR) for automotive
maintenance providers (AMPs); subjects AMPs to the oil changing
requirements and other select ARD requirements, as specified;
and makes other conforming changes.
EXISTING LAW:
1)Establishes the BAR under the supervision and control of the
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Director of the DCA to enforce and administer the Automotive
Repair Act (Act). (Business and Professions Code (BPC) §§
9880-9889.68)
2)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))
3)Defines the "repair of motor vehicles" to mean all maintenance
of, and repairs to, motor vehicles, except the following
services: (BPC § 9880.1)
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 that the director determines to be
customarily performed by a gasoline service station.
4)Provides 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 §
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9880.1(e))
5)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
the definition of "repair of motor vehicles." (BPC §
9880.1(g))
6)Makes it unlawful for any person to engage in the work of an
ARD unless the person has a current, valid registration in
accordance with the Act. (BPC § 9884.6)
7)Requires ARDs to do all of the following:
a) Register with BAR annually, which includes paying a $200
annual registration fee per ARD facility location in the
state; (BPC §§ 9884-9884.6, 9886.3)
b) Post a sign at each location containing a notice that
customers have the right to request and receive any car
parts that were replaced as part of the service and the
phone number and website address of BAR; (BPC § 9884.17)
c) Provide an estimate of parts and labor before performing
services; (BPC § 9884.9)
d) Provide an invoice after performing services; and, (BPC
§ 9884.8)
e) Maintain its transaction records for three years. (BPC
§ 9884.11)
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8)Requires "auto body repair shops," as defined, to register
with the BAR using the ARD registration form, and indicate
that the shop is registering as an "auto body repair shop" not
an ARD. (BPC §§ 9889.51-9889.52)
9)Exempts wholesale parts suppliers from BAR registration, but
requires wholesale parts suppliers to provide customers with a
"written description of the services to be performed" and a
notice to each customer stating that the business is not
regulated by BAR and including BAR's toll-free consumer phone
number. (BPC 9880.2(d))
10)Makes a violation of the ARD provisions of the Act, which
include among other things prohibitions on making untrue or
misleading statements; committing fraud or gross negligence;
and willful disregard for accepted trade standards for good
and workmanlike repair; a misdemeanor punishable by a fine of
up to $1,000 or six months imprisonment, or both. (BPC §§
9884.7, 9889.20)
11)Authorizes the BAR to promulgate regulations and to enforce
violations of the Act against registered and unregistered ARDs
by: investigating on its own initiative or in response to a
consumer complaint; gathering evidence of violations;
suggesting measures to compensate for damages suffered;
issuing citations and notices of abatement; pursuing
administrative disciplinary proceedings against registered
ARDs and suspected unregistered ARDs; pursuing disciplinary
proceedings against registered ARDs, including registration
denial, suspension, revocation, or probation proceedings using
the administrative hearing process; pursuing injunctive relief
against registered and unregistered ARDs in superior court;
and filing criminal charges with the district attorney or city
attorney against a registered or unregistered ARD. (BPC §§
9882.(a), 9882.5, 9884.7, 9882.12-9882.15, 9884.19, 9884.22)
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THIS BILL:
1)Makes several findings and declarations regarding waste of
automotive oil and oil change intervals, including that to
reduce waste, it is the intent of the Legislature to ensure
that an ARD or AMP follows a vehicle manufacturer's published
maintenance schedule unless the manufacture specifies
conditions that require shorter oil change intervals.
2)Amends the title of the Automotive Repair Act to the
Automotive Repair and Maintenance Act.
3)Defines "Automotive Maintenance Provider" as a person who, for
compensation, engages in the business of the preventative
automotive maintenance services associated with fluid and
filter changes, fluid treatments, and belt and windshield
wiper blade replacement.
4)Defines "recommended" or "recommendation" to mean any written
recommendation, including, but not limited to, a
recommendation of an oil drain interval in the form of a
window sticker or a key tag, or through programmable settings
in the vehicle's oil life indicator.
5)Provides that "recommended" or "recommendation" does not mean
resetting a preset or nonprogrammable oil life indicator or an
oil life monitor based on a mathematical algorithm of the
vehicle's usage.
6)Requires an ARD or an AMP who performs oil change services and
recommends a date or mileage for an oil drain interval to
follow the vehicle manufacturer published maintenance
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schedule, except as specified.
7)Provides that, if an ARD or an AMP recommends a date or
mileage for an oil drain interval that deviates from the
vehicle manufacturer's published maintenance schedule for
reasons, including, but not limited to, compliance with a
consumer's preference, the basis for the date or mileage
recommendation shall be noted on the final invoice or on a
document attached to the final invoice.
8)Specifies that none of the oil change requirements under this
bill shall be construed as prohibiting the customer from
selecting any date or mileage for an oil drain interval of his
or her choice and having that choice reflected on future
recommendations from an ARD or an AMP.
9)Specifies that, when an ARD or an AMP performs an oil change
service, the dealer shall include the following oil change
disclosure statement on the final invoice or on a document
attached to the final invoice:
"It is important to change your oil at the proper intervals.
Your vehicle manufacturer publishes oil change intervals in
your owner's manual and on the manufacturer's Web site."
10)Subjects AMPs to the same registration requirements as ARD's
and makes conforming changes. Excludes language and
provisions specific to the repair of motor vehicles,
including:
a) Repair specific terms, such as "install" or "retrofit";
b) The requirement for compliance with Penal Code § 551
relating to referrals and agreements with insurance
companies;
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c) Requirements relating to repair-specific estimates and
repair-specific activities; and
d) The prohibition against liens without a valid
registration.
11)Makes other conforming changes.
FISCAL EFFECT: According to the Senate Committee on
Appropriations May 11, 2016 analysis, pursuant to Senate Rule
28.8, this bill will result in negligible state costs.
COMMENTS:
Purpose. This bill is sponsored by Californians Against Waste .
According to the author, "For decades, drivers have been told
that taking proper care of their vehicle means getting the oil
changed every three months or 3,000 miles. While this may have
been true 30 years ago, advances in motor oil and engine
technology have allowed drivers to extend oil change intervals
greatly. Most vehicles built since 2000 call for an oil change
at intervals of 7,500 or greater. Further, many new vehicles
require the use high quality motor oil that can last 10,000 or
even 25,000 miles between changes. However, most busy car
owners rarely read their owner's manuals; and therefore, have no
idea how often they should change their oil. They simply follow
the windshield reminder sticker, which stubbornly insists on
following the outdated 3,000 miles change interval. In fact, a
2012 survey by CalRecycle indicated almost 10 million
Californians change their motor oil every 3,000 miles or less.
This means Californians are unnecessarily wasting money and
needlessly wasting oil simply because they are cautiously
following the recommendations of their repair dealer. [This
bill] will finally put an end to this wasteful practice by
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requiring any shop performing oil changes to follow the
manufacturer's maintenance schedule when recommending how soon
to return for the next oil change."
Background. According to an article published by Edmunds, a
web-based automotive information provider, a Jiffy Lube customer
who buys high quality oil but follows the window sticker
recommendation of "three months or 3,000 miles" would waste $369
and 15.2 quarts of useable oil every year ("Stop Changing Your
Oil! Breaking the 3,000 Mile Habit", Edmunds, April 23, 2013).
Over five years of the car's life and 60,000 miles of driving,
this would amount to $1,847 and 125 quarts of wasted oil.
Further, while California has a motor oil collection and
recycling program, only about half of used oil is recycled. In
February 2016, the California Department of Resources Recycling
and Recovery (CalRecycle) released a report entitled Used Oil
Life Cycle Assessment Report to the Legislature which examined
the agency's oil recycling program and suggested improvements to
decrease the amount of oil negatively impacting the environment.
One of the policy recommendations in the report states,
"Service stations that change customer oil would be required to
indicate the next recommended oil change service based on the
manufacturer's recommended drain interval for their particular
vehicle (windshield reminder stickers) rather than the typical
3,000 miles." According to CalRecycle, "Changing motor oil
according to the manufacturer specifications would reduce
motor-oil demand in California by about 10 million gallons a
year."
This bill would adopt CalRecycle's policy recommendation by
requiring all car repair and oil change shops to make oil change
recommendations based on the manufacturer's published
maintenance schedule. Specifically, this bill requires car
repair and maintenance shops to make recommendations for oil
changes based on the specific vehicle manufacturer's published
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oil change interval for a given car, rather than using a
one-size-fits-all sticker or notice that recommends "three
months or 3,000 miles." If the shop makes a recommendation that
deviates from the manufacturer's published schedule, then this
bill requires the shop to write basis for that deviation on the
customer's invoice, or on a document attached to the invoice.
Enforcement by BAR. Currently, the BAR regulates the automotive
repair industry and enforces the Act. The primary purposes of
the Act are to protect consumers from unethical and illegal
behavior by the automotive repair industry and improve consumer
confidence in the California auto repair industry.
The Act mandates a statewide automotive repair consumer
protection program, including the requirement that ARDs be
registered and regulated by BAR. The Act also gives the BAR the
authority to license and regulate official stations and
mechanics in the areas of lamp, brake, and smog device
inspection and repair.
The Act protects consumers by requiring all ARD's, including
lamp, brake, and smog stations to: (1) post a sign with
information for consumers; (2) provide written estimates that
detail the parts and labor to be provided; (3) obtain
authorization from their customers prior to commencing any
repair services; and (4) provide customers with itemized
invoices that detail the parts provided and the labor performed.
The Act further requires the 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.
However, existing law exempts those performing minor services,
which at the time of the enactment of the Act were services
typically performed at gas stations, such as oil changes,
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replacing light bulbs, and changing air filters. The rationale
for excluding these services was that they were simple services
that carried a lower risk of serious consumer harm.
As a result, individuals who only perform oil changes are not
currently regulated by the BAR. While the BAR can send cease
and desist letters to individuals suspected of performing
automotive repairs without an ARD registration, without a
registration to tie an administrative disciplinary proceeding
to, the BAR is limited to referring cases to the Office of the
Attorney General or the district attorney.
To allow the BAR to enforce the oil changing requirements under
this bill, this bill creates a new category of registrants
called AMPs. According to the author, the purpose of generating
a new type of registration is to avoid overburdening those who
do not perform repairs (maintenance only). Specifically,
creating a new category creates a clear delineation of the scope
of the work an ARD or AMP may perform and the requirements. The
delineation may relieve unforeseen issues with liability,
insurance, and other regulatory compliance and risk management
concerns.
Current Related Legislation. AB 873 (Jones) of the current
Legislative Session, deletes the current list of minor repairs
exempted from registration with the BAR, effective January 1,
2018, and requires the Director of the DCA, prior to January 1,
2018, to adopt regulations defining a new list; excludes
propulsive batteries from the current list of minor services;
and excludes motor clubs and operators of tow trucks from the
definition of roadside services. STATUS: This bill is currently
pending in the Senate Business, Professions and Economic
Development Committee.
AB 1174 (Bonilla) of the current Legislative Session, would
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require the BAR to adopt regulations on its complaint,
investigation, and mediation process and would require the BAR
to track and retain data on every mediation attempted and
completed for each ARD. The bill also would require the BAR to
study the feasibility, effectiveness, and impact of requiring
all service workers who are employed by ARDs to be licensed or
certified by the BAR and report to the Legislature by July 1,
2018. STATUS: This bill is currently pending in the Senate
Committee on Business, Professions and Economic Development.
Prior Related Legislation. AB 1665 (Jones) of 2014, would have
deleted "repairing tires" and "changing tires" from the list of
repair services exempt from registration as an automotive repair
dealer under the BAR. It would have also required an ARD to be
capable of diagnosing and servicing vehicles, as specified.
NOTE: This bill was vetoed by Governor Brown, writing "The
legislature conducted an oversight hearing that highlighted the
need for the [BAR] to update its regulations to better reflect
changes in automotive technology that have occurred in recent
decades. As a result, the legislature passed [the] bill to
require businesses that change or repair tires for compensation
to register as automotive repair dealers. Before a new
licensing scheme is enacted, a more comprehensive review is
needed. I am directing the [BAR] to work with interested parties
to determine which, if any, automotive repair services merit
further regulation."
SB 202 (Galgiani) of 2013, would have deleted repairing and
changing tires from the list of repair services exempt from
registration as an automotive repair dealer under the BAR.
However, it would have excluded tire services provided by or on
behalf of a motor club holding a specified certificate of
authority or an operator of a tow truck owned or operated by a
person or entity possessing a valid motor carrier permit from
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the definitions of "repair of motor vehicles" and "automotive
technician." NOTE: This bill was held in the Assembly Committee
on Appropriations.
AB 2065 (Galgiani) of 2012, was similar to SB 202 (Galgiani) of
2013. NOTE: This bill was held in the Assembly Committee on
Appropriations.
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.
ARGUMENTS IN SUPPORT:
Californians Against Waste (sponsor) and others similarly write
in support, "Used motor oil, which is insoluble and contains
heavy metals and toxic chemicals, if improperly disposed can
enter our oceans and fresh waters via the storm water systems,
endangering humans, fish and wildlife. In addition, one gallon
of used motor oil can foul the taste of 1 million gallons of
water. This hazardous waste is also often burned as fuel,
creating dangerous air pollution. While California has a motor
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oil collection and recycling program, source reduction makes the
best environmental and economic sense.
It is particularly important that the bill apply equally to
currently unlicensed facilities that perform oil changes, and
require them to properly register with the [BAR], become
licensed, and comply with all applicable laws. Given the stakes
involved, ensuring compliance with environmental and consumer
protections is important enough to warrant uniform enforcement
of the law."
ARGUMENTS IN OPPOSITION:
None on file.
IMPLEMENTATION ISSUES:
This bill establishes a new registration scheme under the BAR.
Because the BAR will be responsible for implementing the new
registration program, the author should continue to work with
the BAR to ensure there are no fiscal, administrative, or
technological barriers to implementation.
Further, the author should continue to work with stakeholders to
ensure that the proper conforming changes have been made.
Specifically, because the language of the new AMP registration
is based largely off of the existing ARD provisions, there may
be more duplicative requirements to fix.
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REGISTERED SUPPORT:
Californians Against Waste (sponsor)
Automotive Oil Change Association
Biosynthetic Technologies
Californians Against Waste
California Product Stewardship Council
CALPIRG and CALPIRG Education Fund
Clean Water Action
Consumer Federation of California
Natural Resources Defense Council
Sierra Club California
Tri-CED Community Recycling
WILDCOAST
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Vincent Chee / B. & P. / (916) 319-3301