BILL ANALYSIS Ó
SB 778
Page 1
Date of Hearing: August 3, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 778
(Allen) - As Amended June 23, 2016
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|Policy |Privacy and Consumer |Vote:|8 - 0 |
|Committee: |Protection | | |
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| |Business and Professions | |14 - 1 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill 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
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oil change to a customer; establishes a new registration type
under the Bureau of Automotive Repair (Bureau) for automotive
maintenance providers (AMPs); and subjects AMPs to the oil
changing requirements and other select ARD requirements, as
specified.
FISCAL EFFECT:
1)Major costs of $1.7 million in 2017-18 and $1.5 million in
2018-19 (special funds) to the Bureau to fund 15.0 two-year
limited-term positions to promulgate regulations and for
inspection-related activities.
2)Minor costs for licensing of $78,000 in 2017-18 and $70,000
annually ongoing to the Bureau to fund 1.0 Program Technician
II to process AMP registration applications.
3)Ongoing costs of $185,000 for Attorney General (AG) and
$36,000 for the Office of Administrative Hearings beginning in
2017-18.
4)Costs will partially offset by approximately $500,000 per year
in additional fee revenue from approximately 2,500 new AMP
registrants.
COMMENTS:
1)Purpose. 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
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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sticker, which stubbornly insists on following the outdated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 requiring any
shop performing oil changes to follow the manufacturer's
maintenance schedule when recommending how soon to return for
the next oil change."
2)Background. The Bureau regulates the automotive repair
industry and enforces the Automotive Repair Act (Act). The
primary purposes of the Act are to protect consumers from
unethical and illegal behavior by the automotive repair
industry and to improve consumer confidence in the California
auto repair industry.
Under current law, new car dealers as well as independent car
dealers that service and repair cars have to register with the
Bureau as ARDs. However, so-called "oil change shops" that
only provide "vehicle maintenance" services, such as oil
changes and lubrication, do not have to register as ARDs
because the services they provide are not defined as "repairs"
in statute - raising the question of how these provisions
would be evenly enforced. In response, this bill changes the
statutory definitions of "repair" and "automotive technician"
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to include oil changes and vehicle lubrication, which would
effectively require all oil change shops to register with the
Bureau as ARDs and be subject to Bureau oversight. Current law
allows BAR to investigate and cite registered and unregistered
ARDs, pursue administrative remedies, such as fines and
registration revocation, and file criminal charges in superior
court against ARDs. Current law makes it a misdemeanor for an
ARD to violate any of ARA's provisions.
In recent years, the Bureau and the Legislature have grappled
with the question of whether vehicle maintenance services,
such as oil changes and tire repairs, should be regulated by
the Bureau. In its 2014 sunset review hearing, the Bureau
suggested that because of advances in automotive technology,
many car maintenance services now require specialized repair
skills and may require the removal of automotive systems,
engine components, and electrical equipment.
AB 1665 (Jones) of 2014 would have deleted the repair and
changing tires from the list of excluded minor services, but
the bill was vetoed by the Governor in order to give the
Bureau the opportunity to include more stakeholder input and
decide which other automotive repair services require
regulation. In 2015, the Bureau held an industry workshop
where industry stakeholders and the Bureau representatives
discussed a range of issues including major/minor services,
compliance with advertising requirements, and the definition
of roadside services.
3)Oil Recycling. California has a motor oil collection and
recycling program, but only about half of used oil is
recycled. In February 2016, the California Department of
Resources Recycling and Recovery (CalRecycle) released a
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report entitled Used Oil Life Cycle Assessment Report to the
Legislature . 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.
4)Current Legislation.
a) AB 873 (Jones), pending in the Senate Appropriations
Committee, requires the Director of DCA to promulgate
regulations by 2018 that would revise the list of services
excluded from the current statutory definition of "repair."
AB 873 would also give DCA the authority to update that
list to keep up with technology.
b) AB 1174 (Bonilla), pending in the Senate Appropriations
Committee, would require the Bureau to adopt regulations on
its complaint, investigation, and mediation process, and
would require the Bureau to track and retain data on every
mediation attempted and completed for each ARD. The bill
also would require the Bureau to study the feasibility,
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effectiveness, and impact of requiring all service workers
who are employed by ARDs to be licensed or certified by the
Bureau and report to the Legislature by July 1, 2018.
1)Prior Legislation. In addition to the 2014 Jones bill
mentioned in Comment #2 above:
a) 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
Bureau, as specified. This bill was held on this
Committee's Suspense file.
b) AB 2065 (Galgiani) of 2012, was similar to SB 202
(Galgiani) of 2013. This bill was held on this Committee's
Suspense file.
c) 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.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
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319-2081