BILL ANALYSIS �
AB 2065
Page 1
Date of Hearing: April 10, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2065 (Galgiani) - As Amended: March 29, 2012
SUBJECT : Automotive repair.
SUMMARY : Deletes tire repair and changing from the list of
services exempt from licensure as an automotive repair dealer
(ARD) under the Bureau of Automotive Repair (BAR), as specified.
Specifically, this bill :
1)Deletes tire repair and tire changing from the list of
services exempt from licensure as an ARD and an automotive
technician's duties when commercially performed for payment.
2)Exempts tires service provided by or on behalf of a motor
vehicle club holding a specified certificate of authority or a
tow truck operator possessing a valid motor carrier permit,
from licensure as an ARD.
EXISTING LAW :
1)Makes it unlawful for any person intending to sell real or
personal property or to perform services, to induce the public
to enter into any obligation or disseminate untrue or
misleading information. Makes it unlawful for any person to
disseminate any statement as part of a scheme not to sell that
personal property or those services at the advertised price.
Makes any violation a misdemeanor punishable by imprisonment
in the county jail not exceeding six months, or by a fine not
exceeding $2,500, or by both that imprisonment and fine.
(Business & Professions Code (BPC) � 17500)
2)Defines unfair competition to mean and include: any unlawful,
unfair or fraudulent business act or practice; unfair,
deceptive, untrue or misleading advertising; and, any act
prohibited commencing with BPC �17500. (BPC �17200)
3)Defines "repair of motor vehicles" to mean all maintenance of
and repairs to motor vehicles performed by an ARD, including
automotive body repair work, but excluding: repairing tires,
changing tires, lubricating vehicles, installing light bulbs,
AB 2065
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batteries, windshield wiper blades and other minor
accessories, cleaning adjusting, and replacing spark plugs,
replacing fan belts, oil, and air filters, and other minor
services, which the director of BAR, by regulation, determines
are customarily performed by a gasoline service station.
4)Defines "automotive technician" to mean an ARD or ARD's
employee, who for salary or wage, repairs motor vehicles and
performs maintenance, diagnostics, repair, removal, or
installation of any integral component parts of an engine,
driveline, chassis, or body of any vehicle, but excluding:
repairing tires, changing tires, lubricating vehicles,
installing light bulbs, batteries, windshield wiper blades,
and other minor accessories; cleaning, replacing fan belts,
oil and air filters; and other minor services which the
director of the BAR, by regulation, determines are customarily
performed by a gasoline service station.
5)Provides that the fees for an ARD license are as follows:
a) The ARD registration fee is not more than $200, for each
place of business in this state;
b) The annual renewal fee for an ARD registration shall not
be more than $200 for each place of business in this state,
if renewed prior to its expiration date; and,
c) The renewal fee for a registration that is not renewed
prior to its expiration date shall be 11/2 times the
renewal fee required for a registration renewal prior to
its expiration date, but not more than the renewal fee plus
$50.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "There
are retail operations that only sell and install tires and they
are exempted from enforcement jurisdiction under BAR. A number
of incidents have occurred where these retailers of 'tire sales
only' shops advertise tires for a certain price, and then after
the tires are mounted present the customer with a final price
that is grossly higher than the advertised price. If the
customer refuses to pay this final price, then these 'tire sales
AB 2065
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only' shops keep possession of the vehicle until the customer
pays.
"Even though California's Unfair Competition Laws prohibit these
types of fraudulent activities, and the Attorney General (AG),
or any district attorney (DA), county counsel, or city attorney
could seek injunctive relief or civil remedies, customers rarely
seek these avenues of recourse. AB 2065 would delete the
exemption for those 'tire sales only' shops and place them under
the jurisdiction of BAR, which would then be able to regulate
these retailers. BAR has the authority to, among other things,
suspend or revoke their business licenses for such fraudulent
practices. AB 2065 is a consumer protection bill aimed at
unscrupulous 'tire sales only' shops, and will also ensure fair
competition in the marketplace."
Background . This bill arose from a news station's consumer
investigation on tire sales businesses for false and misleading
advertisement for tire changing and repair services. The news
station report revealed that certain tire sales businesses were
advertising low prices online, but charging consumers more than
the advertised price once services were already performed
without prior notice or consent. When some consumers disputed
the amount or services, some tires sales stores threatened to
withhold a consumer's car until payment was received. Under
existing law, consumers may file a complaint with the Better
Business Bureau or seek monetary relief by pursuing a civil
action in a small claims court. An individual may also request
that the AG, DA, county counsel, or city counsel pursue legal
action against the business under BPC � 17500, which makes false
advertisement a misdemeanor punishable by imprisonment in the
county jail not exceeding six months, or by a fine not exceeding
$2,500, or by both that imprisonment and fine.
The sponsor, Les Schwab Tire Centers contend that "although
these unfair practices are currently prohibited by law, it was
discovered that customers in these matters seldom seek the
assistance of the city or DA for recourse?"
This bill would include tire repair and changing in the list of
services performed by an ARD and automotive technician, thereby
requiring that tire repair and changing be licensed and
regulated under BAR. This bill would authorize BAR to
investigate complaints related to tire services and take
disciplinary action through citation or suspension or revocation
AB 2065
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of an ARD license. The annual fee for an ARD license is $200.
Support . According to the sponsor, Les Schwab Tire Centers,
"This bill should bring a long-needed remedy to the reported
instances where 'tire sales only' stores have allegedly been
preying on customers by quoting a price for a replacement set of
tires, but charging an inflated amount after the tires have been
installed. Although these unfair practices are currently
prohibited by law, it was discovered that customers in these
matters seldom seek the assistance of the city or DA for
recourse? It is time for all entities in this specific tire
sales only shops only sector to be place under BAR's licensing
and enforcement authority - an authority which includes, among
other things, the ability to suspend or revoke business licenses
when appropriate."
According to the California Tire Dealers Association, "This
consumer protection bill would remedy deceptive practices some
of these shops engage in, whereby they advertise a 'discounted'
price for a set of tires and then add on various hidden fees and
services to the customer. If a customer refuses payment, the
shop then threatens to keep possession of the vehicle until the
bill is paid in full. Few customers are aware that such
practices are illegal."
REGISTERED SUPPORT / OPPOSITION :
Support
Les Schwab Tire Centers (sponsor)
California Tire Dealers Association
Opposition
None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301