BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 1665|
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THIRD READING
Bill No: AB 1665
Author: Jones (R), et al.
Amended: 6/26/14 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 8-0, 6/23/14
AYES: Lieu, Wyland, Berryhill, Corbett, Galgiani, Hernandez,
Hill, Torres
NO VOTE RECORDED: Block
SENATE APPROPRIATIONS COMMITTEE : 7-0, 8/4/14
AYES: De Le�n, Walters, Gaines, Hill, Lara, Padilla, Steinberg
ASSEMBLY FLOOR : 77-1, 5/28/14 - See last page for vote
SUBJECT : Automotive repair
SOURCE : California Tire Dealers Association
Les Schwab Tire Centers
DIGEST : This bill deletes repairing tires and changing tires
from the list of repair services exempt from registration as an
automotive repair dealer (ARD) that repairs or changes tires
under the Bureau of Automotive Repair (BAR), and requires an ARD
to be capable of diagnosing and servicing tire pressure
monitoring systems (TPMS), as specified.
ANALYSIS :
Existing law:
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1.Registers and regulates more than 35,000 ARDs under the
Automotive Repair Act (Act) by BAR within the Department of
Consumer Affairs (DCA).
2.Defines certain terms in the Act, including:
A. "Automotive repair dealer" to mean a person who, for
compensation, engages in the business of repairing or
diagnosing malfunctions of motor vehicles.
B. "Repair of motor vehicles" to mean maintenance of and
repairs to motor vehicles performed by an automotive repair
dealer including automotive body repair work, and excludes
from the definition (1) repairs made under a commercial
business agreement; (2) repairing tires and changing tires;
(3) lubricating vehicles; (4) installing light bulbs,
batteries, windshield wiper blades and other minor
accessories; (5) cleaning, adjusting and replacing spark
plugs, fan belts, oil and air filters; and (6) other minor
services customarily performed by gasoline service
stations.
C. "Automotive technician" to mean an employee of an
automotive dealer (or the dealer itself) who performs
maintenance, diagnostics, repair, removal or installation
of any integral component parts of an engine, driveline,
chassis or body of any vehicle and excludes from the
definition (1) repairing and changing tires; (2)
lubricating vehicles; (3) installing light bulbs,
batteries, windshield wiper blades and other minor
accessories; (4) cleaning, replacing fan belts, oil and air
filters; and (5) other minor services customarily performed
by gasoline service stations.
1.Requires all work done by an ARD to be recorded on an itemized
invoice that describes all service work done and parts
supplied, and requires the invoice to contain specified
information.
2.Requires an ARD to provide a customer with an itemized written
estimate for parts and labor and to obtain authorization from
the customer before performing work or charging for any work
on the customer's vehicle.
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3.Prohibits an ARD from charging a customer for work done or
parts supplied in excess of the written estimate without first
obtaining a customer's oral or written authorization.
4.Establishes the following fees for an ARD registration:
A. Initial registration fee of not more than $200 for each
place of business.
B. Annual renewal fee of not more than $200 for each place
of business.
C. Delinquent renewal fee of 1-1/2 times the renewal fee,
but not more than the renewal fee plus $50.
1.Makes it unlawful for a person to be an ARD unless registered
with BAR, and unless the registration is currently valid.
Makes any violation of the Act a misdemeanor (crime).
This bill:
1.Removes the exemption for tire repair and tire changing from
the definitions of "repair of motor vehicles" and "automotive
technician."
2.Exempts from the definitions of "repair of motor vehicles" and
"automotive technician," tire services provided by or on
behalf of either of the following:
A. A motor vehicle club holding a certificate of authority
under the Insurance Code.
B. A tow truck operator possessing a valid motor carrier
permit under the Vehicle Code.
1.Defines TPMS as the automotive safety device that warns the
driver by using a lighted icon on the onboard diagnostic
system that one or more of the tires are underinflated.
2.Revises and recasts a number of definitions in the Act and
makes clarifying, technical and conforming changes.
3.Requires an ARD that repairs or changes tires to be capable of
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diagnosing and servicing the TPMS in accordance with industry
standards if a vehicle is manufactured with the device.
Background
TPMS . TPMS is a vehicle safety device and its proper
functioning is essential to the safe operation of a vehicle.
The repair and diagnosis of TPMS issues often requires
specialized equipment and adherence to specific diagnostic
procedures. For this reason, BAR has determined, under its
existing authority to distinguish between exempt minor services
and major services requiring registration; that businesses that
work with TPMS need to be registered as an ARD. A March 2013
Chief's Message, from the former BAR Chief John Wallauch,
states, "Tire stores that diagnose TPMS sensors must be
registered with [BAR]. Businesses benefit from this
registration because it establishes a level-playing field where
all tire stores that serve these warning devices are registered.
Consumers will benefit because they will receive a written
estimate and be protected by all other provisions in the [Act]."
This bill codifies BAR's position by making clear that tire
change and repair services are no longer exempt from BAR
oversight. It also requires ARDs that service vehicles with
TPMS sensors must be capable of repairing and diagnosing TPMS in
accordance with industry protocols.
Sunset review of BAR . Earlier this year, the Senate Business
Professions and Economic Development Committee and the Assembly
Business, Professions and Consumer Protection Committee
conducted joint oversight hearings to review BAR and eight other
regulatory entities. As a part of that review, staff of the
Committees made recommendations which are reflected in the
Background Papers prepared for each agency and program reviewed
by the Committees.
In its Sunset Report, BAR raised the issue of ancillary services
which have typically been regarded as exempt areas of practice
and therefore not subject to regulation and registration as an
ARD; such as replacing spark plugs, batteries and fan belts.
BAR indicates that because of advances in automotive technology
many of these services require more specialized repair skills
and necessitate the removal of automotive systems, engine
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components, shrouds or other electrical equipment. BAR
indicates that an ARD registration should be required for those
carrying out such complex repairs.
One of the examples of repairs exempt from registration under
the Act, cited by BAR, is tire services. Many modern vehicles
are equipped with tire pressure monitoring systems that may
require the technician to update the vehicle's on-board
diagnostic system when serviced.
Discussions with repair industry representatives indicate that
the BAR recently determined that some tire dealers must register
as ARDs. This determination has apparently been made because of
the definitions in BPC Section 9880.1 and the TREAD Act
[Transportation Recall Enhancement Accountability
Documentation]. The TREAD Act requires that beginning with the
2006 model year, every new vehicle of less than 10,000 pounds
gross vehicle weight rating must be equipped with a TPMS. BAR
has determined that shops engaging in the repair, removal and
installation of TPMS must register as ARDs because the TREAD Act
mandated new vehicles be equipped with TPMS in response to
numerous deaths. As a clear health and safety issue, the proper
functioning of such components is essential to the safe
operation of a vehicle. BAR has further indicated that the
repair and diagnosis of TPMS often requires the use of
specialized equipment and adherence to specific diagnostic
procedures, which necessitates specific mechanical expertise.
In its Sunset Report, BAR indicated that the definition of
repair of motor vehicles may need to be updated by regulation to
clarify what constitutes maintenance and repairs of motor
vehicles, given changes to automotive technology over time.
In its response to the issues raised in the Committees'
Background Paper, BAR stated that spark plug replacement is a
prime example of these exemptions which might need to be
changed. It is not uncommon for vehicles to have spark plugs
replaced if a specific diagnosis determines that replacement is
warranted or at scheduled intervals of 100,000 miles. Vehicle
manufacturers have made spark plugs inaccessible without removal
of other major systems, even the removal of motor mounts, and in
a few cases, the entire engine, according to BAR. Additionally,
these same services are not exempt from the consumer disclosure
and other protections of the Act if other automotive repair
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services performed by the facility require registration with
BAR.
Committee staff recommended that BAR provide input on this
issue, and asked whether BAR's regulatory authority is
sufficient in these areas. In its reply, BAR did not make a
specific recommendation for legislation in this area.
Comments
The author states: "On November 1, 2000, Congress enacted the
TREAD Act as a direct consequence of its hearings on the safety
and fatalities related to the Firestone tire situation at the
time. It directed NHTSA [National Highway and Traffic Safety
Administration] to adopt regulations to update the Federal motor
vehicle safety standards and to require a system in new motor
vehicles that warns the operator when a tire is significantly
under inflated. The warning telltale appears on the dashboard
screen as a red cross-section of a tire."
The author further cites a 2011 NHTSA letter to the Tire
Industry Association, stating: "In the case of a vehicle
equipped with a functioning TPMS system, a service provider
would violate the 'making inoperative' prohibition of 49 USC
30122(b) by installing new tires and wheels that do not have a
functioning TPMS system. To avoid a 'make inoperative'
violation, the service provider would need to decline to install
the new tires and rims, use the TPMS sensors from the original
wheels (if they are compatible), or convince the motorist to
purchase new TPMS sensors and ensure the sensors are properly
integrated with the vehicle's TPMS system."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Annual license revenue gains of approximately $560,000
(Vehicle Inspection and Repair Fund), assuming an estimated
2,800 tire shops would be licensed as automotive repair
dealers under BAR's regulatory jurisdiction.
According to BAR, any additional costs to process new
applications, investigate more complaints, and conduct
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enforcement activities would be covered by new license fee
revenues.
BAR indicates that one-time workload related to processing
applications would be accomplished through short-term
redirection of existing staff.
SUPPORT : (Verified 8/6/14)
California Tire Dealers Association (co-source)
Les Schwab Tire Centers (co-source)
California New Car Dealers Association
ARGUMENTS IN SUPPORT : In sponsoring this bill, Les Schwab
Tire Centers states that properly maintained tire pressure is
the single most important factor of tire safety, and that this
bill brings the entire tire service and repair industry in
compliance with the current federal and industry standards for
the activation, calibration, maintenance and replacement of the
TPMS embedded in all cars and light weight truck sold in
California and the USA since 2007. They state: "Properly
inflated tires are not only safer but they also deliver improved
fuel economy that in turn results in improved environmental
quality. It has been estimated that the annual fuel savings in
California would be in the hundreds of millions of gallons.
Finally, the bill would additionally remove the Automotive
Repair Act's 42-year-old exemption for tire sales only stores.
This would [provide] a significant consumer protection
advancement. Placing these long-time exempt businesses under
the jurisdiction of the Bureau of Automotive Repair would
finally require them to give written estimates, meet both the
minimum industry requirements for conducting tire repairs and
the federal and industry standards for servicing the TPMSs."
Also sponsoring the bill, the California Tire Dealers
Association (CTDA), states that this bill reflects current
federal and industry standards by requiring tire dealers and
service providers to be able to activate and calibrate TPMSs.
CTDA indicates three reasons it supports this bill: (1) the
bill requires all shops that sell, repair, or change tires (and
which must install and calibrate TPMS) to register with BAR; (2)
properly installed and maintained TPMS increases safety for
occupants in all vehicles that have them; and (3) properly
inflated tires, the reason for TPMS, improve a vehicle's fuel
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economy and benefit the environment.
California New Car Dealers Association (CNCDA) states there is
widespread potential for fraud among "tire sales only" shops who
prey on customers by quoting one price for replacing tires, but
charging an inflated amount after the tires have been installed.
By requiring "tire sales only" shops to register with BAR, this
bill requires these shops to provide customers with written
estimates for parts and labor before any work is done to their
vehicle and prohibit additional charges from accruing without
the customer's prior authorization, according to CNCDA. CNCDA
believes this bill levels the playing field for dealers, creates
a fairer business environment, and protects consumers.
ASSEMBLY FLOOR : 77-1, 5/28/14
AYES: Achadjian, Alejo, Allen, Ammiano, Bigelow, Bloom,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Beth
Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, Gray,
Grove, Hagman, Hall, Harkey, Roger Hern�ndez, Holden, Jones,
Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,
Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian,
Nestande, Olsen, Pan, Patterson, Perea, John A. P�rez, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas,
Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron,
Weber, Wieckowski, Wilk, Williams, Yamada, Atkins
NOES: Dahle
NO VOTE RECORDED: Donnelly, Vacancy
MW:nl 8/6/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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