Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal these provisions and instead make it a misdemeanor for any person to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device intended to replace a supplemental restraint system component, as defined, in any motor vehicle if the device is a counterfeit supplemental restraint system component or a nonfunctional airbag, as defined, or does not meet specified federal safety requirements. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed. The bill would provide that its provisions do not affect any duties, rights, or remedies otherwise available at law or preclude prosecution under any other law. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal these provisions and instead make it a misdemeanor for any person to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device intended to replace a supplemental restraint system component, as defined, in any motor vehicle if the device is a counterfeit supplemental restraint system component or a nonfunctional airbag, as defined, or does not meet specified federal safety requirements. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed. The bill would provide that its provisions do not affect any duties, rights, or remedies otherwise available at law or preclude prosecution under any other law. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal these provisions and instead make it a misdemeanor for any person to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device intended to replace a supplemental restraint system component, as defined, in any motor vehicle if the device is a counterfeit supplemental restraint system component or a nonfunctional airbag, as defined, or does not meet specified federal safety requirements. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed. The bill would provide that its provisions do not affect any duties, rights, or remedies otherwise available at law. law or preclude prosecution under any other law. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal these provisions and instead make it a misdemeanor for any person to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device intended to replace a supplemental restraint system component, as defined, in any motor vehicle if the device is a counterfeit supplemental restraint system component or a nonfunctional airbag, as defined, or does not meet specified federal safety requirements. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed. The bill would provide that its provisions do not affect any duties, rights, or remedies otherwise available at law. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbags, airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal these provisions and instead make it a misdemeanor for any person to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device intended to replace a supplemental restraint system component, as defined, in any motor vehicle if the device is a counterfeit supplemental restraint system component or a nonfunctional airbag, as defined, or does not meet specified federal safety requirements. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed. The bill would deem any of the violations described as an unfair or deceptive act or practice for purposes of the Consumers Legal Remedies Act, as specified. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an air bag, airbags, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed air bag airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal these provisions and instead make it a misdemeanor for any person to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device with the intent that the device replace an airbag intended to replace a supplemental restraint system component, as defined, in any motor vehicle if the person knows or reasonably should know that the device is a counterfeit airbag supplemental restraint system component or a nonfunctional airbag, as defined, or does not meet specified federal safety requirements. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag supplemental restraint system component or nonfunctional airbag, or when no airbag is installed. The bill would deem any of the violations described as an unfair or deceptive act or practice for purposes of the Consumers Legal Remedies Act, as specified. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an air bag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed air bag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would additionally make it a misdemeanor for a person to knowingly distribute, sell, or install a counterfeit or nonfunctional air bag, as defined. The bill would also repeal these provisions and instead make it a misdemeanor for any person to manufacture, import, install, reinstall, distribute, sell, or offer for sale any device with the intent that the device replace an air bag airbag in any motor vehicle if the person knows or reasonably should know that the device is a counterfeit air bag airbag or a nonfunctional air bag airbag, as defined, or does not meet specified federal safety requirements. The bill would provide that a person who installs a nonfunctional air bag that is nonfunctional solely because it has an electric fault, as specified, is only guilty of the crimes described above if, after the electrical fault is discovered, he or she fails to either replace the nonfunctional air bag with a functional air bag in a reasonable time or fails to notify the purchaser or other recipient of the vehicle that the air bag is nonfunctional. The bill would also make it a misdemeanor to knowingly and intentionally sell, install, or reinstall in a vehicle any device that causes the vehicles diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, or when no airbag is installed. The bill would deem any of the violations described as an unfair or deceptive act or practice for purposes of the Consumers Legal Remedies Act, as specified. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbag, air bag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag air bag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law makes it a misdemeanor for a person to (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicles computer system or supplemental restraint system, otherwise referred to as an airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

This bill would repeal the above provisions and instead would prohibit a person from manufacturing, importing, installing, reinstalling, selling, or offering for sale any device with the intent that the device replace an airbag in any motor vehicle if the person knows or reasonably should know that the device is a counterfeit airbag or a nonfunctional airbag, or does not meet specified federal safety requirements. The bill would also prohibit the sale, or installation or reinstallation in a vehicle, of a device that causes the vehicles diagnostic system to inaccurately indicate that the vehicle is equipped with a functional airbag when a counterfeit or nonfunctional airbag, or no airbag is installed. The bill would deem a knowing violation of these provisions an unfair or deceptive act or practice for purposes of the existing Consumers Legal Remedies Act, and a felony punishable as prescribed. By creating new crimes, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 2387

Author:(Mullin)

As Amended Ver:August 16, 2016

Majority vote

Original Committee Reference: PUB. S.

SUMMARY: Particularizes the crime of selling counterfeit airbags, and increases the penalty for selling counterfeit airbags.

The Senate amendments:

1. Add an intent requirement to the prohibition on selling, installing or reinstalling in a vehicle any device that causes the vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed.
2. Delete the subsection which would have deemed a violation of this section an unfair or deceptive act or practice for the purposes of the Consumer Legal Remedies Act.
3. Clarify the safe harbor provision of the definition of a "nonfunctional airbag" by stating the violation does not occur until an installer, seller, or re-seller has returned the vehicle to the customer or when they intended to transfer ownership of the vehicle.
4. Delete the subsection of the "nonfunctional airbag" definition stating an airbag subject to a federal recall shall not be considered non-functional for purpose of this section.
5. Define as a nonfunctional airbag an airbag subject to the prohibitions of federal laws regarding repairs or recalls, as defined.
6. Insert a "savings clause" so that this provision does not affect the other rights, remedies and/or duties available at law regarding nonfunctional, counterfeit airbags or other airbags, as defined.
7. Clarify that the provisions of the bill do not preclude prosecution under any other area of the law.

EXISTING LAW:

1. Prohibits installation, reinstallation, rewiring, tampering with, altering or modifying for compensation a vehicle's computer or supplemental restraint system, or the system's performance indicators, so that it falsely indicates the supplemental restraint system is in proper working order.
2. Prohibits knowingly distributing or selling a previously deployed air bag or previously deployed air bag component that will no longer meet the original equipment manufacturing form or function for proper operation.
3. States that improper installation or installation of previously deployed air bag components which no longer meet the original equipment manufacturing form or function for proper operation is a misdemeanor.
4. Punishes anyone who knowingly sells or knowingly holds for sale any counterfeit trademark registered with the Secretary of State or the Principal Register of the United States Patent and Trademark Office, as provided, according to the total value of the goods or products.
5. Prohibits anyone from willfully and falsely representing their goods or products as being the products of a true dealer, manufacturer or producer of those goods or products.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

AS PASSED BY THE ASSEMBLY, this bill:

1. Repealed existing provisions of law relating to the installation or rewiring of airbag systems to falsely indicate the system is in working order.
2. Prohibited a person from manufacturing, importing, installing, reinstalling, distributing, selling or offering for sale any device with the intent that the device replace an airbag in any motor vehicle if the person knows or reasonably should know the device is a counterfeit or nonfunctional airbag, as defined, or does not meet federal safety standards, as provided.
3. Prohibited a person from knowingly and intentionally selling, installing, or reinstalling in a vehicle, any device that causes the vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, or when no airbag is installed.
4. Stated that a violation of the aforementioned provisions is a misdemeanor, punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or by both that fine and imprisonment.
5. Granted safe harbor to allow installers and other persons to complete their installation work before a violation can occur.
6. Defined "airbag" as a motor vehicle inflatable occupant restraint system device, including all component parts, such as the cover, sensors, controllers, inflators, and wiring, that the vehicle manufacturer recommends be replaced after deployment that meets both of the following criteria:
   1. Operates in the event of a crash; or
   2. Is designed in accordance with federal motor vehicle safety standards for the specific make, model, and year of the motor vehicle in which it is or will be installed.
7. Defined "counterfeit airbag" as a replacement airbag that displays a mark identical or substantially similar to the genuine mark of a motor vehicle manufacturer or a supplier of parts to the manufacturer of a motor vehicle without authorization from that manufacturer or supplier.
8. Defined "nonfunctional airbag" as a replacement airbag that meets any of the following criteria:
   1. The airbag was previously deployed or damaged;
   2. The airbag has an electric fault that is detected by the vehicle's airbag diagnostic systems after the installation procedure is completed; or
   3. The airbag includes a part or object, including, but not limited to, a counterfeit or repaired airbag cover or airbag component, installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed.

COMMENTS: According to the author, "AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard."

Please see the policy committee analysis for a full discussion of this bill.

Analysis Prepared by: Matt Dean / PUB. S. / (916) 319-3744 FN: 0004428

 THIRD READING 

Bill No: AB 2387

Author: Mullin (D), et al.

Amended: 8/16/16 in Senate

Vote: 21

SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/14/16

AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 78-0, 5/12/16 - See last page for vote

SUBJECT: Vehicle equipment: supplemental restraint system components and nonfunctional airbags

SOURCE: Author

DIGEST: This bill makes it a crime to sell or install a counterfeit airbag or sell or install any device which causes the vehicle’s diagnostic system to fail to warn when the vehicle is equipped with a counterfeit airbag.

Senate Floor Amendments of 8/16/16 clarify that the provisions of the bill do not preclude prosecution of manufacturers, importers, installers, distributors, or sellers of counterfeit airbags under any other law.

ANALYSIS:

Existing law:

1. Prohibits tampering with a vehicle’s computer system or supplemental restraint system to falsely indicate the systems are in working order.
2. Prohibits selling a previously deployed air bag that no longer functions as originally intended.

This bill:

1. Prohibits against knowingly and intentionally manufacturing, importing, installing, distributing, and selling any device intended to replace a supplemental restraint system component (e.g., airbag) if the device is counterfeit or a nonfunctional airbag or does not meet applicable federal safety requirements.
2. Prohibits against knowingly and intentionally selling or installing any device that causes the vehicle’s diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag.
3. Provides that violation of these prohibitions is a misdemeanor punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or both, as well as under any other existing provisions of law.

Comments

1. Purpose. AB 2387 strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.
2. Huge problem. Airbags are an essential component of modern vehicle safety systems, helping ensure that the occupants’ heads and upper bodies do not strike the vehicle interior in a crash. Beginning in 2008, airbags made by Takata were recalled because of concerns that airbag deployment could injure the car occupants. Originally limited to Honda, the recall was expanded to 14 car manufacturers and as many as 68.8 million airbags in what the National Highway Traffic Safety Administration (NHTSA) called the largest and most complex safety recall in history. As these airbags are replaced, problems have arisen with the use of counterfeit airbags which don’t provide adequate protection. In October 2012, the NHTSA issued an advisory warning about the dangers of counterfeit airbags.
3. Other states leading. The problem of counterfeit airbags has led 10 states to enact legislation to prohibit the use of counterfeit airbags, including Ohio, Texas, New York, and Florida. The Council of State Governments proposed model legislation to make it a crime to manufacture, import, or install a non-functional or counterfeit airbag.
4. Closing a loophole. This bill closes a loophole in current law which does not address counterfeit airbags. Recent reports indicate that several car manufacturers sell new cars with recalled airbags. That circumstance is not addressed in this bill.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/17/16)

Auto Alliance

Automobile Association of Southern California

Automobile Club of Southern California

California Association of Highway Patrolmen

California Professional Firefighters

Coalition Against Insurance Fraud

Ford

Global Automakers

Honda

Los Angeles County District Attorney

Peace Officers Research Association of California

OPPOSITION: (Verified 8/17/16)

None received

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

Prepared by: Randy Chinn / T. & H. / (916) 651-4121

8/17/16 15:57:55

**** END ****

 THIRD READING 

Bill No: AB 2387

Author: Mullin (D), et al.

Amended: 6/15/16 in Senate

Vote: 21

SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/14/16

AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 78-0, 5/12/16 - See last page for vote

SUBJECT: Vehicle equipment: supplemental restraint system components and nonfunctional airbags

SOURCE: Author

DIGEST: This bill makes it a crime to sell or install a counterfeit airbag or sell or install any device which causes the vehicle’s diagnostic system to fail to warn when the vehicle is equipped with a counterfeit airbag.

ANALYSIS:

Existing law:

1. Prohibits tampering with a vehicle’s computer system or supplemental restraint system to falsely indicate the systems are in working order.
2. Prohibits selling a previously deployed air bag that no longer functions as originally intended.

This bill:

1. Prohibits against knowingly and intentionally manufacturing, importing, installing, distributing, and selling any device intended to replace a supplemental restraint system component (e.g., airbag) if the device is counterfeit or a nonfunctional airbag or does not meet applicable federal safety requirements.
2. Prohibits against knowingly and intentionally selling or installing any device that causes the vehicle’s diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag.
3. Provides that violation of these prohibitions is a misdemeanor punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or both.

Comments

1. Purpose. AB 2387 strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.
2. Huge problem. Airbags are an essential component of modern vehicle safety systems, helping ensure that the occupants’ heads and upper bodies do not strike the vehicle interior in a crash. Beginning in 2008, airbags made by Takata were recalled because of concerns that airbag deployment could injure the car occupants. Originally limited to Honda, the recall was expanded to 14 car manufacturers and as many as 68.8 million airbags in what the National Highway Traffic Safety Administration (NHTSA) called the largest and most complex safety recall in history. As these airbags are replaced, problems have arisen with the use of counterfeit airbags which don’t provide adequate protection. In October 2012, the NHTSA issued an advisory warning about the dangers of counterfeit airbags.
3. Other states leading. The problem of counterfeit airbags has led 10 states to enact legislation to prohibit the use of counterfeit airbags, including Ohio, Texas, New York, and Florida. The Council of State Governments proposed model legislation to make it a crime to manufacture, import, or install a nonfunctional or counterfeit airbag.
4. Closing a loophole. This bill closes a loophole in current law which does not address counterfeit airbags. Recent reports indicate that several car manufacturers sell new cars with recalled airbags. That circumstance is not addressed in this bill.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

SUPPORT: (Verified 8/1/16)

Auto Alliance

Automobile Association of Southern California

Automobile Club of Southern California

California Association of Highway Patrolmen

California Professional Firefighters

Coalition Against Insurance Fraud

Ford

Global Automakers

Honda

Los Angeles County District Attorney

Peace Officers Research Association of California

OPPOSITION: (Verified 8/1/16)

California Public Defenders Association

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

Prepared by: Randy Chinn / T. & H. / (916) 651-4121

8/11/16 14:35:41

**** END ****

 CONSENT 

Bill No: AB 2387

Author: Mullin (D), et al.

Amended: 6/15/16 in Senate

Vote: 21

SENATE TRANS. & HOUSING COMMITTEE: 11-0, 6/14/16

AYES: Beall, Cannella, Allen, Bates, Gaines, Galgiani, Leyva, McGuire, Mendoza, Roth, Wieckowski

SENATE JUDICIARY COMMITTEE: 7-0, 6/28/16

AYES: Jackson, Moorlach, Anderson, Hertzberg, Leno, Monning, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

ASSEMBLY FLOOR: 78-0, 5/12/16 - See last page for vote

SUBJECT: Vehicle equipment: supplemental restraint system components and nonfunctional airbags

SOURCE: Author

DIGEST: This bill makes it a crime to sell or install a counterfeit airbag or sell or install any device which causes the vehicle’s diagnostic system to fail to warn when the vehicle is equipped with a counterfeit airbag.

ANALYSIS:

Existing law:

1. Prohibits tampering with a vehicle’s computer system or supplemental restraint system to falsely indicate the systems are in working order.
2. Prohibits selling a previously deployed air bag that no longer functions as originally intended.

This bill:

1. Prohibits against knowingly and intentionally manufacturing, importing, installing, distributing, and selling any device intended to replace a supplemental restraint system component (e.g., airbag) if the device is counterfeit or a nonfunctional airbag or does not meet applicable federal safety requirements.
2. Prohibits against knowingly and intentionally selling or installing any device that causes the vehicle’s diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag.
3. Provides that violation of these prohibitions is a misdemeanor punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or both.

Comments

1. Purpose. AB 2387 strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.
2. Huge problem. Airbags are an essential component of modern vehicle safety systems, helping ensure that the occupants’ heads and upper bodies do not strike the vehicle interior in a crash. Beginning in 2008, airbags made by Takata were recalled because of concerns that airbag deployment could injure the car occupants. Originally limited to Honda, the recall was expanded to 14 car manufacturers and as many as 68.8 million airbags in what the National Highway Traffic Safety Administration (NHTSA) called the largest and most complex safety recall in history. As these airbags are replaced, problems have arisen with the use of counterfeit airbags which don’t provide adequate protection. In October 2012, the NHTSA issued an advisory warning about the dangers of counterfeit airbags.
3. Other states leading. The problem of counterfeit airbags has led 10 states to enact legislation to prohibit the use of counterfeit airbags, including Ohio, Texas, New York, and Florida. The Council of State Governments proposed model legislation to make it a crime to manufacture, import, or install a nonfunctional or counterfeit airbag.
4. Closing a loophole. This bill closes a loophole in current law which does not address counterfeit airbags. Recent reports indicate that several car manufacturers sell new cars with recalled airbags. That circumstance is not addressed in this bill.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 8/1/16)

Auto Alliance

Automobile Association of Southern California

Automobile Club of Southern California

California Association of Highway Patrolmen

California Professional Firefighters

Coalition Against Insurance Fraud

Ford

Global Automakers

Honda

Los Angeles County District Attorney

Peace Officers Research Association of California

OPPOSITION: (Verified 8/1/16)

California Public Defenders Association

ASSEMBLY FLOOR: 78-0, 5/12/16

AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Rendon

NO VOTE RECORDED: Burke, Jones-Sawyer

Prepared by: Randy Chinn / T. & H. / (916) 651-4121

8/3/16 19:33:37

**** END ****

SENATE JUDICIARY COMMITTEE

Senator Hannah-Beth Jackson, Chair

2015-2016 Regular Session

Bill No: AB 2387 (Author:Mullin)

Version: June 15, 2016

Hearing Date: June 28, 2016

Fiscal: Yes

Urgency: No

Consultant: TH

SUBJECT

Vehicle Equipment: Supplemental Restraint System Components and Nonfunctional Airbags

DESCRIPTION

This bill would make it a misdemeanor to knowingly and intentionally manufacture, import, install, reinstall, distribute, sell, or offer for sale any device intended to replace a motor vehicle supplemental restraint system component if the device is a counterfeit supplemental restraint system component, a nonfunctional airbag, or does not meet specified federal safety requirements, or to knowingly and intentionally sell, install, or reinstall any device that causes a vehicle’s diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed.

BACKGROUND

In October 2012, the National Highway Traffic Safety Administration (NHTSA) issued a consumer safety advisory to alert vehicle owners and repair professionals about the presence and dangers of counterfeit air bags sold in the automotive marketplace. That advisory stated:

NHTSA has become aware of a problem involving the sale of counterfeit air bags for use as replacement parts in vehicles that have been involved in a crash. While these air bags look nearly identical to certified, original equipment parts—including bearing the insignia and branding of major automakers — NHTSA testing showed consistent malfunctioning ranging from non-deployment of the air bag to the expulsion of metal shrapnel during deployment. NHTSA is not aware of any deaths or injuries connected to counterfeit air bags. . . . Consumers whose vehicles have been in a crash and had their air bags replaced by a repair shop that is not part of a new car dealership within the past three years or who have purchased a replacement air bag online should contact the call center that has been established by their auto manufacturer to have their vehicle inspected at their own expense and their air bag replaced if necessary. (NHTSA, Safety Advisory: NHTSA Alerting Consumers to Dangers of Counterfeit Air Bags (Oct. 10, 2012) <http://www.nhtsa.gov/ About+NHTSA/Press+Releases/2012/Safety+Advisory:+NHTSA+Alerting+Consumers+to+Dangers+of+Counterfeit+Air+Bags > [as of June 11, 2016].)

Existing California law prohibits the sale of previously deployed airbags, and prohibits tampering with vehicle computer systems that detect whether an airbag is in proper working order. This bill would recast these prohibitions and additionally prohibit the manufacture, import, installation, reinstallation, distribution, and sale of “counterfeit supplemental restraint system components,” defined as replacement supplemental restraint system components that display a mark identical or substantially similar to the genuine mark of a motor vehicle manufacturer or a supplier of parts to the manufacturer of a motor vehicle without authorization from that manufacturer or supplier.

CHANGES TO EXISTING LAW

Existing law provides that an automotive repair dealer who prepares a written estimate for repairs that includes replacement of a deployed airbag that is part of an inflatable restraint system, and who fails to restore the airbag that is part of an inflatable restraint system to its original operating condition, where the customer has paid for the replacement of the deployed airbag as provided in the estimate, is guilty of a misdemeanor punishable by a fine of $5,000 or by imprisonment in a county jail for one year, or by both that fine and imprisonment. (Bus. & Prof. Code Sec. 9884.76.)

Existing law states that a person who installs, reinstalls, rewires, tampers with, alters, or modifies for compensation, a vehicle’s computer system or supplemental restraint system, including, but not limited to, the supplemental restraint system’s on-board system performance indicators, so that it falsely indicates the supplemental restraint system is in proper working order, or who knowingly distributes or sells a previously deployed air bag or previously deployed air bag component that will no longer meet the original equipment manufacturing form or function for proper operation, is guilty of a misdemeanor punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or by both the fine and imprisonment. (Veh. Code Sec. 27317.)

This bill would strike the above provision and instead prohibit a person from knowingly and intentionally manufacturing, importing, installing, reinstalling, distributing, selling, or offering for sale any device intended to replace a supplemental restraint system component in any motor vehicle if the device is a counterfeit supplemental restraint system component or a nonfunctional airbag, or does not meet federal safety requirements, as specified.

This bill would prohibit a person from knowingly and intentionally selling, installing, or reinstalling in a vehicle, any device that causes the vehicle’s diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag, or when no airbag is installed.

This bill would specify that a violation of the above provisions is a misdemeanor punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or by both the fine and imprisonment.

This bill would define, among other terms, “counterfeit supplemental restraint system component” to mean a replacement supplemental restraint system component, including, but not limited to, an airbag that displays a mark identical or substantially similar to the genuine mark of a motor vehicle manufacturer or a supplier of parts to the manufacturer of a motor vehicle without authorization from that manufacturer or supplier, respectively.

This bill would define “nonfunctional airbag” to mean a replacement airbag that meets any of the following criteria:

• the airbag was previously deployed or damaged;
• the airbag has an electric fault that is detected by the vehicle’s airbag diagnostic systems when the installation procedure is completed and the vehicle is returned to the customer who requested the work to be performed or when ownership is intended to be transferred;
• the airbag is subject to specified prohibitions under federal law; or
• the airbag includes a part or object, including, but not limited to, a supplemental restraint system component installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed.

This bill specifies that its provisions do not affect any duties, rights, or remedies otherwise available at law.

COMMENT

1. Stated need for the bill

The author writes:

AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.

In 2011 California enacted SB 869 to address the problem of airbag fraud. This was a well-intentioned attempt to protect consumers from dangerous phony airbags that received the near-unanimous support of the Legislature and that of auto manufacturers and parts associations, auto safety proponents and the insurance industry. Since its passage, however, automakers have become aware of a growing problem involving dangerous counterfeit and nonfunctional airbags that existing law does not address.

Unlike counterfeiting other products, such as a handbag or DVD, counterfeit airbags have the potential to kill. Testing of these counterfeits by the National Highway Traffic Safety Administration shows just how dangerous these products are.

AB 2387 prohibits a person from manufacturing, importing, installing, reinstalling, selling, or offering for sale counterfeit airbag or a nonfunctional airbag. It also bans the sale, installation or reinstallation of a device that causes the vehicle’s diagnostic system to inaccurately indicate that the vehicle is equipped with a functional airbag when a counterfeit or nonfunctional airbag or no airbag is installed.

1. Protecting consumers from counterfeit goods

Existing law, the Consumer Legal Remedies Act (CLRA), generally protects California consumers from merchants who sell counterfeit goods in the marketplace. The CLRA prohibits specified unfair methods of competition, acts or practices by any person which either results in or is intended to result in the sale or lease of goods or services to a consumer. (Civ. Code Sec. 1770.) Existing law enumerates several methods of unfair competition, acts, or practices, including passing off goods or services as those of another, and misrepresenting the source, sponsorship, approval, or certification of goods or services. Any consumer who suffers damage as a result of these prohibited practices may bring an action to recover damages, and existing law allows for a class action suit to be filed on behalf of a class of consumers adversely affected by an unfair method of competition, act, or practice. (Civ. Code Secs. 1780, 1781.)

This bill would provide additional remedies for public prosecutors to use in combatting the trade in counterfeit airbags and airbag control systems. Specifically, individuals who trade in counterfeit airbag components in violation of this bill’s provisions would be subject to both a $5,000 fine and imprisonment of up to one year. Honda North America, writing in support, states:

[AB 2387] addresses those who knowingly manufacture, sell and install these products into the vehicles of unknowing consumers. We believe that this bill will provide a real disincentive to someone who would consider engaging in this heinous act, and allow the state to pursue such actors. . . . Existing California laws relating to airbag fraud do not address this specific and growing problem, but are consistent with the [L]egislature’s original intent of protecting consumers.

Importantly, this bill expressly states that its provisions do not “affect any duties, rights, or remedies otherwise available at law,” thereby preserving the ability of consumers to seek redress under statutes such as the CLRA independent of actions that may be brought by public prosecutors under this bill.

Support: Alliance of Automobile Manufacturers; Automobile Club of Southern California; California Association of Highway Patrolmen; California New Car Dealers Association; California Professional Firefighters; Coalition Against Insurance Fraud; Ford Motor Company; Global Automakers; Honda North America, Inc.; Los Angeles County District Attorney; Peace Officers Research Association of California

Opposition: None Known

HISTORY

Source: Author

Related Pending Legislation: None Known

Prior Legislation:

AB 1854 (Brownley, Ch. 97, Stats. 2012) made it a misdemeanor to install, reinstall, rewire, tamper with, alter, or modify a vehicle’s computer system or supplemental restraint system so that it falsely indicates the supplemental restraint system is in proper working order, and to knowingly distribute or sell a previously deployed air bag or component that will no longer meet the original equipment manufacturing form or function for proper operation.

SB 869 (Yee, Ch. 430, Stats. 2011) provides that an automotive repair dealer who prepares a written estimate for repairs that includes replacement of a deployed airbag, and who fails to restore the airbag to its original operating condition, is guilty of a misdemeanor punishable by a fine of $5,000 or by imprisonment for one year, or by both fine and imprisonment.

SB 427 (McLeod, 2009) would have increased from $1,000 to $5,000 the penalty under the Automotive Repair Act for an automotive repair dealer who prepares a written estimate for repairs that includes replacement of a deployed airbag and who fails to repair and fully restore the airbag to original operating conditions. This bill was vetoed by Governor Schwarzenegger.

AB 1471 (Havice, Ch. 449, Stats. 1999) prohibited the knowing installation, reinstallation, distribution, or sale of a previously deployed, and made a violation of this prohibition a misdemeanor.

Prior Vote:

Assembly Floor (Ayes 78, Noes 0)

Assembly Appropriations Committee (Ayes 19, Noes 0)

Assembly Privacy and Consumer Protection Committee (Ayes 11, Noes 0)

Assembly Public Safety Committee (Ayes 7, Noes 0)

**************

SENATE COMMITTEE ON TRANSPORTATION AND HOUSING

Senator Jim Beall, Chair

2015 - 2016 Regular

Bill No: Hearing Date: 6/14/2016

SUBJECT:

DIGEST: This bill makes it a crime to sell or install a counterfeit airbag or sell or install any device which causes the vehicle’s diagnostic system to fail to warn when the vehicle is equipped with a counterfeit airbag.

ANALYSIS:

Existing law:

1. Prohibits tampering with a vehicle’s computer system or supplemental restraint system to falsely indicate the systems are in working order
2. Prohibits selling a previously deployed air bag that no longer functions as originally intended.
   

This bill replaces current law with:

1. A prohibition against knowingly and intentionally manufacturing, importing, installing, distributing, and selling any device intended to replace a supplemental restraint system component (e.g., airbag) if the device is counterfeit or a nonfunctional airbag or does not meet applicable federal safety requirements.
2. A prohibition against knowingly and intentionally selling or installing any device that causes the vehicle’s diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit supplemental restraint system component or nonfunctional airbag.

Violating these prohibitions is a misdemeanor punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or both.

COMMENTS:

1. Purpose. AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.
2. Huge problem. Airbags are an essential component of modern vehicle safety systems, helping ensure that the occupants’ heads and upper bodies do not strike the vehicle interior in a crash. Beginning in 2008, airbags made by Takata were recalled because of concerns that airbag deployment could injure the car occupants. Originally limited to Honda, the recall was expanded to 14 car manufacturers and as many as 68.8 million airbags in what the National Highway Traffic Safety Administration (NHTSA) called the largest and most complex safety recall in history. As these airbags are replaced, problems have arisen with the use of counterfeit airbags which don’t provide adequate protection. In October 2012, the NHTSA issued an advisory warning about the dangers of counterfeit airbags.
3. Other states leading. The problem of counterfeit airbags has led 10 states to enact legislation to prohibit the use of counterfeit airbags, including Ohio, Texas, New York, and Florida. The Council of State Governments proposed model legislation to make it a crime to manufacture, import, or install a nonfunctional or counterfeit airbag.
4. Closing a loophole. This bill closes a loophole in current law which does not address counterfeit airbags. Recent reports indicate that several car manufacturers sell new cars with recalled airbags. That circumstance is not addressed in this bill.
5. Double-referral. This bill has been double referred to the Senate Judiciary Committee.

Related Legislation:

AB 1854 (Brownley, Chapter 97, Statutes of 2012) — prohibits:

1. Tampering with a vehicle’s computer system or supplemental restraint system to falsely indicate the systems are in working order
2. Selling a previously deployed air bag that no longer functions as originally intended.

Assembly Votes

Floor: 78-0

Appr: 19-0

P. & C.P: 11-0

Pub. S.: 7-0

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes

POSITIONS: (Communicated to the committee before noon on Wednesday,

June 8, 2016.)

SUPPORT:

Auto Alliance

Automobile Club of Southern California

Automobile Association of Southern California

California Association of Highway Patrolmen

California Professional Firefighters

Coalition Against Insurance Fraud

Ford

Global Automakers

Honda

Los Angeles County District Attorney

OPPOSITION:

None received

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 2387

Author:(Mullin)

As Amended Ver:May 9, 2016

Majority vote

SUMMARY: Particularizes the crime of selling counterfeit airbags, and increases the penalty for selling counterfeit airbags. Specifically, this bill:

1. Repeals existing provisions of law relating to the installation or rewiring of airbag systems to falsely indicate the system is in working order.
2. Prohibits a person from manufacturing, importing, installing, reinstalling, distributing, selling or offering for sale any device with the intent that the device replace an airbag in any motor vehicle if the person knows or reasonably should know the device is a counterfeit or nonfunctional airbag, as defined, or does not meet federal safety standards, as provided.
3. Prohibits a person from knowingly and intentionally selling, installing, or reinstalling in a vehicle, any device that causes the vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, or when no airbag is installed.
4. States that a violation of the aforementioned provisions is a misdemeanor, punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or by both that fine and imprisonment.
5. Grants safe harbor to allow installers and other persons to complete their installation work before a violation can occur.
6. Defines "airbag" as a motor vehicle inflatable occupant restraint system device, including all component parts, such as the cover, sensors, controllers, inflators, and wiring, that the vehicle manufacturer recommends be replaced after deployment that meets both of the following criteria:
   1. Operates in the event of a crash; or
   2. Is designed in accordance with federal motor vehicle safety standards for the specific make, model, and year of the motor vehicle in which it is or will be installed.
7. Defines "counterfeit airbag" as a replacement airbag that displays a mark identical or substantially similar to the genuine mark of a motor vehicle manufacturer or a supplier of parts to the manufacturer of a motor vehicle without authorization from that manufacturer or supplier.
8. Defines "nonfunctional airbag" as a replacement airbag that meets any of the following criteria:
   1. The airbag was previously deployed or damaged;
   2. The airbag has an electric fault that is detected by the vehicle's airbag diagnostic systems after the installation procedure is completed; or
   3. The airbag includes a part or object, including, but not limited to, a counterfeit or repaired airbag cover or airbag component, installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed.

EXISTING LAW:

1. Prohibits installation, reinstallation, rewiring, tampering with, altering or modifying for compensation a vehicle's computer or supplemental restraint system, or the system's performance indicators, so that it falsely indicates the supplemental restraint system is in proper working order.
2. Prohibits knowingly distributing or selling a previously deployed air bag or previously deployed air bag component that will no longer meet the original equipment manufacturing form or function for proper operation.
3. States that improper installation or installation of previously deployed air bag components which no longer meet the original equipment manufacturing form or function for proper operation is a misdemeanor.
4. Punishes anyone who knowingly sells or knowingly holds for sale any counterfeit trademark registered with the Secretary of State or the Principal Register of the United States Patent and Trademark Office, as provided, according to the total value of the goods or products.
5. Prohibits anyone from willfully and falsely representing their goods or products as being the products of a true dealer, manufacturer or producer of those goods or products.

FISCAL EFFECT: According to the Assembly Appropriations Committee, minor nonreimbursable local costs for incarceration, offset to a degree by fine revenue.

COMMENTS:

According to the author, "AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard."

Analysis Prepared by: Gabriel Caswell/ PUB. S. / (916) 319-3744 FN: 0002910

ASSEMBLY THIRD READING

ATR Bill Id:AB 2387

Author:(Mullin)

As Amended Ver:

Majority vote

SUMMARY: Particularizes the crime of selling counterfeit airbags, and increases the penalty for selling counterfeit airbags. Specifically, this bill:

1. Repeals existing provisions of law relating to the installation or rewiring of airbag systems to falsely indicate the system is in working order.
2. Prohibits a person from manufacturing, importing, installing, reinstalling, distributing, selling or offering for sale any device with the intent that the device replace an airbag in any motor vehicle if the person knows or reasonably should know the device is a counterfeit or nonfunctional airbag, as defined, or does not meet federal safety standards, as provided.
3. Prohibits a person from knowingly and intentionally selling, installing, or reinstalling in a vehicle, any device that causes the vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, or when no airbag is installed.
4. States that a violation of the aforementioned provisions is a misdemeanor, punishable by a fine of up to $5,000 or by imprisonment in a county jail for up to one year, or by both that fine and imprisonment.
5. Grants safe harbor to allow installers and other persons to complete their installation work before a violation can occur.
6. Defines "airbag" as a motor vehicle inflatable occupant restraint system device, including all component parts, such as the cover, sensors, controllers, inflators, and wiring, that the vehicle manufacturer recommends be replaced after deployment that meets both of the following criteria:
   1. Operates in the event of a crash; or
   2. Is designed in accordance with federal motor vehicle safety standards for the specific make, model, and year of the motor vehicle in which it is or will be installed.
7. Defines "counterfeit airbag" as a replacement airbag that displays a mark identical or substantially similar to the genuine mark of a motor vehicle manufacturer or a supplier of parts to the manufacturer of a motor vehicle without authorization from that manufacturer or supplier.
8. Defines "nonfunctional airbag" as a replacement airbag that meets any of the following criteria:
   1. The airbag was previously deployed or damaged;
   2. The airbag has an electric fault that is detected by the vehicle's airbag diagnostic systems after the installation procedure is completed; or
   3. The airbag includes a part or object, including, but not limited to, a counterfeit or repaired airbag cover or airbag component, installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed.

EXISTING LAW:

1. Prohibits installation, reinstallation, rewiring, tampering with, altering or modifying for compensation a vehicle's computer or supplemental restraint system, or the system's performance indicators, so that it falsely indicates the supplemental restraint system is in proper working order.
2. Prohibits knowingly distributing or selling a previously deployed air bag or previously deployed air bag component that will no longer meet the original equipment manufacturing form or function for proper operation.
3. States that improper installation or installation of previously deployed air bag components which no longer meet the original equipment manufacturing form or function for proper operation is a misdemeanor.
4. Punishes anyone who knowingly sells or knowingly holds for sale any counterfeit trademark registered with the Secretary of State or the Principal Register of the United States Patent and Trademark Office, as provided, according to the total value of the goods or products.
5. Prohibits anyone from willfully and falsely representing their goods or products as being the products of a true dealer, manufacturer or producer of those goods or products.

FISCAL EFFECT:

According to the Assembly Appropriations Committee, minor nonreimbursable local costs for incarceration, offset to a degree by fine revenue.

COMMENTS:

According to the author, "AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard."

Analysis Prepared by: Matt Dean/ PUB. S. / (916) 319-3744 FN: 0002811

Date of Hearing: April 27, 2016

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2387

Author:(Mullin) – As Amended Ver:April 14, 2016

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill prohibits the intentional manufacture, importation, installation, reinstallation, distribution, sale, or offer for sale of a counterfeit or nonfunctional airbag, and also prohibits a person from knowingly and intentionally selling, installing or reinstalling any device that would cause a vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, violation of which is a misdemeanor punishable by a $5,000 fine and/or up to one year in county jail.

FISCAL EFFECT:

Minor nonreimbursable local costs for incarceration, offset to a degree by fine revenue.

COMMENTS:

Background/Purpose. AB 1854 (Brownley), Chapter 97, Statutes of 2012, prohibits knowingly installing any air bag or air bag component that will no longer meet the original equipment manufacturing form or function for proper operation. AB 1854 added the knowing installation or sale of any nonfunctional air bag or counterfeit air bag to the list of air bags which are prohibited to be installed or sold.

According to the author, “AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.”

AB 2387 is intended to curb the illegal market for dangerous replacement vehicle airbags by prohibiting the intentional manufacture, importation, installation, reinstallation, distribution, sale or offer for sale of counterfeit and nonfunctional airbags.

Analysis Prepared by: Pedro Reyes / APPR. / (916) 319-2081

Date of Hearing: April 19, 2016

ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION

Ed Chau, Chair

ABPCA Bill Id:AB 2387 (

Author:Mullin) – As Amended Ver:April 14, 2016

SUBJECT: Vehicle equipment: counterfeit and nonfunctional airbags

SUMMARY: Prohibits the intentional manufacture, importation, installation, reinstallation, distribution, sale, or offer for sale of a counterfeit or nonfunctional airbag, and also prohibits a person from knowingly and intentionally selling, installing or reinstalling any device that would cause a vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, violation of which is a misdemeanor punishable by a $5000 fine and up to one year in jail. Specifically, this bill:

1. Prohibits the manufacture, importation, installation, reinstallation, distribution, sale, or offer for sale of any device with the intent that the device replace an airbag in any motor vehicle if the person knows or reasonably should know that the device is a counterfeit airbag or a nonfunctional airbag, or does not meet federal safety requirements, violation of which is a misdemeanor punishable by a fine of up to five thousand dollars ($5,000) or by imprisonment in a county jail for up to one year, or both.
2. Prohibits a person from knowingly and intentionally selling, installing or reinstalling in a vehicle, any device that causes the vehicle's diagnostic systems to fail to warn when the vehicle is equipped with a counterfeit airbag or nonfunctional airbag, or when no airbag is installed, violation of which is a misdemeanor punishable by a fine of up to five thousand dollars ($5,000) or by imprisonment in a county jail for up to one year, or both.
3. Deems a violation of either prohibition provided above to be deemed an unfair or deceptive act or practice for purposes of the Consumers Legal Remedies Act, with each act of manufacture, importation, installation, reinstallation, sale, or offer for sale constituting a separate and distinct violation.
4. Provides that an installation or reinstallation shall not have occurred for purposes of these provisions until the work is complete.
5. Defines "airbag" to mean a motor vehicle inflatable occupant restraint system device, including all component parts, such as the cover, sensors, controllers, inflators, and wiring, that the vehicle manufacturer recommends be replaced after deployment that meets both of the following criteria:
   1. Operates in the event of a crash; and
   2. Is designed in accordance with federal motor vehicle safety standards for the specific make, model, and year of the motor vehicle in which it is or will be installed.
      
6. Defines a "counterfeit airbag" to mean a replacement airbag that displays a mark identical or substantially similar to the genuine mark of a motor vehicle manufacturer or a supplier of parts to the manufacturer of a motor vehicle without authorization from the manufacturer of the motor vehicle or supplier.
7. Defines a "nonfunctional airbag" to mean a replacement airbag that meets any of the following criteria:
   1. The airbag was previously deployed or damaged;
   2. The airbag has an electric fault that is detected by the vehicle’s airbag diagnostic systems after the installation procedure is completed; and
   3. The airbag includes a part or object, including, but not limited to, a counterfeit or repaired airbag cover or airbag component, installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed.
8. Deletes and recasts existing law that prohibits the installation, reinstallation, rewiring, tampering, alteration or modification for compensation of a vehicle’s airbag systems to falsely indicate the system is in proper working order, and prohibits the knowing distribution or sale of a previously deployed airbag or component that no longer meets the original equipment specifications.
9. Declares that no reimbursement is required pursuant to the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, or changes the definition of a crime.

EXISTING LAW:

1. Makes it a misdemeanor for a person to: (a) install, reinstall, rewire, tamper with, alter, or modify for compensation, a vehicle’s computer system or supplemental restraint system, otherwise referred to as an airbag, so that it falsely indicates the supplemental restraint system is in proper working order; or (b) knowingly distribute or sell a previously deployed airbag or component that will no longer meet the original equipment manufacturing form or function for proper operation. Violations are a misdemeanor punishable by a fine of up to $5000 and up to one year in county jail. (Vehicle Code Section 27317)

FISCAL EFFECT: Unknown

COMMENTS:

1. Purpose of this bill. This bill is intended to curb the illegal market for dangerous replacement vehicle airbags by prohibiting the intentional manufacture, importation, installation, reinstallation, distribution, sale or offer for sale of counterfeit and nonfunctional airbags.
2. Author's statement. According to the author, “AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard."
3. The counterfeit airbag problem. The National Highway Traffic Safety Administration (NHTSA) states on its website that it "has become aware of a problem involving the sale of counterfeit air bags for use as replacement parts in vehicles that have been involved in a crash. While these air bags look nearly identical to certified, original equipment parts — including bearing the insignia and branding of major automakers — NHTSA testing showed consistent malfunctioning ranging from non-deployment of the air bag to the expulsion of metal shrapnel during deployment. NHTSA is not aware of any deaths or injuries connected to counterfeit air bags."
   
   NHTSA goes on to point out that: " [w]hile the full scope and scale of the problem of counterfeit air bags is uncertain from currently available data, NHTSA has identified certain vehicle makes and models for which these air bags may be available and believes this issue affects less than 0.1 percent of the U.S. vehicle fleet. Only vehicles which have had an air bag replaced within the past three years by a repair shop that is not part of a new car dealership may be at risk."
4. Recent efforts to deal with counterfeit airbags. According to the author, current state and federal law has been insufficient to stop the trade in counterfeit and nonfunctional airbags.
   
   Since 2011, "Federal authorities have made at least 16 arrests across the county, including in California, relating to counterfeit airbags. In these cases the Feds cited a violation of federal trademark law (Title 19, Section 133.21), which occurs when a registered trademark or a mark substantially similar to a registered trademark is used on a fake airbag without approval. Unfortunately, the majority of legitimate airbags, including passenger and side-curtain airbags, do not contain trademarks and therefore counterfeits cannot be prosecuted or even confiscated by federal authorities. When they are discovered by law enforcement they must eventually be released and can find their way into the marketplace. Once in the country, the manufacturer’s insignia is attached and the counterfeit product is sold."

With trademark law proving to be ineffective in stopping the trade, "a coalition of stakeholders has enacted similar laws to AB 2387 in ten states (AL, CT, FL, IA, LA, NJ, NM, NY, OH & TX) by a combined vote of 1,386-1. This policy was also adopted as model legislation by the Council of State Governments in its 2015 'Suggested State Legislation' docket."

In modernizing the existing prohibition against the trade in counterfeit airbags, this bill would do two things. First, by defining the terms “airbag,” “counterfeit airbag,” and “nonfunctional airbag” broadly, the statute would encompass and prohibit all airbags not designed in accordance with federal motor vehicle safety standards. Second, the bill would take aim at the root of the problem by penalizing not only the individuals who install counterfeit and nonfunctional airbags, but those who intentionally manufacture, sell and import them as well.

1. The Consumer Legal Remedies Act. The CLRA exists to provide protection to consumers from unfair methods of competition and unfair or deceptive acts or practices related to the sale or lease of goods or services. The statute currently prohibits 26 commercial practices, which cover a range of general misrepresentations as well as specific restrictions on solicitations related to prerecorded messages, public social service applications, home solicitations of senior citizens, and veteran's benefits.
   
   The CLRA provides a range of remedies to an injured consumer, including actual damages of at least $1000, injunction, restitution, punitive damages, attorney's fees, and other relief as the court may direct. The law also contains provisions for class action suits. However, the CLRA provides an affirmative defense for unintentional violations and bona fide errors if corrected within 30 days of being notified by the consumer.
2. Arguments in support. According to Honda, "In 2010, federal authorities made Honda aware of a growing problem with cheap and ineffective counterfeit bags entering the U.S. stream of commerce from China. While those airbags looked authentic from the outside…the counterfeiters were unable to replicate the technology required to protect consumers in the event of a collision…[M]any counterfeiters…chose to fill airbags with sawdust, newspaper, paper towels, Styrofoam or other items never intended to provide vehicle occupants with protection during a crash…Over the past few years, several thousand counterfeit airbags have been confiscated in raids across the country."
   
   "Despite their best efforts, federal agents have limited authority to combat this problem. Federal authorities are only able to prosecute counterfeiters when they violate federal trademark law…Unfortunately the majority of legitimate airbags, including passage and side-curtain airbags do not contain trademarks and therefore fakes cannot be prosecuted under trademark law. Even when these fake airbags are discovered by authorities they must eventually be released and can eventually find their way into the marketplace. Additionally, counterfeiters are becoming increasingly aware of this loophole and are shipping driver-side airbags without the trademark in order to avoid confiscation and prosecution…Existing California laws relating to airbag fraud do not address this specific and growing problem, but are consistent with the legislature's original intent of protecting consumers…"
   
   According to auto safety advocates, Consumers for Auto Reliability and Safety, "This bill will prohibit any person from manufacturing, importing, installing, reinstalling, selling, or offering for sale counterfeit or nonfunctioning air bags. It will prohibit selling any device designed to mislead car buyers into believing they have a fully functioning air bag, by altering the vehicle's diagnostic system . It will also make a knowing violation of these prohibitions an unfair and deceptive act or practice, for purposes of invoking the Consumer Legal Remedies Act, and a felony criminal offense. Such acts are a serious threat to motorists' safety. Unfortunately, too many dealers continue to sell vehicles without air bags, inducing consumers to sign contracts that state the dealer is not liable for the condition of the air bags. Therefore, a blanket prohibition is all the more important."
3. Recent negotiations. This bill was substantially amended to recast and reorganize its original language. Significant changes include lowering the penalty for violation from a felony and five years in jail to a misdemeanor and one year in jail.
   
   Further discussions between the author, supporters and opponents have been ongoing over the remaining issue of the precise scope of the definition of "airbag." According to the author's office and opponents, a tentative agreement over that definition has been reached that would lead opponents to take a neutral position, although no formal letter to that effect has been received.
4. Previous legislation. SB 869 (Yee), Chapter 430, Statutes of 2011, increased the penalty for a person who, after preparing a written estimate to repair a deployed airbag, fails to properly repair and restore that airbag to its original condition to a misdemeanor penalty of up to one year in jail, a $5,000 fine, or both.
   
   SB 427 (Negrete McLeod) of 2009 would have established a misdemeanor penalty of up to one year in jail, a $5,000 fine, or both for an automotive repair dealer who prepared for a customer a written estimate that includes replacement of a deployed airbag and who fails to repair and restore the airbag to original operating condition. Governor Schwarzenegger vetoed SB 427, citing that it was duplicative of existing law and, therefore, added little additional benefit to consumers.
5. Double-referral. This bill was double-referred to the Assembly Public Safety Committee, where it was heard on April 5, 2016, and passed on a 7 to 0 vote.

REGISTERED SUPPORT / OPPOSITION:

Support

Association of Global Automakers

Consumers for Auto Reliability and Safety (CARS)

Honda North America, Inc.

Alliance of Automobile Manufacturers (previous version)

Automobile Club of Southern California (AAA) (previous version)

California Association of Highway Patrolmen (previous version)

California Professional Firefighters (previous version)

Ford Motor Company (previous version)

Opposition

Auto Dismantlers Association of Southern California (previous version)

California Auto Dismantlers and Recyclers Alliance (previous version)

Inland Auto Dismantlers Association (previous version)

State of California Auto Dismantlers Association (previous version)

Valley Auto Dismantlers Association (previous version)

LKQ Corporation (concerns) (previous version)

Analysis Prepared by: Hank Dempsey / P. & C.P. / (916) 319-2200

Date of Hearing:

Consultant: Matt Dean

ASSEMBLY COMMITTEE ON PUBLIC SAFETY

Reginald Byron Jones-Sawyer, Sr., Chair

ABPCA Bill Id:AB 2387

Author:(Mullin) – As Introduced Ver:

As Proposed to be Amended in Committee

SUMMARY:

Punishes the knowing distribution, selling or installation of any counterfeit or nonfunctional air bag, as defined, and the manufacture or importation of any counterfeit, nonfunctional or unsafe air bag, as defined, as a misdemeanor. Specifically, this bill:

1. Adds to the list of prohibited air bags any counterfeit air bag or nonfunctional air bag, as defined.
   
2. Defines “counterfeit air bag” as an air bag that does any of the following:
   
   1. displays a mark identical or similar to the genuine mark of a motor vehicle manufacturer without authorization from that manufacturer;
      
   2. any air bag falsely represented to be an airbag of any true dealer, manufacturer or producer of the air bag; or
      
   3. a counterfeit or repaired airbag cover, installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed.
      
3. Defines “nonfunctional air bag” as any of the following:
   1. An air bag that is no longer in proper working order,
      
   2. An airbag that was previously deployed or damaged,
      
   3. An airbag that has an electric fault that is detected by the vehicle airbag diagnostic system after the installation procedure is completed,
      
   4. An airbag that includes a part or object, including, but not limited to, a counterfeit or repaired airbag cover, installed in a motor vehicle to mislead the owner or operator of the motor vehicle into believing that a functional airbag has been installed, or
      
   5. An airbag that was subject to factory recall.
      
4. States that any person who manufactures, imports, installs, reinstalls, sells, or offers for sale any device with the intent that the device place an airbag in any motor vehicle if the person knows or reasonably should know that the device is a counterfeit air bag or a nonfunctional air bag, or does not meet federal safety requirements as provided in Section 571.208 of Title 49 of the Code of Federal Regulations is guilty of a misdemeanor punishable by a fine of up to five thousand dollars ($5,000) or by imprisonment in a county jail for up to one year, or by both the fine and imprisonment.
   
5. Grants safe harbor to any installer who installs a nonfunctional air bag, who after discovering the nonfunctional air bag has been installed, either replaces the nonfunctional air bag with a functional air bag or notifies the purchaser or other recipient of the vehicle that the air bag is not functional.

EXISTING LAW:

1. Prohibits installation, reinstallation, rewiring, tampering with, altering or modifying for compensation a vehicle’s computer or supplemental restraint system, or the system’s performance indicators, so that it falsely indicates the supplemental restraint system is in proper working order. (Veh. Code, § 27317.)
   
2. Prohibits knowingly distributing or selling a previously deployed air bag or previously deployed air bag component that will no longer meet the original equipment manufacturing form or function for proper operation. (Veh. Code, § 27317.)
   
3. States that improper installation or installation of previously deployed air bag components which no longer meet the original equipment manufacturing form or function for proper operation is a misdemeanor. (Veh. Code, § 27317.)
   
4. Punishes anyone who knowingly sells or knowingly holds for sale any counterfeit trademark registered with the Secretary of State or the Principal Register of the United States Patent and Trademark Office, as provided, according to the total value of the goods or products. (Pen. Code, § 350.)
   
5. Prohibits anyone from willfully and falsely representing their goods or products as being the products of a true dealer, manufacturer or producer of those goods or products. (Pen. Code, § 351a.)
   

FISCAL EFFECT:

Unknown

COMMENTS:

1. Author's Statement: According to the author, “AB 2387 is a consumer protection measure. It strengthens existing laws aimed at deterring the fraudulent distribution and installation of counterfeit airbags by more clearly defining key terms and increasing the penalty for knowingly exposing the public to this potentially deadly hazard.”
   
2. Background: AB 1854 (Brownley), Chapter 97, Statutes of 2012, states in the analysis “Federal law requires car makers in the United States to install both driver- and front passenger-side airbags because they have been shown to help prevent injuries during a crash. In some areas of the state, however, law enforcement discovered that some repair shops were installing or reinstalling previously deployed airbag systems in their entirety, an act that frequently resulted in fatal or near fatal injuries when the airbags failed to function properly in a crash. To address this problem, the Legislature passed AB 1471 (Havice), [Chapter 449, Statutes of] 1999, which made it a crime to knowingly install or reinstall, for compensation, any previously deployed airbag that is part of an inflatable restraint system.
   
   “Proponents of this bill report that in order to get around this existing law, some unscrupulous salvage vehicle rebuilders are now no longer installing an entire previously deployed airbag system. Instead they are using individual components from previously deployed airbag systems and rewiring the onboard computer so that it appears as though the vehicle's airbag system is functioning properly when it in fact it is not. The author notes that judges have rebuffed the efforts of prosecutors to take legal action against such fraudulent activity because of the lack of a legal prohibition against such actions.”
   
   In sum, AB 1854 (Brownley) prohibits knowingly installing any air bag or air bag component that will no longer meet the original equipment manufacturing form or function for proper operation. This bill added the knowing installation or sale of any nonfunctional air bag or counterfeit air bag to the list of air bags which are prohibited to be installed or sold.
   
3. Counterfeit Air Bags: The National Highway Traffic Safety Administration (NHTSA) has warned that counterfeit air bag systems may pose public safety issues. As of yet there have been no injuries or deaths reported from counterfeit air bags, but testing by the NHTSA has demonstrated that counterfeit air bags frequently malfunction or fail altogether. < http://www.nhtsa.gov/About+NHTSA/Press+Releases/2012/Safety+Advisory:+NHTSA+Alerting+Consumers+to+Dangers+of+Counterfeit+Air+Bags>. Currently, selling counterfeit goods bearing a registered mark is already prohibited by Penal Code Sections 350. The punishment for selling such counterfeit goods includes imprisonment in county jail ranging from not more than a year to three years, fines ranging from $10,000 to $500,000, or both. Selling a single counterfeit air bag would be punishable by a fine of not more than ten thousand dollars ($10,000), or by imprisonment in a county jail for not more than one year, or by both that fine and imprisonment. Goods that do not bear a registered mark, which are falsely represented as genuine manufacturer or dealer goods, are prohibited under Penal Code Section 351a. A defendant who violates this section is guilty of a misdemeanor and punishable by a fine of not less than one hundred dollars ($100) or more than six hundred dollars ($600), or by imprisonment in the county jail for not less than 20 or more than 90 days, or both. Under either of these Code Sections, counterfeit air bags are already prohibited. This bill increases the potential penalties for selling or installing counterfeit air bags.
   
4. Replacement Parts: Honda’s current supplemental restraint system repair manual directs repairmen and repairwomen to only replace the air bag and applicable sensors on the side where the air bag deployed –not the entire air bag system for the vehicle. However, the language of this bill is unclear if Honda or other auto manufacturers or dealers will change their standards for replacing air bags and their components when a vehicle has been in a collision, whether those standards would compel further air bag and air bag component replacement in order for installers to avoid criminal liability under this Section.
5. Criminal Penalty Increases: Over the last few years, Governor Brown has vetoed bills that create new crimes or particularize otherwise prohibited conduct. This bill would do both –by expanding the definition of a crime and by particularizing the counterfeiting of air bags specifically. Governor Brown said, in a blanket veto message sent October 3, 2015 which returned nine bills, “Each of these bills creates a new crime – usually by finding a novel way to characterize and criminalize conduct that is already proscribed. This multiplication and particularization of criminal behavior creates increasing complexity without commensurate benefit.
   
   “Over the last several decades, California’s criminal code has grown to more than 5,000 separate provisions, covering almost every conceivable form of human misbehavior. During the same period, our jail and prison populations have exploded.
   
   “Before we keep going down this road, I think we should pause and reflect on how our system of criminal justice could be made more human, more just and more cost-effective.”
   
6. Description of Amendments: The amendments to this bill reduce the penalties for violations of this section from felonies to misdemeanors, keeping the penalties for violation of this section the same as they are under existing law, while adding counterfeit and nonfunctional air bags to the list of prohibited air bags into the Code Section as it currently exists. The bill also prohibits the manufacture and importation of nonfunctional, counterfeit or otherwise unsafe air bags, as defined in the Federal Regulations on airbags, to the list of offenses in this Section.
   
7. Argument in Support: According to Honda North America, Inc., “Airbags are an essential component of modern vehicle safety systems, with several installed throughout each vehicle cabin as required by federal law. In the milliseconds after a collision, vehicle sensors measure critical information such as the size and position of the passenger, as well as the point and force of the impact. The vehicle then deploys each airbag in a specific order and with a precise amount of force to best protect the occupants. This level of precision requires each component to work as it was designed for the specific make, model and year of the vehicle for which it was designed. We encourage you to visit our website to see video evidence of just how deadly the difference in one airbag inflating seven one-hundredths of a second early or late can be.
   
   “In 2010, federal authorities made Honda aware of a growing problem with cheap and ineffective counterfeit airbags entering the U.S. stream of commerce from China. While those airbags looked authentic from the outside, testing by the federal authorities, Honda and independent third parties confirmed that the counterfeiters were unable to replicate the technology required to protect consumers in the event of a collision. Because of the cost and precision involved in replicating our technology, many counterfeiters did not even bother to try. Instead they chose to fill airbags with sawdust, newspaper, paper towels, styrofoam or other items that were never intended to provide vehicle occupants with protection during a crash. These counterfeit airbags are then advertised as new and sold over the internet in an attempt to make a profit by defrauding consumers at the expense of public safety.
   
   “This problem is so widespread that on October 10, 2012 the National Highway Traffic Safety Administration (NHTSA) issued a consumer advisory alerting vehicle owners and repair professionals about the danger. This advisory shows that this is a problem that impacts not just Honda vehicles, but nearly every make and model vehicle on the road and is putting thousands of motorists at risk for serious injury or even death.
   
   “Since discovering this problem, and because of the inherent danger these products pose to our customers, Honda has made combating these products a priority. We have launched a website www.airbagaware.com filled with news articles and videos in order to raise public awareness about this problem among consumers, repair professionals and policy makers. We have also worked closely with federal authorities in Homeland Security, Customs and Border Protection and the FBI to identify counterfeit airbags and prosecute those responsible when possible. Over the past few years, several thousand counterfeit airbags have been confiscated in raids across the country. To date, Honda has worked with federal authorities to secure the conviction of 16 people for trafficking counterfeit airbags including one California resident. Unfortunately this is just the tip of the iceberg.
   
   “Despite their best efforts, federal agents have limited authority to combat this problem. Federal authorities are only able to prosecute counterfeiters when they violate federal trademark law. This occurs when a registered trademark or a mark substantially similar to a registered trademark is used on a fake airbag without approval. Unfortunately the majority of legitimate airbags, including passenger and side-curtain airbags do not contain trademarks and therefore fakes cannot be prosecuted under trademark law. Even when these fake airbags are discovered by authorities they must eventually be released and can eventually find their way into the marketplace. Additionally, counterfeiters are becoming increasingly aware of this loophole and are shipping driver-side airbags without the trademark in order to avoid confiscation and prosecution. Once in the country, the manufacturer’s insignia is attached and the counterfeit product is sold.

“Because of these shortcomings in federal law, Honda has worked with a coalition of stakeholders to push for legislation in states across the country that address these inadequacies. Over time this coalition has included automakers, auto dealers, insurers, automotive recyclers and several local safety groups. The airbag definition in Assembly Bill 2387 is broad enough to include all airbags not designed in accordance with federal motor vehicle safety standards. The bill also addresses those who knowingly manufacture, sell and install these products into the vehicles of unknowing consumers. We believe that this bill will provide a real disincentive to someone who would consider engaging in this heinous act, and allow the state to pursue such actors. Over the past three years our coalition has enacted similar laws in ten states (AL, CT, FL, IA, LA, NJ, NM, NY, OH & TX) by a combined vote of 1386-1. This bill was also adopted as model legislation by the Council of State Governments in their 2015 “Suggested State Legislation” docket. Existing California laws relating to airbag fraud do not address this specific and growing problem, but are consistent with the legislature’s original intent of protecting consumers and we respectfully ask for your support in enacting this important consumer safety legislation.”

1. Argument in Opposition: According to the State of California Auto Dismantlers Association (SCADA), “SCADA is opposed to AB 2387 because it guts the hard work of then Assemblywomen Brownley. In 2012, Assemblywoman Brownley worked with district attorneys, law enforcement, auto dismantlers and other to make it a crime to fraudulently repair deployed airbags and to sell or make repairs using deployed airbags or deployed airbag components. Current law and industry repair standards are clear that auto dismantlers, repair shops and the public cannot sell or install a deployed airbag or deployed air bag component.
   
   “An additional concern we have is that under the definitions of 'airbag' and 'nonfunctional airbag,' the bill creates a new crime for a person who repairs a vehicle that has a deployed airbag or a deployed air bag component even when the repairs are being done under approved, required and established industry repair standards.
   
   “Other than the issue of counterfeit airbags that is trying to be addressed in AB 2387, the Brownley law addresses all of the issues of concern outlined by the sponsor of the bill. It is for these reasons that SCADA must respectfully oppose AB 2387. However, we are supportive of efforts to address the issue of counterfeit airbags and would be happy to continue to work with you and the sponsor on the issue within the framework of the existing statute.”
   
2. Prior Legislation: AB 1854 (Brownley), Chapter 97, Statutes of 2012, punishes as a misdemeanor any person who installs or tampers with a vehicle’s computer system or supplemental restraint system, including, but not limited to, the supplemental restraint system’s on-board system performance indicators, so that it falsely indicates the supplemental restraint system is in proper working order, and for a person to knowingly distribute or sell a previously deployed air bag or component that will no longer meet the original equipment manufacturing form or function for proper operation.
   

REGISTERED SUPPORT / OPPOSITION:

Support

Alliance of Automobile Manufacturers

Automobile Club of Southern California
California Professional Firefighters

Coalition Against Insurance Fraud

Ford Motor Company

Global Automakers, Inc.

Honda North America, Inc.

Opposition

Auto Dismantlers Association of Southern California
California Auto Dismantlers & Recyclers Alliance, Inc.
California Public Defenders Association
Inland Auto Dismantlers Association
LKQ Corporation
State of California Auto Dismantlers Association
Valley Auto Dismantlers Association

Analysis Prepared by:

Matt Dean / PUB. S. / (916) 319-3744