Existing law, the Automotive Repair Act, the violation of which is a crime, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repair motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2018, defining minor services for these purposes.

This bill would, until January 1, 2018, include installation of propulsive batteries in the definition of repair of motor vehicles.

This bill, commencing January 1, 2018, would recast the definition of repair of motor vehicles to delete the listing of the various types of excluded minor services and to specify that minor services do not include the changing of propulsive batteries, and also would exclude roadside services, as defined. The bill would similarly recast the definition of automotive technician to delete these references and to delete provisions describing the specific work to be performed by an automotive technician. The bill, commencing January 1, 2018, would include the services performed by an operator of a tow truck owned or operated by a person or entity enrolled in the Basic Inspection of Terminals program, as specified, in the definition of roadside services.

This bill would provide that the regulations adopted by the director, prior to January 1, 2018, defining minor services continue in effect on and after January 1, 2018.

Because the failure of a person installing propulsive batteries to register as a repair dealer or technician with the bureau would constitute a crime, 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.

The bill would make the operation of its provisions contingent upon the enactment of SB 778 of the 201516 Regular Session.

Existing law, the Automotive Repair Act, the violation of which is a crime, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repair motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2018, defining minor services for these purposes.

This bill would, until January 1, 2018, include installation of propulsive batteries in the definition of repair of motor vehicles.

This bill, commencing January 1, 2018, would recast the definition of repair of motor vehicles to delete the listing of the various types of excluded minor services and to specify that minor services do not include the changing of propulsive batteries, and also would exclude roadside services, as defined. The bill would similarly recast the definition of automotive technician to delete these references and to delete provisions describing the specific work to be performed by an automotive technician. The bill, commencing January 1, 2018, would include the services performed by an operator of a tow truck owned or operated by a person or entity enrolled in the Basic Inspection of Terminals program, as specified, in the definition of roadside services.

This bill would provide that the regulations adopted by the director, prior to January 1, 2018, defining minor services continue in effect on and after January 1, 2018.

Because the failure of a person installing propulsive batteries to register as a repair dealer or technician with the bureau would constitute a crime, 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.

The bill would make the operation of its provisions contingent upon the enactment of SB 778 of the 201516 Regular Session.

Existing law, the Automotive Repair Act, the violation of which is a crime, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repair motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2018, defining minor services for these purposes.

This bill would, until January 1, 2018, include installation of propulsive batteries in the definition of repair of motor vehicles.

This bill, commencing January 1, 2018, would recast the definition of repair of motor vehicles to delete the listing of the various types of excluded minor services and to specify that minor services do not include the changing of propulsive batteries, and also would exclude roadside services, as defined. The bill would similarly recast the definition of automotive technician to delete these references and to delete provisions describing the specific work to be performed by an automotive technician. The bill, commencing January 1, 2018, would include the services performed by an operator of a tow truck owned or operated by a person or entity enrolled in the Basic Inspection of Terminals program, as specified, in the definition of roadside services.

This bill would provide that the regulations adopted by the director, prior to January 1, 2018, defining minor services continue in effect on and after January 1, 2018.

Because the failure of a person installing propulsive batteries to register as a repair dealer or technician with the bureau would constitute a crime, 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, the Automotive Repair Act, the violation of which is a crime, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repairs repair motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2018, defining minor services for these purposes.

This bill would, until January 1, 2018, include installation of propulsive batteries in the definition of repair of motor vehicles.

This bill, commencing January 1, 2018, would recast the definition of repair of motor vehicles, vehicles to delete the listing of the various types of excluded minor services and to specify that minor services do not include the changing of propulsive batteries, and also would exclude roadside services, as defined, and as defined. The bill would similarly recast the definition of automotive technician, technician to delete these references and to delete provisions describing the specific work to be performed by an automotive technician. The bill, commencing January 1, 2018, would include the services performed by an operator of a tow truck owned or operated by a person or entity enrolled in the Basic Inspection of Terminals program, as specified, in the definition of roadside services.

This bill would provide that the regulations adopted by the director, prior to January 1, 2018, defining minor services continue in effect on and after January 1, 2018.

Existing law, the Automotive Repair Act, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repairs motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2017, 2018, defining minor services for these purposes.

This bill, commencing January 1, 2017, 2018, would recast the definition of repair of motor vehicles, to delete the listing of the various types of excluded minor services and also would exclude roadside services, as defined, and would similarly recast the definition of automotive technician, to delete these references and to delete provisions describing the specific work to be performed by an automotive technician. The bill, commencing January 1, 2018, would include the services performed by an operator of a tow truck owned or operated by a person or entity enrolled in the Basic Inspection of Terminals program, as specified, in the definition of roadside services.

This bill would provide that the regulations adopted by the director, prior to January 1, 2017, 2018, defining minor services continue in effect on and after January 1, 2017. 2018.

Existing law, the Automotive Repair Act, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repairs motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2017, defining minor services for these purposes.

This bill would, bill, commencing January 1, 2017, would recast the definition of repair of motor vehicles, to delete the listing of the various types of excluded minor services and also would exclude roadside services, as defined, and would similarly recast the definition of automotive technician, to delete these references and to delete provisions describing the specific work to be performed by an automotive technician.

This bill would declare provide that the regulations adopted by the director, prior to January 1, 2017, defining minor services shall continue in effect on and after January 1, 2017.

Existing law, the Automotive Repair Act, establishes the Bureau of Automotive Repair under the supervision and control of the Director of Consumer Affairs. Existing law regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the bureau. Existing law defines an automotive repair dealer and an automotive technician as persons who, among other things, repairs motor vehicles.

Existing law defines the repair of motor vehicles to mean all maintenance of, and repairs to, motor vehicles, except repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor services.

Existing law defines automotive technician as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, but excluding minor services, as set forth above.

This bill would require the director to adopt regulations prior to January 1, 2017, defining minor services for these purposes.

This bill would, commencing January 1, 2017, recast the definition of repair of motor vehicles, to delete the listing of the various types of excluded minor services, and would similarly recast the definition of automotive technician, to delete these references and to delete provisions describing the specific work to be performed by an automotive technician.

This bill would declare that the regulations adopted by the director, prior to January 1, 2017, defining minor services shall continue in effect on and after January 1, 2017.

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 873

Author:(Jones)

As Amended Ver:August 19, 2016

Majority vote

Original Committee Reference: B. & P.

SUMMARY: Requires the Bureau of Automotive Repair (BAR) to adopt regulations defining minor services that may be performed on an automobile without registration; deletes, commencing January 1, 2018, the current list of minor automotive services and specifies that, at the time, the BAR's prior regulations will remain in effect but may be amended as necessary; and makes conforming changes.

The Senate amendments add chaptering language that makes this bill contingent on the enactment of SB 778 (Allen) of the current Legislative Session.

FISCAL EFFECT: According to the Senate Appropriations Committee:

1. One-time costs less than $150,000 for the BAR (under the Director of Consumer Affairs) to develop and adopt regulations defining minor repairs (Vehicle Inspection and Repair Fund).
2. Ongoing costs of about $200,000 per year to register and regulate about 1,000 additional businesses that would be required to register under a new definition of minor repairs (Vehicle Inspection and Repair Fund). According to the Bureau, a revised definition of minor repairs would not likely continue to exempt tire dealers and oil change shops. According to the Bureau, there are about 1,000 such businesses in the state that are not already registered with the Bureau. The costs to register and take any necessary enforcement actions against the newly registered businesses would be offset by the current $200 annual registration fee imposed by the Bureau.

COMMENTS:

Purpose. This bill is sponsored by the author. According to the author, this bill "will require the [BAR], within the [Department of Consumer Affairs], to determine through regulation which automotive services are minor and which necessitate oversight.

"The Automotive Repair Act of 1971 has not been significantly update[d] since it was enacted. Existing law should be updated and a determination of what constitutes minor repair work and major repair should be developed through the formal rulemaking process so that:

1. The [BAR] takes a comprehensive technical approach to determine what business practices necessitate registration as an automotive repair dealer; and
2. This determination can be periodically updated through the rulemaking process, as the automotive industry continues to evolve. This approach allows the industry to participate through the rulemaking process to help determine which services are minor and should be excluded from registration and which services are major and require registration."

Background. The Automotive Repair Act requires automotive repair dealers who engage in the business of repairing or diagnosing malfunctions of motor vehicles to be licensed and registered with the BAR. It also defines "repair of motor vehicles" as any maintenance and repair work performed by an automotive repair dealer, including body repair work, but as excluding: 1) repairs made under a commercial business agreement; 2) repairing tires and changing tires; 3) lubricating vehicles; 4) installing light bulbs, batteries, windshield wiper blades and other minor accessories; 5) cleaning, adjusting, and replacing spark plugs; 6) replacing fan belts, oil, and air filters; and 7) other minor services customarily performed by gasoline service stations.

Minor Services. During the BAR's 2014 sunset review oversight hearing, the BAR raised the issue of whether certain ancillary services that are not subject to registration should be. Historically, these services were viewed as simple services that were often performed at gasoline service stations and carried a lower risk of consumer harm. However, the BAR noted that, because of advances in automotive technology, many of the services require specialized repair skills and may require the removal of automotive systems, engine components, shrouds or other electrical equipment.

One of the examples cited by the BAR was tire services. The federal Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act requires that new vehicles of a specified weight be equipped with a Tire Pressure Monitoring System (TPMS). When a vehicle with a TPMS is serviced, the technician may need specialized training, such as on how to update the vehicle's on-board diagnostic system. A malfunctioning TPMS can lead to tire blowouts, undetected slow leaks, and other dangerous conditions.

Another example was spark plugs. According to the BAR, some vehicle manufacturers have made spark plugs inaccessible without removal of other major systems, such as the removal of motor mounts or parts of entire engine. Because failure to perform these services correctly can result in serious harm to consumers, the BAR believes that an automotive repair dealer registration should be required to perform those types of repairs. This bill would authorize the BAR to update the list of minor services through regulations.

Propulsive Batteries. According to stakeholders, propulsive batteries are batteries that power or fuel a vehicle's movement, such as in an electric automobile. Ordinary car batteries only power various electronics within a vehicle, such as the starter and interior or exterior lights. Because a propulsive battery requires specialized training, this bill excludes propulsive batteries from the list of minor services.

Analysis Prepared by: Vincent Chee / B. & P. / (916) 319-3301 FN: 0004862

 THIRD READING  

Bill No: AB 873

Author:

:

Vote:

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/27/16

AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill deletes the current list of minor repairs exempted from registration with the Bureau of Automotive Repair (BAR), effective January 1, 2018, and requires the Director of the Department of Consumer Affairs (DCA), prior to January 1, 2018, to adopt regulations defining a new list; excludes propulsive batteries from the current list of minor services; excludes motor clubs and operators of tow trucks from the definition of roadside services; and adds a contingent enactment provision with SB 778 (Allen).

Senate Floor Amendments of 8/19/16 add a contingent enactment provision with SB 778 (Allen).

ANALYSIS:

Existing law:

1. Establishes BAR under the supervision and control of the Director of DCA. (Business and Professions Code (BPC) § 9882)
2. Regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the BAR.
   (BPC §§ 9880-9889.68)
3. Defines the “repair of motor vehicles” to mean all maintenance of, and repairs to, motor vehicles, except the following services: (BPC § 9880.1(e))
   1. Repairing tires;
   2. Changing tires;
   3. Lubricating vehicles;
   4. Installing light bulbs, batteries, windshield wiper blades and other minor accessories;
   5. Cleaning, adjusting and replacing spark plugs;
   6. Replacing fan belts, oil and air filters; and
   7. Other minor services the Director determines to be customarily performed by a gasoline service station.
4. States that the Director shall not designate a service as minor if the Director finds that performance of the service requires mechanical expertise, has given rise to a high incidence of fraud or deceptive practices or involves a part of the vehicle essential to its safe operation. (BPC § 9880.1(e))
5. Defines an “automotive repair dealer” (ARD) as a person who engages in the business of repairing or diagnosing malfunctions of motor vehicles for compensation. (BPC § 9880.1(a))
6. Defines “automotive technician” as a dealer or a person employed by a dealer who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, excluding the services excluded from repair of motor vehicles. (BPC § 9880.1(g))
7. Regulates motor clubs and makes it unlawful to provide motor club services, including emergency road services, without a certificate of authority from the insurance commissioner. (Insurance Code (INS) §§ 12140-12159)
8. Defines “emergency road service” as the adjustment, repair or replacement by a motor club of the equipment, tires or mechanical parts of a motor vehicle so that it may be operated under its own power. (INS § 12146)

This bill:

1. Excludes propulsive batteries from the current list of minor services.
2. Requires the Director of DCA, prior to January 1, 2018, to adopt comprehensive regulations defining “minor services”.
3. Prohibits the changing of “propulsive batteries” from being categorized as minor services.
4. Repeals BPC § 9880.1 and adds an identical section that becomes operative January 1, 2018. It is identical to the old section, except that it:
   1. Recasts the definition of “repair of motor vehicles” to delete the list of excluded services and instead exclude minor services as defined by the Director and roadside services;
   2. Recasts the definition of “automotive technician” as an employee of an automotive repair dealer or is that dealer, who for salary or wage repairs motor vehicles as set forth in the new definition of “repair of motor vehicles”;
   3. Defines “roadside services” as the services performed upon a motor vehicle for the purpose of transporting the vehicle or to permit it to be operated under its own power, by or on behalf of a motor club holding a certificate of authority issued by the insurance commissioner, or by an operator of a tow truck that is owned or operated by a person or entity who possesses a valid motor carrier permit and is enrolled in the Basic Inspection of Terminals program, as specified.
   4. Declares that the regulations adopted by the Director that defines “minor services” continue in effect on and after January 1, 2018 and allows the director to amend or repeal the regulations, consistent with the chapter.
5. Adds a contingent enactment provision with SB 778 (Allen).

Background

Over the interim and beginning of this year, Legislative policy committee staff, BAR, DCA, Author’s staff, and other industry stakeholders sat down and discussed the main issue with this bill – the definition of roadside services.

Since this bill seeks to amend provisions related to the Automotive Repair Act and BAR’s regulatory duties, concerns were raised that the new term “roadside services” within the definition of “repair of motor vehicles” might require motor clubs and other tow truck operators to register with BAR. While BAR does receive input or complaints from the public regarding the towing industry, they do not directly regulate or license tow truck operators.

After discussions, industry representatives have argued and highlighted that there are other mechanisms in place that provide proper consumer protection. In addition to contractual obligations and remedies with law enforcement and motor clubs, tow companies/emergency roadside service operators currently must hold a motor carrier permit (MCP), administered by the Department of Motor Vehicles (DMV), post/provide a copy of the Towing Fees and Access Notice (Notice) to consumers, and be enrolled in the Basic Inspection of Terminals (BIT) Program.

Currently, all tow companies must obtain a MCP from the DMV in order to operate a commercial vehicle. In order to obtain an MCP, a tow company must produce: proof of financial responsibility (generally no more than $750,000), proof of workers’ compensation insurance, a Carrier Identification number (CA#) issued by the California Highway Patrol (CHP), payment of fees, and enrollment in the BIT program.

Starting in 2016, all tow companies are subject to the CHP’s BIT program due to the enactment of AB 529 (Lowenthal, Chapter 500, Statutes of 2013). Under the BIT program, after payment of fees, the CHP conducts a rigorous inspection of a towing company that includes the safety of the vehicles as well as compliance with a wide variety of laws related to drivers and commercial motor carrier businesses. 

Additionally, consumers have rights under law in the event they are unsatisfied with a towing/emergency roadside service company, as detailed in the Notice in Vehicle Code § 22651.07, enacted by AB 519 (Solorio, Chapter 566, Statutes of 2010). A tow company’s office must post the Notice and provide a copy, upon request, to the consumer. The Notice answers questions a consumer may have related to charges, complaints, liability, and remedies if anything on the Notice is violated. AB 519 also mandated that each consumer receive a detailed written itemized invoice of actual charges and imposes civil penalties of up to two times the amount charged, not to exceed $500, for any violation of the section.

Finally, from a business standpoint, industry members have underscored that economically it would be extremely difficult, if not impossible, to survive in the industry without towing for at least one of the 23 motor clubs certified by the Department of Insurance, or at least one of the hundreds of local police and sheriff departments or CHP. If a tow company exclusively performed private property tows (which are not dispatched by law enforcement or motor clubs) it would be extraordinarily rare and such a company would be subject to the extensive, rigorous requirements of Vehicle Code § 22658 which permit a consumer to obtain four times the amount of the towing and storage charges in the event a violation occurs. Nevertheless, such a company, if it exists, would only be removing a vehicle from private property, not performing any type of minor automotive repair services that are the subject of AB 873.

While the Legislature has kept a close eye on tow truck operators, this bill’s goal was not to directly license tow truck operators/motor clubs. Representatives have argued that tow truck operators and motor clubs are there to help move a vehicle off the road and into a safe and secure area. This activity has never been regulated by BAR. While there is an exemption for these groups under the definition of “roadside services”, by no means does it exempt them from BAR jurisdiction if they perform activities regulated by a license.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee analysis dated on August 1, 2016, this bill will incur one-time costs to develop regulations and ongoing costs that would regulate new businesses that are required to register with the Bureau of Automotive Repair.

SUPPORT: (Verified 8/22/16)

Automotive Service Councils of California

California Autobody Association

California Automotive Business Coalition

California Tire Dealers Association

Les Schwab Tire Centers

OPPOSITION: (Verified 8/22/16)

None received

ARGUMENTS IN SUPPORT: The Automotive Service Councils of California writes in support, “Current law (more than 40 years old) declares certain minor services such as: repairing and changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, replacing spark plugs, replacing fan belts, oil and air filters are exempt from BAR oversight. Because of the advances in automotive technologies many of these minor services now require more specialized training and skills and may necessitate the removal of engine components and other electrical and computer equipment.

There also is an unfair playing field for those businesses that are currently registered/licensed by BAR who must compete with repair facilities that provide the same repair services but are not registered or licensed.”

ASSEMBLY FLOOR: 77-0, 5/7/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, 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, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Campos, Roger Hernández, Steinorth

Prepared by:

8/23/16 9:43:24

**** END ****

 THIRD READING  

Bill No: AB 873

Author:

:

Vote:

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 9-0, 6/27/16

AYES: Hill, Bates, Block, Gaines, Galgiani, Hernandez, Jackson, Mendoza, Wieckowski

SENATE APPROPRIATIONS COMMITTEE: 7-0, 8/11/16

AYES: Lara, Bates, Beall, Hill, McGuire, Mendoza, Nielsen

ASSEMBLY FLOOR: 77-0, 5/7/15 (Consent) - See last page for vote

SUBJECT:

SOURCE: Author

DIGEST: This bill deletes the current list of minor repairs exempted from registration with the Bureau of Automotive Repair (BAR), effective January 1, 2018, and requires the director of the Department of Consumer Affairs (DCA), prior to January 1, 2018, to adopt regulations defining a new list; excludes propulsive batteries from the current list of minor services; and excludes motor clubs and operators of tow trucks from the definition of roadside services.

ANALYSIS:

Existing law:

1. Establishes BAR under the supervision and control of the Director of DCA. (Business and Professions Code (BPC) § 9882)
2. Regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the BAR.
   (BPC §§ 9880-9889.68)
3. Defines the “repair of motor vehicles” to mean all maintenance of, and repairs to, motor vehicles, except the following services: (BPC § 9880.1(e))
   1. Repairing tires;
   2. Changing tires;
   3. Lubricating vehicles;
   4. Installing light bulbs, batteries, windshield wiper blades and other minor accessories;
   5. Cleaning, adjusting and replacing spark plugs;
   6. Replacing fan belts, oil and air filters; and
   7. Other minor services the Director determines to be customarily performed by a gasoline service station.
4. States that the Director shall not designate a service as minor if the Director finds that performance of the service requires mechanical expertise, has given rise to a high incidence of fraud or deceptive practices or involves a part of the vehicle essential to its safe operation. (BPC § 9880.1(e))
5. Defines an “automotive repair dealer” (ARD) as a person who engages in the business of repairing or diagnosing malfunctions of motor vehicles for compensation. (BPC § 9880.1(a))
6. Defines “automotive technician” as a dealer or a person employed by a dealer who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, excluding the services excluded from repair of motor vehicles. (BPC § 9880.1(g))
7. Regulates motor clubs and makes it unlawful to provide motor club services, including emergency road services, without a certificate of authority from the insurance commissioner. (Insurance Code (INS) §§ 12140-12159)
8. Defines “emergency road service” as the adjustment, repair or replacement by a motor club of the equipment, tires or mechanical parts of a motor vehicle so that it may be operated under its own power. (INS § 12146)

This bill:

1. Excludes propulsive batteries from the current list of minor services.
2. Requires the Director of DCA, prior to January 1, 2018, to adopt comprehensive regulations defining “minor services”.
3. Prohibits the changing of “propulsive batteries” from being categorized as minor services.
4. Repeals BPC § 9880.1 and adds an identical section that becomes operative January 1, 2018. It is identical to the old section, except that it:
   1. Recasts the definition of “repair of motor vehicles” to delete the list of excluded services and instead exclude minor services as defined by the Director and roadside services;
   2. Recasts the definition of “automotive technician” as an employee of an automotive repair dealer or is that dealer, who for salary or wage repairs motor vehicles as set forth in the new definition of “repair of motor vehicles”;
   3. Defines “roadside services” as the services performed upon a motor vehicle for the purpose of transporting the vehicle or to permit it to be operated under its own power, by or on behalf of a motor club holding a certificate of authority issued by the insurance commissioner, or by an operator of a tow truck that is owned or operated by a person or entity who possesses a valid motor carrier permit and is enrolled in the Basic Inspection of Terminals program, as specified.
   4. Declares that the regulations adopted by the Director that defines “minor services” continue in effect on and after January 1, 2018 and allows the director to amend or repeal the regulations, consistent with the chapter.

Background

Over the interim and beginning of this year, Legislative policy committee staff, BAR, DCA, Author’s staff, and other industry stakeholders sat down and discussed the main issue with this bill – the definition of roadside services.

Since this bill seeks to amend provisions related to the Automotive Repair Act and BAR’s regulatory duties, concerns were raised that the new term “roadside services” within the definition of “repair of motor vehicles” might require motor clubs and other tow truck operators to register with BAR. While BAR does receive input or complaints from the public regarding the towing industry, they do not directly regulate or license tow truck operators.

After discussions, industry representatives have argued and highlighted that there are other mechanisms in place that provide proper consumer protection. In addition to contractual obligations and remedies with law enforcement and motor clubs, tow companies/emergency roadside service operators currently must hold a motor carrier permit (MCP), administered by the Department of Motor Vehicles (DMV), post/provide a copy of the Towing Fees and Access Notice (Notice) to consumers, and be enrolled in the Basic Inspection of Terminals (BIT) Program.

Currently, all tow companies must obtain a MCP from the DMV in order to operate a commercial vehicle. In order to obtain an MCP, a tow company must produce: proof of financial responsibility (generally no more than $750,000), proof of workers’ compensation insurance, a Carrier Identification number (CA#) issued by the California Highway Patrol (CHP), payment of fees, and enrollment in the BIT program.

Starting in 2016, all tow companies are subject to the CHP’s BIT program due to the enactment of AB 529 (Lowenthal, Chapter 500, Statutes of 2013). Under the BIT program, after payment of fees, the CHP conducts a rigorous inspection of a towing company that includes the safety of the vehicles as well as compliance with a wide variety of laws related to drivers and commercial motor carrier businesses. 

Additionally, consumers have rights under law in the event they are unsatisfied with a towing/emergency roadside service company, as detailed in the Notice in Vehicle Code § 22651.07, enacted by AB 519 (Solorio, Chapter 566, Statutes of 2010). A tow company’s office must post the Notice and provide a copy, upon request, to the consumer. The Notice answers questions a consumer may have related to charges, complaints, liability, and remedies if anything on the Notice is violated. AB 519 also mandated that each consumer receive a detailed written itemized invoice of actual charges and imposes civil penalties of up to two times the amount charged, not to exceed $500, for any violation of the section.

Finally, from a business standpoint, industry members have underscored that economically it would be extremely difficult, if not impossible, to survive in the industry without towing for at least one of the 23 motor clubs certified by the Department of Insurance, or at least one of the hundreds of local police and sheriff departments or CHP. If a tow company exclusively performed private property tows (which are not dispatched by law enforcement or motor clubs) it would be extraordinarily rare and such a company would be subject to the extensive, rigorous requirements of Vehicle Code § 22658 which permit a consumer to obtain four times the amount of the towing and storage charges in the event a violation occurs. Nevertheless, such a company, if it exists, would only be removing a vehicle from private property, not performing any type of minor automotive repair services that are the subject of AB 873.

While the Legislature has kept a close eye on tow truck operators, this bill’s goal was not to directly license tow truck operators/motor clubs. Representatives have argued that tow truck operators and motor clubs are there to help move a vehicle off the road and into a safe and secure area. This activity has never been regulated by BAR. While there is an exemption for these groups under the definition of “roadside services”, by no means does it exempt them from BAR jurisdiction if they perform activities regulated by a license.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

According to the Senate Appropriations Committee analysis dated on August 1, 2016, this bill will incur one-time costs to develop regulations and ongoing costs that would regulate new businesses that are required to register with the Bureau of Automotive Repair.

SUPPORT: (Verified 8/11/16)

Automotive Service Councils of California

California Autobody Association

California Automotive Business Coalition

California Tire Dealers Association

Les Schwab Tire Centers

OPPOSITION: (Verified 8/11/16)

None received

ARGUMENTS IN SUPPORT: The Automotive Service Councils of California writes in support, “Current law (more than 40 years old) declares certain minor services such as: repairing and changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, replacing spark plugs, replacing fan belts, oil and air filters are exempt from BAR oversight. Because of the advances in automotive technologies many of these minor services now require more specialized training and skills and may necessitate the removal of engine components and other electrical and computer equipment.

There also is an unfair playing field for those businesses that are currently registered/licensed by BAR who must compete with repair facilities that provide the same repair services but are not registered or licensed.”

ASSEMBLY FLOOR: 77-0, 5/7/15

AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke, Calderon, 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, Holden, Irwin, Jones, Jones-Sawyer, Kim, Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams, Wood, Atkins

NO VOTE RECORDED: Campos, Roger Hernández, Steinorth

Prepared by:

8/15/16 20:01:59

**** END ****

SENATE COMMITTEE ON

Senator Ricardo Lara, Chair

2015 - 2016 Regular Session

AB 873 (Jones) - Automotive repair

This bill meets the criteria for referral to the Suspense File.

Bill Summary:

AB 873 would delete the existing list of “minor services” that require a business to register with the Bureau of Automotive Repair. Instead, the bill would require the Director of Consumer Affairs to adopt regulations defining what constitutes a minor repair.

Fiscal Impact:

• One-time costs less than $150,000 for the Bureau of Automotive Repair (under the Director of Consumer Affairs) to develop and adopt regulations defining minor repairs (Vehicle Inspection and Repair Fund).
• Ongoing costs of about $200,000 per year to register and regulate about 1,000 additional businesses that would be required to register under a new definition of minor repairs (Vehicle Inspection and Repair Fund). According to the Bureau, a revised definition of minor repairs would not likely continue to exempt tire dealers and oil change shops. According to the Bureau, there are about 1,000 such businesses in the state that are not already registered with the Bureau. The costs to register and take any necessary enforcement actions against the newly registered businesses would be offset by the current $200 annual registration fee imposed by the Bureau.

Background:

Existing law, the Automotive Repair Act (the Act), requires automotive repair dealers who engage in the business of repairing or diagnosing malfunctions of motor vehicles to be licensed and registered with the Bureau of Automotive Repair. For purposes of the Act, “repair of motor vehicles” means any maintenance and repair work performed by an automotive repair dealer, including body repair work, but excluding the following: (1) repairs made under a commercial business agreement; (2) repairing tires and changing tires; (3) lubricating vehicles; (4) installing light bulbs, batteries, windshield wiper blades and other minor accessories; (5) cleaning, adjusting, and replacing spark plugs; (6) replacing fan belts, oil, and air filters; and (7) other minor services customarily performed by gasoline service stations.

There are currently about 34,000 automotive repair dealers licensed in California, each of which pays an annual $200 fee for licensure.

Proposed Law:

AB 873 would delete the existing list of “minor services” that require a business to register with the Bureau of Automotive Repair. Instead, the bill would require the Director of Consumer Affairs to adopt regulations defining what constitutes a minor repair.

Specific provisions of the bill would:

• Exclude the installation of propulsive batteries from the current list of minor services;
• Require the Director of Consumer Affairs to adopt regulations by January 1, 2018 defining “minor services”;
• Prohibit the changing of propulsive batteries from being categorized as “minor services”;
• Delete the current list of “minor services” and require the regulations adopted by the Director to govern “minor services”;
• Revise the definition of “automotive technician”;
• Define roadside services.

Related Legislation:

There have been several bills in recent years, including AB 1665 (Jones, 2014), AB 2065 (Galgiani, 2012), and SB 202 (Galgiani, 2013) that would have required businesses that change or repair tires to register with the Bureau. AB 1665 was vetoed by the Governor and AB 2065 and SB 202 were held in the Assembly Appropriations Committee.

Staff Comments:

During the sunset review process, conducted by the Senate and Assembly Business and Professions Committees, the Bureau raised issues relating to the current list of “minor services”. According to the Bureau, advances in automotive technology mean that services such as tire replacements or changing spark plugs are much more complex than they were in prior years. The Bureau argued that the more technically complex nature of these services means that the Bureau should have regulatory oversight over businesses that provide those services. According to data provided by the Bureau, it has received between 50 and 200 complaints per year against businesses providing tire services that are not registered with the Bureau.

The only costs that may be incurred by a local agency relate to crimes and infractions. Under the California Constitution, such costs are not reimbursable by the state.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2015 - 2016 Regular

Bill No: Hearing Date: June 27 2016

Subject:

SUMMARY:

Deletes the current list of minor repairs exempted from registration with the Bureau of Automotive Repair (BAR), effective January 1, 2018, and requires the director of the Department of Consumer Affairs (DCA), prior to January 1, 2018, to adopt regulations defining a new list; excludes propulsive batteries from the current list of minor services; excludes motor clubs and operators of tow trucks from the definition of roadside services.

Existing law:

1. Establishes BAR under the supervision and control of the Director of DCA. (Business and Professions Code (BPC) § 9882)
2. Regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the BAR. (BPC §§ 9880-9889.68)
3. Defines the “repair of motor vehicles” to mean all maintenance of, and repairs to, motor vehicles, except the following services: (BPC § 9880.1(e))
   1. Repairing tires;
   2. Changing tires;
   3. Lubricating vehicles;
   4. Installing light bulbs, batteries, windshield wiper blades and other minor accessories;
   5. Cleaning, adjusting and replacing spark plugs;
   6. Replacing fan belts, oil and air filters; and
   7. Other minor services the Director determines to be customarily performed by a gasoline service station.
4. States that the Director shall not designate a service as minor if the Director finds that performance of the service requires mechanical expertise, has given rise to a high incidence of fraud or deceptive practices or involves a part of the vehicle essential to its safe operation. (BPC § 9880.1(e))
5. Defines an “automotive repair dealer” (ARD) as a person who engages in the business of repairing or diagnosing malfunctions of motor vehicles for compensation.
   (BPC § 9880.1(a))
6. Defines “automotive technician” as a dealer or a person employed by a dealer who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, excluding the services excluded from repair of motor vehicles. (BPC § 9880.1(g))
7. Regulates motor clubs and makes it unlawful to provide motor club services, including emergency road services, without a certificate of authority from the insurance commissioner. (Insurance Code (INS) §§ 12140-12159)
8. Defines “emergency road service” as the adjustment, repair or replacement by a motor club of the equipment, tires or mechanical parts of a motor vehicle so that it may be operated under its own power. (INS § 12146)

This bill:

1. Excludes propulsive batteries from the current list of minor services.
2. Requires the Director of DCA, prior to January 1, 2018, to adopt comprehensive regulations defining “minor services”.
3. Prohibits the changing of “propulsive batteries” from being categorized as minor services.
4. Repeals BPC § 9880.1 and adds an identical section that becomes operative January 1, 2018. It is identical to the old section, except that it:
   1. Recasts the definition of “repair of motor vehicles” to delete the list of excluded services and instead exclude minor services as defined by the Director and roadside services;
   2. Recasts the definition of “automotive technician” as an employee of an automotive repair dealer or is that dealer, who for salary or wage repairs motor vehicles as set forth in the new definition of “repair of motor vehicles”;
   3. Defines “roadside services” as the services performed upon a motor vehicle for the purpose of transporting the vehicle or to permit it to be operated under its own power, by or on behalf of a motor club holding a certificate of authority issued by the insurance commissioner, or by an operator of a tow truck that is owned or operated by a person or entity who possesses a valid motor carrier permit and is enrolled in the Basic Inspection of Terminals program, as specified.
   4. Declares that the regulations adopted by the Director that defines “minor services” continue in effect on and after January 1, 2018 and allows the director to amend or repeal the regulations, consistent with the chapter.

FISCAL EFFECT:

This bill is keyed “fiscal” by Legislative Counsel. According to the Assembly Appropriations Committee analysis dated April 29, 2015, this bill will result in minor and absorbable costs to DCA to update regulations.

COMMENTS:

1. Purpose. The Author is the sponsor of the bill. According to the Author, this bill “will require the BAR, within the DCA, to determine through regulation which automotive services are minor and which necessitate oversight.

The Automotive Repair Act of 1971 has not been significantly updated since it was enacted. Existing law should be updated and a determination of what constitutes minor repair work and major repair should be developed through the formal rulemaking process so that:

1. BAR takes a comprehensive technical approach to determine what business practices necessitate registration as an automotive repair dealer; and
2. This determination can be periodically updated through the rulemaking process, as the automotive industry continues to evolve. This approach allows the industry to participate through the rulemaking process to help determine which services are minor and should be excluded from registration and which services are major and require registration.”
3. Background. In 2014, the Assembly Committee on Business, Professions and Consumer Protection and the Senate Committee on Business, Professions and Economic Development (Committees) conducted joint oversight hearings to review the BAR and eight other regulatory entities. As a part of the review, staff of the Committees made recommendations for each agency and program reviewed by the Committees.

In its Sunset Report to the Committees, the BAR raised the issue of ancillary services which have typically been seen as simple enough to be considered exempt areas of practice, and therefore not subject to regulation and registration, such as replacing spark plugs, batteries and fan belts. The BAR noted that, because of advances in automotive technology, many of the services require specialized repair skills and may require the removal of automotive systems, engine components, shrouds, or other electrical equipment.

One of the examples cited by the BAR was tire services. The federal Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act requires that, beginning with the 2006 model year, every new vehicle of less than 10,000 pounds gross vehicle weight rating be equipped with a Tire Pressure Monitoring System (TPMS) (Title 49 of the United States Code §§ 30101-30170).

As a result, many modern vehicles are equipped with a TPMS that may require the technician to update the vehicle’s on-board diagnostic system when serviced. A malfunctioning TPMS can lead to tire blowouts, undetected slow leaks and other dangerous conditions.

Another example is spark plugs. According to the BAR, some vehicle manufacturers have made spark plugs inaccessible without removal of other major systems, even the removal of motor mounts and, in a few cases, the entire engine. Because these examples can lead to dangerous situations for consumers, BAR still believes that an automotive repair dealer registration should be required for those performing those types of repairs. By requiring the Director to determine a new list of exclusions that can change to keep up with technology, this bill seeks to ensure the regulation of complicated repairs and maintenance.

1. 2014 Stakeholder Input. AB 1665 (Jones) of 2014 would have deleted repairing and changing tires from the list of excluded minor services. The bill was vetoed by Governor Brown to give the BAR the opportunity to include more stakeholder input and decide which other automotive repair services require regulation.

To address the concerns of the veto, BAR held an industry stakeholder workshop following its quarterly April 25, 2015 BAR Advisory Group meeting. At this Advisory Group meeting, industry stakeholders and BAR representatives discussed a range of issues including major/minor services, compliance with advertising requirements, and the definition of roadside services. Based on the discussion and future introduction of this bill, stakeholders decided to see the outcome of the bill before developing any formal regulations.

1. 2015/2016 Stakeholder Meetings and Mechanisms for Consumer Protection. Over the interim and beginning of this year, Committee staff, BAR, DCA, Author’s staff, and other industry stakeholders sat down and discussed the main issue with this bill – the definition of roadside services.

Since this bill seeks to amend provisions related to the Automotive Repair Act and BAR’s regulatory duties, concerns were raised that the new term “roadside services” within the definition of “repair of motor vehicles” might require motor clubs and other tow truck operators to register with BAR. While BAR does receive input or complaints from the public regarding the towing industry, they do not directly regulate or license tow truck operators.

After discussions, industry representatives have argued and highlighted that there are other mechanisms in place that provide proper consumer protection. In addition to contractual obligations and remedies with law enforcement and motor clubs, tow companies/emergency roadside service operators currently must hold a motor carrier permit (MCP), administered by the Department of Motor Vehicles (DMV), post/provide a copy of the Towing Fees and Access Notice (Notice) to consumers, and be enrolled in the Basic Inspection of Terminals (BIT) Program.

Currently, all tow companies must obtain a MCP from the DMV in order to operate a commercial vehicle. In order to obtain an MCP, a tow company must produce: proof of financial responsibility (generally no more than $750,000), proof of workers’ compensation insurance, a Carrier Identification number (CA#) issued by the California Highway Patrol (CHP), payment of fees, and enrollment in the BIT program.

Starting in 2016, all tow companies are subject to the CHP’s BIT program due to the enactment of AB 529 (Lowenthal, Chapter 500, Statutes of 2013). Under the BIT program, after payment of fees, the CHP conducts a rigorous inspection of a towing company that includes the safety of the vehicles as well as compliance with a wide variety of laws related to drivers and commercial motor carrier businesses. 

Additionally, consumers have rights under law in the event they are unsatisfied with a towing/emergency roadside service company, as detailed in the Notice in Vehicle Code § 22651.07, enacted by AB 519 (Solorio, Chapter 566, Statutes of 2010). A tow company’s office must post the Notice and provide a copy, upon request, to the consumer. The Notice answers questions a consumer may have related to charges, complaints, liability, and remedies if anything on the Notice is violated.
AB 519 also mandated that each consumer receive a detailed written itemized invoice of actual charges and imposes civil penalties of up to two times the amount charged, not to exceed $500, for any violation of the section.

Finally, from a business standpoint, industry members have underscored that economically it would be extremely difficult, if not impossible, to survive in the industry without towing for at least one of the 23 motor clubs certified by the Department of Insurance, or at least one of the hundreds of local police and sheriff departments or CHP. If a tow company exclusively performed private property tows (which are not dispatched by law enforcement or motor clubs) it would be extraordinarily rare and such a company would be subject to the extensive, rigorous requirements of Vehicle Code § 22658 which permit a consumer to obtain four times the amount of the towing and storage charges in the event a violation occurs. Nevertheless, such a company, if it exists, would only be removing a vehicle from private property, not performing any type of minor automotive repair services that are the subject of AB 873.

While the Legislature has kept a close eye on tow truck operators, this bill’s goal was not to directly license tow truck operators/motor clubs. Representatives have argued that tow truck operators and motor clubs are there to help move a vehicle off the road and into a safe and secure area. This activity has never been regulated by BAR. While there is an exemption for these groups under the definition of “roadside services”, by no means does it exempt them from BAR jurisdiction if they perform activities regulated by a license.

1. New Registration for Unlicensed Shops. At the beginning of April 2016, Oil Changers, a quick oil changing shop that provides a number of preventative maintenance services, requested an amendment excluding their shops from BAR regulation. Specifically, Oil Changers feared that by updating “minor services”, services the company has historically provided would now require them to register as an ARD. They are currently not required to register or apply for a license with BAR.

Since there is a gray area about whether these shops actually fall under BAR’s jurisdiction, Oil Changers agreed to a new registration category that will give BAR authority over their activities. This compromise was discussed in conjunction with other issues raised with AB 778 (Allen, 2015). During stakeholder meetings convened by Senator Allen’s office on SB 778, committee staff has also engaged in discussions regarding this new registration category. This new registration category, deemed “automotive maintenance provider”, is defined as a person who, for compensation, engages in the business of the preventative automotive maintenance services associated with fluid and filter changes, fluid treatment, and belt and windshield wiper blade replacement.

This new registration category will allow these unregistered shops to explicitly fall under BAR’s regulatory purview and, in turn, allow these newly registered shops to maintain their current business model.

AB 873 will be amended to reflect the new registration category in SB 778.

1. Previous Legislation. AB 1665 (Jones) of 2014, would have deleted “repairing tires” and “changing tires” from the list of repair services exempt from registration as an automotive repair dealer under the BAR. It would have also required an automotive repair dealer to be capable of diagnosing and servicing TPMS, as specified. (Status: This bill was vetoed Governor Brown who wrote in his veto message that “Before a new licensing scheme is enacted, a more comprehensive review is needed. I am directing the Bureau to work with interested parties to determine which, if any, automotive repair services merit further regulation.”)

SB 202 (Galgiani) of 2013, would have deleted repairing and changing tires from those exclusion lists. It would have also excluded tire services provided by or on behalf of a motor club holding a specified certificate of authority or an operator of a tow truck owned or operated by a person or entity possessing a valid motor carrier permit from the definitions of “repair of motor vehicles” and “automotive technician.” (Status: This bill was held in the Assembly Committee on Appropriations.)

AB 2065 (Galgiani) of 2012 was essentially the same as SB 202. (Status: This bill was held in the Assembly Committee on Appropriations.)

1. Arguments in Support. The Automotive Service Councils of California writes in support, “Current law (more than 40 years old) declares certain minor services such as: repairing and changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, replacing spark plugs, replacing fan belts, oil and air filters are exempt from BAR oversight. Because of the advances in automotive technologies many of these minor services now require more specialized training and skills and may necessitate the removal of engine components and other electrical and computer equipment.

There also is an unfair playing field for those businesses that are currently registered/licensed by BAR who must compete with repair facilities that provide the same repair services but are not registered or licensed.”

The California Autobody Association writes in support, “Existing law does not adequately address the current market realities regarding services provided by auto repair businesses. Certain automotive services were designated minor in [the] early 1970’s and did not require oversight by the BAR. However, automotive technology has advanced significantly since then, which requires much more specialized training and equipment to properly repair vehicles.”

SUPPORT AND OPPOSITION:

Support:

Automotive Service Councils of California

California Autobody Association

California Automotive Business Coalition

California Tire Dealers Association

Les Schwab Tire Centers

Opposition:

None on file as of June 21, 2016.

-- END --

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Jerry Hill, Chair

2015 - 2016 Regular

Bill No: Hearing Date: June 6, 2016

Subject:

SUMMARY:

Deletes the current list of minor repairs exempted from registration with the Bureau of Automotive Repair, effective January 1, 2018, and requires the director of the Department of Consumer Affairs, prior to January 1, 2018, to adopt regulations defining a new list; excludes propulsive batteries from the current list of minor services; excludes motor clubs and operators of tow trucks from the definition of roadside services.

Existing law:

1. Establishes the Bureau of Automotive Repair (BAR) under the supervision and control of the Director of Department of Consumer Affairs (DCA). (Business and Professions Code (BPC) § 9882)
2. Regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the BAR. (BPC § 9880-9889.68)

Defines the “repair of motor vehicles” to mean all maintenance of, and repairs to, motor vehicles, except the following services: (BPC § 9880.1(e))

• 1. Repairing tires;
  2. Changing tires;
  3. Lubricating vehicles;
  4. Installing light bulbs, batteries, windshield wiper blades and other minor accessories;
  5. Cleaning, adjusting and replacing spark plugs;
  6. Replacing fan belts, oil and air filters; and
  7. Other minor services the Director determines to be customarily performed by a gasoline service station.

1. States that the Director shall not designate a service as minor if the Director finds that performance of the service requires mechanical expertise, has given rise to a high incidence of fraud or deceptive practices or involves a part of the vehicle essential to its safe operation. (BPC § 9880.1(e))
2. Defines an "automotive repair dealer" as a person who engages in the business of repairing or diagnosing malfunctions of motor vehicles for compensation.
   (BPC § 9880.1(a))
3. Defines “automotive technician” as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, excluding the services excluded from repair of motor vehicles. (BPC § 9880.1(g))
4. Regulates motor clubs and makes it unlawful to provide motor club services, including emergency road services, without a certificate of authority from the insurance commissioner. (Insurance Code (INS) § 12140-12159)
5. Defines “emergency road service” as the adjustment, repair or replacement by a motor club of the equipment, tires, or mechanical parts of a motor vehicle so that it may be operated under its own power. (INS § 12146)

This bill:

1. Excludes propulsive batteries from the current list of minor services.
2. Requires the Director of DCA, prior to January 1, 2018, to adopt comprehensive regulations defining “minor services”.
3. Prohibits the changing of “propulsive batteries” from being categorized as minor services.
4. Repeals BPC § 9880.1 and adds an identical section that becomes operative January 1, 2018. It is identical to the old section, except that it:
   1. Recasts the definition of “repair of motor vehicles” to delete the list of excluded services and instead exclude minor services as defined by the director and roadside services;
   2. Recasts the definition of “automotive technician” as an employee of an automotive repair dealer or is that dealer, who for salary or wage repairs motor vehicles as set forth in the new definition of “repair of motor vehicles”;
   3. Defines “roadside services” as the services performed upon a motor vehicle for the purpose of transporting the vehicle or to permit it to be operated under its own power, by or on behalf of a motor club holding a certificate of authority issued by the insurance commissioner, or by an operator of a tow truck that is owned or operated by a person or entity who possesses a valid motor carrier permit and is enrolled in the Basic Inspection of Terminals program – as specified.
   4. Declares that the regulations adopted by the Director that defines “minor services” continue in effect on and after January 1, 2018 and allows the director to amend or repeal the regulations, consistent with the chapter.

FISCAL EFFECT:

This bill is keyed “fiscal” by Legislative Counsel. According to the Assembly Appropriations Committee analysis dated April 29, 2015:

• DCA costs (special funds) to update regulations will be minor and absorbable within existing resources.

COMMENTS:

1. Purpose. The Author is the sponsor of the bill. According to the Author, this bill “will require the BAR, within the DCA, to determine through regulation which automotive services are minor and which necessitate oversight.

The Automotive Repair Act of 1971 has not been significantly updated since it was enacted. Existing law should be updated and a determination of what constitutes minor repair work and major repair should be developed through the formal rulemaking process so that:

1. BAR takes a comprehensive technical approach to determine what business practices necessitate registration as an automotive repair dealer; and
2. This determination can be periodically updated through the rulemaking process, as the automotive industry continues to evolve. This approach allows the industry to participate through the rulemaking process to help determine which services are minor and should be excluded from registration and which services are major and require registration.”
3. Background. In 2014, the Assembly Committee on Business, Professions and Consumer Protection and the Senate Committee on Business, Professions and Economic Development (Committees) conducted joint oversight hearings to review the BAR and eight other regulatory entities. As a part of the review, staff of the Committees made recommendations for each agency and program reviewed by the Committees.

In its Sunset Report to the Committees, the BAR raised the issue of ancillary services which have typically been seen as simple enough to be considered exempt areas of practice, and therefore not subject to regulation and registration, such as replacing spark plugs, batteries and fan belts. The BAR noted that, because of advances in automotive technology, many of the services require specialized repair skills and may require the removal of automotive systems, engine components, shrouds, or other electrical equipment.

One of the examples cited by the BAR was tire services. The federal Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act requires that, beginning with the 2006 model year, every new vehicle of less than 10,000 pounds gross vehicle weight rating be equipped with a Tire Pressure Monitoring System (TPMS) (Title 49 of the United States Code §§ 30101-30170).

As a result, many modern vehicles are equipped with a TPMS that may require the technician to update the vehicle’s on-board diagnostic system when serviced. A malfunctioning TPMS can lead to tire blowouts, undetected slow leaks and other dangerous conditions.

Another example is spark plugs. According to the BAR, some vehicle manufacturers have made spark plugs inaccessible without removal of other major systems, even the removal of motor mounts and, in a few cases, the entire engine. Because these examples can lead to dangerous situations for consumers, BAR still believes that an automotive repair dealer registration should be required for those performing those types of repairs. By requiring the Director to determine a new list of exclusions that can change to keep up with technology, this bill seeks to ensure the regulation of complicated repairs and maintenance.

1. 2014 Stakeholder Input. AB 1665 (Jones) of 2014 would have deleted repairing and changing tires from the list of excluded minor services. The bill was vetoed by Governor Brown to give the BAR the opportunity to include more stakeholder input and decide which other automotive repair services require regulation.

To address the concerns of the veto, BAR held an industry stakeholder workshop following its quarterly April 25, 2015 BAR Advisory Group meeting. At this Advisory group meeting, industry stakeholders and BAR representatives discussed a range of issues including major/minor services, compliance with advertising requirements, and the definition of roadside services. Based on the discussion and future introduction of AB 873 (Jones), the stakeholder meeting decided to see the outcome of the bill before any formal regulations were formed.

1. 2015/2016 Stakeholder Meetings and Mechanisms for Consumer Protection. Over the interim and beginning of this year, Committee staff, BAR, DCA, Author’s staff, and other industry stakeholders sat down and discussed the main issue with AB 873 – the definition of roadside services.

Since this bill seeks to amend provisions related to the Automotive Repair Act and BAR’s regulatory duties, concerns were raised that the new term “roadside services” within the definition of “repair of motor vehicles” might require motor clubs and other tow truck operators to register with BAR. While BAR does receive input or complaints from the public regarding the towing industry, they do not directly regulate or license tow truck operators.

After discussions, industry representatives have argued and highlighted that there are other mechanisms in place that provide proper consumer protection. In addition to contractual obligations and remedies with law enforcement and motor clubs, tow companies/emergency roadside service operators currently must hold a motor carrier permit (MCP), administered by the Department of Motor Vehicles (DMV), post/provide a copy of the Towing Fees and Access Notice (Notice) to consumers, and be enrolled in the Basic Inspection of Terminals (BIT) Program.

Currently, all tow companies must obtain a MCP from the DMV in order to operate a commercial vehicle. In order to obtain an MCP, a tow company must produce: proof of financial responsibility (generally no more than $750,000), proof of workers’ compensation insurance, a Carrier Identification number (CA#) issued by the CHP, payment of fees, and enrollment in the BIT program.

Starting in 2016, all tow companies are subject to the CHP’s BIT program due to the enactment of AB 529 (Lowenthal, Chapter 500, Statutes of 2013). Under the BIT program, after payment of fees, the CHP conducts a rigorous inspection of a towing company that includes the safety of the vehicles as well as compliance with a wide variety of laws related to drivers and commercial motor carrier businesses. 

Additionally, consumers have rights under law in the event they are unsatisfied with a towing/emergency roadside service company, as detailed in the Notice in Vehicle Code § 22651.07, enacted by AB 519 (Solorio, Chapter 566, Statutes of 2010). A tow company’s office must post the Notice and provide a copy, upon request, to the consumer. The Notice answers questions a consumer may have related to charges, complaints, liability, and remedies if anything on the Notice is violated. AB 519 also mandated that each consumer receive a detailed written itemized invoice of actual charges and imposes civil penalties of up to two times the amount charged, not to exceed $500, for any violation of the section.

Finally, from a business standpoint, industry members have underscored that, economically, it would be extremely difficult, if not impossible, to survive in the industry without towing for at least one of the 23 motor clubs certified by the Department of Insurance, or at least one of the hundreds of local police and sheriff departments or CHP. If a tow company exclusively performed private property tows (which are not dispatched by law enforcement or motor clubs) it would be extraordinarily rare and such a company would be subject to the extensive, rigorous requirements of Vehicle Code § 22658 which permit a consumer to obtain four times the amount of the towing and storage charges in the event a violation occurs. Nevertheless, such a company, if it exists, would only be removing a vehicle from private property, not performing any type of minor automotive repair services that are the subject of AB 873.

While the legislature has kept a close eye on tow truck operators, this bill’s goal was not to directly license tow truck operators/motor clubs. Representatives have argued that tow truck operators and motor clubs are there to help move a vehicle off the road and into a safe and secure area. This activity has never been regulated by BAR. While there is an exemption for these groups under the definition of “roadside services”, by no means does it exempt them from BAR jurisdiction if they perform activities regulated by a license.

1. Journal Letter. At the beginning of April, Oil Changers, a quick oil changing shop that provides a number of other technical services, requested an amendment excluding their shops from BAR regulation.

However, Oil Changers does not fall under the definition of automotive repair dealer that requires BAR registration. BPC § 9880.1 (a) defines an “automotive repair dealer” as “a person who, for compensation, engages in the business of repairing or diagnosing malfunctions of motor vehicles”. Since companies like Oil Changes perform current minor services and do not “repair” or “diagnose” a malfunction of the vehicle, they will not be required to register with BAR. A letter to the Assembly Journal will highlight this clarification. This letter, however, in no way exempts these companies from BAR’s jurisdiction if they perform work required by a license.

1. Previous Legislation. AB 1665 (Jones) of 2014, would have deleted “repairing tires” and “changing tires” from the list of repair services exempt from registration as an automotive repair dealer under the BAR. It would have also required an automotive repair dealer to be capable of diagnosing and servicing TPMS, as specified. (Status: This bill was vetoed Governor Brown.)

SB 202 (Galgiani) of 2013, would have deleted repairing and changing tires from those exclusion lists. It would have also excluded tire services provided by or on behalf of a motor club holding a specified certificate of authority or an operator of a tow truck owned or operated by a person or entity possessing a valid motor carrier permit from the definitions of “repair of motor vehicles” and “automotive technician.” (Status: This bill was held on the Assembly Appropriations Suspense File.)

AB 2065 (Galgiani) of 2012 was essentially the same as SB 202. (Status: This bill was held on the Assembly Appropriations Committee Suspense File.)

1. Arguments in Support. The Automotive Service Councils of California writes in support, “Current law (more than 40 years old) declares certain minor services such as: repairing and changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, replacing spark plugs, replacing fan belts, oil and air filters are exempt from BAR oversight. Because of the advances in automotive technologies many of these minor services now require more specialized training and skills and may necessitate the removal of engine components and other electrical and computer equipment.

There also is an unfair playing field for those businesses that are currently registered/licensed by BAR who must compete with repair facilities that provide the same repair services but are not registered or licensed.”

The California Autobody Association writes in support, “Existing law does not adequately address the current market realities regarding services provided by auto repair businesses. Certain automotive services were designated minor in [the] early 1970’s and did not require oversight by the BAR. However, automotive technology has advanced significantly since then, which requires much more specialized training and equipment to properly repair vehicles.”

SUPPORT AND OPPOSITION:

Support:

Automotive Service Councils of California

California Autobody Association

California Automotive Business Coalition

California Tire Dealers Association

Les Schwab Tire Centers

Opposition:

None on file as of May 31, 2016.

-- END --

Date of Hearing: April 29, 2015

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Jimmy Gomez, Chair

ABPCA Bill Id:AB 873

Author:(Jones) – As Amended Ver:April 13, 2015

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

SUMMARY: This bill, effective January 1, 2017, sunsets the definitions used for purposes of the Automotive Repair Act and recasts them with several significant changes, and directs the Director of the Department of Consumer Services to adopt regulations defining "minor services." Specifically, this bill:

1. Modifies the definition of "repair of motor vehicles" to:

1. Delete the list of minor services excluded from its definition, and thus can currently be performed by those exempted from registration with the Bureau of Automotive Repair (BAR), and instead requires the Director of the Department of Consumer Affairs (DCA) to adopt new regulations by January 1, 2017, defining "minor services."

2. Add roadside services to the list of services that are excluded from its definition, and thus can be performed by those not registered with BAR.

2. Modifies the definition of "automotive technician" to delete the provisions describing the specific work an automotive technician performs, and instead aligns it with the services determined in the new regulations.

FISCAL EFFECT:

DCA costs (special funds) to update regulations will be minor and absorbable within existing resources.

COMMENTS:

1. Purpose. According to the author, this bill “will require the [BAR], within the [DCA], to determine through regulation which automotive services are minor and which necessitate oversight. The Automotive Repair Act of 1971 has not been significantly update[d] since it was enacted. Existing law should be updated and a determination of what constitutes minor repair work and major repair should be developed through the formal rulemaking process so that:

1. The [BAR] takes a comprehensive technical approach to determine what business practices necessitate registration as an automotive repair dealer; and

2. This determination can be periodically updated through the rulemaking process, as the automotive industry continues to evolve. This approach allows the industry to participate through the rulemaking process to help determine which services are minor and should be excluded from registration and which services are major and require registration.”

1. Background. In 2014, the Assembly Committee on Business, Professions and Consumer Protection and the Senate Committee on Business, Professions and Economic Development (Committees) conducted joint oversight hearings to review the BAR and eight other regulatory entities. In its Sunset Report to the Committees, the BAR raised the issue of ancillary services which have typically been seen as simple enough to be considered exempt areas of practice, and therefore not subject to regulation and registration. Examples include changing and fixing tires, replacing spark plugs, batteries and fan belts. The BAR noted that, because of advances in automotive technology, many of these services now require specialized repair skills and may require the removal of automotive systems, engine components, shrouds or other electrical equipment.

2. Motor Club Exemption. Certified motor clubs are permitted to provide emergency road services, such as the repair or replacement of the equipment, tires, or mechanical parts of a motor vehicle. Current law specifically exempts some of the motor club emergency roadside services from registration with the BAR, such as tire repair and battery installation. This bill would delete the list of exempted services that normally exempt motor clubs from registration with the BAR. However, it will also add language specifically exempting motor club roadside services.

3. New Approach. This bill is the fourth attempt to bring tire-only businesses under the enforcement jurisdiction of BAR. While the previous attempts added the provisions directly in statute, this bill instead provides the option to make the changes through the regulatory process which allows for stakeholder input.

4. Prior Legislation.

1. AB 1665 (Jones) of 2014, would have deleted “repairing tires” and “changing tires” from the list of repair services exempt from registration as an automotive repair dealer under the BAR. It would have also required an automotive repair dealer to be capable of diagnosing and servicing TPMS, as specified. This bill was vetoed Governor Brown. His veto message stated that further review and input from stakeholders was needed.

2. SB 202 (Galgiani) of 2013, would have deleted repairing and changing tires from those exclusion lists. It would have also excluded tire services provided by or on behalf of a motor club or an operator of a tow truck from the definitions of “repair of motor vehicles” and “automotive technician.” This bill was held on this Committee's Suspense File.

3. AB 2065 (Galgiani) of 2012 was substantially similar to SB 202. This bill was held on this Committee's Suspense File.

Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081

Date of Hearing: April 21, 2015

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Susan Bonilla, Chair

ABPCA Bill Id:AB 873

Author:(Jones) – As Amended Ver:April 13, 2015

SUBJECT: Automotive repair.

SUMMARY: Deletes the current list of minor repairs exempted from registration with the Bureau of Automotive Repair (BAR), effective January 1, 2017, and requires the director of the Department of Consumer Affairs (DCA), prior to January 1, 2017, to adopt regulations defining a new list.

EXISTING LAW:

1. Establishes the BAR under the supervision and control of the director of DCA (Business and Professions Code (BPC) § 9882)

2. Regulates the business of automotive repair and makes it unlawful for any person to be an automotive repair dealer unless registered with the BAR. (BPC § 9880-9889.68)

Defines the “repair of motor vehicles” to mean all maintenance of, and repairs to, motor vehicles, except the following services: (BPC § 9880.1(e))

1. Repairing tires;

2. Changing tires;

3. Lubricating vehicles;

4. Installing light bulbs, batteries, windshield wiper blades and other minor accessories;

5. Cleaning, adjusting and replacing spark plugs;

6. Replacing fan belts, oil and air filters; and

7. Other minor services the director determines to be customarily performed by a gasoline service station.

1. States that the director shall not designate a service as minor if the director finds that performance of the service requires mechanical expertise, has given rise to a high incidence of fraud or deceptive practices or involves a part of the vehicle essential to its safe operation. (BPC § 9880.1(e))

2. Defines an "automotive repair dealer" as a person who engages in the business of repairing or diagnosing malfunctions of motor vehicles for compensation. (BPC § 9880.1(a))

3. Defines “automotive technician” as a dealer, or a person employed by a dealer, who performs maintenance, diagnostics, repair, removal or installation of specified integral automotive components, excluding the services excluded from repair of motor vehicles. (BPC § 9880.1(g))

4. Regulates motor clubs and makes it unlawful to provide motor club services, including emergency road services, without a certificate of authority from the insurance commissioner. (Insurance Code (INS) § 12140-12159)

5. Defines “emergency road service” as the adjustment, repair or replacement by a motor club of the equipment, tires, or mechanical parts of a motor vehicle so that it may be operated under its own power. (INS § 12146)

THIS BILL:

1. Adds a new subsection that requires the director to adopt regulations prior to January 1, 2017 defining “minor services” as used in the definition of automotive repair.

2. Adds a new subsection that repeals BPC § 9880.1 on January 1, 2017.

3. Adds a new BPC § 9880.1 that becomes operative on January 1, 2017. It is identical to the old section, except that it:

   1. Recasts the definition of “repair of motor vehicles” to delete the list of excluded services and instead exclude minor services as defined by the director and roadside services;

   2. Recasts the definition of “automotive technician” to delete the list of excluded services and the provisions describing the specific work an automotive technician performs;

   3. Defines “roadside services” as the services performed upon a motor vehicle for the purpose of transporting the vehicle or to permit it to be operated under its own power, by or on behalf of a motor club holding a certificate of authority issued by the insurance commissioner; and

   4. Declares that the regulations adopted by the director that define “minor services” continue in effect on and after January 1, 2017 and allows the director to amend or repeal the regulations, consistent with the chapter.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

1. Purpose. This bill is sponsored by the author. According to the author, this bill “will require the [BAR], within the [DCA], to determine through regulation which automotive services are minor and which necessitate oversight.

The Automotive Repair Act of 1971 has not been significantly update[d] since it was enacted. Existing law should be updated and a determination of what constitutes minor repair work and major repair should be developed through the formal rulemaking process so that:

1. The [BAR] takes a comprehensive technical approach to determine what business practices necessitate registration as an automotive repair dealer; and

2. This determination can be periodically updated through the rulemaking process, as the automotive industry continues to evolve. This approach allows the industry to participate through the rulemaking process to help determine which services are minor and should be excluded from registration and which services are major and require registration.”

1. Background. In 2014, the Assembly Committee on Business, Professions and Consumer Protection and the Senate Committee on Business, Professions and Economic Development (Committees) conducted joint oversight hearings to review the BAR and eight other regulatory entities. As a part of the review, staff of the Committees made recommendations for each agency and program reviewed by the Committees.

In its Sunset Report to the Committees, the BAR raised the issue of ancillary services which have typically been seen as simple enough to be considered exempt areas of practice, and therefore not subject to regulation and registration, such as replacing spark plugs, batteries and fan belts. The BAR noted that, because of advances in automotive technology, many of the services require specialized repair skills and may require the removal of automotive systems, engine components, shrouds or other electrical equipment.

One of the examples cited by the BAR was tire services. The federal Transportation Recall Enhancement, Accountability and Documentation (TREAD) Act requires that, beginning with the 2006 model year, every new vehicle of less than 10,000 pounds gross vehicle weight rating be equipped with a Tire Pressure Monitoring System (TPMS) (Title 49 of the United States Code §§ 30101-30170).

As a result, many modern vehicles are equipped with a TPMS that may require the technician to update the vehicle’s on-board diagnostic system when serviced. A malfunctioning TPMS can lead to tire blowouts, undetected slow leaks and other dangerous conditions.

Another example is spark plugs. According to the BAR, some vehicle manufacturers have made spark plugs inaccessible without removal of other major systems, even the removal of motor mounts and, in a few cases, the entire engine. Because these examples can lead to dangerous situations for consumers, BAR still believes that an automotive repair dealer registration should be required for those performing those types of repairs. By requiring the director to determine a new list of exclusions that can change to keep up with technology, this bill seeks to ensure the regulation of complicated repairs and maintenance.

Motor Club Exemption. In California, motor clubs that provide automotive benefits and discounts to their members are regulated by the Department of Insurance. All motor clubs are required to apply for a certificate of authority (INS § 12160). In order to qualify for a certificate of authority, motor clubs must meet minimum financial requirements ($100,000) and provide supporting documents (INS §12162). They are not required to meet any personnel or training standards. According to the department’s website, there are currently 23 certified motor clubs.

Certified motor clubs are permitted to provide emergency road services, such as the repair or replacement of the equipment, tires, or mechanical parts of a motor vehicle (INS § 12146). Current law specifically exempts some of the motor club emergency roadside services from registration with the BAR, such as tire repair and battery installation (BPC § 9880.1(e)).

This bill will delete the list of exempted services that normally exempt motor clubs from registration with the BAR. However, it will also add language specifically exempting motor club emergency roadside services. The new exemption appears to be broader than current law—it will exempt emergency roadside service on all mechanical parts, not just tires, batteries, or windshield wipers.

Stakeholder Input. Last year, AB 1665 (Jones) of 2014, would have deleted repairing and changing tires from the list of excluded minor services. The bill was vetoed by Governor Brown to give the BAR the opportunity to include more stakeholder input.

To address the concerns of the veto, the BAR plans to hold industry stakeholder workshops following its quarterly BAR Advisory Group meetings. The first is scheduled for April 22, 2015. The Advisory Group is composed of a range of industry professionals. The decision to have the industry stakeholder workshops was decided before this bill was introduced.

3. Previous Related Legislation. AB 1665 (Jones) of 2014, would have deleted “repairing tires” and “changing tires” from the list of repair services exempt from registration as an automotive repair dealer under the BAR. It would have also required an automotive repair dealer to be capable of diagnosing and servicing TPMS, as specified. NOTE: This bill was vetoed Governor Brown. He stated in his veto message that further review and input from stakeholders was needed.

SB 202 (Galgiani) of 2013, would have deleted repairing and changing tires from those exclusion lists. It would have also excluded tire services provided by or on behalf of a motor club holding a specified certificate of authority or an operator of a tow truck owned or operated by a person or entity possessing a valid motor carrier permit from the definitions of “repair of motor vehicles” and “automotive technician.” NOTE: This bill was held on the Assembly Appropriations Suspense File.

AB 2065 (Galgiani) of 2012 was essentially the same as SB 202. NOTE: This bill was held on the Assembly Appropriations Committee Suspense File.

ARGUMENTS IN SUPPORT:

The Automotive Service Councils of California writes in support, “Current law (more than 40 years old) declares certain minor services such as: repairing and changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, replacing spark plugs, replacing fan belts, oil and air filters are exempt from BAR oversight. Because of the advances in automotive technologies many of these minor services now require more specialized training and skills and may necessitate the removal of engine components and other electrical and computer equipment.

There also is an unfair playing field for those businesses that are currently registered/licensed by BAR who must compete with repair facilities that provide the same repair services but are not registered or licensed.”

The California Autobody Association writes in support, “Existing law does not adequately address the current market realities regarding services provided by auto repair businesses. Certain automotive services were designated minor in [the] early 1970’s and did not require oversight by the BAR. However, automotive technology has advanced significantly since then, which requires much more specialized training and equipment to properly repair vehicles.”

ARGUMENTS IN OPPOSITION:

None on file.

IMPLEMENTATION ISSUE:

The bill will require the director to adopt regulations defining “minor services,” but it does not specify how detailed the regulations must be. Similarly, if the director is not able to adopt regulations by January 1, 2017, there could be a period of time where there are no exclusions.

However, as noted above, BAR has been working to resolve Governor Brown’s veto concerns and has taken steps to reach out to stakeholders. It also plans to hold additional stakeholder workshops to specifically address industry concerns.

REGISTERED SUPPORT:

Automotive Service Councils of California

California Autobody Association
California Tire Dealers Association

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Vincent Chee / B. & P. / (916) 319-3301