California Senate Bill SB1460 Latest Draft

 BILL NUMBER: SB 1460AMENDED BILL TEXT AMENDED IN SENATE APRIL 17, 2012 INTRODUCED BY Senator Yee  (   Coauthors:   Assembly Members   Hagman   and Perea   )  FEBRUARY 24, 2012 An act to amend Sections 9880.1, 9884.8, and 9884.9 of,  to add Section 9880.15 to,  and to repeal and add Sections 9875  ,   and  9875.1  , and 9875.2  of, the Business and Professions Code, relating to automotive repair. LEGISLATIVE COUNSEL'S DIGEST SB 1460, as amended, Yee. Automotive repair: replacement parts. 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 provides that a person who fails to comply with the act is guilty of a misdemeanor punishable by a fine not exceeding $1,000, by imprisonment not exceeding 6 months, or by both that fine and imprisonment, except as defined. Existing law prohibits an insurer from requiring the use of nonoriginal equipment or aftermarket replacement parts for repairs on an insured's automobile unless the insured has been given advance notice of the use of these parts in the repair estimate as well as information on the warranty applicable to these replacement parts. This bill would require an automotive repair dealer or insurer who uses or directs the use of replacement crash parts, as defined, to follow specified procedures when using replacement crash parts, to expressly notify the automobile owner regarding the use of specific categories of crash parts in making the repairs, and to provide disclosures as to the warranty for those parts, as specified. Because this bill would create a new crime, the bill would create 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. Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 9875 of the Business and Professions Code is repealed. SEC. 2. Section 9875 is added to the Business and Professions Code, to read: 9875. As used in this chapter, the following definitions shall apply: (a) "Auto body repair shop" has the meaning specified in Section 9889.51. (b) "Certified new non-OEM crash part" means a new non-OEM replacement crash part that: (1) Has been certified by an American National Standards Institute (ANSI) accredited standards developer that develops and maintains a consensus of quality standards for competitive crash repair parts. (2) Is identified by a unique serial number or production lot number that enables full traceability  through the certifying entity  .  (3) Has a manufacturer's warranty that meets or exceeds the original equipment manufacturer's warranty for the applicable original equipment manufacturer (OEM) crash part as defined in subdivision (f).  (c) "Replacement crash part" means any nonmechanical part made of sheet metal, aluminum, plastic, fiberglass, or a similar material that is generally used in the repair of a crashed vehicle. This includes outer panels, hoods, fenders, doors, trunk lids, bumper parts (excluding bumper covers), and radiator supports, but does not include glass, wheel covers, or grilles. (d) "Insurer" means an insurance company or any person authorized to represent the insurer with respect to a claim. (e) "New non-OEM crash part" means a replacement crash part manufactured or sold by an entity other than the OEM. (f) "Original equipment manufacturer (OEM) crash part" means a replacement crash part manufactured or commissioned by a car company, under its own name, for motor vehicles that the car company manufactures or distributes under its own name. (g) "Recycled crash part" means a crash part removed from a vehicle. (h) "Remanufactured or reconditioned crash part" means a recycled crash part that has been refurbished or restored to its original condition or appearance for use on another vehicle. SEC. 3. Section 9875.1 of the Business and Professions Code is repealed. SEC. 4. Section 9875.1 is added to the Business and Professions Code, to read: 9875.1. (a) Replacement crash parts that are recycled, remanufactured, or reconditioned OEM,  new non-OEM,  or certified new non-OEM crash parts  shall not   may  be used in determining the amount to be paid by the insurer for the repair of a motor vehicle  unless   when  both of the following conditions are met: (1) The insurer discloses in writing, either in policy language or in a separate notification, that the insurer may use parts other than OEM crash parts to determine the amount to be paid to repair a damaged motor vehicle in a manner sufficient to restore the vehicle to its preloss condition. (2) The auto body repair shop discloses  in writing  whether the replacement crash part to be used in the repair is any of the following: (A) A recycled, remanufactured, or reconditioned OEM or certified new non-OEM crash part. (B) An OEM crash part. (C) A certified new non-OEM crash part. (b)  Certified   Use of a certified  new non-OEM crash  parts   part, if installed and a reasonable fit,  shall be presumed sufficient to return the motor vehicle to its preloss condition.  (c) A violation of this section shall be enforced by the penalties provided in Section 790.06 of the Insurance Code.   (c) The presumption in subdivision (b) shall not apply in any of the following circumstances:   (1) The certified new non-OEM crash part is installed on a motor vehicle that is subject to a lease with the original equipment manufacturer in which the lease contract requires damage to be repaired using only an original equipment manufacturer (OEM) crash part.   (2) The installation of which would permit the original equipment manufacturer to void its manufacturer's vehicle warranty under permission of a Federal Trade Commission waiver of the "tie-in sales" prohibition under the Magnuson-Moss Warranty Act of 1975 (15 U.S.C. Sec. 2301), which otherwise guarantees consumers the ability to elect either an original equipment manufacturer (OEM) crash part or a non-OEM replacement crash part to repair a vehicle.   (3) The vehicle to be repaired is less than one year old.   SEC. 5.   Section 9875.2 of the Business and Professions Code is repealed.   SEC. 6.   Section 9875.2 is added to the Business and Professions Code, to read: 9875.2. A supplier who supplies a certified new non-OEM crash part shall do all of the following: (a) Provide a written consumer warranty that equals or exceeds the warranty provided by the car company for the type of OEM crash part. (b) Utilize an electronic tracking system that tracks the manufacturer part number, lot number, and repair shop license number for recall purposes. (c) Analyze any crash part returned as defective and report the defective part number, lot number, and nature of the defect to the manufacturer and to the certifying entity. (d) Report annually to the Bureau of Automotive Repair defect rates greater than 5 percent for certified new non-OEM crash parts installed in 1,000 or more vehicles. (e) Provide the auto body repair shop with a service guarantee on any defective certified new non-OEM crash part which includes a full refund within 60 days.   SEC. 7.   SEC. 5.  Section 9880.1 of the Business and Professions Code is amended to read: 9880.1. The following definitions apply for the purposes of this chapter: (a) "Automotive repair dealer" means a person who, for compensation, engages in the business of repairing or diagnosing malfunctions of motor vehicles, including an auto body repair shop as defined in Section 9889.51. (b) "Chief" means the Chief of the Bureau of Automotive Repair. (c) "Bureau" means the Bureau of Automotive Repair. (d) "Motor vehicle" means a passenger vehicle required to be registered with the Department of Motor Vehicles and all motorcycles whether or not required to be registered by the Department of Motor Vehicles. (e) "Repair of motor vehicles" means all maintenance of and repairs to motor vehicles performed by an automotive repair dealer including automotive body repair work, but excluding those repairs made pursuant to a commercial business agreement and also excluding repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades and other minor accessories, cleaning, adjusting, and replacing spark plugs, replacing fan belts, oil, and air filters, and other minor services, which the director, by regulation, determines are customarily performed by gasoline service stations. No service shall be designated as minor, for purposes of this section, 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. (f) "Person" includes  a  firm, partnership, association, limited liability company, or corporation. (g) An "automotive technician" is an employee of an automotive repair dealer or is that dealer, if the employer or dealer repairs motor vehicles and who for salary or wage performs maintenance, diagnostics, repair, removal, or installation of any integral component parts of an engine, driveline, chassis or body of any vehicle, but excluding repairing tires, changing tires, lubricating vehicles, installing light bulbs, batteries, windshield wiper blades, and other minor accessories; cleaning, replacing fan belts, oil and air filters; and other minor services which the director, by regulation, determines are customarily performed by a gasoline service station. (h) "Director" means the Director of Consumer Affairs. (i) "Commercial business agreement" means an agreement, whether in writing or oral, entered into between a business or commercial enterprise and an automobile repair dealer, prior to the repair which is requested being made, which agreement contemplates a continuing business arrangement under which the automobile repair dealer is to repair any vehicle covered by the agreement, but does not mean any warranty or extended service agreement normally given by an automobile repair facility to its customers. (j) "Customer" means the person presenting a motor vehicle for repair and authorizing the repairs to that motor vehicle. "Customer" shall not mean the automotive repair dealer providing the repair services or an insurer involved in a claim that includes the motor vehicle being repaired or an employee or agent or a person acting on behalf of the dealer or insurer. (k) The definitions set forth in Section 9875 apply to this chapter.  SEC. 6.   Section 9880.15 is added to the   Business and Professions Code   , to read:   9880.15. A supplier who supplies a certified new non-OEM crash part shall do all of the following: (a) Provide a written consumer warranty that equals or exceeds the warranty provided by the car company for the type of OEM crash part. (b) Utilize an electronic tracking system that tracks the manufacturer part number, lot number, as described in subdivision (b) of Section 9875, and repair shop license number for recall purposes. (c) Analyze any crash part returned as defective and report the defective part number, lot number, and nature of the defect to the manufacturer and to the certifying entity. (d) Report annually to the bureau defect rates greater than 5 percent for certified new non-OEM crash parts installed in 1,000 or more vehicles. (e) Provide the auto body repair shop with a service guarantee on any defective certified new non-OEM crash part that includes a full refund within 60 days.   SEC. 8.   SEC. 7. Section 9884.8 of the Business and Professions Code is amended to read: 9884.8. (a) All work done by an automotive repair dealer, including all warranty work, shall be recorded on  an   the final  invoice and shall describe all service work done and parts installed. Service work and parts shall be listed separately on the final invoice, which shall also state separately the subtotal prices for service work and for parts, not including sales tax, and shall state separately the sales tax, if any, applicable to each. (b) The final invoice shall clearly state whether any used, rebuilt, or reconditioned parts are installed. If a part of a component system is composed of new and used, rebuilt or reconditioned parts, that final invoice shall clearly state that fact. (c) The final invoice shall itemize each replacement crash part as an OEM, new non-OEM, certified new non-OEM, recycled, remanufactured, or reconditioned crash part. (d) The final invoice shall identify the supplier providing the warranty for each certified new non-OEM crash part, and the tracking information. One copy of the final invoice shall be provided to the customer and one copy shall be retained by the automotive repair dealer. (e) The final invoice shall include the disclosure language set forth in subdivision (c) of Section 9884.9. (f) Upon installation of a certified new non-OEM crash part, the automotive repair dealer shall transfer the unique identification information to the final invoice for tracking purposes. (g) Upon installation of a certified new non-OEM crash part, the automotive repair dealer shall transmit the tracking information to the  certifying entity   supplier  in the form provided by the  certifying entity  supplier  of the replacement crash part to enable traceability.  SEC. 9.  SEC. 8.  Section 9884.9 of the Business and Professions Code is amended to read: 9884.9. (a) The automotive repair dealer shall provide to the customer an estimated price for labor and parts necessary for a specific job in the form of a written estimate. No work shall be done and no charges shall accrue before authorization to proceed is obtained from the customer. No charge shall be made for work done or parts installed in excess of the estimated price without the oral or written consent of the customer that shall be obtained at some time after it is determined that the estimated price is insufficient and before the work not estimated is done or the parts not estimated are installed. Written consent or authorization for an increase in the original estimated price may be provided by electronic mail or facsimile transmission from the customer. The bureau may specify in regulation the procedures to be followed by an automotive repair dealer if an authorization or consent for an increase in the original estimated price is provided by electronic mail or facsimile transmission. If that consent is oral, the dealer shall make a notation on the work order of the date, time, name of person authorizing the additional repairs, and telephone number called, if any, together with a specification of the additional parts and labor and the total additional cost, and shall do either of the following: (1) Make a notation on the invoice of the same facts set forth in the notation on the work order. (2) Upon completion of the repairs, obtain the customer's signature or initials to an acknowledgment of notice and consent, if there is an oral consent of the customer to additional repairs, in the following language: ""I acknowledge notice and oral approval of an increase in the original estimated price. _________________________ (signature or initials)'' Nothing in this section shall be construed as requiring an automotive repair dealer to give a written estimated price if the dealer does not agree to perform the requested repair. (b) The automotive repair dealer shall include with the written estimated price a statement of any automotive repair service that, if required to be done, will be done by someone other than the dealer or his or her employees. No service shall be done by other than the dealer or his or her employees without the consent of the customer, unless the customer cannot reasonably be notified. The dealer shall be responsible, in any case, for any service in the same manner as if the dealer or his or her employees had done the service. (c) In addition to subdivisions (a) and (b), an automotive repair dealer, when doing auto body or collision repairs, shall provide an itemized written estimate for all parts and labor to the customer. The estimate shall contain all of the following: (1) A description of labor and parts separately. (2) An identification of each part, indicating whether the replacement part is new, used, rebuilt, or reconditioned. (3) An identification on the written estimate indicating whether the replacement crash part is an OEM, certified new non-OEM, new non-OEM, recycled, remanufactured, or reconditioned crash part. (4) A disclosure of the replacement crash part warranty provided by the supplier. (d) A customer may designate another person to authorize work or parts supplied in excess of the estimated price, if the designation is made in writing at the time that the initial authorization to proceed is signed by the customer. The bureau may specify in regulation the form and content of a designation and the procedures to be followed by the automotive repair dealer in recording the designation. For the purposes of this section, a designee shall not be the automotive repair dealer providing repair services or an insurer involved in a claim that includes the motor vehicle being repaired, or an employee or agent or a person acting on behalf of the dealer or insurer.  SEC. 10.   SEC. 9.  No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.