HOUSE BILL REPORT

HB 1501

BYRepresentatives Wang, Patrick, Sayan, Zellinsky, O'Brien, Gallagher, Smith, Schoon, Fisher, Walker, Cole, Lux and Doty

Regulating the use of motor vehicle aftermarket crash parts.

House Committe on Commerce & Labor

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (7)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, Sanders and Sayan.

Minority Report:  Do not pass.  (2)

      Signed by Representatives Patrick and Walker.

House Staff:Joan Elgee (786-7166)

AS REPORTED BY COMMITTEE ON COMMERCE & LABOR JANUARY 29, 1988

BACKGROUND:

Domestic motor vehicle manufacturers have for years contracted with Taiwanese and other foreign producers to make original and replacement parts.  More recently, foreign producers have begun making exterior sheet metal replacement parts independently, in competition with original manufacturers.  These "aftermarket crash parts" are generally less expensive than original manufacturer parts, but controversy has arisen over their quality.

At least six states, including Oregon, have enacted legislation regarding aftermarket crash parts.  The provisions range from merely requiring disclosure to the consumer to requiring an insurer to obtain the owner's permission when specifying an aftermarket crash part unless the part has been certified by an independent test facility to be at least equivalent to the part being replaced.

SUMMARY:

SUBSTITUTE BILL:  If an automotive repairman or an insurer prepares an estimate based on the use of any aftermarket crash parts, the repairman or the insurer must make the following disclosure to the consumer on the estimate:

      "This estimate has been prepared based on the use of motor vehicle crash parts that were not manufactured or supplied by the manufacturer of your motor vehicle.  The parts must be certified in accordance with RCW ______ (the provisions) to be at least the same quality as the parts being replaced.  Upon request, we will provide you with a copy of any warranty for such parts for comparison purposes."

An "aftermarket crash part" is an exterior replacement part, sheet metal or plastic, which is generally installed as the result of a collision, and which is not made by the original manufacturer. "Certified" means tested and approved by an independent test facility having the capability to scientifically analyze automotive parts to be the same kind of part as the part being replaced and at least the same quality with respect to fit, finish, function, and corrosion resistance.

An automotive repairman shall obtain the customer's written consent to supply or install any aftermarket crash part for which the repairman prepared the estimate. The customer must give specific written consent to use noncertified parts.  An insurer shall not require the use of noncertified parts for which the insurer prepared the estimate unless the insurer obtains the written consent of the registered owner or his or her authorized representative.

An original equipment manufacturer supplying a crash part shall warrant that the part meets the same quality standards used in manufacturing the original equipment being replaced.

A violation of the provisions constitutes a consumer protection act violation.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The disclosure statement to consumers is modified:  The provision stating that the use of aftermarket crash parts may affect any remaining warranties of the original manufacturer is deleted and language is added stating that the parts must be certified unless the consumer agrees to accept noncertified parts.

The exclusion in the definition of "aftermarket crash parts" for parts made "for" the original manufacturer is striken.

The consent provisions made a part of the disclosure statement are eliminated.  Automotive repairman must continue to obtain the customer's written consent to use aftermarket crash parts, and must obtain specific consent to use noncertified parts.  The insurer's requirement to obtain consent is changed to require written consent only if noncertified parts are used.

Fiscal Note:      Requested February 1, 1988.

Effective Date:The bill takes effect January 1, 1989.

House Committee ‑ Testified For:    Don Romano, Nissan; Todd Miller, Autobody Craftsman Association; Mel Eayrs, Autobody Craftsman Association and Mel's Intercity Collision; Bob Kalwitter, Ford Dealer; Bill Vachter, United Auto Workers; Richard Dugally, Ford Motor Company; Ron Wickham, Honda; Bob Mickey, Autobody Craftsman Association; and Ken Campbell, Autobody Craftsman Association and Redmond Auto Body.

House Committee - Testified Against:      Robert Zeman, National Association of Independent Insurers; Dan Wolfe, Safeco; Jay Zeller, Fitz Auto Parts; Robert Alexander, Eagle Automotive; Jean Leonard, State Farm Insurance; Mike Kapphahn, Farmers Insurance.

House Committee - Testimony For:    Consumers should have the right to know if replacement parts are not supplied by the original manufacturer.  Aftermarket parts have quality problems involving fit, corrosion resistance, and safety, and consequently a vehicle repaired with aftermarket parts may have a lower resale value.  Insurance companies are forcing repair shops to use aftermarket parts, but the repair shop gets blamed when there are problems.  Insurers claim that aftermarket parts save money, but any savings have not been passed on to the consumer.

House Committee - Testimony Against:      The bill will drive out aftermarket parts, which are a low cost option which have also resulted in the lowering of prices for original manufacturer replacement parts. Many insurance companies are already disclosing use of aftermarket parts, and some guarantee repairs. Generally aftermarket parts are equal in quality to original equipment. There is no current capability to certify parts.