2013 -- H 6140

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LC02606

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO BUSINESSES AND PROFESSIONS - AUTOMOBILE BODY REPAIR

SHOPS

     Introduced By: Representatives Ucci, and Corvese

     Date Introduced: May 21, 2013

     Referred To: House Corporations

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 5-38-5 of the General Laws in Chapter 5-38 entitled "Automobile

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Body Repair Shops" is hereby amended to read as follows:

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     5-38-5. Rules and regulations. -- The auto collision repair licensing advisory board shall

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with the director's approval:

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      (1) Establish any rules, regulations, and procedures that it deems appropriate, and all

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those rules, regulations, and procedures constitute a public record.

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      (2) Establish standards for sanitary, hygienic, and healthful conditions of the work

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premises and facilities used by persons licensed by the board.

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      (3) Establish minimum requirements for the licenser of auto body repair shops.

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      (4) Establish minimum requirements for the certification of auto repair technicians, other

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than those whose work is limited to glass repair and/or replacement.

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     (5) Establish two (2) classifications of full collision licensees based upon the following:

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     (i) Class A Certification: To be eligible for Class A certification, a full collision licensed

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auto body repair facility must or exceed the following requirements:

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     (A) Comply with all requirements for licensure promulgated by the department pursuant

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to subdivisions (2), (3), and (4) above; and

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     (B) Have the ability to:

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     (I) Obtain proper specifications for collision repairs through an industry recognized

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computer program with periodic updates for each vehicle being repaired;

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     (II) Make three dimensional measurements that are verified by a computer for each

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vehicle being repaired;

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     (III) Diagnose electronic malfunctions with computer assistance;

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     (IV) Inspect airbags and other occupant restraint devices to the specifications of the

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manufacturer;

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     (V) Perform welding to manufacturer specifications for aluminum and high strength steel

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using equipment, including, but not limited to, an inverter resistance welder;

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     (VI) Refinish vehicles using a paint system with a computerized mixing technology and a

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designated prep station;

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     (VII) Perform repairs with emissions reducing equipment;

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     (VIII) Dispose of hazardous waste pursuant to regulation;

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     (IX) Maintain a healthy work environment including, but not limited to, providing all

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necessary respiratory equipment for refinishing technicians;

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     (X) Hoist vehicles on a lift for full inspection;

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     (XI) Ensure customer satisfaction by providing each customer with a written limited

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lifetime warranty that is valid against workmanship defects and maintain a system for

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documenting customer complaints and responses to service;

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     (XII) Demonstrate certification and compliance with environmental agencies such as the

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EPA;

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     (XIII) Provide evidence of certification of all technicians employed at the auto body

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repair facility by methods approved by the department pursuant to subdivision (4) above; and

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     (XIV) Have a facility of a size sufficient to safely conduct repairs and contain all

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necessary equipment and apparatus.

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     (ii) Class B Certification: To be eligible for Class B certification, a full collision licensed

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auto body repair facility must establish that it has met all of the requirements promulgated by the

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Department pursuant to subdivisions (2), (3), and (4) above.

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     (iii) Class certification shall be issued to qualifying auto body repair facilities upon initial

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application for licensure and upon license renewal.

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     (iv) Any designated Class B repair facility may apply for Class A Certification at any

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time in a calendar year with an application fee of three hundred dollars ($300). The new

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classification, if any, resulting from a repair facility’s application received prior to February 1st of

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any calendar year must be updated on the department’s listing of licensed auto body repair shops

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for use by insurers in their auto body labor rate survey. The new classification resulting from a

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licensee’s application filed after February 1st of any calendar year may not be included in the auto

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body labor rate survey of the same calendar year.

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     (v) Notwithstanding paragraph iii and iv above, all full collision licensed repair facilities

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must apply to the Department for class certification before December 1, 2013 and resulting

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classification designations (A or B) must be issued on or before January 1, 2014 by the

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Department. Any applicant requesting Class A Certification must submit a three hundred dollar

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($300) application fee.

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     (vi) In the event a full collision licensed repair facility does not apply for certification

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prior to December 1, 2013, it will be considered a Class B auto body repair facility.

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     (vii) The Auto Collision Repair Licensing Board shall review the regulations

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promulgated under subdivision (5) herein every two (2) years.

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     (viii) The Department shall adopt such regulations necessary to carry out the provisions

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of this subdivision on or before November 1, 2013.

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     SECTION 2. Section 27-29-4.4 of the General Laws in Chapter 27-29 entitled "Unfair

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Competition and Practices" is hereby amended to read as follows:

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     27-29-4.4. Auto body repair labor rate surveys. -- (a) Every insurance carrier

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authorized to sell motor vehicle liability insurance in the state shall conduct an auto body repair

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labor rate survey, subject to and in accordance with the following provisions:

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      (1)(b) When used in this section the following definitions shall apply:

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      (i)(1) "Auto body labor rate survey" is an analysis of information gathered from auto

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body repair shops regarding the rates of labor that repair shops charge in a certain geographic

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area.

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      (ii)(2) "Prevailing auto body labor rate" means the rate determined and set by an insurer

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as a result of conducting an auto body labor rate survey in a particular geographic area, and used

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by insurers as a basis for determining the cost to settle automobile property damage claims.

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      (iii)(3) "Independent auto body repair facility" means any auto body repair facility that

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does not have a formal agreement and/or written contract with an insurer to provide auto body

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repair services to insureds and/or claimants.

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      (iv)(4) "Direct repair program" means any methods through which an insurer refers,

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suggests, recommends a specific auto body repair facility, with whom the insurer has a formal

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agreement and/or contract to provide auto body repair services, to insureds and/or claimants.

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      (v)(5) "Contract rate" means any labor rate to which an auto body repair facility and an

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insurer have agreed in a formal agreement and/or written contract.

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      (2)(c) Each insurer must conduct an a separate and distinct auto body labor rate survey

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for each classification of auto body shops as established by the Department of Business

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Regulation pursuant to section 5-38-5, in writing, annually to determine a separate and distinct

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prevailing auto body labor rate for fully licensed auto body repair facilities.

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      (3)(d) Insurers may not use an auto body labor rate survey, contract rates from auto body

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repair facilities with which it has a formal agreement or contract to provide auto body repair

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services to insureds and/or claimants, rates paid as a result of subrogation, rates obtained from

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auto body repair facilities in a different classification than the one being surveyed or rates from a

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repair facility holding a limited or special use license.

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      (4)(e) Each auto body labor rate survey shall include the following:

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      (i)(1) The name and address of each shop surveyed in the labor survey;

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      (ii)(2) The total number of shops surveyed;

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      (iii)(3) The prevailing rate established by the insurer for each classification of full

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collision licensed auto body repair facilities; and

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      (iv)(4) A description of the formula or method used to calculate or determine the specific

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prevailing rate reported.

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      (5)(f) Each insurer must report the results of their auto body labor rate survey to the

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department of business regulation insurance division.

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      (6)(g) The department of business regulation must promulgate regulations related to auto

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body labor rate surveys by October 1, 2006 establishing the following:

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      (i)(1) A questionnaire that must be used by all insurers in their labor rate survey;

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      (ii)(2) Date of reporting; and

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      (iii)(3) Number or percentage of shops to be surveyed.

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      (7)(h) The department of business regulation shall review all surveys submitted for

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compliance with this section and any rules and regulations promulgated by the department.

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     (i) If a fully licensed auto body repair facility does not respond to an insurer’s

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questionnaire in the time and method prescribed by the Department of Business Regulation, the

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insurer may reimburse the non-responding auto body repair facility at the prevailing rate it

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established for the lowest auto body shop classification as designated in section 5-38-5.

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     SECTION 3. This act shall take effect upon passage.

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LC02606

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO BUSINESSES AND PROFESSIONS - AUTOMOBILE BODY REPAIR

SHOPS

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     This act would create two (2) classifications for full collision licenses based upon certain

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criteria and require insurance carriers authorized to sell motor vehicle liability insurance to

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conduct auto body repair labor rate surveys by classification in determining reimbursement rates.

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     This act would take effect upon passage.

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LC02606

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