State of California

State Office Building
455 Golden Gate Avenue - Room 1194
San Francisco, CA

December 14, 1978
10:00 a.m.

78-24-1 Approval of Minutes of November 16, 1978 001

78-24-2 Public Hearing to Consider Proposed Emissions Warranty 006
Regulations for Light, Medium, and Heavy-Duty Vehicles,
Including Motorcycles

78-24-3 Other Business -
a. Executive Session - Personnel & Litigation
b. Research Proposals
c. Delegations to Executive Officer

ITEM NO.: 78-24-2

Public Hearing to Consider Proposed Emissions Warranty
Regulations for Light, Medium, and Heavy-Duty Vehicles, Including


Adopt Resolution 78-55.


For over a year, the ARB staff has worked on regulations which
would interpret and clarify the warranty requirements of Health
and Safety Code Section 43204. After conducting meetings with
vehicle manufacturers and members of the automotive service
industry, the staff has revised the proposal it presented to the
Board at its meetings in February and March of 1978. This new
proposal is intended to apprise vehicle owners of their rights
and vehicle manufacturers of their specific obligations under the
statutory warranty requirements.

Major points of the proposal include:

1) The staff has deleted these maintenance sensitive parts from
the Emissions Warranty Parts List in response to concerns
raised by vehicle manufacturers, the automotive service
industry, and the Legislature: cylinders, cylinder heads,
camshafts, air cleaner and element, and carbon canister
filters. For clarity, the staff has defined the term
"warranted part" to mean any emissions-related original
equipment manufacturer (OEM) part which is installed on a
vehicle or engine by a vehicle manufacturer.

2) A vehicle or engine manufacturer would be required to
warrant all "warranted parts" on each vehicle or engine for
either the replacement period of the part or the vehicle's
useful life.

3) Vehicle manufacturers would have to supply to the Executive
Officer copies of their maintenance instructions, "warranted
parts" list, and a statement which describes the vehicle
manufacturer's and the consumer's rights and obligations
under the warranty. These documents would have to be
approved with the preliminary certification application as a
condition of certification.

4) Vehicle manufacturers would be required to reimburse the
vehicle owner for warranted repairs performed somewhere
other than at a manufacturer-approved dealer in an
emergency. The vehicle owner could reasonably be required
to keep receipts and failed parts to receive compensation.

5) Vehicle manufacturers would be required to repair or replace
any other vehicle components damaged by the failure of a
"warranted part."

6) Use by a vehicle owner of any replacement part or any add-on
or modified part would not, per se, be grounds for
disallowing a warranty claim. However damage caused by such
parts would not be the responsibility of the vehicle

7) Vehicle owners could perform maintenance at any repair
facility and could have maintenance performed by any person
without limiting the warranty unless improperly performed
work caused damage to the warranted emissions-related parts.
The failure of a vehicle owner to keep records or to perform
maintenance would not disallow the warranty per se. If
failure to perform maintenance caused damage, such damage
would not be the responsibility of the vehicle manufacturer,
but the rest of the warranty could not be disallowed.

8) The rights and responsibilities of both the vehicle owner
and the manufacturer are specified in the case where a
vehicle fails the Mandatory Vehicle Inspection Program
(MVIP). The "presumption of defect," which was assumed to
arise in the original proposal when a vehicle failed the
MVIP test, has been deleted.

9) In the case of a warranty dispute between a vehicle owner
and the manufacturer, the owner could request that the
Executive Officer mediate a warranty claim. If the
Executive Officer of his/her representative determined that
the vehicle owner's case has merit, a "Finding of Defect"
could be issued. This document would give the vehicle
owner s word some technical support in court.

10) Repairs to a "warranted part" which consist solely of
adjustments to idle air/fuel mixture ratio, curb or high
idle speed, ignition timing, valve lash, injection timing
(diesels), or any combination of these would be exempt from
warranty coverage unless a factory installed adjustment
limiting device were still in place. Any carburetor idle
air/fuel mixture adjustment for 1980 and later passenger
cars and 1981 and later light-duty trucks and medium-duty
vehicles would be covered by the warranty.

11) The replacement parts warranty has been deleted.

The ARB staff has determined that the regulations will
result in an emissions benefit by causing many emissions-
related repairs to be performed which would probably not
have been performed without the regulations.

ITEM NO.: 78-24-3b (1)

Research Proposal No. 802-67 entitled "Economic Impacts of Air
Pollution Control Costs for Selected California Firms"


Adopt Resolution 78-61 approving Research Proposal No. 802-67 for
funding in an amount not to exceed $125,628.


This proposal if funded would provide economic and financial
analyses on selected California firms and industries to estimate
those firms' ability to pay air pollution control costs. The
firms to be analyzed would be chosen in consultation with ARB

The financial analysis would look mainly at the firms' potential
sources of capital and available cash flow to indicate their
profitability and capital availability position in order to
estimate their ability to pay control costs. A financial model
would be developed, computerized, used in the study for the firms
chosen, and turned over to the ARB with a handbook on its use
along with training for ARB staff on how to use the model for
future analyses. The financial data to run the model would be
obtained from Dun s Marketing Services by the contractor and
would be provided to the ARB on computer tape at the end of the
contract. Other information that would be used in the D&R
analysis includes the availability of government financing, state
policies relating to the industries being analyzed, past and
expected future growth of the industries, vintage of technical
processes, technical change and alternative production
techniques, possible substitution of alternative products,
imports and exports of products, and data on multi plant firms
and the California/nonCalifornia split in their operations.

The purposes of this contract would be to provide an independent
identification of those industries (new, old; large, small) best
able and least able to maintain profitability while experiencing
increases in their operating costs. It would also assist the ARB
in the development of control measures. In those cases where the
ARB has alternative options to choose from, knowing different
firms ability to pay would aid the ARB in minimizing the
economic impact of control programs. A major benefit of this
study would be the financial model which will enable the ARB to
perform ability-to-pay analyses for wide range pollutant control