PWA is committed to educating its members on compliance issues with the California Air Resource Board. One of the largest problems right now is lack of knowledge on the matter. So here is what you need to know and what steps your business should be taking to protect itself from costly audit fines.
On February 8, 1990, the California Air Resources Board (CARB) amended Title 13 of the California Code of Regulations. This provided new procedures for the “Criteria for Evaluation of Add-On or Modified Parts.” These detailed procedures outline how to obtain exemptions from Vehicle Codes 27156 and 38391. Theses Vehicle Code sections provide that no person shall install, sell, offer to sell, or advertise any device, apparatus, or mechanism intended for use with, or as a part of, any required motor vehicle pollution-control device or system which alters or modifies the original design or performance of any such motor vehicle pollution-control device or system, unless exempted by the CARB. Many pages can be written about the specific parts effected and how the certification process works. SEMA has a great resource that can be referred to for more detail; look at www.sema.org for their Black Book: Emissions Certification Guidelines document. This is especially important for manufacturers looking to obtain Exemption Order (E.O.) compliance certificates.
A more pressing issue, for many of PWA members is the frequency of Air Resource Board audits being conducted at the distributor level of the supply chain. Several distributors have been audited by CARB and have been heavily fined over the last 18 months. Fines are significant and pose a real threat to any businesses financial health. Distributors need to be very aware they might be next and change their business practices and product decisions now to protect themselves. Some basic guidelines many have run their businesses on and manufacturers have advertised like “49 State Legal” are now being questioned. SEMA and PWA’s presentations at the SEMA show last November, clarified that any part illegal to sell in California, is illegal to sell at the Federal level as well. While the Federal EPA does not have an official compliance process, the CARB EO process should be considered the industry standard for manufacturers and distributors to run their businesses by. Many feel the industry is in a reactive position right now and change is only happening after fines are imposed.
Manufacturers should have a complete understanding of the legislation and be able to share how their company is complying. Those who have addressed their obligation will absolutely have a competitive advantage with distributors. Those that don’t comply will need to quickly address their parts compliance and better communicate what parts are legal to sell. Utilizing SEMA’s Garage Emission Lab will provide more timely turnarounds and cost savings for those who need to obtain E.O.’s. It is important to note that quality CARB EO data from the manufacturer will help boost their sales as other manufacturers continue to ignore the law or have to catch up.
Distributors should increase their knowledge of what parts have EO’s assigned. This awareness will prompt them to selectively choose only those compliant brands and items to sell. Every distributor and jobber should be “locking” out part numbers that do not have EO’s so they don’t mistakenly buy or sell them. Ultimately no distributor should knowingly sell a part that will result in hefty fines. It is essential that frequent updates on EO’s and clarification on questionable parts are requested from the manufacturer. Lawyers should be contacted to discuss selling disclaimers and assess compliance risk. Distributors should develop a plan to share the CARB EO information with their customers. Overall distributors need to act now; audits are expensive and time consuming.
One last note about the risk to the entire supply channel, specifically at the jobber and retail level. It is important to remember that everyone associated with selling parts; even in a broader sense, is at risk. The Vehicle Code section provides “that no person shall install, sell, offer to sell, or advertise”… “unless exempted by the CARB.” On a positive note, as manufacturers and distributors make changes to be in CARB compliance, it will reduce the risk to jobbers and retailers. While the complexity and available man power to conduct audits maybe limited, the risk is still there and should not be ignored. Protect your business and don’t put this off another day.