BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2111
                                                                  Page  1

          CONCURRENCE IN SENATE AMENDMENTS
          AB 2111 (Smyth)
          As Amended  August 16, 2010
          Majority vote
           
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          |ASSEMBLY:  |63-0 |(May 28, 2010)  |SENATE: |31-0 |(August 20,    |
          |           |     |                |        |     |2010)          |
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           Original Committee Reference:    B.,P. & C.P.  

           SUMMARY  :   Expands the number of parties who may sell service  
          contracts, requires a service contract reimbursement insurance  
          policy (SCRIP) for all service contracts (SC), permits  
          electronic sets, appliances and their accessories to be covered  
          by SCs, excludes contracts for structural wiring associated with  
          the delivery of cable, telephone, or broadband services from the  
          definition of SC, exempts certain financial institutions and  
          specified electrical device manufacturer or contractors from the  
          definition of "service contract seller," and makes changes to SC  
          provisions, as specified.  

           The Senate amendments  : 

          1)Exclude from the definition of SC a contract in writing to  
            maintain structural wiring associated with the delivery of  
            cable, telephone, or other broadband communications services.

          2)Exclude the following from the terms "SC seller" or "seller:"

             a)   A bank or bank holding company, or the subsidiary or  
               affiliate of either, or a financial institution, licensed  
               under state or federal law, selling or offering to sell a  
               SC unless that entity is financially and legally obligated  
               under the terms of a SC; and,

             b)   An electrical device manufacturer or electrical  
               contractor who constructs, installs, or services units of  
               an electrical system intended to carry electrical energy as  
               part of a building's electrical system, including raceways,  
               conductors, invertors, conduit, wires, switches or other  
               similar devices.

          3)Clarifies that, unless provided for otherwise, refunds shall  








                                                                  AB 2111
                                                                  Page  2

            be made at the seller's option as indicated in the contract,  
            or for a vehicle service contract, at the guarantor's option  
            as determined at the time of cancellation, as specified.

          4)Make technical and clarifying changes.

           EXISTING LAW:  

          1)Makes it unlawful for any person to act as a service contract  
            administrator (SCA) or a SC seller without first registering  
            with the Bureau under the Electronic and Appliance Repair  
            Dealer Registration Law.

          2)Prohibits a SCA, as defined, from being an obligor, as  
            defined, on a SC and existing law requires these SCAs to  
            maintain a SCRIP, as defined.

          3)Defines a SC seller as a person who sells or offers to sell a  
            SC to a SC holder, including a person who is the obligor under  
            a SC sold by the seller, manufacturer, or repairer of the  
            product covered by the SC.

           AS PASSED BY THE ASSEMBLY  , this bill was substantially similar  
          to the version approved by the Senate.  
           
          FISCAL EFFECT  :   According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.  

           

          Analysis Prepared by  :    Sarah Weaver / B.,P. & C.P. / (916)  
          319-3301 


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