Amended in Assembly April 10, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 2740

Introduced by begin delete Committee on Business, Professions and Consumer Protection (Assembly Members Bonilla (Chair), Jones (Vice Chair), Bocanegra, Campos, Dickinson, Eggman, Gordon, Hagman, Holden, Maienschein, Mullin, Skinner, Ting, and Wilk) end delete begin insert Assembly Member Bonilla end insert

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(Principal coauthor: Senator Lieu)

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February 26, 2014

An act to amend Section 9810 of the Business and Professions Code, relating to consumer affairs.

LEGISLATIVE COUNSEL’S DIGEST

AB 2740, as amended, begin delete Committee on Business, Professions and Consumer Protection end delete   begin insert Bonilla end insert . Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation.

Existing law establishes the Bureau of Electronic and Appliance Repair, Home Furnishings, and Thermal Insulation under the supervision and control of the Director of Consumer Affairs. Existing law requires the director to administer and enforce those provisions relating to the licensure and regulation of electronic and appliance repair service dealers and persons engaged in various businesses associated with home furnishings. Existing law requires the Governor to appoint a chief of the bureau to serve under the direction and supervision of the director, as specified.

This bill would require that the powers and duties of the bureau, as provided, be subject to review by the appropriate policy committees of the Legislature as if these provisions were scheduled to be repealed on January 1, 2019.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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(a) The Legislature finds and declares all of the
following:

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(1) The Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation is within the Department of
Consumer Affairs, its mission is “to protect and serve consumers
while ensuring a competent and fair marketplace,” and its mandate
includes making protection of the public its highest priority in
exercising its licensing, regulatory, and disciplinary functions.

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(2) The California Bureau of Home Furnishings and Thermal
Insulation was established in 1911 in Assembly Bill 547 (Ch. 73,
Stats. 1911) in response to unscrupulous manufacturing practices
in the mattress industry, which contributed to the fires following
the 1906 San Francisco earthquake.

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(3) The California Bureau of Electronic and Appliance Repair
was established in 1963 under the Electronic and Appliance Repair
Dealer Registration Law in Senate Bill 1292 (Ch. 1492, Stats.
1963) in response to growing concerns to consumers and law
enforcement agencies about fraud and negligence in the television
repair industry.

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(4) In 2009, Assembly Bill 20 (Chapter 18 of the Fourth
Extraordinary Session of the Statutes of 2009), officially merged
the Bureau of Home Furnishings and Thermal Insulation with the
Bureau of Electronic and Appliance Repair together to create the
Bureau of Electronic and Appliance Repair, Home Furnishings,
and Thermal Insulation.

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(5) Today, the bureau licenses and regulates over 40,000
businesses, including businesses that engage in the repair of
electronics and appliances, the sale and administration of service
contracts, and the manufacture, sale, or maintenance of
upholstered home furnishings, bedding, and thermal insulation.
In addition, the bureau adopts regulations and ensures compliance
with the law; inspects businesses and conducts investigations;
conducts research on, develops standards for, and tests upholstered
furniture, bedding, and thermal insulation products to confirm
they meet specified standards; handles consumer complaints; and
initiates disciplinary action against businesses that violate statutory
or regulatory requirements.

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(6) On March 10, 2014, the Assembly Business, Professions
and Consumer Protection Committee and the Senate Business,
Professions and Economic Development Committee (the
committees) held a joint oversight sunset hearing and prepared a
background paper on the bureau.

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(7) While the hearing and the background paper found the
bureau in good standing, it also identified areas for follow up and
requested the bureau to report back to the committees on specific
issues, which include all of the following:

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(A) While the bureau is in good fiscal standing, its revenues are
projected to stay the same over the next few years and the cost of
doing business is projected to rise over time, potentially leading
to a long-term deficit. The bureau should report to the committees
any planned efforts to increase its revenues and reduce its
expenditures, and whether, or when, it might seek a statutory fee
increase in the future.

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(B) For the 2013-14 fiscal year, the Bureau’s Electronic and
Appliance Repair Fund and the Home Furnishings and Thermal
Insulation Fund are expected to spend roughly 37 percent and 19
percent of their budgets, respectively, on the pro rata costs to the
department. The bureau should advise the committees about the
bases upon which pro rata costs are calculated, and whether it
could achieve cost savings by dealing with more of its consumer
complaints in-house.

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(C) Currently, electronic and appliance repair and thermal
insulation licenses are renewed annually, and home furnishings
licenses are renewed biennially. The bureau should examine the
pros and cons of requiring biennial rewards instead of annual
license renewals for all licensees.

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(D) In its last sunset review report in 1995, the department
studied both the electronic and appliance repair market and the
home furnishings and thermal insulation market to determine
whether regulatory activities were appropriate, necessary, and
should be continued, and recommended areas of deregulation and
areas to monitor in order to better target resources and evaluate
consumer risk and impact. The bureau should conduct market
condition assessments to study both of these markets and determine
if current statutes and regulations reflect the needs of the markets,
where risk to consumers is the greatest, where resources could be
refocused or expanded, and whether continued regulation is clearly
necessary across all segments of these markets.

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(E) The bureau issues a separate furniture retailer license,
bedding retailer license, combination furniture and bedding retailer
license, sanitizer license, and custom upholsterer license. The
bureau may consider whether it should consolidate any of its
licenses, and whether it should continue to regulate, or issue,
stand-alone licenses to sanitizers and custom upholsterers.

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(F) The bureau has reported high product failure rates, which
are primarily attributed to technical violations of flammability,
product labeling, and feather and down standards. The bureau
should reexamine its testing protocols to ensure that it has the
information it needs to appropriately identify areas of highest risk
to consumers, and reexamine its standards, especially feather and
down and product labeling standards, to determine if some
standards could be relaxed, presuming there is no appreciable
impact on consumer safety, whether standards should be clarified
or better advertised, or whether penalties for violations are too
low to act as a proper deterrent.

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(G) The bureau is scheduled to go live on the department’s
BreEZe system in late 2015. The bureau should update the
committees on the status of its implementation of BreEZe, including
whether the system will accommodate the bureau’s current and
future needs.

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(b) It is the intent of the Legislature that the bureau examine
and respond to the issues and recommendations specified in
subparagraphs (A) to (G), inclusive, of paragraph (7) of
subdivision (a) that were identified in the background paper, and
report back to the committees by March 1, 2015, with its findings.

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begin delete SECTION 1. end delete
begin insert SEC. 2. end insert   

Section 9810 of the Business and Professions Code is
amended to read:

9810.  

(a) There is in the Department of Consumer Affairs a
Bureau of Electronic and Appliance Repair, Home Furnishings,
and Thermal Insulation, under the supervision and control of the
director. The director shall administer and enforce the provisions
of this chapter and Chapter 3 (commencing with Section 19000)
of Division 8.

(b) The Governor shall appoint, subject to confirmation by the
Senate, a chief of the bureau at a salary to be fixed and determined
by the director with the approval of the Director of Finance. The
chief shall serve under the direction and supervision of the director
and at the pleasure of the Governor.

(c) Every power granted to or duty imposed upon the director
under this chapter and Chapter 3 (commencing with Section 19000)
of Division 8 may be exercised or performed in the name of the
director by a deputy or assistant director or by the chief, subject
to conditions and limitations that the director may prescribe.

(d) Whenever the laws of this state refer to the Bureau of
Electronic Repair Dealer Registration or the Bureau of Electronic
and Appliance Repair, the reference shall be construed to be to the
Bureau of Electronic and Appliance Repair, Home Furnishings,
and Thermal Insulation.

(e) Notwithstanding any other law, the powers and duties of the
Bureau of Electronic and Appliance Repair, Home Furnishings,
and Thermal Insulation, as set forth in this chapter and Chapter 3
(commencing with Section 19000) of Division 8, shall be subject
to review by the appropriate policy committees of the Legislature.
The review shall be performed as if this chapter and Chapter 3
begin insert (commencing with Section 19000) of Division 8 end insert were scheduled
to be repealed on January 1, 2019.