BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 2740
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          Date of Hearing:   April 22, 2014

              ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER  
                                     PROTECTION
                               Susan A. Bonilla, Chair
               AB 2740 (Bonilla and Lieu) - As Amended:  April 10, 2014
           
          SUBJECT  :   Bureau of Electronic and Appliance Repair, Home  
          Furnishings and Thermal Insulation.

           SUMMARY  :  Requires the Bureau of Electronic and Appliance  
          Repair, Home Furnishings and Thermal Insulation (BEARHFTI) to be  
          subject to review by the Legislature before January 1, 2019, and  
          requests that BEARHFTI report on specified concerns to the  
          Legislature by March 1, 2015.  Specifically,  this bill  :  

          1)Requires that BEARHFTI's powers and duties be subject to  
            review by the Assembly Business, Professions and Consumer  
            Protection Committee and the Senate Business, Professions and  
            Economic Development Committee (Committees), and further  
            requires that the review be performed as if the provisions of  
            BEARHFTI were scheduled to be repealed on January 1, 2019.
             
          2)Makes findings and declarations relating to BEARHFTI's  
            creation, its jurisdiction, and its joint oversight sunset  
            hearing held by the Committees, and to the following issues  
            and recommendations that were raised in BEARHFTI's sunset  
            background paper:

             a)   Reporting on its long-term fiscal outlook and any  
               planned efforts to increase revenues and reduce  
               expenditures; 

             b)   Advising the Committees on its pro rata costs and  
               whether BEARHFTI could achieve cost savings by handling  
               more consumer complaints in house;

             c)   Examining the pros and cons of biennial license renewals  
               for electronic and appliance repair and thermal insulation  
               licensees;

             d)   Conducting market condition assessments for both the  
               electronic and appliance repair market and the home  
               furnishings and thermal insulation market to determine if  
               current law reflects the needs of the markets, where risk  








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               to consumers is greatest, where resources could be  
               refocused or expanded, and whether continued regulation is  
               necessary across all segments of these markets;

             e)   Considering whether various licenses should be  
               consolidated and if it should continue to regulate, or  
               issue, standalone sanitizer and custom upholsterer  
               licenses;

             f)   Reexamining product testing protocols to ensure it has  
               the information it needs to identify areas of highest risk  
               to consumers, and reexamining product standards to  
               determine if some standards could be relaxed, presuming  
               there is no appreciable impact on consumer safety, if  
               standards could be better clarified or advertised, or if  
               penalties for violations are too low to act as a proper  
               deterrent; and

             g)   Updating the Committees on implementation of the  
               Department of Consumer Affair's (DCA's) BreEZe system.

          3)States that it is the intent of the Legislature that BEARHFTI  
            examine and respond to the issues and recommendations  
            identified in the background paper, and report back to the  
            Committees by March 1, 2015, with its findings.


           EXISTING LAW:  

          1)Establishes the Electronic and Appliance Repair Dealer  
            Registration Law (EARDRL), and provides for the licensure and  
            regulation of electronic and appliance repair dealers and  
            service contract sellers and administrators.  (Business and  
            Professions Code (BPC) Section 9800 et seq.)

          2)Establishes the Home Furnishings and Thermal Insulation Act,  
            and provides for the licensure and regulation of  
            manufacturers, sellers, importers, upholsterers, and  
            sanitizers of home furnishings, including upholstered  
            furniture and bedding and thermal insulation.  (BPC 19000 et  
            seq.)

          3)Establishes BEARHFTI under the supervision and control of the  
            Director of DCA, and requires the Director to administer and  
            enforce the HFTI Act and the EARDRL.  (BPC 9810)








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          4)Requires the Governor to appoint a chief of the bureau to  
            serve under the direction and supervision of the Director, as  
            specified, and authorizes the chief to exercise or perform the  
            powers and duties imposed upon the Director.  (BPC 9810)

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

           1)Purpose of the bill  .  This bill requires BEARHFTI to be  
            subject to review by the Legislature before January 1, 2019,  
            and requests that BEARHFTI report specified information back  
            to the Committees by March 1, 2015.  This is an  
            author-sponsored bill.  

           2)Author's statement  .  According to the author, "Although  
            BEARHFTI is subject to sunset review, and was subject to a  
            sunset review oversight hearing on March 10, 2014, its  
            statutory provisions do not contain a sunset review provision.  
            This bill simply seeks to make clear that BEARHFTI is subject  
            to sunset review, and to reinforce the recommendations  
            contained in BEARHFTI's sunset review report in order to  
            increase accountability."  

           3)BEARHFTI  .  The California Bureau of Home Furnishings and  
            Thermal Insulation was established in 1911 by AB 547 (Ryan),  
            Chapter 73, Statutes of 1911, in response to unscrupulous  
            manufacturing practices in the mattress industry, which  
            contributed to the fires following the 1906 San Francisco  
            earthquake.  The California Bureau of Electronic and Appliance  
            Repair was established in 1963 under the Electronic and  
            Appliance Repair Dealer Registration Law by SB 1292 (Short),  
            Chapter 1492, Statutes of 1963, in response to growing  
            concerns from consumers and law enforcement agencies about  
            fraud and negligence in the television repair industry.  In  
            2009, AB 20 X4 (Audra Strickland and Huber), Chapter 18,  
            Statutes of 2009-10 Fourth Extraordinary Session, officially  
            merged the Bureau of Home Furnishings and Thermal Insulation  
            with the Bureau of Electronic and Appliance Repair to create  
            BEARHFTI.

          BEARHFTI, which is housed under DCA, licenses and regulates over  
            40,000 businesses, including businesses that engage in the  
            repair of electronics and appliances; the sale and  








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            administration of service contracts; and the manufacture,  
            sale, and repair of home furnishings and thermal insulation.   
            BEARHFTI also inspects businesses and conducts investigations;  
            researches and develops standards for, and tests, home  
            furnishings and thermal insulation products; handles consumer  
            complaints; and initiates disciplinary action against  
            businesses that violate statutory or regulatory requirements.

           4)Sunset Review  .  Existing law establishes the Joint Sunset  
            Review Committee to identify and eliminate waste, duplication,  
            and inefficiency in government agencies.  The purpose of the  
            committee is to conduct a performance review of every eligible  
            agency, including boards, bureaus, commissions and councils  
            under DCA, to determine if the agency is still necessary and  
            cost effective.  Currently, the duties of the Joint Sunset  
            Review Committee are performed by the Assembly Business,  
            Professions and Consumer Protection Committee and the Senate  
            Business, Profession and Economic Development Committee  
            (Committees).  

          Each eligible agency scheduled for repeal ("sunset"), and even  
            some bureaus which do not sunset at all, is required to submit  
            to the committee a report covering the entire period since  
            last reviewed that includes, among other things, the purpose  
            and necessity of the agency and any recommendations of the  
            agency for changes or reorganization in order to better  
            fulfill its purpose.  During "sunset review", the Committees  
            take public testimony and evaluate the eligible agency prior  
            to the date the agency is scheduled to be repealed.  An  
            eligible agency is allowed to sunset unless the Legislature  
            enacts a law to extend, consolidate, or reorganize the  
            eligible agency.

          As part of the 2014 Sunset Review, the Committees prepared a  
            sunset background paper on BEARHFTI, and on March 10, 2014,  
            held a joint oversight sunset hearing.  Although BEARHFTI is  
            subject to review, and voluntarily participated in a sunset  
            review oversight hearing, its statutory provisions do not  
            contain a sunset review provision.  This bill simply clarifies  
            that BEARHFTI shall be subject to review by the appropriate  
            policy committees of the Legislature, and requires that review  
            to be performed as if BEARHFTI's provisions were to be  
            repealed on January 1, 2019.

          In addition, while the hearing and the background paper found  








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            BEARHFTI was generally in good standing, it also identified  
            areas for follow up and requested BEARHFTI to report back to  
            the Committees on specific issues.  This bill specifies that  
            it is the intent of the Legislature that BEARHFTI examine and  
            respond to the issues and recommendations identified in the  
            background paper, and report back to the Committees by March  
            1, 2015. 

           5)Related legislation  .  AB 1926 (Bonilla) of 2014 clarifies when  
            a statement or advertisement is untrue or misleading for  
            purposes of existing law prohibiting an electronic or  
            appliance service dealer from making an untrue or misleading  
            statement or advertisement.  That bill is in the Assembly  
            Business, Professions and Consumer Protection Committee.    

           6)Previous legislation  .  AB 480 (Calderon) (Chapter 421,  
            Statutes of 2013) defined service contracts to include  
            contracts for the performance of services relating the  
            maintenance, replacement, or repair of optical products,  
            thereby making administrators and sellers of those contracts  
            subject to registration with the bureau and other requirements  
            of the act.

          AB 127 (Skinner) (Chapter 579, Statutes of 2013) required the  
            State Fire Marshal, in consultation with BEARHFTI, to review  
            the flammability standards for building insulation materials,  
            including whether the flammability standards for some  
            insulation materials can only be met with the addition of  
            chemical flame retardants, and would require, if deemed  
            appropriate, the State Fire Marshal to propose updated  
            insulation flammability standards.

          AB 1443 (Logue) (Chapter 90, Statutes of 2012) required BEARHFTI  
            to reimburse the manufacturer, distributer, or retailer for  
            the actual cost of the article or sample taken for product  
            testing unless the article or sample is found to be in  
            violation of the Home Furnishings and Thermal Insulation Actor  
            a regulation of the bureau.      

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file.









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           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    Eunie Linden / B.,P. & C.P. / (916)  
          319-3301