BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 1019 (Leno) - Upholstered furniture: flame retardant chemicals. Amended: April 21, 2014 Policy Vote: EQ 6-0, BP&ED 9-0 Urgency: No Mandate: Yes (see staff comments) Hearing Date: May 12, 2014 Consultant: Marie Liu This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1019 would require upholstered furniture to include a label indicating whether the product has added flame retardant chemicals. This bill would also direct the Bureau of Electronic and Appliance Repair, Home Furnishings and Thermal Insulation (bureau) to ensure compliance with labeling and documentation and to assess fines for violations. Fiscal Impact: Ongoing costs, in the high hundreds of thousands to low millions of dollars, from the Home Furnishing and Thermal Insulation Fund (special) to the bureau for testing associated with enforcing the labeling requirements of upholstered furniture. Background: The Home Furnishings and Thermal Insulation Act (act) requires mattresses, box springs, and all seating furniture, manufactured for the sale in California to be fire retardant. "Fire retardant" mattresses and boxsprings are defined as a product that meets the standards for resistance to an open-flame set in federal regulations (BPC §19161). The bureau is authorized to adopt regulations to implement those standards. These regulations are contained in Technical Bulletin 117 (TB-117). TB-117 was first adopted in 1975 and required that a material be able to withstand a small open flame for at least 12 seconds. This standard was typically met by adding halogenated organic flame retardants. In 2012, Governor Brown directed the bureau to review the state's flammability standards and recommend changes to reduce toxic flame retardants while continuing to ensure fire safety. This review resulted in a revision to the regulations in 2013 that allows upholstered furniture to subject to a smolder standard instead of an SB 1019 (Leno) Page 1 open-flame standard, which does not require the use of flame retardant chemicals in order to be in compliance. Proposed Law: This bill would require manufactures of upholstered furniture to label the product with a specified statement regarding whether the product has flame retardant chemicals or not. The manufacturer would be required to retain documentation supporting whether flame retardant chemicals were added. This bill would charge the bureau with ensuring compliance with the labeling and documentation requirements and to receive customer complaints regarding the labeling requirement. The bureau would be required to provide the Department of Toxic Substances Control (DTSC) with samples to test for the presence of flame retardant chemicals. DTSC would be required to provide results to the bureau. If DTSC's tests indicate the presence of flame retardant chemicals despite the product being labeled as having no chemicals, the bureau would be able to request additional testing at the manufacturer's expense to verify the product's label. The bureau would be allowed to assess a fine for violation of this bill's requirements. Fine levels would be based on specified factors. This bill would establish maximum fines for failing to maintain documentation and mislabeling a product. Related Legislation: AB 127 (Skinner) Chapter 579, Statutes of 2013 requires the State Fire Marshal to review the flammability standards for building insulation materials. SB 147 (Leno, 2011) would have required the bureau to modify TB-117 to include a smolder flammability test. (Measure failed passage in the Senate BP&ED Committee) SB 1291 (Leno, 2010) would have required DTSC to include flame retardants under the current chemical of concern regulations for Green Chemistry. (Measure died on the Senate Floor inactive file) SB 772 (Leno, 2009) would have exempted "juvenile products" from the fire retardant requirements. (Measure failed passage in the Assembly Appropriations Committee) SB 1019 (Leno) Page 2 SB 706 (Leno, 2008) would have prohibited the use of certain chemicals in bedding products. (Measure failed passage on the Senate Floor) Staff Comments: The bureau indicates that it would incur minor and absorbable costs to develop the regulations required to implement this bill. The bureau will incur costs associated with the enforcement of the bill's requirements and associated regulations, particularly the testing requirement. This bill does not specify the portion of products that should be tested by the bureau or the frequency of testing, although it would only test products that are labeled as having no added flame retardant chemicals. However, as a reference point, the bureau currently tests around 300 products annually for compliance with TB-117. Testing costs would include the cost to transport the samples to DTSC (which may be minor), equipment costs, and staff time to conduct the tests. Each product would potentially require 6 to 12 samples (e.g. different components of a couch) with each sample costing in the range of $1,500 to test (each sample may be subject to more than one analysis). Assuming the bureau would only consider testing products that are also being tested for compliance with TB-117 and assuming that a third of the products are labeled as having no added flame retardant chemicals (i.e. 100 products), testing costs could range between $900,000 and $1.8 million. These costs could be higher if DTSC needs to buy new or additional equipment or if the testing workload would necessitate the hiring additional staff. Staff notes that these testing costs are based on testing for chemicals that are known to be added for flame retardancy (approximately 60 chemicals). Should the list of chemicals that are considered flame retardants grow, testing costs could increase. DTSC would conduct the tests, but the bureau would reimburse DTSC for its costs. This bill would also require the bureau to receive complaints from customers concerning compliance with this bill's labeling requirements. The Bureau currently has a Complaint Resolution Unit. It is unknown how this bill might increase the workload of this unit, but staff assumes that the change in workload would be minor and absorbable. SB 1019 (Leno) Page 3 This bill contains codified findings and declarations. In the interest of code clarity and efficiency, staff recommends this bill be amended to place the findings and declarations in an uncodified section of the bill. This bill is creates a state mandate as it creates a new crime. However, this mandate is not reimbursable.