BILL ANALYSIS Ó
SB 1243
Page 1
Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
SB 1243 (Lieu) - As Amended: June 18, 2014
SENATE VOTE : 36-0
SUBJECT : Professions and vocations.
SUMMARY : Increases the transparency of information distributed
by the Department of Consumer Affairs (DCA); requires DCA, the
Attorney General (AG), and the Office of Administrative Hearings
(OAH) to submit specified reports to the Legislature annually;
enhances unlicensed advertising enforcement; and, establishes a
board member mentor program, among other things; extends until
January 1, 2017 the provisions establishing the Veterinary
Medical Board (VMB) and the term of the executive officer (EO);
extends the Certified Common Interest Development (CID) Manager
program and the Tax Preparer program until January 1, 2019.
Specifically, this bill :
1)Permits an agency within DCA that is required to provide
specified meeting notifications to provide notice by regular
mail, email, or both and specifies that the agency give the
requester the option; and requires DCA to comply with the
requester's chosen form or forms of notification, as
specified.
2)Requires an agency that plans to Web cast a meeting to include
in the meeting notice, as specified, a statement of the
board's intent to Web cast the meeting, and permits the Web
casting of a meeting in the absence of the statement of
intent.
3)Expands the current authority to request telephone
disconnection, for advertising of unlicensed activity in any
form of advertisement, not just in a telephone directory, as
currently permitted and provides this authority to all boards,
bureaus, committees, commissions or programs under DCA.
4)Requires the department to provide an opportunity for an
employee of an agency comprising the DCA who performs
enforcement functions to attend an enforcement academy; as
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specified.
5)Requires the DCA to develop the enforcement academy curricula
in consultation and cooperation with the AG and the OAH, as
specified, and further specifies that the curricula must
include, but is not limited to, complaint intake, determining
which cases should be referred for investigation, preparing a
case suitable for filing an accusation, and the Administrative
Procedures Act.
6)Requires DCA to develop and implement a measure of training
outcomes that includes a pretest and posttest of an employee's
knowledge of the training subject matter, and any other
performance measures that the department deems appropriate.
7)Requires DCA to submit a report of the accounting of the pro
rata calculation of administrative expenses to the appropriate
policy committees of the Legislature on or before July 1, 2015
and on or before July 1, of each subsequent year.
8)Requires DCA to conduct a study of its current system for
prorating administrative expenses, which must include
consideration of whether some of the administrative services
offered by DCA should be outsourced or charged on an as needed
basis, and whether the agencies should be permitted to elect
not to receive and be charged for certain administrative
services, to determine if that system is the most productive,
efficient, and cost effective manner for the department and
the agencies, and requires the study be included in the report
referenced in 7 above.
9)Requires DCA to immediately submit a report from the
third-party consultant if it chooses to hire a third-party
consultant to assess its operations, as specified.
10)Revises information contained in DCA's annual report to the
Governor and the Legislature to include the total number of
restraining orders or interim suspension orders, as specified
and the following information relative to the performance of
each constituent entity including:
a) Number of consumer calls received;
b) Number of consumer calls or letters designated as
discipline-related complaints;
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c) Number of complaint forms received;
d) Number of convictions of licensees reported to the
board;
e) Number of criminal filings reported to the constituent
entity;
f) Number of complaints and referral closed, referred out,
or resolved without discipline, respectively, prior to
accusation;
g) Number of accusations filed and final disposition of
accusations through the constituent entities and court
review, respectively;
h) Final discipline by category;
i) Number of citations issued with and without fines;
j) Number of cases in process more than six months after a
constituent entity receives information regarding the acts
relevant to a filed accusation;
aa) The average and median times in processing complaints
from when a constituent entity receives a complaint to each
state of discipline and court review;
bb) Final discipline by category;
cc) Number of public reprimands issued;
dd) Probation violation reports and probation revocations
filings and dispositions;
ee) Number of petitions for reinstatement and the
disposition of those petitions;
ff) Caseloads of investigators for both original cases and
probation cases;
gg) Number of reports, as specified, by type of peer review
body reporting and, where applicable, the type of health
care facility involved and the number and type of
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administrative or disciplinary actions taken by a
constituent entity with respect to those reports;
hh) Number of reports in relation to peer review, as
specified;
ii) The number of malpractice settlements in excess of
$30,000, as specified;
jj) Number of corner's reports received by the board; as
specified;
aaa) Average length of time for a constituent entity to reach
each of the following milestones in the enforcement
process:
i) Average number of days from when a constituent
entity receives a complaint until the board assigns an
investigator to the complaint;
ii) Average number of days from a constituent entity
opening an investigation conducted by the constituent
entity staff or the Division of Investigation (DOI) to
closing the investigation regardless of outcome;
iii) Average number of days from a constituent entity
closing an investigation to imposing formal discipline;
and,
iv) Average number of days for a constituent entity to
conduct a supplemental investigation for a case that was
referred by the constituent entity to the AG to file an
accusation.
11)Defines "action" to mean a proceeding brought by or on behalf
of, a constituent entity against a licensee for unprofessional
conduct that has not been finally adjudicated, and a
disciplinary action taken by a constituent entity against a
licensee.
12)Requires the report to be submitted in compliance with the
Government Code, as specified.
13)Requires the AG to submit a report to DCA, the Governor, and
the appropriate policy committees of the Legislature on or
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before January 1, 2016, and on or before January 1, of each
subsequent year that includes, at the minimum, the following:
a) The number of cases referred to the AG by each
constituent entity comprising of the DCA;
b) Number of cases referred by the AG back to each
constituent entity with no further action;
c) Number of cases referred by a constituent entity to the
AG after each constituent entity or the DOI completes a
supplemental investigation;
d) Number of accusations filed by each constituent entity;
e) Number of accusations a constituent entity withdraws;
f) Average number of days from the AG receiving a case to
filing an accusation on behalf of each constituent entity;
g) Average number of days to prepare an accusation for a
case that is referred to the AG after a supplemental
investigation is conducted by staff of a constituent entity
or the DOI for each constituent entity;
h) Average number of days from filing an accusation to
transmitting a stipulated settlement for each constituent
entity;
i) Average number of days from filing an accusation to
transmitting a default decision for each constituent
entity;
j) Average number of days from filing an accusation to
scheduling a hearing for each constituent entity; and,
aa) Average number of days from scheduling a hearing for
each constituent entity.
14)Requires the OAH to submit a report to DCA, the Governor, and
the legislature on or before January 1, 2016, and on or before
January 1, of each subsequent year that includes, at a
minimum, all of the following:
a) Number of cases referred by each constituent entity to
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each office of the OAH for a hearing;
b) Average number of days from receiving a request to
setting a hearing date at each office of OAH;
c) Average number of days from setting a hearing to
conducting a hearing; and,
d) Average number of days after conducting a hearing to
transmitting the proposed decision by each office of OAH.
15)Requires DCA to develop a board member mentor program through
which experienced board members will be trained to act as
mentors to newly appointed board members, as specified.
16)Extends the sunset date of the VMB until January 1, 2017.
17)Extends the authority of the VMB to appoint an executive
office until January 1, 2017.
18)Extends the sunset date for the CID manager program until
January 1, 2019.
19)Extends the sunset date for CTEC until January 1, 2019.
20)Makes findings and declarations pertaining to employees and
enforcement functions.
21)Makes other technical and clarifying changes.
EXISTING LAW
1)Specifies that the entities under DCA are established for the
purpose of ensuring that those private businesses and
professions deemed to engage in activities which have
potential impact upon the public health, safety, and welfare
are adequately regulated in order to protect the people of
California. (Business and Professions Code (BPC) Section
101.6)
2)Permits, upon investigation, an agency, as specified, which
has probable cause to believe that a person is advertising in
a telephone directory with respect to the offering or
performance of services, without being properly licensed or
registered with agency to offer or perform those services, the
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agency may issue a citation, as specified, that requires the
violator to do both the following:
a) Cease the unlawful advertising; and,
b) Notify the telephone company furnishing services to the
violator to disconnect the telephone service furnished to
any telephone number contained in the unlawful advertising.
(BPC 149)
3)Authorizes a charge for the estimated administrative expenses
of the department, as specified, to be levied om advance on a
pro rata share basis against any of the funds of any boards,
bureaus, commissions, divisions, and agencies, at the
discretion of the director and with the approval of the
Department of Finance (BPC 201)
4)Requires the director of DCA to submit an annually, to the
Governor and Legislature, a report of programmatic and
statistical information regarding the activities of DCA and
its constituent entities, as specified. (BPC 312)
5)Requires every newly appointed board member, within one year
of assuming office, to complete a training and orientation
program offered by DCA regarding, among other things, his or
her functions, responsibilities, and obligations as a member
of the board. (BPC 453)
6)Establishes the Veterinary Medical Board (VMB) which provides
for the licensure and regulation of veterinarians and
registered veterinarian technicians. (BPC 4800 et seq.)
7)Authorizes the VMB to appoint a person, as specified, to be
the executive director of the VMB who will exercise the powers
and perform the duties delegated by the VMB, and repeals this
authority on January 1, 2016. (BPC 4804.5)
8)Specifies that protection of the public shall be the highest
priority for the VMB, as specified. (BPC 4800.1)
9)Defines a "common interest development" to mean:
a) A community apartment project;
b) A condominium project;
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c) A planned development; and,
d) A stock cooperative. (Civil Code (CC) Section 4100)
10)Defines a "common interest development (CID) manager" to mean
"an individual who provides or contracts to provide management
or financial services, or represents himself or herself to act
in the capacity of providing management or financial services
to an association, as specified. (BPC 11501)
11)Requires a person seeking designation as a CID manager to
meet one of the following requirements:
a) Prior to July 1, 2003, passed a knowledge, skills and
aptitude examination, as specified, or has been granted a
certification or designation by a professional association
for common interest development managers, as specified;
and,
b) On or after July 1, 2003, completed an educational
curriculum that is no less than a combined 30 hours in
coursework, as specified, and passed an examination or
examinations that test competence in CID management, as
specified. (BPC 11502)
c) Establishes the requirements for a voluntary CID manager
certification program to be administered by a professional
association for CID managers, as specified and repeals
those provisions January 1, 2015. (BPC 11500, 11506)
12)Defines a "tax preparer" to include:
a) A person who, for fee or compensation, assists with or
prepares tax returns for another person or who assumes
final responsibility for completed work on a return which
preliminary work has been done by another person, or who
holds himself or herself out as offering those services.
b) A corporation, partnership, association or other entity
that has associated with it persons not exempted, as
specified, which persons have as part of their
responsibilities the preparation of data and ultimate
signatory authority on tax returns or that holds itself out
as offering those services or having that authority. (BPC
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22251 (A)(B))
13)Specifies that a tax preparer does not include an employee
who, as part of the regular clerical duties of his or her
employment, prepares his or her employer's income, sales or
payroll tax returns. (BPC 22251(B))
14)Establishes the California Tax Education Council (CTEC) as a
single, nonprofit organization, made up of not more than one
representative from each California nonprofit corporation in
good standing that chooses to participate in the council and
represents tax preparers, enrolled agents, attorneys or
certified public accountant, as specified and repeals those
provisions on January 1, 2015. (BPC 22251)
15)Requires an applicant for registration as a certified tax
preparer to submit a written application and provide CTEC with
satisfactory evidence that he or she has met the following
requirements:
a) The applicant has successfully completed the educational
requirements, as specified;
b) Paid all required fees, as specified; and,
c) The applicant has met all other requirements for
registration, as specified. (BPC 2251.3)
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the bill . This bill is one of nine sunset
extension measures of legislative authority for multiple
programs and enacts a wide variety of non-controversial
reforms to address issues raised during the 2014 sunset review
process. The changes contained in this bill include:
increasing the public transparency of information distributed
by DCA; requiring DCA, the AG and the OAH to continue to
submit specified reports to the Legislature; enhances illegal
advertising enforcement; extending the sunset date for the VMB
and its EO to 2017; and extending the sunset date of the CID
manager program and CTEC until 2019. This bill is author
sponsored.
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2)Author's statement . According to the author, this bill is one
of six "sunset review bills" authored by the Chair of the
Senate Business, Professions and Economic Development (BPED)
Committee. Absent legislation to extend the sunset dates of
the certified Common Interest Development (CID) manager
program and Tax Preparer program, they will both be repealed
on January 1, 2015 [and] absent legislation to extend the
sunset date of the Veterinary Medical Board (VMB) and its
executive officer; they will both be repealed on January 1,
2016.
"[In addition], [t]his bill will require the boards to email
public meeting notices, when requested. This bill will also
require the boards to include information regarding their
intent to webcast public meetings in the public meeting
notice, when applicable... This bill will enhance the boards'
and bureaus' authority to take action on unlicensed activity.
The bill will require DCA to provide specified enforcement
training with the intent of improving the quality of
investigation and complaint handling. This bill will establish
and enhance mandatory reporting requirements to assist policy
makers in determining how best to solve the long standing
problem of delayed disciplinary action."
"This bill will establish a study and new reporting
requirements regarding DCA's "pro-rata" methodology, which
will enhance public awareness and understanding of how
budgeting process works and potentially improve that process.
This bill will enhance board member training to include a
mentor program that will give newly appointed board members
additional resources to help them understand their role as
board members and to meet the responsibilities associated with
sitting on a consumer protection board."
3)Oversight Hearings and Sunset Review of Licensing Boards of
DCA . In March and April of 2014, the Assembly Business,
Professions and Consumer Protection (BPCP) Committee and the
Senate Business Professions, and Economic Development (BPED)
Committee conducted a joint-oversight hearing to review 9
regulatory entities. The Committees began its review of these
entities in March and conducted three days of hearings. This
bill, like the accompanying sunset bills, is intended to
implement legislative changes as recommended in the background
reports authored by the Senate BPED Committee and this
Committee for all of the agencies reviewed by the Committees
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this year.
4)Sunset review process . The sunset review process provides a
formal opportunity and mechanism for the DCA, the Legislature,
the boards and bureaus, interested parties and stakeholders to
discuss the performance of the boards, bureaus and committees
and make recommendations for improvement. This is performed on
a standard four-year cycle and was mandated by SB 2036
(McCorquodale) (Chapter 908, Statutes of 1994). The
legislation pertaining to this bill is based on specific
issues raised and addressed in the reports released by the
BPED Committee and this Committee.
5)Department of Consumer Affairs . The mission of DCA is to
"protect and serve the interests of California consumers." By
statute, consumer protection is the primary purpose for all of
the regulatory programs located within DCA, which consists of
26 boards, nine bureaus, two committees, one program, and one
commission. Collectively, these entities regulate more than
100 types of businesses and 200 different industries and
professions. For example, doctors, auto mechanics, private
security companies, and beauty salons are all regulated by
DCA.
As regulators, these entities perform two basic program
functions: licensing and enforcement. Licensing entails
ensuring only those who meet minimum standards are issued a
license to practice, and enforcement entails investigation of
alleged violations. During the March 2014, sunset review
hearing, and in the Senate BPED background paper on DCA,
several issues were raised relating to the administration and
operations of DCA. This bill addresses some of the issues
raised during the sunset review process including greater
transparency for consumers and the Legislature, specific
enforcement reporting requirements, and expanding the
telephone disconnect program for unlicensed advertising.
Because entities under DCA do not always notify interested
parties via e-mail when a public meeting notice has been
issued or notify the public when they intend to webcast a
public meeting, this bill will require those entities to email
public meeting notices, when requested and will also require
information be included regarding their intent to Web cast
meetings in a public meeting notice, when applicable.
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In addition, concerns were highlighted about DCA entities not
disciplining licensees in a timely manner. This bill seeks to
enhance the authority to take action on unlicensed activity
and further requires DCA to provide specified enforcement
training with the intent of improving the quality of
investigation and complaint handling. In an effort to provide
greater accountability, this bill also establishes and
enhances the mandatory reporting requirements to help address
issues associated with delayed disciplinary action.
Concerns regarding DCA's pro rata policy was raised during the
sunset review hearing and in the Senate BPED background paper.
In order to address this issue, this bill will establish a
study and new reporting requirements regarding DCA's pro rata
calculation and administrative expenses which will be shared
with the appropriate policy committees of the Legislature
beginning July 1, 2015 and every subsequent year.
DCA is authorized to hire outside consultants to conduct
studies on its internal operations, but it is not mandated
that those reports be made available to the Legislature. In
order to enhance transparency, this bill will require DCA to
submit those third-party reports to the Legislature.
The issue of unlicensed advertising has been raised by many of
the entities under DCA, and was also raised in the Senate BPED
background paper. This bill attempts to address this issue by
providing all DCA entities with the authority to request the
disconnection of telephone services when the telephone service
is associated with the advertising of unlicensed activity in
any form of advertisement, not just in a telephone directory
as currently permitted.
While it was not specifically raised in the Senate BPED
background report, this bill will enhance board member
training to include a mentor program that will give newly
appointed board members additional resources to help them
understand their role as board members and to meet the
responsibilities associated with sitting on a consumer
protection board.
6)Veterinary Medical Board . The VMB licenses and regulates
veterinarians, RVTs, schools/programs and veterinary
premises/hospitals through the enforcement of the California
Veterinary Medicine Practice Act. The VMB develops and
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enforces the standards for examinations, licensing, and
hospital and school inspections. The VMB licenses over 10,000
Veterinarians and 5,000 RVTs. The VMB also requires
registration of all premises where veterinary medicine,
veterinary dentistry, veterinary surgery, and the various
branches thereof, is being practiced, which totals
approximately 3,100 veterinary premises. The veterinary
medical profession provides health care to a variety of
animals including livestock, poultry, and pets from birds,
fish, rabbits, hamsters, and snakes to dogs, cats, goats,
pigs, horses, and llamas.
The VMB was last reviewed by the BPED and BPCP committees on
March 19, 2013. During the previous sunset review, there were
many concerns raised by the BPED in its background paper which
were not being addressed expeditiously. In order to ensure
that the VMB would address the important issues recognized by
both Committees such as outstanding RVT issues and facility
inspections, SB 304 (Price) (Chapter 515, Statutes of 2013)
imposed only a two-year sunset extension of the VMB. However,
due to the time it may take to address these issues through
regulations, or other means, extending the sunset date by
one-year will allow the VMB sufficient time to address the
concerns raised during its last sunset review. This bill
simply extends the CMB sunset date and it authority to appoint
an EO by one year to January 1, 2017.
7)Common Interest Development Managers . Under current law, CID
managers may qualify for the title of "Certified Common
Interest Development Manager." To attain this certification,
an individual must complete at least thirty hours of specified
course work in topics including California CID law and pass an
examination. While a "manager" designation is not mandatory,
it is mandatory for a manager to disclose to the CID whether
or not they are certified and whether or not the manager has
other relevant licenses, such as a real estate license. There
are a number of organizations which offer credentials to CID
managers, but there are two main organizations which actively
certify CID managers. There were no specific issues raised or
recommendations made regarding the CID manager program during
the sunset review process. Because of this, this bill simply
extends the sunset date of the CID manager program until
January 1, 2019.
8)California Tax Education Council . CTEC is the organization
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that registers tax preparers, the second largest segment of
tax preparation professionals serving California, following
certified public accountants. Anyone who, for a fee, assists
with or prepares a state or federal income tax return,
excluding certified public accountants, attorneys, enrolled
agents, enrolled actuaries, and certain financial institutions
or their employees, must be registered with CTEC. CTEC is also
charged with approving providers of tax education and
maintaining and distributing to the public a list of those
approved providers.
The BPED raised four issues during the sunset review including
requiring additional education and a standardized test,
involving the Franchise Tax Board to assist with enforcement
actions, and CTEC's expensive media campaign. The BPED and
BPCP Committees have requested that CTEC report back to the
Committees by July 1, 2015 to inform the Committees about the
effectiveness of its media campaign. The other issues will
continue to be addressed by CTEC. This bill simply extends
the sunset date of CTEC until January 1, 2019.
9)Technical amendments .
On page, 7, line 35, after "the" strike " board " and insert
"constituent entity"
On page 8, strike line 12.
On page 8, line 28, after "a" strike " board " and insert
"constituent entity"
On page 8, line 32, after "the" strike " board " and insert
"constituent entity"
10)Related legislation . SB 1242 (Lieu) of 2014, amends the
Automotive Repair Act and updates the sunset provisions for
the Bureau of Automotive Repair. This bill is pending in the
Assembly Business, Professions and Consumer Protection
Committee.
SB 1244 (Lieu) of 2014 extends until January 1, 2019 the term of
the Structural Pest Control Board which provides for the
licensing and regulation of individuals and business involved
in the structural pest control industry in California. The
bill also extends the term of the board's executive officer
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and subjects the board to review by the appropriate policy
committees of the Legislature. This bill is pending in the
Assembly Appropriations Committee.
SB 1245 (Lieu) of 2014 extends until January 1, 2019 the term of
the Dental Hygiene Committee of California which provides for
the licensing and regulation of dental hygienists. The bill
also extends the term of the committee's executive officer and
subjects the committee to review by the appropriate policy
committees of the Legislature. This bill is pending in the
Assembly Business, Professions and Consumer Protection
Committee.
SB 1246 (Lieu, 2014) extends until January 1, 2019, the term of
the Acupuncture Board which provides for the licensing and
regulation of doctors of acupuncture under the Acupuncture
Licensure Act and subjects the board to review by the
appropriate policy committees of the Legislature. This bill
is pending in the Assembly Business, Professions and Consumer
Protection Committee.
SB 1247 (Lieu) of 2014 extends until January 1, 2019 the term of
the California Private Postsecondary Education Act of 2009,
which provides for the regulation of private postsecondary
educational institutions by the Bureau for Private
Postsecondary Education (Bureau) in the Department of Consumer
Affairs. The bill also extends the term of the Student
Tuition Recovery Fund under the administration of the bureau,
and subjects the bureau to review by the appropriate policy
committees of the Legislature. This bill is pending in the
Assembly Business, Professions and Consumer Protection
Committee.
AB 1147 (Bonilla, Gomez & Holden) of 2013 revises and recasts
the massage therapy act and extends the operation of the
California Massage Therapy Council until December 1, 2017.
This bill is pending in Senate Business, Professions and
Economic Development Committee.
AB 2741 (Bonilla) of 2013 extends the sunset date on the
Professional Fiduciaries Bureau (PFB) from January 1, 2015 to
January 1, 2019. This bill is pending in Senate Business,
Professions and Economic Development Committee.
AB 2740 (Bonilla) of 2013 requires the Bureau of Electronic
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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. This
bill is pending in Senate Business, Professions and Economic
Development Committee.
11)Previous legislation . SB 304 (Price), Chapter, 515 Statutes
of 2013, revises the Medical Practice Act (MPA) to transfer
inspectors and medical consultants from the Medical Board of
California (MBC) to the Division of Investigation (DOI) within
the Department of Consumer Affairs (DCA), extends the sunset
date of MBC by four years, and amends the Veterinary Practice
Act to extend its sunset date by two years.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Elissa Silva / B.,P. & C.P. / (916)
319-3301