BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  May 6, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          1175 (Ridley-Thomas) - As Amended April 14, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:  This bill increases the statutory fee cap by  
          approximately 25 percent for each license type under the Bureau  
          of Electronic and Appliance Repair, Home Furnishings, and  
          Thermal Insulation (Bureau), except as specified.  Specifically,  
          this bill:  










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          1)Increases by approximately 25 percent, licensure fees for the  
            following license types: appliance service dealers; electronic  
            and appliance service dealers; service contract sellers;  
            service contract administrators; joint service contractors and  
            electronic and appliance service dealers, as specified; custom  
            upholsters; bedding retailers; furniture retailers; bedding  
            and furniture retailers; importers; furniture and bedding  
            manufacturers; furniture and bedding wholesalers; furniture  
            and bedding supply dealers; sanitizers; and supply dealers.


          2)Prohibits the Director of the Department of Consumer Affairs  
            (DCA) from adopting any regulation to increase any fees for  
            electronic and appliance service dealers and service  
            contractors licensing categories before January 1, 2017. 


          FISCAL EFFECT:


          1)If fees are raised to the statutory maximum proposed in this  
            bill, the Bureau of Electronic and Appliance Repair (BEAR)  
            fund and Home Furnishings, and Thermal Insulation (HFTI) fund  
            (both special funds) would receive a combined increase in  
            revenues of $1.0 million in 2016-17, and $1.65 million  
            on-going. 



            Without a fee increase, the BEAR fund is projected to go  
            insolvent in fiscal year 2019-2020, and the HFTI fund is  
            projected to go insolvent in fiscal year 2017-18. The Bureau  
            receives no General Fund support, relying solely on fees set  
            by statute and collected from licensing and renewal fees. The  
            fees are currently at the statutory cap for the majority of  
            licenses, except those excluded from this bill.











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          2)One-time minor and absorbable IT costs of approximately  
            $5,000.


          3)One-time minor and absorbable costs to DCA to adopt  
            regulations and increase fees.


          COMMENTS:


          1)Purpose. According to the author, "The last time the Bureau's  
            licensing fees were raised in statute was 1978 for the  
            electronics and appliance industries, and 1998 for the home  
            furnishings and thermal insulation industries.  The Bureau's  
            operational costs have continually increased with its  
            expenditures, and it is projected the Bureau will be in  
            deficit in Fiscal Year (FY) 2017-18, if revenues are not  
            increased.  The Bureau has worked diligently at minimizing  
            operational costs and streamlining its processes for optimum  
            cost savings, but continued resource and overhead costs have  
            reached a level where increased revenues are necessary to  
            sustain the Bureau."


          2)Background.  The Bureau, housed within the DCA, 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, and repair of home furnishings and thermal insulation.   
            The Bureau 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.









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          3)Related Prior Legislation.  AB 2740 (Bonilla), Chapter 428,  
            Statutes of 2014, subjected the powers and duties of the  
            Bureau to (sunset) review by the appropriate policy committees  
            of the Legislature as if these provisions were scheduled to be  
            repealed on January 1, 2019, and requested the Bureau to  
            report back to the committees on specified issues by July 1,  
            2015.








          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  
          319-2081