BILL ANALYSIS Ó AB 1175 Page 1 Date of Hearing: May 6, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1175 (Ridley-Thomas) - As Amended April 14, 2015 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|11 - 2 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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: AB 1175 Page 2 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. AB 1175 Page 3 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. AB 1175 Page 4 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