BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
AB 1175 (Ridley-Thomas) - Bureau of Electronic and Appliance
Repair, Home Furnishings, and Thermal Insulation.
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|Version: April 14, 2015 |Policy Vote: B., P. & E.D. 6 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: June 22, 2015 |Consultant: Mark McKenzie |
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This bill does not meet the criteria for referral to the
Suspense File.
Bill
Summary: SB 1175 would increase the statutory cap on specified
licensing and registration fees imposed by the Bureau of
Electronic and Appliance Repair, Home Furnishings, and Thermal
Insulation (Bureau).
Fiscal
Impact:
Minor and absorbable costs to the Bureau to update regulations
to increase specified fees (Electronic and Appliance Repair
(EAR) Fund and Home Furnishings and Thermal Insulation (HFTI)
AB 1175 (Ridley-Thomas) Page 1 of
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Fund).
Increased revenues of up to $622,000 annually, beginning in
2017-18, to the EAR Fund, and up to $1.03 million annually,
beginning in 2016-17, to the HFTI Fund, if the fees are
increased to the proposed statutory maximums.
Background: The Bureau, which is housed in the Department of Consumer
Affairs (DCA), licenses and regulates over 40,000 businesses,
including those 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,
bedding, and thermal insulation. The Bureau also does the
following: 1) inspects businesses and conducts investigations;
2) researches, develops standards for, and conducts testing on
home furnishings and thermal insulation products; 3) handles
consumer complaints; and 4) initiates disciplinary action
against businesses that violate statutory or regulatory
requirements.
Existing law establishes licensing and registration fees and
requirements, including initial and renewals, for the following
license types administered by the Bureau: electronic service
dealers, appliance service dealers; combination 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; supply dealers; and thermal
insulation manufacturers.
The statutory caps for licensing and registration fees were last
raised in 1978 for the electronics and appliance industries, and
in 1998 for the home furnishings and thermal insulation
industries.
Proposed Law:
SB 1175 would raise the statutory caps on the following
AB 1175 (Ridley-Thomas) Page 2 of
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licensing, registration, and renewal fees:
Under the Electronic and Appliance Repair Dealer Law:
electronic service dealers, appliance service dealers,
combination electronic and appliance service dealers, service
contract sellers, service contract administrators, joint
service contractors and electronic and appliance service
dealers, as specified.
Under the Home Furnishings and Thermal Insulation Act:
importers, furniture and bedding manufacturers, wholesale
furniture and bedding dealers, supply dealers, custom
upholsterers, sanitizers, retail furniture dealers, retail
bedding dealers, and retail furniture and bedding dealers.
The bill also prohibits the Bureau from adopting any regulation
to increase any of the fees under the Electronic and Appliance
Repair Dealer Law before January 1, 2017.
Related
Legislation: SB 763 (Leno), pending in the Assembly, would
require labeling of juvenile products indicating whether they
have added flame retardant chemicals, and require the Bureau to
ensure compliance with labeling and other requirements. The
bill also requires the Bureau to submit samples of products to
the Department of Toxic Substances Control (DTSC) for testing.
The Bureau reimburses DTSC for testing costs.
AB 2740 (Bonilla), Chap 428/2014, subjects the powers and duties
of the Bureau to review by the appropriate policy committees of
the Legislature, as if it was scheduled for sunset on January 1,
2019.
Staff
Comments: This bill is intended to provide for increased
licensing fees to address pending structural deficits in the
special funds administered by the Bureau. The fees are
currently at the statutory maximums for the majority of
licensing categories. The exception is the thermal insulation
manufacturer fees, which are excluded from this bill.
AB 1175 (Ridley-Thomas) Page 3 of
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The Bureau indicates that its operational costs have increased
in all areas since the fees were last increased in 1998 and
1978, respectively, most notably in the areas of testing
associated with flame retardant chemicals used in upholstered
furniture. Absent the proposed increases to the statutory fee
caps, the HFTI Fund is projected to be in deficit in 2017-18,
and the EAR Fund is projected to be in deficit in 2019-20. If
the fees are raised to the proposed maximum levels, and assuming
no new workload is imposed on the Bureau, the FHTI Fund would
have a projected three-month reserve at the end of the 2019-20
fiscal year, and the EAR Fund would have a projected reserve of
approximately 5.4 months at the end of the 2019-20 fiscal year.
The Bureau also notes that the fee increases are not being
sought to cover costs associated with the implementation of
DCA's BreEZe system.
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