BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 1175|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: AB 1175
Author: Ridley-Thomas (D)
Amended: 4/14/15 in Assembly
Vote: 21
SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 6-0, 6/8/15
AYES: Hill, Block, Hernandez, Jackson, Mendoza, Wieckowski
NO VOTE RECORDED: Bates, Berryhill, Galgiani
SENATE APPROPRIATIONS COMMITTEE: 5-0, 6/22/15
AYES: Lara, Beall, Hill, Leyva, Mendoza
NO VOTE RECORDED: Bates, Nielsen
ASSEMBLY FLOOR: 51-26, 5/11/15 - See last page for vote
SUBJECT: Bureau of Electronic and Appliance Repair, Home
Furnishings, and Thermal Insulation
SOURCE: Author
DIGEST: This bill increases the statutory fee cap by
approximately 25% for each license type under the Bureau of
Electronic and Appliance Repair, Home Furnishings, and Thermal
Insulation, except as specified.
ANALYSIS:
Existing law:
1)Establishes the Electronic and Appliance Repair Dealer
Registration Law, and provides for the licensure and
regulation of electronic and appliance repair dealers and
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Page 2
service contract sellers and administrators. (Business and
Professions Code (BPC) § 9800 et seq.)
2)Establishes the Bureau of Electronic and Appliance Repair,
Home Furnishings, and Thermal Insulation (Bureau) within the
Department of Consumer Affairs (DCA), and places the Bureau
under the supervision and control of the DCA Director. (BPC §
9810)
3)Establishes the Home Furnishings and Thermal Insulation Act,
and provides for the licensure and regulation of
manufacturers, sellers, importers, upholsterers, and
sanitizers of home furnishings, including upholstered
furniture and bedding and thermal insulation. (BPC § 19000 et
seq.)
4)Establishes the following licensure categories, including
initial and renewal licensure fees for each of those 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; supply dealers; and thermal
insulation manufacturers. (BPC §§ 9873, 19170)
This bill:
1)Increases by approximately 25%, 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 DCA from adopting any regulation
to increase any fees for electronic and appliance service
dealers and service contractors licensing categories before
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January 1, 2017.
3)Makes conforming changes.
Background
Fund condition. As a Special Fund agency, the Bureau receives
no General Fund support, relying solely on fees set by statute
and collected from licensing and renewal fees. The Electronic
and Appliance Repair (EAR) program and the Home Furnishings and
Thermal Insulation (HFTI) program each operate with their own
budgets and their own funds. There is no mandated reserve level
for the Bureau, however, the DCA Budget Office has historically
recommended that smaller programs maintain a contingency fund
slightly above the standard three to six months of reserve.
Maintaining an adequate reserve of at least six months provides
for a reasonable contingency fund so that the Bureau has the
fiscal resources to absorb any unforeseen costs, such as costly
enforcement actions or other unexpected client service costs.
The Bureau expects the EAR Fund to have 6.8 months in reserve in
fiscal year (FY) 2015/16, 4.9 months in reserve in FY 16/17, 2.9
months in reserve in FY 2017/18, dropping below the recommended
three month reserve, 0.7 months in reserve in FY 2018/19, and a
deficit of $446,000 in FY 19/20. The Bureau expects the HFTI
Fund to have 3.6 months in reserve in FY 15/16, 1.4 months in
reserve in FY 2016/17, dropping below the recommended three
month reserve, and a deficit of $403,000 in FY 2017/18, which
would grow to a deficit of $1.521 million dollars in FY 2018/19
and to a deficit of $2.745 million dollars in FY 2019/20.
Without a fee increase, the Bureau will face a deficit in FY
2017/18 for the HFTI Fund and in FY 2019/20 for the EAR Fund.
According to the Bureau, a deficit will result in curtailed
services, which will delay the handling of consumer complaints,
limit the number of disciplinary actions that could be
adjudicated, and delay the timeframes for licensure and renewal,
which will impact companies trying to legally continue their
business operations.
Increased costs to the Bureau. According to the Bureau, the
increase in expenditures over time is attributable to a general
increase in costs, for example, for retirement and medical
benefits and overhead expenses. In addition, in the past
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several legislative sessions, the Bureau has been charged with
new responsibilities. One of these changes was SB 1019 (Leno,
Chapter 862, Statutes of 2014), which required the Bureau to
partner with the Department of Toxic Substances Control (DTSC)
to establish a program for the testing of chemical flame
retardants in upholstered furniture to determine whether they
comply with a new labeling requirement. This testing is costly,
and in addition to the Bureau's responsibility to reimburse the
DTSC for these tests, the Bureau is required under existing law
to pay the full wholesale cost of any tested upholstered product
if the product is in compliance with labeling and other
requirements. As SB 1019 was being developed, stakeholders were
informed that the Bureau's current fund condition could not
support the establishment of such a robust testing regime. The
increase in fees provided for in this bill, however, will allow
the Bureau to successfully implement such a testing program,
which will enable the Bureau to carry out its statutory mandate
of consumer protection.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee:
Minor and absorbable costs to the Bureau to update regulations
to increase specified fees (EAR Fund and HFTI 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.
SUPPORT: (Verified6/23/15)
California Professional Firefighters
Center for Environmental Health
Natural Resources Defense Council
OPPOSITION: (Verified6/23/15)
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None received
ARGUMENTS IN SUPPORT: According to the Natural Resources
Defense Council, "Fee increases are needed in order to ensure
that [Bureau] has the resources to continue ensuring compliance
with regulations, conducting testing and investigations, and
educating businesses, all of which are critical to consumer
protection?.[Bureau] has a history of working effectively with
stakeholders and we expect that it will continue to do so to
ensure that the fee increases meet resource needs with minimum
negative impact on businesses."
ASSEMBLY FLOOR: 51-26, 5/11/15
AYES: Alejo, Baker, Bloom, Bonilla, Bonta, Brown, Burke,
Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh,
Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia,
Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández,
Holden, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina,
Mullin, Nazarian, O'Donnell, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Santiago, Steinorth, Mark Stone,
Thurmond, Ting, Weber, Williams, Wood
NOES: Achadjian, Travis Allen, Bigelow, Brough, Chang, Chávez,
Dahle, Beth Gaines, Gallagher, Grove, Harper, Irwin, Jones,
Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte,
Olsen, Patterson, Salas, Wagner, Waldron, Wilk
NO VOTE RECORDED: Hadley, Linder, Atkins
Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-1868
6/24/15 15:26:12
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