BILL ANALYSIS �
AB 2740
Page 1
Date of Hearing: April 22, 2014
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
AB 2740 (Bonilla and Lieu) - As Amended: April 10, 2014
SUBJECT : Bureau of Electronic and Appliance Repair, Home
Furnishings and Thermal Insulation.
SUMMARY : Requires the Bureau of Electronic 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. Specifically, this bill :
1)Requires that BEARHFTI's powers and duties be subject to
review by the Assembly Business, Professions and Consumer
Protection Committee and the Senate Business, Professions and
Economic Development Committee (Committees), and further
requires that the review be performed as if the provisions of
BEARHFTI were scheduled to be repealed on January 1, 2019.
2)Makes findings and declarations relating to BEARHFTI's
creation, its jurisdiction, and its joint oversight sunset
hearing held by the Committees, and to the following issues
and recommendations that were raised in BEARHFTI's sunset
background paper:
a) Reporting on its long-term fiscal outlook and any
planned efforts to increase revenues and reduce
expenditures;
b) Advising the Committees on its pro rata costs and
whether BEARHFTI could achieve cost savings by handling
more consumer complaints in house;
c) Examining the pros and cons of biennial license renewals
for electronic and appliance repair and thermal insulation
licensees;
d) Conducting market condition assessments for both the
electronic and appliance repair market and the home
furnishings and thermal insulation market to determine if
current law reflects the needs of the markets, where risk
AB 2740
Page 2
to consumers is greatest, where resources could be
refocused or expanded, and whether continued regulation is
necessary across all segments of these markets;
e) Considering whether various licenses should be
consolidated and if it should continue to regulate, or
issue, standalone sanitizer and custom upholsterer
licenses;
f) Reexamining product testing protocols to ensure it has
the information it needs to identify areas of highest risk
to consumers, and reexamining product standards to
determine if some standards could be relaxed, presuming
there is no appreciable impact on consumer safety, if
standards could be better clarified or advertised, or if
penalties for violations are too low to act as a proper
deterrent; and
g) Updating the Committees on implementation of the
Department of Consumer Affair's (DCA's) BreEZe system.
3)States that it is the intent of the Legislature that BEARHFTI
examine and respond to the issues and recommendations
identified in the background paper, and report back to the
Committees by March 1, 2015, with its findings.
EXISTING LAW:
1)Establishes the Electronic and Appliance Repair Dealer
Registration Law (EARDRL), and provides for the licensure and
regulation of electronic and appliance repair dealers and
service contract sellers and administrators. (Business and
Professions Code (BPC) Section 9800 et seq.)
2)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.)
3)Establishes BEARHFTI under the supervision and control of the
Director of DCA, and requires the Director to administer and
enforce the HFTI Act and the EARDRL. (BPC 9810)
AB 2740
Page 3
4)Requires the Governor to appoint a chief of the bureau to
serve under the direction and supervision of the Director, as
specified, and authorizes the chief to exercise or perform the
powers and duties imposed upon the Director. (BPC 9810)
FISCAL EFFECT : Unknown
COMMENTS :
1)Purpose of the bill . This bill requires BEARHFTI to be
subject to review by the Legislature before January 1, 2019,
and requests that BEARHFTI report specified information back
to the Committees by March 1, 2015. This is an
author-sponsored bill.
2)Author's statement . According to the author, "Although
BEARHFTI is subject to sunset review, and was subject to a
sunset review oversight hearing on March 10, 2014, its
statutory provisions do not contain a sunset review provision.
This bill simply seeks to make clear that BEARHFTI is subject
to sunset review, and to reinforce the recommendations
contained in BEARHFTI's sunset review report in order to
increase accountability."
3)BEARHFTI . The California Bureau of Home Furnishings and
Thermal Insulation was established in 1911 by AB 547 (Ryan),
Chapter 73, Statutes of 1911, in response to unscrupulous
manufacturing practices in the mattress industry, which
contributed to the fires following the 1906 San Francisco
earthquake. The California Bureau of Electronic and Appliance
Repair was established in 1963 under the Electronic and
Appliance Repair Dealer Registration Law by SB 1292 (Short),
Chapter 1492, Statutes of 1963, in response to growing
concerns from consumers and law enforcement agencies about
fraud and negligence in the television repair industry. In
2009, AB 20 X4 (Audra Strickland and Huber), Chapter 18,
Statutes of 2009-10 Fourth Extraordinary Session, officially
merged the Bureau of Home Furnishings and Thermal Insulation
with the Bureau of Electronic and Appliance Repair to create
BEARHFTI.
BEARHFTI, which is housed under DCA, licenses and regulates over
40,000 businesses, including businesses that engage in the
repair of electronics and appliances; the sale and
AB 2740
Page 4
administration of service contracts; and the manufacture,
sale, and repair of home furnishings and thermal insulation.
BEARHFTI 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.
4)Sunset Review . Existing law establishes the Joint Sunset
Review Committee to identify and eliminate waste, duplication,
and inefficiency in government agencies. The purpose of the
committee is to conduct a performance review of every eligible
agency, including boards, bureaus, commissions and councils
under DCA, to determine if the agency is still necessary and
cost effective. Currently, the duties of the Joint Sunset
Review Committee are performed by the Assembly Business,
Professions and Consumer Protection Committee and the Senate
Business, Profession and Economic Development Committee
(Committees).
Each eligible agency scheduled for repeal ("sunset"), and even
some bureaus which do not sunset at all, is required to submit
to the committee a report covering the entire period since
last reviewed that includes, among other things, the purpose
and necessity of the agency and any recommendations of the
agency for changes or reorganization in order to better
fulfill its purpose. During "sunset review", the Committees
take public testimony and evaluate the eligible agency prior
to the date the agency is scheduled to be repealed. An
eligible agency is allowed to sunset unless the Legislature
enacts a law to extend, consolidate, or reorganize the
eligible agency.
As part of the 2014 Sunset Review, the Committees prepared a
sunset background paper on BEARHFTI, and on March 10, 2014,
held a joint oversight sunset hearing. Although BEARHFTI is
subject to review, and voluntarily participated in a sunset
review oversight hearing, its statutory provisions do not
contain a sunset review provision. This bill simply clarifies
that BEARHFTI shall be subject to review by the appropriate
policy committees of the Legislature, and requires that review
to be performed as if BEARHFTI's provisions were to be
repealed on January 1, 2019.
In addition, while the hearing and the background paper found
AB 2740
Page 5
BEARHFTI was generally in good standing, it also identified
areas for follow up and requested BEARHFTI to report back to
the Committees on specific issues. This bill specifies that
it is the intent of the Legislature that BEARHFTI examine and
respond to the issues and recommendations identified in the
background paper, and report back to the Committees by March
1, 2015.
5)Related legislation . AB 1926 (Bonilla) of 2014 clarifies when
a statement or advertisement is untrue or misleading for
purposes of existing law prohibiting an electronic or
appliance service dealer from making an untrue or misleading
statement or advertisement. That bill is in the Assembly
Business, Professions and Consumer Protection Committee.
6)Previous legislation . AB 480 (Calderon) (Chapter 421,
Statutes of 2013) defined service contracts to include
contracts for the performance of services relating the
maintenance, replacement, or repair of optical products,
thereby making administrators and sellers of those contracts
subject to registration with the bureau and other requirements
of the act.
AB 127 (Skinner) (Chapter 579, Statutes of 2013) required the
State Fire Marshal, in consultation with BEARHFTI, to review
the flammability standards for building insulation materials,
including whether the flammability standards for some
insulation materials can only be met with the addition of
chemical flame retardants, and would require, if deemed
appropriate, the State Fire Marshal to propose updated
insulation flammability standards.
AB 1443 (Logue) (Chapter 90, Statutes of 2012) required BEARHFTI
to reimburse the manufacturer, distributer, or retailer for
the actual cost of the article or sample taken for product
testing unless the article or sample is found to be in
violation of the Home Furnishings and Thermal Insulation Actor
a regulation of the bureau.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
AB 2740
Page 6
Opposition
None on file.
Analysis Prepared by : Eunie Linden / B.,P. & C.P. / (916)
319-3301