SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Steven Glazer, Chair

2019 - 2020 Regular

Bill No: Hearing Date: August 8, 2020

Subject:

SUMMARY:

Authorizes a licensed alarm company operator that maintains an internet website to direct a consumer to the internet website for license number instead of placing the licensing information in the advertisement.

Existing law:

1. Establishes the Bureau of Security and Investigative Services (BSIS) to license and regulate Licenses guards, proprietary private security employers and officers, private investigators, alarm companies and employees, locksmith companies and locksmiths, private patrol operators, and repossession agencies and their employees. The Bureau also has jurisdiction over firearm and baton training facilities and their instructors. (Business and Professions Code (BPC) §§ )
   
2. Requires an alarm company operator licensee to notify the BSIS within 30 days of any change of its officers, members, or managers required to be named, as specified, and any addition of a new partner. (BPC § 7599.32)
   
3. Prohibits an alarm company operator from conducting business, from any location other than that location for which a license or branch officer registration was issued. (BPC § 7599.33)
   
4. Requires every advertisement by a licensee soliciting or advertising business to contain his or her name and license number as they appear in the records of the BSIS, and a violation will result in a fine of $500 for the first violation and $1,000 for each subsequent violation. (BPC § 7599.44)
   
5. Defines a “branch office” to mean any additional location, other than the alarm company operator’s principal place of business, where the selling, monitoring, installation, or servicing of alarms is administered, directed or controlled. (BPC § 7599.20)
   

This bill states that if a licensee maintains an internet website, any radio or television broadcast or billboard advertisement by the licensee soliciting or advertising business may direct potential customers to the licensee’s online landing pages for the required advertisement information provided by an alarm company operator, as specified.

FISCAL EFFECT:

According to the Assembly Committee on Appropriations this bill will result in negligible costs to the Bureau of Security and Investigative Services (BSIS).

COMMENTS:

1. Purpose. The California Cable & Telecommunications Association is the sponsor of this bill.
2. Background.

Alarm Company Operations. An alarm company operator operates a business that sells (at the buyer's home or business), installs, monitors, maintains, services, or responds to alarm systems or supervises such actions. Retail stores that sell alarm systems only at the store and do not perform any alarm company functions do not have to obtain a license from the Bureau. Alarm company operators are regulated by the BSIS. BPC § 7599.44 requires licensed alarm companies, on every advertisement, to disclose their company name and license number. This list includes radio ads, TV ads, print ads, website ads, and billboards. The statute has a monetary penalty of $500 for the first violation and $1000 for each subsequent violation. In addition, the law imposes a criminal penalty for violating these provisions.

This bill seeks to revise current law for licensed alarm company operators to not be required to provide their license number during a radio or television broadcast or billboard advertisement and instead direct consumers to the internet website.

1. Arguments in Support. The California Cable and Telecommunications Association writes in support, “(“CCTA”) sponsors Assembly Bill 2783, as amended on May 4, 2020, which would modernize how security alarm companies advertise to potential customers. The current California advertising regulations for alarm companies are costly but provide little consumer protection or awareness. This bill would provide consumers with a better process for vetting security alarm services before signing choosing a particular vendor.”

Cox Homelife Security writes in support, “This bill will provide Californians with additional consumer protections and resources when choosing their security alarm services.”

1. Policy Considerations.

This bill revises the requirements for where an alarm company operator must place their licensing information in an advertisement. There are numerous other licensees regulated under the Department of Consumer Affairs which have to meet the same advertisement guidelines as required of licensed alarm company operators, including: repossessors, private investigators, private security services, locksmiths, and contractors, to name a few. Why should alarm company operators have different advertising requirements than other licensees?

SUPPORT AND OPPOSITION:

Support:

California Cable and Telecommunications Association (sponsor)

Opposition:

None on file

-- END --

Date of Hearing: June 2, 2020

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez, Chair

ABPCA Bill Id:AB 2783

Author:(Medina) – As Amended Ver:May 4, 2020

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill updates alarm company advertising regulations. Specifically, this bill allows, if the licensee maintains a website, any radio or TV broadcast or billboard advertisement by the licensee to direct potential customers to the licensee’s website for the licensee’s name and license number.

FISCAL EFFECT:

Negligible costs to the Bureau of Security and Investigative Services (BSIS).

COMMENTS:

1. Purpose. This bill seeks to provide alarm companies more flexibility in disclosing their name and license number by allowing licensees that advertise on radio, TV or billboards to direct customers to their website for their name and license number.
2. Background. Alarm company operators are regulated by BSIS within the Department of Consumer Affairs. Existing law requires licensed alarm companies, on every advertisement, to disclose their company name and license number, and imposes a criminal penalty for violating these provisions.

Because internet access and websites are now common, the California Cable & Telecommunications Association believes it is unnecessary and unhelpful to display or voice a license number in radio and TV ads. Instead, alarm companies typically have some form of website where customers can be directed to access this information if needed.

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

Date of Hearing:

ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS

Evan Low, Chair

ABPCA Bill Id:AB 2783

Author:(Medina) – As Amended Ver:May 4, 2020

SUBJECT: Alarm company operators: advertisements.

SUMMARY: Modernizes how security alarm companies advertise to potential customers.

EXISTING LAW:

1. Authorizes a city, county, or city and county in the exercise of its police power, and for the purpose of regulation, as specified, license any kind of business not prohibited by law transacted and carried on within the limits of its jurisdiction, including all shows, exhibitions and lawful games, and may fix the rates of the license fee and provide for its collection by suit or otherwise, as specified. (Business and Professions Code (BPC) §§ 16000-16004, 16100-16105; GOV § 37101)
2. Establishes the Bureau of Security and Investigative Services (BSIS) within the Department of Consumer Affairs (DCA). (BPC §§ 101(r), 6980.1, 7501, 7591)
3. Provides for the licensure and regulation of alarm company operators and alarm agents under the Alarm Company Act and requires the BSIS to administer and enforce the act. (BPC §§ 7590-7599.80)
4. Provides that the provisions of the Alarm Company Act shall not prevent the local authorities of any city, county, or city and county, by ordinance and within the exercise of the police power of the city, county, or city and county from:
   1. Requiring alarm company operator licensees to meet the requirements for and obtain a business permit. (BPC § 7592.8(a))
   2. Requiring alarm agents or alarm company operators, or both, to register their name and file a copy of their state issued identification card with the city, county, or city and county. No fee, other than a fee for a business license permit, may be charged nor may any application be required by the city, county, or city and county for that registration. (BPC § 7592.8(b))
   3. Enacting ordinances governing false alarm activations and responses. (BPC § 7592.8(c))

THIS BILL:

1. Clarifies that each printed or online advertisement by a licensee shall have the licensee’s name and license number printed as they appear in the records of the bureau.
2. Clarifies that if the licensee maintains a website, that any radio or TV advertisement shall direct potential customers to an easy-to-find “license information” page on their website.
3. Keeps the violation standards in place and updates the language currently codified.
4. Clarifies and updates alarm company advertising regulations by allowing them to be more flexible when directing customers to their license name and license number.

FISCAL EFFECT: Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose. This bill is sponsored by California Cable & Telecommunications Association. According to the Author, “[This bill] seeks to update, modernize, and clarify the current code section by separating different forms of advertisement. This will clarify and update alarm company advertising regulations. Thus allowing them to be more flexible when directing customers to their license name and license number.”

Background. Alarm company operators are regulated by the Bureau of Security and Investigative Services (BSIS) within the Department of Consumer Affairs (DCS. Existing law requires licensed alarm companies, on every advertisement, to disclose their company name and license number. This list includes radio ads, TV ads, print ads, website ads, and billboards. The statute has a monetary penalty of $500 for the first violation and $1000 for each subsequent violation. Also, the law imposes a criminal penalty for violating these provisions.

This statute, created before the internet, was an effort to capture all possible ways that an alarm company can advertise by mandating “every advertisement.” However, according to the sponsor, the average person does stop and pause the radio or TV to write down an alarm companies license number. This makes it unnecessary and unhelpful to display/voice the license number in radio and TV ads. In keeping with modern times, alarm companies, typically have some form of website where the license number can be displayed and written down if needed.

Prior Related Legislation. SB 673 (Sieroty) (Statutes of 1982, Chapter 1210). Enacted the Alarm Company Act.

ARGUMENTS IN SUPPORT:

According to the California Cable & Telecommunications Association, “More specifically, [this bill] would require security alarm companies to identify its licensee’s name and license number on all print and online advertisements as they appear in the records of the Bureau of Security and Investigative Services at the California Department of Consumer Affairs. For any security alarm company that maintains a website, this bill would require any radio or television advertisements to direct potential customers to an easy-to-find “license information” page on the company website. However, if a security alarm company does not have a website, then any radio or television advertisements to direct potential customers would have to identify its licensee’s name and license number within the radio or television commercial.”

ARGUMENTS IN OPPOSITION:

None on file.

REGISTERED SUPPORT:

California Cable & Telecommunications Association (Sponsor)

REGISTERED OPPOSITION:

None on file.

Analysis Prepared by: Danielle Sires / B. & P. / (916) 319-3301