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CC SR 20230905 D - SB 244 (Eggman) Right to Repair CITY COUNCIL MEETING DATE: 09/05/2023 AGENDA REPORT AGENDA HEADING: Consent Calendar AGENDA TITLE: Consideration and possible action to support Senate Bill (SB) No. 244 (Right to Repair Act). RECOMMENDED COUNCIL ACTION: (1) Authorize the Mayor to sign a letter supporting SB 244 (Right to Repair Act ). FISCAL IMPACT: None Amount Budgeted: N/A Additional Appropriation: N/A Account Number(s): N/A ORIGINATED BY: Shaunna Hunter, MPA, Administrative Analyst REVIEWED BY: Karina Bañales, Deputy City Manager APPROVED BY: Ara Mihranian, AICP, City Manager ATTACHED SUPPORTING DOCUMENTS: A. Draft support letter for SB 244 (page A-1) B. Text of SB 244 (as amended June 29, 2023) (page B-1) C. Assembly Appropriations Analysis, August 13, 2023 (page C-1) BACKGROUND AND DISCUSSION: SB 244, known as the Right to Repair Act, seeks to establish essential requirements for manufacturers of electronic or appliance products, ensuring access to repair information and tools for consumers, service facilities, and service dealers. By doing so, the bill aims to foster equitable and reasonable repair choices, independent of any existing warranties, thereby enhancing clarity in the repair process. SB 244 builds upon the foundation set by the 1970 Song-Beverly Consumer Warranty Act, expanding the obligations for manufacturers of electronic devices and appliances. This move is aligned with a broader trend, as 24 states have contemplated legislation to support consumers' right to repair, and three states have successfully enacted similar protective measures. Senator Eggman, the bill’s author, aims to simplify and decrease the financial burden on consumers seeking repairs for electronics and appliances. Notably, the bill has gained 1 recent support from Apple, Inc., headquartered in Cupertino. A recent communication dated August 23, 2023, from Apple, Inc., underlines the company's endorsement of California's Right to Repair Act, emphasizing the imperative of enhancing repair accessibility while upholding safety, security, and privacy. Under the proposed legislation, manufacturers of electronics designed for personal, household, or home office use would be required to maintain repair documentation for appliances surpassing a $100 valuation threshold, up to seven years sold after July 1, 2021. This measure is poised to streamline and optimize the repair process for consumers. Manufacturer obligations and possible outcomes if SB 244 is enacted: • Access to Repair Information and Tools: The bill would require manufacturers to provide access to diagnostic, maintenance, and repair information, as well as necessary tools, to product owners, service and repair facilities, and service dealers. This access must be provided on fair and reasonable te rms, even if no express warranty exists. • Notification and Disclosure: Service and repair facilities or service dealers not authorized by the manufacturer must inform customers in writing about their non - authorized status before performing repairs on an electronic or appliance product. Additionally, if non-manufacturer replacement parts are used, this fact must be disclosed to the customer. • Civil Penalties: The bill would allow cities, counties, or the state to bring legal action to impose civil penalties on individuals or entities found in violation of the Right to Repair Act. CONCLUSION: Given the potential impacts of SB 244 on consumer rights, repair industries, and local jurisdictions, Staff therefore recommends the City Council authorize the Mayor to sign a letter of support , as drafted, or with revisions. ALTERNATIVES: In addition to the Staff recommendation, the following alternative actions are available for the City Council’s consideration: 1. Identify revised language to add to the letter. 2. Do not authorize the Mayor to sign the letter. 3. Take other action, as deemed appropriate. 2 30940 HAWTHORNE BLVD. / RANCHO PALOS VERDES, CA 90275 -5391 / (310) 544-5207 / FAX (310) 544 -5291 / WWW.RPVCA.GOV September 5, 2023 Via Email The Honorable Susan Talamantes Eggman California State Senate 1021 O Street, Ste. 8530 Sacramento, CA 95814 SUBJECT: Notice of Support for Senate Bill 244 (Right to Repair Act ) Dear Senator Eggman, On behalf of the City of Rancho Palos Verdes, I write to express our support for Senate Bill 244, the Right to Repair Act. We commend your efforts in championing this legislation, which aims to enhance, protect consumer rights, and promote transparency in the electronics and appliance repair industry. In today's rapidly advancing technological landscape, access to repair information and tools for electronic and appliance products is of paramount importance to consumers. Through repair, consumers are extending the life of valuable products and reducing waste while promoting sustainable practices. SB 244 aligns with our City's commitment to fostering equitable and sustainable practices that benefit our residents and the community. By establishing fair and reasonable repair options, this legislation ensures that Californians can make informed choices when it comes to maintaining and repairing their electronic devices and appliances. We acknowledge the significant support that SB 244 has garnered, including the endorsement from Apple, Inc. This level of backing underscores the importance of striking a balance between consumer convenience, safety, and environmental considerations. The Right to Repair Act not only empowers individuals to exercise greater control over their purchases but also aligns with our City's values of responsible resource management and waste reduction. We urge the Committee to carefully consider the positive impact SB 244 can have on all residents and communities across the state. As local leaders, we believe that this legislation will contribute to a more sustainable and equitable future, benefiting both consumers and the environment. A-1 30940 HAWTHORNE BLVD. / RANCHO PALOS VERDES, CA 90275 -5391 / (310) 544-5207 / FAX (310) 544 -5291 / WWW.RPVCA.GOV Thank you for your dedication to advancing policies that promote sustainability. Sincerely, Barbara Ferraro Mayor cc: Ben Allen, Senator, 24th State Senate District Al Muratsuchi, Assemblymember, 66th Assembly District Jeff Kiernan, Cal Cities Sharon Gonsalves, RPPG Rancho Palos Verdes City Council and City Manager A-2 AMENDED IN ASSEMBLY JUNE 29, 2023 AMENDED IN ASSEMBLY JUNE 21, 2023 AMENDED IN ASSEMBLY JUNE 15, 2023 AMENDED IN SENATE MAY 18, 2023 AMENDED IN SENATE APRIL 13, 2023 AMENDED IN SENATE MARCH 27, 2023 SENATE BILL No. 244 Introduced by Senator Eggman (Coauthors: Senators Dodd and Skinner) (Coauthors: Assembly Members Haney, Bennett, and Wicks Wicks, Kalra, and Lowenthal) January 25, 2023 An act to amend and renumber the heading of Chapter 8.6 (commencing with Section 42490) of, and to add Chapter 8.6 (commencing with Section 42488) to, Part 3 of Division 30 of, the Public Resources Code, relating to solid waste management. legislative counsel’s digest SB 244, as amended, Eggman. Right to Repair Act. Existing law, the Song-Beverly Consumer Warranty Act, provides a comprehensive set of procedures for the enforcement of express and implied warranties on consumer goods, as defined. Under existing law, every manufacturer making an express warranty with respect to an electronic or appliance product, including televisions, radios, audio or video recording equipment, major home appliances, antennas, and rotators, with a wholesale price to the retailer of not less than $50 nor Revised 7-6-23—See last page.93 B-1 more than $99.99 is required to make available to service and repair facilities sufficient service literature and functional parts to effect the repair of the product for at least 3 years after the date a product model or type was manufactured, regardless of whether the 3-year period exceeds the warranty period for the product. Existing law also requires every manufacturer making an express warranty with respect to an electronic or appliance product, as described above, with a wholesale price to the retailer of $100 or more, to make available to service and repair facilities sufficient service literature and functional parts to effect the repair of the product for at least 7 years after the date a product model or type was manufactured, regardless of whether the 7-year period exceeds the warranty period for the product. This bill would enact the Right to Repair Act. The bill would require, except as specified and regardless of whether any express warranty is made, the manufacturer of an above-described electronic or appliance product, in the above-described circumstances, and in those same circumstances but sold to others outside of direct retail sales, to make available, on fair and reasonable terms, to product owners, service and repair facilities, and service dealers, the means, as described, to effect the diagnosis, maintenance, or repair of the product, as provided. The bill would also require a service and repair facility or service dealer that is not an authorized repair provider, as defined, of a manufacturer to provide a written notice of that fact to any customer seeking repair of an electronic or appliance product before the repair facility or service dealer repairs the product, and to disclose if it uses replacement parts that are used or from a supplier that is not the manufacturer. The bill would also authorize a city, a county, a city and county, or the state to bring an action in superior court to impose civil penalties on a person or entity for violating the Right to Repair Act, as provided. Vote: majority. Appropriation: no. Fiscal committee: yes.​ State-mandated local program: no.​ The people of the State of California do enact as follows: line 1 SECTION 1. Chapter 8.6 (commencing with Section 42488) line 2 is added to Part 3 of Division 30 of the Public Resources Code, to line 3 read: 93 — 2 — SB 244 B-2 line 1 Chapter 8.6. Right to Repair Act line 2 line 3 42488. This chapter shall be known, and may be cited, as the line 4 Right to Repair Act. line 5 42488.1. It is the intent of the Legislature to provide a fair line 6 marketplace for the repair of electronic and appliance products line 7 and to prohibit intentional barriers and limitations to third-party line 8 repair. line 9 42488.2. (a)  Notwithstanding any other law, every line 10 manufacturer of an electronic or appliance product with a wholesale line 11 price to the retailer, or to others outside of direct retail sale, of not line 12 less than fifty dollars ($50) and not more than ninety-nine dollars line 13 and ninety-nine cents ($99.99), shall make available to owners of line 14 the product, service and repair facilities, and service dealers, line 15 sufficient documentation and functional parts and tools, inclusive line 16 of any updates, on fair and reasonable terms, to effect the diagnosis, line 17 maintenance, or repair of a product for at least three years after line 18 the last date a product model or type was manufactured, regardless line 19 of whether the three-year period exceeds the warranty period for line 20 the product. line 21 (b)  Notwithstanding any other law, every manufacturer of an line 22 electronic or appliance product with a wholesale price to the line 23 retailer, or to others outside of direct retail sale, of one hundred line 24 dollars ($100) or more, shall make available to owners of the line 25 product, service and repair facilities, and service dealers sufficient line 26 documentation and functional parts and tools, inclusive of any line 27 updates, on fair and reasonable terms, to effect the diagnosis, line 28 maintenance, or repair of a product for at least seven years after line 29 the last date a product model or type was manufactured, regardless line 30 of whether the seven-year period exceeds the warranty period for line 31 the product. line 32 (c)  Except as necessary to comply with this section, this section line 33 does not require a manufacturer to divulge a trade secret or license line 34 any intellectual property, including copyrights or patents. line 35 (d)  This section does not require the distribution of a product’s line 36 source code. line 37 (e)  A service and repair facility or service dealer that is not an line 38 authorized repair provider of a manufacturer shall provide a written line 39 notice to any customer seeking repair of an electronic or appliance line 40 product before the repair facility or service dealer repairs the 93 SB 244 — 3 — B-3 line 1 product that informs the customer that it is not an authorized repair line 2 provider for the product, and shall disclose if it uses any used line 3 replacement parts or replacement parts provided by a supplier other line 4 than the manufacturer of the product. line 5 (f)  Nothing in this section shall be construed to require a line 6 manufacturer to make available special documentation, tools, and line 7 parts that would disable or override antitheft security measures set line 8 by the owner of the product without the owner’s authorization. line 9 (g)  Nothing in this section shall be construed to require a line 10 manufacturer to sell service parts if the service parts are no longer line 11 provided by the manufacturer or made available to an authorized line 12 repair provider. line 13 (h)  (1)  No manufacturer or authorized repair provider shall line 14 be liable for any damage or injury caused to any electronic or line 15 appliance product, person, or property that occurs as a result of line 16 repair, diagnosis, maintenance, or modification performed by a line 17 service dealer or owner, including, but not limited to, any of the line 18 following: line 19 (A)   Any indirect, incidental, special, or consequential damages. line 20 (B)  Any loss of data, privacy, or profits. line 21 (C)  Any inability to use, or reduced functionality of, the line 22 electronic product or appliance. line 23 (2)  Paragraph (1) does not apply to a design defect or line 24 manufacturing flaw that existed prior to, or independent of, the line 25 repair, diagnosis, maintenance, or modification performed line 26 pursuant to this section. line 27 (h) line 28 (i)  For purposes of this section, the following definitions apply: line 29 (1)  “Authorized repair provider” means an individual or business line 30 that is unaffiliated with a manufacturer and that has an arrangement line 31 with the manufacturer, for a definite or indefinite period, under line 32 which the manufacturer grants to the individual or business a line 33 license to use a trade name, service mark, or other proprietary line 34 identifier to offer diagnostic, maintenance, or repair services for line 35 electronic or appliance products under the name of the line 36 manufacturer or an arrangement with the manufacturer to offer line 37 diagnostic, maintenance, or repair services for electronic or line 38 appliance products on behalf of the manufacturer. A manufacturer line 39 that offers diagnostic, maintenance, or repair services for the line 40 manufacturer’s electronic or appliance products is considered an 93 — 4 — SB 244 B-4 line 1 authorized repair provider with respect to the electronic or line 2 appliance products if the manufacturer does not have an line 3 arrangement described in this paragraph with an unaffiliated line 4 individual or business. line 5 (2)  “Documentation” means any electronic or appliance product line 6 manual, diagram, reporting output, service code description, line 7 schematic, or similar information that is provided by a line 8 manufacturer to an authorized repair provider, or that is for use by line 9 the manufacturer if the manufacturer does not have any authorized line 10 repair providers, for purposes of effecting the services of diagnosis, line 11 maintenance, or repair of the electronic or appliance product. line 12 (3)  (A)  “Electronic or appliance product” or “product” means line 13 a product, manufactured for the first time time, and first sold or line 14 used in California California, on or after July 1, 2021, described line 15 in subdivision (h), (i), (j), or (k) of Section 9801 of the Business line 16 and Professions Code for which the manufacturer makes available line 17 tools, parts, and documentation to authorized repair providers, and line 18 includes products described in those subdivisions that are sold to line 19 schools, businesses, local governments, or in other methods outside line 20 of direct retail sale. line 21 (B)  “Electronic or appliance product” or “product” does not line 22 include any of the following: line 23 (i)  Equipment or repair parts as defined in Chapter 28 line 24 (commencing with Section 22900) of Division 8 of the Business line 25 and Professions Code. line 26 (ii)  A product or component of an “alarm system” as defined line 27 in subdivision (c) of Section 7590.1 of the Business and Professions line 28 Code. Code, including a fire protection system, as defined in the line 29 California Fire Code. line 30 (iii)  A video game console. line 31 (4)  (A)  “Fair and reasonable terms” means at costs and terms line 32 that are equivalent to the most favorable costs and terms under line 33 which the manufacturer offers the part, tool, or documentation to line 34 an authorized repair provider, accounting for any discount, rebate, line 35 convenient and timely means of delivery, means of enabling fully line 36 restored and updated functionality, rights of use, or other incentive line 37 or preference the manufacturer offers to an authorized repair line 38 provider. line 39 (B)  For documentation, including any relevant updates, “fair line 40 and reasonable terms” also means at no charge, except that, when 93 SB 244 — 5 — B-5 line 1 the documentation is requested in physical printed form, a charge line 2 may be included for the reasonable actual costs of preparing and line 3 sending the copy. line 4 (C)  “Fair and reasonable” also means tools shall be made line 5 available by the manufacturer at no charge and without imposing line 6 impediments to access or use of the tools to diagnose, maintain, line 7 or repair and enable full functionality of the product, or in a manner line 8 that impairs the efficient and cost-effective performance of any line 9 such diagnosis, maintenance, or repair, except that, when a tool is line 10 requested in physical form, a charge may be included for the line 11 reasonable, actual costs of preparing and sending the tool. line 12 (D)  If a manufacturer does not use an authorized repair provider, line 13 “fair and reasonable terms” means at a price that reflects the actual line 14 cost to the manufacturer to prepare and deliver the part, tool, or line 15 documentation, exclusive of any research and development costs line 16 incurred. line 17 (5)  “Part” means any replacement part or assembly of parts, line 18 either new or used, made available by a manufacturer of an line 19 electronic or appliance product to an authorized repair provider to line 20 facilitate the maintenance or repair of a product sold by the line 21 manufacturer. line 22 (6)  “Service dealer” has the same meaning as defined in Section line 23 9801 of the Business and Professions Code. line 24 (7)  “Tool” means any software program, hardware implement, line 25 or other apparatus made available by a manufacturer of an line 26 electronic or appliance product to an authorized repair provider line 27 for the diagnosis, maintenance, or repair of the product, including line 28 software or other mechanisms that provision, program, pair a part, line 29 provide or calibrate functionality, or perform any other function line 30 required to repair the product or part back to fully functional line 31 condition, including any updates. line 32 (8)  “Trade secret” has the same meaning as set forth in line 33 subdivision (d) of Section 3426.1 of the Civil Code, or paragraph line 34 (9) of subdivision (a) of Section 499c of the Penal Code. line 35 (9)  “Video game console” means a computing device, including line 36 its components and peripherals, that is primarily used by consumers line 37 for playing video games, such as a console machine, a handheld line 38 console device, or another device or system. “Video game console” line 39 does not include a general or an all-purpose computer, which 93 — 6 — SB 244 B-6 line 1 includes, but is not limited to, a desktop computer, laptop, tablet, line 2 or cell phone. line 3 42488.3. (a)  A city, a county, a city and county, or the state line 4 may bring an action in superior court to impose civil liability on line 5 a person or entity that knowingly violated this chapter, or line 6 reasonably should have known that it violated this chapter, in the line 7 amount of one thousand dollars ($1,000) per day for the first line 8 violation of this chapter, two thousand dollars ($2,000) per day line 9 for the second violation, and five thousand dollars ($5,000) per line 10 day for the third and subsequent violations. line 11 (b)  Any civil penalties collected pursuant to subdivision (a) line 12 shall be paid to the office of the city attorney, county counsel, line 13 district attorney, or Attorney General, whichever office brought line 14 the action. The penalties collected pursuant to this section by the line 15 Attorney General may be expended by the Attorney General, upon line 16 appropriation by the Legislature, to enforce this chapter. shall be line 17 deposited into the Public Rights Law Enforcement Special Fund. line 18 SEC. 2. The heading of Chapter 8.6 (commencing with Section line 19 42490) of Part 3 of Division 30 of the Public Resources Code is line 20 amended and renumbered to read: line 21 line 22 Chapter 8.7. Cell Phone Recycling Act of 2004 line 23 line 24 line 25 REVISIONS: line 26 Heading—Line 3. line 27 O 93 SB 244 — 7 — B-7 SB 244 Page 1 Date of Hearing: August 16, 2023 ASSEMBLY COMMITTEE ON APPROPRIATIONS Chris Holden, Chair SB 244 (Eggman) – As Amended June 29, 2023 Policy Committee: Privacy and Consumer Protection Vote: 7 - 0 Judiciary 8 - 0 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY: This bill creates a right to repair for certain consumer appliances and electronic products, allowing owners and independent repair providers to obtain from a qualifying product’s manufacturer, on fair and reasonable terms, the documentation, parts, software, and tools needed to repair the product. The bill authorizes a city, a county, a city and county, or the state to bring an action in superior court to impose civil penalties on a person or entity that knew or reasonably should have known they violated this bill’s provisions. FISCAL EFFECT: 1) Costs (Public Rights Law Enforcement Special Fund) to the Department of Justice (DOJ) in the hundreds of thousands of dollars annually to bring actions authorized by the bill. DOJ reports that its Consumer Protection Section will need an additional attorney, a legal secretary, and funding for expert consultants, for costs of $241,000 in fiscal year 2023-24 and $409,000 in fiscal year 2024-25 and ongoing. 2) Costs (Trial Court Trust Fund, General Fund) of an unknown but potentially significant amount to the courts to adjudicate civil actions brought under this bill. This bill allows public prosecutors to file a civil lawsuit to enforce the right to repair created by the bill. Actual costs will depend on the number of violations, the number of cases filed, and the amount of court time needed to resolve each case. It costs approximately $1,000 to operate a courtroom for one hour. Although courts are not funded on the basis of workload, increased pressure on the Trial Court Trust Fund may create a need for increased funding for courts from the General Fund. The 2023-24 budget includes $105 million from the General Fund to backfill declining revenue to the Trial Court Trust Fund. COMMENTS: 1) Purpose. According to the author: SB 244 would make it easier and cheaper to get our consumer electronics and appliances fixed. Manufacturers currently have broad authority to restrict who can access repair information, replacement parts, and the specialized tools that they design devices and products to require. This is authority that we know they are using despite little C-1 SB 244 Page 2 evidence of the harms they claim to protect against, according to a report to Congress by the Federal Trade Commission. Restrictions on repair have direct costs to consumers when they have to pay exorbitant prices to have devices repaired through manufacturer-authorized networks or replace the product entirely. These restrictions also ripple out into the economy, hurting local, regulated repair shops, contributing to our growing e-waste crisis, and stifling the practicality of product owners to resell their property if they choose to do so. Electronic devices have become an essential part of our lives, and we need access to more choices when it comes to the inevitable repairs that will be needed. Providing independent repair shops and product owners with the correct information and parts to make repairs efficiently will stimulate jobs within the communities where repairs are needed, reduce the need to replace products with simple fixes, and save money for consumers. 2) Background. Many products have become more difficult for consumers to repair, particularly products that require special tools, scarce parts, or proprietary diagnostic software or instructional information to fix. When these products break, consumers have very few options for obtaining repairs and must often turn to manufacturers or a limited number of certified repair providers who are authorized by the manufacturers. As a result, consumers are at the mercy of manufacturers and face lengthy waits and expensive repairs, or are forced to purchase new products because they cannot repair their existing goods. In response to this issue, there is a growing “right to repair” movement, which seeks to provide consumers the legal right to access timely, affordable repairs for products like household appliances, cars, agricultural equipment, cellphones, and other consumer electronics. This bill creates a right to repair for specified consumer electronics and appliances. Under the bill, the manufacturer of a qualifying product must provide, on “fair and reasonable terms,” the product’s owner or an independent repair shop with sufficient documentation, tools, and parts needed to repair the product. The duration of the manufacturer’s obligation depends on the price of the product; for products that cost more than $100, the manufacturer must make documentation, parts, and tools available for seven years, with shorter time periods for cheaper products. The right to repair applies to specified electronics and appliances that are normally used or sold for personal, family, household, or home office use, including products sold outside of direct retail sale, including televisions, computers, cellphones, tablets, microwaves, refrigerators, washers, dryers, and dishwashers. Alarm systems, video game consoles, and heavy machinery are expressly exempt from the right to repair. The bill covers products with a wholesale price of at least $50 that have been first sold or used in California on or after July 1, 2021, including products sold outside of direct retail sale. The bill authorizes a city, county, city and county, and the state to bring litigation to enforce a violation of the right to repair and specifies available civil penalties. 3) Related Legislation. SB 271 (Dodd) creates a right to repair for powered wheelchairs, which is enforceable by specified public prosecutors and a private right of action. SB 271 is pending in this committee. C-2 SB 244 Page 3 4) Prior Legislation. SB 983 (Eggman), of the 2021-2022 session, would have created a right to repair for specified appliances and electronic products similar to the right created by this bill. SB 983 was held on the Senate Appropriations Committee’s suspense file. Analysis Prepared by: Annika Carlson / APPR. / (916) 319-2081 C-3