BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON
          BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
                              Senator Jerry Hill, Chair
                                2015 - 2016  Regular 

          Bill No:            SB 468          Hearing Date:    April 27,  
          2015
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          |Author:   |Hill                                                  |
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          |Version:  |April 22, 2015                                        |
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          |Urgency:  |No                     |Fiscal:    |Yes              |
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          |Consultant|Janelle Miyashiro                                     |
          |:         |                                                      |
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              Subject:  Bureau of Security and Investigative Services.


          SUMMARY:  Extends the operation of the Bureau of Security and  
          Investigative Services and the Alarm Company Act, Locksmith Act,  
          Private Investigator Act, Private Security Services Act,  
          Proprietary Security Services Act, and Collateral Recovery Act  
          until January 1, 2020.  Subjects the Bureau to review by the  
          appropriate committees of the Legislature.  Makes various  
          changes to provisions in the aforementioned Acts to improve the  
          oversight, enforcement and regulation by the Bureau of licensees  
          under each Act.

          Existing law:
          
          1)Establishes the Bureau of Security and Investigative Services  
            (Bureau) within the Department of Consumer Affairs (DCA).   
            (Business and Professions Code (BPC) § 6980.1)

          2)Establishes the:

             a)   Alarm Company Act (BPC § 7590)

             b)   Locksmith Act (BPC § 6980)

             c)   Private Investigator Act (BPC § 7512)

             d)   Private Security Services Act (BPC § 7580) 








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             e)   Proprietary Security Services Act (BPC § 7574)

             f)   Collateral Recovery Act (BPC § 7500)

          3)Requires armed guards applying for a Bureau issued firearms  
            permit to submit a second set of fingerprints to the  
            Department of Justice (DOJ) to obtain a DOJ Firearm  
            Eligibility Determination before consideration of a firearms  
            permit from the Bureau.  (BPC § 7583.23(c))

          4)Specifies that any institution, firm, or individual seeking  
            the Bureau's certification as a firearms training facility  
            must complete an application that includes: 

             a)   The name and location of the entity.

             b)   The places, days, and times the course will be offered.

             c)   An estimate of the minimum and maximum class size.

             d)   The location and description of the range facilities.

             e)   The names and certificate numbers of the  
               Bureau-certified firearms training instructors who will  
               teach the course.  (BPC § 7585.3)

          5)States that applicants that wish to obtain a firearms  
            qualifications card must complete a course of training in the  
            carrying and usage of firearms according to the standards of  
            the Bureau's "Firearms Training Manual", which includes:

             a)   Moral and legal aspects of firearms usage.

             b)   Firearms nomenclature and maintenance.

             c)   Weapon handling and shooting fundamentals.

             d)   Emergency procedures.

             e)   Prequalification range training.

             f)   Qualification course of fire: 

               i)     Range safety and procedures;








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               ii)    Demonstration and dry firing;

               iii)   Practice rounds;

               iv)    Qualification firing.  (BPC §§ 7585 and 7585.6)

          6)States those institutions that do not award degrees and solely  
            provide educational programs for total charges of $2,500 or  
            less, when no part of the total charges is paid from State or  
            Federal student financial aid programs, are exempt from  
            regulation by the Bureau of Private Post-Secondary Education.   
            (California Education Code (CEC) § 94874)

          7)Requires Private Patrol Operators to maintain an accurate and  
            current record of all firearms and deadly weapons in the  
            possession of the licensee or any employee while he or she is  
            on duty.  (BPC § 7583.2)

          8)Specifies that any person registered as a security guard or  
            patrol person shall deliver to the Director of the DCA a  
            written report describing fully the circumstances surrounding  
            any incident involving the discharge of any firearm in which  
            he or she was involved while acting within the course and  
            scope of his or her employment, within seven days of the  
            incident and requires specified information to be provided on  
            the form provided by the Director.  (BPC § 7583.4)

          9)Exempts California peace officers from Bureau firearms  
            training courses if he or she has successfully completed a  
            course of study in the use of firearms.  
          (BPC § 7583.22)

          10)States that a Private Investigator must possess a valid  
            Bureau firearms qualification card on his or her person while  
            carrying a firearm during the course of an investigation.   
            (BPC § 7542)

          11)States that every agreement, including but not limited to,  
            lease agreements, monitoring agreements, and service  
            agreements, as well as all labor, services, and materials to  
            be provided for the installation of an alarm system, must be  
            in writing.  (BPC § 7599.54)  









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          This bill:

          1) Extends the Bureau's operations and Alarm Company Act,  
             Locksmith Act, Private Investigator Act, Private Security  
             Services Act, Proprietary Security Services Act, and  
             Collateral Recovery Act until January 1, 2020. 

          2) Subjects the Bureau to review by the appropriate committees  
             of the Legislature.

          3) Requires applicants applying for licensure as an armed  
             security guard to submit alongside his or her application, a  
             signed affidavit of his or her completion of a psychological  
             examination by a licensed psychologist.

          4) Requires both a security guard and his or her  employer  to  
             submit a written report to the Director of the DCA of any  
             incident involving the discharge of a firearm while on he or  
             she is on duty.

          5) Requires the Bureau to conduct inspections of all firearms  
             training facilities in this state to ensure compliance with  
             applicable Bureau requirements, rules, and regulations.

          6) Exempts Federal Law Enforcement Officers from Bureau  
             firearms, power to arrest, and baton training requirements if  
             he or she has already completed a course of study for each.

          7) Clarifies that private investigators who wish to carry a  
             concealed firearm must obtain and have on their person while  
             carrying out an investigation, both a Bureau issued firearms  
             permit as well as a Concealed Carry Weapons (CCW) permit.  

          8) Requires alarm companies to make a specific disclosure to  
             their customers regarding any evergreen clause renewals in  
             their contracts.

          
          FISCAL  
          EFFECT:  Unknown.  This bill has been keyed "fiscal" by  
          Legislative Counsel.

          









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          COMMENTS:
          
          1.Purpose.  This bill is sponsored by the  Author  .  This bill is  
            one of five "sunset bills" the Author is sponsoring this  
            session.  According to the Author, this bill is necessary to  
            extend the sunset date of the Bureau of Security and  
            Investigative Services in order to ensure continued oversight  
            of alarm companies and their employees, locksmiths, private  
            investigators, private security services, proprietary security  
            services, and repossessors.  
             
             California's security guard, alarm company, repossessor,  
             locksmith, and private investigator licensees are better  
             served with oversight from the Bureau, and the public is  
             better protected by Bureau regulation and accountability  
             toward these professions.  If the Bureau is eliminated,  
             consumer safety and the greater public would be vulnerable to  
             more predatory companies and armed guards who would not be  
             held accountable with specific training requirements.

          2.Oversight Hearings and Sunset Review of Licensing Boards and  
            Programs.  In 2015, the Senate Business, Professions and  
            Economic Development Committee and the Assembly Business and  
            Professions Committee (Committees) conducted joint oversight  
            hearings to review 12 regulatory entities: California  
            Accountancy Board; California Architects Board and Landscape  
            Architects Committee; California State Athletic Commission;  
            Board of Barbering and Cosmetology; Cemetery and Funeral  
            Bureau; Contractors State License Board; Dental Board of  
            California; Board for Professional Engineers, Land Surveyors  
            and Geologists; Board of Registered Nursing; Bureau of  
            Security and Investigative Services and; Board of Vocational  
            Nursing and Psychiatric Technicians.
             
             The Committees began their review of the aforementioned  
             licensing agencies in March and conducted two days of  
             hearings.  This bill, and the accompanying sunset bills, are  
             intended to implement legislative changes as recommended by  
             staff of the Committee's and which are reflected in the  
              Background Papers  prepared by Committee staff for each agency  
             and program reviewed by the Committees for this year.

          3.Background.  The private security industry in this country  
            dates back to the 19th century with private citizens  








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            performing many duties that today are associated with Federal  
            and state law enforcement. The growth in the number of  
            individuals and breadth of activities performed (such as  
            guarding railroad shipments, detective work to investigate  
            crimes, tracking down and apprehending criminals, and  
            providing security advice to banks) was integral in  
            determining that regulation of the industry was necessary.
             
             In California, regulatory oversight of the private security  
             industry began in 1915 with the creation of the Detective  
             Licensing Board under the State Board of Prison Directors to  
             license and regulate private detectives. The Detective  
             Licensing Board was subsequently renamed the Detective  
             Licensing Bureau, and today its statutes are known as the  
             Private Investigator Act. In 1955, the Detective Licensing  
             Bureau became the Bureau of Private Investigators and  
             Adjustors that in 1970 was combined with the Collection  
             Agency Licensing Bureau and renamed the Bureau of Collection  
             and Investigative Services.  As a result of legislation (AB  
             936, Chapter 1263, Statutes of 1993), the Bureau was formally  
             renamed as its current identifier, the Bureau of Security and  
             Investigative Services (Bureau).

             The Bureau currently licenses about 380,000 companies and  
             employees serving in the areas of alarm services, locksmith  
             services, private investigation, private security,  
             repossession, and firearm and baton training.  Based on the  
             past three fiscal years, the Bureau issues an average of  
             1,900 company licenses, 71,000 employee registrations, and  
             12,000 Bureau firearm permits. On average, the Bureau renews  
             9,500 company licenses, 105,000 employee registrations, and  
             11,500 Bureau firearm permits each year.

             Specifically, the Bureau regulates the following Acts:

               1.     Alarm Company Act
               2.     Locksmith Act
               3.     Private Investigator Act
               4.     Private Security Services Act
               5.     Proprietary Security Services Act
               6.     Collateral Recovery Act

          1.Review of the Bureau: Issues Identified and Recommended  
            Changes.   The following are some of the major issues  








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            pertaining to the Bureau along with background information  
            concerning the particular issue.  Recommendations were made by  
            Committee staff regarding the particular issue areas which  
            needed to be addressed.

              a)   Issue: Establishing a Sunset Date for the Bureau.  

               Background:  Currently there is no sunset date established  
               for the Bureau or the six Acts which the Bureau regulates.   
               The 2015 Sunset Hearing was the Bureau's first Sunset  
               Review.  The Bureau and Department appear committed to  
               working collaboratively with the Legislature and the  
               Committees to find solutions moving forward in the  
               regulation if this important industry and thus should have  
               the opportunity to address new and existing issues raised  
               within the Bureau as well as from the Committees.  

               Recommendation and Proposed Statutory Change:  As a result  
               of the 2015 Sunset Hearing, this bill will establish a new  
               sunset date, thereby extending the six professional Acts  
               regulated by the Bureau in order to address the issues  
               raised within the Bureau and by the Committees.  

              b)   Issue: Mental Health Evaluations for Armed Guards.  

               Background:  Currently, California does not require mental  
               health examinations for armed guards.  All applicant types,  
               with the exception of proprietary private security  
               employers, must submit their fingerprints to the Federal  
               Bureau of Investigation (FBI) and Department of Justice  
               (DOJ) for a criminal background check. Currently, the law  
               does not provide the Bureau with the authority to require  
               Proprietary Private Security Employers to be fingerprinted.

               Guards who apply for a Bureau Firearm Permit must submit a  
               second set of fingerprints to obtain a DOJ Firearm  
               Eligibility Determination.  The DOJ Firearm Bureau then  
               advises the Bureau whether the individual may possess or is  
               prohibited from possessing a firearm based on the  
               applicant's prior criminal past or history of mental  
               instability.  Mental instability includes past restraining  
               orders, suicide attempts, and 5150 psychiatric holds.

               In addition, Bureau staff checks the Bureau's application  








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               and enforcement databases for any possible prior  
               disciplinary actions, citations issued, or investigations  
               related to the applicant.  The application database is  
               where Bureau enforcement staff would note an application  
               hold.  However, there is no national database for  
               disciplinary actions for the industries under the Bureau's  
               purview.

               Recommendation and Proposed Statutory Change:  As a result  
               of public safety concerns on the mental stability of  
               individuals working as armed guards, this bill will require  
               applicants to submit an affidavit signed by a licensed  
               psychologist that states he or she has undergone a  
               psychiatric evaluation alongside his or her Bureau Firearm  
               Permit application.

              c)   Issue: Mandatory Reporting Requirements.
                     
               Background:  The Bureau is not required by law to collect  
               reports of shooting incidents involving armed guards.   
               However, entities overseeing the actions of licensed armed  
               guards are required to submit these reports.  There is  
               currently no legal basis for the Bureau to collect reports  
               of firearms incidents involving armed guards.

               Private Patrol Operators are mandated to file an incident  
               report with the Bureau when a firearm is discharged by a  
               licensee, its qualified manager (QM), or one of its  
               registrants, or when an act of violence occurs involving a  
               licensee/QM/ registrant that requires law enforcement to  
               respond.  Repossessor Agencies are mandated to file an  
               incident report with the Bureau when an act of violence  
               occurs involving a licensee, its QM, or one of its  
               registrants that requires law enforcement to respond.

               The Private Security Act requires security guards and their  
               licensed employer (Private Patrol Operator) are to report  
               an incident within 7 days of the incident occurring.  The  
               process of reporting an incident of an altercation with an  
               armed guard, whether involving a firearm or not, begins  
               with a Report of Incident Form (RIF).  After an RIF is  
               submitted an investigation can be initiated.  The Bureau  
               will also initiate an investigation if it receives  
               information regarding an incident from law enforcement, a  








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               complaint, or a media article.  After an investigation has  
               been completed the Bureau can file both an administrative  
               action and forward the case to the local District Attorney  
               for potential criminal actions.  If no criminal charges are  
               pressed, then the licensee involved in the incident is  
               subject to have their license revoked or suspended.  If  
               criminal charges are pressed, the Bureau will place a hold  
               on the license until that license expires.  The Bureau  
               continues to pursue administrative action against the guard  
               even if the convicted person is incarcerated, to revoke the  
               license.  Administrative action by the Bureau is made  
               public on the Bureau's website upon the filing of an  
               accusation by the Attorney General's Office.

               It is unknown how many incidents that meet the criteria for  
               reporting are not reported to the Bureau since this is a  
               process that depends upon self-reporting  . However, if an  
               incident rises to the level of a licensee/QM/registrant  
               being arrested, the Bureau should receive a subsequent  
               arrest report from the DOJ.  Specifically, the number of  
               guard shooting incidents is currently unknown because of  
               this self-reporting system and because the current Consumer  
               Affairs System (CAS) does not categorize reports based on  
               the type of incident.  There is currently no consolidated  
               database at the Bureau that can supply quantifiable  
               information as to the incident type in which a report was  
               filed.

               Recommendation and Proposed Statutory Change:  As a result  
               of issues that have been raised about the effectiveness of  
               the self-reporting process for firearms discharge  
               incidents, this bill requires submission to the Director of  
               the DCA of a firearms incident report by both the  
               individual involved in the discharge incident as well as  
               his or her employer.

              d)   Issue: Firearms Training Facilities Oversight.  

               Background:  Any institution, firm, or individual seeking  
               the Bureau's certification as a firearms training facility  
               must complete an application that includes: 1) the name and  
               location of the entity; 2) the places, days, and times the  
               course will be offered; 3) an estimate of the minimum and  
               maximum class size; 4) the location and description of the  








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               range facilities; and 5) the names and certificate numbers  
               of the Bureau-certified firearms training instructors who  
               will teach the course.  In addition, each owner or  
               principal of the training facility business must complete a  
               Bureau personal identification application form, pay the  
               specified certification fee, and submit fingerprints.

               The initial and continued education firearms training  
               course offered by a Bureau-certified firearms training  
               facility must comply with the content and format specified  
               in the Bureau's Firearms Training Manual.  However, the  
               firearm training facility is not required to provide its  
               specific course materials to the Bureau for approval.

               A Bureau-certified firearm or baton training facility, or  
               Bureau-approved school that provides training to private  
               proprietary security officers (PPSOs) or security guards  
               does not need to be approved by the Bureau of Private  
               Postsecondary Education (BPPE) in order to obtain the  
               Bureau's certification or approval, unless BPPE's law  
               requires that they be approved.  The Bureau refers  
               institutions to BPPE to verify their exemption from BPPE's  
               law.

               There is no statutory requirement for the Bureau to inspect  
               the approved schools and firearm/baton training facilities;  
               however, the Bureau has the discretionary authority to do  
               so.  The Bureau carried out a firearm training facility  
               pilot program in Fiscal Year (FY) 2012-13 and conducted 15  
               inspections, but due to staff and workload issues, the  
               inspections were discontinued.  However, the firearm/baton  
               training facilities and approved trainers are inspected as  
               part of an investigation in response to a complaint.  The  
               Bureau has the statutory authority to suspend or revoke a  
               firearm/baton training school's certification for  
               violations of the law. Also, the Bureau has the ability to  
               cancel the approval of an approved trainer.

               Recommendation and Proposed Statutory Change:  As a result  
               of issues that have been raised about the comprehensiveness  
               of firearms training facilities in providing adequate  
               training to licensees who pursue a Bureau Firearm Permit,  
               this bill will require the Bureau to conduct inspections of  
               all firearms training facilities in the state of California  








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               to ensure compliance with applicable Bureau requirements,  
               rules, and regulations.

              e)   Issue: Training Exemptions for Federal Law Enforcement  
               Officers.
                     
               Background:  The Private Security Services Act exempts  
               specified peace officers from the firearm training required  
               as a condition for issuance of the Bureau's Firearms  
               Permit.  Peace officers are already required to complete  
                                             firearms training through their employing agency, hence the  
               exemptions from the training required for issuance of the  
               Bureau's Firearms Permit.

               Active duty peace officers may apply to be an armed or  
               unarmed security guard. However, to carry a weapon as a  
               security guard, a peace officer must have on his/her  
               person, while performing the duties of a security guard,  
               either a written authorization from his/her primary  
               employer (law enforcement entity) giving the peace officer  
               permission to carry a weapon while performing the duties of  
               a security guard or the peace officer must have an exposed  
               firearm permit issued by the Bureau. 

               If the peace office is unable to obtain the written  
               permission from his/her primary employer (law enforcement  
               entity) the peace officer must apply for the firearm  
               permit.  Most law enforcement entities will not give a  
               peace officer written permission on their department  
               letterhead to carry a weapon, off duty, while performing  
               the duties of a security guard.  Therefore, the peace  
               office must usually apply for the Bureau Firearms Permit.  
               Specified active duty and level 1 & 2 reserve peace  
               officers are also exempt from having to submit fingerprints  
               for the security guard registration.  However, a peace  
               officer must submit fingerprints if the officer is also  
               applying for the firearm permit.  If the peace officer is  
               only applying for the security guard registration they have  
               the option of submitting or not submitting fingerprints.   
               However, if they leave their primary employment with law  
               enforcement (retired, quit, laid off, or fired) and have  
               not submitted fingerprints they must notify the Bureau that  
               they are no longer with law enforcement and return the  
               security guard registration to the Bureau within 








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               72 hours. 

               If they wished to continuing working as a security guard  
               they would have to reapply as a private citizen and  
               complete the required training along with submission of  
               fingerprints in order to obtain a security guard  
               registration.  Most peace officers, who work off duty as  
               armed or unarmed security guards, prefer to submit  
               fingerprints for both the security guard and the firearm  
               permit.  This allows a peace officer to retain the security  
               guard registration and exposed firearm permit after the  
               peace officer retires or changes employment status, and is  
               no longer a sworn peace officer.

               California does not recognize Federal Law Enforcement  
               Officers as California peace officers.  Therefore, any  
               Federal Law Enforcement Officer would not qualify for the  
               same exemptions mentioned above that California peace  
               officers would be eligible to receive.  Federal Law  
               Enforcement Officers are also already required to complete  
               firearms training through their employing agency.

               Recommendation and Proposed Statutory Change:  As a result  
               of issues of redundant training requirements for Federal  
               Law Enforcement Officers raised by the Bureau, this bill  
               will exempt Federal Law Enforcement Officers from Bureau  
               firearms, power of arrest, and baton required training  
               courses if he or she has already completed a course of  
               study in each of these subjects.  This will make  
               requirements and exemptions for Federal Law Enforcement  
               Officers consistent with requirements and exemptions for  
               California peace officers, whose prior training has been  
               determined as sufficient for licensure.

              f)   Issue: Concealed Carry for Private Investigators.  

               Background:  Currently, the Business and Professions (B&P)  
               Code does not specifically prohibit Private Investigators  
               (PIs) to carry a concealed weapon while carrying out an  
               investigation covered by the PI Act.  There is some concern  
               about the transmittal of information from the Bureau to  
               licensees that a PI with a Concealed Carry Weapon (CCW)  
               permit (Penal Code §§ 26150 and 26155) may not carry that  
               concealed weapon while carrying out an investigation  








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               covered by the PI Act.  The ambiguity within the B&P Code  
               and the aforementioned information provided to licensees by  
               BSIS has caused confusion among PIs.

               Recommendation and Proposed Statutory Change:  As a result  
               of concerns raised by PI licensees, this bill will clarify  
               that PIs who wish to carry a concealed firearm may do so if  
               he or she possesses both a Bureau Firearm Permit and a CCW  
               permit while carrying out an investigation.

              g)   Issue: Evergreen Clause Disclosure.  
                     
                Background:  Currently, Alarm Companies are exempt from  
               specific disclosure requirements regarding automatic  
               renewal provisions in their contracts, known as "Evergreen  
               Clauses" or "Rollover Clauses".  This clause in the  
               contract allows for automatic renewal of the monitoring  
               portion of the contract unless the customer cancels the  
               contract in writing by the date indicated in the  
               contractual agreement (normally 30 days before the contract  
               ends).  This clause, however, is not always apparent to the  
               customer since Alarm Companies are not obligated to notify  
               consumers of this contractual obligation.  

               The Bureau has stated that it receives approximately 70  
               complaints per year related to Evergreen Clauses, which  
               comprises 40% of all alarm company complaints received.   
               Since these complaints involve a contractual agreement, the  
               Bureau states that is it frequently limited in what it can  
               do for the consumer.

               Recommendation and Proposed Statutory Change:  As a result  
               of an issue about consumer protection raised by the Bureau,  
               this bill will require alarm companies to give their  
               customers specific disclosure about any automatic renewal  
               provisions in their contracts.

          2.Related Legislation This Session. 
             
              SB 465  (Hill) extends the operation of the Contractors' State  
             License Board until 2020 and makes various changes to the  
             Contractors' State License Law.  (  Status:   The bill will also  
             be considered by this Committee at today's hearing.) 









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              SB 466  (Hill) sunsets the Board of Registered Nursing and  
               makes various
             Changes to the Nursing Practice Act.  (  Status:   The bill will  
               also be considered by
                 this Committee at today's hearing.) 

              SB 467  (Hill) extends the operation of the California Board  
             of Accountancy until 2020 and makes several changes as it  
             relates the DCA.  (  Status:   The bill will also be considered  
             by this Committee at today's hearing.) 

              SB 469  (Hill) extends the operation of the California State  
             Athletic Commission until 2020.  Makes changes to the laws  
             governing the Commission's operations and the Commission's  
             oversight of professional and amateur boxing, professional  
             and amateur kickboxing, all forms and combinations of full  
             contact martial arts contests, including mixed martial arts  
             and matches or exhibitions conducted, held or given in  
             California.  (  Status:   The bill will also be considered by  
             this Committee at today's hearing.)     

              AB 177  (Bonilla) extends the operation of the Board for  
             Professional Engineers, Land Surveyors and Geologists and  
             California Architects Board and Landscape Architects  
             Committee until January 1, 2020.  (  Status:   The bill is  
             pending in the Assembly Committee on Business and  
             Professions.)     

              AB 178  (Bonilla) extends the operation of the Board of  
             Vocational Nursing and Psychiatric Technicians until January  
             1, 2020.  (  Status:   The bill is pending in the Assembly  
             Committee on Business and Professions.)     

              AB 179  (Assembly Committee on Business and Professions)  
             extends the operation of the Dental Board of California until  
             January 1, 2020.  (  Status:   The bill is pending in the  
             Assembly Committee on Business and Professions.)     

              AB 180  (Assembly Committee on Business and Professions)  
             extends the operation of the Cemetery and Funeral Bureau  
             until January 1, 2020.  (  Status:   The bill is pending in the  
             Assembly Committee on Business and Professions.)     

              AB 181  (Assembly Committee on Business and Professions)  








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             extends the operation of the Board of Barbering and  
             Cosmetology until January 1, 2020.  (  Status:   The bill is  
             pending in the Assembly Committee on Business and  
             Professions.)


           NOTE  :  Double-referral to Senate Committee on Judiciary.
          
          SUPPORT AND OPPOSITION:
          
           Support:  

          None on file as of April 21, 2015.

           Opposition:  

          None on file as of April 21, 2015.



                                      -- END --