BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          SB 1244 (Lieu) - Structural Pest Control Board: sunset review.
          
          Amended: April 24, 2014         Policy Vote: BP&ED 9-0
          Urgency: No                     Mandate: No
          Hearing Date: May 23, 2014      Consultant: Mark McKenzie
          
          SUSPENSE FILE.
          
          
          Bill Summary: SB 1244 would extend the sunset of the Structural  
          Pest Control Board (SPCB) and the term of its executive officer  
          until January 1, 2019.  The bill would also make a number of  
          technical and clarifying changes to update the Structural Pest  
          Control Law.

          Fiscal Impact: Projected expenditures of approximately $4.85  
          million annually (Structural Pest Control Fund, Structural Pest  
          Control Education and Enforcement Fund), supporting 29.9 PY  
          until January 1, 2019, partially offset by fee revenues of $4.24  
          million, based on the proposed 2014-15 budget.

          Background: Existing law provides for the licensing and  
          regulation of structural pest control applicators, field  
          representatives and operators, and structural pest control  
          companies by the SPCB within the Department of Consumer Affairs  
          (DCA) and repeals the SPCB on January 1, 2015.  Existing law  
          authorizes the SPCB to appoint an executive officer, subject to  
          the approval of the director of DCA and repeals this provision  
          on January 1, 2015.

          In 2011, the SPCB established an Act Review Committee to review  
          the statutes governing structural pest control and assess where  
          changes may be appropriate to streamline processes and maintain  
          consumer protections.  The Act Review Committee has held 18  
          public meetings statewide and solicited input from industry  
          stakeholders and interested parties, ultimately recommending  
          numerous statutory changes that reflect consensus.

          Proposed Law: SB 1244 would extend the sunset of the Structural  
          Pest Control Board (SPCB) and the term of its executive officer  
          until January 1, 2019.  The bill would also make a number of  
          technical and clarifying changes to update the Structural Pest  








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          Control Law, based upon the recommendations of the Act Review  
          Committee, as noted above.

          Related Legislation: This bill is one of six bills introduced  
          this session to extend the sunset on licensing boards within the  
          Department of Consumer Affairs - including SB 1242 (Lieu), SB  
          1243 (Lieu), SB 1245 (Lieu), SB 1246 (Lieu), and SB 1247 (Lieu).

          Staff Comments: DCA indicates that costs associated with  
          extending the operations of the SPCB and its executive director,  
          and making numerous technical, clarifying, and non-substantive  
          changes to the Structural Pest Control Act would be minor and  
          absorbable and within existing resources.  Staff notes that the  
          Structural Pest Control Fund, which supports the activities of  
          the SPCB, is in a declining condition.  Expenditures from the  
          fund outpaced revenues by $593,000 in the current year and are  
          projected to outpace revenues by $547,000 in 2014-15.  The  
          fund's reserve has declined from $1.37 million at the end of  
          2012-13, to $770,000 at the end of 2013-14, and is projected to  
          be $223,000 at the end of 2014-15.  At the current pace of  
          decline, and without corrective action or additional revenues,  
          the fund will be insolvent sometime during the 2015-16 fiscal  
          year, or about three years prior to the sunset date specified in  
          the bill.

          The SPCB intends to implement a pilot program in the current  
          year to test the implementation of a computer based testing  
          system for licensing examinations.  The current cost to  
          administer each examination is $37.50, which exceeds the  
          statutory caps on examination fees.  Staff notes that AB 1685  
          (Williams), currently pending on the Assembly Floor, would raise  
          the maximum fees that the SPCB could charge for examinations as  
          follows:
                 Operator examination fee:  increase from $25 to $100
                 Field representative examination fee:  increase from $15  
               to $75
                 Applicator examination fee:  increase from $15 to $60
          These increased fees are intended to provide sufficient  
          resources to implement computer based testing and allow the SPCB  
          to set the fees at a level sufficient to cover the reasonable  
          costs of administering licensing exams.  It is unclear whether  
          the increased fee authority, if enacted, would provide  
          sufficient resources to address the operating deficiencies in  
          the Structural Pest Control Fund.








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