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 SB 1244 (Lieu) Page 1 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. SB 1244 (Lieu) Page 2