BILL ANALYSIS Ó
AB 2192
Page 1
Date of Hearing: April 12, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 2192
(Salas) - As Amended April 6, 2016
SUBJECT: Court Reporters Board of California: personnel.
SUMMARY: Extends the regulatory authority of the Court
Reporters Board of California (CRB) and its authority to appoint
an executive officer (EO) until January 1, 2021.
EXISTING LAW:
1)Establishes the CRB within the Department of Consumer Affairs
(DCA); specifies that the CRB consists of three public members
and two certified shorthand reporters (CSRs); extends the
operation of the CRB until January 1, 2017; and, subjects the
CRB to review by the appropriate policy committees of the
Legislature. (Business and Professions Code (BPC) Section 8000
et seq.)
2)Authorizes the CRB to adopt rules and regulations as necessary
to administer and enforce the provisions of the CRB licensing
acts, and requires the adoption, amendment or repeal of those
rules and regulations to be made in accordance with
Administrative Regulations and Rulemaking as specified in
Government Code Sections 11340, et seq.)
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3)Defines a "CSR" as a person who holds a valid certificate as a
shorthand reporter, provides that no other person, firm, or
corporation may assume or use the title "CSR". (BPC Section
8018)
4)Provides that the CRB may appoint, prescribe the duties, and
fix the salary of an EO and extends the operation of the EO
until January 1, 2017. (BPC Section 8005)
5)Defines the practice of shorthand reporting as the making, by
means of written symbols or abbreviations in shorthand or
machine shorthand writing, of a verbatim record of any oral
court proceeding, deposition, court ordered hearing or
arbitration, or proceeding before any grand jury, referee, or
court commissioner and the accurate transcription thereof.
(BPC Section 8017)
6)Requires all fees and revenue collected by the CRB to be
reported to the State Controller and shall be deposited with
the State Treasurer to be placed in the Court Reporters' Fund,
which fund is continued in existence in the State Treasury and
is appropriated. (BPC Section 8030)
7)Authorizes the CRB to administer the Transcript Reimbursement
Fund (TRF). (BPC Section 8008(g))
THIS BILL:
1)Extends the sunset date for the Court Reporters Board of
California (CRB) to January 1, 2021.
2)Extends the sunset date for its EO to January 1, 2021.
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FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. Unless legislation is carried this year to extend the
sunset dates for the CRB and its EO, they will be repealed on
January 1, 2017.
The Court Reporters Board of California. Court reporters are
highly trained professionals who stenographically preserve the
words spoken in a wide variety of official legal settings such
as court hearings, trials, and other pretrial litigation-related
proceedings, namely depositions. Court reporters work in
courtrooms as official reporters or in the private sector as
freelance reporters who provide deposition services. These
transcripts, which include testimony given under oath, are
relied upon by the consumer as an accurate source of
information. The CRB carries out its mission by testing,
licensing and disciplining court reporters, who use the title
CSR, and by recognizing the schools of court reporting that meet
state curriculum standards.
In California, a person must be licensed to work as a court
reporter in state courts (official reporter) or to act as a
deposition officer (freelance reporter). Freelance reporters
provide services as individual contractors or through court
reporting firms.
Joint Oversight Hearings and Sunset Review of DCA Licensing
Boards. In March of 2016, the Assembly Business and Professions
Committee and the Senate Business, Professions and Economic
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Development Committee (Committees) conducted multiple joint
oversight hearings to review 11 regulatory boards within the DCA
and one regulatory entity outside of the DCA. The sunset bills
are intended to implement legislative changes recommended in the
respective background reports drafted by the Committees for the
agencies reviewed this year.
The Sunset Review Process. The sunset review process provides a
formal mechanism for the DCA; the Legislature; the regulatory
boards, bureaus and committees; interested parties; and
stakeholders to make recommendations for improvements to the
authority of consumer protection boards and bureaus. This is
performed on a standard four-year cycle and was mandated by SB
2036 (McCorquodale), Chapter 908, Statutes of 1994. Each
eligible agency is required to submit to the Committees a report
covering the entire period since last reviewed that includes,
among other things, the purpose and necessity of the agency and
any recommendations of the agency for changes or reorganization
in order to better fulfill its purpose. During the sunset
review hearings, the Committees take public testimony and
evaluate the eligible agency prior to the date the agency is
scheduled to be repealed. An eligible agency is allowed to
sunset unless the Legislature enacts a law to extend,
consolidate, or reorganize the eligible agency.
In the Committee's background paper on the CRB, issues were
raised regarding the CRB's ability to maintain long-term fiscal
solvency, administer the TRF, and enforce court reporting
statutes against foreign court reporting corporations.
Financial Solvency. The CRB's license fee reached the statutory
limit of $125 in July 2010. This fee cap has not changed since
the CRB was established in 1951 and is no longer viable today.
As such, the CRB is facing a structural deficit, which will lead
to a decreasing reserve of 4.7 months at the end of Fiscal Year
2016-17. Last year, the CRB attempted to secure an author for a
bill to raise the fee cap to $250, but was unsuccessful.
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While there is no statutory mandatory reserve level for the
Board, the TRF cannot be funded when the Board reaches less than
six months of operating expenses in reserve. In addition, the
DCA Budget Office has historically recommended that smaller
programs maintain a contingency fund slightly above the standard
three to six months of reserve. Maintaining an adequate reserve
of at least six months provides for a reasonable contingency
fund so that the Board has the fiscal resources to absorb any
unforeseen costs, such as costly enforcement actions or other
unexpected client service costs.
Transcript Reimbursement Fund. In 1981, the profession initiated
legislation that created the TRF to fund payment of court
transcripts for indigent litigants in civil matters. By law, a
minimum of $300,000 of the Board's total revenue must go to the
TRF annually on July 1. The TRF consists of the Pro Bono
program and the Pro Per program that differ in who may apply and
how much monetary assistance is available to individual cases
and all cases overall. The total amount of annual funding for
the Pro Per program is $30,000, which is quickly exhausted each
year as there are enough unpaid claims at the end of the year to
appropriate the full $30,000 at the beginning of the next year,
creating an ever-growing backlog of applications. The remaining
$270,000 in the TRF is allocated to the Pro Bono program. This
program runs on a fiscal year basis and typically does not
expend the full amount.
Since its inception in 1981, the TRF has had a sunset date,
which the Legislature has continued to extend. The TRF is
currently scheduled to be repealed on January 1, 2017, and
unless legislation is passed extending that date, all
unencumbered funds remaining in the TRF, as of that date, will
be transferred to the Court Reporters Fund. The Pro Per program
began as a pilot project to expand the TRF for more indigent
litigants. This project is also scheduled to be repealed on
January 1, 2017, unless legislation extends that date.
Foreign Court Reporting Corporations. According to the CRB,
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foreign corporations are offering court reporting services are
operating in California without authorization. AB 1461 (Ruskin),
of 2009 sought to clarify that in addition to corporations, a
firm, partnership, sole proprietorship or other business entity
providing or arranging for shorthand reporting services (any
entity offering or providing the services of a shorthand
reporter) was barred from doing or failing to do any act that
constitutes unprofessional conduct under any statute, rule or
regulation, as specified. The bill died in the Assembly
Appropriations Committee.
In 2010, the Board received a complaint that U.S. Legal, a
Texas-based corporation, was violating gift-giving provisions
under CRB regulations. After investigation, a citation and fine
were issued, but U.S. Legal denied the Board's jurisdiction to
issue it a citation. Subsequent litigation (Court Reporters
Board v. U.S. Legal) found that although U.S. Legal was
rendering court reporting services in California and was in
violation of gift-giving regulations, there was no explicit
authority in current statute authorizing the CRB to impose
citations or fines against U.S. Legal because U.S. Legal was not
authorized to do business in California.
Corporations Code Section 13410(a) requires "professional
corporations" (those that provide services for which a license
is required) to be "subject to the applicable rules and
regulations adopted by, and all the disciplinary provisions of
the [BPC] expressly governing the practice of the profession in
this state, and to the powers of, the governmental agency
regulating the profession in which such corporation is
engaged[.]" However, the court reporting corporations do not
believe they are subject to these rules because they are not
professional corporations that offer professional services.
Instead these corporations believe they only contract for
professional services, and are therefore exempt from rules that
would otherwise apply to professional corporations and
licensees.
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SB 270 (Mendoza) of 2015 has been met with heavy opposition from
foreign court reporting corporations. While the bill initially
sought to clarify the CRB's authority over foreign professional
corporations and increase penalties for violations of law, the
author proposed amendments that would instead require these
corporations to register with the Board. Complications may arise
if the CRB is seen as authorizing the registration of
corporations that are in fact providing professional services
and therefore operating as professional corporations, if those
corporations' shareholders are not licensees, as required under
the Corporations Code and the BPC.
This bill will authorize the continued operation of the CRB in
its currently regulatory capacity for the protection of
consumers and the regulation of CSRs as well as require the CRB
to be reviewed by the Legislature again in four years. These
are issues which the CRB will need to continue to focus on.
Current Related Legislation. SB 270 (Mendoza) of 2015 seeks to
clarify the CRB's authority over foreign professional
corporations and increase penalties for violations of law, the
author proposed amendments that would instead require these
corporations to register with the Board. Note: This bill is
currently pending in the Assembly Committee on Business and
Professions.
Prior Related Legislation. AB 1197 (Bonilla), Chapter 346,
Statutes of 2015, requires a deposition notice to include a
statement disclosing the existence of a contractual
relationship, if any, between the deposition officer or entity
providing the services of the deposition officer and the party
noticing the deposition or a third party who is financing all or
part of the action if known.
SB 1236 (Price), Chapter 332, Statutes of 2012, extended the
operation of the CRB, among other boards and bureaus under the
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jurisdiction of the DCA, until January 1, 2017.
REGISTERED SUPPORT:
None on file.
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Gabby Nepomuceno / B. & P. / (916) 319-3301