BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  April 27, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          AB  
          2192 (Salas) - As Amended April 6, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill extends the sunset date of the Court Reporters Board  
          of California (Board), within the Department of Consumer  
          Affairs, and its authority to appoint an executive officer (EO)  
          until January 1, 2021.


          FISCAL EFFECT:









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          On-going annual Special Fund costs of approximately $1.0 million  
          (Court Reporters Fund) to extend the Board beyond the January 1,  
          2017, sunset date. This fund is self-supporting with fee  
          revenue.


          COMMENTS:


          1)Purpose.  In March of 2016, the Assembly Business and  
            Professions Committee and the Senate Business, Professions and  
            Economic Development Committee conducted multiple joint  
            oversight hearings to review 11 regulatory boards within the  
            DCA. The Board is due to sunset January 1, 2017, and was among  
            the boards under review. This bill extends to January 1, 2021,  
            the provisions establishing the Board, as recommended by the  
            legislative sunset review committee.

          2)Background. Established in 1951 by the Legislature, the  
            Certified Shorthand Reporters Board, now known as the Court  
            Reporters Board of California, tests, licenses, regulates,  
            investigates and disciplines members of the court reporting  
            profession. Court reporters are trained professional  
            stenographers who preserve the words spoken in a wide variety  
            of official legal settings. Court reporters work in courtrooms  
            as official reporters or in the private sector as freelance  
            reporters who provide deposition services. Transcripts, which  
            include testimony given under oath, are relied upon by the  
            consumer as an accurate source of information. 





            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  








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            reporting firms. 





            There are approximately 6,800 licensed court reporters in  
            California, of which approximately 5,800 work independently or  
            for court reporting agencies, and approximately 750 to 1,000  
            work as employees of the state court system. The initial  
            license fee is $125 or half that amount, prorated according to  
            the last day of the birth month of the applicant. Thereafter,  
            the annual renewal fee on the licensee's birth month is $125.   
            In FY 2014-15 the Board issued 96 licenses and 6,864 renewals.


            The Board's annual operating budget was $978,000 in FY  
            2014-15. Of that, each year by statute, $300,000 is assigned  
            to the TRB, a fund designated to reimburse transcript costs  
            incurred by the profession when representing indigent clients.  
            Ninety-one percent of the Board's revenue is from licensing  
            fees, with the remainder from examination fees and payments  
            from fines. The Board receives no General Fund support. The  
            greatest expenditure for the Board is its enforcement program  
            (38%), followed by examinations (30%).





          3)Sunset Review. In the Committee's background paper on the  
            Board, issues were raised regarding the Board's ability to  
            maintain long-term fiscal solvency, administer the TRF, and  
            enforce court reporting statutes against foreign court  
            reporting corporations. These issues are not addressed in this  
            bill.  The Board will need to continue to focus on its fee  
            structure and the impending sunset of the TRF.

             a)   Statutory Fee Limit. The Board's license fee reached the  








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               statutory limit of $125 in July 2010.  This fee cap has not  
               changed since the Board was established in 1951 and is no  
               longer viable today.  As such, the Board is facing a  
               structural deficit, which will lead to a decreasing reserve  
               of 4.7 months at the end of Fiscal Year 2016-17.  This  
               issue remains unaddressed.

             b)   TRF Sunset. In 1981, the legislature 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 is scheduled to be repealed on January 1, 2017,  
               at which time all unencumbered funds remaining in the TRF,  
               as of that date, will be transferred to the Court Reporters  
               Fund.  

             c)   Foreign Court Reporting Corporations. According to the  
               Board, foreign corporations offering court reporting  
               services are operating in California without authorization.  
               SB 270 (Mendoza) of 2015 attempts to address this issue but  
               has been met with heavy opposition from foreign court  
               reporting corporations. While the bill initially sought to  
               clarify the Board'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. That bill is  
               under reconsideration in the Assembly Business and  
               Professions Committee.



          1)Prior Legislation. SB 1236 (Price), Chapter 332, Statutes of  
            2012, extended the operation of the Board, among other boards  
            and bureaus under the jurisdiction of the DCA, until January  
            1, 2017.



          Analysis Prepared by:Jennifer Swenson / APPR. / (916)  








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          319-2081