BILL ANALYSIS Ó AB 2192 Page 1 Date of Hearing: April 27, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 2192 (Salas) - As Amended April 6, 2016 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|16 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- 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: AB 2192 Page 2 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 AB 2192 Page 3 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 AB 2192 Page 4 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) AB 2192 Page 5 319-2081