BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2873 (Thurmond) - Certified access specialists
          
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          |Version: August 1, 2016         |Policy Vote: JUD. 5 - 2         |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: August 1, 2016    |Consultant: Jolie Onodera       |
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          This bill meets the criteria for referral to the Suspense File. 

          Bill  
          Summary:  AB 2873 would impose the following requirements on  
          local agencies:
           Commencing January 1, 2021, requires all building inspectors  
            employed or retained by a local agency who conduct permitting  
            and plan check services to review for compliance with state  
            construction-related accessibility standards by a place of  
            public accommodation with respect to new construction or  
            renovation to be certified access specialists (CASps), as  
            specified.


           Requires all new employees employed or retained by a local  
            agency on or after January 1, 2018, who will conduct  
            permitting and plan check services to review for compliance  
            with state construction-related accessibility standards by a  
            place of public accommodation to be CASps within 24 months of  
            their initial date of employment.


           Commencing January 1, 2017, increases the existing $1 fee  
            attached to an application for a local business license to $4,  







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            and extends the current sunset on the fee authority for one  
            year to December 31, 2019. Reduces the proportion of fee  
            revenue to the Division of the State Architect (DSA) from 30  
            percent to 10 percent of collections.


           From January 1, 2017, through December 31, 2019, in any city,  
            county, or city and county that does not issue business  
            licenses, requires any applicant for a building permit to pay  
            an additional fee of $4 for that permit, as specified.  




          Fiscal  
          Impact:  
            CASp mandate  :  Potential major increase in future ongoing  
            local agency costs in the millions of dollars related to the  
            imposition of CASp certification for all applicable building  
            inspectors and new/retained employees within specified  
            timeframes, potentially state-reimbursable if not fully  
            covered by the short-term fee increase and after the fee  
            authority expires in 2019. To the extent the bill creates a  
            higher level of service on local agencies due to mandating  
            CASp-certification for all building inspectors and  
            new/retained employees, local agencies could claim  
            reimbursement for those increased costs not covered by fees.  
            At an average cost of $4,500 for CASp certification,  
            certification costs for every 1,000 new CASps would cost $4.5  
            million. These costs do not reflect the larger impact  
            associated with ongoing compensation for more highly trained  
            personnel.
            State fee revenue  :  Short-term net increase in fee revenues of  
            about $200,000 (Special Fund*) to the DSA through 2019, due to  
            the fee increase from $1 to $4 on business license  
            applications which is partially offset by the reduced  
            proportion (from 30 percent to 10 percent) of fee revenue to  
            DSA. The amount of fee revenue generated by the new $4 fee  
            imposed on building permits in local jurisdictions that do not  
            issue business licenses is unknown, but not anticipated to be  
            significant. 
            Local fee revenue  :  Short-term net increase in fee revenues  
            (Local Funds) of $6 million through 2019 due to the fee  
            increase from $1 to $4 on business license applications and  








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            the increased share from 70 percent to 90 percent of total  
            fees collected. Additional fee revenues due to the new $4 fee  
            imposed on building permits of an unknown, but potentially  
            significant amount.
            DSA administrative costs  : One-time costs ranging from $750,000  
            to $1 million (Special Fund**) to (1) upgrade its existing  
            database system to accommodate the significant expansion of  
            the program, and, (2) revise and transition the CASp exam to  
            an electronic-based format. Additionally, ongoing resource  
            costs of $230,000 (Special Fund**) to manage administration of  
            the examination and certification renewals for the larger  
            program. The current fees for CASp examinations and renewals  
            are estimated to maintain cost-neutrality for the ongoing  
            costs of the program. 

          *Disability Access and Education Revolving Fund 

          **Certified Access Specialist (CASp) Fund - staff notes the CASp  
          Fund has experienced a slowly growing reserve balance over the  
          past three years, with a projected balance of $1.7 million  
          ending FY 2016-17, due to the CASp program operating on a  
          largely cost-neutral basis. However, the potentially significant  
          expansion of the program will likely necessitate budget  
          authority to invest additional funds on a one-time basis to  
          accommodate the changes needed to address the influx of  
          applicants necessitated by the mandate for CASp certification. 


          Background:  SB 262 (Kuehl) Chapter 872/2003 established in the Division of  
          the State Architect of the DGS a voluntary "access specialist  
          certification program" (CASp) in order to assist business and  
          property owners in complying with the federal Americans with  
          Disabilities Act (ADA) and state access laws. Since the passage  
          of SB 262, a number of bills have been enacted seeking to  
          promote compliance with access laws by creating incentives for  
          business owners who proactively brought their businesses into  
          compliance with access laws. 
          SB 1186 (Dutton/Steinberg) Chapter 383/2012 sought to  
          comprehensively address continued issues with disability  
          litigation by creating a number of protections for small  
          businesses and defendants, who had, prior to a claim being  
          filed, sought out a CASp inspection. These protections included  
          reduced minimum statutory damages, early evaluation conferences,  
          and mandatory stays of court proceedings while the violations  








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          were corrected. SB 1186 also prevented the stacking of multiple  
          claims to increase damages, banned pre-litigation demands for  
          money, and increased data collection regarding alleged access  
          violations. 


          There are also requirements in existing law designed to phase in  
          adequate numbers of CASps employed by local agencies. For  
          example, by 2010, each local agency was required to employ at  
          least one building inspector that is a CASp, and local agencies  
          that employ two or more building inspectors are required to have  
          at least one-half of the employed building inspectors be  
          CASp-certified. In addition, by 2014, local agencies were  
          required to employ a sufficient number of CASp-certified  
          building inspectors to conduct permitting and plan check  
          services to review for compliance with state  
          construction-related accessibility standards. (Civil Code   
          55.53(d).) 


          However, at the time of this writing, there appear to be only  
          651 CASPs certified in this state  
          (  https://www.apps2.dgs.ca.gov/DSA/casp/casp_certified_list.aspx  ,  
          as of June 30, 2016) Given the millions of businesses in  
          California, there are arguably an insufficient number of CASps  
          to inspect all new construction, including, but not limited to,  
          projects relating to tenant improvements that may impact access.




          Proposed Law:  
           This bill would, commencing January 1, 2021, require all  
          building inspectors employed or retained by a local agency who  
          conduct permitting and plan check services to review for  
          compliance with state construction-related accessibility  
          standards by a place of public accommodation with respect to new  
          construction or renovation to be CASps. Additionally, this bill:
                 Requires all new employees employed or retained by a  
               local agency on or after January 1, 2018, who will conduct  
               permitting and plan check services to review for compliance  
               with state construction-related accessibility standards by  
               a place of public accommodation to be CASps within 24  
               months of their initial date of employment.








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                 Eliminates the provision of existing law that requires a  
               local agency to employ or retain a sufficient number of  
               building inspectors who are CASps. Deletes the existing  
               provision of law that states if a local agency employs or  
               retains two or more CASps, at least half of them are  
               required to be building inspectors who are CASps. 
                 Commencing January 1, 2017, increases the existing $1  
               fee attached to an application for a local business license  
               to $4, and extends the sunset on the fee for one year to  
               December 31, 2019.
                 On and after January 1, 2017, through December 31, 2019,  
               in any city, county, or city and county that does not issue  
               business licenses, requires any applicant for a building  
               permit to pay an additional fee of $4 for that permit, as  
               specified.  
                 Provides that instead of retaining 70 percent of the  
               business license fees collected and transmitting 30 percent  
               to the DSA for deposit in the Disability Access and  
               Education Revolving Fund, the local government shall retain  
               90 percent of the building permit fees collected and  
               provide 10 percent to the DSA. 
                 Requires that the fees retained by the local government,  
               minus up to five percent of the retained moneys used for  
               related administrative costs, to be deposited into a  
               special fund established by the local government, the "CASp  
               Certification and Training Fund," to be used for increased  
               CASp training and certification and to facilitate  
               compliance with construction-related accessibility  
               requirements. 
                 Requires local governments to include in their annual  
               reports to the DSA of the total fees collected in the  
               previous calendar year and of its distribution, the amount  
               of moneys spent to increase CASp training and  
               certification. 
                 Expands CASp minimum training requirements to include  
               standards governing access to housing for persons with  
               disabilities, familiarity with federal accessibility  
               requirements. 
                 Authorizes the DSA to work with various training  
               organizations to ensure an adequate level of training and  
               educational effort is provided on a statewide basis to  
               prepare individuals to become CASps, as specified.
                 Requires the DSA to, on or before January 1, 2018, to  
               commence testing and certification of individuals at a  








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               level commensurate with the demand attributed to compliance  
               with the mandate on local building inspectors and new  
               employees.
                 Makes other conforming and technical changes.


          Related  
          Legislation:  AB 2093 (Steinorth) 2016 would make various  
          clarifications with regard to CASp inspections, reports,  
          repairs, and disclosures between commercial property owners and  
          prospective tenants. This bill is pending a vote on the Senate  
          Floor.
          Prior Legislation:  SB 262 (Kuehl) Chapter 872/2003 created the  
          CASp program to address the public's need for experienced,  
          trained, and tested individuals to inspect buildings and sites  
          for compliance with applicable state and federal  
          construction-related accessibility standards.



          SB 1608 (Corbett) Chapter 549/2008, among its provisions,  
          required local jurisdictions to retain at least one building  
          inspector who is a CASp by 2010 and a sufficient number of  
          building inspectors who are CASps by 2014.

          SB 1186 (Steinberg/Dutton) Chapter 383/2012 established a $1 fee  
          for local jurisdictions to collect on each business license and  
          business license renewal. 30 percent is submitted to the DSA's  
          Disability Access and Education Revolving Fund and requires the  
          DSA to annually report the total fees transmitted to the fund  
          during the previous calendar year and their distribution.

          SB 84 (Committee on Budget and Fiscal Review) Chapter 25/2015  
          required local jurisdictions to submit an annual report to the  
          DSA on the $1 fee collected and modified the reporting  
          requirements established by SB 1186.


          Staff  
          Comments:  By mandating CASp certification on specified local  
          agency employees within specified timeframes, this bill will  
          significantly expand the operating and administrative costs of  
          the CASp program by the Department of General Services, Division  
          of the State Architect (DSA).  








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          Based on a potential projected increase of 3,000 to 6,000 new  
          applicants for the CASp exam, the DSA projects one-time costs of  
          $500,000 to $1 million will be needed to upgrade or replace the  
          existing database used to operate the CASp program (which  
          currently only reflects 651 CASps statewide) to accommodate the  
          expansion of the program.

          In addition, the DSA has indicated one-time costs of $250,000 to  
          $500,000 to transition the current CASp exam to an electronic  
          format that can be administered at computer testing centers and  
          allow the DSA to meet the testing demand that will be created by  
          this bill. Finally, the DSA is projected to require two  
          additional staff on a full-time permanent basis at a cost of  
          about $230,000 annually to address administration of the exam  
          and certification renewals. 


          The costs to update the database, convert the exam to an  
          electronic format, and address increased staffing needs would be  
          paid from the CASp Fund, which has a projected year-end reserve  
          of $1.7 million in FY 2016-17. Under existing law, the DSA is  
          required to assess each applicant for CASp certification  
          specified fees, including an application and course fee and an  
          examination fee, at a level sufficient to meet the costs of  
          application processing, registration, publishing a list, and  
          other activities that are reasonably necessary to implement and  
          administer the CASp program. The DSA has indicated the current  
          fees imposed by the DSA for the administration of the exam and  
          the renewal of CASp certification are projected to adequately  
          maintain the CASp program operating on a cost-neutral basis. 

          DSA is estimated to receive approximately $200,000 in additional  
          fee revenue annually through 2019 to the Disability Access and  
          Education Revolving Fund due to the increase to the existing fee  
          on business licenses from $1 to $4 per license, assuming the  
          number of business licenses issued annually remains relatively  
          constant. DSA will collect $0.40 on each business license (10  
          percent of the $4 fee) instead of the existing $0.30 (30 percent  
          of the $1 fee). This will result in DSA collecting additional  
          revenue each year through the existing sunset date of December  
          31, 2018, and for one additional year through 2019. The amount  
          of additional fee revenue generated from the new $4 fee  
          established for each building permit issued in a jurisdiction  
          that does not issue business licenses is unknown, but not  








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          estimated to be significant given DSA's proportional share of 10  
          percent. 

          Local agencies are estimated to receive approximately $6 million  
          in additional fee revenue (above the $1.3 million currently  
          collected) through 2019 based on the business license fee  
          increase from $1 to $4, assuming the number of business licenses  
          issued annually remains relatively constant. Additionally, for  
          those local jurisdictions that do not issue business licenses,  
          additional fee revenues of an unknown but potentially  
          significant from the new $4 fee on each building permit issued  
          in those jurisdictions will be collected.  

          This bill could result in major increases in future ongoing  
          local agency costs in the millions of dollars related to the  
          imposition of CASp certification for all building inspectors and  
          new employees employed or retained who conduct permitting and  
          plan check services to review for compliance with state  
          construction-related accessibility standards, potentially  
          state-reimbursable if not fully covered by the short-term fee  
          increase described above and after the fee authority expires in  
          2019. To the extent the bill creates a higher level of service  
          on local agencies due to mandating CASp-certification by all  
          building inspectors and new/retained employees, local agencies  
          could claim reimbursement for those increased costs not covered  
          by fees. At an average cost of $4,500 for CAsp certification,  
          certification costs for every 1,000 new CASps would cost $4.5  
          million. These costs do not reflect the larger impact associated  
          with ongoing compensation for more highly trained personnel.



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