BILL ANALYSIS Ó SENATE COMMITTEE ON APPROPRIATIONS Senator Ricardo Lara, Chair 2015 - 2016 Regular Session AB 2873 (Thurmond) - Certified access specialists ----------------------------------------------------------------- | | | | | | ----------------------------------------------------------------- |--------------------------------+--------------------------------| | | | |Version: August 1, 2016 |Policy Vote: JUD. 5 - 2 | | | | |--------------------------------+--------------------------------| | | | |Urgency: No |Mandate: Yes | | | | |--------------------------------+--------------------------------| | | | |Hearing Date: August 1, 2016 |Consultant: Jolie Onodera | | | | ----------------------------------------------------------------- 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, AB 2873 (Thurmond) Page 1 of ? 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 AB 2873 (Thurmond) Page 2 of ? 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 AB 2873 (Thurmond) Page 3 of ? 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. AB 2873 (Thurmond) Page 4 of ? 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 AB 2873 (Thurmond) Page 5 of ? 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). AB 2873 (Thurmond) Page 6 of ? 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 AB 2873 (Thurmond) Page 7 of ? 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. -- END --