BILL ANALYSIS                                                                                                                                                                                                    Ó



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

          SB 251 (Roth) - Civil rights:  disability access
          
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          |Version: May 20, 2015           |Policy Vote: JUD. 6 - 0, GOV. & |
          |                                |          F. 7 - 0              |
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          |Urgency: No                     |Mandate: Yes                    |
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          |Hearing Date: May 26, 2015      |Consultant: Robert Ingenito     |
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          This bill meets the criteria for referral to the Suspense File.




          


          Bill  
          Summary: SB 251 would (1) enact a tax credit for businesses that  
          make accessibility improvements and (2) require certain state  
          and local agencies to help businesses make accessibility  
          improvements.


          Fiscal  
          Impact:
                 The Franchise Tax Board (FTB) estimate of the current  
               version of the bill is pending. The bill would likely lead  
               to an annual General Fund revenue loss in the tens of  
               millions of dollars minimally. FTB estimated previously  
               that the May 4, 2015 version of the bill would result in  







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               General Fund revenue losses of $42 million in 2015-16, $100  
               million in 2016-17, and $120 million in 2017-18. The  
               revenue impact from the current version of the bill would  
               likely be of similar magnitude.

                 FTB would incur annual administration costs, likely in  
               the hundreds of thousands of dollars minimally, to  
               administer the tax credit.

                 The Division of the State Architect within the  
               Department of General Services would incur minor costs to  
               administer its provisions of the bill.

                 Potentially major one-time and ongoing costs to local  
               agencies for material development, applicant notification,  
               and expedited review requirements mandated in the bill. To  
               the extent the increase in local agency workload qualifies  
               as a reimbursable state mandate, local agencies could  
               submit claims for reimbursement of those costs (General  
               Fund). 



          Background: In California, individuals with disabilities and medical  
          conditions have legal protections to ensure full and free access  
          to and use of roadways, sidewalks, buildings and facilities open  
          to the public, hospitals and medical facilities, and housing.   
          After Congress enacted the Americans with Disabilities Act (ADA)  
          in 1990, the Legislature provided that violations of the ADA are  
          also violations of state legal protections, which are  
          comparatively higher and independent of the ADA.  
          Additionally, under the Unruh Civil Rights Act, all persons,  
          regardless of sex, race, color, religion, ancestry, national  
          origin, disability or medical condition, are entitled to the  
          full and equal accommodations, advantages, facilities,  
          privileges, or services in all business establishments.  A  
          violation of the ADA also constitutes a violation of the Act.   
          Persons violating the Act are subject to actual damages incurred  
          by an injured party plus treble damages, with a minimum of  
          $4,000, plus any attorney's fees as the court may determine to  
          be proper.


           I.  Tax Credits.  California law allows various income tax  








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          credits, deductions, and sales and use tax exemptions to provide  
          incentives to reward taxpayers that incur certain expenses that  
          benefit the public, such as child adoption, or to influence  
          behavior, including business practices and decisions, such as  
          research and development credits.  The Legislature typically  
          enacts such tax incentives to encourage taxpayers to do  
          something that but for the tax credit, they would not do.  The  
          Department of Finance is required to annually publish a list of  
          tax expenditures, currently totaling around $51 billion per  
          year.


          In 1990, Congress enacted a disabled access tax credit against  
          federal taxes for businesses with annual gross receipts of less  
          than $1 million or fewer than 30 full-time employees equal to 50  
          percent of the difference between the amount of expenditures  
          reasonable and necessary to accomplish the below purposes and  
          $250, not to exceed $10,000:


                 Remove barriers that prevent a business from being  
               accessible to or usable by individuals with disabilities; 


                 Provide qualified interpreters or other methods of  
               making audio materials available to hearing-impaired  
               individuals; 


                 Provide qualified readers, taped texts, and other  
               methods of making visual materials available to individuals  
               with visual impairments; and


                 Acquire or modify equipment or devices for individuals  
               with disabilities.





           II.  Local Land Use Permitting.   Cities and counties have broad  
          authority to oversee land use within their boundaries, including  
          the ability to approve or deny permits, licenses, certificates  








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          or other entitlements needed to construct a project or  
          improvement.  The Permit Streamlining Act sets deadlines for  
          cities and counties to make some of those land use decisions,  
          such as approving permits.  The length of time that a city or  
          county has to act varies for different projects, based on  
          factors such as the type of project and whether the project  
          requires an environmental impact report before the city or  
          county makes its decision.  So, local building departments make  
          decisions about how to prioritize permitting applications in  
          order to meet those deadlines and properly exercise local  
          governments' police power.


           III. Construction-Related Accessibility Standards Compliance  
          Act.   The Americans with Disabilities Act (ADA) as well as  
          provisions in state law set standards that public  
          buildings-including businesses-must meet to ensure that persons  
          with disabilities have full access.  Some of these accessibility  
          standards lay out how public buildings must be constructed.  The  
          standards that any given building must meet depends on the  
          history of that building, such as when it was constructed and  
          whether it has been improved. 


          In 2003, the Legislature enacted the Certified Access Specialist  
          Program, administered by the Office of the State Architect, to  
          inspect places of public accommodation to ensure compliance with  
          disability access standards. Persons being sued in a disability  
          access action over a property that has been inspected by a  
          Certified Access Specialist (CASp), and determined to meet  
          applicable construction-related accessibility standards, or is  
          pending a determination by a CASp, may obtain a stay of the  
          action for 90 days and an early evaluation conference to resolve  
          the case.  In 2012, the Legislature again amended the law to  
          provide that (1) any business in California that has received a  
          CASp inspection has 60 days to cure an access violation and the  
          Court may reduce statutory damages by up to 75 percent, and (2)  
          small businesses with 25 or fewer employees that have not had a  
          CASp inspection have 30 days to fix a violation, and the Court  
          may reduce their statutory damages up to 50 percent.


          State law additionally directs the California Commission on  
          Disability Access to develop educational materials to help  








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          California businesses understand the accessibility standards  
          they must meet and identify common violations of the ADA. 


           IV. Charter Cities and Counties.  The California Constitution  
          allows cities and counties that adopt charters to control their  
          own "municipal affairs."  In all other matters, charter cities  
          must follow the general, statewide laws.  Because the  
          Constitution does not define "municipal affairs," the courts  
          determine whether a topic is a municipal affair or whether it is  
          an issue of statewide concern.  




          Proposed Law:  
          This bill would make several changes to assist businesses in  
          complying with ADA requirements.
           I.  Tax Credits.   SB 251 would enact tax credits amounts paid  
          for eligible access expenditures that exceed $250 for the 2016  
          through 2022 taxable years, based largely on the current federal  
          credit.  The credit amount is calculated the same way as the  
          federal credit, and is equal to half of the difference between  
          the amount of the expenditure that exceeds $250. A taxpayer with  
          expenses that exceed $10,250 can take a maximum credit of  
          $5,000.  


          If the taxpayer meets the definition of small business, the  
          credit would be in an amount equal to 50 percent of the  
          difference between the total eligible access expenditures  
          incurred by a taxpayer that do not exceed fifteen thousand two  
          hundred fifty dollars ($15,250) and two hundred fifty dollars  
          ($250). Overall, the maximum credit a small business could  
          receive would be $7,500.


          All taxpayers can carry over the credit for six years.   
          Additionally, FTB may prescribe any rules, guidelines, or  
          procedures necessary to implement the credit, which are exempt  
          from the Administrative Procedures Act.  The measure would  
          sunset the credit on December 1, 2023, and contains legislative  
          findings and declarations to comply with SB 1335.  









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           II.  Local Land Use Permitting.  SB 251 would require local  
          agencies to:


                 Expedite their review of an application for a project to  
               modify a public building if the building has been inspected  
               by a CASp and the CASp has completed a written inspection  
               report stating that the building currently complies with  
               all of the applicable construction-related standards.


                 Develop materials on the ADA, and to provide those  
               materials to project applicants, along with a notice  
               stating that approval of the permit does not mean that the  
               project complies with the ADA.


          SB 251 states that these two requirements apply to all cities  
          and counties, including charter cities and counties.  The bill  
          includes a legislative finding and declaration that the bill  
          addresses a matter of statewide concern because it pertains to  
          development permit applications.





           III. Construction-Related Accessibility Standards Compliance  
          Act.  SB 251 would amend the Construction-Related Accessibility  
          Standards Compliance Act to:


                 Import the definition of microbusiness into the Act, and  
               provides that a defendant meeting that definition shall not  
               be liable for statutory damages for more than one offense  
               if they corrected the violation before the lawsuit was  
               filed. 


                 Provide that any business inspected by a CASp that  
               corrects a violation defined as a "minor matter" within 30  
               days of the service of summons and complaint asserting a  
               claim or receipt of written notice, shall not be liable for  








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               a violation of a construction-related accessibility  
               standard.  "Minor matters" only include violations for  
               interior and exterior signage, the color and condition of  
               parking lot paint striping, and truncated domes.


                 Provide that any business that corrects a violation  
               within 90 days of receiving a CASp inspection shall not be  
               liable for a violation of a construction-related  
               accessibility standard.


           IV. Other provisions.   SB 251 additionally would:


                 Require commercial property owners and lessors to state  
               on every lease form or renal agreement that both they and  
               the tenant are responsible for compliance with ADA, and  
               that the terms of the lease or other contract must allocate  
               compliance responsibility between the two.


                 Require an individual who wishes to become a CASp to  
               provide the State Architect with unspecified information  
               about the city or county in which they provide, or plan to  
               provide, service.  The State Architect must post that  
               information on its website.


                 Directs the California Commission on Disability Access  
               to link to the State Architect's CASp website and provide  
               state agencies and local building departments with  
               educational materials explaining the ADA.


                 Extend the sunset in Civil Code Section 55.32 until  
               January 1, 2019.















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          Staff  
          Comments: By imposing additional duties on local agencies with  
          respect to the receipt and review of applications for  
          development projects, this bill would impose a state-mandated  
          local program. If the Commission on State Mandates determines  
          that the bill contains costs mandated by the state,  
          reimbursement for those costs would be required. The amount is  
          unknown, but potentially significant.


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