Amended in Assembly June 22, 2016

Amended in Assembly June 14, 2016

Amended in Assembly June 23, 2015

Amended in Senate May 5, 2015

Amended in Senate April 14, 2015

Amended in Senate April 6, 2015

Senate Bill No. 270

Introduced by Senator Mendoza

February 19, 2015

An act to begin delete amend Sections 8031 and 8040 of, and to add Sections 8040.1, 8040.2, and end delete begin insert add Section end insert 8041 begin delete to, end delete begin insert to end insert the Business and Professions Code, relating to court begin delete reporters, and making an appropriation therefor. end delete begin insert reporters. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 270, as amended, Mendoza. Court Reporters Board of California: begin delete civil actions: registered corporations. end delete begin insert corporations: arrangement of shorthand reporting services. end insert

Existing law provides for the certification and regulation of shorthand reporters and for the regulation of shorthand reporting corporations by the Court Reporters Board of California begin insert within the Department of Consumer Affairs. The department is under the control of the Director of Consumer Affairs end insert .

Under existing law, a shorthand reporting corporation is a corporation authorized to render professional services, as defined, as long as that corporation and all of its shareholders, officers, directors, and employees rendering professional services who are certified shorthand reporters are in compliance with specified provisions of law. Existing law defines a foreign professional corporation as a corporation organized under the laws of a state of the United States other than this state that is engaged in a profession of a type for which there is specified authorization for the performance of professional services by a foreign professional corporation. Under existing law, it constitutes unprofessional conduct and a violation of these provisions for any licensed person to violate, attempt to violate, assist in or abet the violation of, or conspire to violate any specified provisions of law, including regulations adopted thereunder. Existing law prohibits a shorthand reporting corporation from not doing or failing to do any act the doing of which or the failure to do which would constitute unprofessional conduct under any statute, rule, or regulation pertaining to shorthand reporters or shorthand reporting. begin delete Existing law establishes the Court Reporter’s Fund and provides that all fees received by the board are to be deposited into that fund, which is continuously appropriated, as specified. end delete Existing law makes it a begin delete misdemeanor end delete begin insert crime end insert to violate any of the laws that apply to shorthand reporters.

begin delete

This bill, on and after January 1, 2018, would authorize a corporation organized under the laws of this state or another state that is qualified to do business in this state to arrange for services of shorthand reporting only if it is registered with the board and requires the board, not later than January 1, 2018, to implement a registration process, as specified. The bill would authorize the board to suspend, revoke, deny, or take other disciplinary action against a registered corporation if the registered corporation or any of its officers, agents, or employees perform any act that is considered unprofessional conduct when arranging for any services of shorthand reporting, as described. The bill, on and after January 1, 2018, would make it unlawful for any corporation, whether foreign or domestic, to arrange for services of shorthand reporting in this state, as described, or to advertise or put out any sign, card, or other device that may indicate to members of the public that it is entitled to arrange for shorthand reporting services without first registering with the board. The bill, on and after January 1, 2018, would require a registered corporation to appoint an individual in this state to act as a designated representative and would require the designated representative to hold a valid certificate as a certified court reporter in this state or to pass an examination administered by the board, as specified. The bill would require the board to issue a certificate to the designated representative and would authorize the board to revoke the certification of the designated representative for any violation of the laws, regulations, or rules applicable to a licensee. The bill would authorize the board to bring a civil action in a superior court to enjoin any person or corporation whether organized under the laws of this state or of another state of the United States from rendering court reporter services in this state without being registered with the board or without authorization to arrange for court reporter services in this state. The bill would authorize the board to request the Attorney General to bring such an action. The bill would require the court to impose specified monetary penalties against the person or corporation rendering services without a registration or authorization. The bill would also authorize the court to order restitution and enjoin a person or corporation from taking any action constituting a violation of any law pertaining to impartiality, as provided. The bill would authorize the board to charge a fee for a corporation to register with the board as fixed by the board and prohibits the fee from exceeding the reasonable regulatory cost of preparing and administering the registration process. By authorizing a new fee to be charged by the board that will be deposited into a continuously appropriated fund, this bill would make an appropriation. By making it unlawful for any corporation to arrange for services of shorthand reporting in this state or to advertise, as specified, without registering with the board, this bill would expand an existing crime and, therefore, impose a state-mandated local program.

end delete begin insert

This bill would require any domestic or foreign corporation offering to arrange for or arranging for the services of shorthand reporting to comply with specified requirements, including, but not limited to, acting without bias toward or prejudice against any parties and their attorneys and not entering into, arranging, or participating in a relationship that compromises the impartiality of the certified shorthand reporter, as provided. The bill would also authorize such a corporation to, among other things, receive compensation for the arrangement of shorthand reporting services and provide services without charge or compensation under specified circumstances. The bill would provide the Attorney General, the Director, and the board with jurisdiction to enforce these provisions.

end insert begin insert

Because a violation of these requirements would be a crime, the bill would impose a state-mandated local program.

end insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation:  begin delete yes end delete begin insert no end insert . Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 8041 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

begin insert

begin insert 8041. end insert   

(a) Any domestic or foreign corporation that offers to
arrange for or arranges for the services of shorthand reporting
as defined in Section 8017, whether through an employee or an
independent contractor, shall comply with all of the following:

(1) Act without bias toward or prejudice against any parties
and their attorneys.

(2) Not enter into, arrange, or participate in a relationship that
compromises the impartiality of the certified shorthand reporter,
including, but not limited to, a relationship in which compensation
for reporting services is based upon the outcome of the proceeding.

(3) (A) Except as specified in subparagraph (B), not directly
or indirectly give or receive any gift, incentive, reward, or anything
of value to or from any person or entity associated with a
proceeding being reported, including, but not limited to, an
attorney or an attorney’s family members, employees of an attorney
or an employee’s family members, a law firm, clients, witnesses,
insurers, underwriters, or any agents or representatives thereof.

(B) A domestic or foreign corporation may:

(i) Receive compensation for the arrangement of shorthand
reporting services.

(ii) Give or receive items that do not exceed $100 in the
aggregate for any combination of items given or received per
calendar year to or from an attorney or an attorney’s family
members, employees of an attorney or an employee’s family
members, a law firm, clients, witnesses, insurers, underwriters,
or any agents or representatives thereof.

(iii) Provide services without charge or compensation for which
the certified shorthand reporter reasonably expects to be
reimbursed from the Transcript Reimbursement Fund, established
in Section 8030.2, or otherwise for an indigent person as defined
in Section 8030.4.

(b) The Attorney General, the Director of Consumer Affairs,
and the board have jurisdiction to enforce the provisions of this
section.

end insert

begin delete

SECTION 1.  

Section 8031 of the Business and Professions
Code is amended to read:

8031.  

The amount of the fees required by this chapter is that
fixed by the board in accordance with the following schedule:

(a) The fee for filing an application for each examination shall
be no more than forty dollars ($40).

(b) The fee for examination and reexamination for the written
or practical part of the examination shall be in an amount fixed by
the board, which shall be equal to the actual cost of preparing,
administering, grading, and analyzing the examination, but shall
not exceed seventy-five dollars ($75) for each separate part, for
each administration.

(c) The initial certificate fee is an amount equal to the renewal
fee in effect on the last regular renewal date before the date on
which the certificate is issued, except that, if the certificate will
expire less than 180 days after its issuance, then the fee is 50
percent of the renewal fee in effect on the last regular renewal date
before the date on which the certificate is issued, or fifty dollars
($50), whichever is greater. The board may, by appropriate
regulation, provide for the waiver or refund of the initial certificate
fee where the certificate is issued less than 45 days before the date
on which it will expire.

(d) By a resolution adopted by the board, a renewal fee may be
established in such amounts and at such times as the board may
deem appropriate to meet its operational expenses and funding
responsibilities as set forth in this chapter. The renewal fee shall
not be more than one hundred twenty-five dollars ($125) nor less
than ten dollars ($10) annually, with the following exception:

Any person who is employed full time by the State of California
as a hearing reporter and who does not otherwise render shorthand
reporting services for a fee shall be exempt from licensure while
in state employment and shall not be subject to the renewal fee
provisions of this subdivision until 30 days after leaving state
employment. The renewal fee shall, in addition to the amount fixed
by this subdivision, include any unpaid fees required by this section
plus any delinquency fee.

(e) The duplicate certificate fee shall be no greater than ten
dollars ($10).

(f) The penalty for failure to notify the board of a change of
name or address as required by Section 8024.6 shall be no greater
than fifty dollars ($50).

(g) The fee for a corporation to register with the board pursuant
to Section 8040 shall be in an amount fixed by the board not to
exceed the reasonable regulatory cost of preparing and
administering the registration process.

SEC. 2.  

Section 8040 of the Business and Professions Code is
amended to read:

8040.  

(a) A shorthand reporting corporation is a corporation
that is authorized to render professional services, as defined in
Section 13401 of the Corporations Code, as long as that corporation
and all of its shareholders, officers, directors, and employees
rendering professional services who are certified shorthand
reporters are in compliance with the Moscone-Knox Professional
Corporation Act, this article, and all other statutes and regulations
now or hereafter enacted or adopted pertaining to that corporation
and the conduct of its officers. With respect to a shorthand
reporting corporation, the governmental agency referred to in the
Moscone-Knox Professional Corporation Act is the Court Reporters
Board of California.

(b) (1) On and after January 1, 2018, any corporation organized
under the laws of this state or under the law of another state of the
United States that is qualified to do business in this state may
arrange for services of shorthand reporting in this state, without
complying with the requirements of Section 8044, if that
corporation is registered with the board. For purposes of this
section, Section 8040.1, and 8040.2, any corporation, including
but not limited to a limited liability company, a partnership, or
other entity, that satisfies the requirements of this section, Section
8040.1, and 8040.2 for registration with the board shall be referred
to as a “registered corporation.”

(2) On and after January 1, 2018, the board shall implement a
registration process pursuant to Section 8040.1.

(3) Any law or regulation applicable to a licensee shall also be
applicable to a registered corporation arranging for the services of
shorthand reporting, as described in subdivision (c), in this state.

(4) This section shall not be construed to authorize a person
without a license issued pursuant to this chapter to practice
shorthand reporting, as defined in Section 8017.

(c) A corporation or other entity is considered to be arranging
for services of shorthand reporting in this state if it does any of
the following:

(1) Coordinates or performs any act that would otherwise
constitute an obligation owed by a certified court reporter in the
state to the parties in any reported proceeding.

(2) Determines the amount billed to the parties in a proceeding
for any court reporting services performed in this state.

(3) Recruits a resident of this state to provide court reporting
services or shorthand reporting services.

(4) Performs any services related to the duties of a certified
court reporter.

(d) A registration issued under this section may be suspended,
revoked, or denied and other disciplinary action may be imposed
if the registered corporation or any of its officers, agents, or
employees perform any act that constitutes unprofessional conduct
when arranging for any services of shorthand reporting, as
described in subdivision (c). Unprofessional conduct, includes,
but is not limited to, an act contrary to the professional standards
concerning confidentiality, impartiality, filing and retention of
notes, the notification, availability, delivery, execution, and
certification of transcripts, or any law related to the duties of a
certified court reporter.

SEC. 3.  

Section 8040.1 is added to the Business and Professions
Code, to read:

8040.1.  

(a) On and after January 1, 2018, it shall be unlawful
for any corporation, whether foreign or domestic, to arrange for
services of shorthand reporting, as described in subdivision (c) of
Section 8040, or to advertise or put out any sign, card, or other
device that may indicate to the public that it is entitled to arrange
for services of shorthand reporting without first registering with
the board.

(b) A corporation registering with the board shall file an
application with the board on a form prescribed by the board.

(c) The application shall include, but not be limited to, all of
the following:

(1) The federal identification number of the applicant.

(2) The name of the individual who will be appointed as a
designated representative of the applicant pursuant to Section
8040.2 and any other identifying information as required by the
board.

(3) Any required fee.

(4) All information required to complete the application.

(d) An applicant shall not be required to hold a certificate as a
certified court reporter in order to register with the board pursuant
to this section.

SEC. 4.  

Section 8040.2 is added to the Business and Professions
Code, to read:

8040.2.  

(a) On and after January 1, 2018, each registered
corporation arranging for services of shorthand reporting, as
described in subdivision (c) of Section 8040, shall appoint an
individual in this state to act as a designated representative. The
designated representative shall hold a valid certificate as a certified
court reporter in this state or pass an examination administered by
the board pursuant to subdivision (b).

(b) By January 1, 2018, the board shall administer an
examination to determine whether a designated representative of
a registered corporation understands the ethics and professional
conduct required for the practice of court reporting in this state,
the laws and regulations applicable to court reporting in this state,
and the obligations owed by a certified court reporter in this state
to the parties in any reported proceeding.

(c) The board shall issue a certificate to the designated
representative.

(d) The board may revoke the certification of the designated
representative for any violation of the laws or regulations
applicable to a licensee under this chapter. If the certificate of an
appointed designated representative is revoked, the registered
corporation that appointed that designated representative shall be
in violation of this section.

SEC. 5.  

Section 8041 is added to the Business and Professions
Code, to read:

8041.  

(a) In addition to any other authority or remedy, the
board may pursuant to this section bring a civil action in a superior
court to enjoin any person or corporation whether organized under
the laws of this state or a state of the United States other than this
state from arranging for court reporter services, as described in
subdivision (c) of Section 8040, in this state without being
registered with the board or without authorization to arrange for
court reporter services, as described in subdivision (c) of Section
8040, in this state. The board may request the Attorney General
to bring an action pursuant to this subdivision.

(b) If a civil action is brought pursuant to subdivision (a), the
court, in addition to any other remedy authorized by law, shall
impose a penalty of not less than one thousand dollars ($1,000)
and no more than two thousand five hundred dollars ($2,500) per
day against the person or corporation arranging for services without
a registration or authorization, and the court, in addition to any
other restitution provided by law, may also order restitution and
the return of any payments made to the person or corporation.

(c) In an action brought pursuant to subdivision (a), the court,
in addition to any other authority or remedy, may also enjoin a
person or corporation from taking any action that would otherwise
constitute a violation of any law or regulation of the board
pertaining to impartiality, including, but not limited to, Section
2475 of Title 16 of the California Code of Regulations, and the
court, in addition to any other penalty provided for by law or
regulation pursuant to this section, may impose a penalty of up to
two thousand five hundred dollars ($2,500) and order restitution
for any acts undertaken by any person or corporation rendering
court reporter services in this state. In determining the amount of
the penalty pursuant to this section, the court shall take into
consideration the frequency of the violations and the impact of
those violations, including a violation of Section 2475 of Title 16
of the California Code of Regulations.

(d) If the board or Attorney General is granted an injunction
pursuant to subdivision (a), the court shall award reasonable
investigation and enforcement costs and may also award a portion
of any unallocated penalties collected pursuant to subdivision (c)
to be used for future investigation and enforcement of this section
by the board and the Attorney General. Any such award of penalties
to the board shall be deposited in the Court Reporters’ Fund and
these penalties shall be subject to appropriation by the Legislature.

(e) This section shall not be construed to change, limit, or alter
any existing authority of the board, including existing injunctive
authority.

end delete

begin delete SEC. 6. end delete

begin insert SEC. 2. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.