Economic And Fiscal Impact Statement

Information contained in the Economic and Fiscal Impact Statement form (STD. 399) on the subject of the Responsible Beverage Service Training Program.

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Economic Impact

Department Name:
Department of Alcoholic Beverage Control
Contact Person:
Robert de Ruyter
Email Address:
Robert.deRuyter@abc.ca.gov
Telephone Number:
916-419-8958
Descriptive Title From Notice Register or Form 400:
Responsible Beverage Service Trianing Program
Notice File Number:
Z

Estimated Private Sector Cost Impacts

This regulation:
Impacts business and/or employees
Impacts small businesses
Impacts jobs or occupations
Imposes reporting requirements
Impacts individuals
Estimated Economic Impact (Incl. Fiscal Impact):
Over $50 million[1]
Total number of businesses impacted:
56,173
Types of businesses:
ABC On-Sale Licensees, corporate and nonprofit RBS Training Providers
Percentage of impacted businesses that are small businesses:
33%
Number of business that will be created:
0
Number of business that will be eliminated:
0
Number of jobs created:
2,316
Types of jobs or occupations impacted:
Increased content creation and investment in RBS Training. It is anticipated that $89 per employed Alcohol Server cost will not result in any lost jobs due to this regulation.

This regulation will NOT affect the ability of California businesses to compete with other states by making it more costly to produce goods or services here.

Estimated Costs

Total Costs:
Businesses and individuals statewide may incur $206,800,000 to comply with this regulation over its lifetime.

Initial and Ongoing Costs for Years 2022-2024

Initial costs – small business:
$2,121.40
Annual ongoing costs – small business:
$1,060.70
Initial costs – typical business:
$10,607.00
Annual ongoing costs – typical business:
$5,303.50
Initial costs – individual:
$0.00
Annual ongoing costs – individual:
$89.00
Other economic costs that may occur:
Individual costs are for those being initially hired as Alcohol Servers. Includes opportunity costs of time spent in RBS Course.
Share of total costs for each industry:
The ongoing costs will only be to ABC On-Sale Licensees and individuals who become Alcohol Servers.
Annual costs for a typical busineess to comply with reporting requirements:
$200.00

This regulation will NOT directly impact housing costs.

There are NO comparable Federal regulations.

Given the existence or absence of Federal regulations, the California Legislature determined the need for a mandatory Responsible Beverage Service Training Program to address the costs to the community of overuse of alcohol.

Estimated Benefits

Summary of benefits:
Reduce the overuse of alcohol by minors and intoxicated persons at ABC On-Sale Licensees to reduce the alcohol related harms and costs to California Communities through providing Alcohol Servers with Responsible Beverage Service Training.
Befits are the result of:
Specific statutory requirements – The RBSTPA ensures every Alcohol Server will understand their duty to serve alcohol responsibly.
Total statewide benefits from the regulation over its lifetime:
$3.5 Billion annually
How would current businesses expand as a result of this regulation:
The market for Responsible Beverage Service Training will increase by an estimated 1000% leading to more trainers and investment in effective RBS trainings being developed both in-person and online.

Alternatives to the Regulation

Alternatives considered:
Proposed Solution: ABC Administered Online Certificaiton Exam for Alcohol Servers
Alternative 1: Proctored Certification Exams
Alternative 2: RBS Provider Administered Certification Exam
Benefit of Proposed Regulation:
$7,000,000,000
Cost of Proposed Regulation:
$206,800,000
Benefit of Alternative 1:
$7,000,000,000
Cost of Alternative 1:
$425,800,000
Benefit of Alternative 2:
$3,200,000,000
Cost of Alternative 2:
$207,200,000
Quantification issues relevant to a comparison of estimated costs and benefits for this regulation or
alternatives:
The benefits are an estimated reduction in the economic harms to California due to the overuse of alcohol.
Were performance standards considered to lower compiance costs?
Yes – In the proposed alternative the State is bearing much of the costs of developing and implementing the required technology to provide a full and robust program as prescribed by the legislature with less fiscal impact.

Major Regulations

The regulation subject to OAL review WILL have an estimated economic impact to business enterprises and individuals located in or doing business in California exceeding $50 million in a 12-month period between the date the major regulation is estimated to be filed with the Secretary of State through 12 months after the major regulation is estimated to be fully implemented.

Increase or decrease of investment in the State:
Estimated 2020-2021 Investment is $100.9 Million
Incentive for innovation in products, materials or processes:
Responsible Beverage Service Training Providers will have a strong incentive to innovate and better their training programs to capture more of the newly created market.
Benefits of the regulations:
Alcohol Servers and ABC On-Sale Licensees will better be aware of their duty in serving alcohol and all Californians will benefit.

Fiscal Impact

Fiscal Effect on Local Government

No fiscal impact exists. This regulation does not affect any local entity or program. Some local jurisdictions curently have a Mandatory RBS training Requirement, but this program should not affect the bulk of their funding for enforcement of mandatory RBS standards.

Fiscal Effect on State Government

Additional expenditures in the current State Fiscal Year
Approximately $1,829,211
It is anticipated that State agencies will:
Absorb these addional costs wihin their existing budgets and resources.
Increase the currently authorized budget level for the 2019-2020 Fiscal Year.
Other (please explain):
Please see attached yearly program cost projection from 2019-2020 budget proposal.

Fiscal Effect on Federal Funding of State Programs

No fiscal impact exits. This regulation does not affect any federally funded State agency or program.


Signature

This form was signed by the Fiscal Officer on May 20, 2019 and by the Agency Secretary on May 21, 2019.


Footnotes

  • [1] If the economic impact is over $50 million, agencies are required to submit a Standardized Regulatory Impact Assessment as specified in Government code Section 11346.3(c).

Responsible Beverage Service

Subset of costs from ABC’s Business Modernization Project budget summary for RBS Functionality

This analysis is necessary to estimate the credit card cost related to RBS (RBS program cost/volume of transactions = RBS exam rate, which drives the total revenue estimate and the credit card costs related to collecting that revenue).

Personal Services

Position Monthly Salary 2019-20 Pos 2019-20 Dollars 2020-21 Pos 2020-21 Dollars 2021-22 Pos 2021-22 Dollars 2022-23 Pos 2022-23 Dollars
Product Manager (IT Specialist II) $7,929 0.50 $47,574 0.50 $47,574 0.50 $47,574 0.00 $0
Business Analyst (IT Specialist I) $6,699 0.50 $40,194 0.50 $40,194 0.50 $40,194 0.00 $0
Application Developer (IT Specialist I) $6,699 0.50 $40,194 0.50 $40,194 0.00 $0 0.00 $0
Service Desk (IT Associate) $5,373 0.00 $0 0.50 $32,328 0.50 $32,328 0.50 $32,328
Total Salaries 1.50 $127,962 2.00 $160,200 1.50 $120,008 0.50 $32,328
Benefits 54% $69,099 $86,508 $64,803 $17,409
Total, Salaries and Benefits $197,061 $246,708 $184,809 $49,647

 

Operating Expenses

 

Position 2019-20 2020-21 2021-22 2022-23
OE&E for staff ($13k per PY) $19,500 $26,000 $19,500 $6,500

 

Development and DevOps Contracts

Item 2019-20 2020-21 2021-22 2022-23
Product Management Vendor - transition to ABC Product Manager $160,000 $0 $0 $0
Application Development & Deploy (2-3 contactors for 6-9 months) $500,000 $0 $0 $0
Application DevOps $0 $288,000 $140,000 $70,000
Exam Deploy (Development of online exam) $100,000 $0 $0 $0
Exam DevOps $0 $50,000 $50,000 $50,000
Modern Development Environment Deploy $45,000 $36,000 $36,000 $36,000
Integration Test (Initial rollout/test with current RBS jurisdictions) $150,000 $0 $0 $0
Examination Vendor $25,000 $12,500 $12,500 $12,500
Total Contracts $980,000 $386,500 $238,500 $168,500

 

Services from Department of Technology

Position 2019-20 2020-21 2021-22 2022-23
Statewide Technology Procurement $7,875 $0 $0 $0
Project Approval Lifecycle $9,188 $0 $0 $0
Project Oversight $27,563 $36,750 $0 $0
Total Services from CDT $44,625 $36,750 $0 $0

 

Other

Item 2019-20 2020-21 2021-22 2022-23
Call Center Support $0 $50,000 $25,000 $10,000
Hosting Costs $25,000 $25,000 $25,000 $25,000
Development Tools $2,025 $2,025 $2,025 $2,025

 

Totals

Item 2019-20 2020-21 2021-22 2022-23
Total Operating Expenses $1,071,150 $526,275 $310,025 $212,025
Total Additional Costs $1,268,211 $772,983 $494,834 $261,672
2018-19 BCP Costs $561,000 $381,000 $381,000 $381,000
Total Annual Costs $1,829,211 $1,153,983 $875,834 $642,672
Projected Volume of Exams 0 1,000,000 300,000 300,000
Projected Revenue $0 $3,174,813 $952,444 $952,444
Credit Card Fees (2%) $0 $63,496 $19,049 $19,049
Total Additional Costs with Credit Card $1,268,211 $836,479 $513,883 $280,720

 

Total Costs for first 5 years ( including $578,000 in 2018-19): $5,079,700

Total Volume: 1,600,000

Exam fee to recover first 5 years of cost: $3.17