BILL ANALYSIS                                                                                                                                                                                                    







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          |Hearing Date:April 14, 2008    |Bill No:SB                |
          |                               |1584                      |
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               SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC  
                                     DEVELOPMENT
                          Senator Mark Ridley-Thomas, Chair

                        Bill No:        SB 1584Author:Padilla
               As Introduced: February 22, 2008           Fiscal: Yes

          
          SUBJECT:    Veterinary medicine:  fees.
          
          SUMMARY:  Increases the fee amount charged for veterinarian  
          licensing, registered veterinary technician registration,  
          registered veterinary technician schools and creates new fees to  
          be paid by these licensees for services provided to them by the  
          Veterinary Medical Board.

          
          Existing law:

          1)Provides for the licensing and regulation of  
            veterinarians, registered veterinary technicians and  
            veterinary hospitals by the Veterinary Medical Board  
            (VMB) in the Department of Consumer Affairs.

          2)Requires the VMB to establish an advisory committee on  
            issues pertaining to the practice of veterinary  
            technicians, to be known as the Registered Veterinary  
            Technician (RVT) Committee.

          3)Provides that the duties of the RVT Committee include,  
            among other things, advising and assisting the VMB in:  
            the examination of applicants for veterinary technician  
            registration; the inspection and approval of schools;  
            and, developing regulations to establish animal health  
            care tasks and the appropriate degree of supervision.  

          4)Requires the VMB to set (by regulation) and collect  
            various fees, including, but not limited to, a licensing  
            examination fee for veterinarians, a registration fee for  





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            veterinary technicians, a diversion program registration  
            fee, and an application fee for schools seeking approval  
            of a registered veterinary technician curriculum. 

          5)Requires the VMB to establish diversion program (Program)  
            criteria and provides that the Program cannot accept more  
            than 100 participants.  Additionally, authorizes the VMB  
            to establish diversion evaluation committees (DEC) and  
            provides for the DEC composition and duties. 



          This bill:

          1)Increases the maximum fee and creates new fees the VMB may  
            charge for various licensing and regulatory activities as  
            follows:

             a)   Registered veterinarian technician application exam fee  
               from $200 to $350.
             b)   Initial registered veterinarian technician registration  
               fee from $100 to $350.
             c)   Biennial registered veterinarian technician renewal fee  
               from $100 to $350.
             d)   School application fee from cost of approval process to  
               a flat $300 fee plus actual cost.
             e)   Failure to report a change in mailing address from $15  
               to $25 for veterinarians and new fee for registered  
               veterinarian technicians.
             f)   Diversion program registration fee from $1,600 to  
               $4,000.
             g)   Veterinarian application exam fee from $100 to $350.
             h)   Board exam fee for veterinarians from $150 to $350.
             i)   Veterinary Medicine Practice Act exam for veterinarians  
               from $50 to $100.
             j)   Initial veterinarian license fee from $250 to $500.
             aa)   Biennial veterinarian renewal fee from $250 to $500.
             bb)   Veterinarian temporary license fee from $125 to $250.
             cc)   Veterinary premise fee from $100 to $400.
             dd)   Issuance of a duplicate veterinarian license from $10  
               to $25.
             ee)   Duplication or other services (other than a license)  
               from making a charge to the cost of rendering the service.
             ff)   Delinquency fee from $25 to $50. 

          2)Requires registered veterinarian technicians to notify the VMB  





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            of any changes to their mailing address within 30 days of the  
            change.

          3)Updates various code sections to reflect the change in the  
            name of the technician from animal health technician to  
            registered veterinary technician.


          FISCAL EFFECT:  Unknown.  This bill has been keyed "fiscal"  
          by Legislative Counsel.

          COMMENTS:
          
          1.Purpose.  According to information provided by the Author's  
            office, this measure is intended to ensure that the VMB is  
            able to continue performing critical licensing and enforcement  
            functions that protect consumers and animals throughout  
            California.
          
          2.Background.  
          
             a)   Funding Board Operations.  The VMB licenses and  
               regulates approximately 17,000 licensees including,  
               approximately 9,800 veterinarians, 4,200 registered  
               veterinary technicians and 2,600 veterinary hospitals.  The  
               VMB has remained within its statutory limits and has not  
               sought legislation to increase the fee ceilings since  1992   
               (in over 16 years).  According to the VMB, it increased its  
               fees through the regulatory process on October 1, 2007, to  
               the current statutory maximums; not to fund new programs,  
               but to cover increasing costs of existing business  
               operations.  The fee increase in October 2007 was minimal  
               due to the current statutory fee ceilings and is not  
               sufficient to offset a dwindling Contingent Fund.   
               According to the VMB, it understands that fee increases  
               impact business, the profession and consumers and would not  
               propose increases without considering all options.   
               However, now, based on projections of a Contingent Fund  
               deficiency by the year 2011-2012, outlined in fund  
               conditions projections prepared by the Budget office of the  
               Department of Consumer Affairs, the VMB believes it must  
               request an increase in its fee ceilings.  The VMB states  
               that the proposed fee ceilings are based on an  annualized   
                inflation   rate  of three (3) percent. 

             The VMB is mandated by law to maintain a minimum of three  





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               months of revenue in its Contingent Fund to insure funding  
               for existing programs and to offset increases in the cost  
               of doing business.  For example, according to the VMB, in  
               the last few years the hourly rate for the Office of the  
               Attorney General increased from $139 to $158, increasing  
               the annual expenditure from $240,000 to $425,000.  The VMB  
               points out that other expenditure increases over the last  
               few years include examination development costs, employee  
               compensation and benefits, retirement, worker's  
               compensation, rent and advancements in information  
               technology systems.  Additionally, a transition to online  
               licensing, scheduled to begin in 2010, required a  
               conversion to an automated Applicant Tracking System and a  
               one-time cost in 2007 of $83,000.  Operating cost increases  
               are deducted directly out of the VMB's Contingent Fund.

             According to the VMB, it is continually evaluating ways to  
               control or reduce expenditures and maintain a viable  
               Contingent Fund.  Currently, the VMB has reduced the number  
               of examination development workshops each year and is  
               considering the possibility of using the national  
               veterinary technician examination instead of a California  
               examination.
             
             b)   Diversion Program.  The VMB first implemented the  
               statutorily mandated Drug and Alcohol Diversion Program  
               (Program) in 1984.  The Program's goal is to identify and  
               rehabilitate veterinarians and registered veterinary  
               technicians with impairment due to drugs and alcohol so  
               that they may return to practice in a manner that will not  
               endanger the public's health and safety.  The VMB has an  
               interagency agreement with Maximus to provide confidential  
               intervention, assessment, referral, and monitoring services  
               to administer the Program.  Established in 1982, existing  
               law allows the Board to charge participants $1,600.  This  
               bill proposes to increase the fee to $4,000.   The  
               justification for this increase is that the VMB currently  
               pays $2,820 per year per participant in the diversion  
               program, while the participants charge is capped at $1,600  
                total   cost  .  Since a participant may be in the diversion  
               program from 3 to 4 years, the VMB is out of pocket a  
               substantial sum.

             In 2003, the then Joint Legislative Sunset Review Committee  
               (JLSRC) examined the VMB's Diversion Program and indicated  
               that it is rare that participants are able to cover the fee  





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               due to their loss of income during recovery and the VMB's  
               Program appears to have a low successful completion rate.   
               Since 1984, however, many more treatment options have  
               become available to the general public and to  
               professionals.  Because of this availability and the low  
               successful completion rate, both the VMB and the JLSRC  
               recommended that the legislature review the effectiveness  
               of the diversion program as it currently exists.

             This Committee recently held a hearing on board diversion  
               programs.  There appeared to be many inconsistencies  
               between the various programs and concern about the  
               utilization of a singular program, Maximus, which has not  
               been reviewed or audited to determine its effectiveness and  
               efficiency in providing administration of several drug  
               diversion programs for boards.  There is also concern  
               whether boards should have to pay for  any  of the expenses  
               incurred by the practitioner while participating in a  
               treatment program. 

              The Committee may want to consider whether participants  
               should pay for their own costs while participating in a  
               diversion program rather than being subsidized by the VMB  .   
                   
             
             c)   Address Change.  Existing law requires veterinarians to  
               inform the VMB of mailing address changes within 30 days  
               and allows the VMB to assess a $15 fee for failure to  
               comply.  Of note, there is a change of address form on the  
               VMB's website which can be completed and faxed or mailed to  
               the VMB.  This bill additionally requires registered  
               veterinarian technicians to provide updated mailing address  
               changes to the VMB and allows the VMB to assess a $25 fee  
               for failure by either a veterinarian or a registered  
               veterinarian technician to comply. 

          3.Fee Background Information Questionnaire Completed.  Included  
            with this analysis is a "Fee Background Information  
            Questionnaire" which was completed by the Author's Office.   
            This Questionnaire is required by the Committee to justify any  
            fees increases and provide background information on requested  
            fee increases by the boards under DCA.  The Questionnaire  
            includes fund condition statements displaying five years of  
            actual and five years of projected expenditures and revenues  
            with (a) current statutory maximum fee amounts, and (b)  
            proposed statutory maximum fee amounts.  It also includes a  





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            schedule of fee revenue by various fee "categories" displaying  
            five years of actual and five years of projected revenue based  
            on (a) current fees and (b) proposed fees and includes the  
            workload (e.g., number of licensees) and fee charged per  
            category.  Provides a schedule displaying two years of  
            expenditures by program component, such as application review,  
            examination, enforcement, administration and other licensing  
            activities for  each  licensing category.  Provides a table of  
            comparison of existing and proposed fees which includes the  
            percentage by which the fee will change.  Lastly, provides the  
            history for the past 10 years of legislative fee increase  
            authorizations.  

          4.Arguments in Opposition. According to its letter of  
            opposition, the  California Veterinary Medical Association   
            (CVMA) indicates it is unable to support SB 1584 at this time  
            due to significant concerns with the several facets of the  
            VMB's performance.

          The CVMA states it has had ongoing frustrations with the VMB's  
            inspection and enforcement program.  In particular, it is  
            concerned about the fact that while veterinarians must comply  
            with the law, the VMB's inspectors and consultants have been  
            unable to apply consistent, clear, and fair enforcement  
            standards to countless cases.  Thus, the CVMA would argue that  
            the fee increase could reinforce the current, defective system  
            of enforcement practice.

          The other main concern the CVMA has with the Board is the  
            dominance of the RVT Committee.  In particular, it is the  
            CVMA's contention that the RVT Committee has been  
            significantly exceeding its directive and the CVMA is  
            concerned that the new fees could be used to bolster the  
            Committee's current controversial legislative and regulatory  
            platform.

          Finally, the CVMA points out that in many cases, the bill  
            proposes to raise the fee caps by double if not triple the  
            current level while the VMB has not spelled out how they plan  
            to utilize the various fee increases.  Therefore, the CMVA  
            indicates it opposes this bill until it has a better  
            understanding of the need for the fees, and the way they will  
            be applied to address consumer protection and proper  
            enforcement.

           5.Policy Issue  :  "Can't We All Just Get Along?"  Today the  





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            Committee will also be hearing   SB 1205  (Aanestad), a measure  
            sponsored by the CVMA to address many of the criticisms  
            leveled at the VMB above.  However, these changes do not come  
            without costs to the VMB.  Although the VMB has not taken an  
            official position on 
          SB 1205 since amended on April 9, 2008, the VMB will be meeting  
            on Wednesday, April 16, 2008, to review this measure.  If the  
            VMB supports the changes proposed in CVMA to address the  
            issues they raise concerning VMB then conversely the CVMA  
            should support the efforts of the VMB to raise fees necessary  
            to support its operation and programs.  It appears that the  
            VMB has provided sufficient justification to raise the caps in  
            its fee structure, as both indicated by the DCA and from the  
            information received by the Committee in response to the  
            Questionnaire.


          SUPPORT AND OPPOSITION:
          
           Support:  California Veterinary Medical Board

            Opposition:  California Veterinary Medical Association



          Consultant:Bill Gage