BILL ANALYSIS Senate Appropriations Committee Fiscal Summary Senator Christine Kehoe, Chair 52 (Portantino) Hearing Date: 8/12/2010 Amended: 8/9/2010 Consultant: Katie Johnson Policy Vote: Health 5-3 _________________________________________________________________ ____ BILL SUMMARY: AB 52, an urgency measure, would request the University of California to develop a plan to establish and administer the Umbilical Cord Blood Collection Program on or before July 1, 2011, and would increase the fee for birth certificate copies by $2 to provide funds to implement the program. The bill would also extend the sunset on the program from January 1, 2015, to January 1, 2018. _________________________________________________________________ ____ Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Operating funds unknown, but cost pressure to fund Special/* more than $3,000 annually Federal/ Private/ General $2 fee revenues Approximately $3,000 annually,Special* commencing January 1, 2011 Potential loss of HRSA grant $471 $0 $0Federal *Umbilical Cord Blood Collection Fund _________________________________________________________________ ____ STAFF COMMENTS: This bill meets the criteria for referral to the Suspense File. Existing state law, AB 34 (Portantino), Chapter 516, Statutes of 2007, requires the California Department of Public Health (CDPH), on or before January 1, 2010, and until January 1, 2015, to establish the Umbilical Cord Blood Collection Program (UCBCP), to the extent that public or private funds or grants are identified and secured for these purposes. Existing law provides that no state funds, unless specifically appropriated, may be used for implementation of the program and establishes the Umbilical Cord Blood Collection (UCBC) Fund, from which moneys would be available upon appropriation by the Legislature. CDPH was awarded $471,000 in federal grant funds to implement the Health Resources and Services Administration (HRSA) Public Cord Banking in California. The proposed FY 2010-2011 Budget Act would appropriate the funds to the department; however, it has yet to be passed by the Legislature or signed into law by the Governor. This bill would shift the administration of UCBCP from CDPH to the University of California (UC), if UC elects to administer the program, and would extend the sunset on the program from January 1, 2015, to January 1, 2018, as well as recast and augment the program. This bill would request that UC develop a plan to establish and administer UCBCP for the purpose of collecting units of umbilical cord blood for public use, as Page 2 AB 52 (Portantino) defined, in transplantation and providing nonclinical units for research pertaining to biology and new clinical utilization of stem cells derived from the blood and tissue of the placenta and umbilical cord. The HRSA grant mentioned above could be put in jeopardy because UC is not the grantee; this would be a loss of $417,000 in federal funds in FY 2010-2011 in the event the appropriation is included in the final budget as expected. This bill would permit UC to accept public and private funds for the purpose of implementing these provisions and would clarify that the UCBC Fund would be created in the State Treasury, not within the General Fund. While the existing prohibition on the use of state funds for this program would be deleted, this bill would continue to require that moneys in the fund would be available upon appropriation by the Legislature. Additionally, this bill would provide that nothing would preclude UC from establishing and administering an additional fund independent of the State Treasury in support of the program. Staff recommends that this provision be removed; it would be unnecessary to have dual funds and could complicate state oversight of the program. This bill would assess an additional $2 onto the fee paid by individuals obtaining birth certificates. The current fee is $14 and is collected by local agencies. This bill would provide that a local agency could not withhold up to 15 percent of these additional $2 to cover administrative costs. There could be cost pressure to local agencies in the event that they incur additional administrative costs in collecting and remitting this additional revenue to the state. However, this would not constitute a reimbursable mandate. There are approximately 550,000 births in the state annually and an additional 1 million birth certificates are requested each year. Thus, annual revenues would be approximately $3.1 million. Revenues would vary depending on the number of births and the number of individuals requesting birth certificates annually. The fee, along with the program, would sunset January 1, 2018. In addition to the $2 revenue per birth certificate, the UCBC Fund would be permitted to contain additional federal, state, and private moneys. This bill would state that it is the intent of the Legislature that UC implement the program when the Controller determines by an unspecified date that at least an unspecified amount of money, including both federal and private moneys and the fee revenue collected pursuant to these provisions, is available in the UCBC Fund. Since this provision indicates that the program would need more funds than that provided by the fees in this bill, there would be cost pressure in the hundreds of thousands to millions of dollars annually in federal, private, and General Funds to fund this program. Additionally, this bill would provide that if the Controller has not made a determination on or before an unspecified date that an unspecified amount of money is available to implement the program, the amount in the fund would be immediately distributed to each private contributor or the federal government in the amount contributed and that the UCBC Fund would cease to exist. Staff recommends that this bill be amended to delete the provisions regarding the unspecified amounts and dates mentioned above and to provide that the moneys in the UCBC Fund be available upon appropriation by the Legislature.