BILL ANALYSIS AB 1996 Page 1 Date of Hearing: March 23, 2010 ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS Mary Hayashi, Chair AB 1996 (Hill) - As Introduced: February 17, 2010 SUBJECT : Chiropractors: license renewal fee. SUMMARY : Increases the chiropractic license renewal fee from $150 to between $200 and $350, as determined by the State Board of Chiropractic Examiners (BCE). EXISTING LAW : 1)Provides for the licensure and regulation of chiropractors by BCE. Under the Chiropractic Act (Act), each licensed person practicing chiropractic is annually required to pay BCE a renewal fee not exceeding $150, as determined by BCE. 2)Requires statutory authorization to increase license fees. FISCAL EFFECT : Unknown COMMENTS : Purpose of this bill . According to the author's office, "BCE has implemented significant consumer protection changes that are necessary to fulfill its consumer protection mandate. For example, in 2008, the BCE expanded its enforcement program to include a permanent field investigation and inspection program. Continued improvements to investigations are very important for consumer protection, but require resources. "With these necessary enhancements in the BCE's enforcement program and the increase in costs of doing business, the BCE's current revenue is inadequate to pay for the level of service that is needed to protect consumers. The BCE expends approximately 70% of its operating budget on enforcement. If the renewal fee remains at its current level, the BCE's fund will be insolvent in FY 2010-11, and the BCE will be forced to make drastic cuts to its enforcement program." Background . The BCE was created on December 21, 1922 by initiative. Governed by a seven member board appointed by the Governor, BCE is comprised of five licensed doctors of AB 1996 Page 2 chiropractic and two public members. BCE regulates the chiropractic profession in California, protecting Californians from licensed and unlicensed individuals who engage in fraudulent, negligent, or incompetent practice. The BCE oversees approximately 14,000 licensees and 18 chiropractic schools and colleges located throughout the United States and Canada. The BCE's annual budget is funded exclusively by the profession through licensing and other regulatory fees. The BCE allocates approximately 70% of its total operating budget to enforcement related activities. The BCE has not raised fees since 1991, and though BCE comes in under budget each year, expenditures currently exceed revenue by approximately $1 million. Expenditures will increase further as the BCE fully implements its newly expanded enforcement program. This bill would increase the renewal fee from $150 to a range between $200 and $350, as determined by BCE. According to its executive officer, BCE needs a $75 fee increase to bring revenue and expenditures into alignment for the immediate future. BCE is considering implementing a stepped increase until it reaches sustainable revenue and a prudent reserve. Opposition . The California Chiropractic Association (CCA) writes, "The chiropractic profession has been hit especially hard by this recession because of many compounding factors. Group health reimbursement rates have gone down since BCE last raised its rates in 1991, not up. Workers' compensation law changes in 2004 have resulted in a 70-80% reduction in chiropractic utilization. Medicare rates will be reduced an additional 21% by the end of this month unless Congress acts to stop the fee decrease. CCA members plainly can't afford to have their relicensure fee increased up to 133% during this recession?. "The operating deficit is a result of the expanded enforcement program that has benefited the profession and the public and is being used as a model for other licensing boards. Although CCA understands the need for a fee increase to address the immediate deficit, we oppose any delegation of legislative authority that allows the BCE to raise relicensure fees up to $350 per year." AB 1996 Page 3 REGISTERED SUPPORT / OPPOSITION : Support Board of Chiropractic Examiners (sponsor) Opposition California Chiropractic Association Analysis Prepared by : Sarah Huchel / B. & P. / (916) 319-3301