BILL ANALYSIS                                                                                                                                                                                                    







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        |Hearing Date:June 14, 2010         |Bill No:AB                         |
        |                                   |1996                               |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                         Senator Gloria Negrete McLeod, Chair

                          Bill No:        AB 1996Author:Hill
                        As Amended:June 1, 2010  Fiscal:   Yes

        
        SUBJECT:   Chiropractors:  license renewal fee.
        
        SUMMARY:  Amends the Chiropractic Initiative Act of California by  
        increasing the license renewal fees of chiropractors from $150 to  
        $250.

        Existing law:  Establishes the Chiropractic Initiative Act of  
        California (Initiative Act), approved by voters on November 7, 1922,  
        and became effective on December 21, 1922.  Establishes, under the  
        Initiative Act, the State Board of Chiropractic Examiners (BCE) to  
        license and regulate the chiropractic practice, and prescribes the  
        licensing and renewal fees for chiropractors.  
        
        This bill amends the Initiative Act by increasing the license renewal  
        fees of chiropractors from $150 to $250.

        FISCAL EFFECT:  According to the Assembly Appropriations Committee,  
        annual increased fee-supported special fund revenues of $1.3 million  
        to support enforcement and administration workload for the Board of  
        Chiropractic Examiners. 

        COMMENTS:
        
        1. Purpose.  According to  State Board of Chiropractic Examiners  , the  
           Sponsor of this measure, 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  





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           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.  

        Moreover, BCE points out that it 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  
           it will be forced to make drastic cuts to its enforcement program.   
           The BCE points out that it has not raised renewal fees since 1991,  
           and with no increase in revenue for two decades, it was only a  
           matter of time until expenditures outpaced the funding necessary  
           for the BCE to maintain a balance in its reserve and keep its funds  
           solvent.  

        2. Background.  In 1922, California voters approved the Initiative  
           Act, described as an act prescribing the terms upon which licensees  
           may be issued to practitioners of chiropractic, creating the State  
           Board of Chiropractic Examiners and declaring its powers and  
           duties, prescribing penalties for violation hereof, and repealing  
           all acts and parts of acts inconsistent therewith.  Among other  
           provisions, the Initiative Act provides that each applicant must  
           pay an initial licensure fee of not more than $100, as determined  
           by the board.  Additionally, a licensee must pay a renewal fee  
           annually of not more than $150 as determined by the board.  The  
           Initiative Act also authorized the Legislature to fix the amounts  
           of the fees payable by applicants and licensees.

        The BCE currently regulates over 14,000 licensed chiropractors in  
           California.  According to the BCE, its annual budget is $3.4  
           million, funded exclusively by the profession through licensing  
           fees and other regulatory fees.  
         
        3. Committee Fee Bill Worksheet.  Included with this analysis is a  
           "Fee Background Information Questionnaire" which is to be completed  
           by the Author's office and the board requesting a fee increase.   
           This Questionnaire is required by the Committee to justify any fee  
           increases and provide background information on requested fee  
           increases by the boards under DCA.  The Questionnaire is to include  
           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 must also include a 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.  It is to provide a schedule  





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           displaying two years of expenditures by program components; such as  
           application review, examination, enforcement, administration and  
           other licensing activities for  each  licensing category.  It is to  
           provide a table comparison of existing and proposed fees which  
           includes the percentage by which the fee will change.  Lastly, it  
           should provide the history for the past 10 years of legislative fee  
           increase authorizations.  

        The worksheet submitted by the Author indicates that the fees proposed  
           in this bill will be solely for the use of BCE's expanded  
           enforcement program to include professional and permanent field  
           investigation staff and an inspection program.  The worksheet  
           indicated that at the current fee rate, the BCE will incur a  
           deficit of $32,000 beginning in fiscal year 2011-2012.  The deficit  
           will grow to $1,521,000 by fiscal year 2012-2013, and will continue  
           to increase by approximately $1 million each year thereafter.  

        4. Neutral.  The California Chiropractic Association has taken a  
           neutral position on this bill and points out that previous  
           amendments taken on this bill significantly reduce the potential  
           financial impact on licensees while providing the BCE the money it  
           needs to enforce the law.

        5. Arguments in Support.  The  International Chiropractors Association   
           states that this bill would provide the additional moneys that the  
           BCE needs to better enforce the law and continue to protect  
           consumers.
        
        SUPPORT AND OPPOSITION:
        
         Support:  

        California Board of Chiropractic Examiners (Sponsor)
        International Chiropractors Association

         Opposition:  

        None on file as of June 9, 2010



        Consultant: Rosielyn Pulmano









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