BILL ANALYSIS                                                                                                                                                                                                    

          |Hearing Date:April 20, 2009    |Bill No:SB                      |
          |                               |475                             |

                        Senator Gloria Negrete McLeod, Chair

                        Bill No:        SB 475Author:Padilla
                 As Introduced:     February 26, 2009   Fiscal:  Yes

          SUBJECT:   Guide dogs for the blind.
          SUMMARY:  Sets the annual renewal fee limit for guide dog  
          schools to no more than 0.005 of school's annual expenses,  
          requires the State Board of Guide Dogs for the Blind to  
          establish the exact amount of the fee by regulation and requires  
          the renewal fee to be paid by April 30th of each year.

          Existing law:

          1)Creates the State Board of Guide Dogs for the Blind (Board),  
            within the Department of Consumer Affairs (DCA), to issue  
            licenses for the instruction of blind persons in the use of  
            guide dogs and for the training of guide dogs for use by blind  
            persons.  The Board also has exclusive authority to license  
            guide dog schools.

          2)Establishes the Guide Dog for the Blind Fund (Fund) and  
            imposes an annual renewal fee of no than 0.004 of a school's  
            annual expenses to be deposited in the Fund.  

          This bill sets the annual renewal fee limit for guide dog  
          schools to no more than 0.005 school's annual expenses, requires  
          the Board to establish the exact amount of the fee by regulation  
          and requires the renewal fee to be paid by April 30th of each  

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



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          1.Purpose.  According to the Sponsor,  the State Board of Guide  
            Dogs for the Blind  , the annual renewal payment rate was  
            codified in 1994 when the Board changed from a general funded  
            agency to a special funded agency.  Since that time, the  
            Board's workload has doubled and it is struggling to maintain  
            a consistent level of services.  The Board reports that it has  
            1.3 staff positions to perform its essential services  
            (licensing, examination and enforcement) but that if it cannot  
            provide those functions, guide dog consumers will be harmed  
            because they will not have an avenue for redress of  
            grievances, minimum training standards for guide dogs or  
            instruction of guide dog users may be adversely affected and  
            the financial integrity of guide dog schools could be  
            compromised.  Due to the unstable finances of non-profit  
            organizations, the Board states that it needs to have the  
            flexibility to set the annual renewal payment at a rate that  
            can project future spending levels. 
          2.Background.  In the 1940s, there were no minimum standards for  
            guide dog school operations, and it was possible for anyone to  
            open a school.  The Industrial Revolution and World War II  
            casualties increased the number of persons who were visually  
            impaired.  Guide dog programs of varying quality and  
            competence emerged throughout the country, most of them in  

            There was significant public confusion on the role and  
            function of guide dogs in public places and there was a long  
            list of scandalous activities that characterized the guide dog  
            industry.  Providing dogs with no training, raising funds with  
            no plans to produce trained dogs, selling dogs, accepting  
            people for training and not providing any and selling  
            unauthorized certification papers were commonplace  
            occurrences.  Out of concern that the blind and visually  
            impaired were being victimized by scam artists, the State  
            Board of Guide Dogs for the Blind was created to protect the  
            blind by establishing guide dog school operation standards,  
            providing oversight of the disposition of donor funds to  
            licensed schools and licensing and regulating guide dog  

            Prior to the establishment of the Board, there were  
            approximately 20 guide dog school operations.  After the Board  
            was created, only two were able to qualify for licensure.   
            Those two schools still exist today; Guide Dogs for the Blind,  
            Inc. in San Rafael and Guide Dogs of America in Sylmar.  A  


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            third California school, the Guide Dogs of the Desert was  
            licensed in 1972. 

          3.Department of Consumer Affairs Legal Opinion.  In 2007, the  
            Guide Dogs for the Blind, Inc. submitted a request to the  
            Board to have all direct expenses of its Oregon Campus  
            excluded from the calculation of its annual renewal payment on  
            the grounds that it was unfair for them to pay license fees  
            for expenses for services provided outside California and,  
            therefore, the jurisdiction of the Board.  In response, the  
            Board requested a DCA legal opinion on the matter and on March  
            21, 2008, the Board adopted findings of that opinion.  The DCA  
            opinion stated that the direct costs for operating the Oregon  
            campus should not be included within the total expenses used  
            for the calculation of the annual renewal fee.  The Board  
            believes this decision will reduce its annual revenue by  
          4.Committee Fee Bill Worksheet.  Included with this analysis is  
            a Fee Background Information Questionnaire which was completed  
            by the Author's office and the Board.  This Questionnaire is  
            required by the Committee to justify any fee increases and  
            provide background information on requested fee increases.   
            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 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  
            displaying two years of expenditures by program component.  It  
            is to provide a table of 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 shows that effective FY 2009-10, the Board's  
            fund will be reduced by $30,000 due to the revised calculation  
            of annual renewal fee calculation for the Guide Dogs of the  
            Blind, Inc and that the Board's total revenue will go from  
            $161,500 to $135,000 by FY 2010-11.  In 2012-13, the Board's  
            fund reserve will be down to 0.3 months and by the 2013-14  
            fiscal year, will be at a $66,000 deficit Additionally, the  
            Board anticipates that the non-profit guide dog schools will  


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            significantly decrease their annual expenses due to decreased  
            revenues from the failing economy and a loss of charitable  
            contributions/loss in investment portfolios.

            The Board states that the only other alternative to increasing  
            the annual school renewal payment would be to increase the  
            annual instructor license renewals fee.  However, to bridge  
            the projected $30,000 annual shortfall, the individual license  
            fee would need to increase from $100 to $300 a year.  The  
            Board believes that calculation would be cost prohibitive.

            The Board asserts that increasing the annual school renewal  
            payment to up to 0.005 and permitting them to set the fee by  
            regulation, will allow them to establish the amount of fee  
            required to keep and build a three to six months fund reserve.  
             The Board also believes this gives them more long-term  
            flexibility to set fees at a necessary rate to provide  

          5.Related Legislation.   SB 260  (Wiggins) seeks to increase the  
            maximum fee paid to the Department of Food and Agriculture's  
            Division of Measurement Standards from $0.02 to $0.05 for each  
            gallon of motor oil sold or purchased on or after January 1,  
            2010 and provides that a fee of $0.03 for each gallon of motor  
            oil sold or purchased may be applied by the Secretary prior to  
            the adoption of regulations.  The measure was approved 6-3 in  
            this Committee on April 13th and is set for hearing in the  
            Senate Appropriations Committee on April 20th.   

            AB 1071  (Emmerson) seeks to increase the minimum and maximum  
            amount of the application, examination, licensure and renewal  
            fees the Board of Pharmacy imposes on its licensees.  The  
            measure will be considered in the Assembly Committee on  
            Business and Professions on April 21st.

             SB 1362  (Margett, Chapter 716, Statutes of 2008) authorizes  
            disciplinary action by the Contractors State License Board  
            (CSLB) for failure of a licensed contractor to comply with  
            existing law related to the certification of electricians;  
            authorizes CSLB to charge an additional fee up to $20 to C-10  
            and C-7 contractors to enforce the law relating to electrician  

             SB 1584  (Padilla, Chapter 529, Statutes of 2008) increased the  
            fee amount charged for veterinarian licensing, registered  
            veterinary technician registration, registered veterinary  


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            technician schools and creates new fees to be paid by these  
            licensees for services provided to them by the Veterinary  
            Medical Board.

             AB 214  (Fuentes, 2008) would have established the Physician  
            and Surgeon Diversion Program under the Department of Public  
            Health and permits physicians and surgeons to obtain treatment  
            and monitoring of alcohol or substance abuse or mental  
            disorder recovery so that they may continue to treat patients  
            during treatment or agree to cease practice.  The bill  
            required the program to be funded from additional licensing  
            fees of physicians and surgeons collected by the Medical Board  
            of California.  It was vetoed by the Governor.

             AB 547  (Ma, 2008)   sought to require the Medical Board of  
            California (MBC) to fix the initial licensure and biennial  
            renewal fees assessed on physicians and surgeons and sets  
            these fees at up to $790 and requires the Bureau of State  
            Audits (BSA) to conduct an audit of the MBC's revenue  
            projections by January 1, 2012.  The measure was vetoed by the  

             AB 1248  (Eng, Chapter 488, Statutes of 2008)   deleted the  
            exemption from the written examination for any person with an  
            equivalent certificate of registration; and required each  
            applicant to pay an examination fee fixed by the board at an  
            amount up to $450, equal to the actual cost to administer the  
            written examination.
            AB 2111  (Smyth Chapter 301, Statutes of 2008) made various  
            changes relating to licensure fees and examination  
            requirements for physical therapists (PTs) and physical  
            therapy assistants (PTs); allowed the Physical Therapy Board  
            of California (PT Board) to issue a public letter of reprimand  
            in lieu of filing or prosecuting a formal accusation against a  
            licensee and allowed the PT Board to disqualify an applicant  
            from taking the physical therapy examination, deny or revoke  
            an application or license if it determines that an applicant  
            for licensure or a licensee has engaged or attempted to engage  
            in conduct that undermines the licensing examination.  
            AB 2439  (DeLaTorre, Chapter 640, Statutes of 2008) required  
            the Medical Board of California to charge physicians and  
            surgeons an additional $25 as part of their initial license  
            fee or renewal fee to support the Steven M. Thompson Physician  
            Corps Loan Repayment Program and required at least 15 percent  


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            of the funds to be dedicated to loan assistance for physicians  
            and surgeons who agree to practice in geriatric care settings  
            or settings that primarily serve adults over the age of 65  
            years or adults with disabilities
            AB 2946  (Hayashi, Chapter 504, Statutes of 2008) made  
            permanent the $8.50 fee that each cemetery and crematory pays  
            to the Cemetery and Funeral Bureau for each burial,  
            entombment, inurnment or cremation.

             SB 615  (Oropeza, 2007) would have created the California  
            Pharmacy Technician Scholarship and Loan Repayment Program to  
            provide scholarships and loan repayment for pharmacy  
            technicians in underserved areas and required all pharmacy  
            technicians and pharmacies to pay a $10 fee upon renewal of  
            their licenses to fund the program.  The bill was vetoed by  
            the governor.

             AB 986  (Eng, Chapter 276, Statutes of 2007)   established a  
            retention period for optometrists to maintain patient records,  
            allowed the practice of optometry at temporary locations under  
            certain conditions, increased the amount of fees charged for  
            optometry licensing and created new fees to be paid by  
            licensed optometrists for services provided to them by the  
            Board of Optometry.

             AB 1670  (Mendoza, Chapter 716, Statutes of 2007) revised the  
            conditions under which a new fictitious business name must be  
            filed, revised the content of the fictitious business name  
            statement and permitted county clerks to charge appropriate  
            fees sufficient to cover the actual cost of providing services  
            related to these filings

          6.Arguments in Support.   The Guide Dogs of America  writes in  
            support of SB 475 as it believes the Board needs the resources  
            to protect their interests and provide guidance to the  
            industry.  They assert that the fee ceiling proscribed by the  
            bill provides them reassurances that they will be able to  
            afford the new fee and that if the Board's funds exceed the  
            amount necessary to maintain its functions, the measure also  
            provides them the ability to request a regulatory change to  
            the fee.



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          Guide Dogs of America
          One individual


           None received as of April 10th.

          Consultant: Sieglinde Johnson