BILL ANALYSIS ---------------------------------------------------------------- |Hearing Date:April 20, 2009 |Bill No:SB | | |475 | ---------------------------------------------------------------- SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT 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 year. FISCAL EFFECT: Unknown. This bill is keyed "fiscal" by Legislative Counsel. COMMENTS: SB 475 Page 2 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 California. 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 instructors. 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 SB 475 Page 3 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 $30,000. . 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 SB 475 Page 4 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 services. 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 certification. SB 1584 (Padilla, Chapter 529, Statutes of 2008) increased the fee amount charged for veterinarian licensing, registered veterinary technician registration, registered veterinary SB 475 Page 5 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 Governor. 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 SB 475 Page 6 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. SUPPORT AND OPPOSITION: SB 475 Page 7 Support: Guide Dogs of America One individual Opposition: None received as of April 10th. Consultant: Sieglinde Johnson