BILL ANALYSIS                                                                                                                                                                                                    ”



                                                                  SB 969
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                  Mike Gatto, Chair

                    SB 969 (Vargas) - As Amended:  June 20, 2012 

          Policy Committee:                             Business and 
          Professions  Vote:                            5-4

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill establishes a non-governmental Pet Grooming Council 
          (Council) to manage a voluntary certificate programs for pet 
          groomers, pet bathers, and pet brushers. Specifically, this 
          bill:

          1)Establishes the Council as a non-profit organization with a 
            sunset of January 1, 2017.

          2)Establishes the membership of the Council, including animal 
            right advocates, pet industry representatives, animal law 
            attorneys, and other members.

          3)Requires the Council to issue a pet groomer certificate to 
            applicants who are at least 18 years of age; have completed a 
            Council-approved pet grooming curriculum; have 900 hours in 
            pet grooming experience; and have paid a certification fee not 
            to exceed $40.

          4)Requires the Council to issue a pet bather and brusher 
            certificate to applicants who are at least 18 years of age; 
            have completed a Council-approved pet bathing and brushing 
            curriculum; and have trained under the supervision of a 
            certified dog groomer or certified pet bather and brusher for 
            at least 300 hours.

          5)Grandfathers existing pet groomers, bathers, and brushers by 
            requiring the Council to issue a certificate to any person who 
            applies on or after January 1, 2013, with documentation 
            demonstrating that the person applying for certification has 
            already performed at least 900 hours of pet grooming services.








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          6)Requires the Council to issue a pet grooming certificate to an 
            out-of-state applicants who meets the qualifications of this 
            bill and holds a current registration, certification, or 
            license from any other state whose requirements meet or exceed 
            California's.

          7)Allows for denial, suspension, or revocation of a certificate 
            due to violation of Section 597 of the Penal Code; a finding 
            by the Council of gross negligence on the part of a 
            certificate holder; "unprofessional conduct"; or commission of 
            "any fraudulent, dishonest, or corrupt act substantially 
            related to the qualifications or duties of a certificate 
            holder."

          8)Establishes that it is an unfair business practice to 
            advertise oneself as certified without meeting the 
            requirements of this bill, and authorizes anyone to petition 
            for injunctive relief against a pet groomer violating this 
            provision through the Superior Court.

          9)Requires the Council to establish a board of review to review 
            charges of gross negligence asserted again certificate 
            holders. 

          10)Requires the Council to establish an online registry of 
            certificate holders. 

           FISCAL EFFECT  

          Negligible. 

          The Pet Grooming Council is a non-governmental entity and thus 
          state government bears no expense for its creation or 
          maintenance. Estimates of costs and revenues, however, suggest 
          that the Pet Grooming Council will raise only a small portion of 
          the funds needed to operate each year.

           COMMENTS  

           1)Background and Purpose.  The author's office argues that 
            professionalization of pet groomers, pet bathers, and pet 
            brushers will contribute to greater pet safety. This bill 
            creates a non-governmental non-profit council to provide 
            voluntary certifications to those in the pet grooming 








                                                                  SB 969
                                                                  Page  3

            industry. Similar certifications are already available from 
            private entities within the pet grooming industry. 

           2)Support  . The Executive Director (ED) of Animal Samaritans 
            SPCA, Inc., states, "As the ED of an Animal Welfare and 
            Veterinary Medical Center, I have seen dogs with various 
            injuries suffer at the hands of untrained groomers. In one 
            case, a dog came in with nipples cut off in a grooming 
            incident, leaving it with serious injuries. In other cases, 
            dogs and cats had grooming injuries that included burns ›and] 
            lacerations?. Many pet groomers have years of experience and 
            are diligent in their work and care for animals in their 
            charge. They do wonderful work. However, there are groomers 
            that are untrained and do not understand the basics of pet 
            handling?. This bill would require training for groomers and 
            licensing that would confirm the groomer's professional 
            qualifications."

           3)Opposition.  This bill is opposed by the pet grooming and 
            retailer industry. The industry objects to the provision that 
            allows the Council to investigate claims of gross negligence 
            against groomers and revoke certification upon an affirmative 
            finding. The Industry argues that gross negligence is overly 
            broad and may create spurious claims. The Industry also argues 
            that Council investigations into gross negligence complaints 
            will create paper trails that may give rise to lawsuits by pet 
            owners who, because of the Council's findings, see a 
            likelihood of success in civil court. 

           4)The Impact on Small Business  . SB 969 creates new training, 
            education, and paperwork requirements that impose new costs on 
            pet groomers. Those costs are likely insubstantial for major 
            pet stores that employ in-house groomers, many of whom have 
            already declared they will not seek certifications from the 
            new Council created by SB 969. However, small-scale groomers 
            may encounter potentially significant new barriers when 
            starting or expanding small businesses.

           5)Insufficient funds for operation of the Council.  It is 
            unlikely the Pet Grooming Council will be able to raise 
            sufficient funds to make the Council operable. 

            The pet grooming industry estimates that there are 11,000 pet 
            groomers in California. Roughly 3,000 are employed by major 
            pet retailers like PetSmart and Petco, which state that their 








                                                                 SB 969
                                                                  Page  4

            groomers are already rigorously trained and will opt out of 
            the voluntary certification provided by the Council. Of the 
            8,000 groomers that operate independently and as small 
            businesses, an estimated 1,000 are already certified or 
            licensed by a pet industry authority. 

            Estimating revenues. Assuming all 8,000 small-scale and 
            independent groomers seek certification from the Council in 
            the first year of its operation, and assuming the Council 
            charges the largest allowable first-time fee ($40), the 
            Council will raise $320,000 with which to operate itself for 
            the two years until groomers need to seek recertification. 
            Assuming the Council charges the largest allowable 
            recertification fee ($20), the Council will then have $160,000 
            to operate for every two-year period after that. 

            In all likelihood, however, not every small-scale and 
            independent groomer will seek certification. Assuming 
            one-quarter of them do so, and assuming again that the Council 
            charges the largest allowable fees, the Council will raise 
            $80,000 to fund its first two years, and $40,000 to operate 
            for every two-year period after that. 

            This low-end estimate may understate slightly the ongoing 
            revenues available to the Council. If the Council is 
            successful, groomers who are initially reluctant to seek a 
            certification may do so in later years. We adjust the numbers 
            below to reflect this fact.

            In both the high-end and low-end scenarios, the Council will 
            have slightly larger ongoing revenues if the economy grows and 
            the pet grooming industry expands. 

            Estimating costs. When estimating the annual costs of the Pet 
            Grooming Council, two entities serve as reasonable 
            comparisons. The Cemetery and Funeral Bureau, which serves 
            slightly fewer than 11,000 licensees, requires an annual 
            operating budget of $4 million. The Cemetery and Funeral 
            Bureau regulates a more complex field with a greater number of 
            legal concerns, and has disciplinary powers that the Council 
            would not. This suggests the Pet Grooming Council will be at 
            least somewhat less expensive than $4 million.

            Supporters of SB 969 point to the Massage Therapy Council as 
            an example of a non-governmental, non-profit regulatory entity 








                                                                  SB 969
                                                                  Page  5

            that provides voluntary certifications to an industry filled 
            with small businesses. However, the Massage Therapy Council 
            has much more access to revenue than the Pet Grooming Council 
            would. The Massage Therapy Council has issued 35,000 
            certifications since 2011, at a price of $150 for two years. 
            It reports it has annual expenses and annual revenues of $2.8 
            million.

            A rough estimate of the Pet Grooming Council's annual 
            operating costs, assuming a high number of groomers seek 
            certification, is $1.5 million to $2.5 million. A rough 
            estimate assuming a low number of groomers seek certification 
            is $700,000 to $1 million. A budget of $700,000 would be 
            sufficient to cover: office space of 1000 square feet, office 
            supplies and equipment, and a staff composed of one Executive 
            Director, one IT Director, one staff attorney, two trainers to 
            lead pet grooming workshops, and one support staff. 

            In no scenario do the revenues generated by the Council cover 
            even these minimum operating costs.

           ----------------------------------------------------------------- 
          |  Estimated Annual Costs and Revenues (For Years 1 and 2), Pet   |
          |                    Grooming Council, SB 969                     |
           ----------------------------------------------------------------- 
          |--------------------------+--------------------+------------------|
          |                          |Cost                |Revenue           |
          |--------------------------+--------------------+------------------|
          |High Estimate (8,000      |$1.5-2.5 million    |$160,000          |
          |certificate seekers)      |                    |                  |
          |--------------------------+--------------------+------------------|
          |Low Estimate (2,000       |$700,000-$1 million |$40,000           |
          |certificate seekers)      |                    |                  |
           ------------------------------------------------------------------ 
           ----------------------------------------------------------------- 
          |                                                                 |
          |-----------------------------------------------------------------|
          | Estimated Annual Costs and Revenues (All Years Subsequent), Pet |
          |                    Grooming Council, SB 969                     |
           ----------------------------------------------------------------- 
           ------------------------------------------------------------------ 
          |                          |Cost                |Revenue           |
           ------------------------------------------------------------------ 
          |High Estimate (8,000      |$1.5-2.5 million    |$80,000           |
          |certificate seekers)      |                    |                  |








                                                                 SB 969
                                                                  Page  6

          |--------------------------+--------------------+------------------|
          |Low Estimate (2,000       |$700,000-$1 million |$35,000           |
          |certificate seekers)      |                    |                  |
           ------------------------------------------------------------------ 

           6)Start-Up Costs.  The financial difficulties faced by the 
            Council may be even greater than portrayed here. A significant 
            portion of the Council's expenses will come in the form of 
            start-up costs, incurred before the first groomers step 
            forward to seek certification. SB 969 contains no explanation 
            of where start-up funds will come from. 

            The Massage Therapy Council was loaned start-up money by 
            professional organizations in the massage field, and massage 
            professionals worked pro bono in the Massage Therapy Council's 
            early stages. However, the massage industry supported the 
            Massage Therapy Council and wanted it to succeed, for a 
            variety of economic reasons internal to the massage industry. 
            The pet grooming industry opposes the Pet Grooming Council and 
            could not be counted upon to support it in its early stages.

           7)Suggested Amendment.  The author may wish to amend SB 969 in 
            light of the difficulty the Council may face in raising 
            adequate funding. One such amendment would permit the Council 
            to continuing operating if, but only if, it generates 
            sufficient revenue in its first year to pay for three 
            full-time employees, rent, and any necessary office equipment. 


            Such an amendment would allow the Council to continue 
            operating if it provides value to the market, but would 
            eliminate the Council if it does not. This prevents a legal 
            entity from continuing to exist without the funding necessary 
            to actually operate, helping to avoid uncertainty and 
            confusion in the pet grooming industry.



           Analysis Prepared by  :    Jonathan Stein / APPR. / (916) 319-2081