Amended in Senate May 1, 2013

Senate BillNo. 809


Introduced by Senators DeSaulnier and Steinberg

(Coauthors: Senators Hancock, Lieu, Pavley, and Price)

(Coauthor: Assembly Member Blumenfield)

February 22, 2013


An act to add Section 805.8 to the Business and Professions Code, to amend Sections 11165 and 11165.1 of the Health and Safety Code, and to add Part 21 (commencing with Section 42001) to Division 2 of the Revenue and Taxation Code, relating to controlled substances, and declaring the urgency thereof, to take effect immediately.

LEGISLATIVE COUNSEL’S DIGEST

SB 809, as amended, DeSaulnier. Controlled substances: reporting.

(1) Existing law classifies certain controlled substances into designated schedules. Existing law requires the Department of Justice to maintain the Controlled Substance Utilization Review and Evaluation System (CURES) for the electronic monitoring of the prescribing and dispensing of Schedule II, Schedule III, and Schedule IV controlled substances by all practitioners authorized to prescribe or dispense these controlled substances.

Existing law requires dispensing pharmacies and clinics to report, on a weekly basis, specified information for each prescription of Schedule II, Schedule III, or Schedule IV controlled substances, to the department, as specified.

This bill would establish the CURES Fund within the State Treasury to receive funds to be allocated, upon appropriation by the Legislature, to the Department of Justice for the purposes of funding CURES, and would make related findings and declarations.

This bill would require the Medical Board of California, the Dental Board of California, the California State Board of Pharmacy, the Veterinary Medical Board, the Board of Registered Nursing, the Physician Assistant Committee of the Medical Board of California, the Osteopathic Medical Board of California, the State Board of Optometry, and the California Board of Podiatric Medicine to increase the licensure, certification, and renewal fees charged to practitioners under their supervision who are authorized to prescribe or dispense controlled substances, by up to 1.16%, the proceeds of which would be deposited into the CURES Fund for support of CURES, as specified. This bill would also require the California State Board of Pharmacy to increase the licensure, certification, and renewal fees charged to wholesalers, nonresident wholesalers, and veterinary food-animal drug retailers under their supervision by up to 1.16%, the proceeds of which would be deposited into the CURES Fund for support of CURES, as specified.

(2) Existing law permits a licensed health care practitioner, as specified, or a pharmacist to apply to the Department of Justice to obtain approval to access information stored on the Internet regarding the controlled substance history of a patient under his or her care. Existing law also authorizes the Department of Justice to provide the history of controlled substances dispensed to an individual to licensed health care practitioners, pharmacists, or both, providing care or services to the individual.

This bill would require licensed health care practitioners, as specified, and pharmacists to apply to the Department of Justice to obtain approval to access information stored on the Internet regarding the controlled substance history of a patient under his or her care, and, upon the happening of specified events, to access and consult that information prior to prescribing or dispensing Schedule II, Schedule III, or Schedule IV controlled substances.

(3) Existing law imposes various taxes, including taxes on the privilege of engaging in certain activities. The Fee Collection Procedures Law, the violation of which is a crime, provides procedures for the collection of certain fees and surcharges.

This bill would impose a tax upon qualified manufacturers, as definedbegin delete, for the privilege of doing business in this state, as specified. This bill would also impose a tax upon specified insurers, as defined, for the privilege of doing business in this state, as specifiedend delete. The tax would bebegin delete administered by the State Board of Equalization and would beend delete collectedbegin insert by the State Board of Equalizationend insert pursuant to the procedures set forth in the Fee Collection Procedures Law. The bill would require the board to deposit all taxes, penalties, and interest collected pursuant to these provisions in the CURES Fund, as provided.begin insert This bill would also allow specified insurers, as defined, to voluntarily contribute to the CURES Fund, as described.end insert Because this bill would expand application of the Fee Collection Procedures Law, the violation of which is a crime, it would impose a state-mandated local program.

(4) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

(5) This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

The Legislature finds and declares all of the
2following:

3(a) The Controlled Substance Utilization Review and Evaluation
4System (CURES) is a valuable investigative, preventive, and
5educational tool for law enforcement, regulatory boards,
6educational researchers, and the health care community. Recent
7budget cuts to the Attorney General’s Division of Law Enforcement
8have resulted in insufficient funding to support the CURES
9Prescription Drug Monitoring Program (PDMP). The PDMP is
10necessary to ensure health care professionals have the necessary
11data to make informed treatment decisions and to allow law
12enforcement to investigate diversion of prescription drugs. Without
13a dedicated funding source, the CURES PDMP is not sustainable.

14(b) Each year CURES responds to more than 60,000 requests
15from practitioners and pharmacists regarding all of the following:

16(1) Helping identify and deter drug abuse and diversion of
17prescription drugs through accurate and rapid tracking of Schedule
18II, Schedule III, and Schedule IV controlled substances.

19(2) Helping practitioners make better prescribing decisions.

20(3) Helping reduce misuse, abuse, and trafficking of those drugs.

P4    1(c) Schedule II, Schedule III, and Schedule IV controlled
2substances have had deleterious effects on private and public
3interests, including the misuse, abuse, and trafficking in dangerous
4prescription medications resulting in injury and death. It is the
5intent of the Legislature to work with stakeholders to fully fund
6the operation of CURES which seeks to mitigate those deleterious
7effects, and which has proven to be a cost-effective tool to help
8reduce the misuse, abuse, and trafficking of those drugs.

9

SEC. 2.  

Section 805.8 is added to the Business and Professions
10Code
, to read:

11

805.8.  

(a) (1) The Medical Board of California, the Dental
12Board of California, the California State Board of Pharmacy, the
13Veterinary Medical Board, the Board of Registered Nursing, the
14Physician Assistant Committee of the Medical Board of California,
15the Osteopathic Medical Board of California, the State Board of
16Optometry, and the California Board of Podiatric Medicine shall
17increase the licensure, certification, and renewal fees charged to
18practitioners under their supervision who are authorized pursuant
19to Section 11150 of the Health and Safety Code to prescribe or
20dispense Schedule II, Schedule III, or Schedule IV controlled
21substances by up to 1.16 percent annually, but in no case shall the
22fee increase exceed the reasonable costs associated with
23maintaining CURES for the purpose of regulating prescribers and
24dispensers of controlled substances licensed or certificated by these
25boards.

26(2) The California State Board of Pharmacy shall increase the
27licensure, certification, and renewal fees charged to wholesalers
28and nonresident wholesalers of dangerous drugs, licensed pursuant
29to Article 11 (commencing with Section 4160) of Chapter 9, by
30up to 1.16 percent annually, but in no case shall the fee increase
31exceed the reasonable costs associated with maintaining CURES
32for the purpose of regulating wholesalers and nonresident
33wholesalers of dangerous drugs licensed or certificated by that
34board.

35(3) The California State Board of Pharmacy shall increase the
36licensure, certification, and renewal fees charged to veterinary
37food-animal drug retailers, licensed pursuant to Article 15
38(commencing with Section 4196) of Chapter 9, by up to 1.16
39percent annually, but in no case shall the fee increase exceed the
40reasonable costs associated with maintaining CURES for the
P5    1purpose of regulating veterinary food-animal drug retailers licensed
2or certificated by that board.

3(b) The funds collected pursuant to subdivision (a) shall be
4deposited in the CURES accounts, which are hereby created, within
5the Contingent Fund of the Medical Board of California, the State
6Dentistry Fund, the Pharmacy Board Contingent Fund, the
7Veterinary Medical Board Contingent Fund, the Board of
8Registered Nursing Fund, the Osteopathic Medical Board of
9California Contingent Fund, the Optometry Fund, and the Board
10of Podiatric Medicine Fund. Moneys in the CURES accounts of
11each of those funds shall, upon appropriation by the Legislature,
12be available to the Department of Justice solely for maintaining
13CURES for the purposes of regulating prescribers and dispensers
14of controlled substances. All moneys received by the Department
15of Justice pursuant to this section shall be deposited in the CURES
16Fund described in Section 11165 of the Health and Safety Code.

17

SEC. 3.  

Section 11165 of the Health and Safety Code is
18amended to read:

19

11165.  

(a) To assist law enforcement and regulatory agencies
20in their efforts to control the diversion and resultant abuse of
21Schedule II, Schedule III, and Schedule IV controlled substances,
22and for statistical analysis, education, and research, the Department
23of Justice shall, contingent upon the availability of adequate funds
24in the CURES accounts within the Contingent Fund of the Medical
25Board of California, the Pharmacy Board Contingent Fund, the
26State Dentistry Fund, the Board of Registered Nursing Fund, the
27Osteopathic Medical Board of California Contingent Fund, the
28Veterinary Medical Board Contingent Fund, the Optometry Fund,
29the Board of Podiatric Medicine Fund, and the CURES Fund,
30maintain the Controlled Substance Utilization Review and
31Evaluation System (CURES) for the electronic monitoring of, and
32Internet access to information regarding, the prescribing and
33dispensing of Schedule II, Schedule III, and Schedule IV controlled
34substances by all practitioners authorized to prescribe or dispense
35these controlled substances.

36(b) The reporting of Schedule III and Schedule IV controlled
37substance prescriptions to CURES shall be contingent upon the
38availability of adequate funds for the Department of Justice for
39the purpose of finding CURES. The department may seek and use
40grant funds to pay the costs incurred from the reporting of
P6    1controlled substance prescriptions to CURES. The department
2shall make information about the amount and the source of all
3private grant funds it receives for support of CURES available to
4the public. Grant funds shall not be appropriated from the
5Contingent Fund of the Medical Board of California, the Pharmacy
6Board Contingent Fund, the State Dentistry Fund, the Board of
7Registered Nursing Fund, the Naturopathic Doctor’s Fund, or the
8 Osteopathic Medical Board of California Contingent Fund to pay
9the costs of reporting Schedule III and Schedule IV controlled
10substance prescriptions to CURES.

11(c) CURES shall operate under existing provisions of law to
12safeguard the privacy and confidentiality of patients. Data obtained
13from CURES shall only be provided to appropriate state, local,
14and federal persons or public agencies for disciplinary, civil, or
15criminal purposes and to other agencies or entities, as determined
16by the Department of Justice, for the purpose of educating
17practitioners and others in lieu of disciplinary, civil, or criminal
18actions. Data may be provided to public or private entities, as
19approved by the Department of Justice, for educational, peer
20review, statistical, or research purposes, provided that patient
21information, including any information that may identify the
22patient, is not compromised. Further, data disclosed to any
23individual or agency, as described in this subdivision, shall not be
24disclosed, sold, or transferred to any third party.

25(d) For each prescription for a Schedule II, Schedule III, or
26Schedule IV controlled substance, as defined in the controlled
27substances schedules in federal law and regulations, specifically
28Sections 1308.12, 1308.13, and 1308.14, respectively, of Title 21
29of the Code of Federal Regulations, the dispensing pharmacy or
30clinic shall provide the following information to the Department
31of Justice on a weekly basis and in a format specified by the
32Department of Justice:

33(1) Full name, address, and telephone number of the ultimate
34user or research subject, or contact information as determined by
35the Secretary of the United States Department of Health and Human
36Services, and the gender, and date of birth of the ultimate user.

37(2) The prescriber’s category of licensure and license number,
38the federal controlled substance registration number, and the state
39medical license number of any prescriber using the federal
P7    1controlled substance registration number of a government-exempt
2facility.

3(3) Pharmacy prescription number, license number, and federal
4controlled substance registration number.

5(4) National Drug Code (NDC) number of the controlled
6substance dispensed.

7(5) Quantity of the controlled substance dispensed.

8(6) International Statistical Classification of Diseases, 9th
9revision (ICD-9) Code, if available.

10(7) Number of refills ordered.

11(8) Whether the drug was dispensed as a refill of a prescription
12or as a first-time request.

13(9) Date of origin of the prescription.

14(10) Date of dispensing of the prescription.

15(e) The CURES Fund is hereby established within the State
16Treasury. The CURES Fund shall consist of all funds made
17available to the Department of Justice for the purpose of funding
18CURES. Money in the CURES Fund shall, upon appropriation by
19the Legislature, be available for allocation to the Department of
20Justice for the purpose of funding CURES.

21

SEC. 4.  

Section 11165.1 of the Health and Safety Code is
22amended to read:

23

11165.1.  

(a) (1) A licensed health care practitioner eligible
24to prescribe Schedule II, Schedule III, or Schedule IV controlled
25substances or a pharmacist shall provide a notarized application
26developed by the Department of Justice to obtain approval to access
27information stored on the Internet regarding the controlled
28substance history of a patient maintained within the Department
29of Justice, and, upon approval, the department shall release to that
30practitioner or pharmacist, the electronic history of controlled
31substances dispensed to an individual under his or her care based
32on data contained in the CURES Prescription Drug Monitoring
33Program (PDMP).

34(A) An application may be denied, or a subscriber may be
35suspended, for reasons which include, but are not limited to, the
36following:

37(i) Materially falsifying an application for a subscriber.

38(ii) Failure to maintain effective controls for access to the patient
39activity report.

P8    1(iii) Suspended or revoked federal Drug Enforcement
2Administration (DEA) registration.

3(iv) Any subscriber who is arrested for a violation of law
4governing controlled substances or any other law for which the
5possession or use of a controlled substance is an element of the
6crime.

7(v) Any subscriber accessing information for any other reason
8than caring for his or her patients.

9(B) Any authorized subscriber shall notify the Department of
10Justice within 10 days of any changes to the subscriber account.

11(2) To allow sufficient time for licensed health care practitioners
12eligible to prescribe Schedule II, Schedule III, or Schedule IV
13controlled substances and a pharmacist to apply and receive access
14to PDMP, a written request may be made, until July 1, 2012, and
15the Department of Justice may release to that practitioner or
16pharmacist the history of controlled substances dispensed to an
17individual under his or her care based on data contained in CURES.

18(b) Any request for, or release of, a controlled substance history
19pursuant to this section shall be made in accordance with guidelines
20developed by the Department of Justice.

21(c) (1) Until the Department of Justice has issued the
22notification described in paragraph (3), in order to prevent the
23inappropriate, improper, or illegal use of Schedule II, Schedule
24III, or Schedule IV controlled substances, the Department of Justice
25may initiate the referral of the history of controlled substances
26dispensed to an individual based on data contained in CURES to
27licensed health care practitioners, pharmacists, or both, providing
28care or services to the individual.

29(2) Upon the Department of Justice issuing the notification
30described in paragraph (3) and approval of the application required
31pursuant to subdivision (a), licensed health care practitioners
32eligible to prescribe Schedule II, Schedule III, or Schedule IV
33controlled substances and pharmacists shall access and consult the
34electronic history of controlled substances dispensed to an
35individual under his or her care prior to prescribing or dispensing
36a Schedule II, Schedule III, or Schedule IV controlled substance.

37(3) The Department of Justice shall notify licensed health care
38practitioners and pharmacists who have submitted the application
39required pursuant to subdivision (a) when the department
40determines that CURES is capable of accommodating the mandate
P9    1contained in paragraph (2). The department shall provide a copy
2of the notification to the Secretary of the State, the Secretary of
3the Senate, the Chief Clerk of the Assembly, and the Legislative
4Counsel, and shall post the notification on the department’s Internet
5Web site.

6(d) The history of controlled substances dispensed to an
7individual based on data contained in CURES that is received by
8a practitioner or pharmacist from the Department of Justice
9pursuant to this section shall be considered medical information
10subject to the provisions of the Confidentiality of Medical
11Information Act contained in Part 2.6 (commencing with Section
1256) of Division 1 of the Civil Code.

13(e) Information concerning a patient’s controlled substance
14history provided to a prescriber or pharmacist pursuant to this
15section shall include prescriptions for controlled substances listed
16in Sections 1308.12, 1308.13, and 1308.14 of Title 21 of the Code
17of Federal Regulations.

18

SEC. 5.  

Part 21 (commencing with Section 42001) is added to
19Division 2 of the Revenue and Taxation Code, to read:

20 

21PART 21.  Controlled Substance Utilization
22Review and Evaluation System (CURES) Tax Law

23

 

24

42001.  

For purposes of this part, the following definitions
25apply:

26(a) “Controlled substance” means a drug, substance, or
27immediate precursor listed in any schedule in Section 11055,
2811056, or 11057 of the Health and Safety Code.

29(b) “Insurer” meansbegin delete a health insurer licensed pursuant to Part
302 (commencing with Section 10110) of Division 2 of the Insurance
31Code, a health care service plan licensed pursuant to the
32Knox-Keene Health Care Service Plan Act of 1975 (Chapter 2.2
33(commencing with Section 1340) of Division 2 of the Health and
34Safety Code), and a workers’ compensation insurer licensed
35pursuant to Part 3 (commencing with Section 11550) of Division
362end delete
begin insert an admitted insurer writing health insurance, as defined in
37Section 106 of the Insurance Code, and an admitted insurer writing
38workers’ compensation insurance, as defined in Section 109end insert
of
39the Insurance Code.

P10   1(c) “Qualified manufacturer” means a manufacturer of a
2controlled substancebegin delete doing business in this state, as defined in
3Section 23101end delete
, but does not mean a wholesaler or nonresident
4wholesaler of dangerous drugs, regulated pursuant to Article 11
5(commencing with Section 4160) of Chapter 9 of Division 2 of
6the Business and Professions Code, a veterinary food-animal drug
7retailer, regulated pursuant to Article 15 (commencing with Section
84196) of Chapter 9 of Division 2 of the Business and Professions
9Code, or an individual regulated by the Medical Board of
10California, the Dental Board of California, the California State
11Board of Pharmacy, the Veterinary Medical Board, the Board of
12Registered Nursing, the Physician Assistant Committee of the
13Medical Board of California, the Osteopathic Medical Board of
14California, the State Board of Optometry, or the California Board
15of Podiatric Medicine.

16

42003.  

(a) For the privilege of doing business in this state, an
17annual tax is hereby imposed on all qualified manufacturers in an
18amountbegin delete of ____ dollars ($____)end deletebegin insert determined pursuant to Section
1942005end insert
, for the purpose of establishing and maintaining enforcement
20of the Controlled Substance Utilization Review and Evaluation
21System (CURES), established pursuant to Section 11165 of the
22Health and Safety Code.

begin delete

23(b) For the privilege of doing business in this state, a tax is
24hereby imposed on a one time basis on all insurers in an amount
25of ____ dollars ($____), for the purpose of upgrading CURES.

end delete
begin insert

26(b) The Department of Justice may seek grant moneys from
27insurers for the purpose of upgrading and modernizing the CURES.
28Insurers may contribute by submitting their payment to the
29Controller for deposit into the CURES Fund established pursuant
30to subdivision (e) of Section 11165 of the Health and Safety Code.
31The department shall make information about the amount and the
32source of all private grant funds it receives for support of CURES
33available to the public.

end insert
begin delete
34

42005.  

Each qualified manufacturer and insurer shall prepare
35and file with the board a return, in the form prescribed by the board,
36containing information as the board deems necessary or appropriate
37for the proper administration of this part. The return shall be filed
38on or before the last day of the calendar month following the
39calendar quarter to which it relates, together with a remittance
40payable to the board for the amount of tax due for that period.

end delete
begin delete
P11   1

42007.  

The board shall administer and collect the tax imposed
2by this part pursuant to the Fee Collection Procedures Law (Part
330 (commencing with Section 55001)). For purposes of this part,
4the references in the Fee Collection Procedures Law (Part 30
5(commencing with Section 55001)) to “fee” shall include the tax
6imposed by this part and references to “feepayer” shall include a
7person required to pay the tax imposed by this part.

end delete
begin insert
8

begin insert42005.end insert  

(a) The board shall collect the annual tax imposed by
9this part pursuant to the Fee Collection Procedures Law (Part 30
10(commencing with Section 55001)). For purposes of this part, a
11reference in the Fee Collection Procedures Law to a “fee” shall
12include this tax and a reference to a “feepayer” shall include a
13person liable for the payment for the taxes collected pursuant to
14that law.

15(b) (1) The board shall not accept or consider a petition for
16redetermination that is based on the assertion that a determination
17by the Department of Justice incorrectly determined that a qualified
18manufacturer is subject to the tax or that a determination by the
19Department of Justice improperly or erroneously calculated the
20amount of that tax. The board shall forward to the Department of
21Justice any appeal of a determination that asserts that a
22determination by the Department of Justice incorrectly determined
23that a qualified manufacturer is subject to the tax or that a
24determination by the Department of Justice improperly or
25erroneously calculated the amount of that tax.

26(2) The board shall not accept or consider a claim for refund
27that is based on the assertion that a determination by the
28Department of Justice improperly or erroneously calculated the
29amount of a tax, or incorrectly determined that the qualified
30manufacturer is subject to the tax. The board shall forward to the
31Department of Justice any claim for refund that asserts that a
32determination by the Department of Justice incorrectly determined
33that a qualified manufacturer is subject to the tax or that a
34determination by the Department of Justice improperly or
35erroneously calculated the amount of that tax.

end insert
begin insert
36

begin insert42007.end insert  

(a) The Department of Justice shall determine the
37annual tax by dividing the cost to establish and maintain
38enforcement of CURES by the number of qualified manufacturers.
39For calendar year 2014, the CURES cost shall be four million two
40hundred thousand dollars ($4,200,000). Beginning with the 2015
P12   1calendar year, and for each calendar year thereafter, the
2Department of Justice shall adjust the rate annually to reflect
3increases or decreases in the cost of living during the prior fiscal
4year, as measured by the California Consumer Price Index for all
5items.

6(b) The Department of Justice shall provide to the board the
7name and address of each qualified manufacturer that is liable
8for the annual tax, the amount of tax, and the due date.

9(c) All annual taxes referred to the board for collection pursuant
10to Section 42005 shall be paid to the board.

end insert
11

42009.  

All taxes, interest, penalties, and other amounts
12collected pursuant to this part, less refunds and costs of
13administration, shall be deposited into the CURES Fund.

14

42011.  

The board shall prescribe, adopt, and enforce rules and
15regulations relating to the administration and enforcement of this
16part.

17

SEC. 6.  

No reimbursement is required by this act pursuant to
18Section 6 of Article XIII B of the California Constitution because
19the only costs that may be incurred by a local agency or school
20district will be incurred because this act creates a new crime or
21infraction, eliminates a crime or infraction, or changes the penalty
22for a crime or infraction, within the meaning of Section 17556 of
23the Government Code, or changes the definition of a crime within
24the meaning of Section 6 of Article XIII B of the California
25Constitution.

26

SEC. 7.  

This act is an urgency statute necessary for the
27immediate preservation of the public peace, health, or safety within
28the meaning of Article IV of the Constitution and shall go into
29immediate effect. The facts constituting the necessity are:

30In order to protect the public from the continuing threat of
31prescription drug abuse at the earliest possible time, it is necessary
32this act take effect immediately.



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