BILL ANALYSIS Ó Senate Appropriations Committee Fiscal Summary Senator Kevin de León, Chair SB 1243 (Lieu) - Professions and vocations: sunset review. Amended: April 21, 2014 Policy Vote: BP&ED 9-0 Urgency: No Mandate: No Hearing Date: May 12, 2014 Consultant: Mark McKenzie This bill meets the criteria for referral to the Suspense File. Bill Summary: SB 1243 would extend the sunset of the Veterinary Medical Board (VMB) and the term of its executive officer until January 1, 2017, and extend the sunset of the Certified Common Interest Development Manager (CID manager) program and the Tax Preparer program until January 1, 2019. Fiscal Impact: VMB: Projected costs of approximately $4.5 million annually (VMB Contingency Fund), supporting 23.8 PY, until January 1, 2017, partially offset by fee revenues of approximately $3.5 million, based on the proposed 2014-15 budget. See staff note below pertaining to discrepancies in budget documents. No state costs associated with extending the CID manager and Tax Preparer programs. The certification of CID managers and registration of tax preparers is handled by a specified professional association of CID managers and a nonprofit regulating entity, respectively, that are outside of state government and are not supported by state funds. Background: Veterinary Medical Board Existing law provides for the licensing and regulation of approximately 17,000 licensed veterinarians and registered veterinary technicians by the VMB within the Department of Consumer Affairs (DCA). Existing law establishes a sunset date of January 1, 2016 for the VMB and requires a review of the VMB by the appropriate policy committees of the Legislature prior to that repeal date that is limited to those issues as identified by the respective committees. The VMB is not required to submit a sunset review document or evaluative questionnaire at that time. SB 1243 (Lieu) Page 1 When the VBM was reviewed by the appropriate legislative committees in 2013, concerns were raised about whether the board was taking sufficient and timely actions to address specified issues. To provide an opportunity for additional review in the short term, the committees determined that a two-year extension of the sunset date was appropriate. This bill would allow additional time for the VBM to implement regulations and responses for some of the important issues in the near future. Tax Preparer program Existing law establishes the California Tax Education Council (CTEC) as a nonprofit corporation that represents tax preparers in the state. Existing law also requires tax preparers to register with CTEC, obtain a certificate of completion of specified tax education curriculum, and maintain a surety bond of $5,000 payable to the State of California. The Tax Preparers program is repealed on January 1, 2015. CID managers program Existing law establishes the requirements for a voluntary CID manager program that is administered by a professional association of CID managers. The program specifies the requirements for certification as a CID manager, including 30 hours of coursework and an examination on CID law and management. The CID managers program is repealed on January 1, 2015. Proposed Law: SB 1243 would the sunset of the Veterinary Medical Board (VMB) and the term of its executive officer until January 1, 2017, and extend the sunset of the Certified Common Interest Development Manager (CID manager) program and the Tax Preparer Program until January 1, 2019. Related Legislation: This bill is one of six measures introduced this session to extend the sunset on licensing boards within the Department of Consumer Affairs - including SB 1242 (Lieu), SB 1244 (Lieu), SB 1245 (Lieu), SB 1246 (Lieu), and SB 1247 (Lieu). Staff Comments: The certification of CID managers is performed by a professional association of CID managers, and tax preparers register with CTEC. Both of these programs are outside of state government, SB 1243 (Lieu) Page 2 and no state funds are associated with these voluntary certification and registration programs. The Department of Consumer Affairs indicates that the provisions of the bill that extend the sunset on the VMB are minor and absorbable and within existing resources. Staff notes that, according to the 2014-15 proposed budget, the VMB Contingency Fund, which supports the activities of the VMB, will have expenditures that exceed revenues by over $1 million in the budget year, leaving a reserve of $2.4 million at the end of 2014-15. However, this fund condition statement differs significantly from analyses of the fund condition included in two proposed Budget Change Proposals for VMB augmentations, each of which indicate that the VMB Contingency Fund is in relative balance with a 10-13 month reserve through the extended period of VMB operations. Staff notes that the actual condition of the fund is uncertain, considering these inconsistencies.