BILL ANALYSIS Ó
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Jerry Hill, Chair
2015 - 2016 Regular
Bill No: ACR 131 Hearing Date: June 20,
2016
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|Author: |Patterson |
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|Version: |June 13, 2016 |
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|Urgency: | |Fiscal: |Yes |
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|Consultant|Bill Gage |
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Subject: Professions and vocations: licensing fees: equity
SUMMARY: Encourages the Department of Consumer Affairs (DCA) and its
licensing entities to create policies that promote fairness and
equity to guarantee that each licensee pays a fair amount,
especially in regards to initial and ongoing license fees.
Existing law:
1)Provides for the regulation and licensure of various
professions and vocations by the boards, bureaus and other
licensing entities within the DCA and establishes fees and
schedules for initial licensure and renewal of licenses.
(Business and Professions Code (BPC) §§ 100-11506)
2) Provides that when the term of any license issued by any
agency within DCA exceeds one year, initial license fees for
licenses which are issued during a current license term shall
be prorated on a yearly basis. (BPC § 134)
3) Provides that notwithstanding any other provision within the
BPC, each board within the DCA shall, in cooperation with the
Director of the DCA, establish such license periods and
renewal dates for all licenses in such manner as best to
distribute the renewal work of all boards throughout each
year and permit the most efficient, and economical use of
personnel and equipment. (BPC § 152.6)
4) Provides to the extent practicable, provision shall be made
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for the proration or other adjustment of fees in such manner
that no person shall be required to pay a greater or lesser
fee than he would have been required to pay if the change in
license periods or renewal dates had not occurred. (Id.)
This resolution:
1)Declares that existing law provides for the licensure and
regulation of various professions and vocations by boards,
bureaus, and committees within the DCA.
2)Declares that the mission of many of the licensing entities is
to protect people and promote the health and safety of
Californians through the licensing programs.
3)Declares that hardworking individuals must often complete
hundreds of hours of professional training requirements,
including, but not limited to, education, schooling,
internships, or other requirements, to meet professional
licensing standards in order to be licensed by the State of
California and pursue their profession.
4)Declares that existing law establishes fees for initial
licenses, initial temporary and permanent licenses, and
original licenses for those various professions and
vocations.
5)Declares that licensees may spend up to hundreds of dollars
for their initial license and pay thousands of dollars to the
State of California over their career to maintain their
license, not including the thousands of dollars licensees may
pay to put themselves through training or educational
programs to gain the skills needed for a given profession.
6)Declares that existing law requires that licenses issued to
certain licensees expire at 12 a.m. on either the last day of
the birth month of the licensee or at 12 a.m. of the legal
birth date of the licensee during the second year of a
two-year term if not renewed, yet fails to provide licensees
the opportunity to prorate their initial licensing fee to the
specific amount of time actually licensed.
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7)Declares that the Legislature supports an equitable licensing
fee policy that would prorate license fees based on how many
months have elapsed between the initial issuance of a license
and the time of renewal, as stated in AB 483 of 2015-16
Regular Session, which was unanimously passed by the Senate
and passed by the Assembly with a vote of 78-0.
8)Declares that the Legislature recognizes the important and
valuable services that those licensees provide to the state.
9)Resolves that the Legislature encourages the DCA and its
boards, bureaus, and commissions to create policies that
promote fairness and equity to guarantee that each licensee
pays a fair amount, especially in regard to initial and
ongoing license fees.
10)Resolves that the Chief Clerk of the Assembly transmit copies
of the resolution to the author for appropriate distribution.
FISCAL
EFFECT: This bill is keyed "fiscal" by the Legislative Counsel.
According to the Assembly Appropriations Committee analysis
dated April 13, 2016, DCA has identified five programs that
issue licenses based on birth months but do not prorate fees,
resulting in some licensees having an initial licensure period
of just over one year, with others having up to a full two years
for the same fee. According to the analysis, should DCA
implement changes likely recommended as a result of this
resolution, there would be reduced fee revenues of $686,000 to
the Medical Board of California, unknown reduced fee revenues,
likely exceeding $650,000, to the Board of Registered Nursing,
unknown reduced fee revenues, likely less than $100,000, to the
Board of Pharmacy, reduced fee revenues of approximately $22,000
to the Dental Hygiene Committee and minor and absorbable costs
to the Board of Chiropractic Examiners. The analysis notes that
this bill would also result in absorbable costs of approximately
$50,000 to DCA to implement necessary IT changes as well as
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minor and absorbable costs to the impacted boards to change
business processes, forms, and materials.
COMMENTS:
1. Purpose. This resolution is sponsored by the Author.
According to the Author, this resolution recognizes the many
professionals in the state of California that provide a
variety of services to Californians ranging from barbering
and cosmetology to fields of medicine. Licensed professions
bring valuable services and are also economic drivers within
our state. This resolution expresses that it is the goal and
intent of the Legislature to direct government entities in
establishing policies that make it fairer for newly licensed
Californian's to enter the workforce.
The Author further states that current law requires that some
license expire on either the last day of the birth month of
the licensee or at 12:00 am on the birth date of the licensee
during the second year of a two year term. Professionals
affected by this rule include architects, acupuncturists,
dental hygienists, dentists, occupational therapists,
osteopathic physicians and surgeons, registered veterinary
technicians and veterinarians. Other licenses have different
policies that are equitable to each licensee such as a two
year licensure from the initial date of licensure with a
renewal every two years from that date. As indicated by the
Author, "the problem with this current birth month system is
that some professionals are required to renew their licenses
within just a few months or even weeks after it has been
issued to them. This is unfair because they are forced to
pay the same amount as somebody who has had their license for
an entire 1-2 year term."
2. Background. Under existing law, many professional licensing
entities under the DCA have either a biennial (two-year)
renewal schedule or a biennial renewal schedule that varies
based on a licensee's birthdate. Under the pure biennial
renewal schedule, the renewal date is two years from the date
the license is issued. For example, if a licensee is issued
a license on January 15, 2016, the license would expire on
January 15, 2018.
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However, this can result in workload issues. For many of the
entities, applicants tend to submit applications at the same
time because of the timing of exams and training programs.
This results in licensing entities receiving a large number
of applications for initial licenses during peak times. This
means those entities under a biennial renewal schedule will
also process a large number of renewals at one time.
As a result, many licensing practice acts have been amended to
require entities to stagger the renewals by using licensee
birth dates. Under typical birth date renewal programs,
licenses expire on the last day of the licensee's birth month
during the second year of the biennial term. However, this
means the initial license period can vary from between 12
months to 24 months, depending on how close the applicant's
birth month is to the issuance date.
For example, if a licensee is issued a license on February 1,
2016 and the licensee's birthday is in January, then the
license will expire January 30, 2018, a full 24 months.
However, if the licensee's birthday is in February, then the
license will expire February 30, 2017, the minimum of 12
months. This is because two years from February 30, 2016
would be February 30, 2018. However, since the issuance date
was February 1, 2016, the result would be a 25 month license
period that exceeds the biennial term.
Therefore, under a birth month renewal program, there are
instances were some licensees have an initial license period
that is shorter than other licensees but still pay the full
initial license fee and renewal fee. While additional
renewal periods inevitably extend to a full two-year cycle,
some entities report that licensees find that it is unfair
for those licensees with shorter initial license periods to
have to pay a full renewal fee.
3. Potential Changes to Fee Structure. There are a few
potential changes which could be made so that some licensees
would not have to pay a full renewal or initial license fee
when their initial license period is not as long as other
licensees: 1) use a pro rata formula to decrease either the
initial license fee or the renewal fee based on the length of
the licensee's initial license period; 2) switch back to a
biennial renewal schedule; or, 3) adjust the initial
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application period, such as putting a limit on the number of
initial applications allowed per week.
However, each solution has strengths and draw backs. Using a
pro rata formula has the benefit of ensuring each licensee is
paying a fee that directly correlates to the actual initial
license period, eliminating inequities between licensees. It
also continues to accommodate the administrative workloads of
the entities. However, the licensing entities under the DCA
are special fund agencies, meaning that they receive no
appropriations from the general fund and are funded solely
through licensing and enforcement fees. This means that a
pro rata formula could have an impact on revenues.
Alternatively, switching back to a biennial renewal schedule
would again cause the large peaks in renewal processing.
Although some entities report that the peaks have leveled out
over time, it may still impact administrative workload.
Given that the underlying purpose of the birth month renewal
program was to stagger the timing of renewals, other
solutions might include adjustments to the timing of initial
applications. This might include authorizing entities to
limit the number of applications accepted during a specified
time period or to provide temporary, limited licenses while
licensees wait for their birth month. The downside to these
mechanisms is that they may have a negative impact on waiting
applicants.
Since each licensing entity is unique, the benefit and burden of
each change to its fee structure would have to be
contemplated by the individual entity and its stakeholders.
4. Would Licensing Entities Have to Seek Authority to Adjust
Fees? Under existing law, it is not clear whether licensing
entities under the DCA can promulgate regulations to pro rate
or collect variable fees without the statutory authority to
do so. For example, BPC § 2435 provides that the biennial
renewal fee for a physician and surgeon's license "shall be
fixed by the Medical Board of California (MBC) consistent
with this section and shall not exceed seven hundred ninety
dollars ($790)." The term "fixed" could be interpreted to
mean that the MBC cannot vary the fee between licensees.
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Even if the MBC's authority could be interpreted to allow
additional renewal formulas, context suggests otherwise-there
are entities that have explicit statutory authority to use
pro rata formulas, including the MBC when approving physician
and surgeon supervisors of physician assistants (PAs). BPC §
3522 provides that the MBC "shall establish a cyclical
renewal program, including, but not limited to, the
establishment of a system of staggered expiration dates for
approvals and a pro rata formula for the payment of renewal
fees by physician and surgeon supervisors." Therefore, MBC
has the specific authority to establish a pro rata formula
for that specific class of licensee. This suggests that,
since similar language is lacking for other licensees, the
MBC's authority is limited by the statute.
Similarly, BPC § 3523 provides that the Physician Assistant
Board (PAB) "shall establish by regulation procedures for the
administration of a birthdate renewal program, including, but
not limited to, the establishment of a system of staggered
license expiration dates and a pro rata formula for the
payment of renewal fees by PAs affected by the implementation
of the program."
Further, all entities appear to be required to prorate initial
license fees in certain situations. BPC § 134 provides that
"[w]hen the term of any license issued by any agency in the
department exceeds one year, initial license fees for
licenses which are issued during a current license term shall
be prorated on a yearly basis."
Therefore, since there are instances of specific statutory
authority for entities to establish pro rata formulas, it is
not clear that entities without similar statutory language
can promulgate regulations establishing alternative fee
formulas without a statutory change.
5. Impact on BreEZe Program. In 2013, the DCA implemented the
BreEZe program, an online information technology program
created to assist licensing entities with licensing and other
pertinent functions. Last year, the DCA anticipated that
implementing a pro rata formula would be impacted by the DCA
BreEZe program. During prior sunset review hearings, many
entities under the DCA noted that BreEZe can be inflexible.
Therefore, it is unclear whether BreEZe can be easily
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modified to accommodate new renewal formulas in addition to
other changes entities might need.
6. Prior Legislation. AB 773 (Baker, Chapter 336, Statutes of
2015) switched psychology license renewals from a birth month
renewal to a biennial renewal program.
AB 483 (Patterson) of 2015 would have required that the fees for
an initial license, an initial temporary or permanent
license, an original license, or a renewal for specified
regulatory entities, be prorated on a monthly basis.
( Status : This bill was vetoed by Governor Brown because an
equitable licensing fee policy "can be crafted more carefully
and thoughtfully through regulation.")
AB 1758 (Patterson) of 2014 would have required that the fee for
an initial temporary or permanent license or an original
license be prorated on a monthly basis and authorized the
licensing entities to impose an additional fee to cover the
reasonable costs of issuing an initial or original license
that expires in less than 12 months. ( Status : This bill was
held in the Senate Appropriations Committee.)
SB 1236 (Price, Chapter 332, Statutes of 2012) among other
things, required the MBC to establish a pro rata formula for
the payment of renewal fees by physician and surgeon
supervisors of PAs and required the PAB to establish a pro
rata formula for the payment of renewal fees by PAs.
7. Technical Amendment. To assure consistency in the use of the
term "committees" rather than use of the term "commissions,"
which describes the agencies and entities within the DCA,
make the following change:
On page 3, line 12, strike "commissions" and insert instead
" committees "
SUPPORT AND OPPOSITION:
Support: None on file as of June 14, 2016.
Opposition: None on file as of June 14, 2016.
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