BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
ACR 131 (Patterson) - Professions and vocations: licensing
fees: equity
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|Version: June 23, 2016 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: August 1, 2016 |Consultant: Brendan McCarthy |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: ACR 131 would encourage the Department of Consumer
Affairs and its licensing entities to create policies to ensure
that each licensee pays a fair amount of licensing fees.
Fiscal
Impact: The intention of the resolution is to encourage
licensing entities within the Department of Consumer Affairs to
prorate the fees charged to licensees for the licensee's initial
license period. To the extent that licensing entities did switch
from a fixed initial license fee to a prorated license fee,
those licensing entities would experience a reduction in
licensing revenue.
The projected revenue reductions for licensing entities not
currently using a prorated system for the initial license period
are:
Architects Board - $16,156
Board of Chiropractic Examiners - $7,563
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Dental Hygiene Committee - $22,401
Medical Board - $686,348
Board of Pharmacy - $88,481
Board of Psychology - $74,891
Board of Registered Nursing - $378,125
Veterinary Medical Board - $75,706
In addition there would one-time costs of about $50,000 per
licensing entity to make necessary changes to the information
technology systems used to process license applications.
Background: Under current law, various licensing entities within the
Department of Consumer Affairs license certain professions and
vocations. In general, applicants for licensure pay an initial
license fee upon application and pay a fee upon renewal of a
license. Professional licenses are typically valid for two
years.
Historically, licensing entities experienced a large number of
applications for initial licensure based on academic schedules.
For example, most applicants for an initial license would apply
for licensure soon after undergraduate or graduate training
programs are completed and/or accredited professional
examinations have taken place. Thus, licensing entities must
typically process most of their applications for initial
licensure at the same time every year. (However, over time, many
licensing entities have experienced a shift in workload as
changes in academic requirements or applicant preferences mean
that an influx of applications for initial licensure does not
always take place at one time of year.)
To avoid the same influx of applications for license renewal,
licensing entities often require licensees to renew their
license during the licensee's birth month during the second
year, rather than on the anniversary of the initial licensure.
This is done to spread out the workload for license renewal
across the calendar year.
For example, the initial license granted by the Medical Board is
valid for one full year and then expires at the end of the
licensee's birth month in the second year. In practice, this
means that the length of the initial license period can vary
ACR 131 (Patterson) Page 2 of
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significantly between licensees, depending on when the
licensee's birth month occurs and when the initial license was
granted. The length of the initial license period can vary from
13 months to 24 months. After the initial license period, the
renewed license period lasts for two full years (from the
licensee's birth month until the licensee's birth month two
years later).
Proposed Law:
ACR 131 would encourage the Department of Consumer Affairs
and its licensing entities to create policies to ensure that
each licensee pays a fair amount of licensing fees.
Related
Legislation:
AB 773 (Baker, Statutes of 2015) changed the system for
renewing licenses issued by the Board of Psychology from a
birth month renewal system to a two-year initial license
period.
AB 483 (Patterson, 2015) would have required initial license
fees (and other specified fees) to be assessed by specified
entities within the Department of Consumer Affairs on a
prorated basis. That bill was vetoed by Governor Brown.
AB 1758 (Patterson, 2014) would have required initial license
fees (and other specified fees) to be prorated on a monthly
basis. That bill was held on this committee's Suspense File.
Staff
Comments: As noted above, for several licensing entities, the
revenue reduction is expected to be minor and can likely be
absorbed by the licensing entity. However, the projected revenue
loss to the Medical Board and the Board of Registered Nursing is
substantial.
Typically, licensing fees charged by Department of Consumer
affairs licensing entities are either explicitly set in statute
or statute provides for the maximum fee that a licensing entity
may charge. In cases where the license fee is set at or near the
maximum statutory fee, a licensing entity that switches to a
prorated system for initial licenses may not be able to raise
ACR 131 (Patterson) Page 3 of
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fees on all license applicants to offset the revenue reduction.
The license fees that the Medical Board may impose on applicants
is capped in statute at $790 (with certain additional surcharges
for enforcement activities allowed). The current fee level is
$783 (plus an additional $25 related to enforcement activities).
A shift to a prorated initial license fee is projected to result
in reduced revenues of about $690,000 per year to the Medical
Board. Under current law, the Medical Board has very limited
ability to raise the overall license fee to offset the lost fee
revenue that would occur under this bill. Therefore the Medical
Board would need to reduce expenditures for licensure activity
or enforcement activity to offset the projected revenue loss.
Similarly, the initial license fees charged to registered nurse
applicants is set at the statutory maximum.
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