BILL ANALYSIS Ó AB 179 Page 1 Date of Hearing: May 20, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 179 (Bonilla) - As Amended May 5, 2015 ----------------------------------------------------------------- |Policy |Business and Professions |Vote:|14 - 0 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill: 1)Extends the operations of the Dental Board of California AB 179 Page 2 (Board) until January 1, 2020, and the operation of the Board of Vocational Nursing and Psychiatric Technicians (BVNPT) until January 1, 2018. 2)Dramatically increases statutory fee caps for all categories relating to dentists and dental assistants. 3)Merges the Vocational Nurses Account and the Psychiatric Technician Examiners Account within the Vocational Nursing and Psychiatric Technicians Fund. FISCAL EFFECT: 1)$14.6 million annually (State Dentistry Fund), until January 1, 2020, to maintain current operations of the DBC. 2)$11.2 million annually (Vocational Nursing and Psychiatric Technicians Fund), until January 1, 2018, to maintain current operations of the BVNPT. 3)Unknown potential increased revenues, if DBC adopts regulations to raise fees based on the increased fee caps. COMMENTS: 1)Purpose. These bills extend the sunset of DBC and BVNPT. Boards and bureaus are generally reviewed on a 4-year timeline. 2)DBC Fees. The DBC has been operating with a major structural AB 179 Page 3 deficit, and is faced with impending deficits. Prior to recent increases to its initial and renewal licensure fees, the DBC had not raised fees for nearly two decades. A recent audit of the DBC's finances shows that the cost for licensure and permitting categories do not sufficiently cover the cost for that license or permit. As a result, this bill proposes to increase statutory fee caps across all categories to let the DBC begin to recover its costs, help solve its structural imbalance, and build a healthy reserve. These fee caps are intended to carry the DBC over for many years, and any actual increase in fees would need to go through the regulatory process, thereby ensuring that licensees may voice any concerns to potential increases. 3)BVNPT Fund. Both the LVN and PT programs are at the statutory maximums for the fees they charge licensees. In July of 2012, the Board submitted a Budget Change Proposal (BCP) requesting the merger of the LVN and PT funds. The BCP was denied as the PTs fund condition was expected to remain solvent through FY 2015-16. The Board was advised to seek a statutory proposal to merge the funds versus a BCP. According to the Board, current budget projections indicate that the LVN program fund reserve will remain solvent past FY 2020-21. The PTs program fund reserve will be exhausted by 2017-18. On February 13, 2012, the Board approved a merger of the funds as an alternative to a statutory amendment to raise the PTs fee ranges. The Board has been advised by the DCA Budget Office that the merger would delay a deficit and the need to increase fees for three to four years. 4)Related Legislation. AB 177, AB 178, AB 180, and AB 181, all authored by the Committee on Business and Professions, contain sunset review provisions for other boards and bureaus. AB 178 and this bill are related; AB 178 also contains provisions related to DBC and BVNPT. Certain provisions from AB 179 Page 4 this bill were amended in to AB 178 to take effect immediately. 5)Staff Comment. The DBC fee caps in this bill represent a substantial increase over current caps. For example, the licensure fee caps are proposed to double, triple, or more in some cases. The cap on the renewal fee that generates the bulk of DBC revenue is proposed to be raised from $525 to $800, in spite of a fee audit showing the $525 fee more than covered the cost attributable to that workload. The author and DBC may wish to consider whether a smaller increase in the fee cap is warranted for some of the fees. Analysis Prepared by:Lisa Murawski / APPR. / (916) 319-2081