BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 179


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          Date of Hearing:  May 20, 2015


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                                 Jimmy Gomez, Chair


          AB  
          179 (Bonilla) - As Amended May 5, 2015


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill: 


          1)Extends the operations of the Dental Board of California  








                                                                     AB 179


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            (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


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            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  








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            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