BILL ANALYSIS Ó
AB 179
Page 1
ASSEMBLY THIRD READING
AB
179 (Bonilla)
As Amended May 5, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+----------------------+--------------------|
|Business & |14-0 |Bonilla, Jones, | |
|Professions | |Baker, Bloom, Burke, | |
| | |Chang, Dodd, Eggman, | |
| | |Gatto, Holden, | |
| | |Mullin, Ting, Wilk, | |
| | |Wood | |
| | | | |
|----------------+------+----------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, Eggman, | |
| | |Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Jones, Quirk, Rendon, | |
| | |Wagner, Weber, Wood | |
| | | | |
| | | | |
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AB 179
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SUMMARY: Extends the operation of the Dental Board of California
(DBC) until January 1, 2020, and increases statutory fee caps
relating to dentists and dental assistants. Extends the operation
of the Board of Vocational Nursing and Psychiatric Technicians
(BVNPT) until January 1, 2018, and merges the Vocational Nursing
fund and the Psychiatric Technician funds, as specified.
Specifically, this bill:
1)Extends the operation of the DBC until January 1, 2020.
2)Authorizes the DBC to increase specified fees for dentists and
Registered Dental Assistants (RDAs), as specified, including
raising the maximum fee for initial and renewal licensure for a
dentist from $525 up to $650, and on or after January 1, 2018,
from $650 up to $800.
3)Requires DBC applicants and licensees to report electronic mail
addresses to the DBC no later than July 1, 2016, and provides
that those email addresses are confidential and not subject to
public disclosure.
4)Requires the DBC to annually send an electronic notice to each
applicant and licensee that requires confirmation from the
applicant or licensee that his or her electronic email address
is current.
5)Extends the operation of the BVNPT until January 1, 2018.
6)Merges the funds of the BVNPT, as specified.
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7)Provides that it is not unprofessional conduct for healing arts
licensees who do not provide psychotherapeutic medical treatment
to treat spouses or persons in equivalent domestic
relationships.
8)Makes conforming changes.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)$14.6 million annually to the State Dentistry Fund, until
January 1, 2020, in order to maintain current operations of the
DBC;
2)$11.2 million annually to the Vocational Nursing and Psychiatric
Technicians Fund, until January 1, 2018, in order to maintain
current operations of the BVNPT; and,
3)Unknown potential increased revenues, if DBC adopts regulations
to raise fees based on the increased fee caps.
COMMENTS:
Purpose. This bill is author sponsored. According to the author,
"This bill is necessary to ensure that consumers are protected by
the continued operation of the DBC. The [DBC's] sunset bill
raised numerous issues, including the adequacy of the Dentistry
Fund condition and the practical examination for registered dental
assistants. The DBC has been operating with a major structural
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
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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.
"In addition, on February 13, 2012, the BVNPT approved a merger of
the vocational nursing fund and the psychiatric technician fund as
an alternative to a statutory amendment to raising fees for the
psychiatric technician fees. This bill would advance the fiscal
solvency of the BNVPT by merging these funds. The bill will also
increase accountability by extending the BVNPT's sunset date only
until January 1, 2018, thereby increasing legislative oversight of
the BVNPT in light of the significant issues raised in the BVNPT's
sunset background paper."
Sunset Review. On March 23, 2015, the Assembly Business and
Professions Committee and the Senate Business, Professions, and
Economic Development Committee held a "sunset review" hearing for
the DBC and the BVNPT. As part of the Sunset Review, the DBC and
the BVNPT each prepared a sunset report, which was submitted to
the Committees and Committee staff prepared a background paper on
each board.
A "sunset review" is a performance review of a state agency by the
Legislature aimed at determining whether that agency should
continue to exist, and if so, whether any statutory reforms are
needed to increase the agency's effectiveness. Sunset review is
triggered by the statutory expiration date for the agency, which
is commonly called a "sunset." Without an extension of this
sunset date, the Board would cease to exist.
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DBC Dental Fund Condition. The Dentistry Fund is maintained by
the DBC and includes the revenues and expenditures related to
licensing for dentists. For sixteen years, the license fee for
dentists was set at $365. In 2013, for the first time in 16
years, the DBC increased its license fee for dentists from $365 to
its statutory cap at the time of $450. These regulations went
into effect on July 1, 2014. During that time, the DBC also
pursued an increase in statute from $450 to $525. SB 1416 (Block)
Chapter 73, Statutes of 2014, raised the DBC's fee for initial and
renewal licenses for dentists from $450 to $525, and set fees at
that level. During that time, an analysis conducted by the DCA's
Budget Office determined that the license fees should be raised to
$525 to ensure solvency into the foreseeable future. While fees
increased have generated additional revenue, the DBC's
expenditures, projected to be over $12 million per year, continue
to outpace its revenue, projected to be less than $11 million per
year, thus perpetuating a structural imbalance. Part of the
reason for the increase in projected and actual expenditures in
recent years has been due to funding 12.5 CPEI positions; funding
the diversion program; increased expenses associated with BreEZe;
unexpected litigation expenses; and the general increase in the
cost of doing business over the past 16 years. While the DBC has
expended less than what it has been authorized by the budget due
to some cost savings and reimbursements, the DBC emphasizes that
its fund should be able to sustain expenditures without relying on
estimated savings or reimbursements.
Based on data from the past five fiscal years, the DBC calculated
that the Dentistry Fund will be able to sustain expenditures into
FY 2017-18 before facing a deficit. The DBC projects it will only
have 0.5 months in reserve in FY 2016-17, and underwent a fee rate
audit to determine the appropriate fee amounts to assess and to
project fee levels into the future. The DBC has shared its recent
fee audit, which discovered that in addition to the DBC's
operational imbalance, it is limited in its ability to recover the
true cost of licensure and regulation for dentists and dental
assistants based on many of the set fees, which do not cover the
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actual costs. In light of this fee audit, the DBC is requesting
an increase in all statutory fee caps relating to dentists and
dental assistants, including, but not limited to, those fees
relating to licensure, permits, and examinations.
While some of these fee increases are dramatic, they reflect the
fact that many of these fee caps have not been raised in nearly up
to two decades. The DBC's intent is for this large increase in
statutory fee caps to cover its potential need to increase fees
over a period of many years, including beyond the next sunset
period. The DBC would have to raise any fees through the
regulatory process, however, ensuring that there will be
additional time and robust opportunity for public participation
prior to the increase of any fee.
BVNPT Fund Merger. Both the Licensed Vocational Nurse (LVN) and
Psychiatric Technician (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. This bill will merge the LVN and PT funds.
BVNPT Sunset Date. A review of the issues raised during the last
review of the Board in 2011 reveals that the Board has made some
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strides towards meaningful change. However, the outstanding issues
also reveal that the Board has experienced some significant
problems that have impacted its overall functioning, the oversight
of licensees and protection of the public. As highlighted above,
the Board has shown deficiencies and discrepancies in the areas of
enforcement and management of funds. Due to these continuing
problems as well as potential issues concerning the management and
operations of the Board, it appears that this Board requires
additional oversight and direction. This bill will extend the
BVNPT's sunset date to January 1, 2018. In addition, AB 178
(Bonilla) of the current legislation session will address
additional issues pursuant to the Committees' recommendations.
Analysis Prepared by:
Eunie Linden / B. & P. / (916) 319-3301 FN:
0000679