BILL ANALYSIS Ó
AB 179
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CONCURRENCE IN SENATE AMENDMENTS
AB
179 (Bonilla)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: | | (June 1, |SENATE: |32-5 | (September 10, |
| |60-17 |2015) | | |2015) |
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Original Committee Reference: B. & P.
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, and
authorizes the Dental Board to suspend the dental assistant
practical examination. Extends the operation of the Board of
Vocational Nursing and Psychiatric Technicians (BVNPT) until
January 1, 2018, requires the appointment of an enforcement
monitor to oversee the BVNPT's disciplinary system, and requires
the internal audit unit of the Department of Consumer Affairs to
review the BVNPT, as specified.
The Senate amendments:
1)Delay the merging of the Vocational Nurse Account and the
Psychiatric Technician Examiners Account until July 1, 2016.
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2)Limit the term of a member of the Dental Assisting Council to
no more than two full terms.
3)On or before July 1, 2017, require the Dental Board, in
consultation with the Office of Professional Examination
Services, to determine whether a dental assistant practical
examination is necessary to demonstrate the competency of
registered dental assistants and to submit that determination
to the appropriate policy committees of the Legislature.
4)Authorize the Dental Board to suspend the dental assistant
practical examination until July 1, 2017, if it determines
that the practical examination is unnecessary or does not
accurately measure the competency of a dental assistant.
5)Until January 1, 2018, delete the requirement that the
executive officer of the BVNPT be a vocational nurse,
registered nurse, or psychiatric technician.
6)Require the Director of the Department of Consumer Affairs
(DCA) to appoint an administrative and enforcement program
monitor no later than March 1, 2016, and would require the
monitor to monitor and evaluate the administrative process and
disciplinary system and procedures of the BVNPT for a period
of no more than two years, as specified.
7)Require the DCA's internal audit unit to review the BVNPT's
financial needs, fee structure, budget, and expenditures, as
specified.
8)Add double joining language to address chaptering out issues
with AB 177 (Bonilla) and AB 180 (Bonilla) of the current
legislative session.
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9)Make technical and clarifying amendments.
FISCAL EFFECT: According to the Senate Appropriations
Committee:
1)No significant costs are anticipated due to the extension of
the sunset on the DBC. Current law imposes a sunset on the
existence of the DBC as an appointed board. However, there is
no sunset on the larger body of law requiring licensure and
oversight of the practice of dentistry. If the DBC was allowed
to sunset, the overall licensing and regulatory program would
still exist in law.
2)Significant increases in licensing fee revenues to the DBC are
possible under the bill. This bill authorizes the DBC, through
regulation, to raise a number of licensing fees currently
capped in statute. If the DBC were to raise the fees to the
maximum level authorized in the bill, additional annual
revenues would be about $2.8 million per year for dentist
licensing fees and $2.7 million per year for other regulatory
fees. The actual amount of fee revenue collected by the DBC
will depend on the actual fee levels set through regulation.
3)No significant costs are anticipated due to the extension of
the sunset on the BVNPT. Current law imposes a sunset on the
existence of the BVNPT as an appointed board. However, there
is no sunset on the larger body of law requiring licensure and
oversight of the practice of vocational nurses or psychiatric
technicians. If the BVNPT was allowed to sunset, the overall
licensing and regulatory program would still exist in law.
4)No significant fiscal impact on licensing fees is anticipated
due to the merger of the Vocational Nurses Account and the
Psychiatric Technician Examiners Account. The BVNPT operates
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the licensing and enforcement programs for vocational nurses
and psychiatric technicians as one administrative program.
Thus the current practice of separating licensing fees into
separate accounts does not reflect the BVNPT's current
business practices. Merging the two accounts is not
anticipated to require licensing fees from one group of
licensees to subsidize another group of licensees.
5)One-time costs of $140,000 to change the information
technology systems used by the DBC to accommodate the
suspension of the practical examination. The cost to modify
information technology systems includes changes to the system
currently in use by the DBC and updates to the BreEZe system,
which the DBC will begin using to process licensing
applications and renewals in 2016.
6)No significant additional costs are anticipated to review the
current practical examination in use by the DBC, as the DBC
has already begun this process.
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 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
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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.
DBC Dental Fund Condition. The Dentistry Fund is maintained by
the DBC and includes the revenues and expenditures related to
licensing for dentists. For 16 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
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(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 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
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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.
RDA Practical Examination. The pass rates for the RDA Practical
Exam averaged roughly 83% over the past four fiscal years.
However, in 2014, pass rates dropped dramatically. Passage
rates declined from an over 80% average to a 38% pass rate in
August 2014, 19% in November 2014, to 33% in February 2015. The
sharp declines occurred after the practical examinations were
recalibrated. In addition, recent examination scores from the
February 2015 examination indicate that these rates continue to
be very low. The DBC is conducting an occupational analysis to
determine the best way to measure competency of RDAs. This bill
would authorize the DBC to suspend, until July 1, 2017, the
practical examination if the occupation analysis concludes that
the examination is unnecessary or does not accurately measure
the competency of RDAs. Applicants for licensure would still
need to meet all other existing requirements for licensure,
including passing the written examination.
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
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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 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.
BVNPT Management. Since the inception of the Sunset Review
Oversight process, there have been occasions when the operations
of a licensing entity are called into question and require
additional scrutiny. This is typically in response to
information that is presented to the Legislature that warrants
further investigation. The Assembly Business and Professions
Committee staff believes that this is the case with the BVNPT
Board. As a result, this bill will enlist the support of the
DCA's Internal Audit Office and will place an enforcement
monitor within the BVNPT to observe the activities for two
years.
Analysis Prepared by:
Eunie Linden / B. & P. / (916) 319-3301 FN:
0002358
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