BILL ANALYSIS Ó
AB 1939
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Date of Hearing: April 5, 2016
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Rudy Salas, Chair
AB 1939
Patterson - As Amended March 29, 2016
SUBJECT: Licensing requirements.
SUMMARY: Requires the Director of the Department of Consumer
Affairs (DCA) to conduct a study on whether there are
unnecessary occupational licensing requirements that produce a
barrier to labor entry or labor mobility, with a focus on
dislocated workers, service members, and military spouses and
submit a report to the Legislature by July 1, 2017.
EXISTING LAW:
1)Establishes the DCA to advance the interests of consumers by
facilitating the proper functioning of the free enterprise
market economy by educating consumers, fostering competition,
and promoting the consumers' interest. (Business and
Professions Code (BPC) Section 300)
2)Requires the Director of the DCA to submit to the Governor and
the Legislature an annual report of programmatic and
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statistical information regarding the activities of the
department and its constituent entities. (BPC Section 312)
3)Requires the boards and bureaus under the DCA to provide
methods of evaluating education, training and experience
obtained in the armed services where applicable to the
requirements of a regulated profession. (BPC Section 35)
4)Requires boards and bureaus under the DCA to expedite
licensing processes for applicants who served as active duty
members of the Armed Forces of the United States. (BPC Section
115.4)
4)Requires boards and bureaus under the DCA to expedite
licensing processes for applicants who are married to, or are
in another legal union with an active duty member of the
United States Armed Forces. (BPC Section 115.5)
5)Establishes procedures for submitting a report to the
Legislature. (Government Code Section 9795)
THIS BILL:
1)Requires the Director of the DCA to conduct a study on whether
occupational licensing requirements create an unnecessary
barrier to labor entry and labor mobility, particularly for
dislocated workers, service members, and military spouses.
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2)Provides that the report shall be submitted in compliance with
Section 9795 of the Government Code.
3)Requires the report to be submitted no later than July 1,
2017.
FISCAL EFFECT: Unknown. This bill is keyed fiscal by the
Legislative Counsel.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, "[this bill] is an important measure that will
provide the California State Legislature with vital information
about how some licensing requirements may pose barriers for
people to enter into, or transition into the labor market. By
doing this we will uphold the intention of licensing
requirements which is to promote quality products and services,
and ensure that these requirements do not make it more difficult
for Californians to work.
It is incredibly important that we explore situations where
requirements exceed the skills needed to perform because
arbitrary licensing requirements introduce a number of problems
but mainly they create barriers for Californians to work. In
California, approximately 20.7% of workers are regulated and
licensed. This is a massive portion of the population and we
need to ensure that we do not create unnecessary requirements
that can prohibit them from working.
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[This bill] aims to explore areas that licensing requirements
create barriers to the labor market by way of a study conducted
by the Department of Consumer Affairs. This study is to be
submitted to the Legislature by July 1, 2017. This will give
the Legislature the tools to review licensing requirements and
then fix arbitrary requirements that impede Californians from
working."
Background. The author cites a 2013 report from the White House
entitled, The Fast Track to Civilian Employment: Streamlining
credentialing and licensing for service members, veterans, and
their spouses. Evidence in this report indicates that due to
the mobile nature of military families, unacceptable delays
occur when establishing their skills for minimum employment.
The report finds that many service members are required to
repeat education or training in order to receive industry
certifications and state occupational licenses, even though
much, and in some cases, all of their military training and
experience overlaps with credential training requirements.
Additionally, frequent moves, and the resulting need to search
for new employment, can be a significant problem for military
spouses, especially when getting a job in a new state requires
obtaining an occupational license.
The report noted that California was one of the states with
several programs in place to assist transitioning veterans and
their spouses with employment opportunities. Additionally,
since 2013, there have been statutes enacted to further progress
on these efforts. For example, SB 1226 (Correa) Chapter 657,
Statutes of 2014, requires boards and bureaus to expedite and
assist with the initial licensure process for veterans of active
duty in the Armed Forces of the United States.
DCA and the Sunset Process. The DCA includes 40 regulatory
entities, including 25 boards, nine bureaus, three committees,
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two programs, and one commission, which combined regulate more
than 250 business and professional categories. These entities
establish the minimum qualifications for licensure, issue
licenses, and investigate and discipline licensees. These
entities are primarily funded by licensing fees. The DCA has
several statutory mechanisms in place to compile licensing data
from the entities. It also has the statutory responsibility
under sunset review to respond to suggestions about efficiency
in the licensing process.
Each year, the Senate Committee on Business, Professions and
Economic Development and the Assembly Committee on Business and
Professions (Committees) conduct joint sunset oversight hearings
to review those regulatory entities under the DCA on a rotating
basis. The sunset review process itself provides a formal
opportunity and mechanism for the DCA, the Legislature, the
entities, and interested parties and stakeholders to discuss the
performance of the entities and make recommendations for
improvements. This has been the traditional forum for the
legislature to respond to concerns about unfairness, redundancy,
or inefficiency in the licensing process for various regulatory
entities.
DCA Reports. In the past the DCA has been requested by the
Legislature to conduct entity-specific reports including the
request to have the DCA prepare a report on the implementation
of BPC section 35, relating to military experience and
licensure. The DCA was specifically asked to provide a list of
entities that accept military experience and a description of
the statutes and regulations that authorize the acceptance of
military experience towards licensure. The DCA was also asked
to provide a list of entities that do not accept military
experience and an explanation as to why they do not. That 2012
report, Report to the California State Legislature: Acceptance
of Military Experience & Education Toward Licensure, outlined
administrative solutions that the DCA's programs were
instituting to assist military applicants with the licensure
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process. As noted, the report specifically focused on the
actions of the regulatory entities under the jurisdiction of the
DCA with regard to implementing specific provisions of the BPC.
However, the report is qualitatively different from the study
requested by this bill. This bill seeks to require a study that
would look at the impact of licensing on all professions (some
professions are not licensed by the DCA), rather than the
administrative operations of the regulatory entities under the
DCA.
The Little Hoover Commission. The Little Hoover Commission
(Commission) is a statutorily created independent agency that
conducts research studies about state government operations.
The Commission investigates the efficiency and services of
governmental operations, and makes official recommendations to
the legislative and executive branches of the state government
for improvements. The Commission is currently in the process of
conducting a study on occupational licensing. The study will
partly explore the impact of occupational licensing on upward
mobility for various groups, as well as the effect on of
licensing regulations on consumers and the economy. The
Commission's study will have a broad policy perspective, and
will not place emphasis on licensing testing, education, and
other requirements for specific professions. This bill aims to
analyze the current education and licensing requirements for the
various professions under the DCA and locate any particular
areas where there are duplicative or unnecessary requirements
that pose a barrier to mobility within these given professions.
While this bill and the Commission's study both aim to examine
the effects of occupational licensing requirements, their
endeavors do not fully overlap. According to information
provided on the Commission's Website, "Approximately 21 percent
of California's 19 million member workforce is licensed.
Proponents of occupational licensing advocate that these
regulations are necessary to protect the health and safety of
consumers. Critics contend that these regulations at times go
beyond consumer protection and unjustifiably restrict
competition." The Commission has held two public hearings on
this topic, the first in Sacramento on February 4, 2016, and the
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second on March 30, 2016, in Culver City.
Federal Report. In addition, the White House released a report
in July of 2015, titled, Occupational Licensing: A Framework for
Policymakers. According to that reports executive summary, the
report addresses "the growth of licensing over the past several
decades, its costs and benefits, and its impacts on workers and
work arrangements. The report recommends several best practices
to ensure that licensing protects consumers without placing
unnecessary restrictions on employment, innovation, or access to
important goods and services."
POLICY ISSUES FOR CONSIDERATION:
1)Is the DCA the appropriate entity to conduct this study? The
DCA states that its primary role is to "protect and serve
California consumers while ensuring a competent and fair
marketplace." The DCA helps consumers learn how to protect
themselves from unscrupulous and unqualified individuals and
also protects professionals from unfair competition by
unlicensed practitioners. Given that the DCA's primary
jurisdiction is not conducting studies on issues outside of
its jurisdiction, and that the DCA does not currently have a
research entity in-house that would be equipped to perform a
comprehensive study like the one proposed by this bill, it may
be more appropriate to request an entity that routinely
conducts independent studies and research to conduct a study
on occupational licensing.
2)Is this study necessary? Currently, the Little Hoover
Commission is in the process of a review on the impact of
occupational licensing on upward mobility and opportunities
for entrepreneurship and innovation for Californians,
particularly those of modest means.
3)Is there enough time to complete the study? As currently
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drafted, this bill only provides six months for the DCA to
complete this study. The Little Hoover Commission's study is
currently in its fifth month and is expected to exceed six.
AMENDMENTS:
In order to address policy issue number one, the author has
agreed to the following amendments:
On page 2, line 1, after "the", strike director and insert:
"Legislative Analyst's Office
On page 2, line 2, after "legislature" insert:
and the Department of Consumer Affairs
REGISTERED SUPPORT:
None on file.
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by:Tessa Nevarez and Elissa Silva / B. & P. /
(916) 319-3301
AB 1939
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