BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2750 (Gomez) - Tissue banks
          
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          |Version: June 13, 2016          |Policy Vote: HEALTH 7 - 0       |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: June 27, 2016     |Consultant: Brendan McCarthy    |
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          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill  
          Summary:  AB 2750 would provide an exemption from the requirement that  
          tissue banks be licensed by the state for persons providing  
          health care services, under specified conditions 


          Fiscal  
          Impact:  Ongoing reduction in licensing workload and fee  
          revenues, likely less than $100,000 per year (Tissue Bank  
          License Fund). Currently, there are about 270 hospitals and  
          ambulatory surgical centers that are licensed as tissue banks.  
          Under the bill, some portion of those facilities could surrender  
          their tissue bank license, to the extent that such entities have  
          a tissue bank license only due to their storage of allograft  
          tissue that meets the exemption requirement in the bill. The  
          share of hospitals or ambulatory surgical centers that only have  
          a tissue bank license due to their storage of such tissue is  
          unknown. Because the exemption provided for in this bill is only  
          for tissue that is designated for storage at ambient room  
          temperature, there are likely to be a significant number of  







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          hospitals and ambulatory surgical centers that will still need  
          to maintain their tissue bank license, in order to continue to  
          store other tissues. For example, if 40% of such facilities  
          surrendered their license, the reduction in licensing workload  
          and fee revenue would be about $100,000 per year.


          Background:  Under current law, entities acting as tissue banks must be  
          licensed by the Department of Public Health and must meet  
          specified regulatory requirements. Tissue banks collect, store,  
          and provide musculoskeletal tissue, skin, and veins for  
          transplantation. Current law exempts a number of activities from  
          the licensing requirement, such as the collection and storage of  
          human blood and its derivatives.

          Under current law, the Department is required to develop and  
          adopt regulations governing tissue banks. However, the  
          Department has not yet adopted regulations. In guidance provided  
          to potential licensees, the Department has indicated that any  
          facility that stores any tissue or does not return unused tissue  
          to a licensed tissue bank within the same day as receiving the  
          tissue must be licensed as a tissue bank.

          In many cases, a tissue bank will send tissue for  
          transplantation for a specific patient to a hospital or  
          ambulatory surgical center but the transplantation cannot occur  
          on that day. In such cases, a hospital or surgery center may  
          store the tissue overnight for transplantation the next day.  
          According the Department, such a hospital or surgery center  
          would need to be licensed as a tissue bank in that case. In  
          fact, according to the Department, 191 hospitals and 77  
          ambulatory surgery centers are licensed as tissue banks,  
          presumably due to this requirement.


          Proposed Law:  
            AB 1822 would provide an exemption for persons providing  
          health care services, under specified conditions from the  
          requirement that tissue banks be licensed by the state.

          Specifically, the bill would exempt a hospital or ambulatory  
          surgical center from licensure as a tissue bank if certain  
          record keeping requirements are met, certain storage and  
          handling requirements are met, and the allograft tissue is  








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          registered with the federal Food and Drug Administration and  
          designated to be maintained at ambient room temperature.


          Related  
          Legislation:  AB 1822 (Bonta, 2014) was substantially similar to  
          this bill. That bill was vetoed by Governor Brown.


          Staff  
          Comments:  Staff notes that it is not likely that the Department  
          would reduce staff expenditures immediately under the bill,  
          therefore the Department is likely to support current staff with  
          other licensing fees for some period of time before staff are  
          fully redirected to other licensing activities or positions are  
          eliminated.


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