BILL ANALYSIS Ó
SB 467
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Date of Hearing: July 15, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 467
(Hill) - As Amended July 1, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill is one of several sunset extension bills
introduced this session and enacts a wide variety of changes to
address issues raised during the 2015 sunset review process.
Specifically, this bill:
1)Extends the sunset on the Board of Accountancy (Board) and the
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term of its executive officer until January 1, 2020, and
authorizes the Board to place practice restrictions on
licensees for disciplinary reasons.
2)Transfers authority for approving pro-rata charges for
Department of Consumer Affairs (DCA) administrative expenses
that are imposed upon boards and bureaus within DCA to the
Legislature, rather than having those charges set by the
director of DCA with Department of Finance (DOF) approval.
3)Requires the Attorney General (AG) to submit an annual report
to the Legislature, Governor, and DCA, beginning on January 1,
2017, that includes specified information on cases referred to
the AG by DCA's boards and bureaus.
4)Provides that the Director of the DCA, through its Division of
Investigation (DOI), must work with the health care boards to
implement "Complaint Prioritization Guidelines" in order to
implement the Consumer Protection Enforcement Initiative of
2010.
5)Extends the sunset date for the Contractors State License
Board (CSLB) until January 1, 2020, and revises the financial
security requirements placed on contractors.
FISCAL EFFECT:
1)Board of Accountancy: Projected expenditures of approximately
$14.1 million annually (Accountancy Fund), supporting 98.8 PY,
to extend the sunset date until January 1, 2020, partially
offset by annual fee revenues of approximately $5.4 million in
2015-16, based on the proposed 2015-16 budget. Annual fee
revenues will increase to approximately $11 million annually
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beginning July 1, 2016. Minor and absorbable costs to DCA to
extend the sunset and provide authority for the Board to place
practice restrictions on licensees for disciplinary reasons.
2)Unknown impact on the funds and accounts of individual boards
and bureaus as a result of transferring the authority to the
Legislature for setting pro-rata charges on boards and bureaus
to cover DCA's administrative expenses. There should not be a
net overall impact to the charges, but the change will likely
result in losses to some funds and gains to others (various
special funds).
3)The California Department of Justice reports that it would
incur significant workload impacts and increased costs of
approximately $1.45 million in 2015-16 ($537,000 GF and
$911,000 Legal Services Revolving Fund - LSRF), and ongoing
costs of $1.8 million ($268,000 GF and $1.534 million LSRF)
for the AG to compile data and develop, design, and prepare
the required report. AG costs from the LSRF would be
reimbursed from the funds of the boards and bureaus that refer
cases to the AG.
4)Contractors' State Licensing Board: Projected expenditures of
approximately $63 million annually (primarily Contractors
License Fund), supporting 405.6 PY, to extend the sunset date
until January 1, 2020, partially offset by annual fee revenues
of approximately $55-56 million, based on the proposed 2015-16
budget. Minor and absorbable costs to DCA to extend the sunset
on the CSLB, and revise the financial security requirements
for contractors.
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COMMENTS:
1)Purpose. In March 2015, the Assembly Business and Professions
Committee and the Senate Business, Professions, and Economic
Development Committee held joint "sunset review" hearings to
review 12 regulatory entities. This bill is intended to
implement recommended legislative changes as a result of the
review by the Committees.
2)Board of Accountancy. The California Accountancy Act
establishes the Board of Accountancy within DCA, authorizes
the Board to appoint an executive officer, and sunsets the
Board and executive officer on January 1, 2016. The Board
licenses and regulates over 81,000 accounting professionals to
ensure adherence to professional standards. A person is
deemed to be engaged in the public practice of accountancy if
he or she performs certain acts, makes certain
representations, and renders accounting services to the public
and clients for compensation. Existing law authorizes the
Board to revoke, suspend, or refuse to renew a license or
certificate, or censure the licensee, for unprofessional
conduct that includes one or any combination of criminal acts,
specified false statements or omissions, dishonesty, fraud,
gross negligence or repeated negligent acts in performance of
professional standards, and other acts or violations, as
specified.
3)Pro-rata Shares. Existing law specifies that the boards and
bureaus within the DCA are established for the purpose of
ensuring that private businesses and professions deemed to
engage in activities with potential impact upon the public
health, safety, and welfare are adequately regulated in order
to protect the people of California.
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Existing law authorizes the director of DCA to levy a charge
for the pro-rata share of DCA's administrative expenses
against any of the boards, bureaus, commissions, divisions,
and agencies, at the discretion of the director and with
approval of DOF. DCA is required to submit an annual report
of the accounting of the pro-rata calculation of
administrative expenses to the appropriate policy committees
of the Legislature, beginning on July 1, 2015. DCA is also
required to conduct a one-time study of its current system of
prorating administrative expenses to determine if that system
is the most productive, efficient, and cost-effective manner
for DCA and its boards and bureaus, and requires DCA to
consider certain options and include the findings from the
study in the July 1, 2015 report to the Legislature.
4)Attorney General Report. Current law does not require the AG
to compile statistical data or results of cases referred to
the AG by constituent entities comprising the DCA, or to
report any such information to DCA, the Governor, or
Legislature. Staff notes that the AG report requirement in
this bill was also included in the June 30, 2014 version of SB
1243 (Lieu) Chapter 395, Statutes of 2014, last year's bill
dealing with professions and vocations, but this Committee
voted to delete the AG report from the bill when it was
reported to the Assembly Floor from the Suspense File.
5)Contractors' State Licensing Board. The CSLB, within DCA, is
responsible for the implementation and enforcement of the
Contractors State License Law, including the laws and
regulations related to the licensure, practice, and discipline
of the construction industry in California. All businesses
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and individuals who construct or alter, or offer to construct
or alter, any building, highway, road, parking facility,
railroad, excavation, or other structure in California must be
licensed by the CSLB if the total cost (labor and materials)
of one or more contracts on the project is $500 or more. The
CSLB licenses approximately 290,000 contractors in 44 license
classifications and two certifications, and also registers an
additional 9,600 home improvement salespersons who are engaged
in the sale of home improvement goods and services. The CSLB
issues approximately 15,000 new licenses each year, and renews
more than 121,000 existing licenses. Existing law provides
for a sunset of the CSLB and the Registrar on January 1, 2016,
which provides for continued legislative oversight, of the
board's regulatory activities.
SB 465 (Hill), pending in the Assembly Business and
Professions Committee, until recent amendments, contained the
CSLB provisions that are now in this bill. These provisions
were deleted in their entirety from SB 465 and instead amended
into this bill. SB 465 is now being used for another purpose.
6)Related Legislation.7) This bill is one of five Senate
measures introduced this session to extend the sunset on
licensing boards within DCA - including SB 465 (Hill) and SB
466 (Hill), pending with the Business and Professions
Committee, and SB 468 (Hill) and SB 469 (Hill), pending with
this Committee. Five additional sunset extension bills were
introduced by the Assembly. AB 177 (Bonilla), AB 178
(Bonilla), AB 179 (Assembly Committee on Business and
Professions), AB 180 (Assembly Committee on Business and
Professions), and AB 181 (Assembly Committee on Business and
Professions). All are pending in the Senate.
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Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081