BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1039| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 1039 Author: Hill (D) Amended: 5/31/16 Vote: 21 SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 6-2, 4/18/16 AYES: Hill, Block, Galgiani, Hernandez, Mendoza, Wieckowski NOES: Bates, Berryhill NO VOTE RECORDED: Jackson SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/27/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen SUBJECT: Professions and vocations SOURCE: Author DIGEST: This bill is an omnibus bill which includes several changes to the statutes governing various boards and bureaus under the Department of Consumer Affairs (DCA) and also includes specified fee increases for several boards including the Board of Registered Nursing (BRN), the Board of Pharmacy (BOP), the Contractors State License Board (CSLB) and the Court Reporters Board (CRB). This bill also eliminates the Telephone Medical Advice Services Bureau (TMAS). ANALYSIS: SB 1039 Page 2 Existing law: 1) Establishes, under the Dental Board of California (DBC), the Dental Corps Loan Repayment Program (DCLRP) and requires the DBC in consultation with the Office of Statewide Health Planning and Development, the dental community, other public health facilities and those serving underserved communities to develop and implement the DCLRP. (Business and Professions Code § 1970 et seq.) 2) Establishes the Board of Podiatric Medicine (BPM) within the jurisdiction of the Medical Board of California (MBC). (BPC § 2460) 3) Provides that certificates to practice podiatric medicine and registrations of spectacle lens dispensers and contact lens dispensers, among others, expire on a certain date during the second year of a 2-year term if not renewed. (BPC § 2423) 4) Requires the BRN to adopt regulations establishing standards for continuing education for licensees, as specified, and that the standards shall take cognizance of specialized areas of practice. (BPC § 2811.5) 5) Prescribes various fees to be paid by licensees and applicants for licensure for the BRN and requires these fees to be credited to the BRN Fund, which is a continuously appropriated fund as it pertains to fees collected by the BRN. (BPC §§ 2786.5, 2815, 2815.5, 2830.7 and 2838.2.) 6) Prescribes various fees to be paid by licensees and applicants for licensure, and requires all fees collected on behalf of the BOP to be credited to the BOP Contingent Fund, which is continuously appropriated as it pertains to fees collected by the BOP. (BPC § 4400) SB 1039 Page 3 7) Provides that the licensure requirements for a veterinarian practicing in California do not apply if a veterinarian from another state provides consultation from another state or is called to attend to a case in this state and does not open an office or appoint a place to do business or if a veterinarian from another state is called into this state by a law enforcement or animal control agency to attend to cases that are part of an investigation of an alleged violation of federal or state animal fighting or animal cruelty laws. (BPC § 4830) 8) Requires the certain businesses that provide telephone medical advice services to a patient at a California address to be registered with the TMAS and further requires telephone medical advice services to comply with the requirements established by the DCA, among other provisions, as specified. (BPC § 4999 et seq.) 9) Prescribes various fees to be paid by licensees and applicants for licensure with the CSLB, and requires fees and civil penalties received under the Contractors' State License Law to be deposited in the Contractors' License Fund, which is a continuously appropriated fund as it pertains to fees collected by the CSLB. (BPC §§ 7137 and 7153.3) 10) Authorizes the CRB by resolution to establish a fee for renewal of a certificate issued by the CRB not to exceed $125, as specified, and that all fees and revenues received by the CRB are deposited into the Court Reporters' Fund, which is a continuously appropriated fund as it pertains to fees collected by the CRB. (BPC § 8031) 11) Provides for the licensure and regulation of structural pest control operators and registered companies, as defined, by the Structural Pest Control Board (SPCB), which is within the DCA and requires a licensee to pay a specified fee. Places certain requirements on a registered company or licensee with regards to wood destroying pests or organisms, including that a registered company or licensee is prohibited from commencing work on a contract until an SB 1039 Page 4 inspection has been made by a licensed Branch 3 field representative, as defined, or operator, that the address of each property inspected or upon which work was completed is required to be reported to the SPCB, as specified, and that a written inspection report be prepared and delivered to the person requesting the inspection or his or her agent. Also requires that the original inspection report to be submitted to the SPCB upon demand; for the written report to contain certain information, including a foundation diagram or sketch of the structure or portions of the structure inspected; and requires the report, and any contract entered into, to expressly state if a guarantee for the work is made, and if so, the terms and time period of the guarantee. (BPC §§ 8516 and 8519) 12) Defines control service as the regular inspection of a property after a report has been made in compliance with the requirements of an inspection as specified above, and any corrections as have been agreed upon and have been completed. (BPC § 8516 (g)). This bill: 1) Creates the BPM within the DCA rather than having the BPM within the jurisdiction of the MBC. Revises the requirement that certificates to practice podiatric medicine expire at 12 midnight on the last day of the birth month of the licensee during the second year of a two-year term if not renewed and provides for requirements for renewal of an unexpired certificate. 2) Specifies that the standards established for CE for nurses shall take cognizance of specialized areas of practice, as currently required, but in addition the content shall be relevant to the practice of nursing and shall be related to the scientific knowledge or technical skills required for the practice of nursing or be related to direct or indirect patient or client care. Requires the BRN to audit continuing education providers at least once every five years to ensure adherence to regulatory requirements, and shall withhold or rescind approval from any provider that is in violation of the regulatory requirements. SB 1039 Page 5 3) Prescribes various fee changes to be paid by licensees and applicants for licensure and requires these fees to be credited to the BRN Fund, which is a continuously appropriated fund as it pertains to fees collected by the BRN and also raises specified fees, and provides for additional fees to be paid by licensees and applicants for licensure as well as by schools seeking approval by the BRN. 4) Modifies, on or after July 1, 2017, specified fees to be paid by the licensees and applicants for licensure with the BOP. 5) Specifies that a veterinarian from another state or country does not have to be licensed in California if they are holding a current, valid license in good standing in another state or country and provide assistance to a California licensed veterinarian. The California licensed veterinarian shall maintain a valid veterinarian-client-patient relationship and that the veterinarian providing the assistance shall not establish a veterinarian-client-patient relationship with the client, as specified. Clarifies that a veterinarian in good standing from another state does not have to be licensed in California if they are called into this state by law enforcement agency or animal control agency, as specified. 6) Eliminates TMAS and repeals the requirement that certain businesses that provide telephone medical advice services to a patient at a California address to be registered with the Bureau. 7) Raises specified fees to be paid by the licensees and applicants to the CSLB and requires the CSLB to establish criteria for the approval of expedited processing applications, as specified. 8) Raises the renewal fee limit to be assessed by the CRB from $125 to $250. 9) Requires the operator licensed and regulated by the SPCB prior to conducting an inspection as specified above to be employed by a registered company. Requires that the written inspection report be prepared and delivered to the person requesting it, the property owner, or the property owner's SB 1039 Page 6 designated agent. Requires all inspection reports to be submitted to the SPCB and maintained with field notes, activity forms, and notices of completion until one year after the guarantee expires if the guarantee extends beyond 3 years. Requires the inspection report to clearly list the infested or infected wood members or parts of the structure identified in the required diagram or sketch. Clarifies the definition of "control service agreement" as an agreement, including extended warranties, to have a licensee conduct over a period of time regular inspections and other activities related to the control or eradication of wood destroying pests and organisms. Makes other clarifying and technical changes regarding the SPCB. Background Clarify Jurisdiction of the BPM. Technical changes striking references to the MBC in the podiatry practice act are intended to reflect the independent status of each board. While the BPM was once housed within the MBC, it has been an independent entity since the late 1980's and relies on the MBC only for contractually specified duties, which the MBC provides for other boards, as well. The BPM is independently responsible for determining the eligibility of its licensees and making final disciplinary decisions. Clarify Continuing Education (CE) Requirements for the BRN. All BRN licensees are required by statute to complete 30 hours of CE during each two year renewal cycle to ensure continued competence. Licensees are required to submit proof of their compliance by signing a statement under penalty of perjury and agreeing to produce documentation upon request. The BRN relies on adherence to CE standards as the primary method of assuring the continued competence of its licensees, but it has not institutionalized regular audits of licensees' CEs or CE providers (CEPs) since 2002. This issue was raised in the 2011 Sunset Review Report. During the comprehensive sunset review oversight of the BRN in 2015 conducted by the Senate Committee on Business, Professions and Economic Development and Assembly Committee on Business and Professions (Committees), staff recommended the following: "The BRN should review its criteria for CEPs and require content to be science-based and directly SB 1039 Page 7 related to professionally appropriate practice. The BRN should continue to pursue additional staffing for CE auditors, but should simultaneously rebalance its existing workload and prioritize ongoing CE and CEP audits." This measure reflects the recommendation made in 2015 during sunset review and provides more staffing to audit CE provided pursuant to the fee increase. Fee Changes for BRN . The BRN Fund is maintained by the BRN and includes the revenues and expenditure related to licensing nurses. According to the BRN, the cause of its projected deficit is an ongoing problem. Annual increases in enforcement expenditures (Attorney General, Office of Administrative Hearings, and Evidence/Witness fees) since approximately FY 2010/11 were able to be absorbed as a result of budget bill language in FY 2010/11. However, the following have been annual increases from FY 2010/11 to FY 2014/15 and projected for FY 2015/16: $2,278,000 million in FY 2010/11, along with an additional $2,872,338 through budget bill language in FY 2010/11, $2,284,607 million in FY 11/12, $4,074,512 million in FY 13/14, a BCP augmentation of $2,700,000 million along with an additional $3,330,833 in FY 14/15, and $1,820 million projected in FY 15/16. Also, increasing costs to the BRN as a result of unanticipated BreEZe cost increases (which increased from $2,444,396 million in FY 2014/15 to $5,182,708 million in FY 2015/16 and $4,997,301 in FY 2016/17). As of March 31, 2016, the BRN has expended approximately $10,596,070 on BreEZe. The BRN further indicates that as a result of the high volume of work regularly referred to the Office of the Attorney General, they have requested additional deputies beginning in FY 2016/17 and 10 senior legal analysts to comply with the data reporting requirements contained in SB 467 (Hill, Chapter 656, Statutes of 2015). The BRN will have to help pay for these augmentations if approved by the Legislature and the Governor. The BRN also underwent a fee audit of all fees to determine whether the BRN was charging appropriate fees in order to conduct its business at an adequate service level to provide public protection. It was found that the BRN has not been charging enough fees for many areas and has not been collecting enough fees to support the increased enforcement efforts. Provide for Various Fee Increases for the Board of Pharmacy (BOP). The BOP current statutory authority establishes both a minimum and maximum level for all fees. The BOP uses its SB 1039 Page 8 regulatory authority to establish each fee within this range. As a result of a regulatory change that took effect July 1, 2014, with few exceptions, all of the BOP's fees are at their statutory maximums. The BOP indicates that it is seeking to realign its current fee structure to address a structural imbalance in its current budget resulting from an increase in annual authorized expenditures that is not offset by a corresponding increase in revenue. As a precursor to establishing the new fee schedules, the DCA's Budget Office completed a fee analysis of the BOP's fund condition and fee structure in late 2015. Clarify the Requirements for Veterinarians from Other States. Changes to the exemption for licensure were considered as necessary for out-of-state veterinarians who may consult or provide assistance to a California licensed veterinarian to make it clear under what circumstances veterinary practice in this state would be permissible. Eliminate TMAS. Under current law, any business that provides telephone medical advice services to a patient in California and who employs or contracts with five or more health care professionals to register with TMAS. The registrant must renew every two years and file quarterly reports which, among other requirements, list all California and out-of-state employees who provide medical advice services to California patients. TMAS ensures that all registrants file quarterly reports and checks to make sure that all the licensees provided on the list by the registrant are properly licensed. However, there is no effort to independently confirm the accuracy of the lists provided - for example, whether the registrant has provided a comprehensive list of their licensed providers or whether any non-California licensed providers offered advice to Californians. TMAS receives, on average, 21 consumer complaints per year. In the past five years, 105 complaints were received, and all but two were closed without referral for investigation. According to the most recent DCA reports, there have been zero citations, fines assessed, referrals for criminal or civil action, formal disciplinary actions filed, or consumer restitution ordered by the Bureau in the last five years. DCA licensing boards already have concurrent authority with the practice of healthcare by licensed and unlicensed individuals and can effectively police this area without TMAS. SB 1039 Page 9 Provide for Various Fee Increases for the Contractors State License Board. The proposed fee increases for the CSLB seeks to provide the Board with sufficient funding to support its existing budget and provide for reasonable inflationary cost increases. While costs have increased in every area in the last few years, the most significant areas are in Personal Services, DCA Pro Rata and Enforcement. The CSLB anticipates that it will have, by FY 2018/19, a deficit of approximately $6 million. CSLB needs a fee increase in order to continue to provide its existing level of service to both licensees and consumers. In FY 2012/13, CSLB spent approximately $54 million, and in the current budget year we expect to spend approximately $61 million, an increase of approximately 16% and close to $8.5 million. Of that $8.5 million in increased spending $4.4 million went to Personal Services, which includes salary, benefits, and retirements. During that time period, CLSB added 4 positions, which were approved through the annual budget process. The amount CSLB pays to DCA in pro rata charges increased by $2 million. A significant portion of that $2 million increase is due to DCA's new BreEZe IT system. While CSLB was previously scheduled to be included in the BreEZe system, it is now not currently scheduled to be included. CSLB also had increased enforcement costs of about $2 million, which is primarily costs for the use of services by the Attorney's General's Office and the Office of Administrative Hearings. If CSLB is not able implement a fee increase, we will have to reduce costs in Enforcement, beginning with cuts to our proactive enforcement (stings and sweeps). Provide for Renewal Fee Increase for Court Reporters Board. As part of its fiduciary oversight, the CRB closely monitors the budget, and it projected that the CRB would need to address a projected deficit for $489,000 occurring in fiscal year 2017-18. The deficit is caused by a steady increase in expenditures over the years and a slow decline in the number of licensees. Having already implemented all cost-savings measures, including reduction of onsite school reviews and reduction of exam development workshops, the CRB looked at the various options for increasing revenue. The CRB contends that they looked at increasing the license examination fees, but with a relatively small number of candidates annually, even a substantial hike in the exam fee would not significantly improve the CRB long-term solvency. The CRB also evaluated the possibility of providing SB 1039 Page 10 continuing education to increase revenue, ultimately finding the required increase in staff would not make it cost-effective, nor would it be a mission-critical activity. The existing cap of $125.00 was set in 1951. The CRB reached that cap in 2010. The CRB states that it has worked diligently to cut expenses wherever possible and to operate as efficiently as possible. However, all costs continue to rise, including the pro rata amount the CRB pays to the DCA. While costs rise, the CRB indicates that revenue has slowly decreased as court reporters of the Baby Boom era begin to retire. Clarify Inspection Requirements for Licensees of the Structural Pest Control Board. Currently, the SPCB Act (Act) outlines the procedures to be followed during the performance of wood destroying organism pest inspections and in the preparation of the accompanying inspection reports and also provides guidelines for the preparation of a notice of work completed and not completed after a company completes work under a contract. In 2010, the SPCB created an Act Review Committee and tasked it with reviewing the Act for the purpose of making recommendations to modernize and improve the language for the benefit of consumers and the pest control industry. The proposed changes in this measure related to SPCP are the result of that review and are intended to clarify its provisions. FISCAL EFFECT: Appropriation: Yes Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee analysis dated May 27, 2016, this bill will result in one-time costs of $260,000 and ongoing costs of $250,000 per year for BRN to audit CE providers; increased licensing fee revenues of about $23 million per year to BRN; increased licensing fee revenues of about $7 million per year to BOP, increased licensing fee revenues of about $13 million per year to the CSLB; increased licensing fee revenues of about $950,000 per year to the CRB and; reduced expenditures (and license fee revenues) of about $200,000 per year from the elimination of TMAS. SB 1039 Page 11 SUPPORT: (Verified5/31/16) Medical Board of California Dental Board of California OPPOSITION: (Verified5/31/16) None received ARGUMENTS IN SUPPORT: MBC is supportive of the provision in this bill that clarifies that MBC does not issue podiatric licenses for the BPM. MBC states that BPM is its own board and is completely separate from the MBC but since the statute is not clear and there are some conflicting provisions, clarification is needed. The DBC has a support if amended position on the bill and would like to see the language that was amended out of the bill on April 21, 2016 dealing with foreign dental schools included back into the measure. Prepared by:Bill Gage / B., P. & E.D. / (916) 651-4104 5/31/16 20:45:23 **** END ****