BILL ANALYSIS                                                                                                                                                                                                    

          |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

           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).



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          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  

           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  

           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)


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           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  


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             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  

           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.


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           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  

           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  

           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  


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             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.


          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  


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          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  


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          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. 


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          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  


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          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.


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          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  
          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

          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  

          Prepared by:Bill Gage / B., P. & E.D. / (916) 651-4104
          5/31/16 20:45:23

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