BILL ANALYSIS Ó SB 1039 Page 1 SENATE THIRD READING SB 1039 (Hill) As Amended August 19, 2016 Majority vote SENATE VOTE: 25-12 -------------------------------------------------------------------- |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+-----------------------+---------------------| |Business & |11-5 |Salas, Bloom, Campos, |Brough, Baker, | |Professions | |Dodd, Eggman, Gatto, |Chávez, Dahle, Jones | | | |Gomez, Holden, Mullin, | | | | |Ting, Wood | | | | | | | |----------------+-----+-----------------------+---------------------| |Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, | | | |Bonilla, Bonta, |Gallagher, Jones, | | | |Calderon, Daly, |Obernolte, Wagner | | | |Eggman, Eduardo | | | | |Garcia, Holden, Quirk, | | | | |Santiago, Weber, Wood, | | | | |McCarty | | | | | | | | | | | | -------------------------------------------------------------------- SB 1039 Page 2 SUMMARY: Makes several changes to the statutes governing various boards and bureaus under the Department of Consumer Affairs (DCA); includes specified fee increases for several boards including the Dental Hygiene Committee of California (DHCC), the California Board of Optometry (CBO), the Board of Registered Nursing (BRN), the Board of Pharmacy (BOP), and the Contractors State License Board (CSLB); and eliminates the Telephone Medical Advice Services Bureau (TMAS). Specifically, this bill: 1) Increases the statutory cap for the biennial renewal fee for various types of registered dental hygienists from $160 to $500. 2) Establishes a specified minimum and maximum application fee amount for nonresident contact lens sellers, registered dispensing opticians, and spectacle lens dispensers and increases minimum and maximum amounts for already established fees. Authorizes the CBO to periodically revise and fix the fees, as specified. 3)Clarifies that the $50,000 cap on the administrative fine that the CBO may issue for violations of the ownership prohibitions applicable to optometrists, optical companies, and registered dispensing opticians is "per investigation." 4)Authorizes the CBO to at any time inspect the premises in which optometry is being practiced or in which spectacle or contact lenses are fitted or dispensed, as specified. 5) Specifies that the CE standards established by the BRN 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 SB 1039 Page 3 required for the practice of nursing or be related to direct or indirect patient or client care. 6) Requires the BRN to audit CE providers at least once every five years to ensure adherence to regulatory requirements, and requires the BRN to withhold or rescind approval from any provider that is in violation of the regulatory requirements. 7) 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. 8) Modifies, on or after July 1, 2017, specified fees to be paid by the licensees and applicants for licensure with the BOP. 9) 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. 10)Eliminates the TMAS and repeals the requirement that certain businesses that provide telephone medical advice services to SB 1039 Page 4 a patient at a California address to be registered with the TMAS. 11)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. 12)Requires the operator licensed and regulated by the Structural Pest Control Board (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 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 three 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. 13)Incorporates changes proposed in SB 1193 (Hill) of the Current Legislative Session relating to outsourcing facility licenses. FISCAL EFFECT: According to the Assembly Appropriations Committee: SB 1039 Page 5 1)One-time costs of $260,000 and ongoing costs of $250,000 per year for the BRN to audit providers of continuing education (Board of Registered Nursing Fund). 2)Increased licensing fee revenues of about $23 million per year to the BRN (Board of Registered Nursing Fund). 3)Increased licensing fee revenues of about $7 million per year to the Board of Pharmacy (Pharmacy Board Contingent Fund). 4)Increased licensing fee revenues of about $12.5 million per year to the Contractor's State Licensing Board (Contractors Licensing Fund). 5)Unknown additional fee revenues due to increases in dental hygienist license renewal fees (State Dental Hygiene Fund) and for contact lens sellers, registered dispensing opticians, and spectacle lens dispensers (State Optometry Fund). 6)Reduced expenditures (and license fee revenues) of about $200,000 per year from the elimination of the Telephone Medical Advice Services Bureau (Telephone Medical Advice Services Fund). 7)Information technology costs to change fee amounts are expected to be minor and absorbable. COMMENTS: Purpose. This bill is sponsored by the author. According to SB 1039 Page 6 the author, "?this bill is intended to be an omnibus bill which includes several changes to a number of boards under the [DCA] and would also include necessary fee increases for certain boards to ensure they continue to operate without a major structural deficit and maintain adequate reserves. With the advent of the BreEZe project, which is an attempt to replace multiple antiquated standalone information technology (IT) systems for most of the boards under the DCA, some boards have anticipated what may be significant costs and have also provided projections of future fund conditions which show less than possibly three months in reserve because of overall increased budgetary costs for these individual boards. (Typically, boards consider seeking fee increases when they project their funds in will be at, or dip below, a three-month reserve.) This bill also makes other clarifying substantive changes for the [SPCB] in regards to inspection conducted by structural pest control operators and their companies and eliminates the [TMAS] Bureau which is no longer necessary to provide oversight of remote advice provided by healthcare practitioners." Background. This bill contains several fee increases requested by boards which have projected fund condition issues, incorporates several of the recommendations from the DCA-wide sunset paper published for this year's sunset review oversight hearing in March, and other technical changes. Fee Changes for the CBO. AB 684 (Alejo), Chapter 405, Statutes of 2015, among other things, transferred the regulation of RDOs from the MBC to the CBO, along with the authority to inspect leases and premise locations for compliance with BPC section 655 (dealing with various kick-back arrangements). However, neither the MBC nor the CBO collected data on how many locations are co-located, so there is no concrete data on how many registrants are subject to inspection. In the following years, the CBO will collect the data and use it to further develop the inspection SB 1039 Page 7 program. Currently, the additional revenue brought in by a fee floor will not support the inspection program. After more data is collected, the CBO will reassess the cost of this new function (as recommended by the fee audit) and potentially increase fees through the regulation process. Still, the fee audit shows that current RDO fee structure is not sufficient to sustain the new RDO program. The fee audit shows that the proposed fee floor is just enough to sustain the program without factoring in the requirements specified in AB 684. Further, the CBO notes that there are a lot of "unknowns" pertaining to the total impact on the program in regards to the license population and enforcement workload. The fee auditor recommended setting a fee floor, due to the immediate need, and a fee ceiling high enough to allow the CBO to reassess total impact after a few years of data collection. The auditor recommended fees based on cost per item. However, in an effort to even out the fees and make them more reasonable, the DCA budgets used the auditor's projected program's revenue/budget needs to determine the proposed fee structure. BRN CE Audits. 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. SB 1039 Page 8 During the comprehensive sunset review oversight of the BRN in 2015 conducted by the Senate Committee on Business, Professions and Economic Development and Assembly Business and Professions Committee (Committees), staff recommended the following: "The BRN should review its criteria for CEPs and require content to be science-based and directly 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. 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 fiscal year (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 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. Fee Changes for the BOP. The BOP's current statutory authority SB 1039 Page 9 establishes both a minimum and maximum level for all fees. The BOP uses its 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. Requirements for Veterinarians from Other States. This bill makes changes to the exemption from California licensure 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. 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 the 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. The 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. SB 1039 Page 10 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 TMAS 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. Fee Changes for the CSLB. The proposed fee increases for the CSLB seek to provide the CSLB 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. Inspection Requirements for Licensees of the SPCB. Currently, the Structural Pest Control 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. SB 1039 Page 11 Analysis Prepared by: Le Ondra Clark Harvey Ph.D. / B. & P. / (916) 319-3301 FN: 0004694 Vincent Chee