BILL ANALYSIS                                                                                                                                                                                                    



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

          SB 1195 (Hill) - Professions and vocations:  board actions:   
          competitive impact
          
           ----------------------------------------------------------------- 
          |                                                                 |
          |                                                                 |
          |                                                                 |
           ----------------------------------------------------------------- 
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Version: April 6, 2016          |Policy Vote: B., P. & E.D. 6 -  |
          |                                |          0                     |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Urgency: No                     |Mandate: Yes                    |
          |                                |                                |
          |--------------------------------+--------------------------------|
          |                                |                                |
          |Hearing Date: May 16, 2016      |Consultant: Brendan McCarthy    |
          |                                |                                |
           ----------------------------------------------------------------- 

          This bill meets the criteria for referral to the Suspense File.

          Bill  
          Summary:  SB 1195 would grant authority to the Director of the  
          Department of Consumer Affairs to review decisions and other  
          actions by boards within the Department to determine if the  
          action restrains trade. The bill would require the Office of  
          Administrative Law to perform additional reviews of regulations  
          proposed by boards within the Department. The bill would extend  
          the statutory sunset of the Veterinary Medical Board.


          Fiscal  
          Impact:  
           One-time costs of $600,000 and ongoing costs of $570,000 per  
            year for the Department of Consumer Affairs to establish an  
            Anti-Trust Unit to review board actions for their impacts on  
            trade (various special funds). The costs would be paid from  
            Department of Consumer Affairs boards and bureaus, which are  
            supported by license fees.

           Ongoing costs of about $4.8 million per year for the continued  







          SB 1195 (Hill)                                         Page 1 of  
          ?
          
          
            operation of the Veterinary Medical Board (Veterinary Medical  
            Board Contingent Fund). All costs to operate the Board are  
            funded with licensing fees.

           Minor costs are anticipated by the Veterinary Medical Board  
            for the changes in the bill to its statutory requirements and  
            procedures.

           Ongoing costs of about $160,000 per year for the Board of  
            Pharmacy to coordinate inspection and enforcement activities  
            with respect to the regulation of drug compounding on  
            veterinary premises (Pharmacy Board Contingent Fund).

           Ongoing costs of about $320,000 per year for the Office of  
            Administrative Law to conduct additional analyses on  
            regulations proposed by Department of Consumer Affairs Boards  
            to ensure that they do not have anticompetitive impacts  
            (General Fund).


          Background:  Under current law, various boards and bureaus within the  
          Department of Consumer Affairs license and regulate professions  
          and vocations. The Department is headed by a Director who is  
          appointed by the Governor. The licensing boards within the  
          Department have differing board compositions. Based on current  
          appointments and vacancies, more than half of the licensing  
          boards have a majority of the board from the profession  
          regulated by the board.
          In February 2015, the U.S. Supreme Court ruled that because the  
          North Carolina State Board of Dental Examiners had a majority of  
          dentists on its board, it was not acting as a state agent in its  
          regulation of the practice of dentistry. This opened the North  
          Carolina Board of Dental Examiners to legal action for engaging  
          in unfair restraint of trade. In the ruling, the Supreme Court  
          ruled that a licensing board can only invoke state anti-trust  
          immunity if it is subject to active supervision by a state.




          Proposed Law:  
            SB 1195 would grant authority to the Director of the  
          Department of Consumer Affairs to review decisions and other  
          actions by boards within the Department to determine if the  








          SB 1195 (Hill)                                         Page 2 of  
          ?
          
          
          action restrains trade. The bill would require the Office of  
          Administrative Law to perform additional reviews of regulations  
          proposed by boards within the Department. The bill would extend  
          the statutory sunset of the Veterinary Medical Board.
          Specific provisions of the bill would:
                 Authorize the Director of the Department of Consumer  
               Affairs to review a decision or action by a board within  
               the Department to determine if it unnecessarily restrains  
               trade, and to approve, disapprove, or modify the action;
                 Require the Director to undertake such a review upon  
               request of a consumer or licensee;
                 Require the Director to review and approve any  
               regulation promulgated by a board within the Department,  
               and authorize the Director to modify or disapprove a  
               regulation if it would have an impermissible  
               anticompetitive effect;
                 Extend the statutory sunset on the Veterinary Medical  
               Board to January 1, 2021;
                 Authorize a veterinarian or registered veterinary  
               technician under supervision to compound drugs for  
               anesthesia and authorize the Veterinary Medical Board and  
               the Board of Pharmacy to enforce those requirements;
                 Require veterinarians employed by university veterinary  
               schools to be licensed by the Veterinary Medical Board;
                 Extend the existing indemnity for Department of Consumer  
               Affairs board members to judgements or settlements relating  
               to anticompetitive behavior;
                 Require the Office of Administrative Law to consider the  
               anticompetitive impacts of a regulation proposed by a  
               licensing board within the Department of Consumer Affairs.


          Staff  
          Comments:  This bill is one of a number of bills authored by the  
          chairs of the Senate and Assembly Business and Professions  
          Committees to extend the sunsets of licensing boards and bureaus  
          within the Department of Consumer Affairs.
          In addition to extending the sunset of the Veterinary Medical  
          Board, the bill makes changes to current law intended to address  
          issues raised in the Supreme Court Case relating to the North  
          Carolina Board of Dental Examiners. The purpose of the proposed  
          changes is to ensure that Department of Consumer Affairs  
          licensing boards are subject to active state supervision and are  
          therefore exempt from anti-trust claims relating to professional  








          SB 1195 (Hill)                                         Page 3 of  
          ?
          
          
          licensing.


          The only costs that may be incurred by a local agency relate to  
          crimes and infractions. Under the California Constitution, such  
          costs are not reimbursable by the state.




                                      -- END --