BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 1195 (Hill) - Professions and vocations: board actions:
competitive impact
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|Version: April 6, 2016 |Policy Vote: B., P. & E.D. 6 - |
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|Urgency: No |Mandate: Yes |
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|Hearing Date: May 16, 2016 |Consultant: Brendan McCarthy |
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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
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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
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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
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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.
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