BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 1195|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
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THIRD READING
Bill No: SB 1195
Author: Hill (D)
Amended: 6/1/16
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 6-0, 4/18/16
AYES: Hill, Block, Galgiani, Hernandez, Mendoza, Wieckowski
NO VOTE RECORDED: Bates, Berryhill, Jackson
SENATE APPROPRIATIONS COMMITTEE: 5-0, 5/27/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NO VOTE RECORDED: Bates, Nielsen
SUBJECT: Professions and vocations: board actions
SOURCE: Author
DIGEST: This bill makes various changes that are intended to
improve the effectiveness of the Veterinary Medical Board (VMB),
extends the VMB's sunset dates. This bill also authorizes the
Director of the Department of Consumer Affairs (DCA) to review,
veto, or modify actions and decisions of DCA boards to ensure
such actions or decisions conform with public policy; and
prohibits any board executive officer (EO) from being an
actively licensed member of the profession the board regulates.
ANALYSIS:
Existing law:
1)Establishes the California Veterinary Medicine Practice Act
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until January 1, 2017, and requires the VMB within the DCA to,
among other things, license and regulate veterinarians,
registered veterinary technicians (RVTs), RVT schools and
programs, and veterinary premises. (Business and Professions
Code (BPC) §§ 4800 et seq.)
2)Makes decisions of any board within the DCA pertaining to
setting standards, conducting examinations, passing
candidates, and revoking licenses final, except as specified,
and provides that those decisions are not subject to review by
the Director of the DCA. (BPC § 109 (a))
3)Authorizes the Director to initiate an investigation of any
allegations of misconduct in the preparation, administration,
or scoring of any examination which is administered by a
board, or in the review and qualifications which are part of
the licensing process of any board. (BPC § 109 (b))
4)Requires regulations, except those pertaining to examinations
and qualifications for licensure and fee changes proposed or
promulgated by a board within the DCA, to comply with certain
requirements before the regulation or fee change can take
effect, including that the Director is required to be notified
of the rule or regulation and given 30 days to disapprove the
regulation. (BPC § 313.1)
5)Prohibits a rule or regulation that is disapproved by the
Director from having any force or effect, unless the
Director's disapproval is overridden by a unanimous vote of
the members of the board, as specified. (BPC § 313.1 (e)(3))
6)Provides, until January 1, 2018, for the licensure and
regulation of registered nurses by the Board of Registered
Nursing (BRN) which is within the DCA, and requires the BRN to
appoint an EO who is a nurse currently licensed by the BRN.
(BPC § 2708)
This bill:
1) Extends the sunset date for the VMB and the VMB EO until
January 1, 2021.
2) Authorizes a veterinarian and RVT who is under the direct
supervision of a veterinarian with a current and active
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license to compound a drug for animal use pursuant to federal
regulations and in accordance with regulations promulgated by
the VMB.
3) Requires veterinarians engaged in practice of veterinary
medicine employed by the University of California or by
Western University of Health Sciences to be licensed as a
veterinarian in the state or hold a university license issued
by the VMB, and that the applicant for a university license
meet certain requirements, including that the applicant
passes a specified exam.
4) Provides that a veterinary premise registration may be
canceled after five years of delinquency, unless the VMB
finds circumstances or conditions that would justify a new
premise registration to be issued.
5) Makes technical changes to BPC regarding the VMB.
6) Authorizes the Director to review actions or decisions
related to the setting of professional standards and
conducting examinations.
7) Authorizes the Director, upon his or her own initiative, and
requires the Director upon the request of Legislature or the
DCA board making the subject decision or action, to review a
decision or other action, except for disciplinary actions, to
determine whether it furthers state law.
8) Authorizes the Director, after reviewing a board action or
decision, to approve, disapprove, modify, or request further
information from the board regarding the action or decision.
9) Requires the Director to post on the DCA's Web site his or
her final written decision on the board action or decision
and the reasons for his or her decision within 90 days.
10)Requires, commencing March 1, 2017, the Director to annually
report to the chairs of specified committees of the
Legislature information regarding the Director's
disapprovals, modifications, or findings from any audit,
review or monitoring and evaluation.
11)Prohibits a DCA board from overruling a Director's decision
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to disapprove a regulation.
12)Prohibits any DCA board's executive director from being an
active licensee of the profession the board regulates.
13)Clarifies that treble damages awarded pursuant to the
Clayton Act are not punitive or exemplary damages.
Background
In March of 2015, the Senate Business, Professions, and Economic
Development Committee and the Assembly Business and Professions
Committee (Committees) conducted three joint oversight hearings
to review 12 regulatory entities including the VMB. This bill
and the accompanying sunset bills are intended to implement
legislative changes as recommended by staff of the Committees
and that are reflected in the Background Papers prepared by
Committee staff for each agency and program reviewed this year.
Changes to the DCA are in response to a recent U.S. Supreme
Court decision, North Carolina State Board of Dental Examiners
v. FTC, regarding potential anticompetitive actions taken by
licensing boards which could result in antitrust litigation. In
2010, the Federal Trade Commission (FTC) brought an
administrative complaint against the North Carolina State Board
of Dental Examiners (Board) for excluding non-dentists from the
practice of teeth whitening. The FTC alleged that the Board's
decision was anticompetitive under the FTC Act because the Board
was not acting as a state agent. The Board appealed to the
Supreme Court, arguing that it was acting on behalf of the
government and should be afforded immunity from antitrust
lawsuits.
The Supreme Court ruled in the FTC's favor, stating that
regulatory bodies comprised of active market participants in the
occupation regulated by that body may invoke state-action
antitrust immunity only if it is subject to active supervision
by the state.
The Supreme Court has stated that to qualify as active
supervision "the [state] supervisor must have the power to veto
or modify particular decisions to ensure they accord with state
policy." N. Carolina State Bd., 135 S. Ct. at 1116.
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In order to establish active supervision for California boards,
this bill builds upon the current authority of the Director DCA
to review certain board decisions (except those relating to
disciplinary actions) in order to ensure they conform with state
policy. This bill also ensures that DCA board members are not
personally liable in the event they are sued in an antitrust
matter related to their board service.
This bill also prohibits an active licensee in the profession a
board regulates from serving as EO of a DCA board. This
provision will apply to all boards, but currently only the BRN
requires its EO to be an active licensee. There are no other
licensees serving as EOs of other DCA boards. Because the EO
has such influence on a board's proceedings, especially with
regards to disciplinary decisions, it is important to comply
with the Supreme Court's holding that this person not be an
"active" market participant. The California Nurses Association
has expressed concern that this bill will prohibit a nurse from
serving as the BRN's EO. However, this is not the case. A
retired nurse or a nurse with a license on "inactive" status may
serve as the EO under this bill.
The author's office has worked closely with the DCA, the
Governor's and Attorney General's offices in crafting this bill.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
According to the Senate Appropriations Committee, this bill will
result in one-time costs of $600,000 and ongoing costs of
$570,000 per year for DCA to establish an Anti-Trust Unit to
review board actions for their impacts on trade, costs which
would be paid from the DCA boards and bureaus, which are
supported by license fees. This bill would also result in
ongoing costs of about $4.8 million per year for the continued
operation of the VMB, funded through licensing fees. Minor
costs are anticipated by the VMB for the changes in the bill to
its statutory requirements and procedures. This bill would
result in 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
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premises .
SUPPORT: (Verified5/31/16)
Center for Public Interest Law
OPPOSITION: (Verified5/31/16)
California Nurses Association
California Pharmacists Association
California Psychiatric Association
California Society of Certified Public Accountants
ARGUMENTS IN SUPPORT: The Center for Public Interest Law
(CPIL) supports this bill and just suggests some minor
amendments to clear up inconsistency in the language. The CPIL
makes clear that boards are not immune from federal antitrust
scrutiny unless they are controlled by public members (and not
licensees) or the state has created a mechanism to actively
supervise the acts and decisions of these boards to ensure they
benefit the public, and not merely the professions themselves.
"Indeed, failure to approve SB 1195 will continue to expose
consumers to anticompetitive actions and decisions made by
occupational licensing boards within the Department of Consumer
Affairs (DCA) that are controlled by 'active market
participants' in the relevant market, and will expose DCA boards
and board members to potential federal antitrust criminal and
civil liability."
The CPIL further argues that the opposition to this bill
registered by trade associations misunderstands federal
antitrust law and the North Carolina decision itself. States
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have to either require occupational licensing boards to be
controlled by public members, or they can create an "adequate
state supervision" mechanism to oversee, review, veto, and/or
modify acts and decisions that violate federal antitrust laws
made by boards controlled by active market participants. In
addition, CPIL supports the provision which eliminates the
requirements that the EO of the BRN be a licensee of the Board.
ARGUMENTS IN OPPOSITION: The California Pharmacists
Association, the California Psychiatric Association and the
California Society of Certified Public Accountants writes, "We
do not believe that the additional authority the bill would give
to the Director of Consumer Affairs will best serve our
collective goals of protecting the legitimate actions of
licensing boards."
The California Nurses Association are also concerned about the
new authority of the director, stating that "The DCA director,
no matter who fills the position, may be influenced or swayed by
political agendas designed to overturn board actions and
regulations somehow vaguely harmful to corporate profits or, as
part of a general ideological bias against government and
regulations. This power is particularly dangerous when
countenanced in one person, subject to the varying winds of
political pressure."
Prepared by:Nicole Billington / B., P. & E.D. / (916) 651-4104,
Bill Gage / B., P. & E.D. / (916) 651-4104
6/1/16 19:23:19
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