BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 2570
                                                                  Page  1

          Date of Hearing:   May 16, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                 AB 2570 (Hill) - As Introduced:  February 24, 2012 

          Policy Committee:                              Business and 
          Professions  Vote:                            6 - 3 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill prohibits licensees of any board, bureau or program 
          under the Department of Consumer Affairs (DCA) from including 
          any "regulatory gag clause" in civil settlement agreements.  

           FISCAL EFFECT  

          Minor and absorbable enforcement costs for the various DCA 
          boards and bureaus to enforce the provisions of this 
          legislation. 

           COMMENTS  

           1)Purpose  . This bill is intended to close a loophole in current 
            law that allows a licensee under the supervision of DCA to 
            prohibit a consumer who settles a civil suit from also filing 
            a complaint or cooperating with the licensee's regulator -- 
            either DCA or one of its affiliated boards.  This agreement is 
            known as a regulatory gag clause.  This bill is modeled on an 
            existing statute that prohibits attorneys from including gag 
            clauses in malpractice settlements.

           2)Background  . DCA contains approximately 40 boards, bureaus, 
            commissions and divisions, most of which oversee licensed 
            professions such as physicians, accountants, contractors, 
            professional engineers, nurses, and counselors. These boards 
            and bureaus are generally responsible for licensing, setting 
            and enforcing standards for practice of the professions 
            through a disciplinary program designed to detect and 
            investigate licensee misconduct and, in appropriate cases, 
            revoke, suspend, or restrict occupational licenses to protect 








                                                                  AB 2570
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            the public.  \

           3)Opposition  . According to the policy analysis dated April 24, 
            2012, the California Chamber of Commerce, the Civil Justice 
            Association of California, the American Council of Engineering 
            Companies, California, and the California Board of Accountancy 
            oppose this bill. 

            The California Board of Accountancy (CBA) states, "The CBA is 
            opposed to the limitation on its disciplinary discretion.  The 
            CBA considers all available information when imposing 
            discipline on a licensee including any civil suit settlement.  
            In addition, the CBA opposes the gag clause as it may deter 
            settlements that would benefit consumers and cost them money 
            in litigation expenses."

           
          Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081