BILL ANALYSIS �
AB 1758
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Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1758 (Patterson) - As Amended: April 3, 2014
Policy Committee: Business and
Professions Vote: 14-0
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires the initial license fee for the following
licensing categories to be prorated on a monthly basis:
dentists, dental hygienists, physicians and surgeons, hearing
aid dispensers, occupational therapists, physical therapists,
psychologists, veterinary technicians, veterinarians,
acupuncturists, and architects.
FISCAL EFFECT
1)Significant revenue loss to affected boards attributable to
lower average initial licensure fees. Staff analysis shows
the Medical Board of California (MBC), for example, would
receive an average of $428 per initial license as opposed to
$790 under the status quo. Given over 5,300 initial licenses
are issued annually, this revenue loss would equal nearly $2
million annually (Contingent Fund of the Medical Board of
California). Other boards would be similarly affected. The
revenue loss would not be great in proportion to annual
expenditures-for example, for the MBC, the revenue loss
represents 3.5% of annual expenditures of $60 million.
However, it would increase fiscal pressure on boards to raise
fees. In some cases, fees are already set at their statutory
maximums.
2)Minor and absorbable costs to affected licensing boards
associated with changing cashiering procedures, form and
materials (various special funds).
3)$140,000 in Information Technology expenditures due to
licensing system modifications. (various special funds).
AB 1758
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COMMENTS
1)Purpose . This bill requires initial licensing fees for
specified healing arts practitioners and architects to be
prorated on a monthly basis, to ensure that licensees are
charged fees in a fair manner and are not disadvantaged based
on their birth month. This bill is author-sponsored.
2)Birth Date Renewal Program . Many boards and bureaus under
Department of Consumer Affairs (DCA) operate a birth date
renewal program. Instead of basing license renewals on the
date of issuance of the initial license, which would result in
the boards facing the same influx of applications year after
year, most boards renew licenses based on birth date, rather
than the date the license was issued, which allows the boards
to spread out that work throughout the year.
Under the birth date renewal program, an initial license period
can vary from just a few months up to 24 months, depending on
the applicant's birth month. For example, if an applicant was
born in January and applied for a license in January 2014,
that initial license would typically expire in the birth month
of the second year term, or January 2015. That license would
be effective for roughly 12 months. However, if that
applicant was born in December, that license would be
effective for nearly two years. On the other hand, if that
applicant who was born in January applied in December 2014,
that license might only be effective for two months. In all
of these cases, the licensee would be paying the full initial
fee amount, regardless of how long their initial license was
in effect. This bill addresses this inconsistency by
requiring licenses to be prorated on a monthly basis.
3)Previous Legislation .
a) SB 2014 (Machado) of 2002 directed the MBC to prorate
its annual licensing fees in cases where the initial
licensure period is less than two years, and deleted an
obsolete oral examination fee authority. That bill was
held in the Senate Appropriations Committee.
b) SB 1045 (Murray) of 2000 would have directed the MBC to
prorate its annual licensing fees in cases where the
initial licensure period is less than two years. That bill
AB 1758
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was held in the Senate.
c) SB 663 (Maddy), Chapter 626, Statutes of 1992,
authorized the Veterinary Medical Board (VMB) to adopt
regulations for the waiver or refund of initial
registration fees if the registration is issued less than
45 days before it will expire.
1)Staff Comments . As currently drafted, this bill may result in
a mismatch between fees and workload. Initial licensure and
renewal fees are generally set separately in statute.
Workload associated with initial licensure may be greater that
than that associated with renewal, as the initial verification
of education and experience can be more labor-intensive. The
fee for initial licensure must support initial licensure
workload as well as ongoing oversight workload for the period
of the license. Some level of proration appears reasonable,
but in some cases where the initial licensures will only be in
effect for a short period of time, fees prorated on a monthly
basis may not be adequate to cover the workload costs of
initial licensure. Initial licensure requires a set amount of
workload regardless of the length of the license.
For example, if the license would only be in effect for two
months, the MBC would only be able to charge $66 for an
initial medical license-even though that amount likely would
not cover the staff workload associated with establishing an
individual qualifies for a medical license. Staff suggests
modifying this bill to remove the requirement that the
proration occur on a monthly basis in order to ensure the
workload costs of initial licensure can be supported by the
prorated fee level.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081