BILL ANALYSIS �
SB 1416
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Date of Hearing: June 10, 2014
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Susan A. Bonilla, Chair
SB 1416 (Block) - As Amended: April 10, 2104
SENATE VOTE : 33-0
SUBJECT : Dentistry: fees.
SUMMARY : Increases the fee for an initial license and the
biennial renewal of a license to practice dentistry to $525.
EXISTING LAW
1)Establishes the Dental Practice Act (Act), administered by the
Dental Board of California (DBC) which is housed in the
Department of Consumer Affairs (DCA), to license and regulate
the practice of dentistry. (Business and Professions Code
(BPC) Section 1600, et seq.)
2)Requires the DBC to establish as necessary the amount of
charges and fees for licensure for the purpose of carrying out
its responsibilities under the Act. (BPC 1724)
3)Prohibits the fee for an initial license and for the renewal
of a license from exceeding four hundred fifty dollars ($450).
(BPC 1724(d))
FISCAL EFFECT : None. This bill is keyed non-fiscal by the
Legislative Counsel.
COMMENTS :
1)Purpose of this bill . This bill would eliminate the fee cap
and set the fee for an initial license and the renewal of a
license to practice dentistry at $525, an increase over the
$450 fee currently set in regulation, to ensure the DBC is
solvent and has the funding it needs to support its programs
in future years. This bill is sponsored by the DBC.
2)Author's statement . According to the author, "The DBC is
projecting a fund balance deficit of $2.239 million in [Fiscal
Year (FY)] 2015-16 as well as an ongoing fund balance deficit
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thereafter. The DBC has worked in consultation with the DCA
Budget Office and has determined it is necessary for the DBC
to increase the initial licensure and biennial renewal fees
assessed to its dentist licensees. Averting or delaying an
immediate fee increase will cause the DBC to become insolvent
in FY 2015-16. The DBC is proposing to correct a structural
imbalance between its revenue and expenditures."
3)The Dental Board of California . The DBC licenses and
regulates over 100,000 licensees, including over 45,000
dentists. The DBC's highest priority is the protection of the
public when exercising its licensing, regulatory, and
disciplinary functions. The primary functions of the DBC are
issuing licenses to eligible applicants; investigating
complaints against licensees and disciplining licensees for
violations of the Act; monitoring licensees whose licenses
have been placed on probation (roughly 35 per year); and
managing the Diversion Program for licensees whose practice
may be impaired due to abuse of dangerous drugs or alcohol.
Last quarter, DBC received 778 complaints, closed 746
complaints, and closed, filed with the Attorney General, or
filed with a district or city attorney 218 cases. Averaging
these statistics over the year, DBC could expect to receive
over 3,000 complaints, close over 2,900 complaints, and close,
file with the AG or file with the district or city attorney
over 800 cases.
4)License fee increases . In 1997, SB 1243 (Hughes), Chapter
791, Statutes of 1997, increased the statutory ceiling for
license fees from $250 to $450. Shortly after the passage of
SB 1243, the initial license and the biennial license renewal
fees were increased through regulation from $240 to $365. For
the last 16 years, fees have remained at $365. In 2013, DBC
promulgated regulations to increase the fee amount to $450.
These regulations will go into effect on July 1, 2014.
An analysis conducted by DCA's Budget Office, based on the last
five fiscal years, indicated that the initial license and
renewal fees should be raised to $525 in order for DBC to
remain solvent into the foreseeable future. With the fee
increase, the fund may be solvent until FY 2017-18, assuming
DBC will incur cost savings of $1 million dollars from reduced
enforcement expenditures and additional revenue of over
$200,000 from cost recovery efforts annually.
If license fees were raised to $525 pursuant to this bill, the
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following ancillary fees would also be impacted because those
fees are based on initial and renewal license fee amounts:
inactive licenses, licenses on retired or disability status,
oral and maxillofacial surgery permit renewal fees, fictitious
name permit application fees, and delinquent
retirement/disability renewals. DBC expects that the
additional fee increase contained in this bill would raise
close to an additional $1.4 million dollars annually.
5)The State Dentistry Fund . The State Dentistry Fund is
maintained by the DBC and includes the revenues and
expenditures related to licensing for dentists. For FY
2014-15, the fund is expected to have $10,080,000 in total
revenues, based on the recently adopted increase in license
fees to $450, and $12,454,000 in total disbursements
($12,444,000 for program expenditures), leading to an
imbalance of $2,374,000. (There is no projected deficit for
FY 2014-15 because the fund began with a balance of
$3,457,000.) By FY 2015-16, that imbalance will lead to a
deficit of $500,000, which will increase to $2,340,000 by
FY2016-17.
Between FY2012-13 and FY 2013-14, DBC's program expenditures
increased by almost $2,500,000. The reason for this jump in
expenditures includes, among other things, funding 12.5 new
enforcement positions to improve processing investigations;
funding the operation of the diversion program; increased
expenses associated with the development and implementation of
DCA's BreEZe system; and unanticipated expenses as a result of
litigation. For example, in FY 2013-14 and FY 2015-16, DBC is
expected to spend almost $600,000 on the diversion program
alone. The structural imbalance between the fund's revenues
and expenditures can be attributed to these reasons, in
addition to the general increase in the cost of doing business
and the fact that fees have not increased since 1998.
According to DBC, it may be unable to maintain existing programs
and services without this proposed fee increase, and
operations may suffer if it reduces expenditures, including
reduction of staffing and operating resources and equipment.
Reducing staff may result in increased delays in responding to
licensing inquiries and application approvals, which would
create a barrier to licensure for those applicants graduating
dental school and seeking licensure and employment in a timely
manner. It may also lead to delays in processing consumer
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complaints, conducting investigations, and referring cases to
the Attorney's General's Office for prosecution.
6)License fees in other states and for other professions .
Establishing a biennial renewal fee of $525 would result in an
average cost per year for licensure at $262.50, which is
comparable to licensing renewal fees for dentists in other
states and below the biennial licensing renewal fees for other
healing arts professions in California.
For example, the average cost per year of licensure for dentists
is $183 in New Mexico, $216 in Arizona, $300 in Nevada, and
$350 in Texas. The average cost per year for licensure for
other healing arts professions in California is $210 for
psychologists $404 for physicians and surgeons, and $560 for
podiatrists.
7)Arguments in support . According to the DBC, this bill "will
enable the [DBC] to sustain operations to effectively protect
consumers through its licensing and enforcement functions."
"To provide better public protection, the [DBC] has made
enhancements to its enforcement program over the last [15]
years; these enhancements have included increased analytical
and investigative staffing to process and investigate consumer
complaints in an effective and efficient manner. The proposed
fee increases will support the [DBC's] enforcement program so
that it may continue to process and investigate consumer
complaints effectively and efficiently."
8)Previous legislation . SB 1243 (Hughes), Chapter 791, Statutes
of 1997, increased the statutory ceiling for initial license
and renewal license fees for dentists from $250 to $450.
REGISTERED SUPPORT / OPPOSITION :
Support
Dental Board of California (sponsor)
Opposition
None on file.
Analysis Prepared by : Eunie Linden / B.,P. & C.P. / (916)
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319-3301