BILL ANALYSIS �
SB 1416
Page 1
SENATE THIRD READING
SB 1416 (Block)
As Amended
April 10, 2014
Majority vote
SENATE VOTE :33-0
BUSINESS & PROFESSIONS 8-1
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|Ayes:|Bonilla, Dickinson, | | |
| |Eggman, Gordon, Holden, | | |
| |Mullin, Skinner, Ting | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Wilk | | |
| | | | |
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SUMMARY : Increases the fee for an initial license and the
biennial renewal of a license to practice dentistry to $525.
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 Dental
Board of California (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
thereafter. The DBC has worked in consultation with the DCA
[Department of Consumer Affairs] 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
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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 Dental Practices Act (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 (AG), 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, 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
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,
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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. If this fee
increase is not adopted, for FY 2014-15, the fund is expected
to have $9,732,000 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 $2,722,000. (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 is projected to
increase to a deficit of $2,239,000.
Between FY 2012-13 and FY 2013-14, DBC's program expenditures
increased by almost $2.5 million. 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
complaints, conducting investigations, and referring cases to
the Attorney's General's Office for prosecution.
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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)Arguments in Opposition. There is no opposition on file.
Analysis Prepared by : Eunie Linden / B., P. & C.P. / (916)
319-3301
FN: 0003944