BILL ANALYSIS Ó
SB 467
Page 1
SENATE THIRD READING
SB
467 (Hill)
As Amended August 31, 2015
Majority vote
SENATE VOTE: 40-0
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Business & |13-1 |Bonilla, Jones, |Ting |
|Professions | |Baker, Bloom, Campos, | |
| | |Chang, Dodd, Eggman, | |
| | |Gatto, Holden, | |
| | |Mullin, Wilk, Wood | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Appropriations |12-0 |Gomez, Bloom, Bonta, | |
| | |Calderon, Nazarian, | |
| | |Eggman, Eduardo | |
| | |Garcia, Holden, | |
| | |Quirk, Rendon, Weber, | |
| | |Wood | |
| | | | |
| | | | |
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SB 467
Page 2
SUMMARY: Requires the Attorney General (AG) to submit annually
specified reports and information to the Legislature; requires
the Department of Consumer Affairs (DCA) to implement "Complaint
Prioritization Guidelines," as specified; and extends the
California Accountancy Board (CBA) and the Contractors State
License Board (CSLB) until January 1, 2020. Specifically, this
bill:
1) Requires the AG to submit a report to the DCA, the Governor,
and the appropriate policy committees of the Legislature on
or before January 1, 2018, and on or before January 1 of each
subsequent year, that includes specific statistical
information regarding accusation matters referred to the AG
for each constituent entity within the DCA represented by the
Licensing Section and Health Quality Enforcement Section of
the Office of the AG.
2) Requires the Director of the DCA, through the Division of
Investigation, to implement "Complaint Prioritization
Guidelines" for boards to utilize in prioritizing their
respective complaint and investigative workloads as part of
the Consumer Protection Enforcement Initiative of 2010
(CPEI).
3) Extends the operation of the CBA until January 1, 2020.
4) Provides that the CBA, after notice and hearing may
permanently restrict or limit the practice of a licensee or
impose a probationary term or condition on a license that
prohibits the licensee from performing/providing certain acts
or services, as specified.
5) Extends the operation of the CSLB until January 1, 2020.
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6) Deletes the existing requirement that contractors maintain
$2,500 in capital, and increases the existing surety bond
requirement from $12,500 to $15,000.
FISCAL EFFECT: According to the Assembly Appropriations
Committee:
1)Board of Accountancy: Projected expenditures of approximately
$14.1 million annually (Accountancy Fund), supporting 98.8
Personnel Year (PY), to extend the sunset date until January
1, 2020, partially offset by annual fee revenues of
approximately $5.4 million in 2015-16, based on the proposed
2015-16 budget. Annual fee revenues will increase to
approximately $11 million annually beginning July 1, 2016.
Minor and absorbable costs to DCA to extend the sunset and
provide authority for the Board to place practice restrictions
on licensees for disciplinary reasons.
2)The Department of Justice reports significant workload impacts
and increased costs of approximately $1.45 million in 2015-16
($537,000 GF and $911,000 Legal Services Revolving Fund
(LSRF)), and ongoing costs of $1.8 million ($268,000 GF and
$1.534 million LSRF) for the AG to compile data and develop,
design, and prepare the required report. AG costs from the
LSRF would be reimbursed from the funds of the referring
boards and bureaus.
3)CSLB: Projected expenditures of approximately $63 million
annually (primarily Contractors License Fund), supporting
405.6 PY, to extend the sunset date until January 1, 2020,
partially offset by annual fee revenues of approximately
$55-56 million, based on the proposed 2015-16 budget. Minor
and absorbable costs to DCA to extend the sunset on the CSLB,
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and revise the financial security requirements for
contractors.
COMMENTS:
Purpose. This bill is sponsored by the author. According to
the author, this bill is "?necessary to extend the sunset date
of the (CBA) in order to ensure continued oversight of
accountancy profession?.This bill will also establish and
enhance mandatory reporting requirements for the AG's office and
require health care boards to prioritize complaints to assist
policy makers in determining how best to solve the long standing
problem of delayed disciplinary action. Also, this bill is
necessary to extend the sunset date of CSLB in order to ensure
continued oversight of the contractors industry."
Department of Consumer Affairs (DCA). The mission of DCA is to
"protect and serve the interests of California consumers." By
statute, consumer protection is the primary purpose for all of
the regulatory programs located within DCA, which includes 26
boards, nine bureaus, two committees, one program, and one
commission. Collectively, these entities regulate more than 100
types of businesses and 200 different industries and
professions. During the March 2015, Sunset Review Hearing, and
in the Senate Committee's Background Paper on the DCA, several
issues were raised relating to the administration and operations
of the DCA. This bill addresses some of those issues raised
during the Sunset Review process regarding the DCA, including 1)
prioritization of disciplinary cases, and 2) specific
enforcement reporting requirements for the AG's Office.
Consumer Protection Enforcement Initiative (CPEI). During the
sunset review hearing, an issue was raised about the length of
time the DCA's investigations process took to complete, and the
relationship between the AG's office and the Office of
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Administrative Hearings (OAH). The AG's office must use the OAH
to schedule and conduct the disciplinary hearings. The OAH is
required to provide data for performance measures to review the
length of time it takes to complete the complaint process. When
completed, these performance measures provide an overview of the
investigation process and allow the DCA and the Legislature to
gauge the effectiveness of the CPEI. Missing from the
performance measures is the information about the prosecution
process once it arrives in the AG's office.
Another essential part of the CPEI was enhancing the use of
non-sworn investigative staff to conduct less complex
investigations for the health care boards. The DCA issues
"Complaint Prioritization Guidelines" for boards to utilize in
prioritizing their respective complaint and investigative
workloads. These guidelines established three categories of
complaint identification: Urgent, High and Routine. Cases
categorized as urgent or high would be investigated by sworn
staff at the DCA's Department of Investigation (DOI). These
guidelines coupled with training were designed to free up sown
staff so that they could work on complex investigations.
CPEI staffing enhancements were approved by the Legislature with
this model in mind; however, it does not appear these guidelines
are being followed by the boards under the DCA. To address this
issue, this bill will require that the DCA, through the DOI,
implement "Complaint Prioritization Guidelines" for boards to
utilize in prioritizing their complaint and investigative
workloads and to determine the referral of complaints to the
division and those that are retained by the health care boards
for investigation.
California Accountancy Board (CBA). As a result of the CBA's
recent sunset review, the Senate committee raised an issue
pertaining to the CBA's inability to restrict, limit or place on
probation a license rather than revoke. The CBA has the
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Page 6
authority to revoke, suspend, or refuse to renew any permit or
certificate, or censure the holder of that permit or certificate
due to unprofessional conduct. However, the CBA does not have
the authority to include permanent practice restrictions.
Currently, practice restrictions may only be imposed beyond the
probationary term when specifically agreed to by the licensee
via a stipulated settlement. However, if the licensee is
unwilling to agree to such terms via a stipulated settlement,
the only recourse for the CBA is to seek revocation of the
license. This bill would allow the CBA, and the ALJ, to include
permanent practice restrictions as part of a disciplinary order,
as opposed to seeking a complete license revocation, allowing
the licensee to retain a license and be able to practice and
earn income in such areas where competency is not compromised.
Contractors State Licensing Board (CSLB). Business and
Professions Code (BPC) Section 7067.5 requires that all
applicants and all licensees at renewal, demonstrate, as
evidence of financial solvency, that his or her operating
capital exceeds $2,500. The applicant shall provide answers to
questions contained in a standard form questionnaire as required
by the Registrar relative to financial ability and signed under
the penalty of perjury. The financial information required by
the Registrar shall be confidential and not a public record, but
where relevant, shall be admissible as evidence in any
administrative hearing or judicial action or proceeding. The
Registrar may destroy any financial information which has been
on file for a period of at least three years. The financial
information obtained by the Registrar is unverifiable by the
CSLB. If needed, this bill will delete this code section and
increase the surety bond by $2,500, thereby, increasing the bond
from $12,500 to $15,000.
Surety bonds. BPC Section 7071.6 requires that applicants or
licensees have on file, at all times, proof of a $12,500 surety
contractor bond. This requirement is precedent to the issuance,
reinstatement, reaction, renewal, or continued maintenance of a
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license. Surety bonds are a pledge made by an individual or
company that guarantees another individuals' or company's
performance according to a contract'terms. With the deletion of
BPC Section 7067.5 the surety bond will be increased from
$12,000 to $15,000 to provide greater consumer protection.
Analysis Prepared by:
Eunie Linden / B. & P. / (916) 319-3301 FN:
0001751