Existing law provides for the licensure and regulation of various professions and vocations by boards within the Department of Consumer Affairs. Existing law authorizes a board to deny a license on the grounds that the applicant or licensee has been subject to formal discipline, as specified, or convicted of a crime substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, as specified. Existing law requires a board to notify the applicant in writing, as specified, if a board decides to deny an application for licensure based solely or in part on the applicants conviction history.

If a board decides to deny an application for licensure based solely or in part on the applicants conviction history, this bill would require a board to notify the applicant in writing within 30 days after a decision is made, as specified.

 CONSENT  

Bill No: SB 802

Author: Roth (D)

Introduced: 2/17/23

Vote: 21

SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 12-0, 3/27/23

AYES: Roth, Nguyen, Alvarado-Gil, Archuleta, Becker, Dodd, Eggman, Glazer, Niello, Smallwood-Cuevas, Wahab, Wilk

NO VOTE RECORDED: Ashby

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8

SUBJECT: Licensing boards: disqualification from licensure: criminal conviction

SOURCE: Author

DIGEST:

This bill ensures that applicants for licensure by a program within the Department of Consumer Affairs (DCA) are made aware within 30 days if their license is denied based on a prior criminal conviction

ANALYSIS:

Existing law:

1. Authorizes a board to deny a license regulated by the DCA on the grounds that the applicant has been convicted of a crime or has been subject to formal discipline only if according to specified conditions.
2. Prohibits a person from being denied a license on the basis that the person has been convicted of a crime, or on the basis of acts underlying a conviction for a crime, if that person has obtained a certificate of rehabilitation, as specified, has been granted clemency or a pardon by a state or federal executive, or has made a showing or rehabilitation. (BPC § 480(b))
   
3. Prohibits a board from denying a license based in whole or in part on a conviction without considering the evidence of rehabilitation submitted by an applicant pursuant to any process established in the practice act or regulations of the particular board and as directed related to rehabilitation criteria. (BPC § 481(c))
   
4. Requires each board to post on its website a summary of the criteria used to consider whether a crime is considered to be substantially related to the qualifications, functions, duties of the business or profession it regulates, as specified. (BPC § 481(d))
   
5. Requires each board to develop criteria to evaluate the rehabilitation of a person when either considering the denial of a license or considering suspension or revocation of a license, as specified. (BPC § 482(a))

This bill requires a program within DCA to notify applicants for licensure within 30 days if their license is denied based on a prior criminal conviction.

Background

DCA is one of 12 entities operating under the direction of the Business, Consumer Services and Housing Agency (BCHS). DCA issues almost 4 million licenses, certificates, and approvals to individuals and businesses in over 250 categories. This involves setting the qualifications and levels of competency for the professionals regulated by the DCA’s boards and bureaus which license, register, or certify practitioners; investigate complaints; and discipline violators. Fees paid by DCA licensees fund DCA operations almost exclusively.

Within the DCA are 38 entities, including 26 boards, eight bureaus, two committees, one program, and one commission (hereafter “boards” unless otherwise noted). Collectively, these boards regulate more than 100 types of businesses and 200 different industries and professions. As regulators, these boards perform two primary functions: Licensing—which entails ensuring only those who meet minimum standards are issued a license to practice, and Enforcement—which entails investigation of alleged violations of laws and/or regulations and taking disciplinary action, when appropriate.

Criminal History as a Barrier to Employment. Concerns were raised in the past number of years that statutory authority for boards and bureaus to deny a license to an individual who has "done any act involving honesty, fraud, or deceit" for self-benefit or harm to other, was too broad and could potentially go beyond criminal convictions. Interested parties argued that this authority opened the door for many licensure applications to be denied based purely on alleged misconduct that had not been determined to have occurred through standard due process. The discretion for boards and bureaus to deny licensure to applicants with criminal histories has also been criticized, despite the guarantee of due process afforded to these applicants prior to a crime being reflected on their record. Studies and reports have focused on the impacts of licensing requirements for employment and on individuals seeking to gain employment. According to a July 2015 report on occupational licensing released by the White House, strict licensing creates barriers to mobility for licensed workers, citing several groups of people particularly vulnerable to occupational licensing laws, including former offenders, military spouses, veterans and immigrants.

AB 2138. In response to these reports and continued concerns, AB 2138 (Chiu and Low; Chapter 995, Statutes of 2018) was signed into law, making substantial reforms to the license application process for individuals with criminal records. Under AB 2138, an application may only be denied based on prior misconduct if the applicant was formally convicted of a substantially related crime or was subject to formal discipline by a licensing board. Further, prior conviction and discipline histories are ineligible for disqualification of applications after seven years, with the exception of serious and registerable felonies, as well as financial crimes for certain boards. Among other provisions, the bill additionally requires each board to report data on license denials, publish its criteria on determining if a prior offense is substantially related to licensure, and provide denied applicants with information about how to appeal the decision and how to request a copy of their conviction history. Most DCA programs updated, or are in the final process, of updating regulations to ensure compliance with AB 2138. This bill enhances those previous efforts to increase licensing and employment opportunities by ensuring that applicants are notified within 30 days of a board’s denial of their license based on a past criminal conviction, which in turn will assists applicants in more expeditiously reviewing their record for any inaccuracies and appealing a board’s decision as needed.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT: (Verified 4/12/23)

California Orthopaedic Association

OPPOSITION: (Verified 4/12/23)

None received

ARGUMENTS IN SUPPORT: The California Orthopaedic Association writes in support, “While we don’t anticipate this happening often, this common sense measure is a good idea and worthy of support. Thank you and we urge your support.”

Prepared by: Sarah Mason / B., P. & E.D. / 916-651-4104

4/12/23 14:04:29

**** END ****

SENATE COMMITTEE ON

BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT

Senator Richard Roth, Chair

2023 - 2024 Regular

Bill No: SB 802 Hearing Date: March 27, 2023

Subject: Licensing boards: disqualification from licensure: criminal conviction

SUMMARY: Ensures that applicants for licensure by a program within the Department of Consumer Affairs (DCA) are made aware within 30 days if their license is denied based on a prior criminal conviction.

Existing law:

1. Provides for the licensure and regulation of various professions and vocations by boards, bureaus, and other entities within the DCA. (Business and Professions Code (BPC) §§ 22, 100-144.5)
   
2. Provides that all boards within the DCA are established for the purpose of ensuring that those private businesses and professions deemed to engage in activities, which have potential impact upon the public health, safety, and welfare, are adequately regulated in order to protect the people of California. (BPC § 101.6)
   
3. Authorizes a board to deny a license regulated by the DCA on the grounds that the applicant has been convicted of a crime or has been subject to formal discipline only if either of the following conditions are met:
   
4. The applicant has been convicted of a crime within the preceding seven years from the date of application that is substantially related to the qualifications, functions, or duties of the business or profession for which the application is made, regardless of whether the applicant was incarcerated for that crime, or the applicant has been convicted of a crime that is substantially related of the business or profession for which the application is made and for which the applicant is presently incarcerated or for which the applicant was released from incarceration within the preceding seven years from the date of application, unless the applicant was convicted of a serious felony, as defined, or convicted of a financial crime currently classified as a felony, as specified; or,
   
5. The applicant has been subjected to formal discipline by a licensing board in or outside California within the preceding seven years from the date of application based on professional misconduct that would have been cause for discipline before the board for which the present application is made; however, prior disciplinary action by a licensing board within the preceding seven years shall not be the basis for denial if the basis for that disciplinary action was a conviction that has been dismissed, as specified. (BPC § 480(a))
   
6. Prohibits a person from being denied a license on the basis that the person has been convicted of a crime, or on the basis of acts underlying a conviction for a crime, if that person has obtained a certificate of rehabilitation, as specified, has been granted clemency or a pardon by a state or federal executive, or has made a showing or rehabilitation. (BPC § 480(b))
   
7. Prohibits the delay in processing of an application or a denial of a license based solely on the basis that some or all of the licensure requirements were completed while an individual was incarcerated, as specified. (BPC § 480.5(a))
   
8. Requires each board to develop criteria to aid it when considering the denial, suspension, or revocation of a license, to determine whether a crime is substantially related to the qualifications, functions, or duties of the business or profession it regulates; and specifies that the criteria include all of the following:
   
9. Nature and gravity of the offense;
   
10. Number of years elapsed since the date of the offense; and
    
11. Nature and duties of the profession in which the applicant seeks licensure or in which the licensee is licensed. (BPC § 481(a)(b))
    
12. Prohibits a board from denying a license based in whole or in part on a conviction without considering the evidence of rehabilitation submitted by an applicant pursuant to any process established in the practice act or regulations of the particular board and as directed related to rehabilitation criteria. (BPC § 481(c))
    
13. Requires each board to post on its website a summary of the criteria used to consider whether a crime is considered to be substantially related to the qualifications, functions, duties of the business or profession it regulates, as specified. (BPC § 481(d))
    
14. Requires each board to develop criteria to evaluate the rehabilitation of a person when either considering the denial of a license or considering suspension or revocation of a license, as specified. (BPC § 482(a))

This bill requires a program within DCA to notify applicants for licensure within 30 days if their license is denied based on a prior criminal conviction.

FISCAL EFFECT:

Unknown. This bill is keyed fiscal by Legislative Counsel.

COMMENTS:

1. Purpose. The Author is the Sponsor of this bill. According to the Author, SB 802 makes clarifying changes to ensure timely communication with applicants for licensure to provide more certainty in their path toward employability and participating in the economic marketplace.
2. Background.

DCA. DCA is one of 12 entities operating under the direction of the Business, Consumer Services and Housing Agency (BCHS). DCA issues almost 4 million licenses, certificates, and approvals to individuals and businesses in over 250 categories. This involves setting the qualifications and levels of competency for the professionals regulated by the DCA’s boards and bureaus which license, register, or certify practitioners; investigate complaints; and discipline violators. Fees paid by DCA licensees fund DCA operations almost exclusively.

Within the DCA are 38 entities, including 26 boards, eight bureaus, two committees, one program, and one commission (hereafter “boards” unless otherwise noted). Collectively, these boards regulate more than 100 types of businesses and 200 different industries and professions. As regulators, these boards perform two primary functions:

• Licensing—which entails ensuring only those who meet minimum standards are issued a license to practice, and
• Enforcement—which entails investigation of alleged violations of laws and/or regulations and taking disciplinary action, when appropriate.

DCA entities are semiautonomous regulatory bodies with the authority to set their own priorities and policies and take disciplinary action on their licensees. Board members are representatives of the public and the profession a particular board oversees.

Some programs within DCA have a Disciplinary Review Committee (DRC) comprised of board members, which conducts informal administrative hearings and renders decisions regarding appealed citations or enforcement decisions.

Criminal History as a Barrier to Employment. Concerns were raised in the past number of years that statutory authority for boards and bureaus to deny a license to an individual who has "done any act involving honesty, fraud, or deceit" for self-benefit or harm to other, was too broad and could potentially go beyond criminal convictions. Interested parties argued that this authority opened the door for many licensure applications to be denied based purely on alleged misconduct that had not been determined to have occurred through standard due process.

The discretion for boards and bureaus to deny licensure to applicants with criminal histories has also been criticized, despite the guarantee of due process afforded to these applicants prior to a crime being reflected on their record. The 2016 National Employment Law Project (NELP) report Unlicensed & Untapped: Removing Barriers to State Occupational Licenses for People with Records highlights “a lack of transparency and predictability in the licensure decision-making process and confusion caused by a labyrinth of different restrictions” in regulatory schemes across the country. California was specifically graded as “Needs Improvement,” with recommendations including:

• Expand blanket ban prohibition to all occupations with one overarching law.
• Expand occupation-relatedness requirement to all.
• Require consideration of the time elapsed since conviction.
• Prohibit consideration of certain record information (e.g., arrests, lesser offenses, older offenses).
• Require consideration of the applicant’s rehabilitation.

Additional studies and reports have focused on the impacts of licensing requirements for employment and on individuals seeking to gain employment. According to a July 2015, report on occupational licensing released by the White House, strict licensing creates barriers to mobility for licensed workers, citing several groups of people particularly vulnerable to occupational licensing laws, including former offenders, military spouses, veterans and immigrants.

In October 2016, the Little Hoover Commission released a report entitled Jobs for Californians: Strategies to Ease Occupational Licensing Barriers. The report noted that one out of every five Californians must receive permission from the government to work, and for millions of Californians that means contending with the hurdles of becoming licensed. The report noted that many of the goals to professionalize occupations, standardize services, guarantee quality and limit competition among practitioners, while well intended, have had a larger impact of preventing Californians from working, particularly harder-to-employ groups such as former offenders and those trained or educated outside of California, including veterans, military spouses and foreign-trained workers. The study found that occupational licensing hurts those at the bottom of the economic ladder twice: first by imposing significant costs on them should they try to enter a licensed occupation and second by pricing the services provided by licensed professionals out of reach.

The report found that California compares poorly to the rest of the nation in the amount of licensing it requires for occupations traditionally entered into by people of modest means. According to the report, researchers from the Institute for Justice selected 102 lower-income occupations, defined by the Bureau of Labor Statistics as making less than the national average income, ranging from manicurist to pest control applicator. Of the 102 occupations selected, California required licensure for 62, or 61 percent of them. According to the report, California ranked third most restrictive among 50 states and the District of Columbia, following only Louisiana and Arizona. California ranked seventh of 51 when measuring the burden imposed on entrants into these lower- and moderate-income occupations: on average, California applicants must pay $300 in licensing fees, spend 549 days in education and/or training and pass one exam. The report specifically noted improvements that could be made in the information licensing entities provide applicants to ensure a smoother licensing process.

During the 2016-2017 sunset review oversight of the DCA, this Committee asked what steps DCA was taking to respond to the Little Hoover Commission report and how the DCA is advising entities within the DCA on best practices to assist in the licensure process. The DCA responded that it was working with the BCHS to identify areas where unnecessary barriers to licensure could be reduced and noted that one key area of this work has been on the examination of possible barriers to licensure for individuals reentering the workforce after incarceration. The DCA stated that it had been assessing the criteria used by boards and bureaus to determine if a past conviction is substantially related, as well as how they consider rehabilitation. The DCA reported that clarifying criteria through regulations, through FAQs, or some combination of both could assist applicants and potentially encourage more individuals with prior convictions to apply and stated that it "intends to work with the various boards and bureaus to achieve more clarity and remove unnecessary barriers to licensure. Some of the avenues the DCA is exploring include: providing clear descriptions of licensing criteria on each program's website, potentially re-drafting some regulations to create some consistency and additional clarity, and providing more hands-on guidance to licensees that inquire about these processes."

AB 2138. In response to these reports and continued concerns, AB 2138 (Chiu and Low; Chapter 995, Statutes of 2018) was signed into law, making substantial reforms to the license application process for individuals with criminal records. Under AB 2138, an application may only be denied based on prior misconduct if the applicant was formally convicted of a substantially related crime or was subject to formal discipline by a licensing board. Further, prior conviction and discipline histories are ineligible for disqualification of applications after seven years, with the exception of serious and registerable felonies, as well as financial crimes for certain boards. Among other provisions, the bill additionally requires each board to report data on license denials, publish its criteria on determining if a prior offense is substantially related to licensure, and provide denied applicants with information about how to appeal the decision and how to request a copy of their conviction history. Most DCA programs updated, or are in the final process, of updating regulations to ensure compliance with AB 2138. This bill enhances those previous efforts to increase licensing and employment opportunities by ensuring that applicants are notified within 30 days of a board’s denial of their license based on a past criminal conviction, which in turn will assists applicants in more expeditiously reviewing their record for any inaccuracies and appealing a board’s decision as needed.

SUPPORT AND OPPOSITION:

Support: None received.

Opposition: None received.

-- END --