HOUSE BILL REPORT

SHB 449

BYHouse Committee on State Government (originally sponsored by Representatives H. Sommers and B. Williams; by request of  Governor Gardner)

Consolidating administrative functions of the board of accountancy and the board of pharmacy.

House Committe on State Government

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (8)

     Signed by Representatives H. Sommers, Chair; Peery, Vice Chair; Baugher, Chandler, Hankins, O'Brien, Sayan and Walk.

Minority Report:     Do not pass.  (1)

     Signed by Representative Taylor.

House Staff:Pam Madson (786-7135)

AS PASSED HOUSE MARCH 16, 1987

BACKGROUND:

The Department of Licensing (DOL) is a regulatory agency responsible for licensing over three million drivers, registering over four million vehicles and regulating, through licensing and disciplinary activities, over one hundred different business and professional groups.

The regulation of professions and occupations is carried out by the department's Business and Professions Administration, the director of which serves as an assistant director of the department.

Depending upon the specific occupation or profession being regulated, the responsibility of the Department of Licensing can include, to a varying degree, policy issues, licensing issues, and disciplinary activities.  One common "division of labor" between a board and DOL is to require that the board establish policy, set standards for practice and examinations, and hold disciplinary hearings, while DOL would be responsible for the general administration of all regulatory activities.  This would include administering the budget and staff necessary to carry out the board's policies, administering exams, conducting investigations, issuing licenses in accordance with board policy, investigating complaints, and bringing disciplinary actions before the board.  There are numerous boards created under Title 18 which share responsibilities with the DOL in this manner.

While most occupational and professional boards function within state agencies for administrative purposes, three still exist as independent agencies.  They are the Washington Board of Accountancy, the State Board of Pharmacy and the Cemetery Board.

Board of Accountancy.  The Board of Accountancy, established in 1949, consists of five members appointed by the governor and serving three-year terms. The board employs six staff-persons, two of whom are exempt from civil service.  The board regulates the practice of public accounting in the state of Washington by establishing entrance standards for professional accountants, establishing technical and ethical standards of accounting practice, and enforcing the board's policies and state law pertaining to the practice of accounting.

In carrying out its responsibilities, the board approves and administers an examination required to issue a certificate of "certified public accountant".  The board also issues registrations for partnerships and corporations and biennial permits to practice public accounting.  Fees required for examinations, registration and permits are established by the board.

The board has substantial disciplinary/enforcement authority.  It may revoke or suspend certificates and it may revoke, suspend or refuse to renew registrations and permits.

Board of Pharmacy.  The Board of Pharmacy, established in 1889, consists of seven members appointed by the governor and serving four-year staggered terms. The board regulates the practice of pharmacy and administers and enforces its policies and state law pertaining to the practice of pharmacy.  The board employs seventeen staff-persons, two of whom are exempt from civil service.

In carrying out its responsibilities, the board develops and administers examinations of applicants for pharmacists' licenses.  It also regulates and licenses manufacturers of drugs and wholesalers, pharmacies, shopkeepers, itinerant vendors, and peddlers who sell drugs. The board establishes fees, and renewal fees where appropriate, for all examinations and licenses that it issues.

The Pharmacy Board has substantial disciplinary authority.  The board may inspect and investigate establishments that manufacture or sell drugs and may prosecute individuals or establishments in court.  The board may hold hearings and it may refuse, revoke or suspend licenses which it is authorized to issue.

SUMMARY:

Transfer of Administrative Duties and Related Documents and Personnel.  All administrative powers, duties, and functions of the boards of Accountancy and Pharmacy relating to: (1) the examination of applicants; (2) the issuance of licenses, certificates, permits and registrations; and (3) the discipline of practitioners are transferred to the Department of Licensing (DOL).  Similarly, all personnel, documents, equipment, appropriations, funds and other tangible property of each board which are associated with administrative activities are transferred to the Department of Licensing.  If questions arise regarding the transfers, the director of Financial Management is to determine the proper allocation.

Each board retains its policy-making, disciplinary and enforcement responsibilities. Each board retains the authority to set standards for entrance into the profession and regulations regarding conduct within the profession.  Similarly, each board retains its authority to make disciplinary and enforcement determinations and take appropriate action.

The DOL provides staff to the boards (the authority of each board to employ staff is deleted), sets all fees and charges, administers exams, issues licenses, certificates and permits as appropriate, and conducts investigations and inspections.  The Board of Pharmacy shall designate the law enforcement personnel for conducting investigations.  The Board of Accountancy shall recommend to the director of DOL, candidates for appointment for executive secretary to the board.

Requirements for continuing professional education for accountants holding a certificate are eliminated.  A person may use the title certified public accountant if they have been issued a certificate but may not practice without the appropriate license.

Classified employees who are transferred are to continue performing their duties as employees of the DOL without loss of employment rights.  The transfers may not affect collective bargaining units or agreements until such units are modified by the State Personnel Board or until such agreements expire.  All rules, pending business, contracts and obligations pertaining to the transferred activities are to be carried out by the DOL.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Fred Hellberg, Governor's Office; and Theresa Aragon, Department of Licensing.

House Committee - Testified Against: Don Williams, Board of Pharmacy; Stan Bray, Board of Accountancy; Jerry Frodle, Washington Society of CPA's; and Lars Hennum, Washington Pharmacists.

House Committee - Testimony For:     Merging the boards of Accountancy and Pharmacy with the Department of Licensing would result in increased efficiencies, enhanced coordination with other related regulatory programs, improve operating procedures, and provide more accountability to the public.  This merger will also produce a net cost savings to the state.

House Committee - Testimony Against: No cost savings would result from this merger.  The Board of Accountancy's authority and enforcement power would be diluted.  The Board of Pharmacy opposes putting current staff into the matrix management system of DOL which would break up the team approach of the board.  A small agency can be more responsive to the public, the governor, and the legislature.