PA 16-185—sSB 15

Government Administration and Elections Committee

General Law Committee

AN ACT ADOPTING THE REQUIREMENTS OF NORTH CAROLINA STATE BOARD OF DENTAL EXAMINERS V. FEDERAL TRADE COMMISSION AND REVISING CERTAIN BOARDS AND COMMISSIONS STATUTES

SUMMARY: This act:

1. gives the Department of Consumer Protection (DCP) greater authority over the professional licensing boards and commissions it oversees;

2. authorizes the DCP commissioner to reject or modify actions taken by these boards or commissions if they exercise their statutory functions in a way that is adverse to a party (see BACKGROUND); and

3. makes changes to the composition of various boards, panels, and councils, including the Education Arbitration Panel, Medical Examining Board, and Materials Innovation and Recycling Authority board of directors.

The act requires an appointing authority to notify all other appointing authorities within five calendar days after making an appointment to a board of the state or a political subdivision subject to the law's minority representation requirement (see BACKGROUND). The appointing authority must provide the appointee's name, town of residence, and political affiliation (notice may be made electronically).

The act also makes several minor, technical, and conforming changes.

EFFECTIVE DATE: Upon passage, except that the provisions on the Materials Innovation and Recycling Authority and DCP's oversight of its boards and commissions take effect July 1, 2016.

1-4 & 16-46 — DCP BOARDS AND COMMISSIONS

DCP oversees several professional licensing boards and commissions that, under prior law, exercised their statutory functions independently of the commissioner, including issuing final decisions subject to judicial review under the Uniform Administrative Procedure Act (UAPA). Statutory functions include licensing, certification, and registration; school accreditation; and rendering findings, orders, and adjudications.

The act makes any exercise of statutory functions by these boards or commissions, if adverse to a party, a proposed final decision subject to approval, rejection, or modification by the DCP commissioner. More generally, the act increases DCP's authority over its boards and commissions by requiring that the (1) commissioner exercise the boards' and commissions' functions in consultation with them and (2) department perform any function necessary for their operation. Prior law limited the latter requirement to those functions not specifically vested by statute in the board or commission.

Meetings ( 2)

By law, the boards and commissions in DCP must meet at least quarterly, and their chairpersons may call additional meetings as they deem necessary. The act authorizes the DCP commissioner to also call additional meetings as he deems necessary and eliminates a general requirement that the boards and commissions meet at the request of a majority of their members. However, this requirement is retained for certain boards and commissions (e. g. , the Commission of Pharmacy, CGS 20-573(a)).

Complaints and Investigations ( 3)

By law, DCP receives complaints about people licensed, certified, or registered by its boards or commissions, and about anyone engaging in unauthorized work these boards oversee. It investigates when an allegation, if substantiated, would constitute a violation. After an investigation, the commissioner may dismiss a complaint for lack of probable cause.

The act allows the commissioner to dismiss a complaint for lack of probable cause without first obtaining the approval of the applicable board or commission, which prior law required. It also eliminates a requirement that the commissioner obtain approval from the complainant, practitioner, and board or commission before authorizing a settlement.

The act reduces, from monthly to quarterly, the frequency with which DCP must distribute to the boards and commissions a list of complaints received during the previous reporting period. It eliminates a requirement that the department provide to the boards and commissions, on a monthly basis, all dispositions and final decisions after an investigation has begun.

Third Party Contractors ( 3)

The act eliminates a requirement that DCP's boards and commissions consent before DCP contracts with third parties to administer license examinations and monitor continuing education requirements. It instead allows the department to contract with third parties if the commissioner deems it necessary.

Proposed Final Decisions ( 2 & 16)

Under the act, DCP's boards and commissions must submit to the commissioner any proposed final decision they issue that is adverse to a party. The commissioner must (1) notify the board or commission within 30 calendar days after receiving the proposed final decision that he will issue the final decision and (2) issue the final decision within 30 days after receiving the proposed final decision.

The act authorizes the commissioner to approve, modify, or reject a proposed final decision or remand it for further review or to gather additional evidence. If he finds a proposed final decision will have an anticompetitive effect, he must reject it to ensure compliance with the federal Sherman Act (15 USC 1 et seq. ). The commissioner must inform the board or commission in writing of his decision and explain his rationale.

Under the act, the commissioner's decision is final, subject to an aggrieved person's right to (1) file a petition for reconsideration with DCP or (2) appeal to Superior Court under the UAPA.

Licensing and Enforcement Procedures ( 17-46)

In addition to its general grant of authority to DCP, the act makes specified changes to certain licensing and enforcement procedures, as summarized in Table 1. The act also requires the DCP commissioner to exercise supervision, rather than general supervision, over the Commission of Pharmacy ( 43).

For each board or commission, the table lists only the changes specified by the act. Because the act makes any exercise of statutory functions by a board or commission that is adverse to a party a proposed final decision, additional licensing and enforcement procedures may be subject to the commissioner's review.

Additionally, in several instances listed below, the act makes both DCP and a board or commission responsible for certain licensing-related duties. However, it does not specify how these duties will be shared between the department and the board or commission.

Table 1: Changes to Licensing and Enforcement Procedures

Board or Commission

Licensing Changes

Enforcement Changes

17 & 18

Architectural Licensing Board

None specified

Specifies that any license or certificate suspension or revocation by the board, or any order it issues or penalty it assess for violations, is a proposed final decision that must be submitted to the commissioner

19-22

State Board of Examiners for Professional Engineers and Land Surveyors

Allows the commissioner, not just the board, to judge applicants' qualifications and waive exams

Removes the requirement that the board authorize DCP to issue licenses and instead requires the department to do so directly

Specifies that any order the board issues for violations is a proposed final decision that must be submitted to the commissioner

23-31

Connecticut Real Estate Commission

(The act does not address the commission's regulation of community association managers (CGS 20-450 et seq. ))

Allows the commissioner, not just the commission, to waive or require exams, judge applicants' qualifications, receive license applications and fees, issue licenses, and grant reciprocity

Specifies that license suspensions or revocations by the commission, or fines it issues, are proposed final decisions that must be submitted to the commissioner

2 & 32-37

(see below)

Examining boards for electrical work; plumbing and piping work; heating, piping, cooling and sheet metal work; elevator installation, repair and maintenance work; fire protection sprinkler systems work and automotive glasswork and flat glass work

(The act does not address the Electrical Work Board's regulation of television and radio service dealers and electronics technicians (CGS 20-342 et seq. ))

Allows the commissioner, not just the board, to (1) judge applicants' qualifications and (2) conduct any hearing or other action required for an application or renewal

Potentially extends the date by which a hearing on an application or renewal much be held, from 30 days after submission to a period of time the commissioner deems appropriate, up to 60 days after submission (The act contains conflicting provisions on whether the commissioner may grant this extension)

Requires DCP to issue certain licenses or certifications with the advice and assistance of, or in consultation with, the applicable board; under prior law, it had to receive the board's authorization to do so

Allows DCP to adopt certain licensing regulations in consultation with, rather than with the advice and consent of, the appropriate examining board

Specifies that license or certification suspensions or revocations are proposed final decisions that must be submitted to the commissioner

38 & 39

State Board of Landscape Architects

None specified

Specifies that the following constitute a proposed final decision that must be submitted to the commissioner: (1) refusing or denying a license; (2) suspending or revoking a license or registration; (3) issuing a letter of reprimand; (4) placing a licensee or registrant on probation; or (5) imposing a civil penalty

40 & 41

Home Inspection Licensing Board

None specified

Specifies that the following constitute a proposed final decision that must be submitted to the commissioner: (1) revoking, suspending, or refusing a license or permit; (2) issuing a letter of reprimand; (3) placing a licensee on probationary status; (4) limiting a licensee's practice areas; or (5) ordering a licensee to obtain additional education to increase competence in an area that is the basis for probation

Requires the board to obtain the commissioner's consent before imposing a civil penalty

42

Connecticut Real Estate Appraisal Commission

None specified

Specifies that license or certification refusals, suspensions, or revocations are proposed final decisions that must be submitted to the commissioner

44-46

State Board of Examiners of Shorthand Reporters

Allows licensure applicants to apply directly to DCP, not just to the board

Allows the commissioner, not just the board, to judge applicants' qualifications

Removes the requirement that the board authorize DCP to issue licenses and instead allows the department or the board to do so directly

Allows DCP, not just the board, to reinstate lapsed licenses without examination

Specifies that license suspensions or revocations by the board, or civil penalties it imposes, are proposed final decisions that must be submitted to the commissioner

Electrical Work Board ( 36 & 37)

The act removes the requirement that DCP obtain authorization from the Electrical Work Board before issuing registration certificates to public service technicians. Instead, it requires the department to issue these certificates in consultation with the board. It requires that the utility company employing the technician certify to DCP, rather than to the board, that the employee has the training and experience necessary to perform the job. It similarly requires that utility companies inform DCP, rather than the board, of changes in board-certified technicians' job descriptions.

5-14 — COMPOSITION OF VARIOUS BOARDS, PANELS, AND COUNCILS

The act makes the following changes to various boards, panels, and councils:

1. extends, from two to four years, the terms of Education Arbitration Panel members, who arbitrate collective bargaining agreements between boards of education and their employees ( 5);

2. changes the qualifications of one of the governor's appointments to the Connecticut Health and Educational Facilities Authority's (CHEFA) board of directors (see below) ( 6);

3. removes the requirement that gubernatorial appointees to the Medical Examining Board undergo legislative confirmation (this board adjudicates complaints against physicians and decides license suspension and revocation issues) ( 8);

4. removes the prohibition on alternate members of the State Board of Labor Relations serving terms longer than one year, allowing them to serve at the pleasure of the governor, until the end of his term (this board interprets and administers four employee collective bargaining laws) ( 9);

5. adds the president of each of the five regional emergency medical services (EMS) councils, or their designees, to the EMS Advisory Board in place of a gubernatorial appointee from each council (this board reviews and comments on EMS regulations, guidelines, and policies, and helps state agencies to coordinate the EMS system) ( 10);

6. requires that the bylaws for each regional EMS council include a process for electing a president ( 12);

7. removes the prohibition on more than two of the governor's three appointees to the 11-member Materials Innovation and Recycling Authority board of directors belonging to the same political party (this board plans, designs, builds, and operates solid waste disposal, volume reduction, recycling, intermediate processing, and resources recovery facilities) ( 14); and

8. makes technical changes to the Connecticut Lottery Corporation board of directors and regional EMS councils ( 7, 11 & 13).

CHEFA Board of Directors

CHEFA is a quasi-public agency that assists higher education and health care institutions, nursing homes, child care and child development facilities, and qualified nonprofit organizations in financing capital projects. Its board of directors consists of the Office of Policy and Management secretary, state treasurer, and eight gubernatorial appointees.

By law, one of the governor's appointees must have a favorable reputation for skill, knowledge, and experience in state and municipal finance. Prior law allowed the appointee to gain this reputation as a partner, officer, or employee of an investment bank that originates and purchases state and municipal securities. The act instead allows the appointee to gain the reputation as a member of the financial business industry.

Under existing law, unchanged by the act, the appointee can also gain this favorable reputation as an officer or employee of an insurance company or bank with duties relating to state and municipal securities as an investment and to managing and controlling a portfolio of these securities.

BACKGROUND

Related Case

In North Carolina State Board of Dental Examiners v. Federal Trade Commission, 135 S. Ct. 1101 (2015), the U. S. Supreme Court held that a state regulatory board that is made up of active market participants can claim state action immunity from federal anti-trust actions only if it is subject to active supervision by the state. In rejecting the argument that entities designated by a state as an agency are exempt from the active supervision requirement, the Court noted that “the need for supervision turns not on the formal designation given by States to regulators but on the risk that active market participants will pursue private interests in restraining trade.

The Court identified certain required factors for active supervision but noted that the overall inquiry on the adequacy of supervision depends on context. It also noted that an entity may be excused from the active supervision requirement in some situations, such as when the entity is electorally accountable.

Minority Party Representation

The law generally requires minority party representation on state or political subdivision boards, commissions, legislative bodies, committees, and similar entities. It does so by setting a maximum number of members who may be from one party, based on the entity's total membership. For example, boards with more than nine members cannot have more than two-thirds of their members from one party. This law does not apply to certain entities, such as those with members based on geographic areas.

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