BILL ANALYSIS AB 1152 Page 1 Date of Hearing: May 12, 2009 ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS Mary Hayashi, Chair AB 1152 (Anderson) - As Introduced: February 27, 2009 SUBJECT : Professional corporations: licensed physical therapists. SUMMARY : Adds physical therapists (PT) to the individuals who may be shareholders, officers, directors, or professional employees of a medical or podiatric medical corporation so long as the sum of all shares owned by those licensed persons does not exceed 49 percent of the total number of shares, and so long as the number of those licensed persons owning shares in the professional corporation so designated herein does not exceed the number of persons licensed by the governmental agency regulating the designated professional corporation. EXISTING LAW : 1)Defines a "professional corporation" as one that renders professional services in a single profession, except as otherwise authorized in Corporations Code, Section 13401.5. 2)Authorizes medical corporations to permit the following licensees be shareholders, officers, directors or professional employees: a) Licensed doctors of podiatric medicine; b) Licensed psychologists; c) Registered nurses; d) Licensed optometrists; e) Licensed marriage and family therapists; f) Licensed clinical social workers; g) Licensed physician assistants; h) Licensed chiropractors; AB 1152 Page 2 i) Licensed acupuncturists; and, j) Naturopathic doctors. 3)Authorizes podiatric medical corporations to permit the following licensees be shareholders, officers, directors or professional employees: a) Licensed physicians and surgeons; b) Licensed psychologists; c) Registered nurses; d) Licensed optometrists; e) Licensed chiropractors; f) Licensed acupuncturists; and, g) Naturopathic doctors. FISCAL EFFECT : Unknown. This bill is keyed non-fiscal. COMMENTS : Purpose of this bill . According to the author's office, "Late last year, some members of CPMA were informed that counsel to the Department of Consumer Affairs (DCA) believes that it is now impermissible for a podiatric medical corporation or a medical corporation to employ a PT. The rationale for this opinion is that in 2003 when the naturopaths had their practice act established the list of professionals that they were authorized to employ included PTs. The list of professionals that a medical corporation and podiatric medical corporation can employ has never included PTs, despite the fact that both have employed PTs for years. According to the DCA counsel, the legislative intent by implication is that only naturopaths can now employ PTs. "Rather than have to terminate the employment of PTs up and down the state, we seek a clarification that both medical corporations and podiatric medical corporations can employ PTs. As such, AB 1152 clarifies the law by simply amending Corporations Code section 13401.5 to include PTs in the list of AB 1152 Page 3 professionals that medical and podiatric medical corporations can employ." Background . Corporations code section 13401.5 permits certain individuals to be shareholders, officers, directors, or professional employees of professional corporations, so long as the sum of all shares owned by those licensed persons does not exceed 49 percent of the total number of shares of the professional corporation. Currently, the only professional corporation that is explicitly authorized to include PTs as shareholders, officers, directors or professional employees are naturopathic doctor corporations. Suggested technical amendment . Committee staff suggests a conforming change to a related code section to ensure consistency. Business and Professions code 2406 would be amended to read: A medical corporation or podiatry corporation is a corporation which is authorized to render professional services, as defined in Sections 13401 and 13401.5 of the Corporations Code, so long as that corporation and its shareholders, officers, directors and employees rendering professional services who are physicians, psychologists, registered nurses, optometrists, podiatrists, chiropractors, acupuncturists, naturopathic doctors, physical therapists, or, in the case of a medical corporation only, physician assistants, marriage and family therapists, and clinical social workers are in compliance with the Moscone-Knox Professional Corporation Act, the provisions of this article and all other statutes and regulations now or hereafter enacted or adopted pertaining to the corporation and the conduct of its affairs. With respect to a medical corporation or podiatry corporation, the governmental agency referred to in the Moscone-Knox Professional Corporation Act is the Division of Licensing. REGISTERED SUPPORT / OPPOSITION : Support California Podiatric Medical Association (sponsor) California Medical Association California Orthopaedic Association AB 1152 Page 4 Opposition California Physical Therapy Association Analysis Prepared by : Sarah Huchel / B. & P. / (916) 319-3301