BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1152
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          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
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             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
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          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
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           Opposition 
           
          California Physical Therapy Association 
           
          Analysis Prepared by  :    Sarah Huchel / B. & P. / (916) 319-3301