BILL NUMBER: AB 997 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 11, 2011
AMENDED IN ASSEMBLY MARCH 31, 2011
INTRODUCED BY Assembly Member Wagner
FEBRUARY 18, 2011
An act to amend Section 6501 of the Business and Professions Code,
relating to professional fiduciaries.
LEGISLATIVE COUNSEL'S DIGEST
AB 997, as amended, Wagner. Professional fiduciaries.
Existing law, the Professional Fiduciaries Act, provides for the
licensure and regulation of professional fiduciaries by the
Professional Fiduciaries Bureau within the Department of Consumer
Affairs. Existing law defines the term "professional fiduciary" and
specifies those entities excluded from that term.
This bill would additionally provide that a specified
nonprofit corporations corporation or
charitable trusts trust meeting certain
requirements are is not a
professional fiduciaries fiduciary
subject to the act.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 6501 of the Business and Professions Code is
amended to read:
6501. As used in this chapter, the following terms have the
following meanings:
(a) "Act" means this chapter.
(b) "Bureau" means the Professional Fiduciaries Bureau within the
Department of Consumer Affairs, established pursuant to Section 6510.
(c) "Client" means an individual who is served by a professional
fiduciary.
(d) "Department" means the Department of Consumer Affairs.
(e) "Licensee" means a person who is licensed under this chapter
as a professional fiduciary.
(f) (1) "Professional fiduciary" means a person who acts as a
conservator of the person, the estate, or person and estate, or
guardian of the estate, or person and estate, for two or more
individuals at the same time who are not related to the professional
fiduciary or to each other.
(2) "Professional fiduciary" also means a person who acts as a
trustee, agent under a durable power of attorney for health care, or
agent under a durable power of attorney for finances, for more than
three individuals, at the same time.
In counting individuals under this paragraph to determine whether
a person is a professional fiduciary:
(A) Individuals who are related to the fiduciary shall not be
counted.
(B) All individuals who are related to each other shall be counted
as one individual.
(C) All trustors who are related to each other shall be counted as
one individual, and neither the number of trusts nor the number of
beneficiaries of those trusts shall be counted.
(3) For purposes of this subdivision, "related" means related by
blood, adoption, marriage, or registered domestic partnership.
(4) "Professional fiduciary" does not include any of the
following:
(A) A trust company, as defined in Section 83 of the Probate Code.
(B) An FDIC-insured institution, or its holding companies,
subsidiaries, or affiliates. For the purposes of this subparagraph,
"affiliate" means any entity that shares an ownership interest with,
or that is under the common control of, the FDIC-insured institution.
(C) Any public agency, including the public guardian, public
conservator, or other agency of the State of California or of a
county of California or any regional center for persons with
developmental disabilities as defined in Section 4620 of the Welfare
and Institutions Code.
(D) Any nonprofit corporation or charitable trust that is
described in Section 501(c)(3) of the Internal Revenue Code and that
satisfies all of the following requirements:
(i) Is an organization described in Section 509(a)(1), Section 509
(a)(2), or Section 509(a)(3) of the Internal Revenue Code.
(ii) Has been in existence for at least five years.
(iii) Has total institutional funds as described in subdivision
(e) of Section 18502 of the Probate Code according to its most recent
audited financial statement with a value of at least two million
dollars ($2,000,000) net of encumbrances.
(iv) Is acting as a trustee , incidental to the
purposes for which it was organized as a trust and
, of a trust that meets at least one of the following
conditions:
(I) It is a trust from which annual distributions are limited to
income, a sum certain , or a fixed percentage
of the net fair market value of the trust assets as described in
Section 664(d) of the Internal Revenue Code governing charitable
remainder trusts.
(II) It is a trust from which annual distributions are limited to
a guaranteed annuity or a fixed percentage of the fair market value
of the property as described in Section 2522(c)(2)(B) or Section 2055
(e)(2)(B) of the Internal Revenue Code.
(III) It is a trust from which annual distributions are limited to
income, including a pooled income fund from which annual
distributions are limited to income as described in Section 642(c)(5)
of the Internal Revenue Code governing pooled income funds.
(IV) It is a trust as to which the value of the charitable
interest was presently ascertainable upon creation of the trust and
deductible for federal gift, estate, or income tax purposes under the
Internal Revenue Code as in effect prior to enactment of the federal
Tax Reform Act of 1969 (Public Law 91-172).
(E) Any nonprofit corporation or charitable trust that is
described in Section 501(c)(3) of the Internal Revenue Code acting as
a trustee incidental to the purposes for which it was organized as a
trust and that meets at least one of the following conditions:
(i) It is a trust from which annual distributions are limited to a
sum certain or a fixed percentage of the net fair market value of
the trust assets as described in Section 664(d) of the Internal
Revenue Code governing charitable remainder trusts.
(ii) It is a trust from which annual distributions are limited to
a guaranteed annuity or a fixed percentage of the fair market value
of the property as described in Section 2522(c)(2)(B) or Section 2055
(e)(2)(B) of the Internal Revenue Code governing charitable lead
trusts.
(iii) It is a trust from which annual distributions are limited to
income, including a pooled income fund from which annual
distributions are limited to income as described in Section 642(c)(5)
of the Internal Revenue Code governing pooled income funds.
(iv) It is a trust that was created prior to January 1, 1970.
(F)
(E) A person employed by or acting as an agent on
behalf of an entity or agency described in subparagraph (A),
(B), (C), or (D) , or (E) who is acting
within the course and scope of that employment or agency
, and a public officer of an agency described in subparagraph (C)
acting in the course and scope of official duties.
(G)
(F) Any person whose sole activity as a professional
fiduciary is as a broker-dealer, broker-dealer agent, investment
adviser, or investment adviser representative registered and
regulated under the Corporate Securities Law of 1968 (Division 1
(commencing with Section 25000) of Title 4 of the Corporations Code),
the Investment Advisers Act of 1940 (15 U.S.C. Sec. 80b-1 et seq.),
or the Securities Exchange Act of 1934 (15 U.S.C. Sec. 78a et seq.),
or involves serving as a trustee to a company regulated by the
Securities and Exchange Commission under the Investment Company Act
of 1940 (15 U.S.C. Sec. 80a-1 et seq.).
(g) "Committee" means the Professional Fiduciaries Advisory
Committee, as established pursuant to Section 6511.