BILL NUMBER: AB 1859 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 20, 2014
INTRODUCED BY Assembly Member Maienschein
FEBRUARY 19, 2014
An act to amend Section 6535 of add
Article 7 (commencing with Section 6600) to Chapter 6 of Division 3
of the Business and Professions Code, relating to professional
fiduciaries.
LEGISLATIVE COUNSEL'S DIGEST
AB 1859, as amended, Maienschein. Professional fiduciaries:
licensing. professional corporations.
Existing law, the Professional Fiduciaries Act, establishes the
Professional Fiduciaries Bureau within the Department of Consumer
Affairs and requires the bureau to license and regulate professional
fiduciaries, as specified.
This bill would make a technical, nonsubstantive change to these
provisions.
The Moscone-Knox Professional Corporation Act provides for the
organization of a corporation under specified provisions of law for
the purposes of qualifying as a professional corporation under that
act and rendering professional services. The act defines professional
services as services that may be lawfully rendered only pursuant to
a license, certification, or registration authorized by the Business
and Professions Code, the Chiropractic Act, or the Osteopathic Act.
This bill would provide for the formation of licensed professional
fiduciary corporations pursuant to the act described above, as
specified. The bill would provide that it is unprofessional conduct
and a violation of the Professional Fiduciaries Act to violate,
attempt to violate, directly or indirectly, or assist in or abet the
violation of, or conspire to violate these provisions, the
Moscone-Knox Professional Corporation Act, or any regulations duly
adopted under those laws. The bill would require the name of a
licensed professional fiduciary corporation and any name or names
under which it may render professional services to contain the words
"professional fiduciary" and wording or abbreviations denoting
corporate existence. The bill would require each director,
shareholder, and officer of a licensed professional fiduciary
corporation to be a licensed professional fiduciary. The bill would
prohibit the income of a licensed professional fiduciary corporation
attributable to professional services rendered while a shareholder is
a disqualified person, as defined, from accruing, in any manner, to
the benefit of the shareholder or his or her shares in the licensed
professional fiduciary corporation. The bill would authorize the
bureau to adopt and enforce regulations to carry out these
provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Article 7 (commencing with Section
6600) is added to Chapter 6 of Division 3 of the Business
and Professions Code , to r ead:
Article 7. Licensed Professional Fiduciary Corporations
6600. (a) A licensed professional fiduciary corporation is a
corporation that is authorized to render professional services, as
defined in Section 13401 of the Corporations Code, if that
corporation and its shareholders, officers, directors, and employees
rendering professional services who are licensed professional
fiduciaries are in compliance with the Moscone-Knox Professional
Corporation Act, the provisions of this article, and all other
statutes and regulations pertaining to the corporation and the
conduct of its affairs. With respect to a licensed professional
fiduciary corporation, the governmental agency referred to in the
Moscone-Knox Professional Corporation Act (Part 4 (commencing with
Section 13400) of Division 3 of Title 1 of the Corporations Code) is
the Professional Fiduciaries Bureau.
6601. It is unprofessional conduct and a violation of this
chapter for any person licensed pursuant to this chapter to violate,
attempt to violate, directly or indirectly, or assist in or abet the
violation of, or conspire to violate any provision or term of this
article, the Moscone-Knox Professional Corporation Act, or any
regulations duly adopted under those provisions.
6602. A licensed professional fiduciary corporation shall not
commit or omit any act that, if committed or omitted, would
constitute unprofessional conduct under any statute or regulation. A
licensed professional fiduciary corporation, in the conduct of its
practice, shall observe and be bound by these statutes and
regulations to the same extent as a person holding a license under
this chapter.
6603. The name of a licensed professional fiduciary corporation
and any name or names under which it may render professional services
shall contain the words "professional fiduciary" and wording or
abbreviations denoting corporate existence.
6604. Except as provided in Section 13403 of the Corporations
Code, each director, shareholder, and officer of a licensed
professional fiduciary corporation shall be a licensed professional
fiduciary.
6605. The income of a licensed professional fiduciary corporation
attributable to professional services rendered while a shareholder
is a disqualified person, as defined in Section 13401 of the
Corporations Code, shall not in any manner accrue to the benefit of
the shareholder or his or her shares in the licensed professional
fiduciary corporation.
6606. The bureau may adopt and enforce regulations to carry out
the purposes and objectives of this article, including the following:
(a) A regulation that requires the bylaws of a licensed
professional fiduciary corporation to include a provision that
requires the capital stock of the corporation owned by a disqualified
person, as defined in Section 13401 of the Corporations Code, or a
deceased person, to be sold to the corporation or to the remaining
shareholders of the corporation within the timeframe provided by the
regulation.
(b) A regulation that requires a licensed professional fiduciary
corporation to provide adequate security by insurance or otherwise
for claims against the corporation by its customers arising out of
the rendering of professional services.
SECTION 1. Section 6535 of the Business and
Professions Code is amended to read:
6535. The bureau shall approve or deny licensure in a timely
manner to applicants who apply for licensure. Upon approval of a
license, the bureau shall notify the applicant of issuance of the
license, and shall issue a license certificate identifying the
applicant as a "licensed professional fiduciary."