BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 2024
          Author:   Bonilla (D)
          Amended:  As introduced
          Vote:     21

           
           SENATE BUSINESS, PROF. & ECON. DEV. COMM.  :  8-0, 6/16/14
          AYES:  Lieu, Wyland, Berryhill, Block, Corbett, Galgiani, Hill,  
            Torres
          NO VOTE RECORDED:  Hernandez

           SENATE APPROPRIATIONS COMMITTEE  :  6-0, 6/30/14
          AYES:  De León, Walters, Hill, Lara, Padilla, Steinberg
          NO VOTE RECORDED:  Gaines
           
          ASSEMBLY FLOOR  :  73-0, 5/8/14 (Consent) - See last page for vote


           SUBJECT  :    Professional fiduciaries

           SOURCE  :     Author


           DIGEST  :    This bill authorizes the Professional Fiduciaries  
          Bureau (Bureau) to establish a retired status license; prohibits  
          a professional fiduciary from practicing with a retired or  
          cancelled license; provides that an expired professional  
          fiduciary license, that is not renewed within three years, shall  
          not be renewed, restored, or reinstated; clarifies the Bureau's  
          authority to investigate any professional fiduciary with a  
          retired, inactive, canceled, or suspended license; and makes  
          technical, updating and conforming changes.

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           ANALYSIS  :    

          Existing law:

           1. Licenses and regulates professional fiduciaries under the  
             Professional Fiduciaries Act (Act) by the Bureau within the  
             Department of Consumer Affairs (DCA), and makes the Bureau  
             inoperative and repealed on January 1, 2015.  

           2. Establishes a Professional Fiduciaries Advisory Committee  
             (Committee) composed of seven members:  three members who are  
             licensed as professional fiduciaries, and four public  
             members.  The three licensees and two of the public members  
             are appointed by the Governor and the Senate Rules Committee  
             and the Assembly Speaker each appoint a public member of the  
             Committee.  

           3. Provides that if the Bureau is repealed, the  
             responsibilities and jurisdiction of the Bureau shall be  
             transferred to the Committee, and that Committee shall be  
             established as a board within DCA.  

           4. Authorizes the Bureau to investigate the actions of any  
             professional fiduciary for any breach of the law, and  
             authorizes the Bureau to impose disciplinary action,  
             including license denial, suspension, probation, or  
             revocation, and requires the Bureau to provide, on the  
             Internet, information regarding any enforcement action(s).  

           5. Provides that no person shall act or hold himself/herself  
             out as a professional fiduciary unless that person is  
             licensed as a professional fiduciary in accordance with the  
             Act, or is exempt from the Act.  Those exempt from the Act  
             include attorneys, certified public accountants acting within  
             their scope of practice, and enrolled agents acting within  
             their scope of practice. 

           6. Prohibits a professional fiduciary from practicing with an  
             expired, suspended, or revoked license.  

           7. Requires that in order to renew a license, a professional  
             fiduciary must complete 15 hours of approved continuing  

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             education courses each year.  

           8. Requires the Bureau to set licensing and renewal fees by  
             regulation at an amount necessary to recover the costs to the  
             Bureau in carrying out the provisions of the Act.  

          This bill:

           1. Authorizes the Bureau to establish, by regulation, a system  
             for the placement of a license into retired status, as  
             specified.

           2. Requires the Bureau to deny an application to place a  
             license in retired status if the license is subject to an  
             outstanding order of the Bureau, suspended, placed on  
             probation, revoked, or otherwise punitively restricted by the  
             Bureau, or subject to disciplinary action.

           3. Provides that a retired license shall not be required to be  
             renewed.

           4. Requires the Bureau to establish minimum qualifications to  
             place a license in retired status, and to restore a license  
             from retired status to active status.  The minimum  
             qualifications shall include, but are not limited to,  
             completion of continuing education hours, submission of a  
             statement, and payment of a fee, as specified.

           5. Prohibits a professional fiduciary from practicing with a  
             retired or cancelled license.

           6. Provides that a professional fiduciary license that is not  
             renewed within three years following its expiration shall not  
             be renewed, restored, or reinstated, and the license shall be  
             canceled immediately upon expiration of the three-year  
             period.

           7. Requires that, in order to restore a retired status license  
             to active status, a professional fiduciary must complete 15  
             hours of approved continuing education courses.

           8. Requires the Bureau to set fees by regulation for a retired  
             and inactive license, and to restore a license to active from  
             a retired or inactive status.  The fees shall be set at the  

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             amount necessary to cover the reasonable costs to carry out  
             the functions of the Act. 

           9. Clarifies that the Bureau's authority to investigate any  
             professional fiduciary, with a restricted license, including,  
             but not limited to, a license that is retired, inactive,  
             canceled, or suspended.

           10.Makes technical, updating and conforming changes.

           Background
           
          A professional fiduciary is a person who acts as a conservator  
          of the person or estate, or guardian of the estate or person,  
          for two or more individuals at the same time who are not related  
          to the professional fiduciary or to each other.  A professional  
          fiduciary is also someone 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.

           Retired licenses  .  This bill allows the Bureau to adopt  
          regulations establishing a retired license.  This license status  
          would be for individuals not actively engaged in the practice of  
          a professional fiduciary.  A number of other DCA boards and  
          bureaus permit a similar license status, such as the Board of  
          Accountancy, California Architects Board, and the Dental Board  
          of California.

           Sunset review of the Bureau  .  On March 17, 2014, the Senate  
          Business, Professions, and Economic Development Committee and  
          the Assembly Business, Professions and Consumer Protection  
          (BPCP) Committee held a joint sunset review hearing to hear  
          testimony from the Bureau as to its performance and the  
          necessity for continuing its existence by extending its sunset  
          date.  

          The Sunset review report drafted by the Assembly BPCP Committee  
          recommended that the Bureau continue operations until the next  
          review in 2019, and in the meantime:

             The Bureau should consider reducing fees sufficient to avoid  
             accumulating a 24-month reserve if the Bureau cannot get  
             budget authority to hire additional staff;

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             Brief the Legislature on the potential pool of new  
             professional fiduciaries and provide reasonable yearly  
             targets for attracting new licensees; and

             Discuss with the Legislature and the DCA whether to maintain  
             the Bureau independently if its current staffing and  
             licensing levels do not change.

           Comments
           
          According to the author's office, this bill revises the  
          Professional Fiduciaries Act to provide for a retired license  
          status.  It also requires cancellation of a license that is not  
          renewed within three years, and makes other conforming and  
          clarifying changes.  This bill further clarifies the ability of  
          the Bureau to investigate the actions of any professional  
          fiduciary, even if that person has a retired, inactive,  
          canceled, or suspended license.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee, one-time  
          Bureau costs, likely in the range of $50,000 to $100,000 to  
          develop and adopt regulations (Professional Fiduciaries Fund).   
          DCA estimates that any costs to update regulations, add license  
          status designations, and update applications is absorbable.

          The Professional Fiduciaries Fund is projected to have a reserve  
          balance of $481,000 at the end of 2014-15, which is sufficient  
          to support this bill's efforts.  This bill is likely to result  
          in some minor increased fee revenue related to the new licensing  
          designation, potentially offset by lost fee revenues currently  
          paid by non-practicing fiduciaries who would rather pay an  
          annual renewal fee to keep their license active than allow it to  
          go into a delinquent status.

           SUPPORT  :   (Verified  7/1/14)

          Professional Fiduciary Association of California

           ARGUMENTS IN SUPPORT  :    The Professional Fiduciary Association  
          of California (PFAC) supports the bill's provisions that update  

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          the Act to permit the Bureau to establish a "retired" and  
          "inactive" status for licensees, provided that licenses may not  
          be renewed, restored or reinstated after three years'  
          expiration.  PFAC states that the Bureau does not currently have  
          the statutory authority to designate a license as "retired" or  
          "inactive" or to cancel a license for inactivity.  "Under  
          current practice, a professional fiduciary who retires may  
          either allow his or her license to become delinquent, or  
          continue to pay the renewal fee and complete the required  
          continuing education to keep the license active.  License status  
          is public information, and 'delinquent' has a negative  
          connotation that some retired licensees would like to avoid,"  
          according to PFAC.  The Board of Behavioral Sciences, the Board  
          for Professional Engineers, Land Surveyors and Geologists, the  
          Dental Board, and the Medical Board of California all have  
          "retired" and "inactive" license statuses.  PFAC also supports  
          the clarification of the Bureau's ability to investigate the  
          actions of any professional fiduciary, even if that person has a  
          retired, inactive, canceled, or suspended license.


           ASSEMBLY FLOOR :  73-0, 5/8/14
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley,  
            Dababneh, Dahle, Daly, Dickinson, Donnelly, Fong, Fox,  
            Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,  
            Grove, Hagman, Harkey, Roger Hernández, Holden, Jones,  
            Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein,  
            Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande,  
            Olsen, Pan, Patterson, Perea, Quirk, Quirk-Silva, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Wagner,  
            Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, John A.  
            Pérez
          NO VOTE RECORDED:  Eggman, Gorell, Gray, Hall, Mansoor, V.  
            Manuel Pérez, Vacancy


          MW:k  7/1/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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