BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 997
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    AB 997 (Wagner) - As Amended:  April 11, 2011 

          Policy Committee:                              
          JudiciaryVote:10-0 (Consent)
                        Business and Professions                9-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:               

           SUMMARY  

          This bill exempts, from state regulation under the Professional 
          Fiduciaries Act (PFA), a 501(c)(3) nonprofit corporation or 
          charitable trust meeting several specified requirements, 
          including being in existence for at least five years and having 
          total institutional funds of at least $2 million.

           FISCAL EFFECT  

          Negligible fiscal impact to the Professional Fiduciaries Bureau 
          within the Department of Consumer Affairs.

           COMMENTS  

           1)Background  . SB 1550 (Figueroa)/Chapter 491of 2006, established 
            the PRA and the bureau for the purpose of licensing and 
            regulating professional conservators, guardians, trustees, 
            durable powers of attorneys, and others, as specified.  PFs 
            manage matters involving consumers' daily care, housing and 
            medical needs, and also offer financial management services 
            ranging from basic bill paying to estate and investment 
            management.  PFs commonly manage services for vulnerable 
            seniors, disabled persons, and children.  There are 
            approximately 320 licensed PFs in California. 

           2)Purpose  . According to the author, "The PFA provides blanket 
            statutory exemptions for attorneys, accountants, and enrolled 
            agents before the IRS - without imposing any requirements on 
            such parties to report to any authority on their 
            administration of fiduciary assets?The PFA also exempts trust 








                                                                  AB 997
                                                                  Page  2

            companies, FDIC-insured institutions, broker-dealers, and 
            investment advisers, presumably because they are all monitored 
            by federal regulatory authorities?However, the PFA does not 
            address charities, which are similarly regulated. The proposed 
            limited exemption for charities would not diminish the 
            protections of the PFA. Charities are subject to reporting, 
            compliance, and public disclosure requirements under multiple 
            state and federal authorities that meet - and in most cases, 
            exceed - those applicable to the parties already exempt from 
            the PFA."

           3)Opposition  . The Professional Fiduciaries Association of 
            California is opposed to creating additional exemptions, which 
            it argues will further dilute the effect and intent of the 
            PFA.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081