BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2024|
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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 Le�n, 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inoperative and repealed on January 1, 2015.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 Provides that if the Bureau is repealed, the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, Ch�vez, Chesbro, Conway, Cooley,
Dababneh, Dahle, Daly, Dickinson, Donnelly, Fong, Fox,
Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon,
Grove, Hagman, Harkey, Roger Hern�ndez, 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.
P�rez
NO VOTE RECORDED: Eggman, Gorell, Gray, Hall, Mansoor, V.
Manuel P�rez, Vacancy
MW:k 7/1/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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