AB 1262: Professional fiduciaries.
- Session Year: 2023-2024
- House: Assembly
- Latest Version Date: 2023-10-10
Current Status:
Passed
(2023-10-10: Chaptered by Secretary of State - Chapter 680, Statutes of 2023.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Enacted
What does this bill do?
This bill changes licensing and oversight rules for professional fiduciaries and affects anyone who works or markets themselves in that role. It extends the Professional Fiduciaries Bureau, says only current active bureau licensees may call themselves "licensed professional fiduciaries," and makes falsely holding yourself out as a professional fiduciary an infraction (a minor crime with a fine). The bill removes detailed case names and court identifiers from public online records, creates a process to reinstate canceled or revoked licenses, requires licensees to answer bureau investigation requests within 30 days and to give 60 days’ notice before stopping practice, and makes helping unlicensed people evade the law a reason for discipline.
The summary is provided by generative AI which can make mistakes. For original language, please view the details in the table below.
Existing law, the Professional Fiduciaries Act, until January 1, 2024, establishes the Professional Fiduciaries Bureau, under the supervision and control of the Director of Consumer Affairs, within the Department of Consumer Affairs, and requires the bureau to license and regulate professional fiduciaries, as defined. The act transfers the responsibilities and jurisdiction of the bureau to the Professional Fiduciaries Advisory Committee upon the repeal of the provisions establishing the bureau, and provides that the committee consists of 7 appointed members serving 4-year terms. The act authorizes a person to identify themself as a licensed professional fiduciary if they have been licensed by the bureau.
This bill would extend the repeal date of the provisions establishing the bureau to January 1, 2028, and would delete the provision providing for the transfer of the responsibilities and jurisdiction of the bureau to the committee. The bill, commencing January 1, 2027, would reduce one term of certain appointed members to 2 or 3 years, and, after the reduced term, would resume the 4-year terms for those appointments, as specified. The bill would specify that only a person who holds a current and active license from the bureau is authorized to identify themself as a licensed professional fiduciary. The bill would make it an infraction for a person to hold themself out as a professional fiduciary or a licensed professional fiduciary without being licensed. By creating a new crime, the bill would impose a state-mandated local program.
Existing law generally requires the bureau to maintain and keep confidential certain information in each licensees file, but requires the bureau to make a specified subset of the information available to the public and published on the internet. That subset of information includes whether the licensee has ever been removed for cause or has resigned as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances. That subset of information that the bureau is required to make available to the public and published on the internet also includes the circumstances causing the removal or resignation and the case names, court locations, and case numbers associated with the removal or resignation.
This bill would remove the circumstances causing the removal or resignation and the associated case names, court locations, and case numbers from the subset of information that the bureau is required to make available to the public and published on the internet.
Existing law prohibits a license that is not renewed within 3 years following its expiration from being renewed, restored, or reinstated, and requires the license to be canceled immediately upon expiration of the 3-year period. Existing law also requires the bureau to deny an applicants application to place a license in retired status if the license is punitively restricted by the bureau.
This bill would authorize a canceled license to be reinstated if specified requirements are met, including fulfillment of all application requirements. The bill would authorize a person whose license has been revoked, surrendered, suspended, or otherwise disciplined to petition the bureau for reinstatement or reduction of penalty in accordance with specified requirements. The bill would require the director to rule on the petition and impose any terms and conditions the director reasonably deems appropriate. The bill would require the bureau to deny an application to place a license in retired status if the license is restricted by the bureau.
Existing law requires a licensee to file with the bureau, 60 days before the expiration of a license, an annual statement containing specified information regarding the licensee.
This bill would require a licensee to also notify the bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure, and would require the bureau to provide the licensee with any discrepancies between the final annual statement and the bureaus records. The bill would require a licensee to respond to any written inquiry relating to an investigation of a complaint against a licensee within 30 calendar days, and would make a license who does not provide true and accurate information subject to disciplinary action. The bill would specify that aiding or abetting an unlicensed person to evade the provisions of the act or taking other specified actions relating to unlicensed persons with intent to evade the provision of the act constitutes a cause for disciplinary action.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Professional Fiduciaries Act, until January 1, 2024, establishes the Professional Fiduciaries Bureau, under the supervision and control of the Director of Consumer Affairs, within the Department of Consumer Affairs, and requires the bureau to license and regulate professional fiduciaries, as defined. The act transfers the responsibilities and jurisdiction of the bureau to the Professional Fiduciaries Advisory Committee upon the repeal of the provisions establishing the bureau, and provides that the committee consists of 7 appointed members serving 4-year terms. The act authorizes a person to identify themself as a licensed professional fiduciary if they have been licensed by the bureau.
This bill would extend the repeal date of the provisions establishing the bureau to January 1, 2028, and would delete the provision providing for the transfer of the responsibilities and jurisdiction of the bureau to the committee. The bill, commencing January 1, 2027, would reduce one term of certain appointed members to 2 or 3 years, and, after the reduced term, would resume the 4-year terms for those appointments, as specified. The bill would specify that only a person who holds a current and active license from the bureau is authorized to identify themself as a licensed professional fiduciary. The bill would make it an infraction for a person to hold themself out as a professional fiduciary or a licensed professional fiduciary without being licensed. By creating a new crime, the bill would impose a state-mandated local program.
Existing law generally requires the bureau to maintain and keep confidential certain information in each licensees file, but requires the bureau to make a specified subset of the information available to the public and published on the internet. That subset of information includes whether the licensee has ever been removed for cause or has resigned as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances. That subset of information that the bureau is required to make available to the public and published on the internet also includes the circumstances causing the removal or resignation and the case names, court locations, and case numbers associated with the removal or resignation.
This bill would remove the circumstances causing the removal or resignation and the associated case names, court locations, and case numbers from the subset of information that the bureau is required to make available to the public and published on the internet.
Existing law prohibits a license that is not renewed within 3 years following its expiration from being renewed, restored, or reinstated, and requires the license to be canceled immediately upon expiration of the 3-year period. Existing law also requires the bureau to deny an applicants application to place a license in retired status if the license is punitively restricted by the bureau.
This bill would authorize a canceled license to be reinstated if specified requirements are met, including fulfillment of all application requirements. The bill would authorize a person whose license has been revoked, surrendered, suspended, or otherwise disciplined to petition the bureau for reinstatement or reduction of penalty in accordance with specified requirements. The bill would require the director to rule on the petition and impose any terms and conditions the director reasonably deems appropriate. The bill would require the bureau to deny an application to place a license in retired status if the license is restricted by the bureau.
Existing law requires a licensee to file with the bureau, 60 days before the expiration of a license, an annual statement containing specified information regarding the licensee.
This bill would require a licensee to also notify the bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure, and would require the bureau to provide the licensee with any discrepancies between the final annual statement and the bureaus records. The bill would require a licensee to respond to any written inquiry relating to an investigation of a complaint against a licensee within 30 calendar days, and would make a license who does not provide true and accurate information subject to disciplinary action. The bill would specify that aiding or abetting an unlicensed person to evade the provisions of the act or taking other specified actions relating to unlicensed persons with intent to evade the provision of the act constitutes a cause for disciplinary action.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Professional Fiduciaries Act, until January 1, 2024, establishes the Professional Fiduciaries Bureau, under the supervision and control of the Director of Consumer Affairs, within the Department of Consumer Affairs, and requires the bureau to license and regulate professional fiduciaries, as defined. The act transfers the responsibilities and jurisdiction of the bureau to the Professional Fiduciaries Advisory Committee upon the repeal of the provisions establishing the bureau, and provides that the committee consists of 7 appointed members serving 4-year terms. The act authorizes a person to identify themself as a licensed professional fiduciary if they have been licensed by the bureau.
This bill would extend the repeal date of the provisions establishing the bureau to January 1, 2028, and would delete the provision providing for the transfer of the responsibilities and jurisdiction of the bureau to the committee. The bill, commencing January 1, 2027, would reduce one term of certain appointed members to 2 or 3 years, and, after the reduced term, would resume the 4-year terms for those appointments, as specified. The bill would specify that only a person who holds a current and active license from the bureau is authorized to identify themself as a licensed professional fiduciary. The bill would make it an infraction for a person to hold themselves themself out as a professional fiduciary or a licensed professional fiduciary without being licensed. By creating a new crime, the bill would impose a state-mandated local program.
Existing law generally requires the bureau to maintain and keep confidential certain information in each licensees file, but requires the bureau to make a specified subset of the information available to the public and published on the internet. That subset of information includes whether the licensee has ever been removed for cause or has resigned as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances. That subset of information that the bureau is required to make available to the public and published on the internet also includes the circumstances causing the removal or resignation and the case names, court locations, and case numbers associated with the removal or resignation.
This bill would remove the circumstances causing the removal or resignation and the associated case names, court locations, and case numbers from the subset of information that the bureau is required to make available to the public and published on the internet.
Existing law prohibits a license that is not renewed within 3 years following its expiration from being renewed, restored, or reinstated, and requires the license to be canceled immediately upon expiration of the 3-year period. Existing law also requires the bureau to deny an applicants application to place a license in retired status if the license is punitively restricted by the bureau.
This bill would authorize a canceled license to be reinstated if specified requirements are met, including fulfillment of all application requirements. The bill would authorize a person whose license has been revoked, surrendered, suspended, or otherwise disciplined to petition the bureau for reinstatement or reduction of penalty in accordance with specified requirements. The bill would require the director to rule on the petition and impose any terms and conditions the director reasonably deems appropriate. The bill would require the bureau to deny an application to place a license in retired status if the license is restricted by the bureau.
Existing law requires a licensee to file with the bureau, 60 days before the expiration of a license, an annual statement containing specified information regarding the licensee.
This bill would require a licensee to also notify the bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure, and would require the bureau to provide the licensee with any discrepancies between the final annual statement and the bureaus records. The bill would require a licensee to respond to any written inquiry relating to an investigation of a complaint against a licensee within 30 calendar days, and would make a license who does not provide true and accurate information subject to disciplinary action. The bill would specify that aiding or abetting an unlicensed person to evade the provisions of the act or taking other specified actions relating to unlicensed persons with intent to evade the provision of the act constitutes a cause for disciplinary action.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Professional Fiduciaries Act, until January 1, 2024, establishes the Professional Fiduciaries Bureau, under the supervision and control of the Director of Consumer Affairs, within the Department of Consumer Affairs, and requires the bureau to license and regulate professional fiduciaries, as defined. The act transfers the responsibilities and jurisdiction of the bureau to the Professional Fiduciaries Advisory Committee upon the repeal of the provisions establishing the bureau, and provides that the committee consists of 7 appointed members serving 4-year terms. The act authorizes a person to identify themself as a licensed professional fiduciary if they have been licensed by the bureau.
This bill would extend the repeal date of the provisions establishing the bureau to January 1, 2028, and would delete the provision providing for the transfer of the responsibilities and jurisdiction of the bureau to the committee. The bill, commencing January 1, 2027, would reduce one term of certain appointed members to 2 or 3 years, and, after the reduced term, would resume the 4-year terms for those appointments, as specified. The bill would specify that only a person who holds a current and active license from the bureau is authorized to identify themself as a licensed professional fiduciary. The bill would make it an infraction for a person to hold themselves out as a professional fiduciary or a licensed professional fiduciary without being licensed. By creating a new crime, the bill would impose a state-mandated local program.
Existing law generally requires the bureau to maintain and keep confidential certain information in each licensees file, but requires the bureau to make a specified subset of the information available to the public and published on the internet. That subset of information includes whether the licensee has ever been removed for cause or has resigned as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances. That subset of information that the bureau is required to make available to the public and published on the internet also includes the circumstances causing the removal or resignation and the case names, court locations, and case numbers associated with the removal or resignation.
This bill would remove the circumstances causing the removal or resignation and the associated case names, court locations, and case numbers from the subset of information that the bureau is required to make available to the public and published on the internet.
Existing law prohibits a license that is not renewed within 3 years following its expiration from being renewed, restored, or reinstated, and requires the license to be canceled immediately upon expiration of the 3-year period. Existing law also requires the bureau to deny an applicants application to place a license in retired status if the license is punitively restricted by the bureau.
This bill would authorize a canceled license to be reinstated if specified requirements are met, including fulfillment of all application requirements. The bill would authorize a person whose license has been revoked, surrendered, suspended, or otherwise disciplined to petition the bureau for reinstatement or reduction of penalty in accordance with specified requirements. The bill would require the director to rule on the petition and impose any terms and conditions the director reasonably deems appropriate. The bill would require the bureau to deny an application to place a license in retired status if the license is restricted by the bureau.
Existing law requires a licensee to file with the bureau, 60 days before the expiration of a license, an annual statement containing specified information regarding the licensee.
This bill would require a licensee to also notify the bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure, and would require the bureau to provide the licensee with any discrepancies between the final annual statement and the bureaus records. The bill would require a licensee to respond to any written inquiry relating to an investigation of a complaint against a licensee within 30 calendar days, and would make a license who does not provide true and accurate information subject to disciplinary action. The bill would specify that aiding or abetting an unlicensed person to evade the provisions of the act or taking other specified actions relating to unlicensed persons with intent to evade the provision of the act constitutes a cause for disciplinary action.
Existing law prohibits a guardian or conservator who is not a trust company or an employee of that guardian or conservator from hiring or referring any business to an entity in which the guardian, conservator, or employee has a financial interest, except that a professional fiduciary appointed as a guardian or conservator may hire and compensate individuals as employees, with court approval.This bill would instead authorize a professional fiduciary appointed as a guardian or conservator, in the course of providing services as a guardian or conservator, to use the services of their employees and seek compensation for those services as part of their fee request.The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, the Professional Fiduciaries Act, until January 1, 2024, establishes the Professional Fiduciaries Bureau Bureau, under the supervision and control of the Director of Consumer Affairs, within the Department of Consumer Affairs, and requires the bureau to license and regulate professional fiduciaries, as defined. The act transfers the responsibilities and jurisdiction of the bureau to the Professional Fiduciaries Advisory Committee upon the repeal of the provisions establishing the bureau, and provides that the committee consists of 7 appointed members serving 4-year terms. The act authorizes a person to identify themself as a licensed professional fiduciary if they have been licensed by the bureau.
This bill would extend the repeal date of the provisions establishing the bureau to January 1, 2028, and would delete the provision providing for the transfer of the responsibilities and jurisdiction of the bureau to the committee. The bill, commencing January 1, 2027, would reduce one term of certain appointed members to 2 or 3 years, and, after the reduced term, would resume the 4-year terms for those appointments, as specified. The bill would specify that only a person who holds a current and active license from the bureau is authorized to identify themself as a licensed professional fiduciary. The bill would make it an infraction for a person to hold themselves out as a professional fiduciary or a licensed professional fiduciary without being licensed. By creating a new crime, the bill would impose a state-mandated local program.
Existing law generally requires the bureau to maintain and keep confidential certain information in each licensees file, but requires the bureau to make a specified subset of the information available to the public and published on the internet. That subset of information includes whether the licensee has ever been removed for cause or has resigned as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances. That subset of information that the bureau is required to make available to the public and published on the internet also includes the circumstances causing the removal or resignation and the case names, court locations, and case numbers associated with the removal or resignation.
This bill would remove the circumstances causing the removal or resignation and the associated case names, court locations, and case numbers from the subset of information that the bureau is required to make available to the public and published on the internet.
Existing law prohibits a license that is not renewed within 3 years following its expiration from being renewed, restored, or reinstated, and requires the license to be canceled immediately upon expiration of the 3-year period. Existing law also requires the bureau to deny an applicants application to place a license in retired status if the license is punitively restricted by the bureau.
This bill would authorize a canceled license to be reinstated if specified requirements are met, including fulfillment of all application requirements. The bill would authorize a person whose license has been revoked, surrendered, suspended, or otherwise disciplined to petition the bureau for reinstatement or reduction of penalty in accordance with specified requirements. The bill would require the director to rule on the petition and impose any terms and conditions the director reasonably deems appropriate. The bill would require the bureau to deny an application to place a license in retired status if the license is restricted by the bureau.
Existing law requires a licensee to file with the bureau, 60 days before the expiration of a license, an annual statement containing specified information regarding the licensee.
This bill would require a licensee to also notify the bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure, and would require the bureau to provide the licensee with any discrepancies between the final annual statement and the bureaus records. The bill would require a licensee to respond to any written inquiry relating to an investigation of a complaint against a licensee within 30 calendar days, and would make a license who does not provide true and accurate information subject to disciplinary action. The bill would specify that aiding or abetting an unlicensed person to evade the provisions of the act or taking other specified actions relating to unlicensed persons with intent to evade the provision of the act constitutes a cause for disciplinary action.
Existing law prohibits a guardian or conservator who is not a trust company or an employee of that guardian or conservator from hiring or referring any business to an entity in which the guardian, conservator, or employee has a financial interest, except that a professional fiduciary appointed as a guardian or conservator may hire and compensate individuals as employees, with court approval.
This bill would instead authorize a professional fiduciary appointed as a guardian or conservator, in the course of providing services as a guardian or conservator, to use the services of their employees and seek compensation for those services as part of their fee request.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Existing law, until January 1, 2024, establishes the Professional Fiduciaries Bureau within the Department of Consumer Affairs, and requires the bureau to license and regulate professional fiduciaries, as defined. The act authorizes a person to identify themself as a licensed professional fiduciary if they have been licensed by the bureau.
This bill would specify that only a person who holds a current and active license from the bureau is authorized to identify themself as a licensed professional fiduciary.
(a)Notwithstanding any other provision of law, a violation of any code section listed in subdivision (c) is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code when either of the following applies:
(1)A complaint or a written notice to appear in court pursuant to Chapter 5C (commencing with Section 853.5) of Title 3 of Part 2 of the Penal Code is filed in court charging the offense as an infraction unless the defendant, at the time they are arraigned, after being advised of their rights, elects to have the case proceed as a misdemeanor.
(2)The court, with the consent of the defendant and the prosecution, determines that the offense is an infraction in which event the case shall proceed as if the defendant has been arraigned on an infraction complaint.
(b)Subdivision (a) does not apply to a violation of the code sections listed in subdivision (c) if the defendant has had their license, registration, or certificate previously revoked or suspended.
(c)The following sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by this code:
(1)Section 2474.
(2)Sections 2052 and 2054.
(3)Section 2570.3.
(4)Section 2630.
(5)Section 2903.
(6)Section 3575.
(7)Section 3660.
(8)Sections 3760 and 3761.
(9)Section 4080.
(10)Section 4825.
(11)Section 4935.
(12)Section 4980.
(13)Section 4989.50.
(14)Section 4996.
(15)Section 4999.30.
(16)Section 5536.
(17)Section 6530 or 6532.
(18)Section 6704.
(19)Section 6980.10.
(20)Section 7317.
(21)Section 7502 or 7592.
(22)Section 7520.
(23)Section 7617 or 7641.
(24)Subdivision (a) of Section 7872.
(25)Section 8016.
(26)Section 8505.
(27)Section 8725.
(28)Section 9681.
(29)Section 9840.
(30)Subdivision (c) of Section 9891.24.
(31)Section 19049.
(d)Notwithstanding any other law, a violation of any of the sections listed in subdivision (c), which is an infraction, is punishable by a fine of not less than two hundred fifty dollars ($250) and not more than one thousand dollars ($1,000). No portion of the minimum fine may be suspended by the court unless as a condition of that suspension the defendant is required to submit proof of a current valid license, registration, or certificate for the profession or vocation that was the basis for their conviction.
SEC. 2.Section 6510 of the Business and Professions Code is amended to read:6510.(a)There is within the jurisdiction of the department the Professional Fiduciaries Bureau. The bureau is under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief of the bureau, who is responsible to the director. Every power granted or duty imposed upon the director under this chapter may be exercised or performed in the name of the director by a deputy director or by the chief, subject to conditions and limitations as the director may prescribe.
(b)The Governor shall appoint, subject to confirmation by the Senate, the chief of the bureau, at a salary to be fixed and determined by the director with the approval of the Director of Finance. The chief shall serve under the direction and supervision of the director and at the pleasure of the Governor.
(c)(1)This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
(2)Notwithstanding any other provision of law, the repeal of this section renders the bureau subject to review by the appropriate policy committees of the Legislature.
SEC. 3.Section 6511 of the Business and Professions Code is amended to read:6511.(a)There is within the bureau a Professional Fiduciaries Advisory Committee. The committee shall consist of seven members; three of whom shall be licensees actively engaged as professional fiduciaries in this state, and four of whom shall be public members. One of the public members shall be a member of a nonprofit organization advocating on behalf of the elderly, and one of the public members shall be a probate court investigator.
(b)The Governor shall appoint the member from a nonprofit organization advocating on behalf of the elderly, the probate court investigator, and the three licensees. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint a public member.
(c)Except as provided in paragraphs (1) and (2), each member of the committee shall be appointed for a term of four years, and shall hold office until the appointment of their successor or until one year shall have elapsed since the expiration of the term for which they were appointed, whichever first occurs.
(1)Commencing January 1, 2027, the Governor shall appoint a licensee member and a public member from a nonprofit organization advocating on behalf of the elderly to a term of two years each. Commencing January 1, 2029, the Governor shall resume appointing these committee positions to four-year terms.
(2)Commencing January 1, 2027, the Governor shall appoint a licensee member and a probate court investigator to a term of three years each. Commencing January 1, 2030, the Governor shall resume appointing these committee positions to four-year terms.
(d)Vacancies shall be filled by the appointing power for the unexpired portion of the terms in which they occur. A person shall not serve as a member of the committee for more than two consecutive terms.
(e)Every member of the committee shall receive per diem and expenses as provided in Sections 103 and 113.
(f)The committee shall do all of the following:
(1)Examine the functions and policies of the bureau and make recommendations with respect to policies, practices, and regulations as may be deemed important and necessary by the director or the chief to promote the interests of consumers or that otherwise promote the welfare of the public.
(2)Consider and make appropriate recommendations to the bureau in any matter relating to professional fiduciaries in this state.
(3)Provide assistance as may be requested by the bureau in the exercise of its powers or duties.
(4)Meet at least once each quarter. All meetings of the committee shall be public meetings.
(g)The bureau shall meet and consult with the committee regarding general policy issues related to professional fiduciaries.
SEC. 4.Section 6530 of the Business and Professions Code is amended to read:6530.(a)On and after January 1, 2009, no person shall act or hold themself out to the public as a professional fiduciary unless that person is licensed as a professional fiduciary in accordance with this chapter.
(b)This section does not apply to a person licensed as an attorney under the State Bar Act (Chapter 4 (commencing with Section 6000)).
(c)This section does not apply to a person licensed as, and acting within the scope of practice of, a certified public accountant pursuant to Chapter 1 (commencing with Section 5000) of Division 3.
(d)This section does not apply to a person enrolled as an agent to practice before the Internal Revenue Service only when acting within the scope of practice pursuant to Part 10 of Title 31 of the Code of Federal Regulations. Actions taken by an enrolled agent, when serving as a fiduciary, which are beyond the scope of their license to practice as an enrolled agent is unlicensed activity and subject to discipline under Section 146 unless the enrolled agent is also licensed as a professional fiduciary in accordance with this chapter.
SEC. 5.Section 6532 of the Business and Professions Code is amended to read:6532.Only a person who holds a current and active license from the bureau may identify themself as a licensed professional fiduciary.
SEC. 6.Section 6534 of the Business and Professions Code is amended to read:6534.(a)The bureau shall maintain the following information in each licensees file, shall make this information available to a court for any purpose, including the determination of the appropriateness of appointing, continuing the appointment of, or removing, the licensee as a conservator, guardian, trustee, personal representative of decedents estate, agent under a durable power of attorney for health care, agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, and shall otherwise keep this information confidential, except as provided in subdivisions (b) and (c) of this section:
(1)The names of the licensees current conservatees, wards, principals under a durable power of attorney for health care, or principals under a durable power of attorney for finances, and the names of the trusts or estates currently administered by the licensee, whether the case is court supervised or non-court supervised.
(2)The aggregate dollar value of all assets currently under the licensees supervision as a professional fiduciary.
(3)The licensees current addresses and telephone numbers for their place of business and place of residence.
(4)Whether the licensee has ever been removed for cause as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or has ever resigned or settled a matter in which a complaint against the licensee has been filed with the court as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, in a specific case.
(5)The circumstances causing a removal or resignation described in paragraph (4) and the case names, court locations, and case numbers associated with the removal or resignation.
(6)The case names, court locations, and case numbers of all conservatorship, guardianship, trust, or other estate administration cases that are closed for which the licensee served as the conservator, guardian, trustee, agent under a durable power of attorney for finance or health care, personal representative of a decedents estate, or professional fiduciary practice administrator, whether the case is court supervised or non-court supervised.
(7)Information regarding any discipline imposed upon the licensee by the bureau.
(8)Whether the licensee has filed for bankruptcy or held a controlling financial interest in a business that filed for bankruptcy in the last 10 years.
(b)The bureau shall make the information in paragraphs (2), (4), (7), and (8) of subdivision (a) available to the public.
(c)The bureau shall also publish information regarding licensees on the Internet as specified in Section 27. The information shall include, but shall not be limited to, information regarding license status and the information specified under subdivision (b).
SEC. 7.Section 6541.1 of the Business and Professions Code is amended to read:6541.1.(a)A 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.
(b)A canceled license may be reinstated if the applicant satisfies all of the following requirements:
(1)Submits an application for licensure and fulfills all application requirements pursuant to Section 6533.
(2)Completes 15 hours of continuing education during the preceding calendar year in addition to any educational requirements specified in Section 6533.
(3)Submits fingerprint images as specified in Section 6533.5 in order to obtain criminal offender record information.
(4)Passes the licensing examination pursuant to Section 6539.
(5)Not subject to denial of licensure pursuant to Section 480.
SEC. 8.Section 6542 of the Business and Professions Code is amended to read:6542.(a)The bureau may establish, by regulation, a system for the placement of a license into retired status, upon application and submission to the bureau of a statement as required by Section 6561, for a professional fiduciary who is not actively engaged in the practice of a professional fiduciary or any activity that requires them to be licensed by the bureau.
(b)The bureau shall deny an applicants 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 restricted by the bureau, or subject to disciplinary action under this chapter.
(c)The holder of a retired license shall not be required to renew that license or submit an annual statement pursuant to Section 6561.
(d)The bureau shall establish minimum qualifications to place a license in retired status.
(e)The bureau shall establish minimum qualifications for the restoration of a license from retired status to active status. These minimum qualifications shall include, but are not limited to, completion of continuing education hours as provided in subdivision (b) of Section 6538, submission of a statement as provided in subdivision (a) of Section 6561, and payment of a fee as provided in subdivision (e) of Section 6592.
SEC. 9.Section 6543 is added to the Business and Professions Code, to read:6543.(a)A person whose license has been revoked or surrendered may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition. The director may specify a longer period that must elapse, not to exceed three years, in any decision revoking the license, accepting the surrender of the license due to pending disciplinary action, or denying reinstatement of the license.
(b)A person whose license has not been revoked or surrendered but who has been disciplined by imposition of a suspension or otherwise disciplined may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision.
(c)The director shall rule on the petition and impose any terms and conditions that the director reasonably deems appropriate as a condition of reinstatement or reduction of penalty, including, but not limited to, issuing a probationary license or requiring additional continuing education prior to reinstatement.
SEC. 10.Section 6561.5 is added to the Business and Professions Code, to read:6561.5.(a)A licensee shall respond to any written inquiry relating to the investigation of a complaint against a licensee by the bureau within 30 calendar days. The failure of, or refusal by, a licensee to respond to the written inquiry shall constitute a cause for disciplinary action.
(b)A licensee shall provide true and accurate information and responses to questions, subpoenas, interrogatories or other requests for information or documents and not take any action to obstruct any bureau inquiry, investigation, hearing, or proceeding. Any failure to comply with this subdivision shall constitute a cause for disciplinary action.
SEC. 11.Section 6562.5 is added to the Business and Professions Code, to read:6562.5.(a)A licensee shall notify the bureau in writing of their intent not to renew their license and submit a final annual statement in accordance with Section 6561 and Section 4542 of Title 16 of the California Code of Regulations, as it read on January 1, 2023, demonstrating they are no longer subject to licensure under this chapter.
(b)The written notice of nonpractice and final annual statement shall be submitted to the bureau 60 days before closing their business, ceasing practice as a professional fiduciary, or the expiration of their professional fiduciary license, whichever comes first.
(c)The bureau shall provide the licensee with any discrepancies between the final annual statement and the bureaus records and the licensee shall comply with the bureau to address and resolve any outstanding matters.
SEC. 12.Section 6581.1 is added to the Business and Professions Code, to read:6581.1.Aiding or abetting an unlicensed person to evade the provisions of this chapter, or combining or conspiring with an unlicensed person, or allowing ones license to be used by an unlicensed person, or acting as an agent or partner, associate, or otherwise of an unlicensed person, with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action.
SEC. 13.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Notwithstanding any other provision of law, a violation of any code section listed in subdivision (c) is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code when either of the following applies:
(1)A complaint or a written notice to appear in court pursuant to Chapter 5C (commencing with Section 853.5) of Title 3 of Part 2 of the Penal Code is filed in court charging the offense as an infraction unless the defendant, at the time they are arraigned, after being advised of their rights, elects to have the case proceed as a misdemeanor.
(2)The court, with the consent of the defendant and the prosecution, determines that the offense is an infraction in which event the case shall proceed as if the defendant has been arraigned on an infraction complaint.
(b)Subdivision (a) does not apply to a violation of the code sections listed in subdivision (c) if the defendant has had their license, registration, or certificate previously revoked or suspended.
(c)The following sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by this code:
(1)Section 2474.
(2)Sections 2052 and 2054.
(3)Section 2570.3.
(4)Section 2630.
(5)Section 2903.
(6)Section 3575.
(7)Section 3660.
(8)Sections 3760 and 3761.
(9)Section 4080.
(10)Section 4825.
(11)Section 4935.
(12)Section 4980.
(13)Section 4989.50.
(14)Section 4996.
(15)Section 4999.30.
(16)Section 5536.
(17)Section 6530 or 6532.
(18)Section 6704.
(19)Section 6980.10.
(20)Section 7317.
(21)Section 7502 or 7592.
(22)Section 7520.
(23)Section 7617 or 7641.
(24)Subdivision (a) of Section 7872.
(25)Section 8016.
(26)Section 8505.
(27)Section 8725.
(28)Section 9681.
(29)Section 9840.
(30)Subdivision (c) of Section 9891.24.
(31)Section 19049.
(d)Notwithstanding any other law, a violation of any of the sections listed in subdivision (c), which is an infraction, is punishable by a fine of not less than two hundred fifty dollars ($250) and not more than one thousand dollars ($1,000). No portion of the minimum fine may be suspended by the court unless as a condition of that suspension the defendant is required to submit proof of a current valid license, registration, or certificate for the profession or vocation that was the basis for their conviction.
SEC. 2.Section 6510 of the Business and Professions Code is amended to read:6510.(a)There is within the jurisdiction of the department the Professional Fiduciaries Bureau. The bureau is under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief of the bureau, who is responsible to the director. Every power granted or duty imposed upon the director under this chapter may be exercised or performed in the name of the director by a deputy director or by the chief, subject to conditions and limitations as the director may prescribe.
(b)The Governor shall appoint, subject to confirmation by the Senate, the chief of the bureau, at a salary to be fixed and determined by the director with the approval of the Director of Finance. The chief shall serve under the direction and supervision of the director and at the pleasure of the Governor.
(c)(1)This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
(2)Notwithstanding any other provision of law, the repeal of this section renders the bureau subject to review by the appropriate policy committees of the Legislature.
SEC. 3.Section 6511 of the Business and Professions Code is amended to read:6511.(a)There is within the bureau a Professional Fiduciaries Advisory Committee. The committee shall consist of seven members; three of whom shall be licensees actively engaged as professional fiduciaries in this state, and four of whom shall be public members. One of the public members shall be a member of a nonprofit organization advocating on behalf of the elderly, and one of the public members shall be a probate court investigator.
(b)The Governor shall appoint the member from a nonprofit organization advocating on behalf of the elderly, the probate court investigator, and the three licensees. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint a public member.
(c)Except as provided in paragraphs (1) and (2), each member of the committee shall be appointed for a term of four years, and shall hold office until the appointment of their successor or until one year shall have elapsed since the expiration of the term for which they were appointed, whichever first occurs.
(1)Commencing January 1, 2027, the Governor shall appoint a licensee member and a public member from a nonprofit organization advocating on behalf of the elderly to a term of two years each. Commencing January 1, 2029, the Governor shall resume appointing these committee positions to four-year terms.
(2)Commencing January 1, 2027, the Governor shall appoint a licensee member and a probate court investigator to a term of three years each. Commencing January 1, 2030, the Governor shall resume appointing these committee positions to four-year terms.
(d)Vacancies shall be filled by the appointing power for the unexpired portion of the terms in which they occur. A person shall not serve as a member of the committee for more than two consecutive terms.
(e)Every member of the committee shall receive per diem and expenses as provided in Sections 103 and 113.
(f)The committee shall do all of the following:
(1)Examine the functions and policies of the bureau and make recommendations with respect to policies, practices, and regulations as may be deemed important and necessary by the director or the chief to promote the interests of consumers or that otherwise promote the welfare of the public.
(2)Consider and make appropriate recommendations to the bureau in any matter relating to professional fiduciaries in this state.
(3)Provide assistance as may be requested by the bureau in the exercise of its powers or duties.
(4)Meet at least once each quarter. All meetings of the committee shall be public meetings.
(g)The bureau shall meet and consult with the committee regarding general policy issues related to professional fiduciaries.
SEC. 4.Section 6530 of the Business and Professions Code is amended to read:6530.(a)On and after January 1, 2009, no person shall act or hold themself out to the public as a professional fiduciary unless that person is licensed as a professional fiduciary in accordance with this chapter.
(b)This section does not apply to a person licensed as an attorney under the State Bar Act (Chapter 4 (commencing with Section 6000)).
(c)This section does not apply to a person licensed as, and acting within the scope of practice of, a certified public accountant pursuant to Chapter 1 (commencing with Section 5000) of Division 3.
(d)This section does not apply to a person enrolled as an agent to practice before the Internal Revenue Service only when acting within the scope of practice pursuant to Part 10 of Title 31 of the Code of Federal Regulations. Actions taken by an enrolled agent, when serving as a fiduciary, which are beyond the scope of their license to practice as an enrolled agent is unlicensed activity and subject to discipline under Section 146 unless the enrolled agent is also licensed as a professional fiduciary in accordance with this chapter.
SEC. 5.Section 6532 of the Business and Professions Code is amended to read:6532.Only a person who holds a current and active license from the bureau may identify themself as a licensed professional fiduciary.
SEC. 6.Section 6534 of the Business and Professions Code is amended to read:6534.(a)The bureau shall maintain the following information in each licensees file, shall make this information available to a court for any purpose, including the determination of the appropriateness of appointing, continuing the appointment of, or removing, the licensee as a conservator, guardian, trustee, personal representative of decedents estate, agent under a durable power of attorney for health care, agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, and shall otherwise keep this information confidential, except as provided in subdivisions (b) and (c) of this section:
(1)The names of the licensees current conservatees, wards, principals under a durable power of attorney for health care, or principals under a durable power of attorney for finances, and the names of the trusts or estates currently administered by the licensee, whether the case is court supervised or non-court supervised.
(2)The aggregate dollar value of all assets currently under the licensees supervision as a professional fiduciary.
(3)The licensees current addresses and telephone numbers for their place of business and place of residence.
(4)Whether the licensee has ever been removed for cause as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or has ever resigned or settled a matter in which a complaint against the licensee has been filed with the court as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, in a specific case.
(5)The circumstances causing a removal or resignation described in paragraph (4) and the case names, court locations, and case numbers associated with the removal or resignation.
(6)The case names, court locations, and case numbers of all conservatorship, guardianship, trust, or other estate administration cases that are closed for which the licensee served as the conservator, guardian, trustee, agent under a durable power of attorney for finance or health care, personal representative of a decedents estate, or professional fiduciary practice administrator, whether the case is court supervised or non-court supervised.
(7)Information regarding any discipline imposed upon the licensee by the bureau.
(8)Whether the licensee has filed for bankruptcy or held a controlling financial interest in a business that filed for bankruptcy in the last 10 years.
(b)The bureau shall make the information in paragraphs (2), (4), (7), and (8) of subdivision (a) available to the public.
(c)The bureau shall also publish information regarding licensees on the Internet as specified in Section 27. The information shall include, but shall not be limited to, information regarding license status and the information specified under subdivision (b).
SEC. 7.Section 6541.1 of the Business and Professions Code is amended to read:6541.1.(a)A 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.
(b)A canceled license may be reinstated if the applicant satisfies all of the following requirements:
(1)Submits an application for licensure and fulfills all application requirements pursuant to Section 6533.
(2)Completes 15 hours of continuing education during the preceding calendar year in addition to any educational requirements specified in Section 6533.
(3)Submits fingerprint images as specified in Section 6533.5 in order to obtain criminal offender record information.
(4)Passes the licensing examination pursuant to Section 6539.
(5)Not subject to denial of licensure pursuant to Section 480.
SEC. 8.Section 6542 of the Business and Professions Code is amended to read:6542.(a)The bureau may establish, by regulation, a system for the placement of a license into retired status, upon application and submission to the bureau of a statement as required by Section 6561, for a professional fiduciary who is not actively engaged in the practice of a professional fiduciary or any activity that requires them to be licensed by the bureau.
(b)The bureau shall deny an applicants 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 restricted by the bureau, or subject to disciplinary action under this chapter.
(c)The holder of a retired license shall not be required to renew that license or submit an annual statement pursuant to Section 6561.
(d)The bureau shall establish minimum qualifications to place a license in retired status.
(e)The bureau shall establish minimum qualifications for the restoration of a license from retired status to active status. These minimum qualifications shall include, but are not limited to, completion of continuing education hours as provided in subdivision (b) of Section 6538, submission of a statement as provided in subdivision (a) of Section 6561, and payment of a fee as provided in subdivision (e) of Section 6592.
SEC. 9.Section 6543 is added to the Business and Professions Code, to read:6543.(a)A person whose license has been revoked or surrendered may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition. The director may specify a longer period that must elapse, not to exceed three years, in any decision revoking the license, accepting the surrender of the license due to pending disciplinary action, or denying reinstatement of the license.
(b)A person whose license has not been revoked or surrendered but who has been disciplined by imposition of a suspension or otherwise disciplined may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision.
(c)The director shall rule on the petition and impose any terms and conditions that the director reasonably deems appropriate as a condition of reinstatement or reduction of penalty, including, but not limited to, issuing a probationary license or requiring additional continuing education prior to reinstatement.
SEC. 10.Section 6561.5 is added to the Business and Professions Code, to read:6561.5.(a)A licensee shall respond to any written inquiry relating to the investigation of a complaint against a licensee by the bureau within 30 calendar days. The failure of, or refusal by, a licensee to respond to the written inquiry shall constitute a cause for disciplinary action.
(b)A licensee shall provide true and accurate information and responses to questions, subpoenas, interrogatories or other requests for information or documents and not take any action to obstruct any bureau inquiry, investigation, hearing, or proceeding. Any failure to comply with this subdivision shall constitute a cause for disciplinary action.
SEC. 11.Section 6562.5 is added to the Business and Professions Code, to read:6562.5.(a)A licensee shall notify the bureau in writing of their intent not to renew their license and submit a final annual statement in accordance with Section 6561 and Section 4542 of Title 16 of the California Code of Regulations, as it read on January 1, 2023, demonstrating they are no longer subject to licensure under this chapter.
(b)The written notice of nonpractice and final annual statement shall be submitted to the bureau 60 days before closing their business, ceasing practice as a professional fiduciary, or the expiration of their professional fiduciary license, whichever comes first.
(c)The bureau shall provide the licensee with any discrepancies between the final annual statement and the bureaus records and the licensee shall comply with the bureau to address and resolve any outstanding matters.
SEC. 12.Section 6581.1 is added to the Business and Professions Code, to read:6581.1.Aiding or abetting an unlicensed person to evade the provisions of this chapter, or combining or conspiring with an unlicensed person, or allowing ones license to be used by an unlicensed person, or acting as an agent or partner, associate, or otherwise of an unlicensed person, with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action.
SEC. 13.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Notwithstanding any other provision of law, a violation of any code section listed in subdivision (c) is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code when either of the following applies:
(1)A complaint or a written notice to appear in court pursuant to Chapter 5C (commencing with Section 853.5) of Title 3 of Part 2 of the Penal Code is filed in court charging the offense as an infraction unless the defendant, at the time they are arraigned, after being advised of their rights, elects to have the case proceed as a misdemeanor.
(2)The court, with the consent of the defendant and the prosecution, determines that the offense is an infraction in which event the case shall proceed as if the defendant has been arraigned on an infraction complaint.
(b)Subdivision (a) does not apply to a violation of the code sections listed in subdivision (c) if the defendant has had their license, registration, or certificate previously revoked or suspended.
(c)The following sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by this code:
(1)Section 2474.
(2)Sections 2052 and 2054.
(3)Section 2570.3.
(4)Section 2630.
(5)Section 2903.
(6)Section 3575.
(7)Section 3660.
(8)Sections 3760 and 3761.
(9)Section 4080.
(10)Section 4825.
(11)Section 4935.
(12)Section 4980.
(13)Section 4989.50.
(14)Section 4996.
(15)Section 4999.30.
(16)Section 5536.
(17)Section 6530 or 6532.
(18)Section 6704.
(19)Section 6980.10.
(20)Section 7317.
(21)Section 7502 or 7592.
(22)Section 7520.
(23)Section 7617 or 7641.
(24)Subdivision (a) of Section 7872.
(25)Section 8016.
(26)Section 8505.
(27)Section 8725.
(28)Section 9681.
(29)Section 9840.
(30)Subdivision (c) of Section 9891.24.
(31)Section 19049.
(d)Notwithstanding any other law, a violation of any of the sections listed in subdivision (c), which is an infraction, is punishable by a fine of not less than two hundred fifty dollars ($250) and not more than one thousand dollars ($1,000). No portion of the minimum fine may be suspended by the court unless as a condition of that suspension the defendant is required to submit proof of a current valid license, registration, or certificate for the profession or vocation that was the basis for their conviction.
SEC. 2.Section 6510 of the Business and Professions Code is amended to read:6510.(a)There is within the jurisdiction of the department the Professional Fiduciaries Bureau. The bureau is under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief of the bureau, who is responsible to the director. Every power granted or duty imposed upon the director under this chapter may be exercised or performed in the name of the director by a deputy director or by the chief, subject to conditions and limitations as the director may prescribe.
(b)The Governor shall appoint, subject to confirmation by the Senate, the chief of the bureau, at a salary to be fixed and determined by the director with the approval of the Director of Finance. The chief shall serve under the direction and supervision of the director and at the pleasure of the Governor.
(c)(1)This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
(2)Notwithstanding any other provision of law, the repeal of this section renders the bureau subject to review by the appropriate policy committees of the Legislature.
SEC. 3.Section 6511 of the Business and Professions Code is amended to read:6511.(a)There is within the bureau a Professional Fiduciaries Advisory Committee. The committee shall consist of seven members; three of whom shall be licensees actively engaged as professional fiduciaries in this state, and four of whom shall be public members. One of the public members shall be a member of a nonprofit organization advocating on behalf of the elderly, and one of the public members shall be a probate court investigator.
(b)The Governor shall appoint the member from a nonprofit organization advocating on behalf of the elderly, the probate court investigator, and the three licensees. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint a public member.
(c)Except as provided in paragraphs (1) and (2), each member of the committee shall be appointed for a term of four years, and shall hold office until the appointment of their successor or until one year shall have elapsed since the expiration of the term for which they were appointed, whichever first occurs.
(1)Commencing January 1, 2027, the Governor shall appoint a licensee member and a public member from a nonprofit organization advocating on behalf of the elderly to a term of two years each. Commencing January 1, 2029, the Governor shall resume appointing these committee positions to four-year terms.
(2)Commencing January 1, 2027, the Governor shall appoint a licensee member and a probate court investigator to a term of three years each. Commencing January 1, 2030, the Governor shall resume appointing these committee positions to four-year terms.
(d)Vacancies shall be filled by the appointing power for the unexpired portion of the terms in which they occur. A person shall not serve as a member of the committee for more than two consecutive terms.
(e)Every member of the committee shall receive per diem and expenses as provided in Sections 103 and 113.
(f)The committee shall do all of the following:
(1)Examine the functions and policies of the bureau and make recommendations with respect to policies, practices, and regulations as may be deemed important and necessary by the director or the chief to promote the interests of consumers or that otherwise promote the welfare of the public.
(2)Consider and make appropriate recommendations to the bureau in any matter relating to professional fiduciaries in this state.
(3)Provide assistance as may be requested by the bureau in the exercise of its powers or duties.
(4)Meet at least once each quarter. All meetings of the committee shall be public meetings.
(g)The bureau shall meet and consult with the committee regarding general policy issues related to professional fiduciaries.
SEC. 4.Section 6530 of the Business and Professions Code is amended to read:6530.(a)On and after January 1, 2009, no person shall act or hold himself or herself themself out to the public as a professional fiduciary unless that person is licensed as a professional fiduciary in accordance with the provisions of this chapter.
(b)This section does not apply to a person licensed as an attorney under the State Bar Act (Chapter 4 (commencing with Section 6000)).
(c)This section does not apply to a person licensed as, and acting within the scope of practice of, a certified public accountant pursuant to Chapter 1 (commencing with Section 5000) of Division 3.
(d)This section does not apply to a person enrolled as an agent to practice before the Internal Revenue Service who is only when acting within the scope of practice pursuant to Part 10 of Title 31 of the Code of Federal Regulations. Actions taken by an enrolled agent, when serving as a fiduciary, which are beyond the scope of their license to practice as an enrolled agent is unlicensed activity and subject to discipline under Section 146 unless the enrolled agent is also licensed as a professional fiduciary in accordance with this chapter.
SEC. 4.SEC. 5.Section 6532 of the Business and Professions Code is amended to read:6532.Only a person who holds a current and active license from the bureau may identify themself as a licensed professional fiduciary.
SEC. 5.SEC. 6.Section 6534 of the Business and Professions Code is amended to read:6534.(a)The bureau shall maintain the following information in each licensees file, shall make this information available to a court for any purpose, including the determination of the appropriateness of appointing, continuing the appointment of, or removing, the licensee as a conservator, guardian, trustee, personal representative of decedents estate, agent under a durable power of attorney for health care, agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, and shall otherwise keep this information confidential, except as provided in subdivisions (b) and (c) of this section:
(1)The names of the licensees current conservatees, wards, principals under a durable power of attorney for health care, or principals under a durable power of attorney for finances, and the names of the trusts or estates currently administered by the licensee, whether the case is court supervised or non-court supervised.
(2)The aggregate dollar value of all assets currently under the licensees supervision as a professional fiduciary.
(3)The licensees current addresses and telephone numbers for their place of business and place of residence.
(4)Whether the licensee has ever been removed for cause as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or has ever resigned or settled a matter in which a complaint against the licensee has been filed with the court as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, in a specific case.
(5)The circumstances causing a removal or resignation described in paragraph (4) and the case names, court locations, and case numbers associated with the removal or resignation.
(6)The case names, court locations, and case numbers of all conservatorship, guardianship, trust, or other estate administration cases that are closed for which the licensee served as the conservator, guardian, trustee, agent under a durable power of attorney for finance or health care, personal representative of a decedents estate, or professional fiduciary practice administrator, whether the case is court supervised or non-court supervised.
(7)Information regarding any discipline imposed upon the licensee by the bureau.
(8)Whether the licensee has filed for bankruptcy or held a controlling financial interest in a business that filed for bankruptcy in the last 10 years.
(b)The bureau shall make the information in paragraphs (2), (4), (7), and (8) of subdivision (a) available to the public.
(c)The bureau shall also publish information regarding licensees on the Internet as specified in Section 27. The information shall include, but shall not be limited to, information regarding license status and the information specified under subdivision (b).
SEC. 6.SEC. 7.Section 6541.1 of the Business and Professions Code is amended to read:6541.1.(a)A 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.
(b)A canceled license may be reinstated if the applicant satisfies all of the following requirements:
(1)Submits an application for licensure and fulfills all application requirements pursuant to Section 6533.
(2)Completes 15 hours of continuing education during the preceding calendar year in addition to any educational requirements specified in Section 6533.
(3)Submits fingerprint images as specified in Section 6533.5 in order to obtain criminal offender record information.
(4)Passes the licensing examination pursuant to Section 6539.
(5)Not subject to denial of licensure pursuant to Section 480.
SEC. 7.SEC. 8.Section 6542 of the Business and Professions Code is amended to read:6542.(a)The bureau may establish, by regulation, a system for the placement of a license into retired status, upon application and submission to the bureau of a statement as required by Section 6561, for a professional fiduciary who is not actively engaged in the practice of a professional fiduciary or any activity that requires them to be licensed by the bureau.
(b)The bureau shall deny an applicants 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 restricted by the bureau, or subject to disciplinary action under this chapter.
(c)The holder of a retired license shall not be required to renew that license or submit an annual statement pursuant to Section 6561.
(d)The bureau shall establish minimum qualifications to place a license in retired status.
(e)The bureau shall establish minimum qualifications for the restoration of a license from retired status to active status. These minimum qualifications shall include, but are not limited to, completion of continuing education hours as provided in subdivision (b) of Section 6538, submission of a statement as provided in subdivision (a) of Section 6561, and payment of a fee as provided in subdivision (e) of Section 6592.
SEC. 8.SEC. 9.Section 6543 is added to the Business and Professions Code, to read:6543.(a)A person whose license has been revoked or surrendered may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition. The director may specify a longer period that must elapse, not to exceed three years, in any decision revoking the license, accepting the surrender of the license due to pending disciplinary action, or denying reinstatement of the license.
(b)A person whose license has not been revoked or surrendered but who has been disciplined by imposition of a suspension or otherwise disciplined may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision.
(c)The director shall rule on the petition and impose any terms and conditions that the director reasonably deems appropriate as a condition of reinstatement or reduction of penalty, including, but not limited to, issuing a probationary license or requiring additional continuing education prior to reinstatement.
SEC. 9.SEC. 10.Section 6561.5 is added to the Business and Professions Code, to read:6561.5.(a)A licensee shall respond to any written inquiry relating to the investigation of a complaint against a licensee by the bureau within 30 calendar days. The failure of, or refusal by, a licensee to respond to the written inquiry shall constitute a cause for disciplinary action.
(b)A licensee shall provide true and accurate information and responses to questions, subpoenas, interrogatories or other requests for information or documents and not take any action to obstruct any bureau inquiry, investigation, hearing, or proceeding. Any failure to comply with this subdivision shall constitute a cause for disciplinary action.
SEC. 10.SEC. 11.Section 6562.5 is added to the Business and Professions Code, to read:6562.5.(a)A licensee shall notify the bureau in writing of their intent not to renew their license and submit a final annual statement in accordance with Section 6561 and Section 4542 of Title 16 of the California Code of Regulations, as it read on January 1, 2023, demonstrating they are no longer subject to licensure under this chapter.
(b)The written notice of nonpractice and final annual statement shall be submitted to the bureau 60 days before closing their business, ceasing practice as a professional fiduciary, or the expiration of their professional fiduciary license, whichever comes first.
(c)The bureau shall provide the licensee with any discrepancies between the final annual statement and the bureaus records and the licensee shall comply with the bureau to address and resolve any outstanding matters.
SEC. 11.SEC. 12.Section 6581.1 is added to the Business and Professions Code, to read:6581.1.Aiding or abetting an unlicensed person to evade the provisions of this chapter, or combining or conspiring with an unlicensed person, or allowing ones license to be used by an unlicensed person, or acting as an agent or partner, associate, or otherwise of an unlicensed person, with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action.
SEC. 12.SEC. 13.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Notwithstanding any other provision of law, a violation of any code section listed in subdivision (c) is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code when either of the following applies:
(1)A complaint or a written notice to appear in court pursuant to Chapter 5C (commencing with Section 853.5) of Title 3 of Part 2 of the Penal Code is filed in court charging the offense as an infraction unless the defendant, at the time they are arraigned, after being advised of their rights, elects to have the case proceed as a misdemeanor.
(2)The court, with the consent of the defendant and the prosecution, determines that the offense is an infraction in which event the case shall proceed as if the defendant has been arraigned on an infraction complaint.
(b)Subdivision (a) does not apply to a violation of the code sections listed in subdivision (c) if the defendant has had their license, registration, or certificate previously revoked or suspended.
(c)The following sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by this code:
(1)Section 2474.
(2)Sections 2052 and 2054.
(3)Section 2570.3.
(4)Section 2630.
(5)Section 2903.
(6)Section 3575.
(7)Section 3660.
(8)Sections 3760 and 3761.
(9)Section 4080.
(10)Section 4825.
(11)Section 4935.
(12)Section 4980.
(13)Section 4989.50.
(14)Section 4996.
(15)Section 4999.30.
(16)Section 5536.
(17)Section 6530 or 6532.
(18)Section 6704.
(19)Section 6980.10.
(20)Section 7317.
(21)Section 7502 or 7592.
(22)Section 7520.
(23)Section 7617 or 7641.
(24)Subdivision (a) of Section 7872.
(25)Section 8016.
(26)Section 8505.
(27)Section 8725.
(28)Section 9681.
(29)Section 9840.
(30)Subdivision (c) of Section 9891.24.
(31)Section 19049.
(d)Notwithstanding any other law, a violation of any of the sections listed in subdivision (c), which is an infraction, is punishable by a fine of not less than two hundred fifty dollars ($250) and not more than one thousand dollars ($1,000). No portion of the minimum fine may be suspended by the court unless as a condition of that suspension the defendant is required to submit proof of a current valid license, registration, or certificate for the profession or vocation that was the basis for their conviction.
SEC. 2.Section 6510 of the Business and Professions Code is amended to read:6510.(a)There is within the jurisdiction of the department the Professional Fiduciaries Bureau. The bureau is under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief of the bureau, who is responsible to the director. Every power granted or duty imposed upon the director under this chapter may be exercised or performed in the name of the director by a deputy director or by the chief, subject to conditions and limitations as the director may prescribe.
(b)The Governor shall appoint, subject to confirmation by the Senate, the chief of the bureau, at a salary to be fixed and determined by the director with the approval of the Director of Finance. The chief shall serve under the direction and supervision of the director and at the pleasure of the Governor.
(c)(1)This section shall remain in effect only until January 1, 2028, and as of that date is repealed.
(2)Notwithstanding any other provision of law, the repeal of this section renders the bureau subject to review by the appropriate policy committees of the Legislature.
SEC. 3.Section 6511 of the Business and Professions Code is amended to read:6511.(a)There is within the bureau a Professional Fiduciaries Advisory Committee. The committee shall consist of seven members; three of whom shall be licensees actively engaged as professional fiduciaries in this state, and four of whom shall be public members. One of the public members shall be a member of a nonprofit organization advocating on behalf of the elderly, and one of the public members shall be a probate court investigator.
(b)The Governor shall appoint the member from a nonprofit organization advocating on behalf of the elderly, the probate court investigator, and the three licensees. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint a public member.
(c)Except as provided in paragraphs (1) and (2), each member of the committee shall be appointed for a term of four years, and shall hold office until the appointment of their successor or until one year shall have elapsed since the expiration of the term for which they were appointed, whichever first occurs.
(1)Commencing January 1, 2027, the Governor shall appoint a licensee member and a public member from a nonprofit organization advocating on behalf of the elderly to a term of two years each. Commencing January 1, 2029, the Governor shall resume appointing these committee positions to four-year terms.
(2)Commencing January 1, 2027, the Governor shall appoint a licensee member and a probate court investigator to a term of three years each. Commencing January 1, 2030, the Governor shall resume appointing these committee positions to four-year terms.
(d)Vacancies shall be filled by the appointing power for the unexpired portion of the terms in which they occur. A person shall not serve as a member of the committee for more than two consecutive terms.
(e)Every member of the committee shall receive per diem and expenses as provided in Sections 103 and 113.
(f)The committee shall do all of the following:
(1)Examine the functions and policies of the bureau and make recommendations with respect to policies, practices, and regulations as may be deemed important and necessary by the director or the chief to promote the interests of consumers or that otherwise promote the welfare of the public.
(2)Consider and make appropriate recommendations to the bureau in any matter relating to professional fiduciaries in this state.
(3)Provide assistance as may be requested by the bureau in the exercise of its powers or duties.
(4)Meet at least once each quarter. All meetings of the committee shall be public meetings.
(g)The bureau shall meet and consult with the committee regarding general policy issues related to professional fiduciaries.
SEC. 4.Section 6532 of the Business and Professions Code is amended to read:6532.Only a person who holds a current and active license from the bureau may identify themself as a licensed professional fiduciary.
SEC. 5.Section 6534 of the Business and Professions Code is amended to read:6534.(a)The bureau shall maintain the following information in each licensees file, shall make this information available to a court for any purpose, including the determination of the appropriateness of appointing, continuing the appointment of, or removing, the licensee as a conservator, guardian, trustee, personal representative of decedents estate, agent under a durable power of attorney for health care, agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, and shall otherwise keep this information confidential, except as provided in subdivisions (b) and (c) of this section:
(1)The names of the licensees current conservatees, wards, principals under a durable power of attorney for health care, or principals under a durable power of attorney for finances, and the names of the trusts or estates currently administered by the licensee, whether the case is court supervised or non-court supervised.
(2)The aggregate dollar value of all assets currently under the licensees supervision as a professional fiduciary.
(3)The licensees current addresses and telephone numbers for their place of business and place of residence.
(4)Whether the licensee has ever been removed for cause as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or has ever resigned or settled a matter in which a complaint against the licensee has been filed with the court as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, in a specific case.
(5)The circumstances causing a removal or resignation described in paragraph (4) and the case names, court locations, and case numbers associated with the removal or resignation.
(6)The case names, court locations, and case numbers of all conservatorship, guardianship, trust, or other estate administration cases that are closed for which the licensee served as the conservator, guardian, trustee, agent under a durable power of attorney for finance or health care, personal representative of a decedents estate, or professional fiduciary practice administrator, whether the case is court supervised or non-court supervised.
(7)Information regarding any discipline imposed upon the licensee by the bureau.
(8)Whether the licensee has filed for bankruptcy or held a controlling financial interest in a business that filed for bankruptcy in the last 10 years.
(b)The bureau shall make the information in paragraphs (2), (4), (7), and (8) of subdivision (a) available to the public.
(c)The bureau shall also publish information regarding licensees on the Internet as specified in Section 27. The information shall include, but shall not be limited to, information regarding license status and the information specified under subdivision (b).
SEC. 6.Section 6541.1 of the Business and Professions Code is amended to read:6541.1.(a)A 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.
(b)A canceled license may be reinstated if the applicant satisfies all of the following requirements:
(1)Submits an application for licensure and fulfills all application requirements pursuant to Section 6533.
(2)Completes 15 hours of continuing education during the preceding calendar year in addition to any educational requirements specified in Section 6533.
SEC. 7.Section 6542 of the Business and Professions Code is amended to read:6542.(a)The bureau may establish, by regulation, a system for the placement of a license into retired status, upon application and submission to the bureau of a statement as required by Section 6561, for a professional fiduciary who is not actively engaged in the practice of a professional fiduciary or any activity that requires them to be licensed by the bureau.
(b)The bureau shall deny an applicants 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 restricted by the bureau, or subject to disciplinary action under this chapter.
(c)The holder of a retired license shall not be required to renew that license or submit an annual statement pursuant to Section 6561.
(d)The bureau shall establish minimum qualifications to place a license in retired status.
(e)The bureau shall establish minimum qualifications for the restoration of a license from retired status to active status. These minimum qualifications shall include, but are not limited to, completion of continuing education hours as provided in subdivision (b) of Section 6538, submission of a statement as provided in subdivision (a) of Section 6561, and payment of a fee as provided in subdivision (e) of Section 6592.
SEC. 8.Section 6543 is added to the Business and Professions Code, to read:6543.(a)A person whose license has been revoked or surrendered may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition. The director may specify a longer period that must elapse, not to exceed three years, in any decision revoking the license, accepting the surrender of the license due to pending disciplinary action, or denying reinstatement of the license.
(b)A person whose license has not been revoked or surrendered but who has been disciplined by imposition of a suspension or otherwise disciplined may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision.
(c)The director shall rule on the petition and impose any terms and conditions that the director reasonably deems appropriate as a condition of reinstatement or reduction of penalty, including, but not limited to, issuing a probationary license or requiring additional continuing education prior to reinstatement.
SEC. 9.Section 6561.5 is added to the Business and Professions Code, to read:6561.5.(a)A licensee shall respond to any written inquiry relating to the investigation of a complaint against a licensee by the bureau within 30 calendar days. The failure of, or refusal by, a licensee to respond to the written inquiry shall constitute a cause for disciplinary action.
(b)A licensee shall provide true and accurate information and responses to questions, subpoenas, interrogatories or other requests for information or documents and not take any action to obstruct any bureau inquiry, investigation, hearing, or proceeding. Any failure to comply with this subdivision shall constitute a cause for disciplinary action.
SEC. 10.Section 6562.5 is added to the Business and Professions Code, to read:6562.5.(a)A licensee shall notify the bureau in writing of their intent not to renew their license and submit a final annual statement in accordance with Section 6561 and Section 4542 of Title 16 of the California Code of Regulations, as it read on January 1, 2023, demonstrating they are no longer subject to licensure under this chapter.
(b)The written notice of nonpractice and final annual statement shall be submitted to the bureau 60 days before closing their business, ceasing practice as a professional fiduciary, or the expiration of their professional fiduciary license, whichever comes first.
(c)The bureau shall provide the licensee with any discrepancies between the final annual statement and the bureaus records and the licensee shall comply with the bureau to address and resolve any outstanding matters.
SEC. 11.Section 6581.1 is added to the Business and Professions Code, to read:6581.1.Aiding or abetting an unlicensed person to evade the provisions of this chapter, or combining or conspiring with an unlicensed person, or allowing ones license to be used by an unlicensed person, or acting as an agent or partner, associate, or otherwise of an unlicensed person, with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action.
SEC. 12.Section 2401 of the Probate Code is amended to read:2401.(a)The guardian or conservator, or limited conservator to the extent specifically and expressly provided in the appointing courts order, has the management and control of the estate and, in managing and controlling the estate, shall use ordinary care and diligence. What constitutes use of ordinary care and diligence is determined by all the circumstances of the particular estate.(b)The guardian or conservator:(1)Shall exercise a power to the extent that ordinary care and diligence requires that the power be exercised.(2)Shall not exercise a power to the extent that ordinary care and diligence requires that the power not be exercised.(c)Notwithstanding any other law, a guardian or conservator who is not a trust company, or an employee of that guardian or conservator, in exercising their powers, may not hire or refer any business to an entity in which the guardian or conservator or an employee has a financial interest. For the purposes of this subdivision, financial interest shall mean (1) an ownership interest in a sole proprietorship, a partnership, or a closely held corporation, or (2) an ownership interest of greater than 1 percent of the outstanding shares in a publicly held corporation, or (3) being an officer or a director of a corporation.(d)Subdivision (c) does not prohibit a professional fiduciary appointed as a guardian or conservator in the course of providing services as a guardian or conservator from using the services of their employees and seeking compensation for those services as part of their fee request.(e)(1)Notwithstanding any other law, a guardian or conservator who is a trust company, in exercising its powers may not, except upon authorization of the court, invest in securities of the trust company or an affiliate or subsidiary, or other securities from which the trust company or affiliate or subsidiary receives a financial benefit or in a mutual fund, other than a mutual fund authorized in paragraph (5) of subdivision (a) of Section 2574, registered under the Investment Company Act of 1940 (Subchapter 1 (commencing with Sec. 80a-1) of Chapter 2D of Title 15 of the United States Code), to which the trust company or its affiliate provides services, including, but not limited to, services as an investment adviser, sponsor, distributor, custodian, agent, registrar, administrator, servicer, or manager, and for which the trust company or its affiliate receives compensation.(2)Before authorization from the court, the guardian or conservator shall disclose to the court in writing the trust companys financial interest.SEC. 13.SEC. 12.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
(a)Notwithstanding any other provision of law, a violation of any code section listed in subdivision (c) is an infraction subject to the procedures described in Sections 19.6 and 19.7 of the Penal Code when either of the following applies:
(1)A complaint or a written notice to appear in court pursuant to Chapter 5C (commencing with Section 853.5) of Title 3 of Part 2 of the Penal Code is filed in court charging the offense as an infraction unless the defendant, at the time he or she is they are arraigned, after being advised of his or her their rights, elects to have the case proceed as a misdemeanor.
(2)The court, with the consent of the defendant and the prosecution, determines that the offense is an infraction in which event the case shall proceed as if the defendant has been arraigned on an infraction complaint.
(b)Subdivision (a) does not apply to a violation of the code sections listed in subdivision (c) if the defendant has had his or her their license, registration, or certificate previously revoked or suspended.
(c)The following sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by this code:
(1)Section 2474.
(2)Sections 2052 and 2054.
(3)Section 2570.3.
(4)Section 2630.
(5)Section 2903.
(6)Section 3575.
(7)Section 3660.
(8)Sections 3760 and 3761.
(9)Section 4080.
(10)Section 4825.
(11)Section 4935.
(12)Section 4980.
(13)Section 4989.50.
(14)Section 4996.
(15)Section 4999.30.
(16)Section 5536.
(17)Section 6530 or 6532.
(17)(18)Section 6704.
(18)(19)Section 6980.10.
(19)(20)Section 7317.
(20)(21)Section 7502 or 7592.
(21)(22)Section 7520.
(22)(23)Section 7617 or 7641.
(23)(24)Subdivision (a) of Section 7872.
(24)(25)Section 8016.
(25)(26)Section 8505.
(26)(27)Section 8725.
(27)(28)Section 9681.
(28)(29)Section 9840.
(29)(30)Subdivision (c) of Section 9891.24.
(30)(31)Section 19049.
(d)Notwithstanding any other law, a violation of any of the sections listed in subdivision (c), which is an infraction, is punishable by a fine of not less than two hundred fifty dollars ($250) and not more than one thousand dollars ($1,000). No portion of the minimum fine may be suspended by the court unless as a condition of that suspension the defendant is required to submit proof of a current valid license, registration, or certificate for the profession or vocation that was the basis for his or her their conviction.
SEC. 2.Section 6510 of the Business and Professions Code is amended to read:6510.(a)There is within the jurisdiction of the department the Professional Fiduciaries Bureau. The bureau is under the supervision and control of the director. The duty of enforcing and administering this chapter is vested in the chief of the bureau, who is responsible to the director. Every power granted or duty imposed upon the director under this chapter may be exercised or performed in the name of the director by a deputy director or by the chief, subject to conditions and limitations as the director may prescribe.
(b)The Governor shall appoint, subject to confirmation by the Senate, the chief of the bureau, at a salary to be fixed and determined by the director with the approval of the Director of Finance. The chief shall serve under the direction and supervision of the director and at the pleasure of the Governor.
(c)(1)This section shall remain in effect only until January 1, 2024, 2028, and as of that date is repealed.
(2)Notwithstanding any other provision of law, the repeal of this section renders the bureau subject to review by the appropriate policy committees of the Legislature.
(3)Notwithstanding any other law, upon the repeal of this section, the responsibilities and jurisdiction of the bureau shall be transferred to the Professional Fiduciaries Advisory Committee, as provided by Section 6511.SEC. 3.Section 6511 of the Business and Professions Code is amended to read:6511.(a)There is within the bureau a Professional Fiduciaries Advisory Committee. The committee shall consist of seven members; three of whom shall be licensees actively engaged as professional fiduciaries in this state, and four of whom shall be public members. One of the public members shall be a member of a nonprofit organization advocating on behalf of the elderly, and one of the public members shall be a probate court investigator.
(b)The Governor shall appoint the member from a nonprofit organization advocating on behalf of the elderly, the probate court investigator, and the three licensees. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint a public member.
(b)Each(c)Except as provided in paragraphs (1) and (2), each member of the committee shall be appointed for a term of four years, and shall hold office until the appointment of his or her their successor or until one year shall have elapsed since the expiration of the term for which he or she was they were appointed, whichever first occurs.
(1)Commencing January 1, 2027, the Governor shall appoint a licensee member and a public member from a nonprofit organization advocating on behalf of the elderly to a term of two years each. Commencing January 1, 2029, the Governor shall resume appointing these committee positions to four-year terms.
(2)Commencing January 1, 2027, the Governor shall appoint a licensee member and a probate court investigator to a term of three years each. Commencing January 1, 2030, the Governor shall resume appointing these committee positions to four-year terms.
(c)(d)Vacancies shall be filled by the appointing power for the unexpired portion of the terms in which they occur. No A person shall not serve as a member of the committee for more than two consecutive terms.
(d)The Governor shall appoint the member from a nonprofit organization advocating on behalf of the elderly, the probate court investigator, and the three licensees. The Senate Committee on Rules and the Speaker of the Assembly shall each appoint a public member.(e)Every member of the committee shall receive per diem and expenses as provided in Sections 103 and 113.
(f)The committee shall do all of the following:
(1)Examine the functions and policies of the bureau and make recommendations with respect to policies, practices, and regulations as may be deemed important and necessary by the director or the chief to promote the interests of consumers or that otherwise promote the welfare of the public.
(2)Consider and make appropriate recommendations to the bureau in any matter relating to professional fiduciaries in this state.
(3)Provide assistance as may be requested by the bureau in the exercise of its powers or duties.
(4)Meet at least once each quarter. All meetings of the committee shall be public meetings.
(g)The bureau shall meet and consult with the committee regarding general policy issues related to professional fiduciaries.
(h)Notwithstanding any other provision of law, if the bureau becomes inoperative or is repealed in accordance with Section 6510, or by subsequent acts, the committee shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the bureau and its chief. The succession of the committee to the functions of the bureau as provided in this subdivision shall establish the committee as the Professional Fiduciaries Committee in the department within the meaning of Section 22, and all references to the bureau in this code shall be considered as references to the committee.SECTION 1.SEC. 4.Section 6532 of the Business and Professions Code is amended to read:6532.Only a person who holds a current and active license from the bureau may identify themself as a licensed professional fiduciary.
SEC. 5.Section 6534 of the Business and Professions Code is amended to read:6534.(a)The bureau shall maintain the following information in each licensees file, shall make this information available to a court for any purpose, including the determination of the appropriateness of appointing, continuing the appointment of, or removing, the licensee as a conservator, guardian, trustee, personal representative of decedents estate, agent under a durable power of attorney for health care, agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, and shall otherwise keep this information confidential, except as provided in subdivisions (b) and (c) of this section:
(1)The names of the licensees current conservatees, wards, principals under a durable power of attorney for health care, or principals under a durable power of attorney for finances, and the names of the trusts or estates currently administered by the licensee, whether the case is court supervised or non-court supervised.
(2)The aggregate dollar value of all assets currently under the licensees supervision as a professional fiduciary.
(3)The licensees current addresses and telephone numbers for their place of business and place of residence.
(4)Whether the licensee has ever been removed for cause as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or has ever resigned or settled a matter in which a complaint against the licensee has been filed with the court as a conservator, guardian, trustee, personal representative of a decedents estate, agent under a durable power of attorney for health care, or agent under a durable power of attorney for finances, or a position arising from an appointment as a professional fiduciary practice administrator, in a specific case, the case.
(5)The circumstances causing that a removal or resignation, resignation described in paragraph (4) and the case names, court locations, and case numbers associated with the removal or resignation.
(5)(6)The case names, court locations, and case numbers of all conservatorship, guardianship, trust, or other estate administration cases that are closed for which the licensee served as the conservator, guardian, trustee, agent under a durable power of attorney for finance or health care, personal representative of a decedents estate, or professional fiduciary practice administrator, whether the case is court supervised or non-court supervised.
(6)(7)Information regarding any discipline imposed upon the licensee by the bureau.
(7)(8)Whether the licensee has filed for bankruptcy or held a controlling financial interest in a business that filed for bankruptcy in the last 10 years.
(b)The bureau shall make the information in paragraphs (2), (4), (6), and (7) (7), and (8) of subdivision (a) available to the public.
(c)The bureau shall also publish information regarding licensees on the Internet as specified in Section 27. The information shall include, but shall not be limited to, information regarding license status and the information specified under subdivision (b).
SEC. 6.Section 6541.1 of the Business and Professions Code is amended to read:6541.1.(a)A 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.
(b)A canceled license may be reinstated if the applicant satisfies all of the following requirements:
(1)Submits an application for licensure and fulfills all application requirements pursuant to Section 6533.
(2)Completes 15 hours of continuing education during the preceding calendar year in addition to any educational requirements specified in Section 6533.
SEC. 7.Section 6542 of the Business and Professions Code is amended to read:6542.(a)The bureau may establish, by regulation, a system for the placement of a license into retired status, upon application and submission to the bureau of a statement as required by Section 6561, for a professional fiduciary who is not actively engaged in the practice of a professional fiduciary or any activity that requires him or her them to be licensed by the bureau.
(b)The bureau shall deny an applicants 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 under this chapter.
(c)The holder of a retired license shall not be required to renew that license. license or submit an annual statement pursuant to Section 6561.
(d)The bureau shall establish minimum qualifications to place a license in retired status.
(e)The bureau shall establish minimum qualifications for the restoration of a license from retired status to active status. These minimum qualifications shall include, but are not limited to, completion of continuing education hours as provided in subdivision (b) of Section 6538, submission of a statement as provided in subdivision (a) of Section 6561, and payment of a fee as provided in subdivision (e) of Section 6592.
SEC. 8.Section 6543 is added to the Business and Professions Code, to read:6543.(a)A person whose license has been revoked or surrendered may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition. The director may specify a longer period that must elapse, not to exceed three years, in any decision revoking the license, accepting the surrender of the license due to pending disciplinary action, or denying reinstatement of the license.
(b)A person whose license has not been revoked or surrendered but who has been disciplined by imposition of a suspension or otherwise disciplined may petition the bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision.
(c)The director shall rule on the petition and impose any terms and conditions that the director reasonably deems appropriate as a condition of reinstatement or reduction of penalty, including, but not limited to, issuing a probationary license or requiring additional continuing education prior to reinstatement.
SEC. 9.Section 6561.5 is added to the Business and Professions Code, to read:6561.5.(a)A licensee shall respond to any written inquiry relating to the investigation of a complaint against a licensee by the bureau within 30 calendar days. The failure of, or refusal by, a licensee to respond to the written inquiry shall constitute a cause for disciplinary action.
(b)A licensee shall provide true and accurate information and responses to questions, subpoenas, interrogatories or other requests for information or documents and not take any action to obstruct any bureau inquiry, investigation, hearing, or proceeding. Any failure to comply with this subdivision shall constitute a cause for disciplinary action.
SEC. 10.Section 6562.5 is added to the Business and Professions Code, to read:6562.5.(a)A licensee shall notify the bureau in writing of their intent not to renew their license and submit a final annual statement in accordance with Section 6561 and Section 4542 of Title 16 of the California Code of Regulations, as it read on January 1, 2023, demonstrating they are no longer subject to licensure under this chapter.
(b)The written notice of nonpractice and final annual statement shall be submitted to the bureau 60 days before closing their business, ceasing practice as a professional fiduciary, or the expiration of their professional fiduciary license, whichever comes first.
(c)The bureau shall provide the licensee with any discrepancies between the final annual statement and the bureaus records and the licensee shall comply with the bureau to address and resolve any outstanding matters.
SEC. 11.Section 6581.1 is added to the Business and Professions Code, to read:6581.1.Aiding or abetting an unlicensed person to evade the provisions of this chapter, or combining or conspiring with an unlicensed person, or allowing ones license to be used by an unlicensed person, or acting as an agent or partner, associate, or otherwise of an unlicensed person, with the intent to evade the provisions of this chapter constitutes a cause for disciplinary action.
SEC. 12.Section 2401 of the Probate Code is amended to read:2401.(a)The guardian or conservator, or limited conservator to the extent specifically and expressly provided in the appointing courts order, has the management and control of the estate and, in managing and controlling the estate, shall use ordinary care and diligence. What constitutes use of ordinary care and diligence is determined by all the circumstances of the particular estate.
(b)The guardian or conservator:
(1)Shall exercise a power to the extent that ordinary care and diligence requires that the power be exercised.
(2)Shall not exercise a power to the extent that ordinary care and diligence requires that the power not be exercised.
(c)Notwithstanding any other law, a guardian or conservator who is not a trust company, or an employee of that guardian or conservator, in exercising their powers, may not hire or refer any business to an entity in which the guardian or conservator or an employee has a financial interest. For the purposes of this subdivision, financial interest shall mean (1) an ownership interest in a sole proprietorship, a partnership, or a closely held corporation, or (2) an ownership interest of greater than 1 percent of the outstanding shares in a publicly held corporation, or (3) being an officer or a director of a corporation.
(d)Subdivision (c) does not prohibit a professional fiduciary appointed as a guardian or conservator from hiring and compensating individuals as employees, with court approval. in the course of providing services as a guardian or conservator from using the services of their employees and seeking compensation for those services as part of their fee request.
(e)(1)Notwithstanding any other law, a guardian or conservator who is a trust company, in exercising its powers may not, except upon authorization of the court, invest in securities of the trust company or an affiliate or subsidiary, or other securities from which the trust company or affiliate or subsidiary receives a financial benefit or in a mutual fund, other than a mutual fund authorized in paragraph (5) of subdivision (a) of Section 2574, registered under the Investment Company Act of 1940 (Subchapter 1 (commencing with Sec. 80a-1) of Chapter 2D of Title 15 of the United States Code), to which the trust company or its affiliate provides services, including, but not limited to, services as an investment adviser, sponsor, distributor, custodian, agent, registrar, administrator, servicer, or manager, and for which the trust company or its affiliate receives compensation.
(2)Before authorization from the court, the guardian or conservator shall disclose to the court in writing the trust companys financial interest.
SEC. 13.No reimbursement is required by this act pursuant to Section 6 of Article XIIIB of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIIIB of the California Constitution.
A Only a person who has been licensed by holds a current and active license from the bureau may identify himself or herself themself as a licensed professional fiduciary.
|
Date
|
Status
|
|---|---|
| Oct 10, 2023 | Chaptered by Secretary of State - Chapter 680, Statutes of 2023. |
| Oct 10, 2023 | Approved by the Governor. |
| Sep 21, 2023 | Enrolled and presented to the Governor at 3:30 p.m. |
| Sep 14, 2023 | Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 80. Noes 0. Page 3553.). |
| Sep 13, 2023 | In Assembly. Concurrence in Senate amendments pending. |
| Sep 13, 2023 | Read third time. Passed. Ordered to the Assembly. (Ayes 39. Noes 0. Page 2767.). |
| Sep 8, 2023 | Ordered to special consent calendar. |
| Sep 5, 2023 | Read second time. Ordered to third reading. |
| Sep 1, 2023 | Read second time and amended. Ordered returned to second reading. |
| Sep 1, 2023 | From committee: Amend, and do pass as amended. (Ayes 7. Noes 0.) (September 1). |
| Aug 14, 2023 | In committee: Referred to APPR suspense file. |
| Jul 7, 2023 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jul 6, 2023 | In committee: Set, first hearing. Hearing canceled at the request of author. |
| Jul 6, 2023 | Withdrawn from committee. |
| Jul 6, 2023 | Re-referred to Com. on APPR. |
| Jul 5, 2023 | From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on JUD. |
| Jun 26, 2023 | From committee: Do pass and re-refer to Com. on JUD. (Ayes 13. Noes 0.) (June 26). Re-referred to Com. on JUD. |
| Jun 14, 2023 | In committee: Hearing postponed by committee. |
| Jun 7, 2023 | Referred to Coms. on B., P. & E. D. and JUD. |
| May 26, 2023 | In Senate. Read first time. To Com. on RLS. for assignment. |
| May 25, 2023 | Read third time. Passed. Ordered to the Senate. (Ayes 77. Noes 0. Page 1773.) |
| May 18, 2023 | Read second time. Ordered to third reading. |
| May 18, 2023 | From committee: Do pass. (Ayes 15. Noes 0.) (May 18). |
| May 10, 2023 | In committee: Set, first hearing. Referred to APPR. suspense file. |
| Apr 26, 2023 | From committee: Do pass and re-refer to Com. on APPR. with recommendation: To Consent Calendar. (Ayes 16. Noes 0.) (April 25). Re-referred to Com. on APPR. |
| Apr 24, 2023 | Re-referred to Com. on B. & P. |
| Apr 20, 2023 | From committee chair, with author's amendments: Amend, and re-refer to Com. on B. & P. Read second time and amended. |
| Mar 2, 2023 | Referred to Com. on B. & P. |
| Feb 17, 2023 | From printer. May be heard in committee March 19. |
| Feb 16, 2023 | Read first time. To print. |
|
Date
|
Description
|
Location
|
Votes
|
|
|---|---|---|---|---|
| Sep 14, 2023 | AB 1262 Berman Concurrence in Senate Amendments | Assembly Floor |
Passed |
|
| Sep 13, 2023 | Special Consent AB1262 Berman et al. By Roth | Senate Floor |
Passed |
|
| Sep 1, 2023 | Do pass as amended | Senate Standing Committee on Appropriations |
Passed |
|
| Aug 14, 2023 | Placed on suspense file | Senate Standing Committee on Appropriations |
Passed |
|
| Jun 26, 2023 | Do pass, but first be re-referred to the Committee on [Judiciary] | Senate Standing Committee on Business, Professions and Economic Development |
Passed |
|
| May 25, 2023 | AB 1262 Business and Professions Assembly Third Reading By BERMAN | Assembly Floor |
Passed |
|
| May 18, 2023 | Do pass. | Assembly Standing Committee on Appropriations |
Passed |
|
| Apr 25, 2023 | Do pass and be re-referred to the Committee on [Appropriations] with recommendation: To Consent Calendar | Assembly Standing Committee on Business and Professions |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
|
Organization
|
Position
|
Date
|
|---|---|---|
| Professional Fiduciary Association Of California | * Support | Jun 26, 2023 |
CONCURRENCE IN SENATE AMENDMENTS
CSA1 Bill Id:AB 1262
Author:(Berman)
As Amended Ver:September 1, 2023
Majority vote
SUMMARY
Extends the sunset date for the Professional Fiduciaries Bureau (Bureau) until January 1, 2028 and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process.
Senate Amendments
- Strike language previously proposed in the bill to clarify a guardian or conservator's ability to utilize and compensate their employees.
- Clarify that the existing exemption from fiduciary licensure for persons enrolled as agents to practice before the Internal Revenue Service only applies when an enrolled agent is acting within their own scope of practice.
COMMENTS
In order to ensure that California's myriad professional boards and bureaus are meeting the state's public protection priorities, authorizing statutes for these regulatory bodies are subject to statutory dates of repeal, at which point the entity "sunsets" unless the date is extended by the Legislature. The sunset process provides a regular forum for discussion around the successes and challenges of various programs and the consideration of proposed changes to laws governing the regulation of professionals. Legislation is then subsequently introduced extending the repeal date for the entity along with any reforms identified during the sunset review process.
The background paper for the Bureau's sunset review oversight hearing contained a total of 16 issues and recommendations, each of which is eligible to result in statutory changes enacted through the Bureau's sunset bill.
Issue #1 in the sunset background paper related to the Professional Fiduciaries Act's so-called
"reverse sunset provision." Statute provides that "if the Bureau becomes inoperative or is repealed … the [Professional Fiduciaries Advisory Committee] shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the Bureau and its chief." This statute would have the effect of reconstituting the Advisory Committee as a traditional regulatory board, empowered to continue enforcement of the Act. In his signing message for Senate Bill 1550, Governor Schwarzenegger stated that he intended to seek legislative action in the following session to "clean up" the bill by removing the reverse sunset language, which he believed was "unnecessary and complicated."
However, the language was never repealed. Seventeen years later, this bill would remove the Bureau's reverse sunset provision and strike references to its Advisory Committee assuming its duties. The Bureau would still be subject to the traditional sunset process, and the Legislature would remain fully empowered to provide for any alternative form of regulation of professional fiduciaries were the Bureau to ever be repealed.
Issue #2 raised a concern that every member of the Bureau's Advisory Committee is currently scheduled to term out at the same time. This issue was initially raised by the Bureau in its sunset report. The Bureau pointed out that the alignment of the Advisory Committee's term expirations is not fortuitous and potentially places a strain upon the appointing authorities to reconstitute the entire committee membership. Further, the Advisory Committee would immediately lose all institutional expertise upon the members' departure. The Bureau has therefore suggested that the terms of three Advisory Committee members be temporarily set to two years each, instead of four, so as to stagger the terms. This bill contains language to implement the Bureau's recommendation.
Issue #3 questioned whether the Bureau should continue to be required to publish potentially sensitive personal information in court documents on its website. Statute requires the Bureau to publish information on its website regarding its licensees, including details relating to probate cases involving a professional fiduciary who has been removed or resigned. This information includes case names, locations, and case numbers that can be personally identifying for conservatees and other individuals. The Bureau expressed concern that "this information can expose vulnerable people to serious consumer harm." This bill would resolve that concern by narrowing statute to allow more limited disclosure of information relating to a professional fiduciary who has been removed or resigned in a matter.
Issue #5 raised the issue of the Bureau's long-term financial sustainability in light of its comparatively small licensee population and its high fees, which the Bureau has indicated will potentially need to be adjusted even higher in the future. This issue has been raised repeatedly throughout the Bureau's existence. The background paper for the Bureau's first sunset review in 2011 repeated contemporary assertions that "the Bureau struggled for viability, having a scarcity of licensees and minimal revenues." The issue was also raised in the Bureau's 2014 and 2018 sunset review background papers. One proposed solution has been to increase the Bureau's licensee population by removing or narrowing existing exemptions for certain professions currently exempted from licensure as professional fiduciaries. For example, some stakeholders have proposed eliminating the current exemption for enrolled agents acting within their scope of practice, arguing that the services required of a professional fiduciary acting in a representative capacity extend well beyond tax return preparation. While this bill does not repeal that exemption, it does add language to expressly provide that the exemption only applies when an enrolled agent is acting within their current of practice. The bill additionally clarifes any other activities by an enrolled agent that are within the scope of a fiduciary constitute unlicensed practice.
Issue #7 pointed out that the Professional Fiduciaries Act does not currently provide the Bureau with clear authority to reinstate or deny reinstatement to former licensees, under any circumstances. Current law prohibits the Bureau from renewing, restoring, or reinstating a license that has been canceled, but otherwise offers no criteria for determining if a former licensee warrants having their license restored by the Bureau. The Bureau stated that it believes the Act should be amended to expressly authorize the Bureau to grant or deny a petition for reinstatement of a license, and to provide criteria for the Bureau to consider in determining whether the individual seeking reinstatement poses no discernable public harm and has sufficiently met certain requirements. This bill contains language to implement that recommendation.
Issue #8 related to non-renewing licensees. The Bureau reported that if a professional fiduciary does not renew their license, it may be because they no longer intend to work as a professional fiduciary. However, if a license is not renewed, the licensee may not report final case closures to the Bureau and the Bureau may seek disciplinary action under the assumption that the professional fiduciary is continuing to practice without an active license. The Bureau proposed that licensees be required to provide notice that they no longer intend to practice, regardless of the licensee's status and provide a final annual statement to close out any remaining cases. This bill contains language to implement that recommendation.
Issue #10 proposed giving the Bureau explicit authority to discipline active licensees who aid and abet unlicensed practice. In its sunset report, the Bureau expressed concern that some individuals whose professional fiduciary license has been disciplined by the Bureau, either by revocation or stipulated surrender, simply transfer their cases to their business partners, employers, or coworkers who are actively licensed professional fiduciaries, thereby keeping access to their former clients/cases and the potential to continue working despite being unlicensed. While unlicensed practice itself is an enforceable offense, the Bureau does not have clear authority to discipline licensees who aid and abet it. The Bureau proposed that the Professional Fiduciaries Act be amended to give the Bureau express authority to discipline licensees who aid and abet unlicensed individuals engaged in the practice of a professional fiduciary. This bill currently contains language to implement that recommendation. However, the Committee intends to engage in further discussion with stakeholders to ensure that this language is not excessively broad or at risk of proscribing a licensee's lawful use of unlicensed persons under appropriate circumstances.
Issue #11 discussed how the Bureau could more effectively compel cooperation from licensees during investigations. According to the Bureau, there have been instances where licensees have failed to cooperate with Bureau staff during investigations, and the Bureau lacks tools to compel compliance when licensees ignore the Bureau's inquiries or provide incomplete information. The Bureau proposed that failure to cooperate with an investigation be made an express form of unprofessional conduct; this bill contains language to implement that recommendation.
Issue #12 related to unlicensed activity. Currently, the Bureau can impose an administrative citation and fine up to $5,000 for unlicensed activity, but the Bureau has stated that unlicensed individuals simply ignore the citation. While other practice acts under the Business and Professions Code provide that unlicensed activity is punishable as a misdemeanor, this is not the case for the Professional Fiduciaries Act. The Bureau believes that in order to meaningfully pursue unlicensed activity outside of issuing administrative sanctions, the law should be amended to criminalize unlicensed practice, consistent with other regulated professions.
Issue #16 raised the traditional question of whether the licensing of professional fiduciaries should be continued and be regulated by the Bureau. The sunset background paper acknowledged that persistent questions remain unresolved regarding the Bureau's long-term sustainability as an independent regulatory agency. However, the sunset background paper concluded that the argument for the Bureau continuing to license and regulate professional fiduciaries remains cogent and that if an extension of the Bureau as it currently exists is ultimately deemed practicable, then preserving that regulatory structure should likely be considered ideal. This bill would extend the Bureau's repeal date by an additional four years.
According to the Author
"This bill is the sunset review vehicle for the Professional Fiduciaries Bureau, authored by the Assembly Business and Professions Committee. The bill extends the sunset date for the Bureau and enacts technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process."
Arguments in Support
None on file.
Arguments in Opposition
None on file.
FISCAL COMMENTS
According to the Senate Committee Appropriations, the 2023-24 Budget Act provides approximately $1.09 million to support the continued operation of the Bureau's licensing and enforcement activities; new costs of approximately $32,000 to update regulations and address additional complaints, which is anticipated to be absorbable within the Bureau's existing resources, and $5,000 for the Office of Information Services within the Department of Consumer Affairs to update enforcement codes, which is anticipated to be absorbable.
VOTES:
ASM BUSINESS AND PROFESSIONS: 16-0-2
YES: Berman, Flora, Alanis, Alvarez, Bonta, Dixon, Gipson, Grayson, Irwin, Jackson, Lee, Lowenthal, McKinnor, Stephanie Nguyen, Joe Patterson, Ting
ABS, ABST OR NV: Chen, McCarty
ASM APPROPRIATIONS: 15-0-1
YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega
ABS, ABST OR NV: Robert Rivas
ASSEMBLY FLOOR: 77-0-3
YES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones‑Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie‑Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon
ABS, ABST OR NV: Aguiar-Curry, Mathis, Papan
SENATE FLOOR: 39-0-1
YES: Allen, Alvarado-Gil, Archuleta, Ashby, Atkins, Becker, Blakespear, Bradford, Cortese, Dahle, Dodd, Durazo, Eggman, Glazer, Gonzalez, Grove, Hurtado, Jones, Laird, Limón, McGuire, Menjivar, Min, Newman, Nguyen, Niello, Ochoa Bogh, Padilla, Portantino, Roth, Rubio, Seyarto, Skinner, Smallwood-Cuevas, Stern, Umberg, Wahab, Wiener, Wilk
ABS, ABST OR NV: Caballero
UPDATED
VERSION: September 1, 2023
CONSULTANT: Robert Sumner / B. & P. / (916) 319-3301 FN: 0002252
SENATE RULES COMMITTEE Office of Senate Floor Analyses (916) 651-1520 Fax: (916) 327-4478 | AB 1262 |
THIRD READING
Bill No: AB 1262
Author: Berman (D), et al.
Amended: 9/1/23 in Senate
Vote: 21
SENATE BUS., PROF. & ECON. DEV. COMMITTEE: 13-0, 6/26/23
AYES: Roth, Nguyen, Alvarado-Gil, Archuleta, Ashby, Becker, Dodd, Eggman, Glazer, Niello, Smallwood-Cuevas, Wahab, Wilk
SENATE APPROPRIATIONS COMMITTEE: 7-0, 9/1/23
AYES: Portantino, Jones, Ashby, Bradford, Seyarto, Wahab, Wiener
ASSEMBLY FLOOR: 77-0, 5/25/23 - See last page for vote
SUBJECT: Professional fiduciaries
SOURCE: Author
DIGEST:
This bill makes changes relevant to the Professional Fiduciaries Bureau (PFB, or Bureau) and extends the PFB sunset date to January 1, 2028.
ANALYSIS:
Existing law:
- Establishes the Professional Fiduciaries Act to provide for the licensing and regulation of professional fiduciaries. (Business and Professions Code (BPC) §§ 6500 et seq.)
- Establishes the Bureau within the Department of Consumer Affairs, subject to repeal on January 1, 2024 unless extended by the Legislature. (BPC § 6510)
- Exempts licensed attorneys, as well as certified public accountants and enrolled agents when acting within their scopes of practice, from the provisions of the Act. (BPC § 6530)
- Requires private conservators, guardians, trustees, personal representatives of decedent’s estate, and agents under a durable power of attorney for health care or finances to obtain a license as a professional fiduciary from the Bureau, with certain additional exceptions. (BPC § 6533)
- Empowers the Bureau to investigate the actions of a professional fiduciary based on complaints or for alleged violations of law. (BPC § 6580)
- Specifies that a prohibition against guardians or conservators hiring or referring any business to an entity in which the guardian or conservator or an employee has a financial interest does not prohibit a guardian or conservator from hiring and compensating individuals as employees, with court approval. (Probate Code § 2401)
This bill makes changes relevant to the PFB and extends the PFB sunset date to January 1, 2028.
Background
In early 2023, the Senate Business, Professions and Economic Development Committee and the Assembly Business and Professions Committee began their comprehensive sunset review oversight of eight regulatory entities including the Bureau. The Committees conducted two oversight hearings in March of this year. This bill and the accompanying sunset bills are intended to implement legislative changes as recommended by staff of the Committees, and which are reflected in the Background Papers prepared by each Committee’s staff for each agency and program reviewed this year.
The Bureau was established through the enactment of the Professional Fiduciaries Act (Act) in 2006. The Bureau is advised by a Professional Fiduciaries Advisory Committee, consisting of both public and professional members, which is empowered to take over the Bureau’s responsibilities under the Act were the Bureau to ever be repealed. As of September 1, 2022, the Bureau oversees 841 current and active professional fiduciary licensees, with 1,333 total licenses issued since July 1, 2008. Professional fiduciaries include non-family member conservators, guardians, trustees, personal representatives of a decedent’s estate, and agents under a durable power of attorney. These professions are trusted to look after the personal and financial interests of vulnerable Californians including seniors, children, and persons with disabilities. Professional fiduciaries may provide their clients with daily care, housing and medical needs, as well as financial management services ranging from the basic payment of bills to estate and investment management. Attorneys licensed by the State Bar are not required to be licensed as professional fiduciaries, nor are certified public accountants and enrolled agents when working within the scope of their professions. Statute additionally exempts employees and agents of trust companies, FDIC-insured institutions, public agencies, certain nonprofits, and specified broker-dealers and investment advisers from licensure. Guardians, conservators, or personal representatives of a decedent’s estate serving on behalf of fewer than two individuals at the same time are also not required to be licensed; trustees and agents under a durable power of attorney are exempt if serving on behalf of three individuals or fewer at the same time.
Sunset Review Oversight Related Changes. Section 6511 in the Act provides that “if the Bureau becomes inoperative or is repealed … the [Professional Fiduciaries Advisory Committee] shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the Bureau and its chief.” This statute would have the effect of reconstituting the Advisory Committee as a traditional regulatory board, empowered to continue enforcement of the Act. The question of whether to eliminate the “reverse sunset” clause was considered by the Senate Committee on Business, Professions, and Economic Development during the Bureau’s sunset review in 2011; in its formal response to the Senate Committee’s background paper, the Bureau recommended that the clause be eliminated, but this change was not included in the Bureau’s sunset extension vehicle. This bill removes the reverse sunset provisions.
The Bureau has called attention to the fact that currently, all members appointed to its Advisory Committee are scheduled to term out on the same day resulting in the Advisory Committee immediately losing all institutional expertise upon the members’ departure. This bill restructures appointee terms temporarily so that appointed members will no longer reach term limit simultaneously.
Statute requires the Bureau to publish information on its website regarding its licensees, including details relating to probate cases involving a professional fiduciary who has been removed or resigned. The Bureau is concerned that “this information can expose vulnerable people to serious consumer harm” and proposes narrowing statute to allow more limited disclosure of information relating to a professional fiduciary who has been removed or resigned in a matter. This bill clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
The Act does not currently provide the Bureau with clear authority to reinstate or deny reinstatement to former licensees, under any circumstances. Statute prohibits the Bureau from renewing, restoring, or reinstating a license that has been canceled, but otherwise offers no criteria for determining if a former licensee warrants having their license restored. This bill provides for a process by which a canceled license may be reinstated.
If a professional fiduciary does not renew their license with the Bureau, it may be because they no longer intend to work as a professional fiduciary. However, if a license is not renewed, the licensee may not report final case closures to the Bureau and the Bureau may seek disciplinary action under the assumption that the professional fiduciary is continuing to practice without an active license. This bill requires licensees to notify the Bureau in writing of their intent to not renew their license and to submit a final annual statement demonstrating they are no longer subject to licensure.
The Bureau has expressed concern that some individuals whose professional fiduciary license has been disciplined by the Bureau, either by revocation or stipulated surrender, simply transfer their cases to their business partners, employers, or coworkers who are actively licensed professional fiduciaries, thereby keeping access to their former clients/cases and the potential to continue working despite being unlicensed. While unlicensed practice itself is an enforceable offense, the Bureau does not have clear authority to discipline licensees who aid and abet it. This bill expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Act constitutes a cause for disciplinary action.
Currently, the Bureau can impose an administrative citation and fine up to $5,000 for unlicensed activity, but the Bureau has stated that unlicensed individuals simply ignore the citation. While other practice acts under the Business and Professions Code provide that unlicensed activity is punishable as a misdemeanor, this is not the case for the Act. This bill adds professional fiduciary licensing provisions to the list of sections that make certain unlicensed activity prosecutable as a misdemeanor.
Comments
Persistent questions remain unresolved regarding the Bureau’s long-term sustainability as an independent regulatory agency. However, notwithstanding these logistical challenges, the argument for the Bureau continuing to license and regulate professional fiduciaries remains as cogent as it did decades ago when the Act was first introduced and signed by the Governor.
The Professional Fiduciary Association of California notes that it is generally supports the Bureau’s continued operation, but requests changes moving forward.
FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes
According to the Senate Appropriations Committee, the 2023-24 Budget Act provides approximately $1.09 million (Professional Fiduciaries Fund) and 4.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities. The Bureau reports costs of approximately $32,000 to update regulations and address additional complaints, which is anticipated to be absorbable within the Bureau’s existing resources. The Office of Information Services within the Department of Consumer Affairs reports costs of $5,000 to update enforcement codes, which is anticipated to be absorbable.
SUPPORT: (Verified 9/1/23)
None received
OPPOSITION: (Verified 9/1/23)
None received
ASSEMBLY FLOOR: 77-0, 5/25/23
AYES: Addis, Alanis, Alvarez, Arambula, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Juan Carrillo, Wendy Carrillo, Cervantes, Chen, Connolly, Megan Dahle, Davies, Dixon, Essayli, Flora, Mike Fong, Vince Fong, Friedman, Gabriel, Gallagher, Garcia, Gipson, Grayson, Haney, Hart, Holden, Hoover, Irwin, Jackson, Jones-Sawyer, Kalra, Lackey, Lee, Low, Lowenthal, Maienschein, McCarty, McKinnor, Muratsuchi, Stephanie Nguyen, Ortega, Pacheco, Jim Patterson, Joe Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Sanchez, Santiago, Schiavo, Soria, Ta, Ting, Valencia, Villapudua, Waldron, Wallis, Ward, Weber, Wicks, Wilson, Wood, Zbur, Rendon
NO VOTE RECORDED: Aguiar-Curry, Mathis, Papan
Prepared by: Dana Shaker / B., P. & E.D. /
9/2/23 16:55:58
SENATE COMMITTEE ON APPROPRIATIONS
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
AB 1262 (Committee on Business and Professions) - Professional fiduciaries
Version: July 5, 2023 | Policy Vote: B., P. & E.D. 13 - 0 |
Urgency: No | Mandate: Yes |
Hearing Date: September 1, 2023 | Consultant: Janelle Miyashiro |
Bill Summary:
AB 1262 extends the operation of the Professional Fiduciaries Bureau to January 1, 2028 and makes changes recommended during the joint sunset review of the Bureau, as specified.
*********** ANALYSIS ADDENDUM – SUSPENSE FILE ***********
The following information is revised to reflect amendments
adopted by the committee on September 1, 2023
Fiscal Impact:
- The 2023-24 Budget Act provides approximately $1.09 million (Professional Fiduciaries Fund) and 4.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities.
- The Bureau reports costs of approximately $32,000 to update regulations and address additional complaints, which is anticipated to be absorbable within the Bureau’s existing resources.
- The Office of Information Services within the Department of Consumer Affairs (DCA) reports costs of $5,000 to update enforcement codes, which is anticipated to be absorbable.
Author Amendments:
- Specify that activities by an enrolled agent serving as a fiduciary that are beyond the scope of their license is considered unlicensed activity and subject to discipline unless that agent is licensed as a professional fiduciary.
- Specify conditions to reinstate a canceled license.
- Make other technical and nonsubstantive changes.
-- END --
SENATE COMMITTEE ON
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
AB 1262 (Committee on Business and Professions) - Professional fiduciaries
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
AB 1262 extends the operation of the Professional Fiduciaries Bureau to January 1, 2028 and makes changes recommended during the joint sunset review of the Bureau, as specified.
Fiscal Impact:
The 2023-24 Budget Act provides approximately $1.09 million (Professional Fiduciaries Fund) and 4.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities.
The Bureau reports costs of approximately $32,000 to update regulations and address additional complaints, which is anticipated to be absorbable within the Bureau’s existing resources.
The Office of Information Services within the Department of Consumer Affairs (DCA) reports costs of $5,000 to update enforcement codes, which is anticipated to be absorbable.
Background:
The Bureau was established through the enactment of the Professional Fiduciaries Act in 2006. As a regulatory agency within the Department of Consumer Affairs (DCA), protection of the public is the Bureau’s highest priority. The Bureau is advised by a Professional Fiduciaries Advisory Committee, consisting of both public and professional members, which is empowered to take over the Bureau’s responsibilities under the Act were the Bureau to ever be repealed.
As of September 1, 2022, the Bureau oversees 841 current and active professional fiduciary licensees, with 1,333 total licenses issued since July 1, 2008. Professional fiduciaries include non-family member conservators, guardians, trustees, personal representatives of a decedent’s estate, and agents under a durable power of attorney. These professions are trusted to look after the personal and financial interests of vulnerable Californians including seniors, children, and persons with disabilities. Professional fiduciaries may provide their clients with daily care, housing and medical needs, as well as financial management services ranging from the basic payment of bills to estate and investment management.
Attorneys licensed by the State Bar are not required to be licensed as professional fiduciaries, nor are certified public accountants and enrolled agents when working within the scope of their professions. Statute additionally exempts employees and agents of trust companies, FDIC-insured institutions, public agencies, certain nonprofits, and specified broker-dealers and investment advisers from licensure. Guardians, conservators, or personal representatives of a decedent’s estate serving on behalf of fewer than two individuals at the same time are also not required to be licensed; trustees and agents under a durable power of attorney are exempt if serving on behalf of three individuals or fewer at the same time.
Proposed Law:
- Extends the Bureau’s sunset date until January 1, 2028.
- Repeals provisions of law that would transfer the responsibilities and jurisdiction of the Bureau to the Professional Fiduciaries Advisory Committee if the Bureau were ever repealed.
- Restructures the terms for appointees to the Professional Fiduciaries Advisory Committee temporarily so that appointed members will no longer all reach the term limit simultaneously.
- Clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Provides a process by which a canceled license may be reinstated.
- Allows for a person whose license has been revoked or surrendered to petition the Bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition.
- Requires licensees to notify the Bureau in writing of their intent to not renew their license and to submit a final annual statement demonstrating they are no longer subject to licensure.
- Requires licensees to respond to any written inquiry by the Bureau within 30 calendar days to the extent it relates to an investigation of a complaint against a licensee, and provides that the failure of, or refusal by, a licensee to respond to such written inquiry from the Bureau shall constitute a cause for disciplinary action.
- Expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Act constitutes a cause for disciplinary action.
- Makes other technical, nonsubstantive changes.
Related Legislation:
SB 812 (Roth, 2023) is the California Tax Education Council sunset bill. SB 812 is pending in Assembly Appropriations Committee.
SB 813 (Roth, 2023) is the Structural Pest Control Board sunset bill. SB 813 is pending in Assembly Appropriations Committee.
SB 814 (Roth, 2023) is the Bureau of Household Goods and Services sunset bill. SB 814 is pending in Assembly Appropriations Committee.
SB 815 (Roth, 2023) is the Medical Board of California sunset bill. SB 815 is pending in Assembly Appropriations Committee.
AB 1257 (Berman, 2023) is the Dental Hygiene Board of California sunset bill. AB 1257 is pending in this committee.
AB 1263 (Berman, 2023) is the Bureau of Automotive Repair sunset bill. AB 1263 is pending in this committee.
AB 1264 (Berman, 2023) is the California Acupuncture Board sunset bill. AB 1264 is pending in this committee.
Staff Comments:
The boards and bureaus within the DCA are special fund agencies whose activities are funded by regulatory and license fees and generally receive no support from the General Fund. New legislative mandates, even those modest in scope, may in totality create new cost pressures and impact the entity’s operating costs, future budget requests, or license fees.
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SENATE COMMITTEE ON
Senator Anthony Portantino, Chair
2023 - 2024 Regular Session
AB 1262 (Committee on Business and Professions) - Professional fiduciaries
Version: | Policy Vote: |
Urgency: | Mandate: |
Hearing Date: | Consultant: |
Bill Summary:
AB 1262 extends the operation of the Professional Fiduciaries Bureau to January 1, 2028 and makes changes recommended during the joint sunset review of the Bureau, as specified.
Fiscal Impact:
The 2023-24 Budget Act provides approximately $1.09 million (Professional Fiduciaries Fund) and 4.5 positions to support the continued operation of the Bureau’s licensing and enforcement activities.
The Bureau reports costs of approximately $32,000 to update regulations and address additional complaints, which is anticipated to be absorbable within the Bureau’s existing resources.
The Office of Information Services within the Department of Consumer Affairs (DCA) reports costs of $5,000 to update enforcement codes, which is anticipated to be absorbable.
Background:
The Bureau was established through the enactment of the Professional Fiduciaries Act in 2006. As a regulatory agency within the Department of Consumer Affairs (DCA), protection of the public is the Bureau’s highest priority. The Bureau is advised by a Professional Fiduciaries Advisory Committee, consisting of both public and professional members, which is empowered to take over the Bureau’s responsibilities under the Act were the Bureau to ever be repealed.
As of September 1, 2022, the Bureau oversees 841 current and active professional fiduciary licensees, with 1,333 total licenses issued since July 1, 2008. Professional fiduciaries include non-family member conservators, guardians, trustees, personal representatives of a decedent’s estate, and agents under a durable power of attorney. These professions are trusted to look after the personal and financial interests of vulnerable Californians including seniors, children, and persons with disabilities. Professional fiduciaries may provide their clients with daily care, housing and medical needs, as well as financial management services ranging from the basic payment of bills to estate and investment management.
Attorneys licensed by the State Bar are not required to be licensed as professional fiduciaries, nor are certified public accountants and enrolled agents when working within the scope of their professions. Statute additionally exempts employees and agents of trust companies, FDIC-insured institutions, public agencies, certain nonprofits, and specified broker-dealers and investment advisers from licensure. Guardians, conservators, or personal representatives of a decedent’s estate serving on behalf of fewer than two individuals at the same time are also not required to be licensed; trustees and agents under a durable power of attorney are exempt if serving on behalf of three individuals or fewer at the same time.
Proposed Law:
- Extends the Bureau’s sunset date until January 1, 2028.
- Repeals provisions of law that would transfer the responsibilities and jurisdiction of the Bureau to the Professional Fiduciaries Advisory Committee if the Bureau were ever repealed.
- Restructures the terms for appointees to the Professional Fiduciaries Advisory Committee temporarily so that appointed members will no longer all reach the term limit simultaneously.
- Clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Provides a process by which a canceled license may be reinstated.
- Allows for a person whose license has been revoked or surrendered to petition the Bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition.
- Requires licensees to notify the Bureau in writing of their intent to not renew their license and to submit a final annual statement demonstrating they are no longer subject to licensure.
- Requires licensees to respond to any written inquiry by the Bureau within 30 calendar days to the extent it relates to an investigation of a complaint against a licensee, and provides that the failure of, or refusal by, a licensee to respond to such written inquiry from the Bureau shall constitute a cause for disciplinary action.
- Expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Act constitutes a cause for disciplinary action.
- Makes other technical, nonsubstantive changes.
Related Legislation:
SB 812 (Roth, 2023) is the California Tax Education Council sunset bill. SB 812 is pending in Assembly Appropriations Committee.
SB 813 (Roth, 2023) is the Structural Pest Control Board sunset bill. SB 813 is pending in Assembly Appropriations Committee.
SB 814 (Roth, 2023) is the Bureau of Household Goods and Services sunset bill. SB 814 is pending in Assembly Appropriations Committee.
SB 815 (Roth, 2023) is the Medical Board of California sunset bill. SB 815 is pending in Assembly Appropriations Committee.
AB 1257 (Berman, 2023) is the Dental Hygiene Board of California sunset bill. AB 1257 is pending in this committee.
AB 1263 (Berman, 2023) is the Bureau of Automotive Repair sunset bill. AB 1263 is pending in this committee.
AB 1264 (Berman, 2023) is the California Acupuncture Board sunset bill. AB 1264 is pending in this committee.
Staff Comments:
The boards and bureaus within the DCA are special fund agencies whose activities are funded by regulatory and license fees and generally receive no support from the General Fund. New legislative mandates, even those modest in scope, may in totality create new cost pressures and impact the entity’s operating costs, future budget requests, or license fees.
-- END --
SENATE COMMITTEE ON
BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT
Senator Richard Roth, Chair
2023 - 2024 Regular
Bill No: AB 1262 Hearing Date: June 26, 2023
Author: | Committee on Business and Professions | ||
Version: | April 20, 2023 | ||
Urgency: | No | Fiscal: | Yes |
Consultant: | Dana Shaker | ||
Subject: Professional fiduciaries
SUMMARY:
Makes changes relevant to the Professional Fiduciaries Bureau (PFB, or Bureau). Extends the PFB sunset date to January 1, 2028.
NOTE:
Double-referral to the Senate Committee on Judiciary, second.
Existing law:
- Establishes the Professional Fiduciaries Act (Act) to provide for the licensing and regulation of professional fiduciaries. (Business and Professions Code (BPC) §§ 6500 et seq.)
- Establishes the Bureau within the Department of Consumer Affairs, subject to repeal on January 1, 2024 unless extended by the Legislature. (BPC § 6510)
- Establishes a Professional Fiduciaries Advisory Committee comprised of three professional members and four members of the public, and provides that if the Bureau becomes inoperative or is repealed, the committee shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the Bureau and its chief. (BPC § 6511)
- Provides that protection of the public shall be the highest priority for the Bureau in exercising its licensing, regulatory, and disciplinary functions. (BPC § 6516)
- Exempts licensed attorneys, as well as certified public accountants and enrolled agents when acting within their scopes of practice, from the provisions of the Act. (BPC § 6530)
- Requires private conservators, guardians, trustees, personal representatives of decedent’s estate, and agents under a durable power of attorney for health care or finances to obtain a license as a professional fiduciary from the Bureau, with certain additional exceptions. (BPC § 6533)
- Requires the Bureau to maintain specified information in each licensee’s file relating to the licensee’s current conservatees, wards, principals under a durable power of attorney, and administered trusts or estates, as well as whether the licensee has ever been removed for cause, and to make this information available to a court for any purpose. (BPC § 6534)
- 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. (BPC § 6541.1)
- Authorizes the Bureau to establish a system for the placement of a license into retired status. (BPC § 6542)
- Requires licensed professional fiduciaries to file an annual statement containing information about their practice and whether they have been removed for cause or otherwise subjected to adverse action. (BPC § 6561)
- Requires licensed professional fiduciaries with an internet website to post on that website a schedule or range of the licensee’s fees, including, but not limited to, hourly fees, for services offered. (BPC § 6563)
- Empowers the Bureau to investigate the actions of a professional fiduciary based on complaints or for alleged violations of law. (BPC § 6580)
- Prohibits a licensed professional fiduciary from billing a client or imposing a fee on the estate or trust of a client for responding to a complaint filed with the Bureau against the licensee. (BPC § 6581)
- Provides that a professional fiduciary license may be suspended, revoked, denied, or other disciplinary action may be imposed for various offenses, including fraud, dishonesty, corruption, willful violation of duty, gross negligence or incompetence in practice, or unprofessional conduct in the practice of a professional fiduciary. (BPC § 6584)
- Provides that various sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by the BPC for purposes of unlicensed activity enforcement as a misdemeanor. (BPC § 146)
- Specifies that a prohibition against guardians or conservators hiring or referring any business to an entity in which the guardian or conservator or an employee has a financial interest does not prohibit a guardian or conservator from hiring and compensating individuals as employees, with court approval. (Probate Code § 2401)
This bill:
- Extends the PFB sunset date until January 1, 2028.
- Repeals provisions of law that would transfer the responsibilities and jurisdiction of the Bureau to the Professional Fiduciaries Advisory Committee if the Bureau were ever repealed.
- Restructures the terms for appointees to the Professional Fiduciaries Advisory Committee temporarily so that appointed members will no longer all reach the term limit simultaneously.
- Clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Provides a process by which a canceled license may be reinstated.
- Allows for a person whose license has been revoked or surrendered to petition the Bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition.
- Requires licensees to notify the Bureau in writing of their intent to not renew their license and to submit a final annual statement demonstrating they are no longer subject to licensure.
- Requires licensees to respond to any written inquiry by the Bureau within 30 calendar days to the extent it relates to an investigation of a complaint against a licensee, and provides that the failure of, or refusal by, a licensee to respond to such written inquiry from the Bureau shall constitute a cause for disciplinary action.
- Expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Act constitutes a cause for disciplinary action.
- Adds professional fiduciary licensing provisions to the list of sections that make certain unlicensed activity prosecutable as a misdemeanor.
- Clarifies that the prohibition against guardians or conservators hiring or referring any business to an entity in which the guardian or conservator or an employee has a financial interest does not prohibit a guardian or conservator, in the course of providing services, from utilizing the services of their employees and seeking compensation for those services.
FISCAL EFFECT:
This bill is keyed fiscal by Legislative Counsel. According to the Assembly Committee on Appropriations, this bill will require on-going special fund costs of approximately $594,000 annually supporting three positions to extend the sunset date of the Bureau until January 1, 2028. This fund is fully self-supporting with fee revenue. Additionally, the Bureau estimates additional ongoing special fund costs of $32,000 annually for staff time and Attorney General (GF) hours to handle additional complaints and update regulations per changes in the bill. The Bureau considers these costs to be minor and absorbable.
COMMENTS:
- Purpose and Background. The Author is the Sponsor of this bill. This bill is a result of the joint committee sunset review process.
- Oversight Hearings and Sunset Review of Licensing Boards and Programs. In early 2023, the Senate Business, Professions and Economic Development Committee and the Assembly Committee on Business and Professions (Committees) began their comprehensive sunset review oversight of 8 regulatory entities including the \ Bureau. The Committees conducted two oversight hearings in March of this year. This bill and the accompanying sunset bills are intended to implement legislative changes as recommended by staff of the Committees, and which are reflected in the Background Papers prepared by Committee staff for each agency and program reviewed this year.
- Background on the Professional Fiduciaries Bureau (PFB). The Bureau was established through the enactment of the Professional Fiduciaries Act (Act) in 2006. As a regulatory agency within the Department of Consumer Affairs, protection of the public is the Bureau’s highest priority. The Bureau is advised by a Professional Fiduciaries Advisory Committee, consisting of both public and professional members, which is empowered to take over the Bureau’s responsibilities under the Act were the Bureau to ever be repealed. As of September 1, 2022, the Bureau oversees 841 current and active professional fiduciary licensees, with 1,333 total licenses issued since July 1, 2008. Professional fiduciaries include non-family member conservators, guardians, trustees, personal representatives of a decedent’s estate, and agents under a durable power of attorney. These professions are trusted to look after the personal and financial interests of vulnerable Californians including seniors, children, and persons with disabilities. Professional fiduciaries may provide their clients with daily care, housing and medical needs, as well as financial management services ranging from the basic payment of bills to estate and investment management. Attorneys licensed by the State Bar are not required to be licensed as professional fiduciaries, nor are certified public accountants and enrolled agents when working within the scope of their professions. Statute additionally exempts employees and agents of trust companies, FDIC-insured institutions, public agencies, certain nonprofits, and specified broker-dealers and investment advisers from licensure. Guardians, conservators, or personal representatives of a decedent’s estate serving on behalf of fewer than two individuals at the same time are also not required to be licensed; trustees and agents under a durable power of attorney are exempt if serving on behalf of three individuals or fewer at the same time.
- Review of the PFB. The PFB was last reviewed as part of the sunset review program in 2018. Due to the constraints of the COVID-19 pandemic on legislative business, the legislature extended the PFB’s sunset date by one year, in order to allow for a comprehensive review. The following are some of the issues pertaining to the PFB along with background information concerning particular issues. Recommendations noted by Committee staff regarding the particular issue areas that needed to be addressed include the following:
- Sunset Issue # 1: Reverse Sunset Provision.
Background. Section 6511 in the Professional Fiduciaries Act provides that “if the Bureau becomes inoperative or is repealed … the [Professional Fiduciaries Advisory Committee] shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the Bureau and its chief.” This statute would have the effect of reconstituting the Advisory Committee as a traditional regulatory board, empowered to continue enforcement of the Act. This language was included in the legislation establishing the Bureau, Senate Bill 1550, shortly after the bill was amended to provide for licensure by a bureau rather than a Board of Professional Fiduciaries. As previously discussed, as Senate Bill 1550 was proceeding through the legislative process, Governor Schwarzenegger indicated a preference for bureaus over boards, resulting in the bill’s late-session amendment. However, the Governor remained opposed to the so-called “reverse sunset” language that would transfer responsibility for the Act to the Advisory Committee upon the Bureau’s repeal. In his signing message for Senate Bill 1550, Governor Schwarzenegger stated: “However, clean-up legislation will be necessary in the next legislative session because of the way the author structured the bill. This bill establishes an unnecessary and complicated mechanism of transferring the responsibilities and jurisdiction of the newly created Professional Fiduciaries Bureau (Bureau) to a newly created Professional Fiduciaries Advisory Committee, which would then be established as a board within the Department of Consumer Affairs, after July 1, 2011. The creation of this arrangement is not justified and will leave consumers and the general public more confused by this regulatory scheme. Moreover, there is no rational, analytical justification to assume that in five years the Bureau would even need to be reconstituted as a full board. I would rather have a future Legislature evaluate that need at the time of the sunset review, instead of establishing the presumption now.” The Governor stated that he intended to seek legislative action in the following session to “clean up” the Act by removing the opposed language. However, no legislation was subsequently introduced to amend that code section, and the statute remains in effect. The question of whether to eliminate the “reverse sunset” clause was considered by the Senate Committee on Business, Professions, and Economic Development during the Bureau’s sunset review in 2011; in its formal response to the Senate Committee’s background paper, the Bureau recommended that the clause be eliminated, but this change was not included in the Bureau’s sunset extension vehicle. While there have not been substantial reports of any confusion by the general public about the state’s regulatory scheme for professional fiduciaries due to the “reverse sunset” clause, its inclusion in the Act is an anomaly amongst other bureaus within the Department of Consumer Affairs. It is arguably not necessary to preserve the clause, especially considering there is no longer statute providing that a board’s authority would be transferred to another state agency upon its repeal. If it were determined that the Bureau was no longer the best agency to regulate licensed fiduciaries, the Legislature could then make the decision as to what entity, if any, should continue to carry out its responsibilities under the Act.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the PFB should inform the Committees as to whether it still believes that the “reverse sunset” clause should be eliminated or if it has any other recommendations regarding this provision of law. This bill removes the reverse sunset provisions.
- Sunset Issue # 2: Advisory Committee Member Teams.
Background. The Bureau has called attention to the fact that currently, all members appointed to its Advisory Committee are scheduled to term out on the same day. That date was January 1, 2023; however, statute allows for appointees to continue to serve a grace period for up to one year following the expiration of their term until a new member has been appointed. Therefore, the Advisory Committee’s appointing authorities (the Governor, the Speaker of the Assembly, and the Senate Rules Committee) have until January 1, 2024, to appoint an entirely new membership. As the Bureau has pointed out, this alignment of the Advisory Committee’s term expirations is not fortuitous and potentially places a strain upon the appointing authorities to reconstitute the entire committee membership. Further, the Advisory Committee would immediately lose all institutional expertise upon the members’ departure. The Bureau has therefore suggested that the terms of three Advisory Committee members be temporarily set to two years each, instead of four, so as to stagger the terms.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the PFB should explain what it believes to be the best solution to the Advisory Committee member term issue and provide any language it would recommend. This bill restructures appointee terms temporarily so that appointed members will no longer reach term limit simultaneously.
- Sunset Issue # 3: Disclosure of Sensitive Information.
Background. Statute requires the Bureau to publish information on its website regarding its licensees, including details relating to probate cases involving a professional fiduciary who has been removed or resigned. This information includes case names, locations, and case numbers that can be personally identifying for conservatees and other individuals. The Bureau is concerned that “this information can expose vulnerable people to serious consumer harm” and proposes narrowing statute to allow more limited disclosure of information relating to a professional fiduciary who has been removed or resigned in a matter.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the PFB should provide the Committees with any proposed language to narrow disclosure of sensitive information and further elucidate its support for such language. This bill clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Sunset Issue # 4: Former Licensees.
Background. The Act does not currently provide the Bureau with clear authority to reinstate or deny reinstatement to former licensees, under any circumstances. Statute prohibits the Bureau from renewing, restoring, or reinstating a license that has been canceled, but otherwise offers no criteria for determining if a former licensee warrants having their license restored. The Bureau states that it believes the Act should be amended to expressly authorize the Bureau to grant or deny a petition for reinstatement of a license, and to provide criteria for the Bureau to consider in determining whether the individual seeking reinstatement poses no discernable public harm and has sufficiently met certain requirements.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the Bureau should provide the Committees with recommended language relating to the reinstatement of licenses and further explain its support for such a proposal. This bill provides for a process by which a canceled license may be reinstated.
- Sunset Issue # 5: Non-Renewing Licensees.
Background. If a professional fiduciary does not renew their license with the Bureau, it may be because they no longer intend to work as a professional fiduciary. However, if a license is not renewed, the licensee may not report final case closures to the Bureau and the Bureau may seek disciplinary action under the assumption that the professional fiduciary is continuing to practice without an active license. The Bureau has proposed that licensees be required to provide notice that they no longer intend to practice, regardless of the licensee’s status and provide a final annual statement to close out any remaining cases.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the Bureau should explain how it envisions the above notification requirement being implemented and provide any recommended language. This bill requires licensees to notify the Bureau in writing of their intent to not renew their license and to submit a final annual statement demonstrating they are no longer subject to licensure.
- Sunset Issue # 6: Aiding Unlicensed Practice.
Background. The Bureau has expressed concern that some individuals whose professional fiduciary license has been disciplined by the Bureau, either by revocation or stipulated surrender, simply transfer their cases to their business partners, employers, or coworkers who are actively licensed professional fiduciaries, thereby keeping access to their former clients/cases and the potential to continue working despite being unlicensed. While unlicensed practice itself is an enforceable offense, the Bureau does not have clear authority to discipline licensees who aid and abet it. The Bureau has proposed that the Act be amended to give the Bureau express authority to discipline licensees who aid and abet unlicensed individuals engaged in the practice of a professional fiduciary.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the Bureau should provide the Committees with additional information about cases where licensees aid and abet unlicensed practice and share any recommended amendments to the Act relating to this issue. This bill expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Act constitutes a cause for disciplinary action.
- Sunset Issue # 7: Unlicensed Activity.
Background. Currently, the Bureau can impose an administrative citation and fine up to $5,000 for unlicensed activity, but the Bureau has stated that unlicensed individuals simply ignore the citation. While other practice acts under the Business and Professions Code provide that unlicensed activity is punishable as a misdemeanor, this is not the case for the Act. The Bureau believes that in order to meaningfully pursue unlicensed activity outside of issuing administrative sanctions, the Act should be amended to criminalize unlicensed practice, consistent with other regulated professions.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the Bureau should further explain its current enforcement challenges with regards to unlicensed practice and provide the Committees with recommended language. This bill adds professional fiduciary licensing provisions to the list of sections that make certain unlicensed activity prosecutable as a misdemeanor.
- Sunset Issue # 8: Technical Cleanup.
Background. As the profession continues to evolve and new laws are enacted, many provisions of the Act have potentially become outmoded or superfluous.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the Bureau should recommend cleanup amendments for inclusion in its sunset bill. This bill provides technical clean-up.
- Sunset Issue # 9: Continued Regulation.
Background. As previously discussed, persistent questions remain unresolved regarding the Bureau’s long-term sustainability as an independent regulatory agency. However, notwithstanding these logistical challenges, the argument for the Bureau continuing to license and regulate professional fiduciaries remains as cogent as it did decades ago when the Act was first introduced and signed by the Governor. Therefore, if an extension of the Bureau as it currently exists as a licensing agency is ultimately deemed practicable for the near foreseeable future, then preserving that regulatory structure should likely be considered ideal. If the Committees do decide to initiate any discussions about the organizational structure of the Bureau and whether enforcement of the Act should be transferred to another entity, this discussion should be contextualized with preservation of the Bureau as the preferred option to the extent that it is feasible.
Recommendation and Proposed Statutory Change. The Committees staff background recommended the Bureau should be continued, to be reviewed again on a future date to be determined. This bill extends the sunset date to January 1, 2028.
- Comments. The Professional Fiduciary Association of California writes in with comments: “PFAC supports the Bureau’s recommendation to:
• Eliminate the requirement to include case names, circumstances and court locations as part of their public reporting of a licensee’s disciplinary action.
• Subject to an understanding of the costs associated with the Bureau investigating such criminal activity, including as a criminal act, holding oneself out to be a professional fiduciary, without holding a license.
• Amend the Fiduciary Act to exempt licensees holding a reared license from annual reporting requirements.
• Limit the use of the term “licensed professional fiduciary” to those that hold an active professional fiduciary license.
• Strike the term “punitively” from Business & Professions Code section 6542.
• Include, as unprofessional conduct, a licensed fiduciary’s failure to cooperate with the Bureau during an investigation.”
SUPPORT AND OPPOSITION:
Support:
None received
Opposition:
None received
-- END --
ASSEMBLY THIRD READING
ATR Bill Id:AB 1262
Author:(Committee on Business and Professions)
As Amended Ver:April 20, 2023
Majority vote
SUMMARY
Extends the sunset date for the Professional Fiduciaries Bureau (Bureau) until January 1, 2028 and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process.
Major Provisions
- Extends the repeal date for the Bureau until January 1, 2028.
- Repeals provisions of law that transfer the responsibilities and jurisdiction of the Bureau to the Professional Fiduciaries Advisory Committee in the event the Bureau is ever repealed.
- Temporarily restructures the terms for appointees to the Professional Fiduciaries Advisory Committee so that appointed members will no longer all reach the term limit simultaneously.
- Clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Provides for a process by which a canceled license may be reinstated.
- Allows for a person whose license has been revoked or surrendered to petition the Bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition.
- Requires licensees to notify the Bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure.
- Requires licensees to respond to any written inquiry by the Bureau within 30 calendar days to the extent it relates to an investigation of a complaint against a licensee, and provides that the failure of, or refusal by, a licensee to respond to such written inquiry from the Bureau shall constitute a cause for disciplinary action.
- Expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Professional Fiduciaries Act constitutes a cause for disciplinary action.
- Adds professional fiduciary licensing provisions to the list of sections that make certain unlicensed activity prosecutable as a misdemeanor.
- Clarifies that the prohibition against guardians or conservators hiring or referring any business to an entity in which the guardian or conservator or an employee has a financial interest does not prohibit a guardian or conservator, in the course of providing services, from utilizing the services of their employees and seeking compensation for those services.
COMMENTS
In order to ensure that California's myriad professional boards and bureaus are meeting the state's public protection priorities, authorizing statutes for these regulatory bodies are subject to statutory dates of repeal, at which point the entity "sunsets" unless the date is extended by the Legislature. The sunset process provides a regular forum for discussion around the successes and challenges of various programs and the consideration of proposed changes to laws governing the regulation of professionals. Legislation is then subsequently introduced extending the repeal date for the entity along with any reforms identified during the sunset review process.
The background paper for the Bureau's sunset review oversight hearing contained a total of 16 issues and recommendations, each of which is eligible to result in statutory changes enacted through the Bureau's sunset bill.
Issue #1 in the sunset background paper related to the Professional Fiduciaries Act's so-called "reverse sunset provision." Statute provides that "if the Bureau becomes inoperative or is repealed … the [Professional Fiduciaries Advisory Committee] shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the Bureau and its chief." This statute would have the effect of reconstituting the Advisory Committee as a traditional regulatory board, empowered to continue enforcement of the Act. In his signing message for Senate Bill 1550, Governor Schwarzenegger stated that he intended to seek legislative action in the following session to "clean up" the bill by removing the reverse sunset language, which he believed was "unnecessary and complicated."
However, the language was never repealed. Seventeen years later, this bill would remove the Bureau's reverse sunset provision and strike references to its Advisory Committee assuming its duties. The Bureau would still be subject to the traditional sunset process, and the Legislature would remain fully empowered to provide for any alternative form of regulation of professional fiduciaries were the Bureau to ever be repealed.
Issue #2 raised a concern that every member of the Bureau's Advisory Committee is currently scheduled to term out at the same time. This issue was initially raised by the Bureau in its sunset report. The Bureau pointed out that the alignment of the Advisory Committee's term expirations is not fortuitous and potentially places a strain upon the appointing authorities to reconstitute the entire committee membership. Further, the Advisory Committee would immediately lose all institutional expertise upon the members' departure. The Bureau has therefore suggested that the terms of three Advisory Committee members be temporarily set to two years each, instead of four, so as to stagger the terms. This bill contains language to implement the Bureau's recommendation.
Issue #3 questioned whether the Bureau should continue to be required to publish potentially sensitive personal information in court documents on its website. Statute requires the Bureau to publish information on its website regarding its licensees, including details relating to probate cases involving a professional fiduciary who has been removed or resigned. This information includes case names, locations, and case numbers that can be personally identifying for conservatees and other individuals. The Bureau expressed concern that "this information can expose vulnerable people to serious consumer harm." This bill would resolve that concern by narrowing statute to allow more limited disclosure of information relating to a professional fiduciary who has been removed or resigned in a matter.
Issue #5 raised the issue of the Bureau's long-term financial sustainability in light of its comparatively small licensee population and its high fees, which the Bureau has indicated will potentially need to be adjusted even higher in the future. This issue has been raised repeatedly throughout the Bureau's existence. The background paper for the Bureau's first sunset review in 2011 repeated contemporary assertions that "the Bureau struggled for viability, having a scarcity of licensees and minimal revenues." The issue was also raised in the Bureau's 2014 and 2018 sunset review background papers. One proposed solution has been to increase the Bureau's licensee population by removing or narrowing existing exemptions for certain professions currently exempted from licensure as professional fiduciaries. For example, some stakeholders have proposed eliminating the current exemption for enrolled agents acting within their scope of practice, arguing that the services required of a professional fiduciary acting in a representative capacity extend well beyond tax return preparation. As the Legislature considers multiple options for preserving the financial sustainability of the Bureau as a standalone entity, the proposal to strike the exemption for enrolled agents will remain an active topic of stakeholder discussion, as well as any other viable solutions to resolve the Bureau's fiscal instability.
Issue #7 pointed out that the Professional Fiduciaries Act does not currently provide the Bureau with clear authority to reinstate or deny reinstatement to former licensees, under any circumstances. Statute prohibits the Bureau from renewing, restoring, or reinstating a license that has been canceled, but otherwise offers no criteria for determining if a former licensee warrants having their license restored. The Bureau stated that it believes the Act should be amended to expressly authorize the Bureau to grant or deny a petition for reinstatement of a license, and to provide criteria for the Bureau to consider in determining whether the individual seeking reinstatement poses no discernable public harm and has sufficiently met certain requirements. This bill contains language to implement that recommendation.
Issue #8 related to non-renewing licensees. The Bureau reported that if a professional fiduciary does not renew their license, it may be because they no longer intend to work as a professional fiduciary. However, if a license is not renewed, the licensee may not report final case closures to the Bureau and the Bureau may seek disciplinary action under the assumption that the professional fiduciary is continuing to practice without an active license. The Bureau proposed that licensees be required to provide notice that they no longer intend to practice, regardless of the licensee's status and provide a final annual statement to close out any remaining cases. This bill contains language to implement that recommendation.
Issue #10 proposed giving the Bureau explicit authority to discipline active licensees who aid and abet unlicensed practice. In its sunset report, the Bureau expressed concern that some individuals whose professional fiduciary license has been disciplined by the Bureau, either by revocation or stipulated surrender, simply transfer their cases to their business partners, employers, or coworkers who are actively licensed professional fiduciaries, thereby keeping access to their former clients/cases and the potential to continue working despite being unlicensed. While unlicensed practice itself is an enforceable offense, the Bureau does not have clear authority to discipline licensees who aid and abet it. The Bureau proposed that the Professional Fiduciaries Act be amended to give the Bureau express authority to discipline licensees who aid and abet unlicensed individuals engaged in the practice of a professional fiduciary. This bill currently contains language to implement that recommendation. However, the Committee intends to engage in further discussion with stakeholders to ensure that this language is not excessively broad or at risk of proscribing a licensee's lawful use of unlicensed persons under appropriate circumstances.
Issue #11 discussed how the Bureau could more effectively compel cooperation from licensees during investigations. According to the Bureau, there have been instances where licensees have failed to cooperate with Bureau staff during investigations, and the Bureau lacks tools to compel compliance when licensees ignore the Bureau's inquiries or provide incomplete information. The Bureau proposed that failure to cooperate with an investigation be made an express form of unprofessional conduct; this bill contains language to implement that recommendation.
Issue #12 related to unlicensed activity. Currently, the Bureau can impose an administrative citation and fine up to $5,000 for unlicensed activity, but the Bureau has stated that unlicensed individuals simply ignore the citation. While other practice acts under the Business and Professions Code provide that unlicensed activity is punishable as a misdemeanor, this is not the case for the Professional Fiduciaries Act. The Bureau believes that in order to meaningfully pursue unlicensed activity outside of issuing administrative sanctions, the law should be amended to criminalize unlicensed practice, consistent with other regulated professions.
Issue #14 proposed that statute be amended to clarify that professional fiduciaries may utilize and compensate the services of their employees without prior court approval. Assembly Bill 1194 prohibited a guardian or conservator from hiring or referring any business to an entity in which they or an employee have a financial interest. However, representatives of the profession have raised concerns that both courts and licensees have misinterpreted the statute to require a professional fiduciary to seek court approval prior to utilizing their staff to assist with the administration of a guardianship or conservatorship proceeding. Stakeholders asked that the Probate Code be amended to clarify that a professional fiduciary may utilize and compensate the services of their employees. This bill contains language to effectuate that request.
Issue #16 raised the traditional question of whether the licensing of professional fiduciaries should be continued and be regulated by the Bureau. The sunset background paper acknowledged that persistent questions remain unresolved regarding the Bureau's long-term sustainability as an independent regulatory agency. However, the sunset background paper concluded that the argument for the Bureau continuing to license and regulate professional fiduciaries remains cogent and that if an extension of the Bureau as it currently exists is ultimately deemed practicable, then preserving that regulatory structure should likely be considered ideal. This bill would extend the Bureau's repeal date by an additional four years.
According to the Author
"This bill is the sunset review vehicle for the Professional Fiduciaries Bureau, authored by the Assembly Business and Professions Committee. The bill extends the sunset date for the Bureau and enacts technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau's sunset review oversight process."
Arguments in Support
None on file.
Arguments in Opposition
None on file.
FISCAL COMMENTS
According to the Assembly Appropriations Committee, this bill would result in ongoing special fund costs of approximately $594,000 annually supporting three positions to extend the sunset date of the Bureau until January 1, 2028, in addition to other minor and absorbable costs.
VOTES
ASM BUSINESS AND PROFESSIONS: 16-0-2
YES: Berman, Flora, Alanis, Alvarez, Bonta, Dixon, Gipson, Grayson, Irwin, Jackson, Lee, Lowenthal, McKinnor, Stephanie Nguyen, Joe Patterson, Ting
ABS, ABST OR NV: Chen, McCarty
ASM APPROPRIATIONS: 15-0-1
YES: Holden, Megan Dahle, Bryan, Calderon, Wendy Carrillo, Dixon, Mike Fong, Hart, Lowenthal, Mathis, Papan, Pellerin, Sanchez, Weber, Ortega
ABS, ABST OR NV: Robert Rivas
UPDATED
VERSION: April 20, 2023
CONSULTANT: Robert Sumner / B. & P. / (916) 319-3301 FN: 0000522
Date of Hearing: May 10, 2023
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Chris Holden, Chair
ABPCA Bill Id:AB 1262
Author:(Committee on Business and Professions) – As Amended Ver:April 20, 2023
Policy Committee: | Business and Professions | Vote: | 16 - 0 |
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Urgency: No State Mandated Local Program: Yes Reimbursable: No
SUMMARY:
This bill extends the sunset date for the Professional Fiduciaries Bureau (Bureau) within the Department of Consumer Affairs (DCA) until January 1, 2028, and enacts various changes in response to issues raised during the Bureau’s sunset review oversight process.
Among its provisions, this bill:
- Extends the sunset date for the Bureau, from January 1, 2024, to January 1, 2028.
- Repeals provisions of law that transfer the responsibilities and jurisdiction of the Bureau to the Professional Fiduciaries Advisory Committee in the event the Bureau is ever repealed.
- Temporarily restructures the terms for appointees to the Professional Fiduciaries Advisory Committee so that appointed members will no longer all reach the term limit simultaneously.
- Clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Provides for a process by which a canceled license may be reinstated.
- Requires licensees to respond to any written inquiry by the Bureau within 30 calendar days to the extent it relates to an investigation of a complaint against a licensee, and provides that the failure of, or refusal by, a licensee to respond constitutes a cause for disciplinary action.
- Expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Professional Fiduciaries Act constitutes a cause for disciplinary action.
- Adds professional fiduciary licensing provisions to the list of sections that make certain unlicensed activity prosecutable as a misdemeanor.
FISCAL EFFECT:
- On-going special fund costs of approximately $594,000 annually (Professional Fiduciaries Fund) supporting three positions to extend the sunset date of the Bureau until January 1, 2028. This fund is fully self-supporting with fee revenue.
- The Bureau estimates additional ongoing special fund costs of $32,000 annually for staff time and Attorney General (GF) hours to handle additional complaints and update regulations per changes in the bill. The Bureau considers these costs to be minor and absorbable.
COMMENTS:
- Purpose. This bill the sunset review vehicle for the Professional Fiduciaries Bureau, authored by the Assembly Committee on Business and Professions as part of its review of the authorities and activities of the boards and bureaus under DCA. The bill extends the sunset date for the Bureau and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process.
- Bureau. The Professional Fiduciaries Act (the Act), establishes the Bureau to license and regulate non-family member professional fiduciaries, including conservators, guardians, trustees, and agents under durable power of attorney. Professional fiduciaries commonly manage the affairs for vulnerable populations, such as seniors, minors, and disabled persons, and offer services associated with daily care, housing and medical needs, and financial management. The Bureau currently licenses 841 professional fiduciaries.
Existing law repeals the statute that enables the existence of the Bureau and its chief on January 1, 2024. Upon repeal, the responsibilities and jurisdiction of the Bureau are transferred to the Professional Fiduciaries Advisory Committee, as specified.
- Related Legislation. This bill is one of several sunset extension bills introduced by the Assembly Business and Professions Committee this year. Others include AB 1257, Dental Hygiene Board; AB 1263, Bureau of Automotive Repair; and AB 1264, Acupuncture Board. All three bills are pending in this committee. There are additional sunset review Senate bills pending in the Senate Appropriations Committee.
- Prior Legislation. AB 1194 (Low), Chapter 417, Statutes of 2021, amended the Professional Fiduciaries Act to provide additional protections and rights for conservatees and require coordination between the courts and the Bureau.
SB 607 (Min), Chapter 367, Statutes of 2021, extended the sunset date for the Bureau until January 1, 2024, and made numerous unrelated changes.
Analysis Prepared by: Jennifer Swenson / APPR. / (916) 319-2081
Date of Hearing: April 25, 2023
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Marc Berman, Chair
ABPCA Bill Id:AB 1262
Author:(Committee on Business and Professions) – As Amended Ver:April 20, 2023
SUBJECT: Professional fiduciaries.
SUMMARY: Extends the sunset date for the Professional Fiduciaries Bureau (Bureau) until January 1, 2028 and makes additional technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process.
EXISTING LAW:
- Establishes the Professional Fiduciaries Act to provide for the licensing and regulation of professional fiduciaries. (Business and Professions Code (BPC) §§ 6500 et seq.)
- Establishes the Bureau within the Department of Consumer Affairs, subject to repeal on January 1, 2024 unless extended by the Legislature. (BPC § 6510)
- Establishes a Professional Fiduciaries Advisory Committee comprised of three professional members and four members of the public, and provides that if the Bureau becomes inoperative or is repealed, the committee shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the bureau and its chief. (BPC § 6511)
- Provides that protection of the public shall be the highest priority for the Bureau in exercising its licensing, regulatory, and disciplinary functions. (BPC § 6516)
- Exempts licensed attorneys, as well as certified public accountants and enrolled agents when acting within their scopes of practice, from the provisions of the Professional Fiduciaries Act. (BPC § 6530)
- Requires private conservators, guardians, trustees, personal representatives of decedent’s estate, and agents under a durable power of attorney for health care or finances to obtain a license as a professional fiduciary from the Bureau, with certain additional exceptions. (BPC § 6533)
- Requires the Bureau to maintain specified information in each licensee’s file relating to the licensee’s current conservatees, wards, principals under a durable power of attorney, and administered trusts or estates, as well as whether the licensee has ever been removed for cause, and to make this information available to a court for any purpose. (BPC § 6534)
- 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. (BPC § 6541.1)
- Authorizes the Bureau to establish a system for the placement of a license into retired status. (BPC § 6542)
- Requires licensed professional fiduciaries to file an annual statement containing information about their practice and whether they have been removed for cause or otherwise subjected to adverse action. (BPC § 6561)
- Requires licensed professional fiduciaries with an internet website to post on that website a schedule or range of the licensee’s fees, including, but not limited to, hourly fees, for services offered. (BPC § 6563)
- Empowers the Bureau to investigate the actions of a professional fiduciary based on complaints or for alleged violations of law. (BPC § 6580)
- Prohibits a licensed professional fiduciary from billing a client or imposing a fee on the estate or trust of a client for responding to a complaint filed with the Bureau against the licensee. (BPC § 6581)
- Provides that a professional fiduciary license may be suspended, revoked, denied, or other disciplinary action may be imposed for various offenses, including fraud, dishonesty, corruption, willful violation of duty, gross negligence or incompetence in practice, or unprofessional conduct in the practice of a professional fiduciary. (BPC § 6584)
- Provides that various sections require registration, licensure, certification, or other authorization in order to engage in certain businesses or professions regulated by the BPC for purposes of unlicensed activity enforcement as a misdemeanor. (BPC § 146)
- Specifies that a prohibition against guardians or conservators hiring or referring any business to an entity in which the guardian or conservator or an employee has a financial interest does not prohibit a guardian or conservator from hiring and compensating individuals as employees, with court approval. (Probate Code § 2401)
THIS BILL:
- Extends the repeal date for the Bureau until January 1, 2028.
- Repeals provisions of law that transfer the responsibilities and jurisdiction of the Bureau to the Professional Fiduciaries Advisory Committee in the event the Bureau is ever repealed.
- Temporarily restructures the terms for appointees to the Professional Fiduciaries Advisory Committee so that appointed members will no longer all reach the term limit simultaneously.
- Clarifies that information relating to case names, court locations, and case numbers associated with the removal or resignation of a professional fiduciary do not need to be made available to the public.
- Provides for a process by which a canceled license may be reinstated.
- Allows for a person whose license has been revoked or surrendered to petition the Bureau for reinstatement or reduction of penalty after a period of not less than one year has elapsed from the effective date of the decision or from the date of the denial of a similar petition.
- Requires licensees to notify the Bureau in writing of their intent not to renew their license and submit a final annual statement demonstrating they are no longer subject to licensure.
- Requires licensees to respond to any written inquiry by the Bureau within 30 calendar days to the extent it relates to an investigation of a complaint against a licensee, and provides that the failure of, or refusal by, a licensee to respond to such written inquiry from the Bureau shall constitute a cause for disciplinary action.
- Expressly provides that aiding or abetting an unlicensed person to evade the provisions of the Professional Fiduciaries Act constitutes a cause for disciplinary action.
- Adds professional fiduciary licensing provisions to the list of sections that make certain unlicensed activity prosecutable as a misdemeanor.
- Clarifies that the prohibition against guardians or conservators hiring or referring any business to an entity in which the guardian or conservator or an employee has a financial interest does not prohibit a guardian or conservator, in the course of providing services, from utilizing the services of their employees and seeking compensation for those services.
FISCAL EFFECT: Unknown; this bill is keyed fiscal by the Legislative Counsel.
COMMENTS:
Purpose. This bill is the sunset review vehicle for the Professional Fiduciaries Bureau, authored by the Assembly Business and Professions Committee. The bill extends the sunset date for the Bureau and enacts technical changes, statutory improvements, and policy reforms in response to issues raised during the Bureau’s sunset review oversight process.
Background.
Sunset review. In order to ensure that California’s myriad professional boards and bureaus are meeting the state’s public protection priorities, authorizing statutes for these regulatory bodies are subject to statutory dates of repeal, at which point the entity “sunsets” unless the date is extended by the Legislature. The sunset process provides a regular forum for discussion around the successes and challenges of various programs and the consideration of proposed changes to laws governing the regulation of professionals. Currently, the sunset review process applies to approximately three dozen different boards and bureaus under the Department of Consumer Affairs, as well as the Department of Real Estate and three nongovernmental nonprofit councils.
On a schedule averaging every four years, each entity is required to present a report to the Legislature’s policy committees, which in return prepare a comprehensive background paper on the efficacy and efficiency of their licensing and enforcement programs. Both the Administration and regulated professional stakeholders actively engage in this process. Legislation is then subsequently introduced extending the repeal date for the entity along with any reforms identified during the sunset review process.
Professional Fiduciaries Bureau. The Bureau was established through the enactment of the Professional Fiduciaries Act in 2006. As a regulatory agency within the Department of Consumer Affairs, protection of the public is the Bureau’s highest priority. The Bureau is advised by a Professional Fiduciaries Advisory Committee, consisting of both public and professional members, which is empowered to take over the Bureau’s responsibilities under the Act were the Bureau to ever be repealed.
As of September 1, 2022, the Bureau oversees 841 current and active professional fiduciary licensees, with 1,333 total licenses issued since July 1, 2008. Professional fiduciaries include non-family member conservators, guardians, trustees, personal representatives of a decedent’s estate, and agents under a durable power of attorney. These professions are trusted to look after the personal and financial interests of vulnerable Californians including seniors, children, and persons with disabilities. Professional fiduciaries may provide their clients with daily care, housing and medical needs, as well as financial management services ranging from the basic payment of bills to estate and investment management.
Attorneys licensed by the State Bar are not required to be licensed as professional fiduciaries, nor are certified public accountants and enrolled agents when working within the scope of their professions. Statute additionally exempts employees and agents of trust companies, FDIC-insured institutions, public agencies, certain nonprofits, and specified broker-dealers and investment advisers from licensure. Guardians, conservators, or personal representatives of a decedent’s estate serving on behalf of fewer than two individuals at the same time are also not required to be licensed; trustees and agents under a durable power of attorney are exempt if serving on behalf of three individuals or fewer at the same time.
Under the Act, the Bureau is charged with carrying out the following functions:
- Ensuring protection of the public as its highest priority;
- Promoting legal and ethical standards of professional conduct;
- Ensuring that applicants meet minimum requirements prior to licensure;
- Investigating all complaints; and,
- Taking disciplinary and administrative actions against licensees when appropriate.
Licensure of private conservators and other professional fiduciaries was repeatedly sought over the course of two decades, incepted following the publication of a series of articles by the Associated Press under the title “Guardians of the Elderly: An Ailing System” in 1987. This advocacy was galvanized in late 2005 when another investigative series into deficiencies in the state’s conservatorship laws was published, this time by the Los Angeles Times. The Times followed its investigative series with an editorial explicitly calling for legislation to establish formal state-level licensure of professional conservators and guardians. The editorial argued that the current laws governing minimum standards for conservators were insufficient and would not affect most professional conservators already engaged in providing services. The editorial concluded: “The state Department of Consumer Affairs, which oversees the licensing of many other professions, should add conservators to its purview.”
In 2006, Senator Liz Figueroa introduced Senate Bill 1550, sponsored by the Professional Fiduciary Association of California. This bill established the Professional Fiduciaries Act, which in early iterations would have been enforced by a Board of Professional Fiduciaries within the Department of Consumer Affairs. It was reported that aides to Governor Arnold Schwarzenegger had concerns about the bill and that the Governor had “criticized such boards as bloated bureaucracy and advocated their replacement with bureaus.” The bill was ultimately amended in the final weeks of the session to instead establish the Professional Fiduciaries Bureau, advised by a Professional Fiduciaries Advisory Committee.
On September 27, 2006, Governor Schwarzenegger signed Senate Bill 1550 and three other bills comprising a legislative package collectively referred to as the Omnibus Conservatorship and Guardianship Reform Act. Governor Schwarzenegger stated in signing the legislation that “we have a responsibility to help ensure that individuals entrusted with the well-being of our most vulnerable citizens are not taking advantage of or harming them.” With the enactment of Senate Bill 1550, the Bureau was established.
Shortly after the Bureau began issuing licenses, it became apparent that the number of anticipated license applicants had been dramatically overestimated during the sunrise process. Approximately 1,300 professional fiduciaries who had previously been registered with the Department of Justice were expected to seek licensure. Instead, only 450 licenses were issued by the Bureau by the end of Fiscal Year (FY) 2009-10. The Reorganization Plan proposed by Governor Schwarzenegger in his FY 2009-10 May Budget Revision recommended that the Bureau be consolidated with the California Board of Accountancy, both to provide greater revenue stability and as part of a broader effort to reduce governmental bureaucracy. The Senate Business, Professions, and Economic Development Committee held a hearing to consider this and other proposed reorganizations in June 2009, ultimately voting against consolidation.
A new wave of public and legislative interest in oversight of professional conservators arose when the New York Times aired a documentary titled “Framing Britney Spears” in February 2021, which detailed the rise to fame and the troubling circumstances surrounding the pop star’s involuntary conservatorship under the control of her father. Shortly after the documentary was initially aired, Assembly Bill 1194 by Assemblymember Evan Low was signed into law, enacting a series of new requirements on professional fiduciaries and empowering the Bureau to engage in more robust enforcement of malfeasant conservators. While “#FreeBritney” advocates celebrated these reforms, the Bureau has raised concerns that implementation of the bill’s mandates will be challenging within existing resources. New workload and enforcement-related expenditures are expected to place pressures on the Bureau’s fund condition, with already comparatively high fees charged to licensed fiduciaries potentially in need of further increase.
Issues Raised during Sunset Review. The background paper for the Bureau’s sunset review oversight hearing contained a total of 16 issues and recommendations, each of which is eligible to result in statutory changes enacted through the Bureau’s sunset bill.
Issue #1 in the sunset background paper related to the Professional Fiduciaries Act’s so-called
“reverse sunset provision.” Statute provides that “if the Bureau becomes inoperative or is repealed … the [Professional Fiduciaries Advisory Committee] shall succeed to and is vested with all the duties, powers, purposes, responsibilities, and jurisdiction, not otherwise repealed or made inoperative, of the Bureau and its chief.” This statute would have the effect of reconstituting the Advisory Committee as a traditional regulatory board, empowered to continue enforcement of the Act. In his signing message for Senate Bill 1550, Governor Schwarzenegger stated that he intended to seek legislative action in the following session to “clean up” the bill by removing the reverse sunset language, which he believed was “unnecessary and complicated.”
However, the language was never repealed. Seventeen years later, this bill would remove the Bureau’s reverse sunset provision and strike references to its Advisory Committee assuming its duties. The Bureau would still be subject to the traditional sunset process, and the Legislature would remain fully empowered to provide for any alternative form of regulation of professional fiduciaries were the Bureau to ever be repealed.
Issue #2 raised a concern that every member of the Bureau’s Advisory Committee is currently scheduled to term out at the same time. This issue was initially raised by the Bureau in its sunset report. The Bureau pointed out that the alignment of the Advisory Committee’s term expirations is not fortuitous and potentially places a strain upon the appointing authorities to reconstitute the entire committee membership. Further, the Advisory Committee would immediately lose all institutional expertise upon the members’ departure. The Bureau has therefore suggested that the terms of three Advisory Committee members be temporarily set to two years each, instead of four, so as to stagger the terms. This bill contains language to implement the Bureau’s recommendation.
Issue #3 questioned whether the Bureau should continue to be required to publish potentially sensitive personal information in court documents on its website. Statute requires the Bureau to publish information on its website regarding its licensees, including details relating to probate cases involving a professional fiduciary who has been removed or resigned. This information includes case names, locations, and case numbers that can be personally identifying for conservatees and other individuals. The Bureau expressed concern that “this information can expose vulnerable people to serious consumer harm.” This bill would resolve that concern by narrowing statute to allow more limited disclosure of information relating to a professional fiduciary who has been removed or resigned in a matter.
Issue #5 raised the issue of the Bureau’s long-term financial sustainability in light of its comparatively small licensee population and its high fees, which the Bureau has indicated will potentially need to be adjusted even higher in the future. This issue has been raised repeatedly throughout the Bureau’s existence. The background paper for the Bureau’s first sunset review in 2011 repeated contemporary assertions that “the Bureau struggled for viability, having a scarcity of licensees and minimal revenues.” The issue was also raised in the Bureau’s 2014 and 2018 sunset review background papers.
One proposed solution has been to increase the Bureau’s licensee population by removing or narrowing existing exemptions for certain professions currently exempted from licensure as professional fiduciaries. For example, some stakeholders have proposed eliminating the current exemption for enrolled agents acting within their scope of practice, arguing that the services required of a professional fiduciary acting in a representative capacity extend well beyond tax return preparation. As the Legislature considers multiple options for preserving the financial sustainability of the Bureau as a standalone entity, the proposal to strike the exemption for enrolled agents will remain an active topic of stakeholder discussion, as well as any other viable solutions to resolve the Bureau’s fiscal instability.
Issue #7 pointed out that the Professional Fiduciaries Act does not currently provide the Bureau with clear authority to reinstate or deny reinstatement to former licensees, under any circumstances. Statute prohibits the Bureau from renewing, restoring, or reinstating a license that has been canceled, but otherwise offers no criteria for determining if a former licensee warrants having their license restored. The Bureau stated that it believes the Act should be amended to expressly authorize the Bureau to grant or deny a petition for reinstatement of a license, and to provide criteria for the Bureau to consider in determining whether the individual seeking reinstatement poses no discernable public harm and has sufficiently met certain requirements. This bill contains language to implement that recommendation.
Issue #8 related to non-renewing licensees. The Bureau reported that if a professional fiduciary does not renew their license, it may be because they no longer intend to work as a professional fiduciary. However, if a license is not renewed, the licensee may not report final case closures to the Bureau and the Bureau may seek disciplinary action under the assumption that the professional fiduciary is continuing to practice without an active license. The Bureau proposed that licensees be required to provide notice that they no longer intend to practice, regardless of the licensee’s status and provide a final annual statement to close out any remaining cases. This bill contains language to implement that recommendation.
Issue #10 proposed giving the Bureau explicit authority to discipline active licensees who aid and abet unlicensed practice. In its sunset report, the Bureau expressed concern that some individuals whose professional fiduciary license has been disciplined by the Bureau, either by revocation or stipulated surrender, simply transfer their cases to their business partners, employers, or coworkers who are actively licensed professional fiduciaries, thereby keeping access to their former clients/cases and the potential to continue working despite being unlicensed. While unlicensed practice itself is an enforceable offense, the Bureau does not have clear authority to discipline licensees who aid and abet it.
The Bureau proposed that the Professional Fiduciaries Act be amended to give the Bureau express authority to discipline licensees who aid and abet unlicensed individuals engaged in the practice of a professional fiduciary. This bill currently contains language to implement that recommendation. However, the Committee intends to engage in further discussion with stakeholders to ensure that this language is not excessively broad or at risk of proscribing a licensee’s lawful use of unlicensed persons under appropriate circumstances.
Issue #11 discussed how the Bureau could more effectively compel cooperation from licensees during investigations. According to the Bureau, there have been instances where licensees have failed to cooperate with Bureau staff during investigations, and the Bureau lacks tools to compel compliance when licensees ignore the Bureau’s inquiries or provide incomplete information. The Bureau proposed that failure to cooperate with an investigation be made an express form of unprofessional conduct; this bill contains language to implement that recommendation.
Issue #12 related to unlicensed activity. Currently, the Bureau can impose an administrative citation and fine up to $5,000 for unlicensed activity, but the Bureau has stated that unlicensed individuals simply ignore the citation. While other practice acts under the Business and Professions Code provide that unlicensed activity is punishable as a misdemeanor, this is not the case for the Professional Fiduciaries Act. The Bureau believes that in order to meaningfully pursue unlicensed activity outside of issuing administrative sanctions, the law should be amended to criminalize unlicensed practice, consistent with other regulated professions.
Issue #14 proposed that statute be amended to clarify that professional fiduciaries may utilize and compensate the services of their employees without prior court approval. Assembly Bill 1194 prohibited a guardian or conservator from hiring or referring any business to an entity in which they or an employee have a financial interest. However, representatives of the profession have raised concerns that both courts and licensees have misinterpreted the statute to require a professional fiduciary to seek court approval prior to utilizing their staff to assist with the administration of a guardianship or conservatorship proceeding. Stakeholders asked that the Probate Code be amended to clarify that a professional fiduciary may utilize and compensate the services of their employees. This bill contains language to effectuate that request.
Issue #16 raised the traditional question of whether the licensing of professional fiduciaries should be continued and be regulated by the Bureau. The sunset background paper acknowledged that persistent questions remain unresolved regarding the Bureau’s long-term sustainability as an independent regulatory agency. However, the sunset background paper concluded that the argument for the Bureau continuing to license and regulate professional fiduciaries remains cogent and that if an extension of the Bureau as it currently exists is ultimately deemed practicable, then preserving that regulatory structure should likely be considered ideal. This bill would extend the Bureau’s repeal date by an additional four years.
Current Related Legislation. AB 1257 (Business and Professions) is the sunset bill for the Dental Hygiene Board of California. This bill is pending in this committee.
AB 1263 (Business and Professions) is the sunset bill for the Bureau of Automotive Repair. This bill is pending in this committee.
AB 1264 (Business and Professions) is the sunset bill for the Acupuncture Board. This bill is pending in this committee.
Prior Related Legislation. AB 1194 (Low, Chapter 417, Statutes of 2021) amended the Professional Fiduciaries Act to provide additional protections and rights for conservatees and require coordination between the courts and the Bureau.
SB 607 (Min, Chapter 367, Statutes of 2021) extended the sunset date for the Bureau until January 1, 2024 and made numerous unrelated changes.
AB 3144 (Low, Chapter 681, Statutes of 2018) extended the sunset date for the Bureau until January 1, 2023 and enacted various reforms to the Professional Fiduciaries Act.
AB 2741 (Bonilla, Chapter 344, Statutes of 2014) extended the sunset date for the Bureau until January 1, 2019 and enacted various reforms to the Professional Fiduciaries Act.
SB 543 (Steinberg, Chapter 448, Statutes of 2011) extended the sunset date for the Bureau until January 1, 2015.
SB 1550 (Figueroa, Chapter 491, Statutes of 2006) established the Professional Fiduciaries Act and created the Bureau.
REGISTERED SUPPORT:
None on file.
REGISTERED OPPOSITION:
None on file.
Analysis Prepared by: Robert Sumner / B. & P. / (916) 319-3301
Discussed in Hearing
48SEC
Assembly Floor
1MIN
Senate Standing Committee on Appropriations
6MIN
Senate Standing Committee on Business, Professions and Economic Development
59SEC
Assembly Floor
Bill Author
Bill Co-Author(s):
