Bill Text: CA AB1262 | 2023-2024 | Regular Session | Amended
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Professional fiduciaries.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2023-10-10 - Chaptered by Secretary of State - Chapter 680, Statutes of 2023. [AB1262 Detail]
Download: California-2023-AB1262-Amended.html
SEC. 12. Section 2401 of the Probate Code is amended to read: 2401.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B 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 XIII B of the California Constitution.
Bill Title: Professional fiduciaries.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2023-10-10 - Chaptered by Secretary of State - Chapter 680, Statutes of 2023. [AB1262 Detail]
Download: California-2023-AB1262-Amended.html
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Amended
IN
Senate
July 05, 2023 |
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Amended
IN
Assembly
April 20, 2023 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 1262
| Introduced by Committee on Business and Professions |
February 16, 2023 |
An act to amend Sections 146, 6510, 6511, 6532, 6534, 6541.1, and 6542 of, and to add Sections 6543, 6561.5, 6562.5, and 6581.1 to, the Business and Professions Code, and to amend Section 2401 of the Probate Code, relating to professional fiduciaries.
LEGISLATIVE COUNSEL'S DIGEST
AB 1262, as amended, Committee on Business and Professions.
Professional fiduciaries.
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 licensee’s 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 decedent’s 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 applicant’s 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 bureau’s 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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 146 of the Business and Professions Code is amended to read:146.
(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 licensee’s 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 decedent’s 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 licensee’s 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 licensee’s supervision as a professional fiduciary.
(3) The licensee’s 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 decedent’s 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 decedent’s 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 decedent’s 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 applicant’s 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 bureau’s 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 one’s 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.(a)The guardian or conservator, or limited conservator to the extent specifically and expressly provided in the appointing court’s 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 company’s financial interest.
