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SB-387 Dentists: death or incapacity.(2007-2008)

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SB387:v88#DOCUMENT

Senate Bill No. 387
CHAPTER 433

An act to add Sections 1625.3, 1625.4, and 1625.5 to the Business and Professions Code, and to amend Section 13407 of the Corporations Code, relating to dentistry.

[ Approved by Governor  October 10, 2007. Filed with Secretary of State  October 10, 2007. ]

LEGISLATIVE COUNSEL'S DIGEST


SB 387, Alquist. Dentists: death or incapacity.
Existing law, the Dental Practice Act, provides for the licensure and regulation by the Dental Board of California of those engaged in the practice of dentistry. Existing law provides that a person practices dentistry if the person, among other things, manages or conducts as manager, proprietor, conductor, lessor, or otherwise, a place where dental operations are performed. Existing law excludes from the unlicensed practice of dentistry certain clinics and other entities that comply with various requirements.
This bill would also exclude from the unlicensed practice of dentistry an executor or administrator of a dentist’s estate, a legal guardian, conservator, or authorized representative of a dentist who is deceased or incapacitated, or a trustee or successor trustee of a trust that owns a deceased or incapacitated dentist’s dental practice, as specified, for the purposes of a contract with another licensed dentist or dentists to continue the dental practice if the practice meets specified criteria, for a period not to exceed 12 months from the date of death or incapacity. The bill would require the executor, administrator, legal guardian, conservator, representative, or trustee or successor trustee to meet certain requirements, including providing specified notification to the board. The bill would provide that the notification would include a statement that if the person required to make the notification willfully states as true any material fact that he or she knows to be false, he or she shall be subject to a civil penalty of up to $10,000. The bill would authorize the board to order the termination of the practice upon making certain findings, and would require the board to follow certain procedures in doing so. The bill would also require that a specified written notification relating to the bill’s provisions be included with, or as part of, all application forms required for licensure and renewal. The bill would make related changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 1625.3 is added to the Business and Professions Code, to read:

1625.3.
 (a) Notwithstanding any other provision of law, upon the incapacity or death of a dentist, if the requirements of Section 1625.4 are met, any of the following persons may employ licensees and dental assistants and charge for the professional services they render for a period not to exceed 12 months from the date of the dentist’s death or incapacity without being deemed to be practicing dentistry within the meaning of Section 1625:
(1) The legal guardian, conservator, or authorized representative of an incapacitated dentist.
(2) The executor or administrator of the estate of a dentist who is deceased.
(3) The named trustee or successor trustee of a trust or subtrust that owns assets consisting only of the incapacitated or deceased dentist’s dental practice and that was established solely for the purpose of disposition of the dental practice upon the dentist’s incapacity or death.
(b) The persons described in subdivision (a) shall not interfere with, control, or otherwise direct the professional judgment of a licensee or dental assistant acting within his or her scope of practice as defined in this chapter.

SEC. 2.

 Section 1625.4 is added to the Business and Professions Code, to read:

1625.4.
 (a) Where the dental practice of an incapacitated or deceased dentist is a sole proprietorship or where an incapacitated or deceased dentist is the sole shareholder of a professional dental corporation, a person identified in subdivision (a) of Section 1625.3 may enter into a contract with one or more dentists licensed in the state to continue the operations of the incapacitated or deceased dentist’s dental practice for a period of no more than 12 months from the date of death or incapacity, or until the practice is sold or otherwise disposed of, whichever occurs first, if all of the following conditions are met:
(1) The person identified in subdivision (a) of Section 1625.3 delivers to the board a notification of death or incapacity that includes all of the following information:
(A) The name and license number of the deceased or incapacitated dentist.
(B) The name and address of the dental practice.
(C) If the dentist is deceased, the name, address, and tax identification number of the estate or trust.
(D) The name and license number of each dentist who will operate the dental practice.
(E) A statement that the information provided is true and correct, and that the person identified in subdivision (a) of Section 1625.3 understands that any interference by the person or by his or her assignee with the contracting dentist’s or dentists’ practice of dentistry or professional judgment is grounds for immediate termination of the operations of the dental practice without a hearing. The statement shall also provide that if the person required to make this notification willfully states as true any material fact that he or she knows to be false, he or she shall be subject to a civil penalty of up to ten thousand dollars ($10,000) in an action brought by any public prosecutor. A civil penalty imposed under this subparagraph shall be enforced as a civil judgment.
(2) The dentist or dentists who will operate the practice shall be licensed by the board and that license shall be current, valid, and shall not be suspended, restricted, or otherwise the subject of discipline.
(3) Within 30 days after the death or incapacity of a dentist, the person identified in subdivision (a) of Section 1625.3 or the contracting dentist or dentists shall send notification of the death or incapacity by mail to the last known address of each current patient of record with an explanation of how copies of the patient’s records may be obtained. This notice may also contain any other relevant information concerning the continuation of the dental practice. The failure to comply with the notification requirement within the 30-day period shall be grounds for terminating the operation of the dental practice under subdivision (b). The contracting dentist or dentists shall obtain a form signed by the patient, or the patient’s guardian or legal representative, that releases the patient’s confidential dental records to the contracting dentist or dentists prior to use of those records.
(b) The board may order the termination of the operations of a dental practice operating pursuant to this section if the board determines that the practice is operating in violation of this section. The board shall provide written notification at the address provided pursuant to subparagraph (B) of paragraph (1) of subdivision (a). If the board does not receive a written appeal of the determination that the practice is operating in violation of this section within 10 days of receipt of the notice, the determination to terminate the operations of the dental practice shall take effect immediately. If an appeal is received in a timely matter by the board, the executive officer of the board, or his or her designee, shall conduct an informal hearing. The decision of the executive officer or his or her designee shall be mailed to the practice no later than 10 days after the informal hearing, is the final decision in the manner and is not subject to appeal under the Administrative Procedure Act (Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code).
(c) Notwithstanding subdivision (b), if the board finds evidence that the person identified in subdivision (a) of Section 1625.3, or his or her assignee, has interfered with the practice or professional judgment of the contracting dentist or dentists or otherwise finds evidence that a violation of this section constitutes an immediate threat to the public health, safety, or welfare, the board may immediately order the termination of the operations of the dental practice without an informal hearing.
(d) A notice of an order of immediate termination of the dental practice without an informal hearing, as referenced in subdivision (b), shall be served by certified mail on the person identified in subdivision (a) of Section 1625.3 at the address provided pursuant to subparagraph (B) or (C) of paragraph (1) of subdivision (a), as appropriate, and on the contracting dentist or dentists at the address of the dental practice provided pursuant to subparagraph (B) of paragraph (1) of subdivision (a).
(e) A person receiving notice of an order of immediate termination pursuant to subdivision (d) may petition the board within 30 days of the date of service of the notice for an informal hearing before the executive officer or his or her designee, which shall take place within 30 days of the filing of the petition.
(f) A notice of the decision of the executive officer or his or her designee following an informal hearing held pursuant to subdivision (b) shall be served by certified mail on the person identified in subdivision (a) of Section 1625.3 at the address provided pursuant to subparagraph (B) or (C) of paragraph (1) of subdivision (a), as appropriate, and on the contracting dentist or dentists at the address of the dental practice provided pursuant to subparagraph (B) of paragraph (1) of subdivision (a).
(g) The board may require the submission to the board of any additional information necessary for the administration of this section.

SEC. 3.

 Section 1625.5 is added to the Business and Professions Code, to read:

1625.5.
 The following written notification shall be included with, or as part of, all application forms required for a license to practice dentistry pursuant to this article and for renewal of that license pursuant to Article 6 (commencing with Section 1715):
“Effective January 1, 2008, certain nondentists may, upon your death or incapacity, contract with another licensed dentist or dentists to continue your dental practice for a period not exceeding 12 months if certain conditions are met. Sections 1625.3 and 1625.4 of the Business and Professions Code permit the legal guardian or conservator or authorized representative of an incapacitated dentist, the executor or administrator of the estate of a deceased dentist, or the named trustee or successor trustee of a trust or subtrust who meets certain requirements, to contract with a licensed dentist or dentists to continue the incapacitated or deceased dentist’s dental practice for a period not to exceed 12 months from the date of death or incapacity if the practice meets specified criteria and if certain other conditions are met, including providing a specific notification to the Dental Board of California. You and your estate planner should become familiar with these requirements and the notification process. Please contact the Dental Board of California for additional information.”

SEC. 4.

 Section 13407 of the Corporations Code is amended to read:

13407.
 Shares in a professional corporation or a foreign professional corporation qualified to render professional services in this state may be transferred only to a licensed person, to a shareholder of the same corporation, to a person licensed to practice the same profession in the jurisdiction or jurisdictions in which the person practices, or to a professional corporation, and any transfer in violation of this restriction shall be void, except as provided herein.
A professional corporation may purchase its own shares without regard to any restrictions provided by law upon the repurchase of shares, if at least one share remains issued and outstanding.
If a professional corporation or a foreign professional corporation qualified to render professional services in this state shall fail to acquire all of the shares of a shareholder who is disqualified from rendering professional services in this state or of a deceased shareholder who was, on his or her date of death, licensed to render professional services in this state, or if such a disqualified shareholder or the representative of such a deceased shareholder shall fail to transfer said shares to the corporation, to another shareholder of the corporation, to a person licensed to practice the same profession in the jurisdiction or jurisdictions in which the person practices, or to a licensed person, within 90 days following the date of disqualification, or within six months following the date of death of the shareholder, as the case may be, then the certificate of registration of the corporation may be suspended or revoked by the governmental agency regulating the profession in which the corporation is engaged. In the event of such a suspension or revocation, the corporation shall cease to render professional services in this state.
Notwithstanding any provision in this part, upon the death or incapacity of a dentist, any individual named in subdivision (a) of Section 1625.3 of the Business and Professions Code may employ licensed dentists and dental assistants and charge for their professional services for a period not to exceed 12 months from the date of death or incapacity of the dentist. The employment of licensed dentists and dental assistants shall not be deemed the practice of dentistry within the meaning of Section 1625 of the Business and Professions Code, provided that all of the requirements of Section 1625.4 of the Business and Professions Code are met. If an individual listed in Section 1625.3 of the Business and Professions Code is employing licensed persons and dental assistants, then the shares of a deceased or incapacitated dentist shall be transferred as provided in this section no later than 12 months from the date of death or incapacity of the dentist.