BILL ANALYSIS Ó
AB 502
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
502 (Chau)
As Amended September 4, 2015
Majority vote
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|ASSEMBLY: | 80-0 | (June 4, |SENATE: |40-0 | (September 10, |
| | |2015) | | |2015) |
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Original Committee Reference: B. & P.
SUMMARY: Authorizes the creation of and establishes rules of
governance for a registered dental hygienist in alternative
practice (RDHAP) corporation.
The Senate amendments:
1)Authorize an RDHAP to practice as an employee of a
professional corporation under the Moscone-Knox Professional
Corporation Act.
2)State that an RDHAP corporation is a professional corporation
that is authorized to render professional services, as
specified, so long as that professional corporation and its
shareholders, officers, directors, and professional employees
rendering professional services are in compliance with the
Moscone-Knox Professional Corporation Act and other applicable
laws and regulations.
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3)Declare the violation of, attempt to violate, directly or
indirectly, assist in or abet the violation of, or conspire to
violate any provision or term laws and regulations relating to
the practice of an RDHAP to be unprofessional conduct.
4)Specify that a licensee employed by, or practicing in, an
RDHAP corporation shall practice within the scope of his or
her license.
5)Prohibit a shareholder who is disqualified from providing
professional services from deriving benefit from an RDHAP
corporation attributable to professional services rendered
while a shareholder is a disqualified person.
6)Require the bylaws of an RDHAP corporation to include a
provision whereby the capital stock owned by a disqualified
person or a deceased person be sold to the professional
corporation or to the remaining shareholders of the
professional corporation not later than 90 days after
disqualification, if the shareholder becomes a disqualified
person, or not later than six months after death, if the
shareholder becomes deceased.
7)Require an RDHAP to provide adequate security by insurance or
otherwise for claims against it by its patients arising out of
the rendering of professional services.
8)Exempt a professional corporation rendering professional
services by persons licensed by the Dental Hygiene Committee
of California (DHCC) from any requirement to obtain a
certificate of registration in order to render those
professional services.
9)Authorize registered dental hygienists and registered dental
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hygienists in extended functions to serve as a shareholder,
officer, director, or professional employee of an RDHAP
corporation.
FISCAL EFFECT: According to the Senate Appropriations
Committee, pursuant to Senate Rule 28.8, negligible state costs.
COMMENTS:
Purpose. This bill is sponsored by the California Dental
Hygienists' Association. According to the author, "[The BPC]
authorizes RDHAPs to incorporate. Corporation law would protect
the RDHAP's business, however, there is not language in the
Corporations Code authorizing RDHAPs to establish corporations,
leaving them without critical protections. [This bill] would
address these issues and ensure that the public has access to
quality dental hygiene services."
Background. In 1986, the Office of Statewide Health Planning
and Development (OSHPD) created the RDHAP. In 1993, the
professional designation was made permanent in statute. An
RDHAP must have been engaged in the practice of dental hygiene
as a registered dental hygienist in any setting, including
educational settings and public health settings, for a minimum
of 2,000 hours during the immediately preceding 36 months,
complete 150 additional hours of education courses, and pass a
written exam. An RDHAP has a unique distinction in that they
can work for a dentist or as an employee of another RDHAP as an
independent contractor, as a sole proprietor of an alternative
hygiene practice, or other locations such as residences of the
homebound, schools, residential facilities, and in underserved
dental shortage areas, as determined by OSHPD. They may also
operate a mobile dental clinic or operate an independent office
or offices.
As a result, RDHAPs may practice in settings outside of the
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traditional dental office, and allow patients to receive the
same type of professional preventive care they would receive in
a dental office in schools, skilled and residential care
facilities, hospitals, private homes, and in some instances in
an RDHAP's own office. A 2009 survey of California RDHAPs found
that more than two-thirds of their patients had no other source
of oral health care. RDHAPs also struggle to find referrals to
dentists for patients in need of more advanced care and charge
lower fees than dentists.
The DHCC licenses and regulates approximately 509 RDHAPs.
Professional Corporations. A professional corporation is an
organization made up of individuals of the same trade or
profession. The Moscone-Knox Professional Corporations Act of
1968 authorized the formation of professional corporations to
obtain certain benefits of the corporate form of doing business,
such as limited legal liability. At that time, only medical,
law and dental professional corporations were envisioned; there
are now 15 authorized healing arts professional corporations.
Current law specifies which healing arts licensees may be
shareholders, officers, directors or professional employees of
professional corporations controlled by a differing profession
if the sum of all shares owned by those licensed persons does
not exceed 49% of the total shares of the professional
corporation.
Business and Professions Code Section 1962 authorizes an
association, partnership, corporation, or group of three or more
registered RDHAPs to practice under an assumed or fictitious
name if the association, partnership, corporation, or group
holds a permit issued by the DHCC authorizing the holder to use
that name connection with the holder's practice, as specified.
According to the sponsors, this section was intended to allow
RDHAPs to incorporate to gain the protections afforded by
corporation law, most importantly, protection against personal
liability. However, conforming changes were not made to the
Corporations Code. This bill would authorize the creation of an
RDHAP professional corporation and provide that a dental
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assistant, licensed dentist, registered dental hygienist, or
registered dental hygienist in extended functions may be a
shareholder, officer, director, or professional employee of the
RDHAP corporation, and would establish rules of governance for
that corporation.
Analysis Prepared by:
Eunie Linden / B. & P. / (916) 319-3301 FN:
0002385