The AIACC-sponsored legislation to remove the sunset date on the law that allows architectural firms to organize as Limited Liability Partnerships (LLPs), passed its first legislative hearing without any opposition.
This bill, AB 560, is needed to allow architectural LLPs to continue. The architect LLP law sunsets, or expires, on January 1, 2012.
Why does the architect LLP law have a sunset date? When the AIACC-sponsored architect LLP law was enacted in 1998, allowing architects to join attorneys and accountants (as the only professions at the time that could form LLPs), it included a couple of conditions: architectural LLPs had to carry Errors & Omissions insurance, and the law had to contain a sunset date to require a periodic review of insurance claims data to make sure the required E&O coverage remained sufficient.
Since then, the LLP law has gone through two sunset hearings, in 2001 and 2006.
Like the previous two sunset hearings, the AIACC expects the sunset date to be extended or eliminated, allowing architectural LLPs to continue operating without any interruption. The only question, (and one that will be answered in June when AB 560 is heard in the State Senate Judiciary Committee), is will the required level of E&O insurance an architectural LLP must carry be changed? The AIACC is working with several insurers to compile recent claims data that will be used by the State Senate Judiciary Committee to determine if the existing insurance requirement is sufficient.
For more information, please contact via email Mark Christian, Hon. AIACC, AIACC Director of Legislative Affairs or at 916.642.1708.