BILL NUMBER: AB 2473 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Members Niello and Ma
FEBRUARY 21, 2008
An act to amend Sections 5035.3, 5050, 5050.2, 5088, 5096, 5096.2,
5096.3, 5096.4, 5096.6, 5096.7, 5096.10, 5096.12, 5109, 5116.6, and
5134 of, to amend and repeal Section 5092 of, to repeal Sections
5054, 5096.1, 5096.5, 5096.11, 5096.14, and 5096.15 of, and to repeal
and add Section 5096.13 of, the Business and Professions Code,
relating to accountancy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2473, as introduced, Niello. Accountancy: licensure.
Existing law provides for the licensure and regulation of
accountants by the California Board of Accountancy in the Department
of Consumer Affairs. Existing law prohibits a person from engaging in
the practice of public accountancy in this state unless he or she
holds either a valid permit issued by the board or a practice
privilege, which the board may, until January 1, 2011, issue to an
accountant licensed in another state who meets specified
requirements, and a violation of this provision is a crime. Existing
law exempts from the prohibition the temporary practice of
accountancy in California incident to practice in another state or
foreign country in which a person is licensed or authorized to
practice accountancy, as specified, and the filing of specified tax
returns by an accountant licensed in another state.
This bill would repeal on January 1, 2012, the provisions
governing education, examination, and experience requirements for
licensure as a certified public accountant. The bill would delete the
exception from the practice prohibition for practice incidental to
lawful practice in another state and for the filing of the tax
returns by a licensee of another state, and would revise the
exception from the practice prohibition for practice incidental to
lawful practice in a foreign country by imposing additional
requirements in order for that exception to apply.
This bill would delete the practice privilege provisions for out
of state accountants, including related fees, and would instead
authorize an individual who has a valid and current license,
certificate, or permit to practice public accountancy from another
state and who meets specified requirements to engage in the
cross-border practice of accountancy in this state without obtaining
a certificate or license, subject to specified conditions and
limitations. The bill would authorize an accounting firm or sole
proprietor that performs nonattest services for entities
headquartered in this state to engage in the practice of public
accountancy in this state without a firm registration, and would
authorize an accounting firm or sole proprietor that performs attest
services for entities headquartered in this state to engage in the
practice of accountancy through an alternative firm registration,
subject to certain conditions. The bill would authorize the board to
revoke or suspend the above authorizations to practice, and to take
disciplinary action, as specified.
Because this bill would delete or revise certain exceptions to the
accountancy licensing provisions, the violation of which are a
crime, it would impose a state-mandated local program.
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.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 5035.3 of the Business and Professions Code is
amended to read:
5035.3. For purposes of subdivision (b) of Section 5050
and Sections 5054 and 5096.12 Sections 5050.2,
5096.12, and 5096.13 , "firm" includes any entity that is
authorized or permitted to practice public accountancy as a firm
under the laws of another state or country .
SEC. 2. Section 5050 of the Business and Professions Code is
amended to read:
5050. (a) Except as
provided in subdivisions (b) and (c) of this section, in
subdivision (a) of Section 5054, and in Section 5096.12
Section 5050.2 , no person shall engage in the practice of
public accountancy in this state unless the person is the holder of
a valid permit to practice public accountancy issued by the board or
a holder of a practice privilege practicing
in this state under cross-border practice pursuant to Article
5.1 (commencing with Section 5096).
(b) Nothing in this chapter shall prohibit a certified public
accountant, a public accountant, or a public accounting firm lawfully
practicing in another state from temporarily practicing in this
state incident to practice in another state, provided that an
individual providing services under this subdivision may not solicit
California clients, may not assert or imply that the individual is
licensed to practice public accountancy in California, and may not
engage in the development, implementation, or marketing to California
consumers of any abusive tax avoidance transaction, as defined in
subdivision (c) of Section 19753 of the Revenue and Taxation Code. A
firm providing services under this subdivision that is not registered
to practice public accountancy in California may not solicit
California clients, may not assert or imply that the firm is licensed
to practice public accountancy in California, and may not engage in
the development, implementation, or marketing to California consumers
of any abusive tax avoidance transaction, as defined in subdivision
(c) of Section 19753 of the Revenue and Taxation Code. This
subdivision shall become inoperative on January 1, 2011.
(c) Nothing in this chapter shall prohibit a person who holds a
valid and current license, registration, certificate, permit, or
other authority to practice public accountancy from a foreign
country, and lawfully practicing therein, from temporarily engaging
in the practice of public accountancy in this state incident to an
engagement in that country, provided that:
(1) The temporary practice is regulated by the foreign country and
is performed under accounting or auditing standards of that country.
(2) The person does not hold himself or herself out as being the
holder of a valid California permit to practice public accountancy or
the holder of a practice privilege pursuant to Article 5.1
(commencing with Section 5096).
SEC. 3. Section 5050.2 of the Business and Professions Code is
amended to read:
5050.2. (a) Nothing in this chapter shall prohibit a person
or firm that holds a valid and current license, registration,
certificate, permit, or other authority to practice public
accountancy from a foreign country, and lawfully practicing therein,
from temporarily engaging in the practice of public accountancy in
this state incident to an engagement in that country, provided that
the individual or firm:
(1) Is regulated by the foreign country and is performing the
temporary practice in this state under accounting or auditing
standards of that country.
(2) Does not represent or hold himself, herself, or itself out as
being the holder of a valid California permit to practice public
accountancy.
(3) Is authorized to practice in another country and does not have
an office in this state.
(4) Shall be deemed to consent to the personal, subject matter,
and disciplinary jurisdiction of the board with respect to any
practice under this section.
(5) Shall cooperate with any board investigation or inquiry and
shall timely respond to a board investigation, inquiry, request,
notice, demand, or subpoena for information or documents and timely
provide to the board the identified information and documents.
(6) Shall not perform any services in this state that the
individual or firm is not legally authorized to perform in the
country of principal place of business.
(a)
(b) The board may revoke, suspend,
issue a fine pursuant to Article 6.5 (commencing with Section 5116),
or revoke, suspend, or otherwise restrict the right
to practice in this state or otherwise discipline
the holder of an authorization to practice under subdivision
(b) or (c) of Section 5050, subdivision (a) of Section 5054, or
Section 5096.12 a person with a license, registration,
certificate, permit, or other authority to practice public
accountancy from a foreign country for any act that would be a
violation of this code or grounds for discipline against a licensee
or holder of a practice privilege , or grounds for
denial of a license or practice privilege under
this code. The provisions of the Administrative Procedure Act,
including, but not limited to, the commencement of a disciplinary
proceeding by the filing of an accusation by the board shall apply to
this section. Any person whose authorization to practice
under subdivision (b) or (c) of Section 5050, subdivision (a) of
Section 5054, or Section 5096.12 has been revoked
under this section may apply for reinstatement of the
authorization to practice under subdivision (b) or (c) of
Section 5050, subdivision (b) of Section 5054, or Section 5096.12
not less than one year after the effective date of the
board's decision revoking the authorization to practice unless a
longer time, not to exceed three years, is specified in the board's
decision revoking the authorization to practice.
(b)
(c) The board may administratively suspend the
authorization of any person to practice under subdivision
(b) or (c) of Section 5050, subdivision (a) of Section 5054, or
Section 5096.12 this section for any act that
would be grounds for administrative suspension under Section 5096.4
utilizing the procedures set forth in that section.
SEC. 4. Section 5054 of the Business and Professions Code is
repealed.
5054. (a) Notwithstanding any other provision of this chapter, an
individual or firm holding a valid and current license, certificate,
or permit to practice public accountancy from another state may
prepare tax returns for natural persons who are California residents
or estate tax returns for the estates of natural persons who were
clients at the time of death without obtaining a permit to practice
public accountancy issued by the board under this chapter or a
practice privilege pursuant to Article 5.1 (commencing with Section
5096) provided that the individual or firm does not physically enter
California to practice public accountancy pursuant to Section 5051,
does not solicit California clients, and does not assert or imply
that the individual or firm is licensed or registered to practice
public accountancy in California.
(b) The board may, by regulation, limit the number of tax returns
that may be prepared pursuant to subdivision (a).
SEC. 5. Section 5088 of the Business and Professions Code is
amended to read:
5088. (a) Any individual
who is the holder of a current and valid license , certificate,
or permit as a certified public accountant issued under the
laws of any state and who applies to the board for a license as a
certified public accountant under the provisions of Section 5087 may,
until the time the application for a license is granted or denied,
practice public accountancy in this state only under a
the cross-border practice privilege
pursuant to the provisions of Article 5.1 (commencing with
Section 5096), except that, for purposes of this section, the
individual is not disqualified from a
cross-border practice privilege during the
period the application is pending by virtue of maintaining an office
or principal place of business, or both, in this state. The
board may by regulation provide for exemption, credit, or proration
of fees to avoid duplication of fees.
(b) This section shall become operative on January 1, 2006.
SEC. 6. Section 5092 of the Business and Professions Code is
amended to read:
5092. (a) To qualify for the certified public accountant license,
an applicant who is applying under this section shall meet the
education, examination, and experience requirements specified in
subdivisions (b), (c), and (d), or otherwise prescribed pursuant to
this article. The board may adopt regulations as necessary to
implement this section.
(b) An applicant for the certified public accountant license shall
present satisfactory evidence that the applicant has completed a
baccalaureate or higher degree conferred by a college or university,
meeting, at a minimum, the standards described in Section 5094, the
total educational program to include a minimum of 24 semester units
in accounting subjects and 24 semester units in business related
subjects. This evidence shall be provided prior to admission to the
examination for the certified public accountant license, except that
an applicant who applied, qualified, and sat for at least two
subjects of the examination for the certified public accountant
license before May 15, 2002, may provide this evidence at the time of
application for licensure.
(c) An applicant for the certified public accountant license shall
pass an examination prescribed by the board pursuant to this
article.
(d) The applicant shall show, to the satisfaction of the board,
that the applicant has had two years of qualifying experience. This
experience may include providing any type of service or advice
involving the use of accounting, attest, compilation, management
advisory, financial advisory, tax, or consulting skills. To be
qualifying under this section, experience shall have been performed
in accordance with applicable professional standards. Experience in
public accounting shall be completed under the supervision or in the
employ of a person licensed or otherwise having comparable authority
under the laws of any state or country to engage in the practice of
public accountancy. Experience in private or governmental accounting
or auditing shall be completed under the supervision of an individual
licensed by a state to engage in the practice of public accountancy.
(e) This section shall remain in effect only until January 1,
2012, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2012, deletes or extends
that date.
SEC. 7. Section 5096 of the Business and Professions Code is
amended to read:
5096. (a) An individual whose principal place of business is not
in this state and who has a valid and current license, certificate
, or permit to practice public accountancy from another
state may, subject to the conditions and limitations in this article,
engage in the practice of public accountancy in this state under
a cross-border practice
privilege without obtaining a certificate or license under
this chapter if the individual satisfies one of the following:
(1) The individual has continually practiced public accountancy as
a certified public accountant under a valid license ,
certificate, or permit issued by any state for at least four of
the last ten 10 years.
(2) The individual has a license, certificate, or permit from a
state which that has been determined by
the board to have education, examination, and experience
qualifications for licensure substantially equivalent to this state's
qualifications under Section 5093.
(3) The individual possesses education, examination, and
experience qualifications for licensure which have been
determined by the board to be that are
substantially equivalent to this state's qualifications under Section
5093.
(b) The board may designate states as substantially equivalent
under paragraph (2) of subdivision (a) and may accept individual
qualification evaluations or appraisals conducted by designated
entities, as satisfying the requirements of paragraph (3) of
subdivision (a).
(c) To obtain a practice privilege under this section, an
individual who meets the requirements of subdivision (a), shall do
the following:
(1) In the manner prescribed by board regulation, notify the board
of the individual's intent to practice.
(2) Pay a fee as provided in Article 8 (commencing with Section
5130).
(d) Except as otherwise provided by this article or by board
regulation, the practice privilege commences when the individual
notifies the board, provided the fee is received by the board within
30 days of that date. The board shall permit the notification to be
provided electronically.
(c)
(c) An individual who holds a practice
privilege under this article practices under
cross-border practice in this state :
(1) Is subject to the personal and subject matter jurisdiction and
disciplinary authority of the board and the courts of this state.
(2) Shall comply with the provisions of this chapter, board
regulations, and other laws, regulations, and professional standards
applicable to the practice of public accountancy by the licensees of
this state and to any other laws and regulations applicable to
individuals practicing under cross-border practice
privileges in this state , except the
individual is deemed, solely for the purpose of this article, to have
met the continuing education requirements and ethics examination
requirements of this state when such the
individual has met the examination and
continuing education requirements of the state in which the
individual holds the valid license, certificate, or permit
on which the substantial equivalency is based as
provided in subdivision (a) .
(3) Shall not provide public accountancy services in this state
from any office located in this state, except as an employee of a
firm registered in this state. This paragraph does not apply to
public accountancy services provided to a client at the client's
place of business or residence.
(4) Is deemed to have appointed the regulatory agency of
the each state that issued the
individual's in which he or she holds a
certificate, license, or permit upon which substantial
equivalency is based as the individual's agent on whom
notices, subpoenas or other process may be served in any action or
proceeding by the board against the individual.
(5) Shall cooperate with any board investigation or inquiry and
shall timely respond to a board investigation, inquiry, request,
notice, demand or subpoena for information or documents and timely
provide to the board the identified information and documents.
(6) Shall not perform any services in this state under
cross-border practice that he or she is not legally authorized to
perform in his or her state of principal place of business.
(f) A practice privilege expires one year from the date of the
notice, unless a shorter period is set by board regulation.
(g)
(d) (1) No individual may practice under a
cross-border practice privilege
without prior approval of the board if the individual has
, or acquires at any time during the term of the practice
privilege, any disqualifying condition under paragraph (2)
of this subdivision.
(2) Disqualifying conditions include:
(A) Conviction of any crime other than a minor traffic violation.
(B) Revocation, suspension, denial, surrender or other discipline
or sanctions involving any license, permit, registration, certificate
or other authority to practice any profession in this or any other
state or foreign country or to practice before any state, federal, or
local court or agency, or the Public Company Accounting Oversight
Board.
(C) Pendency of any investigation, inquiry or proceeding by or
before any state, federal or local court or agency, including, but
not limited to, the Public Company Accounting Oversight Board,
involving the professional conduct of the individual.
(D) Any judgment or arbitration award against the individual
involving the professional conduct of the individual in the amount of
thirty thousand dollars ($30,000) or greater within the last 10
years .
(E) Any other conditions as specified by the board in regulation.
(3) The board may adopt regulations exempting specified minor
occurrences of the conditions listed in subparagraph (B) of paragraph
(2) from being disqualifying conditions under this subdivision.
(e) An individual who acquires any disqualifying condition
described in paragraph (2) of subdivision (d) while practicing under
cross-border practice in this state shall immediately notify the
board in writing of the nature and details of the disqualifying
condition.
SEC. 8. Section 5096.1 of the Business and Professions Code is
repealed.
5096.1. (a) Any individual, not a licensee of this state, who is
engaged in any act which is the practice of public accountancy in
this state, and who has not given notice of intent to practice under
practice privileges and paid the fee required pursuant to the
provisions of this article, and who has a license, certificate or
other authority to engage in the practice of public accountancy in
any other state, regardless of whether active, inactive, suspended,
or subject to renewal on payment of a fee or completion of an
educational or ethics requirement, is:
(1) Deemed to be practicing public accountancy unlawfully in this
state.
(2) Subject to the personal and subject matter jurisdiction and
disciplinary authority of the board and the courts of this state to
the same extent as a holder of a valid practice privilege.
(3) Deemed to have appointed the regulatory agency of the state
that issued the individual's certificate or license as the individual'
s agent on whom notice, subpoenas, or other process may be served in
any action or proceeding by the board against the individual.
(b) The board may prospectively deny a practice privilege to any
individual who has violated this section or implementing regulations
or committed any act which would be grounds for discipline against
the holder of a practice privilege.
SEC. 9. Section 5096.2 of the Business and Professions Code is
amended to read:
5096.2. (a) Practice privileges An
individual licensed out of state may be denied
cross-border practice in this state for failure to qualify
under or comply with the provisions of this article or implementing
regulations, or for any act that if committed by an applicant for
licensure would be grounds for denial of a license under Section 480
or if committed by a licensee would be grounds for discipline under
Section 5100, or for any act committed outside of this state that
would be a violation if committed within this state.
(b) The board may deny cross-border practice
privileges in this state using either of the
following procedures:
(1) Notifying the individual in writing of all of the following:
(A) That the cross-border practice privilege
is denied.
(B) The reasons for denial.
(C) The earliest date on which the individual is eligible for
a cross-border practice
privilege in this state .
(D) That the The individual has a
right to appeal the notice and request a hearing under the provisions
of the Administrative Procedure Act if a written notice of appeal
and request for hearing is made within 60 15
days.
(E) That, if Should the individual
does not submit a notice of appeal and request for
hearing within 60 15 days, the board's
action set forth in the notice shall become final.
(2) Filing a statement of issues under the Administrative
Procedure Act.
(c) An individual licensed out of state who
had been denied a cross-border practice
privilege in this state may
apply petition for a new
board approval to practice under cross-border practice
privilege not less than one year after the
effective date of the notice or decision denying the
practice privilege in this state
, unless a longer time period, not to exceed three
years, is specified in the notice or decision denying the
practice privilege in this state
.
SEC. 10. Section 5096.3 of the Business and Professions Code is
amended to read:
5096.3. (a) Practice privileges are The
cross-border practice of a n individual
licensed out of state , practicing or who
practiced in this state under cross-border practice ,
may be subject to revocation, suspension, fines
, or other disciplinary sanctions for any conduct that would
be grounds for discipline against a licensee of the board or for any
conduct in violation of this article or regulations implementing this
article.
(b) Practice privileges are subject to discipline during any time
period in which they are valid, under administrative suspension, or
expired.
(c)
(b) The board may recover its costs pursuant to Section
5107 as part of any disciplinary proceeding against the
holder of a practice privilege an individual who is
licensed in another state and who is practicing or has practiced
under cross-border practice in this state .
(d)
(c) An individual licensed out of state
whose cross-border practice privilege
has been revoked may apply for a new practice
privilege petition for board approval to practice in
this state not less than one year after the effective date of
the board's decision revoking the individual's cross-border
practice privilege unless a longer time
period, not to exceed three years, is specified in the board's
decision revoking the practice privilege
in this state .
(e)
(d) The provisions of the Administrative Procedure Act,
including, but not limited to, the commencement of a disciplinary
proceeding by the filing of an accusation by the board shall apply
under this article.
(e) If the board takes disciplinary action against an individual
licensed in another state who is practicing or practiced in this
state under cross-border practice, the board shall notify each state
in which the individual holds a license, certificate, or permit of
that action.
SEC. 11. Section 5096.4 of the Business and Professions Code is
amended to read:
5096.4. (a) The right of an individual to practice in
this state under a practice privilege engage in
cross-border practice may be administratively suspended at any
time by an order issued by the board or its executive officer,
without prior notice or hearing, for the purpose of conducting a
disciplinary investigation, proceeding, or inquiry concerning the
representations made in the notice, the individual's competence or
qualifications to practice under practice privileges
cross-border practice , failure to timely
respond to a board inquiry or request for information or documents,
or under other conditions and circumstances provided for by board
regulation.
(b) The administrative suspension order is immediately effective
when mailed to the individual's address of record or agent for notice
and service as provided for in this article.
(c) The administrative suspension order shall contain the
following:
(1) The reason for the suspension.
(2) A statement that the individual has the right, within 30 days,
to appeal the administrative suspension order and request a hearing.
(3) A statement that any appeal hearing will be conducted under
the provisions of the Administrative Procedure Act applicable to
individuals who are denied licensure, including the filing of a
statement of issues by the board setting forth the reasons for the
administrative suspension of practice privileges
cross-border practice and specifying the statutes and
rules with which the individual must show compliance by producing
proof at the hearing and in addition any particular matters that have
come to the attention of the board and that would authorize the
administrative suspension, or the denial of practice
privileges cross-border practice .
(d) The burden is on the holder of the suspended practice
privilege individual whose cross-border practice is
suspended to establish both qualification and fitness to
practice under practice privileges
cross-border practice .
(e) The administrative suspension shall continue in effect until
terminated by an order of the board or the executive officer
or expiration of the practice privilege under administrative
suspension .
(f) Administrative suspension is not discipline and shall not
preclude any individual from applying for a license to practice
public accountancy in this state or from applying for a new
practice privilege upon expiration of the one under administrative
suspension, except that the new practice privilege shall not be
effective until approved by the board .
(g) Notwithstanding any administrative suspension, a practice
privilege expires one year from the date of notice unless a
shorter period is set by
board regulation.
(h)
(g) Proceedings to appeal an administrative suspension
order may be combined or coordinated with proceedings for denial
of an individual's authority to engage in cross-border practice
or discipline of a practice privilege
an individual who has engaged in cross-border practice .
SEC. 12. Section 5096.5 of the Business and Professions Code is
repealed.
5096.5. Notwithstanding any other provision of this article, an
individual may not sign any attest report pursuant to a practice
privilege unless the individual meets the experience requirements of
Section 5095 and completes any continuing education or other
conditions required by the board regulations implementing this
article.
SEC. 13. Section 5096.6 of the Business and Professions Code is
amended to read:
5096.6. In addition to the authority otherwise provided for by
this code, the board may delegate to the executive officer the
authority to issue any notice or order provided for in this article
and to act on behalf of the board, including, but not limited to,
issuing a notice of denial of a cross-border
practice privilege and an interim suspension
order, subject to the right of the individual licensed in
another state to timely appeal and request a hearing as
provided for in this article.
SEC. 14. Section 5096.7 of the Business and Professions Code is
amended to read:
5096.7. Except as otherwise provided in this article, the
following definitions apply:
(a) Anywhere the term The terms
"license," "licensee," "permit," or "certificate" is
as used in this chapter or Division 1.5
(commencing with Section 475) , it shall include
persons holding practice privileges ,
as defined in Section 5035, performing cross-border
practice or practicing under an alternative firm registration
under this article, unless otherwise inconsistent with the provisions
of the article.
(b) Any notice of practice privileges under this article and
supporting documents is deemed an application for licensure for
purposes of the provisions of this code, including, but not limited
to, the provisions of this chapter and the provisions of Division 1.5
(commencing with Section 475) related to the denial, suspension and
revocation of licenses.
(c) Anywhere the
(b) The term "employee"
is as used in this article it
shall include, but is not limited to, partners, shareholders, and
other owners.
SEC. 15. Section 5096.10 of the Business and Professions Code is
amended to read:
5096.10. The provisions of this article shall only be operative
if commencing July 1, 2005, and continuing during the period
provided in Section 5096.11, there is an appropriation
from the Accountancy Fund in the annual Budget Act to fund the
activities in the article and sufficient hiring authority is granted
pursuant to a budget change proposal to the board to provide staffing
to implement this article.
SEC. 16. Section 5096.11 of the Business and Professions Code is
repealed.
5096.11. This article shall become operative on January 1, 2006.
It shall remain in effect only until January 1, 2011, and as of that
date is repealed, unless a later enacted statute, which becomes
effective on or before January 1, 2011, deletes or extends that date.
SEC. 17. Section 5096.12 of the Business and Professions Code is
amended to read:
5096.12. (a) A certified public An
accounting firm that is authorized to practice in another
state and that does not have an office in this state ,
as defined in Section 5035.3, or sole proprietor, that performs
attest services for entities headquartered in this state, may
engage in the practice of public accountancy in this state through
the holder of a practice privilege an
alternative firm registration provided that the firm or
sole proprietor :
(1) The practice of public accountancy by the firm is
limited to Is authorized to practice
by the holder of the practice privilege in
another state and does not have an office in this state .
(2) Has one partner, shareholder, or owner who qualifies for
cross-border practice in this state, and provides to the board his or
her name, state of principal place of business, license number, and
firm identifying information.
(2) A firm that engages in practice under this section is
(3) Is deemed to consent to the
personal, subject matter, and disciplinary jurisdiction of the board
with respect to any practice under this section.
(4) Shall comply with the provisions of this chapter, board
regulations, and other laws, regulations, and professional standards
applicable to the practice of public accountancy by the licensees of
this state and to any other laws and regulations applicable to
cross-border practice.
(5) Is deemed to have appointed the regulatory agency of each
state in which the firm or sole proprietor holds a certificate,
license, or permit as the agent on whom notices, subpoenas, or other
process may be served in any action or proceeding by the board
against the firm or sole proprietor.
(6) Shall cooperate with any board investigation or inquiry and
shall timely respond to a board investigation, inquiry, request,
notice, demand, or subpoena for information or documents and timely
provide to the board the identified information and documents.
(7) Shall not perform any services in this state under alternative
firm registration that the firm or sole proprietor is not legally
authorized to perform in its or his or her state of principal place
of business.
(b) "Attest services" include any audit or other engagement to be
performed in accordance with the Statements on Auditing Standards,
any examination of prospective financial information to be performed
in accordance with the Statements on Standards for Attestation
Engagements, and any engagement to be performed in accordance with
the standards of the Public Company Accounting Oversight Board.
"Attest services," for purposes of this article, do not include any
review of a financial statement to be performed in accordance with
the Statements on Standards for Accounting and Review Services.
(b)
(c) The board may revoke , or
suspend an alternative firm registration , issue a
fine pursuant to Article 6.5 (commencing with Section 5116), or
otherwise restrict or discipline the firm or sole proprietor
for any act that would be grounds for discipline against a
holder of a practice privilege through which the firm
practices licensee or grounds for denial of a license
.
(c) This section shall become inoperative on January 1, 2011, and
as of that date is repealed.
SEC. 18. Section 5096.13 of the Business and Professions Code is
repealed.
5096.13. The notification of intent to practice under a practice
privilege pursuant to Section 5096 shall include the name of the
firm, its address and telephone number, and its federal taxpayer
identification number.
SEC. 19. Section 5096.13 is added to the Business and Professions
Code, to read:
5096.13. (a) An accounting firm, as defined in Section 5035.3, or
sole proprietor that performs nonattest services for entities
headquartered in this state may engage in the practice of public
accountancy in this state without any form of firm registration
provided that the firm or sole proprietor:
(1) Is authorized to practice in another state and does not have
an office in this state.
(2) Is deemed to consent to the personal, subject matter, and
disciplinary jurisdiction of the board with respect to any practice
under this section.
(3) Shall comply with the provisions of this chapter, board
regulations, and other laws, regulations, and professional standards
applicable to the practice of public accountancy by the licensees of
this state and to any other laws and regulations applicable to
individuals practicing under cross-border practice.
(4) Is deemed to have appointed the regulatory agency of each
state in which the firm or sole proprietor holds a certificate,
license, or permit as the agent on whom notices, subpoenas, or other
process may be served in any action or proceeding by the board
against the firm or sole proprietor.
(5) Shall cooperate with any board investigation or inquiry and
shall timely respond to a board investigation, inquiry, request,
notice, demand, or subpoena for information or documents and timely
provide to the board the identified information and documents.
(6) Shall not perform any services in this state under
cross-border practice that the firm or sole proprietor is not legally
authorized to perform in their state of principal place of business.
(b) The board may revoke or suspend authorization to practice
under this section, issue a fine pursuant to Article 6.5 (commencing
with Section 5116), or otherwise restrict or discipline the firm or
sole proprietor for any act that would be grounds for discipline
against a licensee or grounds for denial of a license.
SEC. 20. Section 5096.14 of the Business and Professions Code is
repealed.
5096.14. The board shall amend Section 30 of Article 4 of
Division 1 of Title 16 of the California Code of Regulations to
extend the current "safe harbor" period from December 31, 2007, to
December 31, 2010.
SEC. 21. Section 5096.15 of the Business and Professions Code is
repealed.
5096.15. It is the intent of the Legislature that the board adopt
regulations providing for a lower fee or no fee for out-of-state
accountants who do not sign attest reports for California clients
under the practice privilege. These regulations shall ensure that the
practice privilege program is adequately funded. These regulations
shall be adopted as emergency regulations in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code and, for purposes of that chapter, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare.
SEC. 22. Section 5109 of the Business and Professions Code is
amended to read:
5109. The expiration, cancellation, forfeiture, or suspension of
a license , practice, privilege, or other
authority to practice public accountancy by operation of law or by
order or decision of the board or a court of law, or the voluntary
surrender of a license by a licensee shall not deprive the board of
jurisdiction to commence or proceed with any investigation of or
action or disciplinary proceeding against the licensee, or to render
a decision suspending or revoking the license.
SEC. 23. Section 5116.6 of the Business and Professions Code is
amended to read:
5116.6. Anywhere the term "licensee" is used in the article it
shall include certified public accountants, public accountants,
partnerships, corporations, holders of practice privileges
individuals licensed out of state
practicing in this state under cross-border practice
, holders of alternative firm registrations , other persons
licensed, registered, or otherwise authorized to practice public
accountancy under this chapter, and persons who are in violation of
any provision of Article 5.1 (commencing with Section 5096).
SEC. 24. Section 5134 of the Business and Professions Code is
amended to read:
5134. The amount of fees prescribed by this chapter is as
follows:
(a) The fee to be charged to each applicant for the certified
public accountant examination shall be fixed by the board at an
amount not to exceed six hundred dollars ($600). The board may charge
a reexamination fee not to exceed seventy-five dollars ($75) for
each part that is subject to reexamination.
(b) The fee to be charged to out-of-state candidates for the
certified public accountant examination shall be fixed by the board
at an amount not to exceed six hundred dollars ($600) per candidate.
(c) The application fee to be charged to each applicant for
issuance of a certified public accountant certificate shall be fixed
by the board at an amount not to exceed two hundred fifty dollars
($250).
(d) The application fee to be charged to each applicant for
issuance of a certified public accountant certificate by waiver of
examination shall be fixed by the board at an amount not to exceed
two hundred fifty dollars ($250).
(e) The fee to be charged to each applicant for registration as a
partnership or professional corporation shall be fixed by the board
at an amount not to exceed two hundred fifty dollars ($250).
(f) The board shall fix the biennial renewal fee so that, together
with the estimated amount from revenue other than that generated by
subdivisions (a) to (e), inclusive, the reserve balance in the board'
s contingent fund shall be equal to approximately nine months of
annual authorized expenditures. Any increase in the renewal fee shall
be made by regulation upon a determination by the board that
additional moneys are required to fund authorized expenditures and
maintain the board's contingent fund reserve balance equal to nine
months of estimated annual authorized expenditures in the fiscal year
in which the expenditures will occur. The biennial fee for the
renewal of each of the permits to engage in the practice of public
accountancy specified in Section 5070 shall not exceed two hundred
fifty dollars ($250).
(g) The delinquency fee shall be 50 percent of the accrued renewal
fee.
(h) The initial permit fee is an amount equal to the renewal fee
in effect on the last regular renewal date before the date on which
the permit is issued, except that, if the permit is issued one year
or less before it will expire, then the initial permit fee is an
amount equal to 50 percent of the renewal fee in effect on the last
regular renewal date before the date on which the permit is issued.
The board may, by regulation, provide for the waiver or refund of the
initial permit fee where the permit is issued less than 45 days
before the date on which it will expire.
(i) (1) On and after the enactment of Assembly Bill 1868 of the
2005-06 Regular Session, the annual fee to be charged an individual
for a practice privilege pursuant to Section 5096 with an
authorization to sign attest reports shall be fixed by the board at
an amount not to exceed one hundred twenty-five dollars ($125).
(2) On and after enactment of Assembly Bill 1868 of the 2005-06
Regular Session, the annual fee to be charged an individual for a
practice privilege pursuant to Section 5096 without an authorization
to sign attest reports shall be fixed by the board at an amount not
to exceed 80 percent of the fee authorized under paragraph (1).
(j)
(i) The fee to be charged for the certification of
documents evidencing passage of the certified public accountant
examination, the certification of documents evidencing the grades
received on the certified public accountant examination, or the
certification of documents evidencing licensure shall be twenty-five
dollars ($25).
(k)
(j) The board shall fix the fees in accordance with the
limits of this section and, on and after July 1, 1990, any increase
in a fee fixed by the board shall be pursuant to regulation duly
adopted by the board in accordance with the limits of this section.
(l)
(k) It is the intent of the Legislature that, to ease
entry into the public accounting profession in California, any
administrative cost to the board related to the certified public
accountant examination or issuance of the certified public accountant
certificate that exceeds the maximum fees authorized by this section
shall be covered by the fees charged for the biennial renewal of the
permit to practice.
SEC. 25. 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.