BILL ANALYSIS ----------------------------------------------------------------------- |Hearing Date:April 19, 2010 |Bill No:SB | | |1490 | ----------------------------------------------------------------------- SENATE COMMITTEE ON BUSINESS, PROFESSIONS AND ECONOMIC DEVELOPMENT Senator Gloria Negrete McLeod, Chair Bill No: SB 1490Author:Business, Professions and Economic Development Committee As Amended:April 12, 2010Fiscal: Yes SUBJECT: Professions and vocations. SUMMARY: Urgency measure which makes corrections and updates to prior legislation relating to the practice of accountancy. Existing law: 1)Licenses and regulates more than 40,000 certified public accountants (CPAs) under the Accountancy Act (Act) by the California Board of Accountancy (CBA) within the Department of Consumer Affairs. 2)Authorizes a CPA licensed to practice in another state and whose principle place of business is not in this state to practice public accountancy in California through a practice privilege, by notifying the CBA, as specified, of the intent to practice in California, swearing under penalty of perjury that they are qualified to do so, and paying the required fee. 3)Authorizes a CPA firm authorized to practice in another state and that does not have an office in this state to practice in California through a CPA that holds a practice privilege, subject to specified requirements, including: a) Authorizes the CBA to discipline that CPA firm for any act that would be grounds for discipline against a CPA holding a practice privilege. b) Repeals these provisions on January 1, 2011. SB 1490 Page 2 4)Requires an applicant for the CPA license to comply with education, examination, and experience requirements under one of two provisions that establish different criteria (Pathways) for CPA licensure as follows: a) Completion of a baccalaureate or higher degree, as specified, including 24 semester units in accounting and 24 semester units in business related subjects, passing the examination prescribed by the CBA. In addition, requires proof of completion of at least 150 semester units (including the baccalaureate degree), and one year of qualifying experience (150-hour pathway). b) Completion of a baccalaureate or higher degree, as specified, including 24 semester units in accounting and 24 semester units in business related subjects, passing the examination prescribed by the CBA, and two years of qualifying experience (120-hour pathway). The law makes these provisions inoperative on January 1, 2014, and provides that they shall remain operative if specified educational requirements are reduced or eliminated, or if the practice privilege requirements are amended or repealed. 1)Requires the CBA to hold a hearing on a report by the California Research Bureau (CRB) regarding the Uniform Accountancy Act's 150-hour rule no later than September 1, 2010. This bill: 1)Deletes the sunset date on the provisions authorizing a CPA firm to practice in California through a practice privilege (#3, above), and provides that the amendment removing that sunset date shall not be deemed an amendment which would extend the continuation of the 120-hour pathway (as described in Item #4 b), above). 2)Requires the CBA to hold a hearing no later than six months following issuance of the report by CRB on the Uniform Accountancy Act's 150-hour rule. 3)Makes technical and conforming changes. 4)Makes its provisions operative as an urgency measure. FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by Legislative Counsel. SB 1490 Page 3 COMMENTS: 1.Purpose. This bill is one of three "committee bills" authored by the Business, Professions and Economic Development Committee and is an urgency measure intended to consolidate several non-controversial provisions related to the programs and professions under the Business and Professions Code. Consolidating the provisions in one bill is designed to relieve licensing boards and professions from the necessity and burden of having separate measures for a number of non-controversial revisions. The provisions of this bill are minor, technical and updating changes, and also make corrections to drafting errors in prior legislation. As a Committee bill, if controversy or opposition should arise regarding any provision that cannot be resolved, then that provision will be removed from the bill. This will eliminate the chance of placing any of the other provisions in jeopardy. 2.Background. California Board of Accountancy (CBA). According to the California Board of Accountancy (CBA), last year SB 819 (Yee, Chapter 308, Statutes of 2009) deleted the sunset dates on the practice privilege laws under which a CPA licensed in another state may legally practice in California, thereby indefinitely extending those laws. The bill further provided that certain provisions relating to sunsetting the 120-hour pathway for CPAs would be invalidated if the practice privilege requirements were amended before 2014. However, the bill inadvertently failed to delete the sunset date on the practice privilege for CPA firms licensed in another state, and for the board's authority to discipline those firms. This bill conforms with SB 819 by removing the sunset date on BPC 5096.12, and clarifies that the amendment shall not be deemed an amendment that would invalidate the 120-hour pathway sunset in 2014. SB 819 also required the CBA to hold a hearing on the CRB report by September 1, 2010. In order to meet these requirements, the CBA anticipates it would need at least two additional meetings (likely in May and in July). However the CRB has been unable to issue the Report as originally anticipated due to a backlog of priorities. Therefore, it is important to amend the law to instead require the CBA to hold the hearing within 6 months after the report is issued. SUPPORT AND OPPOSITION: SB 1490 Page 4 Support: California Board of Accountancy Opposition: None received as of April 12, 2010 Consultant:G. V. Ayers