BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | SB 1490| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: SB 1490 Author: Senate Business, Professions and Economic Development Amended: 4/12/10 Vote: 27 - Urgency SENATE BUS., PROF. & ECON. DEVEL. COMMITTEE : 7-0, 4/19/10 AYES: Negrete McLeod, Wyland, Aanestad, Correa, Oropeza, Walters, Yee NO VOTE RECORDED: Calderon, Florez SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SUBJECT : Professions and vocations SOURCE : Author DIGEST : This bill makes corrections and updates to prior legislation relating to the practice of accountancy. ANALYSIS : 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 CONTINUED SB 1490 Page 2 and whose principle place of business is not in this state to practice public accountancy n 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. 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. CONTINUED SB 1490 Page 3 5. 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. Background California Board of Accountancy . According to the 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 provides that certain provisions relating to sunsetting the 120-hour pathway for CPAs will 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 Business and Professions Code Section 5096.12, and clarifies that the amendment shall not be deemed an amendment that invalidates the 120-hour pathway sunset in 2014. SB 819 also requires the CBA to hold a hearing on the CRB report by September 1, 2010. In order to meet these requirements, the CBA anticipates it needs at least two CONTINUED SB 1490 Page 4 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 six months after the report is issued. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No SUPPORT : (Verified 5/4/10) California Board of Accountancy JJA:do 5/5/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED