BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 431
                                                                  Page  1

          Date of Hearing:   April 12, 2011

              ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER 
                                     PROTECTION
                                 Mary Hayashi, Chair
                      AB 431 (Ma) - As Amended:  March 31, 2011
           
          SUBJECT  :   Retired public accountants.

           SUMMARY  :   Authorizes the California Board of Accountancy 
          (Board) to establish a retired status license for certified 
          public accountants (CPAs) and public accountants (PAs).  
          Specifically,  this bill  :  

          1)Authorizes the Board to establish, by regulation, a system for 
            the placement of a license on a retired status, upon 
            application, for CPAs and PAs who are not actively engaged in 
            the practice of public accountancy or any activity which 
            requires them to be licensed by the board.

          2)Prohibits a retired status licensee from engaging in any 
            activity for which a permit is required.

          3)Requires the Board to deny an application for a retired status 
            license if the applicant's permit is canceled or if the permit 
            is suspended, revoked, or otherwise punitively restricted by 
            the Board or subject to disciplinary action.

          4)Requires, beginning one year from the effective date of the 
            Board's regulations for placing a license on retired status, 
            the Board to deny an application for a retired status license 
            if the applicant's permit is delinquent.

          5)Requires the board to establish minimum qualifications for a 
            retired status license that may include, but are not limited 
            to, a minimum age requirement and minimum years as a licensee.

          6)Exempts a retired status license from any renewal 
            requirements.

          7)Requires the board to establish minimum qualifications for the 
            restoration of a license in a retired status to an active 
            status.  These minimum qualifications shall include, but are 
            not limited to, continuing education and payment of a fee, as 
            specified.








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          8)Provides that the placement of a license on a retired status 
            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.

          9)Provides for the following fees to be fixed by the Board: the 
            application fee for a retired status license, at $250 or less; 
            and, the application fee for restoration of a retired status 
            license to active status, at $1,000 or less.

          10)Requires retired license holders, when lawfully using the 
            title "certified public accountant," the CPA designation, or 
            any other reference that would suggest that the person is 
            licensed by the Board on materials such as correspondence, 
            Internet Web sites, business cards, nameplates, or name 
            plaques, to place the term "retired" immediately after that 
            title, designation, or reference.

          11)Makes clarifying and technical changes.

           EXISTING LAW  

          Regulates the practice of public accountancy under the 
          California Accountancy Act by the Board within the Department of 
          Consumer Affairs, requires persons licensed by the Board to 
          complete specified continuing education (CE) requirements to 
          maintain an active license, and sets various examination, 
          certification, registration, and renewal fees for licensure.  

           FISCAL EFFECT :   Unknown

           COMMENTS  :   

           Purpose of this bill  .  According to the author's office, "?CPAs 
          & PAs who want to retire from the profession, must either pay a 
          renewal fee for an inactive license, or allow their license to 
          expire (and thus become delinquent), and then "cancel" or 
          "surrender" their license.

          "Accountants who have practiced for many years are very proud of 
          their profession and believe a delinquent, cancelled, or 
          surrendered status is undignified and try to avoid it.  However, 
          many retired licensees who simply want to stop paying for the 








                                                                  AB 431
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          active/inactive license fee have no other choice."

           Background  .  CPAs are Board certified, while PAs register with 
          the Board.  Both designations must hold a valid permit for the 
          practice of public accountancy.  Both must also pay license 
          renewal fees and fulfill CE requirements.

          The Board offered a retired designation for CPAs and PAs in 
          1994, but discontinued the designation after abuse by some 
          licensees attempting to skirt disciplinary action or avoid 
          paying license renewal fees.  CBA legislatively repealed the 
          program in 1998.  However, those in the profession have been 
          requesting a reinstatement of the designation.

          Currently, CPAs and PAs who retire must continue paying renewal 
          fees to maintain a license in good standing, voluntarily 
          surrender their license, or stop paying renewal fees, which 
          leads to a delinquent status and eventual cancellation.

           Support  .  The California Society of CPAs writes, "?current 
          options leave good standing certified public accountants with a 
          'delinquent,' 'canceled,' or 'surrendered' status.  Like many 
          CPAs proud of their service, we consider such statuses to have a 
          negative connotation that suggests the licensee was subject to a 
          form of discipline.  The retired status license designation 
          provided for by Assembly Bill 431 will more accurately reflect 
          the standing of CPAs who have chosen to retire from the 
          profession in perfectly good standing."

           Previous legislation  .

          AB 2191 (Emmerson), Chapter 548, Statutes of 2010, requires the 
          Board of Behavioral Sciences to issue a retired license to a 
          marriage and family therapist, educational psychologist, 
          clinical social worker and professional clinical counselor, as 
          specified.

          AB 2848 (Hernandez) of 2008, allows optometrists to apply for a 
          retired license.  This bill was held on the Senate Floor.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Board of Accountancy (sponsor)








                                                                  AB 431
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          California Society of CPAs (CalCPA)

           Opposition 
           
          None on file.
           
          Analysis Prepared by  :    Angela Mapp / B.,P. & C.P. / (916) 
          319-3301