BILL ANALYSIS Ó SB 306 Page 1 Date of Hearing: August 17, 2011 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair SB 306 (De Leon) - As Amended: July 7, 2011 Policy Committee: Business and Professions Vote: 8 - 0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill reinstates a five-day safe harbor period that expired on December 31, 2010, to allow a temporary California practice privilege for certified public accountants (CPAs) licensed in other states. FISCAL EFFECT There are no significant costs associated with this legislation. COMMENTS 1)Rationale . The purpose of this legislation is to reinstate the safe harbor statute which sunset on December 31, 2010. As a result of the sunset, a practice privilege notification form must be filed with the CBA prior to practicing public accountancy in the state. The author notes that since the program sunset, the California Board of Accountancy (CBA) has considered several alternatives for reinstating the program, including pursuing regulatory action, adopting emergency regulations, or seeking a statutory solution through legislation. At the CBA's March meeting, CBA ultimately determined that placing the program back in state statutes was the most viable solution. 2)Background . California's safe harbor statute allowed out-of-state CPAs five business days to file with the Board a practice privilege notification form following the commencement of practicing in California. SB 306 Page 2 The safe harbor provision was enacted to give an introductory period for out-of-state CPA's to gain familiarity with California's new practice privilege requirements. The safe harbor period was originally set to expire in 2007. AB 1868 (Bermudez), Statutes of 2006, required the CBA to extend the safe harbor period to match the sunset date for the practice privilege program. In 2009, SB 819 (Yee), Statutes of 2009, removed the sunset date for the practice of privilege program but was silent on the safe harbor provisions. Analysis Prepared by : Julie Salley-Gray / APPR. / (916) 319-2081