BILL ANALYSIS                                                                                                                                                                                                    Ó







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        |Hearing Date:April 16, 2012        |Bill No:SB                         |
        |                                   |1405                               |
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                      SENATE COMMITTEE ON BUSINESS, PROFESSIONS 
                               AND ECONOMIC DEVELOPMENT
                          Senator Curren D. Price, Jr., Chair

                         Bill No:        SB 1405Author:De Leon
                     As Amended:April 10, 2012          Fiscal:Yes

        
        SUBJECT:  Accountancy:  military service: inactive service.

        SUMMARY:  Beginning January 1, 2014, authorizes a certified public 
        accountant to apply to have his or her permit placed in a military 
        inactive status if the applicant is engaged in active duty as a member 
        of the California National Guard or the United States Armed Forces, as 
        specified.

        Existing law:
        
       1)Licenses and regulates some 80,000 certified public accountants 
          (CPAs) and public accountants (PAs) under the Accountancy Act by the 
          California Board of Accountancy (Board) within the Department of 
          Consumer Affairs (DCA).

       2)Authorizes any Board or bureau within the DCA to establish, by 
          regulation, a system for an inactive license category for persons 
          not actively engaged in practice, subject to certain provisions, 
          including:  (BPC § 462)

       3)Establishes fees for the renewal of a CPA license.  (BPC § 5134)

       4)Requires each licensee to complete specified continuing education 
          requirements as condition of license renewal.  (BPC § 5027)

       5)Requires each CPA firm to undergo a peer review at least every three 
          years as a condition of registration renewal.  (BPC § 5076) 

       6)Authorizes any licensee whose license expired while he or she was on 
          active duty as a member of the California National Guard or the 
          United States Armed Forces to reinstate his or her license without 





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          examination or penalty if certain requirements are met.  (BPC § 114)

        This bill:

       1)Authorizes, beginning January 1, 2014, a CPA or PA to apply to have 
          his or her permit placed in a military inactive status if the 
          applicant is engaged in active duty as a member of the California 
          National Guard or the United States Armed Forces.

       2)Requires the Board to deny an application for a military inactive 
          status the applicant's permit is canceled, suspended, revoked, or 
          otherwise restricted or subject to disciplinary action by the Board.

       3)Prohibits a holder of a military inactive status permit from engaging 
          in any activity for which a permit is required.

       4)Exempts the holder of a permit in a military inactive status from all 
          of the following:

           a)   Payment of the biennial renewal fee.

           b)   Continuing education requirements.

           c)   Peer review requirements.

       1)Establishes criteria to convert a permit from military inactive 
          status to active status prior to discharge from active duty in the 
          California National Guard or the United States Armed Forces.  The 
          person must: 

           a)   Pay the current biennial renewal fee.

           b)   Meet continuing education requirements prescribed by the 
             Board.

           c)   Meet peer review requirements prescribed by the Board.

       1)Requires a military inactive status permit holder, within one year 
          from his or her discharge from active duty in the California 
          National Guard or the United States Armed Forces, to do all of the 
          following: 

           a)   Provide evidence to the Board of the discharge date.

           b)   Pay the current biennial renewal fee.






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           c)   Meet continuing education requirements prescribed by the 
             Board.

           d)   Meet the peer review requirements prescribed by the Board.

       1)Authorizes the Board to adopt regulations as necessary to administer 
          the above provisions. 

       2)Requires the military inactive permit, when using the title certified 
          public accountant, CPA, or any other reference suggesting licensure 
          by the Board, on correspondence, Internet Websites, business cards, 
          nameplates, or name plaques, must place the term "military inactive" 
          immediately after that title or designation. 
        
        FISCAL EFFECT:  Unknown.  This bill has been keyed "fiscal" by 
        Legislative Counsel.

        COMMENTS:
        
        1. Purpose.  This bill is sponsored by the Author to exempt a 
           certified public accountant or a public accountant from the 
           biennial renewal fee while the permit holder is engaged in 
           full-time training or active service in the California National 
           Guard, United States Army, Navy, Air Force, or Marine Corps.

        According to the Author, currently certified public accountants or 
           public accountants are required to pay the biennial fee for the 
           renewal of each of the permits to engage in the practice of public 
           accountancy, an amount up to $250.

        The Author states that CPAs who are engaged in full-time training or 
           active service in the 
        U.S. Army, Navy, Air Force, or Marine Corps cannot practice 
           accountancy and should not be burdened with the cost of licensing 
           when they indeed cannot practice and are actively engaged in 
           military service.  Current law does not provide exemptions for 
           military service, and the Author states that this bill addresses 
           the issue.

       2.Background.  An existing provision of the Business and Professions 
          Code authorizes a member of the California National Guard or the 
          U.S. Armed Forces to reinstate his or her professional license or 
          registration without examination or penalty if the license expires 
          while the licensee or registrant was on active duty.  Any licensee 
          or registrant who continues to practice that profession, either 
          part-time or full-time, must maintain an active license in good 





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          standing, even while serving in the military.

       3.Physician and Surgeon Exemption.  The Business and Professions Code 
          exempts medical doctors from the requirement to pay the renewal fee 
          while engaged in full-time training or active service in the Army, 
          Navy, Air Force, or Marines, or in the United States Public Health 
          Service.  Those exempted from the renewal fee are prohibited from 
          engaging in any private practice and must pay the fee after 
          discharge from full-time active service.

       4.Related Legislation.   AB 1588  (Atkins) requires boards under the DCA 
          to waive license renewal fees and continuing education requirements 
          for any professional licensee who is a reservist called to active 
          duty as a member of the U.S. Reserve or the California National 
          Guard.  This bill is currently on the Assembly Appropriations 
          Committee suspense file.

        SB 1236  (Price), among other things, exempts a licensed physician from 
          the payment of the renewal fee while engaged in full-time training 
          or active service in the Army, Navy, Air Force, or Marines, or in 
          the United States Public Health Service.  This bill will be heard by 
          the BP&ED Committee on April 23.

        AB 1666  (Frommer, Chapter 345, Statutes of 2005) required the State Bar 
          to waive the membership fees of any attorney in good standing for 
          the duration of his or her military service when written proof of 
          military service is provided to the State Bar.


        SUPPORT AND OPPOSITION:
        
         Support  :  None received as of April 10, 2012

         Opposition  :  None received as of April 10, 2012



        Consultant:G. V. Ayers