BILL ANALYSIS Ó ----------------------------------------------------------------------- |Hearing Date:April 16, 2012 |Bill No:SB | | |1405 | ----------------------------------------------------------------------- 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 SB 1405 Page 2 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. SB 1405 Page 3 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 SB 1405 Page 4 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