Amended in Senate April 2, 2013

Senate Bill No. 484

Introduced by Senator Wyland

February 21, 2013

An act to amend begin delete Section 18602 of the Business and Professions Code, relating to the State Athletic Commission. end delete begin insert Sections 22251, 22252, 22253, 22255, and 22259 of, and to add Sections 22251.1, 22251.2, 22251.2.5, 22251.3, 22252.2, 22253.3, 22253.4, and 22258.1 to, the Business and Professions Code, relating to business. end insert

LEGISLATIVE COUNSEL’S DIGEST

SB 484, as amended, Wyland. begin delete State Athletic Commission. end delete begin insert Tax preparers. end insert

begin insert

(1) Existing law requires a tax preparer to maintain a bond in favor of, and payable to, the people of the State of California for each individual preparing tax returns for another person. Existing law requires a tax preparer to register with the California Tax Education Council (council) and makes it a violation of the provisions governing tax preparers to fail to register. Existing law requires the council to issue a “certificate of completion” when a tax preparer demonstrates completion of not less than 60 hours of specified educational requirements.

end insert begin insert

This bill would prohibit a person from preparing a tax return unless he or she has been issued a registration from the council. The bill would require the council to issue a registration to any applicant who submits an application with evidence that he or she has, among other things, (A) successfully completed those educational requirements and (B) paid specified fees to be established by the council. The bill would make a registration subject to annual renewal including the payment of a renewal fee to be established by the council.

end insert begin insert

This bill would prohibit a registrant or applicant from being disciplined or denied registration by the council except according to specified procedures. The bill would authorize the council to discipline a registrant by, among other things, placing the registration on probation or suspending or revoking the registration. The bill would require the council to notify the Franchise Tax Board and the Internal Revenue Service that a registration is suspended or revoked.

end insert begin insert

(2) Existing law defines the council as a single organization made up of not more than one representative from each specified entity operating as a nonprofit corporation that represents, among others, tax preparers with a membership in California of at least 200 for the last 3 years and not more than one representative from each for-profit tax preparation corporation that has at least 200 employees and has been operating in California for the last 3 years.

end insert begin insert

This bill would specify that the council is a nonprofit organization and would instead require the council to consist of not more than one representative from each California nonprofit corporation in good standing that represents, among others, tax preparers with a membership in California of at least 400 in each of the previous 3 calendar years and not more than one representative from each for-profit tax preparation corporation in good standing that had at least 400 employees or franchisees during the previous calendar year and has been operating in California for the last 3 years.

end insert begin insert

Existing law requires the council to establish a process by which 6 tax preparers are appointed to the council to serve specified terms.

end insert begin insert

This bill would specify that those 6 tax preparers are appointed to the board of directors and would require the council to be governed by that board of directors. The bill would authorize the council to adopt rules and regulations necessary to carry out these provisions.

end insert begin insert

(3) Existing law requires a tax preparer, prior to rendering any tax preparation services, to provide the customer in writing with, among other things, his or her name, address, and telephone number. Existing law makes it a violation for a tax preparer to, among other things, obtain a customer’s signature on a document with blank spaces to be filled in after it has been signed and to engage in advertising practices that are fraudulent. A violation of the provisions governing tax preparers is a crime.

end insert begin insert

This bill would additionally require a tax preparer to provide his or her e-mail address. The bill would also make it a violation to commit certain other acts, and would authorize the council to deny a registration application or discipline a registrant for, among other things, specified unprofessional conduct and conviction of a crime substantially related to the duties of a registrant. The bill would make it an unfair business practice for any person to hold himself or herself out as a registered tax preparer without meeting the above requirements for registration.

end insert begin insert

(4) Under existing law, boards scheduled for repeal are required to be evaluated by the Joint Sunset Review Committee.

end insert begin insert

This bill would instead specify that the council would be subject to review by the appropriate policy committees of the Legislature.

end insert begin insert

(5) This bill would make other technical and conforming changes.

end insert begin insert

(6) Because a violation of the bill’s requirements would be a crime, the bill would impose a state-mandated local program.

end insert begin insert

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

end insert begin delete

Existing law provides, until 2014, for a State Athletic Commission within the Department of Consumer Affairs, and provides for the appointment of members to the commission by the Governor, the Speaker of the Assembly, and the Senate Committee on Rules, for the purpose of licensing and regulating boxing, kickboxing, and martial arts matches.

end delete begin delete

This bill would make a, nonsubstantive change to these provisions.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 22251 of the end insert begin insert Business and Professions
Code end insert begin insert is amended to read: end insert

22251.  

For the purposes of this chapter, the following words
have the following meanings:

(a) (1) Except as otherwise provided in paragraph (2), “tax
preparer” includes:

(A) A person who, for a fee or for other consideration, assists
with or prepares tax returns for another person or who assumes
final responsibility for completed work on a return on which
preliminary work has been done by another person, or who holds
himself or herself out as offering those services. A person engaged
in that activity shall be deemed to be a separate person for the
purposes of this chapter, irrespective of affiliation with, or
employment by, another tax preparer.

(B) A corporation, partnership, association, or other entity that
has associated with it persons not exempted under Section 22258,
which persons shall have as part of their responsibilities the
preparation of data and ultimate signatory authority on tax returns
or that holds itself out as offering those services or having that
authority.

(2) Notwithstanding paragraph (1), “tax preparer” does not
include an employee who, as part of the regular clerical duties of
his or her employment, prepares his or her employer’s income,
sales, or payroll tax returns.

(b) “Tax return” means a return, declaration, statement, refund
claim, or other document required to be made or filed in connection
with state or federal income taxes or state bank and corporation
franchise taxes.

(c) An “approved curriculum provider,” for purposes of basic
instruction as described in subdivision (a) of Section 22255, and
continuing education as described in subdivision (b) of Section
22255, is one who has been approved by the council as defined in
subdivision (d). A curriculum provider who is approved by the tax
education council is exempt from Chapter 7 (commencing with
Section 94700) of Part 59 of Division 10 of the Education Code.

(d) “Council” means the California Tax Education Council that
is a single begin insert nonprofit end insert organization begin insert exempt from taxation under
Section 501(c)(3) of Title 26 of the United States Code end insert made up
of not more than one representative from each begin delete professional society,
association, or other entity operating as a end delete begin insert California end insert nonprofit
corporation begin insert in good standing end insert that chooses to participate in the
council and that represents tax preparers, enrolled agents, attorneys,
or certified public accountants with a membership in California
of at least begin delete 200 for the last end delete begin insert 400 in each of the previous end insert three
begin insert calendar end insert years, and not more than one representative from each
for-profit tax preparation corporation begin insert in good standing end insert that chooses
to participate in the council and that begin delete has end delete begin insert had end insert at least begin delete 200 end delete begin insert 400 end insert
employees begin insert or franchisees, which number can include the employees
of a franchisee, in California during the previous calendar year end insert
and begin insert that end insert has been operating in California for the last three years.
The council shall establish a process by which six individuals who
are tax preparers pursuant to Section 22255 are appointed to the
begin insert board of directors of the end insert council with full voting privileges to serve
terms as determined by the council, with their initial terms being
served on a staggered basis. A person exempt from the
requirements of this chapter pursuant to Section 22258 is not
eligible for appointment to the council, other than an employee of
an individual in an exempt category.

(e) “Client” means an individual for whom a tax preparer
performs or agrees to perform tax preparation services.

(f) “Refund anticipation loan” means a loan, whether provided
by the tax preparer or another entity, such as a financial institution,
in anticipation of, and whose payment is secured by, a client’s
federal or state income tax refund or by both.

(g) “Refund anticipation loan fee schedule” means a list or table
of refund anticipation loan fees that includes three or more
representative refund anticipation loan amounts. The schedule
shall separately list each fee or charge imposed, as well as a total
of all fees imposed, related to the making of a refund anticipation
loan. The schedule shall also include, for each representative loan
amount, the estimated annual percentage rate calculated under the
guidelines established by the federal Truth in Lending Act (15
U.S.C. Sec. 1601 and following).

begin insert

(h) “Registrant” means a tax preparer that has met all of the
requirements of this chapter and has been issued a registration
by the council.

end insert

begin insert

begin insert SEC. 2. end insert   

Section 22251.1 is added to the Business and
Professions Code, to read:

begin insert 22251.1. end insert   

It is the intent of this chapter to enable consumers to
easily identify credible tax preparers who are bonded and
registered, to ensure tax preparers receive adequate education
and treat confidential information appropriately, to prohibit tax
preparers from making fraudulent, untrue, or misleading
representations, and to provide for a self-funded nonprofit
oversight body to register tax preparers and ensure that they meet
all of the requirements of this chapter.

end insert

begin insert

begin insert SEC. 3. end insert   

Section 22251.2 is added to the Business and Professions
Code, to read:

begin insert 22251.2. end insert   

(a) The council shall have the responsibilities and
duties set forth in this chapter. The council may take any
reasonable actions to carry out the responsibilities and duties set
forth in this chapter, including, but not limited to, hiring staff and
entering into contracts. The council shall be governed by a board
of directors comprised in the manner described in subdivision (d)
of Section 22151.

(b) The council shall issue registrations, deny applications, and
discipline registrants as authorized by this chapter. The council
may adopt bylaws, rules, regulations, and procedures necessary
to effectuate the purposes of this chapter.

(c) The council shall establish application fees, renewal fees,
delinquent fees, and other fees related to the regulatory cost of
providing services and carrying out the council’s responsibilities
and duties pursuant to this chapter. These fees shall not exceed
the reasonable cost to the council of providing those services and
carrying out those responsibilities and duties.

end insert

begin insert

begin insert SEC. 4. end insert   

Section 22251.2.5 is added to the Business and
Professions Code, to read:

begin insert 22251.2.5. end insert   

No person may prepare a tax return without being
issued a registration from the council pursuant to Section 22251.3.

end insert

begin insert

begin insert SEC. 5. end insert   

Section 22251.3 is added to the Business and
Professions Code, to read:

begin insert 22251.3. end insert   

(a) The council shall issue a registration to any
applicant who provides satisfactory evidence that he or she meets
all of the requirements of this chapter and who complies with the
bylaws, rules, and procedures established by the council.

(b) In order to obtain a registration, an applicant shall submit
a written application in a form provided by the council and provide
the council with satisfactory evidence that he or she meets all of
the following requirements:

(1) The applicant has successfully completed the educational
requirements described in subdivision (a) of Section 22255.

(2) All fees required by the council as described in subdivision
(c) of Section 22251.2 have been paid.

(3) The applicant meets all of the other requirements for
registration in this chapter.

(c) Any registration under this chapter shall be subject to
renewal every year in a manner prescribed by the council, and
shall expire unless renewed in that manner. The council may
provide for the late renewal of a registration.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 22252 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

22252.  

Prior to rendering any tax preparation services, a tax
preparer shall provide the customer in writing with the tax
preparer’s name, address, telephone number, and evidence of
compliance with the bonding requirement of Section 22250,
including the bond number, if any begin insert , and e-mail address end insert .

begin insert

begin insert SEC. 7. end insert   

Section 22252.2 is added to the Business and
Professions Code, to read:

begin insert 22252.2. end insert   

It is an unfair business practice for any person to
hold oneself out or use the title of “registered tax preparer” or
any other term, such as “licensed” that implies or suggests that
the person is registered as a tax preparer without meeting the
requirements of this chapter and being issued a registration by
the council.

end insert

begin insert

begin insert SEC. end insert begin insert 8. end insert   

end insert

begin insert Section 22253 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

22253.  

(a) It is a violation of this chapter for a tax preparer to
do begin delete any of the following end delete begin insert or commit, and the council may deny an
application for registration or discipline a registrant for, any of
the following end insert :

begin delete

(1) Fail to register as a tax preparer with the council.

end delete begin insert

(1) Unprofessional conduct, including, but not limited to, denial
of licensure, certificate, permit, or registration, or revocation,
suspension, restriction, or any other disciplinary action against
an applicant or registrant by the federal government or another
state or territory of the United States, by any other government
agency, or by another professional licensing board or organization.
A certified copy of the decision, order, or judgment shall be
conclusive evidence of these actions.

end insert begin insert

(2) Failing to register as a tax preparer with the council.

end insert begin insert

(3) Procuring or attempting to procure a registration by fraud,
misrepresentation, or mistake.

end insert begin insert

(4) Violating or attempting to violate, directly or indirectly, or
assisting in or abetting the violation of, or conspiring to violate,
any provision or term of this chapter or any rule or bylaw adopted
by the council.

end insert begin insert

(5) Conviction of any felony or misdemeanor that is substantially
related to the qualifications, functions, or duties of a registrant,
in which event the record of the conviction shall be conclusive
evidence of the crime.

end insert begin insert

(6) Impersonating an applicant or acting as a proxy for an
applicant in any situation or examination referred to under this
chapter for the issuance of a registration.

end insert begin insert

(7) Impersonating a registrant, or permitting or allowing an
unregistered person to use a registration.

end insert begin insert

(8) Committing any fraudulent, dishonest, or corrupt act that
is substantially related to the qualifications, functions, or duties
of a registrant.

end insert begin delete

(2) Make, or authorize

end delete

begin insert (9) end insert begin insert   end insert begin insert Making, or authorizing end insert the making of, any statement or
representation, oral or written or recorded by any means, which is
intended to induce persons to use the tax preparation service of
the tax preparer, which statement or representation is fraudulent,
untrue, or misleading.

begin delete

(3) Obtain

end delete

begin insert (10) end insert begin insert   end insert begin insert Obtaining end insert the signature of a customer to a tax return or
authorizing document which contains blank spaces to be filled in
after it has been signed.

begin delete

(4) Fail or refuse

end delete

begin insert (11) end insert begin insert   end insert begin insert Failing or refusing end insert to give a customer, for his or her own
records, a copy of any document requiring the customer’s signature,
within a reasonable time after the customer signs the document.

begin delete

(5) Fail

end delete

begin insert (12) end insert begin insert   end insert begin insert Failing end insert to maintain a copy of any tax return prepared for
a customer for four years from the date of completion or the due
date of the return, whichever is later.

begin delete

(6) Engage

end delete

begin insert (13) end insert begin insert   end insert begin insert Engaging end insert in advertising practices which are fraudulent,
untrue, or misleading, including, but not limited to, assertions that
the bond required by Section 22250 in any way implies licensure
or endorsement of a tax preparer by the State of California
begin insert misleading end insert .

begin delete

(7) Violate

end delete

begin insert (14) end insert begin insert   end insert begin insert Violating end insert Section 17530.5 or 17530.6.

begin delete

(8) Violate

end delete

begin insert (15) end insert begin insert   end insert begin insert Violating end insert Section 7216 of Title 26 of the United States
Code.

begin delete

(9) Fail

end delete

begin insert (16) end insert begin insert   end insert begin insert Failing end insert to sign a customer’s tax return when payment for
services rendered has been made.

begin delete

(10) Fail

end delete

begin insert (17) end insert begin insert   end insert begin insert Failing end insert to return, upon the demand by or on behalf of a
customer, records or other data provided to the tax preparer by the
customer.

begin delete

(11)

end delete

begin insert (18) end insert  Knowingly give false or misleading information to the
consumer pursuant to Section 22252, or give false or misleading
information to the surety company pursuant to subdivision (a) of
Section 22250, begin insert 22252 end insert or give false or misleading information to
the California Tax Education Council pursuant to Section 22255.

(b) Each violation of this section constitutes a separate offense.

begin insert

begin insert SEC. 9. end insert   

Section 22253.3 is added to the Business and
Professions Code, to read:

begin insert 22253.3. end insert   

(a) The council may discipline a registrant by any,
or a combination, of the following methods:

(1) Placing the registration on probation.

(2) Suspending the registration and the rights conferred by this
chapter on a registrant for a period not to exceed one year.

(3) Revoking the registration.

(4) Suspending or staying the disciplinary order, or portions of
it, with or without conditions.

(5) Taking other action as the council, as authorized by this
chapter or its bylaws, rules, or procedures, deems proper.

(b) The council may issue an initial registration on probation,
with specific terms and conditions, to any applicant.

(c) If a registration is suspended or revoked, the council shall
notify the Franchise Tax Board and the Internal Revenue Service.

end insert

begin insert

begin insert SEC. 10. end insert   

Section 22253.4 is added to the Business and
Professions Code, to read:

begin insert 22253.4. end insert   

(a) No registrant or applicant may be disciplined or
denied registration except according to procedures satisfying the
requirements of this section. A denial or discipline not in accord
with this section shall be void and without effect.

(b) Any application denial or registrant discipline shall be done
in good faith and in a fair and reasonable manner. Any procedures
that conform to the requirements of this chapter are fair and
reasonable, but a court may also find other procedures to be fair
and reasonable when the full circumstances of the application
denial or registrant discipline are considered.

(c) A procedure is fair and reasonable if all of the following
apply:

(1) It provides the giving of 15 days prior notice of the
application denial or registration discipline and the reasons
therefore.

(2) It provides an opportunity for the applicant or registrant to
be heard, either orally or in writing, not less than five days before
the effective date of the application denial or registrant discipline
by a person or body authorized to decide that the proposed
application denial or registrant discipline not take place.

(d) Any notice required under this section may be given by any
method reasonably calculated to provide actual notice. Any notice
given by mail must be given by first-class or express mail sent to
the last address of the applicant or registrant shown on the
council’s records.

(e) Any action challenging an application denial or registrant
discipline, including any claim alleging defective notice, shall be
commenced within one year after the effective date of the
application denial or registrant discipline in the superior court in
and for the county of the council’s principal place of business. If
the action is successful, the court may order any relief, including
reinstatement, that it finds equitable under the circumstances.

(f) The council may charge applicants and registrants a
reasonable regulatory fee as a condition of any hearing requested
by the applicant or registrant for the purpose of contesting denial
of a registration or discipline of a registrant. This fee shall not
exceed the reasonable cost to the council of providing the hearing.
Upon a favorable judgment for the council in any proceeding, the
council shall be entitled to recover its reasonable attorney’s fees.

(g) This section governs only the procedures for application
denial or registrant discipline and not the substantive grounds
therefore. An application denial or registrant discipline based
upon substantive grounds that violates contractual or other rights
of the applicant or registrant or is otherwise unlawful is not made
valid by compliance with this section.

end insert

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 22255 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

22255.  

(a) The council shall issue a “certificate of begin delete completion” end delete
begin insert completion, end insert begin insert ” as part of the education registration requirements
described in Section 22251.3, end insert to the tax preparer when the tax
preparer demonstrates that he or she has (1) completed not less
than 60 hours of instruction in basic personal income tax law,
theory, and practice by an approved curriculum provider within
the previous 18 months; and (2) provides evidence of compliance
with the bonding requirement of Section 22250, including the
name of the surety company, the bond number, and the bond
expiration date. Of the required 60 hours, 45 hours shall be
concerned with federal tax curriculum and 15 hours shall be
concerned with state tax curriculum.

(b) A tax preparer shall complete on an annual basis not less
than 20 hours of continuing education, including 15 hours in federal
taxation and 5 hours in California taxation from an approved
curriculum provider. The council shall issue annually a “statement
of compliance” when the tax preparer demonstrates that he or she
has (1) completed the required 20 hours of continuing education,
and (2) provides evidence of compliance with the bonding
requirement of Section 22250, including the name of the surety
company, the bond number, and the bond expiration date.

(c) An individual who possesses a minimum of two recent years
experience in the preparation of personal income tax returns may
petition the council to review the experience and determine if it is
the equivalent of the required qualifying education begin insert described in
subdivision (a) end insert . The council may provide that individual with a
“certificate of completion” if it is determined that the experience
is the equivalent of the required hours. Tax preparation performed
in situations that violate this chapter, by an individual who is
neither registered nor exempted, may not be used toward the
qualifying experience needed for registration as a tax preparer.

begin insert

begin insert SEC. 12. end insert   

Section 22258.1 is added to the Business and
Professions Code, to read:

begin insert 22258.1. end insert   

This chapter shall be liberally construed. If any
provision of this chapter or the application thereof to any person
or circumstance is held to be invalid, the invalidity shall not affect
other provisions or applications of the chapter that can be given
effect without the invalid provision or application, and to this end
the provisions of this chapter are severable.

end insert

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 22259 of the end insert begin insert Business and Professions Code end insert
begin insert is amended to read: end insert

22259.  

This chapter shall be subject to begin delete the end delete review begin delete required by
Division 1.2 (commencing with Section 473) end delete begin insert by the appropriate
policy committees of the Legislature end insert .

This chapter shall remain in effect only until January 1, 2015,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2015, deletes or extends that date.

begin insert

begin insert SEC. 14. end insert   

No reimbursement is required by this act pursuant
to Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin delete

SECTION 1.  

Section 18602 of the Business and Professions
Code is amended to read:

18602.  

(a) Except as provided in this section, there is in the
Department of Consumer Affairs the State Athletic Commission,
which consists of seven members. Five members shall be appointed
by the Governor, one member shall be appointed by the Senate
Rules Committee, and one member shall be appointed by the
Speaker of the Assembly.

The members of the commission appointed by the Governor are
subject to confirmation by the Senate pursuant to Section 1322 of
the Government Code.

No person who is currently licensed, or who was licensed within
the last two years, under this chapter may be appointed or
reappointed to, or serve on, the commission.

(b) In appointing commissioners under this section, the
Governor, the Senate Rules Committee, and the Speaker of the
Assembly shall make every effort to ensure that at least four of
the members of the commission shall have experience and
demonstrate expertise in one of the following areas:

(1) A licensed physician or surgeon having expertise or
specializing in neurology, neurosurgery, head trauma, or sports
medicine. Sports medicine includes, but is not limited to,
physiology, kinesiology, or other aspects of sports medicine.

(2) Financial management.

(3) Public safety.

(4) Past experience in the activity regulated by this chapter,
either as a contestant, a referee or official, a promoter, or a venue
operator.

(c) Each member of the commission shall be appointed for a
term of four years. All terms shall end on January 1. Vacancies
occurring prior to the expiration of the term shall be filled by
appointment for the unexpired term. No commission member may
serve more than two consecutive terms.

(d) Notwithstanding any other provision of this chapter,
members first appointed shall be subject to the following terms:

(1) The Governor shall appoint two members for two years, two
members for three years, and one member for four years.

(2) The Senate Committee on Rules shall appoint one member
for four years.

(3) The Speaker of the Assembly shall appoint one member for
four years.

(e) This section shall remain in effect only until January 1, 2014,
and as of that date is repealed, unless a later enacted statute, that
is enacted before January 1, 2014, deletes or extends that date.

Notwithstanding any other law, the repeal of this section renders
the board subject to review by the appropriate policy committees
of the Legislature.

end delete