BILL ANALYSIS Ó
SB 823
Page 1
Date of Hearing: June 11, 2013
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Richard S. Gordon, Chair
SB 823 (Business, Professions and Economic Development) - As
Amended: May 23, 2013
SENATE VOTE : 34-0
SUBJECT : Professions and vocations: licensure.
SUMMARY : Revises the qualifications for certified public
accountant (CPA) licensure in order to smooth the transition to
the new requirements for some applicants, and reestablishes
certain provisions regarding the administration of the
Transcript Reimbursement Fund (Fund) operated by the Court
Reporters Board of California (CRB). Specifically, this bill :
1)Grants applicants who pass the CPA examination on or before
December 31, 2013 until December 31, 2015 to complete the
general accounting experience requirement necessary for CPA
licensure.
2)Permits CPA applicants enrolled in a program that grants
concurrent conferral of a master's and baccalaureate degree to
qualify for the CPA examination prior to the conferral of a
baccalaureate degree, upon showing that the applicant has met
the program's requirements for conferral of a baccalaureate
degree.
3)Requires the concurrent degree-conferring educational
institution to mail to the California Board of Accountancy
(CBA) an official transcript and a signed letter documenting
that the applicant is in good standing in a program that will
result in the concurrent conferral of degrees, that the
applicant has fulfilled the requirements for the baccalaureate
degree, and the date the applicant met the requirements for
conferral of a baccalaureate degree.
4)Requires that the total educational program for a qualified
concurrent degree program include a minimum of 24 semester
units in accounting subjects and 24 semester units in
business-related subjects, which shall be evidenced at the
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time of application for admission to the examination, except
that an applicant who applied, qualified, and sat for at least
two subjects of the examination for the CPA license before May
15, 2002 may provide this evidence at the time of application
for licensure.
5)Permits an applicant who has successfully passed the CPA
examination requirement on or before December 31, 2013 to
qualify for the CPA license without satisfying the specified
required semester units of study related to ethics or
accounting if the applicant completes all other requirements
for the issuance of a license on or before December 31, 2015.
6)Provides that an applicant who has successfully passed the CPA
examination requirement on or before December 31, 2013 is
exempt from specified ethics requirements unless the applicant
fails to obtain the specified qualifying experience on or
before December 31, 2015.
7)Provides definitions for the following terms related to the
regulation of shorthand reporters: "applicant", "case",
"certified shorthand reporter", "Developmentally Disabled
Assistance Act", "fee-generating case", "lawyer referral
service", "Legal Services Corporation", "Older Americans Act",
"other qualified project", "pro bono attorney", "qualified
legal services project", "qualified support center", "rules of
professional conduct" and "supplemental security income
recipient", which shall remain operative until January 1,
2017.
8)Requires the CRB to disburse funds from the Fund for the
costs, exclusive of per diem, of preparing either an original
transcript and one copy thereof, or where appropriate, a copy
of the transcript, of court or deposition proceedings, or
both, incurred as a contractual obligation between the
shorthand reporter and the applicant, for litigation conducted
in California.
9)Permits CRB to reimburse the applicant or shorthand reporter
for per diem costs if there is no deposition transcript.
10)Specifies that the rate of per diem for depositions shall not
exceed seventy-five dollars ($75) for one-half day, or one
hundred twenty-five dollars ($125) for a full day, as
specified.
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11)Sets forth the procedures to be followed by the applicant or
certified shorthand reporter and CRB regarding reimbursement
from the Fund, as specified, and specifies that the maximum
amount reimbursable by the Fund shall not exceed $20,000 per
person, per case, per year.
12)Requires CRB to complete its reimbursement action within 30
days of receipt of the invoice and all required documentation,
including a completed application, except that applications
for reimbursement that cannot be paid from the Fund due to
insufficiency for that fiscal year shall be held over until
the next fiscal year to be paid out of the renewed Fund on a
priority basis.
13)Provides that documentation accompanying an invoice for
reimbursement from the Fund shall be sufficient to establish
entitlement to reimbursement if it is filed with the executive
officer on a prescribed and complete application form that
establishes the identify and qualification of the applicant,
the fact that the case is not fee-generating, evidence of
licensure, a signed statement that the invoice is accurate,
written acknowledgement of the responsibility to refund any
disbursement from any costs or attorney's fees awarded or
otherwise provided, and separate itemizations for charges
claimed, as specified.
14)Provides that eligibility for reimbursement for an "other
qualified project", "qualified legal services project", or
"qualified support center", as defined, shall require a letter
from the director of the project or center certifying that the
project or center meets specified standards and that the
litigant or litigants are indigent persons.
15)Provides that eligibility for reimbursement for a pro bono
attorney shall require a letter certifying that the
representation meets specified standards and that the litigant
or litigants are indigent persons, together with a letter from
the director of a project or center, as specified, certifying
that the litigant or litigants had been referred by that
project or center to the applicant.
16)Permits an applicant to receive reimbursement directly from
CRB if the applicant has previously paid the certified
shorthand reporter for transcripts as specified, and submits
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an itemized statement signed by the certified shorthand
reporter, as specified.
17)Authorizes CRB to prescribe appropriate forms to be used by
applicants and certified shorthand reporters to facilitate
reimbursement from the Fund.
18)Clarifies that the law related to shorthand reporters does
not restrict any contractual obligation or payment for
services, including, but not limited to, billing the applicant
directly, during the pendency of the reimbursement claim.
19)Sunsets the provisions of this bill related to the Fund and
the reimbursement process (#13-18 above), effective January 1,
2017.
20)Makes various other technical and clarifying changes relative
to the practice of shorthand reporting.
EXISTING LAW :
1)Licenses and regulates more than 40,000 CPAs under the
Accountancy Act (Act) by CBA within the Department of Consumer
Affairs (DCA). Existing law prohibits a person from engaging
in the practice of public accountancy in this state unless he
or she holds either a valid permit issued by the board or a
practice privilege, as specified. (Business and Professions
Code (BPC) Section 5000 et seq.)
2)Requires an applicant for the CPA license to comply with
education, examination, and experience requirements under one
of two provisions that establish different criteria (pathways)
for CPA licensure as follows:
a) Completion of a baccalaureate or higher degree, as
specified, including 24 semester units in accounting and 24
semester units in business related subjects, passing the
examination prescribed by the CBA, and two years of
qualifying experience (120-hour pathway). The law makes
these provisions inoperative on January 1, 2014. (BPC
5092)
b) Completion of a baccalaureate or higher degree, as
specified, including 24 semester units in accounting and 24
semester units in business related subjects, passing the
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examination prescribed by the CBA. In addition, requires
proof of completion of at least 150 semester units
(including the baccalaureate degree), and one year of
qualifying experience (150-hour pathway). (BPC 5093)
3)Requires an applicant for the CPA examination to submit
evidence of completion of a baccalaureate or higher degree
prior to sitting for the examination. (BPC 5093)
4)Provides for the licensure and regulation of court reporters
by CRB within DCA, and authorizes CRB to appoint an executive
officer and committees as necessary. (BPC 8000)
5)Generally repeals those provisions related to CRB and
shorthand reporters on January 1, 2017, and specifies that CRB
is subject to review by the appropriate policy committees of
the Legislature. (BPC 8000, et seq.)
6)Requires, until January 1, 2017, certain fees and revenues
collected by CRB to be deposited into the Fund, a continuously
appropriated fund, to be available to provide reimbursement
for the cost of providing shorthand reporting services to
low-income litigants in civil cases. (BPC 8030.2)
7)Requires CRB, until January 1, 2017, to publicize the
availability of the Fund to prospective applicants, with
unencumbered funds remaining in the Fund as of January 1, 2017
to be transferred to the Court Reporters' Fund. (BPC 8030.5)
FISCAL EFFECT : Unknown
COMMENTS :
1) Purpose of this bill . This is a "Committee bill" authored
and sponsored by the Senate Business, Professions and
Economic Development Committee for the purpose of
consolidating multiple non-controversial revisions into a
single vehicle. The provisions contained in this bill were
requested by CBA (making minor changes to CPA candidate
eligibility) and CRB (related to reimbursement for providing
transcripts in certain pro bono cases). This bill also
contains an urgency clause.
2) Author's statement . The authoring Committee states: "As
urgency legislation, the bill consolidates several
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non-controversial provisions related to the programs and
professions governed by the Business and Professions Code.
Consolidating the provisions in one bill is designed to
relieve the various licensing boards, agencies and
professions from the necessity and burden of having separate
measures for several non-controversial revisions. These
changes are minor, technical and updating changes."
Furthermore, "As a Committee bill, if controversy or opposition
should arise regarding any provision that cannot be resolved,
then that provision will be removed from the bill. This will
eliminate the chance of placing any of the other provisions
in jeopardy."
3) Accountancy provisions . According to CBA, as of January 1,
2014, CPA applicants will be required to obtain 150 semester
units, including 24 semester units in accounting subjects, 24
semester units in business-related subjects, 20 semester
units in accounting study, 10 semester units in ethics study,
and one year of general accounting experience. As a result,
many applicants who planned their education and general
accounting experience under the presumption that the existing
pathways to licensure would still exist may be ineligible to
become licensed when the new requirements take effect on
January 1, 2014. By extending the existing pathways for
those who pass the examination, this bill would maintain
those applicants' eligibility for licensure as a stopgap
measure. While it is difficult to say with precision how
many individuals could be affected by these changes, CBA
estimates that the number would be in the thousands.
CBA states that existing law requires that an applicant for the
CPA exam present evidence that a baccalaureate degree has
been completed and conferred. However, applicants enrolled
in a five-year baccalaureate and master's concurrent degree
program typically cannot receive their baccalaureate degree
until the master's degree program is also completed.
Therefore, even if the candidate has fulfilled the
baccalaureate degree requirements, the applicant cannot
qualify for the CPA exam. This bill would allow those
applicants who are enrolled in a program that confers a
master's and baccalaureate degree concurrently to qualify for
the CPA exam prior to the conferral of a baccalaureate
degree. The applicant must provide a letter from the
educational institution along with transcripts documenting
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that the applicant is in good standing in a concurrent degree
program and has fulfilled the requirements for the
baccalaureate degree.
4) Court Reporter Provisions . CRB administers the Fund, which
is based in statute and designated to reimburse transcript
costs incurred by indigent litigants. The Fund's
reimbursements are limited to $300,000 per year, and are paid
from court reporter licensing fees. In 2010, SB 1181
(Cedillo) (Chapter 518, Statutes of 2010) established a pilot
project to expand the Fund to pro se (self-represented)
litigants who are indigent. Historically the Fund has been
underutilized by indigent litigants represented by pro bono
attorneys or qualified nonprofit entities, so this pilot
project was implemented in order to maximize the benefits of
the Fund and expand reimbursements to those most in need. A
cap of $30,000 per calendar year was set aside for projects
under SB 1181, with a per case cap of $1,500.
In 2012, SB 1236 (Price) (Chapter 332, Statutes of 2012)
extended the sunset date of the CRB and the Fund from January
1, 2013 to January 1, 2017. However, due to a drafting
error, SB 1236 failed to extend certain provisions related to
the Fund, so that they were repealed as of January 1, 2013.
The repealed sections contain definitions and authorize the
CRB to process and pay the applications. The Fund itself
remains in statute. CRB staff states that it is continuing
to receive and log applications for reimbursement, and upon
restoration of the repealed code sections the CRB would be
able to begin processing them. This bill would restore those
repealed sections and enable CRB to fully administer the
Fund.
5) Previous legislation . SB 1236 (Price), Chapter 332, Statutes
of 2012, extended the sunset date of the CRB and the Fund
from January 1, 2013 to January 1, 2017.
SB 1405 (De León), Chapter 411, Statutes of 2012, revised
California's practice privilege statutes for the practice of
accountancy to allow out-of-state licensees to practice in
California with no notice or fee paid to the CBA.
SB 773 (Negrete-McLeod), Chapter 334, Statutes of 2011, defined
what courses qualify to meet the 10 semester units of ethics
study beginning January 1, 2014.
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SB 819 (Yee), Chapter 398, Statutes of 2009, beginning
January 1, 2014, requires CPA applicants to obtain 150
semester units, including 24 semester units in accounting
subjects, 24 semester units in business-related subjects, 20
semester units in accounting study, and 10 semester units in
ethics study, and one year of general accounting experience.
6) Potential chaptering out conflict . This bill amends the same
code section (BPC 5092) as
AB 1420 (Committee on Accountability and Administrative
Review), which is currently pending in the Senate Rules
Committee. If both measures continue to move, chaptering out
language will need to be added to this bill and to AB 1420 to
prevent a conflict.
7) Urgency measure . This bill contains an urgency clause for
the general purpose of consumer protection, and would take
effect immediately upon enactment. This bill requires a 2/3
vote to pass off the Floor.
REGISTERED SUPPORT / OPPOSITION :
Support
California Board of Accountancy
California Society of CPAs
Court Reporters Board of California
Opposition
None on file.
Analysis Prepared by : Hank Dempsey / B.,P. & C.P. / (916)
319-3301