BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 823| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 823 Author: Senate Business, Professions and Economic Development Committee Amended: 9/6/13 Vote: 27 - Urgency SENATE BUSINESS, PROF. & ECON. DEV. COMM. : 10-0, 4/29/13 AYES: Price, Emmerson, Block, Corbett, Galgiani, Hernandez, Hill, Padilla, Wyland, Yee SENATE FLOOR : 34-0, 5/06/13 AYES: Anderson, Beall, Block, Calderon, Cannella, Corbett, Correa, De León, DeSaulnier, Emmerson, Evans, Fuller, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Leno, Lieu, Liu, Monning, Nielsen, Padilla, Pavley, Price, Roth, Steinberg, Walters, Wright, Wyland NO VOTE RECORDED: Berryhill, Lara, Wolk, Yee, Vacancy, Vacancy ASSEMBLY FLOOR : Not available SUBJECT : Professions and vocations: licensure SOURCE : Author DIGEST : This bill 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 (TRF) operated by the Court Reporters Board of California (CRB). CONTINUED SB 823 Page 2 Assembly Amendments add provisions relating to the administration of the TRF; add a sunset to CPA licensure requirements; and make technical and clarifying changes to correct a typographical error and an incorrect code citation. ANALYSIS : Existing law: 1.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 California Board of Accountancy (CBA), and two years of qualifying experience (120-hour pathway). These provisions become inoperative on January 1, 2014. 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 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). 1.Requires an applicant for the CPA examination to submit evidence of completion of a baccalaureate or higher degree prior to sitting for the examination. 2.Provides for the licensure and regulation of court reporters by the CRB within the Department of Consumer Affairs. 3.Requires, until January 1, 2017, certain fees and revenues collected by CRB to be deposited into the TRF; and requires the unencumbered funds remaining in the TRF as of January 1, 2017, be transferred to the Court Reporters' Fund. This bill: CONTINUED SB 823 Page 3 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 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 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. CONTINUED SB 823 Page 4 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 TRF 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 $75 for one-half day or $125 for a full day, as specified. 11.Sets forth, the procedures to be followed by the applicant, or certified shorthand reporter and CRB, regarding reimbursement from the TRF, as specified, and specifies that the maximum amount reimbursable by the TRF 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 TRF due to insufficiency for that fiscal year shall be held over until the next fiscal year to be paid out of the renewed TRF on a priority basis. 13.Provides that documentation accompanying an invoice for reimbursement from the TRF shall be sufficient to establish entitlement to reimbursement if it is filed with the executive CONTINUED SB 823 Page 5 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 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 TRF. 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 TRF and the reimbursement process (#13 through #18 above), effective January 1, 2017. 20.Makes various other technical and clarifying changes. CONTINUED SB 823 Page 6 Background According to the CBA under SB 819 (Yee, Chapter 398, Statutes of 2009), beginning 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, and 10 semester units in ethics study, and one year of general accounting experience. As a result, many applicants who planned their respective 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 maintains those applicants eligibility for licensure as a stop gap 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. The 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 master's concurrent degree program typically cannot receive their baccalaureate degree until the master's degree program is completed. Therefore, even if the candidate has fulfilled the baccalaureate degree requirements, the applicant cannot qualify for the CPA exam. This bill allows applicants who are enrolled in a program that confers a master's and a 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 that the applicant is in good standing in a concurrent degree and has fulfilled the requirements for the baccalaureate degree. Court reporter provisions . CRB administers the TRF, which is based in statute and designated to reimburse transcript costs incurred by indigent litigants. The TRF'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 TRF to pro se (self-represented) litigants who are indigent. CONTINUED SB 823 Page 7 Historically the TRF 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 TRF 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) 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 TRF, 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 TRF 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 will restore those repealed sections and enable CRB to fully administer the TRF. Comments The author states, "As urgency legislation, the bill consolidates several 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." FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No SUPPORT : (Verified 9/10/13) California Board of Accountancy California Society of CPAs Court Reporters Board of California MW:ej 9/11/13 Senate Floor Analyses CONTINUED SB 823 Page 8 SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED