BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 1243
          Author:   Lieu (D), et al.
          Amended:  4/21/14
          Vote:     21

           
           SENATE BUSINESS, PROF. & ECON. DEV.COMM.  :  9-0, 4/28/14
          AYES:  Lieu, Wyland, Berryhill, Block, Corbett, Galgiani,  
            Hernandez, Hill, Padilla

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 5/23/14
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg


            SUBJECT  :    Professions and vocations:  Veterinary Medical  
                      Board:  certified common interest development  
                      manager:  tax preparers

           SOURCE  :     Author


           DIGEST  :    This bill extends, until January 1, 2017, the  
          provisions establishing the Veterinary Medical Board (VMB) and  
          the term of the executive officer of the VMB, and extends the  
          certified common interest development (CID) manager program and  
          the Tax Preparer program to January 1, 2019.

           ANALYSIS  :    

          Existing law:

           VMB
           
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           1. Provides for the licensing and regulation of approximately  
             9,800 veterinarians and 4,300 registered veterinary  
             technicians by the VMB.  

           2. Requires the VMB to remain in effect only until January 1,  
             2016, and as of that date is repealed, unless a later enacted  
             statute, that is enacted before January 1, 2016, deletes or  
             extends that date, and that prior to repeal of the VMB,  
             requires review by the appropriate legislative policy  
             committees, but that limits review to those issues as  
             identified by the respective committees; and specifies that  
             the VMB shall not be required to submit a sunset review  
             document or evaluative questionnaire.  

           Certified CID Manager
           
           1. Establishes a scheme for the regulation of CIDs, including  
             condominiums, planned unit developments, stock operatives,  
             and community apartments under the Davis-Sterling Common  
             Interest Development Act.  

           2. Defines a "common interest development manager" as an  
             individual, or as a partner or other business entity, who for  
             compensation or in expectation of compensation provides or  
             contracts to provide management or financial services to a  
             community association.  

           3. Establishes requirements for a voluntary CID manager  
             certification program to be administered by a professional  
             association for CID managers. 

           4. Requires that, in order to be "certified," a CID manager  
             complete a minimum of 30 hours of coursework, as specified,  
             and pass an examination relating to CID law and management.  

           5. Requires that a CID manager make specific disclosures to a  
             condominium association, or other association as specified,  
             including whether the CID manager is certified by a  
             professional association.  

           6. Provides that it is an unfair business practice for a CID  
             manager to hold themselves out as a "certified" CID manager  
             without meeting the requirements of the certification  
             program.  

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           7. Sunsets the certified CID manager program on January 1,  
             2015.  

           Tax Preparers

            1. Provides for the registration of tax preparers by the  
             California Tax Education Council (CTEC), and sunsets those  
             provisions of law effective January 1, 2015.  

           2. Defines a "tax preparer" as 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/herself out as  
             offering those services.  

           3. Defines a "tax preparer" to also mean a corporation,  
             partnership, association, or other entity that has persons  
             associated with it who have as part of their responsibilities  
             the preparation of data and ultimate signatory authority of  
             tax returns or that holds itself out as offering those  
             services or having that authority.  

           4. Specifies that a "tax preparer" does not include an employee  
             who, as part of the regular clerical duties of employment,  
             prepares his/her employer's income, sales, or payroll tax  
             returns.  

           5. Establishes the CTEC as a single organization that is 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 three 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 three years.  

           6. Establishes various requirements for tax preparers including  
             obligations to register with the CTEC; obtain a "certificate  
             of completion" based on completing a tax education curriculum  
             as specified; maintain a surety bond of $5,000 payable to the  
             State of California.  Requires the bond to be for the benefit  
             of any person(s) damaged by any fraud, dishonesty,  

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             misstatement, misrepresentation, deceit, or any unlawful acts  
             or omissions by the tax preparer. 

           7. Requires CTEC to issue a "certificate of completion" when a  
             tax preparer demonstrates completion of not less than 60  
             hours of specified educational requirements.  

          This bill:

           1. Extends the sunset date of the VMB and its executive officer  
             to January 1, 2017.

           2. Extends the sunset date of the certified CID manager program  
             to January 1, 2019.

           3. Extends the sunset date of the Tax Preparer program to  
             January 1, 2019.

           Background
           
          This bill is one of six "sunset review bills" authored by the  
          Chair of the Senate Business, Professions and Economic  
          Development (BPED) Committee.  Unless legislation is carried  
          this year to extend the sunset dates of the certified CID  
          manager program and Tax Preparer program, they will both be  
          repealed on 
          January 1, 2015.   The repeal date for the VMB and its executive  
          officer has been extended for one year, to January 1, 2017, to  
          allow sufficient time for the VMB to address issues which have  
          been identified by this Committee.  

          In 2014, the Senate BPED Committee and the Assembly Business,  
          Professions and Consumer Protection Committee conducted joint  
          oversight hearings to review nine regulatory entities:  Bureau  
          of Automotive Repair; Bureau of Home Furnishings and Thermal  
          Insulation; Bureau for Private Postsecondary Education;  
          California Massage Therapy Certification program; California  
          Board of Acupuncture; California Tax Preparer program; Dental  
          Hygiene Committee of California; Professional Fiduciaries  
          Bureau; and the Structural Pest Control Board.  The Senate BPED  
          Committee also reviewed the performance and effectiveness of the  
          CID manager program. 

          The Committees began their review of the aforementioned  

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          licensing agencies in March and conducted two days of hearings.   
          This bill, and the accompanying sunset bills, are intended to  
          implement legislative changes as recommended in the Committee's  
          Background Papers prepared for each agency and program reviewed  
          by the Committees for this year.

           NOTE:  For a summary of the issues and recommendations relating  
                 to the Tax Preparer program, refer to the Senate BPED  
                 Committee analysis of 
           April 28, 2014.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Senate Appropriations Committee:

             VMB:  Projected costs of approximately $4.5 million annually  
             (VMB Contingency Fund), supporting 23.8 personnel years,  
             until January 1, 2017, partially offset by fee revenues of  
             approximately $3.5 million, based on the proposed 2014-15  
             Budget.  

             No state costs associated with extending the CID manager and  
             Tax Preparer programs.  The certification of CID managers and  
             registration of tax preparers is handled by a specified  
             professional association of CID managers and a nonprofit  
             regulating entity, respectively, that are outside of state  
             government and are not supported by state funds.

          The Department of Consumer Affairs indicates that the provisions  
          of the bill that extend the sunset on the VMB are minor and  
          absorbable and within existing resources.  


          MW:k  5/23/14   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  NONE RECEIVED

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