BILL ANALYSIS Ó
SENATE COMMITTEE ON APPROPRIATIONS
Senator Ricardo Lara, Chair
2015 - 2016 Regular Session
SB 467 (Hill) - Professions and vocations
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|Version: April 21, 2015 |Policy Vote: B., P. & E.D. 9 - |
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|Urgency: No |Mandate: No |
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|Hearing Date: May 11, 2015 |Consultant: Mark McKenzie |
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This bill meets the criteria for referral to the Suspense File.
Bill
Summary: SB 467 would extend the sunset on the Board of
Accountancy (Board) and the term of its executive officer until
January 1, 2020, and authorize the Board to place practice
restrictions on licensees for disciplinary reasons.
The bill would transfer authority for approving pro-rata charges
for Department of Consumer Affairs (DCA) administrative expenses
that are imposed upon boards and bureaus within DCA to the
Legislature, rather than having those charges set by the
director of DCA with Department of Finance (DOF) approval.
SB 467 would also require the Attorney General (AG) to submit an
annual report to the Legislature, Governor, and DCA, beginning
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on January 1, 2017, that includes specified information on cases
referred to the AG by DCA's boards and bureaus.
Fiscal
Impact:
Board of Accountancy: projected expenditures of approximately
$14.1 million annually (Accountancy Fund), supporting 98.8 PY,
until January 1, 2020, partially offset by annual fee revenues
of approximately $5.4 million in 2015-16, based on the
proposed 2015-16 budget. Annual fee revenues will increase to
approximately $11 million annually beginning July 1, 2016.
The AG's Office indicates that it would incur significant
increased workload and costs of approximately $1.45 million in
2015-16 ($537,000 General Fund and $911,000 Legal Services
Revolving Fund - LSRF), $1.8 million in 2016-17 ($268,000
General Fund and $1.534 million LSRF), and $1.534 million
ongoing (LSRF). AG costs from the LSRF would be reimbursed
from the funds of the boards and bureaus that refer cases to
the AG.
Unknown impact on the funds and accounts of individual boards
and bureaus as a result of transferring the authority to the
Legislature for setting pro-rata charges on boards and bureaus
to cover DCA's administrative expenses. There should not be a
net overall impact to the charges, but the change will likely
result in losses to some funds and gains to others. (various
special funds)
Background: Existing law, the California Accountancy Act, establishes the
Board of Accountancy within DCA, authorizes the Board to appoint
an executive officer, and sunsets the Board and executive
officer on January 1, 2016. The Board licenses and regulates
over 81,000 accounting professionals to ensure adherence to
professional standards. A person is deemed to be engaged in the
public practice of accountancy if he or she performs certain
acts, makes certain representations, and renders accounting
services to the public and clients for compensation. Existing
law authorizes the Board to revoke, suspend, or refuse to renew
a license or certificate, or censure the licensee, for
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unprofessional conduct that includes one or any combination of
criminal acts, specified false statements or omissions,
dishonesty, fraud, gross negligence or repeated negligent acts
in performance of professional standards, and other acts or
violations, as specified.
Existing law specifies that the boards and bureaus within the
DCA are established for the purpose of ensuring that those
private businesses and professions deemed to engage in
activities which have potential impact upon the public health,
safety, and welfare are adequately regulated in order to protect
the people of California. Existing law authorizes the director
of DCA to levy a charge for the pro-rata share of DCA's
administrative expenses against any of the boards, bureaus,
commissions, divisions, and agencies, at the discretion of the
director and with approval of DOF. DCA is required to submit an
annual report of the accounting of the pro-rata calculation of
administrative expenses to the appropriate policy committees of
the Legislature, beginning on July 1, 2015. DCA is also
required to conduct a one-time study of its current system of
prorating administrative expenses to determine if that system is
the most productive, efficient, and cost-effective manner for
DCA and its boards and bureaus, and requires DCA to consider
certain options and include the findings from the study in the
July 1, 2015 report to the Legislature.
Proposed Law:
SB 467 would do the following:
Extend the sunset on the Board of Accountancy and its
executive officer until January 1, 2020.
Authorize the Board to permanently restrict or limit the
practice of a licensee, or impose a probationary term or
condition on a license, for unprofessional conduct. This
action would prohibit the licensee from performing or engaging
in any of the acts or services as provided for in the practice
of accountancy. Unprofessional conduct would include, but not
be limited to, those grounds for discipline or denial
specified in current law.
Require DCA to receive approval from the Legislature in order
to levy a charge for the estimated administrative expenses of
the DCA on a pro rata share basis against any of the boards,
bureaus, commissions, divisions, and agencies.
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Require the AG to submit an annual report to DCA, the
Governor, and the appropriate policy committees of the
Legislature, beginning January 1, 2017, that includes specific
statistical information regarding cases referred to the AG by
each constituent entity comprising the DCA and the Division of
Investigation (DOI) within DCA.
Require the director of DCA, through the DOI, to work
cooperatively with the health care boards to standardize
referral of complaints to the DOI and those that are retained
by the health care boards for investigation.
Related
Legislation: This bill is one of five measures introduced this
session by the Senate Business, Professions, and Economic
Development Committee to extend the sunset on licensing boards
within DCA - including SB 465 (Hill), SB 466 (Hill), SB 468
(Hill), and SB 469 (Hill). Five additional bills that extend
the sunset on DCA licensing boards and bureaus are being
considered by the Assembly this year.
Staff
Comments: DCA indicates that any costs to extend the sunset on
the Board of Accountancy, and provide authority for the Board to
place practice restrictions on licensees for disciplinary
reasons, would be minor and absorbable.
There are several things to note about the Accountancy Fund,
which supports the operations of the Board. Effective July 1,
2014, the Board reduced licensing and exam fees in a deliberate
effort to bring the Accountancy Fund reserve in line with
appropriate levels (it had over 12-months of revenues in reserve
at that time). This explains the primary source of imbalance in
fees and expenditures in the current year and the 2015-16 fiscal
year (fee revenues are approximately $5.4 million and
expenditures are about $13.8 million in those years). According
to the proposed 2015-16 budget, there will be a projected
reserve of about $3.35 million at the end of the 2015-16 fiscal
year, which is the equivalent of an appropriate three-month
reserve. The temporary reduction in licensing and exam fees
will expire on July 1, 2016, which is expected to bring annual
fee revenues to over $11 million in 2016-17. This amount is
still less than projected expenditures through the remaining
sunset period, but the Board could raise the fees further, if
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necessary. Staff notes that the 2002 Budget Act included a loan
of $6 million from the Accountancy Fund to the General Fund to
help close a budget gap. The Governor's proposed budget
anticipates the repayment of this loan in 2015-16.
Current law does not require the AG to compile statistical data
or results of cases referred to the AG by constituent entities
comprising the DCA, or to report any such information to DCA,
the Governor, or Legislature. The AG reports they would
experience significant workload impacts as a result of this
bill, and would incur staffing costs of $911,000 in 2015-16 and
$1.534 million ongoing, as well as an 18-month contract for
external consulting resources of approximately $805,000. Staff
notes that the AG report requirement in this bill was also
included in the June 30, 2014 version of SB 1243 (Lieu), last
year's bill dealing with professions and vocations, but the
Assembly Appropriations Committee voted to delete the AG report
from the bill when it was reported to the Assembly Floor from
the Suspense File.
DCA indicates that any costs related to provisions requiring
complaint standardization among the healing arts boards would be
minor.
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