BILL ANALYSIS
SB 691
Page 1
Date of Hearing: July 7, 2009
ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS
Mary Hayashi, Chair
SB 691 (Yee) - As Amended: June 2, 2009
SENATE VOTE : 37-0
SUBJECT : Accountants
SUMMARY : Requires an applicant for licensure as a certified
public accountant (CPA) to acknowledge that certain specified
pathways to licensure may not be substantially similar to other
states', exempts certain CPA licensees from having to prove
substantial equivalency with other states, as specified, and
requires the California Board of Accountancy (CBA) to verify and
report on these efforts. Specifically, this bill :
1)Requires an applicant for a CPA license who is qualified by
the pathway requiring 48 semester units of education and two
years of qualifying experience, to acknowledge that a license
achieved via this pathway may not be reciprocal with other
states that require 150 semester units for licensure, as of
January 1, 2014.
2)Establishes California as substantially equivalent to every
state that has adopted 150 semester units or hours as the
educational pathway available for licensure in that state.
3)Prohibits any individual that has licensed in California prior
to January 1, 2014, and no individual licensed by the pathway
requiring 150 semester units of education and one year of
qualifying experience subsequent to January 1, 2014, from be
required to individually establish substantial equivalence in
any other state.
4)Requires the CBA to verify its educational equivalency for
licensure with each state, as specified, within existing
resources.
5)States that if CBA concludes that any state does not consider
the educational provisions, as specified, sufficient to
establish California as substantially equivalent, then CBA
shall immediately report that fact to the Legislature,
identify the states, summarize their reasons, and provide
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options for California to establish substantial equivalency.
EXISTING LAW :
1)Licenses and regulates some 40,000 CPAs under the Accountancy
Act (Act) by the CBA within the Department of Consumer
Affairs.
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 subject, passing the
examination prescribed by the Board, and two-years of
qualifying experience; or,
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 Board. In addition, requires
proof of completion of at least 150 semester units
(including the baccalaureate degree), and one year of
qualifying experience.
3)Establishes criteria upon which an applicant for licensure who
is a CPA licensed by any other country may be deemed to have
met the examination requirements of the Act.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "SB 691
would have California as a state be considered substantially
equivalent consistent with the national standard which has
already been adopted by 48 other states so that California CPAs
have full practice rights representing California taxpayers in
those states.
"Pathway 2 [150 units and one year of experience] has been
adopted as the Standard in 48 states. SB 691 would require that
as of January 1, 2014, Pathway 1 applicants for licensure as
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CPAs be cautioned that their license may not be considered to be
substantially equivalent for purposes of practice privileges in
the 48 other states that require 150 semester units for
licensure. This legislation specifies that the section is to
be interpreted to establish California, as a state as
substantially equivalent, so that no California CPA licensed
prior to January 1, 2014 and no person licensed under the 150
hour pathway is required to individually establish substantial
equivalence in any other state for practice rights. Again, the
goal is to establish California, as a state, as substantially
equivalent to the standards in every other state to ensure that
CPAs licensed here are able to represent their clients
throughout the country by most expeditious means available to
any other licensee in the country."
Background . The Uniform Accountancy Act (UAA) is model
legislation developed by the American Institute of Certified
Public Accountants (AICPA) and the National Association of State
Boards of Accountancy (NASBA) designed to provide a uniform
approach to regulation of the accounting profession.
The UAA declares that differing requirements for CPA
certification, reciprocity, temporary practice, and other
aspects of state accountancy legislation in the fifty-four
American licensing jurisdictions erect artificial barriers to
the interstate practice and mobility of CPAs. The UAA is an
attempt to eliminate such differences and barriers posed to the
effective practice of CPAs under modern conditions through a
standard of "substantial equivalency" (SE) that was added to the
UAA.
SE is a determination by NASBA that the education, examination
and experience requirements contained in the statutes and
administrative rules of another jurisdiction are comparable to
or exceed the education, examination and experience requirements
contained in the UAA. Under this concept, if a CPA is in good
standing from a state with CPA certification criteria similar to
the UAA, that CPA is qualified to practice in another state that
is not the CPA's principal place of business. A NASBA
Qualification Appraisal Service makes the determinations of
equivalency at the request of state boards, on a state-by-state
basis, as well as for individuals.
If the state of licensure does not meet the SE standard,
individual CPAs may demonstrate that they personally have
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education, examination and experience qualifications that are
comparable to or exceed those in the UAA.
Both AICPA and NASBA have strongly urged states to adopt the
entire UAA so as to promote its concept of uniformity and
substantial equivalency, but only a few states have actually
adopted all aspects of the UAA. There are, however,
approximately 49 jurisdictions, including California, who now
have education, examination and experience requirements that are
considered by the NASBA as substantially equivalent to those of
the UAA.
However, the bill's sponsors contend that because California has
two paths to licensure, one of which does not conform with UAA,
it must terminate that paths to retain its SE status. This bill
attempts to clarify to individuals using the non-SE path to
licensure that they may not be eligible to practice in other
states after January 1, 2014.
REGISTERED SUPPORT / OPPOSITION :
Support
California Society, Certified Public Accountants (sponsor)
American Institute of Certified Public Accountants
Ascend, San Francisco Bay Area Chapter
Asian Pacific Islander California Action Network
California Hispanic Chambers of Commerce
California Teachers Association
Federation of Schools of Accountancy
Latino Business Professionals of San Francisco
Latinos Professionals in Finance and Accounting
National Association of Black Accountants, Inc.
National Association of State Boards of Accountancy
Philippine American Society of Certified Public Accountants
Numerous individuals
Opposition
None on file.
Analysis Prepared by : Sarah Huchel / B. & P. / (916) 319-3301