BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  SB 306
                                                                  Page  1

          Date of Hearing:   August 17, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                    SB 306 (De Leon) - As Amended:  July 7, 2011 

          Policy Committee:                              Business and 
          Professions  Vote:                            8 - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This bill reinstates a five-day safe harbor period that expired 
          on December 31, 2010, to allow a temporary California practice 
          privilege for certified public accountants (CPAs) licensed in 
          other states.  

           FISCAL EFFECT  

          There are no significant costs associated with this legislation. 


           COMMENTS 

           1)Rationale  . The purpose of this legislation is to reinstate the 
            safe harbor statute which sunset on December 31, 2010. As a 
            result of the sunset, a practice privilege notification form 
            must be filed with the CBA prior to practicing public 
            accountancy in the state.  

            The author notes that since the program sunset, the California 
            Board of Accountancy (CBA) has considered several alternatives 
            for reinstating the program, including pursuing regulatory 
            action, adopting emergency regulations, or seeking a statutory 
            solution through legislation.  At the CBA's March meeting, CBA 
            ultimately determined that placing the program back in state 
            statutes was the most viable solution. 

           2)Background  . California's safe harbor statute allowed 
            out-of-state CPAs five business days to file with the Board a 
            practice privilege notification form following the 
            commencement of practicing in California. 








                                                                  SB 306
                                                                  Page  2


            The safe harbor provision was enacted to give an introductory 
            period for out-of-state CPA's to gain familiarity with 
            California's new practice privilege requirements.  The safe 
            harbor period was originally set to expire in 2007.  AB 1868 
            (Bermudez), Statutes of 2006, required the CBA to extend the 
            safe harbor period to match the sunset date for the practice 
            privilege program. In 2009, SB 819 (Yee), Statutes of 2009, 
            removed the sunset date for the practice of privilege program 
            but was silent on the safe harbor provisions.  


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081