SB 691 marches on: 150-hour legislation moves through the process.

• Author: Allen, Bruce C.
• Position: CapitolBeat

On April 28, the Senate Business, Professions and Economic Development Committee voted 7-to-0 to pass SB 691 on to the Senate Committee on Appropriations.

The absence of any "No" votes from the committee, made a very powerful statement, given heavy opposition stemming from the Center for Public Interest Law. The Center had recruited other groups, including the California State NAACP and former Senator Liz Figueroa, who serves on the Ralph Nader-initiated Public Citizen board, to oppose SB 691, the CalCPA-sponsored measure which will bring California licensing in line with the national standards used by the vast majority of other states.

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It's critical that California get this legislation enacted so that California CPAs and their clients can participate in the national CPA reciprocity system that already has been adopted in 41 states.

California law allows two pathways to licensure:

* Pathway 1: A bachelor's degree to sit for the Uniform CPA Exam and two years of experience prior to licensure.

* Pathway 2: A bachelor's degree to sit for the Uniform CPA Exam and 150 total semester units, plus one year of experience prior to licensure.

Only Pathway 2 meets national standard.

SB 691 will sunset Pathway I effective 2014 so California CPAs will be considered equivalent to CPAs from other states and allowed to represent clients' interests in those states without facing often insurmountable hurdles. All existing CPAs and those licensed before 2014 would be grandfathered in under National Association of State Boards of Accountancy Rules of Substantial Equivalency to ensure that all California taxpayers are represented.

It's routine for state changes in licensing laws to grandfather in all existing licensees.

"There are 75,000 CPAs in California and most took a pathway different than the 150-hour route." said Sacramento lobbyist Jim Gross, speaking at the hearing in favor of the bill. "Many basic functions we must perform for California resident clients require us to cross state lines. Almost every CPA in private practice encounters this daily."

This fact is supported by many CPAs' anecdotal accounts. In a survey of CalCPA Government Relations Committee members of the kinds of out-of-state services that CPAs performed for their California clients, the results were enlightening, as many small firms reported that they had clients with business interests in other states.

One California resident client commuted to an East Coast...