BILL ANALYSIS Ó
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|Hearing Date:April 28, 2014 |Bill No:SB |
| |1243 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: SB 1243Author:Lieu
As Amended:April 21, 2014 Fiscal: Yes
SUBJECT: Professions and vocations.
SUMMARY: Extends until January 1, 2017, the provisions establishing
the Veterinary Medical Board and the term of the executive officer of
the Board, and extends the Certified Common Interest Development
Manager program and the Tax Preparer program to January 1, 2019.
Existing law:
Veterinary Medical Board
1)Provides for the licensing and regulation of approximately 9,800
veterinarians and 4,300 registered veterinary technicians by the
Veterinary Medical Board (VMB) within the Department of Consumer
Affairs (DCA). (Business and Professions Code (BPC) § 4800 et seq.)
2)Provides that the VMB shall 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2016, and as of that date is repealed, unless a later enacted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 of extends
that date, and that prior to repeal of the VMB, it shall be reviewed
by the appropriate policy committees of the Legislature, but that
the review shall be limited to those issues as identified by the
respective committees and VMB shall not be required to submit a
sunset review document or evaluative questionnaire. (BPC § 4800)
Certified Common Interest Development Manager
1) Establishes a scheme for the regulation of common interest
developments, including condominiums, planned unit
developments, stock operatives, and community apartments under
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the Davis-Sterling Common Interest Development Act. (Civil
Code § 4000 et seq.)
2) Defines a "common interest development manager" (CID 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. (BPC § 11501)
3) Establishes requirements for a voluntary CID manager
certification program to be administered by a professional
association for CID managers. (Id.)
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. (Id.)
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. (BPC § 11504)
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.
(BPC § 11505)
7) Sunsets the certified CID manager program on January 1, 2015.
(BPC § 11506)
Tax Preparers
1) Provides for the registration of tax preparers by the California
Tax Education Council (CTEC), and repeals (sunsets) those
provisions of law effective January 1, 2015. (BPC § 22250 et.
seq.)
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 or herself out as offering those services.
(BPC § 22251)
3) Defines a "tax preparer" to also mean a corporation , partnership ,
association , or other entity that has persons associated with it
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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.
(Id.)
4) Specifies that a "tax preparer" does not include an employee who,
as part of the regular clerical duties of employment, prepares his
or her employer's income, sales or payroll tax returns. (Id.)
5) Establishes the California Tax Education Council (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 3 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 3 years. (BPC § 22251 (d))
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 State of
California. The bond shall be for the benefit of any person or
persons damaged by any fraud, dishonesty, misstatement,
misrepresentation, deceit, or any unlawful acts or omissions by the
tax preparer.
(BPC § 22250)
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. (BPC § 22255)
This bill:
Veterinary Medical Board
1)Extends the repeal date (sunset) of the VMB and its executive officer
to January 1, 2017.
Certified Common Interest Development Manager
1)Extends the repeal date (sunset) of the certified CID manager
program to January 1, 2019.
Tax Preparers
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1)Extends the repeal date (sunset) of the Tax Prepares program to
January 1, 2019.
FISCAL EFFECT: Unknown. This bill has been keyed "fiscal" by
Legislative Counsel.
COMMENTS:
1.Purpose. This bill is one of six "sunset review bills" authored by
the Chair of this 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.
2.Oversight Hearings and Sunset Review of Licensing Boards and
Commission of DCA.
In 2014, the Senate Business and Professions Committee and the
Assembly Business, Professions and Consumer Protection Committee
(Committees) conducted joint oversight hearings to review 9
regulatory entities: Bureau of Automotive Repair; Bureau of Home
Furnishings and Thermal Insulation; Bureau for Private Postsecondary
Education (BPPE); California Massage Therapy Certification program;
California Board of Acupuncture; California Tax Preparers Program;
Dental Hygiene Committee of California; Professional Fiduciaries
Bureau; and Structural Pest Control Board. This Committee also
reviewed the performance and effectiveness of the Community Interest
Development Manager's Certification Program.
The Committees began their review of the aforementioned licensing
agencies in March and conducted two days of hearings and then more
recently held a hearing on the BPPE. This bill, and the
accompanying sunset bills, are intended to implement legislative
changes as recommended by staff of the Committee's and which are
reflected in the Background Papers prepared by Committee staff for
each agency and program reviewed by the Committees for this year.
3.Review of the Certified CID Manager Program. There were no issues
raised regarding this Program and the two professional associations
which provide certification did not have any recommended changes to
this Program. The only statutory change considered necessary was
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the extension of this Program's sunset date for four years, to
January 1, 2019.
4.Review of the Tax Preparer Program, Issues Identified and
Recommended Changes. There were few issues raised regarding this
Program and the CTEC had no recommended statutory changes at this
time; therefore, the only statutory change considered necessary was
the possible extension of this Program's sunset date for four years,
to January 1, 2019.
a) Issue : Continued Regulation by the CTEC.
Background : The responsibility for approving tax schools and
certifying the education of tax preparers was transferred from
the California State Tax Preparer Program, under the Department
of Consumer Affairs, to CTEC by the Governor and the Legislature
effective July 1, 1997. Since taking over this responsibility,
CTEC has continued to be more efficient and effective and has
provided better value, service and response to the profession of
tax preparers than the prior state run program. For example, a
survey was conducted in 2006 by CTEC with 2,063 CTEC registered
tax preparers responding to see how tax preparers viewed CTEC.
Questions ranged from "how to reach CTEC" to "how effective is
CTEC in protecting taxpayers from fraudulent tax preparers." The
following is a compilation of the information gathered from the
survey.
Communications and Services: 80% of respondents
were satisfied with the various methods of communicating
with CTEC-toll-free telephone and fax lines, email, and
regular mail. Of those surveyed, 88% indicated that the
services provided by CTEC were about right. Some of the
services provided preparers include: newsletters, brochures,
online registration and access to education providers. 82%
of survey respondents rated the overall service provided by
CTEC as either good or excellent.
Providers : 95% of those surveyed indicated they had
adequate access to continuing education providers with 56%
wanting more courses offered online.
Consumer Protection : 62% of respondents indicated
that CTEC registration protects consumers from fraudulent or
incompetent tax preparers and that the existing protections
are sufficient. 70% indicated that the bond requirement
protects the public.
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CTEC indicates that one of its main responsibilities is to
educate the public regarding illegal tax preparers. 88% of
survey respondents indicated that they were aware of all or some
of the resources CTEC had available to educate the public about
the risks of hiring unregistered tax preparers. Respondents
overwhelmingly indicated that regulation of tax preparers benefit
the public, with 77% of those surveyed indicating CTEC
registration is necessary.
In 2013, CTEC conducted another survey of its registered tax
preparers. In this survey, as in the previous one, questions
regarding CTEC services were asked, with a bit more emphasis on
educational requirements. The CTEC survey was conducted with
1,211 CTEC registered tax preparers responding. The following is
a compilation of the information gathered from the survey.
Communications and Services : Since CTEC's last
survey in 2006, the number of survey respondents rating the
services provided by CTEC, either good or excellent,
increased from 88% to 96%. 88% of survey respondents
indicated that for the services provided, CTEC's $25
registration fee was about right.
Providers : Over 96% of respondents indicated they
had adequate access to continuing education providers, an
increase from the 2006 survey. Almost 80% of respondents
indicated they would obtain continuing education without the
registration requirement.
Consumer Protection : Almost 80% of respondents
indicated CTEC registration protects consumers from
fraudulent or incompetent tax preparers. This is an
increase of almost 20% from the 2006 survey. Over 83% of
respondents indicated the bond requirement protects the
public, an increase of 13% from the 2006 survey. Only 34%
of respondents would prefer errors and omissions insurance
as a CTEC requirement rather than the surety bond
requirement.
Over 80% of respondents indicated that CTEC registration improves
tax preparer ability to prepare tax returns and 72% indicated
they were more competent tax preparers due to CTEC registration
requirements. Both surveys would seem to indicate strong support
of CTEC by tax preparers.
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CTEC has also been very responsive to the recommendations of this
Committee and that of the prior JLSRC. As discussed earlier, all
the recommendations made to CTEC by the JLSRC in 2001 were fully
addressed and appropriate action taken. With the assistance of
the JLSRC and Legislature, CTEC was able to successfully achieve
the results recommended by the Joint Committee and has continued
to show improvement in its overall operation.
Recommendation : Committee staff recommended that the
registration of tax preparers by CTEC be continued and the
profession be regulated by the current Council membership in
order to protect the interests of the public and consumers in
seeking the assistance of tax preparers and that CTEC be reviewed
by this Committee once again in six years.
[ The current language in this measure reflects this recommended
change .]
1.Extension of the Sunset Date for VBM for One Year. When the VBM was
reviewed by the Committees in 2013, there were concerns raised about
issues which the VBM was not addressing or delaying action to
resolve. To assure that the VBM would move ahead more expeditiously
to implement these necessary changes and address important issues,
it was decided by the Committees to only extend the sunset date of
the VBM for two years until such time as both Committees were
confident that these outstanding issues would be addressed.
Recently, the Committees met with the new Executive Officer of the
VBM and with DCA to discuss these outstanding issues. It was
decided that because some of the changes necessary would require
regulations and a response from the VBM would have to be made to the
Committees in just a few months, it would be appropriate to allow at
least one more year for the VBM to complete the regulatory process
and to resolve some of the more important issues by 2016.
2.Current Related Legislation. SB 1242 (Lieu, 2014) amends the
Automotive Repair Act and updates the sunset provisions for the
Bureau of Automotive Repair. ( Status : This bill will also be heard
before the BP&ED Committee during today's hearing.)
SB 1244 (Lieu, 2014) Extends until January 1, 2019 the term of the
Structural Pest Control Board which provides for the licensing and
regulation of individuals and business involved in the structural
pest control industry in California. The bill also extends the term
of the board's executive officer and subjects the board to be
reviewed by the appropriate policy committees of the Legislature.
( Status : This bill will also be heard before the BP&ED Committee
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during today's hearing.)
SB 1245 (Lieu, 2014) Extends until January 1, 2019 the term of the
Dental Hygiene Committee of California which provides for the
licensing and regulation of dental hygienists. The bill also
extends the term of the committee's executive officer and subjects
the committee to be reviewed by the appropriate policy committees of
the Legislature. ( Status : This bill will also be heard before the
BP&ED Committee during today's hearing.)
SB 1246 (Lieu, 2014) Extends until January 1, 2019 the term of the
Acupuncture Board which provides for the licensing and regulation of
doctors of acupuncture under the Acupuncture Licensure Act and
subjects the board to be reviewed by the appropriate policy
committees of the Legislature. ( Status : This bill will also be
heard before the BP&ED Committee during today's hearing.)
SB 1247 (Lieu, 2014) Extends until January 1, 2019 the term of the
California Private Postsecondary Education Act of 2009, which
provides for the regulation of private postsecondary educational
institutions by the Bureau for Private Postsecondary Education in
the Department of Consumer Affairs. The bill also extends the term
of the Student Tuition Recovery Fund under the administration of the
bureau, and subjects the bureau to review by the appropriate policy
committees of the Legislature. ( Status : This bill will also be
heard before the BP&ED Committee during today's hearing.)
SUPPORT AND OPPOSITION:
Support: None on file as of April 23, 2014.
Opposition: None on file as of April 23, 2014.
Consultant:Bill Gage