SECTIONS 5096-5096.15 - California Statutes

BUSINESS AND PROFESSIONS CODE

SECTION 5096-5096.15

5096. (a) An individual whose principal place of business is not in
this state and who has a valid and current license, certificate or
permit to practice public accountancy from another state may, subject
to the conditions and limitations in this article, engage in the
practice of public accountancy in this state under a practice
privilege without obtaining a certificate or license under this
chapter if the individual satisfies one of the following:
(1) The individual has continually practiced public accountancy as
a certified public accountant under a valid license issued by any
state for at least four of the last ten years.
(2) The individual has a license, certificate, or permit from a
state which has been determined by the board to have education,
examination, and experience qualifications for licensure
substantially equivalent to this state's qualifications under Section
5093.
(3) The individual possesses education, examination, and
experience qualifications for licensure which have been determined by
the board to be substantially equivalent to this state's
qualifications under Section 5093.
(b) The board may designate states as substantially equivalent
under paragraph (2) of subdivision (a) and may accept individual
qualification evaluations or appraisals conducted by designated
entities, as satisfying the requirements of paragraph (3) of
subdivision (a).
(c) To obtain a practice privilege under this section, an
individual who meets the requirements of subdivision (a), shall do
the following:
(1) In the manner prescribed by board regulation, notify the board
of the individual's intent to practice.
(2) Pay a fee as provided in Article 8 (commencing with Section
5130).
(d) Except as otherwise provided by this article or by board
regulation, the practice privilege commences when the individual
notifies the board, provided the fee is received by the board within
30 days of that date. The board shall permit the notification to be
provided electronically.
(e) An individual who holds a practice privilege under this
article:
(1) Is subject to the personal and subject matter jurisdiction and
disciplinary authority of the board and the courts of this state.
(2) Shall comply with the provisions of this chapter, board
regulations, and other laws, regulations, and professional standards
applicable to the practice of public accountancy by the licensees of
this state and to any other laws and regulations applicable to
individuals practicing under practice privileges in this state except
the individual is deemed, solely for the purpose of this article, to
have met the continuing education requirements and ethics
examination requirements of this state when such individual has met
the examination and continuing education requirements of the state in
which the individual holds the valid license, certificate, or permit
on which the substantial equivalency is based.
(3) Shall not provide public accountancy services in this state
from any office located in this state, except as an employee of a
firm registered in this state. This paragraph does not apply to
public accountancy services provided to a client at the client's
place of business or residence.
(4) Is deemed to have appointed the regulatory agency of the state
that issued the individual's certificate, license, or permit upon
which substantial equivalency is based as the individual's agent on
whom notices, subpoenas or other process may be served in any action
or proceeding by the board against the individual.
(5) Shall cooperate with any board investigation or inquiry and
shall timely respond to a board investigation, inquiry, request,
notice, demand or subpoena for information or documents and timely
provide to the board the identified information and documents.
(f) A practice privilege expires one year from the date of the
notice, unless a shorter period is set by board regulation.
(g) (1) No individual may practice under a practice privilege
without prior approval of the board if the individual has, or
acquires at any time during the term of the practice privilege, any
disqualifying condition under paragraph (2) of this subdivision.
(2) Disqualifying conditions include:
(A) Conviction of any crime other than a minor traffic violation.
(B) Revocation, suspension, denial, surrender or other discipline
or sanctions involving any license, permit, registration, certificate
or other authority to practice any profession in this or any other
state or foreign country or to practice before any state, federal, or
local court or agency, or the Public Company Accounting Oversight
Board.
(C) Pendency of any investigation, inquiry or proceeding by or
before any state, federal or local court or agency, including, but
not limited to, the Public Company Accounting Oversight Board,
involving the professional conduct of the individual.
(D) Any judgment or arbitration award against the individual
involving the professional conduct of the individual in the amount of
thirty thousand dollars ($30,000) or greater.
(E) Any other conditions as specified by the board in regulation.
(3) The board may adopt regulations exempting specified minor
occurrences of the conditions listed in subparagraph (B) of paragraph
(2) from being disqualifying conditions under this subdivision.

5096.1. (a) Any individual, not a licensee of this state, who is
engaged in any act which is the practice of public accountancy in
this state, and who has not given notice of intent to practice under
practice privileges and paid the fee required pursuant to the
provisions of this article, and who has a license, certificate or
other authority to engage in the practice of public accountancy in
any other state, regardless of whether active, inactive, suspended,
or subject to renewal on payment of a fee or completion of an
educational or ethics requirement, is:
(1) Deemed to be practicing public accountancy unlawfully in this
state.
(2) Subject to the personal and subject matter jurisdiction and
disciplinary authority of the board and the courts of this state to
the same extent as a holder of a valid practice privilege.
(3) Deemed to have appointed the regulatory agency of the state
that issued the individual's certificate or license as the individual'
s agent on whom notice, subpoenas, or other process may be served in
any action or proceeding by the board against the individual.
(b) The board may prospectively deny a practice privilege to any
individual who has violated this section or implementing regulations
or committed any act which would be grounds for discipline against
the holder of a practice privilege.

5096.2. (a) Practice privileges may be denied for failure to
qualify under or comply with the provisions of this article or
implementing regulations, or for any act that if committed by an
applicant for licensure would be grounds for denial of a license
under Section 480 or if committed by a licensee would be grounds for
discipline under Section 5100, or for any act committed outside of
this state that would be a violation if committed within this state.
(b) The board may deny practice privileges using either of the
following procedures:
(1) Notifying the individual in writing of all of the following:
(A) That the practice privilege is denied.
(B) The reasons for denial.
(C) The earliest date on which the individual is eligible for a
practice privilege.
(D) That the individual has a right to appeal the notice and
request a hearing under the provisions of the Administrative
Procedure Act if a written notice of appeal and request for hearing
is made within 60 days.
(E) That, if the individual does not submit a notice of appeal and
request for hearing within 60 days, the board's action set forth in
the notice shall become final.
(2) Filing a statement of issues under the Administrative
Procedure Act.
(c) An individual who had been denied a practice privilege may
apply for a new practice privilege not less than one year after the
effective date of the notice or decision denying the practice
privilege unless a longer time period, not to exceed three years, is
specified in the notice or decision denying the practice privilege.

5096.3. (a) Practice privileges are subject to revocation,
suspension, fines or other disciplinary sanctions for any conduct
that would be grounds for discipline against a licensee of the board
or for any conduct in violation of this article or regulations
implementing this article.
(b) Practice privileges are subject to discipline during any time
period in which they are valid, under administrative suspension, or
expired.
(c) The board may recover its costs pursuant to Section 5107 as
part of any disciplinary proceeding against the holder of a practice
privilege.
(d) An individual whose practice privilege has been revoked may
apply for a new practice privilege not less than one year after the
effective date of the board's decision revoking the individual's
practice privilege unless a longer time period, not to exceed three
years, is specified in the board's decision revoking the practice
privilege.
(e) The provisions of the Administrative Procedure Act, including,
but not limited to, the commencement of a disciplinary proceeding by
the filing of an accusation by the board shall apply under this
article.

5096.4. (a) The right of an individual to practice in this state
under a practice privilege may be administratively suspended at any
time by an order issued by the board or its executive officer,
without prior notice or hearing, for the purpose of conducting a
disciplinary investigation, proceeding, or inquiry concerning the
representations made in the notice, the individual's competence or
qualifications to practice under practice privileges, failure to
timely respond to a board inquiry or request for information or
documents, or under other conditions and circumstances provided for
by board regulation.
(b) The administrative suspension order is immediately effective
when mailed to the individual's address of record or agent for notice
and service as provided for in this article.
(c) The administrative suspension order shall contain the
following:
(1) The reason for the suspension.
(2) A statement that the individual has the right, within 30 days,
to appeal the administrative suspension order and request a hearing.
(3) A statement that any appeal hearing will be conducted under
the provisions of the Administrative Procedure Act applicable to
individuals who are denied licensure, including the filing of a
statement of issues by the board setting forth the reasons for the
administrative suspension of practice privileges and specifying the
statutes and rules with which the individual must show compliance by
producing proof at the hearing and in addition any particular matters
that have come to the attention of the board and that would
authorize the administrative suspension, or the denial of practice
privileges.
(d) The burden is on the holder of the suspended practice
privilege to establish both qualification and fitness to practice
under practice privileges.
(e) The administrative suspension shall continue in effect until
terminated by an order of the board or the executive officer or
expiration of the practice privilege under administrative suspension.
(f) Administrative suspension is not discipline and shall not
preclude any individual from applying for a license to practice
public accountancy in this state or from applying for a new practice
privilege upon expiration of the one under administrative suspension,
except that the new practice privilege shall not be effective until
approved by the board.
(g) Notwithstanding any administrative suspension, a practice
privilege expires one year from the date of notice unless a shorter
period is set by board regulation.
(h) Proceedings to appeal an administrative suspension order may
be combined or coordinated with proceedings for denial or discipline
of a practice privilege.

5096.5. Notwithstanding any other provision of this article, an
individual may not sign any attest report pursuant to a practice
privilege unless the individual meets the experience requirements of
Section 5095 and completes any continuing education or other
conditions required by the board regulations implementing this
article.

5096.6. In addition to the authority otherwise provided for by this
code, the board may delegate to the executive officer the authority
to issue any notice or order provided for in this article and to act
on behalf of the board, including, but not limited to, issuing a
notice of denial of a practice privilege and an interim suspension
order, subject to the right of the individual to timely appeal and
request a hearing as provided for in this article.

5096.7. Except as otherwise provided in this article, the following
definitions apply:
(a) Anywhere the term "license," "licensee," "permit," or
"certificate" is used in this chapter or Division 1.5 (commencing
with Section 475), it shall include persons holding practice
privileges under this article, unless otherwise inconsistent with the
provisions of the article.
(b) Any notice of practice privileges under this article and
supporting documents is deemed an application for licensure for
purposes of the provisions of this code, including, but not limited
to, the provisions of this chapter and the provisions of Division 1.5
(commencing with Section 475) related to the denial, suspension and
revocation of licenses.
(c) Anywhere the term "employee" is used in this article it shall
include, but is not limited to, partners, shareholders, and other
owners.

5096.8. In addition to the authority otherwise provided by this
code, all investigative powers of the board, including those
delegated to the executive officer, shall apply to investigations
concerning compliance with, or actual or potential violations of, the
provisions of this article or implementing regulations, including,
but not limited to, the power to conduct investigations and hearings
by the executive officer under Section 5103 and to issuance of
subpoenas under Section 5108.

5096.9. The board is authorized to adopt regulations to implement,
interpret, or make specific the provisions of this article.

5096.10. The provisions of this article shall only be operative if
commencing July 1, 2005, and continuing during the period provided in
Section 5096.11, there is an appropriation from the Accountancy Fund
in the annual Budget Act to fund the activities in the article and
sufficient hiring authority is granted pursuant to a budget change
proposal to the board to provide staffing to implement this article.

5096.12. (a) A certified public accounting firm that is authorized
to practice in another state and that does not have an office in this
state may engage in the practice of public accountancy in this state
through the holder of a practice privilege provided that:
(1) The practice of public accountancy by the firm is limited to
authorized practice by the holder of the practice privilege.
(2) A firm that engages in practice under this section is deemed
to consent to the personal, subject matter, and disciplinary
jurisdiction of the board with respect to any practice under this
section.
(b) The board may revoke, suspend, issue a fine pursuant to
Article 6.5 (commencing with Section 5116), or otherwise restrict or
discipline the firm for any act that would be grounds for discipline
against a holder of a practice privilege through which the firm
practices.

5096.13. The notification of intent to practice under a practice
privilege pursuant to Section 5096 shall include the name of the
firm, its address and telephone number, and its federal taxpayer
identification number.

5096.14. The board shall amend Section 30 of Article 4 of Division
1 of Title 16 of the California Code of Regulations to extend the
current "safe harbor" period from December 31, 2007, to December 31,
2010.

5096.15. It is the intent of the Legislature that the board adopt
regulations providing for a lower fee or no fee for out-of-state
accountants who do not sign attest reports for California clients
under the practice privilege. These regulations shall ensure that the
practice privilege program is adequately funded. These regulations
shall be adopted as emergency regulations in accordance with Chapter
3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title
2 of the Government Code and, for purposes of that chapter, the
adoption of the regulations shall be considered by the Office of
Administrative Law to be necessary for the immediate preservation of
the public peace, health and safety, and general welfare.