86R5958 SOS-D

By: Watson, et al. S.B. No. 613

A BILL TO BE ENTITLED

AN ACT

relating to the continuation and functions of the Texas State Board of Public Accountancy.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 901.006, Occupations Code, is amended to read as follows:

Sec. 901.006. APPLICATION OF SUNSET ACT. The Texas State Board of Public Accountancy is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the board is abolished and this chapter expires September 1, 2031 [2019].

SECTION 2. Section 901.059, Occupations Code, is amended by amending Subsection (b) and adding Subsection (d) to read as follows:

(b) The training program must provide the person with information regarding:

(1) the law governing board operations [this chapter];

(2) the board's programs, functions, rules, and budget [operated by the board];

(3) [the role and functions of the board;

[(4)] the scope of and limitations on the rulemaking authority [rules] of the board[, with an emphasis on the rules that relate to disciplinary and investigatory authority];

(4) the types of board rules, interpretations, and enforcement actions that may implicate federal antitrust law by limiting competition or impacting prices charged by persons engaged in a profession or business the board regulates, including rules, interpretations, and enforcement actions that:

(A) regulate the scope of practice of persons in a profession or business the board regulates;

(B) restrict advertising by persons in a profession or business the board regulates;

(C) affects the price of goods or services provided by persons in a profession or business the board regulates; and

(D) restrict participation in a profession or business the board regulates;

(5) [the current budget for the board;

[(6)] the results of the most recent formal audit of the board;

(6) [(7)] the requirements of:

(A) laws relating to [the] open meetings, [law, Chapter 551, Government Code;

[(B) the] public information, [law, Chapter 552, Government Code;

[(C) the] administrative procedure, and disclosing conflicts-of-interest [law, Chapter 2001, Government Code]; and

(B) [(D)] other laws applicable to members of a state policymaking body in performing their duties [relating to public officials, including conflict-of-interest laws]; and

(7) [(8)] any applicable ethics policies adopted by the board or the Texas Ethics Commission.

(d) The executive director of the board shall create a training manual that includes the information required by Subsection (b). The executive director shall distribute a copy of the training manual annually to each member of the board. On receipt of the training manual, each member of the board shall sign and submit to the executive director a statement acknowledging receipt of the training manual.

SECTION 3. Subchapter D, Chapter 901, Occupations Code, is amended by adding Sections 901.164 and 901.169 to read as follows:

Sec. 901.164. OUTSIDE LEGAL COUNSEL. The board may not contract with outside legal counsel to provide legal services to the board, including representation of the board in a matter referred to the State Office of Administrative Hearings, unless the contract is approved by the attorney general as provided by Section 402.0212, Government Code, regardless of the source of money to be used to pay the outside counsel.

Sec. 901.169. CRIMINAL HISTORY RECORD INFORMATION. (a) The board shall require an individual to submit a complete and legible set of fingerprints, on a form prescribed by the board, to the board or to the Department of Public Safety for the purpose of obtaining criminal history record information from the Department of Public Safety and the Federal Bureau of Investigation if:

(1) the individual has not previously submitted fingerprints for the purpose of the board obtaining criminal history record information; and

(2) the individual:

(A) is an applicant to take the uniform CPA examination;

(B) is an applicant for a certificate;

(C) is an owner or seeks to become an owner of a certified public accountancy firm and the individual is not a license holder, if requested by the board under Section 901.354(e);

(D) is an applicant for a license under Subchapter I; or

(E) is an applicant for renewal of a license under Subchapter I, unless the applicant is an individual who does not engage in the practice of public accountancy because of retirement or permanent disability.

(b) The board may not allow an individual to take the uniform CPA examination or issue a certificate or license to an individual who does not comply with the requirement of Subsection (a).

(c) The board may administratively suspend or refuse to renew the license of an individual who is an applicant for renewal of a license under Subchapter I and who does not comply with the requirement of Subsection (a).

(d) The board shall require a license holder who qualified for an exemption described by Subsection (a)(2)(E) to comply with the requirement of Subsection (a) if the license holder no longer qualifies for the exemption.

(e) The board shall conduct a criminal history record information check of each individual required to submit fingerprints under Subsection (a) using information:

(1) provided by the individual under this section; and

(2) made available to the board by the Department of Public Safety, the Federal Bureau of Investigation, and any other criminal justice agency under Chapter 411, Government Code.

(f) The board may:

(1) enter into an agreement with the Department of Public Safety to administer a criminal history record information check required under this section; and

(2) authorize the Department of Public Safety to collect from each applicant the costs incurred by the Department of Public Safety in conducting the criminal history record information check.

SECTION 4. Section 901.203, Occupations Code, is amended to read as follows:

Sec. 901.203. COMPLAINT INFORMATION. (a) The board shall maintain a system to promptly and efficiently act on complaints filed with the board. The board shall maintain information about parties to the complaint, the subject matter of the complaint, a summary of the results of the review or investigation of the complaint, and its disposition [a file on each written complaint filed with the board. The file must include:

[(1) the name of the person who filed the complaint;

[(2) the date the complaint is received by the board;

[(3) the subject matter of the complaint;

[(4) the name of each person contacted in relation to the complaint;

[(5) a summary of the results of the review or investigation of the complaint; and

[(6) an explanation of the reason the file was closed, if the board closed the file without taking action other than to investigate the complaint].

(b) The board shall make information available describing its [provide to the person filing the complaint and to each person who is a subject of the complaint a copy of the board's policies and] procedures for [relating to] complaint investigation and resolution.

(c) The board[, at least quarterly until final disposition of the complaint,] shall periodically notify the [person filing the] complaint parties [and each person who is a subject of the complaint] of the status of the complaint until final disposition [investigation] unless the notice would jeopardize an undercover investigation.

SECTION 5. Section 901.204, Occupations Code, is amended by adding Subsections (c), (d), and (e) to read as follows:

(c) The board shall include on the agenda of each regular board meeting an opportunity for public comment on each agenda item or other issue before the board makes a decision on the item or issue, except as otherwise provided by Subsection (d).

(d) The board may prohibit public comment at a meeting of the board regarding an active investigation or enforcement proceeding by the board.

(e) The board may not require a person who wishes to make a public comment at a meeting of the board to notify the board in advance of the meeting.

SECTION 6. Section 901.252, Occupations Code, is amended to read as follows:

Sec. 901.252. ELIGIBILITY REQUIREMENTS. To be eligible to receive a certificate, a person must:

(1) satisfy the requirements of [be of good moral character as determined under] Section 901.253;

(2) meet the education requirements established under Section 901.254 or 901.255;

(3) pass the uniform CPA examination;

(4) meet the work experience requirements established under Section 901.256; and

(5) pass an examination on the rules of professional conduct as determined by board rule.

SECTION 7. The heading to Section 901.253, Occupations Code, is amended to read as follows:

Sec. 901.253. BACKGROUND [CHARACTER] INVESTIGATION.

SECTION 8. Section 901.253(a), Occupations Code, is amended to read as follows:

(a) The board shall ensure that an applicant to take the uniform CPA examination or to receive a certificate lacks a [is of good moral character as demonstrated by a lack of] history of dishonest or felonious acts. The board shall require each applicant to comply with the requirements of Section 901.169(a).

SECTION 9. Section 901.309, Occupations Code, is amended to read as follows:

Sec. 901.309. REEXAMINATION. A person who fails all or part of an examination may apply for a subsequent examination, subject to the board's satisfaction that the person meets the requirements of this chapter relating to the person's background investigation [moral character] and education.

SECTION 10. Section 901.351(e), Occupations Code, is amended to read as follows:

(e) The board by rule shall specify:

(1) the form of the application for a firm license;

(2) the fee for an original or renewal firm license, which may be based on the number of owners, members, partners, shareholders, or employee license holders in this state, not to exceed $25 for each of those persons; [and]

(3) the term of a firm license; and

(4) the requirements for renewal of a firm license.

SECTION 11. Section 901.353(a), Occupations Code, is amended to read as follows:

(a) An office established or maintained in this state by a firm of certified public accountants, a firm of public accountants, or a person described by Section 901.355 must designate [be under the direct supervision of] a resident manager who is responsible for the license of the firm or person, as applicable. The resident manager must be [who]:

(1) [is] an owner, member, partner, shareholder, or employee of the firm or person that occupies the office; and

(2) [is] licensed under this chapter.

SECTION 12. Sections 901.354(b) and (e), Occupations Code, are amended to read as follows:

(b) A certified public accountancy firm may include individuals as owners who are not license holders if:

(1) the firm designates to the board as responsible for the firm's license [and the supervision of the firm]:

(A) a license holder who resides in this state; or

(B) if the firm is required under Section 901.351(a-1)(2) to hold a firm license, an individual practicing under a privilege under Section 901.462;

(2) each owner who is not a license holder and who is a resident of this state as determined by board rule:

(A) is actively involved in the firm or an affiliated entity;

(B) lacks a [is of good moral character as demonstrated by a lack of] history of dishonest or felonious acts;

(C) [holds a baccalaureate or graduate degree conferred by a college or university acceptable to the board or equivalent education as determined by the board;

[(D)] maintains any professional designation held by the individual in good standing with the appropriate organization or regulatory body that is identified or used in an advertisement, letterhead, business card, or other firm-related communication;

(D) [(E)] has passed an examination on the rules of professional conduct as determined by board rule; and

(E) [(F)] complies with the rules of professional conduct as determined by board rule; [and

[(G) maintains professional continuing education applicable to license holders as required by board rule;] and

(3) the firm and the owners who are not license holders comply with board disciplinary actions and other requirements the board may impose by rule.

(e) The board may require an individual who is not a license holder under this chapter to comply with the requirement of Section 901.169(a) [submit a complete set of fingerprints]. If the individual does not comply with the requirement of that subsection [provide the complete set of fingerprints] on request, the board may refuse to allow that individual to become an owner of a certified public accountancy firm and may cancel or refuse to issue or renew a firm license to the firm.

SECTION 13. Section 901.402(a), Occupations Code, is amended to read as follows:

(a) On payment of the required fees, the board shall issue a license to an applicant who complies with the requirement of Section 901.169(a) and:

(1) holds a certificate issued under this chapter; or

(2) holds a firm license issued under this chapter.

SECTION 14. Section 901.403, Occupations Code, is amended by adding Subsection (c) to read as follows:

(c) The board shall require an applicant for renewal of a license to comply with the requirement of Section 901.169(a).

SECTION 15. The heading to Section 901.409, Occupations Code, is amended to read as follows:

Sec. 901.409. FEE REDUCTION FOR RETIRED PERSONS OR [DISABLED] PERSONS WITH DISABILITIES.

SECTION 16. Section 901.411(d), Occupations Code, is amended to read as follows:

(d) The board by rule may exempt certain license holders, including license holders who are persons with disabilities [disabled], retired, or not associated with accounting, as defined by board rule, from all or part of the requirements of this section.

SECTION 17. Subchapter M, Chapter 901, Occupations Code, is amended by adding Section 901.6011 to read as follows:

Sec. 901.6011. INJUNCTIVE RELIEF. (a) The attorney general at the request of the board may petition a district court for an injunction to prohibit a person who is violating this chapter from continuing the violation.

(b) Venue in a suit for injunctive relief is in Travis County.

(c) After application and a finding that a person is violating this chapter, the district court shall grant the injunctive relief the facts warrant.

SECTION 18. Section 901.656(a), Occupations Code, is amended to read as follows:

(a) The board[, in consultation with the advisory committee appointed under Section 901.657,] shall determine the maximum amount of any scholarship awarded under this subchapter. The scholarship may be spent by the recipient on the expenses for tuition, fees, books, supplies, and living expenses incurred by the student in connection with the student's fifth year of an accounting program. Scholarships shall be made available to eligible students attending:

(1) any institution of higher education; or

(2) any nonprofit independent institution approved by the Texas Higher Education Coordinating Board under Section 61.222, Education Code.

SECTION 19. The following provisions of the Occupations Code are repealed:

(1) Section 901.163;

(2) Sections 901.253(b) and (c);

(3) Section 901.351(d); and

(4) Section 901.657.

SECTION 20. (a) Except as provided by Subsection (b) of this section, Section 901.059, Occupations Code, as amended by this Act, applies to a member of the Texas State Board of Public Accountancy appointed before, on, or after the effective date of this Act.

(b) A member of the Texas State Board of Public Accountancy who, before the effective date of this Act, completed the training program required by Section 901.059, Occupations Code, as that law existed before the effective date of this Act, is only required to complete additional training on the subjects added by this Act to the training program required by Section 901.059, Occupations Code. A board member described by this subsection may not vote, deliberate, or be counted as a member in attendance at a meeting of the board held on or after December 1, 2019, until the member completes the additional training.

(c) Section 901.164, Occupations Code, as added by this Act, applies only to an original contract entered into on or after the effective date of this Act. An original contract entered into before the effective date of this Act is governed by the law as it existed immediately before the effective date of this Act, and that law is continued in effect for that purpose.

(d) The Texas State Board of Public Accountancy shall require each applicant for renewal of a license under Subchapter I, Chapter 901, Occupations Code, to first comply with the requirement of Section 901.169(a), Occupations Code, as added by this Act, not later than September 1, 2021. Notwithstanding Sections 901.169(a)(2)(E) and 901.403(c), Occupations Code, as added by this Act, an applicant for renewal of a license is not required to comply with Section 901.169(a) until first required to by the board as provided by this subsection.

(e) Section 901.203, Occupations Code, as amended by this Act, applies only to a complaint filed with the Texas State Board of Public Accountancy on or after the effective date of this Act. A complaint filed before the effective date of this Act is governed by the law in effect on the date the complaint was filed, and the former law is continued in effect for that purpose.

(f) Sections 901.252, 901.253, and 901.309, Occupations Code, as amended by this Act, apply only to an application submitted to the Texas State Board of Public Accountancy on or after the effective date of this Act. An application submitted before the effective date of this Act is governed by the law in effect on the date the application was submitted, and the former law is continued in effect for that purpose.

(g) As soon as possible after the effective date of this Act, the Texas State Board of Public Accountancy shall adopt or amend any rules necessary to implement the changes in law made by this Act to Chapter 901, Occupations Code.

SECTION 21. This Act takes effect September 1, 2019.