By Uher H.B. No. 2755
77R1950 SMH-F
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the regulation of the practice of public accounting.
1-3 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-4 SECTION 1. Section 901.002(a), Occupations Code, is amended
1-5 to read as follows:
1-6 (a) In this chapter:
1-7 (1) "Attest service" means:
1-8 (A) an audit or other engagement required by the
1-9 board to be performed in accordance with the auditing standards
1-10 adopted by the American Institute of Certified Public Accountants
1-11 or another national accountancy organization recognized by the
1-12 board;
1-13 (B) an engagement required by the board to be
1-14 performed in accordance with standards for accounting and review
1-15 services adopted by the American Institute of Certified Public
1-16 Accountants or another national accountancy organization recognized
1-17 by the board;
1-18 (C) an engagement required by the board to be
1-19 performed in accordance with standards for attestation engagements
1-20 adopted by the American Institute of Certified Public Accountants
1-21 or another national accountancy organization recognized by the
1-22 board; or
1-23 (D) any other assurance service required by the
1-24 board to be performed in accordance with professional standards
2-1 adopted by the American Institute of Certified Public Accountants
2-2 or another national accountancy organization recognized by the
2-3 board.
2-4 (2) "Board" means the Texas State Board of Public
2-5 Accountancy.
2-6 (3) [(2)] "Certificate" means a certificate issued to
2-7 a certified public accountant.
2-8 (4) [(3)] "Certified public accountant" means a person
2-9 who holds a certificate issued under this chapter.
2-10 (5) "Certified public accountancy firm" means a person
2-11 who holds a permit issued under Subchapter H.
2-12 (6) "Client" means a person who enters into an
2-13 agreement with a license holder or a license holder's employer to
2-14 receive a professional accounting service.
2-15 (7) [(4)] "Corporation" means a corporation authorized
2-16 by a statute applicable to this state or by an equivalent law of
2-17 another state or a foreign country, including a professional public
2-18 accounting corporation organized under The Texas Professional
2-19 Corporation Act (Article 1528e, Vernon's Texas Civil Statutes).
2-20 (8) [(5)] "Firm" means a sole proprietorship,
2-21 partnership, corporation, or other business entity engaged in the
2-22 practice of public accountancy.
2-23 (9) "License" means a license issued under Subchapter
2-24 I.
2-25 (10) "Peer review" means the study, appraisal, or
2-26 review of the professional accounting work of a public accountancy
2-27 firm that performs attest services by a certificate holder who is
3-1 not affiliated with the firm.
3-2 (11) "Permit" means a permit issued under Subchapter
3-3 H.
3-4 (12) "Professional accounting services" or
3-5 "professional accounting work" means services or work that requires
3-6 the specialized knowledge or skills associated with certified
3-7 public accountants, including:
3-8 (A) issuing reports on financial statements;
3-9 (B) providing management or financial advisory
3-10 or consulting services;
3-11 (C) preparing tax returns; and
3-12 (D) providing advice in tax matters.
3-13 (13) [(6) "Practice unit" means an office of a firm
3-14 that is required to be registered with the board to practice public
3-15 accountancy.]
3-16 [(7)] "Public accountant" means a person authorized to
3-17 practice public accountancy under the Public Accountancy Act of
3-18 1945 (Article 41a, Vernon's Texas Civil Statutes).
3-19 [(8) "Sole proprietorship" means an unincorporated
3-20 firm that is owned and controlled by one person engaged in the
3-21 practice of public accountancy.]
3-22 SECTION 2. Subchapter A, Chapter 901, Occupations Code, is
3-23 amended by adding Section 901.0021 to read as follows:
3-24 Sec. 901.0021. MEANING AND IMPLICATION OF REPORT. (a) In
3-25 this chapter, a reference to a report used with respect to a
3-26 financial statement means an opinion, report, or other document,
3-27 including an assurance prepared in accordance with standards for
4-1 accounting and review services adopted by the American Institute of
4-2 Certified Public Accountants or another national accountancy
4-3 organization recognized by the board, that:
4-4 (1) states or implies assurance as to the reliability
4-5 of the financial statement; and
4-6 (2) includes or is accompanied by a statement or
4-7 implication that the person issuing the opinion, report, or other
4-8 document has special knowledge or competence in accounting or
4-9 auditing.
4-10 (b) A statement or implication of assurance as to the
4-11 reliability of a financial statement or as to the special knowledge
4-12 or competence of the person issuing the opinion, report, or other
4-13 document includes any form of language that is conventionally
4-14 understood to constitute such a statement or implication.
4-15 (c) A statement or implication of special knowledge or
4-16 competence in accounting or auditing may arise from:
4-17 (1) the use by the issuer of the opinion, report, or
4-18 other document of a name or title indicating that the person is an
4-19 accountant or auditor; or
4-20 (2) the language of the opinion, report, or other
4-21 document itself.
4-22 SECTION 3. Section 901.004(a), Occupations Code, is amended
4-23 to read as follows:
4-24 (a) This chapter does not:
4-25 (1) restrict an official act of a person acting in the
4-26 person's capacity as:
4-27 (A) an officer of the state or of a county,
5-1 municipality, or other political subdivision, including a county
5-2 auditor;
5-3 (B) an officer of a federal department or
5-4 agency; or
5-5 (C) an assistant, deputy, or employee of a
5-6 person described by Paragraph (A) or (B);
5-7 (2) prohibit a person who is not a certified public
5-8 accountant or public accountant from serving as an employee of:
5-9 (A) a certified public accountant or public
5-10 accountant licensed by the board; or
5-11 (B) a firm composed of certified public
5-12 accountants or public accountants licensed by the board; [or]
5-13 (3) prohibit a person licensed by the federal
5-14 government as an enrolled agent from performing an act or using a
5-15 designation authorized by federal law;
5-16 (4) prohibit an attorney or firm of attorneys from
5-17 preparing or presenting records or documents customarily prepared
5-18 by an attorney or firm of attorneys in connection with the
5-19 attorney's or firm's professional work in the practice of law; or
5-20 (5) prohibit an employee, officer, or director of a
5-21 federally insured depository institution from preparing or
5-22 presenting records or documents when lawfully acting within the
5-23 scope of the activities of the institution's trust department.
5-24 SECTION 4. Section 901.005, Occupations Code, is amended to
5-25 read as follows:
5-26 Sec. 901.005. FINDINGS; PUBLIC POLICY; PURPOSE. (a) The
5-27 practice of public accountancy is a learned profession that
6-1 requires specialized education and experience. That practice has
6-2 historically been defined to include a broad range of financial,
6-3 advisory, and attest services, including:
6-4 (1) issuing a report on a financial statement;
6-5 (2) preparing a tax return;
6-6 (3) providing advice in a tax matter;
6-7 (4) providing management or financial advisory or
6-8 consulting services;
6-9 (5) recommending the sale of a product if the
6-10 recommendation requires or implies accounting or auditing skill;
6-11 and
6-12 (6) providing litigation support services.
6-13 (b) The attest function is part of the practice of public
6-14 accountancy. That function provides assurance to the public,
6-15 especially the public markets, that the management of commercial
6-16 entities has reasonably described the financial status of those
6-17 entities. That assurance contributes to the strength of the
6-18 economy and public markets of this state and to the soundness and
6-19 reliability of the financial system. The strength of the financial
6-20 system in this state is supported by the competence, integrity, and
6-21 expertise of the persons who attest to financial statements in this
6-22 state.
6-23 (c) Notwithstanding Subsection (b), the public relies on the
6-24 competence and integrity of certified public accountants in all of
6-25 its dealings with certified public accountants and not merely in
6-26 connection with their performance of the attest function.
6-27 (d) The terms "accountant" and "auditor," and derivations,
7-1 combinations, and abbreviations of those terms, have an implication
7-2 of competence in the profession of public accountancy on which the
7-3 public relies in personal, business, and public activities and
7-4 enterprises.
7-5 (e) [(b)] The policy of this state and the purpose of this
7-6 chapter are to provide that:
7-7 (1) the admission of persons to the practice of public
7-8 accountancy require education and experience commensurate with the
7-9 requirements of the profession;
7-10 (2) a person who represents that the person practices
7-11 public accountancy be qualified to do so;
7-12 (3) a person licensed as a certified public
7-13 accountant:
7-14 (A) [engaged in the practice of public
7-15 accountancy] maintain high standards of professional competence,
7-16 integrity, and learning; and
7-17 (B) demonstrate competence and integrity in all
7-18 dealings with the public that rely on or imply the special skills
7-19 of a certified public accountant and not merely in connection with
7-20 the performance of the attest function;
7-21 (4) areas of specialized practice require special
7-22 training; and
7-23 (5) the activities and competitive practices of
7-24 persons practicing public accountancy be regulated to be free of
7-25 commercial exploitation to provide the public with a high level of
7-26 professional competence at reasonable fees by independent,
7-27 qualified persons.
8-1 SECTION 5. Section 901.051(a), Occupations Code, is amended
8-2 to read as follows:
8-3 (a) The Texas State Board of Public Accountancy consists of
8-4 15 members appointed by the governor with the advice and consent of
8-5 the senate as follows:
8-6 (1) 10 certified public accountant members, at least
8-7 eight of whom are, on the date of appointment:
8-8 (A) a sole practitioner; or
8-9 (B) an owner or employee of a certified public
8-10 accountancy firm [engaged in public practice]; and
8-11 (2) five public members who are not:
8-12 (A) licensed under this chapter; or
8-13 (B) financially involved in an organization
8-14 subject to board regulation.
8-15 SECTION 6. Sections 901.158 and 901.159, Occupations Code,
8-16 are amended to read as follows:
8-17 Sec. 901.158. RULES RESTRICTING [ADVERTISING OR] COMPETITIVE
8-18 PRACTICES [BIDDING]. The board in its rules of professional conduct
8-19 may regulate the [not restrict advertising or] competitive
8-20 practices of [bidding by] a license holder [except] as necessary to
8-21 ensure that the[:]
8-22 [(1) the license holder's communications, including
8-23 advertising and price information, are informative, free of
8-24 deception, and consistent with the professionalism expected and
8-25 deserved by the public from a person engaged in the practice of
8-26 public accountancy;]
8-27 [(2) the license holder's conduct is free from fraud,
9-1 undue influence, deception, intimidation, overreaching, and
9-2 harassment;]
9-3 [(3) the license holder does not engage in an
9-4 uninvited solicitation, by use of a means other than mass media
9-5 advertisement, to perform professional accounting services;]
9-6 [(4) a contract between a license holder and a state
9-7 agency, publicly owned utility, or political subdivision, including
9-8 a county, municipality, district, or authority, for the performance
9-9 of professional accounting services is not solicited or awarded on
9-10 the basis of competitive bids submitted in violation of law;]
9-11 [(5) a contract for the preparation of a financial
9-12 statement or an opinion on a financial statement includes
9-13 information necessary to protect the public if:]
9-14 [(A) the financial statement or opinion can be
9-15 used by or given to a person other than a party to the contract to
9-16 induce reliance on the statement or opinion; and]
9-17 [(B) the contract is entered into on the basis
9-18 of competitive bids; or]
9-19 [(6) a] license holder does not engage in a
9-20 competitive practice that:
9-21 (1) [(A)] impairs the independence or quality of a
9-22 service provided by a license holder;
9-23 (2) [(B)] impairs or restricts the public's
9-24 opportunity to obtain professional accounting services of high
9-25 quality at a reasonable price; or
9-26 (3) [(C)] unreasonably restricts competition among
9-27 license holders.
10-1 Sec. 901.159. PEER [QUALITY] REVIEW. (a) The board by rule
10-2 shall provide for a peer [quality] review program to review the
10-3 work product of a license holder or of the certified public
10-4 accountancy firm in which the license holder is a member [practice
10-5 unit], in lieu of the [a] license holder, to the extent necessary
10-6 to comply with any applicable standards adopted by generally
10-7 recognized bodies responsible for setting accounting standards.
10-8 Peer review must include a verification that each individual in a
10-9 certified public accountancy firm who is responsible for
10-10 supervising attest services and who signs or authorizes another
10-11 person to sign an accountant's reports on financial statements on
10-12 behalf of the firm meets the competency requirements of the
10-13 professional standards that apply to those services.
10-14 (b) The board by rule shall establish a fee in an amount not
10-15 to exceed $200 to be paid by a certified public accountancy firm
10-16 [practice unit], or by a license holder who is not a member of a
10-17 certified public accountancy firm [practice unit], for each peer
10-18 [quality] review required by the board under this section.
10-19 SECTION 7. Section 901.160(c), Occupations Code, is amended
10-20 to read as follows:
10-21 (c) Except on written authorization as provided by
10-22 Subsection (b), the following information gathered or received by
10-23 the board is confidential and not subject to disclosure under
10-24 Chapter 552, Government Code:
10-25 (1) information regarding the qualifications of an
10-26 applicant or license holder to be certified [or registered] as a
10-27 certified public accountant; [and]
11-1 (2) information regarding the qualifications of an
11-2 applicant or permit holder to be issued a permit as a certified
11-3 public accountancy firm; and
11-4 (3) information regarding a disciplinary action under
11-5 Subchapter K against a license holder or an applicant to take the
11-6 uniform CPA examination, before a public hearing on the matter.
11-7 SECTION 8. Section 901.161(a), Occupations Code, is amended
11-8 to read as follows:
11-9 (a) Any statement or record prepared or an opinion formed in
11-10 connection with a positive enforcement[, quality review,] or peer
11-11 review is privileged and is not:
11-12 (1) subject to discovery, subpoena, or other means of
11-13 legal compulsion for release to a person other than the board; or
11-14 (2) admissible as evidence in a judicial or
11-15 administrative proceeding other than a board hearing.
11-16 SECTION 9. Section 901.162, Occupations Code, is amended by
11-17 adding Subsection (c) to read as follows:
11-18 (c) Each board member and each employee, volunteer, or agent
11-19 of the board is immune from personal liability for an action taken
11-20 in good faith in the discharge of the board's responsibilities. The
11-21 state shall hold each board member and each employee, volunteer, or
11-22 agent of the board harmless from any cost, damage, or attorney's
11-23 fees arising from a claim or suit against that person with respect
11-24 to matters to which that immunity applies.
11-25 SECTION 10. Section 901.163(a), Occupations Code, is amended
11-26 to read as follows:
11-27 (a) The board shall develop and maintain a system for
12-1 tracking a complaint filed with the board against a person who
12-2 holds a license or permit [registered under this chapter].
12-3 SECTION 11. Subchapter D, Chapter 901, Occupations Code, is
12-4 amended by adding Section 901.165 to read as follows:
12-5 Sec. 901.165. RULES FOR ATTEST SERVICES. (a) The board by
12-6 rule shall specify those services that constitute attest services.
12-7 (b) Attest services are required to be performed in
12-8 accordance with professional standards. The board may adopt by
12-9 reference the standards developed for general application by the
12-10 American Institute of Certified Public Accountants or another
12-11 nationally recognized accountancy organization.
12-12 SECTION 12. Section 901.251(a), Occupations Code, is amended
12-13 to read as follows:
12-14 (a) A person who is an individual may not perform attest
12-15 services [engage in the practice of public accountancy] unless the
12-16 person holds a certificate issued under this chapter.
12-17 SECTION 13. Section 901.253(c), Occupations Code, is amended
12-18 to read as follows:
12-19 (c) The board may obtain criminal history record information
12-20 maintained by a law enforcement agency, including the Department of
12-21 Public Safety and the Federal Bureau of Investigation
12-22 identification division, to investigate the qualifications of an
12-23 individual who applies to take the uniform CPA examination or to be
12-24 certified or issued a permit [registered] under this chapter.
12-25 SECTION 14. Section 901.254, Occupations Code, is amended to
12-26 read as follows:
12-27 Sec. 901.254. EDUCATION REQUIREMENTS. [(a)] To be eligible
13-1 to take the uniform CPA examination, an applicant must:
13-2 (1) hold a baccalaureate or graduate degree, or its
13-3 equivalent as determined by board rule, conferred by a
13-4 board-recognized institution of higher education; and
13-5 (2) complete at least[:]
13-6 [(A)] 150 semester hours or quarter-hour
13-7 equivalents in board-recognized courses, including an accounting
13-8 concentration or equivalent courses as determined by board rule[;]
13-9 [(B) 30 semester hours or quarter-hour
13-10 equivalents in board-recognized accounting courses, as defined by
13-11 board rule, including at least 20 semester hours or quarter-hour
13-12 equivalents in core accounting courses, as defined by board rule;
13-13 and]
13-14 [(C) 20 semester hours or quarter-hour
13-15 equivalents in board-recognized college or university
13-16 accounting-related courses in other areas of business
13-17 administration].
13-18 SECTION 15. Section 901.256(a), Occupations Code, is amended
13-19 to read as follows:
13-20 (a) To be eligible to receive a certificate, a person must
13-21 complete:
13-22 (1) at least two years of work experience under the
13-23 supervision of a certified public accountant; or
13-24 (2) at least one year of work experience acceptable to
13-25 the board, including experience providing a service or advice
13-26 involving accounting, attest services, management or financial
13-27 advisory or consulting services, or tax services [under the
14-1 supervision of a certified public accountant], if the person:
14-2 (A) has completed at least 150 semester hours of
14-3 college credits; or
14-4 (B) holds a graduate degree.
14-5 SECTION 16. Section 901.259(a), Occupations Code, is amended
14-6 to read as follows:
14-7 (a) The board shall issue a certificate to a person who
14-8 holds a certificate or license issued by another state if the
14-9 person:
14-10 (1) satisfies at least one of the following:
14-11 (A) holds a certificate or license as a
14-12 certified public accountant from a state that the National
14-13 Association of State Boards of Accountancy's National Qualification
14-14 Appraisal Service has verified as having education, examination,
14-15 and experience requirements for certification or licensure that are
14-16 comparable to or exceed the requirements for licensure as a
14-17 certified public accountant of The American Institute of Certified
14-18 Public Accountants/National Association of State Boards of
14-19 Accountancy Uniform Accountancy Act and the board determines that
14-20 the licensure requirements of that Act are comparable to or exceed
14-21 the licensure requirements of this chapter;
14-22 (B) obtains from the National Association of
14-23 State Boards of Accountancy's National Qualification Appraisal
14-24 Service verification that the individual's education, examination,
14-25 and experience qualifications are comparable to or exceed the
14-26 requirements for licensure as a certified public accountant of The
14-27 American Institute of Certified Public Accountants/National
15-1 Association of State Boards of Accountancy Uniform Accountancy Act
15-2 and the board determines that the licensure requirements of that
15-3 Act are comparable to or exceed the licensure requirements of this
15-4 chapter;
15-5 (C) [has passed the uniform CPA examination with
15-6 grades that were passing grades in this state on the date the
15-7 person took the examination;]
15-8 [(2) satisfies at least one of the following:]
15-9 [(A)] meets the requirements for issuance of a
15-10 certificate in this state other than the requirement providing the
15-11 grades necessary to pass the uniform CPA examination;
15-12 (D) [(B)] met the requirements in effect for
15-13 issuance of a certificate in this state on the date the person was
15-14 issued a certificate by the other state; or
15-15 (E) [(C)] has completed at least four years of
15-16 experience practicing public accountancy, if the experience:
15-17 (i) occurred after the person passed the
15-18 uniform CPA examination and within the 10 years preceding the date
15-19 of application; and
15-20 (ii) satisfies requirements established by
15-21 board rule; and
15-22 (2) [(3)] has met the continuing professional
15-23 education requirements that apply to a license holder under this
15-24 chapter for the three-year period preceding the date of
15-25 application.
15-26 SECTION 17. Subchapter F, Chapter 901, Occupations Code, is
15-27 amended by adding Section 901.260 to read as follows:
16-1 Sec. 901.260. CERTIFICATE BASED ON FOREIGN CREDENTIALS. (a)
16-2 The board may issue a certificate to an applicant who holds a
16-3 substantially equivalent foreign credential if:
16-4 (1) the foreign jurisdiction that granted the
16-5 credential has an analogous provision allowing a person who holds a
16-6 certificate issued by this state to obtain that foreign
16-7 jurisdiction's comparable credential;
16-8 (2) the foreign credential:
16-9 (A) entitles the holder to issue reports on
16-10 financial statements;
16-11 (B) was issued by a foreign jurisdiction that
16-12 regulates the practice of public accountancy on the basis of
16-13 education, examination, and experience requirements established by
16-14 the jurisdiction; and
16-15 (C) has not expired or been revoked, suspended,
16-16 limited, or probated; and
16-17 (3) the applicant:
16-18 (A) received the credential based on education
16-19 and examination requirements that are comparable to or exceed those
16-20 in effect in this state on the date that the foreign credential was
16-21 granted;
16-22 (B) satisfied one of the following:
16-23 (i) completed an experience requirement in
16-24 the jurisdiction that granted the foreign credential that is
16-25 comparable to or exceeds the experience requirements established
16-26 under this chapter;
16-27 (ii) completed at least four years of
17-1 professional accounting experience in this state; or
17-2 (iii) within the 10 years preceding the
17-3 date of the application, has met equivalent requirements prescribed
17-4 by board rule;
17-5 (C) passed a uniform qualifying examination
17-6 acceptable to the board covering national standards; and
17-7 (D) passed an examination acceptable to the
17-8 board covering the laws, rules, and code of ethical conduct in
17-9 effect in this state.
17-10 (b) An applicant for a certificate under Subsection (a)
17-11 must list in the application each jurisdiction, foreign and
17-12 domestic, in which the applicant has applied for or holds a
17-13 credential to practice public accountancy. Each holder of a
17-14 certificate issued under Subsection (a) shall notify the board in
17-15 writing of the issuance, denial, revocation, suspension,
17-16 limitation, or probation of a credential or the commencement of a
17-17 disciplinary or enforcement action by any jurisdiction not later
17-18 than the 30th day after the effective date of that action.
17-19 (c) The board's determination of whether a foreign
17-20 credential is substantially equivalent to a certificate issued
17-21 under this chapter is not subject to judicial review.
17-22 SECTION 18. Section 901.301, Occupations Code, is amended to
17-23 read as follows:
17-24 Sec. 901.301. ADMINISTRATION; BOARD RULES. (a) The board
17-25 shall conduct or contract with another person to conduct [each]
17-26 uniform CPA examinations [examination] administered under this
17-27 chapter.
18-1 (b) The board by rule may establish the:
18-2 (1) manner in which a person may apply for the
18-3 examination;
18-4 (2) time, date, and place for the examination;
18-5 (3) manner in which the examination is conducted; and
18-6 (4) [method used to grade the examination;]
18-7 [(5) criteria used to determine a passing score on the
18-8 examination; and]
18-9 [(6)] manner in which a person's examination score is
18-10 reported to the person.
18-11 SECTION 19. Section 901.304(a), Occupations Code, is amended
18-12 to read as follows:
18-13 (a) For each examination or reexamination, the board by rule
18-14 shall apportion an amount of the total examination fee among the
18-15 parts of the examination that an applicant is eligible to take on a
18-16 particular examination date. For each examination or
18-17 reexamination, the board shall collect a [The total examination]
18-18 fee set by board rule [may] not to exceed the cost of administering
18-19 the examination [$250].
18-20 SECTION 20. Section 901.305, Occupations Code, is amended to
18-21 read as follows:
18-22 Sec. 901.305. FREQUENCY OF EXAMINATION. A [The board shall
18-23 administer a] uniform CPA examination shall be administered under
18-24 this chapter as often as necessary but at least once each year.
18-25 SECTION 21. Section 901.306(a), Occupations Code, is amended
18-26 to read as follows:
18-27 (a) The board may use or require the use of all or part of
19-1 the uniform CPA examination and any related service available from:
19-2 (1) the American Institute of Certified Public
19-3 Accountants; or
19-4 (2) the National Association of State Boards of
19-5 Accountancy, if doing so would result in a greater degree of
19-6 reciprocity with the examination results of other states.
19-7 SECTION 22. Section 901.307, Occupations Code, is amended to
19-8 read as follows:
19-9 Sec. 901.307. GRADING EXAMINATION [MINIMUM PASSING GRADE].
19-10 (a) The board by rule shall:
19-11 (1) adopt a method for grading the examination; and
19-12 (2) determine the grade a [A] person must attain [a
19-13 grade of at least 75 percent on each subject of the examination] to
19-14 pass the examination.
19-15 (b) Rules adopted under this section must, to the extent
19-16 possible, be uniform with those of other states.
19-17 SECTION 23. The heading to Subchapter H, Chapter 901,
19-18 Occupations Code, is amended to read as follows:
19-19 SUBCHAPTER H. FIRM PERMIT [REGISTRATION] REQUIREMENTS
19-20 SECTION 24. Sections 901.351, 901.354, 901.355, and 901.401,
19-21 Occupations Code, are amended to read as follows:
19-22 Sec. 901.351. FIRM PERMIT REQUIRED. (a) A firm may not
19-23 provide attest services or use the title "CPA's," "CPA Firm,"
19-24 "Certified Public Accountants," "Certified Public Accounting Firm,"
19-25 or "Auditing Firm" or a variation of one of those titles unless the
19-26 firm holds a permit issued under this subchapter.
19-27 (b) The board shall grant or renew a permit to practice as a
20-1 certified public accountancy firm to:
20-2 (1) a firm that applies and demonstrates the necessary
20-3 qualifications in accordance with this subchapter; or
20-4 (2) a firm originally licensed as a certified public
20-5 accountancy firm in another state that establishes an office in
20-6 this state.
20-7 (c) A permit issued under Subsection (b)(2) is automatically
20-8 revoked and may not be renewed if the firm does not maintain a
20-9 license as a certified public accountancy firm in the other state.
20-10 (d) The board by rule shall specify:
20-11 (1) the form of the application for a permit;
20-12 (2) the term of a permit; and
20-13 (3) the requirements for renewal of a permit.
20-14 [REGISTRATION REQUIRED. A certified public accountant, a public
20-15 accountant, a firm of certified public accountants or public
20-16 accountants, and each office of that firm in this state, including
20-17 a practice unit, and a person described by Section 901.355 and each
20-18 office of that person in this state may not engage in the practice
20-19 of public accountancy unless the person is registered with the
20-20 board.]
20-21 Sec. 901.354. PERMIT [REGISTRATION] INFORMATION AND
20-22 ELIGIBILITY. (a) An applicant for initial issuance or renewal of a
20-23 permit must show that a majority of the ownership of the firm, in
20-24 terms of financial interests and voting rights, belongs to persons
20-25 who hold certificates issued under this chapter or are licensed in
20-26 another state. A firm and its owners shall comply with board rules
20-27 regardless of whether the firm includes owners who are not license
21-1 holders.
21-2 (b) A certified public accountancy firm may include
21-3 individuals as owners who are not license holders if:
21-4 (1) the firm designates to the board a license holder
21-5 who resides in this state to be responsible for the firm's permit
21-6 and the supervision of the firm;
21-7 (2) each owner who is not a license holder:
21-8 (A) is actively involved in the firm or an
21-9 affiliated entity;
21-10 (B) is of good moral character as demonstrated
21-11 by a lack of history of dishonest or felonious acts;
21-12 (C) holds a baccalaureate or graduate degree
21-13 conferred by a college or university acceptable to the board or
21-14 equivalent education as determined by the board;
21-15 (D) maintains any professional designation held
21-16 by the individual in good standing with the appropriate
21-17 organization or regulatory body that is identified or used in an
21-18 advertisement, letterhead, business card, or other firm-related
21-19 communication;
21-20 (E) has passed an examination on the rules of
21-21 professional conduct as determined by board rule; and
21-22 (F) complies with the rules of professional
21-23 conduct as determined by board rule; and
21-24 (3) the firm and the owners who are not license
21-25 holders comply with board disciplinary actions and other
21-26 requirements the board may impose by rule.
21-27 (c) The board by rule may adopt a system to investigate the
22-1 background of individual owners who are not license holders under
22-2 this chapter.
22-3 (d) The board may obtain criminal history record information
22-4 maintained by the Department of Public Safety, the Federal Bureau
22-5 of Investigation identification division, and other law enforcement
22-6 agencies to investigate the qualifications of an individual who is
22-7 not a license holder under this chapter.
22-8 (e) The board may require an individual who is not a license
22-9 holder under this chapter to submit a complete set of fingerprints.
22-10 If the individual does not provide the complete set of fingerprints
22-11 on request, the board may refuse to allow that individual to become
22-12 an owner of a certified public accountancy firm and may cancel or
22-13 refuse to issue or renew a permit to the firm.
22-14 (f) An applicant for issuance or renewal of a permit under
22-15 this section must register each office of the firm and show that
22-16 all attest services performed in this state and each office in this
22-17 state are under the supervision of a person who holds a certificate
22-18 issued under this chapter or by another state.
22-19 (g) An application for a permit [registration] under this
22-20 chapter must be made on an affidavit of the owner, an officer, or
22-21 the general partner of the firm, as applicable, stating:
22-22 (1) the name of the firm;
22-23 (2) the firm's post office address in this state;
22-24 (3) the address of the firm's principal office;
22-25 (4) [if the firm is a partnership or corporation,] the
22-26 address of each office of the firm in this state;
22-27 (5) the name of the resident manager of each office of
23-1 the firm in this state; and
23-2 (6) [if the firm is a partnership,] the name,
23-3 residence, and post office address of:
23-4 (A) each partner, shareholder, or other owner;
23-5 and
23-6 (B) if the firm is a partnership, each
23-7 shareholder of a partner that is a corporation.
23-8 (h) [(b)] A sole proprietorship is eligible for a permit
23-9 [registration] if the sole proprietor and each resident manager of
23-10 an office of the sole proprietorship in this state are certified
23-11 public accountants in good standing.
23-12 (i) [(c) A partnership is eligible for registration as a
23-13 partnership that includes a certified public accountant if:]
23-14 [(1) at least one general partner is a certified
23-15 public accountant or corporation of certified public accountants
23-16 licensed in this state in good standing;]
23-17 [(2) each partner engaged in the practice of public
23-18 accountancy in this state is a certified public accountant or
23-19 corporation of certified public accountants licensed in this state
23-20 in good standing;]
23-21 [(3) each partner not engaged in the practice of
23-22 public accountancy in this state is a certified public accountant
23-23 or corporation of certified public accountants licensed in another
23-24 state in good standing; and]
23-25 [(4) each resident manager of an office of the
23-26 partnership in this state is a certified public accountant licensed
23-27 in this state in good standing.]
24-1 [(d) A partnership is eligible for registration as a
24-2 partnership that includes a public accountant if:]
24-3 [(1) at least one general partner is a certified
24-4 public accountant, public accountant, or corporation of certified
24-5 public accountants or public accountants licensed in this state in
24-6 good standing;]
24-7 [(2) each partner engaged in the practice of public
24-8 accountancy in this state is a certified public accountant, public
24-9 accountant, or corporation of certified public accountants or
24-10 public accountants licensed in this state in good standing;]
24-11 [(3) each partner not engaged in the practice of
24-12 public accountancy in this state is a certified public accountant,
24-13 public accountant, or corporation of certified public accountants
24-14 or public accountants licensed in another state in good standing;
24-15 and]
24-16 [(4) each resident manager of an office of the
24-17 partnership in this state is a certified public accountant or
24-18 public accountant licensed in this state in good standing.]
24-19 [(e) A corporation is eligible for registration as a
24-20 corporation engaged in the practice of public accountancy if the
24-21 corporation meets the requirements applicable to partnerships under
24-22 this chapter.]
24-23 [(f)] The board shall determine whether an applicant is
24-24 eligible for a permit [registration] under this section. The board
24-25 by rule shall define "good standing" for purposes of this section.
24-26 (j) [(g)] A certified public accountancy firm [sole
24-27 proprietorship] shall notify the board not later than the 31st day
25-1 after the date on which information in the affidavit is changed,
25-2 including information regarding the admission or withdrawal of an
25-3 owner or [a] resident manager[. A partnership shall notify the
25-4 board within one month after the date on which information in the
25-5 affidavit is changed, including information regarding the admission
25-6 or withdrawal of a partner].
25-7 (k) A certified public accountancy firm that is no longer in
25-8 compliance with this section because of a change in firm ownership
25-9 or personnel that occurs after the firm receives or renews a permit
25-10 shall report that fact to the board not later than the 30th day
25-11 after the date the firm ceases to be in compliance and shall take
25-12 corrective action to bring the firm into compliance. Failure to
25-13 bring the firm into compliance within a reasonable time as
25-14 determined by board rule is grounds for the suspension or
25-15 revocation of the firm's permit.
25-16 Sec. 901.355. REGISTRATION FOR CERTAIN [OUT-OF-STATE OR]
25-17 FOREIGN APPLICANTS. (a) The [A certified public accountant of
25-18 another state or the] holder of a certificate, license, or degree
25-19 authorizing the person to practice public accountancy in a foreign
25-20 country may register with the board as [a certified public
25-21 accountant of the other state or as] the holder of a certificate,
25-22 license, or degree issued by the foreign country, if the board
25-23 determines that the standards under which the applicant was
25-24 certified or otherwise authorized to practice public accountancy
25-25 were at least as high as the standards of this state at the time
25-26 that authority was granted.
25-27 (b) To register with the board under this section, the
26-1 person must pay:
26-2 (1) the fee for issuance of a license as provided by
26-3 Section 901.154; and
26-4 (2) a processing fee in an amount set by the board not
26-5 to exceed $250.
26-6 (c) A person registered under this section may renew the
26-7 registration in the manner provided for renewal of a license under
26-8 Subchapter I.
26-9 (d) A person's registration under this section is
26-10 automatically revoked and may not be renewed if the person does not
26-11 maintain the authority to practice public accountancy in the other
26-12 [state or] country. The board shall adopt rules to ensure that the
26-13 person maintains that authority.
26-14 Sec. 901.401. LICENSE REQUIRED. (a) A person may not
26-15 perform attest services [practice public accountancy] unless the
26-16 person holds a license issued under this chapter.
26-17 (b) Each office of a certified public accountancy firm or a
26-18 firm of [certified] public accountants [or public accountants] must
26-19 hold a license issued under this chapter to perform attest services
26-20 [engage in the practice of public accountancy].
26-21 SECTION 25. Section 901.402(a), Occupations Code, is amended
26-22 to read as follows:
26-23 (a) On payment of the required fees, the board shall issue a
26-24 license to an applicant who:
26-25 (1) holds a certificate issued under this chapter; or
26-26 (2) holds a permit issued [is registered with the
26-27 board] under this chapter.
27-1 SECTION 26. Section 901.403, Occupations Code, is amended to
27-2 read as follows:
27-3 Sec. 901.403. APPLICATION FOR AND RENEWAL OF LICENSE
27-4 [RENEWAL REQUIRED]. [(a)] The board shall specify:
27-5 (1) the form of the application for a license;
27-6 (2) the term of a license; and
27-7 (3) the requirements for renewal of a license [provide
27-8 for the renewal of a license. A person licensed under this chapter
27-9 must pay to the board a biennial license fee. On payment of the
27-10 required fee, the board shall renew the person's license for a
27-11 period of two years.]
27-12 [(b) A license expires on December 31 of the applicable year
27-13 or on another date as set by the board under Subsection (c). The
27-14 board shall provide that half of the licenses issued by the board
27-15 expire in each even-numbered year and that the other half expire in
27-16 each odd-numbered year. The board shall prorate the license fee
27-17 for a person whose license term is for less than two years as a
27-18 result of the board's providing for half of the licenses to expire
27-19 in consecutive years.]
27-20 [(c) The board by rule may adopt a system under which
27-21 licenses expire on a date other than December 31. For the biennium
27-22 in which the license expiration date is changed, license fees shall
27-23 be prorated on a monthly basis so that each license holder pays
27-24 only that portion of the fee that is allocable to the number of
27-25 months during which the license is valid. On renewal of the
27-26 license on the new expiration date, the total license renewal fee
27-27 is payable].
28-1 SECTION 27. Sections 901.411(a) and (c), Occupations Code,
28-2 are amended to read as follows:
28-3 (a) A license holder who is an individual shall participate
28-4 in a program of continuing professional education designed to
28-5 maintain professional competency. The program must comply with
28-6 rules adopted by the board [complete at least 120 hours of
28-7 continuing professional education in each three-year period, 20
28-8 hours of which must be completed in each one-year period].
28-9 (c) The board by rule shall provide for the [biennial]
28-10 reporting of continuing professional education by a license holder
28-11 to coincide with the person's license renewal date.
28-12 SECTION 28. Subchapter I, Chapter 901, Occupations Code, is
28-13 amended by adding Section 901.412 to read as follows:
28-14 Sec. 901.412. REGISTRATION OF OUT-OF-STATE PRACTITIONER WITH
28-15 SUBSTANTIALLY EQUIVALENT QUALIFICATIONS. (a) An individual who
28-16 holds a certificate or license as a certified public accountant
28-17 issued by another state and whose principal place of business is
28-18 not in this state may exercise all the privileges of certificate
28-19 and license holders of this state without obtaining a certificate
28-20 or license under this chapter if:
28-21 (1) the National Association of State Boards of
28-22 Accountancy's National Qualification Appraisal Service has verified
28-23 that the other state has education, examination, and experience
28-24 requirements for certification or licensure that are comparable to
28-25 or exceed the requirements for licensure as a certified public
28-26 accountant of The American Institute of Certified Public
28-27 Accountants/National Association of State Boards of Accountancy
29-1 Uniform Accountancy Act and the board determines that the licensure
29-2 requirements of that Act are comparable to or exceed the licensure
29-3 requirements of this chapter; or
29-4 (2) the individual obtains from the National
29-5 Association of State Boards of Accountancy's National Qualification
29-6 Appraisal Service verification that the individual's education,
29-7 examination, and experience qualifications are comparable to or
29-8 exceed the requirements for licensure as a certified public
29-9 accountant of The American Institute of Certified Public
29-10 Accountants/National Association of State Boards of Accountancy
29-11 Uniform Accountancy Act and the board determines that the licensure
29-12 requirements of that Act are comparable to or exceed the licensure
29-13 requirements of this chapter.
29-14 (b) An individual who meets the requirements of Subsection
29-15 (a)(1) or (2) must register with the board to practice public
29-16 accountancy in this state. To register with the board, the
29-17 individual must:
29-18 (1) in the manner prescribed by board rule, notify the
29-19 board of the person's intent to practice; and
29-20 (2) pay a processing fee in an amount set by the board
29-21 not to exceed $250.
29-22 (c) An individual who registers under this section:
29-23 (1) is subject to the personal and subject matter
29-24 jurisdiction and disciplinary authority of the board and the courts
29-25 of this state;
29-26 (2) must comply with this chapter and the board's
29-27 rules; and
30-1 (3) is considered to have appointed the regulatory
30-2 agency of the state that issued the individual's certificate or
30-3 license as the individual's agent on whom process may be served in
30-4 any action or proceeding by the board against the individual.
30-5 (d) An individual's practice privileges under this section
30-6 are automatically revoked if the individual does not maintain the
30-7 authority to practice public accountancy in the other state.
30-8 SECTION 29. Sections 901.451, 901.452, 901.453, and 901.454,
30-9 Occupations Code, are amended to read as follows:
30-10 Sec. 901.451. USE OF TITLE OR ABBREVIATION FOR "CERTIFIED
30-11 PUBLIC ACCOUNTANT". (a) A person may not assume or use the title
30-12 or designation "certified public accountant," the abbreviation
30-13 "CPA," or any other title, designation, word, letter, abbreviation,
30-14 sign, card, or device tending to indicate that the person is a
30-15 certified public accountant unless the person holds a certificate
30-16 under this chapter[, or a firm composed of certified public
30-17 accountants, unless:]
30-18 [(1) the person is certified or registered, as
30-19 appropriate, and is licensed under this chapter; and]
30-20 [(2) each of the person's offices in this state for
30-21 the practice of public accounting is maintained and registered as
30-22 required under Subchapter H].
30-23 (b) A person may not provide attest services or assume or
30-24 use the title "certified public accountants," the abbreviation
30-25 "CPAs," or any other title, designation, word, letter,
30-26 abbreviation, sign, card, or device tending to indicate that the
30-27 person is a certified public accountancy firm unless:
31-1 (1) the person holds a permit issued under this
31-2 chapter;
31-3 (2) ownership of the person complies with the
31-4 requirements of this chapter and rules adopted by the board; and
31-5 (3) the person complies with board rules authorizing
31-6 the practice.
31-7 (c) The title or designation "certified public accountant"
31-8 and the abbreviation "CPA" may not be used in connection with an
31-9 office that is required to be under the supervision of a resident
31-10 manager under Section 901.353 unless the resident manager holds a
31-11 certificate and a license issued under this chapter.
31-12 Sec. 901.452. USE OF TITLE OR ABBREVIATION FOR "PUBLIC
31-13 ACCOUNTANT". A person may not assume or use the title or
31-14 designation "public accountant" or any other title, designation,
31-15 word, letter, abbreviation, sign, card, or device tending to
31-16 indicate that the person is a public accountant, or a firm composed
31-17 of public accountants, unless:
31-18 (1) the person is certified or holds a permit
31-19 [registered], as appropriate, and is licensed under this chapter;
31-20 and
31-21 (2) each of the person's offices in this state for the
31-22 practice of public accounting is maintained and practices under a
31-23 permit [registered] as required under Subchapter H.
31-24 Sec. 901.453. USE OF OTHER TITLES OR ABBREVIATIONS. (a)
31-25 Except as provided by Subsection (b), a person may not assume or
31-26 use:
31-27 (1) a title or designation likely to be confused with
32-1 "certified public accountant" or "public accountant," including
32-2 "certified accountant," "chartered accountant," "enrolled
32-3 accountant," [or] "licensed accountant," "registered accountant,"
32-4 or "accredited accountant"; or
32-5 (2) an abbreviation likely to be confused with "CPA,"
32-6 including "CA," "PA," "EA," "RA," "LA," or "AA." [or "LA."]
32-7 (b) A person may hold the person out to the public as an
32-8 "accountant," "auditor," or any combination of those terms if:
32-9 (1) the person holds a license issued under this
32-10 chapter; and
32-11 (2) each of the person's offices in this state for the
32-12 practice of public accounting is maintained and practices under a
32-13 permit [registered] as required under Subchapter H.
32-14 Sec. 901.454. TITLE USED BY CERTAIN OUT-OF-STATE OR FOREIGN
32-15 ACCOUNTANTS. (a) A person who is an accountant of another state
32-16 [or foreign country] may use the title under which the accountant
32-17 is generally known in the state [or country] from which the
32-18 accountant received a certificate, license, or degree, followed by
32-19 the name of that state [or country], if:
32-20 (1) the person is registered and holds a license
32-21 issued under this chapter; and
32-22 (2) each of the person's offices in this state for the
32-23 practice of public accountancy is maintained and practices under a
32-24 permit [registered] as required under Subchapter H.
32-25 (b) A person who holds a certification, degree, license, or
32-26 other credential granted in a foreign jurisdiction that entitles
32-27 the person to engage in the practice of public accountancy or its
33-1 equivalent in that jurisdiction may use in this state any title or
33-2 designation under which the person practices in the foreign
33-3 jurisdiction, followed by a translation of the title or designation
33-4 into English if it is in a different language and by the name of
33-5 that jurisdiction, if:
33-6 (1) the person's activities in this state are limited
33-7 to the provision of professional accounting services to persons who
33-8 are residents, governments, or business entities of that foreign
33-9 jurisdiction; and
33-10 (2) the person does not perform attest services or
33-11 issue reports on the financial statements of any other person in
33-12 this state.
33-13 (c) A person registered under Section 901.355 shall
33-14 [represent to the public that the person is a certified public
33-15 accountant of the state that issued the certificate or] use the
33-16 title held in the country from which the person received a
33-17 certificate, license, or degree, and shall indicate the name of the
33-18 [state or] country.
33-19 SECTION 30. Section 901.455(c), Occupations Code, is amended
33-20 to read as follows:
33-21 (c) A corporation that holds a permit [registered] and is
33-22 licensed under this chapter may practice public accountancy under a
33-23 corporate name indicating that it is engaged in that practice.
33-24 SECTION 31. Sections 901.456 and 901.457, Occupations Code,
33-25 are amended to read as follows:
33-26 Sec. 901.456. REPORTS ON FINANCIAL STATEMENTS; USE OF NAME
33-27 OR SIGNATURE ON CERTAIN DOCUMENTS. (a) Only a license holder may
34-1 issue a report on a financial statement of another person or
34-2 otherwise perform or offer to perform an attest service.
34-3 (b) A person who is not a license holder:
34-4 (1) may not use language in any statement related to
34-5 the financial affairs of a person that is conventionally used by
34-6 license holders in reports on financial statements;
34-7 (2) may prepare financial statements; and
34-8 (3) may issue non-attest transmittals or information
34-9 regarding non-attest transmittals if the transmittals or
34-10 information do not purport to be in compliance with standards for
34-11 accounting and review services adopted by the American Institute of
34-12 Certified Public Accountants or another national accountancy
34-13 organization recognized by the board.
34-14 (c) The board by rule shall prescribe safe harbor language
34-15 that a person who is not a license holder may use without violating
34-16 Subsection (b).
34-17 (d) Unless a person is in compliance with this chapter, the
34-18 person may not sign on or affix to an accounting or financial
34-19 statement, or an opinion on, report on, or certificate to an
34-20 accounting or financial statement, the person's name or a trade or
34-21 assumed name used by the person in the person's profession or
34-22 business with any wording indicating that the person:
34-23 (1) is an accountant or auditor; or
34-24 (2) has expert knowledge in accounting or auditing.
34-25 (e) [(b)] This section does not prohibit:
34-26 (1) a partner, officer, employee, or principal of an
34-27 organization from signing a statement or report regarding the
35-1 financial affairs of the organization with wording that designates
35-2 the position, office, or title held by the person in the
35-3 organization; [or]
35-4 (2) any act of a public official or public employee in
35-5 the performance of the person's duties as a public official or
35-6 public employee; or
35-7 (3) the performance by a person who is not a license
35-8 holder of a service that is not an attest service and that involves
35-9 the use of bookkeeping skills, including:
35-10 (A) the preparation of tax returns;
35-11 (B) management advisory services; or
35-12 (C) the preparation of financial statements
35-13 without the issuance of reports.
35-14 (f) A license holder who performs attest services must
35-15 provide those services in accordance with standards adopted by the
35-16 American Institute of Certified Public Accountants or another
35-17 national accountancy organization recognized by the board.
35-18 Sec. 901.457. ACCOUNTANT-CLIENT PRIVILEGE. (a) A license
35-19 holder or a partner, officer, shareholder, or employee of a license
35-20 holder may not voluntarily disclose information communicated to the
35-21 license holder by a client in connection with services provided to
35-22 the client by the license holder [in the practice of public
35-23 accountancy], except with the permission of the client or the
35-24 client's representative.
35-25 (b) This section does not prohibit a license holder from
35-26 disclosing information that is required to be disclosed:
35-27 (1) by the professional standards for reporting on the
36-1 examination of a financial statement;
36-2 (2) under [in] a summons under the provisions of the
36-3 Internal Revenue Code or under a court order if the summons or
36-4 order:
36-5 (A) is addressed to the license holder;
36-6 (B) mentions the client by name; and
36-7 (C) requests specific information concerning the
36-8 client [court proceeding];
36-9 (3) in an investigation or proceeding conducted by the
36-10 board;
36-11 (4) in an ethical investigation conducted by a
36-12 professional organization of certified public accountants; or
36-13 (5) in the course of a peer [quality] review under
36-14 Section 901.159.
36-15 SECTION 32. Sections 901.458(a) and (b), Occupations Code,
36-16 are amended to read as follows:
36-17 (a) In this section, "direct labor cost" means:
36-18 (1) the total compensation paid to a person who
36-19 performs services; and
36-20 (2) the employer payroll expenses related to that
36-21 compensation, including workers' compensation insurance premiums,
36-22 social security contributions, costs of participating in retirement
36-23 plans, group insurance costs, and unemployment taxes.
36-24 (b) A person creates a presumption of loss of independence
36-25 if the person:
36-26 (1) holds a certificate or permit issued under this
36-27 chapter [or is registered under this chapter]; and
37-1 (2) performs or offers to perform an attest [a]
37-2 service [involving auditing skills] for compensation that is less
37-3 than the direct labor cost reasonably expected to be incurred in
37-4 performing the service.
37-5 SECTION 33. Subchapter J, Chapter 901, Occupations Code, is
37-6 amended by adding Section 901.460 to read as follows:
37-7 Sec. 901.460. PERFORMING ATTEST SERVICES. (a) A certificate
37-8 holder must perform attest services in a certified public
37-9 accountancy firm.
37-10 (b) A license holder who is an individual and who is
37-11 responsible for supervising attest services or signs or authorizes
37-12 another person to sign an accountant's reports on financial
37-13 statements on behalf of a certified public accountancy firm must
37-14 meet the competency requirements of the professional standards that
37-15 apply to those services.
37-16 SECTION 34. Section 901.501(a), Occupations Code, is amended
37-17 to read as follows:
37-18 (a) On a determination that a ground for discipline exists
37-19 under Section 901.502, after notice and hearing as provided by
37-20 Section 901.509, the board may:
37-21 (1) revoke a certificate or permit [registration]
37-22 issued under this chapter;
37-23 (2) suspend under any terms a certificate, permit
37-24 [registration], or license issued under this chapter for a period
37-25 not to exceed five years;
37-26 (3) refuse to renew a license;
37-27 (4) place a license holder on probation;
38-1 (5) reprimand a license holder;
38-2 (6) limit the scope of a license holder's practice;
38-3 (7) require a license holder to complete a peer review
38-4 program conducted in the manner prescribed by the board;
38-5 (8) require a license holder to complete a continuing
38-6 education program specified by the board;
38-7 (9) impose on a license holder the direct
38-8 administrative costs incurred by the board in taking action under
38-9 Subdivisions (1) through (8) [(6)]; or
38-10 (10) [(8)] impose an administrative penalty under
38-11 Subchapter L.
38-12 SECTION 35. Sections 901.502 and 901.504, Occupations Code,
38-13 are amended to read as follows:
38-14 Sec. 901.502. GROUNDS FOR DISCIPLINARY ACTION. The board
38-15 may discipline a person under Section 901.501 for:
38-16 (1) fraud or deceit in obtaining a certificate, permit
38-17 [registration], or license under this chapter;
38-18 (2) fraud, dishonesty, or gross negligence in the
38-19 performance of services as a license holder [practice of public
38-20 accountancy], including:
38-21 (A) knowingly participating in the preparation
38-22 of a false or misleading financial statement or tax return; or
38-23 (B) failing to file the license holder's own
38-24 income tax return;
38-25 (3) the failure of a person who is certified or holds
38-26 a permit [registered] under this chapter to obtain a license not
38-27 later than the third anniversary of the date on which the person
39-1 was certified or obtained a permit [registered];
39-2 (4) the failure of a person who is licensed under this
39-3 chapter to renew the license not later than the third anniversary
39-4 of the date on which the person most recently obtained or renewed
39-5 the license;
39-6 (5) a violation of Subchapter J, other than Section
39-7 901.457 or 901.459;
39-8 (6) a violation of a rule of professional conduct
39-9 adopted by the board;
39-10 (7) a revocation or suspension of the certificate or
39-11 permit [registration] or a revocation, suspension, or refusal to
39-12 renew the license of the person's partner or shareholder;
39-13 (8) a revocation, cancellation, placement on
39-14 probation, limitation on the scope of practice, or suspension by
39-15 another state, or a refusal of renewal by another state, of the
39-16 authority issued by that state to the person, or to the person's
39-17 partner or shareholder, to engage in the practice of public
39-18 accountancy for a reason other than the failure to pay the
39-19 appropriate authorization [registration] fee;
39-20 (9) a revocation or suspension of, or a voluntary
39-21 consent decree concerning, the right of the person, or of the
39-22 person's partner or shareholder, to practice before a state or
39-23 federal agency for a reason the board determines warrants its
39-24 action;
39-25 (10) a final conviction of or the imposition of
39-26 deferred adjudication for an offense under the laws of any state or
39-27 the United States that:
40-1 (A) is a felony; or
40-2 (B) includes fraud or dishonesty as an element
40-3 of the offense; [or]
40-4 (11) conduct indicating lack of fitness to serve the
40-5 public as a professional accountant; or
40-6 (12) a violation by an owner of a license holder of:
40-7 (A) this chapter;
40-8 (B) professional standards adopted by the board;
40-9 or
40-10 (C) a rule or order adopted by the board.
40-11 Sec. 901.504. LICENSE REVOCATION BASED ON VIOLATION OF
40-12 CHAPTER. After notice and hearing as provided by Section 901.509,
40-13 the board:
40-14 (1) may revoke a license that was issued or renewed in
40-15 violation of this chapter or a rule adopted under this chapter; and
40-16 (2) shall revoke the permit [registration] and license
40-17 of a sole proprietorship, partnership, or corporation that does not
40-18 meet each qualification for a permit [registration] prescribed by
40-19 this chapter.
40-20 SECTION 36. Sections 901.505(a) and (d), Occupations Code,
40-21 are amended to read as follows:
40-22 (a) On conviction of a person of an offense under the laws
40-23 of any state or the United States that is a felony or that includes
40-24 fraud or dishonesty as an element of the offense, after notice and
40-25 hearing as provided by Section 901.509, the board may:
40-26 (1) suspend a certificate or permit [registration]
40-27 issued under this chapter; or
41-1 (2) suspend or refuse to renew a license issued under
41-2 this chapter.
41-3 (d) If the conviction is reversed, set aside, or modified so
41-4 that the underlying offense is not a felony or an offense that
41-5 includes fraud or dishonesty as an element of the offense, the
41-6 board shall reinstate the certificate, permit [registration], or
41-7 license suspended under this section. A reinstatement under this
41-8 subsection does not limit the board's right to take other
41-9 disciplinary action authorized by this subchapter.
41-10 SECTION 37. Sections 901.506 and 901.507, Occupations Code,
41-11 are amended to read as follows:
41-12 Sec. 901.506. VOLUNTARY SURRENDER OF CERTIFICATE OR PERMIT
41-13 [REGISTRATION]. (a) Subject to board approval, an individual who
41-14 holds a certificate or permit [registration] issued under this
41-15 chapter may resign and surrender the certificate or permit
41-16 [registration] to the board at any time and for any reason.
41-17 (b) An individual who resigns and surrenders a certificate
41-18 or permit [registration] may not apply for reinstatement of the
41-19 certificate or permit [registration]. The individual may be issued
41-20 a new certificate or permit [registration] on completion of all
41-21 requirements for the issuance of an original certificate or permit
41-22 [registration]. The board may not issue a certificate to an
41-23 individual who previously resigned a certificate unless:
41-24 (1) after the date of resignation, the individual
41-25 completes the examination requirement for a new certificate; or
41-26 (2) on application, the board waives the examination
41-27 requirement.
42-1 (c) An individual who applies for a new certificate or
42-2 permit [registration] must, if applicable, disclose in the
42-3 application the fact that the individual previously resigned and
42-4 surrendered a certificate or permit [registration] during the
42-5 course of a disciplinary investigation or proceeding conducted by
42-6 the board. The board shall consider that fact in determining
42-7 whether to issue a new certificate or permit [registration] to the
42-8 individual.
42-9 Sec. 901.507. REINSTATEMENT. On receipt of a written
42-10 application, and after notice and hearing, the board may:
42-11 (1) issue a new certificate to an individual whose
42-12 certificate was revoked;
42-13 (2) issue a new permit to [reregister] a person whose
42-14 permit [registration] was revoked;
42-15 (3) reinstate a suspended license or modify the terms
42-16 of the suspension;
42-17 (4) approve a previously denied application to take
42-18 the uniform CPA examination; or
42-19 (5) reinstate an individual's previously voided
42-20 uniform CPA examination grades.
42-21 SECTION 38. Subchapter K, Chapter 901, Occupations Code, is
42-22 amended by adding Section 901.511 to read as follows:
42-23 Sec. 901.511. DISCIPLINARY ACTION FOR ACT COMMITTED IN
42-24 ANOTHER STATE. (a) A license holder of this state who offers to
42-25 perform or performs professional accounting services or who uses
42-26 the license holder's title as a certified public accountant in
42-27 another state or jurisdiction is subject to disciplinary action in
43-1 this state for an act committed in the other state or jurisdiction
43-2 for which the license holder would be subject to discipline as a
43-3 license holder of the other state or jurisdiction.
43-4 (b) The board shall investigate any complaint made by the
43-5 regulatory agency of another state or jurisdiction concerning a
43-6 license holder of this state.
43-7 SECTION 39. Section 901.602(c), Occupations Code, is amended
43-8 to read as follows:
43-9 (c) A complaint filed under this section must be filed in a
43-10 district court in:
43-11 (1) Travis County, if the complaint is filed against a
43-12 person who is [registered or] licensed under this chapter; or
43-13 (2) the county in which the person resides, if the
43-14 complaint is filed against a person who is not [registered or]
43-15 licensed under this chapter.
43-16 SECTION 40. Subchapter M, Chapter 901, Occupations Code, is
43-17 amended by adding Sections 901.603, 901.604, and 901.605 to read as
43-18 follows:
43-19 Sec. 901.603. INTERVENTION IN ACTION. Subject to approval
43-20 by the board, a license holder or a professional organization of
43-21 certified public accountants may intervene in an action by the
43-22 board or may bring an action in the name of the license holder or
43-23 professional organization to enforce any provision of this chapter
43-24 against a person who does not hold a license or permit.
43-25 Sec. 901.604. SINGLE ACT AS EVIDENCE OF PRACTICE. In an
43-26 action brought under this chapter, evidence of a single act
43-27 prohibited by this chapter is sufficient to justify a penalty,
44-1 injunction, restraining order, or conviction without evidence of a
44-2 general course of conduct.
44-3 Sec. 901.605. APPOINTMENT OF SECRETARY OF STATE AS AGENT. A
44-4 person who is not a resident of this state and who applies for a
44-5 certificate or permit is considered to have appointed the secretary
44-6 of state as the applicant's agent for service of process in any
44-7 action or proceeding against the applicant arising out of any
44-8 transaction connected with or incidental to professional accounting
44-9 services performed by the applicant while the applicant holds a
44-10 certificate or permit.
44-11 SECTION 41. Sections 901.003, 901.352, and 901.356,
44-12 Occupations Code, are repealed.
44-13 SECTION 42. (a) This Act takes effect September 1, 2001.
44-14 (b) A person who is registered under Subchapter H, Chapter
44-15 901, Occupations Code, on the effective date of this Act is
44-16 considered to hold a permit under that subchapter as amended by
44-17 this Act and is not required to obtain a permit under that
44-18 subchapter until the date the registration expires.
44-19 (c) The Texas State Board of Public Accountancy shall adopt
44-20 rules under Sections 901.304(a) and 901.307, Occupations Code, as
44-21 amended by this Act, not later than January 1, 2002.
44-22 (d) Sections 901.304(a) and 901.307, Occupations Code, as
44-23 amended by this Act, apply only to an examination given on or after
44-24 the date the Texas State Board of Public Accountancy adopts rules
44-25 under those sections as required by this Act. An examination given
44-26 before the date the board adopts rules under those sections is
44-27 governed by the law in effect when the examination was given, and
45-1 the former law is continued in effect for that purpose.
45-2 (e) The change in law made by this Act applies only to an
45-3 offense committed on or after the effective date of this Act. For
45-4 purposes of this subsection, an offense is committed before the
45-5 effective date of this Act if any element of the offense occurs
45-6 before that date.
45-7 (f) An offense committed before the effective date of this
45-8 Act is governed by the law in effect when the offense was
45-9 committed, and the former law is continued in effect for that
45-10 purpose.