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78R686 JMM-D
By: Howard H.B. No. 843
A BILL TO BE ENTITLED
AN ACT
relating to the issuance of a license to a firm to practice public
accountancy.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 901.354, Occupations Code, is amended to
read as follows:
Sec. 901.354. FIRM LICENSE INFORMATION AND
ELIGIBILITY. (a) An applicant for initial issuance or renewal of
a firm license must show that [a majority of] the ownership of the
firm, in terms of financial interests and voting rights, belongs
only to persons who hold certificates issued under this chapter or
are licensed in another state. [A firm and its owners shall comply
with board rules regardless of whether the firm includes owners who
are not license holders.]
(b) [A certified public accountancy firm may include
individuals as owners who are not license holders if:
[(1) the firm designates to the board a license holder
who resides in this state to be responsible for the firm's firm
license and the supervision of the firm;
[(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) 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;
[(E) has passed an examination on the rules of
professional conduct as determined by board rule;
[(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.
[(c) The board by rule may adopt a system to investigate the
background of individual owners who are not license holders under
this chapter.
[(d) The board may obtain criminal history record
information maintained by the Department of Public Safety, the
Federal Bureau of Investigation identification division, and other
law enforcement agencies to investigate the qualifications of an
individual who is not a license holder under this chapter.
[(e) The board may require an individual who is not a
license holder under this chapter to submit a complete set of
fingerprints. If the individual does not 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.
[(f)] An applicant for issuance or renewal of a firm license
under this section must register each office of the firm and show
that all attest services performed in this state and each office in
this state are under the supervision of a person who holds a
certificate issued under this chapter or by another state.
(c) [(g)] An application for a firm license under this
chapter must be made on an affidavit of the owner, an officer, or
the general partner of the firm, as applicable, stating:
(1) the name of the firm;
(2) the firm's post office address in this state;
(3) the address of the firm's principal office;
(4) the address of each office of the firm in this
state;
(5) the name of the resident manager of each office of
the firm in this state; and
(6) the name, residence, and post office address of:
(A) each partner, member, shareholder, or other
owner; and
(B) if the firm is a partnership, each
shareholder of a partner that is a professional corporation.
(d) [(h)] A sole proprietorship is eligible for a firm
license if the sole proprietor and each resident manager of an
office of the sole proprietorship in this state are certified
public accountants in good standing.
(e) [(i)] The board shall determine whether an applicant is
eligible for a firm license under this section. The board by rule
shall define "good standing" for purposes of this section.
(f) [(j)] A certified public accountancy firm shall notify
the board not later than the 31st day after the date on which
information in the affidavit is changed, including information
regarding the admission or withdrawal of an owner or resident
manager.
(g) [(k)] A certified public accountancy firm that is no
longer in compliance with this section because of a change in firm
ownership or personnel that occurs after the firm receives or
renews a firm license shall report that fact to the board not later
than the 30th day after the date the firm ceases to be in compliance
and shall take corrective action to bring the firm into compliance.
Failure to bring the firm into compliance within a reasonable time
as determined by board rule is grounds for the suspension or
revocation of the firm's firm license.
SECTION 2. Section 901.502, Occupations Code, is amended to
read as follows:
Sec. 901.502. GROUNDS FOR DISCIPLINARY ACTION. The board
may discipline a person under Section 901.501 for:
(1) fraud or deceit in obtaining a certificate, firm
license, or license under this chapter;
(2) fraud, dishonesty, or gross negligence in the
performance of services as a license holder, including:
(A) knowingly participating in the preparation
of a false or misleading financial statement or tax return; or
(B) failing to file the license holder's own
income tax return;
(3) the failure of a person who is certified or
required to hold a firm license under this chapter to obtain a
license not later than the third anniversary of the date on which
the person was certified or required to obtain a firm license;
(4) the failure of a person who is licensed under this
chapter to renew the license not later than the third anniversary of
the date on which the person most recently obtained or renewed the
license;
(5) a violation of Subchapter J;
(6) a violation of a rule of professional conduct
adopted by the board;
(7) a revocation or suspension of the certificate or
firm license or a revocation, suspension, or refusal to renew the
license of the person's partner, member, or shareholder;
(8) a revocation, cancellation, placement on
probation, limitation on the scope of practice, or suspension by
another state, or a refusal of renewal by another state, of the
authority issued by that state to the person, or to the person's
partner, member, or shareholder, to engage in the practice of
public accountancy for a reason other than the failure to pay the
appropriate authorization fee;
(9) a revocation or suspension of, or a voluntary
consent decree concerning, the right of the person, or of the
person's partner, member, or shareholder, to practice before a
state or federal agency for a reason the board determines warrants
its action;
(10) a final conviction of or the imposition of
deferred adjudication for an offense under the laws of any state or
the United States that:
(A) is a felony; or
(B) includes fraud or dishonesty as an element of
the offense;
(11) conduct indicating lack of fitness to serve the
public as a professional accountant; or
(12) a violation by a license holder [or an owner of a
certified public accountancy firm who is not a license holder] of:
(A) this chapter;
(B) professional standards adopted by the board;
or
(C) a rule or order adopted by the board.
SECTION 3. (a) This Act takes effect September 1, 2003.
(b) The change in law made by this Act to Section 901.354,
Occupations Code, applies only to an application by a firm for a
license to practice public accountancy filed on or after the
effective date of this Act. An application filed before the
effective date of this Act is governed by the law in effect on the
date the application is filed, and the former law is continued in
effect for that purpose.
(c) The eligibility of a firm that holds a license to
practice public accountancy on the effective date of this Act to
hold or renew that license is not affected by the change in law made
by this Act to Section 901.354, Occupations Code, and the former law
is continued in effect for the purpose of determining eligibility.
(d) The change in law made by this Act to Section 901.502,
Occupations Code, applies only to a certified public accountancy
firm that holds a license issued on or after the effective date of
this Act. A certified public accountancy firm that holds a license
issued before the effective date of this Act is governed by the law
in effect immediately before that date, and the former law is
continued in effect for that purpose.