Texas 2019 - 86th Regular

Texas House Bill HB1520 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	H.B. No. 1520
	1	+	By: Thompson of Harris, et al. H.B. No. 1520
	2	+	(Senate Sponsor - Watson)
	3	+	(In the Senate - Received from the House April 4, 2019;
	4	+	April 8, 2019, read first time and referred to Committee on
	5	+	Business & Commerce; April 29, 2019, reported adversely, with
	6	+	favorable Committee Substitute by the following vote: Yeas 8,
	7	+	Nays 0; April 29, 2019, sent to printer.)
	8	+	Click here to see the committee vote
	9	+	COMMITTEE SUBSTITUTE FOR H.B. No. 1520 By: Nichols
2	10
3	11
	12	+	A BILL TO BE ENTITLED
4	13		AN ACT
5	14		relating to the continuation and functions of the Texas State Board
6	15		of Public Accountancy.
7	16		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
8	17		SECTION 1. Section 901.006, Occupations Code, is amended to
9	18		read as follows:
10	19		Sec. 901.006. APPLICATION OF SUNSET ACT. The Texas State
11	20		Board of Public Accountancy is subject to Chapter 325, Government
12	21		Code (Texas Sunset Act). Unless continued in existence as provided
13	22		by that chapter, the board is abolished and this chapter expires
14	23		September 1, 2031 [2019].
15	24		SECTION 2. Section 901.059, Occupations Code, is amended by
16	25		amending Subsection (b) and adding Subsection (d) to read as
17	26		follows:
18	27		(b) The training program must provide the person with
19	28		information regarding:
20	29		(1) the law governing board operations [this chapter];
21	30		(2) the programs, functions, rules, and budget of
22	31		[operated by] the board;
23	32		(3) [the role and functions of the board;
24	33		[(4)] the scope of and limitations on the rulemaking
25	34		authority [rules] of the board[, with an emphasis on the rules that
26	35		relate to disciplinary and investigatory authority];
27	36		(4) the types of board rules, interpretations, and
28	37		enforcement actions that may implicate federal antitrust law by
29	38		limiting competition or impacting prices charged by persons engaged
30	39		in a profession or business the board regulates, including any
31	40		rule, interpretation, or enforcement action that:
32	41		(A) regulates the scope of practice of persons in
33	42		a profession or business the board regulates;
34	43		(B) restricts advertising by persons in a
35	44		profession or business the board regulates;
36	45		(C) affects the price of goods or services
37	46		provided by persons in a profession or business the board
38	47		regulates; or
39	48		(D) restricts participation in a profession or
40	49		business the board regulates;
41	50		(5) [the current budget for the board;
42	51		[(6)] the results of the most recent formal audit of
43	52		the board;
44	53		(6) [(7)] the requirements of:
45	54		(A) laws relating to [the] open meetings, [law,
46	55		Chapter 551, Government Code;
47	56		[(B) the] public information, [law, Chapter 552,
48	57		Government Code;
49	58		[(C) the] administrative procedure, and
50	59		disclosure of conflicts of interest [law, Chapter 2001, Government
51	60		Code]; and
52	61		(B) [(D)] other laws applicable to members of the
53	62		board in performing their duties [relating to public officials,
54	63		including conflict-of-interest laws]; and
55	64		(7) [(8)] any applicable ethics policies adopted by
56	65		the board or the Texas Ethics Commission.
57	66		(d) The executive director of the board shall create a
58	67		training manual that includes the information required by
59	68		Subsection (b). The executive director shall distribute a copy of
60	69		the training manual annually to each member of the board. Each
61	70		member of the board shall sign and submit to the executive director
62	71		a statement acknowledging that the member received and has reviewed
63	72		the training manual.
64	73		SECTION 3. Subchapter D, Chapter 901, Occupations Code, is
65	74		amended by adding Sections 901.164 and 901.169 to read as follows:
66	75		Sec. 901.164. OUTSIDE LEGAL COUNSEL. The board may not
67	76		contract with outside legal counsel to provide legal services to
68	77		the board, including representation of the board in a matter
69	78		referred to the State Office of Administrative Hearings, unless the
70	79		contract is approved by the attorney general as provided by Section
71	80		402.0212, Government Code, regardless of the source of money to be
72	81		used to pay the outside counsel.
73	82		Sec. 901.169. CRIMINAL HISTORY RECORD INFORMATION. (a)
74	83		The board shall require an individual to submit a complete and
75	84		legible set of fingerprints, on a form prescribed by the board, to
76	85		the board or to the Department of Public Safety for the purpose of
77	86		obtaining criminal history record information from the Department
78	87		of Public Safety and the Federal Bureau of Investigation if:
79	88		(1) the individual has not previously submitted
80	89		fingerprints for the purpose of the board obtaining criminal
81	90		history record information; and
82	91		(2) the individual:
83	92		(A) is an applicant to take the uniform CPA
84	93		examination;
85	94		(B) is an applicant for a certificate;
86	95		(C) is an owner or seeks to become an owner of a
87	96		certified public accountancy firm and the individual is not a
88	97		license holder, if requested by the board under Section 901.354(e);
89	98		(D) is an applicant for a license under
90	99		Subchapter I; or
91	100		(E) is an applicant for renewal of a license
92	101		under Subchapter I, unless the applicant is an individual who does
93	102		not engage in the practice of public accountancy because of
94	103		retirement or permanent disability.
95	104		(b) The board may not allow an individual to take the
96	105		uniform CPA examination or issue a certificate or license to an
97	106		individual who does not comply with the requirement of Subsection
98	107		(a).
99	108		(c) The board may administratively suspend or refuse to
100	109		renew the license of an individual who is an applicant for renewal
101	110		of a license under Subchapter I and who does not comply with the
102	111		requirement of Subsection (a).
103	112		(d) The board shall require a license holder who qualified
104	113		for an exemption described by Subsection (a)(2)(E) to comply with
105	114		the requirement of Subsection (a) if the license holder no longer
106	115		qualifies for the exemption.
107	116		(e) The board shall conduct a criminal history record
108	117		information check of each individual required to submit
109	118		fingerprints under Subsection (a) using information:
110	119		(1) provided by the individual under this section; and
111	120		(2) made available to the board by the Department of
112	121		Public Safety, the Federal Bureau of Investigation, and any other
113	122		criminal justice agency under Chapter 411, Government Code.
114	123		(f) The board may:
115	124		(1) enter into an agreement with the Department of
116	125		Public Safety to administer a criminal history record information
117	126		check required under this section; and
118	127		(2) authorize the Department of Public Safety to
119	128		collect from each applicant the costs incurred by the Department of
120	129		Public Safety in conducting the criminal history record information
121	130		check.
122	131		SECTION 4. Section 901.203, Occupations Code, is amended to
123	132		read as follows:
124	133		Sec. 901.203. COMPLAINT INFORMATION. (a) The board shall
125	134		maintain a system to promptly and efficiently act on complaints
126	135		filed with the board. The board shall maintain information about
127	136		parties to the complaint, the subject matter of the complaint, a
128	137		summary of the results of the review or investigation of the
129	138		complaint, and its disposition [a file on each written complaint
130	139		filed with the board. The file must include:
131	140		[(1) the name of the person who filed the complaint;
132	141		[(2) the date the complaint is received by the board;
133	142		[(3) the subject matter of the complaint;
134	143		[(4) the name of each person contacted in relation to
135	144		the complaint;
136	145		[(5) a summary of the results of the review or
137	146		investigation of the complaint; and
138	147		[(6) an explanation of the reason the file was closed,
139	148		if the board closed the file without taking action other than to
140	149		investigate the complaint].
141	150		(b) The board shall make information available describing
142	151		its [provide to the person filing the complaint and to each person
143	152		who is a subject of the complaint a copy of the board's policies
144	153		and] procedures for [relating to] complaint investigation and
145	154		resolution.
146	155		(c) The board[, at least quarterly until final disposition
147	156		of the complaint,] shall periodically notify the [person filing
148	157		the] complaint parties [and each person who is a subject of the
149	158		complaint] of the status of the complaint until final disposition
150	159		[investigation] unless the notice would jeopardize an undercover
151	160		investigation.
152	161		SECTION 5. Section 901.204, Occupations Code, is amended by
153	162		adding Subsections (c), (d), and (e) to read as follows:
154	163		(c) The board shall include on the agenda of each regular
155	164		board meeting an opportunity for public comment on each agenda item
156	165		or other issue before the board makes a decision on the item or
157	166		issue, except as otherwise provided by Subsection (d).
158	167		(d) The board may prohibit public comment at a meeting of
159	168		the board regarding an active investigation or enforcement
160	169		proceeding by the board.
161	170		(e) The board may not require a person who wishes to make a
162	171		public comment at a meeting of the board to notify the board in
163	172		advance of the meeting.
164	173		SECTION 6. Section 901.252, Occupations Code, is amended to
165	174		read as follows:
166	175		Sec. 901.252. ELIGIBILITY REQUIREMENTS. To be eligible to
167	176		receive a certificate, a person must:
168	177		(1) satisfy the requirements of [be of good moral
169	178		character as determined under] Section 901.253;
170	179		(2) meet the education requirements established under
171	180		Section 901.254 or 901.255;
172	181		(3) pass the uniform CPA examination;
173	182		(4) meet the work experience requirements established
174	183		under Section 901.256; and
175	184		(5) pass an examination on the rules of professional
176	185		conduct as determined by board rule.
177	186		SECTION 7. The heading to Section 901.253, Occupations
178	187		Code, is amended to read as follows:
179	188		Sec. 901.253. BACKGROUND [CHARACTER] INVESTIGATION.
180	189		SECTION 8. Section 901.253(a), Occupations Code, is amended
181	190		to read as follows:
182	191		(a) The board shall ensure that an applicant to take the
183	192		uniform CPA examination or to receive a certificate lacks a [is of
184	193		good moral character as demonstrated by a lack of] history of
185	194		dishonest or felonious acts. The board shall require each applicant
186	195		to comply with the requirements of Section 901.169(a).
187	196		SECTION 9. Section 901.309, Occupations Code, is amended to
188	197		read as follows:
189	198		Sec. 901.309. REEXAMINATION. A person who fails all or part
190	199		of an examination may apply for a subsequent examination, subject
191	200		to the board's satisfaction that the person meets the requirements
192	201		of this chapter relating to the person's background investigation
193	202		[moral character] and education.
194	203		SECTION 10. Sections 901.351(a-1), (b), and (e),
195	204		Occupations Code, are amended to read as follows:
196	205		(a-1) A firm is required to hold a firm license under this
197	206		subchapter if the firm [:
198	207		[(1)] establishes or maintains an office in this state
199	208		[; or
200	209		[(2) performs for an entity with its principal office in
201	210		this state:
202	211		[(A) a financial statement audit or other
203	212		engagement that is to be performed in accordance with the
204	213		Statements on Auditing Standards;
205	214		[(B) an examination of prospective financial
206	215		information that is to be performed in accordance with the
207	216		Statements on Standards for Attestation Engagements; or
208	217		[(C) an engagement that is to be performed in
209	218		accordance with auditing standards of the Public Company Accounting
210	219		Oversight Board or its successor].
211	220		(b) The board shall grant or renew a firm license to
212	221		practice as a certified public accountancy firm to:
213	222		(1) a firm that applies and demonstrates the necessary
214	223		qualifications in accordance with this subchapter; or
215	224		(2) a firm originally licensed as a certified public
216	225		accountancy firm in another state that [:
217	226		[(A) is required to hold a firm license under
218	227		Subsection (a-1); and
219	228		[(B)] demonstrates the necessary qualifications
220	229		in accordance with this subchapter.
221	230		(e) The board by rule shall specify:
222	231		(1) the form of the application for a firm license;
223	232		(2) the fee for an original or renewal firm license,
224	233		which may be based on the number of owners, members, partners,
225	234		shareholders, or employee license holders in this state, not to
226	235		exceed $25 for each of those persons; [and]
227	236		(3) the term of a firm license; and
228	237		(4) the requirements for renewal of a firm license.
229	238		SECTION 11. Section 901.353(a), Occupations Code, is
230	239		amended to read as follows:
231	240		(a) An office established or maintained in this state by a
232	241		firm of certified public accountants, a firm of public accountants,
233	242		or a person described by Section 901.355 must designate [be under
234	243		the direct supervision of] a resident manager who is responsible
235	244		for the license of the firm or person, as applicable. The resident
236	245		manager must be [who]:
237	246		(1) [is] an owner, member, partner, shareholder, or
238	247		employee of the firm or person that occupies the office; and
239	248		(2) [is] licensed under this chapter.
240	249		SECTION 12. Sections 901.354(b), (e), and (f), Occupations
241	250		Code, are amended to read as follows:
242	251		(b) A certified public accountancy firm may include
243	252		individuals as owners who are not license holders if:
244	253		(1) the firm designates to the board as responsible
245	254		for the firm's license [and the supervision of the firm:
246	255		[(A)] a license holder who resides in this
247	256		state[; or
248	257		[(B) if the firm is required under Section
249	258		901.351(a-1)(2) to hold a firm license, an individual practicing
250	259		under a privilege under Section 901.462];
251	260		(2) each owner who is not a license holder and who is a
252	261		resident of this state as determined by board rule:
253	262		(A) is actively involved in the firm or an
254	263		affiliated entity;
255	264		(B) lacks a [is of good moral character as
256	265		demonstrated by a lack of] history of dishonest or felonious acts;
257	266		(C) [holds a baccalaureate or graduate degree
258	267		conferred by a college or university acceptable to the board or
259	268		equivalent education as determined by the board;
260	269		[(D)] maintains any professional designation
261	270		held by the individual in good standing with the appropriate
262	271		organization or regulatory body that is identified or used in an
263	272		advertisement, letterhead, business card, or other firm-related
264	273		communication;
265	274		(D) [(E)] has passed an examination on the rules
266	275		of professional conduct as determined by board rule; and
267	276		(E) [(F)] complies with the rules of
268	277		professional conduct as determined by board rule; [and
269	278		[(G) maintains professional continuing education
270	279		applicable to license holders as required by board rule;] and
271	280		(3) the firm and the owners who are not license holders
272	281		comply with board disciplinary actions and other requirements the
273	282		board may impose by rule.
274	283		(e) The board may require an individual who is not a license
275	284		holder under this chapter to comply with the requirement of Section
276	285		901.169(a) [submit a complete set of fingerprints]. If the
277	286		individual does not comply with the requirement of that subsection
278	287		[provide the complete set of fingerprints] on request, the board
279	288		may refuse to allow that individual to become an owner of a
280	289		certified public accountancy firm and may cancel or refuse to issue
281	290		or renew a firm license to the firm.
282	291		(f) An applicant for issuance or renewal of a firm license
283	292		under this section must register each office of the firm in this
284	293		state and show that all attest services performed in this state [and
285	294		each office in this state] are under the supervision of a person who
286	295		holds a certificate issued under this chapter or by another state.
287	296		SECTION 13. Section 901.402(a), Occupations Code, is
288	297		amended to read as follows:
289	298		(a) On payment of the required fees, the board shall issue a
290	299		license to an applicant who complies with the requirement of
291	300		Section 901.169(a) and:
292	301		(1) holds a certificate issued under this chapter; or
293	302		(2) holds a firm license issued under this chapter.
294	303		SECTION 14. Section 901.403, Occupations Code, is amended
295	304		by adding Subsection (c) to read as follows:
296	305		(c) The board shall require an applicant for renewal of a
297	306		license to comply with the requirement of Section 901.169(a).
298	307		SECTION 15. The heading to Section 901.409, Occupations
299	308		Code, is amended to read as follows:
300	309		Sec. 901.409. FEE REDUCTION FOR RETIRED PERSONS OR
301	310		[DISABLED] PERSONS WITH DISABILITIES.
302	311		SECTION 16. Section 901.411(d), Occupations Code, is
303	312		amended to read as follows:
304	313		(d) The board by rule may exempt certain license holders,
305	314		including license holders who are persons with disabilities
306	315		[disabled], retired, or not associated with accounting, as defined
307	316		by board rule, from all or part of the requirements of this section.
308	317		SECTION 17. Section 901.451(c), Occupations Code, is
309	318		amended to read as follows:
310	319		(c) The title or designation "certified public accountant"
311	320		and the abbreviation "CPA" may not be used in connection with an
312	321		office that does not meet the requirements of Sections 901.353 and
313	322		901.354 [is required to be under the supervision of a resident
314	323		manager under Section 901.353 unless the resident manager holds a
315	324		certificate and a license issued under this chapter].
316	325		SECTION 18. Sections 901.461(a) and (b), Occupations Code,
317	326		are amended to read as follows:
318	327		(a) A certified public accountancy firm that is not licensed
319	328		in this state but is licensed [and has its primary place of
320	329		business] in another state [and is not required to hold a firm
321	330		license under Section 901.351(a-1)] may practice in this state
322	331		without a firm license or notice to the board if the firm's practice
323	332		in this state is performed by an individual who holds a license
324	333		under this chapter or who practices under a privilege under Section
325	334		901.462.
326	335		(b) A firm described by Subsection (a) may exercise all the
327	336		practice privileges of a firm license holder, except that the firm
328	337		[:
329	338		[(1) may not perform the services described by Section
330	339		901.351(a-1); and
331	340		[(2)] may perform the services described by Section
332	341		901.002(a)(1) [Sections 901.002(a)(1)(B) and (D)] for an entity
333	342		with its home office in this state only if:
334	343		(1) [(A)] the firm meets the ownership requirements of
335	344		Sections 901.354(a) and (b);
336	345		(2) [(B)] the firm complies with the board's peer
337	346		review program under Section 901.159; and
338	347		(3) [(C)] the services are performed by an individual
339	348		who holds a license under this chapter or practices under a
340	349		privilege under Section 901.462.
341	350		SECTION 19. Subchapter M, Chapter 901, Occupations Code, is
342	351		amended by adding Section 901.6011 to read as follows:
343	352		Sec. 901.6011. INJUNCTIVE RELIEF. (a) The attorney
344	353		general at the request of the board may petition a district court
345	354		for an injunction to prohibit a person who is violating this chapter
346	355		from continuing the violation.
347	356		(b) Venue in a suit for injunctive relief is in Travis
348	357		County.
349	358		(c) After application and a finding that a person is
350	359		violating this chapter, the district court shall grant the
351	360		injunctive relief the facts warrant.
352	361		SECTION 20. Section 901.656(a), Occupations Code, is
353	362		amended to read as follows:
354	363		(a) The board[, in consultation with the advisory committee
355	364		appointed under Section 901.657,] shall determine the maximum
356	365		amount of any scholarship awarded under this subchapter. The
357	366		scholarship may be spent by the recipient on the expenses for
358	367		tuition, fees, books, supplies, and living expenses incurred by the
359	368		student in connection with the student's fifth year of an
360	369		accounting program. Scholarships shall be made available to
361	370		eligible students attending:
362	371		(1) any institution of higher education; or
363	372		(2) any nonprofit independent institution approved by
364	373		the Texas Higher Education Coordinating Board under Section 61.222,
365	374		Education Code.
366	375		SECTION 21. The following provisions of the Occupations
367	376		Code are repealed:
368	377		(1) Section 901.163;
369	378		(2) Sections 901.253(b) and (c);
370	379		(3) Section 901.351(d);
371	380		(4) Section 901.462(e); and
372	381		(5) Section 901.657.
373	382		SECTION 22. (a) Except as provided by Subsection (b) of
374	383		this section, Section 901.059, Occupations Code, as amended by this
375	384		Act, applies to a member of the Texas State Board of Public
376	385		Accountancy appointed before, on, or after the effective date of
377	386		this Act.
378	387		(b) A member of the Texas State Board of Public Accountancy
379	388		who, before the effective date of this Act, completed the training
380	389		program required by Section 901.059, Occupations Code, as that law
381	390		existed before the effective date of this Act, is only required to
382	391		complete additional training on the subjects added by this Act to
383	392		the training program required by Section 901.059, Occupations Code.
384	393		A board member described by this subsection may not vote,
385	394		deliberate, or be counted as a member in attendance at a meeting of
386	395		the board held on or after December 1, 2019, until the member
387	396		completes the additional training.
388	397		(c) Section 901.164, Occupations Code, as added by this Act,
389	398		applies only to an original contract entered into on or after the
390	399		effective date of this Act. An original contract entered into
391	400		before the effective date of this Act is governed by the law as it
392	401		existed immediately before the effective date of this Act, and that
393	402		law is continued in effect for that purpose.
394	403		(d) The Texas State Board of Public Accountancy shall
395	404		require each applicant for renewal of a license under Subchapter I,
396	405		Chapter 901, Occupations Code, to first comply with the requirement
397	406		of Section 901.169(a), Occupations Code, as added by this Act, not
398	407		later than September 1, 2021. Notwithstanding Sections
399	408		901.169(a)(2)(E) and 901.403(c), Occupations Code, as added by this
400	409		Act, an applicant for renewal of a license is not required to comply
401	410		with Section 901.169(a) until first required to by the board as
402	411		provided by this subsection.
403	412		(e) Section 901.203, Occupations Code, as amended by this
404	413		Act, applies only to a complaint filed with the Texas State Board of
405	414		Public Accountancy on or after the effective date of this Act. A
406	415		complaint filed before the effective date of this Act is governed by
407	416		the law in effect on the date the complaint was filed, and the
408	417		former law is continued in effect for that purpose.
409	418		(f) Sections 901.252, 901.253, and 901.309, Occupations
410	419		Code, as amended by this Act, apply only to an application submitted
411	420		to the Texas State Board of Public Accountancy on or after the
412	421		effective date of this Act. An application submitted before the
413	422		effective date of this Act is governed by the law in effect on the
414	423		date the application was submitted, and the former law is continued
415	424		in effect for that purpose.
416	425		(g) As soon as possible after the effective date of this
417	426		Act, the Texas State Board of Public Accountancy shall adopt or
418	427		amend any rules necessary to implement the changes in law made by
419	428		this Act to Chapter 901, Occupations Code.
420	429		SECTION 23. This Act takes effect September 1, 2019.
421		-	______________________________ ______________________________
422		-	President of the Senate Speaker of the House
423		-	I certify that H.B. No. 1520 was passed by the House on April
424		-	3, 2019, by the following vote: Yeas 147, Nays 0, 2 present, not
425		-	voting; and that the House concurred in Senate amendments to H.B.
426		-	No. 1520 on May 10, 2019, by the following vote: Yeas 104, Nays 0,
427		-	1 present, not voting.
428		-	______________________________
429		-	Chief Clerk of the House
430		-	I certify that H.B. No. 1520 was passed by the Senate, with
431		-	amendments, on May 3, 2019, by the following vote: Yeas 30, Nays 0.
432		-	______________________________
433		-	Secretary of the Senate
434		-	APPROVED: __________________
435		-	Date
436		-	__________________
437		-	Governor
	430	+	* * * * *