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OCCUPATIONS CODE

TITLE 5. REGULATION OF FINANCIAL AND LEGAL SERVICES

SUBTITLE A. FINANCIAL SERVICES

CHAPTER 901. ACCOUNTANTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 901.001. SHORT TITLE. (a) This chapter may be cited as

the Public Accountancy Act.

(b) A reference in law to the Public Accountancy Act of 1979 or

the Public Accountancy Act of 1991 means this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.002. GENERAL DEFINITIONS. (a) In this chapter:

(1) "Attest service" means:

(A) an audit or other engagement required by the board to be

performed in accordance with the auditing standards adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board;

(B) an engagement required by the board to be performed in

accordance with standards for accounting and review services

adopted by the American Institute of Certified Public Accountants

or another national accountancy organization recognized by the

board;

accordance with standards for attestation engagements adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board; or

(D) any other assurance service required by the board to be

performed in accordance with professional standards adopted by

the American Institute of Certified Public Accountants or another

national accountancy organization recognized by the board.

(2) "Board" means the Texas State Board of Public Accountancy.

(3) "Certificate" means a certificate issued to a certified

public accountant.

(4) "Certified public accountant" means a person who holds a

certificate issued under this chapter or who practices in this

state under Section 901.462.

(5) "Certified public accountancy firm" means a person who holds

a firm license or a firm that practices in this state under

Section 901.461.

(6) "Client" means a person who enters into an agreement with a

license holder or a license holder's employer to receive a

professional accounting service.

(7) "Corporation" means a corporation authorized by a statute

applicable to this state or by an equivalent law of another state

or a foreign country, including a professional public accounting

corporation organized under The Texas Professional Corporation

Act (Article 1528e, Vernon's Texas Civil Statutes).

(8) "Firm" means a sole proprietorship, partnership,

corporation, limited liability company, or other business entity

engaged in the practice of public accountancy.

(9) "Firm license" means a license issued under Subchapter H.

(10) "License" means a license issued under Subchapter I.

(11) "Peer review" means the study, appraisal, or review of the

professional accounting work of a public accountancy firm that

performs attest services by a certificate holder who is not

affiliated with the firm.

(12) "Professional accounting services" or "professional

accounting work" means services or work that requires the

specialized knowledge or skills associated with certified public

accountants, including:

(A) issuing reports on financial statements;

(B) providing management or financial advisory or consulting

services;

(D) providing advice in tax matters.

(13) "Public accountant" means a person authorized to practice

public accountancy under the Public Accountancy Act of 1945

(Article 41a, Vernon's Texas Civil Statutes).

(b) The board by rule may define "financial statement" to comply

with the standards adopted by generally recognized bodies

responsible for setting accounting standards.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 1, eff. Sept. 1,

2001.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 1, eff. September 1, 2007.

Sec. 901.0021. MEANING AND IMPLICATION OF REPORT. (a) In this

chapter, a reference to a report used with respect to a financial

statement means an opinion, report, or other document, including

an assurance prepared in accordance with standards for accounting

and review services adopted by the American Institute of

Certified Public Accountants or another national accountancy

organization recognized by the board, that:

(1) states or implies assurance as to the reliability of the

financial statement; and

(2) includes or is accompanied by a statement or implication

that the person issuing the opinion, report, or other document

has special knowledge or competence in accounting or auditing.

(b) A statement or implication of assurance as to the

reliability of a financial statement or as to the special

knowledge or competence of the person issuing the opinion,

report, or other document includes any form of language that is

conventionally understood to constitute such a statement or

implication.

competence in accounting or auditing may arise from:

(1) the use by the issuer of the opinion, report, or other

document of a name or title indicating that the person is an

accountant or auditor; or

(2) the language of the opinion, report, or other document

itself.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 2, eff. Sept. 1,

2001.

Sec. 901.003. PRACTICE OF PUBLIC ACCOUNTANCY. (a) In this

chapter, "practice of public accountancy" means:

(1) the performance for a client by a person who is certified,

licensed, or registered under this chapter of a service that

involves the use of accounting, attesting, or auditing skills;

(2) the performance or offer of performance for a client or

potential client by a person who represents to the public that

the person is certified, licensed, or registered under this

chapter of a service that involves the use of accounting,

attesting, or auditing skills;

(3) the performance of activities of a person or practice unit

licensed under this chapter in:

(A) preparing or reporting on a financial statement or report

that is to be used by an investor, the management of an

organization, a third party, or a financial institution, unless

the report is prepared for internal use only; or

(B) preparing a tax return that is filed with a taxing

authority; or

(4) the supervision of an activity described by Subdivision (3).

(b) For purposes of this section, a service that involves the

use of accounting, attesting, or auditing skills includes:

(1) issuing a report on or preparing a financial statement;

(2) providing management or financial advisory or consulting

services; and

(3) preparing a tax return or advising or consulting on a tax

matter.

public that the person is certified, licensed, or registered

under this chapter if the person makes an oral or written

representation that the person is certified, licensed, or

registered. A written representation includes a representation

communicated by office sign, business card, letterhead, or

advertisement. A representation does not include:

(1) the display of an original certificate or registration

unless a license is also displayed;

(2) a representation made by a faculty member of an educational

institution solely in connection with the duties of the person as

a faculty member; or

(3) a representation in a book, article, or other publication,

or a representation made in connection with the promotion of the

publication, unless the representation includes an offer to

perform a service or to sell a product other than the

publication.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 3, eff. Sept. 1,

2001.

Sec. 901.004. CONSTRUCTION; LIMITATIONS. (a) This chapter does

not:

(1) restrict an official act of a person acting in the person's

capacity as:

(A) an officer of the state or of a county, municipality, or

other political subdivision, including a county auditor;

(B) an officer of a federal department or agency; or

Paragraph (A) or (B);

(2) prohibit a person who is not a certified public accountant

or public accountant from serving as an employee of:

(A) a certified public accountant or public accountant licensed

by the board; or

(B) a firm composed of certified public accountants or public

accountants licensed by the board;

(3) prohibit a person licensed by the federal government as an

enrolled agent from performing an act or using a designation

authorized by federal law;

(4) prohibit an attorney or firm of attorneys from preparing or

presenting records or documents customarily prepared by an

attorney or firm of attorneys in connection with the attorney's

or firm's professional work in the practice of law; or

(5) prohibit an employee, officer, or director of a financial

institution, as defined by Section 201.101, Finance Code, from

preparing or presenting records or documents when lawfully acting

within the scope of the activities of the institution.

(b) A person who serves as an employee as described by

Subsection (a)(2) may not issue an accounting or financial

statement over the employee's name.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 4, eff. Sept. 1,

2001.

Sec. 901.005. FINDINGS; PUBLIC POLICY; PURPOSE. (a) The

practice of public accountancy is a learned profession that

requires specialized education and experience. That practice has

historically been defined to include a broad range of financial,

advisory, and attest services, including:

(1) issuing a report on a financial statement;

(2) preparing a tax return;

(3) providing advice in a tax matter;

(4) providing management or financial advisory or consulting

services;

(5) recommending the sale of a product if the recommendation

requires or implies accounting or auditing skill; and

(6) providing litigation support services.

(b) The attest service is part of the practice of public

accountancy. That service provides assurance to the public,

especially the public markets, that the management of commercial

entities has reasonably described the financial status of those

entities. That assurance contributes to the strength of the

economy and public markets of this state and to the soundness and

reliability of the financial system. The strength of the

financial system in this state is supported by the competence,

integrity, and expertise of the persons who attest to financial

statements in this state.

competence and integrity of certified public accountants in all

of its dealings with certified public accountants and not merely

in connection with their performance of the attest service.

(d) The terms "accountant" and "auditor," and derivations,

combinations, and abbreviations of those terms, have an

implication of competence in the profession of public accountancy

on which the public relies in personal, business, and public

activities and enterprises.

(e) The policy of this state and the purpose of this chapter

are to provide that:

(1) the admission of persons to the practice of public

accountancy require education and experience commensurate with

the requirements of the profession;

(2) a person who represents that the person practices public

accountancy be qualified to do so;

(3) a person licensed as a certified public accountant:

(A) maintain high standards of professional competence,

integrity, and learning; and

(B) demonstrate competence and integrity in all dealings with

the public that rely on or imply the special skills of a

certified public accountant and not merely in connection with the

performance of the attest service;

(4) areas of specialized practice require special training; and

(5) the activities and competitive practices of persons

practicing public accountancy be regulated to be free of

commercial exploitation to provide the public with a high level

of professional competence at reasonable fees by independent,

qualified persons.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 5, eff. Sept. 1,

2001.

Sec. 901.006. APPLICATION OF SUNSET ACT. The Texas State Board

of Public Accountancy is subject to Chapter 325, Government Code

(Texas Sunset Act). Unless continued in existence as provided by

that chapter, the board is abolished and this chapter expires

September 1, 2015.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 1, eff. Sept. 1,

2003.

SUBCHAPTER B. TEXAS STATE BOARD OF PUBLIC ACCOUNTANCY

Sec. 901.051. BOARD MEMBERSHIP. (a) The Texas State Board of

Public Accountancy consists of 15 members appointed by the

governor with the advice and consent of the senate as follows:

(1) 10 certified public accountant members, at least eight of

whom are, on the date of appointment:

(A) a sole practitioner; or

(B) an owner or employee of a certified public accountancy firm;

and

(2) five public members who are not:

(A) licensed under this chapter; or

(B) financially involved in an organization subject to board

regulation.

(b) Each member of the board must be a United States citizen.

the race, color, disability, sex, religion, age, or national

origin of the appointee.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 6, eff. Sept. 1,

2001.

Sec. 901.052. ELIGIBILITY OF PUBLIC MEMBERS. A person is not

eligible for appointment as a public member of the board if the

person or the person's spouse:

(1) is registered, certified, or licensed by an occupational

regulatory agency in the field of public accountancy;

(2) is employed by or participates in the management of a

business entity or other organization regulated by the board or

receiving funds from the board;

(3) owns or controls, directly or indirectly, more than a 10

percent interest in a business entity or other organization

regulated by the board or receiving funds from the board; or

(4) uses or receives a substantial amount of tangible goods,

services, or funds from the board, other than compensation or

reimbursement authorized by law for board membership, attendance,

or expenses.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.053. MEMBERSHIP AND EMPLOYEE RESTRICTIONS. (a) In

this section, "Texas trade association" means a cooperative and

voluntarily joined statewide association of business or

professional competitors in this state designed to assist its

members and its industry or profession in dealing with mutual

business or professional problems and in promoting their common

interest.

(b) A person may not be a member of the board and may not be a

board employee employed in a "bona fide executive,

administrative, or professional capacity," as that phrase is used

for purposes of establishing an exemption to the overtime

provisions of the federal Fair Labor Standards Act of 1938 (29

U.S.C. Section 201 et seq.), and its subsequent amendments, if:

(1) the person is acting in the capacity of an officer,

executive board or executive committee member, employee, or paid

consultant of a Texas trade association in the field of public

accountancy; or

(2) the person's spouse is acting in the capacity of an officer,

executive board or executive committee member, manager, or paid

consultant of a Texas trade association in the field of public

accountancy.

general counsel to the board if the person is required to

because of the person's activities for compensation on behalf of

a profession related to the operation of the board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 2, eff. Sept. 1,

2003.

Sec. 901.054. TERMS. (a) Board members serve staggered

six-year terms.

(b) A board member who has served all or part of six consecutive

years is not eligible for reappointment until the second

anniversary of the expiration date of the member's most recent

term.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.055. OFFICERS; EXECUTIVE COMMITTEE. (a) The governor

shall designate a member of the board as presiding officer. The

presiding officer serves in that capacity at the will of the

governor.

(b) The board shall annually elect from its members an assistant

presiding officer, secretary, treasurer, and other officers the

board considers necessary to serve with the presiding officer on

the executive committee.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.056. GROUNDS FOR REMOVAL. (a) It is a ground for

removal from the board that a member:

(1) does not have at the time of taking office the

qualifications required by Section 901.051;

(2) does not maintain during service on the board the

qualifications required by Section 901.051;

(3) is ineligible for membership under Section 901.052 or

901.053;

(4) cannot, because of illness or disability, discharge the

member's duties for a substantial part of the member's term; or

(5) is absent from more than half of the regularly scheduled

board meetings that the member is eligible to attend during a

calendar year without an excuse approved by a majority vote of

the board.

(b) The validity of an action of the board is not affected by

the fact that it is taken when a ground for removal of a board

member exists.

ground for removal exists, the executive director shall notify

the presiding officer of the board of the potential ground. The

presiding officer shall then notify the governor and the attorney

general that a potential ground for removal exists. If the

potential ground for removal involves the presiding officer, the

executive director shall notify the next highest ranking officer

of the board, who shall then notify the governor and the attorney

general that a potential ground for removal exists.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 3, eff. Sept. 1,

2003.

Sec. 901.057. PER DIEM; REIMBURSEMENT. (a) A board member is

entitled to receive:

(1) $100 for each day that the member conducts board business;

and

(2) reimbursement for actual and necessary expenses incurred in

performing board functions.

(b) The board by rule may determine the activities that

constitute board business.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.058. MEMBER EQUALITY. A board member who is not a

certified public accountant has the same authority,

responsibility, and duties as any other board member.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.059. TRAINING. (a) A person who is appointed to and

qualifies for office as a member of the board may not vote,

deliberate, or be counted as a member in attendance at a meeting

of the board until the person completes a training program that

complies with this section.

(b) The training program must provide the person with

information regarding:

(1) this chapter;

(2) the programs operated by the board;

(3) the role and functions of the board;

(4) the rules of the board, with an emphasis on the rules that

relate to disciplinary and investigatory authority;

(5) the current budget for the board;

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

(7) the requirements of:

(A) the open meetings law, Chapter 551, Government Code;

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

Code; and

(D) other laws relating to public officials, including

conflict-of-interest laws; and

(8) any applicable ethics policies adopted by the board or the

Texas Ethics Commission.

reimbursement, as provided by the General Appropriations Act, for

the travel expenses incurred in attending the training program

regardless of whether the attendance at the program occurs before

or after the person qualifies for office.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 4, eff. Sept. 1,

2003.

SUBCHAPTER C. EXECUTIVE DIRECTOR AND OTHER BOARD PERSONNEL

Sec. 901.101. EXECUTIVE DIRECTOR AND PERSONNEL. The board shall

employ an executive director, independent contractors, and

personnel selected by the executive director as necessary to

assist the board in performing its duties.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.102. DIVISION OF RESPONSIBILITIES. The board shall

develop and implement policies that clearly separate the

policy-making responsibilities of the board and the management

responsibilities of the executive director and the staff of the

board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 5, eff. Sept. 1,

2003.

Sec. 901.103. QUALIFICATIONS AND STANDARDS OF CONDUCT

INFORMATION. The board shall provide, as often as necessary, to

its members and employees information regarding their:

(1) qualifications for office or employment under this chapter;

and

(2) responsibilities under applicable laws relating to standards

of conduct for state officers or employees.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.104. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS.

(a) The executive director or the executive director's designee

shall develop an intra-agency career ladder program. The program

must require intra-agency postings of all nonentry level

positions concurrently with any public posting.

(b) The executive director or the executive director's designee

shall develop a system of annual performance evaluations. All

merit pay for board employees must be based on the system

established under this subsection.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.105. EQUAL EMPLOYMENT OPPORTUNITY POLICY; REPORT. (a)

The executive director or the executive director's designee shall

prepare and maintain a written policy statement that implements a

program of equal employment opportunity to ensure that all

personnel decisions are made without regard to race, color,

disability, sex, religion, age, or national origin.

(b) The policy statement must include:

(1) personnel policies, including policies relating to

recruitment, evaluation, selection, training, and promotion of

personnel, that show the intent of the board to avoid the

unlawful employment practices described by Chapter 21, Labor

Code; and

(2) an analysis of the extent to which the composition of the

board's personnel is in accordance with federal and state law and

a description of reasonable methods to achieve compliance with

federal and state law.

(1) be updated annually;

(2) be reviewed by the Commission on Human Rights for compliance

with Subsection (b)(1); and

(3) be filed with the governor's office.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 6, eff. Sept. 1,

2003.

SUBCHAPTER D. BOARD POWERS AND DUTIES

Sec. 901.151. GENERAL POWERS AND DUTIES OF BOARD. (a) The

board shall:

(1) administer this chapter;

(2) adopt rules the board determines are necessary or advisable

to administer this chapter;

(3) keep a record of each proceeding conducted before or action

taken by the board; and

(4) keep an official seal.

(b) On its own motion or on the complaint of any person, the

board may initiate:

(1) proceedings to determine the eligibility of a person for

examination, certification, registration, or licensing under this

chapter; or

(2) disciplinary proceedings under Subchapter K.

other assistance from any source to administer this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.152. ADVISORY COMMITTEES. (a) The board may appoint

advisory committees to perform the advisory functions assigned to

the committees by the board.

(b) A member of an advisory committee who is not a member of the

board may not receive compensation for service on the committee.

The member may receive reimbursement for actual and necessary

expenses incurred in performing committee functions as provided

by Section 2110.004, Government Code.

board.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.1525. APPOINTMENT OF BOARD COMMITTEES. (a) The board

may appoint policy-making and working committees to assist the

board in performing its responsibilities under this chapter. The

board's policy-making committees shall assist the board in

establishing policies, drafting rules, setting budgets,

representing the board, and performing other oversight duties

necessary to administer this chapter. The board's working

committees shall assist the board in carrying out the board's

functions, including reviewing enforcement cases and other

licensing matters. In establishing committees, the board shall

maintain the distinction between the types of committees

authorized by this section.

(b) A person may not serve on a policy-making committee unless

the person is a board member. A working committee may consist of

members who are members of the board and members who are not

board members. A member of a working committee who is not a board

member may participate as a full voting member of the committee.

(1) the person is acting in the capacity of an officer,

executive board or executive committee member, employee, or paid

consultant of a Texas trade association in the field of public

accountancy;

(2) the person's spouse is acting in the capacity of an officer,

executive board or executive committee member, manager, or paid

consultant of a Texas trade association in the field of public

accountancy; or

(3) the person is required to register as a lobbyist under

Chapter 305, Government Code, because of the person's activities

for compensation on behalf of a profession related to the

operation of the board.

(d) For purposes of Subsection (c), "Texas trade association"

has the meaning assigned by Section 901.053.

(e) A committee member who is not a member of the board is

subject to the same financial disclosure requirements that apply

to a member of the board, except that the financial disclosures

shall be maintained by the executive director.

(f) A committee member who is not a member of the board may not

serve on the committee if the member:

(1) violates Subsection (c);

(2) cannot, because of illness or disability, discharge the

member's duties for a substantial time;

(3) is absent from more than half of the regularly scheduled

meetings of the committee that the member is eligible to attend

during a calendar year unless the absence is excused by a

majority vote of the committee; or

(4) does not comply with Subsection (e).

(g) The board shall adopt rules that provide that a committee

member shall refrain from participating in the discussion of and

may not vote on an issue before a committee in which the member

has a personal or financial interest. A committee member who is

not permitted to vote on a matter described by this subsection

shall state at the time of the vote the reason why the member is

not voting on the matter.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 8, eff. Sept. 1,

2003.

Sec. 901.153. ENFORCEMENT COMMITTEES. (a) The board may

appoint enforcement committees. An enforcement committee operates

as a board working committee. The membership of each enforcement

committee must include at least one public member of the board.

(b) An enforcement committee shall consider and make

recommendations to the board on matters relating to the

enforcement of this chapter and board rules.

each enforcement committee's duties.

(d) In appointing the members of an enforcement committee, the

board must determine whether a prospective committee member who

is a license holder under this chapter has been the subject of

any disciplinary action under this chapter. A license holder who

has been found in violation of this chapter may not serve on an

enforcement committee.

(e) A board member who serves on an enforcement committee that

participates in the investigation of a specific complaint may not

participate in any subsequent disciplinary proceeding of the

board that pertains to the complaint and may not vote on the

final disposition of the case. The board shall adopt rules

necessary to implement the requirements of this subsection.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 9, eff. Sept. 1,

2003.

Sec. 901.154. FEES. (a) The board shall set the fee for the

issuance of a certificate under this chapter and the fee for the

issuance or renewal of a license under this chapter in an amount

not to exceed $250.

(b) The board may increase the fee for the issuance or renewal

of a license as necessary to cover the costs of enforcing this

chapter.

provided by this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.155. SCHOLARSHIP TRUST FUND FOR FIFTH-YEAR ACCOUNTING

STUDENTS. (a) The fee for the issuance or renewal of a license

under this chapter is the amount of the fee set by the board

under Section 901.154 together with the fee increase imposed

under Section 901.406 and an additional $10 annual fee to be

deposited to the credit of the scholarship trust fund for

fifth-year accounting students.

(b) The scholarship trust fund for fifth-year accounting

students is held by the board outside the state treasury and may

be used only to:

(1) provide scholarships under Subchapter N to accounting

students in the fifth year of a program designed to qualify each

student to apply for certification as a certified public

accountant; and

(2) pay administrative costs under Subsection (c).

under Subsection (a) and to disburse the money may not exceed 10

percent of the total money collected.

(d) Notwithstanding Section 404.071, Government Code, interest

earned on amounts in the scholarship trust fund for fifth-year

accounting students shall be credited to that fund.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

119, Sec. 1, eff. September 1, 2009.

Sec. 901.156. RULES OF PROFESSIONAL CONDUCT. The board shall

adopt rules of professional conduct to:

(1) establish and maintain high standards of competence and

integrity in the practice of public accountancy; and

(2) ensure that the conduct and competitive practices of license

holders serve the purposes of this chapter and the best interest

of the public.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.1565. RULES ON CONSEQUENCES OF CRIMINAL CONVICTION.

(a) The board shall adopt rules necessary to comply with Chapter

53.

(b) In its rules under this section, the board shall list the

specific misdemeanor offenses for which a conviction would

constitute grounds for the board to take action under Section

53.021. With regard to a misdemeanor conviction in another state,

the board shall develop a process for determining whether the

conviction is for an offense listed in the rules required by this

subsection.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 10, eff. Sept. 1,

2003.

Sec. 901.157. RULES FOR SPECIALIZATION. The board by rule may

recognize an area of specialization in the practice of public

accountancy if the area of specialization is generally recognized

by other bodies that regulate or issue authoritative

pronouncements in the field of public accountancy.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.158. RULES RESTRICTING COMPETITIVE PRACTICES. The

board in its rules of professional conduct may regulate the

competitive practices of a license holder as necessary to ensure

that the license holder does not engage in a competitive practice

that:

(1) impairs the independence or quality of a service provided

by a license holder;

(2) impairs or restricts the public's opportunity to obtain

professional accounting services of high quality at a reasonable

price; or

(3) unreasonably restricts competition among license holders.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 7, eff. Sept. 1,

2001.

Sec. 901.159. PEER REVIEW. (a) The board by rule shall provide

for a peer review program to review the work product of a license

holder or of the certified public accountancy firm in which the

license holder is a member, in lieu of the license holder, to the

extent necessary to comply with any applicable standards adopted

by generally recognized bodies responsible for setting accounting

standards. Peer review must include a verification that each

individual in a certified public accountancy firm who is

responsible for supervising attest services and who signs or

authorizes another person to sign an accountant's reports on

financial statements on behalf of the firm meets the competency

requirements of the professional standards that apply to those

services.

(b) The board by rule shall establish a fee in an amount not to

exceed $200 to be paid by a certified public accountancy firm, or

by a license holder who is not a member of a certified public

accountancy firm, for each peer review required by the board

under this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 7, eff. Sept. 1,

2001.

Sec. 901.160. AVAILABILITY AND CONFIDENTIALITY OF CERTAIN BOARD

FILES. (a) The board shall make available at the board's

offices in Austin any file maintained or information gathered or

received by the board from a third party regarding a license

applicant or current or former license holder for inspection by

the applicant or license holder during normal business hours.

(b) A license applicant or current or former license holder may

authorize the board in writing to make available for inspection

by a designated person or by the public any information gathered

or received by the board from a third party regarding the

applicant or license holder.

(b), the following information gathered or received by the board

is confidential and not subject to disclosure under Chapter 552,

Government Code:

(1) information regarding the qualifications of an applicant or

license holder to be certified as a certified public accountant;

(2) information regarding the qualifications of an applicant or

firm license holder to be issued a firm license as a certified

public accountancy firm; and

(3) information regarding a disciplinary action under Subchapter

K against a license holder or an applicant to take the uniform

CPA examination, before a public hearing on the matter.

(d) A final order of the board relating to a disciplinary action

against a license holder, including a reprimand, that results

from an informal proceeding or a formal public hearing is subject

to disclosure to the public and is available on request.

(e) The board may disclose information that is confidential

under this section to another governmental, regulatory, or law

enforcement agency engaged in an enforcement action. The board by

rule shall adopt guidelines to assist the board in exercising its

authority to share information under this subsection. Subsections

(a) and (c) do not apply to information disclosed under this

subsection.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 8, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 525, Sec. 11, eff. Sept. 1, 2003.

Sec. 901.161. PRIVILEGE FOR CERTAIN INFORMATION. (a) Any

statement or record prepared or an opinion formed in connection

with a positive enforcement or peer review is privileged and is

not:

(1) subject to discovery, subpoena, or other means of legal

compulsion for release to a person other than the board; or

(2) admissible as evidence in a judicial or administrative

proceeding other than a board hearing.

(b) The privilege provided by Subsection (a) does not apply to

information involved in a dispute between a reviewer and the

person, including an entity, who is the subject of the review.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 9, eff. Sept. 1,

2001.

Sec. 901.162. IMMUNITY FROM LIABILITY. (a) Each board member

and each officer, director, or employee of a state agency, board,

or commission is immune from liability arising out of a

disclosure made to the board in connection with a complaint filed

with the board.

(b) The board and each board member is immune from liability to

a person for damages incident to:

(1) the board's investigation of the person; or

(2) any complaint, charge, or proceeding that results from the

investigation.

the board, and volunteer member of a constructive enforcement

committee of the board harmless from any cost, damage, or

attorney's fees arising from a claim or suit against that person

for an action taken by the person in good faith in the discharge

of the board's responsibilities.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 10, eff. Sept. 1,

2001.

Sec. 901.163. STATISTICAL ANALYSIS OF COMPLAINTS. (a) The

board shall develop and maintain a system for tracking a

complaint filed with the board against a person who holds a

license or firm license.

(b) At the time the board files an annual report under Section

901.164, the board shall also report a statistical analysis of

the disciplinary actions taken by the board during the preceding

year. The report must contain a statistical analysis of:

(1) the number of complaints received;

(2) the number of complaints resolved and the manner in which

they were resolved;

(3) a categorization of complaints received and the number of

complaints in each category;

(4) the average length of time required to resolve a complaint

for each category of complaints; and

(5) other information the board determines necessary.

during a reporting period, the board shall report that a

complaint was not received in that category.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 11, eff. Sept. 1,

2001.

Sec. 901.164. ANNUAL FISCAL REPORT. (a) The board shall file

annually with the governor and the presiding officer of each

house of the legislature a complete and detailed report

accounting for all funds received and disbursed by the board

during the preceding calendar year.

(b) The report must be in the form and reported in the time

provided by the General Appropriations Act.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.165. RULES FOR ATTEST SERVICES. (a) The board by rule

shall specify those services that constitute attest services.

(b) Attest services are required to be performed in accordance

with professional standards. The board may adopt by reference the

standards developed for general application by the American

Institute of Certified Public Accountants or another nationally

recognized accountancy organization.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 12, eff. Sept. 1,

2001.

Sec. 901.166. AUTHORITY TO ISSUE SUBPOENA, ADMINISTER OATH, AND

RECEIVE EVIDENCE. (a) The board may issue a subpoena to compel

the attendance of a relevant witness or the production, for

inspection and copying, of relevant documents, records, and other

evidence, maintained by electronic or other means, that is in

this state.

(b) The board may administer oaths and take testimony and other

evidence regarding any matter under the board's jurisdiction.

acting through the attorney general, may file suit to enforce the

subpoena in a district court in Travis County or in a county in

which a hearing conducted by the board may be held.

(d) On finding that good cause exists for issuing the subpoena,

the court shall order the person to comply with the subpoena. The

court may punish a person who fails to obey the court order.

(e) The board shall pay a reasonable fee for photocopies

subpoenaed under this section in an amount not to exceed the

amount the board may charge for copies of its own records.

(f) The reimbursement of the expenses of a witness whose

attendance is compelled under this section is governed by Section

2001.103, Government Code.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 12, eff. Sept. 1,

2003.

Sec. 901.167. NEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE

RESOLUTION POLICY. (a) The board shall develop and implement a

policy to encourage the use of:

(1) negotiated rulemaking procedures under Chapter 2008,

Government Code, for the adoption of board rules; and

(2) appropriate alternative dispute resolution procedures under

Chapter 2009, Government Code, to assist in the resolution of

internal and external disputes under the board's jurisdiction.

(b) The board's procedures relating to alternative dispute

resolution must conform, to the extent possible, to any model

guidelines issued by the State Office of Administrative Hearings

for the use of alternative dispute resolution by state agencies.

(1) coordinate the implementation of the policy adopted under

Subsection (a);

(2) serve as a resource for any training necessary for

implementation of the negotiated rulemaking or alternative

dispute resolution procedures; and

(3) collect data on the effectiveness of the procedures

implemented by the board.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 13, eff. Sept. 1,

2003.

Sec. 901.168. TECHNOLOGY POLICY. The board shall develop and

implement a policy requiring the executive director and board

employees to research and propose appropriate technological

solutions to improve the board's ability to perform its

functions. The technological solutions must:

(1) ensure that the public is able to easily find information

about the board on the Internet;

(2) ensure that persons who want to use the board's services are

able to:

(A) interact with the board through the Internet; and

(B) access any service that can be provided effectively through

the Internet; and

(3) be cost-effective and developed through the board's planning

processes.

Added by Acts 2003, 78th Leg., ch. 525, Sec. 14, eff. Sept. 1,

2003.

SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND COMPLAINT

PROCEDURES

Sec. 901.201. PUBLIC INTEREST INFORMATION. (a) The board shall

prepare information of public interest describing the functions

of the board and the procedures by which complaints are filed

with and resolved by the board.

(b) The board shall make the information available to the public

and appropriate state agencies.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.202. COMPLAINTS. The board by rule shall establish

methods by which consumers and service recipients are notified of

the name, mailing address, and telephone number of the board for

the purpose of directing a complaint to the board. The board may

require that notice:

(1) on each registration form, application, or written contract

for services of a person regulated under this chapter; or

(2) in a bill for service provided by a person regulated under

this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.203. COMPLAINT INFORMATION. (a) The board shall

maintain a file on each written complaint filed with the board.

The file must include:

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

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

(3) the subject matter of the complaint;

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

complaint;

(5) a summary of the results of the review or investigation of

the complaint; and

(6) an explanation of the reason the file was closed, if the

board closed the file without taking action other than to

investigate the complaint.

(b) The board shall provide to the person filing the complaint

and to each person who is a subject of the complaint a copy of

the board's policies and procedures relating to complaint

investigation and resolution.

complaint, shall notify the person filing the complaint and each

person who is a subject of the complaint of the status of the

investigation unless the notice would jeopardize an undercover

investigation.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2003, 78th Leg., ch. 525, Sec. 15, eff. Sept. 1,

2003.

Sec. 901.204. PUBLIC PARTICIPATION. (a) The board shall

develop and implement policies that provide the public with a

reasonable opportunity to appear before the board and to speak on

any issue under the board's jurisdiction.

(b) The board shall prepare and maintain a written plan that

describes how a person who does not speak English or who has a

physical, mental, or developmental disability may be provided

reasonable access to the board's programs.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

SUBCHAPTER F. CERTIFICATE REQUIREMENTS

Sec. 901.251. CERTIFICATE REQUIRED. (a) A person who is an

individual may not engage in the practice of public accountancy

unless the person holds a certificate issued under this chapter

or practices in this state under a privilege under Section

901.462.

(b) The board shall issue a certificate to a person who meets

the applicable requirements of this chapter.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch.

315, Sec. 2, eff. September 1, 2007.

Sec. 901.252. ELIGIBILITY REQUIREMENTS. To be eligible to

receive a certificate, a person must:

(1) be of good moral character as determined under Section

901.253;

(2) meet the education requirements established under Section

901.254 or 901.255;

(3) pass the uniform CPA examination;

(4) meet the work experience requirements established under

Section 901.256; and

(5) pass an examination on the rules of professional conduct as

determined by board rule.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.253. CHARACTER INVESTIGATION. (a) The board shall

ensure that an applicant to take the uniform CPA examination or

to receive a certificate is of good moral character as

demonstrated by a lack of history of dishonest or felonious acts.

(b) The board by rule may adopt a system to investigate an

applicant's background.

maintained by a law enforcement agency, including the Department

of Public Safety and the Federal Bureau of Investigation

identification division, to investigate the qualifications of an

individual who applies to take the uniform CPA examination or to

be certified or issued a firm license under this chapter.

(d) The board may require the applicant to submit a complete set

of fingerprints. If an applicant does not provide a complete set

of fingerprints on request of the board, the board may:

(1) deny the applicant's application to take the uniform CPA

examination; or

(2) refuse to issue a certificate to the applicant.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 13, eff. Sept. 1,

2001.

Sec. 901.254. EDUCATION REQUIREMENTS. To be eligible to take

the uniform CPA examination, an applicant must:

(1) hold a baccalaureate or graduate degree, or its equivalent

as determined by board rule, conferred by a board-recognized

institution of higher education; and

(2) complete at least 150 semester hours or quarter-hour

equivalents in board-recognized courses, including an accounting

concentration or equivalent courses as determined by board rule.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 14, eff. Sept. 1,

2001.

Sec. 901.255. SPECIAL EDUCATION REQUIREMENTS FOR PART-TIME

STUDENT. (a) This section applies only to an applicant to take

the uniform CPA examination who:

(1) was enrolled in an accounting program on September 1, 1994;

(2) notified the board not later than September 1, 1997, of the

applicant's intent to take the examination;

(3) is enrolled in fewer than 12 semester hours in each semester

that the applicant attends a college or university; and

(4) completes the accounting program not later than September 1,

2002.

(b) To be eligible to take the uniform CPA examination, an

applicant subject to this section must:

(1) hold a baccalaureate or graduate degree, or its equivalent

as determined by board rule, conferred by a board-recognized

institution of higher education; and

(2) complete at least:

(A) 30 semester hours or quarter-hour equivalents in

board-recognized accounting courses, as defined by board rule;

and

(B) 20 semester hours or quarter-hour equivalents in

board-recognized accounting-related courses in other areas of

business administration.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.256. WORK EXPERIENCE REQUIREMENTS. (a) To be eligible

to receive a certificate, a person must complete:

(1) at least two years of work experience under the supervision

of a certified public accountant; or

(2) at least one year of work experience acceptable to the

board, including experience providing a service or advice

involving accounting, attest services, management or financial

advisory or consulting services, tax services, or other services

the board considers appropriate for an accountant, if the person:

(A) has completed at least 150 semester hours of college

credits; or

(B) holds a graduate degree.

(b) The board by rule shall define the work experience that is

acceptable for purposes of this section.

The board may not consider a petition from another entity in

resolving a dispute under this section.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 15, eff. Sept. 1,

2001.

Sec. 901.257. OATH AND CERTIFICATE FEE. Before the board issues

a certificate to a person, the person must:

(1) take an oath, administered by a board member or by another

person authorized to administer oaths, to support:

(A) the constitution and laws of this state and the United

States; and

(B) the board's rules; and

(2) pay a fee for the certificate in an amount set by board rule

not to exceed $50.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.258. TRANSFER OF COMPLETE EXAMINATION CREDIT BETWEEN

STATES. (a) The board may accept the completion of the uniform

CPA examination given by the licensing authority of another state

if:

(1) the examination was prepared and graded by the American

Institute of Certified Public Accountants or, if doing so would

result in a greater degree of reciprocity with the examination

results of other states, the National Association of State Boards

of Accountancy; and

(2) the applicant met the requirements in effect in this state

at the time the credit was earned.

(b) The board may transfer to the licensing authority of another

state active credits earned as a result of completing the uniform

CPA examination in this state.

(1) a fee in an amount not to exceed $100 to receive credits

from another licensing authority; and

(2) a fee in an amount not to exceed $50 to transfer credits to

another licensing authority.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.259. CERTIFICATION BASED ON RECIPROCITY. (a) The

board shall issue a certificate to a person who holds a

certificate or license issued by another state if the person:

(1) satisfies at least one of the following:

(A) holds a certificate or license as a certified public

accountant from a state that the National Association of State

Boards of Accountancy's National Qualification Appraisal Service

has verified as having education, examination, and experience

requirements for certification or licensure that are comparable

to or exceed the requirements for licensure as a certified public

accountant of The American Institute of Certified Public

Accountants/National Association of State Boards of Accountancy

Uniform Accountancy Act and the board determines that the

licensure requirements of that Act are comparable to or exceed

the licensure requirements of this chapter;

(B) obtains from the National Association of State Boards of

Accountancy's National Qualification Appraisal Service

verification that the individual's education, examination, and

experience qualifications are comparable to or exceed the

requirements for licensure as a certified public accountant of

The American Institute of Certified Public Accountants/National

Association of State Boards of Accountancy Uniform Accountancy

Act and the board determines that the licensure requirements of

that Act are comparable to or exceed the licensure requirements

of this chapter;

state other than the requirement providing the grades necessary

to pass the uniform CPA examination;

(D) met the requirements in effect for issuance of a

certificate in this state on the date the person was issued a

certificate by the other state; or

(E) has completed at least four years of experience practicing

public accountancy, if the experience:

(i) occurred after the person passed the uniform CPA examination

and within the 10 years preceding the date of application; and

(ii) satisfies requirements established by board rule; and

(2) has met the continuing professional education requirements

that apply to a license holder under this chapter for the

three-year period preceding the date of application.

(b) The board shall issue a certificate by reciprocity to the

extent required by a United States treaty.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 1497, Sec. 16, eff. Sept. 1,

2001.

Sec. 901.260. CERTIFICATE BASED ON FOREIGN CREDENTIALS. (a)

The board may issue a certificate to an applicant who holds a

substantially equivalent foreign credential if:

(1) the foreign jurisdiction that granted the credential has an

analogous provision allowing a person who holds a certificate

issued by this state to obtain that foreign jurisdiction's

comparable credential;

(2) the foreign credential:

(A) entitles the holder to issue reports on financial

statements;

(B) was issued by a foreign jurisdiction that regulates the

practice of public accountancy on the basis of education,

examination, and experience requirements established by the

jurisdiction; and

probated; and

(3) the applicant:

(A) received the credential based on education and examination

requirements that are comparable to or exceed those in effect in

this state on the date that the foreign credential was granted;

(B) satisfied one of the following:

(i) completed an experience requirement in the jurisdiction that

granted the foreign credential that is comparable to or exceeds

the experience requirements established under this chapter;

(ii) completed at least four years of professional accounting

experience in this state; or

(iii) within the 10 years preceding the date of the application,

has met equivalent requirements prescribed by board rule;

board covering national standards; and

(D) passed an examination acceptable to the board covering the

laws, rules, and code of ethical conduct in effect in this state.

(b) An applicant for a certificate under Subsection (a) must

list in the application each jurisdiction, foreign and domestic,

in which the applicant has applied for or holds a credential to

practice public accountancy. Each holder of a certificate issued

under Subsection (a) shall notify the board in writing of the

issuance, denial, revocation, suspension, limitation, or

probation of a credential or the commencement of a disciplinary

or enforcement action by any jurisdiction not later than the 30th

day after the effective date of that action.

substantially equivalent to a certificate issued under this

chapter is not subject to judicial review.

Added by Acts 2001, 77th Leg., ch. 1497, Sec. 17, eff. Sept. 1,

2001.

SUBCHAPTER G. UNIFORM CPA EXAMINATION

Sec. 901.301. ADMINISTRATION; BOARD RULES. (a) The board shall

conduct or contract with another person to conduct uniform CPA

examinations administered under this chapter.

(b) The board by rule may establish the:

(1) manner in which a person may apply for the examination;

(2) time, date, and place for the examination;

(3) manner in which the examination is conducted; and

(4) manner in which a person's examination score is reported to

the person.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Amended by Acts 2001, 77th Leg., ch. 381, Sec. 1, eff. Sept. 1,

2001; Acts 2001, 77th Leg., ch. 1497, Sec. 18, eff. Sept. 1,

2001; Acts 2003, 78th Leg., ch. 1276, Sec. 14.006(a), eff. Sept.

1, 2003.

Sec. 901.302. APPLICATION OF INTENT. (a) The board may

establish an application of intent for a person pursuing a

certificate.

(b) The board shall maintain an application of intent filed

under this section as an active application until the second

anniversary of the date the application is filed.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.303. FILING FEE. The board by rule may set a filing

fee in an amount not to exceed $100 to be paid by an applicant at

the time the applicant files an initial application to take the

uniform CPA examination.

Acts 1999, 76th Leg., ch. 388, Sec. 1, eff. Sept. 1, 1999.

Sec. 901.304. EXAMINATION FEE. (a) For each examination or

reexamination, the board by rule shall